MKT 111 Chapter 8 (Multiple Choice/TF only)
14) A detailed version of a product idea stated in meaningful consumer terms is a ________. A) product feature B) product concept C) product idea D) product image E) product framework
B
9) A company's external sources of new product ideas include its ________. A) managers B) salespeople C) engineers D) manufacturing staff E) suppliers
E
2) Product modifications are an important source of new products for organizations.
TRUE
47) An innovation management system collects, reviews, evaluates, and manages new product ideas.
TRUE
44) Commercialization focuses on finding new ways to solve customer problems and create more customer satisfying experiences.
FALSE
45) Under the innovative management system approach, one company department works individually to complete its stage of the process before passing the new product along to the next department and stage.
FALSE
46) During concept testing, a product is evaluated by management without any input from external sources.
FALSE
48) The innovation management system approach shows that shareholders support, encourage, and reward innovation.
FALSE
50) The business analysis stage is the final step in the new product development process.
FALSE
51) Product development usually costs the least among all the steps of the new product development process.
FALSE
52) Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Finish is using controlled test marketing in this scenario.
FALSE
53) A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly.
FALSE
57) It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies.
FALSE
87) Fashions are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.
FALSE
88) Modifying a product is an ineffective strategy in the maturity period of the product life cycle because the product's decline is irreversible at this stage.
FALSE
26) If a product passes both the concept test and the product test, the next step is most likely to be ________. A) marketing strategy development B) product development C) test marketing D) business analysis E) concept development
C
99) When a company decides to go international with a product, it must first figure out what products and services to introduce and in which countries.
TRUE
16) The stage in which product ideas are presented to groups of target consumers physically or symbolically is referred to as ________. A) concept testing B) concept development C) test marketing D) marketing strategy development E) crowdsourcing
A
20) The third part of a marketing strategy statement describes the ________ of a new product. A) sales, market, and profit goals B) distribution and pricing C) marketing budget D) planned value proposition E) target market and sales goals
A
27) Foods International is developing a new gluten-free, chili-flavored pretzel. The marketing strategy for the product has already been developed and presented to top management. Several prototypes were also formulated by the company's R&D team. The final prototype is now being tested rigorously to ensure that it passes FDA standards. Once approved, the next step will most likely be ________. A) test marketing B) portfolio analysis C) commercialization D) internal marketing E) business analysis
A
31) Using ________, researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments. A) simulated test markets B) controlled test markets C) business analysis D) standard test markets E) concept development
A
33) Which of the following costs is most likely associated with commercialization? A) building or renting a manufacturing facility B) paying groups of consumers for participating in crowdsourcing activities C) determining a product's planned price, distribution, and marketing budget D) developing a prototype of a product E) using simulated tests to measure market capacity
A
73) Colonial furniture has been in existence since the 1600s and continues to adorn homes today. According to the product life cycle concept, it would be described as a ________. A) style B) fashion C) fad D) trend E) drift
A
78) In the ________ stage, a firm most likely faces a trade-off between high market share and high current profit. A) growth B) decline C) maturity D) introduction E) commercialization
A
39) Sleek Designs Inc. is producing its first eReader. The company is striving to overcome some of the issues communicated by customers about competitive products including screen glare and product bulkiness. Sleek Designs Inc. is using a ________ approach in their new product development process. A) customer-centered B) team-based C) sequential D) supply/demand E) systematic
A
8) In which of the following cases is crowdsourcing used for new product development? A) A company creates a forum where anyone can contribute new product ideas. B) A company hires a marketing agency to generate new product ideas. C) A company reviews the sales, costs, and profit projections of an existing product. D) A company depends on its R&D department to come up with new ideas. E) A company partners with a design agency to create a few prototypes.
