Question 1

Which of the following is true of the idea screening phase of the new product development process?

Accepted Answer

A)  New product ideas are not eliminated merely because they are outside the fields of a firm's interest. 
B)  Lack of technology and resources is often not a useful reason to discount new product ideas. 
C)  A firm must consider three categories of risk and risk tolerance in the idea screening phase prior to reaching a decision. 
D)  Unlike the idea generation stage, the idea screening stage is not involved in expanding viable ideas into full product concepts.

Question 2

On earnings associated with new products of a firm, it is critical that the:

Accepted Answer

A)  firm's management body has the pressure of steady improvement in earnings per share. 
B)  firm does not become solely preoccupied with a short-term focus. 
C)  firm does not focus on the ultimate economic contribution. 
D)  firm realizes that profitability will not be supported by the stock market in terms of higher share prices over the long term.

Question 3

The product launching step where a firm commits to introducing a product into the marketplace is referred to as _____.

Accepted Answer

A)  commercialization 
B)  test marketing 
C)  personal selling 
D)  direct marketing

Question 4

Which of the following does a strategic risk involve?

Accepted Answer

A)  The risk that a new product will not be developed within the desired time and budget 
B)  The risk of not matching the role of a new product with a specific strategic need of the organization 
C)  The risk that a new product will not meet a market need in a strategic, value-added, differentiated way 
D)  The risk of environmental influences that inhibit the strategic functioning of the organization

Question 5

Stacy, a marketing manager at a beverage manufacturing firm, conducts a market research to analyze the sales dip of the company's product, Zeal, in the last quarter. Through research, she understands that there is an immediate customer demand requiring the use of organic ingredients to its cola, Zeal. She discussed with the research and development team and decides to enhance Zeal with the introduction of organic ingredients to it. This new product would fall into the category of _____.

Accepted Answer

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

Question 6

Which of the following methods are commonly used for creating and managing project teams?

Accepted Answer

A)  Idea screening and observational research 
B)  Test marketing and marketing applications 
C)  Skunkworks and rugby approach 
D)  Idea generation and consumer research

Question 7

Which of the following is a potential benefit of forming a strategic alliance?

Accepted Answer

A)  It primarily helps both firms in accomplishing their short-term operational goals. 
B)  It will lead to one of the organizations in the alliance gaining a competitive advantage over the other. 
C)  It will lead to market expansion and greater penetration of current markets. 
D)  It typically reduces the market risk of introducing a new product.

Question 8

An automobile manufacturing firm consolidates all its suppliers to produce a new automobile that is a minor variant from its older version in terms of design and performance. The intention of the firm in doing so is to provide loyal customers automobiles with similar performance but at a lower price. According to authors Crawford and DiBenedetto, this new product falls into the category of _____.

Accepted Answer

A)  cost reductions 
B)  price redemptions 
C)  repositionings 
D)  price exemptions

Question 9

According to the growth vector matrix, which of the following products usually require a firm to make significant investments in research and development and make significant changes in its organizational structure?

Accepted Answer

A)  New products 
B)  Repositioned products 
C)  Improved products 
D)  Additions to existing products

Question 10

Which of the following organizational growth strategies deals with present products in present markets?

Accepted Answer

A)  Diversification 
B)  Product development 
C)  Market development 
D)  Market penetration

Exam 7: New Product Planning and Development