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Exam 9: Product Management and New-Product Development

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Question 121

True/False

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A fad is an idea that is fashionable only to certain groups who are enthusiastic about it.

A) True
B) False

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Question 122

Multiple Choice

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"Product life cycles" are concerned with sales and profits:

A) in generic markets-not individual product-markets.
B) of a firm's individual products or brands.
C) of goods but not services.
D) in a product-market.
E) None of these alternatives is a good answer.

F) None of the above
G) All of the above

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Question 123

Multiple Choice

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The Consumer Product Safety Commission

According to your text, which of the following is an example of a "new product"?

The new-product development process

In general, top management support is needed for successful new-product development efforts.

Market introduction, market growth, market maturity, and sales decline are the four stages of the product life cycle.

Use this information for question that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI) , has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire-coated with special paints. 1) WPI's "Wire Closet" products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market continue to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as "Wire Fold-Fence." Previously, WPI had never made fences or been a player in the lawn and garden market-although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed "Oil Wire," a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is "Wire Locker" used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire style lockers is only half of what it was 10 years ago. 5) WPI's "Wire Window" product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called "Wire Car Top." There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. "Wire Car Top" is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new product idea, tentatively called "Wire Tent," is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which step of the new-product development process is the "Wire Tent"?

Which of the following statements about "new products" is FALSE?

Seeking to stop declining sales for an established mouthwash, a sales manager suggests that new coloring be added to the product and a major promotion effort be started for the "new" product. The Federal Trade Commission would:

During the market maturity stage of the product life cycle:

The market introduction stage of the product life cycle is usually marked by losses, as money is being invested in the hope of future profits.

Sales growth is faster when the product can be used on a trial basis.

Which of the following statements is true of how innovation and market changes create opportunities?

A new product idea is more likely to move quickly through the early stages of the product life cycle when:

The first step in new-product development is evaluating ideas.

Which of the following is true of product liability?

When purchasing consumer electronics or other high-technology products, most consumers are aware that within a year after making a purchase, it is likely that a new model-or an entirely new product idea-will offer more features for the same amount of money. This phenomenon is a good example of the fact that:

The smaller the comparative advantage of a new product over those already on the market, the faster its sales will grow.

Industry profits decline during the market maturity stage due to: