Chapter 12—Developing and Managing Products
ESSAY
1. Compare and contrast line extensions and product modifications.
2. Identify and describe the three major ways to modify existing products, and give an example of each.
3. List and discuss the major phases of the new-product development process.
4. Discuss the role of new-product development in the marketing mix. Why is new-product development
an important issue?
5. What is concept testing, and why is it important?
6. What exactly is analyzed during the business analysis phase of new-product development?
7. Discuss the advantages and problems associated with test marketing.
8. Discuss the major approaches that marketers use to differentiate their products.
9. Identify and explain the dimensions of product quality.
10. Why and how might an organization delete existing products?
11. Why is it often difficult for organizations to delete products?
12. Compare and contrast a product manager and a market manager.
MULTIPLE CHOICE
13. Why are line extensions more common than new products?
a.
They are higher risk and more expensive.
b.
They are guaranteed to succeed in the marketplace.
c.
They are less expensive and lower-risk.
d.
They require no market research.
e.
Modifications to existing products are very easy.
14. Coca-Cola has expanded to Diet Coke, Cherry Coke, and Caffeine-free Coke, to name a few. These are
examples of
a.
product modifications.
b.
functional modifications.
c.
aesthetic modifications.
d.
line extensions.
e.
product lining.
15. When Jeep Wrangler produces the new year’s model vehicle, they discontinue production of last
year’s. However, when Apple brings out a new iPhone, they continue to produce the previous version
for at least some period of time. Jeep Wrangler’s new-product strategy is an example of a(an) _____
while Apple’s is an example of a(an)______.
a.
product modification; quality modification
b.
product modification; line extension
c.
quality modification; product modification
d.
functional modification; product modification
e.
line extension; product modification
16. If the manufacturer of Cool Whip were to introduce a chocolate-flavored Cool Whip and still continue
to produce all of its other Cool Whip products, this would be an example of
a.
a brand extension.
b.
line extension.
c.
functional modification.
d.
quality modification.
e.
a new-to-the-world product.
17. ____ is the development of a product that is closely related to one or more products in a firm’s existing
product line but is designed specifically to meet somewhat different customer needs.
a.
Quality modification
b.
Line extension
c.
Aesthetic modification
d.
Feature modification
e.
Product mix modification
18. What is the primary distinction between a line extension and a product modification?
a.
A product modification results in a completely new product while a line extension is
simply changing an old product.
b.
In both cases an existing product is altered, but the alteration is more dramatic with a
product modification than it is with a line extension.
c.
Line extensions are designed to better meet the needs of the existing market segment while
product modifications target entirely new segments of the market.
d.
With product modifications, the original product is replaced in the product line while both
the old and the new products remain in the case of line extension.
e.
Line extensions are strictly aesthetic changes to an existing product whereas product
modifications consist of changes in quality and functionality.
19. In product modification, the first issue to consider is whether
a.
existing customers can perceive that a product modification has been made.
b.
the product is modifiable.
c.
quality is modified.
d.
modification will make the product more consistent with customers’ desires.
e.
modification will provide greater satisfaction to the consumer.
20. In product modification, three conditions must be met to improve a firm’s product mix: the product
must be modifiable, customers must be able to perceive that a modification has been made, and
a.
modification should make the product more consistent with customers’ desires.
b.
competing companies should not be aware of planned product modifications.
c.
modification should change customers’ desires to provide greater satisfaction.
d.
management must perceive the modification as a reasonable and necessary action.
e.
production costs and materials needed should be limited.
21. Quality modifications are changes that relate to a product’s
a.
dependability and durability.
b.
effectiveness and versatility.
c.
price and availability.
d.
reliability and value.
e.
value and durability.
22. Bauman Flooring found a supplier of very inexpensive fibers that could be used to produce low-grade
carpeting at a very low cost. Because Bauman had been facing stiff competition in the medium-grade
carpet industry, it started using the new material in all of its carpeting and reducing its prices. This is
an example of a(n)
a.
aesthetic modification.
b.
line extension.
c.
material adjustment.
d.
functional modification.
e.
quality modification.
23. Which of the following types of product modifications inevitably tend to cause firms to reduce costs in
some of the organization?
a.
Aesthetic
b.
Operational
c.
Benefit
d.
Functional
e.
Quality
24. Changes that affect a product’s versatility, effectiveness, convenience, or safety are called ____
modifications.
a.
functional
b.
formal
c.
aesthetic
d.
quality
e.
package
25. Which of the following is the best example of a functional modification?
a.
Campbell’s puts more of a higher-grade chicken in its classic chicken noodle soup.
b.
