Question 1

The market testing stage of the new-product process often involves test markets or purchase laboratories in which the variable to test is:

Accepted Answer

The variable to test in the market testing stage is sales. This involves selling the new product in a limited geographical area and measuring the level of consumer demand and sales volume. This helps in evaluating the potential success of the product before a full-scale launch. Test markets and purchase laboratories may also be used to assess consumer attitudes, price sensitivity, and advertising effectiveness, but the primary goal is to measure actual sales data.

Question 2

Parallel development is the simultaneous development of both the _____ processes.

Accepted Answer

Parallel development involves the simultaneous development of both the product and production processes. This means that product development and production processes are worked on at the same time to minimize delays and bring products to the market faster. Marketing and financing processes may also be included but are not the primary focus of parallel development. Therefore, options A, B, and D are incorrect.

Question 3

In the new-product process,the stage at which the product is positioned and launched in full-scale production and sales is called:

Accepted Answer

Commercialization is the stage in the new-product process where the product is positioned and launched in full-scale production and sales. Screening and Evaluation is the stage where ideas for new products are evaluated and selected for development. Business analysis is the stage where the feasibility and profitability of the product are assessed. Development is the stage where the product is designed, developed, and tested.

Question 4

Simulated test markets are the same as:

Accepted Answer

Simulated test markets are laboratory test markets that simulate an actual market environment but are conducted in a controlled setting. Option A refers to regular market testing, option B is a management technique for performance evaluation, and option D describes limited market tests.

Question 5

If a new grocery product does not achieve a predetermined sales target,some retailers require a penalty payment by the manufacturer to compensate the retailer for sales its valuable shelf space never made.What is this type of payment called?

Accepted Answer

A failure fee is a penalty payment required by some retailers from manufacturers if a new product does not meet sales expectations, compensating for the use of shelf space.

Question 6

A new beverage by Snapple is currently being sold only in Western Canada.Over the next year,Snapple plans to introduce the beverage sequentially into Canada from west to east.This is called a:

Accepted Answer

The answer of A new beverage by Snapple is currently...

Question 7

Loblaws required that Birds Eye pay $15,000 to get its new frozen stir-fry vegetable mix placed in the freezers of Loblaws supermarkets.This payment is called a _____ by Birds Eye.

Accepted Answer

This payment is known as a slotting fee, which is a fee charged by retailers to cover the costs associated with placing a new product on their shelves, such as advertising and labor costs. It is a common practice in the retail industry.

Question 8

Heinz paid $1M to Sobeys and Metro to have their new 'Purple EZ Squirt Ketchup' placed at the front of the condiments aisle in each of the respective stores.However,sales for the Ketchup did not reach the pre-agreed upon targets.Heinz then paid another $500,000 to both Sobeys and Metro.This payment is considered a(n):

Accepted Answer

The payment made by Heinz to Sobeys and Metro after failing to meet sales targets is considered a "failure fee," which is a penalty paid when sales do not reach the agreed-upon levels.

Question 9

Which of the products listed below would be the best candidate for full-scale market testing?

Accepted Answer

A new iced coffee beverage from Snapple would be the best candidate for full-scale market testing. This is because it is a new product that needs to be introduced and tested in the market. The other options listed are existing products or services that have already been tested and have a market presence.

Question 10

Some companies are using neuromarketing techniques to preview several versions of commercials to a group of customers,to understand which ones are most effective.The use of this technique would be commonly found in which stage?

Accepted Answer

The use of neuromarketing techniques to preview several versions of commercials to a group of customers to understand which ones are most effective would be commonly found in the market testing stage, where the company tests the product or marketing strategy in a small, controlled market to determine its effectiveness.

Question 11

For David Kelley,co-founder of IDEO,product design includes both _______ and _________ elements.

Accepted Answer

David Kelley, co-founder of IDEO, believes that product design includes both artistic and functional elements, indicating that product design should not only be aesthetically pleasing but also fulfill its practical purpose. This suggests that option A is the best choice as it covers both aspects mentioned by Kelley.

Question 12

The risk and uncertainty of the commercialization stage of new-product development is reflected in each of the following EXCEPT:

Accepted Answer

Market testing is intended to minimize risk and uncertainty by assessing the viability of the product and any necessary adaptations before full commercial launch. Options A and B reflect common challenges in the commercialization stage, while Option C reflects a potential risk related to market adoption, but in practice, most buyers should be able to understand the benefits of a new product if it is properly marketed and communicated.

Question 13

When audiences are allowed to preview actual movies such as Pretty Woman and Honey,I Shrunk the Kids before they are released to the general public,it is a part of the _____ stage of the new-product process.

Accepted Answer

Market testing involves allowing potential customers to try out the product or service before its official launch. In the case of movies, it involves allowing preview audiences to watch the movie and giving feedback to the producers. Therefore, allowing audiences to preview movies such as Pretty Woman and Honey, I Shrunk the Kids is a part of the market testing stage of the new-product process.

Question 14

Because of the time,cost,and confidentiality problems of test markets,manufacturers often turn to:

Accepted Answer

Simulated test markets provide an alternative to traditional test markets by using computer simulations or surveys to simulate real-world conditions. This method is less time-consuming and expensive than traditional test markets and can provide valuable data on consumer behavior and market potential.

Question 15

KFC is trying to understand whether they should launch the 'Double Down' Sandwich as a regular featured item on the menu.To understand the receptivity to the product in the first place,KFC offers the Double Down for sale:

Accepted Answer

Launching the product in a defined area allows KFC to test the product in a controlled environment and to obtain feedback from a smaller group of customers before making a decision to offer it nationwide. This approach allows KFC to minimize the risk of a nationwide launch in case the product is not well-received by customers.

Question 16

Heinz paid $1M to Sobeys and Metro to have their new 'Purple EZ Squirt Ketchup' placed at the front of the condiments aisle in each of the respective stores.This payment is considered:

Accepted Answer

The answer of Heinz paid $1M to Sobeys and Metro...

Question 17

A failure fee is a penalty payment:

Accepted Answer

A failure fee is a penalty payment that a manufacturer makes to a retailer as compensation for sales not made while the product was on the shelf.

Question 18

The 'Lean Startup' preaches constant iteration of products.This process can be referred to as:

Accepted Answer

The process of constant iteration of products is often achieved through the use of fast prototyping, which involves quickly building and testing new product concepts in order to improve them through ongoing feedback and iteration. Limited rollouts, phased geographic rollouts, and market-product expansion may also be part of the process, but they are not the most accurate descriptions of the iterative approach advocated by the Lean Startup methodology.

Question 19

Test marketing is:

Accepted Answer

Test marketing is typically not done with services, expensive consumer products, or costly industrial products due to the high costs and risks involved. It is more commonly used for new consumer products, but not always necessary for every product.

Question 20

Breyers introduced for sale a new line of ice cream flavours in elegant black containers.This was done on a limited scale to determine consumer reactions before national distribution of the product.Breyers' new product was in the _____ stage of the new-product process.

Accepted Answer

The introduction of the new ice cream flavours in elegant black containers on a limited scale is a characteristic of market testing, which is the stage where a company evaluates consumer reactions before national distribution of the product. The previous stages of the new-product process are screening and evaluation, business analysis, and commercialization.

Quiz 10: Developing New Products and Services