Marketing Management 3rd Edition

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Marketing Management, 3e (Marshall)
Chapter 8 Product Strategy and New Product Development

1) The essential component in delivering value is the product price.

Answer: FALSE
Explanation: The essential component in delivering value is the product experience, which is
why it is considered the heart of marketing.
Difficulty: 1 Easy
Topic: The Concept of Customer Value
Learning Objective: 08-01 Understand the essential role of the product experience in
marketing.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

2) When the product is wrong, skilled marketing communication and pricing sophistication can
correct the problems.

Answer: FALSE
Explanation: When the product is wrong, no amount of marketing communications and no
degree of logistical expertise or pricing sophistication will make it successful.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-01 Understand the essential role of the product experience in
marketing.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

3) The essential benefit is the fundamental need met by a product.

Answer: TRUE
Explanation: The essential benefit is the fundamental need met by a product. No matter what
other value-added product experiences are provided to the customer, the essential benefit must be
part of the encounter.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

1
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4) Different target markets will view the same product in completely different ways.

Answer: TRUE
Explanation: Different target markets will view the same product in completely different ways.
Parents buying their daughter a pair of jeans would probably consider Hollister jeans to be just
another pair of jeans; however, to the teenager, the same purchase makes an important statement
about herself and her choice of clothes.
Difficulty: 2 Medium
Topic: Target Markets
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

5) A stock-keeping unit (SKU) is a unique identification number used to track a product in the
consumer's home.

Answer: FALSE
Explanation: A stock-keeping unit (SKU) is a unique identification number used to track a
product through a distribution system, inventory management, and pricing.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

6) Reliability is a product's ability to deliver on features and performance characteristics

promised in marketing communications.

Answer: FALSE
Explanation: Reliability is the percentage of time the product works without failure or stoppage.
Conformance is a product's ability to deliver on features and performance characteristics
promised in marketing communications.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

2
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written consent of McGraw-Hill Education.
7) More than any other discriminator, style has the disadvantage of being difficult to copy.

Answer: FALSE
Explanation: One of the most difficult discriminators to accurately assess and build into a
product is the look and feel of the product, or style. It is easy for someone to say a particular
product has style, but designing it into a product can be a challenge. More than any other
discriminator, style offers the advantage of being difficult to copy.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

8) Luxury cars such as the Chevrolet Corvette are available with tires that enable a driver to
continue driving even after the tire has been damaged. This is an example of Corvette using style
as a product discriminator.

Answer: FALSE
Explanation: This is an example of using repairability as a product discriminator, or ease of
fixing a problem with the product. As a result, companies have built better diagnostics into their
products to help isolate, identify, and repair products without the need for the costly repairs of a
professional service. Luxury cars such as the Corvette are available with tires that enable the
driver to continue driving even after the tire has been damaged.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

9) One of the disadvantages of using style as a product discriminator is that consumer tastes
change over time and what is considered stylish can quickly lose its appeal.

Answer: TRUE
Explanation: One of the most difficult discriminators to accurately assess and build into a
product is the look and feel of the product, or style. A challenge is that style can be difficult to
create consistently. Consumer tastes change over time, and what is considered stylish can
quickly lose it appeal.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

3
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written consent of McGraw-Hill Education.
10) Barbara's Bakery sells custom cakes, cookies, and other pastries. These represent Barbara's
Bakery's product line.

Answer: TRUE
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-03 Recognize how product strategies evolve from one product to many
products.
Bloom's: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

11) Product life cycle (PLC) includes four basic stages: introduction, growth, maturity, and
delay.

Answer: FALSE
Explanation: Companies create, launch, and transform products as market conditions change
over time. This product evolution is referred to as the product life cycle (PLC) and defines the
life of a product in four basic stages: introduction, growth, maturity, and decline.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

12) The product life cycle (PLC) generally refers to a product item rather than a product
category.

Answer: FALSE
Explanation: The product life cycle (PLC) generally refers to a product category (touring
bicycles) rather than a product item (Giant Sedona bicycles), although companies often track
their own product items against an industry PLC.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

4
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written consent of McGraw-Hill Education.
13) The targeted consumers during the maturing phase of a product life cycle are innovators and
early adopters.

Answer: FALSE
Explanation: The targeted consumers during the maturing phase of a product life cycle are
majority adopters. The targeted consumers during the introduction phase of a product life cycle
are innovators and early adopters.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

14) Desktop computers, cell phones, and tablet computers are examples of new-to-the-world
products considered disruptive innovations.

Answer: TRUE
Explanation: Most people would define new as a product that has not been available before or
bears little resemblance to an existing product. Desktop computers, cell phones, and tablet
computers are examples of new-to-the-world products considered disruptive innovations.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

15) The three major activities in new-product development are to (1) generate new ideas, (2)
screen and evaluate ideas, and (3) define and test product concept.

Answer: FALSE
Explanation: The new-product development process consists of three main activities and eight
specific tasks. The three major activities in new-product development are to (1) identify product
opportunities, (2) define the product opportunity, and (3) develop the product opportunity.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

5
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16) A go-to-market mistake happens when a good idea is prematurely eliminated during the
screening process.

