ch11

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

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

During the maturity stage of the product life cycle, new users can be added indefinitely. (a) True (b) False

FALSE

High costs and other risks of developing and testing new products stop many companies, such as Newell Rubbermaid, Colgate-Palmolive, Campbell Soup Company, and 3M, from aggressively developing and introducing new products. (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

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 iPhone 12 has a new physical design; 5.4", 6.7", and 6.1" sizes; a triple lens 3D camera; an all OLED display; 5G connectivity; and an A14 chip. These changes indicate that Apple was offering a new product line. (a) True (b) False

FALSE

When Dickenson 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

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 or new-to-the-world product (c) repositioned product (d) lower-priced product

a

A firm that starts with a global strategy is better able to develop products that are marketable worldwide. (a) True (b) False

TRUE

A product category includes all brands that satisfy a particular type of need. (a) True (b) False

TRUE

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

As a promotional campaign shifts from the early adopters to the early and late majorities, marketers should study the dominant characteristics, buying behavior, and media characteristics of these target markets. (a) True (b) False

TRUE

Desktop and laptop computers are shopping products that are in the maturity stage of the product life cycle. (a) True (b) False

TRUE

In many multinational corporations, every product is developed for potential global distribution. (a) True (b) False

TRUE

In recent years, Lego introduced Lego Friends, designed to appeal to girls. The Lego Friends building sets include pastel-colored bricks that can be used to make a hair salon 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

Profits rise rapidly in the growth stage of product lifecycle, reach their peak, and begin declining as competition intensifies. (a) True (b) False

TRUE

Some companies cannot adapt their products, sell them at affordable prices, and still make a profit in many countries. (a) True (b) False

TRUE

Successful new products offer a meaningful and perceivable benefit to a significant number of people or organizations and differ in a meaningful way from their intended substitutes. (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

Tesla, one of the highest-priced luxury hybrid and electric cars, is in the _______ stage. In this stage, Tesla is continuing to raise awareness and educate potential customers. Customers must learn about the car and its benefits before they decide to purchase one. In this stage, people are willing to take more risk and pay more to have the latest Tesla model. (a) growth stage (b) introductory stage (c) decline stage (d) maturity stage

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 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

All of the following are true about early adopters EXCEPT _______. (a) they rely on group norms and values and are oriented to the local community (b) they tend to be opinion leaders because of their close group affiliation (c) they are distinguished by behavior, not demographics (d) they do not rely on group norms and like to try new products

d

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 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 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. Bounty's production costs are also high. In which PLC stage is Bounty Foods most likely to be? (a) Introductory stage (b) Growth stage (c) Maturity stage (d) Decline stage

a

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

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

Burger King failed with Satisfries because it did a bad job convincing the public that they were a healthier choice. Satisfries were a better choice than regular fries, but the public took that in the same way it sees a medium milkshake as a better choice than a large one. This example shows that one reason for this product's failure is that _______. (a) it did not offer any discernible benefit as compared with existing products (b) it was healthier than McDonald's fries (c) it was a good match between product features and customer desires (d) the advertising was very persuasive

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

Examples of fads include the Hula-hoop®, Pet Rock®, Pokémon®, the yo-yo, and Beanie Babies®. A fad product usually doesn't have much utility, which is one of the reasons sales drop quickly after the initial public fascination subsides. 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

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

Kentucky Fried Chicken, with 18,875 stores in 118 countries and territories around the world, changed their recipe (the spiciness) for various regions. Even within China, the spiciness varies from region to region. Their menu changed also; for example, in Shanghai, KFC serves porridge for breakfast and Peking Duck burgers for lunch. This example shows that multinational firms must _______. (a) develop every new product for potential worldwide distribution (b) standardize new products (c) avoid changing products that are proven to be successful at home (d) increase local advertising for their products

a

McDonald's is testing the Crispy Chicken Sandwich in two markets. McDonald's franchisees have asked for a Southern-style chicken sandwich as Chick-fil-A's threat to its business continues to grow. In test marketing, the greatest danger to McDonald's 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

The Dream Company wanted to sell its gallon ice cream containers in Japan: however, the Japanese have small freezers. The Japanese also like ice cream far less sugary than Americans do. The Dream Company packaged a reduced-sugar ice cream in individual-sized containers. This example shows that had the Dream company not made the change it would have _______. (a) had little or no business in Japan (b) changed Japanese preferences for sugary ice cream (c) resulted in an increase in large freezer sales (d) increased its ice cream export level

a

The Jitterbug cell phone is excellent for seniors in particular. It is easy to set up and navigate. It is easy to read the letters and numbers on the screen. Another feature is that the minutes and data costs are reasonable, compared to other phones. While the Jitterbug is successful, other mobile telephones fail because _______. (a) there is a poor match between product features and customer desires (b) there is a good match between product features and customer desires (c) there is correct customer targeting (d) there is correct product positioning

a

When Starbucks entered China, it used no advertising that could be perceived as a threat to China's tea-drinking culture. It selected high-visibility locations to project its brand image. Starbucks then introduced beverages such as green tea. This strategy has effectively turned obstacles into Starbucks's favor. This example shows that _______. (a) succeeding in countries such as China means developing products that meet unique needs (b) global markets require standardized products (c) global markets do not require product adaptations (d) Starbucks stopped selling coffee in China

a

When considering a product's characteristics and the rate of adoption, complexity refers to the degree to which a new product is _______. (a) difficult to understand and use (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 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 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 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

