94) Which of the following stages of the new-product development was Evelyn involved in when
she set up a demonstration booth to learn about consumers’ feelings toward her vacuum cleaner?
A) concept testing
B) marketing strategy development
C) idea screening
D) commercializing
E) crowdsourcing
95) Evelyn’s vacuum is at the ________ stage of the product life cycle.
A) product development
B) laggard
C) growth
D) decline
E) maturity
96) A firm can obtain new products through acquisition or new-product development efforts.
97) Acquisition involves the purchase of a whole company, a patent, or a license to produce
someone else’s product.
98) New-product development begins with a systematic search for new product ideas through
idea generation.
99) Companies seldomly solicit ideas from customers during the idea generation stage of product
development.
100) A product idea is an idea for a possible product that a company can offer the market.
101) Blair Housewares wants to add new products to its existing line of products. Managers are
correct in believing that the purpose of idea generation is to create a few ideas, and the purpose
of succeeding stages is to increase that number.
102) Concept testing works best with people who are familiar with the new idea and the new
product’s purpose. This generally includes top management, the sales force, and research and
development.
103) GreenTree Lawn and Garden Products is engaged in marketing strategy development. The
first part of the marketing strategy statement created by management should outline the product’s
planned price, distribution, and marketing budget for the first year.
104) The business analysis stage represents the first large jump in financial investment in the
new-product development process.
105) GreenTree Lawn and Garden Products is engaged in a review of the sales, costs, and profit
projections for some new products to find out whether they satisfy the company’s objectives.
This activity is called business product development.
106) Marketers often involve actual customers in product testing.
107) A company launching a new product into the market must first decide where to launch the
product.
108) JumBo Games is in the commercialization stage. The first decision that the firm should
make while introducing the product in the market is introduction timing.
109) Sequential product development has the advantage of not only being a team-oriented
approach, but also of being faster in bringing products to market.
110) To avoid too few new-product ideas and the failure of many good ideas, management
should install an innovation management system that collects, reviews, evaluates, and manages
new-product ideas.
111) Using the PLC concept to develop marketing strategy can be problematic because strategy
is both a cause and a result of the product’s life cycle.
112) Profits drop during the growth stage of the PLC because per customer promotion costs are
high.
113) Although products that remain in the maturity stage of the PLC seem unchanged, the most
successful ones actually evolve to meet changing consumer needs.
114) When sales of a product drop during the decline stage of the PLC, a company typically
modifies the marketing mix, the product, or the market.
115) Sales of products decline because of technological advances, shifts in consumer tastes, and
increased competition.
116) Harvesting the product involves reducing various costs such as maintenance, R&D, and
advertising to increase sales.
117) The distribution strategy during the decline stage of PLC involves building more intensive
distribution networks.
118) The federal government may prevent a company from adding products through acquisitions
if acquisition threatens to lessen competition.
119) The international growth of many professional and business services such as accounting,
consulting, and advertising led to the globalization of the client companies they served.
120) Explain the reasons for the failure of new products. What methods can a company adopt to
improve its odds of new-product success?
121) Briefly describe the steps in the new-product development process.
122) Provide the major sources of external new-product ideas and explain why these sources
offer advantages over internal sources.
123) Differentiate between a product idea, a product concept, and a product image.
124) Explain concept testing.
125) Define commercialization. Explain two important decisions the company must make during
this stage.
126) What are the two advantages of an innovation management system for developing new
products? Provide four strategies for a company to use to establish a successful system.
127) Each product will have a life cycle, although its exact shape and length is not known in
advance. Briefly explain each phase of the product life cycle.
128) Explain why the PLC can be applied to more than just brands.
129) Describe three public policy issues or regulations that marketers should carefully consider
as they make decisions about adding or dropping products.
130) How might a firm benefit from implementing an “intrapreneurial” program?
131) Why are competitors considered a good external idea source?
132) What elements may help to create a product image?
133) The potential sales, costs, and profit projections are being determined for a new-product
idea at Art for Kids. Which of the following stages of the new-product development process does
this illustrate?
134) What factors are assessed in test marketing?
135) A marketer has selected a single city in which to conduct a test market. What can be
concluded from this choice of a single-city test market?
136) A marketer has chosen a multiple-city test market. What can be concluded from this choice
of a multiple-city test market?
137) Differentiate between controlled test markets and simulated test markets.
138) Why might individual departments prefer sequential product development?
139) Explain how the PLC applies differently to a product class than to a product form.
140) Why are ad expenditures high for products in the introduction stage of the PLC?
141) Why do ad expenditures remain high in the growth stage of the PLC?
142) Marketers can prolong the lives of many products in the maturity or decline stages of the
PLC, sometimes even moving these products back into the growth stage. How is this
undertaken?
143) Why has the cost of product liability insurance risen so dramatically?