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Indicate whether the statement is true or false.
1. Many new product ideas are necessary to produce one successful new product.
a. True
b. False
2. The maturity stage is the shortest stage of the product life cycle.
a. True
b. False
3. A process called 3D printing, or additive manufacturing, is sometimes used to create three-dimensional prototypes
quickly and at a relatively low cost.
a. True
b. False
4. Unlike the in growth stage of the product life cycle, emphasis switches from primary demand promotion to aggressive
brand advertising and communication of the differences between brands in the introductory stage.
a. True
b. False
5. Absolute failure occurs when a product returns a profit but fails to achieve sales, profit, or market share goals.
a. True
b. False
6. The product life cycle for a brand is usually longer than the product life cycle for a product form.
a. True
b. False
7. A message developed for and targeted toward early adopters will be perceived similarly by late majority adopters.
a. True
b. False
8. Concept tests are used at the screening stage to rate concept or product alternatives.
a. True
b. False
9. A firm that starts with a global strategy is better able to develop products that are marketable worldwide.
a. True
b. False
10. A product category includes all brands that satisfy a particular type of need.
a. True
b. False
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11. The growth stage of the product life cycle represents the full-scale launch of a new product into the marketplace.
a. True
b. False
12. Daily Farm, a food and beverage manufacturing firm, is known for its unique variety of table sauces. To provide more
variations to its customers, Daily Farm recently launched an olive and pepper sauce. The olive and pepper sauce would
fall under the category of improved products.
a. True
b. False
13. An innovation is a product perceived as new by a potential adopter.
a. True
b. False
14. A new-product strategy links the new-product development process with the objectives of the marketing department,
the business unit, and the corporation.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
15. Identify a true statement about the product life cycle (PLC).
a. The PLC dictates the marketing strategy to be used for a product.
b. A product spends the same amount of time in the different stages of the life cycle.
c. The PLC for a product form is longer than the PLC for any one brand.
d. Changes in a product, its uses, its image, or its positioning do not affect that product’s life cycle.
16. Daleroes, a luxury leather footwear brand, launches Kidsnow, a new range of party footwear for kids. The company
heavily invests in advertising campaigns with the tagline “Kids can’t stop partying,” for promoting the new product line.
Despite these efforts, Kidsnow experiences slow sales with negative profits due to the heavy investment in the new
product line. In the context of the product life cycle, Kidsnow is in its _____.
a. maturity stage
b. growth stage
c. decline stage
d. introductory stage
17. The marketing team of Mariantel Pharma requested its research and development (R&D) team to develop new
medicines that can cater to the minor ailments of the working population. Accordingly, Philip, the head of R&D team,
scheduled a team meeting. In the meeting, he asked all members to come up with as many product development ideas as
they could. Philip neither discouraged any idea nor let any of the members criticize another member’s ideas. In this
scenario, the R&D team at Mariantel Pharma is engaged in _____.
a. idea screening
b. brainstorming
c. beta testing
d. concept testing
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18. Which of the following statements is true of opinion leaders?
a. They most likely belong to the late majority category of adopters.
b. They speed up the diffusion process through word-of-mouth communication.
c. They are distinguished by demographics.
d. They have the longest adoption time and the lowest socioeconomic status.
19. Which of the following is an objective of focus group interviews?
a. To stimulate insightful comments through group interaction
b. To directly involve customers in test marketing
c. To get recommendations on product ideas from outside consultants
d. To eliminate ideas that are inconsistent with the organization’s new-product strategy
20. Jenny, owner of an ice cream parlor, has been experimenting with different flavors to create a new exotic ice cream for
her customers. After much deliberation and many tests, she decides to market the new Beet Cake with Black Walnut
variant of ice cream. In this scenario, the chosen ice cream flavor has entered the _____ of the new-product development
process.
a. business analysis stage
b. development stage
c. test marketing stage
d. commercialization stage
21. Fresnas Inc. manufactures and sells electronic equipment. The research and development team has generated ideas for
new products, and the ideas pass through the screening stage. In this case, the goal of screening will be to:
a. calculate preliminary figures for demand, cost, sales, and profitability.
b. eliminate ideas that are inconsistent with the organization’s new-product strategy.
c. filter various prototypes of the products and select the most efficient one.
d. set a limit on the number of members allowed to evaluate the new-product ideas.
22. In the context of adopters who participate in the diffusion process, which of the following statements is true of
laggards?
a. They act as an important link in the process of diffusing ideas.
b. They are more likely to get their information from scientific sources and experts.
c. They act as influencers and begin the viral marketing chain.
d. They have the longest adoption time and the lowest socioeconomic status.
