Kotler Chapter 9 MCQ

8/20/2019 Kotler Chapter 9 MCQ

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Chapter 9 New-Product Development and Product Life-Cycle Strategies

1) What are the two ways that a company can obtain new products?A) line extension and brand managementB) internal development and brand management

C) new-product development and acquisition) service development and product extension!) mar"et mix modi#ication and research and developmentAnswer$ C

i##$ % &age 'e#$ %(*"ill$ Concept+b,ective$ -1

%) &roduct improvements. product modi#ications. and original products can all be classi#ied as ////////0A) pioneer products

B) new productsC) product concepts) product ideas

!) test productsAnswer$ B

i##$ 1 &age 'e#$ %(*"ill$ Concept+b,ective$ -1

) Which o# the #ollowing is 2+3 a potential reason #or a new product to #ail?A) an underestimated mar"et si4e

B) a poorly designed productC) an incorrectly positioned product) higher than anticipated costs o# product development

!) ine##ective advertisingAnswer$ A


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9) Which o# the #ollowing is 2+3 a challenge presented by the product li#e cycle that a #irmmust #ace?A) All products eventually decline0B) Changing tastes. technologies. and competition a##ect the mar"eting o# the product as it passesthrough li#ecycle stages0

C) A #irm must be good at developing new products to replace aging ones0) A #irm must be good at adapting its mar"eting strategies0!) 7t is di##icult to plot the stages as a product goes through them0Answer$ !


() 3he creation o# a success#ul new product depends on a company:s understanding o# its //////// and its ability to deliver //////// to customers0A) competitors. distributors. and employees; new stylesB) customers. brands. products; product imagesC) customers. competitors. and mar"ets; superior value

) product. mar"eting mix. and mar"eting strategy; #unctional #eatures!) product li#e cycle. legal responsibilities. and social responsibilities; innovationsAnswer$ C

i##$ % &age 'e#$ %(*"ill$ Concept+b,ective$ -%


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) >our company decides to use internal sources #or developing new product ideas0 Which o# the#ollowing would 2+3 be consulted?A) executives and pro#essionalsB) company records and dataC) intrapreneurial programs

) suppliers!) salespeopleAnswer$

i##$ 1 &age 'e#$ %our #irm as"s you to consult external sources #or new product ideas0 All o# the #ollowing arecommon external sources ! C!&3 ////////0A) customersB) suppliersC) competitors

) trade shows and maga4ines!) the #irm:s executivesAnswer$ !

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1%) 3he purpose o# idea generation is to create a //////// number o# ideas0 3he purpose o#succeeding stages is to //////// that number0A) small number; reduceB) small number; increaseC) large number; increase

) large number; reduce!) limited number; sustainAnswer$

i##$ % &age 'e#$ %


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1() A detailed version o# a new idea stated in meaning#ul customer terms is called a ////////0A) product ideaB) product conceptC) product image

) product proposal

!) product movementAnswer$ Bi##$ % &age 'e#$ %


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1 ) 7n the concept testing stage o# new-product development. a product concept in ////////#orm is presented to groups o# target consumers0A) physical or symbolicB) prototypeC) #inal

) mar"et-tested!) commercialAnswer$ A

i##$ % &age 'e#$ %<*"ill$ Concept+b,ective$ -%

%6) With what groups do #irms conduct concept testing #or new products?A) suppliersB) employeesC) target customers

) manu#acturers!) competitorsAnswer$ C

i##$ &age 'e#$ %<*"ill$ Concept+b,ective$ -%

%1) or some ////////. a simple description consisting o# a word or picture might be su##icient0A) concept testsB) product conceptsC) mar"eting strategies

) product developments!) business analysesAnswer$ A

i##$ % &age 'e#$ %<AAC*B$ Communication*"ill$ Concept+b,ective$ -%

%%) A#ter concept testing. a #irm would engage in which stage in developing and mar"eting anew product?A) idea screeningB) mar"eting strategy developmentC) business analysis

) product development!) test mar"etingAnswer$ B


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% ) 3he #irst part o# the mar"eting strategy statement describes the target mar"et; the planned product positioning; and goals #or sales. pro#its. and ////////0A) mar"et shareB) competitionC) secondary mar"et

