Page 364 - Introduction to Business

338 PART 3 Marketing

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True/False Questions b. Repositionings
Please indicate if the following statements are true or c. New product lines
false: d. Additions to existing product lines
e. New-to-world products
1. Industrial products are not usually mar-
keted through channels of distribution. 3. Which of the following refers to the extent
to which a new product enables customers
2. Marketing mixes need to be modified over
to try it on a limited basis without the prod-
time.
uct having to be purchased?
3. Product design involves the intangible
a. Compatibility
aspects of products.
b. Relative advantage
4. National brands are developed by and mar-
c. Complexity
keted by retailers.
d. Divisibility
5. For some products, the cost of the package e. Communicability
may exceed the cost of the contents.
4. A 25 percent markup on cost is equivalent
6. An implicit warranty is an unspoken or to which percentage markup on retail?
unwritten warranty.
a. 10 percent
7. A standardization strategy for marketing b. 20 percent
products to international markets has the c. 30 percent
advantage of holding down R&D, produc- d. 33.3 percent
tion, and marketing costs. e. 50 percent
8. Product depth refers to the number of 5. If a new product has a development cost of
product lines a company has. $100,000, a desired profit of $20,000, a price
9. In comparison to follow-the-leader compa- of $10, and a cost per unit of $6, its break-
nies, first movers incur more risk when they even quantity is
bring out a new product. a. 10,000 units.
10. Demand is an indication of the number of b. 20,000 units.
units that will be purchased at various c. 30,000 units.
prices. d. 40,000 units.
e. 50,000 units.
Multiple-Choice Questions
6. The first 2.5 percent of individuals to adopt
Choose the best answer. a new product are called
1. The major function of business analysis in a. the late majority.
the new product development process is to b. the early majority.
a. initially screen new product ideas. c. innovators.
b. estimate potential profitability of the d. laggards.
new product idea. e. early adopters.
c. estimate potential market share of the 7. Profits for products are usually the highest
new product. during which stage of the product life
d. develop a new product prototype. cycle?
e. generate a list of new product ideas.
a. Growth
2. Which of the following is the type of new b. Introduction
product that involves the greatest level c. Maturity
of risk? d. Decline
a. Cost reductions e. Extension

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