23. In the context of the new-product development process, which of the following statements is true of the business
analysis stage?
a. Depending on the nature of the product and the company, this process may be simple or complex.
b. Forecasting market share for a new entry in a new, fragmented, or relatively small niche market is easy.
c. The newness of the product, the size of the market, and the nature of the competition do not affect the accuracy of
revenue projections.
d. Costs increase dramatically once a product idea enters the business analysis stage.
24. In the context of the rate of adoption, relative advantage is defined as the degree to which:
a. a product is perceived as superior to existing substitutes.
b. a new product is consistent with existing values and product knowledge, past experiences, and current needs.
c. the benefits of using a product can be communicated to target customers.
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d. a product can be tried on a limited basis.
25. _____ is the degree to which a product can be sampled on a limited basis.
a. Compatibility
b. Trialability
c. Observability
d. Complexity
26. Steven, a construction worker, always buys new gadgets because most of his friends have them. Besides, he relies on
reviews from his friends rather than on the mass media to make his purchase decisions. It can be inferred that Steven
belongs to the category of _____ in the diffusion process.
a. laggards
b. innovators
c. the late majority
d. the early majority
27. Steve, a retired man, wants to open a day care facility for dogs with his savings. After deciding on the services that he
would be providing to his customers, he calculates the preliminary figures for demand, cost, sales, and profitability. After
extensive deliberation, Steve decides to take credit from the bank for opening the facility as the initial investment cost
estimates are too high. Steve is currently at the _____ of the new-product development process.
a. commercialization stage
b. business analysis stage
c. idea generation stage
d. test marketing stage
28. Which of the following is an advantage of simultaneous product development?
a. It shortens the development process and reduces costs.
b. It eliminates the need for conducting laboratory tests on product prototypes.
c. It ensures that product development occurs in highly structured stages.
d. It eliminates the need for test marketing a new product.
29. In the context of the new-product development process, which of the following is true of a new-product strategy?
a. It refrains from adopting ideas suggested by customers and competitors.
b. It is the last stage of the new-product development process.
c. It must be compatible with the objectives of the marketing department, the business unit, and the corporation.
d. It involves targeting existing products at new markets.
30. Pharmoel Corp., a pharmaceutical company, is ready to launch its revolutionary medicine for wheezing, WheeCure.
The concerned government authorities have approved the solution for the medicine. In this scenario, WheeCure has
entered the _____ of the new-product development process.
a. business analysis stage
b. development stage
c. screening stage
d. commercialization stage
31. Identify a true statement about the maturity stage of the product life cycle (PLC).
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a. The beginning of this stage is signaled by increased sales.
b. Niche marketers that target the underserved segments of a market emerge during this stage.
c. It is the shortest stage of the PLC.
d. Product design changes tend to become functional rather than stylistic.
32. Esther, an affluent freelance writer, closely monitors the launches of tablet computers in the market. She conducts
opinion polls on her personal website about the newly launched tablets. Also, she writes reviews about the tablets she
purchases within a month or two of the product’s launch. Esther would belong to the category of _____ in the diffusion
process.
a. the late majority
b. innovators
c. the early majority
d. early adopters
33. The objective of test marketing is:
a. to implement simultaneous product development.
b. to shorten the development process of a product and reduce costs.
c. to evaluate alternative marketing strategies.
d. to create three-dimensional prototypes quickly and at a relatively low cost.
34. Regina, a model for an online fashion website, follows the latest trends in handbags and buys a couple of them every
season before the styles become too common. She compares every choice with similar models and designs offered by
competing brands, discusses what her friends recommend, and then eventually buys the products. Regina would belong to
the category of _____ in the diffusion process.
a. the late majority
b. innovators
c. the early majority
d. laggards
35. In the context of the product characteristics that can be used to predict and explain the rate of acceptance and
diffusion, the degree of difficulty involved in understanding and using a new product is known as _____.
a. complexity
b. compatibility
c. observability
d. trialability
36. Hariette Inc., an apparel manufacturer, has been famous for its pleated maxi skirts that recently went out of fashion.
Since the last quarter, Hariette has had large amount of unsold inventories, and therefore, a drop in sales revenue. In the
context of the product life cycle, the pleated maxi skirts sold by Hariette Inc. are going through the _____.
a. maturity stage
b. growth stage
c. decline stage
d. introductory stage
37. Coreynd Corp., a paper manufacturing company, launched Censer Notes, which is a new product line of scented sticky
notes. Five years after its launch, the new product line broke even, and Coreynd’s profits rose rapidly. The company
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increased its distribution channels and currently exports Censer Notes to various countries. In the context of the product
life cycle, Censer Notes is in its _____.
