Deck 4: The New Product Development Process: Managing the Idea Infrastructure

Question 1

The third step in the cycle of customer satisfaction is to verify the ________ viability of new products.

A) production
B) market
C) technical
D) financial

Answer 1

financial

Question 2

Customer focus requires that businesses look not only at their own operations, but also at
external ________.

A) competitors
B) organizations
C) supply chains
D) financial institutions

Answer 2

supply chains

Question 3

Satisfying customer needs is not the job of the marketing department alone. It is
the task of the entire supply chain, sometimes called a __________ by customer focused
marketers.

A) contingency
B) business
C) organization
D) demand chain

Answer 3

demand chain

Question 4

SC leaders regarding new product introduction rely heavily on a teaming approach that includes ________ and ________early in the process.

A) raw materials, labor
B) orders, inventory
C) information, materials
D) customers, suppliers

Question 5

Understanding your _______ and positioning the total package to meet their needs is critical to customer loyalty.

A) customers
B) suppliers
C) competitors
D) products

Question 6

The first critical step in managing and controlling risk is to recognize the__________.

A) products
B) processes
C) risks
D) raw materials

Question 7

The first challenge of the new product introduction process is determining the________ of the product.

A) market
B) target price
C) attributes
D) qualities

Question 8

While the team is working on cost management activities, it must keep in mind that the new product it is creating must __________.

A) be inexpensive
B) meet the customer's needs
C) have the highest quality
D) be technically excellent

Question 9

It is the job of all members of the ________ to understand, serve, and satisfy the end customer.

A) supply chain
B) organization
C) department
D) team

Question 10

The second step in the cycle of satisfaction is to take the product from idea to ________.

A) customer
B) production
C) end
D) market

Question 11

As part of the design process, it is most important for each company to know its __________.

A) core competencies
B) raw materials
C) marketing forecasts
D) demands

Question 12

The first step in the cycle of customer satisfaction is to get into the mind of the customer to identify customer __________ and __________.

A) products, processes
B) people, products
C) needs, desires
D) goals, objectives

Question 13

One marketing department responsibility is to identify current and emerging ________.

A) products
B) competitors
C) core competencies
D) employees

Question 14

A sequential NPD cycle is often ________ and ________.

A) value-adding, effective
B) fast, intuitive
C) time consuming, inefficient
D) quantifiable, efficient

Question 15

Most viable ideas for new products don't come as a flash of insight, but rather from ________ and ________.

A) books, journals
B) hard work, research
C) suppliers, customers
D) employees, partners

Question 16

Assessing the cost and quality of a new product in the ________phase of development enables a more accurate prediction of customer acceptability of the product or service.

A) production
B) design
C) marketing
D) sales

Question 17

The use of new product development (NPD) teams reduces the risk that comes from poor ________.

A) communication
B) suppliers
C) customers
D) processes

Question 18

The NPD process and target costing process are ________ processes.

A) competing
B) successive
C) complimentary
D) intuitive

Question 19

Deducting the target________ from the ________ yields the target cost.

A) value, target price
B) price, profit
C) cost, profit
D) profit, target price

Question 20

Getting ________ involved early through an ESI program is critical to the success of complex development efforts.

A) suppliers
B) managers
C) competitors
D) customers

Question 21

A company with good long-term investments may look profitable before taxes, but actually be losing money on operations.

Question 22

The __________ is a measure of how much a company makes after paying all its expenses.

A) sales revenue
B) profit
C) assets
D) cash flow

Question 23

The top management is the driver of SCM.

Question 24

Top management often gives the new product team responsibility for the entire customer satisfaction cycle.

Question 25

Profit before tax represents the sum of operating profits plus or minus gains and losses from other activities.

Question 26

The finance department at Intel sees itself as a _________ of cost management by providing the right tools and support.

A) leader
B) facilitator
C) controller
D) prime mover

Question 27

Honeywell's Engine Division estimates that it costs them about $1 million a week to develop a new product.

Question 28

Cash flows out of the company when receivables are collected; the company borrows money, or sells shares of stock.

Question 29

The interface between marketing and SCM lies in developing the right product at a fair price and then positioning it properly in the marketplace.

Question 30

Cash also flows out to repay investors with dividends and creditors.

Question 31

Because costly misunderstandings almost never occur with upstream suppliers, the NPD team need not include key suppliers of inputs and services.

Question 32

As important as it is, few companies have mastered the new product development process.

Question 33

EVA gives a longer-term perspective on whether a project is generating or destroying the firm's value over the project life cycle.

Question 34

Working together over a sustained time period helps companies get to know their suppliers' capabilities and risk factors.

Question 35

Finance and accounting are the firm's scorekeepers. They communicate performance results throughout the organization and to the outside world.

