MARKETING UNIT #7: CHAPTER 9 & 10 PRACTICE EXAM

TRUE OR FALSE 88) JumBo Games is in the commercialization stage. The first decision that the firm should make while introducing the product in the market is introduction timing.

TRUE

TRUE OR FALSE. 76) New product development begins with a systematic search for new product ideas through idea generation.

TRUE

TRUE OR FALSE. 78) A product idea is an idea for a possible product that a company can offer the market.

TRUE

TRUE OR FALSE. 85) Marketers often involve actual customers in product testing.

TRUE

TRUE OR FALSE. 9) Acquisition involves the purchase of a whole company, a patent, or a license to produce someone else's product.

TRUE

TRUE OR FALSE. 90) To avoid too few new product ideas and the failure of many good ideas, management should implement an innovation management system that collects, reviews, evaluates, and manages new product ideas.

TRUE

TRUE OR FALSE. 8) A firm can obtain new products through acquisition or new product development efforts.

TRUE

30) JoAnn Fabrics Inc. has created a new combination of colors and fabric types. The firm wants to know how consumers will perceive the new product. The firm is concerned with the product ________. A) idea B) displacement C) image D) activation E) placement

C) image

1) Which of the following is a significant challenge presented by the product life cycle? A) increased expenses B) increased competition C) new product development D) evaluation of results E) recognizing the stages as a product goes through them

C) new product development

35) Which of the following is included in the second part of the marketing strategy statement? A) advertising tagline B) promotional mix C) planned price D) customer segmentation E) operational excellence

C) planned price

29) A ________ is the way consumers perceive an actual or potential product. A) product idea B) product concept C) product image D) brand personality E) concept test

C) product image

107) Which of the following best characterizes the decline stage of product development? A) rapid market acceptance B) slow sales growth C) sales and profits decline D) high investment costs E) increasing profits

C) sales and profits decline

50) Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use? A) controlled test markets B) simulated test markets C) standard test markets D) ambush marketing E) affinity marketing

C) standard test markets

31) Which of the following groups do marketers involve for the process of concept testing new products? A) suppliers B) employees C) target consumers D) manufacturers E) competitors

C) target consumers

67) At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance work in cross-functional groups to save time and money in the new product development process. Fantastic Flavors uses a ________ approach. A) customer-centered new product development B) sequential product development C) team-based new product development D) heuristic E) functional

C) team-based new product development

TRUE OR FALSE. 79) Blair Housewares wants to add new products to its existing line of products. Managers are correct in believing that the purpose of idea generation is to create a few ideas, and the purpose of succeeding stages is to increase that number.

FALSE

TRUE OR FALSE. 82) GreenTree Lawn and Garden Products is engaged in marketing strategy development. The first part of the marketing strategy statement created by management should outline the product's planned price, distribution, and marketing budget for the first year.

FALSE

TRUE OR FALSE. 83) The business analysis stage represents the first large jump in financial investment in the new product development process.

FALSE

TRUE OR FALSE. 84) GreenTree Lawn and Garden Products is engaged in a review of the sales, costs, and profit projections for some new products to find out whether they satisfy the company's objectives. This activity is called business product development.

FALSE

TRUE OR FALSE. 86) A company introducing a product that is similar to its competitors' product will do a complete test market to gain maximum information before product introduction.

FALSE

TRUE OR FALSE. 87) A company launching a new product into the market must first decide where to launch the product.

FALSE

TRUE OR FALSE. 89) Sequential product development has the advantage of not only being a team-oriented approach, but also of being faster in bringing products to market.

FALSE

TRUE OR FALSE. 10) Adapting marketing strategies is not a challenge faced in the product life cycle.

FALSE

TRUE OR FALSE. 77) Companies seldom solicit ideas from customers during the idea generation stage of product development.

FALSE

TRUE OR FALSE. 80) In the concept development stage, a firm will create a single product concept to test.

FALSE

TRUE OR FALSE. 81) Concept testing works best with people who are familiar with the new idea and the new product's purpose. This generally includes top management, the sales force, and research and development.