a. maturity stage
b. growth stage
c. decline stage
d. introductory stage
38. Cleanz Inc., a toiletries manufacturing firm, has launched a new range of natural sanitizing wipes. It wants to test its
consumers’ reactions to this new product in an economical way. Therefore, Cleanz Inc. sends out flyers to a few selected
members of the target market, advertising several of its products along with the new product. Besides this, it also takes the
members to a mock shop and monitors their shopping behavior. In this scenario, Cleanz Inc. is using _____.
a. scanner-based research testing
b. simulated market testing
c. virtual test marketing
d. traditional test marketing
39. Which of the following is the most important factor in successful new-product introduction?
a. The features of the new product should be similar to its substitutes in the market.
b. The product should not be developed using crowdsourcing.
c. The new product should be priced lower than other products in the same category.
d. The new product should deliver a meaningful and perceivable benefit to a sizable number of people.
40. Due to her tight work schedule, Melanie neither finds time to follow the latest trends in technology nor has an aptitude
for it. As a result, she mostly ends up buying a cell phone model that is on the verge of getting outdated. She does not
realize her mistake until she finds it hard to find accessories and parts for the device. Melanie would belong to the
category of _____ in the diffusion process.
a. early adopters
b. innovators
c. the early majority
d. laggards
41. Claudenec Inc., a home appliances manufacturing company, introduces Sungulp, a new range of coffee mugs fitted
with solar panels that reheat the liquid content in the mugs using solar power. Being the first to introduce such a product,
Claudenec Inc. plans to apply for a patent for Sungulp. In this scenario, Sungulp is an example of _____.
a. discontinuous innovations
b. new and improved products
c. repositioned products
d. new product lines
42. Roger, an affluent graduate, buys gadgets on the first day of their launch in the market. He reads expert reviews on the
Internet, and he is not influenced by the opinions of his family and friends while choosing products. Roger would fall
under the category of _____ in the diffusion process.
a. the late majority
b. innovators
c. the early majority
d. early adopters
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43. 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
44. In which of the following ways does the product life cycle concept help marketing managers?
a. It tells managers the length of a product’s life cycle.
b. It can be used to analyze a brand, a product form, or a product category.
c. It dictates the marketing strategy to be used for a product.
d. It informs marketers about the duration of a product in the various stages of its life cycle.
45. Kylemme Inc., a fast moving consumer goods company, introduced a new range of herbal body wash, Ayushower.
The management of Kylemme decided to distribute flyers of the product to consumers at a supermarket. This decision was
taken to analyze consumer response toward Ayushower. Also, the company appointed sales people to record the
purchases of customers who had read about the product. In this scenario, Kylemme has adopted _____.
a. scanner-based research testing
b. simulated market testing
c. virtual marketing
d. traditional test marketing
46. Gloria, a graduate in fashion designing, wants to open her own tailoring shop. She estimated the preliminary figures
for demand, cost, sales, and profitability for the first financial year of running her shop. After much deliberation, she
decided to borrow money from her friends and family who have offered to invest in her business. Gloria is currently at the
_____ of the new-product development process.
a. commercialization stage
b. business analysis stage
c. idea generation stage
d. test marketing stage
47. Magnira Corp. is an apparel company. After an initial slow start, it saw a steep rise in its clientele and a remarkable
increase in its profits. However, with the launch of other apparel manufacturers in the market, the profits of Magnira Corp.
are declining now. In order to sustain its growth in the market, the managers of Magnira Corp. should:
a. focus on primary demand stimulation rather than advertising the brand.
b. shift to aggressive brand advertising and open new branches.
c. suggest the management to reduce the number of employees in the company.
d. distribute the company’s products at limited outlets.
48. In the context of the new-product development process, the decision to market a product is made during _____.
a. commercialization
b. test marketing
c. the development stage
d. the business analysis stage
49. Three years after Leslette Inc., a home appliances manufacturer, launched its sleek pop-up bread toaster, the
competition intensified, and other manufacturers came up with sleeker and more stylish models of pop-up toasters. The
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loyal customers of Leslette continued to get their toasters serviced, but the sales started increasing only at a decreasing
rate. In the context of the product life cycle, Leslette’s toasters were going through the _____.
a. maturity stage
b. growth stage
c. decline stage
d. introductory stage
50. For conducting an accurate test marketing, —-_____.
a. the media reach in test locations should be very high
b. the company should have limited distribution in test cities
c. test locations should mirror the purchasing habits of the overall market
d. test marketing should expose the new product and its marketing mix to competitors
51. Which of the following statements is true of the development stage of the new-product development process?
a. Costs decrease dramatically once a product idea enters the development stage.
b. It involves evaluating a new-product idea before creating any prototype.
c. Simultaneous product development increases the time spent in the development process.
d. It involves examining the feasibility of manufacturing a product at an acceptable cost.
