Chpt 11

simulated (laboratory) market testing

the presentation of advertising and other promotional materials for several products, including a test product, to members of the product's target market

Diffusion

the process by which the adoption of an innovation spreads

Brainstorming

the process of getting a group to think of unlimited ways to vary a product or solve a problem

growth stage

the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy

business analysis

the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated

development

the stage in the product development process in which a prototype is developed and a marketing strategy is outlined

reposistioned products

these are existing products targeted at new markets or market segments, or ones repositioned to change the current market's perception of the product or company, which may be done to boost declinging sales.

new to the world products

these products create an entirely new market

new product lines

these products, which the firm has not previously offered, allow it to enter an established market

additions to existing product lines

this category includes new products that supplement a firm's established line

Lower-priced products

this category refers to products that provide performance similar to competing brands at a lower price

Product Life Cycle (PLC)

a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death)

decline stage

a long-run drop in sales

product development

a marketing strategy that entails the creation of new products for present markets; the process of converting applications for new technologies into marketable products

maturity stage

a period during which sales increase at a decreasing rate

new-product strategy

a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation

new product

a product new to the world, the market, the producer, the seller, or some combination of these

innovation

a product perceived as new by a potential adopter

simultaneous product development

a team-oriented approach to new-product development

concept test

a test to evaluate a new-product idea, usually before any prototype has been created

Which of the following statements is true of the business analysis stage of the new-product development process? a. For the first time, costs and revenues are estimated and compared. b. The firm should start sketching a marketing strategy. c. Established products are test marketed to assess new marketing strategies. d. Objective evaluation of ideas is postponed.

a. For the first time, costs and revenues are estimated and compared.

Which of the following statements is true of a new-product strategy? a. It provides general guidelines for generating, screening, and evaluating new-product ideas. b. It refrains from adopting ideas suggested by customers and competitors. c. It is the last stage of a formal new-product development process. d. It is limited to product development and does not play a role in overall marketing strategy

a. It provides general guidelines for generating, screening, and evaluating new-product ideas.

Which of the following statements is true of commercialization? a. It refers to the decision to market a product. b. It refers to the launch of a new product. c. It refers to limited introduction of a product. d. It refers to the adoption of an innovation.

a. It refers to the decision to market a product

In the context of adopters who participate in diffusion, which of the following individuals is most likely to be a part of the early majority? a. Stephen, who always purchases a product after conducting an in-depth research on its pros and cons b. Evan, who obsesses over new gadgets and purchases them on the day they are launched in the market c. Farhan, who buys his first desktop computer when laptops and tablets are already being widely used d. Mike, who buys an iPhone as all his friends own one and he does not want them to consider him poor

a. Stephen, who always purchases a product after conducting an in-depth research on its pros and cons

In the new-product development process, which of the following statements is true of the development stage? a. The marketing department should decide on the product's packaging, branding, labeling, and so forth. b. A group thinks of unlimited ways to vary the product or solve a problem. c. Ideas that are inconsistent with an organization's new-product strategy are eliminated. d. Preliminary figures for demand, cost, sales, and profitability are calculated for the first time.

a. The marketing department should decide on the product's packaging, branding, labeling, and so forth.

From a worldwide perspective, which of the following statements is true of global marketers? a. They design their products to meet regulations in their major markets. b. They do not focus on meeting smaller markets' requirements. c. They believe that all products have the potential for global market penetration without modification. d. They develop products that are common across all markets and populations.

a. They design their products to meet regulations in their major markets.

Italiano, an American restaurant, experienced increased sales and high profits in the initial years of its establishment. Recently, it began to face increased competition. To rebuild its brand value, Italiano started expanding its distribution network and aggressively promoting its restaurant. In this scenario, Italiano is in the _____ stage of the product life cycle. a. growth b. decline c. introductory d. maturity

a. growth

Addiso, an energy drink, was extremely popular in the early 2000s. It suffered a decline in its sales because of rising competition in the market. As a result, the manufacturers modified the product's packaging from its regular cylindrical bottle to an interesting triangular-shaped package. This led to an increase in sales. In this scenario, the modified product belongs to the category of a. improvements or revisions of existing products. b. new-to-the-world products. c. additions to existing product lines. d. repositioned products.

a. improvements or revisions of existing products.

