CHAPTER 8

T/F A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly.

FALSE

T/F Acquisitions are not considered a source of new products for organizations.

FALSE

T/F Companies that combine a customer-centered approach with team-based new product development gain a big competitive edge by getting the right new products to market faster.

TRUE

T/F In the new product development process, the purpose of idea generation is to create a large number of ideas and the purpose of the next set of stages in the process is to reduce that number

TRUE

T/F Product modifications are an important source of new products for organizations.

TRUE

T/F The installation of an innovation management system allows a company to collect, review, evaluate, and manage new product ideas.

TRUE

T/F Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.

TRUE

In which of the following cases is crowdsourcing used for new product development? A) A company creates a forum where anyone can contribute new product ideas. B) A company hires a marketing agency to generate new product ideas. C) A company reviews the sales, costs, and profit projections of an existing product. D) A company depends on its R&D department to come up with new ideas. E) A company partners with a design agency to create a few prototypes

a company creates a forum where anyone can contribute new product ideas

Which of the following is most likely true of a product in the maturity stage of the product life cycle? A) Sales are zero, and the company's investment costs mount. B) New competitors enter the market. C) A slowdown occurs in sales growth. D) Sales increase with decreasing competition. E) New distribution channels are acquired

a slowdown occurs in sales growth

In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features? A) product development B) introduction C) growth D) maturity E) adoption

adoption

An innovation management system would most likely be used by ________. A) managers to update details about customer information B) brand managers to collect, review, and evaluate new product ideas C) suppliers to access inventory information D) product managers to track logistics of a new product

brand managers to collect, review, and evaluate new product ideas

________ involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives. A) Vendor analysis B) Portfolio analysis C) Business analysis D) SWOT analysis E) Concept analysis

business analysis

Gershwin, a musical toy for toddlers, is in the maturity stage of the product life cycle, and Gershwin managers have decided to modify the product. What will Gershwin managers most likely do to achieve this goal? A) change distributors B) offer coupons for the toy C) change the packaging of the toy D) launch an online advertising campaign E) cut prices of the toy to attract new customers

change the packaging of the toy

Introducing a new product into the market is called ________. A) test marketing B) segmentation C) product development D) commercialization E) market penetration

commercialization

The stage in which product ideas are presented to groups of target consumers physically or symbolically is referred to as ________. A) concept testing B) concept development C) test marketing D) marketing strategy development E) crowdsourcing

concept testing

Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate? A) standard test markets B) inventory tracking C) controlled test markets D) simulated test markets E) direct commercialization

controlled test markets

Sleek Designs Inc. is producing its first eReader. The company is striving to overcome some of the issues communicated by customers about competitive products including screen glare and product bulkiness. Sleek Designs Inc. is using a ________ approach in their new product development process. A) customer-centered B) team-based C) sequential D) supply/demand E) systematic

customer-centered

A product life cycle has five distinct stages: product development, introduction, growth, maturity, and ________. A) stabilization B) rebranding C) decline D) progression E) segmentation

decline

Flurrbies, a line of winter accessories by a leading fashion label, quickly fell in and out of favor with customers. Flurrbies represents an example of a ________. A) form B) fashion C) fad D) style E) drift

fad

Parvon, a cleaning product, is in the maturity stage of the product life cycle, and Parvon managers have decided to modify the market. Which of the following steps should Parvon managers most likely take to achieve this goal? A) find new market segments for the brand B) improve the overall quality of the product C) reduce mass media advertising expenses D) offer improved services to new buyers E) conduct controlled test marketing activities

find new market segments for the brand

The new product development process usually starts with ________. A) idea screening B) idea generation C) concept development D) concept testing E) market strategy development

idea generation

Which of the following steps of the new product development process would most likely use an R-W-W framework? A) idea generation B) idea screening C) concept testing D) test marketing E) commercialization

