Chapter 10—Developing and Managing Products
TRUE/FALSE
1. Ben & Jerry's addition of new ice cream flavors would not be considered new products since the company was already making ice cream. They would simply be called line extensions. T F
2. Ebony soap has just undergone a minor change in fragrance, but the manufacturer can still call the soap a new product, as in "new and improved."T F
3. While developing new products is far from an exact science, most firms do follow a formal new-product development process.T F
4. A firm's overall marketing strategy is one subset of that firm's new-product strategy that is necessary to the long-term survival of the firm.T F
5. If a firm adopts the marketing concept, then during the idea generation stage of the new-product development process, the logical starting place should be the customers of the firm.T F
6. Applied research is the process of converting useful applications into marketable products.T F
7. Employees at the Bear Creek Craft Corporation are trying to come up with ideas for new product development. The employees are all in a room together, shouting out potential ideas. The ideas are written down and evaluated as they are generated. This is an example of brainstorming.T F
8. During the screening stage of the new product development process, it is appropriate to use concept tests.T F
9. The Tichnor Publishing Company is currently engrossed in its first estimations of costs and revenues for a new project. This firm is engaged in a new-product business analysis.T F
10. Basically, all that happens in the development stage of the new-product process is that the first prototype of the product gets developed.T F
11. A test market is one example of a laboratory test where consumers are encouraged to try a new product and provide feedback to the manufacturer.T F
12. The city a firm chooses as its test market should reflect the demographic and other characteristics of the whole nation only if that is an accurate representation of the producer's intended market for the product.T F
13. A serious problem that may be caused by test marketing is that a firm's competitors can find out about the new product before it has been fully introduced.T F
14. The Downhill Racing Company has developed a new kind of snow ski. The company has already performed screening, development, and testing. Assuming the results coincide with profit and cost expectations, the most likely next step is commercialization.T F
15. The most important factor in product failures is a poor match between product characteristics and customer desiresT F
16. Increasing globalization of markets and of competition provides a reason for multinational firms to consider new-product development from a worldwide perspective.T F
17. Diffusion is the process of individual choice--of one particular consumer choosing to accept an innovationT F
18. Ferree Cabinet Making Company has two new products: one is a cherry wood bookcase that is sold completely constructed; the other is a walnut bookcase with glass doors and fluorescent lights that comes unassembled. Of these two, the cherry unit will probably be diffused more quickly, because it is less complex.T F
19. The So-Comfy Footstool Company is considering introduction of a reclining chair with a built-in footstool. The company plans to offer a one-week, in-home trial to encourage people to buy its product. This plan would probably increase the product's rate of diffusion.T F
20. The product life cycle is so named because it is similar to the premise underlying the concept of any life cycle. The unit of interest is born, it grows for some time, and it reaches some level of maturity and stability before dying.T F
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