Deck 15: Introducing New Market Offerings

Question 1

High-tech firms that function in a market with high technological uncertainty, high market uncertainty, and high investment costs are not likely to seek radical innovation.

Answer 1

False

Question 2

Pager, a simple personal device for short messages, became famous in the 1990s. Troveron Communications launched a pager in the early twenty-first century. Due to the introduction of mobile phones and text messaging, the pager industry was on a decline. The company's innovations were not well received by the market and the product was a failure. Which of the following is the most likely reason for the product's failure in this case?

A) poor launch timing of the product
B) a small and fragmented target market
C) high cost of development
D) social and economic constraints
E) hasty product development

Answer 2

A

Question 3

Jordan's firm enters new markets by tweaking products for new customers, uses variations on a core product to stay one step ahead of the market, and creates interim solutions for industry-wide products. In other words, it uses ________.

A) disruptive technologies
B) incremental innovation
C) complex innovations
D) discontinuous innovations
E) radical innovations

Answer 3

E

Question 4

It has been observed that most new products have shorter product life cycles. What is the reason for this?

A) Most new products do not use technology.
B) Most new products are not backed by a marketable idea.
C) New products do not get adequate management support.
D) Social and governmental constraints lead to this failure.
E) Rivals quickly copy products that are successful.

Question 5

Most established companies focus on ________ innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product.

A) incremental
B) continuous
C) spontaneous
D) radical
E) competitive

Question 6

Jill, a Product Manager for Nike, is responsible for evaluating the viability of a radically new product. How should she estimate demand?

Question 7

Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation.

Question 8

New-to-the-world products are ________.

A) low-cost products designed to obtain an edge in highly competitive markets
B) new product enhancements that supplement established products
C) new versions of an existing product that has been less successful
D) new products that create an entirely new market
E) existing products that are targeted to new geographical markets

Question 9

Which of the following strategies for new-product development incorporates buyers' preferences in the final design of the product?

A) quality function deployment
B) market leadership
C) cost leadership
D) incremental innovation
E) disruptive technology

Question 10

Which of the following is most closely related with the organic growth of an organization?

A) acquiring a product or service brand
B) entering new marketplaces
C) increasing the operational profitability
D) increasing productivity of employees
E) developing new products from within

Question 11

What are the types of new products that a firm can introduce? What are the problems associated with introducing a truly innovative product? What are the necessary conditions to create a radically innovative product?

Question 12

Which of the following firms is most likely to seek radical innovation?

A) a traditional publishing company
B) a small scale FMCG company
C) a firm that procures and markets wheat
D) a high-tech firm in telecommunications
E) a firm that sells mineral water

Question 13

What does the term organic growth mean?

Question 14

Fewer than 10 percent of all new products are truly innovative and new to the world.

Question 15

Most new-product activities are devoted to ________.

A) changing the target markets
B) developing new-to-the-world products
C) introducing backward integration
D) improving existing products
E) changing the existing market dynamics

Question 16

What is incremental innovation? Give an example of incremental innovation.

Question 17

After creating a product prototype, a company tests it within the firm to see how it performs in different applications. The company refines the prototype to correct the mistakes found in in-house testing. What should be the next step?

A) commercializing the product
B) performing concept testing
C) conducting beta testing with customers
D) creating a marketing strategy for the product
E) performing business analysis

Question 18

I-ball, a cell phone manufacturer introduces a cell phone targeted at customers ages 70 and above. It has features such as loud volume, large keys, and so forth. How do you classify this product innovation? What could be a possible disadvantage of this product?

Question 19

Organic growth refers to increasing the profitability of the organization by increasing employee productivity.

Question 20

Which of the following is the best example of a new-to-the-world product?

A) Walmart, the retail giant, opens new stores in an underdeveloped African country.
B) Pestorica, a publishing company, decides to launch a new sports magazine.
C) Tata Motors, an Indian automobile company, acquires Jaguar to extend its business.
D) An Asian company licenses a US apparel brand name though the brand is not familiar in Asia.
E) Kids-Med, a company that produces childcare products, launches a non-contact thermometer.

Question 21

A ________ process recognizes the value of returning to an earlier stage to make improvements before moving forward.

A) spiral development
B) reactive development
C) market testing
D) proactive development
E) concept testing

Question 22

A business analysis is performed mainly to identify if a company has got a technically and commercially sound product.

Question 23

During which of the following stages in new product development decision making do managers analyze if they can find a good thought consumers say they would try?

A) idea generation
B) idea screening
C) business analysis
D) concept development and testing
E) product development and testing

Question 24

Identify a shortcoming of giving the responsibility to develop new products to the product managers of a company.

A) They would not be familiar with the industry standards.
B) Product managers would not have an operational focus.
C) Product managers are often busy managing existing lines.
D) They will find it difficult to gain support from employees.
E) Product managers are less likely to use participative management.

