Chapter 8 Product Planning and Development Multiple Choice Questions 1. According to the textbook's broad definition of a product, which of the following is an example of a product? A) the Iowa State Fair B) a tax referendum C) a performance by the community symphony D) a book by John Grisham E) all of the above Answer: E Type: Application Page: 206 2. According to the textbook's broad definition of a product, which of the following is an example of a product? A) an ice cream cone B) the airplane flight from Fresno, California, to Baltimore, Maryland C) tickets to a Green Bay Packers football game D) a mayoral candidate E) all of the above Answer: E Type: Application Page: 206 3. The basic factor separating consumer products and business products is: A) whether the product will be used in the manufacture of another product. B) whether the product is sold by a wholesaler or a retailer. C) whether the product is sold in a direct or an indirect channel of distribution. D) the ultimate use intended for the product in its present form. E) the cost of the product. Answer: D Type: Comprehension Page: 208 4. Which of the following is an example of a consumer product? A) a bedspread bought by the motel owner to replace one that was ruined by a motel guest B) a case of Gatorade purchased for the school's track team to drink C) Mrs. Wilson's purchase of a new vacuum cleaner to clean her home D) a tape dispenser to be used to hang "sale" signs in a small grocery store E) Lenox plates purchased to serve food on at a restaurant Answer: C Type: Application Page: 202 315 Chapter 8 Product Planning and Development 5. Which of the following is an example of a consumer product? A) a video on flower arranging targeted to owners of retail florists B) light bulbs to replace those in a Department of Transportation road sign C) tickets for an entire fifth grade in an elementary school to attend a showing of The Nutcracker Suite D) a mother's purchase of a case of Dannon yogurt to feed her three small children E) a box of tongue depressors purchased for use in a physician's office Answer: D Type: Application Page: 202 6. Which of the following is an example of a business product? A) a biography purchased by a high school teacher who wants to have something good to read on her vacation B) a bottle of aspirin bought by a mother who is dreading the start of summer vacation C) a case of champagne purchased by a caterer to serve at a wedding rehearsal dinner D) a student's subscription to The Wall Street Journal E) a dog collar bought by a veterinarian for her own dog Answer: C Type: Application Page: 208 7. Which of the following is an example of a business product? A) a gross of linen tablecloths that a caterer buys to use at wedding receptions B) a dozen long-stem roses bought by a husband as a birthday gift for his wife C) a can of liquid starch bought by a man who likes to wear crisply ironed shirts D) a teenager's purchase of a pair of designer jeans E) paint bought by a hardware store owner to paint his own house Answer: A Type: Application Page: 208 8. Which of the following is an example of a consumer product? A) tomato plants purchased by a farmer who will sell the vegetables to his local supermarket B) motor oil purchased by a mechanic for an old Corvair he is fixing up for a customer C) ribbon, lace, buttons, and fabric purchased as stock for a crafts store D) a dentist's purchase of audio tapes to play in her office to soothe nervous patients E) a plane ticket bought by a young executive for a vacation trip to Tokyo Answer: E Type: Application Page: 208 316 Chapter 8 Product Planning and Development 9. The subdivision of consumer goods into various categories is based on: A) price. B) types of products. C) how the goods were manufactured. D) consumer buying behavior. E) how the goods will be distributed. Answer: D Type: Comprehension Page: 208 10. Which of the following is the best example of a convenience good? A) radial tires B) Shania Twain's newest CD C) a Twix candy bar D) a Timex watch E) a swimsuit Answer: C Type: Application Page: 202-209 11. Which of the following is the best example of a convenience good? A) leather driving gloves B) Microsoft Works software C) a wallet D) a Bic pen E) a silk flower arrangement Answer: D Type: Application Page: 208-209 12. Which of the following is LEAST likely to be thought of by its buyers as a convenience good? A) flashlight batteries B) radial tires C) a copy of TV Guide D) thumb tacks E) Tic-Tac breath mints Answer: B Type: Application Page: 208-209 317 Chapter 8 Product Planning and Development 13. Which of the following is LEAST likely to be thought of by its buyers as a convenience good? A) National Enquirer newspaper B) a tennis racket C) adhesive tape D) fingernail clippers E) Wrigley's chewing gum Answer: B Type: Application Page: 208-209 14. Which of the following statements about convenience goods is true? A) Convenience products typically have a low unit price. B) By definition, convenience goods are purchased infrequently. C) Convenience products typically are large and bulky. D) Retailers do most of the promotion for convenience goods. E) Like any other product, convenience goods are significantly affected by fad and fashion. Answer: A Type: Comprehension Page: 208-209 15. Convenience goods: A) are promoted by both the manufacturer and the retailer. B) are typically purchased infrequently. C) are usually sold without any packaging. D) have a low gross margin. E) are seldom sold in point-of-purchase displays. Answer: D Type: Definition Page: 208-209 16. On the side of each Energizer battery is a tester that can tell the user immediately if the battery is good. In this way, the manufacturer of Energizer batteries distinguishes its batteries from others on the market. It is hoping consumers will become more brand conscious and not treat batteries as if they were: A) convenience goods. B) specialty goods. C) shopping goods. D) accessory equipment. E) unsought goods. Answer: A Type: Application Page: 208-209 318 Chapter 8 Product Planning and Development 17. As a result of the way in which convenience products must be marketed, their manufacturers: A) rarely advertise because of the expense involved. B) seldom employ wholesalers in the distribution of their products. C) find it too expensive to sell direct to consumers. D) are interested in selling their products in a limited number of retail outlets. E) customarily sell their products through their own retail stores. Answer: C Type: Comprehension Page: 209 18. In comparison to shopping goods, convenience goods usually: A) use point-of-purchase displays. B) sell at higher unit prices. C) have a higher gross margin. D) are purchased less frequently. E) have a lower stock turnover. Answer: A Type: Comprehension Page: 208-210 19. The promotion of convenience goods is: A) a marketing function shared by their manufacturers, their wholesalers, and their retailers. B) mostly done by their manufacturers. C) always done by their individual retailers. D) primarily done by middlemen. E) never done by their manufacturers. Answer: B Type: Comprehension Page: 209 20. Shopping goods: A) are typically purchased infrequently. B) are only promoted by the manufacturer. C) have a rapid stock turnover. D) have a low gross margin. E) require the consumer to devote very little time to shopping. Answer: A Type: Definition Page: 209 319 Chapter 8 Product Planning and Development 21. Which of the following is the best example of a shopping good? A) a ream of computer paper B) a dozen organic eggs C) a microwave oven D) a bottle of shampoo E) a ticket to Adam Sadler's latest movie Answer: C Type: Application Page: 209-210 22. Which of the following statements about shopping goods is true? A) Individual retailers typically