UNIT-5 MULTIPLE CHOICE QUESTIONS 1.

According to information presented in the text, _____________ is at the heart of Microsofts and Bill Gates innovation strategy. a. R & D b. the X-box c. the Internet d. predatory pricing Answer: (c) Difficulty: (2) Page: 320 2. The product life cycle presents two major challenges. First, a firm must be good at developing new products to replace aging ones. Second, a firm must be good at: a. adapting its marketing strategies in the face of changing tastes, technologies, and competition as products pass through life-cycle stages. b. image building to ensure that products sell well. c. primary demand forecasting so product winners can be chosen rather than making poor investments with product losers. d. acquisition of other companies since this is the only real way to ensure new product success--go with what has worked in the past. Answer: (a) Difficulty: (2) Page: 322 3. A firm can obtain new products in two ways. First, it can develop them by using its own research and development department. Second, it can: a. steal them. b. get them through acquisition. c. transfer them between divisions. d. copy them. Answer: (b) Difficulty: (1) Page: 322 4. Original products, product improvements, product modifications, and new brands that a firm develops through its own research and development efforts are called: a. new products. b. concept products. c. altered products. d. supplemental products. Answer: (a) Difficulty: (1) Page: 322 5. New products continue to fail at a disturbing rate. One study estimated that new consumer packaged goods (consisting mostly of line extensions) fail at a rate of: a. 100 percent. b. 90 percent. c. 80 percent. d. 70 percent.

Answer: (c) Difficulty: (3) Page: 322 6. Why do so many new products fail? All of the following are reasons EXCEPT: (Select the LEAST LIKELY reason.) a. the size of the market has been overestimated. b. hostility on the part of the sales force. c. the product may have been incorrectly positioned. d. a high-level executive might have pushed a favorite idea. Answer: (b) Difficulty: (3) Page: 322 7. If a new product has higher quality, new features, and higher value in use than its competition, then it is called a(n): a. unique superior product. b. synergistic product. c. positioned product. d. pre-launch product. Answer: (a) Difficulty: (2) Page: 323 8. Which of the following would be a key success factor in developing new products? a. a well-defined product concept b. a product priced well below market or industry standards c. a product that appeals to the late majority d. a product that can be sold over the Internet with a minimum of explanation Answer: (a) Difficulty: (2) Page: 323 9. To create successful new products, a company must understand consumers, markets, and competitors and: a. develop a great advertising campaign. b. have a strong Web site to push the product. c. adopt a push rather than pull promotional concept. d. develop products that deliver superior value to consumers. Answer: (d) Difficulty: (2) Page: 323

10. Which of the following best describes the first stage of the new-product development process? a. idea screening b. concept development and testing c. idea generation d. business analysis Answer: (c) Difficulty: (2) Page: 323, Figure 9-1 11. The systematic search for new-product ideas is characteristic of which stage in the new-product development process? a. idea screening b. concept development and testing c. idea generation d. business analysis Answer: (c) Difficulty: (2) Page: 323 12. After idea generation has occurred in the new-product development process, the next stage is most likely to be: a. ideation. b. idea screening. c. concept development and testing. d. test marketing. Answer: (b) Difficulty: (1) Page: 323, Figure 9-1, 328 13. For every 1,000 ideas, only _____ will have enough commercial promise to merit a small-scale experiment. a. 10 b. 50 c. 100 d. 300 Answer: (c) Difficulty: (3) Page: 323 14. According to the text, all of the following are thought to be sources of new-product ideas EXCEPT: a. internal sources. b. customers. c. competitors. d. the local library. Answer: (d) Difficulty: (1) Page: 323

15. According to Mr. Failures Lessons for Sweet Success, all of the following would help to prevent failure on the part of new products EXCEPT: a. offer real value. b. cherish thy brand. c. dont be too different. d. always be the lowest priced. Answer: (d) Difficulty: (2) Page: 324, 325 16. The search for new-product ideas should be systematic rather than haphazard. One way to ensure that the process is systematic is to install a(n): a. product planning committee. b. venture capital team. c. idea management system. d. a Delphi idea system. Answer: (c) Difficulty: (2) Page: 327 17. If an organization wishes to create an innovation-oriented company culture, it should consider the ____________ approach. a. product planning approach b. venture capital team c. idea manager d. Delphi idea system Answer: (c) Difficulty: (2) Page: 327 18. ________________ is screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible. a. Idea generation b. Concept development and testing c. Idea screening d. Brainstorming Answer: (c) Difficulty: (1) Page: 328 19. One reason that idea screening is a critical stage in the new-product development process is that: a. product-development costs rise greatly in later stages and the company only wants those products that can succeed. b. competitors can quickly steal ideas so the company wants only those ideas that can be protected with patents. c. international competition and markets demand that all ideas be culturally sensitive. d. the Federal government carefully monitors each companys idea screening process to make sure no national security matters are at stake. Answer: (a) Difficulty: (2) Page: 328

20. A _______________ is an idea for a possible product that the company can see itself offering to the market.

a. b. c. d.

product idea product image product concept product feature

Answer: (a) Difficulty: (2) Page: 328 21. A ___________________ is a detailed version of the idea stated in meaningful consumer terms. a. product idea b. product image c. product concept d. product feature Answer: (c) Difficulty: (2) Page: 328 22. A ____________________ is the way consumers perceive an actual or potential product. a. product idea b. product image c. product concept d. product feature Answer: (b) Difficulty: (2) Page: 328 23. If Toyota describes one of its cars of the future as being a moderately priced subcompact designed as a second family car to be used around town; the car is ideal for running errands and visiting friends, then the company has just stated a potential new product in terms of a: a. product idea. b. product image. c. product concept. d. product feature. Answer: (c) Difficulty: (3) Page: 328 24. Presenting new-product ideas to consumers in symbolic or physical ways to measure their reactions occurs during which of the following stages? a. idea generation b. concept testing c. marketing strategy d. screening Answer: (b) Difficulty: (2) Page: 329 25. If a kitchen cabinet designer wished to test design concepts with customers, the designer might wish to use a _______________ program that would show the consumer how his or her kitchen would look and work if remodeled with the companys products. a. color chart

b. cartoon figure chart c. virtual reality d. descriptive schematic Answer: (c) Difficulty: (1) Page: 329 26. Designing an initial marketing strategy for a new product based on the product concept is called: a. screening. b. business analysis. c. product development. d. marketing strategy development. Answer: (d) Difficulty: (1) Page: 330 27. The marketing strategy statement consists of three parts. All of the following would be among those parts EXCEPT: a. description of the production flow diagrams. b. description of the target market. c. the planning product positioning. d. the sales, market share, and profit goals for the first few years. Answer: (a) Difficulty: (2) Page: 330, 331 28. The stage in the new-product development process in which the anticipated sales, market share, and profit goals for the first few years are described is called: a. idea generation. b. marketing strategy development. c. business analysis. d. product development. Answer: (b) Difficulty: (2) Page: 330