Chapter 8: Product Strategy and New Product Development

Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information and rely heavily on prior purchase behavior are called ________ goods.

convenience

Once a product has been developed and is on the market, the company can extend the product by ________.

creating additions to existing product lines

External sources of generating product ideas include ________.

customers

An important issue for consumers is conformance, which is the product's ability to ________.

deliver on features and performance characteristics promised in marketing communications

The primary function of marketing and the entire organization, in a broader context, is to ________.

deliver value to the customer

During the decline phase of the product life cycle, ________.

channel members cease to support the product

Internal sources of generating product ideas include ________.

company salespeople

In the context of product characteristics, companies translate the essential benefit into physical, tangible elements known as the ________ product.

core

An individual moves through five stages before adopting a product. The five stages include all of the following EXCEPT ________.

validation

Among the five groups of adopters, laggards are people who ________.

want to evade adoption as long as possible and are resistant to change

When a company can show that its product's projected lifetime is high under certain operating conditions, it is using ________ as a product discriminator.

durability

The essential component in delivering value is the product price.

false

________ can be defined as anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas.

Product

________ goods are unique purchases made based on a defining characteristic for the consumer, which might be a real or perceived product feature, such as Apple iPhone's easy user interface.

Specialty

While screening and evaluating ideas, a go-to-market mistake happens when ________.

a company fails to stop a bad product idea from moving into product development

While screening and evaluating ideas, a stop-to-market mistake happens when ________.

a good idea is prematurely eliminated during the screening process

During which stage do consumers purchase a product with the intent of becoming a dependable user?

adoption

The rate at which new products become accepted is known as the ________ process.

adoption

Which of the following helps clarify the basic operationalization of a product during product testing, such as the physical characteristics and features?

alpha testing

The essential marketing objective in the growth phase of the product life cycle (PLC) is to ________.

differentiate product from those of new competitors, promoting rapid expansion

More than any other product discriminator, style offers the advantage to a company of being ________.

difficult for competition to copy

Many organizations are too small to have the resources for a national sales force to help discover new-product ideas. As a consequence, they often use ________ as a link between the customer and company.

distributors

Among the five groups of adopters, which group is considered critical to long-term success?

early majority

In the context of product testing, beta testing is designed to ________.

encourage customers to evaluate and provide feedback on a prototype

The ________ product extends the core product to include additional features, designs, and innovations that exceed customer expectations.

enhanced

A go-to-market mistake happens when a good idea is prematurely eliminated during the screening process.

false

A stock-keeping unit (SKU) is a unique identification number used to track a product in the consumer's home.

false

Early adopters are product watchers who seek out new products but are price-sensitive.

false

When the product is wrong, skilled marketing communication and pricing sophistication can correct the problems.

false

Product life cycle (PLC) includes four basic stages: introduction, growth, maturity, and delay.

false (introduction, growth, maturity, decline)

Which group of adopters include prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase?

innovators

________ are product enthusiasts who enjoy being the first to try and master a new product.

innovators

Today, many tangible products include aspects that impact the customer's satisfaction before and after the purchase. These aspects that complement the tangible features of a product are called ________.

intangible characteristics

Informing and educating the target audience about the product's benefits and features is part of the communication strategy in the ________ phase of the product life

introduction

The product life cycle (PLC) defines the life of a product in four basic stages, which include ________.

introduction, growth, maturity and decline

An individual moves through stages before adopting a product. During the awareness stage, consumers ________.

know of the product, but insufficient information to move forward through the adoption process

Among the five groups of adopters, product avoiders who want to evade adoption as long as possible are known as ________.

laggards

Product followers who purchase older generation models with lower prices and fewer features are called ________.

late majority

In the maturity phase of the product life cycle, the targeted consumers are ________.

majority adopters

In the ________ phase of the product life cycle (PLC), sales continue to increase but at a decreasing rate.

maturity

When companies provide too few products in a product line, they run the risk of ________.

missing important market opportunities

Customers view new products much differently than companies view them. Customers care only if a product is ________.

new to them

Estimating total demand is a function of three separate purchase situations, which are ________ purchases.

new, repeat, and replacement

The introduction phase of the product life cycle for an industry is usually characterized by ________.

no profits

In the context of product classifications, tangibility refers to the ________.

