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Principles of Marketing MKG 201

Chapter 8 Product Decisions - Question Bank

Multiple choice questions & answers: [For Quiz] [Answers are marked in green
and underlined]

1. Rapid skimming strategy means


a. Charging high price and spending high on promotion
b. Charging low price
c. Charging high price and low promotion
d. All the above

2. Rapid penetration strategy means -


a. Charging high price and spending high on promotion
b. Charging low price and spending high on promotion
c. Charging high price and low promotion
d. Low promotion

3. Slow skimming strategy means


a. Charging high price and spending high on promotion
b. Charging low price and spending high on promotion
c. Charging high price and spending low on promotion
d. Low promotion ;,lm

Tick true or false: [answers marked in green, bold and underlined]

4. New products are a key to growth. True / False


5. Companies that excel in developing and managing new products do not reap big
rewards. True / False
6. New product development is risky and expensive. True / False
7. Idea screening means dropping of poor ideas. True / False
8. New product ideas cannot be generated through interaction with others. True /
False

9. New products are a key to growth. True / False


10. Companies that excel in developing and managing new products do not reap big
rewards. True / False

Short answer questions [For Mid Term and final examination]


1
11. What are the different formats/categories of a new product?
Answer:
New to the world products
New product lines
Additions to existing lines
Improvements to existing products
Repositioning
Cost reductions

12. List out the reasons as to why new product development is essential? -
Answer:
New product development essential due to
Changing customer needs and wants
Evolving of New Technologies
Shortened PLC
Increased domestic and foreign competition

13. List out the hurdles in new product development?


Answer:
Shortage of ideas
Fragmented markets
Social and Government constraints
Increased Cost of Development
Faster/quicker development time
Shorter Product Life Cycles [PLC]

14. Bring out the stages in a new product development process?


Answer:
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Deciding the Marketing strategy
5. Business Analysis
6. Product development
7. Market testing
8. Commercialization

15. List out the essential factors that would lead to the success of a new product
concept
Answer:
1. Product superiority
2. Economic advantage to user
3. Overall company fit
4. Technological compatibility
5. Familiarity to the company
6. Market need, growth, and size
2
7. Competitive situation
8. Defined opportunity

16. What are the different stages in a Products life cycle?


Answer:
Stage 1 - Introduction stage
Stage 2 - Growth stage
Stage 3 - Maturity stage
Stage 4 - Decline stage

17. List out the various marketing strategies that can be used when a product is in its
introduction stage.
Answer:
Rapid-skimming strategy [high price - high promotion]
Slow-skimming strategy [ high price and low promotion ]
Rapid-penetration strategy [low price and high promotion]
Slow-penetration strategy [low price & low promotion]

18. What marketing strategies can be used when a product reaches growth stage?
Answer:
Improves product quality, styling, add features
Add new models
Enters new market segment
Distribution coverage and new distribution channels
Product awareness advertising to product preference advertising
Lower prices to price sensitive buyers

19. List out the marketing strategies that can be used when products reach maturity
and decline stage.
Answer:
Maturity stage
Market modification
Product modification
Marketing-mix modification

Decline stage
Identify weak products
Determine decline marketing strategies
Drop decision

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