A smoke alarm is modified to be more sensitive to smoke at farther distances.
c.
Motorola uses a battery that allows its cell phones to charge back up more quickly.
d.
The manufacturer of the primer and sealer, Kilz, introduces an odorless variety.
e.
Friskies changes the ingredients in its cat food to a taste that is preferred by most cats.
26. Functional modifications usually require that the product be
a.
less specific.
b.
limited to its functions.
c.
more appealing.
d.
more technical.
e.
redesigned.
27. When Conair adds an electrical component that automatically shuts off its curling irons when they
have been left on for more than one hour. This improvement would best be classified as a(n)
a.
product line extension.
b.
quality modification.
c.
aesthetic modification.
d.
market extension.
e.
functional modification.
28. Changes that affect the sensory appeal of a product by altering its taste, texture, sound, smell, or visual
characteristics are called ____ modifications.
a.
aesthetic
b.
functional
c.
operational
d.
quality
e.
feature
29. Sony’s design of its new large-screen television sets with smoked-glass control panel covers and other
visual changes would be classified as a(n) ____ modification; changes to make the TV’s remote easier
to use would be classified as a(an) ___.
a.
functional; aesthetic modification
b.
aesthetic; functional modification
c.
aesthetic; quality modification
d.
aesthetic; line extension
e.
quality modification; functional modification
30. The major drawback to using aesthetic modifications is
a.
the cost of the modifications.
b.
that the value of the modification is determined subjectively.
c.
the need for redesign of the product.
d.
a possible decrease in market share.
e.
that there is no differentiation for the product in the market.
31. If Stonefield School Furniture Company provides standard primary school chairs in new colors to
match the interiors of schools, this modification is most likely to be viewed as a(n) ____ modification.
a.
aesthetic
b.
functional
c.
quality
d.
image
e.
feature
32. Morgan is interested in upgrading to a new sofa for her apartment. Morgan looks online to see what
new models her favorite sofa brand has available and can get information on the style and color;
however, she can’t actually sit on the sofa to determine its comfort level. Morgan is able to evaluate
the ____ modifications to the sofa, but not the ____ modifications.
a.
aesthetic; quality
b.
quality; aesthetic
c.
aesthetic; functional
d.
functional; quality
e.
functional; aesthetic
33. Rick is a new product manager for a large bio-chemical firm. He is currently working on a proposal
for a new chemical solvent and knows that introducing the new product can be risky because it might
fail. He also knows that ___ is risky as well.
a.
performing marketing research.
b.
keeping tabs on the actions of competitors.
c.
not introducing new products.
d.
generating new product ideas.
e.
addressing customers’ concerns about products.
34. A complex product development process, including an extensive business analysis to determine the
possibility of success, are hallmarks of a
a.
genuinely new product.
b.
radically new product.
c.
new product failure.
d.
controlled new product.
e.
market share advance.
35. A genuinely new product⎯like the iPhone once was⎯offers
a.
lower prices than existing products.
b.
at least two new product features.
c.
innovative benefits to consumers.
d.
better value than existing products.
e.
at least two new product features at a lower price.
36. All of the following are major steps in developing new products except
a.
test marketing.
b.
evaluation of competitors’ efforts.
c.
screening.
d.
business analysis.
e.
idea generation.
37. Outback Steakhouse wants to expand its line of food products. The managers sent surveys to
customers to determine which food items would appeal to them. Outback is currently in the ____
phase of new-product development.
a.
business analysis
b.
product development
c.
test marketing
d.
screening
e.
idea generation
38. When marketers at Nabisco met with groups of young adults to identify the types of snacks that young
people want, they were engaging in which phase of new-product development?
a.
Idea generation
b.
Business analysis
c.
Test marketing
d.
Commercialization
e.
Product development
39. Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during
a.
commercialization.
b.
screening.
c.
concept testing.
d.
product development.
e.
test marketing.
40. Concerns about cannibalization of current product sales must be addressed in the ____ phase of the
new-product development process.
a.
screening
b.
concept testing
c.
business analysis
d.
product development
e.
test marketing
41. What step in developing new products involves determining whether the product idea is compatible
with company objectives, needs, and resources on a general level?
a.
Product development
b.
Evaluation of competitor’s efforts
c.
Screening
d.
Idea generation
e.
Business analysis
42. A group of managers has been assigned the task of developing a new product. They are now in the
process of assessing several ideas to determine whether they are consistent with the firm’s overall
objectives and resources. The managers are at what stage of the new-product development process?
a.
Business analysis
b.
Product testing
c.
Idea generation
d.
Commercialization
e.
