978-0134492513 Chapter 9 Solutions Manual

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Discussion Questions

9-1 Why do so many new products fail? (AACSB: Communication)

Answer:

Innovation can be very expensive and very risky. New products face tough odds. For

 9-2 What is idea generation? List and explain the sources of new product ideas. (AACSB:

Communication; Reflective Thinking)

 9-3 What actions are performed in the business analysis step of the new product development

process? How does a business carry out this step? (AACSB: Communication)

9-4 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

 9-5 Describe the options available to marketers of products in the decline stage of the product

life cycle. (AACSB: Communication)

Critical Thinking Exercises

 9-6 Companies large and small, across all industries, are crowdsourcing product innovation

ideas. Research three crowdsourcing campaigns that companies have used within the past

two years. Were they successful? Explain. (AACSB: Communication; Use of IT; Reflective

Thinking)

9-7 In small groups, research driverless cars. In what stage of the new product development

process are driverless cars? What challenges are companies such as Google, Apple, Amazon,

and Ford facing in getting this product to the launch stage? (AACSB: Communication; Use

of IT; Reflective Thinking)

Answer:

According to Business Insider, driverless cars are classified into two types –

9-8 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 four 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 “Best New Products” brings several results from

which students can select for this activity. Inc.com lists the top eight products of 2016 (see

APPLICATIONS AND CASES

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 non-emergencies, 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.

9-9 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

The American Telemedicine Association (www.americantelemed.org/) and the Office of the

National Coordinator for Health Information Technology (ONC) (see HealthIT.gov:

9-10 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

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

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.

9-11 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

9-12 What is the Food and Drug Administration’s stance on these types of devices and other

products marketed as cognitive enhancers, such as herbal supplements? (AACSB:

Communication; Reflective Thinking)

Answer:

Currently, tDCS is not an FDA-approved therapy and some argue that it should not be sold to

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 2: Marketing by the Numbers to answer the following

questions.

9.12 What types of fixed costs are associated with this service? Estimate the total fixed costs for

this additional service, and, assuming a 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:

9-13 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

Company Case Notes

Bose: Better Products Through Research

Synopsis

The Bose Corporation has been around since the 1960s. Known for its high-end speakers and

headphones, Bose is a brand with a very high level of equity and is the most trusted brand of the

22 best-known consumer technology brands. As the brainchild of its founder, Amar Bose, the

Bose Corporation has been very successful financially as well. Yet Bose the company and Bose

the man are very much intertwined. Amar Bose has kept the company private to control the

degree to which the company invests in and conducts research, which he considers the lifeblood

of the company. Time and time again, he has ignored existing technologies and started entirely

from scratch. It is this philosophy that has led to groundbreaking innovations. Bose Corporation

has marketed speakers and headphones unlike anything else on the market.

Teaching Objectives

The teaching objectives for this case are:

1. To gain a better understanding of factors that contribute to new product success.

2. To understand the true meaning of a customer-centered orientation.

3. To gain perspective on the intricacies of the product lifecycle and product lifecycle

management.

4. To gain exposure to companies that succeed by taking an unconventional approach.

Discussion Questions

9-18 Based on concepts discussed in this chapter, describe the factors that have contributed to

Bose’s new product success.

Bose was founded and run by people who are passionate about the quality of sound.

Bose has always been a very research-oriented company. Most often, the company has

ignored existing technologies and has started from scratch to develop products that

perform better than the status quo.

All company profits were put back into research and development.

9-19 Is Bose’s product development process customer centered? Explain.

This is a very tricky question. Bose is an anomaly. It is a company that seems to strike gold

9-20 How is Bose unique with respect to product life-cycle management?

While Bose is a very unique company in terms of product research and new product

development, it may not be so unique with respect to product life-cycle management. The

9-21 With respect to the product life cycle, what challenges does Bose face in managing its

product portfolio?

Bose has diversified. Its primary products are speakers and headphones. It also markets a

Bose faces the challenge of potentially declining markets in its core categories. However,

9-22 Can Bose continue to maintain its innovative culture without Amar Bose?

This is an age-old question for many privately held companies where the founder has been

such a major part of the company for most of its existence. In his later years, Amar Bose

Teaching Suggestions

This case covers many of the concepts identified in the text. Thus, these things should be covered

prior to discussing the case. One interesting approach is to start out by leading students down the

path of an orthodox company. Bose seems to produce the results of a customer-centric company.

Let the students follow this line of thought until someone suggests the response to question 5—

that Bose Corporation focuses on innovation and invention without really conducting extensive

customer research.

