NEW-PRODUCT DEVELOPMENT AND PRODUCT
LIFE-CYCLE STRATEGIES
1. According to information presented in the text, _____________ is at the heart of
Microsoft’s and Bill Gates’ innovation strategy.
a. R & D
b. the X-box
C. the Internet
d. predatory pricing
2. The product life cycle presents two major challenges. First, a firm must be good at
developing new products to replace aging ones. Second, a firm must be good at:
a. adapting its marketing strategies in the face of changing tastes, technologies,
And competition as products pass through life-cycle stages.
b. image building to ensure that products sell well.
c. primary demand forecasting so product winners can be chosen rather than
making poor investments with product losers.
d. acquisition of other companies since this is the only real way to ensure new
product success--go with what has worked in the past.
3. A firm can obtain new products in two ways. First, it can develop them by using its
own research and development department. Second, it can:
a. steal them.
B. get them through acquisition.
c. transfer them between divisions.
d. copy them.
4. Original products, product improvements, product modifications, and new brands that
a firm develops through its own research and development efforts are called:
A. new products.
b. concept products.
c. altered products.
d. supplemental products.
5. New products continue to fail at a disturbing rate. One study estimated that new
consumer packaged goods (consisting mostly of line extensions) fail at a rate of:
a. 100 percent.
b. 90 percent.
C. 80 percent.
d. 70 percent.
6. Why do so many new products fail? All of the following are reasons EXCEPT:
(Select the LEAST LIKELY reason.)
a. the size of the market has been overestimated.
B. hostility on the part of the sales force.
c. the product may have been incorrectly positioned.
d. a high-level executive might have pushed a favorite idea.
7. If a new product has higher quality, new features, and higher value in use than its
competition, then it is called a(n):
A. unique superior product.
b. synergistic product.
c. positioned product.
d. pre-launch product.
8. Which of the following would be a key success factor in developing new products?
A. a well-defined product concept
b. a product priced well below market or industry standards
c. a product that appeals to the late majority
d. a product that can be sold over the Internet with a minimum of explanation
9. To create successful new products, a company must understand consumers, markets,
and competitors and:
a. develop a great advertising campaign.
b. have a strong Web site to push the product.
c. adopt a push rather than pull promotional concept.
D. develop products that deliver superior value to consumers.
10. Which of the following best describes the first stage of the new-product development
process?
a. idea screening
b. concept development and testing
C. idea generation
d. business analysis
11. The systematic search for new-product ideas is characteristic of which stage in the
new-product development process?
a. idea screening
b. concept development and testing
C. idea generation
d. business analysis
12. After idea generation has occurred in the new-product development process, the
next stage is most likely to be:
a. ideation.
B. idea screening.
c. concept development and testing.
d. test marketing.
13. For every 1,000 ideas, only _____ will have enough commercial promise to merit a
small-scale experiment.
a. 10
b. 50
C. 100
d. 300
14. According to the text, all of the following are thought to be sources of new-product
ideas EXCEPT:
a. internal sources.
b. customers.
c. competitors.
D. the local library.
15. According to “Mr. Failure’s Lessons for Sweet Success,” all of the following would
help to prevent failure on the part of new products EXCEPT:
a. offer real value.
b. cherish thy brand.
c. don’t be too different.