91) When Kraft focused on cost-cutting with its older and established brands, leaving them to wither without much investment or modification, Kraft decided to ________ the older products.
A) extend
B) maintain
C) drop
D) harvest
E) review
Answer: D
Diff: 2 Page Ref: 279
AACSB: Analytic Skills
Skill: Application
Objective: 9-3
92) CellTones, a new company selling several lines of cellular phones, has closely modeled its products after successful products that are already in the marketplace. As it prepares to enter the market with its new products and services, which of the following should concern CellTones the most?
A) legal obligations to suppliers and dealers
B) patent laws
C) the Federal Food, Drug, and Cosmetic Act
D) product liability suits
E) limited warranties
Answer: B
Diff: 2 Page Ref: 280
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 9-4
93) 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) Some potentially profitable ideas may be ill perceived by the idea screeners.
C) Some ideas that will become market disasters may be originally viewed favorably by the idea screeners.
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 giving the green light to only the product ideas that are likely to be profitable.
Answer: E
Diff: 3 Page Ref: 264
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-2
94) Although test marketing costs can be high, they are often small when compared with ________.
A) business analysis costs
B) the costs of a major mistake
C) prototype development costs
D) the costs of idea generation
E) research and development costs
Answer: B
Diff: 2 Page Ref: 267
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-2
95) Anita's DayCare plans to offer third-shift childcare, based upon the opening of two new manufacturing plants in the area. Together the plants will hire 423 employees and run all three shifts. Initial test marketing results look promising. In considering launching this new service, Anita must first decide on ________.
A) timing
B) employee schedules
C) identifying suitable new employees
D) local and state regulations
E) menu offerings
Answer: A
Diff: 2 Page Ref: 268
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-2
96) Atlas Steel Corporation lacks the confidence, capital, and capacity to launch its new steel product into full national or international distribution. Test market results look promising, so what should be management's next step?
A) retest the product in additional markets
B) develop a planned market rollout over time
C) secure a loan to provide confidence, capital, and capacity
D) seek the help of a nationally known consultant
E) develop a prototype
Answer: B
Diff: 3 Page Ref: 269
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-2
97) It's What's Hip, a chain of 18 music and CD stores, has discovered that carrying a weak product during the decline stage of the PLC can be very costly to a firm, and not just in profit terms. Which one of these is NOT likely to be one of those costs?
A) takes up much of management's time
B) frequent price and inventory adjustment
C) requires advertising and sales force attention
D) requires too much focus on new-product development
E) negatively affects the company's reputation
Answer: D
Diff: 2 Page Ref: 279
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-3
Refer to the scenario below to answer the following questions.
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 children's 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 dome-shaped, something 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 10 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 race cars 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. "It's such a novel idea," Evelyn added. "People will notice it, even if they don't buy it right away."
98) Evelyn's ________ is the practical use of solar power in a vacuum cleaner that is designed to effortlessly sweep the floors of on-the-go and elderly consumers.
A) product idea
B) product concept
C) product image
D) prototype
E) promotional product
Answer: B
Diff: 2 Page Ref: 264
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
99) When Evelyn set up a demonstration booth to learn about consumers' feelings toward her vacuum cleaner, she was doing which of the following?
A) concept testing
B) marketing strategy development
C) idea screening
D) commercializing
E) test marketing
Answer: A
Diff: 2 Page Ref: 265
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
100) Evelyn's vacuum is at the ________ stage of the product life cycle.
A) product development
B) introduction
C) growth
D) adoption
E) incubation
Answer: A
Diff: 2 Page Ref: 273
AACSB: Analytic Skills
Skill: Application
Objective: 9-3
101) A firm can obtain new products in two ways: acquisition or new-product development.
Answer: TRUE
Diff: 2 Page Ref: 260
Skill: Concept
Objective: 9-1
102) Up to 80 percent of all new consumer products fail or seriously underperform.
Answer: TRUE
Diff: 2 Page Ref: 260
Skill: Concept
Objective: 9-1
103) New-product development begins with a systematic search for new product ideas through idea generation.
Answer: TRUE
Diff: 1 Page Ref: 261
Skill: Concept
Objective: 9-2
104) Companies rarely solicit ideas from customers during the idea generation stage of product development.
