Deck 8: New Products: Developing and Managing Innovation

Question 1

The purpose of idea generation is to create a ________ of ideas.The purpose of succeeding stages is to ________ that number.

A)small number;reduce
B)small number;increase
C)large number;increase
D)large number;reduce
E)limited number;sustain

Answer 1

D

Question 2

Your firm asks you to consult external sources for new product ideas.All of the following are common external sources EXCEPT ________.

A)customers
B)suppliers
C)competitors
D)trade shows and magazines
E)the firm's executives

Answer 2

E

Question 3

Product improvements,product modifications and original products can all be classified as ________.

A)pioneer products
B)new products
C)product concepts
D)product ideas
E)test products

Answer 3

B

Question 4

A firm can obtain new products in two ways: acquisition or new-product development.

Question 5

Which of the following is NOT a potential reason for a new product to fail?

A)An underestimated market size.
B)A poorly designed product.
C)An incorrectly positioned product.
D)Higher than anticipated costs of product development.
E)Ineffective advertising.

Question 6

New product development starts with ________.

A)idea generation
B)idea screening
C)concept development
D)concept testing
E)test marketing

Question 7

According to your text,which of the following is perhaps the most important external source of new-product ideas?

A)engineers
B)customers
C)competitors
D)trade magazines,shows and seminars
E)distributors and suppliers

Question 8

Which of the following is NOT a recommended method for companies to tap into their customers as sources for new-product ideas?

A)analysing customer complaints and questions
B)relying heavily on customers to know what types of technical products they need
C)working alongside customers to get ideas and suggestions
D)turning customers into co-creators
E)putting products created by their customers on the market

Question 9

Crowdsourcing can produce a flood of innovative ideas.Which of the following is correct?

A)All are good.
B)All are bad.
C)All are feasible.
D)All are local.
E)The firm may be overwhelmed.

Question 10

Executives,manufacturing employees and salespeople are all examples of ________.

A)external sources for new-product ideas
B)internal sources for new-product ideas
C)core members of innovation management systems
D)research and development team members
E)new-product committee members

Question 11

Explain why so many new products fail and how a company can improve its odds of new product success.

Question 12

The creation of a successful new product depends on a company's understanding of its ________ and its ability to deliver ________ to customers.

A)competitors,distributors and employees;new styles
B)customers,brands and products;product images
C)customers,competitors and markets;superior value
D)product,marketing mix and marketing strategy;functional features
E)product life-cycle,legal responsibilities and social responsibilities;innovations

Question 13

A company can obtain new products in two ways: One is through ________ and the other is through the company's own new product development process.

Question 14

Some 'favourite' products are marketed despite poor marketing research findings.

Question 15

Your company decides to use internal sources for developing new-product ideas.Which of the following would NOT be consulted?

A)executives and professionals
B)company records and data
C)'intrapreneurial' programs
D)suppliers
E)salespeople

Question 16

Which of the following is the most likely reason that employees at your firm regularly attend trade shows and seminars?

A)to analyse the product life-cycle
B)to test new-product concepts
C)to obtain new-product ideas
D)to test market new products
E)to implement a team-based new-product development approach

Question 17

What are the two ways that a company can obtain new products?

A)line extension and brand management
B)internal development and merger
C)new-product development and acquisition
D)service development and product extension
E)market mix modification and research and development

Question 18

By some estimate,60 per cent of all new products launched by established companies fail.

Question 19

Fiat has recently purchased several automotive suppliers,including car company Chrysler.This is an example of _____.

A)harvest
B)divestment
C)organic growth
D)acquisition
E)portfolio planning

Question 20

Which of the following is NOT a challenge presented to marketers by the product life-cycle?

A)Innovation is very expensive and risky.
B)A firm must be good at developing new products to replace ageing ones.
C)A firm must be good at adapting its marketing strategies.
D)It is difficult to plot the stages as a product goes through them.
E)Changing tastes,technologies and competition affect the marketing of the product as it passes through life-cycle stages.

Question 21

A review of the sales,costs and profit projections for a new product to find out whether they satisfy the company's objectives is called a ________.

A)business feasibility plan
B)market strategy development
C)business analysis
D)product acceptance
E)proposal

Question 22

The R-W-W framework asks three questions: Is it real? Can we win? Is it worth doing? Marketers should ask these questions during the ________ stage of the new-product development process.