Answer: FALSE
Explanation: A stop-to-market mistake happens when a good idea is prematurely eliminated
during the screening process.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

17) The number of products purchased by the same customer is called repeat purchases.

Answer: TRUE
Explanation: Repeat purchases are defined as the number of products purchased by the same
customer. This can be important with frequently purchased products such as convenience goods
that rely on frequent repeat purchases for success.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

18) The business case analysis is an overall evaluation of a product and usually assesses the
product's probability of success.

Answer: TRUE
Explanation: The business case analysis is an overall evaluation of a product and usually
assesses the product's probability of success. It is often done when there are changes to an
existing marketing plan, such as an increase in the marketing communications budget. The
business case would assess the feasibility of increasing the communications budget.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

6
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written consent of McGraw-Hill Education.
19) An individual moves through five stages before adopting a product, including awareness,
notice, trial, testing, and feedback.

Answer: FALSE
Explanation: An individual moves through five stages before adopting a product: awareness,
interest, evaluation, trial, and adoption.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

20) Trial purchase is the focus of a product launch marketing plan.

Answer: TRUE
Explanation: Trial purchase is the focus of a product launch marketing plan, because if you can
get consumers to try the product, you can win them over with superior product design, features,
and value.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

21) Early adopters are product watchers who seek out new products but are price-sensitive.

Answer: FALSE
Explanation: Early adopters are product opinion leaders who seek out new products consistent
with the personal self-image. This group is not price-sensitive and is willing to pay the price
premium for a product. At the same time, early adopters demand a high level of personalized
service and product features.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

7
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written consent of McGraw-Hill Education.
22) Everyone in a target market falls into one of five groups based on their willingness to try the
innovation, including innovators, early adopters, early majority, late majority, and laggards.

Answer: TRUE
Explanation: Everyone in a target market falls into one of five groups based on their
willingness to try the innovation, including innovators, early adopters, early majority, late
majority, and laggards. A person can be an innovator or early adopter in one product category
and a laggard in another.
Difficulty: 1 Easy
Topic: Target Markets
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

23) Late majority are product followers who are price-sensitive and risk-averse.

Answer: TRUE
Explanation: Late majority are product followers who are price-sensitive and risk-averse. They
purchase older generation or discontinued models with lower prices and fewer product features.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

24) The primary function of marketing and the entire organization, in a broader context, is to
________.
A) increase employee turnover
B) offer highly customized products
C) deliver value to the customer
D) focus on short-term benefits
E) eliminate barriers to market entry

Answer: C
Explanation: The primary function of marketing and, more broadly speaking, the entire
organization is to deliver value to the customer. The essential component in delivering value is
the product experience, which is why it is considered the heart of marketing.
Difficulty: 1 Easy
Topic: Core Marketing Concepts
Learning Objective: 08-01 Understand the essential role of the product experience in
marketing.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

8
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written consent of McGraw-Hill Education.
25) The failure of Apple Newton, the first PDA, highlights the fact that ________.
A) the essential benefit is not the fundamental need met by a product
B) people look for products that are technically superior
C) the best product technically is not always the most successful product
D) the essential component in delivering value is product pricing
E) intense marketing communications can even make a wrong product successful

Answer: C
Explanation: Newton's failure highlights the fact that the best product technically is not always
the most successful product. People look for the product that delivers the best overall product
experience.
Difficulty: 2 Medium
Topic: The Concept of Customer Value
Learning Objective: 08-01 Understand the essential role of the product experience in
marketing.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

26) ________ can be defined as anything that delivers value to satisfy a need or want and
includes physical merchandise, services, events, people, places, organizations, information, even
ideas.
A) Utility
B) Strategy
C) Exchange
D) Product
E) Market

Answer: D
Explanation: Most people define a product as a tangible object; however, that is not accurate.
The product experience encompasses a great deal more. Product can be defined as anything that
delivers value to satisfy a need or want and includes physical merchandise, services, events,
people, places, organizations, information, even ideas.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-01 Understand the essential role of the product experience in
marketing.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

9
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written consent of McGraw-Hill Education.
27) In the context of product characteristics, companies translate the essential benefit into
physical, tangible elements known as the ________ product.
A) augmented
B) core
C) deviated
D) differentiated
E) contrasting

Answer: B
Explanation: The physical, tangible elements of a product are known as the core product. Some
companies do it better than others, making this critical challenge an important differentiator
separating successful companies from their competitors.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

28) The ________ product extends the core product to include additional features, designs, and
innovations that exceed customer expectations.
A) differentiated
B) deviated
C) amended
D) specialized
E) enhanced

Answer: E
Explanation: The enhanced product extends the core product to include additional features,
designs, and innovation that exceed customer expectations. In this way, companies build on the
core product, creating opportunities to strengthen the brand.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

10
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written consent of McGraw-Hill Education.
29) In the context of product classifications, tangibility refers to the ________.
A) service delivered with a product
B) ability to create a combination of product and service
C) physical aspects of a product
D) value of a product in the market
E) fundamental need met by a product

