MULTIPLE CHOICE QUESTIONS FOR MARKETING MANAGEMENT UNIT 1 &UNIT

1. According to information presented in the text, _____________ is at the heart of

Microsofts and Bill Gates innovation strategy.
a. R & D
b. the X-box
c. the Internet
d. predatory pricing
Answer: (c)
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.
Answer: (a)
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.
Answer: (b)

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.
Answer: (a)
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.
Answer: (c)
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.
Answer: (b)
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.
Answer: (a)
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
Answer: (a)

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.
Answer: (d)
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
Answer: (c)
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
Answer: (c)
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.
Answer: (b)
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
Answer: (c)
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
Answer: (d)
15. According to Mr. Failures 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. dont be too different.
d. always be the lowest priced.
Answer: (d)
16. The search for new-product ideas should be systematic rather than haphazard. One
way to ensure that the process is systematic is to install a(n):
a. product planning committee.
b. venture capital team.
c. idea management system.
d. a Delphi idea system.
Answer: (c)
17. If an organization wishes to create an innovation-oriented company culture, it should
consider the ____________ approach.
a. product planning approach
b. venture capital team
c. idea manager
d. Delphi idea system
Answer: (c)
18. ________________ is screening new-product ideas in order to spot good ideas and
drop poor ones as soon as possible.
a. Idea generation
b. Concept development and testing
c. Idea screening
d. Brainstorming
Answer: (c)

19. One reason that idea screening is a critical stage in the new-product development
process is that:
a. product-development costs rise greatly in later stages and the company only wants
those products that can succeed.

b. competitors can quickly steal ideas so the company wants only those ideas that
can be protected with patents.
c. international competition and markets demand that all ideas be culturally sensitive.
d. the Federal government carefully monitors each companys idea screening process
to make sure no national security matters are at stake.
Answer:

(a)

20. A _______________ is an idea for a possible product that the company can see
itself offering to the market.
a. product idea
b. product image
c. product concept
d. product feature
Answer: (a)
21. A ___________________ is a detailed version of the idea stated in meaningful
consumer terms.
a. product idea
b. product image
c. product concept
d. product feature
Answer: (c)
22. A ____________________ is the way consumers perceive an actual or potential
product.
a. product idea
b. product image
c. product concept
d. product feature
Answer: (b)
23. If Toyota describes one of its cars of the future as being a moderately priced
subcompact designed as a second family car to be used around town; the car is ideal
for running errands and visiting friends, then the company has just stated a potential
new product in terms of a:
a. product idea.
b. product image.
c. product concept.
d. product feature.
Answer: (c)

24. Presenting new-product ideas to consumers in symbolic or physical ways to

measure their reactions occurs during which of the following stages?
a. idea generation
b. concept testing
c. marketing strategy
d. screening
Answer: (b)
25. If a kitchen cabinet designer wished to test design concepts with customers, the
designer might wish to use a _______________ program that would show the
consumer how his or her kitchen would look and work if remodeled with the
companys products.
a. color chart
b. cartoon figure chart
c. virtual reality
d. descriptive schematic
Answer: (c)
26. Designing an initial marketing strategy for a new product based on the product
concept is called:
a. screening.
b. business analysis.
c. product development.
d. marketing strategy development.
Answer: (d)
27. The marketing strategy statement consists of three parts. All of the following would
be among those parts EXCEPT:
a. description of the production flow diagrams.
b. description of the target market.
c. the planning product positioning.
d. the sales, market share, and profit goals for the first few years.
Answer: (a)
28. The stage in the new-product development process in which the anticipated sales,
market share, and profit goals for the first few years are described is called:
a. idea generation.
b. marketing strategy development.
c. business analysis.
d. product development.
Answer: (b)

29. Sanyo intends to capture a 5-percent share of the small radio market in three years.
To achieve this, product quality will start high and be improved over time. Price will
begin low but then be raised (competition permitting). An advertising budget of
$300,000 will be rolled out over a three-year period. To successfully accomplish
its long-run goals, Sanyo should construct and then adhere to a(n):
a. image statement.
b. marketing strategy statement.
c. product development theory.
d. demand-curve theorem.
Answer: (b)
30. When a company reviews sales, costs, and profit projections for a new product to find
out whether these factors satisfy the companys objectives, they are in which of the
following new-product development stages?
a. concept development and testing
b. commercialization
c. business analysis
d. marketing strategy development
Answer: (c)
31. Looking at the sales history of similar products and surveying market opinion are
tools used at which stage in the new-product development process?
a. concept development and testing
b. commercialization
c. business analysis
d. marketing strategy development
Answer: (c)
32. A company is in the ______________ stage of the new-product development process
when the company develops the product concept into a physical product in order to
assure that the product idea can be turned into a workable product.
a. product development
b. commercialization
c. marketing strategy
d. business analysis
Answer: (a)

