TRUE/FALSE QUESTIONS Answer whether the following statements are true or false
1 Explain the importance of developing new products and describe the six categories of new products
2 Explain the steps in the new-product development process
2. If a firm adopts the marketing concept, then during the idea generation stage of the new product development process, the logical starting place should be the customers of the firm. true false 3. The employees at Genco are all in a room together, shouting out potential ideas. The ideas are written down and evaluated as they are generated, with everyone voting on which ideas to accept or discard. This is an example of brainstorming. true false 4. During the screening stage of the new product development process, it is appropriate to use concept tests. true false 5. During the development stage of the new product process, the product may undergo laboratory tests. true false 6. One of the great advantages to test markets is the low cost of conducting one. true false 7. The Wheelsport Company has developed a new type of inline skateboard. The company has already gone through several stages of the new product development process, including screening, development, and testing. Assuming the results are consistent with profit and cost expectations, the most likely next step is commercialization. true false
2. If a firm adopts the marketing concept, then during the idea generation stage of the new product development process, the logical starting place should be the customers of the firm. true false
3. The employees at Genco are all in a room together, shouting out potential ideas. The ideas are written down and evaluated as they are generated, with everyone voting on which ideas to accept or discard. This is an example of brainstorming. true false
4. During the screening stage of the new product development process, it is appropriate to use concept tests. true false
5. During the development stage of the new product process, the product may undergo laboratory tests. true false
6. One of the great advantages to test markets is the low cost of conducting one. true false
7. The Wheelsport Company has developed a new type of inline skateboard. The company has already gone through several stages of the new product development process, including screening, development, and testing. Assuming the results are consistent with profit and cost expectations, the most likely next step is commercialization. true false
5 Describe the organizational groups or structures used to facilitate new-product development
8. Zapco, Inc., would like to reorganize the structure of its company to encourage constant development of new products. Three such organization forms are new product departments, venture capitalists, and new product committees. true false 9. The president at the Newpro Corporation has given each department the same idea to develop a new product. Each department completes its version of the idea and submits it at the same time as the other departments. The president will compare the alternatives and pick the best one. NewPro is practicing parallel engineering. true false
8. Zapco, Inc., would like to reorganize the structure of its company to encourage constant development of new products. Three such organization forms are new product departments, venture capitalists, and new product committees. true false
9. The president at the Newpro Corporation has given each department the same idea to develop a new product. Each department completes its version of the idea and submits it at the same time as the other departments. The president will compare the alternatives and pick the best one. NewPro is practicing parallel engineering. true false
6 Explain the diffusion process through which new products are adopted
10. Carol loves romantic comedy movies and is among the first 2 ½ percent to see a new movie when it is released. She either tries to see it in a preview showing or else goes during the first weekend launch. Carol is an example of an early adopter. true false 11. The Chipster Computer Company has two new products: One is a ready-to-go computer that is already assembled and preloaded with business software; the other is a kit of parts that the consumer must assemble to make his or her own computer. Of these two, the ready-to-go computer will probably be diffused more quickly because it is less complex. true false 12. The Robo-Vac company will be introducing its automated vacuum cleaner robot. The company plans to offer a one-week, in-home examination period to encourage people to buy its product. This plan would probably increase the product's rate of diffusion because it increases the product's trialability. true false
10. Carol loves romantic comedy movies and is among the first 2 ½ percent to see a new movie when it is released. She either tries to see it in a preview showing or else goes during the first weekend launch. Carol is an example of an early adopter. true false
11. The Chipster Computer Company has two new products: One is a ready-to-go computer that is already assembled and preloaded with business software; the other is a kit of parts that the consumer must assemble to make his or her own computer. Of these two, the ready-to-go computer will probably be diffused more quickly because it is less complex. true false
12. The Robo-Vac company will be introducing its automated vacuum cleaner robot. The company plans to offer a one-week, in-home examination period to encourage people to buy its product. This plan would probably increase the product's rate of diffusion because it increases the product's trialability. true false
7 Explain the concept of product life cycles
13. The Kitchen-Pro Company is about to introduce a new kitchen gadget that combines a food processor with a toaster oven. As with other products of this type, Kitchen-Pro can expect sales of this new product to follow a bell-shaped curve over the next ten to fifteen years as it follows the product life cycle. true false
MULTIPLE-CHOICE QUESTIONS Select the response that best answers the question, and write the corresponding letter in the space provided.