) competition:s anticipated reaction!) li#e-cycle durationAnswer$ A

i##$ &age 'e#$ %<*"ill$ Concept+b,ective$ -%

%9) 3he second part o# the mar"eting strategy statement outlines the product:s planned price.distribution. and //////// #or the #irst year0A) advertisingB) promotion

C) mar"eting budget) positioning!) target mar"etAnswer$ C

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%=) uring which stage o# new-product development will management most li"ely estimateminimum and maximum sales to assess the range o# ris" in launching a new product?A) concept testingB) mar"eting strategy developmentC) business analysis

) product development!) test mar"etingAnswer$ C

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6) +nce the product or service passes the business analysis test. it moves into what stage?A) concept developmentB) product developmentC) mar"et testing

) strategy development

!) product proposalAnswer$ Bi##$ % &age 'e#$ %


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9) nder what circumstances might it be wise #or a company to do little or no test mar"eting?A) when a new product requires a ma,or investmentB) when management is not sure o# the productC) when management is not sure o# the mar"eting program

) when the product has no substitutes and is new in its category

!) when the costs o# developing and introducing the product are lowAnswer$ !i##$ % &age 'e#$ %


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) 7ntroducing a new product into the mar"et is called ////////0A) test mar"etingB) new product developmentC) experimenting

) commerciali4ation

!) mar"eting developmentAnswer$ i##$ % &age 'e#$ %<

*"ill$ Concept+b,ective$ -%

) Which o# the #ollowing costs is most li"ely associated with the commerciali4ation stage o#new-product development?A) building or renting a manu#acturing #acilityB) paying groups o# target customers #or product #eedbac" C) determining the product:s planned price. distribution. and mar"eting budget

) developing a prototype o# the product!) identi#ying target mar"etsAnswer$ A


96) A company getting ready to launch a new product must ma"e several decisions0 3hecompany must #irst decide on ////////0A) whether to launch the product in a single locationB) whether to launch the product in a regionC) whether to launch the product into #ull national distribution

) when to time the new product introduction!) when to develop a planned mar"et rolloutAnswer$


91) ollowing the decision to EtimeE the introduction o# the new product. a company must decide //////// to launch the new product0A) whereB) howC) to what degree

) why!) all o# the aboveAnswer$ A


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9%) Which o# the #ollowing is necessary #or success#ul new-product development?A) a holistic and sequential product development approachB) a customer-centered. team-based. systematic approachC) a team-based. innovation-management approach

) a mar"et pioneer mindset and a holistic approach

!) an innovation management system and sequential product developmentAnswer$ Bi##$ &age 'e#$ %<

*"ill$ Concept+b,ective$ -%

9 ) Which stage o# the new-product development process #ocuses on #inding new ways to solvecustomer problems and create more customer-satis#ying experiences?A) concept testingB) new-product developmentC) customer-centered new-product development

) sequential product development!) team-based new-product developmentAnswer$ C

i##$ 1 &age 'e#$ %<*"ill$ Concept+b,ective$ -%

99) //////// is a new-product development approach in which one company department wor"sto complete its stage o# the process be#ore passing the new product along to the next departmentand stage0A) 3eam-based product developmentB) *imultaneous product developmentC) *equential product development

) &roduct li#e-cycle analysis!) Dicromar"etingAnswer$ C


9() 7n order to get their new products to mar"et more quic"ly. many companies are adopting a#aster. team-oriented approach called ////////0A) simulated new-product developmentB) sequential product developmentC) team-based new-product development

) phased-in new-product development!) mar"et developmentAnswer$ C

i##$ 1 &age 'e#$ %=6*"ill$ Concept+b,ective$ -%



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9 ) 3he innovation management system approach yields two #avorable outcomes$ it helps createan innovation-oriented company culture. and it ////////0A) clearly assigns responsibility #or the processB) yields a larger number o# new-product ideasC) guarantees success#ul products

