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d. finding new uses.
101. Which of the following terms refers to a series of stages consumers go through in learning about a new
product, trying it, and deciding whether to purchase it again?
a. Product life cycle
b. Adoption process
c. Product development process
d. Diffusion process
102. Some consumers are hesitant to try new products. In general, they are risk averse, so they only buy new
technology after it has been well established, and often after facing peer pressure from others. These consumers
tend to be older as well. These customers would tend to fall into the ______ category of the diffusion process.
a. late majority
b. innovator
c. early majority
d. early adopter
103. Special Confectioners, a major chocolate company, has recently started promoting its festive packs with the
tag line, “making each moment special.” By doing so, the management is trying to make its customers realize
the everyday relevance of their festive packs. In doing so, the company is attempting to extend the product
lifecycle by:
a. increasing the number of users.
b. finding new uses for the product.
c. changing product quality.
d. increasing the frequency of use.
104. The first step in the new-product development process is:
a. screening.
b. development.
c. idea generation.
d. business analysis.
105. Christopher recently took his family to lunch at One World Café when they visited him at college. The entire
experience was positive – especially the service provided by their waitress Michelle. She was attentive, engaging, and
efficient in serving Christopher and his family. From a marketing perspective, we would say Christopher and his family
had a positive:
a. service encounter.
b. product exchange.
c. client contact.
d. service assurance.
106. Coca Cola and Pepsi have been competitors in the soft drink business for over a century. While they have
both introduced a wide variety of related items, the battle between their core products remains. These
companies fight over shelf space in retail stores and access to fountain outlets in restaurants and convenience
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stores. While customers might have a preference, most are willing to drink either Coke or Pepsi depending on
availability and price. Gaining shelf space or fountain outlets is an example of:
a. market penetration.
b. market development.
c. product diversification.
d. product development.
107. Virtually all firms would claim that quality is of primary importance. However, not all firms can offer evidence of
their quality. Therefore, provide assurance of quality standards, an international quality certification process has been
established. Companies that meet this standard can show they have met:
a. ISO 9001 certification.
b. IQM (International Quality Measurement).
c. World Quality Certification.
d. RIMS (Recognized International Management Standards.
108. The final stage in the new-product development process is when the product enters full-scale
manufacturing and wide retail distribution. This stage of the new-product development process is:
a. commercialization.
b. test marketing.
c. field testing.
d. business analysis.
109. Harley Davidson employees are heavily engaged in phenomenological research – living the life of a biker.
Riding their own products and paying attention to what their customers are doing with Harley motorcycles has
resulted in many new-product development ideas. This research is particularly useful in the new-product
development:
a. idea generation stage.
b. screening stage.
c. business analysis stage.
d. test marketing stage.
110. The process by which new goods or services are accepted in the marketplace is known as the _____
process.
a. extension
b. referencing
c. diffusion
d. polarization
111. Like all companies, McDonald’s needs to continue identifying, developing, and introducing new products.
One recent concept McDonald’s identified is a vegan burger. After assessing the concept, McDonald’s research
and development kitchen developed a vegan burger that they felt would be appealing to the 13% of Americans
that are vegetarian or vegan. Before rolling the vegan burger out, McDonald’s wanted to examine the viability
in the real world, but on a limited basis. McDonald’s next step should be to ______ the vegan burger.
a. test market
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b. concept test
c. field exam
d. commercialize
112. You launched the first ad campaign for your new nutrition bar just a few weeks ago, and are pleased to see hundreds
of requests for more information about its ingredients on the company’s Facebook page and Twitter account. The nutrition
bar is most likely in which stage of the consumer adoption process?
a. Adoption
b. Evaluation
c. Awareness
d. Interest
e. Accelerated
113. Not all products fit with all companies. For example, while a concept might appear to be a good idea, it
might not fit well with a particular company’s image or distribution channels. It is important these ideas be
“weeded out” early in the new-product development process. Typically, this takes place during the new-product
development:
a. screening stage.
b. idea generation stage.
c. business analysis stage.
d. test marketing stage.
114. Delectable, a fast food chain, emphasizes a lot on things like how the staffs are dressed, how the food is
presented, as well as cleanliness of their service area. According to this information, Delectable is focusing on
which of the following variables of service quality?
a. Assurances
b. Responsiveness
c. Tangibles
d. Empathy
115. When Microsoft introduced the latest edition of Age of Empires III, it provided a free download of one of
the game scenarios. Addition of this link is most likely to influence which of the following characteristics of the
product innovation?
a. Complexity
b. Associability
c. Possibility of trial use
d. Compatibility
116. Some new products are introduced and quickly are accepted by the marketplace. Other products take years
before they spread across society. A product that is complex and hard to understand is likely to diffuse across
society:
a. more slowly than a simple product.
b. more quickly than a simple product.
c. complexity has no effect on diffusion.
d. about the same as a simple product.
