Ch.9

Question 1

Innovation is the engine that drives growth (T/F)

Answer 1

True

Question 2

• enhances product mix

Answer 2

benefits of developing new products

Question 3

• expensive
• creates risk of market failure

Answer 3

disadvantages of developing new products

Question 4

original products, product improvements, product modifications, and new brands that the firm develops through its own product development

Answer 4

new products development

Question 5

• idea generation
• idea screening
• concept development and testing
• marketing strategy development
• business analysis
• product development
• test marketing
• commercialization

Answer 5

stages in new product development

Question 6

the systematic search for new product ideas (sources are both internal and external)

Answer 6

idea generation

Question 7

company’s own formal research and development, management and staff, and intrapreneurial programs

Answer 7

internal sources

Question 8

sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms

Answer 8

external sources

Question 9

inviting broad communities of people

Answer 9

crowd sourcing

Question 10

first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new product strategy or are inappropriate for some other reason

Answer 10

idea screening

Question 11

a test with consumers to evaluate a new product concept usually before any prototype has been created

Answer 11

concept test

Question 12

expresses the key idea in the concept

Answer 12

headline

Question 13

expresses the target consumer’s unmet need

Answer 13

accepted consumer belief (ACB)

Question 14

the concept’s promise that answers the target consumer’s question: What’s in it for me?

Answer 14

benefit

Question 15

the portion of the concept that gives credibility to the product promise

Answer 15

reason to believe (RTB)

Question 16

assess how the new product will fit into the firm’s total product mix, evaluate whether the product can be profitable contribution for the organizations product mix

Answer 16

business analysis

Question 17

involves the creation and testing of one or more physical versions by the R&D or engineering departments

Answer 17

product development

Question 18

try out the complete marketing plan (4P’s) in a small geographic area that is similar to larger target market

Answer 18

market testing

Question 19

• no discernible benefits
• poor match between features and customer desire
• overestimation of market size
• price too high or too low
• incorrect positioning
• poor promotion
  -inadequate distribution
• inferior product

Answer 19

reasons why new products fail

Question 20

explains how features change over the life of a product (must change and evolve as product moves through the PLC)

concept that seeks to describe a product’s sales, competitors, customers, and marketing emphasis from its beginning until it is removed from the market

Answer 20

product life cycle (PLC)

Question 21

1. Introduction
2. Growth
3. Maturity
4. Decline

Answer 21

product life cycle stages

Question 22

• full scale launch of new product into marketplace
• sales are low, high failure rate
• little competition
• limited distribution
• high marketing and product costs

Answer 22

introduction

Question 23

• sales grow at an increasing rate
• many competitors enter the market
• large companies may acquire small pioneering firms
• profits are healthy
• promotion emphasizes brand advertising and comparative ads
• wider distribution

Answer 23

growth

Question 24

• sales continue to increase but at a decreasing rate
• marketplace is approaching saturation
• product lines are often extended
• marginal competitors drop out
• increased promotion and R&D
• prices and profits fall

Answer 24

maturity

Question 25

• signaled by long-run drop in sales
• falling demand forces many out of market
• few specialty firms left

Answer 25

decline

Question 26

New product development starts with _____

Answer 26

idea generation

Question 27

Through _____ a company invites broad communities of people into the innovation process

Answer 27

crowdsourcing

Question 28

If the product passes both the concept test and the product test, the next step is _____

Answer 28

test marketing

Question 29

______ development focuses on finding new ways to solve customer problems

Answer 29

customer-centered new product

Question 30

_____ is the first stem of the product life cycle

Answer 30

product development

Question 31

Profits increase during the ____ stage of the product life cycle

Answer 31

growth

Question 32

One of the disadvantages of product and service standardization for the international markets is _____

Answer 32

varying worldwide market