California State University, Sacramento

MKTG

Marketing Management, 14e (Kotler/Keller) Chapter 20 Introducing New Market Offerings

1)Which of the following is most closely related with the organic growth of an organization?

1. 1. acquiring a product or service brand
   2. entering new market places
   3. increasing the operational profitability
   4. increasing productivity of employees
   5. developing new products from within

2. New-to-the-world products are          .
   1. low-cost products designed to obtain an edge in highly competitive markets
   2. new product enhancements that supplement established products
   3. new versions of an existing product that has been less successful
   4. new products that create an entirely new market
   5. existing products that are targeted to new geographical markets

3. Which of the following firms is most likely to seek radical innovation?
   1. a traditional publishing company
   2. a small scale FMCG company
   3. a firm that procures and markets wheat
   4. a high-tech firm in telecommunications
   5. a firm that sells mineral water

4. Most new-product activities are devoted to       .
   1. changing the target markets
   2. developing new-to-the-world products
   3. introducing backward integration
   4. improving existing products
   5. changing the existing market dynamics

5. Which of the following is the best example of a new-to-the-world product?
   1. Walmart, the retail giant, opens new stores in an underdeveloped African country.
   2. Pestorica, a publishing company, decides to launch a new sports magazine.
   3. Tata Motors, an Indian automobile company, acquires Jaguar to extend its business.
   4. An Asian company licenses a U.S. apparel brand name though the brand is not familiar in Asia.
   5. Kids-Med, a company that produces childcare products, launches a non-contact thermometer.

6. Most established companies focus on          innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product.
   1. incremental

1. 2. continuous
   3. spontaneous
   4. radical
   5. competitive  

7. It has been observed that most new products have shorter product life cycles. What is the reason for this?
   1. Most new products do not use technology.
   2. Most new products are not backed by a marketable idea.
   3. New products do not get adequate management support.
   4. Social and governmental constraints lead to this failure.
   5. Rivals quickly copy products that are successful.

8. Which of the following strategies for new-product development incorporates the buyers' preferences in the final design of the product?
   1. customer-driven engineering
   2. market leadership
   3. cost leadership
   4. incremental innovation
   5. disruptive technology

9. Pager, a simple personal device for short messages, became famous in the 1990s. Troveron Communications launched a pager in the early twenty-first century. Due to the introduction of mobile phones and text messaging, the pager industry was on a decline. The company's innovations were not well received by the market and the product became a failure. Which of the following is the most likely reason for the product's failure in this case?
   1. poor launch timing of the product
   2. a small and fragmented target market
   3. high cost of development
   4. social and economic constraints
   5. hasty product development

10. After creating a product prototype, a company tests it within the firm to see how it performs in different applications. The company refines the prototype to correct the mistakes found in in-house testing. What should be the next step?
    1. commercializing the product
    2. performing concept testing
    3. conducting beta testing with customers
    4. creating a marketing strategy for the product
    5. performing business analysis

11. Identify a shortcoming of giving the responsibility of new product development to the product managers of a company.
    1. They would not be familiar with the industry standards.
    2. Product managers would not have an operational focus.

1. 3. Product managers are often busy managing existing lines.
   4. They will find it difficult to gain support from employees.
   5. Product managers are less likely to use participative management.

12.                    teams are cross-functional groups charged with developing a specific product or business.
    1. Virtual
    2. Venture
    3. Fundamental
    4. Elemental
    5. Transitory  

13. Intercom, Inc. together with its subsidiaries, primarily engages in the generation, transmission, and distribution of electric power in the United States. The company observes that its growth has stagnated over a period of two years. In an attempt to promote growth, it considers adding new features to the existing products and introducing a few new products. The company forms a committee consisting of three top executives, one of the production mangers, a few operational managers, and a representative of the HR department to generate ideas. This team is called a(n)                                                       .
    1. virtual team
    2. venture team
    3. fundamental team
    4. elemental team
    5. transitory team

14. A team formed at Intercom, Inc. to generate ideas for new products, conducts frequent meetings and engages in activities such as mind mapping and brainstorming. Most of the meetings are conducted at informal locations away from office. These workplaces are called .
    1. skunkworks
    2. idea funnels
    3. research centers
    4. stage gate systems
    5. contextual bases

15. The                   used by companies divides the innovation process into stages, with a checkpoint at the end of each stage.
    1. reverse assumption analysis technique
    2. skunkworks system
    3. stage-gate system
    4. spiral development process
    5. new-product department technique

16.                    are informal workplaces, sometimes garages, where intrapreneurial teams attempt to develop new products.
    1. Stage-gate systems

1. 2. Skunkworks
   3. Funnels
   4. Opportunity spaces
   5. Research centers

17. Which of the following questions is answered during the business analysis of ideas?
    1. Will this product meet our profit goals?
    2. Have we got a technically and commercially sound product?
    3. Can we find a cost-effective, affordable marketing strategy?
    4. Can this product meet sales expectations?
    5. Can we find a good concept consumers say they would try?