A)idea generation
B)idea screening
C)concept testing
D)product development
E)commercialisation

Question 23

A potential marketer of new Teflon coated shower enclosures asks consumers,'Do you understand how the addition of Teflon will benefit you?' and 'Would this type of shower closure solve a cleaning problem for you?' This marketer is in the ________ stage of new-product development.

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

Question 24

A firm has asked its engineering department to create a prototype for a promising product concept.The firm is engaged in ________.

A)product development
B)concept testing
C)business analysis
D)market testing
E)concept development

Question 25

An attractive idea must be developed into a ________.

A)product idea
B)product concept
C)product image
D)test market
E)product strategy

Question 26

The third part of the marketing strategy statement includes all of the following EXCEPT ________.

A)long-run sales
B)profit goals
C)marketing mix strategies
D)short-run sales
E)A and C

Question 27

The second part of the marketing strategy statement outlines the product's planned price,distribution and ________ for the first year.

A)advertising
B)promotion
C)marketing budget
D)positioning
E)target market

Question 28

After concept testing,a firm would engage in which stage in developing and marketing a new product?

A)idea screening
B)marketing strategy development
C)business analysis
D)product development
E)test marketing

Question 29

A fabric manufacturer has just created a new combination of colour and fabric types.The firm wants to be sure of the way consumers perceive its new product.The firm is concerned with the product ________.

A)idea
B)concept
C)image
D)proposal
E)presentation

Question 30

________ calls for testing new-product concepts with groups of target consumers.

A)Concept development
B)Concept testing
C)Idea generation
D)Idea screening
E)Test marketing

Question 31

A ________ is the way consumers perceive an actual or potential product.

A)product idea
B)product concept
C)product image
D)test market
E)concept test

Question 32

Which of the following statements best explains why idea screening may be the most import step of new product development?

A)It increases the number of ideas generated.
B)Some potentially profitable ideas may be ill perceived by the idea screeners.
C)Some ideas that will become market disasters may be originally viewed favourably by the idea screeners.
D)It gives research and development team members an opportunity to gather consumer feedback.
E)It saves the company money in product development costs by giving the green light to only the product ideas that are likely to be profitable.

Question 33

For some ________,a simple description consisting of a word or a rough drawing might be sufficient.

A)concept tests
B)product concepts
C)marketing strategies
D)product developments
E)business analyses

Question 34

Which of the following is a product concept?

A)a battery-powered all-electric car
B)a pocket-size digital music player
C)an energy efficient humidifier
D)a thin,lightweight laptop with extended battery life appealing to students and young professionals who want access to their computer anywhere,anytime
E)a running shoe with built-in sensors

Question 35

The first part of the marketing strategy statement describes the target market,the planned product positioning,and the sales,________ and profit goals for the first few years.

A)market share
B)competition
C)secondary market
D)competition's anticipated reaction
E)life-cycle duration

Question 36

With what groups do firms conduct concept testing for new products?

A)suppliers
B)employees
C)target consumers
D)manufacturers
E)competitors

Question 37

In the concept testing stage of new-product development,a product concept in ________ form is presented to groups of target consumers.

A)physical or symbolic
B)prototype
C)final
D)market-tested
E)commercial

Question 38

GrayBerry Gifts has just brainstormed a large number of ideas for adding new products and services after visiting several buying fairs.The owners will begin the first idea-reducing stage,called ________,to arrive at a realistic number to pursue.

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

Question 39

Which of the following is most likely to be included in an executive's write up of a new-product idea to be presented to a new-product committee?

A)the proposed customer value proposition
B)the product image
C)the marketing strategy
D)the business analysis
E)the planned market rollout

Question 40

A detailed version of a new idea stated in meaningful customer terms is called a ________.

A)product idea
B)product concept
C)product image
D)product proposal
E)product movement

Question 41

Your firm added three new products earlier this year to increase variety for customers.Two of them failed to reach even minimal sales.Which of the following is LEAST likely to have been the cause of their failure?

A)The products were priced too high.
B)The products were advertised incorrectly.
C)Competitors fought back harder than expected.
D)Research was too extensive.
E)The product launch was ill-timed.

Question 42

Under what circumstances might it be wise for a company to do little or no test marketing?

A)when a new product requires a major investment
B)when management is not sure of the product
C)when management is not sure of the marketing program
D)when the product has no substitutes and is new in its category
E)when the costs of developing and introducing the product are low

Question 43

Although test marketing costs can be high,they are often small when compared with ________.