Answer: C
Explanation: Products, as opposed to services, have a physical aspect referred to as tangibility.
Tangible products present opportunities (customers can see, touch, and experience the product)
and also some challenges (customers may find the product does not match their personal tastes
and preferences).
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

30) Today, many tangible products include aspects that impact the customer's satisfaction before
and after the purchase. These aspects that complement the tangible features of a product are
called ________.
A) physical aspects
B) core competencies
C) monetary characteristics
D) intangible characteristics
E) essential benefits

Answer: D
Explanation: Services are intangible. A significant challenge for marketers today is that many
tangible products have intangible characteristics. For example a significant element in an
individual's satisfaction with a new car is the customer service before and after the purchase.
Intangible products, on the other hand, such as services have tangible characteristics.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

11
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written consent of McGraw-Hill Education.
31) Frequently purchased, relatively low-cost products for which customers have little interest in
seeking new information and rely heavily on prior purchase behavior are called ________ goods.
A) shopping
B) convenience
C) specialty
D) unsought
E) consenting

Answer: B
Explanation: Frequently purchased, relatively low-cost products for which customers have little
interest in seeking new information or considering other options and rely heavily on prior brand
experience and purchase behavior are called convenience goods. These products include most
items people buy regularly such as toiletries, gasoline, and paper products and fall into four
categories.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

32) Clothes, furniture, and major appliances such as refrigerators and dishwashers are examples
of ________ goods.
A) convenience
B) specialty
C) unsought
D) capital
E) shopping

Answer: E
Explanation: Products that require consumers to do more research and compare across product
dimensions such as color, size, features, and price are called shopping goods. Consumer products
that fall into this category include clothes, furniture, and major appliances such as refrigerators
and dishwashers.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

12
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written consent of McGraw-Hill Education.
33) ________ goods are unique purchases made based on a defining characteristic for the
consumer, which might be a real or perceived product feature, such as Apple iPhone's easy user
interface.
A) Shopping
B) Convenience
C) Specialty
D) Unsought
E) Capital

Answer: C
Explanation: Specialty goods are a unique purchase made based on a defining characteristic for
the consumer. The characteristic might be a real or perceived product feature, such as Apple
iPhone's easy user interface or brand identification like Porsche's reputation for building sports
cars.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

34) Unsought goods are characterized as being the kinds of goods that consumers ________.
A) purchase solely for business purposes
B) do more research on and compare across product dimensions such as color, size, features, and
price
C) frequently purchase and have little interest in seeking new information about
D) would rather not purchase at all
E) purchase solely for personal purposes

Answer: D
Explanation: Unsought goods are products that consumers do not seek out and, indeed, often
would rather not purchase at all. Insurance, particularly life insurance, is not a product people
want to purchase. In general, customers do not want to purchase products or services related to
sickness, death, or emergencies because, in part, the circumstances surrounding the purchase are
not pleasant.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

13
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written consent of McGraw-Hill Education.
35) Companies often use features to differentiate themselves from competitors. However, a
company must balance the features customers want with ________.
A) what the competition offers
B) the ability to manufacture the feature in a timely way
C) what customers will pay
D) the configurations that make a positive brand look stylish
E) the resources available for production

Answer: C
Explanation: A feature is any product attribute or performance characteristic and is often added
or subtracted from a product to differentiate it from competitors. However, while delivering
consumer value is the primary driver in making product decisions, a company must balance the
features customers want with what they will pay at a given quality level.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

36) An important issue for consumers is conformance, which is the product's ability to
________.
A) deliver on features and performance characteristics promised in marketing communications
B) conform to the standards set by the federal guidelines
C) deliver value in the form of product quality
D) get the manufacturing aligned using quality processes
E) deliver additional features, designs, and innovations that exceed customer expectations

Answer: A
Explanation: An important issue for consumers is conformance, which is the product's ability to
deliver on features and performance characteristics promised in marketing communications. The
challenge for marketers and manufacturing is that every product must deliver on those promises.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

14
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written consent of McGraw-Hill Education.
37) When a company can show that its product's projected lifetime is high under certain
operating conditions, it is using ________ as a product discriminator.
A) style
B) performance quality
C) form
D) durability
E) conformance quality

Answer: D
Explanation: Consumer research and purchase patterns affirm that people find durability, the
projected lifetime of a product under specific operating conditions, an important discriminating
product characteristic and are willing to pay a premium for products that can demonstrate greater
durability.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

38) More than any other product discriminator, style offers the advantage to a company of being
________.
A) a low-cost differentiator
B) easy to do consistently over time
C) able to ensure high quality
D) difficult for competition to copy
E) associated with high repairability

Answer: D
Explanation: It is easy for someone to say a particular product has style, but designing it into a
product can be a challenge. More than any other discriminator, style offers the advantage of
being difficult to copy.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

15
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written consent of McGraw-Hill Education.
39) A product ________ is a group of products linked through usage, customer profile, price
points, and distribution channels.
A) form
B) mix
C) line
D) cycle
E) core