) #rees up senior management time!) requires less budget supportAnswer$ B

i##$ &age 'e#$ %=%*"ill$ Concept+b,ective$ -%

(6) 3he search #or new-product ideas should be //////// rather than hapha4ard0A) intermittentB) systematicC) segmented

) strategically planned!) rareAnswer$ B

i##$ % &age 'e#$ %=1*"ill$ Concept+b,ective$ -%

(1) //////// is the product li#e cycle period when sales #all o## and pro#its drop0A) 7ntroductionB) @rowthC) Daturity

) ecline!) evelopmentAnswer$

i##$ 1 &age 'e#$ %=*"ill$ Concept+b,ective$ -

(%) 7ncreasing pro#its will most li"ely occur at which stage o# the & C?A) introductionB) maturityC) growth

) decline!) product developmentAnswer$ C


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( ) Which stage in the & C is characteri4ed by rapid mar"et acceptance and increasing sales?A) introductionB) maturityC) growth

) decline

!) developmentAnswer$ Ci##$ 1 &age 'e#$ %=

*"ill$ Concept+b,ective$ -

(9) *ome products that have entered the decline stage have been cycled bac" to the growth stagethrough ////////0A) promotion or repositioningB) concept testingC) business analysis

) innovation management!) customer-centered product developmentAnswer$ A

i##$ % &age 'e#$ %=*"ill$ Concept+b,ective$ -

(() All o# the #ollowing are stages in the & C ! C!&3 ////////0A) introductionB) growthC) maturity

) adoption!) declineAnswer$


(


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(=) Which o# the #ollowing CA22+3 be described using the & C concept?A) product classB) product #ormC) product image

) brand

!) stylesAnswer$ Ci##$ &age 'e#$ %=


( ) All o# the #ollowing are accurate descriptions o# a style product. ! C!&3 which one?A) *tyle products appear in home. clothing. and art0B) +nce a style is invented. it may last #or generations0C) A style has a cycle showing several periods o# renewed interest0

) *tyles last only a short time and tend to attract only a limited #ollowing0

!) *tyles are basic and distinctive modes o# expression0Answer$ i##$ % &age 'e#$ %=9


( ) 3he & C concept can be applied by mar"eters as a use#ul #ramewor" #or describing how ////////0A) to #orecast product per#ormanceB) to develop mar"eting strategiesC) products and mar"ets wor"

) concept testing is conducted!) product ideas are developedAnswer$ C

i##$ &age 'e#$ %=9*"ill$ Concept+b,ective$ -


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< ) *ales decline in the decline stage o# the & C because o# technological advances. increasedcompetition. and ////////0A) shi#ts in the economyB) shi#ts in unemploymentC) shi#ts in consumer tastes and pre#erences

) inventory costs!) new mar"et pioneersAnswer$ C


< ) Which o# the #ollowing best represents the options a company has when a product isdeclining?A) maintain or harvest the productB) harvest or drop the productC) maintain. harvest. or drop the product

) maintain or pioneer the product!) pioneer. harvest. or maintain the productAnswer$ C


=6) A manu#acturer with a product in the decline stage o# the product li#e cycle might decide to //////// i# it has reason to hope that competitors will leave the industry0A) harvest the productB) maintain the product without changeC) drop the product

) search #or replacements!) delay planningAnswer$ B


=1) Danu#acturers must comply with speci#ic laws regarding ////////0A) price structuresB) product quality and sa#etyC) product placement

) distribution channels!) product li#e cyclesAnswer$ B

i##$ 1 &age 'e#$ % 6AAC*B$ !thical 'easoning*"ill$ Concept+b,ective$ -9



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=%) Because o# ////////. a company cannot ma"e its product illegally similar to a competitor:salready established product0A) anti-monopoly lawsB) patent lawsC) the Consumer &roduct *a#ety Act

) product warranties!) product liabilityAnswer$ B

i##$ 1 &age 'e#$ % 6AAC*B$ !thical 'easoning*"ill$ Concept+b,ective$ -9

= ) Which o# the #ollowing best describes the role o# a product steward?A) to protect consumers #rom harmB) to evaluate new-product ideas against a set o# general criteriaC) to develop a new-product concept into a physical product

