Chapter 11 MKT
A new-product strategy links the new-product development process with the objectives of the marketing department, the business unit, and the corporation. a. True b. False
true
A process called 3D printing, or additive manufacturing, is sometimes used to create three-dimensional prototypes quickly and at a relatively low cost. a. True b. False
true
Concept tests are considered relatively precise predictors of success for new products that are not copycat items, are not easily classified into existing product categories, and do not require major changes in consumer behavior. a. True b. False
true
In late 2014, Apple introduced the iPhone 6, which featured a larger screen with 38% more pixels than the iPhone 5S and an upgraded camera that could record videos in slow motion. These changes indicate that Apple was offering a new product line. a. True b. False
true
In recent years, LEGO updated the packaging of its LEGO Friends line of toys to be more girl-friendly. It has also started to include bricks that can be used to make a pop star's house and a cupcake café. These efforts indicate that LEGO is repositioning its product. a. True b. False
true
Innovators are the first 2.5% of all those who adopt a new product. Early adopters are the next 13.5% to adopt the product. a. True b. False
true
It really does not matter whether the product is "new to the world" or some other category of new product. If it is new to a potential adopter, it is an innovation in this context. a. True b. False
true
Marketers typically pay little or no attention to directing their advertising or personal selling toward laggards. a. True b. False
true
The maturity stage is normally the longest stage of the PLC. Many major household appliances are in the maturity stage of their life cycles. a. True b. False
true
The rate of the decline of sales during the product life cycle is governed by how rapidly consumer tastes change or substitute products are adopted. a. True b. False
true
While word-of-mouth marketing is important to Millennials, actually getting them to discuss products concretely can be difficult. a. True b. False
true
Which of the following products has the highest trialability? a. An airline b. A condominium c. A toothpaste d. An investment app
c
Atwood Furnishers is experiencing a period when their sales are increasing at a slower rate. The company realizes that new users cannot be added indefinitely and that, sooner or later, its market will approach saturation. Which stage is the company now entering? a. End of the decline stage b. End of the introductory stage c. Beginning of the growth stage d. Beginning of the maturity stage
d
In comparison to early adopters, which of the following statements is true of the early majority? a. They are more likely to be opinion leaders. b. They are less likely to extend the adoption process. c. They are self-confident, and they rely less on group norms. d. They are likely to collect more information and evaluate more brands.
d
Jason bought his first color television set after flat screen televisions were already widely diffused. He is most likely to be one among the ______. a. early adopters b. early majority c. late majority d. laggards
d
A concept test evaluates an existing product idea, after the creation of a prototype. a. True b. False
false
A message developed for and targeted toward early adopters of a new product will be perceived similarly by late majority adopters. a. True b. False
false
A firm that starts with a global strategy is better able to develop products that are marketable worldwide. a. True b. False
true
A source suggested to Rubbermaid the idea of the Sidekick, a litter-free lunch box. Rubbermaid could place some of its plastic containers inside a lunch box and sell the box as an alternative to plastic wrap and paper bags. The source saw this opportunity because of being closer to the consumers than the manufacturer was and, thus, more aware of customer needs. Which of the following was likely the source? a. The product's distributor b. The product's competitor c. Customers d. A company employee
a
At which stage in the new-product development process is the decision to market a product made? a. Commercialization b. Test marketing c. Development d. Business analysis
a
Which of the following is an objective of focus group interviews? a. To stimulate insightful comments through group interaction b. To directly involve customers in test marketing c. To reject ideas that are obviously inappropriate for some reason d. To eliminate ideas that are inconsistent with an organization's new-product strategy
a
Which of the following provides an accurate contrast of product life cycle lengths? a. The PLC for a product form is usually longer than the PLC for any one brand. b. The PLC for a product category is usually shorter than the PLC for any one product form. c. The PLC for a product form is usually equal to the PLC for the corresponding product category. d. The PLC for a product category is usually shorter than the PLC for any one brand.