Answer: C
Explanation: A product line is a group of products linked through usage, customer profile, price
points, and distribution channels or needs satisfaction. Within a product line, strategies are
developed for a single product, but also for all the products in the line.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-03 Recognize how product strategies evolve from one product to many
products.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

40) When companies provide too few products in a product line, they run the risk of ________.
A) having inefficiencies in production
B) increasing barriers to market entry
C) delivering products that can be easily copied
D) missing important market opportunities
E) being differentiated from competitors

Answer: D
Explanation: Companies must balance the number of items in a product line. Too many items
and customers find it difficult to differentiate between individual products. In addition, cost
inefficiencies involved in producing multiple products lower margins for the entire product line.
Too few products and the company runs the risk of missing important market opportunities.
Difficulty: 2 Medium
Topic: The Characteristics of a Product
Learning Objective: 08-03 Recognize how product strategies evolve from one product to many
products.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

16
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written consent of McGraw-Hill Education.
41) Combining all the products offered by a company is called the product ________.
A) line
B) mix
C) profile
D) standardization
E) function

Answer: B
Explanation: Combining all the products offered by a company is called the product mix.
Developing strategies for the entire product mix is done at the highest levels of the organization.
Difficulty: 1 Easy
Topic: The Characteristics of a Product
Learning Objective: 08-03 Recognize how product strategies evolve from one product to many
products.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

42) The product life cycle (PLC) defines the life of a product in four basic stages, which include
________.
A) introduction, growth, maturity, and decline
B) awareness, interest, trial, and adoption
C) primary, secondary, advanced, and nominal
D) production, development, distribution, and enhancement
E) idea generation, creation, presentation, and promotion

Answer: A
Explanation: Companies create, launch, and transform products as market conditions change
over time. This product evolution is the product life cycle (PLC) and defines the life of a product
in four basic stages: introduction, growth, maturity, and decline.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

17
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written consent of McGraw-Hill Education.
43) The introduction phase of the product life cycle for an industry is usually characterized by
________.
A) high profits
B) no profits
C) high sales
D) low marketing costs
E) low product development costs

Answer: B
Explanation: New companies entering the market sustain product development and initial
marketing costs associated with the product launch. As a result, the industry starts the PLC "in
the red" (no profits). As the product category grows, successful companies recoup their initial
costs and begin to realize are turn on their investments.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

44) The objective in the introduction phase of the product life cycle (PLC) is to ________.
A) differentiate the product from those of new competitors, promoting rapid expansion
B) transition the product from high growth to sales stability
C) build market awareness for the product leading to trial purchase
D) determine the future of the product
E) develop product development strategies

Answer: C
Explanation: The objective in the introduction phase of the product life cycle (PLC) is to build
market awareness for the product leading to trial purchase. This phase is characterized by low
profitability and high costs.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

18
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
45) The essential marketing objective in the growth phase of the product life cycle (PLC) is to
________.
A) build trial of the product
B) build public relations for the product
C) build trial followed by loyalty
D) differentiate the product from those of new competitors
E) create market awareness for the product

Answer: D
Explanation: The essential marketing objective in the growth phase of the product life cycle
(PLC) is to differentiate the product from those of new competitors. During this phase, sales
grow at increasing rate.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

46) In the ________ phase of the product life cycle (PLC), sales continue to increase but at a
decreasing rate.
A) maturity
B) growth
C) introduction
D) decline
E) initial

Answer: A
Explanation: In the maturity phase of the product life cycle (PLC), sales continue to increase
but at a decreasing rate. The objective during this phase is to transition product from high growth
to sales stability.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

19
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
47) Informing and educating the target audience about the product's benefits and features is part
of the communication strategy in the ________ phase of the product life cycle.
A) introduction
B) growth
C) maturity
D) decline
E) regression

Answer: A
Explanation: Informing and educating the target audience about the product's benefits,
characteristics, and features is part of the communication strategy in the introduction phase of the
product life cycle. Promotions are focused on product awareness and to stimulate primary
demand.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation

48) The most dramatic increase in revenue is most likely to occur in the ________ phase of the
product life cycle.
A) introduction
B) growth
C) maturity
D) saturation
E) decline

Answer: B
Explanation: The most dramatic increase in revenue is most likely to occur in the growth phase
of the product life cycle. The objective during this phase is to differentiate product from those of
new competitors, promoting rapid expansion.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

20
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
49) During the decline phase of the product life cycle, ________.
A) promotion is focused on product awareness
B) companies boost customer service efforts to keep up with product
C) channel members cease to support the product
D) the product reaches its maximum distribution
E) promotion emphasizes brand advertising and comparative ads

Answer: C
Explanation: During the decline phase of the product life cycle, channel members cease to
support the product. This stage is characterized by reduced distribution channels.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

50) During the maturity phase of the product life cycle, ________.
A) sales grow, but at a rate lower than the growth stage
B) no growth in sales occurs
C) sales are low, typically with high failure rate
D) sales grow at an increasing rate in comparison to the growth stage
E) long-run drop in sales takes place

