New product planning is becoming increasingly important in a modern economy because
A. most profits go to innovators or fast companies that quickly copy products from other companies
B. it is not always profitable just to sell "me-too" products
C. the failure rate of new products is becoming increasingly low
D. every product must pass FTC laws to be bought and sold
E. All of the above are true
Answer: (B) In today's modern economy, market competition and product life cycles are changing at a fast pace. The product life cycle shows a firm needs different marketing mixes as a product moves through the cycle. It may no longer be profitable just to sell "me-too" products; firms need to expand their offerings; therefore, (B) is the correct choice. Most of the profits do not go to innovators (A), as profits rarely occur in the product introduction phase. Moreover, the failure rate of new products is high, not low (C), since only 2% of new products make it to market. The FTC ensures that products are safe for public use (D), but does not play a part in the planning of a new product. Since (A), (C), and (D) are incorrect choices, (E) would be eliminated as a correct answer.