a
In the context of diffusion of innovation, the dominant value of laggards is _____. a. skepticism b. deliberateness c. adventure d. tradition
d
NutriOats, an oatmeal cookie product, has been in the market for more than seven years and is now in its decline stage. In this case, which of the following strategies would be successful in marketing NutriOats? a. Lengthen the product line. b. Focus on adding new users. c. Spend heavily on advertising to educate consumers about the product's benefits. d. Eliminate all nonessential marketing expenses and let sales decline.
d
Both demographics and behavior distinguish early adopters. a. True b. False
false
Identify a similarity between laggards and innovators. a. Neither relies on group norms. b. Neither is rooted in tradition. c. Both are eager to try new products. d. Both exhibit short adoption time.
a
Besides its high cost, what is the other possible problem that test marketing is likely to face? a. The actions of competitors countering the test market may contribute to normalizing conditions that the testing firm might expect in the market. b. The product's success may present a threat to other product extensions recently introduced by the company and thus spread its customers thin. c. It exposes the new product and its marketing mix to competitors before its introduction. Thus, the element of surprise is lost. d. Consumers may perceive the sales promotion, pricing, or advertising campaign as overzealous hard sell or even unfair trade practices.
c
Absolute failure of a new product occurs when it returns a profit but fails to achieve its sales goals, profit goals, or market share goals. a. True b. False
false
At the product development stage, it is premature to explore the feasibility of manufacturing the product at an acceptable cost. a. True b. False
false
Daily Farm, a food and beverage manufacturing firm, is known for its unique variety of table sauces. To offer more variations to its customers, Daily Farm recently launched an olive and pepper sauce. According to new product development, this new sauce would be categorized as an improved product. a. True b. False
false
It is during the product development stage that one asks questions such as: Would current customers benefit from the product? What new facilities, if any, would be needed? How might competitors respond? What is the risk of failure? Is the company willing to take the risk? a. True b. False
false
A relative product failure results when a new product returns a profit but fails to achieve its goals for sales, profit, or market share. a. True b. False
true
Fournotts Corp. manufactures and sells accessories for cell phones. To boost its sales, the research and development team decides to use product modification as an approach to new product development. In this scenario, the research and development team will most likely: a. eliminate products that are inconsistent with Fournotts's business mission. b. develop products by applying new technology. c. make a slight change in the design or function of the existing products. d. add new products to supplement Fournotts's established product line.
c
Hakimo Corp., a manufacturer of audio equipment, has developed a unique wireless speaker system that runs on solar power. The speakers can operate for 16 hours after being exposed to the sun for 2 hours. This product, which is radically different from anything available in the market, falls into which category of new products? a. Repositioned products b. Revised products c. Discontinuous innovations d. New and improved products
c
Steven, a construction worker, tends to buy a new gadget if most of his friends have them and only after they've teased him about not having the gadget yet. He relies on reviews from his friends rather than on television or newspaper advertisements to make his purchase decisions. It can be inferred that when it comes to the diffusion of innovation, Steven belongs to the group of _____. a. early adopters b. innovators c. late majority d. early majority
c
The objective of brainstorming is to ______. a. generate a large quantity of ideas through a process of rigorous objective evaluation b. generate a small set of distilled ideas through a process of rigorous objective evaluation c. postpone objective evaluation and focus on the sheer quantity of ideas generated d. postpone objective evaluation but eliminate ideas that do gain unanimous acceptance
c
Which is true of the influencers found among early adopters? a. They come from higher-income groups and are mostly in their 30s. b. They use media differently than other users who are considered followers. c. They are distinguished not by demographics but by behavior. d. They are not focused on earning the respect of others.
c
Which of the following is a characteristic shared by both early majority and the late majority? a. Both tend to have opinion leaders within their groups. b. Both rely on science and experts for information. c. Both depend on word-of-mouth communication. d. Both are primarily influenced by the mass media.