Answer: A
Explanation: During the maturity phase of the product life cycle, sales grow, but at a rate lower
than the growth stage. During this stage, cost minimization has reached full extent.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

21
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
51) In the maturity phase of the product life cycle, the targeted consumers are ________.
A) laggards
B) majority adopters
C) late adopters
D) innovators
E) early adopters

Answer: B
Explanation: In the maturity phase of the product life cycle, the targeted consumers are
majority adopters. During this stage, marginal competitors tend to drop out.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

52) Which of the following characterizes the decline stage of the product life cycle?
A) New and improved models are sold at high price points.
B) Attractive price points are set to gain market share and discourage competitors.
C) Established competition makes price pressures more pronounced, forcing lower-price strategy
if product not well-differentiated.
D) Significant price pressures come from competitors and consumers.
E) Existing models or earlier generations move down in price.

Answer: D
Explanation: During the decline stage of the product life cycle, significant price pressures come
from both competitors and more price-sensitive consumers. Cost of continued investment in
marketing communications is not justified by market conditions.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

22
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
53) Products that are new-to-the-world create a fundamental change in the marketplace and are
known as ________.
A) technological transformations
B) convenience goods
C) core products
D) disruptive innovations
E) enhanced products

Answer: D
Explanation: Most people would define new as a product that has not been available before or
bears little resemblance to an existing product, and one type of new product is actually referred
to as a new-to-the-world product because it has not been available before. Sometimes new-to-
the-world products are so innovative they create a fundamental change in the marketplace and
are known as disruptive innovation.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

54) New-to-the-world products are products that ________.

A) have been available before but are recycled
B) are innovative but only slightly different than previous products
C) have not been available before their introduction to the market
D) are not disruptive to the marketplace
E) make existing products more desirable

Answer: C
Explanation: Most people would define new as a product that has not been available before or
bears little resemblance to an existing product, and one type of new product is actually referred
to as a new-to-the-world product because it has not been available before.
Difficulty: 1 Easy
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

23
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
55) When new-to-the-world products are better, faster versions of existing products that target,
for the most part, existing customers, then these products are described as ________.
A) specialized goods
B) core products
C) convenience goods
D) sustaining innovations
E) disruptive innovations

Answer: D
Explanation: Sustaining innovations are newer, better, faster versions of existing products that
target, for the most part, existing customers. Sustaining innovations can be revolutionary by
taking the market in a new direction.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

56) Once a product has been developed and is on the market, the company can extend the
product by ________.
A) creating additions to existing product lines
B) creating new names for the same products
C) developing persuasive advertisements
D) upgrading or modifying existing products
E) creating a fundamental change in the marketplace

Answer: A
Explanation: Once a product has been developed and on the market, the company can extend
the product by creating additions to existing product lines. For years, Coca-Cola has added new
products to the Coke line, first with Diet Coke in the early 1980s and now with many different
Coke-branded products including Coke Zero. These products are also available in various sizes
and packaging, giving Coke many different product items.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

24
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
57) When products like cell phones are promoted as a safety device for working women and
moms, this demonstrates that one way to find "new" markets is to ________.
A) develop product penetration strategies
B) sell added benefits to the existing customers
C) reposition the existing products targeting different customer segments
D) alter the cost so more people can afford the product
E) create advertisements targeting working women and moms

Answer: C
Explanation: A "new" product approach is to reposition existing products to target new
markets. The cell phone market used this strategy successfully to introduce cell phones in the
mid-1990s. Originally cell phone service providers positioned the phones as a tool for business
people or as a safety tool targeting individuals such as working women and moms. As the
product become more widely adopted, the positioning of the product changed to become an
important work tool. As the market for cell phones expands, the positioning has evolved to
include younger users. Cell phones are the dominant communication device for teenagers, and
phones have been created for kids as young as seven.
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

58) Customers view new products much differently than companies view them. Customers care
only if a product is ________.
A) new to their retail store
B) new to them
C) offered through a new outlet
D) offered online instead of at a brick-and-mortar store
E) repositioned to target new markets

Answer: B
Explanation: While the company follows a specific strategy in creating a new product, the
customer is unaware and, in reality, often does not really care about how the product arrived in
the marketplace. The customer's perspective is much more narrow and self-directed. The
customer is most interested in an answer to the fundamental question—is this product new to
me?
Difficulty: 2 Medium
Topic: Product Life Cycle
Learning Objective: 08-05 Recognize the importance of new product development to long-term
success.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

25
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
59) External sources of generating product ideas include ________.
A) employees from R&D
B) marketing executives
C) customer service representatives
D) customers
E) salespeople

Answer: D
Explanation: Internal sources include employees from R&D, marketing, and manufacturing.
Key employees know both the capabilities of the company and the needs of the market. An
excellent source of ideas comes from individuals and organizations not directly connected with
the company. Customers and distributers are external sources of product ideas.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

60) Internal sources of generating product ideas include ________.

