Marketing - Developing New Products and Managing the Product Life Cycle (1-32 Answer Key)

Principles of Marketing Developing New Products and Managing the Product Life Cycle 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 Answer: C 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 Answer: A 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 Answer: B 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 Answer: B 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 Answer: A 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. Answer: D 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 Answer: B 8) A firm can obtain new products through acquisition or new product development efforts. Answer: TRUE 9) Acquisition involves the purchase of a whole company, a patent, or a license to produce someone else's product. Answer: TRUE 10) Adapting marketing strategies is not a challenge faced in the product life cycle. Answer: FALSE 11) Explain common reasons for the failure of new products. What must be the goals for a company to create successful new products? Answer: Although an idea may be good, the market size may have been overestimated. Other possible reasons for failure include the following: the actual product was not designed as well as it should have been; the product may have been incorrectly positioned in the market, priced too high, or advertised poorly; a high-level executive might have pushed a favorite idea despite poor marketing research findings; the costs of product development were higher than expected; or competitors fought back harder than expected. To create successful new products, a company must understand its customers, markets, and competitors and deliver superior value to customers. 12) New product development starts with ________. A) concept development B) idea screening C) idea generation D) concept testing E) test marketing Answer: C 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 Answer: B 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 Answer: B 15) Many companies have developed ________ programs that encourage employees to develop new product ideas. A) management B) incentive C) entrepreneurial D) intrapreneurial E) crowdsourcing Answer: D 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. Answer: B 17) Which of the following is an external source for ideas? A) project managers B) engineers C) salespeople D) manufacturing staff E) suppliers Answer: E 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 Answer: E 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 Answer: C 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. Answer: D 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 Answer: E 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 Answer: D 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 Answer: A 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? Answer: D 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. Answer: E 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 Answer: C 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 Answer: B 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 Answer: B 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 Answer: C 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 Answer: C 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 Answer: C 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 Answer: D