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Marketing Management, 15e (Kotler)
Chapter 15 Introducing New Market Offerings
1) 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
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
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
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
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.
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
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
8) Fewer than 10 percent of all new products are truly innovative and new to the world.
9) Jill, a Product Manager for Nike, is responsible for evaluating the viability of a radically new
product. How should she estimate demand?
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?
11) What does the term organic growth mean?
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?
13) What is incremental innovation? Give an example of incremental innovation.
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.
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
16) Pager, a simple personal device for short messages, became famous in the 1990s. Troveron
Communications launched a pager in the early twenty-first century. Due to the introduction of
mobile phones and text messaging, the pager industry was on a decline. The company's
innovations were not well received by the market and the product was a failure. Which of the
following is the most likely reason for the product's failure in this case?
A) poor launch timing of the product
B) a small and fragmented target market
C) high cost of development
D) social and economic constraints
E) hasty product development
17) After creating a product prototype, a company tests it within the firm to see how it performs
in different applications. The company refines the prototype to correct the mistakes found in in-
house testing. What should be the next step?
A) commercializing the product
B) performing concept testing
C) conducting beta testing with customers
D) creating a marketing strategy for the product
E) performing business analysis
18) Organic growth refers to increasing the profitability of the organization by increasing
employee productivity.
19) Companies typically must create a strong R&D and marketing partnership to pull off a
radical innovation.
20) High-tech firms that function in a market with high technological uncertainty, high market
uncertainty, and high investment costs are not likely to seek radical innovation.
21) Companies that fail to develop new products leave their existing offerings vulnerable to
increased domestic and foreign competition.
22) Most established companies focus on incremental innovation rather than radical innovation.
23) Shorter product life cycles are common in industries characterized by low level of
competition.
24) Identify the major reasons why new product failures occur.
25) What practices guide innovation at W. L. Gore?
26) Tosho Electronics, a leading Japanese, electronic manufacturer believes shorter product life
cycles of new products reduce the scope for R&D and innovation. Offer a possible reason for
shorter life cycles.
27) Identify a shortcoming of giving the responsibility to develop new products to the product
managers of a company.
A) They would not be familiar with the industry standards.
B) Product managers would not have an operational focus.
C) Product managers are often busy managing existing lines.
D) They will find it difficult to gain support from employees.
E) Product managers are less likely to use participative management.
28) ________ teams are cross-functional groups charged with developing a specific product or
business.
A) Virtual
B) Venture
C) Fundamental
D) Elemental
E) Transitory
29) Intercom Inc., together with its subsidiaries, primarily engages in the generation,
transmission, and distribution of electric power in the United States. The company observes that
its growth has stagnated over a period of two years. In an attempt to promote growth, it considers
adding new features to the existing products and introducing a few new products. The company
forms a committee consisting of three top executives, one of the production mangers, a few
operational managers, and a representative of the HR department to generate ideas. This team is
called a(n) ________ team.
A) virtual
B) venture
C) fundamental
D) elemental
E) transitory
30) A team formed at Intercom Inc. to generate ideas for new products conducts frequent
meetings and engages in activities such as mind mapping and brainstorming. Most of the
meetings are conducted at informal locations away from office. These workplaces are called
________.
A) skunkworks
B) idea funnels
C) research centers
D) stage-gate systems
E) contextual bases
31) A ________ divides the innovation process into stages with a checkpoint at the end of each
stage.
A) reverse assumption analysis technique
B) skunkworks system
C) stage-gate system
D) spiral development process
E) new-product department technique
32) ________ are informal workplaces, sometimes garages, where intrapreneurial teams attempt
to develop new products.
A) Stage-gate systems
B) Skunkworks
C) Funnels
D) Opportunity spaces
E) Research centers
33) Which of the following questions is answered during the business analysis of ideas?
A) Will this product meet our profit goals?
B) Have we got a technically and commercially sound product?
C) Can we find a cost-effective, affordable marketing strategy?
D) Can this product meet sales expectations?
E) Can we find a good concept consumers say they would try?
34) During which of the following stages in new product development decision making do
managers analyze if they can find a good thought consumers say they would try?
A) idea generation
B) idea screening
C) business analysis
D) concept development and testing
E) product development and testing
35) A ________ process recognizes the value of returning to an earlier stage to make
improvements before moving forward.
A) spiral development
B) reactive development
C) market testing
D) proactive development
E) concept testing
36) Companies should use normal investment criteria to budget for new-product developments.
37) Almost all companies use the conventional percentage-of-sales figure while budgeting for
new product development.
38) Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new
products.
39) Venture teams are cross-functional groups charged with developing a specific product or
business.
40) A business analysis is performed mainly to identify if a company has got a technically and
commercially sound product.
41) A spiral development process recognizes the value of returning to an earlier stage to make
improvements before moving forward.
42) Angell Healthcare, the world's largest manufacturer of protective gloves and clothing,
adopted a spiral development process, which divided the innovation process into stages with
checkpoints at the end of each stage, to develop products that increased overall sales from 4.6
percent to 13 percent in a little over two years.
43) How do companies organize new product development?
44) Explain how stage-gate systems are used by companies to manage innovation and new
product launches.
45) Dormentor Inc. produces, converts, and markets packaging products including boxboard,
container board, and numerous other specialty packaging products. In an attempt to increase its
organic growth, the company decides to introduce new products. It asks the managers and
employees to send in ideas for new products. Before launching products based on any of these
ideas, what are the stages that the company has to go through?