A) existing customers
B) distributers
C) company salespeople
D) retailers
E) wholesalers

Answer: C
Explanation: People who work directly with customers are another source of ideas. As
salespeople, customer service representatives, and others interact directly with customers, it is
possible to identify new-product ideas. Often these ideas are incremental changes to existing
products that solve a particular problem; however, occasionally the customer challenge requires
a truly innovative solution.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

26
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
61) Many organizations are too small to have the resources for a national sales force to help
discover new-product ideas. As a consequence, they often use ________ as a link between the
customer and company.
A) distributors
B) parts manufacturers
C) logistics companies
D) server farms
E) suppliers

Answer: A
Explanation: Distributors are a good source for new-product ideas particularly when they are
the primary link between the customer and the company. Small organizations generally do not
have the resources for a national sales force and use distributors in many markets.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

62) While screening and evaluating ideas, a go-to-market mistake happens when ________.
A) a good idea is prematurely eliminated during the screening process
B) a company fails to stop a bad product idea from moving into product development
C) a company uses only internal sources to generate product ideas
D) a company uses only external sources to generate product ideas
E) a good idea that involves high costs is implemented

Answer: B
Explanation: Ideas need to be screened and evaluated as quickly as possible. While screening
and evaluating ideas, a go-to-market mistake happens when a company fails to stop a bad
product idea from moving into product development.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

27
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
63) While screening and evaluating ideas, a stop-to-market mistake happens when ________.
A) a bad idea is allowed to make it to market
B) a company decides to market a product that has a fatal flaw
C) a good idea is pushed forward without knowing the ROI of its execution
D) a good idea is prematurely eliminated during the screening process
E) a company fails to stop a bad product idea from moving into product development

Answer: D
Explanation: Ideas need to be screened and evaluated as quickly as possible. A stop-to-market
mistake happens when a good idea is prematurely eliminated during the screening process.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

64) In the context of criteria used to prioritize product ideas, time to market refers to the time
taken to ________.
A) create awareness about a product among new market segments
B) generate product ideas using internal forces
C) develop and get the product to market
D) get the product through the introduction stage to the growth stage
E) analyze market conditions to forecast sales

Answer: C
Explanation: The criteria used to prioritize the ideas vary by company but often include: time to
market (how long it will take to develop and get the product to market), ROI, and new product fit
with overall company product portfolio.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

28
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
65) The first step in the new-product development process is to ________.
A) define the market opportunity
B) generate new-product ideas
C) define the product potential
D) develop the product
E) conduct business case analysis

Answer: B
Explanation: The first step in the new-product development process, identify potential product
opportunities, has two specific tasks. First, companies must generate sufficient new-product
ideas. Second, ideas need to be evaluated before resources are committed to development.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

66) Which of the following is an overall evaluation of a product and usually assesses the
product's probability of success?
A) business case analysis
B) portfolio review
C) trend prediction
D) situation analysis
E) SWOT analysis

Answer: A
Explanation: The business case analysis is an overall evaluation of a product and usually
assesses the product's probability of success. It is often done when there are changes to an
existing marketing plan, such as an increase in the marketing communications budget.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

29
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
67) New purchases of new products are called ________ purchases.
A) original
B) subliminal
C) replacement
D) trial
E) repeat

Answer: D
Explanation: New purchases are first-time sales. With new products, these sales are called trial
purchases. This is also calculated as the trial rate (how many individuals in a particular target
market have tried the product).
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

68) Estimating total demand is a function of three separate purchase situations, which are
________ purchases.
A) new, ideal, and impulse
B) new, repeat, and replacement
C) new, repeat, and impulse
D) new, impulse, and replacement
E) new, convenient, and impulse

Answer: B
Explanation: Estimating total demand is a function of three separate purchase situations, which
includes new, repeat, and replacement purchases.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

30
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written consent of McGraw-Hill Education.
69) In the context of product testing, beta testing is designed to ________.
A) encourage customers to evaluate and provide feedback on a prototype
B) let engineers test a product's performance
C) give fake information to competitors about a new product
D) allow product specialists to check the quality of a product
E) clarify the basic operationalization of a product

Answer: A
Explanation: At some point, the company will want potential customers to begin testing the
product. Beta testing encourages customers to evaluate and provide feedback on the prototype.
The product may be close to the final configuration but beta tests allow for further product
testing and refinement.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

70) Market testing of a new product can take a long time, and this can result in ________.
A) competitors being able to develop marketing strategies to counter a product launch
B) the company losing the excitement of a new product
C) the product becoming obsolete by the time it reaches the target market
D) online guerrilla tactics by competitors that will disrupt the sales cycle of the product
E) customers forming negative opinions about the product

Answer: A
Explanation: Market testing takes time and competitors can take advantage to enhance their
product mix or develop marketing strategies to counter a successful product launch.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

31
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written consent of McGraw-Hill Education.
71) For products designed for business markets, market testing is ________.
A) identical to the testing in B2C market
B) smaller in scope and involves fewer individuals and companies
C) larger in scope and involves more individuals and companies
D) insignificant in the new-product development process
E) not conducted for sustainable innovations