FALSE

12) New product development starts with ________. A) concept development B) idea screening C) idea generation D) concept testing E) test marketing

C) idea generation

44) The product development stage requires ________. A) a huge jump in investment B) salespeople to contact potential customers C) financial analysis D) a few hours E) management approval

A) a huge jump in investment

59) Which of the following involves costs that most likely occur during the commercialization stage of new product development? A) building or renting a manufacturing facility B) paying target customers for product feedback C) determining the product's planned distribution D) developing a prototype of the product E) identifying target markets

A) building or renting a manufacturing facility

58) P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction. General Foods was able to enter the ________ stage of the new product development process before P&G could. A) commercialization B) co-marketing C) idea generation D) idea screening E) simulation

A) commercialization

Refer to the scenario below to answer the following question(s). Most people laughed when Evelyn Ringler explained her product idea: a solar-powered vacuum cleaner. But the concept was practical and the technology used in the vacuum was the same as that used in many electronic toys. After setting up a demonstration booth in a mall in a Chicago suburb, Evelyn felt more assured than ever that her idea would be a hit. Consumers seemed receptive and offered helpful pieces of advice, such as how much they would pay for the vacuum, what colors they would prefer, and why they would not buy the vacuum. The vacuum itself was shaped like a small saucer, with a filter bag on top and sensory nodes along the edges. After being charged in the sunlight, the vacuum could run for 7 hours, covering a floor area of 600 square feet. As the apparatus lightly bumped into table legs, chairs, and so on, the sensory nodes allowed the vacuum to move around the objects in various directions. This is the same type of technology used in the manufacture of children's racecars and walking dolls. Evelyn knew that the solar-powered vacuum would be especially helpful to both elderly consumers, who may have a more difficult time with vacuuming, and on-the-go consumers who lead busy lives. The price would be above average but would likely be reduced after Evelyn recouped some of her costs. After a 500-unit production run and a substantial financial investment, Evelyn set up a multiple-city test market, in a Chicago mall and in an appliance store in New Jersey and several other retail stores in Florida. "It's such a novel idea," Evelyn added. "People will notice it, even if they don't buy it right away." 75) Which of the following stages of new product development was Evelyn involved in when she set up a demonstration booth to learn about consumers' feelings toward her vacuum cleaner? A) concept testing B) marketing strategy development C) idea screening D) commercializing E) crowdsourcing

A) concept testing

52) In a(n) ________, new products and marketing tactics are tested among specifically identified groups of customers and stores. A) controlled test market B) simulated test market C) standard test market D) systematic sample E) accidental sample

A) controlled test market

5) Which of the following is a common reason for new product failure? A) incorrect estimation of the market size B) low product development costs C) ineffective social marketing campaigns D) low selling prices of products E) patent ownership exclusively held by the company

A) incorrect estimation of the market size

46) A group of business entrepreneurs who worried about their teenage children drinking and driving decided there must be some way to approach this problem proactively. They came up with an idea for a pair of blurry goggles. They believed looking through the goggles would simulate what the world looks like when someone is seriously intoxicated. They developed a crude pair of blurry goggles to show prospective customers. This crude pair of goggles is known as a ________. A) prototype B) concept test C) product concept D) product image E) product idea

A) prototype

112) Some products that have entered the decline stage have been cycled back to the growth stage through ________. A) repositioning B) harvesting C) maintaining D) pruning E) expanding

A) repositioning

47) Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes product tests, the next step is ________. A) test marketing B) focus group surveys C) commercialization D) concept testing E) business analysis

A) test marketing

2) Acquisition refers to ________. A) the buying of a whole company, a patent, or a license to produce someone else's product B) an agreement between two or more commercial companies to produce a common product C) a partnership between two companies to produce a product in different countries by sharing risks D) investments made in a country's businesses by foreign citizens, often in the form of stocks E) the development of original products, product improvements, product modifications, and new brands through the firm's own product development strategies

A) the buying of a whole company, a patent, or a license to produce someone else's product

56) The major purpose of test marketing is to provide management with the information needed to make a final decision about ________. A) the entire marketing program B) which market to compete in C) whether to launch the new product D) how to compete in the market E) how long to compete in the market

