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Basic Marketing, 10th Canadian Edition
Basic Marketing: A Global Managerial Approach, 10/e
Stanley J. Shapiro
Kenneth B. Wong, Queens School of Business
William D. Perreault, University of North Carolina
E. Jerome McCarthy, Michigan State University

Product Management and New-Product Development

Quiz Questions


The sales and profits of an individual product may not follow the life cycle pattern.

During the sales decline stage of the product life cycle, no firm can earn a profit.

A new product is one that is new in any way for the company concerned.

If an individual is injured by a defective or unsafely designed product, the seller's legal obligation to pay damages is called product liability.

Category managers have exactly the same role as brand managers.

During the introduction stage of the product life cycle:
A)promotion is likely to be needed to increase primary demand.
B)"me too" products quickly take market share away from the innovator.
C)most products achieve intensive distribution.
D)industry profits are at their highest.
E)none of the above.

During the introduction stage, what would hinder acceptance of a new product?
A)consumers may not see the new product as offering a superior alternative to whatever they are currently using.
B)the new product may not be compatible with the buyer's values.
C)problems communicating or demonstrating the new product's benefits.
D)risk in buying something for the first time.
E)all of the above.

During the market growth stage of the product life cycle:
A)the industry experiences the smallest profits.
B)the market begins to fragment into sub-markets or segments.
C)industry sales grow slowly.
D)industry profits fall, then rise.
E)all of the above.

What is the most important reason why industry sales level off in the market maturity stage of the product life cycle?
A)aggressive competitors entering the markets.
B)price cutting.
C)less efficient firms leaving the market.
D)pool of potential users is exhausted.
E)persuasive promotion.

Rallo Company has seen most of its competitors drop out of its product market due to declining sales and profits. However Rallo still has much demand for its products from a small group of loyal customers. In which stage of the product life cycle is this product market?
A)market introduction.
B)market growth.
C)market development.
D)market maturity.
E)sales decline.

The length of a product's life cycle:
A)may be as short as 90 days.
B)may be as long as 100 years.
C)varies widely across products.
D)depends on the ease of entry to the market for competitors.
E)all of the above.

Regarding product life cycles, a good marketing manager knows that:
A)once a market goes into sales decline, oligopoly conditions set in.
B)entirely different target markets may be involved at different stages of the product life cycle.
C)industry profits are increasing well after sales start to decline.
D)a company's marketing mix usually should be kept constant over the product life cycle.
E)all of the above.

A pioneer in a product market may have the opportunity to establish industry norms, which may include:
A)selection of distribution channels.
B)earning monopoly profits.
C)losing money.
D)research and development.
E)removing barriers to entry.

Which of the following gives the correct order of the steps in the new product development process?
A)development, idea generation, screening, idea evaluation, commercialization.
B)idea generation, idea evaluation, development, screening, commercialization.
C)commercialization, idea generation, idea evaluation, screening, development.
D)idea generation, screening, idea evaluation, development, commercialization.
E)screening, idea generation, idea evaluation, development, commercialization.

Which of the following is an effective source of ideas at the idea generation stage of the new product development process?
A)its R & D department.
B)customer complaints.
C)competitors' products.
D)lead users of the product.
E)all of the above.

Generating "socially responsible" new product ideas:
A)is easy for new product planners.
B)is promoted by consumer groups.
C)reduces the long-term welfare of consumers.
D)is unprofitable and should not be done.
E)is done by all companies.

Concept testing:
A)involves usage tests by potential customers.
B)seeks potential customers' reactions and attitudes toward new product ideas—before actual models are developed.
C)takes place during the screening step of the new product development process.
D)is the last step before the commercialization of a new product idea.
E)both c and d.

Regarding the new product development process:
A)all product ideas should go through market testing before being accepted or rejected.
B)a gradual "roll out" should be used to cut promotion costs.
C)screening criteria should be both qualitative and quantitative.
D)screening based on consumer welfare is never used.
E)all of the above.

According to Industry Canada a "new" product:
A)can only be called "new" for 12 months.
B)can only be called "new" for 6 months.
C)must be changed from the previous product in a functionally insignificant respect.
D)is harmful to competition.
E)is a fast-changing product.

Product managers:
A)no longer work with advertising because of the rush of everyday business.
B)are increasingly taking responsibility for their products' profitability.
C)are designed to replace sales managers.
D)do not work in services.
E)none of the above.