33. R&D and engineering first produce the product concept into a physical product
during which of the following stages of the new-product development process?
a. concept development and testing
b. marketing strategy
c. business analysis
d. product development
Answer: (d)
34. One of the unique considerations during the product development phase of the new
product development process is that the _______________ developed during this
phase should have the required functional features and also convey the intended
psychological characteristics so consumer testing can be beneficial and meaningful.
a. program
b. placebo
c. prototype
d. process
Answer: (c)
35. Introducing a new product and marketing program to more realistic market settings
following functional and consumer approval is carried out at which new-product
development stage?
a. idea generation
b. screening
c. marketing strategy
d. test marketing
Answer: (d)
36. If a company wishes to test its positioning strategy, advertising, distribution, pricing,
branding and packaging, and budget levels, it can do so during which of the following
stages of the new-product development process?
a. commercialization
b. test marketing
c. product development
d. marketing strategy development
Answer: (b)
37. James Manufacturing would like to do test marketing on a new bicycle that it has
just developed, however, cost is a serious consideration. James Manufacturing has
just been approached by a firm called Simul-Shop that has offered to study the
bicycle market using a unique approach that will only cost about $25,000. Which of
the following innovative test marketing methods is James Manufacturing probably
considering?

a.
b.
c.
d.

virtual reality research

sequential research
simultaneous research
starch testing

Answer: (a)
38. Introducing the new product into the market takes place in which stage of the new
product development process?
a. commercialization
b. test marketing
c. marketing strategy
d. product development
Answer: (a)
39. The FIRST decision that must be reached by the company that is introducing a new
product is:
a. where to introduce.
b. the distribution process.
c. the timing of the introduction.
d. the number of outlets to be included in the rollout.
Answer: (c)
40. With respect to developing new products, if a company chooses to introduce its
new products city-by-city and region-by-region, then the company is probably using
which of the following methods for launching new products?
a. blitz
b. blanket
c. market rollout
d. market blister
Answer: (c)
41. When Colgate-Palmolive uses a ________________ strategy, they pick certain
countries for new-product introductions before general introduction to entire regions
or continents.
a. gray market
b. primo country
c. demand-based
d. lead-country
Answer: (d)
42. A new-product development approach in which one company department works to

complete its stage of the process before passing the new product along to the next
department and stage is called:
a. sequential product development.
b. retrograde product development.
c. simultaneous product development.
d. reactive product development.
Answer: (a)
43. Overlapping steps in the new-product development process to save time and
increase effectiveness across the various departments involved is called:
a. sequential product development.
b. retrograde product development.
c. simultaneous product development.
d. reactive product development.
Answer: (c)
44. The simultaneous approach to new-product introduction does have several
limitations. All of the following would be considered to be among those limitations
EXCEPT:
a. it is riskier than other forms of introduction.
b. it is more costly in many instances.
c. it is too slow for many marketers.
d. it has increased organizational tension and confusion.
Answer: (c)
45. The course of a products sales and profits over its lifetime is called:
a. the sales chart.
b. the dynamic growth curve.
c. the adoption cycle.
d. the product life cycle.
Answer: (d)
46. The ______________ is characterized by five distinct stages: product development,
introduction, growth, maturity, and decline.
a. adoption cycle
b. fashion process
c. product life cycle
d. style curve
Answer: (c)
47. With respect to the product life cycle, the _____________ begins when the
company finds and develops a new-product idea.
a. product development stage

b. introduction stage
c. growth stage
d. maturity stage
Answer: (a)
48. With respect to the product life cycle, the ______________ is a period of slow
sales growth as the product is introduced in the market.
a. product development stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (b)
49. With respect to the product life cycle, the _______________ is a period of rapid
market acceptance and increasing profits.
a. product development stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (c)
50. With respect to the product life cycle, the ________________ is a period of
slowdown in sales growth because the product has achieved acceptance by most
potential buyers.
a. product development stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (d)
51. With respect to the product life cycle, the __________________ is the period when
sales fall off and profits drop.
a. decline stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (a)
52. The product life cycle concept has many varied uses. The PLC can describe all of
the following EXCEPT:
a. a product class.
b. a product form.

c. a product shape.
d. a product brand.
Answer: (c)
53. ______________ have the longest product life cycles.
a. Product forms
b. Product brands
c. Product genres
d. Product classes
Answer: (d)
54. In terms of special product life cycles, a _____________ is a basic and distinctive
mode of expression.
a. genre
b. style
c. fashion
d. fad
Answer: (b)
55. In terms of special product life cycles, a _______________ would be exemplified by
the preppie look in the clothing of the late 1970s and early 1980s.
a. genre
b. style
c. fashion
d. fad
Answer: (c)
56. In terms of special product life cycles, a _________________ only lasts for a short
time, is adopted with a great deal of zeal, peaks early, and declines very fast.
a. genre
b. style
c. fashion
d. fad
Answer: (d)
57. Pet rocks are a classic example of which of the following?
a. a genre
b. a style
c. a fashion
d. a fad

