Question 1

Companies with cultures that value all new-product ideas,whatever the source,tend to develop more blockbuster products than companies that are unwilling to search far and wide for sources of innovation.

Accepted Answer

The statement suggests that companies valuing all new-product ideas, regardless of their source, are more likely to develop blockbuster products compared to those that limit their innovation sources. Hence, the statement is true.

Question 2

New-category entries help companies compete better in an already-established market or enter a new market.

Accepted Answer

Adding new-category entries can give companies a competitive edge in established markets or create opportunities to enter new markets. By offering something unique or addressing unmet needs, companies can differentiate themselves from competitors and attract new customers. This strategy can help businesses grow their customer base and revenue.

Question 3

Revamped products make up the smallest percentage of new products but carry the most risk for the company introducing them.

Accepted Answer

Revamped products are existing products that have been improved or updated, making them less risky than completely new products. Therefore, they typically carry less risk for the company introducing them.

Question 4

The price of a product is usually higher in the _______ stage of the product life cycle.

Accepted Answer

The answer of The price of a product is usually...

Question 5

While the idea generation stage of the new-product development process generates a great number of potential ideas,in reality,very few of these ideas ever become marketed products.

Accepted Answer

This is true as only a small percentage of ideas make it to the product development and launch stages. Many ideas are screened and eliminated due to various reasons such as high cost, low demand, lack of technical feasibility, and competitive pressures.

Question 6

Less-expensive forms of test marketing include simulated test markets and online test marketing.

Accepted Answer

Simulated test markets and online test marketing are both less-expensive forms of test marketing as they do not require physical distribution of products or placement in traditional retail stores.

Question 7

The highest level of risk for new-product development occurs when products fail to generate sales or prove to be dangerous and defective.

Accepted Answer

When new products fail to generate sales or prove to be dangerous and defective, the company may face financial losses, lawsuits, and reputational damage, which represent high levels of risk. However, some level of risk is inherent in any new-product development process, as there is uncertainty about market demand, production costs, competition, and external factors beyond the company's control. Therefore, companies need to balance risk and reward when introducing new products, and use effective strategies and tools to minimize risks and maximize profitability.

Question 8

Services are intangible products that cannot be touched,weighed,or measured.

Accepted Answer

Services are intangible, meaning they cannot be perceived through the senses like physical products.

Question 9

Test marketing occurs when a new product is introduced in its final form to a geographically limited market to see how well the product sells and to get reactions from potential users.

Accepted Answer

This is a correct statement. Test marketing involves introducing a new product to a small, targeted market to gauge its performance and receive feedback before a full launch.

Question 10

Firms that want to maintain or improve their competitive position in the marketplace generally must develop new products.

Accepted Answer

Developing new products allows firms to stay competitive by offering unique, innovative, and up-to-date offerings to customers.

Question 11

Among other things,the first stage in the new-product strategy development process helps to determine if the idea can be turned into a product that will prove to be profitable.

Accepted Answer

The answer of Among other things,the first stage in the...

Question 12

The launch stage of the new-product development process is usually the least expensive stage for new products.

Accepted Answer

The launch stage of the new-product development process is actually one of the most expensive stages as it involves the actual production of the product, creating marketing and advertising campaigns, and distribution efforts. The earlier stages of the process, such as idea generation and product concept development, may have lower costs as they typically involve market research, consumer surveys, and brainstorming sessions.

Question 13

It is during the idea generation stage of the new-product development process that the company often ends up rejecting most new goods and services for one reason or another.

Accepted Answer

The answer of It is during the idea generation stage...

Question 14

Products that take longer for consumers to see the benefits of or that do not have a good infrastructure in place to support them are called _____ _____ products.

Accepted Answer

The answer of Products that take longer for consumers to...

Question 15

One of the disadvantages of concurrent new-product development is that it may create tension between functional areas.

Accepted Answer

Concurrent new-product development involves different functional areas working simultaneously on different aspects of a new product. This can lead to conflicts and tensions between the groups as they may have different goals, perspectives, and priorities. For example, the engineering team may prioritize technical feasibility, while the marketing team may prioritize marketability and customer needs. Managing these tensions and conflicts is crucial to the success of concurrent new-product development.

Question 16

The new-product development path that utilizes a progressive sequence in which functional areas consecutively complete their development tasks is referred to as a chronological new-product development path.

Accepted Answer

The correct term for this process is "sequential new-product development path," not "chronological."

Question 17

During the test-marketing stage,the firm tests not only the product itself but also the marketing strategy related to it.

Accepted Answer

During test-marketing, the firm tests both the product and the marketing strategy related to it to assess their effectiveness and make any necessary changes before launching the product on a larger scale.

Question 18

A company can advertise a product as new and improved for only one year after it hits store shelves.

Accepted Answer

There is no specific time limit set by law for how long a company can advertise a product as "new and improved." The duration depends on various factors, including market perception and regulatory guidelines in the relevant industry or country.

Question 19

Concept tests ensure that the product will not be a hazard to users or their families,that it can be produced in the company's or supplier's manufacturing facilities,and that it can be manufactured at a cost low enough to generate profits.

Accepted Answer

Concept tests are primarily used to evaluate consumer interest and potential market success of a product idea, not to assess safety, manufacturability, or cost efficiency.

Question 20

The recently introduced Sprinkled Donut Crunch is a product-line extension for Quaker Oats' Cap'n Crunch brand.

Accepted Answer

The statement is true. Quaker Oats' Cap'n Crunch brand recently introduced Sprinkled Donut Crunch as a product-line extension.

Quiz 6: Product Development