Deck 7: Product Design and Development

Question 1

All of the following are characteristics of a typical entrepreneurial start-up except:

A)the start-up focuses on new opportunities.
B)its owners are willing to take risks.
C)it creates innovative products and/or practices.
D)it focus on growth rather than profits.

Answer 1

D

Question 2

In addition to being creative people,entrepreneurs are generally also ______

A)only moderately intelligent
B)willing to take risks
C)from poor backgrounds
D)from large families

Answer 2

B

Question 3

Which of the following venture is riskiest?

A)Starting up a store to sell improved versions of existing surfboards.
B)Starting a business to sell the first motorized surfboard.
C)Setting up a store to sell fireworks.
D)Buying an existing skydiving school.

Answer 3

B

Question 4

The PowerSki Jetboard is best characterized as a(n)_____.

A)service
B)physical good
C)component
D)intangible item

Question 5

Most entrepreneurial decision making can be improved by using knowledge gained from personal experience.

Question 6

Products are either physical goods or services and can't be both.

Question 7

Woody Allen once said,"If you're not failing every now and again,it's a sign you're not going to be very profitable."

Question 8

A product is something that can be marketed to customers because it provides them with a benefit and satisfies a need.

Question 9

A _____ business offers such products as haircuts or taxi rides.

A)goods-producing
B)soft-goods
C)service-producing
D)low-tech

Question 10

In an effort to make its food healthier,McDonald's changed the way it made its french fries.This is an example of a:

A)new-to-the-company product.
B)extension to an existing product line.
C)"new-to-the-market" health conscious product.
D)improvement in an existing product.

Question 11

His job,according to Doug Hall,head of a Cincinnati-based idea factory,is to help executives get their creative juices flowing.

Question 12

Launching a "new-to-the-market" product is very risky but can be very profitable.

Question 13

When Just Born reduced the piece size,added some new ingredients,and put its Mike & Ike's in pouches,this was an extension to an existing product.

Question 14

Which of the following statement(s)about entrepreneurs is true?

A)they take carefully calculated risks
B)They take unnecessary risks
C)They can minimize their risk by drawing on personal experience and conducting research
D)Both a and c

Question 15

Most companies constantly look for ways to make ________improvements in existing products by adding features that will broaden their consumer appeal.

A)incremental
B)marketable
C)social
D)industrial

Question 16

If no product existed prior to its invention,then the product is a(n)_____.

A)improvement in an existing product
B)new-to-the-company product
C)extension to an existing product line
D)"new-to-the-market" product

Question 17

When Just Born came out with its Peeps marshmallow Easter decorating kits the company was releasing a "new-to-the-market" product.

Question 18

When Just Born extended its product line to include "Peeps in a chocolate egg," this was considered an extension to an existing product line.

Question 19

An example of a "new-to-the-company" product sold by Just Born is _____.

A)Marshmallow Peeps
B)Peers marshmallow Easter decorating kits
C)change in ingredients and packaging for Mike & Ike's
D)Peeps chocolate eggs

Question 20

A goal of an entrepreneurial start-up includes profitability and growth.

Question 21

By making Christmas decorations available the day after Thanksgiving,Holly's Holiday Shop is offering customers what kind of utility?

A)Time utility
B)Place utility
C)Ownership utility
D)Form utility

Question 22

To come up with good businesses ideas you should do all of the following except _____.

A)have lots of ideas
B)ask yourself what you want to sell
C)be creative
D)seek product ideas from people inside your organization

Question 23

When you buy a product and get a receipt,you are receiving a form of ownership utility.

Question 24

If a footwear maker's latest jogging shoe is considered a "purple cow," the line has _____.

A)incremental appeal
B)marginal value
C)modest potential
D)great potential

Question 25

An idea turns into business success when it has commercial potential.

Question 26

Which of the following is not an approach commonly used by medium and large organizations to identify product development opportunities?

A)Establish entrepreneurial units in their organizations
B)Hire "creativity" consultants
C)Talk with potential customers
D)All of the above are approaches used to identify product opportunities

Question 27

By making liquid refreshment available when it's needed,a concessionaire selling bottled water at a summer concert is creating time utility.

Question 28

In coming up with a product idea,you should ask "what do I want to sell."

Question 29

The majority of product ideas come from _____.

A)medium-size organizations
B)large organizations
C)marketing consultants
D)small businesses and entrepreneurs

Question 30

According to the Small Business Administration,10% of all new product innovations come from small businesses.

Question 31

A novel approach to generating new-to-the-world product ideas is hiring "creativity" consultants.

Question 32

The best way to have a good idea is to:

A)Study the industry
B)Talk with other inventors
C)Have lots of ideas
D)Be willing take risks

Question 33

The majority of product ideas come from entrepreneurs and small business owners.