Answer: (d)
58. Which of the following is characterized by a extremely peaked demand curve that
rises rapidly and declines rapidly in a short period of time?
a. a genre
b. a style
c. a fashion
d. a fad
Answer: (d)
59. A concentration on producing a basic version of a product by a firm and its
competitors is typical of which stage in the product life cycle?
a. product development stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (b)
60. An increase in competition, attracted by the opportunities for profit, is typical of
which stage of the product life cycle?
a. decline stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (c)
61. In the ___________ , a firm faces a trade-off between high market share and high
current profit.
a. decline stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (c)
62. The stage of the PLC characterized by overcapacity, greater competition, and the
eventual elimination of weaker competitors is called the:
a. decline stage.
b. introduction stage.
c. growth stage.
d. maturity stage.
Answer: (d)

63. In the maturity phase of the PLC, a marketing manager should consider:
a. dropping the product and moving on to the next product winner.
b. modifying the market, product, and marketing mix.
c. expanding R & D.
d. pricing to penetrate the market.
Answer: (b)
64. The strategy used during maturity to attempt to increase the consumption of the
current product is called:
a. customer modification.
b. market modification.
c. product modification.
d. marketing mix modification.
Answer: (b)
65. All of the following are examples of products that have had very long and successful
product life cycles EXCEPT:
a. Beanie Babies.
b. Barbie.
c. the Plymouth Prowler.
d. Crayola Crayons.
Answer: (c)
66. Cutting prices, using aggressive sales promotion, or launching a better advertising
campaign, are all typical elements of which strategy used during the maturity stages
of the PLC?
a. customer modification
b. market modification
c. product modification
d. marketing mix modification
Answer: (d)
67. Technological advances, shifts in consumer tastes, and increased competition, all
of which reduce demand for a product, are typical of which stage in the PLC?
a. decline stage
b. introduction stage
c. growth stage
d. maturity stage
Answer: (a)

68. As a product reaches its decline stage of the PLC, management may decide to
__________ the product, which means reducing various costs and hoping that sales
hold up.
a. disengage
b. drop
c. harvest
d. cultivate
Answer: (c)
69. The stage in the product life cycle that focuses on using a cost-plus formula and
creating product awareness and trial is the:
a. decline stage.
b. introduction stage.
c. growth stage.
d. maturity stage.
Answer: (b)
70. The stage in the product life cycle where the strategic focus is on market penetration
and building intensive distribution is the:
a. decline stage.
b. introduction stage.
c. growth stage.
d. maturity stage.
Answer: (c)
71. The stage in the product life cycle where the strategic focus is on maximizing profit
while defending market share and pricing to match or best the competition is called
the:
a. decline stage.
b. introduction stage.
c. growth stage.
d. maturity stage.
Answer: (d)
72. The stage in the product life cycle where the strategic focus is on reducing
expenditures and milking the brand while cutting prices is called the:
a. decline stage.
b. introduction stage.
c. growth stage.
d. maturity stage.
73.The New Product development process does not incorporate which of the following?

a.
b.
c.
d.

Test Marketing
Obtaining Funding from venture capitalists
Business Analysis
Concept development & Testing

Answer (b)
74. The statement of the planned strategy for a new product that outlines the target market,
product positioning & market goals and projection is a:
a. Corporate Goal
b. Marketing Plan
c. Marketing Strategy
d. All of the Above
Answer (c)
75. There are three remaining stages of product development. What are they?
a. Test Marketing, Commercialisation, Monitoring & Evaluation
b. Communication, Test Marketing, Market Research
c. Market Research, Commercialisation, Evaluation
d. Communication, Test Marketing, Market Research
Answer (a)
76. Test Marketing offers a number of benefits. Which of the following are the examples of
these benefits?
a. Gives the opportunity to vary some of the mix variables
b. Offers a chance for fine tuning
c. All of the above
d. None of the above
Answer (c)
77. What % of new products that are launched, will fail to achieve their potential & not survive?
a. Up to 90%
b. 30%
c. 80%
d. 40%
Answer (a)
78. Discontinuous innovation is defined as:
a. Minor innovation to market
b. A new product so radical that it changes the way people live
c. New to market
d. New to company, significant innovation to market
Answer (b)
79. Identify the type of innovation shown by the development of the cellular phone:

a.
b.
c.
d.

