Chapter 14 Study Guide
Which of the following refers to the number of different product lines that a company offers?
width
__________ is the stage in the life cycle in which sales begin to level off.
the maturity phase
Which of the following is a part of new-product development effort?
A company making improvements on a product developed by its in-house R&D team
In the new-product development process, test marketing occurs before __________.
commercialization
The last stage in the new-product development process is __________.
commercialization
Which of the following activities is typically performed by companies during the commercialization step of the new-product development process?
Introducing a new product into the market
Which of the following best describes bundling?
It is a strategy in which several products are combined and offered at a lower price than consumers would have to pay if they were purchased separately.
Which of the following best describes a brand extension?
It is using a brand name of existing products for a new product category.
What is brand equity?
It the value that a company has built up in a brand.
Which of the following scenarios is an example of increasing the width of a firm's product mix?
Reintron Inc., a consumer electronics manufacturer, is planning to add two new product lines, laptops and headphones, to its product mix to increase its sales.
__________ extends from the research-and-development (R&D) phase through the product's first commercial availability.
The introduction stage
Which of the following statements is true of variable costs?
They depend on production levels.
Which of the following is the primary purpose of test marketing when it comes to new products?
To introduce the product in selected markets and monitor consumer reactions
Which of the following is a risk associated with a product-line extension?
Too many categories or types of products can dilute the brand's meaning in the minds of target customers.
__________ is using a brand name of existing products for a new product category.
brand extension
A snack bar offers a soup, sandwich, and a muffin for a combo price of $10. The snack bar has a large number of takers for this combo because the items are more expensive when bought individually. What pricing strategy is the snack bar using?
bundling
The idea generation step in the new-product development process primarily involves __________.
coming up with ideas for products that will satisfy unmet needs
Fixed costs are costs that __________.
do not change when production levels rise or fall
Which pricing strategy involves continually adjusting the price of a product depending upon the supply and demand for it?
dynamic pricing
Price elasticity is __________.
how responsive demand will be to a change in price
The process of new-product development starts with __________.
idea generation