A)the final results
B)the costs of a major mistake
C)management's approval and acceptance
D)stockholders' confidence
E)research and development costs

Question 44

In the early 1990s,Jarrah was the first brand in the Australian market to offer pre-prepared,instant coffee mixes in flat and frothy varieties.The brand featured exotic flavourings with cheeky names such as Cheeky 'Cino Cappuccino,White Choc-a-Mocha Latte,Mocha Truffle Latte,Vanilla Thriller Latte and Crème Caramel Latte.At the time,the launch was considered high risk and did not enjoy a big budget.Accordingly,the marketers devised a plan which involved a limited scale launch first in the regional Victorian town of Ballarat.Only when that was successful was the brand launched in Tasmania.Over time,the brand was launched in more and larger towns and cities around the country.The purpose of this was to gauge customer reactions,minimise the company's risk exposure,spread out investment outlays and fine tune elements of the marketing mix.This practice is best described as a planned ________.

A)test marketing
B)focus group survey
C)scaled commercialisation
D)post-testing
E)roll-out

Question 45

A Day Care centre plans to offer third-shift childcare,based upon the opening of two new manufacturing plants in the area.Together the plants will hire 450 employees and run all three shifts.Initial test marketing results look promising.In considering launching this new service,the firm must first decide on ________.

A)timing
B)employee schedules
C)identifying suitable new employees
D)local and state regulations
E)menu offerings

Question 46

Following the decision to 'time' the introduction of the new product,a company must decide ________ to launch the new product.

A)where
B)how
C)to what degree
D)why
E)All of the above.

Question 47

The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.

A)how to develop a market strategy
B)which market to compete in
C)whether to launch the new product
D)how to compete in the market
E)how long to compete in the market

Question 48

Introducing a new product into the market is called ________.

A)test marketing
B)new product development
C)experimenting
D)commercialisation
E)marketing development

Question 49

Which of the following costs is most likely associated with the commercialisation stage of new-product development?

A)building or renting a manufacturing facility
B)paying groups of target consumers for product feedback
C)determining the product's planned price,distribution and marketing budget
D)developing a prototype of the product
E)identifying target markets

Question 50

Once managers of a firm have decided on their product concept and marketing strategy,they can evaluate the business attractiveness of the proposal in the ________ stage of the new-product development process.

A)business feasibility
B)feasibility study
C)business analysis
D)product acceptance
E)concept testing

Question 51

Sony Music is conducting a business analysis to determine which of the many new songs available to management should be released.Estimates of sales must be prepared before costs can be estimated.Which of the following did your text recommend for forecasting sales?

A)considering the history of market opinions
B)conducting surveys of competitors
C)considering the sales history of similar products and conducting surveys of market opinions
D)applying the PLC concept
E)None of the above.

Question 52

In the ________ stage of new-product development,products undergo rigorous tests to make sure that they perform safely and effectively or that consumers will find value in them.

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

Question 53

A new company designing and selling several lines of mobile phones has closely modelled its products after successful competitive products that are already in the marketplace.As it prepares to enter the market with its new products and services,which of the following should concern it the most?

A)product configurations
B)timing
C)sequential product development
D)product life cycle issues
E)sales

Question 54

Telekom Communications is concerned about test marketing its new device.Which of the following is NOT a disadvantage of test marketing that would likely concern them?

A)Test marketing costs can be high.
B)It can take much time to test market.
C)Test marketing allows time for competitors to gain advantages.
D)People who are surveyed tend to tell less than the truth.
E)Test marketing does not guarantee success.

Question 55

A company getting ready to launch a new product must make several decisions.The company must first decide on ________.

A)whether to launch the product in a single location
B)whether to launch the product in a region
C)whether to launch the product into full national distribution
D)when to time the new product introduction
E)when to develop a planned market rollout

Question 56

During which stage of new-product development will management most likely estimate minimum and maximum sales to assess the range of risk in launching a new product?

A)concept testing
B)marketing strategy development
C)business analysis
D)product development
E)test marketing

Question 57

Once the prototype of a new ride-on lawnmower,made especially for women,passes product tests,the next step is ________.

A)test marketing
B)focus group surveys
C)commercialisation
D)post-testing
E)business analysis

Question 58

Companies often do not test ________ or copies of successful competitors' products.

A)concept development
B)concept testing
C)marketing strategy development
D)product development
E)simple line extensions

Question 59

Once the product or service passes the business analysis test,it moves into what stage?

A)concept development
B)product development
C)market testing
D)strategy development
E)product proposal

Question 60

Masport Industries will build a new prototype ride-on lawnmower especially for women.In the product development stage,they will incorporate the functional features and convey the ________.

