Question 1

Which of the following costs is most likely associated with commercialization?

Accepted Answer

Building or renting a manufacturing facility is a significant cost associated with commercialization because it involves setting up the infrastructure necessary to produce and distribute the product at scale. This cost is often one of the largest expenses incurred during the commercialization process.

Question 2

At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavors uses a(n)________ approach.

Accepted Answer

The use of cross-functional groups from different departments in the company suggests a team-based approach to new product development, where individuals with different skills and expertise come together to work on a project. This approach is designed to save time and money by promoting collaboration, communication, and knowledge sharing. The other options, such as intradepartmental new product development, sequential new product development or test markets are not clearly suggested by the description provided.

Question 3

In which of the following cases is little or no test marketing most likely recommended for a new product?

Accepted Answer

When the costs of developing and introducing the product are low, little or no test marketing is needed because the risk is low and the cost of failure is manageable. Testing the product could add unnecessary expenses to the budget.

Question 4

If a product passes both the concept test and the product test, the next step is most likely to be ________.

Accepted Answer

After a product passes both the concept test and the product test, the next step in the product development process is typically test marketing, where the product and its marketing strategy are tested in a more realistic market setting.

Question 5

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.

Accepted Answer

In the product development stage, the focus is on developing the product concept into a physical product, including prototype testing and finalizing product features, packaging, and branding. This stage also involves testing the product for safety and efficacy to ensure that it meets consumer expectations.

Question 6

Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product?

Accepted Answer

The stage where the managers review the sales history and conduct marketing surveys to estimate minimum and maximum sales for the product is the business analysis stage. This stage involves analyzing the potential profitability of the product and determining whether it is worth investing in.

Question 7

Using ________, researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments.

Accepted Answer

Simulated test markets are created in laboratory stores or online environments where researchers can measure consumer responses to new products and marketing tactics in a controlled and simulated setting. Controlled and standard test markets involve real-life settings and are not as controlled as simulated tests. Business analysis and concept development are separate processes that may inform research design but are not specific methods of testing consumer responses to new products and marketing tactics.

Question 8

Taco Bell test marketed Doritos Locos Tacos for three years and developed 45 prototypes. Once the decision was made to launch the new taco shell, it moved into the ________ stage of the new product development process.

Accepted Answer

The answer of Taco Bell test marketed Doritos Locos Tacos...

Question 9

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

Accepted Answer

A team-based approach can lead to organizational confusion and tension due to differing opinions and conflicts among team members, which can affect the development process.

Question 10

________ is the stage where a product and its proposed marketing program are introduced into realistic market settings.

Accepted Answer

Test marketing is the stage where a product and its proposed marketing program are introduced into realistic market settings. It allows the company to test the marketing mix, gauge consumer acceptance and gather feedback before a full-scale launch.

Question 11

The team-based new product development approach saves times and increases effectiveness because departments work closely together in ________.

Accepted Answer

Cross-functional teams bring together employees from different functional areas of the company (such as marketing, engineering, sales) to work together on a specific project. This allows for a more collaborative and integrated approach to new product development, as each department can contribute their expertise and insights. This can save time and increase effectiveness by ensuring that all aspects of the product are considered and addressed.

Question 12

Foods International is developing a new gluten-free, chili-flavored pretzel. The marketing strategy for the product has already been developed and presented to top management. Several prototypes were also formulated by the company's R&D team. The final prototype is now being tested rigorously to ensure that it passes FDA standards. Once approved, the next step will most likely be ________.

Accepted Answer

Test marketing is the next logical step after the final prototype has been developed and tested to ensure it meets standards. It involves introducing the product to a limited market to gauge consumer response before a full-scale launch.

Question 13

Under a ________ new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness.

Accepted Answer

In a team-based new product development approach, departments work closely in cross-functional teams, overlapping steps to enhance efficiency and effectiveness.

Question 14

Introducing a new product into the market is called ________.

Accepted Answer

Commercialization is the process of introducing a new product or production method into the market.

Question 15

Under a ________ product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage.

Accepted Answer

In sequential product development approach, every department has a specific set of tasks to complete in a specific order, and the next department only begins once the previous one has completed its work and passed on the product. This approach is more linear and structured, but it can also be slower and less flexible than other approaches.

Question 16

________ involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives.

Accepted Answer

Business analysis involves evaluating the potential profitability of a new product by analyzing sales, costs, profit projections, and other financial factors to determine if they meet a company's objectives. Vendor analysis assesses the performance and capabilities of suppliers, portfolio analysis evaluates a company's product portfolio, SWOT analysis examines a company's strengths, weaknesses, opportunities, and threats, and concept analysis assesses customer attitudes and preferences towards a new product idea.

Question 17

In a sequential new product development process, which of the following is true of the product development step?

Accepted Answer

In a sequential new product development process, product development is usually followed by test marketing. This step involves introducing the product into realistic market settings and testing it on actual customers to gauge their consumer response and interest. Test marketing helps companies analyze the potential success of their products before fully launching them into the market. Business analysis and profit projections are typically done earlier in the process, while avoiding testing on actual customers is not a recommended practice in product development.

Question 18

Sleek Designs Inc. is producing its first eReader. The company is striving to overcome some of the issues communicated by customers about competitive products including screen glare and product bulkiness. Sleek Designs Inc. is using a ________ approach in their new product development process.

Accepted Answer

A customer-centered approach focuses on understanding customer needs and wants, and utilizing that information to guide the development process. In this case, Sleek Designs Inc. is aiming to overcome issues communicated by customers about competitive products, indicating a customer-centered approach.

Question 19

A company launching a new product must first decide ________.

Accepted Answer

Before deciding on where to launch the product or the budget for advertising, the company must first determine when is the best time to launch the product. This involves analyzing market trends, competitor activities, and consumer behavior to ensure that the product launch will be successful. The sample size of the market and the viability of a global launch also come after this step has been taken. Therefore, the best choice is C.

Question 20

Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate?

Accepted Answer

The scenario describes a controlled test market approach, where Evans and Hills are regularly seeking input from the test marketing process through the use of BuyerScan software to generate reports on the actual sales of tested products and the impact of marketing efforts. This approach allows the company to make informed decisions about the success of their new line of specialty teas before fully launching them in the market.

Quiz 8: New Product Development and Product Life-Cycle Strategies