) to protect the company #rom liability by identi#ying and solving potential product problems!) A and Answer$ !

i##$ &age 'e#$ % 6AAC*B$ !thical 'easoning*"ill$ Concept+b,ective$ -9

=9) 3he advantages o# standardi4ing an international product include all o# the #ollowing! C!&3 ////////0A) the development o# a consistent imageB) lower product design costsC) the adaptation o# products to di##erent mar"ets

) decreased manu#acturing costs!) lower mar"eting costsAnswer$ C

i##$ % &age 'e#$ % 1*"ill$ Concept+b,ective$ -9

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=() Because names. labels. and colors may not easily translate #rom one country to another.international mar"eters must care#ully assess ////////0A) product standardi4ationB) mar"et rolloutC) the product li#e cycle

) pac"aging!) stylesAnswer$

i##$ % &age 'e#$ % 1AAC*B$ Dulticultural and iversity*"ill$ Concept+b,ective$ -9

=our #irm added three new products earlier this year to increase variety #or customers0 3woo# them #ailed to reach even minimal sales0 Which o# the #ollowing is !A*3 li"ely to have beenthe cause o# their #ailure?A) 3he products were priced too high0B) 3he products were advertised incorrectly0C) Competitors #ought bac" harder than expected0

) 'esearch was too extensive0!) 3he product launch was ill-timed0Answer$

i##$ 1 &age 'e#$ %(AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -1

==) Which o# the #ollowing is the most li"ely reason that employees at your #irm regularly attendtrade shows and seminars?A) to analy4e the product li#e cycleB) to test new-product conceptsC) to get new-product ideas

) to test mar"et new products!) to implement a team-based new-product development approachAnswer$ C

i##$ % &age 'e#$ %


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= ) Which o# the #ollowing statements best explains why idea screening may be the most importstep o# new product development?A) 7t increases the number o# ideas generated0B) *ome potentially pro#itable ideas may be ill perceived by the idea screeners0C) *ome ideas that will become mar"et disasters may be originally viewed #avorably by the idea

screeners0) 7t gives research and development team members an opportunity to gather consumer#eedbac"0!) 7t saves the company money in product development costs by giving the green light to onlythe product ideas that are li"ely to be pro#itable0Answer$ !

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1) Wainwright 7ndustries will build a new prototype riding lawnmower especially #or women07n the product development stage. Goe Wainwright and his sta## will incorporate the #unctional#eatures and convey the ////////0A) brand imageB) advertising

C) sa#ety #eatures) intended psychological characteristics!) visual characteristicsAnswer$

i##$ &age 'e#$ %


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9) Atlas *teel Corporation lac"s the con#idence. capital. and capacity to launch its new steel product into #ull national or international distribution0 !ven though test mar"et results loo" promising. what will be management:s next step?A) retest the product in additional mar"etsB) develop a planned mar"et rollout over time

C) secure a loan to provide con#idence. capital. and capacity) see" the help o# a nationally "nown consultant!) develop a prototypeAnswer$ B

i##$ &age 'e#$ %<AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -%

() At antastic lavors. a large regional chain o# candy stores. employees #rom mar"eting.design. production. and #inance wor" in a cross-#unctional group to save time and money in thenew-product development process0 antastic lavors uses aFn) //////// approach0A) customer-centered new-product developmentB) sequential new-product developmentC) team-based new-product development

) innovation management system!) consumer compositeAnswer$ C

i##$ 1 &age 'e#$ %<AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -%


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=) lurrbies. a winter accessory which #ell in and out o# #avorability with customers quic"ly. arean example o# a ////////0A) styleB) #ashionC) #ad

) product idea!) mar"et strategyAnswer$ C

i##$ % &age 'e#$ %=9AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -

) Big Doose 3oys is a mar"et pioneer introducing a modern version o# Bullwin"le the Doose.a character #rom an animated television series originally broadcast in the (6s and


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6) Dattel:s Barbie is an example o# an age-de#ying product0 Barbie. simultaneously timeless andtrendy. is in the //////// stage o# the & C0A) introductionB) growthC) maturity

