New Product Development and Product Life-Cycle Strategies (1-57 Answer Key)

Marketing: An Introduction New Product Development and Product Life-Cycle Strategies 1) Acquisitions are not considered a source of new products for organizations. Answer: FALSE Diff: 2 LO: 8-1: Explain how companies find and develop new product ideas. 2) Product modifications are an important source of new products for organizations. Answer: TRUE Diff: 1 LO: 8-1: Explain how companies find and develop new product ideas. 3) List and explain some of the reasons why new products fail. Answer: There are several reasons why a new product may fail. Although an idea may be good, a company might have overestimated the market size. The actual product itself may have been poorly designed. Another possible reason is that the product may have been incorrectly positioned in the market. It may have been priced too high, or advertised poorly. It is also possible that a high-level executive pushed a favorite idea despite poor market research findings. Sometimes, the costs of product development are higher than expected. The product may have been launched at the wrong time, or competitors may have fought back harder than expected. Diff: 2 LO: 8-1: Explain how companies find and develop new product ideas. AACSB: Analytical thinking 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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. Answer: E Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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) competitor's ads E) intrapreneurial programs Answer: E Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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) intrapreuneurial Answer: D Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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. Answer: A Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 9) A company's external sources of new product ideas include its ________. A) managers B) salespeople C) engineers D) manufacturing staff E) suppliers Answer: E Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 10) Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its Web site 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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. Answer: D Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking; Interpersonal relations and teamwork 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 Answer: B Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 (the way customer perceive an product) D) product framework E) product concept Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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 Answer: A Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 17) Doggie World concept 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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 Answer: D Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 20) The third part of a marketing strategy statement describes the ________ of a new product. A) sales, market share, and profit goals B) distribution and pricing C) marketing budget D) planned value proposition E) target market and sales goals Answer: A Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: C Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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. Answer: D Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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. (prototype here is in product development stage) A) concept development B) product development C) test marketing D) strategy development E) commercialization Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 25) In the ________ stage of new product development, products undergo rigorous tests to make sure that they perform safely and effectively, or that consumers will find value in them. A) business analysis B) idea generation C) concept screening D) product development E) test marketing Answer: D Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 (blue color means product development??Yes, prototype is tested in product development stage) B) portfolio analysis C) commercialization D) internal marketing E) business analysis Answer: A Diff: 3 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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 Answer: E Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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 Answer: C Diff: 3 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking; Information technology 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: A Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 32) Introducing a new product into the market is called ________. A) test marketing B) segmentation C) product development D) commercialization E) market penetration Answer: D Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: A Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 34) A company launching a new product must first decide ________. A) where 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Answer: D Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 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 Answer: C Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 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 Answer: D Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 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 are likely to affect the process. E) The process is highly ineffective for products with short life cycles. Answer: D Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 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 Answer: A Diff: 3 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 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 Answer: C Diff: 3 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking; Interpersonal relations and teamwork 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 Answer: B Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 42) Manufacturers rely on distributors and suppliers as internal sources of new product ideas. Answer: FALSE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 43) Since suppliers are so close to the market, they are valuable sources of information about consumer problems, marketing opportunities, and new product possibilities. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 44) In the new product development process, the purpose of idea generation is to create a large number of ideas and the purpose of the next set of stages in the process is to reduce that number. Answer: TRUE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 45) An abstract presentation of a product concept is likely to increase the reliability of the concept test. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 46) During concept testing, a product is evaluated by management without any input from external sources. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 47) Concept testing typically follows the marketing strategy development phase of the new product development process. Answer: FALSE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 48) The amount of test marketing needed is the same for each new product. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 49) When developing a new product, concept testing should ideally be followed by the business analysis stage. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 50) The business analysis stage is the final step in the new product development process. Answer: FALSE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 51) Product development usually costs the least among all the steps of the new product development process. Answer: FALSE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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 Pro is using controlled test marketing in this scenario. Answer: FALSE (simulated test markets) Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Analytical thinking 53) A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 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. Answer: TRUE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 55) The installation of an innovation management system allows a company to collect, review, evaluate, and manage new product ideas. Answer: TRUE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. 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. Answer: TRUE Diff: 1 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process. AACSB: Interpersonal relations and teamwork 57) It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies. Answer: FALSE Diff: 2 LO: 8-2: List and define the steps in the new product development process and the major considerations in managing this process.