Question 34

If you ordered french fries with your hamburger and were given a raw potato instead,the restaurant failed to provide you with form utility.

Question 35

Large companies seek all of their product ideas from those outside the organization,including current customers.

Question 36

The key to coming up with a great product idea is finding a product you are passionate about.

Question 37

Seth Gordon,marketing consultant and author,refers to truly remarkable products as "jackpots."

Question 38

A street vendor selling hotdogs outside an office building is creating place utility.

Question 39

Entrepreneur and marketing consultant Seth Goodin refers to truly remarkable products as _____.

A)outstanding products
B)cash cows
C)winners
D)purple cows

Question 40

An idea turns into a business opportunity when:

A)people like the product.
B)it is a quality product.
C)it can be made cheaply.
D)it has commercial potential.

Question 41

Businesses in the same industry don't generally compete with each other.

Question 42

Peggy Deardon's DVDs classifies its rental movies according to categories such as "Action," "Comedy," "Foreign," "Children's," and so on.Which of the following is Peggy Deardon's primary standard for segmenting its market?

A)Psychographic
B)Geographic
C)Income
D)Demographic

Question 43

Market segments can be a group of potential customers in a geographic location.

Question 44

When a Domino's delivery person brings a pepperoni pizza to your dorm room,this is an example of _____.

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 45

___________is an example of ownership utility.

A)A real estate agent helping you buy a home
B)Buying a gift for yourself rather than for a friend
C)Building a home
D)Buying insurance on your car

Question 46

Taking an online course gives you which type of utility?

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 47

Which of the following is a market segment?

A)People who live in the same climate
B)Individuals who have adopted the same lifestyle
C)Age groups
D)All of these

Question 48

Within the footwear industry there are several groups of customers,each of which is called a(n)_____.

A)market segment
B)niche
C)market
D)sub-industry

Question 49

A _____ is a narrowly defined group of potential customers with a fairly specific set of needs.

A)market segment
B)niche
C)market share
D)concentrated market

Question 50

All of the following are types of utility that customers value except _____.

A)product
B)time
C)place
D)form

Question 51

A market segment is best characterized as a group of _____.

A)stores that sell similar products
B)manufacturers who produce similar products
C)potential customers with common characteristics
D)consumers with comparable incomes

Question 52

To research an industry,you begin by looking at smaller sectors of the industry.

Question 53

An industry is a group of related businesses.

Question 54

If you've concluded that you have a potential product for which people will pay money,your next step is to _____.

A)segment your market
B)identify your competitors
C)understand your industry
D)hire the right employees

Question 55

A niche is a widely defined group of potential customers with a fairly broad set of needs.

Question 56

Customers buy products to satisfy _____ needs and expect to derive some value or _____ from them.

A)unmet / benefit
B)material / profit
C)unmet / pleasure
D)logical / satisfaction

Question 57

Which of the following is the smallest division of customers?

A)Niche
B)Segment
C)Market
D)Industry

Question 58

You might want to subdivide a segment further to isolate a market.

Question 59

An example of place utility would be:

A)car rental company at a busy airport
B)document delivery service
C)a banner maker able to install banners at the place of business within 24 hours
D)commercial real estate agent

Question 60

When a soap manufacturer adds liquid soap to its product line,the manufacturer is providing which type of utility?

A)Time utility
B)Ownership utility
C)Form utility
D)Place utility

Question 61

A company plans to forecast its sales for high-end kitchen appliances sold wholesale to home remodeler contractors in the Lehigh Valley.What would their expected annual sales be based on the following information: 150,000 existing households and 20,000 new construction;average remolded home spends $3000 in appliances;company expects 10% of the households to perform a kitchen remodel project in the next 12 months with 50% using a contractor and 50% doing it themselves.The company hopes to capture a 10% market share their first year.

A)$2,550,000
B)$4,500,000
C)$9,000,000
D)$2,250,000

Question 62

Connie’s is a regional chain of family style restaurants in the Midwest. Over the years, Connie Sedgewick has been an innovative, hard working businessperson who’s expanded her business to 15 locations in four states. A “calling card” of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences. Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.

-In such activities as greeting customers,seating them,taking their orders,cooking their food,and serving them,Connie's staff is providing _____.

A)customer relations
B)services
C)a combination service/product
D)the personal touch

Question 63

Your goal is to sell jogging shoes to those 65 and other who live in Florida. Here is some information you have collected: (1) There are 3 million joggers 65 and older in the U.S. (2) 600,000 of them live in Florida. (3) Florida attracts 20% of all people who move when they retire. (4) You estimate that during your first year you will capture 2 percent of the Florida joggers who are age 65 or older. (5) You estimate that your sales will increase by 25% in year 2.

