Deck 10: Product Design and Development

Question 1

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

Answer 1

True

Question 2

Launching a "new-to-the-market" product is very risky and only about 25% of products created fall into this category.

Answer 2

False

Question 3

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

Answer 3

D

Question 4

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

Question 5

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 6

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

Question 7

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

Question 8

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

Question 9

His job, according to Doug Hall, head of a Cincinnati?based idea factory, is to turn old goods into new services.

Question 10

In an effort to make its food healthier, McDonald 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 11

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 12

The goals of an entrepreneurial start-up include profitability and growth.

Question 13

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 14

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

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

Question 15

Identify and describe the four major types of product development. Provide an example of each.

Question 16

The PowerSki Jetboard is best characterized as a _____.

A) consumer product
B) a good
C) a component
D) merchandise item

Question 17

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

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.

Question 18

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

Question 19

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.

Question 20

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 21

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

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

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

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 24

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

Question 25

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

Question 26

The majority of product ideas come from _____.

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

Question 27

Entrepreneurs and small businesspeople come up with many good product ideas because they are:

A) willing to devote an exorbitant amount of time thinking up ideas.
B) highly motivated people.
C) often creative people.
D) young with fresh ideas.

Question 28

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

Question 29

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 30

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

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

Question 31

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 32

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 33

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

Question 34

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

Question 35

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

Question 36

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 37

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

Question 38

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 39

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

Question 40

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

Question 41

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

Question 42

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 43

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 44

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 45

An industry is a group of related businesses.

Question 46

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) analyze your market
D) hire the right employees

Question 47

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

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

Question 48

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

Question 49

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 50

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

Question 51

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

Question 52

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 53

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 54

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

Question 55

Which of the following is the smallest division of customers?

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

Question 56

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 57

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 58

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 59

Taking an online course gives you which type of utility?

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

Question 60

Its market share is a whole industry's portion of its target market.

Question 61

After identifying a group of potential customers, your next step is to _____.

A) find out what they think of your product idea
B) find funding for your product
C) manufacture a prototype
D) collate the industry data that you've collected

Question 62

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

Question 63

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 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

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

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

Question 66

What is a market segment?

Question 67

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 68

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 69

Psychographics is an essential part of sales forecasting.

Question 70

Which of the following is/are approaches used to forecast demand for a product?

A) reviewing industry data on the internet
B) speaking with competitors
C) speaking with potential customers
D) all of these approaches.

Question 71

What is an industry?

Question 72

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

Question 73

What is a niche?

Question 74

Identify eight major questions to ask when assessing competition.
Is the industry growing or contracting? (2) Are sales revenues increasing? (3) Who are the major competitors? (4) How does your product differ from those of your competitors? (5) What opportunities and threats exist in the industry? (6) Has the industry undergone recent changes and where is it headed? (7) Do companies in the industry make reasonable profits? (8) Is the industry mature or are new firms successfully entering it?

Question 75

A company plans to forecast its sales for high-end kitchen appliances sold wholesale to home remodeler contractors in the Lehigh Valley. What would their expected annual sales be based on the following information: 150,000 existing households and 20,000 new construction; average remolded home spends $3000 in appliances; company expects 10% of the households to perform a kitchen remodel project in the next 12 months with 50% using a contractor and 50% doing it themselves. The company hopes to capture a 10% market share their first year.

A) $2,550,000
B) $4,500,000
C) $9,000,000
D) $2,250,000

Question 76

The food and beverages that Connie's serves are best classified as _____.

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

Question 77

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 78

To estimate sales of jogging shoes to joggers over age 65 living in Florida, you would determine your share of the athletic shoes sold in the U.S.

Question 79

What is a market?

Question 80

To get some idea of the total market for products like the one you want to launch, you could begin by _____.

A) looking at styles advertised in magazines
B) going to a busy store and seeing what people are buying
C) asking your friends what they think is popular
D) examining pertinent industry research