question

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?

answer

Business analysis

question

Which of the following is an advantage of simultaneous product development?

answer

It shortens a product's development process

question

T/F: A new-product strategy describes the characteristics of products an organization wants to offer and the markets it wants to serve.

answer

true

question

The purpose of test marketing is to:

answer

assess how well various aspects of the marketing mix fit together

question

T/F: A low failure rate, greater competition, and wide distribution typify the introductory stage of the product life cycle.

answer

false

question

Which of the following is a feature of a new-product strategy?

answer

It provides general guidelines for generating, screening, and evaluating new-product ideas

question

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) _____.

answer

innovator

question

T/F: 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.

answer

true

question

Which of the following is true of product modification?

answer

It makes cosmetic or functional changes to existing products

question

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.

answer

commercialization

question

T/F: New products are important to sustain growth, increase revenues and profits, and replace obsolete items

answer

true

question

T/F: Sometimes it is difficult to decide when to replace a successful product

answer

true

question

new product

answer

a product new to the world, the market, the producer, the seller, or some combination of these

question

There are six categories of new products:

answer

New-to-the-world products, New product lines, Additions to existing product line, Improvements or revisions of existing products, Repositioned products, and Lower-priced products

question

New-to-the-world products (also called discontinuous innovations):

answer

These products create an entirely new market

question

New product lines:

answer

These products, which the firm has not previously offered, allow it to enter an established market

question

Additions to existing product lines:

answer

This category includes new products that supplement a firm's established line

question

Improvements or revisions of existing products:

answer

The "new and improved" product may be significantly or only slightly changed

question

Repositioned products:

answer

These are existing products targeted at new markets or market segments, or ones repositioned to change the current market's perception of the product or company, which may be done to boost declining sales

question

Lower-priced products:

answer

This category refers to products that provide performance similar to competing brands at a lower price

question

new-product strategy

answer

a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation

question

________________________ sharpens the focus and provides general guidelines for generating, screening, and evaluating new-product ideas

answer

new product strategy

question

Companies can derive insight from listening to _______________ or _______________, which often indicate early trends or areas consumers are interested in seeing develop or change

answer

Internet chatter; reading blogs

question

T/F: To encourage participation, some companies run contests, hold votes, and set up idea kiosks

answer

true

question

T/F: Many companies want to encourage risk-taking through new ideas and have begun implementing rewards for failing after taking a big risk

answer

true

question

product development

answer

a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products

question

Traditionally, ____________ determine whether a company has a balanced portfolio of products and, if not, what new-product ideas are needed to offset the imbalance

answer

consultants

question

A technique that is being used increasingly to generate new product ideas is called "_______________."

answer

crowdsourcing

question

T/F: General information regarding ideas being sought is provided to a wide range of potential sources such as industry experts, independent researchers, and academics

answer

true

question

____________ is the wellspring of new-product ideas, regardless of who comes up with them

answer

Creativity

question

The two considered most useful for generating new-product ideas are _____________ and _________________________

answer

brainstorming; focus group exercises

question

brainstorming

answer

the process of getting a group to think of unlimited ways to vary a product or solve a problem

question

screening

answer

the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason

question

The new-product committee, the new-product department, or some other formally appointed group performs the _______________________

answer

screening reviews

question

T/F: Concept tests are often used at the screening stage to rate concept (or product) alternatives

answer

true

question

concept test

answer

a test to evaluate a new-product idea, usually before any prototype has been created

question

T/F: Concept tests are considered fairly good predictors of success for line extensions

answer

true

question

business analysis

answer

the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated

question

T/F: Analyzing overall economic trends and their impact on estimated sales is especially important in product categories that are sensitive to fluctuations in the business cycle

answer

true

question

development

answer

the stage in the product development process in which a prototype is developed and a marketing strategy is outlined

question

the marketing department should decide on the product's ___________, __________, ___________, and so forth

answer

packaging, branding, labeling

question

T/F: The time invested in development can often have tremendous payoff

answer

true

question

simultaneous product development

answer

a team-oriented approach to new-product development

question

This approach allows firms to shorten the development process and reduce costs

answer

simultaneous product development

question

The __________ is a useful tool for implementing simultaneous product development

answer

Internet

question

On the _______, multiple partners from a variety of locations can meet regularly to assess new-product ideas, analyze markets and demographics, and review cost information

answer

Web

question

The best-managed global firms leverage their global networks by sharing _________________, _____________, and _______________

answer

best practices, knowledge, and technology

question

________________ are often conducted on prototype models during the development stage

answer

Laboratory tests

question

test marketing

answer

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

question

_________________ allows management to evaluate alternative strategies and to assess how well the various aspects of the marketing mix fit together

answer

Test marketing

question

T/F: est marketing frequently takes one year or longer, and costs can exceed $1 million

answer

true

question

Despite the ________, many firms believe it is better to fail in a test market than in a national introduction

answer

cost

question

One unavoidable problem is that test marketing _________ the new product and its marketing mix to competitors before its introduction

answer

exposes

question

simulated (laboratory) market testing

answer

the presentation of advertising and other promotional materials for several products, including a test product, to members of the product's target market

question

T/F: The Internet offers a fast, cost-effective way to conduct test marketing

answer

true

question

commercialization

answer

the decision to market a product

question

The decision to commercialize the product sets several tasks in motion:

answer

ordering production materials and equipment, starting production, building inventories, shipping the product to field distribution points, training the sales force, announcing the new product to the trade, and advertising to potential customers.

question

time from the initial commercialization decision

answer

It can range from a few weeks for simple products that use existing equipment to several years for technical products that require custom manufacturing equipment

question

Despite the amount of time and money spent on developing and testing new products, a large proportion of new product introductions _____

answer

fail

question

A ________________________ results when the product returns a profit but fails to achieve sales, profit, or market share goals.

answer

relative product failure

question

T/F: Increasing globalization of markets and competition provides a reason for multinational firms to consider new-product development from a worldwide perspective

answer

true

question

_____________ in some countries (such as China) often requires companies to develop products that meet the unique needs of these ______________

answer

succeeding; populations

question

innovation

answer

a product perceived as new by a potential adopter

question

Diffusion

answer

the process by which the adoption of an innovation spreads

3832 CH.11 – Flashcards

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