chapter 8

Question 1

9) The new product development starts with ________.
A) idea screening
B) idea generation
C) concept development
D) concept testing
E) market strategy development

Answer 1

B) idea generation

Question 2

10) 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 2

E) Customers, competitors, distributors, and suppliers are major sources of new product ideas.

Question 3

Some companies, such as Google, have ________ that encourage employees to develop new ideas.
A) trade magazines
B) marketing research firms
C) government agencies
D) competitors’ ads
E) intrapreneurial programs

Answer 3

E) intrapreneurial programs

Question 4

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 4

A) A company creates a forum where anyone can contribute new product ideas.

Question 5

A company’s external sources of new product ideas include its ________.
A) managers
B) salespeople
C) engineers
D) manufacturing staff
E) suppliers

Answer 5

E) suppliers

Question 6

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

Answer 6

B) crowdsourcing

Question 7

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 7

D) Idea generation is usually followed by procedures that reduce the total number of ideas.

Question 8

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 8

B) idea screening

Question 9

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 9

B) idea screening

Question 10

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 10

B) product concept

Question 11

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

Answer 11

C) product image

Question 12

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 12

A) concept testing

Question 13

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

Answer 13

B) marketing strategy development

Question 14

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, the planned value proposition, and the sales goals
E) planned long-run sales and market share

Answer 14

D) target market, the planned value proposition, and the sales goals

Question 15

The second part of a marketing strategy statement describes the ________ of a new product.
A) marketing mix strategy
B) profit and the sales goals
C) planned price, distribution, and the marketing budget
D) target market and the sales goals
E) planned value proposition

Answer 15

C) planned price, distribution, and the marketing budget

Question 16

The third part of a marketing strategy statement describes the ________ of a new product.
A) sales, market mix strategy, and profit goals
B) distribution and pricing strategy
C) marketing budget and cost-benefit analysis
D) planned value proposition
E) target market and sales goals

Answer 16

C) marketing budget and cost-benefit analysis

Question 17

The first part of the business analysis is to ________.
A) forecast sales
B) create an advertising campaign
C) begin building the products
D) develop a sales force
E) estimated profits

Answer 17

A) forecast sales

Question 18

________ 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 18

C) Business analysis

Question 19

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 19

C) business analysis

Question 20

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 20

D) Product development is usually followed by test marketing.

Question 21

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

Answer 21

B) product development

Question 22

________ 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

Answer 22

D) Marketing strategy development

Question 23

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 23

C) test marketing

Question 24

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

Answer 24

A) test marketing

Question 25

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 25

E) when the costs of developing and introducing the product are low

Question 26

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 26

C) controlled test markets

Question 27

________ 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 27

C) Test marketing

Question 28

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 28

A) simulated test markets

Question 29

Introducing a new product into the market is called ________.
A) test marketing
B) segmentation
C) product development
D) commercialization
E) market penetration

Answer 29

D) commercialization

Question 30

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 30

A) building or renting a manufacturing facility

Question 31

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

Answer 31

C) when to launch the product

Question 32

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 32

D) team-based

Question 33

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 33

C) sequential

Question 34

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 34

D) cross-functional teams

Question 35

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.

Answer 35

D) Organizational confusion and tension sometimes affect the process.

Question 36

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 36

A) customer-centered

Question 37

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 37

C) team-based new product development

Question 38

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 38

B) brand managers to collect, review, and evaluate new product ideas

Question 39

Several companies sponsor times when employees take some time away from their day-to-day work to develop new ideas. These ________ are legendary at Facebook.
A) vacations
B) hackathons
C) staycations
D) test markets
E) strategy development sessions

Answer 39

B) hackathons

Question 40

) One study found that most successful new products are differentiated, ________, and offer a compelling customer value proposition.
A) solve major customer problems
B) very inexpensive
C) widely advertised
D) rapidly distributed
E) high quality