46) Interno Computers Inc., together with subsidiaries, designs, manufactures, and markets
personal computers and mobile communication and media devices, as well as sells related
software, services, peripherals, networking solutions, and applications worldwide. The company
is planning to launch a high-end portable digital music player worldwide. What is the best way to
organize this product launch?
47) What is a spiral development process?
48) What are the benefits of brainstorming? How would one run an effective brainstorming
session?
49) ________ means inviting the Internet community to help create content or software, often
with prize money or a moment of glory involved.
A) Stage-gating
B) Cocreation
C) Microstocking
D) Buzzing
E) Crowdsourcing
50) Companies such as Edison Nation and the Big Idea Group have sprung up to tap into
________ possibilities, often combining its own design, branding, engineering, and sales teams
with online participants, forming a community for devising new products.
A) stage-gating
B) cocreation
C) microstocking
D) buzzing
E) crowdsourcing
51) Surgeons and ER nurses would be considered ________ for surgical equipment.
A) venture agents
B) internal customers
C) buzz agents
D) lead users
E) connectors
52) Many people believe that customer focus does not help to create better, or new, products.
This belief rests on which of the following ideas?
A) Such new product developments decrease the chances of success.
B) Customers do not consider the cost of design when making suggestions.
C) Customers are at times unaware of what they really want.
D) It increases the cost of testing a product or service.
E) Having too much customer focus leads to a negative brand image.
53) The ________ technique for stimulating creativity lists all the characteristics of an object and
then modifies each to try to arrive at a new idea.
A) reverse assumption analysis
B) lateral marketing
C) attribute listing
D) forced relationship
E) morphological analysis
54) The ________ technique used for stimulating creativity identifies a problem and then
considers the dimension, the medium, and the power source.
A) attribute listing
B) reverse assumption analysis
C) mind mapping
D) lateral marketing
E) morphological analysis
55) In an attempt to improve the product, a company that manufactures screwdrivers discusses
the modification of each attribute, such as replacing the wooden handle with plastic, providing
torque power, adding different screw heads, and so on. This creativity technique is called
________.
A) attribute listing
B) mind mapping
C) morphological analysis
D) lateral analysis
E) reverse analysis
56) Electro Locomotors (EL) Inc. engages in the manufacture, distribution, and marketing of
custom vehicles in Brazil. Bono, a hybrid car brand that the company produces, is a market
leader in the hybrid vehicles segment. With the increased global focus on nature-friendly
vehicles and governmental subsidies for companies that manufacture hybrid vehicles,
competition has increased for flex-fuel cars like Bono. The heads of the R&D team at EL are in a
creative session to generate ideas for improvements to Bono. They consider each part of the car
and discuss the possibilities of improvements in each of them. Identify the creativity technique
used here.
A) attribute listing
B) forced relationship analysis
C) morphological analysis
D) reverse assumption analysis
E) mind mapping
57) ________ works by listing all the normal assumptions about an entity and then turning them
around.
A) Lateral marketing
B) Attribute listing
C) Reverse assumption analysis
D) Forced relationships
E) Morphological analysis
58) The ________ creativity technique begins with a thought that is written down, then proceeds
to develop other thoughts that are linked to the first thought, and finally a new idea materializes
by associating all of the thoughts.
A) mind mapping
B) contextual analysis
C) attribute listing
D) reverse assumption analysis
E) morphological analysis
59) Increasingly, new-product ideas arise from ________ that combines two product concepts or
ideas to create a new offering.
A) reverse assumption analysis
B) lateral marketing
C) attribute listing
D) forced relationships
E) morphological analysis
60) A group of college graduates decides to start a business. Though they are knowledgeable in
various business domains, they are unable to arrive at a valuable business idea. They decide to
search for ideas in a structured manner. They meet and start discussing everyone's ideas. Each
idea is recorded and then the thoughts that come up in relation to the ideas are written down and
discussed. This process helps them to finalize a business plan. What technique is used here?
A) morphological analysis
B) forced relationship analysis
C) reverse assumption analysis
D) attribute listing
E) mind mapping
61) Morboro Energy Inc. is a large chain of fuel stations in Europe. The company decided to
expand its business by incorporating restaurants and automobile service stations as a part of its
fuel outlets. This is an example of ________.
A) lateral marketing
B) brand extension
C) market development
D) internal marketing
E) brand personification
62) A ________ error occurs when the company dismisses a good idea.
A) probability
B) performance
C) double counting
D) DROP
E) GO
63) The stage in the new product process that occurs first and has a pass ratio of 1:4 is the
________ stage.
A) idea screening
B) product development
C) test marketing
D) product soft launch
E) concept testing
64) Crowdsourcing means inviting an Internet community to help create content or software,
often with prize money or a moment of glory as an incentive.
65) Cocreation can help a company create favorable word of mouth.
66) Employees can be a source of ideas for improving production, products, and services.
67) Attribute listing lists several ideas and considers each in relationship to the others.
68) Reverse assumption analysis lists all the normal assumptions about an entity and then turns
them around.
69) Morphological analysis starts by forming a new dimension and then thinks about the possible
problems of the dimension.
70) A DROP-error occurs when the company accepts a bad idea.
71) Explain three techniques for stimulating creativity to generate better ideas.
72) What is crowdsourcing?