18. During which of the following stages in new product development decision making do managers analyze if they can find a good thought consumers say they would try?
    1. idea generation
    2. idea screening
    3. business analysis
    4. concept development and testing
    5. product development and testing

19.                    process recognizes the value of returning to an earlier stage to make improvements before moving forward.
    1. Spiral development
    2. Reactive development
    3. Market testing
    4. Proactive development
    5. Concept testing

20. The                   uses observational, anthropological, and ethnographic methods or consumer self-reports to map consumer needs, wants, and even beyond.
    1. business analysis
    2. demand landscape
    3. opportunity space
    4. strategic blueprint
    5. internal design analysis

21. Which of the following uses conceptual lens and structured innovative-thinking tools to achieve market perspectives from different angles?
    1. business analysis
    2. strategic blueprint
    3. internal design analysis
    4. demand landscape
    5. opportunity space

22. Gordon Apparel, Inc. engages in the design, manufacture, and retail of fashion apparel for women, men, children, and pets. The company is known for its timely launch of apparels and stylish designer clothing. The company believes a new product has to create needs and not just satisfy the existing needs. To achieve this goal it engages in controlled idea generation techniques such as brainstorming while creating new designs. Which of the following parts of the DIG framework is given prominence here?
    1. business analysis
    2. strategic blueprint
    3. opportunity space
    4. internal design analysis
    5. demand landscape

23. Identify the element in the DIG network that considers how a new product can fit into customers lives and how it can be distinguished from the competitors' products.
    1. business analysis
    2. internal design analysis
    3. strategic blueprint
    4. demand landscape
    5. opportunity space

24.                    means inviting the Internet community to help create content or software, often with prize money or a moment of glory involved.
    1. Stage-gating
    2. Cocreation
    3. Microstocking
    4. Buzzing
    5. Crowdsourcing

25. Surgeons and ER nurses would be considered         for surgical equipment.
    1. venture agents
    2. internal customers
    3. buzz agents
    4. lead users
    5. connectors  

26. Many believe that customer focus does not help to create better or new products. This belief rests on which of the following ideas?
    1. Such new product developments decrease the chances of success.
    2. Customers do not consider the cost of design when suggesting.
    3. Customers are at times unaware of what they really want.
    4. It increases the cost of testing a product or service.
    5. Having too much customer focus leads to a negative brand image.

27. The                   technique for stimulating creativity lists all the characteristics of an object and then modifies each to try to arrive at a new idea.
    1. reverse assumption analysis
    2. lateral marketing
    3. attribute listing
    4. forced relationship
    5. morphological analysis

28. The                   technique used for stimulating creativity identifies a problem and then considers the dimension, the medium, and the power source.
    1. attribute listing
    2. reverse assumption analysis
    3. mind mapping
    4. lateral marketing
    5. morphological analysis

29. In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called          .
    1. attribute listing
    2. mind mapping
    3. morphological analysis
    4. lateral analysis
    5. reverse analysis

30. Electro Locomotors (EL), Inc. engages in the manufacture, distribution, and marketing of custom vehicles in Brazil. Bono, a hybrid car brand that the company produces, is a market leader in the hybrid vehicles segment. With the increased global focus on nature friendly vehicles and governmental subsidies for companies that manufacture hybrid vehicles, competition has increased for flex-fuel cars like Bono. The heads of the R&D team at EL is in a creative session to generate ideas for improvements to Bono. They consider each part of the car and discuss the possibilities of improvements in each of them. Identify the creativity technique used here.
    1. attribute listing
    2. forced relationship analysis
    3. morphological analysis
    4. reverse assumption analysis
    5. mind mapping

31.                    works by listing all the normal assumptions about an entity and then turning them around.
    1. Lateral marketing
    2. Attribute listing
    3. Reverse assumption analysis
    4. Forced relationships