carry one and only one brand of a shopping good. B) Shopping goods typically have a low unit price. C) Consumers use comparison shopping when purchasing a shopping good. D) Shopping goods are not greatly affected by changes in fashion and fad. E) Manufacturers have sole promotional responsibility for shopping goods. Answer: C Type: Comprehension Page: 209-210 23. Which of the following is the best example of a shopping good? A) breath mints B) Good Housekeeping magazine C) a dozen thank-you cards D) a business suit E) paper napkins Answer: D Type: Application Page: 209-210 24. Which of the following is the best example of a shopping good? A) Rolex watch B) mattress set C) fingernail file D) dog food bowl E) fan belt for car engine Answer: B Type: Application Page: 209-210 320 Chapter 8 Product Planning and Development 25. Which of the following is NOT an example of a shopping good? A) Easter candy B) a computer C) a car radio/CD player D) a man's suit E) a television set Answer: A Type: Application Page: 209-210 26. Which of the following is an example of a shopping good? A) small potted African violet plant B) a clothes dryer C) brownie mix D) needle-nose pliers E) box of business-sized envelopes Answer: B Type: Application Page: 211-212 27. Specialty goods: A) have a high stock turnover. B) have a high gross margin. C) usually require the buyer to engage in some comparison shopping. D) often use point-of-purchase displays. E) require very little time be spent on planning the purchase. Answer: B Type: Definition Page: 210-211 28. Which of the following is the best example of a specialty good? A) an exercise bicycle B) fat-free ice cream C) an Armani suit D) potatoes E) nail clippers Answer: C Type: Application Page: 210-211 321 Chapter 8 Product Planning and Development 29. Which of the following is the best example of a specialty good? A) a Steinway piano B) long-stem red roses C) a tote bag D) light bulbs E) a bathroom shower curtain Answer: A Type: Application Page: 210-211 30. Every Thursday, the Atlanta Journal-Constitution runs a section called "Buyer's Edge." Readers of the newspaper write in and ask for help finding products. Three women wrote to the paper asking for help finding a hypoallergenic moisturizing lotion called Allercreme. It seems that it was the only brand they could use without breaking out. They had looked in a number of stores and had not located it. For these women Allercreme Petal lotion is an example of a: A) convenience good. B) shopping good. C) specialty good. D) impulse good. E) generic product. Answer: C Type: Application Page: 210-211 31. Consumer brand preferences are strongest for: A) convenience goods. B) shopping goods. C) specialty goods. D) impulse goods. E) generic products. Answer: C Type: Definition Page: 210-211 32. In the marketing of specialty goods,: A) retailers absorb all advertising costs. B) wholesalers are always important. C) few retail outlets are used. D) retailers have complete control over how the advertising for the good is handled. E) indirect distribution channels are common. Answer: C Type: Comprehension Page: 210-211 322 Chapter 8 Product Planning and Development 33. Which of the following products is LEAST likely to be considered an unsought product by the average consumer? A) a subscription to the local newspaper B) toilet paper C) a bicycle D) a television set E) a loaf of bread Answer: B Type: Application Page: 211 34. Which of the following products is the BEST example of an unsought product for the average member of Generation X? A) sheets and towels B) burial insurance C) a plane ticket to Orlando, Florida D) a home equity loan E) replacement storm windows Answer: B Type: Application Page: 211 35. Because most dog owners do not know it exists, Sun Spot, a spray that protects dogs from ultraviolet rays, is best categorized as a(n) _____ good. A) unsought B) impulse C) specialty D) convenience E) shopping Answer: A Type: Application Page: 211 36. If people in Africa where malaria is a serious problem do not know the existence of a new anti-malarial drug, than it is a(n) _____ good. A) unsought B) impulse C) specialty D) convenience E) shopping Answer: A Type: Application Page: 211 323 Chapter 8 Product Planning and Development 37. One of the problems with fluorescent tubes is that they sometimes will shatter, creating quite a mess. The shattering bulbs also pose a real danger in many situations. There is a shatterproof fluorescent tube on the market, but because most people don't know such a product is available, the shatterproof light falls into the category of _____ good. A) unsought B) impulse C) specialty D) convenience E) shopping Answer: A Type: Application Page: 211 38. By applying knowledge of the consumer goods classifications, an astute marketer could tell you that _____ presents the biggest marketing challenge for its marketers. A) prepaid burial insurance B) re-releases of songs by former country music stars like Hank Williams and Patsy Cline C) leftover Easter candy the week after Easter D) arts and crafts supplies E) Corvettes made before 1968 Answer: A Type: Application Page: 211 39. The two main categories of raw materials are: A) all agricultural products and minerals. B) minerals and land. C) animal products and minerals. D) crops and minerals. E) agricultural products and products found in their natural state. Answer: E Type: Definition Page: 211-213 40. As a type of business good, raw materials: A) have very little standardization. B) are purchased in small quantities. C) are typically sold directly from the producer to the business user. D) always have very short negotiation periods. E) must be supported with after-the-sale service. Answer: C Type: Definition Page: 211-213 324 Chapter 8 Product Planning and Development 41. Which of the following is an example of a raw material for a company that produces jams and jellies? A) vats used in manufacturing B) pectin used for thickening the jelly C) jars in which the jams and jellies are sold D) refined sugar E) fruit Answer: E Type: Application Page: 211-213 42. Which of the following is an example of a raw material for a bakery? A) the pans used for baking the bread B) the wooden boards used for kneading bread C) the talent of the bakery chef D) the natural honey it uses as a glaze E) the dishwashing soap used for cleaning bread pans Answer: D Type: Application Page: 211-213 43. Which of the following statements about the marketing of raw materials in their natural state is true? A) The supply of these products is limitless. B) The supply of these products is easily replenished. C) Many small producers are involved. D) These products have a high unit value. E) Standardization and grading are commonplace. Answer: E Type: Comprehension Page: 211-213 44. Which of the following statements about the marketing of agricultural products as a class of raw materials is true? A) The supply of these products is uniform. B) The source of these products is nearly always close to its markets. C) These products are typically perishable. D) A few large producers are involved in their production. E) Product differentiation is a key marketing strategy for agricultural products. Answer: C Type: Comprehension Page: 212 325 Chapter 8 Product Planning and Development 45. As a type of business good, fabricating parts and materials: A) are purchased in large quantities. B) require very little, if any, promotion. C) do not usually require an advance buying contract. D) have high unit prices. E) are not standardized. Answer: A Type: Definition Page: 213 46. Which of the following is an example of a fabricating part for a manufacturer of baseball uniforms? A) the buttons that go on the front of the shirts B) the sewing machines used to make the uniforms C) the labor used