Deck 7: Product Design and Development

Question 1

His job, according to Doug Hall, head of a Cincinnati?based idea factory, is to help executives get their creative juices flowing.

Answer 1

True

Question 2

All of the following are characteristics of a typical entrepreneurial start-up :

A)the start-up focuses on new opportunities.
B)its owners are willing to take risks.
C)it creates innovative products and/or practices.
D)it focus on growth rather than profits.

Answer 2

D

Question 3

Which of the following venture is riskiest?

A)Starting up a store to sell improved versions of existing surfboards.
B)Starting a business to sell the first motorized surfboard.
C)Setting up a store to sell fireworks.
D)Buying an existing skydiving school.

Answer 3

B

Question 4

In an effort to make its food healthier, McDonald's changed the way it made its french fries.This is an example of a:

A)new-to-the-company product.
B)extension to an existing product line.
C)"new-to-the-market" health conscious product.
D)improvement in an existing product.

Question 5

Launching a "new-to-the-market" product is very risky but can be very profitable.

Question 6

When Just Born came out with its Peeps marshmallow Easter decorating kits the company was releasing a "new-to-the-market" product.

Question 7

In addition to being creative people, entrepreneurs are generally also ______

A)only moderately intelligent
B)willing to take risks
C)from poor backgrounds
D)from large families

Question 8

An example of a "new-to-the-company" product sold by Just Born is _____.

A)Marshmallow Peeps
B)Peers marshmallow Easter decorating kits
C)change in ingredients and packaging for Mike & Ike's
D)Peeps chocolate eggs

Question 9

Most companies constantly look for ways to make ________improvements in existing products by adding features that will broaden their consumer appeal.

A)incremental
B)marketable
C)social
D)industrial

Question 10

Most entrepreneurial decision making can be improved by using knowledge gained from personal experience.

Question 11

The PowerSki Jetboard is best characterized as a(n) _____.

A)service
B)physical good
C)component
D)intangible item

Question 12

A _____ business offers such products as haircuts or taxi rides.

A)goods producing
B)soft goods
C)service producing
D)low tech

Question 13

Which of the following statement(s) about entrepreneurs is true?

A)they take carefully calculated risks
B)They take unnecessary risks
C)They can minimize their risk by drawing on personal experience and conducting research
D)Both a and c

Question 14

If no product existed prior to its invention, then the product is a(n) _____.

A)improvement in an existing product
B)new-to-the-company product
C)extension to an existing product line
D)"new-to-the-market" product

Question 15

A product is something that can be marketed to customers because it provides them with a benefit and satisfies a need.

Question 16

When Just Born reduced the piece size, added some new ingredients, and put its Mike & Ike's in pouches, this was an extension to an existing product.

Question 17

Products are either physical goods or services and can't be both.

Question 18

A goal of an entrepreneurial start-up includes profitability and growth.

Question 19

Woody Allen once said, "If you're not failing every now and again, it's a sign you're not going to be very profitable."

Question 20

When Just Born extended its product line to include "Peeps in a chocolate egg," this was considered an extension to an existing product line.

Question 21

To come up with good businesses ideas you should do all of the following _____.

A)have lots of ideas
B)ask yourself what you want to sell
C)be creative
D)seek product ideas from people inside your organization

Question 22

By making Christmas decorations available the day after Thanksgiving, Holly's Holiday Shop is offering customers what kind of utility?

A)Time utility
B)Place utility
C)Ownership utility
D)Form utility

Question 23

Which of the following is not an approach commonly used by medium and large organizations to identify product development opportunities?

A)Establish entrepreneurial units in their organizations
B)Hire "creativity" consultants
C)Talk with potential customers
D)All of the above are approaches used to identify product opportunities

Question 24

An idea turns into business success when it has commercial potential.

Question 25

Large companies seek all of their product ideas from those outside the organization, including current customers.

Question 26

The key to coming up with a great product idea is finding a product you are passionate about.

Question 27

If you ordered french fries with your hamburger and were given a raw potato instead, the restaurant failed to provide you with form utility.

Question 28

If a footwear maker's latest jogging shoe is considered a "purple cow," the line has _____.

A)incremental appeal
B)marginal value
C)modest potential
D)great potential

Question 29

A street vendor selling hotdogs outside an office building is creating place utility.

Question 30

According to the Small Business Administration, 10% of all new product innovations come from small businesses.

Question 31

The majority of product ideas come from _____.

A)medium-size organizations
B)large organizations
C)marketing consultants
D)small businesses and entrepreneurs

Question 32

Entrepreneur and marketing consultant Seth Goodin refers to truly remarkable products as _____.

A)outstanding products
B)cash cows
C)winners
D)purple cows

Question 33

By making liquid refreshment available when it's needed, a concessionaire selling bottled water at a summer concert is creating time utility.

Question 34

The best way to have a good idea is to:

A)Study the industry
B)Talk with other inventors
C)Have lots of ideas
D)Be willing take risks

Question 35

What type of a product is described as a "purple cow" and how did Seth Godin, marketing consultant, come up with term?

Question 36

The majority of product ideas come from entrepreneurs and small business owners.

Question 37

In coming up with a product idea, you should ask "what do I want to sell."

Question 38

A novel approach to generating new-to-the-world product ideas is hiring "creativity" consultants.

Question 39

When you buy a product and get a receipt, you are receiving a form of ownership utility.

