Armstrong Mai12 Tif 08
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Marketing: An Introduction, 12e (Armstrong/Kotler)
Chapter 8 New Product Development and Product LifeC!cle "trategies
1) The new product development process usually starts with ________.
A) idea screening
B) idea generationC) concept development
D) concept testing
E) market strategy developmentAnswer B
Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
%) 'hich o! the !ollowing statements is most likely true a&out the new product development
process(
A) The !irst step in developing a new product involves determining any &udgetary or distri&utionlimitations.
B) "ost !irms discourage employees !rom contri&uting new product ideas &ecause o! legalconcerns.
C) n most cases* concept testing is !ollowed &y concept development.
D) A product concept should &e developed !or each idea &e!ore it goes through idea screening.E) Customers* competitors* and suppliers are ma+or sources o! new product ideas.
Answer E
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
,) 'hich o! the !ollowing is an internal source o! new product ideas !or a company(A) trade maga-ines
B) marketing research !irms
C) government agenciesD) competitors ads
E) intrapreneurial programs
Answer E
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
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3) nternal sources o! new product ideas !or a company include its ________.
A) customers
B) distri&utorsC) suppliers
D) employees
E) competitorsAnswer D
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
) n which o! the !ollowing cases is crowdsourcing used !or new product development(A) A company creates a !orum where anyone can contri&ute new product ideas.
B) A company hires a marketing agency to generate new product ideas.
C) A company reviews the sales* costs* and pro!it pro+ections o! an e4isting product.D) A company depends on its 56D department to come up with new ideas.
E) A company partners with a design agency to create a !ew prototypes.
Answer ADi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
8) A companys e4ternal sources o! new product ideas include its ________.
A) managersB) salespeople
C) engineers
D) manu!acturing sta!! E) suppliers
Answer E
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
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9) :allton is a multinational communications and in!ormation technology corporation. ts
principal products are mo&ile telephones and ta&lets. t recently announced on its 'e& site that
customers can suggest ideas !or its upcoming product model. Contri&utors o! short;listed ideaswill &e ade<uately rewarded. n this case* :allton is using ________ to generate new product
ideas.
A) marketing strategy developmentB) crowdsourcing
C) concept development
D) &usiness analysisE) test marketing
Answer B
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
=) 'hich statement is most likely true a&out idea generation in the new product development process(
A) dea generation is most e!!ective when it occurs a!ter idea screening.B) "ost companies set a limit !or the num&er o! ideas generated to simpli!y the process.
C) ntrapreneurial programs ena&le customers to contri&ute to the idea generation process.
D) dea generation is usually !ollowed &y procedures that reduce the total num&er o! ideas.E) A company can either develop ideas through internal or e4ternal sources &ut not through &oth.
Answer D
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
>) ?uest nc. recently conducted a &rainstorming session that generated a large num&er o! ideas
!or adding new products and services. ?uest managers will most likely use ________ ne4t to
arrive at a realistic num&er o! ideas to adopt.A) crowdsourcing
B) idea screening
C) concept testing
D) concept developmentE) &usiness analysis
Answer B
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
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10) 'hich o! the !ollowing steps o! the new product development process would most likely use
an 5;';' !ramework(
A) idea generationB) idea screening
C) concept testing
D) test marketingE) commerciali-ation
Answer B
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
11) A product concept is ________.A) the most promising product idea that develops at the &rainstorming stage
B) a detailed version o! a product idea stated in meaning!ul consumer terms
C) the way consumers perceive an actual or potential product
D) a detailed strategy to promote the launch o! a new productE) a product idea that is generated through crowdsourcing
Answer BDi!!iculty "oderate
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1%) A ________ is the way consumers perceive an actual or potential product.
A) product audit
B) product !eatureC) product image
D) product !ramework
E) product conceptAnswer C
Di!!iculty Easy
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
1,) The stage in which a product concept is presented to groups o! target consumers physicallyor sym&olically is re!erred to as ________.
A) concept testing
B) concept developmentC) test marketing
D) marketing strategy development
E) crowdsourcingAnswer A
Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
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13) n a se<uential new product development process* concept testing is most likely to &e
!ollowed &y ________.
A) idea screeningB) marketing strategy development
C) &usiness analysis
D) product developmentE) test marketing
Answer B
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
1) The !irst part o! a marketing strategy statement descri&es the ________ o! a new product.A) planned price
B) marketing &udget
C) marketing mi4 strategy
D) target marketE) planned long;run sales
Answer DDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
18) The second part o! a marketing strategy statement descri&es the ________ o! a new product.
A) marketing mi4 strategy
B) pro!it goalsC) planned price
D) target market
E) planned value propositionAnswer C
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
19) The third part o! a marketing strategy statement descri&es the ________ o! a new product.A) pro!it goals
B) distri&ution
C) marketing &udgetD) planned value proposition
E) target market
Answer ADi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
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1=) ________ involves a review o! the sales* costs* and pro!it pro+ections !or a new product to
!ind out whether they satis!y a companys o&+ectives.
