Marketing Chapter 9

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

Firms that sell ______-related products should expect short product life cycles.

fashion

In general, product life cycles, as a whole, are ______.

getting shorter

An organizational culture that emphasizes ______ can generate more ideas.

innovation

Competitive advantage is especially important in ______ product-markets.

mature

A product idea can be in a different ______ in different markets.

life-cycle stage

It is important to evaluate a new idea's return on investment and likely__________.

profitability

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

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 evalauation 4. Development of product and marketing mix 5. Commercialization

Direct contact between the customer and the company occurs most often among ______ organizations.

service-providing

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

Rapid prototyping ensures that ______.

the best version of the product reaches the market as quickly as possible

Which of these characteristics help a new product move quickly through the early stages of the product life cycle? (Check all that apply.)

Ease of use Matches values of target customers Comparative advantage

Really new product innovations tend to ______.

disrupt old ways of doing things

Total quality management requires ______ to focus on quality and meeting customer needs.

everyone in the organization

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.

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

Products influenced by fashion typically have _____ life cycles.

short

When companies use their competitors as sources of new-product ideas, they often ______.

disassemble competitors' products in order to reverse engineer their innovations

Place the four stages of the product life cycle in order from the first stage (top) to the final stage (bottom).

market introduction market growth market maturity sales decline

Rapidly changing ______ is one reason why product life cycles are getting shorter.

technology

Getting reactions from customers about how well a new product idea fits their needs is called ______.

concept testing

Continuous improvement means that an organization strives to ______.

constantly make things better

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

A firm should never skip steps in the new-product development process because ______.

a single misstep or oversight could cause the product to fail.

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

New products that require minor changes in customer behavior are called ______ innovations.

dynamically continuous

The cost of new-product development is typically ______ and the associated risk of failure is ______.

high; high

Concept testing in the form of focus groups, surveys, or online testing are all ways to conduct ______.

market research

During the market growth stage of a product, a company will want to focus promotional efforts on _____ customers.

persuading

The first company to introduce a new product to a market is known as a(n) ______.

pioneer

The legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products is called ______.

product liability

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

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

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

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

True or false: The sales and profits of an individual brand always follow the product life-cycle pattern.

False

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.

Candace doesn't want another company to copy her idea for a self-charging phone case. To protect her idea, Candace should file for a _____.

patent

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 cost of ______ is lost customers.

poor quality product

Which governmental body was set up to encourage safety in product design and better quality control?

Consumer Product Safety Commission

Which of the following factors are important to new product success? (Check all that apply.)

Effective transitions from idea to market Effective product design Offering superior customer value

True or false: Marketing managers should focus on informing customers about their brand during the market growth stage of the product life cycle.

False

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

It is important that a firm _____ in the new-product development process.

should not skip steps

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

True or false: Product liability is capped so that total costs to a firm cannot exceed its total assets.

False

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

______ is essential if a company is going to survive in today's dynamic markets.

New product development

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

Which of these products is protected by copyright law?

A musical score

During the ______ step of the new-product development process, a new product is finally placed on the market.

commercialization

The longer new-product development takes, the more likely it is that ______.

customer needs will change

In the ______ step of the new-product development process, the physical product is designed.

development

A phase-out strategy should be implemented _____.

gradually

If a new product has a greater comparative advantage over products already on the market, sales will tend to _____.

grow more rapidly

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

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

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

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

It is important to evaluate a new idea's return on investment and likely .

profitability

The Consumer Product Safety Commission has the power to _____.

remove a toy from the market if it posed a choking hazard

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

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.

Match the stage of the product life cycle (on the left) with the characteristics of the product-market (on the right).

Market introduction -Verizon introduces a phone with a 3D screen; no other firm has one. Market growth - 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. There is a battle of the brands in frozen pizza, with all brand offerings being relatively similar. Sales decline matches - Only a few firms still make disk drives for computers; sales and profits are dropping fast.

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

What is the one key trait found in companies that are successful at developing new goods and services?

Top-management support

An ongoing commitment to improving processes and products one step at a time is referred to as ______ improvement.

continuous

According to the FTC, a product can only be called new for _____.

six months

True or false: More ideas are generated in a firm with a culture that emphasizes efficiency and cost-cutting.

False

What are four common reasons why new products may fail? (Check all that apply.)

The marketing plan for the product is weak. The benefit offered is not unique. A company underestimates the competition. The product is not designed well.

SOme companies use data and ___________ intelligence to support continuous improvement.

artificial

The product life-cycle concept ______ indicates precisely how long each stage will last.

never

The process where customer input is incorporated into a new design of the product and then the revised product is given back to the customer for further evaluation is called ______.

rapid prototyping

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

The four stages new-product ideas go through are known as _____.

the product life cycle

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

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 the following are ideas consistent with total quality management? (Check all that apply.)

Everyone in the company should care about quality. It is less expensive to do things right the first time. Poor quality equals lost customers.

Which of the following typically occur in the market introduction stage of the product life cycle? (Check all that apply.)

Firms inform customers about the product. Sales are low. Customers are not seeking the product.

When introducing a new product in the market introduction stage, which of the following must a marketing manager consider? (Check all that apply.)

How to promote the product Which distribution channels to select The cost of product development

Match the activities (on the right) with the appropriate step of the new-product development process (on the left).

Idea Generation-Screening- Solicit ideas from customers. Idea evaluation- Idea fit with company objectives. Development- Create prototype. Commercialization- "Roll out" product in select markets

Which market situation is typical of the market growth stage of the product life cycle?

Monopolistic competition

Which of the following occur in the market growth stage of the product life cycle? (Check all that apply.)

Product variety increases. Innovators profit. New competitors enter. Sales grow fast.

During the new-product development process, a company should continually evaluate which two of the following? (Check all that apply.)

Profitability Return on investment

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

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