Rapala VMC Corporation
Finland-based Rapala VMC Corporation is the world’s largest fishing lure manufacturer. It developed
its first fishing lure—a cigar-shaped minnow—in 1962. The annual market for fishing lures in terms of
retail sales is approximately $600 million. Rapala VMC garnered one-third of that amount in 2008.
New lures must be introduced each year in order to stay competitive in this industry. Like other lure
manufacturers, Rapala focuses on two questions in developing and making new lures: Does it work,
and does it look good? Developing a new lure takes two or three years and involves extensive field
testing by tournament professionals and fishing guides. At the annual fishing industry trade show in
2008, Rapala unveiled the “dream lure for the 21st century.”
NARREND
108. Refer to Rapala. The “dream lure for the 21st century will more than likely be an example of a(n):
a.
new product line
b.
addition to existing product line
c.
discontinuous innovation
d.
improvement to existing product
e.
repositioned product
109. Refer to Rapala. The testing of new lures by tournament professionals and fishing guides would take
place in which stage of new-product development?
a.
commercialization
b.
idea generation
c.
idea screening
d.
concept testing
e.
product development
110. Refer to Rapala. After the trade show, the newest lure made by Rapala will enter which stage of the
new-product development process?
a.
commercialization
b.
idea generation
c.
idea screening
d.
concept testing
e.
product development
111. Refer to Rapala. Because buyers of fishing lures want to have the newest, most technologically
improved lure, most of Rapala’s customers would more than likely fall into the _____ category of
adopters.
a.
laggards
b.
prompt diffusers
c.
early adopters
d.
innovators
e.
early majority
112. Refer to Rapala. The degree to which the newest lures are perceived as superior to earlier models
refers to their _____, a characteristic used to predict the rate of adoption.
a.
trialability
b.
observability
c.
relative advantage
d.
differentiation capability
e.
complexity
113. Refer to Rapala. Fishing lures are most likely in the _____ stage of their product life cycle.
a.
saturation
b.
maturity
c.
growth
d.
innovation
e.
decline
NARRBEGIN: Going to the Dogs
Going to the Dogs
Demand for pet services is greatly increasing across the United States. In fact, Americans will spend
nearly $44 billion dollars on their pets this year. Many American dog owners are seeking out “doggy
daycares” that are more like a resort or spa than an ordinary kennel for their canine companion.
Daycare services for dogs now include toy rooms, outside play areas, doggie massages, treadmills,
swimming pools and cushy beds for nap time. Pet owners can watch their pets via a Web cam and
some doggy daycares have a phone where owners can talk to their dog when they feel their pet needs
to hear their voice. Rates vary from $20 to $45 a day per pet, depending on the amenities that the pet
owner chooses.
NARREND
114. Refer to Going to the Dogs. The doggy daycare center is more like a dog resort than a dog kennel. A
dog daycare represents what type of new product?
a.
competitive innovation
b.
discontinuous innovation
c.
new product lines
d.
revision to an existing product
e.
higher-priced product
115. Refer to Going to the Dogs. Suppose before opening the It’s a Dog’s Life doggy resort the owners
gathered together a group of ten dog owners to discuss what they would want to see in the ideal dog
daycare center. The would be an example of _____.
a.
idea screening
b.
diffusion
c.
a focus group
d.
basic research
e.
observation
116. Refer to Going to the Dogs. Before opening the It’s a Dog’s Life doggy resort the potential company
owners projected the costs involved in providing the services the target market (dog owners) appears
to desire. Unfortunately, a decision was made to not proceed with the doggy resort as the owners felt
the cost to provide the services was too high considering the rates the target market would be willing
to pay. The would be an example of _____.
a.
idea screening
b.
concept testing
c.
business analysis
d.
commercialization
e.
test marketing
117. Refer to Going to the Dogs. When the dog daycare first launched, it most likely appealed to which
product adopter category?
a.
early adopter
b.
early majority
c.
late majority
d.
innovators
e.
laggards
118. Refer to Going to the Dogs. For many dog owners it may be hard to understand the difference between
a traditional kennel and a dog daycare, especially given the price differential. As a result, dog daycares
may offer special low rates for first-time users in an effort to reduce which of the following issues
concerning the rate of diffusion:
a.
compatibility
b.
complexity
c.
observability
d.
innovativeness
e.
relative advantage
119. Refer to Going to the Dogs. One challenge to adoption of the dog daycare is the fact that dog owners
are used to paying a somewhat minimal fee for boarding their dog in a kennel, while a daycare center
may demand many times as much for the same time span. This suggests the _____ of the new product
may affect the rate of diffusion.
a.
compatibility
b.
complexity
c.
relative advantage
d.
observability
e.
trialability
120. Refer to Going to the Dogs. Central Bark Doggie Day Care currently has 31 locations, with a new
Gainesville, FL location coming soon. With the opening of competition in the form of Camp Bow
Wow and others, it appears that the dog daycare product is moving into the _____ stage of the product
life cycle.
a.
commercialization
b.
introductory
c.
growth
d.
