Chapter 11 Developing and Managing Products

The rate of acceptance and diffusion of a new product will be faster when:

the benefits of using the product can be observed by others.

Steven, a construction worker, always buys new gadgets because most of his friends have them. Besides, he relies on reviews from his friends rather than on the mass media to make his purchase decisions. It can be inferred that Steven belongs to the category of _____ in the diffusion process.

the late majority

A major implication of the diffusion process to marketing managers is that:

the targeted adopter and media may need to shift based on how various categories of adopters gather product information.

The early majority is an important link in the process of diffusing new ideas because:

they are positioned between earlier and later adopters

In the context of the new-product development process, which of the following statements is true of the business analysis stage?

​Depending on the nature of the product and the company, this process may be simple or complex.

In the context of the new-product development process, which of the following is true of a new-product strategy?

​It must be compatible with the objectives of the marketing department, the business unit, and the corporation.

_____ is the degree to which a product can be sampled on a limited basis.

​Trialability

Roger, an affluent graduate, buys gadgets on the first day of their launch in the market. He reads expert reviews on the Internet, and he is not influenced by the opinions of his family and friends while choosing products. Roger would fall under the category of _____ in the diffusion process.

​innovators

For conducting an accurate test marketing, ----_____.

test locations should mirror the purchasing habits of the overall market

In the context of adopters who participate in the diffusion process, which of the following statements is true of the late majority?

Their adoption of a new product stems from pressure to conform to group norms.

In the context of adopters who participate in the diffusion process, which of the following statements is true of innovators?

They are characterized as being deliberate and skeptical.

In the context of adopters who participate in the diffusion process, which of the following statements is true of innovators?

They are worldly and active outside their community

In the context of new-product development, which of the following is a global strategy adopted by multinational corporations?

They develop all their products for potential worldwide distribution.

In the context of adopters who participate in the diffusion process, which of the following statements is true of laggards?

They have the longest adoption time and the lowest socioeconomic status.

Which of the following statements is true of opinion leaders?

They speed up the diffusion process through word-of-mouth communication.

Which of the following is an objective of focus group interviews?

To stimulate insightful comments through group interaction

In the context of research and development, which of the following is true of product development?

It converts applications into marketable products

_____ goes beyond applied research by converting applications into marketable products.

Product development

Which of the following is a characteristic of products produced by multinational corporations?

Products are developed to meet unique market requirements whenever possible.

Mercury Corp., an audio equipment manufacturing company, has launched Merc 360x headphones in the market. The product is of an unconventional, skull-shaped design. In this scenario, which of the following is likely to happen to Merc 360x headphones in this stage of the life cycle?

Sales will increase slowly and profits will be negative

_____ is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

Test marketing

Which of the following statements is true of the product life cycle (PLC)?

The PLC allows the analysis of a brand, a product form, or a product strategy.

Identify a true statement about the product life cycle (PLC).

The PLC for a product form is longer than the PLC for any one brand.

In a product development process, _____ is the stage to eliminate ideas that are inconsistent with an organization's new-product strategy or are obviously inappropriate for some other reason.

screening

Magnira Corp. is an apparel manufacturing company. After an initial slow start, it saw a steep rise in its clientele and a remarkable increase in its profits. However, with the launch of other apparel manufacturers in the market, the profits of Magnira Corp. are declining now. In order to sustain its growth in the market, the managers of Magnira Corp. should:

shift to aggressive brand advertising and open new branches.

Cleanz Inc., a toiletries manufacturing firm, has launched a new range of natural sanitizing wipes. It wants to test its consumers' reactions to this new product in an economical way. Therefore, Cleanz Inc. sends out flyers to a few selected members of the target market, advertising several of its products along with the new product. Besides this, it also takes the members to a mock shop and monitors their shopping behavior. In this scenario, Cleanz Inc. is using _____.

simulated market testing

A major implication of the diffusion process to marketing managers is that:

based on how various categories of adopters gather product information.

The research and development (R&D) team at DataCom, a software firm, holds a meeting to discuss some potential ideas for new products. In the meeting, the moderator encourages everyone to share the ideas that comes to mind no matter how trivial it may seem. He prohibits employees from criticizing any idea and instead asks them to focus on giving the maximum number of ideas. In this scenario, the R&D team at DataCom is engaged in _____.

brainstorming

In a new-product development process, _____ is the stage where preliminary figures for demand, cost, sales, and profitability are calculated.

business analysis

Jenny, owner of an ice cream parlor, has been experimenting with different flavors to create a new exotic ice cream for her customers. After much deliberation and many tests, she decides to market the new Beet Cake with Black Walnut variant of ice cream. In this scenario, the chosen ice cream flavor has entered the _____ of the new-product development process.

commercialization stage

In the context of the product characteristics that can be used to predict and explain the rate of acceptance and diffusion, the degree of difficulty involved in understanding and using a new product is known as _____.

complexity

In the context of new-product development from a worldwide perspective, global marketers:

design their products to meet regulations in their major markets.

In the context of the new-product development process, _____ is the stage at which laboratory tests are conducted on prototypes.

development

Hakimo Corp., a manufacturer of audio equipment, has developed a unique wireless speaker system that runs on solar power. The speakers can operate for sixteen hours after being exposed to the sun for two hours. This new product, which is radically different from anything currently available in the market, would fall in the new product category of a:

discontinuous innovation.

Fresnas Inc. manufactures and sells electronic equipment. The research and development team has generated ideas for new products, and the ideas pass through the screening stage. In this case, the goal of screening will be to:

eliminate ideas that are inconsistent with the organization's new-product strategy.

