Final Exam Study Exam
New Product Development MKTG 408
Multiple-Choice Questions on Themes: (worth 120 points on
exam with 40 questions worth 3 points each
1. Product development has become more challenging due to:
A. lack of feedback from superiors.
B. increased level of employee expectations.
C. reduction in the budget allocated for HR activities in
D. increased globalization. (p-
all aspects of business, product development has become more difficult due to
2. Which of the following best represents rules of thumb
that firms have found work for them?
D. Product innovation charters (p-12)
rules of thumb that firms have found work for them
3. Products that take
a firm into a category or market new to it are best described as:
A. repositioned products.
B. new-to-the-firm products.
C. cost reductions.
D. line extensions. (p-14)
4. When a current product of a company has been enhanced to
better serve consumer needs, it will fall in this new product category.
A. New-to-the-world products
B. New category entries
C. Additions to product lines
D. Product improvements (p-14)
5. P&G‘s Ivory Soap and Tide powder laundry detergent
have been revised numerous times throughout their history. Identify the product
category that these products would BEST fit into.
A. Line extensions
B. New-to-the-firm products
C. New-to-the-world products
D. Product improvements (p-14)
6. In a new product process, an evaluation task that
includes conditional “Go” decisions is sometimes called a(n):
B. fuzzy gate.
C. unconfirmed step.
D. hollow-gate. (P-21)
7. The development phase involves the development of:
A. new product suggestions.
B. the marketing plan.
C. the product innovation charter.
D. the product financing plan. (P-33)
8. Identify the new products process where through
interaction with customers, designers are inspired to probe, experiment, and
improvise and as a result, may come up with a successful new-to-the-world
B. Consumer analysis
C. Mind sharing
D. Concept redefining (p-51)
9. Which of the following statements is true about a product
innovation charter (PIC)?
A. It is typically prepared by team leaders.
B. It is designed to provide guidance to the business units
on the role of innovation.
C. It reminds us that the new product strategy is for
processes and other activities.
D. It can be thought of as a kind of vision statement which
is applied at macro level (P-69)
10. Identify the INCORRECT statement concerning the Product
A. It is typically prepared by senior management
B. It is designed to provide guidance to the business units
on the role of innovation
C. It reminds us that the new product strategy is for
processes and other activities
D. It can be thought of as a kind of mission statement, but
applied at a more micro level (P-69)
11. The product innovation charter utilizes this as an
A. Employment policies
B. Articles of incorporation
C. Code of conduct
D. Corporate mission p-69
12. The procedure of converting technical specifications, to
product features and benefits, to market needs is called the ____.
A. dual-drive strategy
B. just-in-time strategy
C. T-P-M linkage
D. customer franchise p-74
13. A new product only really comes into being when:
A. a concept is generated.
B. the technology to create the product is acquired.
C. a prototype passes scrutiny by potential users.
D. it is successful in the market. P-102
14. Identify the best sequence to follow during the
development of a new product.
A. Technology; form; benefit
B. Form; technology; benefit
C. Benefit; technology; form
D. Technology; benefit; form p-104
15. Which of the following would qualify as an outside
source of ready-made new product concepts?
A. New products people
B. Marketing teams
C. Manufacturing teams
D. Lead users p-109
16. The objective of _____ is for the firm to access the
global R&D community, even beyond the confines of its own industry, in
order to accelerate its speed of research and innovation.
A. applications engineering
B. open innovation
D. leveraged creativity p-118
17. One of the complicated issues a firm must manage in an
open innovation policy is:
A. filtering the ideas.
B. intellectual property protection.
C. top management support.
D. developing a work culture suitable for open innovation
18. One way to address the problem of new product failure is
to begin the development process by:
A. identifying heavy product users.
B. creating a problem-solution matrix.
C. identifying unsolved consumer problems.
D. preparing concept statements. P-126
19. Scenario analysis:
A. helps us in finding out those problems that customers do
not know they have at this time.
B. is primarily used to solve current problems with products
already in the market.
C. focuses on problems that have already been told to competitors.
D. involves watching customers using products in their own
20. According to an assessment by the Arlington Institute,
in the future, human cloning will raise ethical issues as well as the
possibility of extending human life thanks to organ and tissue cloning. This
high-impact, low-probability event is an example of:
B. lateral thinking.
C. wild cards.
D. itemized response. P-138
21. Identify an advantage that electronic brainstorming may
have as compared to traditional brainstorming.
