Question 1

Xapple Inc., a manufacturer of bottled lemonade and other beverages, has released a new, zero-calorie drink called Diet Lemonade. This is an example of _____.

Accepted Answer

A)  new-to-the-world products 
B)  new-to-the-firm products 
C)  additions to existing product lines 
D)  product repositionings

Question 2

_____ is a method of creating and managing the project teams, where groups in different areas of the company simultaneously work on the project.

Accepted Answer

A)  Skunkworks 
B)  Rugby approach 
C)  Idea equity 
D)  Out-rotation

Question 3

Which of the following best defines a product feature?

Accepted Answer

A)  It refers to the design of a firm's production facilities. 
B)  It refers to a producer's unstated promise of delivering high product quality. 
C)  It refers to an assurance by a manufacturer that a product will perform properly. 
D)  It refers to a fact or particular specification about a product.

Question 4

In an ideal selling situation, products that generate a maximum dollar profit with a minimum amount of risk should be:

Accepted Answer

A)  harvested or divested. 
B)  developed and marketed. 
C)  produced only for the local market. 
D)  shelved for future use.

Question 5

Which of the following is the least costly stage in the new product development process?

Accepted Answer

A)  Product development 
B)  Commercialization 
C)  Test marketing 
D)  Idea generation

Question 6

A problem during the idea generation stage of the new product development process within an organization is:

Accepted Answer

A)  the heavy costs involved in terms of investment in funds, time, and personnel. 
B)  the interference of the top management of the organization that is totally unnecessary at this stage. 
C)  to avoid ideas coming from unusual sources that have a high level of escalation of commitment. 
D)  to ensure that all new product ideas available to the company at least have a chance to be heard and evaluated.

Question 7

_____ risk is the risk that a new product will not be developed within the desired time and budget.

Accepted Answer

A)  Strategic 
B)  Credit 
C)  Market 
D)  Internal

Question 8

In which of the following stages of the new product development process is a development budget established and some preliminary marketing and technical research undertaken?

Accepted Answer

A)  Idea generation 
B)  Project planning 
C)  Test marketing 
D)  Commercialization

Question 9

Which of the following statements is true of time to market?

Accepted Answer

A)  Companies that shorten their products' time to market can create a competitive advantage. 
B)  Companies need to follow a centralized work schedule and monitoring for achieving a successful time to market. 
C)  Successful time-based innovations are attributed to the use of long production runs. 
D)  It primarily calculates the elapsed time between test marketing and commercialization.

Question 10

Which of the following is true of the idea generation stage of the new product development process?

Accepted Answer

A)  The role of the top management of an organization is insignificant at this stage of the new product development process. 
B)  New product ideas at this stage of the new product development process have a low mortality rate. 
C)  Ideas are the raw materials for product development, and the whole planning process depends on the quality of idea generation. 
D)  It is the most expensive stage of the new product development process in terms of investments in funds, time, and personnel.

Question 11

Products that are inventions and create a whole new market are called _____.

Accepted Answer

A)  new-to-the-world products 
B)  new-to-the-firm products 
C)  additions to existing product lines 
D)  product improvements

Question 12

To its line of canned tomato products, Value Foods introduces cans of readymade diced-and-spiced tomatoes. In which of the following new product categories would diced-and-spiced canned tomatoes fall?

Accepted Answer

A)  New-to-the-world products 
B)  New-to-the-firm products 
C)  Additions to existing product lines 
D)  Improvements to industry product classes

Question 13

HealthPlus Corp., a popular manufacturer of processed food products, recently introduced specialty infant food under the brand name of Nutrababy. Which of the following new product categories does this product fall into?

Accepted Answer

A)  New-to-the-world products 
B)  Additions to existing product lines 
C)  New-to-the-firm products 
D)  Product improvements

Question 14

Which of the following growth strategies aims at either increasing frequency of consumption or increasing the number of customers using a firm's product(s)?

Accepted Answer

A)  Diversification and market penetration 
B)  Product development and diversification 
C)  Market development and diversification 
D)  Market development and market penetration

Question 15

Product development and diversification can be characterized as _____.

Accepted Answer

A)  product mix strategies 
B)  strategies based on differentiation 
C)  target market segmentation strategies 
D)  cost leadership strategies

Question 16

When evaluating risks in the idea screening phase, if a firm is found to lack the necessary resources or expertise, it should:

Accepted Answer

A)  completely reject the new product idea. 
B)  not act too hastily in discounting the new product idea. 
C)  ignore the risks and commercialize the new product idea. 
D)  not reconsider other alternatives.

Question 17

In the _____ stage of the new product development process, procedures and responsibility for evaluating the success of a new product by comparison with projections are finalized.

Accepted Answer

A)  commercialization 
B)  idea screening 
C)  idea generation 
D)  test marketing

Question 18

Anchor Investments Inc. is an investment bank that acts as a financial advisory body to many independent asset owners. The bank acquires a high-stakes project that requires the exclusive involvement of senior project managers. They therefore work in relative privacy away from the rest of the organization. This alternative approach to project management is called _____.

Accepted Answer

A)  crashstakes 
B)  skunkworks 
C)  relay approach 
D)  rugby approach

Question 19

Wallflower Inc. sells cards, gift-wrapping materials, and collectibles. To boost sales of its existing products, Wallflower added fresh cut flower arrangements as part of its product offering. In which of the new product categories would the floral arrangements fall?

Accepted Answer

A)  New-to-the-world products 
B)  New-to-the-firm products 
C)  Product repositionings 
D)  Product improvements

Question 20

Fred is a marketing manager consultant working in tandem with members from other functional areas that include engineering, production, and administrative staff. While evaluating a new product proposal, Fred and his team members from other functional areas work simultaneously toward reaching a conclusion. Which of the following methods is Fred's project team following?

Accepted Answer

A)  Rugby approach 
B)  Out-rotation 
C)  Skunkworks 
D)  Brainstorming

Exam 7: New Product Planning and Development