c
Jenny, the owner of an ice cream parlor, has been experimenting with different flavors to create a new exotic ice cream for her customers. After much deliberation and many tests, she decides to market the new Beet Cake with Black Walnut variant. In this scenario, the chosen ice cream flavor has entered the _____ stage of the new-product development process. a. business analysis b. development c. test marketing d. commercialization
d
A product category includes all brands that satisfy a particular type of need. a. True b. False
true
A furniture manufacturer with a reputation for making plain, lightweight foldable steel chairs decides to make cushioned chairs with printed upholstery. The new type of chair will be a ______. a. product line extension b. discontinuous innovation c. repositioned product d. new and improved product
a
A marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products is called ______. a. product development b. niche marketing c. idea screening d. commercialization
a
Which of the following is an advantage of simultaneous product development? a. It shortens the development process and reduces costs. b. It eliminates the need for conducting laboratory tests on product prototypes. c. It ensures that product development occurs in highly structured stages. d. It eliminates the need for test marketing a new product.
a
Which statement is true of the maturity stage of the product life cycle (PLC)? a. The beginning of this stage is signaled by increased sales. b. Niche marketers that target the underserved segments of a market emerge. c. It is the shortest stage of the PLC. d. Product design changes tend to become functional rather than stylistic.
b
Which of the following is a disadvantage of test marketing? a. It requires major changes in consumer behavior such as rejecting microwave ovens. b. It promotes the criticism of an idea, no matter how ridiculous it may seem. c. It inaccurately predicts the success of a product that creates new consumption patterns. d. It exposes the new product and its marketing mix to its competitors before its introduction.
d
During the maturity stage of the product life cycle, new users can be added indefinitely. a. True b. False
false
It is generally considered wise to have a well extended introductory stage of the product life cycle. a. True b. False
false
Profits rise rapidly in the growth stage of product lifecycle, reach their peak, and begin declining as competition intensifies. a. True b. False
false
The growth stage of the product life cycle (PLC) represents the full-scale launch of a new product into the marketplace. a. True b. False
false
The product life cycle (PLC) for a brand is usually longer than the PLC for a product form. a. True b. False
false
When Clayton Specialties enters the simultaneous product development phase for its new engine, it will have its R&D department and marketing work sequentially on the product. a. True b. False
false
When considering the diffusion of innovation regarding new products, a dominant characteristic of innovators is tradition. a. True b. False
false
Which of the following is the most important factor in successful new-product introduction? a. The features of the new product should be similar to its substitutes in the market. b. The product should not be developed using crowdsourcing. c. The new product should be priced lower than the other products in the same category. d. The new product should deliver a meaningful and perceivable benefit to a sizable number of people.
d
Which of the following statements is true of simulated market testing? a. It is often conducted on prototype models during the development stage. b. It is a useful tool for implementing simultaneous product development. c. It is the final stage in the new-product development and marketing process. d. It is used to monitor shopper behavior to assess a product's likely performance.
d
Which of the following statements is true of the development stage of the new-product development process? a. Costs decrease dramatically once a product idea enters the development stage. b. The development stage involves evaluating a new-product idea before creating a prototype. c. Simultaneous product development increases the time spent in the development process. d. The development stage involves examining the feasibility of manufacturing a product at an acceptable cost.
d
A mobile telephone manufacturer markets a limited edition cell phone model with 126 different functions. The campaign failed across all 50 states in the United States. Which of the following is the most likely reason? a. The mobile simply wouldn't offer any discernible benefit compared to existing products. b. There was a good match between product and customer desires to have a simple phone. c. The market size was overestimated and thus the manufacturer overproduced. d. The price was little high and the initial distribution covered a small geographical area.