Retrograde innovation
Continuous innovation
Discontinuous innovation
Dynamically continuous innovation
Answer (c)

80. The ability to try a new product on a limited basis is called:

a. Divisibility
b. Trial
c. Consumerism awareness
d. Complexity
Answer (a)
81. Which of the following is not a feature of the Decline Phase of the Product Life Cycle?
a. Laggards
b. Reduction in Expenditure
c. Low cost per customer
d. Declining number of competitors
Answer (c)
82. Which of the following is a factor that determines whether a brand-new product is adopted
or not?
a. Communicability
b. Positioning
c. Innovativeness
d. Consumer awareness
Answer (a)
83. A Product which is not accepted by consumers but which makes money initially, is an
example of:
a. Outright failure
b. Partial failure
c. Success
d. Partial success
Answer (b)
84. Which of the following is not true about test marketing?
a. It keeps competitors out of the market
b. It gives an opportunity to measure consumer reactions to the product
c. It risks notifying the competitors
d. None of the above
Answer (a)
85. Which of the following is not a strategy that will be used in the introductory phase of the
product life cycle?
a. Build Product awareness among early adopters & dealers

b. Use a cost plus pricing strategy

c. Offer a basic product
d. Offer product extensions
Answer (d)
86. Which of the following is not a feature of the maturity phase of the Product Life Cycle?
a. Begin to diversify brands & models
b. Building product awareness amongst early adopters & dealers
c. High Profits
d. Sales Peaking
Answer (b)
87. Acme Corporation is currently experiencing rising sales for a new product idea it pioneered
several months ago. Profits are also increasing, so other competitors are now entering the
market with similar products. The competitive situation is changing from monopoly to
monopolistic competition. In which stage of the PLC is Acme Corporation operating?
a. Market establishment
b. Market growth
c. Market maturity
d. Sales decline
Answer (b)
88. As a product moves into the market maturity stage of the PLC:
a. Consumers tend to view products as being more similar
b. The competitive situation moves toward monopoly
c. Promotion emphasizes informing consumers more than persuading them
d. All of the above
Answer (a)
89. A product idea that provides a high degree of immediate satisfaction, but a low degree of
long-run consumer welfare is a:
a. Desirable product
b. Pleasing product
c. Salutary product
d. Deficient product
Answer (b)
90. Which stage of the PLC is marked by falling costs & rising revenues?
a. Introduction stage
b. Growth stage
c. Maturity stage
d. Saturation stage
Answer (b)

91. A _______________ is an idea for a possible product that the company can see itself
offering to the market.
a. Product Idea
b. Product Image
c. Product Concept
d. Product Feature
Answer (a)
92. Designing an initial marketing strategy for a new product based on the product concept is
called:
a. Screening
b. Business Analysis
c. Product Development
d. Marketing strategy development
Answer (d)

93. What is Price Skimming?

a. Setting a low price to Skim off a large number of consumers
b. Setting initially high price which falls as competitors enter the market
c. Setting a high price which consumers perceive as indicating high quality
d. None of these
Answer (b)
94. Setting a price below that of the competition is called:
a. Skimming
b. Penetrating pricing
c. Competitive pricing
d. None of these
Answer (b)
95. Which of the following is not a reason for cutting prices?
a. Increasing profit margins
b. Capacity utilisation
c. Market defence
d. All of the above
Answer (a)
96. A profit calculated by adding a percentage to the costs of production is called:
a. Breakeven
b. Mark-up
c. Margin
d. None
Answer (b)

97. Calculating Prices on the basis of what the market will pay is called:
a. Prestige pricing
b. Demand pricing
c. Competitive pricing
d. Psychological pricing
Answer (b)
98. Bundle pricing is:
a. Providing a bundle of benefits for one price
b. Packaging a group of products together
c. Providing a group of prices for on product category
d. None of these
Answer (b)
99. Internal pricing between departments of the same firm is called:
a. Cost-plus pricing
b. Transfer pricing
c. Internal pricing
d. External pricing
Answer (b)
100.
A ____________ policy means that a firm sets one price for all buyers in a given
product or service line.
a. Fixed price
b. Variable price
c. Standard price
d. Dynamic price
Answer (a)
101.
Which of the following factors is spurring a new movement in pricing towards
dynamic pricing?
a. The federal government
b. Strong retailers
c. The Internet strong
d. Wholesalers
Answer (b)
102.
____________ is the practice of charging different prices depending on individual
customers and situations.
a. Fixed-pricing
b. Standard-pricing
c. Barter-pricing
d. Dynamic pricing
Answer (d)

