Question 1

Products with low share in a poor market are called:
A) Stars
B) Question marks
C) Cows
D) Dogs
E) Category killers

Accepted Answer

Products with low share in a poor market are referred to as "Dogs" in the BCG matrix. These products have a low market share and operate in a slow-growing market, resulting in low profits or even losses.

Question 2

Whenever a firm introduces a new product,it is taking a(n):
A) Market risk
B) Investment risk
C) Product risk
D) Opportunity risk
E) Commodity risk

Accepted Answer

The answer of Whenever a firm introduces a new product,it...

Question 3

Testing the product at the customer's location,to see if the product will work under real-world conditions is:
A) Operational testing
B) Alpha testing
C) Simulated testing
D) Beta testing
E) Internal acceptance testing

Accepted Answer

Beta testing involves testing the product in real-world conditions with actual customers to gather feedback and improve the product before its official release. This is the best choice as it specifically refers to testing under real-world conditions with customers.

Question 4

In terms of the GE grid,this is a determinant of business strength.
A) Company's image
B) Social environment
C) Diversity
D) Competitive structure change
E) Technology change

Accepted Answer

Company's image is a determinant of business strength in the GE (General Electric) matrix, as it reflects the company's brand reputation and market position, which are critical factors in assessing its competitive strength.

Question 5

In the BCG approach to portfolio management,products having high market share and strengths in a steady market are called:
A) Cash cows
B) Stars
C) Dogs
D) Question marks
E) Category killers

Accepted Answer

Cash cows are products that have high market share and strengths in a steady market. They generate high profits and cash flow, but have low growth potential. Therefore, they are a reliable source of income for the company and require minimal investment to maintain their market position.

Question 6

Whenever a firm declines to introduce a potential new product,it is accepting a(n):
A) Opportunity risk
B) Investment risk
C) Product risk
D) Commodity risk
E) Market risk

Accepted Answer

Opportunity risk refers to the potential loss or missed gain from an opportunity not taken, such as the decision not to introduce a new product. This could mean missing out on potential profits and market share.

Question 7

Question marks:
A) Require a great deal of investment, using cash generated from cash cows
B) Are those products with low share in a poor market
C) Have high market share and strength in a steady market
D) Are those products that should contribute the most to the company's profit
E) Are those products that are usually thought to be in the decline stage of their life

Accepted Answer

Question marks are products or business units that require significant investment to increase their market share. They generate little or no cash by themselves but have the potential for growth, thus requiring cash input from the company's more successful products or segments, often referred to as cash cows.

Question 8

In terms of the GE grid,a product that is sold in an attractive market and represents a strong product for the company would be similar to a _____ in the BCG matrix.
A) Dog
B) Question mark
C) Category killer
D) Star
E) Cash cow

Accepted Answer

A product that is sold in an attractive market and represents a strong product for the company is likely to have high market share and high growth potential. This characteristics corresponds to a "Star" in the BCG matrix, which is a product with high market growth rate and high relative market share. Stars require investment to maintain their growth and market share, but they have potential to become cash cows in the future.

Question 9

Which of the following BCG product categories require large investments to maintain their rapid growth in a market already largely dominated by the firm?
A) Dogs
B) Cash cows
C) Stars
D) Question marks
E) Category killers

Accepted Answer

Stars are products with high market growth and high market share. These products require significant investment to maintain their growth and dominant market position.

Question 10

The GE grid "positions" the firm's product portfolio along two "dimensions" based on:
A) Market share and profitability
B) Market attractiveness and business strength
C) Sales and market share
D) PLC stage and sales volume
E) PLC stage and BCG rating

Accepted Answer

The GE grid, also known as the BCG matrix, positions a firm's product portfolio along two dimensions: market attractiveness (market growth rate, market size, market profitability, and market attractiveness) and business strength (relative market share, brand strength, distribution network, production efficiency, and other capabilities). Therefore, the best choice is B: Market attractiveness and business strength. The other options do not accurately reflect the two dimensions used in the GE grid.

Question 11

In this stage of the product development process,information is gathered to determine development costs and time,potential sales,and other factors that influence whether the process should continue.
A) Beta testing
B) Idea generation
C) Specifying features
D) Product development
E) Screening and preliminary investigation

Accepted Answer

The stage described in the question is the Screening and preliminary investigation stage. This is where the feasibility of the product is determined, taking into account factors such as development costs, potential sales, and time. The other options mentioned (such as Idea generation and Product development) occur at different stages of the product development process.

Question 12

A composite measure of the potential for sales and profits in a particular market segment is:
A) A first-mover advantage
B) Business strength
C) Market attractiveness
D) Primary demand
E) Secondary demand

Accepted Answer

Market attractiveness combines factors such as market size, growth rate, competition, and profit potential to determine the potential for sales and profits in a particular market segment. It is a composite measure that allows businesses to assess the potential of a market segment before entering it. The other choices are not appropriate as they do not specifically measure the potential for sales and profits in a market segment.