a
A new range of organic confectionary was introduced by Bounty Foods. The company is forced to give its dealer high margins and also needs to invest heavily in advertising. Their production costs are also high. In which PLC stage is the company most likely to be? a. Introductory stage b. Growth stage c. Maturity stage d. Decline stage
a
Advertising and other promotional materials for a variety of products, including the test product, are shown to members of the product's target market. These people are then taken to shop at a mock or real store, where their purchases are recorded. This is part of the process involved in ______. a. simulated (laboratory) market testing b. scanner-based research c. simultaneous product development d. customer relationship management
a
Comparably speaking, which of the following would have the highest observability in terms of its rate of acceptance and diffusion? a. A new line of trousers b. A musical instrument c. A medicinal tea d. A social media app
a
In test marketing, the greatest danger is in choosing a test-site city that ______. a. does not reflect market conditions in the new product's projected market area b. is unique in being representative of the entire city, although it is unlike neighboring cities c. does not respond quickly to changing trends and is highly entrenched in its cultural ways d. has a racial mix and thus has more diversity than other cities in the projected market area
a
What do programs like Google X do to promote innovative thinking among its employees? a. They eliminate the fear of coming up with bad ideas by rewarding failure. b. They eliminate the possibility of investment in bad ideas by rewarding only successes. c. They promote the fear of coming up with bad ideas by punishing failure. d. They promote investment in bad ideas to explore the possibilities learned from them.
a
When considering a product's characteristics and the rate of adoption, complexity refers to the degree to which a new product is ______. a. difficulty to understand and use the new product b. consistent with existing values c. perceived as superior to existing substitutes d. available to be tried on a limited basis
a
When considering the diffusion of innovation, which group is least motivated by advertising or personal selling? a. Laggards b. Innovators c. The late majority d. The early majority
a
When considering the new-product development process, which of the following statements is true of screening? a. It eliminates ideas that are inconsistent with an organization's new-product strategy. b. It calculates preliminary figures for demand, cost, sales, and profitability. c. It involves getting consumer reactions to visual representations of a proposed product. d. It involves making cosmetic or functional changes to existing products.
a
Which is a characteristic of fads? a. They can move through the entire cycle in weeks. b. They typically register a gradual and unpredictable spike in sales. c. They peak slowly but then register a rather abrupt decline. d. They stay in the maturity stage for decades.
a
Which is a limitation of the PLC concept? a. It does not tell managers the length of a product's life cycle or its duration in any stage. b. It can only dictate marketing strategy with forecasts of events depending on life cycle length. c. It only tells managers the length of a product's life cycle based on past and currently running cycles. d. It cannot help marketers forecast future events and suggest appropriate strategies.
a
Which of the following describes the late majority? a. They adopt a new product because most of their friends have already adopted it. b. They do not rely on group norms and their adoption is free from pressure to conform. c. They tend to be younger and above average in income as well as education. d. They depend mainly on mass media rather than on word-of-mouth communication.
a
Which of the following is a characteristic of products produced by multinational corporations? a. Products are developed for global distribution and then tweaked to meet unique market requirements whenever possible. b. A firm that starts with a local strategy is better able to develop global products. c. Products are inadequately distributed in local markets. d. Test marketing is not required for products developed by multinational firms.
a
Which statement is true of opinion leaders? a. They most likely belong to the late majority category of adopters. b. They speed up the diffusion process through word-of-mouth communication. c. They are distinguished by demographics. d. They have the longest adoption time and the lowest socioeconomic status.
b
Cleanz Inc., a toiletries manufacturing firm, has launched a new range of organic sanitizing wipes. It wants to test its consumers' reactions to this new product in an economical way. Therefore, Cleanz creates flyers that advertise several of its products along with the new product and send them to a few selected members of the target market. Besides this, it also takes the members to a mock shop and monitors their shopping behavior. In this scenario, Cleanz is using _____. a. scanner-based research testing b. simulated market testing c. virtual test marketing d. traditional test marketing
b
Felicita Brewery wants to add brown ale beer to its existing list of alcoholic products. The questions the company currently is asking itself are: What is the likely demand for the product? What impact would the new product probably have on total sales, profits, market share, and return on investment? How would the introduction of the product affect existing products? At what stage of new-product development process is this company? a. Developmental stage b. Business analysis stage c. Marketing stage d. Screening stage
b
In which way does the concept of product life cycle (PLC) help marketing managers? a. It tells managers the length of a product's life cycle. b. It helps marketers forecast future events and suggest appropriate strategies. c. It dictates the marketing strategy to be used for a product. d. It informs marketers about the duration of a product in the various stages of its life cycle.