Question 36

________ is a metric for monitoring and managing business activities.

A) Financial performance
B) Management
C) SCM
D) NPD

Question 37

Companies like Intel have seen their product life cycles grow from 4 or 5 months to 4 or 5 years.

Question 38

________ represents how much money a company makes from the ongoing business of selling its goods and services.

A) Financing cash flow
B) Working capital
C) Operating profit
D) Total profit

Question 39

New product development exists only as a function in many organizations.

Question 40

A long production time or high inventory levels tie up large amounts of cash.

Question 41

What are your takeaways from this chapter? List at least 4.
Understand customer needs
Involve finance and accounting early in the product development cycle
Risk management is a critical dimension of new product and service development. Risk management includes (1) early supplier involvement to reduce supply risks, (2) ensuring that the company is not outsourcing core competencies, and (3) design considerations such as whether products should be modular or integral.
The interface between marketing and SCM lies in developing the right product at a fair price and then positioning it properly in the marketplace.

Question 42

What are the 4 P's of marketing? Explain what some people have started terming as the 5^th 'P'.

Question 43

Failure in any aspect of the tangible or intangible product experience can leave a bad taste in the customer's mouth and cause an organization to lose future sales.

Question 44

Cost management and product development beyond the concept stage are also marketing's areas of expertise.

Question 45

Fill in the Blank(s)
EVA = Operating Profit - - (Total Capital employed - Company's Cost of Capital)

Question 46

It is the job of all members of the supply chain to understand, serve, and satisfy the end customer.

Question 47

Satisfying customer needs is the job of the marketing department alone.

Question 48

Describe in brief the meaning of Economic Value Added (EVA) and its implications.
There is yet another measure that has become popular in finance to measure the true value that a product or an organization returns to its shareholders: economic value added (EVA). The simple explanation of economic value-added is that it considers how much money the company makes from operations after taxes, less the cost of the capital that the company had tied up to make that money. It is essentially a measure of the surplus value generated by an investment. If the value is negative, the investment did not pay for itself. If it is zero, the investment basically broke even, considering what else could have been done with the capital employed. A positive EVA demonstrates that a company is really adding value.

Question 49

A company should never outsource its core competency or activities that support it.

Question 50

Based on the reading provide an understanding of the changes that Harley-Davidson made and their results.

Question 51

Excessive change can become a "habit" that does not add value, but adds unnecessary complexity and risk.

Question 52

Provide a possible reason for why IBM was losing money in the PC market.

Question 53

Explicitly focusing on downstream requirements can increase risks in the development and introduction process.

Question 54

Harley-Davidson gives all employees the opportunity to attend motorcycle rallies to talk to customers and get a feel for customer wants and needs.

Question 55

As taught in any basic marketing class, the marketing mix is made up of four Ps: product, price, place, and promotion.

Question 56

Explain in brief the meaning of Formalized Risk Management and enumerate the 8 risk factors identified by Intel.

Question 57

Good marketing, advertising, and a sharp Web site can sell a product with little apparent value.

Question 58

Sequential NPD is a traditional approach based on strict functional boundaries.

Question 59

Explain in a short paragraph the role that finance plays in New Product Development (NPD)
The third step in the cycle of satisfaction is to verify the financial viability of new products.
Finance and accounting are the firm's scorekeepers, and they communicate performance results throughout the organization and to the outside world.
Finance is a tool for monitoring and managing business activities.
Finance plays an important role in almost all activities of an organization. Right from planning and design to marketing and sales.

Question 60

What is target costing? And list down the determinants of target price.

Question 61

Fill in the Blank(s)
Some companies continue to manage innovation. Others have adopted cross-functional teams.

Question 62

Fill in the Blank(s)
Many "" issues should be considered when a company is designing its products and services.

Question 63

Fill in the Blank(s)
Making the wrong decision on what to do internally versus what to can make or break a company.

Question 64

Fill in the Blank(s)
Apple has really the direction and future of its product.

Question 65

Fill in the Blank(s)
Design for represents the realization by many organizations that all change does not represent true innovation or improvement.

Question 66

Fill in the Blank(s)
Experts say that more than 9 out of every 10 new products introduced .

Question 67

Fill in the Blank(s)
The customer satisfaction cycle shows that new product development is truly a process.

Question 68

Fill in the Blank(s)
Intel has developed an excellent, formalized process for new product development.

Question 69

Fill in the Blank(s)
Risk is reduced when is identified and applied.

Question 70

Fill in the Blank(s)
It is the job of all members of the to understand, serve, and satisfy the end customer.

Question 71

Fill in the Blank(s)
In 2005, IBM sold its PC manufacturing business to , a Chinese firm.

Question 72

Fill in the Blank(s)
The original IBM PC became a product.

Question 73

Fill in the Blank(s)
At the heart of the new product development process is the cycle.

Question 74

Fill in the Blank(s)
Gillette spent $ on R&D to create its Mach III razor.