A
82) Parvon, a cleaning product, is in the maturity stage of the product life cycle, and Parvon managers have decided to modify the market. Which of the following steps should Parvon managers most likely take to achieve this goal? A) find new market segments for the brand B) improve the overall quality of the product C) reduce mass media advertising expenses D) offer improved services to new buyers E) conduct controlled test marketing activities
A
84) A product is in the maturity stage of the product life cycle, and the company decides to modify the marketing mix. Which of the following steps is the company most likely to take? A) use aggressive sales promotions B) change features of the product C) improve product quality D) find new uses for the product E) explore new market segments
A
86) During the ________ stage of the product life cycle, product sales may plunge to zero, or drop to a low level where they continue for many years. A) decline B) growth C) maturity D) ideation E) analysis
A
10) Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its website that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Kallton is using ________ to generate new product ideas. A) marketing strategy development B) crowdsourcing C) concept development D) business analysis E) test marketing
B
12) Safari Unlimited recently conducted national research to generate ideas for a new line of fatigues geared to women. The company uncovered a number of ideas about clothing and accessory preferences as well as important benefits such as built-in sunblock and durability. The Safari Unlimited product development team will most likely use ________ next to arrive at a realistic number of products for the new fatigues line. A) crowdsourcing B) idea screening C) concept testing D) concept development E) business analysis
B
13) Which of the following steps of the new product development process would most likely use an R-W-W framework? A) idea generation B) idea screening C) concept testing D) test marketing E) commercialization
B
17) Doggie World tested an idea for a new chew toy that would entertain dogs while simultaneously cleaning their teeth. Dog owners were pleased with the results. The next stage in developing the new product concept is ________. A) idea screening B) marketing strategy development C) business analysis D) product development E) test marketing
B
24) Taco Bell test marketed Doritos Locos Tacos for three years and developed 45 prototypes. Once the decision was made to launch the new taco shell, it moved into the ________ stage of the new product development process. A) concept development B) product development C) test marketing D) strategy development E) commercialization
B
4) The new product development process usually starts with ________. A) idea screening B) idea generation C) concept development D) concept testing E) market strategy development
B
41) An innovation management system would most likely be used by ________. A) managers to update details about customer information B) brand managers to collect, review, and evaluate new product ideas C) suppliers to access inventory information D) product managers to track logistics of a new product E) human resource managers to update information on employee incentives
B
67) ________ can describe a product class, a product form, or a brand. A) The product development process B) The product life cycle concept C) Business analysis theory D) Vendor analysis theory E) Portfolio analysis
B
76) In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features? A) product development B) introduction C) growth D) maturity E) adoption
B
80) Craft Inc.'s Krayons is a multi-color chalk material that was released in the market over a century ago. Since the release, the company has had remarkable sales and Krayons has remained unchanged. However, over the last few years, sales of Krayons have been stagnant. Competitors have begun marking prices down, and increasing their advertising and sales promotions. Craft's Krayons is most likely in the ________ stage of the product life cycle. A) introduction B) maturity C) growth D) decline E) incubation
B
95) As a result of ________, a company cannot make its product illegally similar to a competitor's already established product. A) anti-monopoly laws B) patent laws C) antitrust laws D) product warranties E) product liability
B
22) Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product? A) test marketing B) idea screening C) business analysis D) marketing strategy development E) concept testing
C
15) The style, ease of use, and multi-blade technology of Gillette's Fusion razor system is a ________ that has favorably impacted consumer perceptions about other new products sold by the company. A) product audit B) product feature C) product image D) product framework E) product concept
C
19) The second part of a marketing strategy statement describes the ________ of a new product. A) marketing mix strategy B) profit and sales goals C) planned price, distribution, and marketing budget D) target market and sales goals E) planned value proposition
C
21) ________ involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives. A) Vendor analysis B) Portfolio analysis C) Business analysis D) SWOT analysis E) Concept analysis
C
29) Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate? A) standard test markets B) inventory tracking C) controlled test markets D) simulated test markets E) direct commercialization
C
30) ________ is the stage where a product and its proposed marketing program are introduced into realistic market settings. A) Market strategy development B) Concept testing C) Test marketing D) Concept development E) Business analysis
C
34) A company launching a new product must first decide ________. A) how to launch the product B) the sample size of the market C) when to launch the product D) the viability of a global launch E) the budget for print advertising
C
36) Under a ________ product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage. A) cross-sectional B) simultaneous C) sequential D) team-based E) systematic
C
40) At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavors uses a(n) ________ approach. A) intradepartmental new product development B) sequential new product development C) team-based new product development D) simulated test market E) controlled test market
C
69) A product life cycle has five distinct stages: product development, introduction, growth, maturity, and ________. A) stabilization B) rebranding C) decline D) progression E) segmentation
C
70) Which of the following is true of the product life cycle (PLC)? A) All products generally go through all five stages of the PLC. B) All products pass through the stages of PLC in the same order. C) It is generally difficult to forecast the sales level at each PLC stage. D) The PLC concept can be applied to styles but not to fashions and fads. E) Product forms have longer life cycles than product classes.