103.
Pricing to cover variable costs and some fixed costs, as in the case of some
automobile distributorships that sell below total costs, is typical of which of the following
pricing objectives?
a. Current profit maximization
b. Product quality leadership
c. Market share leadership
d. Survival
Answer (d)
104.
Choosing a price based upon its short-term effect on current profit, cash flow, or
return on investment reflects which of the following pricing objectives?
a. Current profit maximization
b. Product quality leadership
c. Market share leadership
d. Survival
Answer (a)
105.
The Samuels Company, a company that makes performance race cars for dirt tracks,
charges high prices to cover higher performance quality and the high cost of R&D necessary
to stay on top of the performance racing field. Which of the following pricing objectives
would the Samuels Company most likely is following as a course of action?
a. Current profit maximization
b. Product quality leadership
c. Market share leadership
d. Survival
Answer (c)
106.
When a company sets a price for a new product on the basis of what it thinks the
product should cost, then develops estimates on what each component should cost to meet
the proposed price with an acceptable profit margin, the company is practicing:
a. Predatory pricing
b. Target costing
c. Strategic pricing
d. Low cost leadership
Answer (b)
107.
In industries such as aerospace, steel, railroads, and oil, companies often have a
_____________ to set the prices or to help others in setting them.
a. Vice-President of Pricing
b. Pricing Board
c. Pricing Department
d. PFO (Pricing and Financial Officer)
Answer (c)

108.
Markup pricing remains popular in the marketplace. Which of the following is a
reason for this popularity?
a. Cost-plus pricing favors the best price.
b. Standard markups make the most sense.
c. Cost-plus pricing is fairer to both buyers and sellers.
d. The method focuses on demand as its base.
Answer (c)
109.
Which of the following pricing methods uses the idea that pricing begins with
analyzing consumer needs and value perceptions, and price is set to match consumers
perceived value?
a. Cost-based pricing
b. Service-based pricing
c. Psychology-based pricing
d. Value-based pricing
Answer (d)
110.When Intel develops a strategy whereby they develop and introduce a newer, higher
margin microprocessor chip every 12 months and send the older models down the industry
food chain to feed demand at lower price points (their new chips can sell for as much as a
$1,000 apiece), they are using which of the following pricing strategies?
a. Market-layer pricing
b. Market-segmentation pricing
c. Market-saturation pricing
d. Market-skimming pricing
Answer (d)
111.The use of price points for reference to different levels of quality for a companys
related products is typical of which product-mix pricing strategy?
a. Optional-product pricing
b. Captive-product pricing
c. By-product pricing
d. Product line pricing
Answer (d)
112Captive-product pricing applies to services pricing. With respect to services, the
captive-product strategy is called:
a. Demand pricing
b. Slack pricing
c. Two-part pricing
d. Referral pricing
Answer (c)
113.____ is the development of original products, product improvements, product modifications,
and new brands through the firms own R&D efforts.

a.Idea generation
b.Concept testing
c. Test marketing
d. New product development
Answer: (d) Difficulty: (1) Page: 264
114. All of the following are different ways a firm can obtain new products, except which one?
a By acquiring a whole new company
b. A firm can obtain a new product through patents
c A firm can obtain a new product by licensing someone else's new product
d.A firm can obtain a new product by using the R&D department of other firms in the same
industry.
Answer: (d) Difficulty: (2) Page: 264
115. All of the following are accurate descriptions of reasons why new products fail, except which
one?
a. Although the market size was correctly estimated, the product idea itself was not good.
b. The actual product was not designed as well as it should have been.
c. The new product was priced too high.
d. The new product was advertised poorly.
Answer: (a) Difficulty: (3) Page: 264
116. All of the following are accurate descriptions of ways companies are anxious to learn how to
improve the odds of new-product success, except which one?
a Find out what successful new products have in common.
b. To learn lessons from new product failures.
c. Companies have to learn to understand their own consumers.
d.Do not overly rely on product innovation when you can succeed by copying others.

Answer: (d) Difficulty: (3) Pages: 262-264

117. New-product development starts with _____.
a. idea screening
b. idea generation
c. concept development and testing
d. marketing strategy development
Answer: (b) Difficulty: (2) Page: 265
118. _____ is the systematic search for new-product ideas.
a. Idea generation
b. Idea screening
c. Concept development and testing
d. Marketing strategy development
Answer: (a) Difficulty: (1) Page: 265
118. All of the following are major internal sources of new-product ideas, except which one?
a. Picking the brains of company executives, scientists, engineers and salespeople is a good
way to generate ideas.
b. Intrapreneurial programs that encourage employees to think and develop new-product
ideas is a good way to generate ideas.
c. Some companies employ creative approaches, including both "method and madness" in
helping them to generate new product ideas.
d. Good ideas come from watching and listening to customers.
Answer: (d) Difficulty: (3) Page: 266
119. Major sources of new product ideas include _____.
a. internal sources, using company R&D
b. creative approaches, using both "method and madness" approaches

c. watching and listening to customers

d. all of the above are sources of new product ideas
Answer: (d) Difficulty: (2) Page: 266
120 All of the following are major external sources of new-product ideas, except which one?
a.Companies can conduct surveys or focus groups to learn about consumer needs and wants.
b. Competitors are a good source of new-product ideas.
c. Some companies employ creative approaches, including both "method and madness" in
helping them to generate new product ideas.
d. Good ideas come from watching and listening to customers.
Answer: (d) Difficulty: (3) Page: 266
121