Answer: B
Explanation: Products designed for business markets are tested differently than their consumer
product counterparts. Essentially, the tests are smaller in scope and involve fewer individuals and
companies; however, they are no less important in the new-product development process.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

72) Which of the following helps clarify the basic operationalization of a product during product
testing, such as the physical characteristics and features?
A) alpha testing
B) beta testing
C) business case analysis
D) innovation diffusion process
E) concept testing

Answer: A
Explanation: As a product's characteristics are being finalized, most of the testing is done
internally by engineers, product specialists, and other employees. This type of testing, called
alpha testing, helps clarify the basic operationalization of the product such as the physical
characteristics and features.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

32
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
73) The rate at which new products become accepted is known as the ________ process.
A) variance
B) sensitivity
C) adoption
D) steering
E) diffusion

Answer: C
Explanation: The rate at which products become accepted is known as the adoption process.
Marketers are interested in knowing the rate at which a product will be adopted into a market as
well as the timeline.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

74) An individual moves through five stages before adopting a product. The five stages include
all of the following EXCEPT ________.
A) awareness
B) interest
C) validation
D) evaluation
E) adoption

Answer: C
Explanation: An individual moves through five stages before adopting a product: awareness,
interest, evaluation, trail, and adoption. Marketers, particularly those involved in a new-product
launch, want to move consumers through the process as quickly as possible.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

33
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written consent of McGraw-Hill Education.
75) An individual purchases a product for the purpose of making a value decision. He or she is in
the ________ stage of the product adoption process.
A) awareness
B) interest
C) trial
D) evaluation
E) adoption

Answer: C
Explanation: An individual moves through five stages before adopting a product. During the
fourth stage—trial—a person purchases a product for the purpose of making a value decision.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

76) ________ is the focus of a product launch marketing plan, because if you can get consumers
to use the product once, you can win them over with superior product design, features, and value.
A) Adoption
B) Trial purchase
C) Interest
D) Evaluation
E) Awareness

Answer: B
Explanation: An individual moves through five stages before adopting a product: awareness,
interest, evaluation, trail, and adoption. Trial purchase is the focus of a product launch marketing
plan because if you can get consumers to try the product, you can win them over with superior
product design, features, and value.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

34
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written consent of McGraw-Hill Education.
77) The innovation diffusion process is how long it takes a product to move from ________.
A) introduction to growth
B) awareness to interest
C) trial to adoption
D) first purchase to last purchase
E) growth to maturity

Answer: D
Explanation: A product can be in the market for a long time and still be considered an
innovation to an individual consumer. The innovation diffusion process is how long it takes a
product to move from first purchase to last purchase (the last set of users to adopt the product).
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

78) An individual moves through stages before adopting a product. During the interest stage,
consumers ________.
A) evaluate the product for trial purchase
B) purchase the product for the purpose of making a value decision
C) seek out added information about a product for further evaluation
D) feel, see, and touch the product
E) purchase the product with the intent of becoming a dependable user

Answer: C
Explanation: An individual moves through five stages before adopting a product. During the
interest stage, consumers receive additional information (advertising, word of mouth) and be
motivated to seek out added information for further evaluation.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

35
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
79) An individual moves through stages before adopting a product. During the awareness stage,
consumers ________.
A) find they have a passion for the product
B) receive additional information and be motivated to seek out added information for further
evaluation
C) know of the product, but have insufficient information to move forward through the adoption
process
D) purchase the product for the purpose of making a value decision
E) purchase the product with the intent of becoming a dependable user

Answer: C
Explanation: An individual moves through stages before adopting a product. During the
awareness stage, consumers know of the product, but have insufficient information to move
forward through the adoption process. Marketers, particularly those involved in a new-product
launch, want to move consumers through the process as quickly as possible.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

80) During the evaluation stage of the product adoption process, consumers ________.
A) seek out information to further define the product
B) get to know of the product, but have insufficient information to move forward through the
adoption process
C) purchase the product for the purpose of making a value decision
D) combine all information and assess the product for trial purchase
E) purchase the product with the intent of becoming a dependable user

Answer: D
Explanation: An individual moves through five stages before adopting a product. During the
evaluation stage of the product adoption process, consumers combine all information (word of
mouth, reviews, advertising) and evaluate the product for trial purchase.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

36
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
81) During which stage do consumers purchase a product with the intent of becoming a
dependable user?
A) awareness
B) adoption
C) trial
D) evaluation
E) interest

Answer: B
Explanation: An individual moves through five stages before adopting a product. During the
adoption stage, consumers purchase a product with the intent of becoming a dependable user.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

82) Among the five groups of adopters, product avoiders who want to evade adoption as long as
possible are known as ________.
A) early adopters
B) the early majority
C) innovators
D) the late majority
E) laggards

Answer: E
Explanation: Product avoiders who want to evade adoption as long as possible are known as
laggards. Resistant to change, they will put off the purchase until there is no other option.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

