New Product Development Process Quiz

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Questions and Answers

What is the primary goal of the idea screening stage in new product development?

  • To generate a large number of innovative concepts.
  • To develop prototypes of all potential new products.
  • To gather customer feedback on product ideas.
  • To identify promising concepts and eliminate poor ones. (correct)

Which of the following is an example of an internal source for new product ideas?

  • Customer feedback surveys.
  • A company's research and development department. (correct)
  • Ideas from a supplier of raw materials.
  • Competitor analysis reports.

What does the 'R-W-W' framework in idea screening stand for?

  • Research-Write-Review.
  • Relevance-Workability-Results.
  • Refine-Weigh-Workable.
  • Real-Win-Worth doing. (correct)

What does crowdsourcing involve in the context of new product development?

<p>Inviting a broad community of people to contribute to the innovation process. (D)</p> Signup and view all the answers

Which scenario best exemplifies the use of external sources for new product ideas?

<p>A company receiving a suggestion from a distributor regarding product packaging. (B)</p> Signup and view all the answers

According to the content, what was the original service that Delfast provided before it expanded into electric bicycle manufacturing?

<p>A parcel delivery service. (A)</p> Signup and view all the answers

What was the primary goal of Tupperware's Clever Container Challenge?

<p>To use IoT technologies for developing smart food containers. (C)</p> Signup and view all the answers

What is the primary purpose of Google's Area 120?

<p>To encourage continued internal innovation by allowing employees to work on projects. (C)</p> Signup and view all the answers

What does the term 'acquisition' refer to in the context of new product development?

<p>The buying of a whole company, a patent, or a license to produce someone else’s product. (D)</p> Signup and view all the answers

According to the information provided, what is the approximate failure rate of new products introduced each year?

<p>95 percent (A)</p> Signup and view all the answers

What is a key characteristic of Google's approach to new product development, as described in the text?

<p>A process that moves quickly and fosters widespread innovation. (C)</p> Signup and view all the answers

Which of the following best describes 'new product development' as defined in the provided text?

<p>The process of creating original products, product improvements, product modifications, and new brands developed from the firm’s own R&amp;D. (B)</p> Signup and view all the answers

What is meant by the term 'moon shots' in the context of Alphabet's new product development?

<p>Futuristic, high-risk projects with the potential for profound impact. (D)</p> Signup and view all the answers

The text suggests that innovation at Google is:

<p>Part of the company’s DNA and can occur anywhere within it (C)</p> Signup and view all the answers

What are the two primary ways a company can obtain new products?

<p>Acquisition and New product development. (B)</p> Signup and view all the answers

Which of the following actions would best represent 'product modification' in the context of new product development?

<p>Making changes to an existing product's design or features. (D)</p> Signup and view all the answers

For which of the following scenarios would test marketing be LEAST necessary?

<p>The introduction of a slightly different flavor of an already established product line. (D)</p> Signup and view all the answers

In the context of new product development, what is the primary purpose of a product concept?

<p>To articulate the product idea in terms that resonate with consumers. (B)</p> Signup and view all the answers

What is the primary goal of customer-centered new product development?

<p>To create products that solve customer problems and offer satisfying experiences. (B)</p> Signup and view all the answers

Which of these best describes a core characteristic of team-based new product development?

<p>Various company departments work together closely at the same time. (C)</p> Signup and view all the answers

How does 'product image' differ from 'product concept' in new product development?

<p>Product image is how consumers perceive the product, while the product concept is a detailed description of the idea. (B)</p> Signup and view all the answers

What is the main objective of concept testing in the new product development process?

<p>To gauge consumer reaction to a new product idea before investing resources. (D)</p> Signup and view all the answers

What is a key objective of creating an innovation management system?

<p>To establish a culture that promotes new product thinking and development. (D)</p> Signup and view all the answers

What is the primary goal of marketing strategy development in the context of new product development?

<p>To create a preliminary marketing plan based on the product concept. (B)</p> Signup and view all the answers

In the context of new product development, what is the meaning of 'commercialization'?

<p>The process of finally bringing a new product to the market. (B)</p> Signup and view all the answers

What is the primary purpose of conducting a business analysis during new product development?

<p>To see if the product meets the objectives of the company financially. (A)</p> Signup and view all the answers

What is the potential risk associated with cutting spending during turbulent times in the context of new product development?

<p>It could cause a company to become less competitive in the market. (C)</p> Signup and view all the answers

Which of the following is NOT mentioned as a characteristic of successful new product development?

<p>Cost Driven (C)</p> Signup and view all the answers

Which of the following best describes what occurs during the product development stage of new product development?