A. It allows only one person to talk at a time
B. Unpopular ideas would not crop up
C. It encourages “social loafing”
D. Participants can answer anonymously p-142
22. Product attributes used in gap analysis, which
differentiate between offerings and are important in consumer purchase
decisions, are called _____ attributes.
D. determinant p-154
23. Marketing managers in the America-First Corporation
routinely create “gap maps” representing the position of their
product vis-à-vis competitive offerings. These maps, based on managerial
expertise and judgment, are examples of a(n) _____ GAP map.
A. AR perceptual
C. OS perceptual
D. experiential p-153
24. In AR perceptual gap mapping, individual respondents can
be grouped together into benefit segments based on their preferences through
the use of:
A. attribute analysis.
B. cluster analysis.
C. factor analysis.
D. function analysis. P-155
25. Gap maps:
A. are useful in identifying potential product concepts.
B. identify potential threats in the market.
C. identify or evaluate interrelationships and synergies.
D. accurately measure nuances and shadings of consumer
26. Conjoint analysis:
A. involves listing all of the physical features of a
B. can use the output of AR gap analysis to select product
C. uses virtual prototypes for determining product
D. is a qualitative technique used to incorporate customer
input into concept generation p-168
27. Identify the correct statement regarding conjoint
A. It allows a manager to identify the best market segment
for a product.
B. It is most commonly used in opportunity identification.
C. It is most useful in the case of completely new
D. It cannot be carried out until determinant attributes
have been identified p-173
28. Which of the following idea-generating techniques
evolved from early forms of dimensional analysis?
B. AR gap mapping
C. Choice-based conjoint analysis
D. Brainstorming p-176
29. Which of the following reasons lets us telescope the
development process into shorter periods of time?
A. The development process proceeds in a straight-line,
B. The development process begins after the initial
prototypes are generated.
C. We evaluate the product and its marketing plan as
separate and divisible pieces.
D. A cross-functional team works on the development process p-190
30. The primary purpose of evaluation during Phase III of
the evaluation process is:A. the development of a marketing plan.
B. the creation of a final, full-scale prototype.
C. identification of concepts, which will proceed further in
the development process.
D. to eliminate all mistakes made during the launch phase. P-192
31. The evaluation issue during the launch phase in the new
product process is whether the firm has proven itself able to make and market
the item on a commercial scale. This issue is usually resolved by some form of
A. market testing
B. prototype development
C. development protocol
D. iteration analysis P-192
32. All of the following statements about the evaluation
system/process are true EXCEPT:
A. everything is tentative here.
B. form can usually be changed during the process.
C. everything should be keyed to a Go/No Go decision.
D. requires product developers to anticipate major potholes
of product innovation. P-197
33. In the case of A-T-A-R model, R stands for ____.
D. region p-199
34. The A-T-A-R concept is taken from ____.
A. the risk/payoff matrix
B. diffusion of innovation
C. the delay curve
D. the cumulative expense curve P-199
35. All of the following statement about the A-T-A-R model
are true, EXCEPT:
A. The model is based on how we forecast sales and profit on
a new item
B. The basic formula of the A-T-A-R model is take from the
C. The A-T-A-R model gives guidance on evaluation system
D. A-T-A-R is term that came from consumer products
36. During concept testing, the firm will do all of the
A. evaluate quality, time, and cost factors.
B. confirm the target market.
C. develop a product positioning statement.
D. perform full screening and begin development. P-210
37. With reference to new product development, which of the
following is referred to as the bazooka effect?
A. Capturing the target market by introducing the new
product at a low price
B. Quickly blasting out suggestions
C. Enhancing the image of a product by introducing it at a
D. Approving a concept solely based on the technical
38. According to the classic five-point question format of
the concept test, the top-two-boxes score is used as an indicator of group
reaction and includes the number of people who:
A. definitely would buy or probably would buy the product.
B. probably would buy or might/might not buy the product.
C. might/might not buy or probably would not buy the
D. probably would not buy or definitely would not buy. P-215
39. Which of the following questions appears in almost every
A. Past experience with the organization
B. Appropriate price for the product
C. The distribution channel to be used for the product
D. Intention of buying the product p-215
40. The BASES Group is the largest supplier of _____ tests.
D. product use p-215
41.Which of the following adopter groups are the most
important for concept testing of new products and, probably, market acceptance?