37
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written consent of McGraw-Hill Education.
83) ________ are product enthusiasts who enjoy being the first to try and master a new product.
A) Innovators
B) Early adopters
C) Early majority
D) Late majority
E) Laggards

Answer: A
Explanation: Innovators are product enthusiasts who enjoy being the first to try and master a
new product.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Technology
Accessibility: Keyboard Navigation

84) Among the five groups of adopters, laggards are people who ________.
A) enjoy being the first to try and master a new product
B) put off purchasing until there is no other option
C) are price-sensitive and look for simplified products
D) seek out new products consistent with their personal self-image
E) are willing to pay the premium price for a product

Answer: B
Explanation: Laggards are product avoiders who want to evade adoption as long as possible.
Resistant to change, they will put off the purchase until there is no other option.
Difficulty: 2 Medium
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

38
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written consent of McGraw-Hill Education.
85) Which group of adopters include prime candidates for beta testing and represent a good
source of feedback late in the product development process or early in the product launch phase?
A) innovators
B) laggards
C) early adopters
D) late majority
E) early majority

Answer: A
Explanation: Innovators are product enthusiasts who enjoy being the first to try and master a
new product. Individuals in this group are prime candidates for beta testing and represent a good
source of feedback late in the product development process or early in the product launch phase.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

86) Product followers who purchase older generation models with lower prices and fewer
features are called ________.
A) laggards
B) early adopters
C) innovators
D) the late majority
E) the early majority

Answer: D
Explanation: Late majority refers to product followers who are price-sensitive and risk-averse.
They purchase older generation or discontinued models with lower prices and fewer product
features.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

39
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written consent of McGraw-Hill Education.
87) Among the five groups of adopters, which group is considered critical to long-term success?
A) laggards
B) early adopters
C) late majority
D) innovators
E) early majority

Answer: E
Explanation: The early majority group is considered critical to long-term success as they take
the product into the mainstream.
Difficulty: 1 Easy
Topic: The New-Product Development Process
Learning Objective: 08-07 Identify how new products become diffused in a market.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

88) Explain the four categories of consumer goods and give an example of each.

Answer: Frequently purchased, relatively low-cost products for which customers have little
interest in seeking new information or considering other options and rely heavily on prior brand
experience and purchase behavior are called convenience goods. These products include most
items people buy regularly such as toiletries, gasoline, and paper products.

Products that require consumers to do more research and compare across product dimensions
such as color, size, features, and price are called shopping goods. Consumer products that fall
into this category include clothes, furniture, and major appliances such as refrigerators and
dishwashers.

Specialty goods are a unique purchase made based on a defining characteristic for the consumer.
The characteristic might be a real or perceived product feature such as Apple iPhone's easy user
interface or brand identification like Porsche's reputation for building sports cars.

The final categories of goods, unsought goods, are products that consumers do not seek out and,
indeed, often would rather not purchase at all. Insurance, particularly life insurance, is not a
product people want to purchase.

Examples will vary.

Difficulty: 3 Hard
Topic: The Characteristics of a Product
Learning Objective: 08-02 Define the characteristics of a product.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

40
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89) Explain the difference between a product line and a product mix, Give an example of each.

Answer: A product line is a group of products linked through usage, customer profile, price
points, and distribution channels or needs satisfaction. Within a product line, strategies are
developed for a single product, but also for all the products in the line.

Combining all the products offered by a company is called the product mix. Small, start-up
companies frequently have a relatively limited product mix, but, as companies grow, their list of
products grows as well.

Examples will vary.

Difficulty: 3 Hard
Topic: The Characteristics of a Product
Learning Objective: 08-03 Recognize how product strategies evolve from one product to many
products.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

90) Choose a product and explain how it moves through the product life cycle. Include the
objective of each phase, the targeted customers, and product strategies.

Answer: Answers will vary.

Difficulty: 3 Hard
Topic: Product Life Cycle
Learning Objective: 08-04 Understand the life of a product and how product strategies change
over time.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

41
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written consent of McGraw-Hill Education.
91) When consumer product market tests are created, what four key decisions must be made, and
why?

Answer:
1. Where: The location of the market test is based on how well it reflects the potential target
markets. Most market tests involve somewhere between two and five cities to mitigate regional
differences in purchase patterns (if there are any).

2. How long: Most test markets run less than a year. The test should be long enough to include
several purchase cycles. With many consumer products, purchase cycles are relatively short
(days or weeks) so there is less need for a long market test.

3. Data: Critical information needed to make necessary decisions must be identified.

Management frequently wants to know how long it takes for the product to move through the
distribution system, tracking the product from manufacturing plant through to the point of sale
(matching inventory as it leaves the plant with store sales). In addition, buyers are interviewed on
their product experience.

4. Decision criteria: Metrics for further action must be identified. At this stage it is difficult to
pull a product, but if the product fails in the market test, management is faced with a difficult
decision—drop the product or send it back for major redesign. If the product is a success, then
the product launch decision is much easier.
Difficulty: 3 Hard
Topic: The New-Product Development Process
Learning Objective: 08-06 Understand the new product development process.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

42
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written consent of McGraw-Hill Education.