Marketing Management, 14e (Kotler/Keller)
Chapter 20 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 market places
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 U.S. 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) 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.
8) Which of the following strategies for new-product development incorporates the buyers’
preferences in the final design of the product?
A) customer-driven engineering
B) market leadership
C) cost leadership
D) incremental innovation
E) disruptive technology
9) 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 became 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
10) 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
11) Identify a shortcoming of giving the responsibility of new product development 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.
12) ________ teams are cross-functional groups charged with developing a specific product or
business.
A) Virtual
B) Venture
C) Fundamental
D) Elemental
E) Transitory
13) 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) ________.
A) virtual team
B) venture team
C) fundamental team
D) elemental team
E) transitory team
14) 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
15) The ________ used by companies 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
16) ________ 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
17) 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?
18) 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
19) ________ 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
20) The ________ uses observational, anthropological, and ethnographic methods or consumer
self-reports to map consumer needs, wants, and even beyond.
A) business analysis
B) demand landscape
C) opportunity space
D) strategic blueprint
E) internal design analysis
21) Which of the following uses conceptual lens and structured innovative-thinking tools to
achieve market perspectives from different angles?
A) business analysis
B) strategic blueprint
C) internal design analysis
D) demand landscape
E) opportunity space
22) Gordon Apparel, Inc. engages in the design, manufacture, and retail of fashion apparel for
women, men, children, and pets. The company is known for its timely launch of apparels and
stylish designer clothing. The company believes a new product has to create needs and not just
satisfy the existing needs. To achieve this goal it engages in controlled idea generation
techniques such as brainstorming while creating new designs. Which of the following parts of
the DIG framework is given prominence here?
A) business analysis
B) strategic blueprint
C) opportunity space
D) internal design analysis
E) demand landscape
23) Identify the element in the DIG network that considers how a new product can fit into
customers lives and how it can be distinguished from the competitors’ products.
A) business analysis
B) internal design analysis
C) strategic blueprint
D) demand landscape
E) opportunity space
24) ________ 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
25) Surgeons and ER nurses would be considered ________ for surgical equipment.
A) venture agents
B) internal customers
C) buzz agents
D) lead users
E) connectors
26) Many 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 suggesting.
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.
27) 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
28) 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
29) 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
30) 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 is 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
31) ________ 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
32) The ________ creativity technique begins in a thought that is written down, then proceeds to
develop other thoughts that are linked to the first thought, and finally materializes a new idea by
associating all the thoughts.
A) mind mapping
B) contextual analysis
C) attribute listing
D) reverse assumption analysis
E) morphological analysis
33) 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
34) A group of college graduates decide 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 together 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
35) 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
36) A ________ error occurs when the company dismisses a good idea.
A) probability
B) performance
C) double counting
D) DROP
E) GO
37) A(n) ________ is a possible product the company might offer to the market.
A) test brand
B) alpha product
C) beta version product
D) product idea
E) product concept
38) A(n) ________ is an elaborated version of a product idea expressed in consumer terms.
A) test brand
B) alpha product
C) beta product
D) business schedule
E) product concept
39) ________ means presenting the product concept to target consumers, symbolically of
physically, and getting their reactions.
A) Perceptual mapping
B) Brand-positioning mapping
C) Brand attribute mapping
D) Concept development
E) Concept testing
40) Modern firms use the ________ concept testing tool to design products on a computer and
then produce rough models to show potential consumers for their reactions.
A) morphological analysis
B) rapid prototyping
C) concept testing
D) perceptual mapping
E) conjoint analysis
41) Brown & Smith, Inc. engages in the design, development, making, and retail of designer
jewelry in North America. Before approving a new design of jewelry the company draws it on a
computer and then produces models to show potential consumers for their reactions. This allows
the company to analyze the possible customer reaction. Identify the concept testing method used
here.
A) conjoint analysis
B) perceptual mapping
C) virtual reality testing
D) rapid prototyping
E) digital fabrication
42) Consumer preferences for alternative product concepts can be measured through ________, a
method for deriving the utility values that consumers attach to varying levels of a product’s
attributes.
A) concept testing
B) perceptual mapping
C) gap level analysis
D) conjoint analysis
E) morphological analysis
43) With ________, respondents see different hypothetical offers formed by combining varying
levels of the attributes, then rank the various offers.
A) gap level analysis
B) conjoint analysis
C) perceptual mapping
D) concept testing
E) morphological analysis
44) Universal Services, Inc. provides communication services to residential and business
customers in rural and small urban communities primarily in northern England. The company
offers services such as local and long distance voice, data, and Internet and broadband product
offerings. The company, in an attempt to increase the attractiveness of its offerings, decides to
provide special voice and data packages to its customers. The company designs eight different
packs that offer varying voice and data benefits to customers. The company then asks a few of its
customers to rank the packs in order to choose two best packs. Which of the following testing
methods is being used in the above scenario?