A) @endor analysisB) 2ort!olio analysis
C) Business analysis
D) 7'$T analysisE) Concept analysis
Answer C
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
1>) ollingsworth is a retail company that is planning to release a new line o! lu4ury personalcare products. ts managers are now reviewing the sales history o! similar products and
conducting marketing surveys to estimate minimum and ma4imum sales !or the product. n
which o! the !ollowing stages o! the new product development process is the product(
A) test marketingB) idea screening
C) &usiness analysisD) marketing strategy development
E) concept testing
Answer CDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
%0) n a se<uential new product development process* which o! the !ollowing is true o! the
product development step(A) 2roduct development is usually !ollowed &y a &usiness analysis o! the product.
B) 2roduct development involves introducing a product into realistic market settings.
C) 2roduct development avoids testing products on actual customers due to lia&ility concerns.D) 2roduct development is usually !ollowed &y test marketing.
E) 2roduct development helps top management review pro!it pro+ections.
Answer D
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
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%1) n a se<uential new product development process* once a product or service passes the
&usiness test* it moves into ________.
A) concept developmentB) product development
C) test marketing
D) strategy developmentE) commerciali-ation
Answer B
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
%%) n the ________ stage o! new product development* products undergo rigorous tests to makesure that they per!orm sa!ely and e!!ectively* or that consumers will !ind value in them.
A) &usiness analysis
B) idea generation
C) concept screeningD) product development
E) test marketingAnswer D
Di!!iculty Easy
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
%,) ! a product passes &oth the concept test and the product test* the ne4t step is most likely to
&e ________.A) marketing strategy development
B) product development
C) test marketingD) &usiness analysis
E) concept development
Answer CDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
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%3) 'ayne ndustries* a retail and home improvement store* is developing a new lawnmower.
The marketing strategy !or the product has already &een developed and presented. A prototype
has also &een developed &y the companys 56D team. The prototype is now &eing testedrigorously to ensure that there are no product lia&ility issues. $nce the prototype o! the
lawnmower passes product tests* the ne4t step is most likely to &e ________.
A) test marketingB) port!olio analysis
C) commerciali-ation
D) internal marketingE) &usiness analysis
Answer A
Di!!iculty Di!!icult
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
%) n which o! the !ollowing cases is little or no test marketing most likely recommended !or a
new product(A) when the product re<uires a ma+or investment
B) when management is unsure o! the pro+ected demand !or the product
C) when the risks associated with introducing the product are high
D) when management is unsure o! the marketing program !or the productE) when the costs o! developing and introducing the product are low
Answer E
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
%8) Evans and ills* a &everages manu!acturing company* has developed a new line o! specialty
teas and is seeking regular input !rom the test marketing process. To !acilitate this process* the!irm uses Buyer7can* a so!tware that generates store;&y;store* week;&y;week reports on the
actual sales o! tested products and the impact o! in;store and in;home marketing e!!orts. 'hich
o! the !ollowing approaches does this scenario illustrate(
A) standard test marketsB) inventory tracking
C) controlled test markets
D) simulated test marketsE) direct commerciali-ation
Answer C
Di!!iculty Di!!icultChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking n!ormation technology
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%9) ________ is the stage where a product and its proposed marketing program are introduced
into realistic market settings.
A) "arket strategy developmentB) Concept testing
C) Test marketing
D) Concept developmentE) Business analysis
Answer C
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
%=) sing ________* researchers measure consumer responses to new products and marketingtactics in la&oratory stores or virtual online shopping environments.
A) simulated test markets
B) controlled test markets
C) &usiness analysisD) standard test markets
E) concept developmentAnswer A
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
%>) ntroducing a new product into the market is called ________.A) test marketing
B) segmentation
C) product developmentD) commerciali-ation
E) market penetration
Answer DDi!!iculty Easy
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
,0) 'hich o! the !ollowing costs is most likely associated with commerciali-ation(
A) &uilding or renting a manu!acturing !acility
B) paying groups o! consumers !or participating in crowdsourcing activitiesC) determining a products planned price* distri&ution* and marketing &udget
D) developing a prototype o! a product
E) using simulated tests to measure market capacityAnswer A
Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
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,1) A company launching a new product must !irst decide ________.
A) where to launch the product
B) the sample si-e o! the marketC) when to launch the product
D) the via&ility o! a glo&al launch
E) the &udget !or print advertisingAnswer C
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
,%) nder a ________ new product development approach* company departments work closely
together in cross;!unctional groups* overlapping the steps in the product development process tosave time and increase e!!ectiveness.