Answer: FALSE
Diff: 1 Page Ref: 262
Skill: Concept
Objective: 9-2
105) A product idea is an idea for a possible product a company can offer the market, while a product concept is a detailed version of the idea stated in meaningful consumer terms.
Answer: TRUE
Diff: 3 Page Ref: 264
Skill: Concept
Objective: 9-2
106) 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.
Answer: FALSE
Diff: 3 Page Ref: 265
Skill: Concept
Objective: 9-2
107) The business analysis stage represents the first large jump in financial investment in the new-product development process.
Answer: FALSE
Diff: 2 Page Ref: 266
Skill: Concept
Objective: 9-2
108) The stage at which new product and marketing programs are introduced into realistic market settings is called concept testing.
Answer: FALSE
Diff: 1 Page Ref: 267
Skill: Concept
Objective: 9-2
109) A company launching a new product into the market must first decide on when to launch the product.
Answer: TRUE
Diff: 2 Page Ref: 268
Skill: Concept
Objective: 9-2
110) JumBo Games is launching a new set of game toys in the commercialization stage. The first decision to make is introduction timing and the second is where to launch the new product.
Answer: TRUE
Diff: 2 Page Ref: 268
Skill: Concept
Objective: 9-2
111) Sequential product development has the advantage of not only being a team-oriented approach, but also of being faster in bringing products to market.
Answer: FALSE
Diff: 2 Page Ref: 270
Skill: Concept
Objective: 9-2
112) 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.
Answer: TRUE
Diff: 2 Page Ref: 270
Skill: Concept
Objective: 9-2
113) 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.
Answer: TRUE
Diff: 3 Page Ref: 275
Skill: Concept
Objective: 9-3
114) Profits rise during the growth stage of the PLC because promotion costs are spread over a large volume and unit manufacturing costs fall.
Answer: TRUE
Diff: 2 Page Ref: 275
Skill: Concept
Objective: 9-3
115) Although products that remain in the maturity stage of the PLC seem unchanged, the most successful ones actually evolve to meet changing consumer needs.
Answer: TRUE
Diff: 2 Page Ref: 277
Skill: Concept
Objective: 9-3
116) When sales of a product falter during the PLC, a company can take several approaches. The more common ones are to modify the marketing mix, modify the product, or modify the market.
Answer: TRUE
Diff: 2 Page Ref: 277
Skill: Concept
Objective: 9-3
117) Companies need to pay attention to their aging products. Management should regularly review sales, market shares, costs, and profit trends, and then decide whether to maintain, harvest, or drop these declining products.
Answer: TRUE
Diff: 2 Page Ref: 279
Skill: Concept
Objective: 9-3
118) When a company decides to maintain a product in the decline stage, it will reduce costs and hope that sales hold up to increase the profits in the short run.
Answer: FALSE
Diff: 2 Page Ref: 279
Skill: Concept
Objective: 9-3
119) The federal government may prevent a company from adding products through acquisitions if acquisition threatens to lessen competition.
Answer: TRUE
Diff: 2 Page Ref: 280
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 9-4
120) The international growth of many professional and business services such as accounting, consulting, and advertising led to the globalization of the client companies they serve.
Answer: FALSE
Diff: 3 Page Ref: 282
AACSB: Multicultural and Diversity Understanding
Skill: Concept
Objective: 9-4
121) Malibu Beach Parties finds that the tastes and preferences of its customers change more rapidly than in the past. The manager should constantly look for external ideas from customers, suppliers, and the competition.
Answer: TRUE
Diff: 2 Page Ref: 262
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 9-2
122) Blair Housewares wants to add new lines of products to its 46-store chain. 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.
Answer: FALSE
Diff: 2 Page Ref: 264
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 9-2
123) GreenTree Lawn and Garden Products is engaged in marketing strategy development. Management should first create a statement outlining the product's planned price, distribution, and marketing budget for the first year.
Answer: FALSE
Diff: 3 Page Ref: 265
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 9-2
124) 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.
Answer: FALSE
Diff: 2 Page Ref: 266
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
125) Sales for the time-tried household cleansers made by Brite and New, Inc. have been declining for some time. If these products are typical, sales are declining because of technological advances, shifts in consumer tastes, and lack of raw materials from foreign suppliers.
Answer: FALSE
Diff: 3 Page Ref: 278
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 9-3
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