MK MG- Chapter 9
List the steps of the new-product development process in order, placing the first step at the top of the list.
1. Idea Generation 2. Screening 3. Idea Evaluation 4. Development of product and marketing mix 5. Commercialization
Place the four stages of the product life cycle in order from the first stage (top) to the final stage (bottom).
1. Market Introduction 2.Market growth 3. Market Maturity 4. Sales decline
At which stage of the product life cycle may firms introduce a product?
At any stage
K.C. Rao, brand manager for Hershey, has introduced a new low-calorie chocolate candy bar, Choco-Lite. He is gradually rolling out the product, starting to sell it in the western United States before moving east. He has decided on an expensive promotional campaign to make customers aware of the new bar. Choco-Lite is in which step of the new-product development process?
Commercialization
Which of these characteristics help a new product move quickly through the early stages of the product life cycle?
Comparative advantage Ease of use Matches values of target customers
Which of the following typically occur in the market introduction stage of the product life cycle? (Check all that apply.)
Customers are not seeking the product. Sales are low. Firms inform customers about the product.
Matthew received a pacemaker to help the arrhythmia he is experiencing with his heart. The pacemaker provides a continual stream of information that is monitored by specialists at the heart clinic and if they notice any indicators of concern, they contact Matthew and he reports to the clinic for assessment. What is helping the heart clinic improve the quality of care Matthew is receiving?
Data
True or false: Marketing managers should focus on informing customers about their brand during the market growth stage of the product life cycle.
False; Reason: During this stage, marketing managers should focus on persuading customers rather than informing them as the customers are already aware of the product.
True or false: Now that companies spend more money on new product introduction, it is common for more than 80 percent of new products to succeed.
False; Reason: It is estimated that companies spend more than $20 million to introduce new consumer packaged goods but 80 to 95 percent of these products flop.
True or false: More ideas are generated in a firm with a culture that emphasizes efficiency and cost-cutting.
False; Reason: Recall that companies with an organizational culture that encourages innovation generate more ideas.
True or false: Industry profits begin to increase toward the end of the market growth stage.
False; Reason: Recall that profits begin to decrease toward the end of the market growth stage due to competitors entering the market.
True or false: The sales and profits of an individual brand always follow the product life-cycle pattern.
False; Reason: The sales and profits of an individual brand may not, and often do not, follow the life-cycle pattern
Which of the following should impact marketing strategy planning? (Check all that apply.)
How fast the product is moving to the next stage Where a product is in its life-cycle stage
Match the activities (on the right) with the appropriate step of the new-product development process (on the left).
Idea generation- Solicit ideas from customers Solicit ideas from customers Screening-Idea fit with company objectives Idea fit with company objectives Idea evaluation-Concept testing Development-Create prototype Commercialization-"Roll out" product in select markets
Which of the following occur in the market maturity stage of the product life cycle? (Check all that apply.)
Industry profits decline. Competition gets tougher.
Which of the following occur in the market growth stage of the product life cycle?
Innovators profit. Sales grow fast. New competitors enter. Product variety increases.
Seeing sales of its tennis balls in decline, the brand manager at Tennis Pro International made minor changes to the brand's packaging (moving from three-ball packages to four-ball packages) and promoted this as a new product. How would the Federal Trade Commission respond to this decision?
It probably would not approve of it.
Which of the following industries are, for the most part, in market maturity in the United States?
Laundry detergent Carbonated soft drinks Breakfast cereal
Match the stage of the product life cycle (on the left) with the characteristics of the product-market (on the right). Instructions
Market introduction-Choice, Verizon introduces a phone with a 3D screen; no other firm has one. Verizon introduces a phone with a 3D screen; no other firm has one. Market growth-Choice, Several firms sell compact fluorescent light bulbs; sales and profits are growing. Several firms sell compact fluorescent light bulbs; sales and profits are growing. Market maturity-There is a battle of the brands in frozen pizza, with all brand offerings being relatively similar. Sales decline-Only a few firms still make disk drives for computers; sales and profits are dropping fast.
In what stage of the product life cycle do many firms slash prices or modify existing products to add value and maintain market share?
Maturity
Which market situation is typical of the market growth stage of the product life cycle?
Monopolistic competition
______ is essential if a company is going to survive in today's dynamic markets.
New product development
Which of the following factors are important to new product success? (Check all that apply.)
Offering superior customer value Effective product design Effective transitions from idea to market
Which of the following are ideas consistent with total quality management? (Check all that apply.)
Poor quality equals lost customers. Everyone in the company should care about quality. It is less expensive to do things right the first time.
