Question 1

Competition limits the ideas for new products or services.

Accepted Answer

Competition represents an obvious source for product and service ideas. For example, products that are in the test-market phase are vulnerable to copying.

Question 2

To be successful, a new product must be compatible with the needs of consumers.

Accepted Answer

A new product or service must offer a relative advantage compared with the other offerings available on the market and must be compatible with the needs of consumers.

Question 3

To be successful, a new product or service must offer a relative advantage compared with the other offerings available on the market.

Accepted Answer

A new product or service must offer a relative advantage compared with the other offerings available on the market and must be compatible with the needs of consumers.

Question 4

Continuous innovations cause a great deal of disruption for consumers and often involve new industries or new standards of management.

Accepted Answer

Continuous innovations have no disruption on consumption patterns. Continuous innovations involve product alterations. A new flavor of ice cream is an example of a continuous innovation. Discontinuous (or radical) innovations are disruptive and create new industries.

Question 5

A new product or service must be observable (or communicable to others) and have a high trialability.

Accepted Answer

A new product or service must be observable (or communicable to others) and have a high trialability (for example, consumers can try the product on a limited basis, by renting it, for instance).

Question 6

At the idea-generation stage, a checklist is usually developed to screen for product ideas that do not meet these criteria.

Accepted Answer

At new-product-ideas' screening stage, a checklist is usually developed to screen for product ideas that do not meet these criteria.

Question 7

Continuous innovations create new industries or new standards of management, manufacturing and servicing.

Accepted Answer

Radical innovations (also known as discontinuous innovations) create new industries or new standards of management, manufacturing and servicing. They represent fundamental changes for consumers. On the other hand continuous innovations have no disruption on consumption patterns and only involve product alterations.

Question 8

Endoscopic surgery is an example of a radical innovation.

Accepted Answer

The text lists the Internet and endoscopic surgery as examples of radical innovations. Radical innovations represent fundamental changes for consumers, entailing departures from established consumption.

Question 9

The most important factor of an international product launch is often high service quality.

Accepted Answer

According to the text, goodness-of-launch is characterized by the following, in order of impact: high service quality, on-time shipment and adequate product availability, quality sales force and enough sales effort and support, quality of promotion and sufficient promotional effort.

Question 10

Controlled test marketing is usually conducted by a research firm in an industrialized country.

Accepted Answer

Controlled test marketing is usually conducted by a research firm in an industrialized country. Controlled test marketing involves offering a new product to a group of stores and evaluating the market reaction to it. It is difficult to perform such tests in markets that are not industrialized.

Question 11

The later the product or service is introduced in a lag country, the faster the adoption rate.

Accepted Answer

Later introduction allows consumers in lag countries to learn from the experiences of consumers in lead countries. For this reason, the later the product or service is introduced in a lag country, the faster the adoption rate.

Question 12

Multinational companies usually limit test marketing to their home countries.

Accepted Answer

Multinational companies do not limit test marketing, nor product launching to their home countries. The text uses Pepsi Cola as an example of a multinational company that tests and launches products in numerous markets.

Question 13

Most of the innovation taking place today is discontinuous.

Accepted Answer

Most of the innovation taking place today is continuous. It is much easier to add a flavor of ice cream than it is to create a radical innovation.

Question 14

Generally, the diffusion rate tends to be faster in "lag" countries.

Accepted Answer

Consumers in lag countries learn form the experiences of adopters in lead countries. For this reason, the diffusion rate tends to be faster in lag countries.

Question 15

New items in an existing product line for a company are likely to have the higher success rate than "new to the world" type products.

Accepted Answer

New items in an existing product line are likely to have the highest success rate (83%) of any "new" type of product.

Question 16

Conjoint analysis is typically used in the business analysis stage of new product development.

Accepted Answer

Conjoint analysis is typically used in the concept development and evaluation stage of new product development. Conjoint analysis is a method in which respondents receive descriptions of hypothetical products with varying levels of the same attributes. Respondents then rank the products on the basis of their preference. Researchers are able to determine the ideal combination of attributes which is then used in concept development and evaluation.

Question 17

Simulated test marketing is open to competitive sabotage.

Accepted Answer

Test marketing a product can provide a good indication of how the product will be received when it is in the market, but this stage can also be expensive, time consuming, and open to competitive sabotage.

Question 18

Countries where the product or service is first introduced and adopted are referred to as lag countries, and countries where the product or service is adopted at a later stage are known as lead countries.

Accepted Answer

Countries where the product or service is first introduced and adopted are referred to as lead countries, and countries where the product or service is adopted at a later stage are known as lag countries.

Question 19

In the process of screening new product ideas, it is best to consider both the extent to which the product fits with the target consumers, as well as with the overall mission of the organization.

Accepted Answer

In the process of screening new product ideas, it is best to consider both the extent to which the product fits with the target consumers, as well as with the overall mission of the organization.

Question 20

Nine out of ten new products fail.

Accepted Answer

Eight out of ten new products fail. For this reason simulated test markets (or even other forms of test marketing) are used to reduce the risk of failure.

Quiz 10: International Product and Service Strategies

Competition limits the ideas for new products or services.

To be successful, a new product must be compatible with the needs of consumers.

To be successful, a new product or service must offer a relative advantage compared with the other offerings available on the market.

Continuous innovations cause a great deal of disruption for consumers and often involve new industries or new standards of management.

A new product or service must be observable (or communicable to others) and have a high trialability.

At the idea-generation stage, a checklist is usually developed to screen for product ideas that do not meet these criteria.

Continuous innovations create new industries or new standards of management, manufacturing and servicing.

Endoscopic surgery is an example of a radical innovation.

The most important factor of an international product launch is often high service quality.

Controlled test marketing is usually conducted by a research firm in an industrialized country.

The later the product or service is introduced in a lag country, the faster the adoption rate.

Multinational companies usually limit test marketing to their home countries.

Most of the innovation taking place today is discontinuous.

Generally, the diffusion rate tends to be faster in "lag" countries.

New items in an existing product line for a company are likely to have the higher success rate than "new to the world" type products.

Conjoint analysis is typically used in the business analysis stage of new product development.

Simulated test marketing is open to competitive sabotage.

Countries where the product or service is first introduced and adopted are referred to as lag countries, and countries where the product or service is adopted at a later stage are known as lead countries.

In the process of screening new product ideas, it is best to consider both the extent to which the product fits with the target consumers, as well as with the overall mission of the organization.

Nine out of ten new products fail.