Screening
43. Compared with other phases of the new-product development process, the largest number of new–
product ideas is rejected during the ____ phase.
a.
idea generation
b.
concept testing
c.
business analysis
d.
screening
e.
test marketing
44. The phase of new-product development in which a small sample of potential buyers are presented with
a product idea through a written or oral description in order to determine their attitudes and initial
buying intentions regarding the product is called
a.
concept testing.
b.
customer response testing.
c.
idea analysis.
d.
test marketing.
e.
screening.
45. Patrick is a member of a consumer marketing panel and has been introduced to a company’s new idea
for energy drinks. Some of the questions he has been asked are “ How often would you buy this
product?” and “Which features are of little or no interest to you?” Patrick is most likely participating in
the ___ phase of the new-product development process.
a.
concept testing.
b.
business analysis
c.
idea screening.
d.
idea generation.
e.
test marketing.
46. Which of the following is the stage of the new-product development process where customers are first
exposed to the new product idea?
a.
Screening
b.
Concept testing
c.
Business analysis
d.
Product development
e.
Test marketing
47. Marketers at Starbucks have generated several ideas for new food products. Management has assessed
whether these ideas are consistent with Starbucks’ objectives and resources. Several product ideas
were dropped after this analysis. The next stage of development for the remaining product ideas is
a.
product development.
b.
idea screening.
c.
concept testing.
d.
business analysis.
e.
test marketing.
48. Which of the following phases of new-product development is likely the least costly for the firm?
a.
Commercialization
b.
Concept testing
c.
Business analysis
d.
Product development
e.
Test marketing
49. Karla tells Jeff that she likes his team’s idea about a new three-lace running shoe but wants him to put
together some figures regarding anticipated sales, costs, and resulting profits. She is asking Jeff to
proceed to which stage of the new-product development process?
a.
Idea generation
b.
Business analysis
c.
Commercialization
d.
Test marketing
e.
Screening
50. Breakeven analysis is a tool that marketers are likely to employ during the ____ stage of the new–
product development process.
a.
screening
b.
concept testing
c.
business analysis
d.
product development
e.
test marketing
51. “Is the demand strong enough?” is a question that marketers ask during the ____ phase of new-product
development.
a.
screening
b.
concept testing
c.
business analysis
d.
product development
e.
test marketing
52. Clive is an engineer involved in the product development of a new plastic laminate that would be sold
to manufacturers of kitchen counter tops. Currently, Clive and his colleagues are considering the
potential for profitability of the new product. They are likely in the ____ phase of the new product
development process.
a.
Idea generation
b.
Market testing
c.
Business analysis
d.
Concept testing
e.
Compatibility research
53. As Justin works on the prototype of a new action-oriented computer game, he is engaging in which
phase of the new-product development process?
a.
Idea generation
b.
Commercialization
c.
Test marketing
d.
Screening
e.
Product development
54. Ideally, test marketing should follow which stage in the new-product development process?
a.
Commercialization
b.
Business analysis
c.
Screening
d.
Limited production
e.
Product development
55. Kara is a member of the product development team at a company that manufactures sports equipment.
During a recent meeting, one of the team members asked “What level of quality are we building into
the camping gear?” Based on this question, Kara and her team are most likely in the ____ phase of
new-product development.
a.
commercialization
b.
concept testing
c.
business analysis
d.
product development
e.
test marketing
56. The phase of the new-product development process when the organization determines the
technological feasibility of producing the product at a cost that results in a reasonable selling price is
a.
test marketing.
b.
commercialization.
c.
concept testing.
d.
product development.
e.
business analysis.
57. After building a prototype of his new device, Brad is asked to conduct rigorous functional testing to
see if the device meets performance and safety qualifications. This is part of the ____ phase of the
new-product development process.
a.
product design
b.
screening
c.
product development
d.
concept testing
e.
test marketing
58. After a company has created a prototype during the product development stage, its performance, or
____ must be tested.
a.
appeal to customers
b.
dependability
c.
durability
d.
functionality
e.
pricing
59. Marcellis is a product manager for a major electronics company. His current project is the
development and introduction of a new smartphone. Since there are a number of smartphones
currently out on the market, Marcellis is concerned about product failure. Currently, Marcellis and his
team are in the screening phase of the new product development process. Has his team already passed
the phase which is best able to measure the product failure concern?
a.
Yes, the best phase is the idea screening phase.
b.
Yes, the best phase is the concept testing phase.
c.
No, the best phase is the business analysis phase.
d.
Yes, the best phase is the test marketing phase.
e.
No, the best phase is the test marketing phase.