A) cross;sectional
B) simultaneous
C) se<uentialD) team;&ased
E) systematicAnswer D
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
,,) nder a ________ product development approach* one company department works tocomplete its stage o! the product development process &e!ore passing the new product along to
the ne4t department and stage.
A) cross;sectionalB) simultaneous
C) se<uential
D) team;&asedE) systematic
Answer C
Di!!iculty Easy
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
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,3) The team;&ased new product development approach saves times &ecause departments work
closely together in ________.
A) divisional teamsB) pro&lem;solving teams
C) sel!;managed groups
D) cross;!unctional teamsE) independent groups
Answer D
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
,) 'hich o! the !ollowing is a disadvantage o! a team;&ased approach to new productdevelopment(
A) t lengthens the time re<uired to get the right products to market.
B) t involves the use o! a rigid* se<uential product development approach.
C) A &ottleneck at one place can seriously hinder the entire pro+ect.D) $rgani-ational con!usion and tension are likely to a!!ect the process.
E) The process is highly ine!!ective !or products with short li!e cycles.Answer D
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
,8) 'hen an end users pro&lems and e4periences de!ine a new product* the approach is called
________.A) customer;centered new product development
B) team;&ased new product development
C) se<uential product developmentD) supplydemand new product development
E) systematic new product development
Answer ADi!!iculty Easy
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
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,9) At antastic lavors* a large regional chain o! candy stores* employees !rom marketing*
design* production* and !inance departments work in cross;!unctional groups to save time and
money in the new product development process. rom this description* it can &e in!erred thatantastic lavors uses aFn) ________ approach.
A) intradepartmental new product development
B) se<uential new product developmentC) team;&ased new product development
D) simulated test market
E) controlled test marketAnswer C
Di!!iculty Di!!icult
Chapter #$ %
Course #$ Descri&e the steps o! the new product development processAAC7B Analytic thinking
,=) An innovation management system would most likely &e used &y ________.
A) managers to update details a&out customer in!ormationB) &rand managers to collect* review* and evaluate new product ideas
C) suppliers to access inventory in!ormationD) product managers to track logistics o! a new product
E) human resource managers to update in!ormation on employee incentives
Answer BDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
,>) ________ is used to study the course o! a products sales and pro!its !or the duration that it is
produced and sold in the market.
A) A se<uential product development processB) A product li!e cycle
C) Business analysis
D) @endor analysisE) 2ort!olio analysis
Answer B
Di!!iculty Easy
Chapter #$ ,Course #$ Discuss the product li!e cycle
1%
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30) 'hich o! the !ollowing statements is most likely true a&out the product li!e cycle(
A) Throughout the product introduction stage* sales are -ero.
B) The growth stage is the longest stage o! the product li!e cycle.C) 2ro!its are none4istent in the growth stage.
D) Growth is a period o! rapid market acceptance and increasing pro!its.
E) "aturity is the period when sales !all o!! &ut pro!its continue to rise.Answer D
Di!!iculty "oderate
Chapter #$ ,Course #$ Discuss the product li!e cycle
31) A product li!e cycle has !ive distinct stages product development* introduction* growth*maturity* and ________.
A) sta&ili-ation
B) re&randingC) decline
D) progression
E) segmentationAnswer C
Di!!iculty Easy
Chapter #$ ,
Course #$ Discuss the product li!e cycle
3%) 'hich o! the !ollowing is true o! the product li!e cycle F2#C)(
A) All products generally go through all !ive stages o! the 2#C.B) All products pass through the stages o! 2#C in the same order.
C) t is generally di!!icult to !orecast the sales level at each 2#C stage.
D) The 2#C concept can &e applied to styles &ut not to !ashions and !ads.E) 2roduct !orms have longer li!e cycles than product classes.
Answer C
Di!!iculty "oderateChapter #$ ,
Course #$ Discuss the product li!e cycle
3,) 7ome products that have entered the decline stage can &e cycled &ack to the growth stagethrough ________.
A) concept testing
B) test marketingC) sole sourcing
D) repositioning
E) data miningAnswer D
Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
1,
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33) ads are characteri-ed &y their ________.
A) enduring nature that spans several generations
B) low rates o! adoption &y consumersC) unusually high sales and rapid decline
D) &asic and distinctive modes o! e4pression that seldom &ecome unpopular
E) non;attainment o! the last two stages o! the product li!e cycleAnswer C
Di!!iculty "oderate
Chapter #$ ,Course #$ Discuss the product li!e cycle
3) 'hich o! the !ollowing would most likely have the longest duration in a market and &echaracteri-ed &y several periods o! renewed interest(
A) a style
B) a !ashionC) a !ad
D) a trend
E) a dri!tAnswer A
Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
38) lurr&ies* a line o! winter accessories &y a leading !ashion la&el* <uickly !ell in and out o!