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117. The term service _____ refers to the point at which the customer and service provider interact.
a. encounter
b. locus
c. platform
d. zone
118. Apex Corp. has been manufacturing furniture for past several years. Now in order to grow its business, the
company has decided to manufacture curtains and bed sheets. The strategy being used by the company to target
new markets is referred to as a _____.
a. product association strategy
b. market simulation strategy
c. market engagement strategy
d. product diversification strategy
119. A new-product concept passes the test for financial feasibility and initial evaluation by focus groups and in–
store polling,and then needs to convert from a concept into a prototype. This step can involve creating an actual
item for further assessment before launching the product. These activities are part of the _________ stage of the
new-product development.
a. development
b. concept testing
c. screening
d. business analysis
120. Which of the following statements is true regarding the maturity stage of the product lifecycle?
a. It is the second stage of the product lifecycle.
b. Since the product is unknown to the public during this stage, the promotional campaigns stress
information about its features.
c. During this stage, differences between competing products diminish.
d. It is characterized by rapid growth in the volume of sales.
121. Apple is constantly striving to introduce new products into the marketplace. At the initial stage, Apple design
teams are separated from the rest of the organization and housed in a separate facility to enhance the ability to develop
new concepts. This approach has proven to enhance the ability to come up with new concepts in the _____ stage of the
new-product development process.
a. idea generation
b. new-product identification
c. screening
d. business analysis
122. Mackenzie just completed her master’s degree and is willing to take risks on new technologies. In fact, Mackenzie is
one of the very first consumers to buy new technology and is not worried about what others think. Mackenzie is in the
_________ category of the diffusion process.
a. innovator
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b. early adopter
c. early majority
d. laggard
123. Hershey’s develops new products on an ongoing basis. One of the most successful is Reese’s Minis – the
miniature Reese’s cup without a wrapper. Reese’s Minis came from the consumer desire to have a snack that
they could eat with one hand. After a brief test market showed wide demand for the product, Hershey’s
launched Reese’s Minis in the _________ stage of the new-product development.
a. commercialization
b. concept test
c. field trial
d. test market
124. During which of the following stages of a new-product development process, ideas with commercial
potential are separated from those not meeting company objectives?
a. Idea generation
b. Business analysis
c. Screening
d. Test marketing
125. New-product development is the life blood of firms. However, it is a difficult process and not always
successful. In fact, approximately ____ of new products fail.
a. 80%
b. 60%
c. 40%
d. 20%
126. In which stage of the product life cycle is encouraging trial purchases the primary marketing challenge?
a. Growth
b. Introduction
c. Maturity
d. Decline
127. More than 90 percent of cereal is consumed at breakfast, but ads for Kellogg’s Cracklin’ Oat Bran say that it
tastes like oatmeal cookies and makes “a great snack anytime.” Kellogg’s is implementing a strategy of _____
with this product.
a. market penetration
b. market development
c. product development
d. product diversification
128. Which of the following variables of service quality best represents the readiness to serve one’s customers?
a. Tangibles
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c. Responsiveness
d. Empathy
129. The Florida Orange Juice Growers and their ad agency utilized the slogan, “It’s not just for breakfast
anymore” to motivate consumers to drink more orange juice by having current orange juice drinkers enjoy the
beverage throughout the day hoping this would increase demand and sales of orange juice. This strategy is
called:
a. market penetration.
b. product development.
c. market development.
d. product diversification.
130. The business analysis stage generates extremely important information for new-product development as:
a. collecting information from different sources to generate new ideas.
b. turning the original concept into a product.
c. verifying if the product will perform well in a real-life environment.
d. assessing how the product can be differentiated from the competition.
131. Manufacturers of consumer food items often provide taste tests when they introduce new products. One of the
benefits of this approach is consumers can be moved through multiple steps of the new-product adoption process.
