MCQs on Exploiting the Product Life Cycle
Q. What best describes the main purpose of the Product Life Cycle (PLC) concept?
A. To calculate product pricing strategies
B. To entertain marketing professionals
C. To serve as a managerial instrument of competitive power
D. To analyze only product failures
✅ Answer: C. To serve as a managerial instrument of competitive power
Q. Why is the PLC concept underutilized?
A. Because it's too technical for managers
B. Because it is misunderstood as a theoretical concept only
C. Because companies have too much working capital
D. Because sales data is unreliable
✅ Answer: B. Because it is misunderstood as a theoretical concept only
Q. Which of the following best describes Stage 1 of the Product Life Cycle?
A. Market Decline
B. Market Development
C. Market Expansion
D. Market Stabilization
✅ Answer: B. Market Development
Q. What is a common characteristic of the Market Development stage?
A. High profits
B. Proven consumer demand
C. Staggering costs and high failure rates
D. Intense price competition
✅ Answer: C. Staggering costs and high failure rates
Q. What does the “used apple policy” refer to in the context of new product introduction?
A. Reusing old technologies
B. Avoiding innovation altogether
C. Letting others pioneer a market before entering
D. Selling outdated products
✅ Answer: C. Letting others pioneer a market before entering
Q. Which pricing strategy involves setting high initial prices to quickly recoup investments?
A. Penetration pricing
B. Discount pricing
C. Skimming the cream
D. Promotional pricing
✅ Answer: C. Skimming the cream
Q. In the takeoff stage, the main goal shifts from trial to what?
A. Manufacturing efficiency
B. Brand preference
C. Distribution coverage
D. Exit strategy
✅ Answer: B. Brand preference
Q. What happens to per-unit profits during Market Growth stage?
A. They steadily rise
B. They stabilize
C. They peak and then decline
D. They remain constant
✅ Answer: C. They peak and then decline
Q. What was RCA’s strategy to accelerate the growth of color TV tubes?
A. Raising prices aggressively
B. Limiting competitors through legal means
C. Making patents available to competitors
D. Reducing quality for mass production
✅ Answer: C. Making patents available to competitors
Q. What does the Market Maturity stage indicate?
A. Increased R&D
B. Peak consumer enthusiasm
C. Market saturation
D. Sharp demand increase
✅ Answer: C. Market saturation
Q. During market maturity, what becomes the main source of product demand?
A. New users
B. Imports
C. Replacement purchases
D. Spontaneous consumer interest
✅ Answer: C. Replacement purchases
Q. What type of competition becomes most intense in the maturity stage?
A. Product quality
B. Price competition
C. Distribution reach
D. Packaging
✅ Answer: B. Price competition
Q. What characterizes the decline stage of the PLC?
A. High profitability
B. Rapid consumer adoption
C. Depressed prices and margins
D. Brand loyalty
✅ Answer: C. Depressed prices and margins
Q. Which of the following industries can extend maturity for generations?
A. Fashion jewelry
B. Women’s fads
C. Men’s shoes
D. Smartphones
✅ Answer: C. Men’s shoes
Q. What is the best time to start planning for product life extension?
A. After launch
B. During maturity
C. Before product launch
D. During decline
✅ Answer: C. Before product launch
Q. What is the benefit of an active product policy?
A. Minimizes R&D cost
B. Reduces need for promotion
C. Encourages proactive planning
D. Delays product launch
✅ Answer: C. Encourages proactive planning
Q. What does sequencing product interventions around optimum consumer readiness lead to?
A. Increased warehousing costs
B. Inefficient marketing
C. Timely profit-boosting activities
D. Lower brand value
✅ Answer: C. Timely profit-boosting activities
Q. What is one example of timed product sequencing provided in the text?
A. Smartphones before chargers
B. Hair coloring before hair spray
C. Hair spray before hair coloring
D. Packaging before branding
✅ Answer: C. Hair spray before hair coloring
Q. What transformation did Jell-O undergo as per the text?
A. From gelatin to candy
B. From dessert to dessert technology
C. From food to electronics
D. From snacks to cleaning products
✅ Answer: B. From dessert to dessert technology
Q. What is a key benefit of viewing products through a “technological approach,” as 3M did?
A. Enhances visual appeal
B. Decreases product cost
C. Expands into new applications
D. Increases legal protection
✅ Answer: C. Expands into new applications
Q. What was 3M’s core expertise that enabled diversification?
A. Branding
B. Low-cost labor
C. Bonding things (adhesives)
D. Digital advertising
✅ Answer: C. Bonding things (adhesives)