to manufacture the uniform D) the cardboard boxes used to store and ship the uniforms E) all of the above Answer: A Type: Application Page: 213 47. Which of the following is an example of a fabricating material for a manufacturer of designer sweaters? A) buttons B) rhinestones C) knitting machines D) wool yarn E) packaging for shipping to distributors Answer: D Type: Application Page: 213 48. Which of the following examples are best classified as fabricating parts and materials? A) flea spray, dog shampoo, and leashes used in a dog grooming business B) tires, batteries, and blades used to manufacture lawn mowers C) gas, oil, and antifreeze used by a taxi driver D) seed, fertilizer, and herbicides used by a farmer E) computer software, printers, and monitors used by a statistician Answer: B Type: Application Page: 213 326 Chapter 8 Product Planning and Development 49. Which of the following is an example of fabricating parts and materials used by a book publisher? A) a copying machine B) spellchecking software C) desks, filing cabinets, and office chairs D) computer E) paper and ink for printing Answer: E Type: Application Page: 213 50. Harriet & Henderson manufactures socks. It buys yarn by the 100-pound lot. This yarn in spun into the fabric from which the company makes its socks. For Harriet & Henderson yarn is an example of a(n): A) fabricating material. B) operating supply. C) installation. D) accessory equipment. E) fabricating part. Answer: A Type: Application Page: 213 51. Which of the following statements about the marketing of fabricating materials and parts is true? A) Long channels of distribution are normally used. B) Quantities purchased are typically small. C) Buying decisions are usually made on the basis of price and the service provided by the seller. D) Middlemen are never used. E) Most fabricating materials and parts do not undergo any further processing. Answer: C Type: Comprehension Page: 213 52. Which of the following statements about fabricating parts and materials is true? A) Tires for cars and batteries for engines are examples of fabricating parts. B) Brand is generally the most important consideration when purchasing fabricating products. C) Most fabricating products are marketed by wholesalers. D) Microprocessors for computers are an example of fabricating materials. E) Fabricating parts and materials are usually purchased in large quantities. Answer: A Type: Comprehension Page: 213 327 Chapter 8 Product Planning and Development 53. Artemisia is an herb that is an essential ingredient in a new drug that is extremely effective anti-malarial drug. As a type of business good, artemisia is a(n): A) installation. B) operating supply. C) accessory material. D) facilitating material. E) shopping good. Answer: D Type: Application Page: 213 54. As a type of business good, installations: A) have a limited supply. B) have a low unit price. C) are purchased frequently. D) can be custom-made. E) do not require postsale service. Answer: D Type: Definition Page: 213 55. The characteristics of installations that differentiate them from other categories of business goods is that they: A) do not depreciate. B) directly affect the scale of operation for the buyer. C) are always classified as modified rebuys. D) are unaffected by technological obsolescence. E) require a totally different promotional mix. Answer: B Type: Comprehension Page: 213-214 56. Wholesalers are LEAST likely to be used in the marketing of: A) operating supplies. B) consumer goods. C) accessory equipment. D) installations. E) fabricating materials. Answer: D Type: Comprehension Page: 213-214 328 Chapter 8 Product Planning and Development 57. Which of the following is an example of an installation? A) a dump truck B) a movable display unit for a brand of soft drink C) a charcoal grill D) a farmer's silo used to store his annual wheat harvest E) all of the above Answer: D Type: Application Page: 213-214 58. Which of the following is the best example of an installation? A) a walk-in refrigerator used to keep flowers fresh B) the wire rack displays used in the children's department of a department store C) a parking lot for a shopping center D) a moveable sign for in front of a convenience store E) the popcorn machine in a theater Answer: C Type: Application Page: 213-214 59. As a type of business good, accessory equipment: A) typically has a short life. B) requires no promotion. C) is completely standardized. D) uses a direct channel of distribution. E) is usually purchased in small quantities. Answer: E Type: Definition Page: 214 60. Which of the following is an example of accessory equipment for a store that sells breads and pastries? A) bread pans B) cash register C) ovens for baking D) yeast, bread, and sugar E) uniforms for employees Answer: B Type: Application Page: 214 329 Chapter 8 Product Planning and Development 61. Which of the following is an example of accessory equipment for a bookstore? A) the customer parking lot B) books for a window display C) book shelves D) boxes in which to return unsold books E) a receipt book Answer: C Type: Application Page: 214 62. Which of the following is an example of accessory equipment for a taxidermy company that prepares trophy animals for display? A) formaldehyde for preserving B) glass eyes C) a receipt book D) a refrigerating unit E) cleaning rags Answer: D Type: Application Page: 214 63. Which of the following statements about accessory equipment is true? A) The market for accessory equipment is generally confined to medium- and largesize organizations. B) Manufacturers of accessory equipment often use middlemen because individual orders may be relatively small. C) Accessory equipment orders are usually large. D) By law, all sales of accessory equipment must be made through middlemen. E) Accessory equipment is comparable to convenience goods in the consumer market. Answer: B Type: Comprehension Page: 214 64. As a type of business good, operating supplies: A) are frequently purchased. B) are usually purchased in extremely large quantities. C) are not typically sold through advance buying contracts. D) have long negotiation periods. E) use a direct channel of distribution. Answer: A Type: Definition Page: 214 330 Chapter 8 Product Planning and Development 65. Operating supplies in the business market are comparable to _____ goods in the consumer market. A) unsought B) impulse C) shopping D) convenience E) specialty Answer: D Type: Comprehension Page: 214 66. Which of the following is NOT an example of an operating supply for a shoe manufacturer? A) paper towels B) computer paper C) shoe dye D) air conditioner filters E) order forms Answer: C Type: Application Page: 214 67. Which of the following is the best example of a list of operating supplies? A) degreaser, cleaning rags, mops, and buckets for cleaning a restaurant kitchen B) cash register, book shelves, and computer for bookstore C) flowers, vases, scissors, tissue paper, and bows for use by a florist D) tires, mufflers, uniforms, and tools used by a mechanic E) fertilizer, plants, lawn mowers, and gardening hand tools used by a landscaper Answer: A Type: Application Page: 214 68. Which of the following statements about the market for operating supplies for businesses is true? A) There is little price competition. B) Brand preference is important. C) Purchasers of operating supplies usually spend a considerable amount of time comparison shopping. D) Typically, operating supplies are purchased in large quantities. E) Producers usually make extensive use of wholesaling middlemen. Answer: E Type: Comprehension Page: 214 331 Chapter 8 Product Planning and Development 69. A manufacturer that wants to sustain its revenues and profits should engage in newproduct development because: A) federal regulations