Deck 8: New Product Development

Question 1

Rolaids and Tums,antacids normally used as antidotes for heartburn,are now promoted as calcium supplements for women.Which of the following categories of new product development best describes this announcement?

A)classically innovative products
B)new category entries
C)line extensions
D)repositionings

Answer 1

D

Question 2

________ are new versions of existing products already marketed by the firm.

A)Classically innovative products
B)New category entries
C)Line extensions
D)Repositioned products

Answer 2

C

Question 3

Which of the following most likely helps to ensure that the product or service ultimately introduced has a unique value proposition?

A)the appropriate organizational structure
B)a strong market orientation
C)fast time-to-market
D)strong support by top management

Answer 3

B

Question 4

________ is the key to success of new product introductions and deals with the speed of reducing the time it takes from concept generation to launch.

A)Strong market orientation
B)Sharp product definition
C)Careful launch planning
D)Fast time-to-market

Question 5

In the classic linear approach,once the company has determined which markets it wants to enter,the immediately next step of a new product development process is:

A)initial design and concept screening.
B)business analysis.
C)testing and concept development.
D)idea generation.

Question 6

Which of the following approaches to new product development consists of a funnel like process where the number of concepts diminishes after each step because some will fail the test at each stage?

A)the Classic Linear Approach
B)the Rugby Approach
C)the Cost Differential Approach
D)the Target Costing Approach

Question 7

For consumer durables and other industrial products with long purchase cycles,________ purchase is the key event.

A)reinforcement
B)bulk
C)trial
D)repeat purchase

Question 8

Which of the following best describes a category of new product that already exists but the firm is just entering it?

A)classically innovative products
B)new category entries
C)line extensions
D)improved products

Question 9

In the classic linear approach,identify the stage of the new product development process where a competitor is most likely to learn about the new product.

A)idea generation
B)testing and concept development
C)business analysis
D)initial design and concept screening

Question 10

A firm's entrance into various sporting goods categories (e.g.,in-line skates)fits into this new product category.

A)classically innovative products
B)new category entries
C)line extensions
D)improved products

Question 11

In the classic linear approach,identify the stage of the new product development process in which the company determines the markets it wants to enter.

A)opportunity identification
B)testing and concept development
C)initial design and concept screening
D)life cycle management

Question 12

With reference to the classic linear approach to new product development,the ________ phase of the new product development process includes a step to screen the concepts developed in the first stage.

A)opportunity identification
B)initial design and concept screening
C)business analysis
D)life cycle management

Question 13

New products falling under this category are also called as new-to-the-company products.

A)classically innovative products
B)new category entries
C)line extensions
D)improved products

Question 14

Which of the following is an example of line extensions?

A)introduction of the personal computer
B)a firm's entry into various packaged food categories
C)introduction of a new flavor of ice crème by a company
D)introduction of improved version of a detergent powder by a firm

Question 15

The personal computer will fall under this category of new products.

A)classically innovative products
B)new category entries
C)line extensions
D)improved products

Question 16

Most successful companies generate ________ of their sales from new products introduced within the last two years.

A)less than 5%
B)less than 25%
C)about 50%
D)more than 75%

Question 17

Which of the following refers to the homework part of the new product development process?

A)implementing a good project prioritization process
B)keeping a strong market orientation throughout the new product development process
C)spending time on up-front activities before the product is launched
D)high-quality execution of the steps of the process

Question 18

________ refers to knowing the target market,specifying the benefits to be delivered to the target customers,having a basic idea of how the product will be positioned,and finalizing the features and attributes.

A)Fast time-to-market
B)Sharp product definition
C)Careful launch planning
D)Strong market orientation

Question 19

Companies good at launching new products often have ________ culture that encourages risk-taking and the open exchange of ideas.

A)an entrepreneurial
B)a centralized
C)a bureaucratic
D)a mechanistic

Question 20

________ are also called new-to-the-world products because the firm has created a new product category.

A)Classically innovative products
B)New category entries
C)Line extensions
D)Improved products

Question 21

When we refer to "democratizing" of innovation,we mean that:

A)the new product development teams should report directly to the top management.
B)the new product development teams should be treated like startup companies.
C)customers can be treated as the best source of new-product ideas.
D)the product development cycle should be minimized.

Question 22

Multilearning refers to:

A)transmitting the learning across different levels and functions.
B)allowing project teams to operate like startup companies.
C)allowing various phases of development to overlap.
D)top management providing only a general strategic direction for the team without controlling it strictly.

Question 23

________ are effectively used in concept testing because of their diagnostic power and they can be used to get detailed discussion of various aspects of the concept.

A)Surveys
B)Focus groups
C)Demonstrations
D)Experiments

Question 24

Which of the following challenges is typically associated with target costing?

A)developing a superior product with unique product benefits
B)closing of the gap between the target and expected costs
C)incorporating market orientation in the development process
D)reducing the time it takes from concept generation to launch

Question 25

When the customers become active participants in the innovation process,it is known as:

A)democratizing.
B)multilearning.
C)customerization.
D)co-creation.

