Why Are line Extensions more Common than New Products?

14. Why are line extensions more common than new products?

a) They are higher risk and more expensive.

b) They are guaranteed to succeed in the marketplace.

c) They are less expensive and lower-risk.

d) They require no market research.

e) Modifications to existing products are very easy.

15. Coca-Cola has expanded to Diet Coke, Cherry Coke, and Caffeine-free Coke, to name a few. These are examples of

a) product modifications.

b) functional modifications.

c) aesthetic modifications.

d) line extensions.

e) product lining.

16. A(n) ___________ is the development of a product that is closely related to one or more products in the existing product line but is designed specifically to meet somewhat different needs of customers.

a) product modification

b) line extension

c) quality modification

d) functional development

e) aesthetic extension

17. If the manufacturer of Cool Whip were to introduce an orange-flavored Cool Whip and still continue to produce all of its other Cool Whip products, this would be an example of

a) a brand extension.

b) line extension.

c) functional modification.

d) quality modification.

e) a new-to-the-world product.

18. __________ is the development of a product that is closely related to one or more products in a firm’s existing product line but is designed specifically to meet somewhat different customer needs.

a) Quality modification

b) Line extension

c) Aesthetic modification

d) Feature modification

e) Product mix modification

19. What is the primary distinction between a line extension and a product modification?

a) A product modification results in a completely new product while a line extension is simply changing an old product.

b) In both cases an existing product is altered, but the alteration is more dramatic with a product modification than it is with a line extension.

c) Line extensions are designed to better meet the needs of the existing market segment while product modifications target entirely new segments of the market.

d) With product modifications, the original product is replaced in the product line while both the old and the new products remain in the case of line extension.

e) Line extensions are strictly aesthetic changes to an existing product whereas product modifications consist of changes in quality and functionality.

20. In product modification, the first issue to consider is whether

a) existing customers can perceive that a product modification has been made.

b) the product is modifiable.

c) quality is modified.

d) modification will make the product more consistent with customers’ desires.

e) modification will provide greater satisfaction to the consumer.

21. In product modification, three conditions must be met to improve a firm’s product mix: the product must be modifiable, customers must be able to perceive that a modification has been made, and

a) modification should make the product more consistent with customers’ desires.

b) competing companies should not be aware of planned product modifications.

c) modification should change customers’ desires to provide greater satisfaction.

d) management must perceive the modification as a reasonable and necessary action.

e) production costs and materials needed should be limited.

22. Quality modifications are changes that relate to a product’s

a) dependability and durability.

b) effectiveness and versatility.

c) price and availability.

d) reliability and value.

e) value and durability.

23. Bauman Flooring found a supplier of very inexpensive fibers that could be used to produce low-grade carpeting at a very low cost. Because Bauman had been facing stiff competition in the medium-grade carpet industry, it started using the new material in all of its carpeting and reducing its prices. This is an example of a(n)

a) aesthetic modification.

b) line extension.

c) material adjustment.

d) functional modification.

e) quality modification.

24. Which of the following types of product modifications inevitably tend to cause firms to reduce costs in some of the organization?

a) Aesthetic

b) Operational

c) Benefit

d) Functional

e) Quality



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