<p>The product concept is turned into a tangible physical product. (C)</p> Signup and view all the answers

What is the defining characteristic of the 'test marketing' stage in new product development?

<p>The product is being tested in a real market before a full launch. (B)</p> Signup and view all the answers

Which type of product would most likely require a comprehensive test marketing process?

<p>A new, complex smart home device with advanced features. (D)</p> Signup and view all the answers

What is the correct order of the following stages in the new product development process? (1) Business Analysis (2) Concept Testing (3) Product Development (4) Test Marketing

<p>2, 1, 3, 4 (C)</p> Signup and view all the answers

Which stage of the product life cycle is characterized by slow sales growth and minimal or no profits?

<p>Introduction (D)</p> Signup and view all the answers

During which stage of the product life cycle do sales typically increase rapidly and new competitors enter the market?

<p>Growth (A)</p> Signup and view all the answers

What is a key characteristic of the maturity stage of the product life cycle?

<p>Slowdown in sales growth and increased competition (D)</p> Signup and view all the answers

In which stage of the product life cycle are companies most likely to increase their spending on promotion and R&D to maintain sales and profits?

<p>Maturity (D)</p> Signup and view all the answers

Which of the following best describes the sales trend in the decline stage of the product life cycle?

<p>Falling off (D)</p> Signup and view all the answers

During which phase of a product's life cycle are economies of scale most likely to be achieved?

<p>Growth (C)</p> Signup and view all the answers

Which of the following options is NOT a typical characteristic of the introduction stage of the product life cycle?

<p>Rapid market acceptance (B)</p> Signup and view all the answers

What can be inferred about the competitive landscape during the maturity stage of the product life cycle?

<p>Many suppliers, many substitute products (A)</p> Signup and view all the answers

Which of the following is a modification strategy employed during the maturity stage of a product's life cycle?

<p>Modifying the marketing mix to appeal to new market segments. (B)</p> Signup and view all the answers

What is a primary characteristic of the maturity stage in the product life cycle?

<p>Peak sales and stable, high profits. (B)</p> Signup and view all the answers

According to the provided information, what strategy does Campbell's Soup Company use during the maturity stage?

<p>They have created a website and phone application to encourage greater usage of their goods. (C)</p> Signup and view all the answers

What is the main objective of marketing activities during the decline phase of the product life cycle?

<p>Reduce expenditures to enhance profitability as sales decline. (A)</p> Signup and view all the answers

Which customer group is most likely to purchase products in the decline stage of the product life cycle?

<p>Lagging adopters who are slow to accept new ideas. (B)</p> Signup and view all the answers

What does 'harvesting a product' imply during the decline stage of a product's life cycle?

<p>Reducing marketing and distribution costs while still generating sales. (B)</p> Signup and view all the answers

Hallmark is described as 'reimagining how it delivers modern digital experiences'. Which stage of the product life-cycle is this most likely happening for their core offering of greeting cards?

<p>Late maturity or early decline stage as purchasing habits change. (C)</p> Signup and view all the answers

What happens to the cost per customer as a product moves from the introduction to the maturity stage?

<p>The cost per customer decreases from high to low. (C)</p> Signup and view all the answers

Flashcards

New Product Development

The process of creating original products or modifying existing ones.

Acquisition

Buying a whole company, patent, or license to produce products.

Product Life Cycle

Stages a product goes through from introduction to decline.

Stages of Product Life Cycle

Introduction, Growth, Maturity, Decline - phases in a product's market presence.

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Innovative Culture at Google

Google promotes innovation as part of its company's DNA.

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New Product Failure Rate

95% of new products introduced fail annually.

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Socially Responsible Product Decisions

Ethical considerations in product development and marketing.

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International Product Marketing

Adapting products for global markets.

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Idea Generation

The systematic search for new product ideas from various sources.

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Internal Sources

Company-based sources for generating new product ideas, like staff and R&D.

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External Sources

Sources outside the company that provide new product ideas, such as customers and competitors.

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Crowdsourcing

Inviting broad communities to contribute ideas for new products.

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R-W-W Screening Framework

A method to evaluate ideas based on three criteria: Are they real? Can we win? Is it worth doing?

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In-house Innovation Incubator

A dedicated space within a company for employees to explore their creative projects.

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Technology in Idea Generation

Using tech tools to discover and assess new product designs and concepts.

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Idea Screening

The process of identifying good ideas while dropping the poor ones.

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Product Idea

An idea for a potential product the company might offer.

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Product Concept

A detailed version of a product idea expressed in consumer terms.

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Product Image

How consumers perceive an actual or potential product.

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Concept Testing

Testing new product concepts with target consumer groups.