idea screening

The Dairy Bar, a national soft-service ice cream retailer, buys cones from Cones & More. Cones & More is an important resource for marketplace information. They're considered a(n) ________ source of new product ideas for the Dairy Bar. A) entrepreneurial B) competitive C) external D) internal E) intrapreuneurial

internal

Companies like 3M, Google, and Sony have ________ that encourage employees to develop new ideas. A) trade magazines B) marketing research firms C) government agencies D) competitor's ads E) intrapreneurial programs

intrapreneurial programs

In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features? A) product development B) introduction C) growth D) maturity E) adoption

introduction

Doggie World concept tested an idea for a new chew toy that would entertain dogs while simultaneously cleaning their teeth. Dog owners were pleased with the results. The next stage in developing the new product concept is ________. A) idea screening B) marketing strategy development C) business analysis D) product development E) test marketing

marketing strategy development

Craft Inc.'s Krayons is a multi-color chalk material that was released in the market over a century ago. Since the release, the company has had remarkable sales and Krayons has remained unchanged. However, over the last few years, sales of Krayons have been stagnant. Competitors have begun marking prices down, and increasing their advertising and sales promotions. Craft's Krayons is most likely in the ________ stage of the product life cycle. A) introduction B) maturity C) growth D) decline E) incubation

maturity

When a product is in the ________ stage, profits level off or decline because of increased marketing outlays to defend the product against competition. A) production B) decline C) maturity D) test marketing E) conception

maturity

Appliances Galore is continually updating its line of refrigerators to reflect market trends and customer needs. Although the product class is in the maturity stage of the product life cycle, they maintain healthy sales of their line of refrigerators by continually ________. A) concept testing B) modifying the marketing mix C) rebranding D) modifying the product E) modifying the market

modifying the product

As a result of ________, a company cannot make its product illegally similar to a competitor's already established product. A) anti-monopoly laws B) patent laws C) antitrust laws D) product warranties E) product liability

patent laws

The second part of a marketing strategy statement describes the ________ of a new product. A) marketing mix strategy B) profit and sales goals C) planned price, distribution, and marketing budget D) target market and sales goals E) planned value proposition

planned price, distribution, and marketing budget

A detailed version of a product idea stated in meaningful consumer terms is a ________. A) product feature B) product concept C) product idea D) product image E) product framework

product conept

In a sequential new product development process, which of the following is true of the product development step? A) Product development is usually followed by a business analysis of the product. B) Product development involves introducing a product into realistic market settings. C) Product development avoids testing products on actual customers due to liability concerns. D) Product development is usually followed by test marketing. E) Product development helps top management review profit projections.

product development is usually followed by test marketing

Electronics International has experienced a significant decline in sales for SweetTunes, its MP3 player, during the past two years. In response, the company has reduced its advertising and sales expenditures for SweetTunes in an attempt to improve short-run profits. Which term best describes Electronics International's strategy for SweetTunes? A) sales outsourcing B) product modification C) industry repositioning D) product harvesting E) marketing mix modification

product harvesting

Which of the following is true of the growth stage of the product life cycle? A) New competitors avoid the market. B) Prices tend to increase significantly. C) Early adopters stop buying the product. D) Profits are nonexistent at this stage. E) Sales start climbing quickly.

sales start climbing quickly

The third part of a marketing strategy statement describes the ________ of a new product. A) sales, market share, and profit goals B) distribution and pricing C) marketing budget D) planned value proposition E) target market and sales goals

sales, market share, and profit goals

Under a ________ product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage. A) cross-sectional B) simultaneous C) sequential D) team-based E) systematic

sequential

Using ________, researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments. A) simulated test markets B) controlled test markets C) business analysis D) standard test markets E) concept development

stimulated test markets

Colonial furniture has been in existence since the 1600s and continues to adorn homes today. According to the product life cycle concept, it would be described as a ________. A) style B) fashion C) fad D) trend E) drift