Answer 40

A) solve major customer problems

Question 41

Companies that engage their customers in new product development and innovation tend to have ________ when new products are introduced relative to firms that do not engage customers in the innovation process.
A) twice the return on assets
B) five times the profitability
C) surprisingly lower sales
D) four to five times higher sales
E) lower distribution costs

Answer 41

A) twice the return on assets

Question 42

Some firms may create ________ programs to reward individuals who contribute the best new product ideas.
A) innovation management systems
B) lottery box systems
C) recognition programs
D) innovation labs
E) promotion and pay raise

Answer 42

C) recognition programs

Question 43

An innovation management system will result in ________.
A) very few ideas worth pursuing
B) higher employee turnover as jaded employees leave
C) automatically higher profits
D) an innovation oriented company culture
E) a more diverse workforce

Answer 43

D) an innovation oriented company culture

Question 44

________ 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

Answer 44

B) The product life cycle concept

Question 45

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.

Answer 45

D) Growth is a period of rapid market acceptance and increasing profits.

Question 46

A product life cycle has five distinct stages: product development, introduction, growth, maturity, and ________.
A) stabilization
B) rebranding
C) decline
D) progression
E) segmentation

Answer 46

C) decline

Question 47

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.

Answer 47

C) It is generally difficult to forecast the sales level at each PLC stage.

Question 48

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

Answer 48

D) modifying the product

Question 49

) 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

Answer 49

C) unusually high sales and rapid decline

Question 50

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

Answer 50

A) style

Question 51

) 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

Answer 51

C) fad

Question 52

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

Answer 52

C) maturity

Question 53

) 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

Answer 53

B) introduction

Question 54

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.

Answer 54

E) Sales growth tends to be slow.

Question 55

) 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

Answer 55

A) growth

Question 56

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.

Answer 56

E) Sales start climbing quickly.

Question 57

) 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

Answer 57

B) maturity

Question 58

) 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

Answer 58

D) product harvesting

Question 59

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

Answer 59

A) find new market segments for the brand

Question 60

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

Answer 60

C) change the packaging of the toy

Question 61

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

Answer 61

A) use aggressive sales promotions

Question 62

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.

Answer 62

C) A slowdown occurs in sales growth.

Question 63

) 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

Answer 63

A) decline

Question 64

In which of the following product life cycle stages will the firm make the most money?
A) decline
B) growth
C) maturity
D) ideation
E) analysis

Answer 64

C) maturity

Question 65

In which of these life cycle stages will the firm be the most likely to incur financial losses?
A) decline
B) growth
C) maturity
D) introduction
E) analysis

Answer 65

D) introduction

Question 66

Which of these products is most likely to have had the longest life cycle?
A) Apple iPhone
B) Crayola Crayons
C) Taylor Swift music
D) Tide laundry detergent
E) Fidget spinners

Answer 66

B) Crayola Crayons

Question 67

Which of these service companies is least likely to expand internationally?
A) professional services
B) medical providers
C) telecommunications
D) banking
E) airlines

Answer 67

B) medical providers

Question 68

Which of these business types is among the latest to expand globally?
A) medical providers
B) manufacturing
C) commercial banks
D) restaurants
E) retailers

Answer 68

E) retailers

Question 69

Consumer tastes and preferences differ widely around the world which creates the need for firms to ________.
A) standardize products to lower costs
B) stay in their domestic market
C) adapt their product offerings
D) train consumers when they enter new markets
E) lower prices to encourage consumption of new products

Answer 69

C) adapt their product offerings

Question 70

A recent survey of manufacturing firms showed that their biggest litigation concern was ________.
A) labor and employment matters
B) product liability
C) environmental issues
D) Federal government lawsuits
E) being sued by competitors

Answer 70

A) labor and employment matters

Question 71

A recent survey of manufacturing firms showed that product liability was the firm’s ________ litigation concern.
A) largest
B) second-largest
C) third-largest
D) fourth-largest
E) smallest

Answer 71

B) second-largest

Question 72

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

Answer 72

B) patent laws

Question 73

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

Answer 73

D) product stewards