A. Early majority and late majority
B. Early majority and laggards
C. Innovators and early adopters
D. Innovators and laggards p-221
42. Which of the following is an immediate and critical
question in concept testing which should be answered prior to all other questions?
A. How likely is it that the respondents would buy?
B. How much do the respondents like the concept?
C. Does the respondent understand the concept?
D. What are the respondents’ reactions to price? P-222
43. Benefit segments are most likely to be
identified/described using the ____.
A. risk/payoff matrix
B. cluster analysis
C. trial averages
D. cumulative expenditures curve p-224
44. If a concept passes the full screen:
A. it enters the concept development stage.
B. it will require a serious increase in commitment of
financial and human resources.
C. the product innovation charter for the concept is
D. it undergoes concept testing. P-238
45. Which of the following techniques is most likely to be
used for product project screening and evaluation?
A. Perceptual gap mapping
B. Scenario analysis
C. Factor analysis
D. Analytic Hierarchy Process p-248
46. Anne Cassidy was asked to attend a new product scoring
session in order to explain “special considerations” and
“intangible benefits” unique to the concept she helped develop.
Anne’s role was to push past normal resistance to change and to see that the
concept gets a fair hearing at all turns. Anne is BEST described as a ____.
A. virtual scorer
B. product champion
C. human database
D. process facilitator p-344
47. Which of the following tools is most likely to be the
basis of many of the simulated test markets?
A. The cumulative expenditures curve
B. The risk/payoff matrix
C. The A-T-A-R model
D. The decay curve p-259
48, _____ refers to the process by which an innovation is
spread within a market, over time and over categories of adopters.
A. Diffusion of innovation
B. Adoption of innovation
C. Adaptation of innovation
D. Simulation of innovation p-261
49. . Which of the following forecasting tools is commonly
used for durable goods and is based on the diffusion curve of new products
through a population?
A. The A-T-A-R model
B. Econometric analysis
C. Multiple regression analysis
D. The Bass model p-261
50. In the new product development process, the product use
test is conducted during the _____ phase of the process.
A. opportunity identification and selection
B. concept generation
C. concept/project evaluation
D. development p-266
51. Generally, “hurdle rates” for return on
investment will be highest for products whose strategic role or purpose is to:
A. combat competitive entry.
B. establish a foothold in a new market.
C. capitalize on existing markets.
D. introduce line extensions. P-272
52. Ergonomics can be best defined as studying:
A. human characteristics in order to develop appropriate
B. unmet customer needs with the help of perceptual gap
C. potential target markets to identify the most profitable
D. the life cycle of a product to develop suitable marketing
strategies for each phase p-316
53. BMW has designed disassembly and recycling into its
cars. Used plastic parts are sorted, recycled, and made into new parts. Other
components are either recycled or rebuilt, while unusable parts are incinerated
to create energy. Here, BMW’s cars can be best described as being designed:
A. for the environment.
B. for ease of manufacture.
C. to build or support corporate identity.
D. for price promotion. P-317
54. . A fully functional, full-size product prototype that
is essentially ready for examination by potential customers would be best
described as a _____ prototype.
D. modified p-322
55. Which of the following is most likely to be used in
A. Focused prototype
B. Comprehensive prototype
C. Conceptual prototype
D. Ideational prototype p-323
56. The “release” of a comprehensive prototype to
potential users for testing in a real usage situation that may support further
product improvement and/or refinement is called _____ testing.
D. pre-purchase p-323
57. The most important DFM process is _____, which is
concerned with checking ease of assembly and manufacturing and encouraging
A. computer-aided design
B. design for assembly
C. design for maintainability
D. computer-aided manufacturing p-328
58. The creation of a solid object directly from a
three-dimensional computer model is called _____.
B. rapid prototyping
C. technological ideation
D. assembly design p-329
59. The primary goal of use testing is to:
A. speed the product to market.
B. determine if the product solves user problems.
C. avoid competition from entering the market.
D. identify more new product concepts p-371
60. Which of the following is the main disadvantage commonly
associated with use testing?