15. The artificial sweetener NutraSweet (aspartame), when first introduced, was a new-to-the-world product--a method of sweetening products with few calories and no bad aftertaste. This type of new product was a: a. diffusion b. discontinuous innovation c. moderate innovation d. venture product e. specialty product
16. Recently, the Cheez Whiz cracker spread product has been featured in promotions as a cheese sauce for the microwave oven. This is an example of: a. revising existing products b. lowering costs c. repositioning d. segmenting existing product lines e. reformulation
17. Klean Laundry detergent was just replaced with a "new and improved" Klean that makes clothes smell good as well as gets them clean. This new product is an example of: a. revising an existing product b. lowering costs c. repositioning d. a new-to-the-world product e. a line extension
18. Veronica is the new products manager at a packaged foods company. She would like to put together a brainstorming team to generate ideas about new food products. She should consider inviting people from the following areas EXCEPT: a. account executives from her advertising agency b. a couple of big customers c. lawyers from the company's law firm d. a couple of large distributors e. sales people who have access to competitive intelligence 19. The first step in the new products process is: a. concept testing b. generating ideas ("brainstorming") c. developing the new product d. developing a new products strategy e. test marketing 20. Fabrique, Inc. invented a fabric that was fireproof, tearproof, but also edible. The week after the product was invented, a group of the firm's employees got together and listed ways the product might be used. This is an example of: a. an unfocus group b. concept testing c. brainstorming d. venture group activities e. screening 21. After the research team at Epsilon Corporation had generated a dozen new product ideas for gasoline additives, a committee of company executives met to analyze whether the product ideas were consistent with the organization's new product strategy. This is called: a. screening b. commercialization c. business analysis d. test marketing e. idea generation 22. After Revvin' Cosmetics evaluated many new product ideas, the company selected three ideas to present to consumers. Before any prototype had been created, researchers presented the product ideas to groups of consumers for evaluation. This stage of new product development is called: a. screening b. market testing c. concept testing d. simulated market testing e. use testing 23. As the Slimmy Company continued the development of its new product idea, diet fat, a group was assigned the task of estimating preliminary demand for the product, costs, sales, and future profitability. This is the ____________ stage in product development. a. test marketing b. idea generation c. concept testing d. screening e. business analysis 24. When Philips developed a new extra-long life halogen light bulb, the company installed 100 bulbs at no charge in the homes of fifty consumers and monitored the bulbs for one year. This is a: a. laboratory test b. use test c. concept test d. market test e. diffusion test 25. Sigma-Sunco has decided to introduce its new sunscreen eye drops in a limited market consisting of only two cities and closely monitor the reactions of potential customers to the product and marketing program. This is called: a. diffusion analysis b. use test c. concept test d. test marketing e. laboratory test 26. All of the following factors should be considered when choosing a test market EXCEPT: a. the city's large population b. the city's relative isolation from other cities c. the city's good record as a test city, but not overly used d. availability of retailers that will cooperate in the test market e. similarity to planned distribution outlets 27. Gramma's Treats tested consumers' reactions to a new dessert by getting consumers to look through a newspaper with grocery store ads, make out a grocery list, and then "shop" in a mock store filled with real products, including the new dessert. This is a: a. real test market b. simulated (laboratory) market test c. concept test d. use test e. cable/scanner test 28. SunGlass has ordered production materials and equipment for its new polarized auto windshields for all of its manufacturing plants. SunGlass is entering the ____________ stage of new product development. a. business analysis b. commercialization c. product testing d. product prototypes e. market testing
18. Veronica is the new products manager at a packaged foods company. She would like to put together a brainstorming team to generate ideas about new food products. She should consider inviting people from the following areas EXCEPT: a. account executives from her advertising agency b. a couple of big customers c. lawyers from the company's law firm d. a couple of large distributors e. sales people who have access to competitive intelligence
19. The first step in the new products process is: a. concept testing b. generating ideas ("brainstorming") c. developing the new product d. developing a new products strategy e. test marketing