A company may introduce or drop a product at any stage of the
Product Life Cycle
Which of the following positions oversee product promotion and often take over the jobs formerly handled by advertising managers? (Check all that apply.)
Product manager Brand manager
During the new-product development process, a company should continually evaluate which two of the following? (Check all that apply.)
Profitability Return on investment
Marcus has three new product ideas that seem to be right for the company. His manager asks him to make a rough estimate of how much it would cost to develop each idea and potential profits for each idea. What is his manager asking Marcus to determine?
ROI
Which two of the following are potential advantages of performing concept tests online? (Check all that apply.)
Research and testing costs are lower. Feedback is immediate.
Most of Stardust Co.'s competitors have left the market because of declining sales. Stardust has introduced new products, but has continued producing the old products because a small group of loyal customers still use them. This product-market is in which product life cycle stage?
Sales decline
Which of the following occur in the sales decline stage of the product life cycle? (Check all that apply.)
Strong brands can make profits. Price competition becomes vigorous. New products replace old.
As a market moves into the market maturity stage, which of the following might provide a firm in that market with sources of competitive advantage? (Check all that apply.)
Successful promotion strategies A somewhat better product Lower production costs
What are four common reasons why new products may fail? (Check all that apply.)
The product is not designed well. The marketing plan for the product is weak. The benefit offered is not unique. A company underestimates the competition.
What is the one key trait found in companies that are successful at developing new goods and services?
Top-management support
When introducing a new product in the market introduction stage, which of the following must a marketing manager consider? (Check all that apply.)
Which distribution channels to select The cost of product development How to promote the product
A firm should never skip steps in the new-product development process because ______.
a single misstep or oversight could cause the product to fail.
Some companies use data and ___ intelligence to support continuous improvement. (Enter one word in the blank.)
artificial
During the ______ step of the new-product development process, a new product is finally placed on the market.
commercialization
Getting reactions from customers about how well a new product idea fits their needs is called ______.
concept testing
Jason participated in a focus group in which he was shown a new line of "healthy" soft drinks and tasted the product. He wrote down his reaction to how well he thought the soft drink tasted and whether or not he preferred it over his current soft drink. Jason is participating in _____.
concept testing
Continuous improvement means that an organization strives to ______.
constantly make things better
An ongoing commitment to improving processes and products one step at a time is referred to as ______ improvement.
continuous
The longer new-product development takes, the more likely it is that ______.
customer needs will change
During the idea evaluation step of the new-product development process, marketing managers should ______.
describe and test the firm's assumptions about each new-product idea and customers' needs
In the ______ step of the new-product development process, the physical product is designed.
development
When companies use their competitors as sources of new-product ideas, they often ______.
disassemble competitors' products in order to reverse engineer their innovations
Innovations that require major changes in customer behavior are called ______ innovations.
discontinuous
The invention of the television, automobile, or personal computer, all of which introduced drastic changes into the lives and behaviors of customers, are examples of ______.
discontinuous innovations
Really new product innovations tend to ______.
disrupt old ways of doing things
New products that require minor changes in customer behavior are called ______ innovations.
dynamically continuous
The introduction of camera technology to cell phones, which required users to learn relatively minor new behaviors, is an example of a(n) _____.
dynamically continuous innovation
Total quality management requires ______ to focus on quality and meeting customer needs.
everyone in the organization
Firms that sell ______-related products should expect short product life cycles.
fashion
Splash Facial Cleanser Inc., has a new product and decides to release the product into eight test cities to gain customer reaction. Each city is receiving the same product but under a different name and at a different price point. This is an example of a(n) _____.
full-scale market test
Customer reactions to various marketing mixes under real market conditions can be determined through ______.
full-scale market testing
In general, product life cycles, as a whole, are ______.
getting shorter
A phase-out strategy should be implemented _____.
gradually; Reason: Due to the ongoing costs of some marketing strategies, losses may happen when ending a plan too quickly.
