END OF CHAPTER MATERIAL
Discussion and Critical Thinking
Discussion Questions
8.1. Define crowdsourcing and describe an example not already presented in the chapter.
(AACSB: Communication; Reflective Thinking)
Answer:
Crowdsourcing throws the innovation doors wide open, inviting broad communities of
8.2. What activities are performed in the marketing strategy development step of the new
product development process? What is required in a good marketing strategy statement?
(AACSB: Communication; Reflective Thinking)
Answer:
Marketing strategy development—designing an initial marketing strategy for introducing
8.3. What is performed in the business analysis step of the new product development process?
How does a business carry out this step? (AACSB: Communication)
Answer:
Business analysis involves a review of the sales, costs, and profit projections for a new
product to find out whether they satisfy the company’s objectives. If they do, the product can
move to the product development stage. To estimate sales, the company might look at the
8.4. How can companies adopt a holistic approach to managing new product development?
(AACSB: Communication).
Answer:
Successful new product development requires a customer-centered, team-based, and
systematic effort. Customer-centered new product development focuses on finding new ways
to solve customer problems and create more customer-satisfying experiences. To get their
new products to market more quickly, many companies use a team-based new product
8.5. Describe the options available to marketers of products in the decline stage of the product
life cycle. (AACSB: Communication)
Answer:
Companies with products in the decline stage must decide whether to maintain, harvest, or
drop them. Management may decide to maintain its brand, repositioning or reinvigorating it
Critical Thinking Exercises
8.6. It appears that the sky is the limit regarding ideas for smartphone/tablet apps. In a small
group, create an idea for new apps related to (1) business, (2) health, (3) education, (4)
sports, and (5) shopping. (AACSB: Communication; Use of IT; Reflective Thinking)
Answer:
Students’ responses will vary and are limited only by their imaginations. Some examples of
existing apps in these areas include:
1. Business – Stock Tracker, LinkedIn, and business card reader apps are just a few
business app examples.
8.7. Find an example of a company that launched a new consumer product within the past five
years. Develop a presentation showing how the company implemented the 4 Ps in
launching the product and report on the product’s success since the launch. (AACSB:
Communication; Reflective Thinking)
Answer:
Students’ examples will vary. Searching “New Products” brings several results students can
select for this activity. For example USA Today had a photo gallery at
P&G launched Tide Pods in early 2012, selecting the Academy Awards as the broadcast
vehicle because of the timing and audience fit for the product. The launch was not without
8.8. The “Internet of Things”—a term that refers to everyday objects being connected to the
Internet—is growing. Thermostats, ovens, cars, toothbrushes, and even baby clothes are
connecting to the Internet. Research this phenomenon and suggest five innovative
product ideas connected to the Internet of Things. (AACSB: Communication; Use of IT;
Reflective Thinking)
Answer:
The Internet of Things is a term to refer to everyday objects connected to the Internet.
Minicases and Applications
Online, Mobile, and Social Media Marketing: Telemedicine
With the majority of health-care costs spent for the treatment of chronic diseases and the reason
for most emergency room visits being nonemergencies, the time is ripe for telemedicine. Patients
are tapping their phones, tablets, and keyboards instead of making an office visit or trip to the
emergency room. Technology makes it possible for doctors to consult with patients through
Skype or FaceTime on smartphones, access medical tests via electronic medical records, and
send a prescription to a patient’s local pharmacy—all from miles away. The telemedicine
industry is still in its infancy, earning only $200 million in annual revenue, but it is predicted to
increase to an almost $2 billion industry in just a few years. Technology isn’t the only reason for
this industry’s growth. The HITECH Act encouraging electronic medical records is also adding
fuel to this fire.
8.9. Research the telemedicine industry and describe two companies offering services. What
are the pros and cons of offering medical services this way, and is there governmental or
industry guidance for this industry? (AACSB: Communications; Reflective Thinking)
Answer:
Students’ answers will vary. One company, HealthTap (www.healthtap.com/) charges a
monthly retainer fee and patients can access the service as often as desired, leading these
The American Telemedicine Association (www.americantelemed.org/) and the Office of the
National Coordinator for Health Information Technology (ONC) (see HealthIT.gov:
8.10. In what stage of the product life cycle is telemedicine? What role has mobile technology
played in evolution of this industry? Explain (AACSB: Communication; Reflective
Thinking)
Answer:
Telemedicine appears to be in the growth stage of the product life cycle as sales are
increasing rapidly and more competitors are entering the marketspace. The growth of
Marketing Ethics: Put On Your Thinking Caps!
For years, electrical current has been used to treat brain disorders such as depression, Parkinson’s
disease, and epilepsy. Traditional electrical treatment methods are invasive and require sending
large currents or implanting devices in users’ brains to achieve positive results. Recent studies
have shown, however, that sending noninvasive low-dose electric current powered by a nine-volt
battery through the brains of adults and children helps them to learn math and languages better.
For as little as $55, you can purchase your own transcranial direct-current stimulation (tDCS)
device to get better grades in school. The Brain Stimulator tDCS Basic Kit allows users to select
between four different current levels and a nice blue headband or cap to hold the electrodes next
to your skull. The buyer should beware, however, because these devices have been neither
reviewed nor approved by the Food and Drug Administration as medical devices.
8.11. Discuss the ethical issues surrounding this type of product. Is there substantial research to
support the claims and safety of these new products? (AACSB: Communication; Ethical
Reasoning)
Answer:
Students’ answer will vary. A study conducted at Oxford University holds out promise for
transcranial electrical stimulation, showing that it does enhance cognitive performance with
8.12. What is the Food and Drug Administration’s stance on these types of devices and other
products, such as herbal supplements, marketed as cognitive enhancers? (AACSB:
Communication; Reflective Thinking)
Answer:
Currently, tDCS is not an FDA-approved therapy, and some argue that it should not be sold
to the masses (see www.sciencebasedmedicine.org/brain-stimulation-for-the-masses/). See
For a list of dietary supplements that supposedly enhance intelligence, see George Divorsky,
Marketing by the Numbers: Dental House Calls
With the population aging and patients who dread sitting in a sterile dental office, dentists are
finding an opportunity in dental house calls. The Blende Dental Group has taken its service on
the road in San Francisco and New York City, performing everything from routine exams and
cleanings to root canals. Some patients are wealthy and prefer the personal service, whereas
others are elderly homebounds who cannot get out to the dentist’s office. Recreating a dental
office in a home requires additional equipment, such as a portable X-ray machine that looks like
a ray gun, sterile water tanks, a dental drill, lights, and a laptop. A portable X-ray machine alone
costs $8,000. Refer to Appendix 3: Marketing by the Numbers to answer the following questions.
8.13. What types of fixed costs are associated with this service? Assuming fixed costs of
adding this mobile service will increase by $20,000 and a desired contribution margin of
40 percent, determine the amount of sales necessary to break even on this increase in
fixed costs to offer this additional service. (AACSB: Communication; Analytical
Thinking)
Answer:
Fixed costs include things such as insurance, salaries, and equipment. The equation for
calculating change in breakeven sales is:
Δ Total Fixed Costs
Δ Breakeven sales = ————————
Contribution Margin
With an increase in total fixed costs of $20,000, then:
8.14. What other factors must a dentist consider before offering this service in addition to his or
her in-office service? (AACSB: Communication; Reflective Thinking)
Answer:
A house-call service added to an in-office service could create cannibalization of existing
patients switching to the new service. If margins are higher for the house-call service, then that