20. Fabrique, Inc. invented a fabric that was fireproof, tearproof, but also edible. The week after the product was invented, a group of the firm's employees got together and listed ways the product might be used. This is an example of: a. an unfocus group b. concept testing c. brainstorming d. venture group activities e. screening
21. After the research team at Epsilon Corporation had generated a dozen new product ideas for gasoline additives, a committee of company executives met to analyze whether the product ideas were consistent with the organization's new product strategy. This is called: a. screening b. commercialization c. business analysis d. test marketing e. idea generation
22. After Revvin' Cosmetics evaluated many new product ideas, the company selected three ideas to present to consumers. Before any prototype had been created, researchers presented the product ideas to groups of consumers for evaluation. This stage of new product development is called: a. screening b. market testing c. concept testing d. simulated market testing e. use testing
23. As the Slimmy Company continued the development of its new product idea, diet fat, a group was assigned the task of estimating preliminary demand for the product, costs, sales, and future profitability. This is the ____________ stage in product development. a. test marketing b. idea generation c. concept testing d. screening e. business analysis
24. When Philips developed a new extra-long life halogen light bulb, the company installed 100 bulbs at no charge in the homes of fifty consumers and monitored the bulbs for one year. This is a: a. laboratory test b. use test c. concept test d. market test e. diffusion test
25. Sigma-Sunco has decided to introduce its new sunscreen eye drops in a limited market consisting of only two cities and closely monitor the reactions of potential customers to the product and marketing program. This is called: a. diffusion analysis b. use test c. concept test d. test marketing e. laboratory test
26. All of the following factors should be considered when choosing a test market EXCEPT: a. the city's large population b. the city's relative isolation from other cities c. the city's good record as a test city, but not overly used d. availability of retailers that will cooperate in the test market e. similarity to planned distribution outlets
27. Gramma's Treats tested consumers' reactions to a new dessert by getting consumers to look through a newspaper with grocery store ads, make out a grocery list, and then "shop" in a mock store filled with real products, including the new dessert. This is a: a. real test market b. simulated (laboratory) market test c. concept test d. use test e. cable/scanner test
28. SunGlass has ordered production materials and equipment for its new polarized auto windshields for all of its manufacturing plants. SunGlass is entering the ____________ stage of new product development. a. business analysis b. commercialization c. product testing d. product prototypes e. market testing
3 Explain why some products succeed and others fail
29. In the long run, products fail because of a poor match between: a. advertising and personal selling b. limited resources and unlimited consumer wants c. the marketing mix and physical distribution d. prices and consumer demand e. product characteristics and consumer needs
30. Haytco, Inc., is considering several organization forms that can facilitate new product development. Haytco's options include all of the following EXCEPT: a. new product department b. intrapreneurship c. new product committee d. venture team e. product-review committee 31. The Blanko corporation is a highly consumer-oriented firm and has recently set up a new product department. Logically, Blanko should locate the department as a: a. subfunction of the marketing department b. subfunction of research and development c. separate function d. high-level staff activity e. division of human resources 32. The Gallant Winery created a separate group of employees working outside the normal corporate structure to develop one special project, a nonalcoholic wine. What type of product development organization did Gallant use? a. new product department b. new product committee c. venture team d. new product matrix management e. product manager
30. Haytco, Inc., is considering several organization forms that can facilitate new product development. Haytco's options include all of the following EXCEPT: a. new product department b. intrapreneurship c. new product committee d. venture team e. product-review committee
31. The Blanko corporation is a highly consumer-oriented firm and has recently set up a new product department. Logically, Blanko should locate the department as a: a. subfunction of the marketing department b. subfunction of research and development c. separate function d. high-level staff activity e. division of human resources
32. The Gallant Winery created a separate group of employees working outside the normal corporate structure to develop one special project, a nonalcoholic wine. What type of product development organization did Gallant use? a. new product department b. new product committee c. venture team d. new product matrix management e. product manager
