76. Before Segway manufactured its two-wheeled people movers, it built a prototype and had staff engineers test it for performance and stability. At this
stage, Segway was involved in
77. YouEye is developing eye tracking technology that works with an individual’s webcam. Instead of needing to spend thousands of dollars on eye
tracking equipment and having customers come into labs, firms will be able to utilize everyday webcams to track not only what a person attends to on a
computer screen but also his or her emotional reactions to these products. Firms such as YouEye are automating the
78. Golf ball manufacturers use “Iron Mike,” a machine that swings a golf club at a constant velocity, to test the distance for new golf ball designs. When
using Iron Mike, the manufacturers are engaged in
79. One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme
conditions. Using the cars in a real-use setting provides an opportunity for _______ the product.
80. Lorraine belongs to a national consumer panel created by a market research company. She regularly receives samples of new products from a variety
of firms and fills out questionnaires about the products. The national consumer panel Lorraine is part of is engaged in
81. A marketing professor in Ithaca, New York, maintains a museum of failed consumer products. Most new products in this museum failed during the
__________ stage of new product development, when they are introduced to a limited geographic area.
82. When McDonald’s comes up with a new drink or sandwich for its restaurants, it often markets it in a dozen or so of its outlets. When the company
does this, it is engaged in
83. The __________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the
marketing mix.
84. Which of the following reflects the maturity stage of the product life cycle?
85. All of the following would be part of the launch of a new product except
86. Because a market is saturated, firms may attempt to enter new geographical markets that may be less saturated. For example, pharmaceutical
companies are realizing that they need to turn to ____________ for continued growth in the coming years.
87. The Apple iPod changed the way people listen to music but it also created an entirely new industry devoted to accessories such as cases, ear buds,
docking stations, and speakers. The Apple iPod is considered a
88. Beverly is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Beverly will likely
consider all of the following except
89. All of the following are included in the four product life cycle stages except
90. Microsoft’s Windows operating system continues to dominate the market, even though it has been around for over 20 years. Windows will likely
remain in the maturity stage of the product life cycle
91. During the __________ stage of the product life cycle, sales are low and profits are small or negative.
92. When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage
93. During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors.
94. When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting
the product life cycle for hybrid cars into the __________ stage of the product life cycle.
95. Some products may stay comfortably in the maturity phase of the product life cycle until a new product emerges to replace them. An example of
such a mature product is
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96. The growth phase of the product life cycle is always dynamic. All of the following occur during this phase except
97. All of the following are characteristics of products in the maturity stage of the product life cycle except
98. During the __________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.
99. By the time BMW and Mercedes-Benz entered the mini-SUV market, there were many competitors, sales had peaked, and profits were declining.
100. During the ___________ stage of the product life cycle, firms either position themselves for a niche segment of diehard consumers or they
completely exit the market.
101. The CEO of David’s firm just came back from a business seminar. He called David into his office and stated, “I just found out about the product life
cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you’re doing and inventory all of our products to determine exactly
where they are in the product life cycle.” David needs to think fast for a good answer because he knows that
102. Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve?
103. Which of the following adopter categories refers to the last large group of buyers to enter a new product market?
104. During the __________ stage of the product life cycle, there are few but an increasing number of competitors.
105. If a few of Nintendo’s customers are asked to try out a new video game that has not yet been released on the market, this is an example of
106. A product in the __________ stage of the product life cycle has a high number of competitors and competitive products.
107. Which of the following is true of profits in the maturity stage of the product life cycle?
108. The Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs was a(n) __________ in the MP3 player
market.
109. In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the
product again. This is known as
110. All of the following are stages in the product life cycle except
111. On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the XYZ firm
confirms its target market (or markets) and decides how its product will be positioned. Then the firm finalizes the remaining marketing mix variables for
the new product, including the marketing budget for the first year. This process illustrates
112. The product life cycle is theoretically __________ with regard to sales and profits.
113. In the United States, most consumer packaged goods found in grocery and discount stores are already in the __________ stage of the product life
cycle.
114. During the introduction stage of a product’s life cycle, typical consumers are
115. How is consumer panel data collected during the test marketing phase of a new product introduction?
116. After a product has been launched, marketers must undertake a critical postlaunch review to determine whether the product and its launch were a
success or failure and what additional resources or changes to the marketing mix are needed, if any. For a product that does move on, the firms can
measure the success of the new product by interrelated factors that include all of the following except
117. Paul listens to music on his iPod and iPhone, but he still buys vinyl records at his local music store on occasion, although they are getting harder to
find. Vinyl records are in the __________ stage of the product life cycle.
118. Cathy has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced
micro-sculpting cream from Olay’s Regenerist line. Olay is in the _________ stage of the product life cycle.