!avor with customers. lurr&ies represents an e4ample o! aFn) ________.A) !orm
B) !ashion
C) !adD) style
E) dri!t
Answer CDi!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
39) 'hen a product hits the ________ stage* pro!its level o!! or decline &ecause o! increased
marketing outlays to de!end the product against competition.
A) productionB) decline
C) maturity
D) test marketingE) conception
Answer C
Di!!iculty "oderate
Chapter #$ ,Course #$ Discuss the product li!e cycle
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3=) n which stage o! the product li!e cycle will promotional e4penditures &e signi!icantly high
in an attempt to create consumer awareness o! a product and its !eatures(
A) product developmentB) introduction
C) growth
D) maturityE) adoption
Answer B
Di!!iculty EasyChapter #$ ,
Course #$ Discuss the product li!e cycle
3>) 'hich o! the !ollowing is true a&out the introduction stage o! a new product(
A) 2ro!its are typically high.
B) 2romotion spending is relatively low.C) #ess money is needed to attract distri&utors.
D) Companies tend to avoid &asic versions o! the product.
E) 7ales growth tends to &e slow.Answer E
Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycleAAC7B Analytic thinking
0) n the ________ stage* a !irm most likely !aces a trade;o!! &etween high market share andhigh current pro!it.
A) growth
B) declineC) maturity
D) introduction
E) commerciali-ationAnswer A
Di!!iculty Easy
Chapter #$ ,
Course #$ Discuss the product li!e cycle
1) 'hich o! the !ollowing is true o! the growth stage o! the product li!e cycle(
A) Hew competitors avoid the market.B) 2rices tend to increase signi!icantly.
C) Early adopters stop &uying the product.
D) 2ro!its are none4istent at this stage.E) 7ales start clim&ing <uickly.
Answer E
Di!!iculty "oderate
Chapter #$ ,Course #$ Discuss the product li!e cycle
1
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%) Cra!t nc.s :rayons is a multi;color chalk material that was released in the market over a
century ago. 7ince the release* the company has had remarka&le sales and :rayons has remained
unchanged. owever* over the last !ew years* sales o! :rayons have &een stagnant. Competitorshave &egun marking prices down* and increasing their advertising and sales promotions. Cra!ts
:rayons is most likely in the ________ stage o! the 2#C.
A) introductionB) maturity
C) growth
D) declineE) incu&ation
Answer B
Di!!iculty Di!!icult
Chapter #$ ,Course #$ Discuss the product li!e cycle
AAC7B Analytic thinking
,) Tavera* an automo&ile company* e4perienced a signi!icant decline in sales over the last 10
months o! its !lagship car* Tetra. n response* Tavera reduced its 56D* advertising* and salese4penditures !or Tetra in an attempt to improve short;run pro!its. 'hich term &est descri&es
Taveras actions with regards to Tetra(
A) sales outsourcing
B) product modi!icationC) industry repositioning
D) product harvesting
E) marketing mi4 modi!icationAnswer D
Di!!iculty Di!!icult
Chapter #$ ,Course #$ Discuss the product li!e cycle
AAC7B Analytic thinking
3) 2arvon* a cleaning product* is in the maturity stage o! the product li!e cycle* and 2arvon
managers have decided to modi!y the market. 'hich o! the !ollowing steps should 2arvon
managers most likely take to achieve this goal(
A) !ind new market segments !or the &randB) improve the overall <uality o! the product
C) reduce mass media advertising e4penses
D) o!!er improved services to new &uyersE) conduct controlled test marketing activities
Answer A
Di!!iculty "oderateChapter #$ ,
Course #$ Discuss the product li!e cycle
AAC7B Analytic thinking
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) Gershwin* a musical toy !or toddlers* is in the maturity stage o! the product li!e cycle* and
Gershwin managers have decided to modi!y the product. 'hat will Gershwin managers most
likely do to achieve this goal(A) change distri&utors
B) o!!er coupons !or the toy
C) change the packaging o! the toyD) launch an online advertising campaign
E) cut prices o! the toy to attract new customers
Answer CDi!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
AAC7B Analytic thinking
8) A product is in the maturity stage o! the product li!e cycle* and the company decides tomodi!y the marketing mi4. 'hich o! the !ollowing steps is the company most likely to take(
A) use aggressive sales promotions
B) change !eatures o! the productC) improve product <uality
D) !ind new uses !or the product
E) e4plore new market segments
Answer ADi!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycleAAC7B Analytic thinking
9) 'hich o! the !ollowing is most likely true o! a product in the maturity stage o! the productli!e cycle(
A) 7ales are -ero* and the companys investment costs mount.
B) Hew competitors enter the market.C) A slowdown occurs in sales growth.
D) 7ales increase with decreasing competition.
E) Hew distri&ution channels are ac<uired.
Answer CDi!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycleAAC7B Analytic thinking
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=) A product has hit the ________ stage when sales plunge to -ero* or they drop to a low level
where they continue !or many years.