33. In an attempt to understand its target markets better, Carrot Personal Computers has been studying the product adoption stages and strategies. Carrot can expect to find all of the following EXCEPT that: a. early adopters may also be opinion leaders b. there are three categories of consumers who will adopt computer products c. laggards are the last consumers to adopt a new product d. early triers of a product are generally heavy users of that product e. innovators were the first to purchase home computers 34. In a meeting with Sony corporate officials, you (a leading marketing consultant) are asked if the new digital tape technology will be quickly accepted and sought by the Canadian consumer. You tell them that this depends on many product characteristics, including all of the following EXCEPT: a. how similar it is to existing tape players in use and fulfilling needs b. the degree of difficulty involved in understanding and using it c. how much of a relative advantage it has over current tape players d. the "buy Canadian" movement in Canada e. its degree of trialability
33. In an attempt to understand its target markets better, Carrot Personal Computers has been studying the product adoption stages and strategies. Carrot can expect to find all of the following EXCEPT that: a. early adopters may also be opinion leaders b. there are three categories of consumers who will adopt computer products c. laggards are the last consumers to adopt a new product d. early triers of a product are generally heavy users of that product e. innovators were the first to purchase home computers
34. In a meeting with Sony corporate officials, you (a leading marketing consultant) are asked if the new digital tape technology will be quickly accepted and sought by the Canadian consumer. You tell them that this depends on many product characteristics, including all of the following EXCEPT: a. how similar it is to existing tape players in use and fulfilling needs b. the degree of difficulty involved in understanding and using it c. how much of a relative advantage it has over current tape players d. the "buy Canadian" movement in Canada e. its degree of trialability
35. Wilderness, Inc., sells a tent that collapses down into a roll the size of one roll of toilet paper. The tent can be easily carried in a backpack. The tent has been in the market for two years, and the company is spending a lot on advertising. The tent is in which stage of the product life cycle? a. maturity stage b. introduction stage c. innovation stage d. growth stage e. early majority stage 36. Pepsi and Coca-Cola have been battling in the "cola war" for years. Both products have been in the market for nearly 100 years and spend much of their marketing budgets on short-term promotions to steal market share from each other. Pepsi and Coca-Cola are in which stage of the product life cycle? a. maturity stage b. decline stage c. promotional stage d. growth stage e. late majority stage 37. The Acme Slide Rule Company has seen most of its competition slip away, and it now holds 90 percent of the market share for slide rules and other mechanical calculation devices. Acme's own sales totals are slowly decaying, and it spends little on promotion. Acme's products are in which stage of the product life cycle? a. maturity stage b. decline stage c. downfall stage d. decay stage e. laggard stage 38. When reports were published that aspirin consumption could reduce the chance of heart attacks, aspirin sales boomed. This is an example of product: a. diffusion b. adaptation c. life cycle extension d. modification e. mix widening
35. Wilderness, Inc., sells a tent that collapses down into a roll the size of one roll of toilet paper. The tent can be easily carried in a backpack. The tent has been in the market for two years, and the company is spending a lot on advertising. The tent is in which stage of the product life cycle? a. maturity stage b. introduction stage c. innovation stage d. growth stage e. early majority stage
36. Pepsi and Coca-Cola have been battling in the "cola war" for years. Both products have been in the market for nearly 100 years and spend much of their marketing budgets on short-term promotions to steal market share from each other. Pepsi and Coca-Cola are in which stage of the product life cycle? a. maturity stage b. decline stage c. promotional stage d. growth stage e. late majority stage
37. The Acme Slide Rule Company has seen most of its competition slip away, and it now holds 90 percent of the market share for slide rules and other mechanical calculation devices. Acme's own sales totals are slowly decaying, and it spends little on promotion. Acme's products are in which stage of the product life cycle? a. maturity stage b. decline stage c. downfall stage d. decay stage e. laggard stage
38. When reports were published that aspirin consumption could reduce the chance of heart attacks, aspirin sales boomed. This is an example of product: a. diffusion b. adaptation c. life cycle extension d. modification e. mix widening