1. 5. Morphological analysis

32. The                   creativity technique begins in a thought that is written down, then proceeds to develop other thoughts that are linked to the first thought, and finally materializes a new idea by associating all the thoughts.
    1. mind mapping
    2. contextual analysis
    3. attribute listing
    4. reverse assumption analysis
    5. morphological analysis

33. Increasingly, new-product ideas arise from          that combines two product concepts or ideas to create a new offering.
    1. reverse assumption analysis
    2. lateral marketing
    3. attribute listing
    4. forced relationships
    5. morphological analysis

34. A group of college graduates decide to start a business. Though they are knowledgeable in various business domains, they are unable to arrive at a valuable business idea. They decide to search for ideas in a structured manner. They meet together and start discussing everyone's ideas. Each idea is recorded and then the thoughts that come up in relation to the ideas are written down and discussed. This process helps them to finalize a business plan. What technique is used here?
    1. morphological analysis
    2. forced relationship analysis
    3. reverse assumption analysis
    4. attribute listing
    5. mind mapping

35. Morboro Energy, Inc. is a large chain of fuel stations in Europe. The company decided to expand its business by incorporating restaurants and automobile service stations as a part of its fuel outlets. This is an example of                                                                                                                                                               .
    1. lateral marketing
    2. brand extension
    3. market development
    4. internal marketing
    5. brand personification

36. A                    error occurs when the company dismisses a good idea.
    1. probability
    2. performance
    3. double counting
    4. DROP

1. 5. GO  

37. A(n)                   is a possible product the company might offer to the market.
    1. test brand
    2. alpha product
    3. beta version product
    4. product idea
    5. product concept

38. A(n)                   is an elaborated version of a product idea expressed in consumer terms.
    1. test brand
    2. alpha product
    3. beta product
    4. business schedule
    5. product concept

39.                    means presenting the product concept to target consumers, symbolically of physically, and getting their reactions.
    1. Perceptual mapping
    2. Brand-positioning mapping
    3. Brand attribute mapping
    4. Concept development
    5. Concept testing

40. Modern firms use the              concept testing tool to design products on a computer and then produce rough models to show potential consumers for their reactions.
    1. morphological analysis
    2. rapid prototyping
    3. concept testing
    4. perceptual mapping
    5. conjoint analysis

41. Brown & Smith, Inc. engages in the design, development, making, and retail of designer jewelry in North America. Before approving a new design of jewelry the company draws it on a computer and then produces models to show potential consumers for their reactions. This allows the company to analyze the possible customer reaction. Identify the concept testing method used here.
    1. conjoint analysis
    2. perceptual mapping
    3. virtual reality testing
    4. rapid prototyping
    5. digital fabrication

42. Consumer preferences for alternative product concepts can be measured through                , a method for deriving the utility values that consumers attach to varying levels of a product's attributes.
    1. concept testing
    2. perceptual mapping
    3. gap level analysis
    4. conjoint analysis
    5. morphological analysis

43. With                  , respondents see different hypothetical offers formed by combining varying levels of the attributes, then rank the various offers.
    1. gap level analysis
    2. conjoint analysis
    3. perceptual mapping
    4. concept testing
    5. morphological analysis

44. Universal Services, Inc. provides communication services to residential and business customers in rural and small urban communities primarily in northern England. The company offers services such as local and long distance voice, data, and Internet and broadband product offerings. The company, in an attempt to increase the attractiveness of its offerings, decides to provide special voice and data packages to its customers. The company designs eight different packs that offer varying voice and data benefits to customers. The company then asks a few of its customers to rank the packs in order to choose two best packs. Which of the following testing methods is being used in the above scenario?
    1. virtual reality testing
    2. conjoint analysis
    3. perceptual mapping
    4. product fabrication
    5. rapid prototyping

45. The trade-off approach may be easier to use when there are/is .
    1. many variables
    2. only a few alternatives
    3. observers that are biased
    4. possible offers that are limited
    5. only one highly desirable solution

46.                    is a "hybrid" data collection technique that combines self-explicated importance ratings with pair-wise trade-off tasks.
    1. Sales wave analysis
    2. Simulative data testing
    3. Adaptive conjoint analysis
    4. Business analysis
    5. Exponential data collection

47.                    exhibit replacement cycles dictated by physical wear or obsolescence associated with changing style, features, and performance.
    1. Frequently purchased products
    2. High-moving goods
    3. Inexpensive products
    4. Commodity products
    5. Infrequently purchased products

48. To estimate replacement sales, management must research the product's , the number of units that fail in year one, two, three, and so on.
    1. survival-age distribution
    2. lifecycle ratio
    3. obsolescence rate
    4. business turnover ratio
    5. product-performance usage