Q. What is the first strategic route for product life extension?
A. Lowering price
B. Promoting more frequent use among current users
C. Licensing technology
D. Exporting to new countries
✅ Answer: B. Promoting more frequent use among current users
Q. How did Jell-O increase frequency of use among existing users?
A. Changed packaging
B. Introduced new slogans
C. Expanded flavor variety
D. Reduced price
✅ Answer: C. Expanded flavor variety
Q. What was the strategy behind developing a variety of dispensers for Scotch tape?
A. To make it look more modern
B. To promote frequent and convenient usage
C. To attract industrial users
D. To reduce manufacturing time
✅ Answer: B. To promote frequent and convenient usage
Q. Which strategy focuses on encouraging different ways of using the same product?
A. Expanding market reach
B. Developing varied usage among current users
C. Cost reduction
D. Brand consolidation
✅ Answer: B. Developing varied usage among current users
Q. How did Scotch tape implement the strategy of varied usage?
A. Released smart tape with GPS
B. Developed different colors and functionalities
C. Stopped advertising
D. Partnered with electronic brands
✅ Answer: B. Developed different colors and functionalities
Q. How was Jell-O repositioned for salad use?
A. Made it cheaper
B. Added sugar
C. Created vegetable-flavored variants
D. Advertised to children only
✅ Answer: C. Created vegetable-flavored variants
Q. How can companies create new users for their products?
A. Raise prices significantly
B. Promote frequent discounts
C. Target new segments like teens or specific demographics
D. Discontinue old models
✅ Answer: C. Target new segments like teens or specific demographics
Q. What was a technique used by Jell-O to appeal to weight-conscious users?
A. Introduced large packs
B. Linked it with Metrecal trend
C. Reduced shelf life
D. Added fat
✅ Answer: B. Linked it with Metrecal trend
Q. What strategy did 3M use to reach new industrial markets?
A. Patenting all products
B. Creating luxury packaging
C. Developing lower-priced and commercial tape versions
D. Sponsoring TV shows
✅ Answer: C. Developing lower-priced and commercial tape versions
Q. What is the fourth route for product life extension according to the text?
A. Building online communities
B. Creating new uses for the basic material
C. Franchise expansion
D. Product bundling
✅ Answer: B. Creating new uses for the basic material
Q. How did nylon benefit from finding new uses?
A. Reduced inventory
B. Gained military approval
C. Expanded into applications like tire cord and carpet yarn
D. Increased fashion appeal only
✅ Answer: C. Expanded into applications like tire cord and carpet yarn
Q. Why did Jell-O introduce a completely flavorless version?
A. To lower production cost
B. To reduce calories
C. To be used for nail strengthening and bone health
D. For use in pet food
✅ Answer: C. To be used for nail strengthening and bone health
Q. What is an example of 3M’s innovation in finding new uses for adhesives?
A. Creating sticky toys
B. Developing double-coated and reflective tapes
C. Selling glue guns
D. Investing in real estate
✅ Answer: B. Developing double-coated and reflective tapes
Q. What kind of approach should a successful new product strategy take?
A. Defensive
B. Reactive
C. Planned totality
D. Randomized marketing
✅ Answer: C. Planned totality
Q. What does advance planning help avoid?
A. Expanding the product line
B. Creating new factories
C. Inappropriate merchandising decisions
D. Online fraud
✅ Answer: C. Inappropriate merchandising decisions
Q. Which early decision helps prepare for competitive threats in later stages?
A. Selecting suppliers
B. Choosing distribution channel
C. Pricing policy
D. Employing interns
✅ Answer: C. Pricing policy
Q. What was the issue with Metrecal's initial advertising theme?
A. It used too many languages
B. It was overly humorous
C. It relied solely on a medical angle, limiting broader appeal
D. It targeted only athletes
✅ Answer: C. It relied solely on a medical angle, limiting broader appeal
Q. What is a benefit of assigning priorities early in product development?
A. Faster equipment upgrades
B. Enhanced packaging
C. Better planning for future capital and marketing needs
D. Early outsourcing
✅ Answer: C. Better planning for future capital and marketing needs
Q. According to Charles Kettering, why should businesses be concerned with the future?
A. Because products are short-lived
B. Because that’s where we’ll spend the rest of our lives
C. Because planning is legally required
D. Because investors demand it
✅ Answer: B. Because that’s where we’ll spend the rest of our lives
Q. Why is prediction considered better than no prediction in product strategy?
A. It improves ad copywriting
B. It guarantees success
C. It supports offensive strategy over reactive one
