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. New product development essential due to –
a. Changing customer needs and wants
b. Evolving of new technologies
c. Both a and b
d. None of the above
2. New product can be a. New product lines
b. New to the world products
c. Both a and b
d. None of the above
3. Hurdles in new product development are –
a. Shortage of ideas
b. High cost of development
c. Both a and b
d. None of the above
4. Business Analysis involves –
a. Estimating total sales
b. Estimating costs and profits
c. Conducting break even analysis
d. All the above
5. Appropriate country to test market a new product –
a. India
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b. Saudi Arabia
c. Indonesia
d. None of the above
6. Essential for the success of new product concept –
a.
Product superiority
b. Overall company fit
c. Offer economic advantage to user
d. All the above
7. Stages in a Product life cycle [PLC] –
a. Introduction stage
b. Growth stage
c. Maturity and decline stage
d. All the above
8. 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
9. 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
10. 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
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d. Low promotion
Tick true or false: [answers marked in green, bold and underlined]
11. New products are a key to growth. True / False
12. Companies that excel in developing and managing new products do not reap big
rewards. True / False
13. New product development is risky and expensive. True / False
14. Idea screening means dropping of poor ideas. True / False
15. New product ideas cannot be generated through interaction with others. True /
False
Short answer questions [For Mid Term and final examination]
16. 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
17. 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
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18. List out the hurdles in new product development?
Answer:
• Shortage of ideas
•
•
•
•
•
Fragmented markets
Social and Government constraints ‫القيود‬
Increased Cost of Development
Faster/quicker development time
Shorter Product Life Cycles [PLC]
19. 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
20. List out the essential factors that would lead to the success of a new product
concept
Answer:
1. Product superiority
2.
3.
4.
5.
6.
7.
8.
Economic advantage‫ ميزة‬to user
Overall company fit
Technological compatibility ‫متوافق‬
Familiarity ‫ مألوف‬to the company
Market need, growth, and size
Competitive situation
Defined opportunity
21. What are the different stages in a Product’s life cycle?
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Answer:
Stage 1 - Introduction stage
Stage 2 - Growth stage
Stage 3 - Maturity stage
Stage 4 - Decline stage
22. 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]
23. 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
24. 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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