Question 40

Seth Gordon, marketing consultant and author, refers to truly remarkable products as "jackpots."

Question 41

Within the footwear industry there are several groups of customers, each of which is called a(n) _____.

A)market segment
B)niche
C)market
D)sub-industry

Question 42

Customers buy products to satisfy _____ needs and expect to derive some value or _____ from them.

A)unmet / benefit
B)material / profit
C)unmet / pleasure
D)logical / satisfaction

Question 43

All of the following are types of utility that customers value except _____.

A)product
B)time
C)place
D)form

Question 44

Market segments can be a group of potential customers in a geographic location.

Question 45

Which of the following is the smallest division of customers?

A)Niche
B)Segment
C)Market
D)Industry

Question 46

Which of the following is a market segment?

A)People who live in the same climate
B)Individuals who have adopted the same lifestyle
C)Age groups
D)All of these

Question 47

Peggy Deardon's DVDs classifies its rental movies according to categories such as "Action," "Comedy," "Foreign," "Children's," and so on.Which of the following is Peggy Deardon's primary standard for segmenting its market?

A)Psychographic
B)Geographic
C)Income
D)Demographic

Question 48

A niche is a widely defined group of potential customers with a fairly broad set of needs.

Question 49

Taking an online course gives you which type of utility?

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 50

Businesses in the same industry don't generally compete with each other.

Question 51

To research an industry, you begin by looking at smaller sectors of the industry.

Question 52

To analyze the market to see whether you should go forward with the development of a new product, you should answer all of the following questions except:

A)why will customers buy the product from me
B)who would my customers be
C)Is this product something I want to sell
D)How will customers benefit from my product

Question 53

When a Domino's delivery person brings a pepperoni pizza to your dorm room, this is an example of _____.

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 54

An example of place utility would be:

A)car rental company at a busy airport
B)document delivery service
C)a banner maker able to install banners at the place of business within 24 hours
D)commercial real estate agent

Question 55

___________is an example of ownership utility.

A)A real estate agent helping you buy a home
B)Buying a gift for yourself rather than for a friend
C)Building a home
D)Buying insurance on your car

Question 56

You might want to subdivide a segment further to isolate a market.

Question 57

An idea turns into a business opportunity when:

A)people like the product.
B)it is a quality product.
C)it can be made cheaply.
D)it has commercial potential.

Question 58

The process of transforming inputs into goods and services offers value to customers by providing them with utility.Identify and describe the four types of utility that can bring value to buyers.

Question 59

An industry is a group of related businesses.

Question 60

When a soap manufacturer adds liquid soap to its product line, the manufacturer is providing which type of utility?

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 61

Which of the following questions is not helpful to ask when researching an industry?

A)Is the industry growing or contracting
B)How important is technology to the industry
C)Do companies in the industry make reasonable profits
D)Do other small business owners that I know find the industry interesting

Question 62

What is a market segment?

Question 63

What is a niche?

Question 64

Connie has an opportunity to buy out a struggling Italian restaurant in one of her better market areas.Before taking this step, she should ask herself all of the following questions except:

A)Who will my customers be
B)Why will customers buy products from me
C)Will I lose current customers and hurt my business
D)How will customers benefit from the product

Question 65

What is an industry?

Question 66

A _____ is a narrowly defined group of potential customers with a fairly specific set of needs.

A)market segment
B)niche
C)market share
D)concentrated market

Question 67

If you've concluded that you have a potential product for which people will pay money, your next step is to _____.

A)segment your market
B)identify your competitors
C)understand your industry
D)hire the right employees

Question 68

What is a market?

Question 69

On the surface, data published by industry associations seems helpful in estimating sales for your proposed business.But the data is often old and not very helpful.

Question 70

Psychographics is an essential part of sales forecasting.

Question 71

A family?style, dine-in restaurant is best characterized as a _____ business.

A)service
B)product
C)combined service/product
D)lifestyle

Question 72

Your product idea is to offer cruises for college students.Your market niche is:

A)the recreational activity industry.
B)people who travel.
C)people who take cruises.
D)college students who take cruises.

Question 73

Identify eight major questions to ask when assessing competition.

Question 74

If your proposed business was a frozen yogurt store in Michigan, you could get an estimate of the number of customers you might have if you asked those leaving a bakery in California if they'd buy frozen yogurt in the winter.

Question 75

Scenario-Based
Connie's is a regional chain of family?style restaurants in the Midwest.Over the years, Connie Sedgewick has been an innovative, hard?working businessperson who's expanded her business to 15 locations in four states.A "calling card" of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences.Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.
The food and beverages that Connie's serves are best classified as _____.

A)services
B)products
C)combination services/products
D)amenities

Question 76

Dan the Dog Groomer estimates that 600 poodle owners in Decatur will bring their dogs to his shop during his first year of business.Dan probably arrived at this number by trying to calculate his market share.

Question 77

A market segment is best characterized as a group of _____.

A)stores that sell similar products
B)manufacturers who produce similar products
C)potential customers with common characteristics
D)consumers with comparable incomes

Question 78

Conceivably, Connie could get new product or service ideas from _____.

A)suppliers
B)employees
C)customers
D)all of these

Question 79

Talking to people in your prospective industry can be especially helpful if your proposed product is a service.

Question 80

In such activities as greeting customers, seating them, taking their orders, cooking their food, and serving them, Connie's staff is providing _____.

A)customer relations
B)services
C)a combination service/product
D)the personal touch