A) declineB) growth
C) maturity
D) ideationE) analysis
Answer A
Di!!iculty EasyChapter #$ ,
Course #$ Descri&e the steps o! the new product development process
>) As a result o! ________* a company cannot make its product illegally similar to acompetitors already esta&lished product.
A) anti;monopoly laws
B) patent laws
C) antitrust lawsD) product warranties
E) product lia&ilityAnswer B
Di!!iculty "oderate
Chapter #$ 3Course #$ Descri&e the steps o! the new product development process
AAC7B Ethical understanding and reasoning
80) 7ome companies are now appointing ________* whose +o& is to protect consumers !rom
harm and the company !rom lia&ility &y proactively !erreting out potential product pro&lems.
A) intradepartmental teamsB) idea generation teams
C) product audit committees
D) product stewardsE) listening o!!icers
Answer D
Di!!iculty Easy
Chapter #$ 3Course #$ Descri&e the steps o! the new product development process
AAC7B Ethical understanding and reasoning
81) n the conte4t o! new product development* new products include original products that a
!irm develops through its 56D e!!orts.
Answer T5EDi!!iculty "oderate
Chapter #$ 1
Course #$ Descri&e the steps o! the new product development process
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8%) Ac<uisition is one o! the ways through which a company o&tains new products.
Answer T5E
Di!!iculty EasyChapter #$ 1
Course #$ Descri&e the steps o! the new product development process
8,) Customers o! a &rand are internal sources o! new product ideas !or the &rand.
Answer A#7E
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
83) 7ince suppliers are so close to the market* they are valua&le sources o! in!ormation a&outconsumer pro&lems* marketing opportunities* and new product possi&ilities.
Answer A#7E
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
8) n the new product development process* the purpose o! idea generation is to create a large
num&er o! ideas* and the purpose o! the stages !ollowing it is to reduce that num&er.
Answer T5EDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
88) A concrete and physical presentation o! a product concept is likely to increase the relia&ility
o! the concept test.
Answer T5EDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
89) During concept testing* a product is evaluated &y management without any input !rom
e4ternal sources.Answer A#7E
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
8=) The stage at which new product and marketing programs are introduced into realistic marketsettings is called concept testing.
Answer A#7E
Di!!iculty Easy
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
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8>) 'ith the crowdsourcing approach* a company can estimate the sales volume that a new
product will generate.
Answer A#7EDi!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
90) 'hen developing a new product* concept testing should ideally &e !ollowed &y marketing
strategy development.Answer T5E
Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
91) The &usiness analysis stage is the !inal step in the new product development process.
Answer A#7E
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
9%) 2roduct development usually costs the least among all the steps o! the new product
development process.Answer A#7E
Di!!iculty Easy
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
9,) CisTech is test marketing its new computers &y measuring consumer responses to the new
computers and its marketing tactics in la&oratory stores. CisTech is using controlled testmarketing in this scenario.
Answer A#7E
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
93) 7e<uential product development* which is a team;oriented approach* ena&les !irms to &ring
products to market very <uickly.Answer A#7E
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
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9) Team;&ased new product development encourages employees o! all departments to work
within the roles and &oundaries o! their individual departments &e!ore com&ining the results o!
their e!!orts at the commerciali-ation stage.Answer A#7E
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
98) An innovation management system collects* reviews* evaluates* and manages new productideas.
Answer T5E
Di!!iculty Easy
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
99) Test marketing gives management the in!ormation needed to make a !inal decision a&out
whether to launch a new product.Answer T5E
Di!!iculty EasyChapter #$ %
Course #$ Descri&e the steps o! the new product development process
9=) According to the author* when tough economic times hit* or when a company !aces !inancial
di!!iculties* management should stop spending on new product development.
Answer A#7E
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
9>) The maturity stage o! the 2#C is characteri-ed &y a slowdown in sales growth.
Answer T5E
Di!!iculty EasyChapter #$ ,
Course #$ Discuss the product li!e cycle
=0) "odi!ying a product is an ine!!ective strategy in the maturity period o! the product li!e cycle &ecause the products decline is irreversi&le at this stage.
Answer A#7E
Di!!iculty "oderateChapter #$ ,
Course #$ Discuss the product li!e cycle
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=1) During the decline stage o! the 2#C* product sales may plunge to -ero* or they may drop to a
low level where they continue !or many years.
Answer T5EDi!!iculty Easy
Chapter #$ ,
Course #$ Discuss the product li!e cycle
=%) 'hen a company decides to maintain a product in the decline stage* it has no alternative &ut
to sell the product to another !irm or simply li<uidate it at salvage value.Answer A#7E
Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
=,) The !ederal government has the legal authority to prevent a company !rom adding products
through ac<uisitions i! the ac<uisition threatens to lessen competition.