Normally, the longest stage of the product life cycle is the _____. a. maturity stage b. growth stage c. introductory stage d. decline stage

a. maturity stage

In the product development process, _____ eliminates ideas that are inconsistent with an organization's new-product strategy or are obviously inappropriate for some other reason. a. screening b. business analysis c. test marketing d. brainstorming

a. screening

product category

all brands that satisfy a particular type of need

_____ is the degree to which a new product is consistent with existing values and product knowledge, past experiences, and current needs. a. Observability b. Compatibility c. Complexity d. Trialability

b. Compatibility

Which of the following is true of a concept test? a. It is used to evaluate new products after their prototypes have been created. b. It is considered a fairly good predictor of success for line extensions. c. It is accurate in predicting the success of new products that create new consumption patterns. d. It is often used at the development stage to rate product alternatives.

b. It is considered a fairly good predictor of success for line extensions.

Which of the following statements best defines the term diffusion? a. It is the process by which a product is perceived as new by a potential adopter. b. It is the process by which the adoption of an innovation spreads. c. It is the process of deciding whether or not to market a product. d. It is the process of developing a prototype of a new product.

b. It is the process by which the adoption of an innovation spreads.

Which of the following statements is true of absolute failure? a. It occurs when a product achieves sales and market share goals but fails to achieve profit goals. b. It occurs when a company fails to recoup its development, marketing, and production costs. c. It results when a company sells its products at bargain prices to make a profit. d. It results when a product returns a profit but fails to achieve sales, profit, or market share goals.

b. It occurs when a company fails to recoup its development, marketing, and production costs.

Which of the following statements is true of brainstorming? a. The sheer quality of ideas generated during the process is what matters. b. Its goal is to get a group to think of unlimited ways to solve a problem. c. Group members advocate criticism of an idea when it is ridiculous. d. Objective evaluation of ideas is advanced by group members.

b. Its goal is to get a group to think of unlimited ways to solve a problem.

Which of the following statements is true of the maturity stage of the product life cycle (PLC)? a. Service and repair assume the least significant roles. b. New users cannot be added indefinitely during this stage. c. The beginning of this stage is signaled by increased sales rates. d. This is the shortest stage of the PLC.

b. New users cannot be added indefinitely during this stage.

Which of the following statements is true of the product life cycle (PLC)? a. The time a product spends in any one stage of the PLC is constant for all the products in that category. b. The PLC can be used to analyze a brand, a product form, or a product strategy. c. The PLC of a product cannot be extended once its sales decline. d. The PLC for a product form is usually shorter than the PLC for a brand.

b. The PLC can be used to analyze a brand, a product form, or a product strategy.

In the context of adopters who participate in diffusion, which of the following statements is true of innovators? a. They tend to be suspicious of new products and alienated from a rapidly advancing society. b. They are worldly and active outside their community than other categories. c. They have the longest adoption time and the lowest socioeconomic status. d. They are characterized as being deliberate and skeptical.

b. They are worldly and active outside their community than other categories.

Nike recently released the Air Jordan XXXII basketball shoe. This shoe style is in its 32nd iteration and would be considered: a. a repositioned product. b. an improvement or revision of an existing product. c. a new product line. d. an addition to an existing product line.

b. an improvement or revision of an existing product

In the context of the new-product development process, laboratory tests are often conducted on prototype models in the _____ stage. a. screening b. development c. business analysis d. test marketing

b. development

Vilante Corp., a television manufacturing firm, observes that its profits are declining because of slow sales. Therefore, it begins to promote the product to its consumers and dealers to maintain its market share. To distinguish its products from its competitors, it redesigns its television models stylistically. It also increases the product warranty from one year to three years. In this scenario, Vilante's products are in the _____ stage of the product life cycle. a. growth b. maturity c. introductory d. decline

b. maturity

In the context of new-product ideas, _____ goes beyond applied research by converting applications into marketable products. a. simulated market test b. product development c. concept testing d. product modification

b. product development

New-to-the-world products: a. are usually not profitable. b. represent the smallest category of new products. c. are slightly changed versions of existing products. d. are offered at a lower price, but provide performance similar to competing brands.

b. represent the smallest category of new products.