This case was developed for use with Chapter 9. This case also works well with the competitive

advantage chapter (Chapter 18).

Go to mymktlab.com for the answers to the following assisted-graded writing questions:

9-23 Define crowdsourcing and explain why companies use it in new product

development. Describe an example of a company using crowdsourcing this

way.

9-24 Discuss how a company can maintain success for products in the mature stage of the

product life cycle and give examples not already described in this chapter.

ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1. Go to Microsoft’s Web site (www.microsoft.com) and read about one of their newest

offerings. Imagine if you had been assigned the job of developing questions for the concept

test of this product. Develop a series of five questions that you would have included.

(Objective 2)

2. Why is test marketing so important for marketers? Why is it not more often used?

(Objective 2)

3. Find two products that you believe are in the introduction stage of the product life cycle.

Justify your beliefs. (Objective 3)

4. What is the difference between fads, styles, and fashions? (Objective 3)

5. In what ways do the growth and maturity stages of the product life cycle differ?

(Objective 3)

Small Group Assignments

1. Form students into groups of three to five. Each group should read Real Marketing 9.1:

Google (…er Alphabet): The New Product Moonshot Factory. Each group should then

answer the following questions and share their answers with the class. (Objective 2)

a. Describe Google’s secret to innovation. What exactly does it do better than its

competitors?

b. How does Google thrive in its chaotic new product development environment?

c. Recall the quote from Google’s innovation director: “Anything which is a huge problem

for society we’ll sign up for.” Do you agree with this business approach? Explain.

2. Form students into groups of three to five. Each group should read the opening chapter

vignette on Samsung. Each group should then answer the following questions and share

their answers with the class. (Objective 2)

a. Describe Samsung’s secret to innovation. What exactly does it do better than its

competitors?

b. How does Samsung thrive in its competitive new product development environment?

c. Recall this quote from Samsung’s CEO: “We have to show consumers what’s in it for

them and what the Internet of Things can achieve, to transform our economy, society, and

how we live our lives.” Do you agree with this business approach? Explain.

Individual Assignments

1. Read Real Marketing 9.2: Managing Mattel’s Product Life Cycle: More Than Just Fun and

Games. (Objective 3)

a. Discuss the Barbie product life cycle from the doll’s inception in 1959 to the present day.

b. Discuss the steps Mattel has taken to try to revitalize the Barbie brand, and its doll

product line overall? Explain.

c. If you were to envision the next chapter in the evolving Mattel story, what might it be? In

what direction could this company’s many product life-cycle problems spin off to in

upcoming decades?

2. Review the stages of the product life cycle contained in Table 9.2. Answer the following

questions. (Objective 3)

a. What are two products you consider to be in the decline stage of the PLC? Justify your

answer.

b. Smartphones are still all the rage. In which stage of the PLC would you place

smartphones? Why?

c. How do you know when a product has moved from the growth stage to the maturity stage

of the PLC?

Think-Pair–Share

Consider the following questions, formulate an answer, pair with the student on your right, share

your thoughts with one another, and respond to questions from the instructor.

1. How do companies find new products? (Objective 2)

2. Define the stages of the new product development process. (Objective 2)

3. How are competitors a source of new product ideas? (Objective 2)

4. What are the advantages of team-based new product development? (Objective 2)

5. What stage of the PLC do you believe currently holds Apple’s iPhone? Why? (Objective

Outside Examples

1. Take a look at the Tesla electric car (www.teslamotors.com/). How is this company

striving to build excitement and demand for its all-electric sports car? (Objective 2)

Possible Solution:

Their Web site is set up to provide the browser with great quantities of information from

All the information is designed to provide excitement concerning this new product.

Additionally, they go to great efforts to point out how cutting edge this product is—it is

2. Research the bottled water market. Check out the Web sites for Evian

(http://www.evian.com/en_us/), Aqua Pacific (www.aquapacific.com), Mountain Valley

Spring Water (www.mountainvalleyspring.com), and Perrier (www.usa.perrier.com).

What stage of the PLC would you say bottled water occupies? How is each of these

companies attempting to maintain or grow sales of their products? (Objective 3)

Possible Solution:

From a review of the information available, it is probably safe to say bottled water is in

Evian is attempting to position itself as the bottled water for the younger, active group.

The music played on their Web site, as well as the new product forms they are

introducing, reinforces this idea.

Aqua Pacific is promoted as more exotic and unique than the “traditional” bottled water.

It reaches out to the consumer interested in the “finest” water available.

Mountain Valley Spring Water has positioned itself as “America’s Spring Water.”