style

A company's external sources of new product ideas include its ________. A) managers B) salespeople C) engineers D) manufacturing staff E) suppliers

suppliers

The first part of a marketing strategy statement describes the ________ of a new product. A) planned price and distribution B) marketing budget C) marketing mix strategy D) target market, planned value proposition, and sales goals E) planned long-run sales and market share

target market, planned value proposition, and sales goals

Under a ________ new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness. A) cross-sectional B) simultaneous C) sequential D) team-based E) systematic

team-based

At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavors uses a(n) ________ approach. A) intradepartmental new product development B) sequential new product development C) team-based new product development D) simulated test market E) controlled test market

team-based new product development

If a product passes both the concept test and the product test, the next step is most likely to be ________. A) marketing strategy development B) product development C) test marketing D) business analysis E) concept development

test marketing

________ can describe a product class, a product form, or a brand. A) The product development process B) The product life cycle concept C) Business analysis theory D) Vendor analysis theory E) Portfolio analysis

the product life cycle concept

Fads are characterized by their ________. A) enduring nature that spans several generations B) low rates of adoption by consumers C) unusually high sales and rapid decline D) basic and distinctive modes of expression that seldom become unpopular

unusually high sales and rapid decline

A product is in the maturity stage of the product life cycle, and the company decides to modify the marketing mix. Which of the following steps is the company most likely to take? A) use aggressive sales promotions B) change features of the product C) improve product quality D) find new uses for the product E) explore new market segments

use aggressive sales promotions

In which of the following cases is little or no test marketing most likely recommended for a new product? A) when the product requires a major investment B) when management is unsure of the projected demand for the product C) when the risks associated with introducing the product are high D) when management is unsure of the marketing program for the product E) when the costs of developing and introducing the product are low

when the costs of developing and introducing the product are low

T/F An abstract presentation of a product concept is likely to increase the reliability of the concept test.

FALSE

T/F Concept testing typically follows the marketing strategy development phase of the new product development process.

FALSE

T/F During concept testing, a product is evaluated by management without any input from external sources

FALSE

T/F It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies.

FALSE

T/F Manufacturers rely on distributors and suppliers as internal sources of new product ideas.

FALSE

T/F Product development usually costs the least among all the steps of the new product development process.

FALSE

T/F Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Pro is using controlled test marketing in this scenario.

FALSE

T/F Since suppliers are so close to the market, they are valuable sources of information about consumer problems, marketing opportunities, and new product possibilities.

FALSE

T/F The amount of test marketing needed is the same for each new product.

FALSE

T/F The business analysis stage is the final step in the new product development process.

FALSE

T/F When developing a new product, concept testing should ideally be followed by the business analysis stage.

FALSE

Which of the following costs is most likely associated with commercialization? A) building or renting a manufacturing facility B) paying groups of consumers for participating in crowdsourcing activities C) determining a product's planned price, distribution, and marketing budget D) developing a prototype of a product E) using simulated tests to measure market capacity

building or renting a manufacturing facility

Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product? A) test marketing B) idea screening C) business analysis D) marketing strategy development E) concept testing

business analysis

The team-based new product development approach saves times and increases effectiveness because departments work closely together in ________. A) divisional teams B) problem-solving teams C) self-managed groups D) cross-functional teams E) independent groups

cross-functional teams

Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its Web site that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Kallton is using ________ to generate new product ideas. A) marketing strategy development B) crowdsourcing C) concept development D) business analysis E) test marketing

crowdsourcing

Which of the following statements is most likely true about the new product development process? A) The first step in developing a new product involves determining any budgetary or distribution limitations. B) Most firms discourage employees from contributing new product ideas because of legal concerns. C) In most cases, concept testing is followed by concept development. D) A product concept should be developed for each idea before it goes through idea screening. E) Customers, competitors, distributors, and suppliers are major sources of new product ideas.

customers, competitors, distributors, and suppliers are major sources of new product ideas