D. It reduces market size
✅ Answer: C. It supports offensive strategy over reactive one
Q. What does “planned totality” in new product strategy imply?
A. Creating only prototypes
B. Avoiding pricing decisions
C. Anticipating market and competitor behavior
D. Ignoring future risks
✅ Answer: C. Anticipating market and competitor behavior
Q. What can strong branding in early stages help prevent later?
A. Supply chain issues
B. Price competition
C. Advertising waste
D. Consumer lawsuits
✅ Answer: B. Price competition
Q. What was the unintended effect of Metrecal's medical advertising theme?
A. It made it popular among doctors only
B. It improved short-term sales
C. It limited long-term market appeal
D. It increased male consumer adoption
✅ Answer: C. It limited long-term market appeal
Q. What does “disciplined product development” result from?
A. Spontaneous marketing
B. Large-scale hiring
C. Systematic pre-introduction planning
D. Media coverage
✅ Answer: C. Systematic pre-introduction planning
Q. What does “systematic assignment of priorities” help in?
A. Risk-free investing
B. Elimination of marketing altogether
C. Coordinating product, capital, and marketing decisions
D. Avoiding market feedback
✅ Answer: C. Coordinating product, capital, and marketing decisions
Q. What does “optimum consumer readiness” mean?
A. When the market is over-supplied
B. When consumers are least likely to buy
C. When consumers are most likely to accept a new product
D. When competitors are strongest
✅ Answer: C. When consumers are most likely to accept a new product
Q. Why is understanding the competitive sequence critical in product strategy?
A. It helps hire staff
B. It determines accounting methods
C. It supports timely strategic responses
D. It improves tax compliance
✅ Answer: C. It supports timely strategic responses
Q. Which of the following is NOT one of the four routes to product life extension?
A. Promote frequent usage
B. Develop varied usage
C. Create new users
D. Cut customer service
✅ Answer: D. Cut customer service
Q. What role does advertising play in the adoption of products according to the conclusion?
A. Minimal
B. Secondary
C. Essential in inducing wants
D. Only for luxury goods
✅ Answer: C. Essential in inducing wants
Q. What are “contrived wants”?
A. Wants shaped through education and social learning
B. Unnecessary luxury demands
C. Manufacturer desires
D. Expensive product features
✅ Answer: A. Wants shaped through education and social learning
Q. What is one example of long maturity phase product from the text?
A. Smartwatches
B. Men’s shoes
C. Women’s handbags
D. Tablets
✅ Answer: B. Men’s shoes
Q. Which factor does NOT directly affect length of Market Development stage?
A. Product complexity
B. Availability of skilled labor
C. Competitive substitutes
D. Degree of product newness
✅ Answer: B. Availability of skilled labor
Q. What is a likely result when per-unit profits approach zero during growth stage?
A. Sales peak
B. Exit from market
C. Continued growth in total volume
D. R&D shuts down
✅ Answer: C. Continued growth in total volume
Q. What is the ultimate aim of planning a product strategy from the beginning?
A. To create viral campaigns
B. To build a tech-driven team
C. To make things happen rather than reacting
D. To reduce government regulations
✅ Answer: C. To make things happen rather than reacting
Q. What is a key risk for innovators in Stage 1 of the PLC?
A. High logistics cost
B. Lack of branding
C. Inability to attract sufficient investment
D. Limited office space
✅ Answer: C. Inability to attract sufficient investment
Q. What does “skimming the cream” pricing involve?
A. Setting low prices
B. Selling only to VIP customers
C. Charging high initial prices to recover investment
D. Using discounts early
✅ Answer: C. Charging high initial prices to recover investment
Q. What characterizes “exclusion pricing”?
A. High pricing to exclude competition
B. Premium packaging
C. Low pricing to deter competitors
D. Ignoring customer feedback
✅ Answer: C. Low pricing to deter competitors
Q. Why do originating producers often face a profit squeeze during market growth?
A. Because unit profits decline due to competition
B. Because raw materials become unavailable
C. Because advertising costs disappear
D. Because markets become regulated
✅ Answer: A. Because unit profits decline due to competition
Q. How does the originating company’s sales curve behave during growth?
A. Increases indefinitely
B. Declines immediately
C. May slow despite total industry growth
D. Remains flat
✅ Answer: C. May slow despite total industry growth
Q. Which company demonstrated the benefit of opening patents to competitors for market growth?
A. DuPont
B. General Foods
C. RCA
D. 3M
✅ Answer: C. RCA
Q. What does the presence of competitive substitutes in Stage 1 typically lead to?
A. Faster success