If a new product has a greater comparative advantage over products already on the market, sales will tend to _____.
grow more rapidly
The cost of new-product development is typically ______ and the associated risk of failure is ______.
high; high
The stage in the new-product development process that involves gathering feedback from customers even before there is an actual product is called ______.
idea evaluation
An organizational culture that emphasizes ______ can generate more ideas.
innovation
Most companies experience losses during the market ______ phase due to high levels of promotional spending, sharing information about the product, and low sales. All of these are important since most target customers are not aware of the product.
introduction
A product idea can be in a different ______ in different markets.
life-cycle stage
TQM is based on the idea that the cost of poor product quality is ______.
lost customers
Ultimately, the cost of a poor quality product or service is _____.
lost customers
The ____ stage is the time of biggest profits for an industry.
market growth
In the United States, the markets for cars and household appliances are in the ___ stage.
market maturity
Tennis Products Corp. has noticed that in one of its product-markets, industry sales have leveled off and competition has been getting tougher. This product-market appears to be in the ______ stage of the product life cycle.
market maturity
Concept testing in the form of focus groups, surveys, or online testing are all ways to conduct ______.
market research
As sales and profits decline in a mature market, a firm can stimulate overall demand by ______.
marketing the product differently to new markets
Advertising new uses for a product to different markets can help offset declining sales in a(n)______ market.
mature
Competitive advantage is especially important in ______ product-markets.
mature
Sometimes in a(n) ______ market, a firm may find a new use for an existing product that aids in boosting sales and avoiding sales decline.
mature
During the market ______ stage of the product life cycle, promotion becomes more important due to increased competition.
maturity
Many firms respond to the increased competition of the market ______ stage of the product life cycle by slashing prices in order to maintain market share.
maturity
The product life-cycle concept ______ indicates precisely how long each stage will last.
never; Reason: Recall that the product life-cycle concept does not tell a manager precisely how long the cycle will last.
An offering that is different in any way from a company's other products is known as a(n) ______ product, even if it is a refined version of a previous product.
new
Because the product life cycle is an inevitability in most markets, a firm must have an active ______ process or otherwise risk going out of business.
new-product development
During the market growth stage of a product, a company will want to focus promotional efforts on _____ customers.
persuading
When a firm determines that a product will no longer be profitable enough for the firm to meet its objectives, it may need to develop a ______ strategy.
phase-out
The first company to introduce a new product to a market is known as a(n) ______.
pioneer
The cost of ______ is lost customers.
poor quality product
It is important to evaluate a new idea's return on investment and likely
profitability, profits, or profitable
During the market introduction stage of the product life cycle, it takes time for customers to learn that a new product is available; therefore, a firm must invest heavily in ______.
promotion
Late entrants who come into the market at maturity must try to take a share of an already saturated market. They attempt to do this by investing heavily in _____.
promotion
The major responsibility of most product managers or brand managers is ______.
promotion
A sunglasses manufacturer that develops a sample of a new product design to test among employees and customers has produced a(n) ______.
prototype
A(n) ___ is an early sample or model built to test a concept.
prototype
Sales of an individual product or brand will ______ follow the product life-cycle pattern.
rarely; Reason: Recall that strategy planners should not expect sales of an individual product to follow the product life-cycle pattern.
When a company compares the ROI of each possible product idea, it is looking at _____.
return on investment
When research and development managers at Bosch Home Appliances purchase a new Maytag dishwasher and take it apart to get new product ideas, Bosch's managers are engaging in ______.
reverse engineering
Carl Kastle, marketing manager for NPG Electronics, reviews a S.W.O.T. analysis to help him evaluate three new product ideas NPG is currently considering. Kastle is operating in the ______ step of the new-product development process.
screening
You would conduct a S.W.O.T. analysis in the _____ phase of the new product development process.
screening
Companies that respond quickly to products introduced by pioneers and offer a superior marketing mix are known as ______ and can be more profitable over time.
second-movers
In the service industry, training and empowerment are two keys to improving ______.
service quality
Direct contact between the customer and the company occurs most often among ______ organizations.
service-providing
Products influenced by fashion typically have _____ life cycles.
short
It is important that a firm _____ in the new-product development process.
should not skip steps
According to the FTC, a product can only be called new for _____.
six months
Because introducing a new product is expensive, a marketing manager may try to the market--- charging a relatively high price to help pay for the introductory costs.
skim
Product life cycle patterns apply to the sales of a given product idea in a(n) ______.
specific product-market
Finding a new use for an existing product in a mature market has the potential to ______.
stimulate sales growth
Rapidly changing ______ is one reason why product life cycles are getting shorter.
technology
The development stage of the new-product development process helps to determine ______.
the materials, equipment, staff, or training that will be required to deliver a new product or service
The four stages new-product ideas go through are known as _____.
the product life cycle
A firm that attempts to provide superior customer service by focusing on quality throughout each of its activities is engaging in ______.
total quality management (TQM)
Moments of direct contact between the customer and the firm, also known as ______, are opportunities for the company to deliver superior value.
touchpoints
Two keys to improving service quality are ______.
training and empowerment
The duration of the whole product life cycle tends to ______.
vary greatly across products