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Marketing Strategy Development

Designing an initial marketing strategy based on the product concept.

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Business Analysis

Reviewing sales, costs, and profit projections for a product.

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Product Development

Turning the product concept into a physical product.

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Test Marketing

Testing the product and marketing program in realistic settings.

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When to Use Test Marketing

Best for new products with significant investment and uncertainty.

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When Not to Use Test Marketing

Avoid for simple extensions or low-cost products with high management confidence.

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Commercialization

The process of launching a new product in the market.

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Customer-Centered Development

Focus on solving customer problems to enhance satisfaction.

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Team-Based Development

Multiple departments collaborate closely to streamline the product process.

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Systematic Development

An organized approach fostering an innovation-oriented culture.

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Innovation Management System

A framework to create an innovative company culture and generate ideas.

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Maturity Stage

The stage in the product life cycle where sales peak, and market saturation occurs.

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Modification Strategies

Tactics used to innovate a product, market, or marketing mix during the maturity stage.

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Market Modification

Adjusting target markets to increase product usage during the maturity stage.

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Product Modification

Changing aspects of the product itself to stay competitive in the maturity stage.

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Marketing Mix Modification

Adjusting the four Ps (Product, Price, Place, Promotion) to stimulate sales in maturity.

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Decline Stage

The stage in the product life cycle where sales decrease and profits fade.

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Maintain the Product

Strategy to keep a product in the market despite declining sales.

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Harvest the Product

Maximizing short-term profits from a product with decreasing sales.

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Systematic New Product Development

A structured approach to creating and launching new products efficiently.

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Introduction Stage

The phase where sales grow slowly, profits are low, and promotion costs are high.

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Growth Stage

Sales increase rapidly, new competitors enter, and profits rise.

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Fads

Short-lived products that gain popularity quickly and fade away.

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Economies of Scale

Cost advantages gained as production increases, allowing lower prices.

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Study Notes

Chapter 9: Developing New Products and Managing the Product Life Cycle

  • This chapter explores developing new products and managing the product life cycle
  • Nine key learning objectives are outlined, covering new product ideas, new product development processes, product life cycles, and additional product issues.
  • Google, a company known for innovation, is highlighted as an example of a firm with a strong focus on creating new product ideas.
  • Google's innovative approach, including its New Product Moonshot Factory and Area 120 incubator, is described.
  • The text notes that, on average, 95% of new products introduced annually fail.
  • New product development strategies include acquisition and developing original products, improvements, modifications, and new brands.

Learning Objective 1: Exploring New Product Ideas

  • Companies use various methods to find new product ideas.
  • Key sources for internal ideas include formal research and development departments, management, staff, and intrapreneurial programs.
  • External sources include customers, competitors, distributors, suppliers, and outside design firms.
  • Crowdsourcing, a method to gather input from a wide range of people, is also mentioned, using examples like Tupperware's Clever Container Challenge.

Learning Objective 2: Defining the New Product Development Process

  • The new product development process typically involves several key stages:
  • Idea generation: The process begins with systematically searching for new product ideas; both internal and external sources are considered.
  • Idea screening: Identifying good ideas while eliminating poor ones; a common framework involves the R-W-W—Real, Winnable, Worth Doing—criteria.
  • Concept development and testing: Creating a detailed product concept, considering consumer terms, and testing to determine consumer appeal.
  • Marketing strategy development: Developing an initial marketing strategy for the product based on the product concept (target market description, value proposition, sales targets, and marketing mix).
  • Business analysis: Evaluating sales, costs, and profit projections to ensure the product satisfies the company's objectives.
  • Product development: Creating the actual product to ensure the idea is feasible.
  • Test marketing: Testing the product and its marketing program in realistic market settings. This phase often involves extensive market research.
  • Commercialization: Introducing the product into the market, considering timing and launch strategies.

Defining Steps in the New Product Development Process

  • The key stages in the new product development process, from idea generation to commercialization, are outlined with details about each step.

Learning Objective 3: Describing the Product Life Cycle

  • The product life cycle, encompassing product introduction, growth, maturity, and decline, is discussed.
  • Sales and profits fluctuate during each stage, with unique considerations for each, such as strategies for innovating or adapting the product.
  • Different product life cycles are shown, with some products having long lifespans (like Crayola Crayons), emphasizing the concept of longevity.
  • The concept of modifying the market, product, or marketing mix are important in the extended stages of a product's cycle, in response to market changes.

Learning Objective 4: Socially Responsible and International Product Decisions

  • Socially responsible product decisions are crucial for developing products that are safe, ethically produced and that do not harm the environment or society.
  • International products should consider the specific customs, laws, values, and cultural contexts of different markets.

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