require that a certain percentage of a company's products must be new. B) products inevitably pass through a product life cycle that culminates in a sales decline. C) new products are always the most profitable ones. D) copyright protections last for only 5 years unless the product is somehow revitalized. E) consumers do not like to buy products that are not innovative. Answer: B Type: Comprehension Page: 215 70. Why do new products fail? A) They are not given the marketing support they need by their manufacturer. B) They are poorly positioned in the market. C) They are not significantly different from products already on the market. D) Consumers perceive the products as offering poor value in relation to their prices. E) All of the above are reasons why new products fail. Answer: E Type: Comprehension Page: 215-216 71. Why do new products fail? A) They are given too much marketing support by their manufacturer. B) They are poorly positioned in the market. C) They are significantly different from products already on the market. D) Consumers perceive the products as offering great value in relation to their prices. E) All of the above are reasons why new products fail. Answer: B Type: Comprehension Page: 215-216 72. Which of the following is the best example of a really innovative new product? A) the addition of cinnamon flavoring to Pebbles cereal B) a computerized prosthetic leg for amputees that simulates walking and allows full mobility C) a new television comedy about a group of friends who hang around together and talk a lot about their own lives D) a game show where someone has the opportunity to win one million dollars E) a square container for Morton salt—replacing the old cylinder model Answer: B Type: Application Page: 217 332 Chapter 8 Product Planning and Development 73. The development process for a new product should be guided by: A) brainstorming. B) concept testing. C) an explicit new product strategy. D) an examination of the external microenvironment. E) the determination of a pricing strategy. Answer: C Type: Comprehension Page: 218 74. Assume the goal for Spalding is to maintain market share in the health fitness equipment business. Which of the following describes an appropriate new-product strategy for the company? A) Adopt environmentally-safe packaging. B) Raise its product prices by 10 percent. C) Introduce portable exercise equipment that can be used anywhere and at anytime. D) Develop a treadmill that directly competes with Nordic Track. E) Reduce the number of products it now manufactures. Answer: C Type: Application Page: 218-219 75. A company should engage in a structured new-product development process in order to: A) guarantee the success of the new product. B) increase the likelihood of customer satisfaction with the new product. C) develop the ideal marketing mix. D) locate the perfect target market. E) do all of the above. Answer: B Type: Comprehension Page: 218-219 76. Which of the following is NOT one of the stages in the structured new-product development process? A) a business analysis B) an environmental audit C) idea screening D) a market test E) prototype development Answer: B Type: Definition Page: 220, Figure 8.2 333 Chapter 8 Product Planning and Development 77. Management is in the _____ stage of the new-product development process when it estimates market demand and prepares cost estimates for the new product. A) business analysis B) environmental audit C) idea screening D) market test E) prototype development Answer: A Type: Definition Page: 220 78. During the business analysis stage of new-product development for a new musical variety show featuring a different million-record seller solo entertainer or group each week, the production company would; A) estimate market demand for such a television show. B) determine which artists would be willing to participate in such a program. C) set fees for performing artists. D) find a venue in which to film the shows. E) tape a sample show and get audience reaction. Answer: A Type: Application Page: 220 79. During the business analysis stage of the new-product development process, the management of a company will: A) evaluate consumer responses to test models of the new product. B) recommit the company to the marketing concept. C) conduct market tests. D) perform an environmental analysis. E) do none of the above. Answer: E Type: Definition Page: 220 80. During the prototype development stage for a new musical variety show featuring a different million-record selling solo entertainers or groups each week, the production company would; A) estimate market demand for such a television show. B) determine which artists would be willing to participate in such a program. C) set fees for performing artists. D) find a venue in which to film the shows. E) tape a sample show to determine that all of the show's technical requirements can be met. Answer: E Type: Application Page: 220 334 Chapter 8 Product Planning and Development 81. In the prototype development stage of the new-product development process, a winery developing a new varietal wine should: A) determine the competition's response to the new wine. B) estimate market demand for the wine. C) determine the wine's target market. D) look for investors. E) have a sample of the wine tested in the laboratory for clarity, aroma, and taste. Answer: E Type: Application Page: 220 82. MIT's Media Lab has developed something it calls the Audio Spotlight, which is a large black disk that transmits a beam of sound inaudible just two seats away. It was not developed for a particular product. So when its inventors are looking at potential applications for the disk they are in which stage of the new-product development process? A) business analysis B) environmental audit C) idea screening D) market test E) prototype development Answer: C Type: Application Page: 220 83. In the market test stage of the new-product development process for a cinnamonflavored sports drink,: A) the company's researchers test to see what kinds of tastes would be attractive to consumers' palates even before a sample of the product is produced. B) the company's researchers test to see if the cinnamon flavor is strong enough. C) the company's financial officers estimate the sports drink's profitability. D) the company's marketing department devises an advertising campaign for the cinnamon-flavored sports drink. E) none of the above happens. Answer: E Type: Application Page: 220-221 84. During the commercialization stage of the new-product development process,: A) government approval of the product is required. B) packaging and branding decisions are made. C) the product is test marketed. D) cost estimates for the new product are developed. E) the product is put into full-scale production and marketing. Answer: E Type: Definition Page: 221 335 Chapter 8 Product Planning and Development 85. Which of the six stages of the new-product development process is most often omitted when a company is in a hurry to get a new product to market? A) idea screening B) business analysis C) idea generation D) market tests E) prototype development Answer: D Type: Comprehension Page: 221-222 86. Which of the following statements about the new-product development process is true? A) The most common omission in the process is the idea screening stage. B) New-product development today typically takes from three to four years to complete. C) Each subsequent stage of the new-product development process is more expensive. D) There are five stages in the new-product development process. E) The most common omission in the process is the prototype testing stage. Answer: C Type: Comprehension Page: 219-222 87. Which of the following statements about the new-product development process is true? A) The most common