All of the following are accurate descriptions of new product ideas, except which one?
a. New product development starts with idea generation.
b. Some companies use brainstorming exercises that expand people's minds and generate
new ideas around the client's problem.
c. At the beginning of the process, carefully scrutinize each idea and throw far-fetched and
impractical ones out the window.
d. Customers must be careful not to rely too heavily on customer input when developing
new products.
Answer: (c) Difficulty: (3) Pages: 268-269

122. Some companies have installed a(n) _____ that directs the flow of new ideas to a central
point where they can be collected, reviewed, and evaluated.
a.

new-product development team

b.

idea management system

c.

computer system

d.

satellite system

Answer: (b) Difficulty: (3) Page: 269

123. In order to install an idea management system, whereby all ideas are directed to a central point,
a company can do any or all of the following:
a.

Appoint a respected senior person to be the firm's idea manager.

b. Create a cross-functional idea management committee comprising of people form R&D,

finance, engineering and operations to meet and evaluate new product ideas.
c. Reward employees through formal recognition programs.
d. All of the above are legitimate ways to systematically collect ideas.
Answer: (d) Difficulty: (3) Page: 269
124 The purpose of _____ is to generate a large number of ideas.
a. idea screening
b. idea generation
c. concept development and testing
d. marketing strategy development
Answer: (b) Difficulty: (2) Page: 270
125

The first idea reducing stage is _____ , which helps spot good ideas and drop poor ones as
soon as possible.
a. idea generation
b. idea screening
c. concept development and testing
d. marketing strategy development
Answer: (b) Difficulty: (2) Page: 270
126. What are the two ways that a company can obtain new products?
a. market mix modification and research and development
b. internal development and merger
c. new-product development and acquisition

d. line extension and brand management

e. service development and product extension

Answer (b)

127. Which of the following is not a potential cause of the failure of a new product?
a.
b.
c.
d.
e.

an underestimated market size

ineffective advertising
higher than anticipated costs of product development
an incorrectly positioned product
a poorly designed product
Answer (a)

128. The creation of a successful new product depends on a company's understanding of its
________ and its ability to deliver ________ to customers
a. customers, competitors, and markets; superior value
b. product, marketing mix, and marketing strategy; functional features
c. product life cycle, legal responsibilities, and social responsibilities;
innovations
d. competitors, distributors, and employees; new styles
e. customers, brands, products; product images
129 ..includes two visual signals of a brand its character (e.g. Amul girl,
Pillsbury doughboy) and its logo. Both are elements of brand identity.
a. Brand attitude
b. Brand Image
c. Brand Symbol
d. Brand Positioning
Answer: c

130..can be thought of as a perceptual map of in which like products of the

same company (say, toothpaste) are positioned very close to one another and compete more
with one another than with brands of other companies.
a. Brand Comparison
b. Cannibalization
c. Positioning
d. Brand Associations
Answer: b

131 . A marketer need to understand that some general traits of a brand name are:
a. Easy to recognize
b. Easy to pronounce
c. Easy to memorize or recall
d. All of the above
e. None of the above
Answer:d

132 Close up, Doordarshan, Frooti, Babool, Fair and Lovely, Band aid and Ujala are the
examples of..
a. Descriptive Brand Name
b. Suggestive brand name
c. Free Standing brand name
d. None of the above

Answer: a

133 Kadak, Xerox, Exxon, Fidji are the examples of

a. Free Standing brand name
b. Descriptive Brand Name
c. Suggestive brand name
d. Bothe b and c
Answer: a

134Whisper, Visa, Tropicana, Surf, Limca, Crush, Denim are the examples of
a. Descriptive Brand Name
b. Suggestive brand name
c. Free Standing brand name
d. None of the above
Answer: b

135 Watches sold as a Jewellery is related to

a. Titan Raga
b. Tanishq
c. Swatch
d. GoldPlus
Answer: b

136 Jod jo tootega nahin tagline is related with brand

a. M-Seal
b. Fevikwik
c. Fevicol
d. Ambooja cement
Answer: c

137 Lifebuoy kills the germs you cannot see, is an example of

a. Emotional benefit related positioning
b. Functional benefit related positioning
c. Usage occasion related positioning
d. Health related positioning
Answer: b

138 Match the correct

1. Close up

i. Fresh

2. JK Tyres

ii. Caring

3. J&J

iii. In control

4. Liril

iv. Confident

Options:
a. 1(ii), 2(iii), 3(i), 4(iv)
b. 1(ii), 2(iv), 3(i), 4(iii)

c. 1(iv), 2(iii), 3(ii), 4(i)

d. 1(ii), 2(iii), 3(iv), 4(i)
Answer: c
139An organization using a name, phrase, design, symbols, or combination of these to identify its
products is:
a.
b.
c.
d.
e.