A) the entire marketing program

23) Which of the following would most likely be included in an executive's write up of a new product idea to be presented to a new product committee? A) the proposed customer value proposition B) the product image C) the marketing strategy D) the business analysis E) the pricing strategy

A) the proposed customer value proposition

62) Steelz Inc. has designed a process that manufactures an improved version of steel more efficiently, which will save the firm both money and resources. In considering the launch of this new steel in the market, the firm must first decide on ________. A) timing B) location C) organizational structure D) test marketing E) product mix

A) timing

61) According to the commercialization stage of the new product development process, following the decision to introduce the new product at a particular time, a company must next decide ________. A) where to launch the new product B) how to launch the new product C) why to launch the new product D) what pricing strategies to implement E) what marketing mix elements to use

A) where to launch the new product

63) Which of the following focuses on finding new ways to solve customer problems and create more customer-satisfying experiences? A) concept testing process B) customer value proposition C) customer-centered new product development D) customer lifetime value E) team-based new product development

C) customer-centered new product development

111) ________ is the product life cycle period when sales growth slows because the product has achieved acceptance. Profits level off because marketing costs increase in the face of competition. A) Decline B) Maturity C) Product development D) Introduction E) Growth

B) Maturity

108) Which of the following statements characterizes the introduction stage of the PLC? A) There are increased marketing outlays. B) Profits are nonexistent. C) The company incurs minimal expenses. D) The product achieves acceptance by most potential buyers. E) Promotional expenditures are zero.

B) Profits are nonexistent.

16) Why are customers often considered the most important sources of new product ideas? A) Customers are close to the market and can pass along information about problems and new product possibilities. B) The company can analyze customer questions and complaints to find new products that better solve consumer problems. C) Customers buy competing new products, take them apart to see how they work, analyze sales, and then decide to purchase. D) Customers review the sales, costs, and profit projections for a new product to find out whether the product satisfies the company's objectives. E) Customers estimate the minimum and maximum sales to assess the range of risk.

B) The company can analyze customer questions and complaints to find new products that better solve consumer problems.

40) Which of the following statements is true of the new product development process? A) The purpose of the idea screening stage is to create a large number of ideas. B) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage. C) A product concept is the way consumers perceive an actual or potential product. D) The concept testing stage is the stage at which the product and its proposed marketing program are introduced into realistic market settings. E) Commercialization is the process of inviting broad communities of people such as customers, employees, and scientists into the new product innovation process.

B) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage.

3) Electron Corp. purchased Proton Corp. by buying all of its assets and ownership equity. This is an example of a(n) ________. A) new product development B) acquisition C) joint venture D) licensing contract E) divestment

B) acquisition

14) Which of the following is an internal source for new product ideas? A) competitors B) company employees C) marketing research firms D) trade magazines E) government agencies

B) company employees

27) A detailed version of a new idea stated in meaningful customer terms is called a product ________. A) solution B) concept C) image D) proposal E) lining

B) concept

7) The product life cycle presents challenges. Which of the following is LEAST likely to require a company to adapt its marketing strategies? A) developments in technology B) decreased manufacturing costs C) competition D) changing tastes of consumers E) aging of products

B) decreased manufacturing costs

64) Skyrim Corp. lacks the capital and capacity to launch its new helicopter for full national and international distribution. If the test market results look promising, what should be management's next step? A) retest the product in additional markets B) develop a planned market rollout over time C) liquidate its assets to gain capital and capacity D) seek the help of a nationally known consultant E) develop a prototype

B) develop a planned market rollout over time

115) The more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of the 2000s and 2010s. This is an example of a ________. A) style B) fashion C) fad D) subculture E) norm

B) fashion

70) According to the text, the search for new product ideas should most likely be ________. A) intermittent B) holistic C) segmented D) compartmentalized E) flexible

B) holistic

13) John's fascination for his grandmother's sherbet recipes inspired him to come up with a recipe for SherBetter, a gourmet sherbet for the American market. Which of the following stages of the new product development process does this exemplify? A) idea screening B) idea generation C) concept testing D) product development E) product manufacturing

B) idea generation

71) A company can install a(n) ________ management system to collect, review, evaluate, and manage new product ideas. A) quality B) innovation C) content D) supply chain E) customer relationship