Answer T5EDi!!iculty Easy
Chapter #$ 3Course #$ Descri&e the steps o! the new product development process
AAC7B Ethical understanding and reasoning
=3) The Consumer 2roduct 7a!ety Act o! 1>9% esta&lished the Consumer 2roduct 7a!ety
Commission* which has the authority to &an or sei-e potentially harm!ul products and set severe
penalties !or violation o! the law.
Answer T5EDi!!iculty Easy
Chapter #$ 3
Course #$ Descri&e the steps o! the new product development processAAC7B Ethical understanding and reasoning
=) 'hen a company decides to go international with a product* it must !irst !igure out what products and services to introduce and in which countries.
Answer T5E
Di!!iculty Easy
Chapter #$ 3Course #$ Descri&e the steps o! the new product development process
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=8) #ist and e4plain some o! the reasons why new products !ail.
Answer There are several reasons why a new product may !ail. Although an idea may &e good*
a company might have overestimated the market si-e. The actual product itsel! may have &een poorly designed. Another possi&le reason is that the product may have &een incorrectly
positioned in the market. t may have &een priced too high* or advertised poorly. t is also
possi&le that a high;level e4ecutive pushed a !avorite idea despite poor market research !indings.7ometimes* the costs o! product development are higher than e4pected. The product may have
&een launched at the wrong time* or competitors may have !ought &ack harder than e4pected.
Di!!iculty "oderateChapter #$ 1
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
=9) Brie!ly descri&e the steps in the new product development process.
Answer The new product development process generally consists o! eight se<uential stages.The process starts with idea generation. dea generation can &e done through internal or e4ternal
sources. He4t comes idea screening , which reduces the num&er o! ideas &ased on the companys
own criteria. deas that pass the screening stage continue through product concept development , in which a detailed version o! the new product idea is stated in meaning!ul consumer terms. This
stage includes concept testing , in which new product concepts are tested with a group o! target
consumers to determine whether the concepts have strong consumer appeal. 7trong concepts
proceed to marketing strategy development , in which an initial marketing strategy !or the new product is developed !rom the product concept. n the &usiness;analysis stage* a review o! the
sales* costs* and pro!it pro+ections !or a new product is conducted to determine whether the new
product is likely to satis!y the companys o&+ectives. 'ith positive results here* the ideas &ecomemore concrete through product development* where the product concept is developed into a
physical product and test marketing* where the product and its proposed marketing program are
introduced into realistic market settings. ! all goes well* the product gets launched duringcommerciali-ation. Hew product development involves more than +ust going through a set o!
steps. Companies must take a systematic* holistic approach to managing this process. 7uccess!ul
new product development re<uires a customer;centered* team;&ased* systematic e!!ort.Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
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==) 'hat are the ma+or e4ternal sources o! new product ideas( 'hat type o! in!ormation can &e
gathered !rom each o! these sources( ow do !irms &ene!it !rom such in!ormation(
Answer The ma+or e4ternal sources o! new product ideas include customers* suppliers*distri&utors* competitors* and research !irms. These sources are close to the market and tend to
re!lect current tastes and pre!erences. Distri&utors are linked to the market and can pass along
in!ormation a&out consumer pro&lems and new product possi&ilities. 7uppliers can tell acompany a&out new concepts* techni<ues* and materials that can &e used to develop new
products. Consumers o!ten create new products and services on their own. The company can
analy-e customer <uestions and complaints to !ind new products that &etter solve consumer pro&lems. $r it can invite customers to share suggestions and ideas. Companies can also directly
involve customers in the innovation process through customer co;creation. $ther idea sources
include trade maga-ines* shows* 'e& sites* and seminars government agencies advertising
agencies marketing research !irms university and commercial la&oratories and inventors.Companies can also watch competitors ads to get clues a&out their new products. They &uy
competing new products* take them apart to see how they work* analy-e their sales* and decide
whether they should &ring out a new product o! their own. Companies can &etter match their
product o!!erings to customer needs and wants when these sources are involved in the new product development process.
Di!!iculty Di!!icultChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
=>) 'hat is crowdsourcing( ow is crowdsourcing use!ul in new product development(
Answer Crowdsourcing re!ers to throwing the innovation doors wide open and inviting &roadcommunities o! peopleIcustomers* employees* independent scientists and researchers* and even
the pu&lic at largeIinto the new product innovation process. "any companies are now
developing crowdsourcing or open;innovation new product idea programs. 5ather than creatingand managing their own crowdsourcing plat!orms* companies can use third;party crowdsourcing
networks* such as nnoCentive* TopCoder* ypios* and Jovoto. or e4ample* organi-ations
ranging !rom ace&ook and 2ay2al to E72H* HA7A* and the 7alk nstitute tap into TopCodersnetwork o! nearly 300*000 mathematicians* engineers* so!tware developers* and designers !or
ideas and solutions. Crowdsourcing can produce a !lood o! innovative ideas. t ena&les
companies to rely not only on one source or another &ut on e4tensive innovation networks that
capture ideas and inspirations !rom multiple sources.Di!!iculty "oderate
Chapter #$ %
Course #$ Descri&e the steps o! the new product development processAAC7B Analytic thinking
>0) Distinguish &etween a product idea* a product concept* and a product image.Answer A product idea is an idea !or a possi&le product that a company can see itsel! o!!ering to
the market. A product concept is a detailed version o! the product idea stated in meaning!ul
consumer terms. A product image is the way consumers perceive an actual or potential product.