) decline!) adoptionAnswer$ C

i##$ % &age 'e#$ %==AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -

1) +ver the past 166 years or so. Binney and *mith:s Crayola crayons have become a householdstaple in more than 6 countries around the world0 Crayola crayons are in the //////// stage o#the & C0A) introductionB) growthC) maturity

) decline!) incubationAnswer$ C

i##$ % &age 'e#$ %==AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -

%) When 8ein4 introduced !H *quirt pac"aging and new colors such as Blastin: @reen andAwesome +range to revitali4e consumer buying. the company was ////////0A) modi#ying the mar"etB) modi#ying the pricing strategyC) modi#ying the distribution

) modi#ying the product!) dropping the productAnswer$

i##$ 1 &age 'e#$ %=AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -



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) 7t:s What:s 8ip. a chain o# 1 music and C stores. has discovered that carrying a wea" product during the decline stage o# the & C can be very costly to a #irm. and not ,ust in pro#itterms0 Which one o# these is 2+3 li"ely to be one o# those costs?A) ta"es up much o# management:s timeB) #requent price and inventory ad,ustment

C) requires advertising and sales #orce attention) #ew concerns about company image and other products!) all o# the aboveAnswer$

i##$ &age 'e#$ %=AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -

9) *uperior uggage Company has underta"en the tas" o# identi#ying its products in the declinestage o# the & C0 Which o# the #ollowing should 2+3 be done in the identi#ication process?A) regularly reviewing salesB) regularly reviewing mar"et shareC) regularly reviewing costs and pro#it trends

) regularly reviewing management:s pet pro,ects!) all o# the aboveAnswer$


() &roctor I @amble has sold o## a number o# lesser or declining brands such as +xydoldetergent and Gi# peanut butter0 7n these examples. management decided to //////// the

products0A) #urther testB) maintainC) drop

) harvest!) ignore the test mar"et results o# Answer$ C




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Refer to the scenario below to answer the following uestions!

Dost people laughed when !velyn 'ingler explained her product idea$ a solar-poweredvacuum cleaner0 But the concept was practical and the technology used in the vacuum was thesame as that used in many children:s toys0 A#ter setting up a demonstration booth in a mall in a

Chicago suburb. !velyn #elt more assured than ever that her idea would be a hit0 Consumersseemed receptive and o##ered help#ul pieces o# advice. such as how much they would pay #or thevacuum. what colors they would pre#er. and why they would not buy the vacuum0

3he vacuum itsel# was dome-shaped. something li"e a small saucer. with a #ilter bag ontop and sensory nodes along the edges0 A#ter being charged in the sunlight. the vacuum could run#or 16 hours. covering a #loor area o#


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166) !velyn:s vacuum is at the //////// stage o# the product li#e cycle0A) product developmentB) introductionC) growth

) adoption

!) incubationAnswer$ Ai##$ 1 &age 'e#$ %=

AAC*B$ 'e#lective 3hin"ing*"ill$ Application+b,ective$ -

161) A #irm can obtain new products in two ways$ acquisition or new-product development0Answer$ 3' !

i##$ % &age 'e#$ %(*"ill$ Concept

+b,ective$ -116%) p to 6 percent o# all new consumer products #ail0Answer$ 3' !


16 ) 2ew product development begins with a systematic search #or new product ideas throughidea generation0Answer$ 3' !

i##$ 1 &age 'e#$ %(*"ill$ Concept+b,ective$ -%

169) Dalibu Beach &arties #inds that the tastes and pre#erences o# its customers change morerapidly than in the past0 3he manager should constantly loo" #or external ideas #rom customers.suppliers. and the competition0Answer$ 3' !

i##$ 1 &age 'e#$ %


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111) 3he business analysis stage represents the #irst large ,ump in #inancial investment in thenew-product development process0Answer$ A *!

i##$ % &age 'e#$ %


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11=) sing the & C concept to develop mar"eting strategy can be problematic because strategyis both a cause and a result o# the product:s li#e cycle0Answer$ 3' !

i##$ &age 'e#$ %=9*"ill$ Concept

+b,ective$ -

11 ) &ro#its rise during the growth stage o# the & C because promotion costs are spread over alarge volume and unit manu#acturing costs #all0Answer$ 3' !