B) innovation

33) Which of the following stages in the new product development would a firm engage in immediately after the completion of concept testing? A) idea screening B) marketing strategy development C) business analysis D) product development E) idea generation

B) marketing strategy development

4) Product improvements, product modifications, and original products can all be classified as ________. A) blueprints B) new products C) prototypes D) product extensions E) test products

B) new products

28) An attractive product idea must be developed into a ________. A) concept alternative B) product concept C) brand personality D) brand placement E) product strategy

B) product concept

Refer to the scenario below to answer the following question(s). Most people laughed when Evelyn Ringler explained her product idea: a solar-powered vacuum cleaner. But the concept was practical and the technology used in the vacuum was the same as that used in many electronic toys. After setting up a demonstration booth in a mall in a Chicago suburb, Evelyn felt more assured than ever that her idea would be a hit. Consumers seemed receptive and offered helpful pieces of advice, such as how much they would pay for the vacuum, what colors they would prefer, and why they would not buy the vacuum. The vacuum itself was shaped like a small saucer, with a filter bag on top and sensory nodes along the edges. After being charged in the sunlight, the vacuum could run for 7 hours, covering a floor area of 600 square feet. As the apparatus lightly bumped into table legs, chairs, and so on, the sensory nodes allowed the vacuum to move around the objects in various directions. This is the same type of technology used in the manufacture of children's race cars and walking dolls. Evelyn knew that the solar-powered vacuum would be especially helpful to both elderly consumers, who may have a more difficult time with vacuuming, and on-the-go consumers who lead busy lives. The price would be above average but would likely be reduced after Evelyn recouped some of her costs. After a 500-unit production run and a substantial financial investment, Evelyn set up a multiple-city test market, in a Chicago mall and in an appliance store in New Jersey and several other retail stores in Florida. "It's such a novel idea," Evelyn added. "People will notice it, even if they don't buy it right away." 74) Evelyn's ________ is the practical use of solar power in a vacuum cleaner that is designed to effortlessly vacuum clean the floors of on-the-go and elderly consumers. A) product placement B) product concept C) product image D) product idea E) virtual product

B) product concept

43) Which of the following stages of the new product development process occurs immediately after the completion of the business analysis for the product or service? A) idea screening B) product development C) product activation D) marketing strategy development E) product design

B) product development

68) Which of the following is the goal of the team-based new product development approach when it uses cross-functional teams that overlap the steps in the process? A) gain a big competitive edge by getting the right new products to market B) save time and increase effectiveness C) increase production efficiency and customer satisfaction D) speed product distribution to market and reduce costs E) reduce organizational tension and confusion

B) save time and increase effectiveness

48) In a ________, new products and marketing tactics are tested online in a virtual shopping environment. A) controlled test market B) simulated test market C) standard test market D) focus group E) survey

B) simulated test market

49) Starbucks introduced a less-than-perfect mobile payments app, then worked out the flaws after the launch. The company chose speed to market over a perfect app at introduction. This illustrates ________. A) why many companies engage in crowdsourcing B) the influence of fast-changing market developments C) why prototypes are so important D) how idea screening can make a product a commercial success E) the importance of different sources for idea generation

B) the influence of fast-changing market developments

72) The innovation management system approach yields two favorable outcomes: it helps create an innovation-oriented company culture, and it ________. A) clearly assigns responsibility for the process to a single department B) yields a larger number of new product ideas C) guarantees successful products D) frees up senior management time E) requires less budget support

B) yields a larger number of new product ideas

41) Neutron Inc. is conducting a business analysis to determine which of the many newly developed apps should be released. To estimate sales, the company must ________. A) conduct surveys of competitors B) exclusively consider the government's opinions C) consider the sales history of similar products D) apply the PLC concept to industry sales E) opt for business process reengineering

C) consider the sales history of similar products

19) Which of the following is the practice of inviting broad communities of customers, employees, independent researchers, and members of the public into the new product innovation process? A) brainstorming B) idea screening C) crowdsourcing D) outsourcing E) concept testing