b
Innovators are eager to try new ideas and products, almost as an obsession. Which of the following is true of them? a. They are the first 12.5% of all those who adopt a product. b. They have higher incomes and are more self-confident. c. They are less worldly, more introverted, and less sociable than noninnovators. d. They have higher incomes and rely more on group norms.
b
Magnira Corp. is an apparel company. After a slow start, it saw a steep rise in the number of its customers and a remarkable increase in its profits. However, with the launch of competing apparel manufacturers in the market, the profits of Magnira have started declining. To sustain its growth in the market, the managers of Magnira should a. focus on primary demand stimulation rather than advertising the brand. b. shift to aggressive brand advertising and open new branches of its stores. c. advise top management to reduce the number of employees in the company. d. distribute the company's products at limited outlets.
b
Marketing costs are high in the introductory stage of the product life cycle because a. product design changes become stylistic rather than functional. b. high dealer margins are often needed to obtain adequate distribution. c. manufacturers scramble to sign up dealers and distributors. d. emphasis is given to communicating the differences among brands in the market.
b
Roger, an affluent college graduate, buys gadgets on the day of their launch in the market. He reads expert reviews on the Internet, and is not influenced by the opinions of his family and friends while choosing products. Roger is most likely to belong to the category of _____ in the context of diffusion of innovation. a. the late majority b. innovators c. the early majority d. early adopters
b
Samsung is best known for its smartphones, tablets, and televisions. Years ago when it decided to expand its business activities and operations into ship building and military hardware, it was gearing to offer ______. a. discontinuous innovations b. new product lines c. repositioned products d. new-to-the-world products
b
Steve, a retiree, wants to use his savings to open a day care facility for dogs. After deciding on the services that he would provide to his customers, he calculates costs versus the demand and the profit he could make depending on the volume of sales. After extensive deliberation, Steve decides to take a bank loan because the needed initial investment is too high for opening the facility. Steve is currently in the _____ stage of the new-product development process. a. commercialization b. business analysis c. idea generation d. test marketing
b
Test marketing is very expensive. As a result which of the following is true of some companies? a. They go for a national introduction than an expensive test market. b. They do not test market line extensions of well-known brands to save costs. c. It is better to have a large-scale test market that is decidedly affordable. d. They mandatorily test market line extensions of well-known brands.
b
When predicting or explaining the rate of acceptance and diffusion of a new product, the degree to which it can be sampled on a limited basis is its ______. a. compatibility b. trialability c. observability d. complexity
b
Which of the following is characteristic of both early adopters and the early majority? a. Both groups tend to be opinion leaders. b. Both rely on group norms and values. c. Both desire to earn the respect of others. d. Both are influenced by social media websites and digital promotions.
b
A company well-known for its easy-to-cook breakfast cereals was facing stiff competition from the many players in the market. The company changed its campaign to focus on dietary needs rather than just convenience, thus targeting a segment of consumers looking for healthy diet. This is an example of a ______. a. new line-extension product b. discontinuous innovation c. repositioned product d. new and improved product
c
Compared to innovators, early adopters ______. a. rely less on group norms and values b. are less oriented to the local community c. are more likely to be opinion leaders d. have weaker affiliations with groups
c
For which type of products are concept tests thought to be less effective in predicting the success of a product? a. Products that are line extensions (same product category and brand) b. Products that are not easily classified into existing product categories c. Products that create new consumption patterns d. Products that do not require major changes in consumer behavior
c
When advertising a test product, should test locations in particular markets be isolated from media with a far reach, such as television? a. No, if media advertising cannot reach outside that particular market, it will fail to project the product's true potential outside the market and thus the product may then appear less successful than it could be. b. No, if media advertising cannot reach consumers within the market area being tested, it may fail to pull in many consumers from the market and thus the product may then appear less successful than it could be. c. Yes, if media advertising reaches a very large area outside that market, it may pull in many consumers from outside the market being tested and thus the product may then appear more successful than it really is. d. Yes, if media advertising persuades consumers in the market area, the product may then appear more successful than it really is. It would be an advertising success, not a product success.