A. The risk of a competitor obtaining the firm’s product and
entering the market first
B. The high cost of testing
C. The drain on the firm’s resources in terms of time and
D. The loss of management faith in the new products team p-371
61. The _____ is a short-term use test that evaluates the
product at customer sites, to determine if the product works free of bugs.
A. beta test
B. pre-use sense reaction
C. early use experience
D. laboratory simulation p-375
62. Which of the following statements is NOT true regarding
A. These are short-term use tests at selected customer
B. They are designed to tell if original customer needs have
C. They are sometimes preceded by internal alpha tests with
D. They are designed to tell whether the product works and
if it is free of bugs. P-375
63. Alpha tests are:
A. designed to tell if original customer needs have been
B. quick tests of a very early version of the product with
C. short-term use tests, at selected external customer
D. often preceded by external beta tests with customers. P-376
64. To pass which of the following tests must the new item
solve whatever problem the customer had, no matter how long it takes?
A. Alpha test
B. Gamma test
C. Beta test
D. Pre-use sense test p-377
65. Which of the following would involve higher costs in
terms of time and money?
A. Alpha testing
B. Beta testing
C. Gamma testing
D. Pre-use sense testing p-380
66. . In a _____ test, which is especially common for
services, a respondent tests a single new product for a period of time.
B. sequential monadic
C. paired comparison
D. triangular comparison p-381
67. In this type of test, use of the test product is
interspersed with two competitive products.
A. Monadic test
B. Paired comparison test
C. Triangular comparison test
D. Sequential monadic test p-382
68. The initial, quick test predicts the early reactions of
_____; failure here, even if perceptions are unjustified, often dooms a good
A. early adopters
C. early majority
D. laggards p-383
69. _____ define how the strategic decisions will be
A. Strategic action decisions
B. Tactical launch decisions
C. Strategic platform decisions
D. Competitive strategies p-394
70. . If a firm decides to be very aggressive at the time of
launching a new product, it is an example of a(n) _____ decision.
C. marketing mix
D. corporate mission p-394
71. Which of the following statements is NOT true regarding
A. They may be very expensive to change during strategic
B. They include certain established operation decisions.
C. They are more easily modified as compared to tactical
D. They comprise a “resistance to change” that new
products people often dislike. P-395
72. The America-First Corporation is preparing to introduce
a new-to-the-world product. The firm must attempt to:
A. stimulate primary demand for the product category.
B. create a need for the product.
C. stimulate selective demand for the product category.
D. stimulate replacement demand for the product category. P-397
73. Zircon Inc., generally drops the “old” product
as soon as the new product intended to replace it has been announced. The firm
is using which of the following product replacement strategies?
B. Splitting channels
C. Butt-on product replacement
D. Roll-in, roll-out p-400
74. Markets segmented according to variables such as values,
activities, and lifestyles can be best described as using _____ segmentation.
B. geographic and demographic
C. behavioral and psychographic
D. benefit p-402
75. . _____ segment information in combination with brand
perceptions can be very helpful in developing a positioning strategy.
D. Benefit p-402
76. Ralph Corp., deliberately seeks out very small targets
(neighborhoods or industrial subsets) with unique purchase patterns. The firm
is targeting _____.
B. elite markets
D. primary markets p-403
77. Tailoring a good or service to the unique specifications
of individual customers is known as _____.
A. mass production
B. target marketing
C. customer service
D. mass customization p-404
78. According to the theory of innovation diffusion, if a
firm could just market its new product to _____ and _____, it could then sit
back and let them spread the word to the others.
A. innovators; early adopters
B. the early majority; late majority
C. the early majority; laggards
D. innovators; the late majority p-407
79. Carrion Corp., a manufacturer of industrial tools, often
uses its reputation to position its new products for success. Carrion Corp. is
positioning these products on the basis of _____ attributes.
D. function p-409
80. Brand names are important assets that provide value to
both the firm and its customers, as they communicate quality, build positive
brand images, and encourage customer loyalty. This value is known as _____.
A. service mark
B. brand mark
C. brand equity
D. trade asset p-416
81. Training of sales and other promotional people, building
service capability, and arranging for stocking of the product at the reseller
level takes place during the _____ stage.
C. early growth
D. late growth p-429
82. . Launch tactics planning includes all of the following
A. selecting the new product idea.
B. selecting distribution channels.
C. training salespeople.
D. setting price. P-433
83 Which of the following promotional approaches is best
suited for cases where awareness will stimulate trial?