C) crowdsourcing

65) ________ is a new product development approach in which one company department works to complete its stage of the process before passing the new product along to the next department and stage. A) Team-based product development B) Simultaneous product development C) Sequential product development D) Horizontal integration E) Vertical integration

C) Sequential product development

26) A product idea is ________. A) the way consumers perceive an actual or potential product B) the knowledge and awareness of a product among consumers C) a possible product that the company can see itself offering to the market D) a detailed version of the new product idea stated in meaningful consumer terms E) the testing of new product concepts with groups of target consumers

C) a possible product that the company can see itself offering to the market

37) A review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives is called a ________. A) business feasibility plan B) marketing strategy development C) business analysis D) product acceptance E) business proposal

C) business analysis

38) Which stage of new product development requires management to estimate minimum and maximum sales to assess the range of risk in launching a new product? A) concept testing B) marketing strategy development C) business analysis D) product development E) test marketing

C) business analysis

39) Once managers of The Grecian Urn have decided on their product concept and marketing strategy, they can evaluate the business attractiveness of the proposal in the ________ stage of the new product development process. A) business transformation B) test marketing C) business analysis D) business process reengineering E) concept testing

C) business analysis

66) Under a team-based new product development approach, ________. A) a single departmental team works to complete different stages of the process before passing the new product along to the next department and stage B) the organizational tension and confusion is less than under the sequential approach C) company departments work closely together in cross-functional teams D) a bottleneck at one phase can seriously delay an entire project E) the new product passes from one department to another before finalizing

C) company departments work closely together in cross-functional teams

109) Which stage in the product life cycle is characterized by rapid market acceptance and increasing profits? A) introduction B) maturity C) growth D) decline E) product development

C) growth

110) ________ is the product life cycle period when sales fall off and profits drop. A) Introduction B) Growth C) Maturity D) Decline E) Product development

D) Decline

24) Which of the following is NOT likely to be a question asked in the new product screening process? A) Is there a real need and desire for the product? B) Is there a clear product concept? C) Does the product offer a sustainable advantage? D) How many items will the company sell in the first two years? E) Does the product fit the company's overall growth strategy?

D) How many items will the company sell in the first two years?

69) Which of the following is a disadvantage of a team-based approach to new product development? A) It takes longer for the development of a new product. B) The development effort is not as effective because of employee inexperience. C) It decreases the efficiency of the new product development process. D) It can result in organizational confusion and tension. E) The process does not work with the shorter life cycles of many of today's products.

D) It can result in organizational confusion and tension.

6) A particular firm added three new products earlier this year to increase variety for customers. Two of the products failed to reach the minimal sales quota. Which of the following is LEAST likely to have been the cause of their failure? A) The products were priced too high. B) The products were advertised incorrectly. C) Competitors fought back harder than expected. D) Product research was too extensive. E) The product development costs were high.

D) Product research was too extensive.

20) Which of the following statements is true of the idea generation stage in the new product development process? A) The purpose of idea generation is to reduce the number of ideas to the least possible number. B) Truly innovative companies rely exclusively on a single source for new product ideas. C) Customers are the least important sources of new product ideas. D) Truly innovative companies develop extensive innovation networks that capture ideas and inspiration from every possible source. E) Truly innovative companies seldom rely on customers and the general public for ideas.

D) Truly innovative companies develop extensive innovation networks that capture ideas and inspiration from every possible source.

32) For concept test, companies will frequently present customers with ________ of the concept for a reliable concept test. A) a verbal description B) a PowerPoint slide C) a picture D) a physical presentation E) a printed paragraph

D) a physical presentation

57) Introducing a new product into the market is called ________. A) test marketing B) simulation C) co-marketing D) commercialization E) segmentation

D) commercialization

113) What causes a specific brand's life cycle to change quickly? A) costs of raw materials B) changing demographics C) shift in company strategy D) competitive attacks and responses E) new technology

D) competitive attacks and responses

53) All of the following are disadvantages of test marketing EXCEPT that test marketing ________. A) is typically expensive B) can be time consuming C) enables competitors to gain advantages D) encourages dishonesty among participants E) fails to guarantee product success in the market