A)marketing strategy
B)advertising
C)safety features
D)intended psychological characteristics
E)warranty offering

Question 61

Which stage of the new-product development process focuses on finding new ways to solve customer problems and to create more customer-satisfying experiences?

A)concept testing
B)new-product development
C)customer-centred new-product development
D)sequential product development
E)team-based new-product development

Question 62

Which of the following is necessary for successful new-product development?

A)a holistic and sequential product development approach
B)a customer-centred,team-based,systematic approach
C)a team-based,innovation-management approach
D)a market pioneer mindset and a holistic approach
E)an innovation management system and sequential product development

Question 63

A product idea is an idea for a possible product a company can offer the market,while a product concept is a detailed version of the idea stated in meaningful consumer terms.

Question 64

When LEGO developed the LEGO Mindstorms build-it-yourself robot,more than 1000 intrigued customers formed their own web community devoted to making it better.This is an example of customer co-creation.LEGO embraced it.

Question 65

In order to get their new products to market more quickly,many companies are adopting a faster,team-oriented approach called ________.

A)simulated new-product development
B)sequential product development
C)team-based new-product development
D)phased-in new-product development
E)market development

Question 66

Companies rarely solicit ideas from customers during the idea generation stage of product development.

Question 67

________ is a new-product development approach in which one company department works to complete its stage of the process before passing the new product along to the next department and stage.

A)Team-based product development
B)Simultaneous product development
C)Sequential product development
D)Product life-cycle analysis
E)Micromarketing

Question 68

Top management can install a(n)________ to direct the flow of new-product ideas to a central point where they can be collected,reviewed and evaluated.

A)idea evaluation system
B)innovation management system
C)database
D)market strategy
E)data processing system

Question 69

Which of the following is a disadvantage of a team-based approach to new-product development?

A)It takes longer to get the right products to market.
B)The development effort is not as effective because of team members' lack of expertise.
C)Levels of risk can be more easily controlled.
D)Organisational confusion and tension can affect the process.
E)The process does not work with the shorter life-cycles of many of today's products.

Question 70

The team-based new-product development approach uses cross-functional teams that overlap the steps in the process to achieve which of the following goals?

A)save time and reduce errors
B)save time and increase effectiveness
C)increase effectiveness and employee satisfaction
D)speed product to market and reduce risks
E)B and D

Question 71

BHP Steel lacks the confidence,capital and capacity to launch a new steel product into full national or international distribution.Even though test market results look promising,what will most likely be management's next step?

A)Retest the product in additional markets.
B)Develop a planned market rollout over time.
C)Secure a loan to provide confidence,capital,and capacity.
D)Seek the help of a nationally known consultant.
E)Develop a prototype.

Question 72

The team-based new-product development approach is faster because departments work closely together through ________.

A)sequential efforts
B)a step-by-step process
C)the help of a consultant
D)cross-functional teams
E)departmentalisation

Question 73

An established firm finds that the tastes and preferences of its customers change more rapidly than in the past.They should constantly look for external ideas from customers,suppliers,the competition and the salesforce.

Question 74

A homewares retailer wants to add new lines of products to its 46-store chain.Managers are correct in believing that the purpose of idea generation is to create a few ideas,and the purpose of succeeding stages is to increase that number.

Question 75

A large regional chain of candy stores transfers employees from marketing,design,production and finance to work in a cross-functional group to save time and money in the new-product development process.It is using a(n)________ approach.

A)customer-centred new-product development
B)sequential new-product development
C)team-based new-product development
D)innovation management system
E)consumer composite

Question 76

Ferntree Lawn and Garden Products is engaged in a review of the sales,costs and profit projections for some new products to find out whether they satisfy the company's objectives.This activity is called business product development.

Question 77

The search for new-product ideas should be ________ rather than ________.

A)intermittent;continuous
B)systematic;haphazard
C)segmented;holistic
D)impulsive;strategic
E)employee-centred;customer-centred

Question 78

The innovation management system approach yields two favourable outcomes: it helps create an innovation-oriented company culture and it ________.

A)clearly assigns responsibility for the process
B)yields a larger number of new-product ideas
C)guarantees successful products
D)frees up senior management time
E)requires less budget support

Question 79

New product development begins with a systematic search for new product ideas in a process known as idea generation.

Question 80

Ferntree Lawn and Garden Products is engaged in marketing strategy development.Management should first create a statement outlining the product's planned price,distribution and marketing budget for the first year.