Question 25

Companies should use normal investment criteria to budget for new-product developments.

Question 26

Tosho Electronics, a leading Japanese, electronic manufacturer believes shorter product life cycles of new products reduce the scope for R&D and innovation. Offer a possible reason for shorter life cycles.

Question 27

________ are informal workplaces, sometimes garages, where intrapreneurial teams attempt to develop new products.

A) Stage-gate systems
B) Skunkworks
C) Funnels
D) Opportunity spaces
E) Research centers

Question 28

Intercom Inc., together with its subsidiaries, primarily engages in the generation, transmission, and distribution of electric power in the United States. The company observes that its growth has stagnated over a period of two years. In an attempt to promote growth, it considers adding new features to the existing products and introducing a few new products. The company forms a committee consisting of three top executives, one of the production mangers, a few operational managers, and a representative of the HR department to generate ideas. This team is called a(n) ________ team.

A) virtual
B) venture
C) fundamental
D) elemental
E) transitory

Question 29

Shorter product life cycles are common in industries characterized by low level of competition.

Question 30

Identify the major reasons why new product failures occur.

Question 31

________ teams are cross-functional groups charged with developing a specific product or business.

A) Virtual
B) Venture
C) Fundamental
D) Elemental
E) Transitory

Question 32

A ________ divides the innovation process into stages with a checkpoint at the end of each stage.

A) reverse assumption analysis technique
B) skunkworks system
C) stage-gate system
D) spiral development process
E) new-product department technique

Question 33

Almost all companies use the conventional percentage-of-sales figure while budgeting for new product development.

Question 34

Companies that fail to develop new products leave their existing offerings vulnerable to increased domestic and foreign competition.

Question 35

Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new products.

Question 36

Which of the following questions is answered during the business analysis of ideas?

A) Will this product meet our profit goals?
B) Have we got a technically and commercially sound product?
C) Can we find a cost-effective, affordable marketing strategy?
D) Can this product meet sales expectations?
E) Can we find a good concept consumers say they would try?

Question 37

What practices guide innovation at W. L. Gore?

Question 38

Venture teams are cross-functional groups charged with developing a specific product or business.

Question 39

Most established companies focus on incremental innovation rather than radical innovation.

Question 40

A team formed at Intercom Inc. to generate ideas for new products conducts frequent meetings and engages in activities such as mind mapping and brainstorming. Most of the meetings are conducted at informal locations away from office. These workplaces are called ________.

A) skunkworks
B) idea funnels
C) research centers
D) stage-gate systems
E) contextual bases

Question 41

Companies such as Edison Nation and the Big Idea Group have sprung up to tap into ________ possibilities, often combining its own design, branding, engineering, and sales teams with online participants, forming a community for devising new products.

A) stage-gating
B) cocreation
C) microstocking
D) buzzing
E) crowdsourcing

Question 42

In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called ________.

A) attribute listing
B) mind mapping
C) morphological analysis
D) lateral analysis
E) reverse analysis

Question 43

Interno Computers Inc., together with subsidiaries, designs, manufactures, and markets personal computers and mobile communication and media devices, as well as sells related software, services, peripherals, networking solutions, and applications worldwide. The company is planning to launch a high-end portable digital music player worldwide. What is the best way to organize this product launch?

Question 44

________ means inviting the Internet community to help create content or software, often with prize money or a moment of glory involved.

A) Stage-gating
B) Cocreation
C) Microstocking
D) Buzzing
E) Crowdsourcing

Question 45

What is a spiral development process?

Question 46

________ works by listing all the normal assumptions about an entity and then turning them around.

A) Lateral marketing
B) Attribute listing
C) Reverse assumption analysis
D) Forced relationships
E) Morphological analysis

Question 47

The ________ technique used for stimulating creativity identifies a problem and then considers the dimension, the medium, and the power source.

A) attribute listing
B) reverse assumption analysis
C) mind mapping
D) lateral marketing
E) morphological analysis

Question 48

A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

Question 49

Explain how stage-gate systems are used by companies to manage innovation and new product launches.

Question 50

Electro Locomotors (EL) Inc. engages in the manufacture, distribution, and marketing of custom vehicles in Brazil. Bono, a hybrid car brand that the company produces, is a market leader in the hybrid vehicles segment. With the increased global focus on nature-friendly vehicles and governmental subsidies for companies that manufacture hybrid vehicles, competition has increased for flex-fuel cars like Bono. The heads of the R&D team at EL are in a creative session to generate ideas for improvements to Bono. They consider each part of the car and discuss the possibilities of improvements in each of them. Identify the creativity technique used here.

A) attribute listing
B) forced relationship analysis
C) morphological analysis
D) reverse assumption analysis
E) mind mapping

Question 51

Angell Healthcare, the world's largest manufacturer of protective gloves and clothing, adopted a spiral development process, which divided the innovation process into stages with checkpoints at the end of each stage, to develop products that increased overall sales from 4.6 percent to 13 percent in a little over two years.

Question 52

Dormentor Inc. produces, converts, and markets packaging products including boxboard, container board, and numerous other specialty packaging products. In an attempt to increase its organic growth, the company decides to introduce new products. It asks the managers and employees to send in ideas for new products. Before launching products based on any of these ideas, what are the stages that the company has to go through?

Question 53

What are the benefits of brainstorming? How would one run an effective brainstorming session?

Question 54

The ________ technique for stimulating creativity lists all the characteristics of an object and then modifies each to try to arrive at a new idea.

A) reverse assumption analysis
B) lateral marketing
C) attribute listing
D) forced relationship
E) morphological analysis

Question 55

How do companies organize new product development?

Question 56

Surgeons and ER nurses would be considered ________ for surgical equipment.

A) venture agents
B) internal customers
C) buzz agents
D) lead users
E) connectors

Question 57

A group of college graduates decides to start a business. Though they are knowledgeable in various business domains, they are unable to arrive at a valuable business idea. They decide to search for ideas in a structured manner. They meet and start discussing everyone's ideas. Each idea is recorded and then the thoughts that come up in relation to the ideas are written down and discussed. This process helps them to finalize a business plan. What technique is used here?

A) morphological analysis
B) forced relationship analysis
C) reverse assumption analysis
D) attribute listing
E) mind mapping

Question 58

Increasingly, new-product ideas arise from ________ that combines two product concepts or ideas to create a new offering.

A) reverse assumption analysis
B) lateral marketing
C) attribute listing
D) forced relationships
E) morphological analysis

Question 59

The ________ creativity technique begins with a thought that is written down, then proceeds to develop other thoughts that are linked to the first thought, and finally a new idea materializes by associating all of the thoughts.

A) mind mapping
B) contextual analysis
C) attribute listing
D) reverse assumption analysis
E) morphological analysis

Question 60

Many people believe that customer focus does not help to create better, or new, products. This belief rests on which of the following ideas?

A) Such new product developments decrease the chances of success.
B) Customers do not consider the cost of design when making suggestions.
C) Customers are at times unaware of what they really want.
D) It increases the cost of testing a product or service.
E) Having too much customer focus leads to a negative brand image.

Question 61

Attribute listing lists several ideas and considers each in relationship to the others.

Question 62

A category concept defines the product's attributes and features.

Question 63

When a company combines two product concepts or ideas to create a new offering, it is called reverse assumption analysis.

Question 64

Morphological analysis starts by forming a new dimension and then thinks about the possible problems of the dimension.

Question 65

A group of young students run an Internet center. In an attempt to increase their profitability they start a cafe alongside the existing business. Explain the type of marketing used here.

Question 66

Explain three techniques for stimulating creativity to generate better ideas.

Question 67

Reverse assumption analysis lists all the normal assumptions about an entity and then turns them around.

Question 68

A(n) ________ is a possible product the company might offer to the market.

A) test brand
B) alpha product
C) beta version product
D) product idea
E) product concept

Question 69

What is a brand-positioning map?

Question 70

Crowdsourcing means inviting an Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

Question 71

A DROP-error occurs when the company accepts a bad idea.

Question 72

The stage in the new product process that occurs first and has a pass ratio of 1:4 is the ________ stage.

A) idea screening
B) product development
C) test marketing
D) product soft launch
E) concept testing

Question 73

Use reverse assumption analysis to analyze a school.

Question 74

Cocreation can help a company create favorable word of mouth.

Question 75

A ________ error occurs when the company dismisses a good idea.

A) probability
B) performance
C) double counting
D) DROP
E) GO

Question 76

Morboro Energy Inc. is a large chain of fuel stations in Europe. The company decided to expand its business by incorporating restaurants and automobile service stations as a part of its fuel outlets. This is an example of ________.

A) lateral marketing
B) brand extension
C) market development
D) internal marketing
E) brand personification

Question 77

What is crowdsourcing?

Question 78

A(n) ________ is an elaborated version of a product idea expressed in consumer terms.

A) test brand
B) alpha product
C) beta product
D) business schedule
E) product concept

Question 79

Employees can be a source of ideas for improving production, products, and services.

Question 80

Horon Furniture is a manufacturer of office furniture. The company is known for its innovative multipurpose furniture. When designing a new product, the designers list several ideas and consider each in relationship to others. For example, the company considers various options such as an office table, foldable chairs, and filing cabinet, etc. Finally, the company may come up with a foldable office table with chairs attached and with a filing cabinet. Describe the creativity technique used at Horon Furniture.