B. Longer product life
C. Increased uncertainty and difficulty in gaining acceptance
D. Elimination of marketing
✅ Answer: C. Increased uncertainty and difficulty in gaining acceptance
Q. What does the “better mousetrap” metaphor suggest in product development?
A. Consumers will naturally discover good products
B. Superior products sell themselves
C. Even great products need marketing, promotion, and persuasion
D. Only low-cost products succeed
✅ Answer: C. Even great products need marketing, promotion, and persuasion
Q. What was one tactic used to enhance Scotch tape’s perceived usability?
A. Price cuts
B. Online ads
C. Handy dispensers
D. Loyalty points
✅ Answer: C. Handy dispensers
Q. What was the key to 3M's expansion beyond Scotch tape?
A. Online marketing
B. Acquiring other companies
C. Applying adhesive technology to new products
D. Licensing to third parties
✅ Answer: C. Applying adhesive technology to new products
Q. Which of the following is an example of a revivifying tactic in declining markets?
A. Deregulation
B. Fashion and styling updates
C. Reducing product size
D. Outsourcing labor
✅ Answer: B. Fashion and styling updates
Q. What happens in industries experiencing endemic overcapacity?
A. Excess demand drives prices up
B. Companies compete fiercely, often merging or exiting
C. Employees receive bonuses
D. Advertising ceases
✅ Answer: B. Companies compete fiercely, often merging or exiting
Q. What is a characteristic feature of Stage 4: Market Decline?
A. Rising sales and profits
B. Growth in consumer base
C. Drifting sales and depressed margins
D. Introduction of new competitors
✅ Answer: C. Drifting sales and depressed margins
Q. Why is product differentiation important during market maturity?
A. To increase production costs
B. To delay decline by sustaining competitive edge
C. To shift to B2B sales
D. To reduce distribution needs
✅ Answer: B. To delay decline by sustaining competitive edge
Q. Which example demonstrates new usage for basic material in Jell-O’s case?
A. Gelatin in meat products
B. Gelatin for nail strengthening and bone health
C. Gelatin-based toys
D. Gelatin in cosmetics
✅ Answer: B. Gelatin for nail strengthening and bone health
Q. What outcome is expected from proactive product policy planning?
A. Defensive strategy
B. Random product launches
C. Structured long-term marketing and development
D. Outsourced logistics
✅ Answer: C. Structured long-term marketing and development
Q. What does “optimum competitive effectiveness” refer to in timing interventions?
A. Choosing the cheapest ad channel
B. Launching when competitors are strongest
C. Taking action when competitive advantage is greatest
D. Matching competitor’s every move
✅ Answer: C. Taking action when competitive advantage is greatest
Q. What did 3M develop to showcase new applications of its adhesive core?
A. GPS-enabled tape
B. Magnetic paint
C. Reflective bumpers and double-coated tapes
D. Smart packaging
✅ Answer: C. Reflective bumpers and double-coated tapes
Q. What does “market stretching” focus on?
A. Extending the time before market maturity or decline
B. Rapid liquidation
C. Licensing product to foreign firms
D. Creating fads
✅ Answer: A. Extending the time before market maturity or decline
Q. What can happen if a product strategy ignores competitive sequencing?
A. Sales increase
B. Market monopoly
C. Short-lived product life and missed market opportunities
D. Increased consumer loyalty
✅ Answer: C. Short-lived product life and missed market opportunities
Q. Why is it risky to rely solely on short-term advertising themes?
A. They are too expensive
B. They may undermine long-term brand positioning
C. They cannot be used online
D. They are hard to design
✅ Answer: B. They may undermine long-term brand positioning
Q. What did Metrecal's medical theme restrict in terms of its future appeal?
A. Packaging options
B. Male consumers
C. Fashion-conscious audience
D. Government endorsement
✅ Answer: C. Fashion-conscious audience
Q. What effect can “contrived wants” have on product acceptance?
A. Limit consumer freedom
B. Mislead buyers
C. Create broader market adoption
D. Reduce product awareness
✅ Answer: C. Create broader market adoption
Q. Why should product policy be proactive rather than reactive?
A. To increase risk
B. To reduce labor costs
C. To prepare better for market transitions and competitor responses
D. To copy competitors
✅ Answer: C. To prepare better for market transitions and competitor responses
Q. According to the text, what often triggers a company’s profit squeeze?
A. Expansion into foreign markets
B. New factory investments
C. Influx of competitors with better pricing
D. Increased customer loyalty
✅ Answer: C. Influx of competitors with better pricing
Q. What marketing shift occurs in the growth stage for the originating producer?
A. From branding to price cuts