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
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>1) E4plain what happens during the concept testing stage o! new product development.
Answer Concept testing re!ers to testing new product concepts with groups o! target consumers.The concepts may &e presented to consumers sym&olically or physically. or some concept tests*
a word or picture description might &e su!!icient. owever* concrete and physical presentations
usually increase the relia&ility o! the concept test. A!ter &eing e4posed to the concept* consumersare asked <uestions a&out it. Their answers will help the company decide which concept has the
strongest appeal.
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
>%) E4plain what happens during the &usiness analysis stage o! new product development.Answer Business analysis involves a review o! the sales* costs* and pro!it pro+ections !or a new
product to !ind out whether they satis!y a companys o&+ectives. ! they do* the product can move
to the product development stage. To estimate sales* the company might look at the sales history
o! similar products and conduct market surveys. t can then estimate minimum and ma4imumsales to assess the range o! risk. A!ter preparing the sales !orecast* management can estimate the
e4pected costs and pro!its !or the product* including marketing* 56D* operations* accounting*and !inance costs. The company then uses the sales and costs !igures to analy-e the new
products !inancial attractiveness.
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
>,) 'hat is test marketing( 'hat role does it play in new product development( 'hat !actors do
!irms consider when determining whether or not to conduct test marketing(
Answer Test marketing is the stage at which a product and its proposed marketing program areintroduced into realistic market settings. A product reaches this stage only a!ter it passes the
concept test and product test stage. Test marketing gives the marketer e4perience with marketing
a product &e!ore going to the great e4pense o! !ull introduction. t lets a company test the productand its entire marketing programItargeting and positioning strategy* advertising* distri&ution*
pricing* &randing and packaging* and &udget levels. The amount o! test marketing needed varies
with each new product. Test marketing costs can &e high* and testing takes time that may allow
market opportunities to slip &y or competitors to gain advantages. A company may do little or notest marketing when the costs o! developing and introducing a new product are low* or when
management is already con!ident a&out the new product.
Di!!iculty Di!!icultChapter #$ %
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking
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>3) De!ine commerciali-ation. E4plain the two important issues that a company must decide
during this stage.
Answer ntroducing a new product into a market is called commerciali-ation. A companylaunching a new product must !irst decide on introduction timing. ! the new product will eat into
the sales o! other company products* the introduction may &e delayed. ! the product can &e
improved !urther* or i! the economy is down* the company may wait until the !ollowing year tolaunch it. owever* i! competitors are ready to introduce their own competing products* the
company may push to introduce its new product sooner. He4t* the company must decide where to
launch the new productIin a single location* a region* the national market* or the internationalmarket. 7ome companies may <uickly introduce new models into the !ull national market.
Companies with international distri&ution systems may introduce new products through swi!t
glo&al rollouts.
Di!!iculty "oderateChapter #$ %
Course #$ Descri&e the steps o! the new product development process
>) 'hat are the advantages o! an innovation management system !or developing new products(Answer The new product development process should &e holistic and systematic rather than
compartmentali-ed and hapha-ard. $therwise* !ew new ideas will sur!ace* and many good ideaswill sputter and die. To avoid these pro&lems* a company can install an innovation management
system to collect* review* evaluate* and manage new product ideas. The innovation management
system approach yields two !avora&le outcomes. irst* it helps create an innovation;orientedcompany culture. t shows that top management supports* encourages* and rewards innovation.
7econd* it will yield a larger num&er o! new product ideas* among which will &e !ound some
especially good ones. The good new ideas will &e more systematically developed* producing
more new product successes. Good ideas will not su!!er !rom the lack o! a sounding &oard or asenior product advocate.
Di!!iculty "oderate
Chapter #$ %Course #$ Descri&e the steps o! the new product development process
>8) Brie!ly e4plain each step in a typical product li!e cycle.
Answer 2roduct development &egins when a company !inds and develops a new product idea.
During this stage* sales are -ero and the companys investment costs mount. ntroduction is a
period o! slow sales growth as the product is introduced in the market. 2ro!its are none4istent inthis stage &ecause o! the heavy e4penses o! product introduction. Growth is a period o! rapid
market acceptance and increasing pro!its. "aturity is a period o! slowdown in sales growth
&ecause the product has achieved acceptance &y most potential &uyers. 2ro!its level o!! ordecline &ecause o! increased marketing outlays to de!end the product against competition.
Decline is the period when sales !all o!! and pro!its drop. At this stage* a company may decide to
maintain* harvest* or drop a product.Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
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>9) Di!!erentiate &etween styles* !ashions* and !ads. llustrate your response with e4amples o!
each.
Answer A style is a &asic and distinctive mode o! e4pression. or e4ample* styles appear inhomes Fcolonial* ranch* transitional)* clothing F!ormal* casual)* and art Frealist* surrealist*
a&stract). $nce a style is invented* it may last !or generations* passing in and out o! vogue. A
style has a cycle showing several periods o! renewed interest.A !ashion is a currently accepted or popular style in a given !ield. or e4ample* the more !ormal
K&usiness attireK look o! corporate dress o! the 1>=0s and 1>>0s gave way to the K&usiness
casualK look o! the %000s and %010s. ashions tend to grow slowly* remain popular !or a while*and then decline slowly. ads are temporary periods o! unusually high sales driven &y consumer
enthusiasm and immediate product or &rand popularity. A !ad may &e part o! an otherwise normal
li!e cycle* as in the case o! recent surges in the sales o! poker chips and accessories. $r the !ad
may comprise a &rands or products entire li!e cycle.Di!!iculty Di!!icult
Chapter #$ ,
Course #$ Discuss the product li!e cycle
AAC7B Analytic thinking
>=) Brie!ly descri&e the maturity stage o! the product li!e cycle.Answer At some point* a products sales growth will slow down* and it will enter the maturity
stage. This maturity stage normally lasts longer than the previous stages* and it poses strong
challenges to marketing management. "ost products are in the maturity stage o! the li!e cycle*and there!ore most o! marketing management deals with the mature product. The slowdown in
sales growth results in many producers with many products to sell. n turn* this overcapacity
leads to greater competition. Competitors &egin marking down prices* increasing their
advertising and sales promotions* and upping their product development &udgets to !ind &etterversions o! the product. These steps lead to a drop in pro!it. 7ome o! the weaker competitors start
dropping out* and the industry eventually contains only well;esta&lished competitors. Although
many products in the mature stage appear to remain unchanged !or long periods* most success!ulones are actually evolving to meet changing consumer needs. 2roduct managers should do more
than simply ride along with or de!end their mature productsIa good o!!ense is the &est de!ense.
They should consider modi!ying the market* product o!!ering* and marketing mi4.Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycle
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>>) 'hat options are availa&le to a !irm that has a product in the decline stage o! the product li!e
cycle( Brie!ly discuss each option.
Answer A !irm has many options with regard to a !ailing product. t may decide to maintain its &rand* repositioning or reinvigorating it in hopes o! moving it &ack into the growth stage o! the
product li!e cycle. "anagement may decide to harvest the product* which means reducing
various costs Fplant and e<uipment* maintenance* 56D* advertising* sales !orce)* hoping thatsales hold up. ! success!ul* harvesting will increase the companys pro!its in the short run.
inally* management may decide to drop the product !rom its line. The company can sell the
product to another !irm or simply li<uidate it at salvage value. ! the company plans to !ind a &uyer* it will not want to run down the product through harvesting.
Di!!iculty "oderate
Chapter #$ ,
Course #$ Discuss the product li!e cycleAAC7B Analytic thinking
100) Discuss pu&lic policy issues* government regulations* and laws that a!!ect new product
development.Answer "arketers should care!ully consider pu&lic policy issues and regulations regarding
ac<uiring or dropping products* patent protection* product <uality and sa!ety* and productwarranties. 5egarding new products* the government may prevent companies !rom adding
products through ac<uisitions i! the e!!ect threatens to lessen competition. Companies dropping
products must &e aware that they have legal o&ligations* written or implied* to their suppliers*dealers* and customers who have a stake in the dropped product. Companies must also o&ey .7.
patent laws when developing new products. A company cannot make its product illegally similar
to another companys esta&lished product.
"anu!acturers must comply with speci!ic laws regarding product <uality and sa!ety. The ederalood* Drug* and Cosmetic Act protects consumers !rom unsa!e and adulterated !ood* drugs* and
cosmetics. @arious acts provide !or the inspection o! sanitary conditions in the meat; and poultry;
processing industries. 7a!ety legislation has &een passed to regulate !a&rics* chemical su&stances*automo&iles* toys* and drugs and poisons. The Consumer 2roduct 7a!ety Act o! 1>9% esta&lished
the Consumer 2roduct 7a!ety Commission* which has the authority to &an or sei-e potentially
harm!ul products and set severe penalties !or violation o! the law.Di!!iculty "oderate
Chapter #$ 3
Course #$ Descri&e the steps o! the new product development process
AAC7B Analytic thinking