Principles of Marketing, 15e (Kotler/Armstrong)
Chapter 9 New-Product Development and Product Life Cycle Strategies
1) Which of the following is a significant challenge presented by the product life cycle?
A) new-product development
B) static tastes and zero competition
C) anti-trust laws
D) measurement of results
E) plotting the stages as a product goes through them
2) Acquisition refers to ________.
A) the buying of a whole company, a patent, or a license to produce someone else’s product
B) an agreement between two or more commercial companies to produce a common product
C) a partnership between two companies to produce a product in different countries by sharing
risks
D) investments made in a country’s businesses by foreign citizens, often in the form of stocks
E) the development of original products, product improvements, product modifications, and new
brands through the firm’s own product development strategies
3) Electron Corp. purchased Proton Corp. by buying all of its assets and ownership equity. This
is an example of a(n) ________.
A) new-product development
B) acquisition
C) joint venture
D) greenfield investment
E) divestment
4) Product improvements, product modifications, and original products can all be classified as
________.
A) blueprints
B) new products
C) prototypes
D) product extensions
E) test products
5) Which of the following is a common reason for new product failure?
A) incorrect estimation of the market size
B) low product development costs
C) ineffective social marketing campaigns
D) low selling prices of products
E) patent ownership exclusively held by the company
6) A particular firm added three new products earlier this year to increase variety for customers.
Two of the products failed to reach the minimal sales quota. Which of the following is LEAST
likely to have been the cause of their failure?
A) The products were priced too high.
B) The products were advertised incorrectly.
C) Competitors fought back harder than expected.
D) Product research was too extensive.
E) The product development costs were high.
7) New-product development starts with ________.
A) idea generation
B) idea screening
C) concept development
D) concept testing
E) test marketing
8) John’s fascination for his grandmother’s sherbet recipes inspired him to come up with a recipe
for SherBetter, a gourmet sherbet for the American market. Which of the following stages of the
new-product development process does this exemplify?
A) idea screening
B) idea generation
C) concept testing
D) product development
E) product manufacturing
9) Which of the following is an internal source for new-product ideas?
A) competitors
B) company executives
C) marketing research firms
D) trade magazines
E) government agencies
10) Many companies have developed ________ programs that encourage employees to develop
new-product ideas.
A) management
B) inshoring
C) entrepreneurial
D) intrapreneurial
E) offshoring
11) Why are customers often considered the most important sources of new-product ideas?
A) Customers are close to the market and can pass along information about problems and new-
product possibilities.
B) The company can analyze customer questions and complaints to find new products that better
solve consumer problems.
C) Customers buy competing new products, take them apart to see how they work, analyze sales,
and then decide to purchase.
D) Customers review the sales, costs, and profit projections for a new product to find out
whether the product satisfies the company’s objectives.
E) Customers estimate the minimum and maximum sales to assess the range of risk.
12) Which of the following is an external source for new-product ideas?
A) project managers
B) engineers
C) salespeople
D) manufacturing staff
E) suppliers
13) Which of the following is the most likely reason that employees regularly attend trade shows
and seminars?
A) to analyze the product life cycle
B) to test new-product concepts
C) to get new-product ideas
D) to imitate competitors’ products and strategies
E) to implement a team-based new-product development approach
14) Which of the following is the practice of inviting broad communities of customers,
employees, independent researchers, and members of the public into the new-product innovation
process?
A) brainstorming
B) idea screening
C) crowdsourcing
D) outsourcing
E) concept testing
15) Which of the following statements is true of the idea generation stage in the new-product
development process?
A) The purpose of idea generation is to reduce the number of ideas to the least possible number.
B) Truly innovative companies rely exclusively on a single source for new-product ideas.
C) Customers are the least important sources of new-product ideas.
D) Truly innovative companies develop extensive innovation networks that capture ideas and
inspiration from every possible source.
E) Truly innovative companies seldom rely on customers and the general public for ideas.
16) In the new-product development process, the first idea-reducing stage is ________.
A) business analysis
B) idea generation
C) concept development
D) crowdsourcing
E) idea screening
17) Executives at an automobile manufacturing company conducted a brainstorming session for
selected employees. This session resulted in a large number of ideas for developing new cars
after extensive R&D. The executives then planned to filter out the best ideas during the
________ stage.
A) business analysis
B) idea generation
C) concept testing
D) idea screening
E) concept development
18) Which of the following would most likely be included in an executive’s write up of a new-
product idea to be presented to a new-product committee?
A) the proposed customer value proposition
B) the product image
C) the marketing strategy
D) the business analysis
E) the pricing strategy
19) A product idea is ________.
A) the way consumers perceive an actual or potential product
B) the knowledge and awareness of a product among consumers
C) a possible product that the company can see itself offering to the market
D) a detailed version of the new-product idea stated in meaningful consumer terms
E) the testing of new-product concepts with groups of target consumers
20) A detailed version of a new idea stated in meaningful customer terms is called a ________.
A) product solution
B) product concept
C) product image
D) product proposal
E) product lining
21) An attractive product idea must be developed into a ________.