Question 26

________ is an approach to group creative thinking in which group members try to generate a large number of diverse ideas without criticism from other members.

A)Idea screening
B)Brainstorming
C)Concept testing
D)Test marketing

Question 27

Presenting customers with a verbal or written statement of the product idea and then recording their reactions is the most common approach to:

A)idea screening.
B)brainstorming.
C)concept testing.
D)test marketing.

Question 28

Which of the following is an internal source of new product ideas?

A)vendors and suppliers
B)competitors
C)company employees
D)independent inventors

Question 29

Which of the following stages of the classic linear approach of a new product development process is related to continuous updating and refinement of products and services?

A)idea generation
B)life-cycle management
C)business analysis
D)initial design and concept screening

Question 30

Which of the following is an external source of new product ideas?

A)company employees
B)company salespeople
C)independent inventors
D)the research and development department

Question 31

Which of the following approaches to new product development starts with estimated price that the customers in the target segment are willing to pay?

A)the classic linear approach
B)the rugby approach
C)the cost-differential approach
D)the target-costing approach

Question 32

________ is used to get an initial notion of the commercial prospects of a concept.

A)Idea screening
B)Brainstorming
C)Concept testing
D)Test marketing

Question 33

Which of the following is a benefit of the target costing approach?

A)The product development process is continuously guided by the top management.
B)It produces a superior product with unique product benefits.
C)It decreases the likelihood that low-margin products will be introduced.
D)It shortens the product development cycle.

Question 34

In the case of a rugby process,the new product development team consists of:

A)members with the same functional specializations.
B)members of the same nationality.
C)members with different functional specializations and personalities.
D)members who belong to different organizations.

Question 35

Which of the following is the main reason many experts believe that relying on customers for new products,particularly true innovations,is doomed to failure?

A)Customers have limited ability to see into the future and conceptualize what could be.
B)Customers would be biased and would want only inexpensive products.
C)Customers don't have the time to think about new products.
D)Customers might share the same new product ideas with competitors.

Question 36

Which of the following statements is true regarding the rugby approach to new product development?

A)The team handling new product development is closely controlled by the top management.
B)The new product development process is a linear process where different stages take place sequentially.
C)Different teams of experts handle the product development during different stages of the process.
D)Members of the development team stay in close touch with external market conditions and continually learn from each other.

Question 37

________ are useful for getting large samples for projection purposes.

A)Surveys
B)Focus groups
C)Demonstrations
D)Interviews

Question 38

When the ideal selling price is first determined and the feasibility of meeting that price is assessed and costs are controlled in order to produce the product that can be sold at the target price,this is called:

A)market development.
B)price determination.
C)target costing.
D)product development.

Question 39

What is the main disadvantage of using surveys to effectively evaluate a product concept?

A)Large samples for projection purposes cannot be obtained from surveys.
B)It is often difficult to convey a concept in a survey.
C)The implementation of a survey is often expensive.
D)Survey research is often unreliable because people may not reply honestly to survey questions.

Question 40

Which of the following best describes the approach to new product development that results from the constant interaction of a multidisciplinary team whose members work together from the beginning of the project to the product's introduction?

A)the classic linear approach
B)the rugby approach
C)the cost-differential approach
D)the target-costing approach

Question 41

Concept evaluation tests are used to:

A)reduce the concepts under consideration to a manageable number.
B)generate new product ideas.
C)refine the concept statements.
D)quantitatively assess demand for the concept.

Question 42

________ needs are the main strategic benefits that the product or service attempts to deliver.

A)Primary
B)Secondary
C)Tertiary
D)Psychological

Question 43

Which of the following describes the main disadvantage of a focus group ?

A)The small sample size makes it inaccurate for projection purposes.
B)Focus groups is a very expensive research method.
C)Focus groups is a very time consuming research method.
D)It is difficult to effectively convey a concept during a focus group discussion.

Question 44

In monitoring sales in market tests,it is important to recognize that a large percentage of first-year factory sales represents:

A)sales to final customers.
B)one-time stocking up by channels of distribution.
C)increased growth of the product category.
D)increased growth of the product type.

Question 45

Which of the following most likely indicates poor product quality?

A)high awareness and a low trial rate
B)a high trial rate with a low repeat rate
C)low awareness and a high repeat rate
D)a low trial rate and a high repeat rate

Question 46

________ tests are used to reduce the concepts under consideration to a manageable number.

A)Concept generation
B)Screening
C)Concept evaluation
D)Concept development

Question 47

The most elaborate form of product use test requires:

A)diagnostic test to eliminate serious problems with the product.
B)limited time horizon trial among customers who should be asked whether they would buy.
C)placement of the product in homes for an extended period.
D)small sample of customers,usually employees.

Question 48

The most basic concept test is a ________ test that describes several concepts briefly and asks subjects for an overall evaluation.