i##$ % &age 'e#$ %==*"ill$ Concept+b,ective$ -

11 ) Although products that remain in the maturity stage o# the & C seem unchanged. the mostsuccess#ul ones actually evolve to meet changing consumer needs0

Answer$ 3' !i##$ % &age 'e#$ %==*"ill$ Concept+b,ective$ -

1%6) When sales o# a product #alter during the & C. a company can ta"e several approaches0 3hemore common ones are to modi#y the mar"eting mix. modi#y the product. or modi#y the mar"et0Answer$ 3' !

i##$ % &age 'e#$ %==*"ill$ Concept+b,ective$ -

1%1) *ales #or the time-tried household cleansers made by Brite and 2ew. 7nc0. have beendeclining #or some time0 7# these products are typical. sales are declining because o#technological advances. shi#ts in consumer tastes. and lac" o# raw materials #rom #oreignsuppliers0Answer$ A *!

i##$ &age 'e#$ %=AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -

1%%) Companies need to pay attention to their aging products0 Danagement should regularlyreview sales. mar"et shares. costs. and pro#it trends. and then decide whether to maintain.harvest. or drop these declining products0Answer$ 3' !


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1% ) When a company decides to maintain a product in the decline stage. it will reduce costs andhope that sales hold up to increase the pro#its in the short run0Answer$ A *!

i##$ % &age 'e#$ %=*"ill$ Concept

+b,ective$ -

1%9) 3he #ederal government may prevent a company #rom adding products through acquisitionsi# acquisition threatens to lessen competition0Answer$ 3' !

i##$ % &age 'e#$ % 6AAC*B$ !thical 'easoning*"ill$ Concept+b,ective$ -9

1%() 3he international growth o# many pro#essional and business services such as accounting.

consulting. and advertising led to the globali4ation o# the client companies they serve0Answer$ A *!i##$ &age 'e#$ % %

AAC*B$ Dulticultural and iversity*"ill$ Concept+b,ective$ -9

1%


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1%=) Brie#ly describe the steps in the new-product development process0Answer$ 2ew-product development starts with idea generation #rom internal andKor externalsources0 2ext. the ideas must be reduced through idea screening0 +nce the new ideas are decidedupon. the product concept must be developed and tested0 A mar"eting strategy must be developedto introduce the product to the mar"et0 +nce the product concept and mar"eting strategy are

chosen. a business analysis is conducted to review the sales. costs. and pro#it pro,ections to see i# they will satis#y the company:s ob,ectives0 A prototype will next be created in the productdevelopment stage0 3est mar"eting will #ollow. introducing the new product and its mar"eting

program into more realistic mar"et settings0 3he last step is to launch or not launch the new product0 7# the company decides to launch the product. it will go ahead with thecommerciali4ation stage and later test its sales and pro#it results0

i##$ &age 'e#$ %( -%<AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -%

1% ) &rovide the ma,or sources o# external new product ideas and explain why these sourceso##er advantages over internal sources0Answer$ 3he ma,or sources o# new product ideas #rom external sources include customers.suppliersKdistributors. competitors. and research #irms0 3hese sources are close to the mar"et andtend to re#lect current tastes and pre#erences0 irms can better match their product o##erings tocustomer needs and wants0 Consumers may also create new products and services on their own0

i##$ % &age 'e#$ %


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1 6) !xplain concept testing0Answer$ Concept testing calls #or testing new product concepts with groups o# target consumers03he concepts may be presented physically or symbolically0 A more concrete and physical

presentation. however. will increase the reliability o# the concept test0 A#ter being exposed to theconcept. consumers are as"ed questions about it; their answers reveal to the mar"eter whether the

concept needs to be altered in any way0i##$ 1 &age 'e#$ %<AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -%