maturity
e.
decline
NARRBEGIN: Voodoo Envy
Voodoo Envy
Hewlett-Packard is the number one seller of personal computers worldwide. The company has been
increasingly more creative in their computer designs following the trend set by Apple Inc. Hewlett-
Packard has created a ultra thin laptop called the Voodoo Envy. The laptop is less than a half inch
thick and weights less than 3 1/2 pounds. It is priced at $2000. HP created the laptop to compete
against Apple’s MacBook Air and a model created by the Lenovo Group Ltd. Both these models were
priced at around $3000. The MacBook Air does not have removable batteries or a built-in socket for
plugging into Ethernet networks. HP’s Voodoo envy does have removable batteries and offers an
Ethernet port that is part of its power adapter. The Voodoo can also be booted up in less than five
seconds made possible by software developed by HP.
NARREND
121. Refer to Voodoo Envy. Even though HP offers other laptop computers, the Voodoo Envy is HP’s first
entry into the ultrathin computer market. It is not really an update of an existing laptop. Instead, it was
originally designed as an ultrathin laptop. As such it is an example of a _____.
a.
new-to-the-world product
b.
new product line
c.
addition to existing product lines
d.
repositioned product
e.
improvement or revision of existing products
122. Refer to Voodoo Envy. Apple seems to have a success with its MacBook Air. However, not all of
Apple’s new product efforts have been successful. For example, the Newton Messagepad failed in the
marketplace. While a revolutionary product that created the PDA industry, many consumers perceived
the product as too big. For success, it is essential to have a good match between product _____ and
consumer _____.
a.
attributes, demographics
b.
trialability, comprehension
c.
value, income
d.
observability, freedom
e.
features, desires
123. Refer to Voodoo Envy. With very few competitors and high product prices, those purchasing ultrathin
computers now are probably the most venturesome consumers, also known as the _____.
a.
innovators
b.
late majority
c.
late adopters
d.
early adopters
e.
early majority
124. Refer to Voodoo Envy. Two advantages the Voodoo Envy has over the MacBook Air are removable
batteries and an Ethernet port. In other words, since the Voodoo Envy has these features that are
consistent with full size laptops, in terms of the adoption process, it has the advantage of _____.
a.
compatibility
b.
complexity
c.
maturity
d.
observability
e.
trialability
125. Refer to Voodoo Envy. The price of the Voodoo Envy is expected to be approximately $2,000.
According to Forrester Research, anything above $1,500 in this market would be considered “ultra
expensive.” In order to motivate consumers to spend $2,000 for the Voodoo Envy, HP will probably
need to spend considerable money on advertising to educate consumers to the advantages of ultrathin
laptops. This is a characteristic of which stage of the product life cycle?
a.
equity
b.
growth
c.
maturity
d.
introductory
e.
decline
ESSAY
1. List four potential advantages that come to the company that is first to market.
2. Name and describe the six categories of new products.
3. List the seven steps of the new-product development process.
4. Discuss five sources of new-product ideas. What are some techniques could be used to stimulate
creative thinking for new-product ideas?
5. Describe the idea screening stage of the new-product development process. Describe a common test
used during the screening stage.
6. New-product ideas that survive the initial screening process move to the business analysis stage. List
five of the many questions that are commonly asked during this stage.
7. After successful business analysis of a new product, the development stage begins. Describe the
development process and explain the difference between laboratory testing and use testing.
8. After products and marketing programs have been developed for new products, they are usually tested
in the marketplace. What is test marketing? How may a company benefit from the use of test
marketing? How can test marketing cause problems for a company?
9. Discuss alternatives to traditional test marketing.
10. What is the final stage in the new-product development process? What tasks are set in motion during
this stage?
11. Explain why some products fail and others succeed.
12. Describe how a multinational corporation can most efficiently and effectively meet the needs of the
global market.
13. There are five categories of adopters that participate in the diffusion process. Name and briefly
describe each of these five categories in the correct order from earliest adopter to last adopter.
14. Hemopure is a blood substitute developed by Biopure Corporation. It does not have to be refrigerated
or blood-typed like donated human blood that is currently being used in blood transfusions. It comes
in bags just like donated blood, so it can be used with IV tubes and needles just like donated human
blood is used. As a result, medical personnel will not have to make any adjustments if they adopted
this product. Name and describe the five product characteristics influencing the rate of adoption of
new products and explain how each factor will influence the rate of adoption of a blood substitute like
Hemopure.
15. Draw the sales line and the profit line of the product life cycle in the following diagram, and label each
line. Then indicate the names of the four stages of the product life cycle in the blanks provided.
16. List the four stages of the product life cycle and discuss the typical characteristics for each stage.
17. Briefly describe a typical marketing strategy followed for the four Ps in each stage of the product life
cycle. Name the stages of the product life cycle at the top of the chart.
Stage I.
Stage II.
Stage III.
Stage IV.
PRODUCT:
DISTRIBUTION:
PROMOTION:
PRICE:
INTRODUCTION
PRODUCT:
models; frequent
