Innovation Management and New Product Development Quiz and Flashcards

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Questions and Answers

What is the primary goal of new product development in terms of revenue generation?

To generate profits to cover the initial cost

What is the sequence of events in new product development, starting from the innovation process?

From idea generation to entrepreneurship, including analysis/research, developing successful business ideas, and implementing the business plan

What is the significance of market research in new product development?

To introduce the right product to customers

What is one of the possible outcomes of launching a new product to the market?

Product failure Signup and view all the answers

What is the importance of educating customers in new product development?

To facilitate understanding and adoption of the new product Signup and view all the answers

What is the focus of adopting a sustainable new product development (S-NPD) strategy?

To develop sustainable products that meet environmental and social standards Signup and view all the answers

What is the primary reason for involving customers in every stage of the New Product Development (NPD) process?

To ensure that the product reflects their needs Signup and view all the answers

What is the primary purpose of managing and growing a firm in the context of organization feasibility?

To achieve objectives and ensure the firm's long-term sustainability Signup and view all the answers

What are the key challenges in using customers as a resource for generating ideas in the NPD process?

Finding the right customer groups, motivating them to participate, and capturing customer knowledge Signup and view all the answers

What is the significance of identifying sufficiency risks and issues in the industry/market feasibility analysis?

To mitigate potential risks and ensure the firm's success in the market Signup and view all the answers

What is the primary difference between a business opportunity and a product concept in the context of NPD?

A business opportunity is a possible idea, while a product concept is a physical form or technology with a clear description of benefits Signup and view all the answers

How do customers contribute to the idea screening and selection stage of the NPD process?

By ranking ideas based on their importance and helping to choose the best concept that creates more value Signup and view all the answers

What is the role of customers in the product development stage of the NPD process?

Involving them in development tasks to define the final product design and defining product features Signup and view all the answers

What is the primary goal of a detailed business plan in the context of NPD?

To provide a roadmap for implementation, investor pitch, and owner/partner decision-making Signup and view all the answers

What is the significance of considering fatal flaws in the context of product/service feasibility?

To identify potential weaknesses that could lead to product failure Signup and view all the answers

Why is it essential to carefully select customers for involvement in the NPD process?

To get reliable and useful information Signup and view all the answers

How does the cost/profit dynamic evolve during the NPD process, according to the linear NPD model?

Costs are initially high, but as sales increase, the cost is covered, and profit eventually emerges Signup and view all the answers

What are the key activities that customers are involved in during the product introduction stage of the NPD process?

Verifying product features, testing product performance, and building customer service centers Signup and view all the answers

What are the characteristics of lead users that make them a valuable source of information for NPD?

They are the first to buy products, are loyal and passionate about improvement, generate creative ideas, contribute to identifying future opportunities, and are willing to participate in evaluating emerging concepts. Signup and view all the answers

How can a minor change to a product lead to a new product in the detergent industry?

A minor change, such as improving the strength of the detergent, can be considered a new product. Signup and view all the answers

What is an example of a new product in the food industry?

Introducing the same product with a new size, with the same features (taste) Signup and view all the answers

What is an example of a new product in the phone industry?

Introducing a new version of the product by adding new features, which usually happens annually. Signup and view all the answers

What is required for introducing a totally new product by creating a new design?

Significant resources and time to come to market. Signup and view all the answers

Why may customers initially reject new products, but later become successful?

Because they may not initially understand the benefits of the new product. Signup and view all the answers

What was the initial response of consumers to the fax machine in the 1960s?

Consumers initially rejected the fax machine because they could not see any application for it. Signup and view all the answers

Why did consumers initially reject the Dyson bagless vacuum cleaner in the 1990s?

Consumers initially did not want to see dirt collected in a transparent container. Signup and view all the answers

What is the primary reason why firms need to launch a robust marketing campaign for new products?

To educate the mass market about the detailed value of the new product due to its novelty. Signup and view all the answers

What was the strategy used by Apple to educate customers about the benefits of the iPod when it was introduced?

They gave a detailed explanation of the iPod's benefits, such as saving 500 songs, ability to change songs, and easy portability. Signup and view all the answers

Why do some industries experience more complicated processes in new product development?

The level of technical activities is more intense in some industries. Signup and view all the answers

What was the initial expectation of the market for the Chrysler Cruiser in the 1990s?

It was expected to be good for a small market. Signup and view all the answers

Study Notes

New Product Development (NPD)

NPD is a part of the innovation process, where innovative ideas become real and tangible.
New products must generate profits to cover the initial cost.
NPD requires significant market research to introduce the right product to customers.

Sequence of Events During NPD

Idea generation: generating/selecting an idea.
Business approach: developing successful business ideas, including feasibility analysis and business plan.
Entrepreneurship: implementing business plan, building management team, and obtaining seed funds.

NPD Four Stages Model

Idea generation: opportunities, feasibility, and concept development.
Idea screening and selection: ranking ideas based on customer importance.
Product development: involving customers in development tasks to define the final product design.
Product introduction: verifying product features and testing product performance.

Customer Roles in NPD

Customer as resource: providing ideas, participating in development, and testing.
Customer as co-creator: ranking ideas, defining product features, and building customer service centers.
Customer as user: verifying product features and testing product performance.

Types of Customers Needed for NPD

Lead users: the best source of information for NPD, providing valuable ideas and feedback.
Characteristics of lead users: loyal, passionate about improvement, generate creative ideas, and contribute to identifying future opportunities.

Examples of New Products

A minor change can lead to a new product (e.g., improving detergent strength).
Adjusting the package can lead to a new product.
Introducing a new design or smell can produce a new product.
Introducing a new size or version of the product with new features.

Educating Customers for New Product

Sometimes new products are initially rejected by customers, but later become successful.
Examples: fax machines, microcomputers, Dyson bagless vacuum cleaner, and Chryslers Cruiser.
Firms should launch a robust marketing campaign to educate the mass market about the detailed value of the new product.

Adopting Sustainable NPD (S-NPD) Strategy

Firms should prioritize sustainability in their NPD process.
S-NPD involves considering environmental, social, and economic impacts throughout the product life cycle.

Product Failure

Some products may fail after launching to the market.
Factors contributing to product failure: lack of market research, poor product design, and ineffective marketing.

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Description

Test your understanding of new product development (NPD) in the innovation process, including the NPD sequence of events, four stages model, customer roles, and adopting sustainable NPD strategies. Learn about the importance of educating customers and avoiding product failure.

Innovation Management Chapter 9: New Product Development

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