c
When developing new product, which is true of a new-product development strategy? a. It refrains from adopting ideas suggested by customers and competitors. b. It doesn't provide the general guidelines for new-product ideas. c. It must be compatible with the objectives of the marketing department, the business unit, and the corporation. d. It involves targeting existing products at new markets.
c
When predicting or explaining a new the rate of adoption and diffusion of a new product, relative advantage refers to the degree to which that product is ______. a. free of difficulty relating to its usage b. consistent with existing values c. perceived as superior to existing substitutes d. available to be tried on a limited basis
c
Which is a key characteristic of those in the early majority who purchase a new product? a. They do not spend much time weighing the pros and cons of adopting a new product. b. They are likely to collect less information and evaluate fewer brands than early adopters. c. They rely on the group for information but are unlikely to be opinion leaders themselves. d. They tend to be opinion leaders themselves, rather than their friends and neighbors.
c
Which of the following describes laggards? a. They have the shortest adoption time and the lowest socioeconomic status. b. They have the longest adoption time and the highest socioeconomic status. c. They have the longest adoption time and the lowest socioeconomic status. d. They have the shortest adoption time and the highest socioeconomic status.
c
Which of the following is a goal of brainstorming? a. To get a group to arrive at a solution within set parameters b. To get a group to promote a product without varying it c. To discuss ideas while avoiding criticism of them d. To have a group criticize an idea until it is acceptable to all
c
Which of the following statements best describes simultaneous product development? a. It is a strategy that provides general guidelines for generating, screening, and evaluating new-product ideas. b. It is used to determine the reactions of potential customers in a market situation. c. It is the process where all the involved areas work together rather than sequentially during a product's development. d. It is a strategy that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.
c
Which of the following statements describes a customer innovation center? a. It is an approach to repositioning a company's products using sales figures. b. It promotes advertising among status-conscious customers. c. It is a forum for meeting with customers and directly involving them in the innovation process. d. It is used in the business analysis stage of the new-product development process.
c
Which of the following statements is true of the product life cycle (PLC)? a. The PLC dictates the marketing strategy to be used for a product. b. A product spends the same amount of time in the different stages of the life cycle. c. The PLC for a product form is longer than the PLC for any one brand. d. Changes in a product, its uses, its image, or its positioning do not affect its life cycle.
c
Nozzle is a specially designed product that retro fits into your existing water faucet and atomizes the water stream in a spray that lets you use 98% less water when washing hands, brushing teeth, and washing produce or dishes. Some consider this a game changer for environmental protection, especially in regions of water scarcity. This product would fall in the new product category of _____. a. repositioned products b. revised products c. revised products d. discontinuous innovations
d
The PLC for a brand that was the first and last competitor in a product form market is ______. a. said to be zero or nil b. longer than that of the product form c. shorter than that of the product form d. as long as that of the product form
d
The approach taken in the process of simultaneous product development leads a company to ______. a. lengthen the development process and incur increased costs b. shorten the development process and incur increased costs c. lengthen the development process and incur decreased costs d. shorten the development process and incur decreased costs
d
The beginning of which stage of the product life cycle is signaled by a long-run drop in a product's sales? a. Introductory stage b. Growth stage c. Maturity stage d. Decline stage
d
The final stage in the new-product development process is ______. a. business analysis b. development c. test marketing d. commercialization
d
To rate concept (or product) alternatives, concept tests are often used at the ______ stage. a. developmental b. business analysis c. marketing d. screening
d