omission in the process is the business analysis stage. B) The prototype development stage is more expensive than the market test stage. C) The external environment has no effect on the new-product development process. D) There are only four stages in the development of a new service. E) None of the above statements about the new-product development process is true. Answer: E Type: Comprehension Page: 219-222 88. Which of the following is an example of a question a manufacturer considering adding a new product to its current assortment should ask? A) Is the new product compatible with environmental standards? B) Does the product fit the company's current marketing structure? C) Will the new product reduce seasonal and cyclical fluctuations in the company's sales? D) Do enough people really want this product? E) All of the above questions should be asked by a manufacturer considering adding a new product to its current assortment. Answer: E Type: Comprehension Page: 222-223 336 Chapter 8 Product Planning and Development 89. Which of the following is an example of a question a manufacturer that is considering adding a new product to its current assortment should ask? A) How can we make use of the 80/20 principle with this product? B) Will the new product reduce seasonal and cyclical fluctuations in the company's sales? C) Is there any way to shorten the physical distribution channel? D) Does the producer have a reputation for producing high-quality merchandise? E) All of the above questions should be asked by a manufacturer that is considering adding a new product to its current assortment. Answer: B Type: Comprehension Page: 222-223 90. Which of the following describes a question a middleman should ask itself before deciding to buy a new product for resale? A) Can we make a sufficient profit with this product? B) If adding a new product necessitates eliminating another product because of a shortage of shelf or storage space, will the result be a net gain in sales? C) What kind of selling effort is required for this product? D) Does the product complement existing products? E) All of the above questions should be asked by a middleman before it decides to buy a new product for resale. Answer: E Type: Comprehension Page: 223 91. Which of the following describes a question a middleman does NOT need to ask itself before deciding to buy a new product for resale? A) Does the production process for this new product pollute the environment? B) If adding a new product necessitates eliminating another product because of a shortage of shelf or storage space, will the result be a net gain in sales? C) What kind of selling effort is required for this product? D) Does the product complement existing products? E) Can we make a sufficient profit with this product? Answer: A Type: Comprehension Page: 223 337 Chapter 8 Product Planning and Development 92. The _____ process is the decision-making activity of an individual through which an innovative new product is accepted. A) osmosis B) diversification C) diffusion D) differentiation E) adoption Answer: E Type: Definition Page: 223 93. The _____ of a new product is the process by which an innovation is spread through a social system over time. A) osmosis B) diversification C) diffusion D) differentiation E) adoption Answer: C Type: Definition Page: 223 94. The diffusion of a new product is the process by which: A) an individual determines whether to buy a new product. B) an innovation is spread through a social system over time. C) an innovation competes with existing products. D) a new product is introduced to its life cycle. E) competition enters a market. Answer: B Type: Definition Page: 223 95. Today Beau William read about PROGRAM, a once-a-month flea control tablet for dogs. He wonders if he could give his German shepherd one each month and if it would eliminate the flea problem his dog has had each summer. William is most likely in the _____ stage of the new-product adoption process. A) awareness B) trial C) feedback D) adoption E) confirmation Answer: A Type: Application Page: 223 338 Chapter 8 Product Planning and Development 96. Last week William read about PROGRAM, a once-a-month flea control tablet for dogs. He wonders if he could give his German shepherd one each month and if it would eliminate the flea problem his dog has had each summer. He called his veterinarian to ask him his opinion of PROGRAM, and he looked for information in the dog magazines his friend has. William is most likely in the _____ stage of the new-product adoption process. A) awareness B) interest C) feedback D) adoption E) confirmation Answer: B Type: Application Page: 223 97. Yesterday Brian Snow, a florist, read about a new product called Aquafoam for arranging fresh-cut flowers. For years florists have been using a product called Oasis, which is a similar product. A piece of Oasis was cut to fill a vase, soaked in water, and then placed in the bottom of the vase. Flowers were stuck into the Oasis. One of the problems with Oasis is its tendency to crumble. According to what Brian has just read, Aquafoam does not. In terms of the Aquafoam product, Brain is most likely in the _____ stage of the new-product adoption process. A) awareness B) evaluation C) trial D) information E) interest Answer: A Type: Application Page: 223 98. Brian Snow, a florist, has just purchased a box of Aquafoam. For years he has used a product called Oasis, which is a type of foam. A piece of Oasis was cut to fill a vase, soaked in water, and then placed in the bottom of the vase. Flowers were stuck into the Oasis. One of the problems with Oasis is its tendency to crumble. According to what Brian has read, Aquafoam does not. Brian is eager to make his first arrangement with Aquafoam. In terms of the Aquafoam product, Brian is most likely in the _____ stage of the new-product adoption process. A) awareness B) evaluation C) trial D) information E) interest Answer: C Type: Application Page: 223 339 Chapter 8 Product Planning and Development 99. Kielo had heard her friends frequently talking about how much they liked Red Fusion, a new soda. She purchased a bottle at her local convenience store to see why so many people liked the beverage. Kielo was in the _____ stage of the new-product adoption process. A) awareness B) evaluation C) trial D) information E) interest Answer: C Type: Application Page: 223 100. For years Brian Snow, a florist, has used a product called Oasis, which is a type of foam. A piece of Oasis was cut to fill a vase, soaked in water, and then placed in the bottom of the vase. Flowers were stuck into the Oasis. One of the problems with Oasis is its tendency to crumble. After trying a box of a new product called Aquafoam that provides all of the benefits of Oasis and does not crumble, Brian is convinced Aquafoam is the product for him. He plans on buying no more Oasis. In terms of the Aquafoam product, Brian is most likely in the _____ stage of the new-product adoption process. A) awareness B) evaluation C) trial D) information E) adoption Answer: E Type: Application Page: 223 101. Melissa kept seeing ads about how easy it would be to color her hair. She had always wanted to see what it was like to be blonde. So she went to the store, bought a box of Preference by L'Oreal, and tried the product. Because she is at the _____ stage of the new-product adoption process, she is often heard asking her friends what they think about her blonde hair. A) impact B) evaluation C) feedback D) adoption E) confirmation Answer: E Type: Application Page: 223 340 Chapter 8 Product Planning and Development 102. Mark Dent has just recently opened an Internet bank checking account. He is continually asking his friends if they think he made the right decision when he chose on-line banking. Mark is in