C
72) Fads are characterized by their ________. A) enduring nature that spans several generations B) low rates of adoption by consumers C) unusually high sales and rapid decline D) basic and distinctive modes of expression that seldom become unpopular E) non-attainment of the last two stages of the product life cycle
C
74) Flurrbies, a line of winter accessories by a leading fashion label, quickly fell in and out of favor with customers. Flurrbies represents an example of a ________. A) form B) fashion C) fad D) style E) drift
C
75) When a product is in the ________ stage, profits level off or decline because of increased marketing outlays to defend the product against competition. A) production B) decline C) maturity D) test marketing E) conception
C
83) Gershwin, a musical toy for toddlers, is in the maturity stage of the product life cycle, and Gershwin managers have decided to modify the product. What will Gershwin managers most likely do to achieve this goal? A) change distributors B) offer coupons for the toy C) change the packaging of the toy D) launch an online advertising campaign E) cut prices of the toy to attract new customers
C
85) Which of the following is most likely true of a product in the maturity stage of the product life cycle? A) Sales are zero, and the company's investment costs mount. B) New competitors enter the market. C) A slowdown occurs in sales growth. D) Sales increase with decreasing competition. E) New distribution channels are acquired.
C
11) Which statement is most likely true about idea generation in the new product development process? A) Idea generation is most effective when it occurs after idea screening. B) Most companies set a limit for the number of ideas generated to simplify the process. C) Intrapreneurial programs enable customers to contribute to the idea generation process. D) Idea generation is usually followed by procedures that reduce the total number of ideas. E) A company can either develop ideas through internal or external sources but not through both.
D
18) The first part of a marketing strategy statement describes the ________ of a new product. A) planned price and distribution B) marketing budget C) marketing mix strategy D) target market, planned value proposition, and sales goals E) planned long-run sales and market share
D
23) In a sequential new product development process, which of the following is true of the product development step? A) Product development is usually followed by a business analysis of the product. B) Product development involves introducing a product into realistic market settings. C) Product development avoids testing products on actual customers due to liability concerns. D) Product development is usually followed by test marketing. E) Product development helps top management review profit projections.
D
25) ________ refers to designing a plan for a new product based on the product concept. A) Business analysis B) Idea generation C) Concept screening D) Marketing strategy development E) Test marketing
D
32) Introducing a new product into the market is called ________. A) test marketing B) segmentation C) product development D) commercialization E) market penetration
D
35) Under a ________ new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness. A) cross-sectional B) simultaneous C) sequential D) team-based E) systematic
D
37) The team-based new product development approach saves times and increases effectiveness because departments work closely together in ________. A) divisional teams B) problem-solving teams C) self-managed groups D) cross-functional teams E) independent groups
D
38) Which of the following is a disadvantage of a team-based approach to new product development? A) It lengthens the time required to get the right products to market. B) It involves the use of a rigid, sequential product development approach. C) A bottleneck at one place can seriously hinder the entire project. D) Organizational confusion and tension sometimes affect the process. E) The process is highly ineffective for products with short life cycles.