D. Advertising p-434
84. When a firm removes competitors’ products from customer
shelves to fill them with its own products, it is known as _____.
A. illegal distribution
D. stocking p-439
85. Large, important retailers often sell their scarce shelf
space by charging manufacturers _____ allowances.
D. promotional p-440
86. If target market buyers do a serious trial on a new
item, and if there is previous assurance from the product use test that people
would like it, _____ is virtually assured.
A. increased competition
B. repeat buying
C. premium pricing
D. market leadership p-444
87. Which of the following statements is NOT true regarding
A. There is a growing trend toward quicker, less costly
market testing methods.
B. Test marketing is now a relatively minor market testing
C. Test marketing, being more accurate is replacing scanner
D. Many firms have replaced the traditional test market with
a product rollout. P-452
88. Which of the following is a method of market testing
falling under the category of ‘full sale’?
A. Direct marketing
C. Test marketing
D. Stealth marketing p-459
89. Which of the following types of market testing relies
upon asking potential customers if they would buy the product if the product
were available, but does not require them to spend money or take a risk?
A. Pseudo sale
B. Controlled sale
C. Full salee
D. Informal sale p-459
90. . Identify the method of market testing which is most
likely to make use of rollouts.
A. Controlled sale
B. Pseudo sale
C. Full sale
D. Temporary sale p-460
91. The role of simulated test marketing in A-T-A-R
forecasting is to provide estimates of _____.
A. market units
C. costs and prices
D. trial and repeat purchasing p-461
92. Radiant Corp., a manufacturer of consumer products,
primarily sells its products to the consuming unit by means of catalogs and
mail. It tests its new product lines, simply by listing them in some of its
catalogs and counting the orders. Identify the market testing method being used
B. Simulated test markets
C. Direct marketing
D. Speculative sale p-466
93. Which of the following statements is true regarding test
A. Test market results are projectable.
B. We can control all environmental factors.
C. It offers the most abundant supply of information.
D. Test marketing is cheap and quick p-470
94. Today test marketing has been largely replaced by _____.
A. simulated test marketing
C. informal sales
D. minimarkets p-472
95. Launch management ends:
A. at the prototype stage.
B. after the new product has achieved its objectives.
C. as soon as a new product fails.
D. at the introduction stage of the PLC. P-482
problems needing control can be based on all of the following EXCEPT:
A. the fact that a firm cannot control all problems.
B. the potential damage.
C. the likelihood of occurrence.
D. the fact that once tracked, they will assure success.
97. The most common type of company failure is _____,
particularly at the retail or dealer level.
A. inappropriate pricing
B. inadequate distribution
C. inappropriate advertising
D. poor packaging
98. A tracking variable is _____ if it identifies the
99. Which of the following statements is NOT true about an
After Action Review (AAR)?
A. Its goal is to identify what went right and what went
B. It includes statements of planned objectives and actual
C. It should include only top management as they are the
only ones who have direct experience with the entire development cycle.
D. It is designed to capture the events leading up to the
product launch and to try to understand the thinking behind the actions taken.
100. A(n) _____ is designed to capture the events leading up
to the product launch and to try to understand the thinking behind the actions
A. After Action Review
B. A-T-A-R model
C. expected effects matrix model
D. hierarchy of effects matrix
the concept/project evaluation phase of the new products process. (Page 32 & 37)
reverse brainstorming. (Page 130-131)
Four step process where participants generate a list of key
problems, then sort and rank them so they can address the most important ones.
people and some firms, assume that the new product development process occurs –
or should occur – in a “logical, step-by-step, sequence of steps”. Is this
true? Defend your answer. (197)
4. Why is
benefit segmentation, arguably, the most logical method of developing – and
marketing – new products? (223-224)
the problems associated with forecasting. (265)
6. What is a
prototype? What types of prototypes may be used, and for what purposes?
7. What is
product use testing? Should all firms undertake use testing? Justify your
alpha, beta, and gamma testing (375-371)
describe the major means of segmenting a market (402-403)
describe “Trial”. What barriers to trial must be overcome? What tools may be
brought to this effort? (440-443)
11. Why has
the rollout approach to market testing become more popular in recent years?
What are its disadvantages? (472-477)
12. How are
control events selected? What is the primary tool employed for this purpose?