which stage of the new-product adoption process? A) impact B) evaluation C) feedback D) adoption E) confirmation Answer: E Type: Application Page: 223 103. The target market for a brand new combined fitness and diet program is young professionals between the ages of 25 and 30 with annual incomes of more than $30,000. The company marketing this program has decided to use billboards and radio advertising to reach this group rather than personal selling. Given this information about the target market for the program and the types of promotion that will be used to reach this target market, which of the adopter categories is this target market? A) early adopters B) innovators C) laggards D) early majority E) late majority Answer: B Type: Application Page: 224 104. In which of the adopter categories will opinion leaders most likely be found? A) early adopters B) innovators C) laggards D) early majority E) late majority Answer: A Type: Comprehension Page: 224-225 105. _____ purchase a new product after innovators, but sooner than other consumers. A) Early majority members B) Late majority members C) Late adopters D) Early adopters E) Early minority members Answer: D Type: Definition Page: 224-225 341 Chapter 8 Product Planning and Development 106. More than half the market belongs to: A) the early majority and the late majority categories. B) innovator and early majority categories. C) early majority category. D) late majority category. E) Early adopters and early majority categories. Answer: A Type: Definition Page: 225 107. In the process of diffusion, a(n) _____ is a person who seeks to accelerate the spread of a given innovation. A) idea orchestrator B) change agent C) adaptation force D) idea catalyst E) idea generator Answer: B Type: Definition Page: 225 108. A change agent is most likely to be a member of which adoption category? A) early majority B) laggard C) innovator D) early adopter E) late adopter Answer: D Type: Comprehension Page: 224-225 109. Word-of-mouth communication: A) is always favorable. B) is only useful to marketers of consumer products. C) is largely uncontrollable even though it can be influenced by advertising. D) is created through public relations activities. E) has little measurable effect on diffusion rates of new products. Answer: C Type: Comprehension Page: 225 342 Chapter 8 Product Planning and Development 110. Duette Shades are a product of the Hunter Douglas Company. The shades diffused in the market more rapidly than Hunter-Douglas expected because of the support of interior decorators who love the fabric, texture, and lighting options available with the shades and who often use them in home and office decorating. In this example, interior decorators had the role of: A) idea orchestrators. B) change agents. C) adaptation force. D) idea catalysts. E) idea generators. Answer: B Type: Application Page: 225 111. Which form of persuasion works most effectively with members of the late majority group? A) television advertising B) personal selling C) billboard advertising D) radio advertising E) word-of-mouth communication Answer: E Type: Comprehension Page: 225 112. In which of the adopter categories would you find the most tradition-bound people? A) early adopters B) innovators C) laggards D) early majority E) late majority Answer: C Type: Definition Page: 225 113. Luis Richard works as a cement finisher for a parking lot repaving company. He is suspicious of innovation and innovators. He was one of the very last people in his small Western city in which he lives to buy a microwave oven. When it comes to the adoption of microwave ovens, Richard is in the _____ category. A) early adopters B) innovators C) laggards D) early majority E) late majority Answer: C Type: Application Page: 225 343 Chapter 8 Product Planning and Development 114. Which of the following is NOT identified by the text as one of the innovative characteristics that affects the adoption rate of new products? A) aesthetics B) compatibility C) trialability D) complexity E) relative advantage Answer: A Type: Definition Page: 225-227 115. The ad for Actimel, a dairy-based probiotic supplemental beverage, emphasized that the drink was ten times more beneficial than yogurt at strengthening the body's natural defenses. The ad emphasized which characteristic of Actimel? A) relative advantage B) trialability C) complexity D) aesthetics E) compatibility Answer: A Type: Application Page: 225-226 116. Hismanal is a drug that will eliminate seasonal allergy complaints without causing drowsiness. In terms of currently available allergy remedies that do make many people drowsy, Hismanal has greater _____ for allergy sufferers. A) aesthetics B) compatibility C) trialability D) complexity E) relative advantage Answer: E Type: Application Page: 225-226 117. Hundreds of thousands of African children are infected annually with malaria. A new anti-malarial medication called ACTs (artemisia-based combination treatments) will hopefully prevent malaria and save lives. ACTs seem to have a strong: A) aesthetics. B) compatibility. C) trialability. D) complexity. E) relative advantage. Answer: E Type: Application Page: 225-226 344 Chapter 8 Product Planning and Development 118. Hundreds of thousands of African children are infected annually with malaria. A new anti-malarial medication called ACTs (artemisia-based combination treatments) will hopefully prevent malaria and save lives. The problem is that taking such drugs is inconsistent with the cultural believes of many Africans. Therefore, the new drug has a weak: A) aesthetics. B) compatibility. C) trialability. D) complexity. E) relative advantage. Answer: B Type: Application Page: 225-226 119. Paintball is a sport that has attracted many individual and team participants. Tippman has developed a new paintball marker, which offers the fastest rate of fire of any paintball marker currently on the market. For paintball participants, this new paintball marker has a strong _____ when compared to older models. A) aesthetics B) compatibility C) trialability D) complexity E) relative advantage Answer: E Type: Application Page: 225-226 120. Internet supermarkets where a customer can place an order and have it delivered to his or her house at a convenient time are a new service that is growing in popularity and availability. One of the factors that is helping its diffusion is the fact that so many Americans describe themselves as “time-poor.” The online supermarkets will shorten the time required for shopping for groceries and have a strong _____ characteristic, which will positively affect its adoption rate. A) aesthetics B) compatibility C) economy D) complexity E) flexibility Answer: B Type: Application Page: 226 345 Chapter 8 Product Planning and Development 121. Edge Active Care is a shaving gel for men with a built-in facial cleanser. It helps lift dirt and oil from the skin while shaving, so the user gets great skin without having to think about it. Its manufacturer hopes this shaving gel has a strong _____ when compared to shaving gels and creams currently on the market. A) aesthetics B) computability C) compatibility D) complexity E) relative advantage Answer: E Type: Application Page: 225-226 122. How often have you been underlining some text and wanted to jot down some comment or question relating to it? It usually means hunting around for a pen. Sheaffer Pen has produced a writing tool that joins pen and highlighter in one. Pop off the cap, and it's a ballpoint pen. Twist the black band, and a yellow highlighter tip emerges around and past the ballpoint. When compared to other highlighters, the Sheaffer pen has strong: A) aesthetics B) computability C) compatibility D) complexity E) relative advantage Answer: E Type: Application Page: 225-226 123. Which of the