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Principles of Marketing, 17e, Global Edition (Kotler/Armstrong)
Chapter 9 Developing New Products and Managing the Product Life Cycle
1) Which of the following is a significant challenge presented by the product life cycle?
A) increased expenses
B) increased competition
C) new product development
D) evaluation of results
E) recognizing 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) licensing contract
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) The product life cycle presents challenges. Which of the following is LEAST likely to
require a company to adapt its marketing strategies?
A) developments in technology
B) decreased manufacturing costs
C) competition
D) changing tastes of consumers
E) aging of products
8) A firm can obtain new products through acquisition or new product development efforts.
9) Acquisition involves the purchase of a whole company, a patent, or a license to produce
someone else's product.
10) Adapting marketing strategies is not a challenge faced in the product life cycle.
11) Explain common reasons for the failure of new products. What must be the goals for a
company to create successful new products?
12) New product development starts with ________.
A) concept development
B) idea screening
C) idea generation
D) concept testing
E) test marketing
13) 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
14) Which of the following is an internal source for new product ideas?
A) competitors
B) company employees
C) marketing research firms
D) trade magazines
E) government agencies
15) Many companies have developed ________ programs that encourage employees to develop
new product ideas.
A) management
B) incentive
C) entrepreneurial
D) intrapreneurial
E) crowdsourcing
16) 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.
17) Which of the following is an external source for ideas?
A) project managers
B) engineers
C) salespeople
D) manufacturing staff
E) suppliers
18) Who can pass along information about new concepts or techniques to use in new products?
A) competitors
B) salespeople
C) customers
D) suppliers
E) distribution channels
19) 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
20) 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.
21) 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
22) 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
23) 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
24) Which of the following is NOT likely to be a question asked in the new product screening
process?
A) Is there a real need and desire for the product?
B) Is there a clear product concept?
C) Does the product offer a sustainable advantage?
D) How many items will the company sell in the first two years?
E) Does the product fit the company's overall growth strategy?
25) 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.
26) 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
27) A detailed version of a new idea stated in meaningful customer terms is called a product
________.
A) solution
B) concept
C) image
D) proposal
E) lining
28) An attractive product idea must be developed into a ________.
A) concept alternative
B) product concept
C) brand personality
D) brand placement
E) product strategy
29) 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
30) 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
31) 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
32) For concept test, companies will frequently present customers with ________ of the
concept for a reliable concept test.
A) a verbal description
B) a PowerPoint slide
C) a picture
D) a physical presentation
E) a printed paragraph
33) Which of the following stages in the new product development would a firm engage in
immediately after the completion of concept testing?
A) idea screening
B) marketing strategy development
C) business analysis
D) product development
E) idea generation
34) 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
35) 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
36) 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
37) 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
38) 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
39) 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
40) 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.
41) 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
42) Which figures does the company use to analyze the new product's financial attractiveness?
A) size of population
B) expected market share
C) number of competitors
D) anticipated number of options
E) sales and costs
43) 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
44) The product development stage requires ________.
A) a huge jump in investment
B) salespeople to contact potential customers
C) financial analysis
D) a few hours
E) management approval
45) 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
46) 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) concept test
C) product concept
D) product image
E) product idea
47) 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
48) 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
49) Starbucks introduced a less-than-perfect mobile payments app, then worked out the flaws
after the launch. The company chose speed to market over a perfect app at introduction. This
illustrates ________.
A) why many companies engage in crowdsourcing
B) the influence of fast-changing market developments
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
50) 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
51) In a(n) ________, consumers interact with new products and marketing tactics in laboratory
stores or virtual online shopping environments.
A) standard test market
B) focus group
C) controlled test market
D) simulated test market
E) individual survey
52) 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
53) 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
54) 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
55) 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.
56) The major purpose of test marketing is to provide management with the information needed
to make a final decision about ________.
A) the entire marketing program
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
57) Introducing a new product into the market is called ________.
A) test marketing
B) simulation
C) co-marketing
D) commercialization
E) segmentation
58) 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
59) 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
60) 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
61) 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
62) 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