Question 13

Balancing risk and return among all product investments and managing all products simultaneously is:
A) Product life cycle management
B) Product differentiation
C) Product portfolio management
D) Product data management
E) Product positioning

Accepted Answer

Managing a portfolio of products involves balancing the risk and return of each product investment and managing all products simultaneously. This involves determining the optimal allocation of resources to different products based on their individual risk and return profiles, as well as their strategic fit within the overall product portfolio. Product differentiation, positioning, and data management are important components of product management, but they do not involve managing a portfolio of products. Product life cycle management is focused on managing the stages of a single product's life cycle.

Question 14

Which of the following is the simplest of the grid models?
A) GE grid
B) Product/market grid
C) Balanced scorecard
D) Positioning grid
E) BCG grid

Accepted Answer

The BCG (Boston Consulting Group) grid, also known as the Growth-Share Matrix, is considered the simplest of the grid models listed. It categorizes a company's business units or products into four categories (Stars, Question Marks, Cash Cows, and Dogs) based on market growth and market share, which simplifies strategic decision-making.

Question 15

What is the purpose of the product development step in the product development process?
A) To introduce the product into the market
B) To test the product at the customer's location, to see if the product will work under real-world conditions
C) To develop and test a prototype of the product in the lab, based on the specifications developed in the previous step
D) To evaluate the product and adapt elements of the marketing program to fit changing market conditions
E) To develop detailed specifications of the product

Accepted Answer

The purpose of the product development step is to develop and test a prototype of the product in the lab, based on the specifications developed in the previous step. This step involves designing and developing a physical product or software, testing its functionality, and ensuring that it meets the intended purpose and solves the problem it was designed to address. It is an important step in the product development process, as it enables the product team to identify and fix any design flaws or issues before introducing the product into the market.

Question 16

In most cases,these products are not worth much investment and most companies want to withdraw them quickly from the market.
A) Category killers
B) Question marks
C) Cash cows
D) Stars
E) Dogs

Accepted Answer

These products are considered "Dogs" in the BCG Matrix, which are low market share and low growth products that generate little to no profit, making them not worth much investment. Most companies try to withdraw or divest from these products quickly.

Question 17

Products depicted by the BCG model as having low market share/strength in high-growth markets are:
A) Stars
B) Question marks
C) Dogs
D) Category killers
E) Cash cows

Accepted Answer

Question marks are products with low market share in high-growth markets, indicating uncertainty about their future success and the need for strategic decisions regarding investment to potentially increase their market share.

Question 18

Which of the following is a PLC dimension?
A) The company's image
B) People resources
C) Growth rate
D) Market size
E) Time

Accepted Answer

PLC dimension refers to the different stages in a product's life cycle. Time is a critical dimension as it serves as the basis for the different stages of a product's life cycle, such as introduction, growth, maturity, and decline. The other options - company's image, people resources, growth rate, and market size - are important business factors, but they do not fall under the dimensions of a PLC.

Question 19

All of the following statements about new products are true EXCEPT:
A) More than one-third of all new products fail
B) Old products are being withdrawn from the market at an increasingly rapid rate
C) The key to successful products is solid planning
D) The risk associated with new product development has been drastically reduced
E) New products may mean the difference between profit and loss for a firm

Accepted Answer

The statement "The risk associated with new product development has been drastically reduced" is not entirely true. While companies have implemented tools and strategies to reduce risks in the development process, there is still a significant degree of uncertainty involved in launching new products. Therefore, it cannot be said that the risk has been drastically reduced.

Question 20

In terms of the GE grid,which of the following is a market attractiveness determinant?
A) Company's image
B) Market share
C) Social environment
D) People resources
E) Company growth rate

Accepted Answer

The GE/McKinsey Matrix evaluates business portfolio strategies by examining market attractiveness and business unit strength. Market attractiveness includes factors external to the firm, such as the social environment, which can influence the potential for growth and profitability in a given market.

Quiz 8: Developing and Managing Offerings: What Do Customers

Products with low share in a poor market are called:

Whenever a firm introduces a new product,it is taking a(n) :

Testing the product at the customer's location,to see if the product will work under real-world conditions is:

In terms of the GE grid,this is a determinant of business strength.

In the BCG approach to portfolio management,products having high market share and strengths in a steady market are called:

Whenever a firm declines to introduce a potential new product,it is accepting a(n) :

Question marks:

In terms of the GE grid,a product that is sold in an attractive market and represents a strong product for the company would be similar to a _____ in the BCG matrix.

Which of the following BCG product categories require large investments to maintain their rapid growth in a market already largely dominated by the firm?

The GE grid "positions" the firm's product portfolio along two "dimensions" based on:

In this stage of the product development process,information is gathered to determine development costs and time,potential sales,and other factors that influence whether the process should continue.

A composite measure of the potential for sales and profits in a particular market segment is:

Balancing risk and return among all product investments and managing all products simultaneously is:

Which of the following is the simplest of the grid models?

What is the purpose of the product development step in the product development process?

In most cases,these products are not worth much investment and most companies want to withdraw them quickly from the market.

Products depicted by the BCG model as having low market share/strength in high-growth markets are:

Which of the following is a PLC dimension?

All of the following statements about new products are true EXCEPT:

In terms of the GE grid,which of the following is a market attractiveness determinant?