repositioning product lives

forming family units
trademarking products
patenting product
branding products

Answer

(e)

140 Aggressive pricing is associated with which of the following stage of product life cycle?
a. Introduction
b. Growth
c. Maturity
d. Decline
Answer(c)
141.Market price is also known as:
a. Effective price
b. List price
c. Retail price
d. Wholesaler price
Answer(a)
142. Which of the following firms emphasizes on products benefits to the customers rather product
attributes?
a.Product oriented

b.Market oriented
c. Sales oriented
d. Production oriented
Answer (b)

143 Firms that use ----- are less likely to damage their reputations if a new product fails.
A)individual branding
B)overall family branding
C)line family branding
D)brand extension branding
Answer (a)

144. Which of the following is NOT a desirable feature for a brand name?
A)it can facilitate the introduction of new products
B)it can become used as the generic name for all products in the category
C)it can make it possible for the firm to engage in non price competition
D)it can help develop brand loyalty amongst buyers
Answer (b)

145. The major characteristic of own label brands is that

A)only retailers initiate and own the brand.
B)manufacturers are not identified on the product.
C)producers become involved with the marketing mix.

D)producers are identified on the product.

Answer (b)

146. Marketers should view packaging as a major strategic tool, especially for
A)consumer convenience products.
B)consumer shopping products.
C)industrial products.
D)specialty products.
Answer (a)

147 __________ packaging means that the product is packaged in line with the packaging practices
associated with a particular product category.
A)Category-consistent
B)Category-specific
C)Innovative
D)Multiple-category
E)Selective
Answer (a)

148. Multiple packaging is

A)likely to increase demand.

B)the same as family packaging.

C)the most effective type of packaging.
D)the most expensive type of packaging.

Answer (b)

149. The label on a soft drink can reads "cool and refreshing." For what reason are these words
used?
A)To provide information
B)To encourage multiple purchases
C)To promote the product
D)To satisfy legal requirements
Answer (c)

150. A firm may decide that all packages are to be similar or include one major element of the
design. This approach to promote an overall company image is called
A)family extension.
B)family packaging.
C)overall packaging.
D)package extension
Answer (b)

151. When brand management becomes the heart of marketing then which one becomes the heart

of brand management.
A)Owners equity
B)Brand equity
C)Brand assets
D)Brand value
Answer (b)

152.Intel inside is a classic example of which one of the following?

Bundling
A)Ingredient co-branding
B captive branding
c)Joint venture
d)Effective packaging
Answer (a)

153. The creation of a successful new product depends on a company's understanding of its
________ and its ability to deliver ________ to customers.
A)
B)
C)
D)
E)

product life cycle, legal responsibilities, and social responsibilities; innovations

product, marketing mix, and marketing strategy; functional features
customers, brands, products; product images
customers, competitors, and markets; superior value
competitors, distributors, and employees; new styles

Answer (d)
154. Executives, manufacturing employees, and salespeople are all examples of ________.
A) research and development team members
B) internal sources for new-product ideas
C) core members of innovation management systems
D) new-product committee members
E) external sources for new-product ideas
Answer (b)

155 Which of the following is perhaps the most important external source of new-product ideas?
A) customers
B) competitors
C) engineers
D) distributors and suppliers
E) trade magazines, shows, and seminars
Answer (a)

156. Your firm wants to use external sources for new product ideas. After consulting with a friend
you learn that all of the following are common external sources except ________.
A) suppliers
B) customers
C) competitors
D) trade shows and magazines
E) the firm's executives
Answer (e)

157.GrayBerry Gifts has just brainstormed a large number of ideas for adding new products and
services after visiting several buying fairs. The owners will begin the first idea-reducing stage,
called ________ , to arrive at a realistic number to adopt.
a. concept development
b. idea screening
c. product concept
d. idea dissemination
e. idea generation
Answer (b)
158 A detailed version of a new idea stated in meaningful customer terms is called a ________.
a.product concept
b.product movement
c.product image
d.product idea
e.product proposal
Answer (a)

159.An attractive idea must be developed into a ________.

a. product strategy
b. product image
c. product concept
d. test market
e. product idea
Answer (c)

160. In the concept testing stage of new-product development, a product concept in ________ form
is presented to groups of target consumers.
a. market-tested
b. final
c. commercial
d. physical or symbolic
e. prototype
Answer (d)
161. After concept testing, a firm would engage in which stage in developing and marketing a new
product?
marketing strategy development
idea screening
business analysis
test marketing
product development
Answer (a)
162.The second part of the marketing strategy statement outlines the product's planned price,
distribution, and ________ for the first year.
a. advertising
b. positioning
c. marketing budget
d. target market
e. promotion
Answer (c)
163. During which stage of new-product development is management most likely to estimate
minimum and maximum sales to assess the range of risk in launching a new product?
a. business analysis

b.
c.
d.
e.