-Which of the following piece(s)of information would be used to forecast your demand for year 2?

A)3 million joggers who are 65 or older
B)Your estimate that you will capture 2 percent of the Florida joggers in year 1.
C)Your estimate that your sales will increase by 25% in year 2
D)Both b and c

Question 64

Your goal is to sell jogging shoes to those 65 and other who live in Florida. Here is some information you have collected: (1) There are 3 million joggers 65 and older in the U.S. (2) 600,000 of them live in Florida. (3) Florida attracts 20% of all people who move when they retire. (4) You estimate that during your first year you will capture 2 percent of the Florida joggers who are age 65 or older. (5) You estimate that your sales will increase by 25% in year 2.

-Which piece(s)of information is/are irrelevant to the problem?

A)20% of those who retire move to Florida
B)600,000 joggers who are 65 and older and live in Florida
C)3 million joggers who are 65 or older
D)Both a and c

Question 65

Of the following,_____ is the best example of a company's proprietary information.

A)store location
B)sales volume
C)advertising strategy
D)production equipment

Question 66

On the surface,data published by industry associations seems helpful in estimating sales for your proposed business.But the data is often old and not very helpful.

Question 67

Your product idea is to offer cruises for college students.Your market niche is:

A)the recreational activity industry.
B)people who travel.
C)people who take cruises.
D)college students who take cruises.

Question 68

Connie’s is a regional chain of family style restaurants in the Midwest. Over the years, Connie Sedgewick has been an innovative, hard working businessperson who’s expanded her business to 15 locations in four states. A “calling card” of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences. Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.

-The food and beverages that Connie's serves are best classified as _____.

A)services
B)products
C)combination services/products
D)amenities

Question 69

After identifying a group of potential customers,your next step is to _____.

A)find out what they think of your product idea
B)find funding for your product
C)manufacture a prototype
D)collate the industry data that you've collected

Question 70

Which of the following is/are approaches used to forecast demand for a product?

A)reviewing industry data on the internet
B)speaking with competitors
C)speaking with potential customers
D)all of these approaches.

Question 71

Dan the Dog Groomer estimates that 600 poodle owners in Decatur will bring their dogs to his shop during his first year of business.Dan probably arrived at this number by trying to calculate his market share.

Question 72

Connie’s is a regional chain of family style restaurants in the Midwest. Over the years, Connie Sedgewick has been an innovative, hard working businessperson who’s expanded her business to 15 locations in four states. A “calling card” of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences. Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.

-A family style,dine-in restaurant is best characterized as a _____ business.

A)service
B)product
C)combined service/product
D)lifestyle

Question 73

Talking to people in your prospective industry can be especially helpful if your proposed product is a service.

Question 74

If your proposed business was a frozen yogurt store in Michigan,you could get an estimate of the number of customers you might have if you asked those leaving a bakery in California if they'd buy frozen yogurt in the winter.

Question 75

To estimate sales of jogging shoes to joggers over age 65 living in Florida,you would determine your share of the athletic shoes sold in the U.S.

Question 76

____ is one of the hardest tasks in business.

A)forecasting demand for a proposed product
B)selecting employees to manufacture a product
C)choosing capable managers to oversee operations
D)getting capital to fund operations

Question 77

Psychographics is an essential part of sales forecasting.

Question 78

Connie’s is a regional chain of family style restaurants in the Midwest. Over the years, Connie Sedgewick has been an innovative, hard working businessperson who’s expanded her business to 15 locations in four states. A “calling card” of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences. Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.

-Conceivably,Connie could get new product or service ideas from _____.

A)suppliers
B)employees
C)customers
D)all of these

Question 79

To get some idea of the total market for products like the one you want to launch,you could begin by _____.

A)looking at styles advertised in magazines
B)going to a busy store and seeing what people are buying
C)asking your friends what they think is popular
D)examining pertinent industry research

Question 80

Your goal is to sell jogging shoes to those 65 and other who live in Florida. Here is some information you have collected: (1) There are 3 million joggers 65 and older in the U.S. (2) 600,000 of them live in Florida. (3) Florida attracts 20% of all people who move when they retire. (4) You estimate that during your first year you will capture 2 percent of the Florida joggers who are age 65 or older. (5) You estimate that your sales will increase by 25% in year 2.

-Which of the following would be used to forecast your demand for year 1?

A)3 million joggers who are 65 or older
B)600,000 joggers who are 65 and older and live in Florida
C)20% of those who retire move to Florida
D)You estimate that your sales will increase by 25% in year 2.