119. When a product is successful in the introductory stage of the product life cycle,
120. Firms can measure the success of a new product by all of the following factors except
Essay Questions
121. Think back to a time when you have said, “This is great idea. How come nobody thought of this before?” Assuming no one has thought of it before,
what would be the first steps to take to develop a new product idea?
122. Respond to the statement “Create or die” from a new product innovation perspective.
123. A good friend of yours wonders why you always seem to have the latest technology, long before anyone else. He then says, “I always want to wait
until the bugs have been worked out. It saves me money and aggravation.” Use diffusion of innovation theory to explain how you differ as consumers,
and what this means to marketers.
124. Many car manufacturers have developed prototypes of alternative energy vehicles like hydrogen-fueled cars. When developing their marketing
strategies, how can these firms use the diffusion of innovation curve in the early stages of product development?
125. What is the difference between an innovator and an early adopter?
126. Around 2006, hybrid cars moved from the early adopter to the early majority stage. What did this mean for marketers of hybrid cars?
127. Using the diffusion of innovation theory, what factors contributed to the rapid adoption and success of Amazon.com?
128. General Electric is developing a new magnetic resonance imaging (MRI) device to be marketed to family practice physicians. These new machines
will be much smaller and less expensive than the existing MRI machines now in most hospitals. What factors will probably affect the diffusion of these
new machines?
129. Marketing is a dynamic practice. While you are watching your competitors, they are watching you. Assume that you have just redesigned a product
that is in the maturity phase of the product life cycle and have identified some new market segments. How do you think your competitors will respond?
130. What is the difference between alpha testing and beta testing?
131. When they add products, services, and processes to their offerings, firms can create and deliver value more effectively by satisfying the changing
needs of their current and new customers or by keeping customers from getting bored with the current product or service offering. How did Steve Jobs,
the Apple company’s founder and visionary leader, change the phone, camera, communication, and technology markets?
132. Carmen is ready to launch her company’s new product, a line of chocolate for diabetics, based on her instincts and knowledge from 30 years of
marketing. Her staff is encouraging her to delay the launch until test marketing can be done. What are the advantages and disadvantages of each
approach?
133. Laura is about to launch a new product: herself! She is running for a local political office. First-time candidates quickly learn the importance of
marketing. She has consulted with various experts, tested her campaign themes and messages with focus groups, and now is ready to do a full-scale
product launch. Why is her product launch the most critical step? What will she need to do?
134. A year after expanding his celebrity golf photography business to include golf course photography, Chet decided it was time to evaluate results.
What three interrelated factors will Chet consider when evaluating the success of his new product?
135. Why is it important for marketers to understand the product life cycle?
136. Many marketers think personal computers in the United States are in the maturity stage of the product life cycle. What does this mean for
manufacturers of personal computers? What can they do about it?
137. In new product development, what advantage do first movers have?
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138. Describe your actions (or someone you know) in a situation where you (or they) were an innovator in the diffusion of innovation curve.
139. Robin carefully studies her options before buying new products. She enjoys new things, especially electronic games, and is very knowledgeable
about them. Other people often ask her opinion. In the diffusion of innovation curve, which category does Robin fit in?
140. Describe a product that is in the early majority stage of the new product diffusion curve.
141. Why do you think that many biotechnology firms license their new products?
142. Why do marketers take the time and cost associated with test marketing?
143. Which step in the new product development process is the most critical to the survival of a firm, and why?
144. Jennifer has just taken over a line of organic teas for her company. She looks at the company records and sees sales have peaked, profit margins are
declining, and there are many new competitors in that category. Which stage of the product life cycle are her teas in?
145. Define and describe the product life cycle stage in which laggards begin to purchase products.
146. Explain the concept of outsourcing product development, and give an example of when this would be a good idea.
147. What is a “new-to-the-world” product, and how does this type of product impact markets and consumer preferences? Use an example to explain
this concept.
148. Why is the failure rate for new products so high?
149. Why are innovators important to marketers?
150. What happens when a product has been in the marketplace for a long time? How can this be avoided?
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Category # of Questions
AACSB: Analytical Thinking 113
AACSB: Ethics 2
AACSB: Knowledge Application 35
Accessibility: Keyboard Navigation 120
Blooms: Analyze 9
Blooms: Apply 35
Blooms: Remember 40
Blooms: Understand 66
Difficulty: 1 Easy 44
Difficulty: 2 Medium 65
Difficulty: 3 Hard 41
Learning Objective: 12-01 Identify the reasons firms create new products. 12
Learning Objective: 12-02 Describe the different groups of adopters articulated by the diffusion of innovation theory. 58
Learning Objective: 12-03 Describe the various stages involved in developing a new product or service. 47
Learning Objective: 12-04 Explain the product life cycle. 33
Topic: Consumer Adoption Process 53
Topic: Enhancing Customer Satisfaction 1
Topic: New-product Development 63
Topic: Product Life Cycle 33