marketing strategy development

product development
concept testing
test marketing

Answer (a)
164 All of the following are different ways a firm can obtain new products, except which one?
a. By acquiring a whole new company
b. A firm can obtain a new product through patents
c. A firm can obtain a new product by licensing someone else's new product
d. A firm can obtain a new product by using the R&D department of other firms in the same
industry.
Answer: (d)

165. All of the following are accurate descriptions of reasons why new products fail, except which
one?
a. Although the market size was correctly estimated, the product idea itself was not good.
b. The actual product was not designed as well as it should have been.
c. The new product was priced too high.
d. The new product was advertised poorly.
Answer: (a)

166. All of the following are accurate descriptions of ways companies are anxious to learn how to
improve the odds of new-product success, except which one?
a. Find out what successful new products have in common.
b. To learn lessons from new product failures.
c. Companies have to learn to understand their own consumers.

d.Do not overly rely on product innovation when you can succeed by copying others.
Answer: (d)
167.

New-product development starts with _____.

a. idea screening
b. idea generation
c. concept development and testing
d. marketing strategy development
Answer: (b)

168. _____ is the systematic search for new-product ideas.

a. Idea generation
b. Idea screening
c. Concept development and testing
d. Marketing strategy development
Answer: (a)

169.

All of the following are major internal sources of new-product ideas, except which one?
a. Picking the brains of company executives, scientists, engineers and salespeople is a good
way to generate ideas.
b. Intrapreneurial programs that encourage employees to think and develop new-product
ideas is a good way to generate ideas.
c. Some companies employ creative approaches, including both "method and madness" in
helping them to generate new product ideas.
d. Good ideas come from watching and listening to customers.

Answer: (d)

170

Major sources of new product ideas include _____.

a.internal sources, using company R&D
b.creative approaches, using both "method and madness" approaches
c.watching and listening to customers
d. all of the above are sources of new product ideas
Answer: (d)

171

All of the following are major external sources of new-product ideas, except which one?
a. Companies can conduct surveys or focus groups to learn about consumer needs and
wants.
b. Competitors are a good source of new-product ideas.
c. Some companies employ creative approaches, including both "method and madness" in
helping them to generate new product ideas.
d. Good ideas come from watching and listening to customers.
Answer: (d)

172. All of the following are accurate descriptions of new product ideas, except which one?
a. New product development starts with idea generation.
b. Some companies use brainstorming exercises that expand people's minds and generate
new ideas around the client's problem.
c.At the beginning of the process, carefully scrutinize each idea and throw far-fetched and
impractical ones out the window.
d. Customers must be careful not to rely too heavily on customer input when developing
new products.

Answer: (c)

173. Some companies have installed a(n) _____ that directs the flow of new ideas to a central point
where they can be collected, reviewed, and evaluated.
a. new-product development team
b. idea management system
c. computer system
d. satellite system
Answer: (b)

174. In order to install an idea management system, whereby all ideas are directed to a central
point, a company can do any or all of the following:
a. Appoint a respected senior person to be the firm's idea manager.
b. Create a cross-functional idea management committee comprising of people form R&D,
finance, engineering and operations to meet and evaluate new product ideas.
c. Reward employees through formal recognition programs.
d. All of the above are legitimate ways to systematically collect ideas.
Answer: (d)
175. The purpose of _____ is to generate a large number of ideas.
a. idea screening
b. idea generation
c. concept development and testing
d. marketing strategy development
Answer: (b)

176. The first idea reducing stage is _____ , which helps spot good ideas and drop poor ones as
soon as possible.
a. idea generation
b. idea screening
c. concept development and testing
d. marketing strategy development
Answer: (b

177. A _____ is a detailed version of the idea stated in meaningful consumer terms.
a. product idea
b. product concept
c. product image
d. test market
Answer: (b)

178

A _____ is the way consumers perceive an actual or potential product.

a. product idea
b. product concept
c. product image
d. test market
Answer: (c)

179. An attractive idea must be developed into a _____.

a. product idea

b. product concept
c. product image
d. test market
Answer: (b
180

All of the following are accurate descriptions of activities performed in the idea screening
stage of new product development,except which one?
a. Idea screening helps spot good ideas and drop poor ones as soon as possible.
b. Companies want to go ahead only with the product ideas that will turn into profitable
products.
c. Many companies require their executives to write up new product ideas on a standard
form that can be reviewed by a new-product committee.
d. Setting up a toll-free number or Web site for anyone who wants to send a new idea to the
idea manager.
Answer: (d)

181.

_____ calls for testing new-product concepts with groups of target consumers.
a. Concept development
b. Concept testing
c. Idea generation
d. Idea screening
Answer: (b)

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