During the ________ stage of the product life cycle, product sales may plunge to zero, or drop to a low level where they continue for many years. A) decline B) growth C) maturity D) ideation E) analysis

decline

In the ________ stage, a firm most likely faces a trade-off between high market share and high current profit. A) growth B) decline C) maturity D) introduction E) commercialization

growth

Which of the following statements is most likely true about the product life cycle? A) Throughout the product introduction stage, sales are zero. B) The growth stage is the longest stage of the product life cycle. C) Profits are nonexistent in the growth stage. D) Growth is a period of rapid market acceptance and increasing profits. E) Maturity is the period when sales fall off but profits continue to rise.

growth is a period of rapid market acceptance and increasing profits

Which statement is most likely true about idea generation in the new product development process? A) Idea generation is most effective when it occurs after idea screening. B) Most companies set a limit for the number of ideas generated to simplify the process. C) Intrapreneurial programs enable customers to contribute to the idea generation process. D) Idea generation is usually followed by procedures that reduce the total number of ideas.

idea generation is usually followed by procedures that reduce the total number of ideas

Safari Unlimited recently conducted national research to generate ideas for a new line of fatigues geared to women. The company uncovered a number of ideas about clothing and accessory preferences as well as important benefits such as built-in sunblock and durability. The Safari Unlimited product development team will most likely use ________ next to arrive at a realistic number of products for the new fatigues line. A) crowdsourcing B) idea screening C) concept testing D) concept development E) business analysis

idea screening

Which of the following is true of the product life cycle (PLC)? A) All products generally go through all five stages of the PLC. B) All products pass through the stages of PLC in the same order. C) It is generally difficult to forecast the sales level at each PLC stage. D) The PLC concept can be applied to styles but not to fashions and fads. E) Product forms have longer life cycles than product classes.

it is generally difficult to forecast the sales level at each PLC stage

Which of the following is a disadvantage of a team-based approach to new product development? A) It lengthens the time required to get the right products to market. B) It involves the use of a rigid, sequential product development approach. C) A bottleneck at one place can seriously hinder the entire project. D) Organizational confusion and tension are likely to affect the process. E) The process is highly ineffective for products with short life cycles.

organizational confusion and tension are likely to affect the process

In the ________ stage of new product development, products undergo rigorous tests to make sure that they perform safely and effectively, or that consumers will find value in them. A) business analysis B) idea generation C) concept screening D) product development E) test marketing

product development

Taco Bell test marketed Doritos Locos Tacos for three years and developed 45 prototypes. Once the decision was made to launch the new taco shell, it moved into the ________ stage of the new product development process. A) concept development B) product development C) test marketing D) strategy development E) commercialization

product development

The style, ease of use, and multi-blade technology of Gillette's Fusion razor system is a ________ that has favorably impacted consumer perceptions about other new products sold by the company. A) product audit B) product feature C) product image D) product framework E) product concept

product image

Some companies are now appointing ________, whose job is to protect consumers from harm and the company from liability by proactively ferreting out potential product problems. A) intradepartmental teams B) idea generation teams C) product audit committees D) product stewards E) listening officers

product stewards

Foods International is developing a new gluten-free, chili-flavored pretzel. The marketing strategy for the product has already been developed and presented to top management. Several prototypes were also formulated by the company's R&D team. The final prototype is now being tested rigorously to ensure that it passes FDA standards. Once approved, the next step will most likely be ________. A) test marketing B) portfolio analysis C) commercialization D) internal marketing E) business analysis

test marketing

________ is the stage where a product and its proposed marketing program are introduced into realistic market settings. A) Market strategy development B) Concept testing C) Test marketing D) Concept development E) Business analysis

test marketing

A company launching a new product must first decide ________. A) where to launch the product B) the sample size of the market C) when to launch the product D) the viability of a global launch E) the budget for print advertising

when to launch the product