B. From trials to building brand preference
C. From B2B to B2C
D. From niche to mass production
✅ Answer: B. From trials to building brand preference
Q. What does the product life cycle encourage managers to do?
A. Reduce costs only
B. Focus on reactive advertising
C. Use structured planning and competitive foresight
D. Rely on patent lawsuits
✅ Answer: C. Use structured planning and competitive foresight
Q. What is one of the earliest mistakes a company can make during product development?
A. Too much R&D
B. Too many product variants
C. Ignoring pre-launch life extension strategies
D. Overusing influencers
✅ Answer: C. Ignoring pre-launch life extension strategies
Q. How did General Foods extend the life of Jell-O?
A. Reduced packaging sizes
B. Removed sweeteners
C. Introduced new flavors and salad-use variations
D. Raised price significantly
✅ Answer: C. Introduced new flavors and salad-use variations
Q. What insight is derived from “infinitely descending curve” in Stage 1?
A. Guaranteed success over time
B. Many new products fail without reaching market
C. All products will decline eventually
D. Only patented products survive
✅ Answer: B. Many new products fail without reaching market
Q. What is the central challenge for innovators in early product life cycle?
A. Too many customers
B. Finding low-cost suppliers
C. Proving demand and securing investment
D. Competing with old brands
✅ Answer: C. Proving demand and securing investment
Q. Which product life cycle stage may involve new forms of promotion like bundling or added services?
A. Development
B. Growth
C. Maturity
D. Decline
✅ Answer: C. Maturity
Q. What kind of appeal did Jell-O adopt during the Metrecal boom?
A. Children's health
B. Medical authority
C. Fashion-oriented weight-loss
D. High-protein fitness
✅ Answer: C. Fashion-oriented weight-loss
Q. What happens when a company aligns its actions with “optimum competitive effectiveness”?
A. Resources are misused
B. Costs increase
C. Strategic moves achieve better results
D. Employees get overworked
✅ Answer: C. Strategic moves achieve better results
Q. What illustrates broadened business perspective using adhesives in 3M?
A. Shifting to glue sticks
B. Launching branded workshops
C. Expanding into recording tapes and duplicators
D. Selling on Amazon
✅ Answer: C. Expanding into recording tapes and duplicators
Q. What message does the quote by Charles F. Kettering convey?
A. Avoid forecasting
B. Ignore new technologies
C. Emphasize the need for future planning
D. Focus only on profits
✅ Answer: C. Emphasize the need for future planning
Q. What should a company avoid in early-stage advertising that might limit future strategy?
A. Humor
B. Broad audience appeal
C. Niche medical messaging
D. Use of celebrities
✅ Answer: C. Niche medical messaging
Q. In what way does timing of interventions influence product success?
A. It improves packaging design
B. It has no real impact
C. It aligns efforts with market readiness for maximum impact
D. It decreases capital needs
✅ Answer: C. It aligns efforts with market readiness for maximum impact
Q. Why are staggered product appeals useful in long-term strategy?
A. They allow faster product obsolescence
B. They confuse competitors
C. They help maintain freshness and relevance in the market
D. They reduce employee training
✅ Answer: C. They help maintain freshness and relevance in the market
Q. How did DuPont successfully extend the use of nylon?
A. Launched in only fashion markets
B. Promoted nylon as eco-friendly
C. Developed multiple industrial and textile applications
D. Focused only on tire cord
✅ Answer: C. Developed multiple industrial and textile applications
Q. What does frequent product usage promotion focus on?
A. Getting more people to try the product
B. Making users buy more often
C. Changing the product entirely
D. Outsourcing customer service
✅ Answer: B. Making users buy more often
Q. What role does consumer “education” play in product life cycles?
A. Lowers production costs
B. Prevents decline
C. Helps induce and build demand
D. Reduces competition
✅ Answer: C. Helps induce and build demand
Q. Why should companies avoid being purely reactive?
A. It's cheaper in the long run
B. It attracts attention
C. It leads to loss of control and missed opportunities
D. It builds brand loyalty
✅ Answer: C. It leads to loss of control and missed opportunities
Q. What example in the text showed the transformation of product identity?
A. RCA from tubes to cameras
B. Jell-O from dessert to dessert technology
C. Scotch tape to paper
D. Metrecal to cosmetics
✅ Answer: B. Jell-O from dessert to dessert technology
Q. How do companies “make things happen” in product strategy?
A. React quickly to competitors
B. Stick to initial plans only
C. Take early, well-planned actions
D. Rely on luck and trends
✅ Answer: C. Take early, well-planned actions