physical aspects of a product

A product ________ is a group of products linked through usage, customer profile, price points, and distribution channels.

product line

Combining all the products offered by a company is called the product ________.

product mix

An individual moves through stages before adopting a product. During the interest stage, consumers ________.

receive additional information and motivated to seek out added information for further evaluation

When products like cell phones are promoted as a safety device for working women and moms, this demonstrates that one way to find "new" markets is to ________.

reposition the existing products targeting different customer segments

During the maturity phase of the product life cycle, ________.

sales grow, but at a rate lower than the growth stage

Clothes, furniture, and major appliances such as refrigerators and dishwashers are examples of ________ goods.

shopping

When new-to-the-world products are better, faster versions of existing products that target, for the most part, existing customers, then these products are described as ________.

sustaining innovations

The failure of Apple Newton, the first PDA, highlights the fact that ________.

the best product technically is not always the most successful

An individual purchases a product for the purpose of making a value decision. He or she is in the ________ stage of the product adoption process.

trial

New purchases of new products are called ________ purchases.

trial

________ is the focus of a product launch marketing plan, because if you can get consumers to use the product once, you can win them over with superior product design, features, and value.

trial

Barbara's Bakery sells custom cakes, cookies, and other pastries. These represent Barbara's Bakery's product line.

true

Different target markets will view the same product in completely different ways.

true

Everyone in a target market falls into one of five groups based on their willingness to try the innovation, including innovators, early adopters, early majority, late majority, and laggards.

true

Late majority are product followers who are price-sensitive and risk-averse.

true

More than any other discriminator, style has the disadvantage of being difficult to copy.

true

One of the disadvantages of using style as a product discriminator is that consumer tastes change over time and what is considered stylish can quickly lose its appeal.

true

The business case analysis is an overall evaluation of a product and usually assesses the product's probability of success.

true

The essential benefit is the fundamental need met by a product.

true

The number of products purchased by the same customer is called repeat purchases.

true

Trial purchase is the focus of a product launch marketing plan.

true

Desktop computers, cell phones, and tablet computers are examples of new-to-the-world products considered disruptive innovations.

--

The objective in the introduction phase of the product life cycle (PLC) is to ________.

build market awareness for the product leading to trial purchase

Which of the following is an overall evaluation of a product and usually assesses the product's probability of success?

business case analysis

During the evaluation stage of the product adoption process, consumers ________.

combine all information and evaluate the product trial purchase

Market testing of a new product can take a long time, and this can result in ________.

competitors being able to develop marketing strategies to counter a product launch

In the context of criteria used to prioritize product ideas, time to market refers to the time taken to ________.

develop and get the product to market

Products that are new-to-the-world create a fundamental change in the marketplace and are known as ________.

disruptive innovations

An individual moves through five stages before adopting a product, including awareness, notice, trial, testing, and feedback.

false (including awareness, interest, evaluation, trial, and adoption)

The targeted consumers during the maturing phase of a product life cycle are innovators and early adopters.

false (majority adopters)

The product life cycle (PLC) generally refers to a product item rather than a product category.

false (refers to a product category)

The three major activities in new-product development are to (1) generate new ideas, (2) screen and evaluate ideas, and (3) define and test product concept.

false 1. identify product opportunities 2. define the product opportunity 3. develop the product opportunity

Reliability is a product's ability to deliver on features and performance characteristics promised in marketing communications.

false (conformance)

Luxury cars such as the Chevrolet Corvette are available with tires that enable a driver to continue driving even after the tire has been damaged. This is an example of Corvette using style as a product discriminator.

false (repairability)

The innovation diffusion process is how long it takes a product to move from ________.

first purchase to last purchase

The most dramatic increase in revenue is most likely to occur in the ________ phase of the product life cycle.

growth

New-to-the-world products are products that ________.

have not been available before their introduction to the market

The first step in the new-product development process is to ________.

identify product opportunities

Which of the following characterizes the decline stage of the product life cycle?

significant price pressures come from competitors and consumers

For products designed for business markets, market testing is ________.

smaller in scope and involves fewer individuals and companies

Companies often use features to differentiate themselves from competitors. However, a company must balance the features customers want with ________.

what customers will pay

Unsought goods are characterized as being the kinds of goods that consumers ________.

would rather not purchase at all