Exam (elaborations)
Chapter 9 Setting Product Strategy and Introducing New Offerings
- Course
- Business
- Institution
- West Virginia Business College
Chapter 9 Setting Product Strategy and Introducing New Offerings
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Chapter 9 Setting Product Strategy and Introducing New Offerings1) Which of the following is most closely related with the organic growth of an organization?
A) acquiring a product or service brand
B) entering new marketplaces
C) increasing the operational profitability
D) increasing productivity of employees
E) developing new products from within
Answer: E
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
2) New-to-the-world products are .
A) low-cost products designed to obtain an edge in highly competitive markets
B) new product enhancements that supplement established products
C) new versions of an existing product that has been less successful
D) new products that create an entirely new market
E) existing products that are targeted to new geographical markets
Answer: D
Diff: 1
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
3) Which of the following firms is most likely to seek radical innovation?
A) a traditional publishing company
B) a small scale FMCG company
C) a firm that procures and markets wheat
D) a high-tech firm in telecommunications
E) a firm that sells mineral water
Answer: D
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
4) Most new-product activities are devoted to .
A) changing the target markets
B) developing new-to-the-world products
C) introducing backward integration
D) improving existing products
E) changing the existing market dynamics
Answer: D
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
5) Which of the following is the best example of a new-to-the-world product?
A) Walmart, the retail giant, opens new stores in an underdeveloped African country.
B) Pestorica, a publishing company, decides to launch a new sports magazine.
,C) Tata Motors, an Indian automobile company, acquires Jaguar to extend its business.
D) An Asian company licenses a US apparel brand name though the brand is not familiar in
Asia.
E) Kids-Med, a company that produces childcare products, launches a non-contact
thermometer.
Answer: E
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Analytical thinking; Application of knowledge
6) Most established companies focus on innovation when they aim to enter new
markets by tweaking existing products, or they want to stay one step ahead in the market by
using variations on a core product.
A) incremental
B) continuous
C) spontaneous
D) radical
E) competitive
Answer: A
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
7) Jordan's firm enters new markets by tweaking products for new customers, uses
variations on a core product to stay one step ahead of the market, and creates interim
solutions for industry-wide products. In other words, it uses .
A) disruptive technologies
B) incremental innovation
C) complex innovations
D) discontinuous innovations
E) radical innovations
Answer: E
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Application of knowledge
8) Fewer than 10 percent of all new products are truly innovative and new to the world.
Answer: TRUE
Diff: 1
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
,9) Jill, a Product Manager for Nike, is responsible for evaluating the viability of a radically
new product. How should she estimate demand?
Answer: Few reliable techniques exist for estimating demand for radical innovations. Focus
groups can provide perspective on customer interest and need, but marketers may need a
probe-and-learn approach based on observation and feedback of early users' experiences
and other means such as online chats or product-focused blogs.
Diff: 3
LO: 15.1: How can new products be categorized?
AACSB: Application of knowledge
10) What are the types of new products that a firm can introduce? What are the problems
associated with introducing a truly innovative product? What are the necessary conditions
to create a radically innovative product?
Answer: New products range from new-to-the-world products that create an entirely new
market to minor improvements or revisions of existing products. Most new-product activity
is devoted to improving existing products. Truly innovative and new-to-the-world products
incur the greatest cost and risk. Although radical innovations can hurt the company's bottom
line in the short run, if they succeed they can create a greater sustainable competitive
advantage than ordinary products and produce significant financial rewards as a result.
Companies typically must create a strong R&D and marketing partnership to pull off a radical
innovation. The right corporate culture is another crucial determinant; the firm must
prepare to cannibalize existing products, tolerate risk, and maintain a future market
orientation. Few reliable techniques exist for estimating demand for radical innovations.
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
11) What does the term organic growth mean?
Answer: Organic growth refers to the development of new products from within.
Diff: 1
LO: 15.1: How can new products be categorized?
AACSB: Reflective thinking
12) I-ball, a cell phone manufacturer introduces a cell phone targeted at customers ages 70
and above. It has features such as loud volume, large keys, and so forth. How do you classify
this product innovation? What could be a possible disadvantage of this product?
Answer: This can be considered a new-to-the-world product. New-to-the-world products
are products that create an entirely new market. The product has the greatest cost and risk
of all product types.
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Analytical thinking
, 13) What is incremental innovation? Give an example of incremental innovation.
Answer: Student answers will vary. Incremental innovation refers to entering new markets
by tweaking products for new customers, using variations on a core product to stay one step
ahead of the market, and creating interim solutions for industry-wide problems.
When Scott Paper couldn't compete with Fort Howard Paper Co. on price for the lucrative
institutional toilet tissue market, it borrowed a solution from European companies: a
dispenser that held bigger rolls. Scott made the larger rolls of paper and provided
institutional customers with free dispensers, later doing the same thing with paper towels.
Scott not only won over customers in a new market; it became less vulnerable to
competitors, such as Fort Howard, which could lower prices but weren't offering the larger
rolls or tailor-made dispensers.
Diff: 2
LO: 15.1: How can new products be categorized?
AACSB: Analytical thinking
14) It has been observed that most new products have shorter product life cycles. What is
the reason for this?
A) Most new products do not use technology.
B) Most new products are not backed by a marketable idea.
C) New products do not get adequate management support.
D) Social and governmental constraints lead to this failure.
E) Rivals quickly copy products that are successful.
Answer: E
Diff: 2
LO: 15.2: What challenges does a company face in developing new products and services?
AACSB: Reflective thinking
15) Which of the following strategies for new-product development incorporates buyers'
preferences in the final design of the product?
A) quality function deployment
B) market leadership
C) cost leadership
D) incremental innovation
E) disruptive technology
Answer: A
Diff: 3
LO: 15.2: What challenges does a company face in developing new products and services?
AACSB: Reflective thinking
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