49. For a frequently purchased new product, the seller estimates repeat sales as well as first-time sales. A high rate of repeat purchasing means customers         .
    1. value price more than differentiation
    2. do not support innovation on brands
    3. value differentiation more than price
    4. prefer personalized products rather than standard ones
    5. are satisfied with the product

50.                    contribution lists the changes in income to other company products caused by the introduction of a new product.
    1. Supplementary
    2. Dragalong
    3. Gross
    4. Cumulative
    5. Net  

51. The highest loss a project can create is called         .
    1. rapid prototyping income
    2. payback income
    3. maximum investment exposure
    4. incremental yearly exposure
    5. cannibalized income

52. The job of translating target customer requirements into a working prototype is helped by a set of methods referred to as

                  .

1. 1. quality function deployment
   2. quality control processes
   3. rapid prototyping
   4. marketing control
   5. control system formation

53. Which of the following methodologies takes the list of desired customer attributes (CAs) generated by market research and turns them into a list of engineering attributes (EAs) that engineers can use?
    1. quality control processes
    2. quality function deployment
    3. rapid prototyping
    4. marketing control
    5. control system formation

54. is a customer test that involves placing the product within the firm to see how it performs in different applications.

1. Beta testing
2. Research testing
3. Sales-wave testing
4. Alpha testing
5. Simulated testing

55. In consumer-goods market testing, the company seeks to estimate four variables. These four variables are: trial, first repeat,

adoption, and               .

1. 1. guaranteed response
   2. price sensitivity
   3. purchase frequency
   4. usage convenience
   5. preferential treatment

56. A large FMCG company decides to test market Kora, a new brand of face cleanser, to be launched soon. The company initially distributes a few free samples to some prospective consumers. Later it offers the product to the customers at a discounted price and observes that not only more than seventy percent of the customers are purchasing it but the same number are also satisfied using it. The company keeps using this process 3-4 times to obtain a correct count of the number of people purchasing the product repeatedly. Which of the following testing methods is being used here?
    1. simulated testing
    2. controlled testing
    3. full test marketing
    4. parallel testing
    5. sales-wave research

57. Which of the following is an advantage of sales-wave research?

1. 1. It gives surprisingly accurate results on advertising effectiveness.
   2. It allows the brand to gain favorable shelf position.
   3. It guarantees immediate brand recognition and high sales volume.
   4. It can be implemented quickly with a fair amount of security.
   5. It easily creates a buzz in the minds of customers.

58. Which of the following is usually referred to as a full-blown test market?
    1. an internal focus group
    2. a discussion group
    3. a country
    4. a city or a few cities
    5. a laboratory  

59. Which of the following products is most likely to undergo alpha and beta testing?
    1. food products
    2. industrial goods
    3. consumer products
    4. commodities
    5. FMCG products

60. During                  , the company's technical people observe how customers use the product, a practice that often exposes unanticipated problems of safety and servicing and alerts the company to customer training and servicing requirements.
    1. beta testing
    2. research testing
    3. sales-wave testing
    4. alpha testing
    5. simulated testing

61. Poga International, a multinational beverage corporation identifies that one of its competitors is launching an apple flavored drink. The company decides to launch an apple flavor brand along with its competitor. What timing strategy is used here?
    1. first entry
    2. blunt entry
    3. parallel entry
    4. late entry
    5. exchange entry

62. Some firms might delay the launch of their products until after the competitor has borne the cost of educating the market. Such an entry is called         entry.
    1. strategic pay off
    2. parallel
    3. balancing

1. 4. late
   5. compensating  

63. A(n)                   is any good, service, or idea that is perceived as new, no matter how long its history.
    1. commodity
    2. innovation
    3. adoption
    4. invention
    5. novel product  

64. Adopters of new products move through five stages. These stages begin with          and follow with interest, evaluation, trial, and adoption.
    1. awareness
    2. investigation
    3. trial
    4. innovation
    5. diffusion  

65. Identify the stage in the consumer adoption process in which the customer is stimulated to seek information about the innovation.
    1. awareness
    2. adoption
    3. interest
    4. evaluation
    5. trial  

66. Robert has heard about the latest cell phone from LG electronics that features Wi-Fi hotspot technology. Wi-Fi hotspot is a technology that allows users to share mobile internet with other Wi-Fi enabled devices. Robert visits the company's Web site to read more about the phone. Robert is in the   stage of consumer-adoption process.
    1. interest
    2. awareness
    3. evaluation
    4. trial
    5. adoption  

67. Armordo is a famous vacuum cleaner brand in Africa. Clara has heard of Armordo and she knows that the product is a success. She has started considering whether or not to buy the vacuum cleaner. What stage of the consumer-adoption process is Clara in?
    1. awareness
    2. adoption
    3. evaluation
    4. trial
    5. interest

68. Which of the following is the mental step in consumer-adoption process where the customer starts considering whether to try the innovation?
    1. adoption
    2. trial
    3. awareness
    4. evaluation
    5. interest  

69. People who are technology enthusiasts, venturesome, and who enjoy tinkering with new products and mastering their intricacies are called      .
    1. innovators
    2. early adopters
    3. early majority
    4. investigators
    5. experimenters

70. Troma Inc., is a famous manufacturer of cookware, that follows a traditional distributor-retailer system to distribute its products. The company abstains from the use of automated supply chain management (SCM) system mainly due to the fear of unknown. However, rapidly escalating operational costs and inefficiencies have made it absolutely necessary for the company to implement an SCM system. The company goes for a big-bang installation of SCM system to become more competitive and cost effective. Identify the adopter group to which Troma belongs.
    1. innovator
    2. early adopter
    3. early majority
    4. laggard
    5. late majority  

71. Which of the following characteristics is closely associated with late majority adopter groups?
    1. superior technological knowledge
    2. low price sensitiveness
    3. opinion leadership
    4. deliberate pragmatism
    5. high risk aversion

72. Joseph, a student of the Columbia University, finds many of his classmates have purchased the I-pad tablet PC from Apple Computers. I-pad, launched a few months before has been identified as a very useful product and many students in the U.S. have rated it highly. Considering all these, Joseph also decides to purchase an I-pad. Which of the following is the adopter group to which Joseph belongs?
    1. early adopter

1. 2. innovator
   3. late majority
   4. laggard
   5. early majority

73. Five characteristics influence the rate of adoption of an innovation. One of these is                .
    1. marketing expertise
    2. relative advantage
    3. packaging attractiveness
    4. government regulations
    5. place of value exchange

74.                    is the effect one person has on another's attitude or purchase probability.
    1. Sharing power
    2. Collaborative power
    3. Market influence
    4. Brand power
    5. Personal influence

75. Relative advantage of an innovation refers to the degree to which .
    1. it matches the values and experiences of the individuals
    2. it is difficult to understand or use
    3. it can be tried on a limited basis
    4. it appears superior to existing products
    5. the benefits of use are observable or describable to others

76. The degree to which the beneficial results of an innovation's use are observable or describable to others is called                                                                                                                                                                                                               .
    1. divisibility
    2. communicability
    3. compatibility
    4. relative advantage
    5. plainness  

77. Which of the following terms refers to the degree to which the innovation can be tried on a limited basis?
    1. compatibility
    2. relative advantage
    3. divisibility
    4. communicability
    5. complexity

78. Organic growth refers to increasing the profitability of the organization by increasing employee productivity.

79. Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation.

80. High-tech firms that function in a market with high technological uncertainty, high market uncertainty, and high investment costs are not likely to seek radical innovation.

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Objective: 1 Difficulty: Easy

81. Companies that fail to develop new products leave their existing offerings vulnerable to increased domestic and foreign competition.

82. Most established companies focus on incremental innovation rather than radical innovation.

83. Shorter product life cycles are common in industries characterized by low level of competition.

84. Companies should use normal investment criteria to budget for new-product developments.

85. Almost all companies use the conventional percentage-of-sales figure while budgeting for new product development.

86. Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new products.

87. Venture teams are cross-functional groups charged with developing a specific product or business.

88. A business analysis is performed mainly to identify if a company has got a technically and commercially sound product.

89. A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

90. The demand landscape uses conceptual lens and structured innovative-thinking tools to achieve market perspectives from different angles.

91. The strategic blueprint thinks about how the new product can fit into customers' lives and how it can be distinguished from competitors.

92. Crowdsourcing means inviting the Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

93. Cocreation can help a company create favorable word of mouth.

94. Employees can be a source of ideas for improving production, products, and services.

95. Attribute listing lists several ideas and considers each in relationship to the others.

96. Reverse assumption analysis lists all the normal assumptions about an entity and then turns them around.

97. Morphological analysis starts by forming a new dimension and then thinks about the possible problems of the dimension.