A) concept alternative
B) product concept
C) brand personality
D) brand placement
E) product strategy
22) A ________ is the way consumers perceive an actual or potential product.
A) product idea
B) product concept
C) product image
D) brand personality
E) concept test
23) JoAnn Fabrics Inc. has created a new combination of colors and fabric types. The firm wants
to know how consumers will perceive the new product. The firm is concerned with the product
________.
A) idea
B) displacement
C) image
D) activation
E) placement
24) Which of the following statements best explains why idea screening may be the most
important step of new-product development?
A) It increases the number of ideas generated.
B) It provides an opportunity for the marketer to test the prototype in a simulated market.
C) It helps forecast the products’ sales and profits accurately for a specific period.
D) It gives research and development team members an opportunity to gather consumer
feedback.
E) It saves the company money in product development costs by going ahead with only the
product ideas that are likely to be profitable.
25) Which of the following statements is true of the new-product development process?
A) The purpose of the idea screening stage is to create a large number of ideas.
B) Under the business analysis stage, if the new product satisfies the company’s objectives, the
product then moves to the product development stage.
C) A product concept is the way consumers perceive an actual or potential product.
D) The concept testing stage is the stage at which the product and its proposed marketing
program are introduced into realistic market settings.
E) Commercialization is the process of inviting broad communities of people such as customers,
employees, and scientists into the new-product innovation process.
26) Which of the following groups do marketers involve for the process of concept testing new
products?
A) suppliers
B) employees
C) target consumers
D) manufacturers
E) competitors
27) Which of the following stages in the new-product development would a firm engage itself in
immediately after the completion of concept testing?
A) idea screening
B) marketing strategy development
C) business analysis
D) product development
E) idea generation
28) What is included in the first part of a marketing strategy statement?
A) distribution strategy
B) product longevity
C) long-run sales goals
D) promotional mixes
E) target market description
29) Which of the following is included in the second part of the marketing strategy statement?
A) advertising tagline
B) promotional mix
C) planned price
D) customer segmentation
E) operational excellence
30) Which of the following is included in the third part of the marketing strategy statement?
A) the planned value proposition
B) distribution strategy
C) the product’s planned price
D) marketing budget
E) the planned long-run sales
31) A review of the sales, costs, and profit projections for a new product to find out whether they
satisfy the company’s objectives is called a ________.
A) business feasibility plan
B) marketing strategy development
C) business analysis
D) product acceptance
E) business proposal
32) Which stage of new-product development requires management to estimate minimum and
maximum sales to assess the range of risk in launching a new product?
A) concept testing
B) marketing strategy development
C) business analysis
D) product development
E) test marketing
33) Once managers of The Grecian Urn have decided on their product concept and marketing
strategy, they can evaluate the business attractiveness of the proposal in the ________ stage of
the new-product development process.
A) business transformation
B) test marketing
C) business analysis
D) business process reengineering
E) concept testing
34) Neutron Inc. is conducting a business analysis to determine which of the many newly
developed apps should be released. To estimate sales, the company must ________.
A) conduct surveys of competitors
B) exclusively consider the government’s opinions
C) consider the sales history of similar products
D) apply the PLC concept to industry sales
E) opt for business process reengineering
35) Which of the following stages of the new-product development process occurs immediately
after the completion of the business analysis for the product or service?
A) idea screening
B) product development
C) product activation
D) marketing strategy development
E) product design
36) In the ________ stage of the new-product development process, products undergo rigorous
tests to make sure that they perform safely and effectively, or that consumers will find value in
them.
A) product design
B) idea generation
C) concept development and testing
D) product development
E) product activation
37) A group of business entrepreneurs who worried about their teenage children drinking and
driving decided there must be some way to approach this problem proactively. They came up
with an idea for a pair of blurry goggles. They believed looking through the goggles would
simulate what the world looks like when someone is seriously intoxicated. They developed a
crude pair of blurry goggles to show prospective customers. This crude pair of goggles is known
as a ________.
A) prototype
B) component part
C) synergistic model
D) product image
E) product idea
38) Once the prototype of Wainwright Industries’ new riding lawnmower, made especially for
women, passes product tests, the next step is ________.
A) test marketing
B) focus group surveys
C) commercialization
D) concept testing
E) business analysis
39) P&G introduced Duncan Hines ready-to-spread frosting in a small geographic area. When
General Mills became aware of the product, it rushed to market its own Betty Crocker ready-to–
spread frosting, which eclipsed the Duncan Hines product introduction. This illustrates
________.
A) why many companies engage in crowdsourcing
B) one of the problems associated with test marketing
C) why prototypes are so important
D) how idea screening can make a product a commercial success
E) the importance of different sources for idea generation
40) Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small
number of representative cities. The company plans to use the results to forecast national sales
and profits. Which of the following did the firm use?
A) controlled test markets
B) simulated test markets
C) standard test markets
D) ambush marketing
E) affinity marketing
41) In a(n) ________, new products and marketing tactics are tested among specifically
identified groups of customers and stores.