following new products would have the highest level of observability? A) all-natural insulation B) underwear C) a mineral supplement to improve eyesight D) grass fertilizer E) carrot juice Answer: D Type: Application Page: 227 346 Chapter 8 Product Planning and Development 124. Before buying some brands of new music CD, consumers can listen to an abbreviated version of some of the songs on the CD through an Internet connection. In this way, these CDs have greater _____ than other CD titles that cannot be as readily sampled before being purchased. A) trialability B) computability C) compatibility D) complexity E) relative advantage. Answer: A Type: Application Page: 227 125. Even though most Muslims, many Jews, and many Hindus believe in shrouding the body instead of embalming, few know how to conduct the shrouding ritual. A newly produced video tape with step-by-step instructions on the proper techniques for shrouding would have a high degree of _____ for these people who desire to shroud their deceased instead of embalming them. A) trialability B) computability C) compatibility D) complexity E) relative advantage. Answer: C Type: Application Page: 227 126. Imagine a bandage manufacturer came out with a bandage that would speed healing by 50 percent when compared to a standard bandage. In market tests, consumers claimed that scratches healed noticeably faster with the new bandage than with the traditional bandage. The new bandage that promoted faster healing seems to have a greater _____ than traditionally used bandages. A) complexity and trialability B) observability and relative advantage C) aesthetics and comparability D) trialability and complexity E) comparability and relative advantage Answer: B Type: Application Page: 227 347 Chapter 8 Product Planning and Development 127. For which of the following new products will the degree of trialability be greatest? A) scratch-resistant prescription eyeglasses with ultraviolet protection built into the lenses B) fat-free Ritz crackers C) a home gymnasium unit that stores easily under the bed D) a pickup truck that runs on natural gas E) a fire insurance policy that protects against terrorists' activities Answer: B Type: Application Page: 227 128. Which of the following new products has the greatest degree of compatibility with people who want it now and do not like to wait? A) long scenic guided tours through a national forest B) 24-hour a day, 7-day a week aromatherapy massage home service C) a chocolate bread mix that takes only 2 hours to prepare D) a physician's waiting room that contains free video games for waiting patients E) a solar-powered car that has a maximum speed of 40 mph Answer: B Type: Application Page: 227 129. A(n) _____ typically includes executives from major departments who work together to plan and develop new products. A) joint venture alliance B) new product team C) strategic alliance D) executive alliance E) product-planning committee Answer: E Type: Definition Page: 227 130. _____ are small (typically five or fewer people) and report to the company president in small and medium-sized organizations. It is responsible for planning and developing new products. A) Strategic alliances B) Joint ventures C) New-product teams D) Venture groups E) Brand committees Answer: C Type: Definition Page: 227 348 Chapter 8 Product Planning and Development 131. In a company like General Mills where there are many different brands and types of products, the executive responsible for planning a complete marketing program for one brand or a small group of similar products is called a(n) _____ manager. A) venture B) brand C) commercializing D) field E) marketing Answer: B Type: Definition Page: 227 132. A brand manager who works for the Gillette Company has been assigned one project to handle and can be expected to: A) set the product's operational budget. B) develop plans by which the sales force will market the product to wholesalers and retailers. C) draft advertising plans for the product. D) establish sales goals for the product. E) do all of the above. Answer: E Type: Definition Page: 227 133. Which of the following describes one of the biggest problems in the brand-manager system? A) Brand managers never work with existing products. B) A brand manager's duties are limited to selling and sales promotional work. C) Brand managers report to vice-presidents of marketing, production, and quality control. D) Brand managers are given great responsibility without the corresponding authority. E) Brand managers have both line and staff authority over the sales force. Answer: D Type: Comprehension Page: 227 349 Chapter 8 Product Planning and Development 134. Which of the following statements about brand managers is true? A) The position is being modified in many companies and has been abolished in others. B) Brand managers have authority over the sales force that will sell the product to wholesalers and retailers. C) Brand managers typically have great responsibility and great authority. D) Brand managers are not typically responsible for any facet of product advertising. E) Brand managers control costs, prices, and advertising budgets. Answer: A Type: Comprehension Page: 227 135. The effectiveness of individual brand managers depends upon: A) the type of distribution strategy implemented. B) their ability to influence other executives to cooperate with their plans. C) the design of the organizational chart. D) how many hierarchical levels the organization has. E) the actions of the steering committee. Answer: B Type: Comprehension Page: 227 136. Another name for a brand manager is a: A) line manager. B) brand ombudsman. C) product manager. D) marketing assistant. E) change agent. Answer: C Type: Definition Page: 228 True/False Questions 137. According to the textbook's definition of a product, Heinz ketchup and Hunt's ketchup are not separate products even though they are different brands. Answer: False Type: Application Page: 206 138. Any product that supplies a benefit must be tangible. Answer: False Type: Comprehension Page: 206-207 350 Chapter 8 Product Planning and Development 139. The member of a distribution channel that has possession of a product has no bearing on its classification. Answer: True Type: Comprehension Page: 208 140. Candy, breath mints, nail clippers, and aspirin are all examples of convenience goods. Answer: True Type: Application Page: 208-209 141. Measuring tapes, ovenproof dishes, and candy bars are all good examples of shopping goods. Answer: False Type: Application Page: 209-210 142. Swimming pool chemicals would most likely be classified as an unsought good during January with temperatures hovering at or below the freezing mark. Answer: True Type: Application Page: 211 143. Flour, sugar, vanilla flavoring, and eggs are examples of business goods for a shop that makes doughnuts. Answer: True Type: Application Page: 211 144. The blades that go into new lawn mowers being produced by a manufacturer are examples of fabricating parts. Answer: True Type: Application Page: 213 145. The glass eyes used by a taxidermist for preparing animals for display are an example of operating supplies. Answer: False Type: Application Page: 214 146. The barn where a farmer cures his tobacco is an example of an installation. Answer: True Type: Application Page: 213 147. A mannequin in a dress shop is an example of an installation. Answer: False Type: Application Page: 213 351 Chapter 8 Product Planning and Development 148. The candy display case in a neighborhood theater is an example of an installation. Answer: False Type: Application Page: 213 149. Most new products fail because they are no different from existing products. Answer: True Type: Comprehension Page: 215-216 150. To be classified as a new product, a product