Chapter 9

1. It is important because it will help the company decide which concept has the strongest appeal.
The company can project figures of the full population using the concept testing results to
estimate sales volume.
2. When the costs of developing and introducing the product are low, or when management is
already confident about the new product, the company may do little or no test marketing.
Companies often do not test-market simple line extensions or copies of successful competitor
products.
3. The sequential product development approach is a process wherein one company department
works individually to complete its stage of the process before passing the new product along to
the next department and stage while the team-based approach is the process wherein the company
assembles a team of people from various departments that stays with the new product from start
to finish. It depends on the status and condition of the markets related to the company, if the
market is advanced the team-based approach is appropriate or better.

4. Some potential problems are the difficulty to forecast the sales level at each PLC stage, the length
of each stage, and the shape of the PLC curve and the theory does not adequately account for
product redesign and/or reinvention.
5. The statement implies that in the growth stage of the product life cycle, theres an occurrence of
balance between high market share and high current profit which means that the company could
never be at its maximum profit state while it has a high market share in the market and vice versa
because in order for the company to remain in the position of being dominant in the market, the
company will incur some expenses that reduces the profit so therefore the maximum profit that
the companys product should receive is unobtainable.
6. Some major reasons are technological advances, shifts in consumer tastes, and increased
competition.