A) virtual reality testing
B) conjoint analysis
C) perceptual mapping
D) product fabrication
E) rapid prototyping
45) The trade-off approach may be easier to use when there are/is ________.
A) many variables
B) only a few alternatives
C) observers that are biased
D) possible offers that are limited
E) only one highly desirable solution
46) ________ is a “hybrid” data collection technique that combines self-explicated importance
ratings with pair-wise trade-off tasks.
A) Sales wave analysis
B) Simulative data testing
C) Adaptive conjoint analysis
D) Business analysis
E) Exponential data collection
47) ________ exhibit replacement cycles dictated by physical wear or obsolescence associated
with changing style, features, and performance.
A) Frequently purchased products
B) High-moving goods
C) Inexpensive products
D) Commodity products
E) Infrequently purchased products
48) To estimate replacement sales, management must research the product’s ________, the
number of units that fail in year one, two, three, and so on.
A) survival-age distribution
B) lifecycle ratio
C) obsolescence rate
D) business turnover ratio
E) product-performance usage
49) For a frequently purchased new product, the seller estimates repeat sales as well as first-time
sales. A high rate of repeat purchasing means customers ________.
A) value price more than differentiation
B) do not support innovation on brands
C) value differentiation more than price
D) prefer personalized products rather than standard ones
E) are satisfied with the product
50) ________ contribution lists the changes in income to other company products caused by the
introduction of a new product.
A) Supplementary
B) Dragalong
C) Gross
D) Cumulative
E) Net
51) The highest loss a project can create is called ________.
A) rapid prototyping income
B) payback income
C) maximum investment exposure
D) incremental yearly exposure
E) cannibalized income
52) The job of translating target customer requirements into a working prototype is helped by a
set of methods referred to as ________.
A) quality function deployment
B) quality control processes
C) rapid prototyping
D) marketing control
E) control system formation
53) Which of the following methodologies takes the list of desired customer attributes (CAs)
generated by market research and turns them into a list of engineering attributes (EAs) that
engineers can use?
A) quality control processes
B) quality function deployment
C) rapid prototyping
D) marketing control
E) control system formation
54) ________ is a customer test that involves placing the product within the firm to see how it
performs in different applications.
A) Beta testing
B) Research testing
C) Sales-wave testing
D) Alpha testing
E) Simulated testing
55) In consumer-goods market testing, the company seeks to estimate four variables. These four
variables are: trial, first repeat, adoption, and ________.
A) guaranteed response
B) price sensitivity
C) purchase frequency
D) usage convenience
E) preferential treatment
56) A large FMCG company decides to test market Kora, a new brand of face cleanser, to be
launched soon. The company initially distributes a few free samples to some prospective
consumers. Later it offers the product to the customers at a discounted price and observes that
not only more than seventy percent of the customers are purchasing it but the same number are
also satisfied using it. The company keeps using this process 3-4 times to obtain a correct count
of the number of people purchasing the product repeatedly. Which of the following testing
methods is being used here?
A) simulated testing
B) controlled testing
C) full test marketing
D) parallel testing
E) sales-wave research
57) Which of the following is an advantage of sales-wave research?
A) It gives surprisingly accurate results on advertising effectiveness.
B) It allows the brand to gain favorable shelf position.
C) It guarantees immediate brand recognition and high sales volume.
D) It can be implemented quickly with a fair amount of security.
E) It easily creates a buzz in the minds of customers.
58) Which of the following is usually referred to as a full-blown test market?
A) an internal focus group
B) a discussion group
C) a country
D) a city or a few cities
E) a laboratory
59) Which of the following products is most likely to undergo alpha and beta testing?
A) food products
B) industrial goods
C) consumer products
D) commodities
E) FMCG products
60) During ________, the company’s technical people observe how customers use the product, a
practice that often exposes unanticipated problems of safety and servicing and alerts the
company to customer training and servicing requirements.
A) beta testing
B) research testing
C) sales-wave testing
D) alpha testing
E) simulated testing
61) Poga International, a multinational beverage corporation identifies that one of its competitors
is launching an apple flavored drink. The company decides to launch an apple flavor brand along
with its competitor. What timing strategy is used here?
A) first entry
B) blunt entry
C) parallel entry
D) late entry
E) exchange entry
62) Some firms might delay the launch of their products until after the competitor has borne the
cost of educating the market. Such an entry is called ________ entry.
A) strategic pay off
B) parallel
C) balancing
D) late
E) compensating
63) A(n) ________ is any good, service, or idea that is perceived as new, no matter how long its
history.
A) commodity
B) innovation
C) adoption
D) invention
E) novel product