D
68) Which of the following statements is most likely true about the product life cycle? A) Throughout the product introduction stage, sales are zero. B) The growth stage is the longest stage of the product life cycle. C) Profits are nonexistent in the growth stage. D) Growth is a period of rapid market acceptance and increasing profits. E) Maturity is the period when sales fall off but profits continue to rise.
D
7) The Dairy Bar, a national soft-service ice cream retailer, buys cones from Cones & More. Cones & More is an important resource for marketplace information. They're considered a(n) ________ source of new product ideas for the Dairy Bar. A) entrepreneurial B) competitive C) external D) internal E) analytical
D
71) Appliances Galore is continually updating its line of refrigerators to reflect market trends and customer needs. Although the product class is in the maturity stage of the product life cycle, they maintain healthy sales of their line of refrigerators by continually ________. A) concept testing B) modifying the marketing mix C) rebranding D) modifying the product E) modifying the market
D
81) Electronics International has experienced a significant decline in sales for SweetTunes, its MP3 player, during the past two years. In response, the company has reduced its advertising and sales expenditures for SweetTunes in an attempt to improve short-run profits. Which term best describes Electronics International's strategy for SweetTunes? A) sales outsourcing B) product modification C) industry repositioning D) product harvesting E) marketing mix modification
D
96) Some companies are now appointing ________, whose job is to protect consumers from harm and the company from liability by proactively ferreting out potential product problems. A) intradepartmental teams B) idea generation teams C) product audit committees D) product stewards E) listening officers
D
1) Acquisitions do not include ________. A) purchasing a whole company B) buying a patent C) buying a license D) opening a franchise E) developing a product
E
28) In which of the following cases is little or no test marketing most likely recommended for a new product? A) when the product requires a major investment B) when management is unsure of the projected demand for the product C) when the risks associated with introducing the product are high D) when management is unsure of the marketing program for the product E) when the costs of developing and introducing the product are low
E
5) Which of the following statements is most likely true about the new product development process? A) The first step in developing a new product involves determining any budgetary or distribution limitations. B) Most firms discourage employees from contributing new product ideas because of legal concerns. C) In most cases, concept testing is followed by concept development. D) A product concept should be developed for each idea before it goes through idea screening. E) Customers, competitors, distributors, and suppliers are major sources of new product ideas.
E
6) Companies like 3M, Google, and Sony have ________ that encourage employees to develop new ideas. A) trade magazines B) marketing research firms C) government agencies D) competitors' ads E) intrapreneurial programs
E
77) Which of the following is true about the introduction stage of a new product? A) Profits are typically high. B) Promotion spending is relatively low. C) Less money is needed to attract distributors. D) Companies tend to avoid basic versions of the product. E) Sales growth tends to be slow.
E
79) Which of the following is true of the growth stage of the product life cycle? A) New competitors avoid the market. B) Prices tend to increase significantly. C) Early adopters stop buying the product. D) Profits are nonexistent at this stage. E) Sales start climbing quickly.
E
42) In the team-based approach, if one area hits snags, it works to resolve them while the team moves on.
TRUE
43) Crowdsourcing refers to inviting broad communities of people—customers, employees, independent scientists and researchers, and even the public at large—into the new product innovation process.
TRUE
49) Customer involvement has a positive effect on the new product development process and product success.
TRUE
54) Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.
TRUE
55) A new product must have the required functional features and also convey the intended psychological characteristics.
TRUE
56) Companies that combine a customer-centered approach with team-based new product development gain a big competitive edge by getting the right new products to market faster.
TRUE
89) During the decline stage of the product life cycle, product sales may plunge to zero, or they may drop to a low level where they continue for many years.
TRUE
90) The moral of the product life cycle is that companies must continually innovate; otherwise, they risk extinction.
TRUE
97) The federal government has the legal authority to prevent a company from adding products through acquisitions if the acquisition threatens to lessen competition.
TRUE
98) Standardization helps a company develop a consistent worldwide image, and lowers the product design, manufacturing, and marketing costs.
TRUE