A) controlled test market
B) simulated test market
C) standard test market
D) systematic sample
E) accidental sample
42) All of the following are disadvantages of test marketing EXCEPT that test marketing
________.
A) is typically expensive
B) can be time consuming
C) enables competitors to gain advantages
D) encourages dishonesty among participants
E) fails to guarantee product success in the market
43) Which of the following is the most likely circumstance for a company to decide to do little or
no test marketing?
A) when the new product requires a major investment
B) when management lacks confidence in the new product
C) when management lacks confidence in the marketing strategy
D) when the product has no substitutes and is new in its category
E) when the costs of developing and introducing the product are low
44) Which of the following statements is true of test marketing?
A) The amount of test marketing needed remains constant for each new product.
B) When the costs of developing and introducing the product are low, the company will have to
do significant test marketing.
C) Test marketing is seldom done on products that are risky.
D) Test marketing is seldom done when management is not sure of the product or its marketing
program.
E) Test marketing costs can be high, and it takes time that may allow competitors to gain
advantages.
45) In a ________, new products and marketing tactics are tested online in a virtual shopping
environment.
A) controlled test market
B) simulated test market
C) standard test market
D) focus group
E) survey
46) The major purpose of test marketing is to provide management with the information needed
to make a final decision about ________.
A) how to develop a marketing strategy
B) which market to compete in
C) whether to launch the new product
D) how to compete in the market
E) how long to compete in the market
47) Introducing a new product into the market is called ________.
A) test marketing
B) simulation
C) co-marketing
D) commercialization
E) segmentation
48) P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When
General Mills became aware of the product, it rushed to market its own Betty Crocker ready-to–
spread frosting, which eclipsed the Duncan Hines product introduction. General Foods was able
to enter the ________ stage of the new-product development process before P&G could.
A) commercialization
B) co-marketing
C) idea generation
D) idea screening
E) simulation
49) Which of the following involves costs that most likely occur during the commercialization
stage of new-product development?
A) building or renting a manufacturing facility
B) paying target customers for product feedback
C) determining the product’s planned distribution
D) developing a prototype of the product
E) identifying target markets
50) A company getting ready to launch a new product must make several decisions. The
company must first decide on ________.
A) whether to launch the product in a single location
B) whether to launch the product in a region
C) whether to launch the product into full national distribution
D) when to introduce the product
E) when to develop a planned market rollout
51) According to the commercialization stage of the new-product development process,
following the decision to introduce the new product at a particular time, a company must next
decide ________.
A) where to launch the new product
B) how to launch the new product
C) why to launch the new product
D) what pricing strategies to implement
E) what marketing mix elements to use
52) Steelz Inc. has designed a process that manufactures an improved version of steel more
efficiently, which will save the firm both money and resources. In considering the launch of this
new steel in the market, the firm must first decide on ________.
A) timing
B) location
C) organizational structure
D) test marketing
E) product mix
53) Which of the following focuses on finding new ways to solve customer problems and create
more customer-satisfying experiences?
A) concept testing process
B) customer value proposition
C) customer-centered new-product development
D) customer lifetime value
E) team-based new-product development
54) Skyrim Corp. lacks the capital and capacity to launch its new helicopter for full national and
international distribution. If the test market results look promising, what should be management’s
next step?
A) retest the product in additional markets
B) develop a planned market rollout over time
C) liquidate its assets to gain capital and capacity
D) seek the help of a nationally known consultant
E) develop a prototype
55) ________ is a new-product development approach in which one company department works
to complete its stage of the process before passing the new product along to the next department
and stage.
A) Team-based product development
B) Simultaneous product development
C) Sequential product development
D) Horizontal integration
E) Vertical integration
56) Under a team-based new-product development approach, ________.
A) a single departmental team works to complete different stages of the process before passing
the new product along to the next department and stage
B) the organizational tension and confusion is less than under the sequential approach
C) company departments work closely together in cross-functional teams
D) a bottleneck at one phase can seriously delay an entire project
E) the new product passes from one department to another before finalizing
57) At Fantastic Flavors, a large regional chain of candy stores, employees from marketing,
design, production, and finance work in cross-functional groups to save time and money in the
new-product development process. Fantastic Flavors uses a ________ approach.
A) customer-centered new-product development
B) sequential product development
C) team-based new-product development
D) heuristic
E) functional
58) Which of the following is the goal of the team-based new-product development approach
when it uses cross-functional teams that overlap the steps in the process?
A) gain a big competitive edge by getting the right new products to market
B) save time and increase effectiveness
C) increase production efficiency and customer satisfaction
D) speed product distribution to market and reduce costs
E) reduce organizational tension and confusion
59) Which of the following is a disadvantage of a team-based approach to new-product
development?
A) It takes longer for the development of a new product.
B) The development effort is not as effective because of employee inexperience.
C) It decreases the efficiency of the new-product development process.
D) It results in organizational confusion and tension.
E) The process does not work with the shorter life cycles of many of today’s products.
60) According to the text, the search for new-product ideas should most likely be ________.
A) intermittent
B) holistic
C) segmented
D) compartmentalized
E) flexible
61) A company can install a(n) ________ management system to collect, review, evaluate, and
manage new-product ideas.
A) quality
B) innovation
C) content
D) supply chain
E) customer relationship