Celebrate 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 Celebrate have started declining. To sustain its growth in the market, the managers of Celebrate 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

Craft Brewery wants to add a brown ale beer to its existing line of alcoholic products. The questions the company currently is asking itself are the following. 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

Expressions 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, Expressions 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, Expressions is using _____. (a) scanner-based research testing (b) simulated (laboratory) market testing (c) virtual test marketing (d) traditional test marketing

b

Francisco, 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. Francisco 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

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

Jonas, 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, Jonas decides to take a bank loan because the needed initial investment is too high for opening the facility. Jonas is currently in the _____ stage of the new-product development process. (a) commercialization (b) business analysis (c) idea generation (d) test marketing

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 or new-to-the-world products (b) new product lines (c) repositioned products (d) product line extensions

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) product line extension (b) discontinuous innovation or new-to-the-world product (c) repositioned product (d) new and improved product

c

Barnes & Noble spun off the NOOK, its unprofitable e-reader. Shoppers couldn't get beyond identifying Barnes & Noble as a destination for books; however, most people are not buying hard copies of books and instead are using e- readers. The NOOK, though an e-reader, has different features from the Amazon's Kindle. The Kindle is inexpensive, easy to use, and syncs up easily with an Amazon digital account. This example shows that product failure results from all of the following EXCEPT _______. (a) overestimation of market size (b) incorrect positioning (c) a low price (d) an inferior product

c

Besides its high cost, what is the other possible problem that test marketing is likely to face? (a) The decision to commercialize a product includes ordering materials and equipment. (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

Carol wants to replace her oven and is considering the GE profile oven. She reads Consumer Reports to check the ratings on the oven. Then she reads reviews online from those who have purchased and used the over. Finally, she asks her sister and her best friend which brand of oven they have and what they have heard about the GE profile. In the stages of product adoption, Carol is an example of a(n) _______. (a) late adopter (b) early adopter (c) early majority adopter (d) innovator

c

DVDs are an example of a product in the _______ stage. The demand for DVDs has now been surpassed by the demand for Blu-ray discs and online streaming of content. This stage is governed by the change in consumer tastes and the rate at which new products enter the market. (a) growth (b) maturity (c) decline (d) introductory

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

Geraldo, 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 Geraldo belongs to the group of _____. (a) early adopters (b) innovators (c) late majority (d) early majority

c

Pasquale 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 two 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 or new-to-the-world products (d) New and improved products

c

The Google Ventures design team uses a brainstorming process called "note-and-vote" for naming companies, choosing product features, setting meeting agendas, or picking a restaurant. Everyone writes down ideas, reviews the ideas, shares the ideas, and votes on the ideas in only 15 minutes. This example shows that brainstorming can be successful if a group _______. (a) arrives at a solution within set parameters (b) promotes a solution without varying it (c) discusses ideas while avoiding criticism of them (d) criticizes an idea until it is acceptable to all

c

The Shaw 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 Shaw'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 Shaw's established product line

c

When developing a 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

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 do not rely on group norms and are obsessed with trying new ideas and products. (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 the 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

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

Austrian company Red Bull is such an effective marketer that many Americans assume it's a local brand. Its most successful tactic is to host extreme sports events globally and take the brand everywhere. Also, Red Bull looks like a global product, not like a traditional American soft drink in a 12-ounce can, with script lettering like Pepsi or Coke. It looks European. This example shows all of the following EXCEPT that _______. (a) global marketers design their products to meet regulations in major markets (b) Red Bull develops products that can be sold in most markets (c) sponsoring global events helps a brand gain local appeal (d) Red Bull should localize its packaging to appeal to global customers

d

CAT is an online forum where professionals who work with Caterpillar equipment and engines can exchange ideas and information, find answers, and get expert advice from their peers. To help members get the most out of the community, CAT members offer feedback and suggestions. All of the following are true about online simultaneous product development EXCEPT that the internet _______. (a) allows for input from multiple partners (b) offers a variety of R&D input from customers (c) allows for input from a variety of locations (d) does not allow for assessing new products

d

Flora, 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 Pecan 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

Lewis bought his first LED flat screen television 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

NaturalOats, 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 NaturalOats? (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

Reynold's 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

Self-driving cars are still being tested, but firms hope to sell to early adopters relatively soon. To date, the only platform taking passengers in fully driverless vehicles is Waymo, a Google spinoff. It is the sector's presumed front- runner. In Phoenix, for example, Lyft customers order up Waymo minivans. Self-driving cars are in the _______ stage of the product life cycle. (a) decline (b) growth (c) maturity (d) introductory

d

TeaForMe is a tea company that considered branching out into the snack food business. The TeaForMe team offered many new ideas such as flavored chips or paleo cookies. After much discussion, the team eliminated the chips and the cookies because they were inconsistent with the organization's new-product strategy, which was to develop new flavors of tea. In the new-product development process, the TeaForMe company is in the _______ stage. (a) development (b) idea generation (c) commercialization (d) idea screening

d

WaterSaver is a specially designed product that retrofits 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 be categorized as _______. (a) a repositioned product (b) a product line extension (c) a revised product (d) a discontinuous innovation or new-to-the-world product

d