A)screening
B)concept generation
C)concept evaluation
D)concept development

Question 49

Which of the following is a very popular marketing research method that enables the marketer to determine how customers value different levels of product attributes?

A)cohort analysis
B)conjoint analysis
C)segmentation analysis
D)market analysis

Question 50

The ________ approach is usually implemented by asking customers to develop short phrases in their own words about the benefits and needs of a particular feature of a product,for example,car door.

A)classic linear
B)rugby
C)cost differential
D)voice-of-the-customer

Question 51

Which of the following takes place during the product definition phase?

A)generating new product ideas
B)translating concepts into actual products for further testing
C)reducing the concepts under consideration to a manageable number
D)quantitatively assessing demand for the concept

Question 52

Concept generation tests are used to:

A)reduce the concepts under consideration to a manageable number.
B)generate new product ideas.
C)refine the concept statements.
D)quantitatively assess demand for the concept.

Question 53

________ consist of producing the product and getting potential customers to try it in order to forecast demand.

A)Product use tests
B)Conjoint analysis
C)Cohort analysis
D)Concept generation tests

Question 54

For a frequently-purchased product,________ are the keys to success.

A)trial rates
B)repeat rates
C)brand awareness
D)brand recall

Question 55

What is the main disadvantage of having a longer run for the test market?

A)It costs more and gives competitors time to formulate a counterattack.
B)It is difficult to gather information about customer attitudes as their responses to surveys may not be honest.
C)Customers might lose interest in the product.
D)The sales data gathered will not be useful for predicting actual sales.

Question 56

________ are used to predict sales and profits from the prospective new product launch and to make certain that marketing,distribution,and production skills are developed before full-scale operations begin.

A)Product use tests
B)Market tests
C)Sales forecasts
D)Concept generation tests

Question 57

________ needs are the operational needs related to the engineering aspect of making the product.

A)Primary
B)Secondary
C)Tertiary
D)Biological

Question 58

During the most elaborate form of product use test,the placement of packaged goods is usually for approximately:

A)one week.
B)two months.
C)six months.
D)one year.

Question 59

Which of the following types of needs describe the more tactical needs associated with the primary perceptual benefit?

A)primary
B)secondary
C)tertiary
D)biological

Question 60

Which of the following illustrates how customer needs and engineering characteristics influence one another?

A)house of quality
B)conjoint analysis
C)quality function deployment
D)communication matrix

Question 61

Which of the following statements is true regarding repeat rates?

A)Repeat rates tend to increase.
B)A product can be successful without a high repeat rate.
C)A low repeat rate indicates lack of brand awareness.
D)For frequently purchased products,repeat rates are the key to success.

Question 62

Companies rarely rely on new products for their long term health.

Question 63

Which of the following techniques uses an estimate of the eventual penetration rate,an estimate of the ultimate repeat rate,and an estimate of the relative product category usage rate of buyers of the new brand to determine eventual market share?

A)Parfitt-Collins model
B)Boston Consulting Group Matrix
C)Porter's Five Forces model
D)GE's industry analysis evaluation

Question 64

A market orientation helps to ensure that the product or service ultimately introduced has a unique value proposition.

Question 65

In the target costing approach to the product development process,the selling price is determined at the end of the process.

Question 66

Companies discovering that customers are the best source of new-product ideas is called the "democratizing" of innovation.

Question 67

Target costing ensures that market feedback is brought back into the development process right from the beginning.

Question 68

The target costing approach increases the likelihood that low-margin products will be introduced.

Question 69

In this stage of the product life cycle,product development should focus on product enhancements and line extensions that focus on the segments still purchasing the category.

A)introduction
B)growth
C)maturity
D)decline

Question 70

Many products are repositioned for a new use or benefit.

Question 71

When the rugby approach is used for new product development,the project teams usually consist of members with different functional specializations and personalities.

Question 72

In this stage of the product life cycle,the focus should be on product innovation-that is,making improvements in the product and differentiating from existing competitors on the basis of observed product quality.

A)introduction
B)growth
C)maturity
D)decline

Question 73

Co-creation is a much deeper level of involvement than simply being recruited as part of a panel or competition.

Question 74

In the classic linear approach to new product development,the first step of the new product development process is idea generation.

Question 75

Classically innovative products are commonly called new-to-the-company products.

Question 76

Identify the stage of the product life cycle where the focus should be on marketing differentiation.

A)introduction
B)growth
C)maturity
D)decline

Question 77

New products can form the foundation for a complete turnaround of a company's performance.

Question 78

In a classic linear approach to new-product development,various development phases may overlap.

Question 79

In the rugby approach to product development,a bottleneck at one phase stops the whole process.

Question 80

Parfitt-Collins model is used to:

A)map customer needs to engineering characteristics of a product.
B)uncover product shortcomings.
C)forecast market share.
D)determine how customers value different levels of product attributes.