D) encourages dishonesty among participants

22) Executives at an automobile manufacturing company conducted a brainstorming session for selected employees. This session resulted in a large number of ideas for developing new cars after extensive R&D. The executives then planned to filter out the best ideas during the ________ stage. A) business analysis B) idea generation C) concept testing D) idea screening E) concept development

D) idea screening

15) Many companies have developed ________ programs that encourage employees to develop new product ideas. A) management B) incentive C) entrepreneurial D) intrapreneurial E) crowdsourcing

D) intrapreneurial

45) In the ________ stage of the new product development process, products undergo rigorous tests to make sure that they perform safely and effectively, or that consumers will find value in them. A) product design B) idea generation C) concept development and testing D) product development E) product activation

D) product development

106) Which of the following refers to the course that a product's sales and profits take over its lifetime? A) total product process B) service life C) product mix D) product life cycle E) marketing mix

D) product life cycle

51) In a(n) ________, consumers interact with new products and marketing tactics in laboratory stores or virtual online shopping environments. A) standard test market B) focus group C) controlled test market D) simulated test market E) individual survey

D) simulated test market

60) A company getting ready to launch a new product must make several decisions. The company must first decide on ________. A) whether to launch the product in a single location B) whether to launch the product in a region C) whether to launch the product into full national distribution D) when to introduce the product E) when to develop a planned market rollout

D) when to introduce the product

25) Which of the following statements best explains why idea screening may be the most important step of new product development? A) It increases the number of ideas generated. B) It provides an opportunity for the marketer to test the prototype in a simulated market. C) It helps forecast the products' sales and profits accurately for a specific period. D) It gives research and development team members an opportunity to gather consumer feedback. E) It saves the company money in product development costs by going ahead with only the product ideas that are likely to be profitable.

E) It saves the company money in product development costs by going ahead with only the product ideas that are likely to be profitable.

55) Which of the following statements is true of test marketing? A) The amount of test marketing needed remains constant for each new product. B) When the costs of developing and introducing the product are low, the company will have to do significant test marketing. C) Test marketing is seldom done on products that are risky. D) Test marketing is seldom done when management is not sure of the product or its marketing program. E) Test marketing costs can be high, and it takes time that may allow competitors to gain advantages.

E) Test marketing costs can be high, and it takes time that may allow competitors to gain advantages.

114) A style is best defined as a ________. A) currently popular trend in retail goods B) popular consumer taste at a given time C) temporary period of unusually high sales D) short-term component of the marketing mix E) basic and distinctive mode of expression

E) basic and distinctive mode of expression

18) Who can pass along information about new concepts or techniques to use in new products? A) competitors B) salespeople C) customers D) suppliers E) distribution channels

E) distribution channels

73) New product success requires all of the following EXCEPT ________. A) a whole-company commitment B) a holistic approach for finding new ways to create valued customer experiences C) thinking up a few good ideas D) introducing products that will satisfy a want or need for customers E) efficient engineering and manufacturing

E) efficient engineering and manufacturing

21) In the new product development process, the first idea-reducing stage is ________. A) business analysis B) idea generation C) concept development D) crowdsourcing E) idea screening

E) idea screening

42) Which figures does the company use to analyze the new product's financial attractiveness? A) size of population B) expected market share C) number of competitors D) anticipated number of options E) sales and costs

E) sales and costs

17) Which of the following is an external source for ideas? A) project managers B) engineers C) salespeople D) manufacturing staff E) suppliers

E) suppliers

34) What is included in the first part of a marketing strategy statement? A) distribution strategy B) product longevity C) long-run sales goals D) promotional mixes E) target market description

E) target market description

36) Which of the following is included in the third part of the marketing strategy statement? A) the planned value proposition B) distribution strategy C) the product's planned price D) marketing budget E) the planned long-run sales

E) the planned long-run sales

54) Which of the following is the most likely circumstance for a company to decide to do little or no test marketing? A) when the new product requires a major investment B) when management lacks confidence in the new product C) when management lacks confidence in the marketing strategy D) when the product has no substitutes and is new in its category E) when the costs of developing and introducing the product are low

E) when the costs of developing and introducing the product are low