A major implication of the diffusion process to marketing managers is that a. it weakens the notion that many new product ideas are necessary to produce a continuous flow of successful new products. b. the targeted adopter and media may need to shift based on how various categories of adopters gather product information. c. messages developed for and targeted toward early adopters may be perceived similarly by the late majority. d. managers may need to restrict themselves to one new product idea to develop successful products.

b. the targeted adopter and media may need to shift based on how various categories of adopters gather product information.

_____ occurs when a company cannot recoup its development, marketing, and product costs and the company actually loses money. a. Development failure b. Relative product failure c. Absolute failure d. Perceived failure

c. Absolute failure

Which of the following is true of simultaneous product development? a. It increases the costs involved in the product development process. b. The functional teams proceed through highly structured, sequential stages. c. All relevant functional areas participate in all stages of the development process. d. It allows firms to lengthen the product development process.

c. All relevant functional areas participate in all stages of the development process.

For a long time, baking soda was used only as a cooking ingredient. Recently, Nails & Hammer Co., a construction firm, began marketing baking soda as an odor absorbent. The company promoted its use in absorbing odors in homes. In this scenario, which of the following categories of new products does baking soda belong to? a. New-to-the-world products b. Existing products c. Repositioned products d. Lower-priced products

c. Repositioned products

_____ is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. a. Business analysis b. Idea screening c. Test marketing d. Concept testing

c. Test marketing

Which of the following is a characteristic of early adopters? a. They rely less on group norms and values. b. They are less eager to try new ideas. c. They are more oriented to the local community. d. They are more influenced by global marketers.

c. They are more oriented to the local community.

You've just joined a marketing and sales fraternity on campus. At your first meeting you met Robert, who is also a huge Green Bay Packers fan. Robert suggests you get together to watch the game the on Sunday. You ask for Robert's cell phone number and he replies that he doesn't own a cell phone. Robert is likely: a. a late adopter. b. an early adopter. c. a laggard. d. an innovator.

c. a laggard.

In the context of the early stage of new-product development, 3D printing is also known as _____. a. discontinuous innovating b. test marketing c. additive manufacturing d. idea screening

c. additive manufacturing

The rate of acceptance and diffusion of a new product will be faster when the a. product is different from existing values. b. product can be tried only on a limited basis. c. benefits of using the product can be observed by others. d. product is complex to understand and use.

c. benefits of using the product can be observed by others.

The decision to commercialize a product involves _____. a. additive manufacturing b. discontinuous innovations c. building inventories d. concept testing

c. building inventories

One of the reasons for new-product failures is that the products a. are promoted continuously at regular intervals. b. are test marketed in locations isolated from the media. c. offer no discernible benefits compared to existing products. d. do not match their features with the competitors' products.

c. offer no discernible benefits compared to existing products.

The _____ is a biological metaphor that traces the stages of a product's acceptance, from its introduction to its decline. a. new-product development process b. concept test c. product life cycle d. diffusion process

c. product life cycle

In the context of the product life cycle, which of the following is true of a product's growth stage? a. Profits rise and remain at their peak throughout the phase. b. Instead of stimulating demand for a specific brand, demand for the product is stimulated. c. Emphasis switches from aggressive brand advertising to primary demand promotion. d. Competition intensifies as more competitors enter the market.

d. Competition intensifies as more competitors enter the market.

