Marketing Chapter 9: New-Product Development

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Questions and Answers

What characterizes team-based new-product development?

Cross-functional teams collaborate and overlap in the product development process. (correct)

Only one department oversees the entire product development.

Departments work independently to increase their efficiency.

Ideas are developed in isolation without inter-departmental communication.

Which stage of the product life cycle is characterized by slow sales growth and nonexistent profits?

Decline

Maturity

Introduction (correct)

Growth

What does systematic new-product development aim to create?

An innovative culture focused on idea management. (correct)

A random collection of product ideas.

Strict guidelines that limit creativity in product ideas.

A system for immediate product launch without reviews.

How is the 'fad' in the product life cycle defined?

A short-lived surge in sales driven by consumer enthusiasm. Signup and view all the answers

Which of the following best describes a 'style' in the context of the product life cycle?

A distinctive method of expression that remains constant. Signup and view all the answers

What characterizes the introduction stage of the product life cycle?

High distribution and promotion expenses Signup and view all the answers

What is a primary focus during the growth stage of the product life cycle?

Achieving economies of scale in manufacturing Signup and view all the answers

Which of the following is NOT a characteristic of the maturity stage in the product life cycle?

High profits and market dominance Signup and view all the answers

During the decline stage, a company has three options regarding its product. Which option is NOT included?

Revitalize the product Signup and view all the answers

What strategies can be utilized during the maturity stage to modify the product or its market?

Marketing mix modification Signup and view all the answers

What is a significant consideration when determining the introduction of products internationally?

Customization of the product for local markets Signup and view all the answers

Which statement best describes the economic environment of a product during its introduction stage?

The company faces high expenses but low revenue Signup and view all the answers

What challenge commonly arises during the maturity stage of a product life cycle?

Difficulty in sustaining market share Signup and view all the answers

What is the main difference between acquisition and new product development?

Acquisition refers to buying existing products, while new product development involves creating original products. Signup and view all the answers

Which of the following is NOT a source of new-product ideas?

Company's annual profit reports Signup and view all the answers

What is the purpose of the idea screening process?

To identify and retain good ideas while discarding poor ones. Signup and view all the answers

How does the R-W-W screening framework assist in idea screening?

It assesses the viability, success potential, and worthiness of ideas. Signup and view all the answers

Which step in the new-product development process focuses on developing and testing product concepts?

Concept Development and Testing Signup and view all the answers

Internal sources of new product ideas include which of the following?

Management and staff’s insights Signup and view all the answers

What characterizes the idea generation phase in the new-product development process?

Systematically searching for new-product ideas. Signup and view all the answers

What is typically a reason for new product failure?

Failure to meet market needs or expectations. Signup and view all the answers

What is the primary advantage of controlled test markets compared to standard test markets?

They are more cost-effective and quicker. Signup and view all the answers

Which type of test market allows researchers to create a simulated shopping environment?

Simulated test markets Signup and view all the answers

Successful new-product development should primarily be _____?

Customer-centered Signup and view all the answers

What is the main focus of customer-centered new product development?

Solving customer problems Signup and view all the answers

In sequential new-product development, how do company departments interact?

They complete each stage individually before passing it on. Signup and view all the answers

What critical decision must a company make during the commercialization phase?

Where and when to launch the product. Signup and view all the answers

Which of the following describes a standard test market?

A detailed, full marketing campaign in a small market. Signup and view all the answers

What is a disadvantage of controlled test markets?

Competitors can access the new product information. Signup and view all the answers

What is the primary objective of concept testing in the new-product development process?

To test new product concepts with target consumers Signup and view all the answers

Which part of the marketing strategy development focuses on long-run sales and profit goals?

Long-term sales and profit description Signup and view all the answers

What does business analysis in the new-product development process primarily evaluate?

Sales, costs, and profit projections Signup and view all the answers

At which stage of the new-product development process are physical versions of a product created and tested?

Product Development Signup and view all the answers

What is the purpose of test marketing in the new-product development process?

To introduce the product in realistic marketing settings Signup and view all the answers

In concept development, what must marketers do after creating alternative product concepts?

Find out how attractive each concept is to customers Signup and view all the answers

Which aspect does product image refer to in the context of new product development?

How consumers perceive an actual or potential product Signup and view all the answers

What key element is NOT included in the first part of the marketing strategy development?

Marketing budget for the second year Signup and view all the answers

Study Notes

Chapter Nine: New-Product Development and Product Life-Cycle Strategies

The chapter covers new product development and product life cycle strategies.
Acquisition involves buying a whole company, patent, or license to produce another's product.
New product development creates original products, product improvements, modifications, and new brands based on internal research and development.

New-Product Development Strategy

Reasons for new product failure include overestimating market size, poor design, incorrect positioning, wrong timing, pricing too high, ineffective promotion, management influence, high development costs, and competition.
A typical new product development process includes idea generation (internal and external sources), idea screening (using the R-W-W framework), concept development and testing (product idea, concept, image), concept development, concept testing, marketing strategy development (target market, value proposition, sales goals, price, distribution, budget, and long-term marketing mix), business analysis (reviewing sales, costs, and profit projections), product development (creating and testing physical versions), test marketing (introducing the product and marketing program into realistic settings), and commercialization (introducing the product to the market).

Managing New-Product Development

Successful new product development should be customer-centered, team-based, and systematic.
Customer-centered development focuses on solving customer problems.
Sequential development involves individual department completion of each stage before passing to the next department.
Team-based development uses cross-functional teams for overlapping stages.
Systematic new-product development is an innovative approach that collects, reviews, evaluates, and manages new-product ide

Product Life-Cycle Strategies

Product development (inception): Sales are zero, and investment costs are high.
Introduction: Slow sales growth and minimal profits; high distribution and promotion expenses.
Growth: Rapid market acceptance and increasing profits.
Maturity: Slowdown in sales growth and profits; overcapacity leading to competition.
Decline: Sales fall off, and profits drop; maintain, harvest, or drop the product.

Additional Product and Service Considerations

Public policy and regulations regarding developing and dropping products, patents, quality, and safety are important factors.
International product and service marketing involves considering different countries with respect to standardization vs customization, packaging, and labeling, customs, values, and laws.

Specific Product Life Cycle

Specific categories include:
- Style: Basic and distinctive mode of expression.
- Fashion: Currently accepted/popular style in a given field.
- Fad: Temporary high sales driven by consumer enthusiasm.

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Description

This quiz explores the key concepts of new product development and product life-cycle strategies as covered in Chapter Nine. It discusses factors that contribute to new product success and failure, along with the stages of the new product development process. Test your understanding of how businesses innovate and manage products over time.