52. Fournotts Corp. manufactures and sells accessories for cell phones. To boost its sales, the research and development
team is involved in modifying the company’s products. In this case, the research and development team will:
a. eliminate products that are inconsistent with Fournotts Corp.’s business mission.
b. convert applications into marketable products.
c. make cosmetic or functional changes to existing products.
d. add new products to supplement Fournotts Corp.’s established product line.
53. Audrette, a luxury handbag brand, decided to boost its declining sales by introducing a sub-brand, Gannette, a new
range of affordable handbags for students. Its tag line for Gannette, “Unveiling college fashion,” changed the market
perception of Audrette. In this scenario, Gannette is an example of _____.
a. convenience products
b. repositioned products
c. discontinuous innovations
d. new-to-the-world products
54. Which of the following statements best describes simultaneous product development?
a. It is a strategy that provides general guidelines for generating, screening, and evaluating new-product ideas.
b. It is used to determine the reactions of potential customers in a market situation.
c. It is the process where all the involved areas work together rather than sequentially during a product’s
development.
d. It is a strategy that links the new-product development process with the objectives of the marketing department,
the business unit, and the corporation.
55. Suntacte, a sunscreen brand, was one of the most popular cosmetic brands in the late 1900s. With increasing number
of sunscreen products entering the market, Suntacte lost its market share to competing brands. In early 2005, Suntacte
relaunched its products with an attractive squeeze bottle packaging. This increased the sales of Suntacte substantially. In
this scenario, the newly packaged Suntacte products best exemplify _____.
a. new-to-the-world products
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b. new and improved products
c. repositioned products
d. new product lines
56. Nutrioats, an oatmeal cookie product, has been in the market for over seven years. However, the product is now in its
decline stage. In this case, which of the following will be a successful strategy to market Nutrioats?
a. Lengthening the product line
b. Focusing on adding new users
c. Spending heavily on advertising to educate consumers about the product’s benefits
d. Eliminating all nonessential marketing expenses and letting sales decline
57. In the context of adopters who participate in the diffusion process, a difference between early adopters and the early
majority is that the early majority are:
a. more likely to be opinion leaders.
b. less likely to extend the adoption process.
c. self-confident, and they rely less on group norms.
d. likely to collect more information and evaluate more brands.
58. Which of the following is a characteristic of products produced by multinational corporations?
a. Products are developed to meet unique market requirements whenever possible.
b. Products are developed to cater to local markets.
c. Products are inadequately distributed in local markets.
d. Products are not subjected to test marketing.
59. Marketing costs are high in the introductory stage of the product life cycle because:
a. product design changes become stylistic rather than functional.
b. high dealer margins are often needed to obtain adequate distribution.
c. manufacturers scramble to sign up dealers and distributors.
d. emphasis is given to communication of the differences between brands in the market.
60. The early majority is an important link in the process of diffusing new ideas because:
a. they act as influencers and begin the viral marketing chain.
b. they are positioned between earlier and later adopters.
c. they are eager to try new ideas and products.
d. they are characterized as being venturesome.
61. Irene, an affluent fashion enthusiast, closely follows five popular international fashion brands. She buys every new
design from all those brands on the day it is launched. She purchases fashion magazines to read about the latest launches
every season. Irene would belong to the category of _____ in the diffusion process.
a. the late majority
b. innovators
c. the early majority
d. early adopters
62. In the context of adopters who participate in the diffusion process, which of the following statements is true of the late
majority?
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a. They are characterized as being venturesome.
b. They are more worldly and more active outside their community than noninnovators.
c. Their opinions heavily influence their friends and neighbors.
d. Their adoption of a new product stems from pressure to conform to group norms.
63. Which of the following statements is true of a customer innovation center?
a. It is an approach to reposition a company’s products.
b. It promotes status-conscious advertising among customers.
c. It is a forum for meeting with customers and directly involving them in the innovation process.
d. It is used in the business analysis stage of the new-product development process.
64. Hakimo Corp., a manufacturer of audio equipment, has developed a unique wireless speaker system that runs on solar
power. The speakers can operate for sixteen hours after being exposed to the sun for two hours. This new product, which
is radically different from anything currently available in the market, would fall in the new product category of a:
a. repositioned product.
b. revised product.
c. discontinuous innovation.
d. new and improved product.
65. Explain absolute and relative product failure. Why do a large proportion of new product introductions fail?
66. Describe the growth stage of the product life cycle (PLC).
67. How does a multinational corporation meet the needs of the global market?
68. Explain the differences between innovators and early adopters.
69. What are the major implications of the new-product development process and the diffusion process to marketing
managers?
70. How is the Internet important for implementing simultaneous product development?
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Answer Key
1. True
2. False
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