In the context of research and development, which of the following is true of product development? a. It analyzes a brand, a product form, or a product category. b. It traces the stages of a product's acceptance, from its introduction to its decline. c. It makes cosmetic or functional changes to an existing product. d. It converts applications into marketable products.

d. It converts applications into marketable products.

In a product development process, which of the following is a disadvantage of test marketing? a. It prevents management from evaluating alternative strategies. b. It cannot be used to test established products. c. It leads to problems in assessing how well various aspects of the marketing mix fit together. d. It exposes the new product and its marketing mix to competitors before its introduction.

d. It exposes the new product and its marketing mix to competitors before its introduction.

How does the product life cycle concept help marketing managers? a. It suggests how to position a product to extend its life cycle. b. It shows marketers the appropriate marketing strategies to sell a new product. c. It tells marketers the length of a product's life cycle. d. It helps marketers forecast future events and suggest appropriate strategies.

d. It helps marketers forecast future events and suggest appropriate strategies.

Which of the following statements is true of the decline stage of the product life cycle? a. Firms spend heavily on advertising to educate consumers about the product's benefits. b. Manufacturers undertake heavy consumer promotion because of stiff competition. c. Companies lengthen product lines to appeal to additional market segments. d. The rate of decline is governed by how rapidly substitute products are adopted.

d. The rate of decline is governed by how rapidly substitute products are adopted.

Which of the following statements is true of laggards? a. Their views about the future heavily influence their decisions. b. They want to be opinion leaders. c. They have a worldly outlook. d. Their independence is rooted in their ties to tradition.

d. Their independence is rooted in their ties to tradition.

In the context of new-product development, which of the following is a global strategy adopted by many multinational corporations? a. Their products are common across all markets and populations. b. They do not make any changes to a product's design to accommodate global regulations. c. They adopt global strategies during the commercialization stage rather than the development stage. d. They develop every product for potential worldwide distribution.

d. They develop every product for potential worldwide distribution.

The research and development (R&D) team of DataCom Corp., a software firm, holds a meeting to discuss potential ideas for new products. In the meeting, the moderator encourages everyone to share their ideas, no matter how trivial they may seem. He warns members against criticizing any idea and asks them to focus on offering plenty of ideas. In this scenario, the R&D team of DataCom is engaged in _____. a. beta testing b. concept testing c. idea screening d. brainstorming

d. brainstorming

In the context of the new-product development process, preliminary figures for demand, cost, sales, and profitability are calculated in the _____ stage. a. idea screening b. test marketing c. concept testing d. business analysis

d. business analysis

Screening

the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason

introductory stage

the full-scale launch of a new product into the marketplace

Many multinational companies have found that they need to alter their products to meet regulations or consumer preferences in other countries. Unilever discovered that customers in emerging markets such as Indonesia, Pakistan, and Sri Lanka have use for their products, but may not be able to afford a full-size bottle of shampoo or bar of soap. As a result, when Unilever looks at new-product development for these countries, they probably: a. sell the same size products at a much lower price. b. do not sell products in these countries at all. c. develop new scents of shampoo to meet customer preference. d. sell single-serve packets of shampoo or soap at a low price.

d. sell single-serve packets of shampoo or soap at a low price.

increasing _____ of markets and competition provides a reason for multinational firms to consider new-product development from a worldwide perspective

globalization

___ products are important to sustain growth, increase revenues and profits, and replace obsolete items

new

the ___________ is one of the most familiar concepts in marketing

product life cycle

Improvements or revisions of existing products

the "new and improved" product may be significantly or only slightly changed

Commercialization

the decision to market a product

complexity

the degree of difficulty involved in understanding and using a new product

"trialability"

the degree to which a product can be tried on a limited basis

relative advantage

the degree to which a product is perceived as superior to existing substitutes

Observability

the degree to which the benefits or other results of using the product can be observed by others and communicated to target customers

compatibility

the degree to which the new product is consistent with existing values and product knowledge, past experirnces, and current needs

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation