chpt 11

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  1. A low failure rate, greater competition, and wide distribution typify the introductory stage of the product life cycle.

    True or False?
    False

    A high failure rate, little competition, frequent product modification, and limited distribution typify the introductory stage of the product life cycle. The introductory stage of the product life cycle represents the full-scale launch of a new product into the market place. See 11-6:Product Life Cycles
  2. A period during which sales decrease at an increasing rate signals the beginning of the maturity stage of the product life cycle.

    True or False?
    False

    A period during which sales increase at a decreasing rate signals the beginning of the maturity stage of the product life cycle. Normally, this is the longest stage of the product life cycle. See 11-6:Product Life Cycles
  3. In the growth stage of the product life cycle, sales typically grow at an increasing rate, many competitors enter the market, and large companies may start to acquire pioneering firms.

    True or False?
    True

    If a product category survives the introductory stage, it then advances to the growth stage of the life cycle. In the growth stage of a product life cycle, sales typically grow at an increasing rate, many competitors enter the market, and large companies may start to acquire pioneering firms. See 11-6:Product Life Cycles
  4. An organized effort to generate many ideas from various sources is important for any firm that wishes to produce a continuing flow of new products.

    True or False?
    True

    An organized effort to generate many ideas from various sources is important for any firm that wishes to produce a continuing flow of new products. Many new product ideas are necessary to produce one successful new product. See 11-6:Product Life Cycles
  5. 3D printing is a process which is sometimes used to create three dimensional prototypes of a product quickly and at a relatively low cost.

    True or False?
    True

    The 3D printing is a process which is sometimes used to create three dimensional prototypes quickly and at a relatively low cost. It is used by the R&D or engineering department of a company to develop a prototype of a product. See 11-2:The New-Product Development Process
  6. Eliminating all nonessential marketing expenses and letting sales decline is one of the successful strategies for marketing products in the decline stage of their life cycle.

    True or False?
    True

    Some firms eliminate all nonessential marketing expenses and let sales decline as more and more customers discontinue purchasing products that are in the decline stage of their life cycle. It is one of the successful strategies for marketing products in the decline stage of the product life cycle. See 11-6:Product Life Cycles
  7. The use of concept tests during the idea screening stage of the new-product development process reduces the efficiency of screening.

    True or False?
    False

    Concept tests are often used in the idea screening stage to rate concept (or product) alternatives. They are considered fairly good predictors of success for line extensions. See 11-2:The New-Product Development Process
  8. Increasing globalization of markets and competition provides a reason for multinational firms to consider new-product development from a worldwide perspective.

    True or False?
    True

    Increasing globalization of markets and competition provides a reason for multinational firms to consider new-product development from a worldwide perspective. A firm that starts with a global strategy is better able to develop products that are marketable worldwide. See 11-4:Global Issues in New-Product Development
  9. The most important factor in successful new-product introduction is a good match between the product and market needs.

    True or False?
    True

    The most important factor in successful new-product introduction is a good match between the product and market needs—as the marketing concept would predict. Successful new products deliver a meaningful and perceivable benefit to a sizeable number of people or organizations and are different in some meaningful ways from their intended substitutes. See 11-3:Why Some Products Succeed and Others Fail
  10. A new-product strategy describes the characteristics of products an organization wants to offer and the markets it wants to serve.

    True or False?
    True

    A new-product strategy specifies the roles that new products must play in an organization's overall plan and describes the characteristics of products the organization wants to offer and the markets it wants to serve. See 11-2:The New-Product Development Process
  11. Compatible products diffuse more slowly than incompatible products.

    True or False?
    False

    Incompatible products diffuse more slowly than compatible products. Compatibility is the degree to which a new product is inconsistent with existing values and product knowledge, past experiences, and current needs. See 11-5:The Spread of New Products
  12. Hakimo Corp., a multinational corporation that specializes in audio equipment, has developed a wireless speaker that sits unobtrusively on a desktop. The tiny, yet strong, twin speakers use Bluetooth to stream music directly from a PC or MP3 player. This small wireless speaker, which is radically different from anything currently on the market, can most likely be classified as a:
    A. repositioned product.
    B. discontinuous innovation.
    C. lower-priced product.
    D. revision of an existing product.
    B. discontinuous innovation.

    The small wireless speaker developed by Hakimo Corp. is an example of a discontinuous innovation. These products create an entirely new market. Discontinuous innovations represent the smallest category of new products. See 11-1: The Importance of New Products
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  13. Which of the following is true of customer innovation centers?
    A. They depend largely on distributors to gather information about customer needs and expectations.
    B. They involve key suppliers early in the process, capitalize on their knowledge, and enable them to develop critical component parts.
    C. They provide a forum for meeting with customers and directly involving them in the process of developing new ideas.
    D. They require a grouping of employees who can brainstorm and suggest ideas for new products to meet customer needs.
    C. They provide a forum for meeting with customers and directly involving them in the process of developing new ideas.

    The idea behind customer innovation centers is to provide a forum for meeting with customers and directly involving them in the innovation process. It is one of the approaches for generating new product ideas. See 11-2: The New-Product Development Process
    (this multiple choice question has been scrambled)
  14. Which of the following is true of product modification?
    A. It makes cosmetic or functional changes to existing products.
    B. It goes beyond applied research by converting applications into marketable products.
    C. It entails the creation of marketable new products.
    D. It necessitates the use of crowdsourcing to develop new ideas for a product.
    A. It makes cosmetic or functional changes to existing products.

    Product modification makes cosmetic or functional changes to existing products. It is one of the four ways in which research and development can be carried out. See 11-2: The New-Product Development Process
    (this multiple choice question has been scrambled)
  15. Daily Farm is a manufacturer of consumer goods such as foods, beverages, cleaning agents, and personal care products. It is expected to introduce more than ten new products in the next two years. One of the products is a spicier variant of its tomato ketchup aimed at the baby boomer market. Which of the following categories of new products will the spicier ketchup represent?
    A. Repositioned product
    B. Revision of existing product
    C. New product line
    D. Addition to existing product line
    D. Addition to existing product line

    The spicier ketchup would represent an addition to existing product line. This category includes new products that supplements a firm's established line. In this case, the spicier variant of tomato ketchup is an addition to Daily Farm's existing product line of tomato ketchups. See 11-1: The Importance of New Products
    (this multiple choice question has been scrambled)
  16. Which of the following is true of the development stage of a new-product development process?
    A. It estimates the demand, cost, sales, and profitability of a product for the first time.
    B. It sets several tasks in motion, such as building inventories and advertising to potential customers.
    C. It evaluates a new-product idea usually before any prototype has been created.
    D. It examines the feasibility of manufacturing a product at an acceptable cost.
    D. It examines the feasibility of manufacturing a product at an acceptable cost.

    The development stage of a new-product development process examines the feasibility of manufacturing a product at an acceptable cost. The development stage can last a long time and thus be very expensive. See 11-2: The New-Product Development Process
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  17. Why are marketing costs high in the introductory stage of the product life cycle?
    A. Sales increase rapidly during the introductory stage, requiring greater investment for marketing.
    B. Product and manufacturing costs need to be identified and corrected.
    C. Cutthroat competition during the introductory stage can lead to price wars.
    D. High dealer margins are often needed to obtain adequate distribution.
    D. High dealer margins are often needed to obtain adequate distribution.

    Marketing costs in the introductory stage are normally high for several reasons. High dealer margins are often needed to obtain adequate distribution, and incentives are needed to get consumers to try the new product. Advertising expenses are high because of the need to educate consumers about the new product's benefits. See 11-6: Product Life Cycles
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  18. Why do most firms consider test marketing essential for new products?
    A. The ability of test marketing to evaluate consumer preference for a new product prior to developing a prototype increases its importance.
    B. The high price of failure simply prohibits the widespread introduction of new products without testing.
    C. The speed, safeness, and reliability of test marketing is higher than that of simulated market testing.
    D. The decision to test a product sets several tasks in motion, such as ordering product materials, starting production, building inventories, and advertising to potential customers.
    B. The high price of failure simply prohibits the widespread introduction of new products without testing.

    The high price of failure simply prohibits the widespread introduction of new products without testing. Despite various cheaper, safer, and faster alternatives, most firms still consider test marketing essential for new products. See 11-2: The New-Product Development Process
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  19. Which of the following is a feature of the product life cycle (PLC)?
    A. It tells managers the length of a product's life cycle or its duration in any stage.
    B. It dictates the marketing strategy to be used for a product.
    C. It allows firms to shorten the development process of a product and reduce costs.
    D. It helps marketers forecast future events and suggest appropriate strategy.
    D. It helps marketers forecast future events and suggest appropriate strategy.

    The product life cycle (PLC) concept is simply a tool to help marketers forecast future events and suggest appropriate strategies. It does not tell managers the length of a product's life cycle or its duration in any stage. It does not dictate marketing strategy. See 11-6: Product Life Cycles
    (this multiple choice question has been scrambled)
  20. A difference between early majority and early adopters is that early majority are:
    A. more eager to try new products and ideas, almost as an obsession.
    B. more likely to be opinion leaders.
    C. less likely to extend the adoption process.
    D. likely to collect more information and evaluate more brands.
    D. likely to collect more information and evaluate more brands.

    A difference between early majority and early adopters is that early majority are likely to collect more information and evaluate their brands, thereby extending the adoption process. They rely on the group for information but are unlikely to be opinion leaders themselves. See 11-5: The Spread of New Products
    (this multiple choice question has been scrambled)
  21. The purpose of the screening stage in a new-product development process is to:
    A. refine the promotion campaign to be used with the new product.
    B. identify and eliminate concept tests that might lead to duplication of experiments.
    C. eliminate ideas that are inconsistent with an organization's new-product strategy.
    D. set a limit on the number of members allowed to assess the viability of a new-product idea.
    C. eliminate ideas that are inconsistent with an organization's new-product strategy.

    The screening stage in a new-product development process is used to eliminate ideas that are inconsistent with an organization's new-product strategy or are obviously inappropriate for some other reason. See 11-2: The New-Product Development Process
    (this multiple choice question has been scrambled)
  22. The purpose of test marketing is to:
    A. evaluate a new-product idea before any prototype is created.
    B. shorten the development process of a product and reduce costs.
    C. eliminate ideas that are inconsistent with an organization's new-product strategy.
    D. assess how well various aspects of the marketing mix fit together.
    D. assess how well various aspects of the marketing mix fit together.

    Test marketing allows management to evaluate alternate strategies and to assess how well various aspects of the marketing mix fit together. It is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. See 11-2: The New-Product Development Process
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  23. Which of the following is an advantage of simultaneous product development?
    A. It ensures that a development process proceeds through highly structured stages.
    B. It shortens a product's development process.
    C. It lengthens product lines to appeal additional markets.
    D. It eliminates the need for test marketing a new product.
    B. It shortens a product's development process.

    Simultaneous product development allows firms to shorten the development process and reduce costs. With simultaneous product development, all relevant functional areas and outside suppliers participate in all stages of the development process See 11-2: The New-Product Development Process
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  24. Steve wanted to open a day care service facility for dogs. He estimated the costs involved in providing the services desired by dog owners. After extensive deliberation, Steve decided not to proceed with the plan as the cost of providing the services was too high compared to the rates dog owners would be willing to pay. Which of the following stages of the new-product development process has Steve used to arrive at this decision?
    A. Idea screening
    B. Idea generation
    C. Business analysis
    D. Test marketing
    C. Business analysis

    Steve has used the business analysis stage of the new-product development process to decide if he should open a day care service facility for dogs. In the business analysis stage, preliminary figures for demand, cost, sales, and profitability are calculated. For the first time, costs and revenues are estimated and compared. See 11-2: The New-Product Development Process
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  25. Which of the following is true of laggards?
    A. They have the longest adoption time and the lowest socioeconomic status.
    B. They are eager to try new products and ideas, almost as an obsession.
    C. They are more likely to get their information from scientific sources and experts.
    D. They act as an important link in the process of diffusing ideas.
    A. They have the longest adoption time and the lowest socioeconomic status.

    Laggards have the longest adoption time and the lowest socioeconomic status. They tend to be suspicious of new products and alienated from a rapidly advancing society. See 11-5: The Spread of New Products
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  26. Which of the following is a feature of a new-product strategy?
    A. It gives greater importance to highly structured development process rather than simultaneous development.
    B. It provides general guidelines for generating, screening, and evaluating new-product ideas.
    C. It increases the time spent by a product in the introduction stage of its life cycle.
    D. It traces all stages of a product's acceptance, from its introduction to its decline.
    B. It provides general guidelines for generating, screening, and evaluating new-product ideas.

    A new-product strategy sharpens the focus and provides general guidelines for generating, screening, and evaluating new-product ideas. It is part of an organization's overall marketing strategy. See 11-2: The New-Product Development Process
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  27. The business analysis stage of a new-product development process _____.
    A. decides on a product’s packaging, branding, labeling, and so forth
    B. calculates preliminary figures for demand, cost, sales, and profitability
    C. eliminates ideas that are inconsistent with an organization’s new-product strategy
    D. involves the development of a prototype of the proposed product
    B. calculates preliminary figures for demand, cost, sales, and profitability

    New-product ideas that survive the initial screening process move to the business analysis stage, where preliminary figures for demand, cost, sales, and profitability are calculated. For the first time, costs and revenues are estimated and compared. See 11-2: The New-Product Development Process
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  28. The process where all the involved areas—R&D, marketing, engineering, production, and even suppliers—work together rather than sequentially during a product’s development is called _____.
    A. simulated market testing
    B. choice modelling
    C. simultaneous product development
    D. test marketing
    C. simultaneous product development

    The product development process works best when all the involved areas (R&D, marketing, engineering, production, and even suppliers) work together rather than sequentially, a process called simultaneous product development. It is a team-oriented approach to new-product development. See 11-2: The New-Product Development Process
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  29. The maker of Protect Your Hands hand sanitizer decided to test its consumers’ reactions to one of its new products, Protect Your Hands Sanitizing Wipes. It sent out flyers advertising several of the company’s products along with the new product to select customers of the target market. The flyer also asked the customers to shop in a mock store filled with real products, including the new product. In this case, the maker of Protect Your Hands has used -_____.
    A. concept testing
    B. product simulation
    C. simulated market testing
    D. crowdsourcing
    C. simulated market testing

    The maker of Protect Your Hands has used simulated (laboratory) market testing. Simulated market tests typically entail showing members of the target market advertising for a variety of products and then monitoring purchase behavior in a mock or real store. See 11-2: The New-Product Development Process
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  30. During the _____ stage of the new-product development process, production starts, inventories are built up, the product is shipped to distribution points, the sales force is trained, and advertising and promotion begin.
    A. test marketing
    B. business analysis
    C. commercialization
    D. idea generation
    C. commercialization

    During the commercialization stage of the new-product development process, production starts, inventories are built up, the product is shipped to distribution points, the sales force is trained, and advertising and promotion begin. Commercialization is the final stage in the new-product development process. See 11-2: The New-Product Development Process
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  31. Jeni’s Splendid Ice Creams has decided to put its new Beet Cake with Black Walnut ice cream on the market. This product has entered the _____ stage of new-product development process.
    A. test marketing
    B. business analysis
    C. commercialization
    D. development
    C. commercialization

    The product has entered the commercialization stage of new-product development process. Commercialization is the decision to market a product. It is the final stage in the new-product development process. See 11-2: The New-Product Development Process
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  32. _____ are the first 2.5 percent of all those who first adopt a new product.
    A. Laggards
    B. Early adopters
    C. Early majority
    D. Innovators
    D. Innovators

    Innovators are the first 2.5 percent of all those who adopt a product. Innovators are eager to try new ideas and products, almost as an obsession. They are characterized as being venturesome. See 11-5: The Spread of New Products
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  33. Roger is always eager to own the latest cell phone model launched in the market. He makes it a point to buy new cell phones on the first day of their launch. He is also an active member of various online forums that discuss the latest technical developments. In this case, Roger is a(n) _____.
    A. laggard
    B. late majority
    C. early majority
    D. innovator
    D. innovator

    Roger is an innovator as he is always eager to own the latest cell phone model launched in the market. Innovators are the first 2.5 percent of all those who adopt the product. Innovators are eager to try new ideas and products, almost as an obsession. In addition to having higher incomes, they are more worldly and more active outside their community than noninnovators. See 11-5: The Spread of New Products
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  34. In the context of the product characteristics that can be used to predict and explain the rate of acceptance and diffusion, _____ represents the degree of difficulty involved in understanding and using a new product.
    A. trialability
    B. observability
    C. complexity
    D. compatibility
    C. complexity

    Complexity is the degree of difficulty involved in understanding and using a new product. The more complex the product, the slower is its diffusion. See 11-5: The Spread of New Products
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  35. _____ have the longest product life cycles.
    A. Individual brands
    B. Product items
    C. Product categories
    D. New products
    C. Product categories

    Product categories have the longest life cycles. A product category includes all brands that satisfy a particular type of need, such as shaving products, passenger automobiles, or soft drinks. See 11-6: Product Life Cycles
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  36. _____ are typically categorized by a sudden and unpredictable spike in sales followed by a rather abrupt decline.
    A. Fad items
    B. Product life cycles
    C. Consumer durable goods
    D. Product trends
    A. Fad items

    Fads are typically categorized by a sudden and unpredictable spike in sales followed by a rather abrupt decline. Examples of fad items are Silly Bandz, Beanie Babies, and Crocs. See 11-6: Product Life Cycles
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  37. Central Bark Doggie Day Care opened the first day care center for dogs. It currently has 31 locations, with a new Gainesville, Florida, location coming soon. The concept of day care center for dogs became so popular that other competitors begin to enter the market. With competing companies such as Camp Bow Wow and others entering the market, it can be said that the concept of day care center for dogs is moving into the _____ stage of a product life cycle.
    A. decline
    B. growth
    C. maturity
    D. introductory
    B. growth

    With the opening of competition in the form of Camp Bow Wow and others, it can be said that the dog day care product is moving into the growth stage of the product life cycle. A competitor entering the market is an indicator of the growth stage in the product life cycle. See 11-6: Product Life Cycles
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  38. In the context of the product life cycle, a long-run drop in a product’s sales signals the beginning of the _____.
    A. introductory stage
    B. growth stage
    C. maturity stage
    D. decline stage
    D. decline stage

    A long-run drop in sales signals the beginning of the decline stage. The rate of decline is governed by how rapidly consumer tastes change or substitute products are adopted. See 11-6: Product Life Cycles
    (this multiple choice question has been scrambled)
  39. Nutritreat Industries Corp. is a manufacturer of food products. The company introduced chocolate cookies to the local market. After a period of initial success, the product lost its market and Nutritreat decided to withdraw chocolate cookies from the market. This scenario is an example of the _____ stage of a product life cycle.
    A. growth
    B. decline
    C. introduction
    D. maturity
    B. decline

    This scenario is an example of the decline stage of the product life cycle. A long-run drop in sales signals the beginning of the decline stage. Eventually, the product is withdrawn from the market. See 11-6: Product Life Cycles
    (this multiple choice question has been scrambled)

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chpt 11
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2016-04-07 00:45:47
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