1 1) e#ine commerciali4ation0 !xplain the two important issues on which the company mustdecide during this stage0Answer$ 7ntroducing a new product into the mar"et is called commerciali4ation0 3he companylaunching a new product must #irst decide on introduction timing0 2ext. the company mustdecide where to launch the new productLin a single location. a region. the national mar"et. or theinternational mar"et0 Con#idence. capital. and capacity are required to launch new products on alarge-scale basis0 8ence. #irms plan a mar"et rollout over time0

i##$ 1 &age 'e#$ %<AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -%

1 %) What are the two advantages o# an innovation management system #or developing new products? &rovide #our ideas #or a company to use to establish a success#ul system0Answer$ 3he #irst advantage o# an innovation management system is that it helps create aninnovation-oriented company culture0 7t shows that top management supports. encourages. andrewards innovation0 3he second advantage is that it will yield a larger number o# ideas. amongwhich will be #ound some especially good ones0 As the system matures. ideas will #low more#reely0 3o establish a success#ul system a company can do the #ollowing$ F1) Appoint a respectedsenior person to be the company:s idea manager; F%) create a cross-#unctional innovationmanagement committee with people #rom each department; F ) set up a Web site #or anyone whowants to become involved in #inding and developing new products; F9) encourage all companysta"eholders to send their ideas to the idea manager; and F() set up #ormal recognition programsto reward those who contribute the best new ideas0

i##$ &age 'e#$ %=%AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -%



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1 ) !ach product will have a li#e cycle. although its exact shape and length is not "nown inadvance0 Brie#ly explain each step in the & C0Answer$ &roduct development begins when the company #inds and develops a new product idea0*ales are 4ero and the company:s investment costs mount0 7ntroduction is a period o# slow salesgrowth as the product is introduced in the mar"et0 &ro#its are nonexistent in this stage because o#

the heavy expenses o# product introduction0 @rowth is a period o# rapid mar"et acceptance andincreasing pro#its0 Daturity is a period o# slowdown in sales growth because the product hasachieved acceptance by most potential buyers0 &ro#its level o## or decline because o# increasedmar"eting outlays to de#end the product against competition0 ecline is the period when sales#all o## and pro#its drop0 A company may see" to reinvigorate a product in decline or maintain ithoping competition will diminish or harvest it or drop it0

i##$ % &age 'e#$ %=AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -

1 9) & C can be applied to more than ,ust brands0 >our assignment is to prepare a presentationabout the application o# the & C to as many o# your company:s operations as possible0 Whatwould you include?Answer$ 3he & C can be applied to new product and services0 7t can also be applied to productclass. a product #orm. or a brand0 3he & C concept lends itsel# to styles. #ashions. and #ads0 3heconcept can be used as a use#ul #ramewor" #or describing how products and mar"ets wor". aswell as developing mar"eting strategy #or each stage o# the product li#e cycle0 Danagers mayhave di##iculties using the & C concept to #orecast product per#ormance or develop generalmar"eting strategies0

i##$ % &age 'e#$ %=9AAC*B$ Analytic *"ills*"ill$ Application+b,ective$ -

1 () escribe three public policy issues or regulations that mar"eters should care#ully consideras they ma"e decisions about adding or dropping products0Answer$ 3he government may prevent companies #rom adding products through acquisitions i#the e##ect threatens to lessen competition0 +n the other hand. companies dropping products must

be aware that they have legal obligations to their suppliers. dealers. and customers who have asta"e in the dropped product0 Companies must also obey 0*0 patent laws when developing new

products. meaning that a company cannot ma"e its product illegally similar to another company:sestablished product0 Danu#acturers must also comply with speci#ic laws regarding productquality and sa#ety0 3he ederal ood. rug. and Cosmetic Act and the Consumer &roduct *a#etyAct are ,ust two o# many laws that protect consumers #rom potentially harm#ul products0 7#consumers have been in,ured by a product that has a de#ective design. they can suemanu#acturers or dealers0

i##$ % &age 'e#$ % 6AAC*B$ !thical 'easoning*"ill$ Application+b,ective$ -9



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191) What may be learned in a test mar"et?Answer$ 3est mar"eting lets a company assess customer response to its product and thee##ectiveness o# its positioning strategy. advertising. distribution. pricing. branding. and

pac"aging0i##$ % &age 'e#$ %


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Kotler Chapter 9 MCQ