1. Tactical launch decisions are marketing mix decisions such as communication and promotion, distribution, and pricing of a new product. TRUE FALSE 2. Strategic givens are more easily modified as compared to tactical decisions. TRUE FALSE 3. Product cost is one of the common customer acceptance measures used by firms as goals for individual products. TRUE FALSE 4. The launch plan for a new-to-the-world product is expected to stimulate replacement demand rather than primary demand. TRUE FALSE 5. Markets today are so complex that one product cannot come close to meeting all needs and desires of the customers. TRUE FALSE 11. New Product Decision Read the overview below and complete the activities that follow. Which iPhone App? Answer the questions to determine which of these two apps would be the best candidate for your venture capital investment. (5 questions, 2 point each, total 10 points) Without question, one of the amazing new product stories of the last decade has been the Apple iPhone. However, no less of a story are the thousands of apps (applications) that have been developed for this device. Recent figures put the number of apps developed for the iPhone at more than 100,000 ... by the time you read this, the number will no doubt be much higher. Here's the scenario. You are a venture capital investor looking at getting in on the fast-growing app business. You are seriously considering two different ideas that developers have brought to you seeking money for developing and rolling out their respective ideas. Being the careful and prudent investor, you know that most new product ideas never prove successful. But you have developed a checklist of items that you like to go through to improve the odds that the product you back will be a success. Included on that checklist are: 1. Market size (at entry, subsequent years) 2. Market growth rate (how rapid, accelerating, slowing) 3. Number of competitors (initially, prospects for competition) 4. Product differentiation (significantly different, minor differences) 5. Is marketing plan consistent with market requirements? App A's target market is expected to purchase 800,000 units this year, 900,000 next year, and 1 million units in the third year. The growth rate will level out for the next two years. The market for App B is currently 400,000 units and is expected to grow to 600,000 units next year. Like App A, the third year will grow at about the same rate, as will the fourth and fifth years. The App A target market has five other competitors, all of which are well-capitalized. App A is adding some features to its offering that will enhance the functionality of the application compared to the existing products. At least four other competitors are expected to enter the market in the next year. App B will be facing two other competitors, but it is expected that four more will enter this market over the next two years. App B takes a very different approach to delivering its functionality. Customer reviews suggest that it is superior to the other offerings but it will be necessary to "train" customers on the new features. Finally, your review of the respective marketing plans for the two apps suggests some differences that need to be considered. The developer for App A does not have to educate customers on how to use App A since it is similar to other products already in the market. App B's developer has put together a promotion plan that includes ads that will tell customers how this app is different and how customers can learn to use it. App B will be facing two other competitors, but it is expected that four more will enter this market over the next two years. App B takes a very different approach to delivering its functionality. Customer reviews suggest that it is superior to the other offerings but it will be necessary to "train" customers on the new features. Finally, your review of the respective marketing plans for the two apps suggests some differences that need to be considered. The developer for App A does not have to educate customers on how to use App A since it is similar to other products already in the market. App B's developer has put together a promotion plan that includes ads that will tell customers how this app is different and how customers can learn to use it. 1. What are the growth rates for App A and App B in the first year? a. 12.5 percent and 50 percent b. 12.5 and 40 percent c. 10 percent and 33 percent 2. What is the projected size of the target market for App B in year 3? a. 1 million units b. 900,000 units c. 800,000 units 3. Which App will face the tougher competitive environment? a. App A b. App B 4. Based on your review, App A seems to a. Be unlike its competitors b. Be significantly different from any competitors c. Be different but not significantly different 5. Which of the two developers has a promotional plan that seems most consistent with the requirements of the target market? a. App A b. App B 1. Why Products and Services Succeed or Fail Read and answer the multiple-choice questions. (5 questions, 2 point each, total 10 points) As hot coffee sales slumped in the late 1980s, the Pepsi-Cola Company noticed a new market trend the morning consumption of caffeinated soda. Soft-drink manufacturers had only captured a small portion of the morning beverage market at this point, which included Coca-Cola's advertising campaign for a "Coca-Cola in the morning." Although Pepsi had not conducted significant market research into the phenomenon of morning soda consumption, they believed that young adults were driving the trend of drinking caffeinated, carbonated beverages for breakfast. Pepsi was eager to pounce on the opportunity to capitalize on this growing section of the morning beverage market. In 1989, Pepsi elevated the morning cola game with the introduction of Pepsi AM. Clad in a new red, white, blue, and yellow can, Pepsi AM featured 28 percent more caffeine per ounce than regular Pepsi with the same Pepsi Cola flavor. In blind taste tests, most consumers could not differentiate between regular Pepsi and Pepsi AM. Pepsi marketing executives believed that the caffeinated and sweetened Pepsi AM would be a natural replacement for a morning cup of coffee, even though Pepsi AM had 77 percent less caffeine than tea or coffee. Despite an increase in morning soda consumption and Pepsi's efforts to promote Pepsi AM as a morning beverage, consumers did not seem to want a "morning only" soda. Consumers seemed perfectly happy drinking existing cola drinks or coffee at breakfast. Pepsi also failed to recognize the social implications of drinking coffee. For most consumers, drinking a cold glass of soda was not the same as a sipping steaming cup of joe. Pepsi AM was pulled from the market in 1990 after it failed to achieve sales forecasts and goals. 1. The name Pepsi AM suggests to consumers that the beverage should be consumed ..Only in the evening b. Only in the morning c. Any time of day 2. Pepsi AM was perceived to be regular Pepsi by most American consumers. a. The same as Significantly different than Quite a bit different than 3. Drinking a cup of coffee and drinking a can of Pepsi AM were perceived to be socially by most Americans. Similar 1. The name Pepsi AM suggests to consumers that the beverage should be consumed a. Only in the evening b. Only in the morning c. Any time of day 2. Pepsi AM was perceived to be regular Pepsi by most American consumers. a. The same as b. Significantly different than c. Quite a bit different than 3. Drinking a cup of coffee and drinking a can of Pepsi AM were perceived to be socially by most Americans. a. Similar b. Different c. Unrelated 4. Marketing research and taste testing was implemented in order to avoid a mistake with Pepsi AM. a. Poor product quality b. Bad timing c. Limited market attractiveness 5. The primary source of competition for Pepsi AM was likely a. Coffee b. Coke C. Pepsi