Which step of the new-product adoption process can NOT be experienced through a taste test?
a. Rejection
b. Awareness
c. Trial
d. Evaluation
132. Dali Stationery and Office Supplies is a market leader in China. The company wants to expand its business
and is setting up retail chains in other Asian countries. Which of the following new-product development
strategies is being used by the company in the above scenario?
a. Market development strategy
b. Market penetration strategy
c. Product development strategy
d. Product diversification strategy
133. Lily introduced the first drone camera that follows the operator and records video in 2014. While the Lily drone is
tough, portable, and waterproof – perfect for videoing your bicycle ride, float down the river, or skiing down a mountain,
it was not immediately financially successful. More recently though, sales have increased, the Lily drone camera has
become profitable, and other manufacturers have introduced direct competitors. While sales continue to increase, Lily’s
market share is dropping as the market becomes more competitive. What stage of the product life cycle is the Lily drone
camera?
a. growth
b. introduction
c. decline
d. maturity
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134. McDonald’s started with a simple concept in 1940 – fast service offering only hamburgers, cheeseburgers,
potato chips, and drinks at the start. However, they menu soon expanded to include French fries and
milkshakes. This process of menu expansion continues to today, with a broad range of sandwiches, drinks,
salads, and breakfast items to serve their customers. There does not appear to be any end in sight to the menu
items! This expansion is an example of:
a. product development.
b. market penetration.
c. diversification.
d. market development.
135. Colin owns a dog food business, but wants to develop a canine fashion line as a way of expanding his
portfolio and increasing sales and profits. One of the things customers love about Colin’s company is that all of
the products are manufactured locally, creating jobs for young people. Though he does not have a lot of money
and hopes that he won’t have to hire new staff, he thinks he might have to. Rather than developing a canine
fashion line, which of the following alternatives can you suggest to Colin?
a. Colin should use cannibalization strategy.
b. Colin should use a market penetration strategy.
c. Colin should outsource his company’s jobs to cut costs.
d. Colin should consider selling his business to a larger pet food company.
e. Colin should hire a marketing company to help him promote his products.
136. The Sanyo Xacti HD1010 was named the “2008 Gadget of the Year.” The pistol-shaped Xacti is a digital camera
and video camera in one. Instead of the bulky and heavy digital cameras and video recorders of the time, the Xacti
combined the functions of both. Xacti takes 4-megapixel stills and 1080i video. While the Xacti looked promising and
initial sales increased rapidly, it was just a few years before the cameras in cell phones were able to provide the same
capabilities in a much smaller package. As a result, sales dropped rapidly. It is safe to say the Xacti in the _______ stage
of the product life cycle.
a. decline
b. maturity
c. growth
d. introduction
137. Individuals who purchase new products almost as soon as these products reach the market are called _____.
a. late adopters
b. laggards
c. consumer innovators
d. hesitant buyers
138. A new-product innovation that is consistent with the values and experiences of potential adopters and
attracts new buyers at a relatively rapid rate is said to have high _____.
a. complexity
b. observability
c. compatibility
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d. transparency
139. 4K curved screen televisions were introduced to the consumer market in April 2014. Led by Korean manufacturers
Samsung and LG, prices were high and sales slow for the first two years. Currently, sales are increasing at an increasing
rate, they have gained much wider distribution, and new competitors have entered the market. Manufacturers are now
realizing profits from the 4K curved televisions, which are in the __________ stage of the product life cycle.
a. growth
b. introduction
c. decline
d. maturity
140. In 2010, Kimberly-Clark introduced the Huggies Little Movers Jeans, a diaper with a denim-like style. Mothers and
mommy bloggers loved them and sales took off. Over the years, however, sales have leveled off as competition has
grown and the market becomes even more fragmented. Which of the following marketing activities would be
appropriate now for the Huggies Little Movers Jeans?
a. Introduce a new color or design of Little Movers
b. Provide coupons to motivate hesitant buyers to buy Little Movers
c. Communicate product details through television advertising
d. Drop the Little Movers line
141. The purpose of test marketing new-product offerings is to:
a. separate ideas with commercial potential from those that will not meet company objectives.
b. subject the product idea to additional study prior to its actual development.
c. verify that the product will perform well in a real-life environment.
d. evaluate the compatibility of the product with organizational resources.
142. Describe the stages involved in the consumer adoption process.
143. Define benchmarking. Describe the benchmarking process.
144. Discuss the steps involved in the new-product development process.
145. Define service quality. Describe its five variables.
146. List out the characteristics of product innovation that influence its adoption rate.
147. What are the different ways in which firms can extend a product’s lifecycle? Explain any one of them.
148. Define Total Quality Management (TQM) and ISO 9001:2008. Give examples of some companies that you
know of as certified by ISO.
149. Briefly describe the four new-product development strategies.
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Answer Key
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