Italiano, an American restaurant, experienced increased sales and high profits in the initial years of its establishment. Recently, it faced increased competition. To rebuild its brand, Italiano starts expanding its distribution network and aggressively promotes its restaurant. In this scenario, Italiano is in the _____ of the product life cycle.

growth stage

Marketing costs are high in the introductory stage of the product life cycle because:

high dealer margins are often needed to obtain adequate distribution.

Vilante Corp., a television manufacturing firm, is facing declining profits due to slow sales. Therefore, it offers promotions to consumers and dealers to maintain its market share. To distinguish its products from its competitors, it redesigns its television models stylistically. It also increases the product warranty from one to three years. In this scenario, Vilante Corp.'s products are in the _____ of the product life cycle.

maturity stage

A difference between absolute failure and relative failure is that absolute failure:

occurs when a company fails to recoup its development, marketing, and production costs.

One of the reasons for the new-product failures is that the products:

offer no discernible benefits compared to existing products.

The _____ is a biological metaphor that traces the stages of a product's acceptance, from its introduction to its decline.

product life cycle

In the diffusion process, unlike innovators, early adopters:

rely more on group norms and values than innovators.

For a long time, baking soda was used only as a cooking ingredient. Recently, Nails & Hammer Co., a construction firm, began marketing baking soda as an odor absorbent. The company promoted its use in absorbing foul odors in homes. In this scenario, baking soda would fall in the new product category of:

repositioned products.

In the context of the new-product development process, the decision to market a product is made during _____.

commercialization

The final stage in the new-product development process is _____.

commercialization

_____ is the degree to which a new product is consistent with existing values and product knowledge, past experiences, and current needs.

Compatibility

In the context of the product life cycle, which of the following is true of a product's growth stage?

Competition intensifies as more competitors enter the market.

Nutrioats, an oatmeal cookie product, has been in the market for over seven years. However, the product is now in its decline stage. In this case, which of the following will be a successful strategy to market Nutrioats?

Eliminating all nonessential marketing expenses and letting sales decline

In a product development process, which of the following is a disadvantage of test marketing?

It exposes the new product and its marketing mix to competitors before its introduction.

How does the product life cycle concept help marketing managers?

It helps marketers forecast future events and suggest appropriate strategies

Which of the following is true of simultaneous product development?

It involves all relevant functional areas and outside suppliers in all stages of the development process.

Which of the following statements is true of the development stage of the new-product development process?

It involves examining the feasibility of manufacturing a product at an acceptable cost

Which of the following statements is true of a customer innovation center?

It is a forum for meeting with customers and directly involving them in the innovation process.

Which of the following statements best defines the term diffusion?

It is the process by which the adoption of an innovation spreads.

Which of the following statements best describes simultaneous product development?

It is the process where all the involved areas work together rather than sequentially during a product's development

Which of the following statements is true of a new-product development strategy?

It provides general guidelines for generating, screening, and evaluating new-product ideas.

Which of the following is an advantage of simultaneous product development?

It shortens the development process and reduces costs.

In the context of product life cycle, which of the following statements is true of the introductory stage?

Marketing costs are normally high.

In the context of product life cycle, which of the following statements is true of the introductory stage?.

Marketing costs are normally high.

In the new-product development process, which of the following statements is true of the development stage?

Marketing department decides on the product's packaging, branding, labeling, and so forth.

Which of the following statements is true of the maturity stage of the product life cycle (PLC)?

New users cannot be added indefinitely during this stage.

Identify a true statement about the maturity stage of the product life cycle (PLC).

Niche marketers that target the under-served segments of a market emerge during this stage.

In the context of adopters who participate in the diffusion process, which of the following individuals is most likely to be a part of the early majority?

Stephen always purchases a product after doing an in-depth research on its pros and cons.

Which of the following is the most important factor in successful new-product introduction?

The new product should deliver a meaningful and perceivable benefit to a sizable number of people.

Which of the following statements is true of the decline stage of the product life cycle?

The rate of consumers' adoption of substitute products governs the rate of decline of the product.

In the early stage of development, _____ is sometimes used to create three-dimensional prototypes quickly and at a relatively low cost.

additive manufacturing

Steve, a retired man, wants to open a day care facility for dogs with his savings. After deciding on the services that he would be providing to his customers, he calculates the preliminary figures for demand, cost, sales, and profitability. After extensive deliberation, Steve decides to take credit from the bank for opening the facility as the initial investment cost estimates are too high. Steve is currently at the _____ of the new-product development process.

business analysis stage

In a new-product development process, _____ is the stage that involves the decision to market a product.

commercialization

In the context of the product life cycle, a long-run drop in a product's sales signals the beginning of the _____.

decline stage

Konnekt, a manufacturer of electronic goods, experienced a long-run drop in the sales of its radios after the diffusion of televisons in the market. Lately, there have been no sales of its radios, whereas its televisions are witnessing increased sales. Therefore, Konnekt is no longer marketing its radios but investing extensively in the promotion of its televisions. In this scenario, Konnekt's radios are in the _____ of its product life cycle.

decline stage

Elegance Inc., a clothing store based in the United States, manufactures, markets, and sells women's apparel. It recently launched a new line of men's apparel to diversify its market. It invests heavily on advertisement and dealership as it wants to reach a wide customer base. Despite these efforts, Elegance Inc. is experiencing slow sales with negative profits due to the huge investment in the new product line. According to the product life cycle concept, Elegance Inc.'s men's apparel is in the _____ of its life cycle.

introductory stage

In the context of adopters who participate in the diffusion process, unlike the early majority, _____.

laggards' independence is rooted in their ties to tradition.

In the context of adopters who participate in the diffusion process, a difference between early adopters and the early majority is that the early majority are:

likely to collect more information and evaluate more brands.

An implication of the new-product development process on marketing managers is that:

many new-product ideas are necessary to produce one successful new product.

The longest stage of the product life cycle (PLC) is the _____.

maturity stage