60. Top managers at Cincinnati Microwave believe that they have a successful working prototype of their
new radar detector and plan to go directly to regional commercialization of the new product. In this
instance, they are contemplating skipping the ____ phase of the new-product development process.
a.
screening
b.
test marketing
c.
product development
d.
business analysis
e.
idea generation
61. The test-marketing stage
a.
is an extension of the screening stage.
b.
should come immediately after business analysis.
c.
ensures that the product will not fail.
d.
is a sample launching of the entire marketing mix.
e.
prevents competitors from copying the product.
62. Select the true statement concerning test marketing.
a.
Test marketing is simply an extension of the screening and developing stages.
b.
Test marketing should be conducted after all the marketing mix variables have been
finalized.
c.
Test marketing is a limited introduction of the product in areas chosen to represent the
intended market.
d.
If the product is successful in the test market, then it is ensured of success upon total
introduction.
e.
Large corporations usually launch test-marketing efforts in one small area at a time.
63. Sales and cost analyses occur most frequently in what stage of the new-product development process?
a.
Screening
b.
Product development
c.
Test marketing
d.
Commercialization
e.
Business analysis
64. PepsiCo has a new flavor of soft drink that it wants to test to determine reactions of probable buyers.
Which of the following test-market characteristics would be least useful to PepsiCo when testing the
new soft drink?
a.
There are research and audit services available.
b.
Retailers would be cooperative.
c.
Testing efforts would not be easily jammed by competitors.
d.
Tourism is a major industry in the area.
e.
The city has stable year-round sales of soft drinks.
65. Angela and Ralph at Tablerock Foods believe they have come up with a delicious low-calorie dessert,
but they have some doubt about which of two promotional and pricing campaigns will be better
received by consumers. In this instance, they probably should proceed to the ____ stage of the new-
product development process.
a.
business analysis
b.
commercialization
c.
screening
d.
test marketing
e.
product development
66. If Jason Carter, product manager at SeaRay Boats, became aware that Bass Boats, Inc., was in the
process of test marketing a new line of shallow-water fishing boats in the southeast region, he might
want to engage in ____ to reduce the validity of the other firm’s results.
a.
testing interference
b.
leadership pricing
c.
jamming
d.
test marketing
e.
stress marketing
67. One disadvantage of test marketing a new product is that
a.
the product is distributed on a regional basis.
b.
competitors may copy the product.
c.
the results give little indication of the product’s future success.
d.
price, advertising, and packaging cannot be varied from market to market.
e.
it might fail before it can be commercialized.
68. Stacey and Evan are preparing budgets for a new product as well as finalizing plans for the full-scale
marketing and manufacturing of the new Genie-Vac. They are in the ____ phase of the new-product
development process.
a.
test marketing
b.
business analysis
c.
concept testing
d.
product development
e.
commercialization
69. When Natalie and Chris analyze the results from the recently completed test market to determine if any
changes in the marketing mix are needed, they are in the ____ phase of the new-product development
process.
a.
idea generation
b.
commercialization
c.
test marketing
d.
business analysis
e.
screening
70. Early in the commercialization phase, marketers must make decisions about
a.
warranties, repairs, and replacement parts.
b.
product features and breakeven points.
c.
functionality, safety, and convenience.
d.
the proposed marketing mix variables.
e.
which ideas to further pursue.
71. Often, a new product is launched in stages during commercialization. This gradual introduction of the
product is known as
a.
market development.
b.
regional commercialization.
c.
roll-out.
d.
market extension.
e.
competitive jamming.
72. Which of the following is a disadvantage of gradually introducing a product to market?
a.
It reduces the risk of introducing a new product.
b.
It is easier logistically to introduce it all at once.
c.
It is difficult to slow down production enough for a gradual introduction.
d.
It allows competitors to monitor the results of the new product.
e.
It prevents product differentiation based on geographical differences.
73. A new variety of Doritos is initially introduced in Ft. Worth, Texas; Columbia, South Carolina; Peoria,
Illinois; and Spokane, Washington. After its initial success, Frito Lay markets the Doritos in those
entire states, then the adjacent states, and finally the entire country. Frito-Lay is using a ____ for its
new variety of Doritos.
a.
multi-stage introduction
b.
roll-out approach
c.
test-market expansion
d.
mass commercialization
e.
trickle-down approach
74. Three major ways in which marketers engage in product differentiation are
a.
product quality, product design and features, and product support services.
b.
product quality, product support services, and packaging.
c.
product support services, product design and features, and product positioning.
d.
product positioning, product quality, and product management.
e.
product positioning, product design and features, and product promotion.