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63) 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
64) 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
65) ________ 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
66) 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
67) 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
68) 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
69) 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 can result in organizational confusion and tension.
E) The process does not work with the shorter life cycles of many of today's products.
70) According to the text, the search for new product ideas should most likely be ________.
A) intermittent
B) holistic
C) segmented
D) compartmentalized
E) flexible
71) 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
72) The innovation management system approach yields two favorable outcomes: it helps
create an innovation-oriented company culture, and it ________.
A) clearly assigns responsibility for the process to a single department
B) yields a larger number of new product ideas
C) guarantees successful products
D) frees up senior management time
E) requires less budget support
73) New product success requires all of the following EXCEPT ________.
A) a whole-company commitment
B) a holistic approach for finding new ways to create valued customer experiences
C) thinking up a few good ideas
D) introducing products that will satisfy a want or need for customers
E) efficient engineering and manufacturing
Refer to the scenario below to answer the following question(s).
Most people laughed when Evelyn Ringler explained her product idea: a solar-powered vacuum
cleaner. But the concept was practical and the technology used in the vacuum was the same as
that used in many electronic toys. After setting up a demonstration booth in a mall in a Chicago
suburb, Evelyn felt more assured than ever that her idea would be a hit. Consumers seemed
receptive and offered helpful pieces of advice, such as how much they would pay for the
vacuum, what colors they would prefer, and why they would not buy the vacuum.
The vacuum itself was shaped like a small saucer, with a filter bag on top and sensory nodes
along the edges. After being charged in the sunlight, the vacuum could run for 7 hours,
covering a floor area of 600 square feet. As the apparatus lightly bumped into table legs, chairs,
and so on, the sensory nodes allowed the vacuum to move around the objects in various
directions. This is the same type of technology used in the manufacture of children's racecars
and walking dolls.
Evelyn knew that the solar-powered vacuum would be especially helpful to both elderly
consumers, who may have a more difficult time with vacuuming, and on-the-go consumers who
lead busy lives. The price would be above average but would likely be reduced after Evelyn
recouped some of her costs.
After a 500-unit production run and a substantial financial investment, Evelyn set up a
multiple-city test market, in a Chicago mall and in an appliance store in New Jersey and several
other retail stores in Florida. "It's such a novel idea," Evelyn added. "People will notice it, even
if they don't buy it right away."
74) Evelyn's ________ is the practical use of solar power in a vacuum cleaner that is designed
to effortlessly vacuum clean the floors of on-the-go and elderly consumers.
A) product placement
B) product concept
C) product image
D) product idea
E) virtual product
75) Which of the following stages of 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
76) New product development begins with a systematic search for new product ideas through
idea generation.
77) Companies seldom solicit ideas from customers during the idea generation stage of product
development.
78) A product idea is an idea for a possible product that a company can offer the market.
79) 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.
80) In the concept development stage, a firm will create a single product concept to test.
81) 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.
82) 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.
83) The business analysis stage represents the first large jump in financial investment in the
new product development process.
84) 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.
85) Marketers often involve actual customers in product testing.
86) A company introducing a product that is similar to its competitors' product will do a
complete test market to gain maximum information before product introduction.
87) A company launching a new product into the market must first decide where to launch the
product.
88) 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.
89) Sequential product development has the advantage of not only being a team-oriented
approach, but also of being faster in bringing products to market.
90) To avoid too few new product ideas and the failure of many good ideas, management
should implement an innovation management system that collects, reviews, evaluates, and
manages new product ideas.
91) What elements may help to create a product image?
92) How might a firm benefit from implementing an "intrapreneurial" program?
93) Why are competitors considered a good external idea source?
94) 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?
95) What factors are assessed in test marketing?
96) 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?
97) A marketer has chosen a multiple-city test market. What can be concluded from this choice
of a multiple-city test market?
98) Differentiate between controlled test markets and simulated test markets.
99) Why might individual departments prefer sequential product development?
100) Briefly describe the steps in the new product development process.
101) Identify the major sources of external new product ideas and explain why these sources
offer advantages over internal sources.
102) Differentiate between a product idea, a product concept, and a product image.
103) Explain concept testing.
104) Define commercialization. Explain two important decisions the company must make
during this stage.
105) 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.
106) Which of the following refers to the course that a product's sales and profits take over its
lifetime?
A) total product process
B) service life
C) product mix
D) product life cycle
E) marketing mix
107) Which of the following best characterizes the decline stage of product development?
A) rapid market acceptance
B) slow sales growth
C) sales and profits decline
D) high investment costs
E) increasing profits
108) Which of the following statements characterizes the introduction stage of the PLC?
A) There are increased marketing outlays.
B) Profits are nonexistent.
C) The company incurs minimal expenses.
D) The product achieves acceptance by most potential buyers.
E) Promotional expenditures are zero.
109) Which stage in the product life cycle is characterized by rapid market acceptance and
increasing profits?
A) introduction
B) maturity
C) growth
D) decline
E) product development
110) ________ is the product life cycle period when sales fall off and profits drop.
A) Introduction
B) Growth
C) Maturity
D) Decline
E) Product development
111) ________ is the product life cycle period when sales growth slows because the product
has achieved acceptance. Profits level off because marketing costs increase in the face of
competition.
A) Decline
B) Maturity
C) Product development
D) Introduction
E) Growth
112) Some products that have entered the decline stage have been cycled back to the growth
stage through ________.
A) repositioning
B) harvesting
C) maintaining
D) pruning
E) expanding
113) What causes a specific brand's life cycle to change quickly?
A) costs of raw materials
B) changing demographics
C) shift in company strategy
D) competitive attacks and responses
E) new technology