must be truly unique from anything else currently on the market. Answer: False Type: Definition Page: 218-219 151. The addition of roasted garlic to its potato soup would not qualify as a new product for Campbell's. Answer: False Type: Application Page: 216-218 152. Customers are often used as a source for new-product ideas. Answer: True Type: Comprehension Page: 220 153. The business analysis stage of the new-product development process is more expensive than the prototype development stage. Answer: False Type: Comprehension Page: 220 154. A manufacturer that rushes to bring a new product to market would most likely omit the business analysis stage of the new-product development process. Answer: False Type: Comprehension Page: 221 155. The diffusion process is the set of successive decisions an individual makes before accepting an innovation. Answer: False Type: Definition Page: 223 156. During the awareness stage of the adoption process, an individual is exposed to the innovation and becomes a prospect. Answer: True Type: Definition Page: 223 352 Chapter 8 Product Planning and Development 157. Xavier would be in the confirmation stage of the adoption process for a new type of glass cleaning product if he were comparing how well the new type of cleaner cleaned glass with the results he got from using his usual brand of cleaner. Answer: False Type: Application Page: 223 158. The innovators category includes more opinion leaders than any other group. Answer: False Type: Comprehension Page: 224 159. In terms of an innovation characteristic that affects the rate of adoption, relative advantage refers to the degree to which an innovation is superior to currently available products. Answer: True Type: Definition Page: 225-226 160. The adoption rate for a new form of investment insurance will likely be lower than that for a new flavor of soda because of the complexity characteristic. Answer: True Type: Application Page: 225-227 161. Presidents of small companies should be included in a product-planning committee. Answer: True Type: Comprehension Page: 227 162. The brand manager is responsible for planning new products as well as managing established brands. Answer: True Type: Definition Page: 227 Fill in the Blank Questions 163. A _____ is a set of tangible and intangible attributes, which may include packaging, color, price, quality, and brand, plus the seller's services and reputation. Answer: product Type: Definition Page: 209-210 164. For most buyers, _____ _____ include milk, batteries, eggs, greeting cards, and paper clips. Answer: convenience goods Type: Application Page: 208 353 Chapter 8 Product Planning and Development 165. Armani suits, Waterford crystal, and Anne Klein jewelry are examples of _____ _____ for many consumers. Answer: specialty goods Type: Application Page: 210-211 166. _____ _____ include platinum, gold, silver, and coral if they are still in their natural form. Answer: Raw materials Type: Application Page: 211-212 167. Computer CDs, file folders, paper clips, and pencils are _____ _____ for an accountant's office. Answer: operating supplies Type: Application Page: 214 168. A _____ _____ is a statement identifying the role new products are expected to play in achieving corporate and marketing goals. Answer: new-product strategy Type: Definition Page: 218-219 169. In the _____ stage of the new-product development process, full-scale production and marketing programs are planned and then implemented. Answer: commercialization Type: Definition Page: 221 170. _____ are consumers who are bound by tradition and, hence, are the last to adopt an innovation. Answer: Laggards Type: Definition Page: 225 171. In terms of the characteristics that affect adoption of a new product, _____ refers to the degree to which an innovation coincides with the cultural values and experiences of prospective adopters. Answer: compatibility Type: Definition Page: 226 172. In terms of the characteristics that affect the adoption of new products, _____ refers to the degree to which an innovation can be seen by others as effective. Answer: observability Type: Definition Page: 227 354 Chapter 8 Product Planning and Development 173. In terms of the characteristics that affect the adoption of new products, a one-serving bag of a new jalapeno-spiced corn chips would have greater _____ than a $15,000 flatscreen television. Answer: trialability Type: Application Page: 227 174. A _____ _____ is an individual who is responsible for planning new products as well as managing established ones. Answer: brand manager Type: Definition Page: 227 Mini-Case Questions Use the following to answer questions 175-181: Tammy Foley had always had a fascination with firearms and physics. So when he learned of the difficulty of capturing a near-perfect round for ballistics matching to weapons used in crimes, he thought he might develop a system for testing bullets and firearms. While considering the possibility of developing such a product, Foley realized his major problem was in finding a medium that would diffuse the energy of a bullet as it leaves the muzzle of a firearm. He spent three years testing almost 300 different variations and combinations of synthetic and natural materials before developing a method that worked. He named his company Ballistics Research. At a demonstration for FBI agents, Foley fired a variety of different kinds of firearms into his ballistics testing system and retrieved each one in the condition in which it left the muzzle. Forensics experts at the demonstration expressed disbelief as they watched the various trials. The ballistic testing units are priced at $12,000, and very few law enforcement agencies can afford to spend that much. 175. The synthetic materials he used in the construction of the ballistics testing system would be classified as: A) operating supplies. B) consumer goods. C) accessory equipment. D) installations. E) fabricating material. Answer: E Page: 213 355 Chapter 8 Product Planning and Development 176. If the FBI were to buy one of Foley's ballistic testing systems, the machine would be categorized as: A) operating supplies. B) consumer goods. C) accessory equipment. D) installations. E) fabricating material. Answer: C Page: 214 177. The bullets he purchased to test his new system would be categorized as: A) operating supplies. B) consumer goods. C) accessory equipment. D) installations. E) fabricating materials. Answer: A Page: 214 178. In which stage of the new-product development process was Foley after he learned about the difficulty law enforcement officials were having with traditional ballistics testing systems? A) business analysis B) idea generation C) idea screening D) market test E) prototype development Answer: B Page: 221 179. As Foley tested the various synthetic and natural materials to see how well they diffused the force of a bullet leaving a muzzle, he would have been in which stage of the new-product development process? A) business analysis B) idea generation C) idea screening D) market test E) prototype development Answer: E Page: 220 356 Chapter 8 Product Planning and Development 180. Foley demonstrated his ballistics testing system during which stage of the new-product development process? A) business analysis B) idea generation C) idea screening D) market test E) prototype development Answer: D Page: 220 181. Foley hoped the law enforcement agents witnessing the demonstration of his ballistics testing system would be impressed by its ______, which would encourage them to adopt the system. A) relative advantage and observability B) complexity and trialability C) compatibility and observability D) trialability and aesthetics E) comparability and relative advantage Answer: A Page: 225-226 357
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