Chapter 08 – Innovation and New-Product Strategy
Chapter 08
Innovation and New-Product Strategy
1. New products that provide improved performance or greater perceived value are known as
substantial innovations.
2. Conformity between consumer value expectations and product use experience indicates
greater new-product opportunities.
3. Analyzing customer value expectations to finding new-product opportunities are very
useful in evaluating potential transformational innovations.
4. Radical innovations have the potential of creating negative impacts on the leading firms
that pursue new-product strategies using existing technologies.
5. When products become commodities, profit margins increase and differentiated advantages
are easily achieved.
6. The elite circle is a form of innovation through collaborative relationship in which a
company chooses participants, defines the problem, and chooses the solution.
7. A new-product screening involves testing if the product is commercially viable.
Chapter 08 – Innovation and New-Product Strategy
8. A product prototype is the first completed model of the product that is ready for
commercial production and marketing.
9. Product specifications describe what the product will do rather than how it should be
designed.
10. The traditional method of market testing helps eliminate the risk present in simulated tests
of competitor exposure.
11. Which of the following enables producing a product by building it up a layer at a time?
A. Additive manufacturing
B. Productive layering
C. Merchandise fabrication
D. Object enabling
12. _____ innovation occurs when products are radically new and the values created are
substantial.
A. Substantial
B. Transformational
C. Incremental
D. Nondescript
13. Products that are significantly new and create important value for customers are called
_____ innovations.
A. transformational
B. incremental
C. substantial
D. nondescript
Chapter 08 – Innovation and New-Product Strategy
14. New products that provide improved performance or greater perceived value (or lower
cost) are called _____ innovations.
A. transformational
B. substantial
C. nondescript
D. incremental
15. Customer _____ indicates how well the product use experience compares to the value
expected by the buyer.
A. value
B. satisfaction
C. need
D. segmentation
16. _____ is the combination of benefits provided by a product minus all of the costs incurred
by the buyer.
A. Product use experience
B. Customer satisfaction
C. Customer value
D. Leveraging cost
17. The objective of _____ is to identify needs for new products and improvements in existing
products, processes, and supporting services.
A. test marketing
B. incremental innovation
C. analytical positioning techniques
D. customer value analysis
18. The _____ is a form of innovation through collaborative relationship in which a company
chooses participants, defines the problem, and chooses the solution.
A. elite circle
B. innovation mall
C. innovation community
Chapter 08 – Innovation and New-Product Strategy
D. consortium
19. The _____ is a form of innovation through collaborative relationships where a company
posts a problem and anyone can propose a solution.
A. elite circle
B. innovation mall
C. innovation community
D. consortium
20. The _____ is a form of innovation through collaborative relationships where anybody can
propose problems, offer solutions, and decide which solutions to use.
A. elite circle
B. innovation mall
C. innovation community
D. consortium
21. The _____ is a form of innovation through collaborative relationships which operates like
a private club with participants jointly selecting problems, deciding how to work on them, and
choosing solutions.
A. elite circle
B. innovation mall
C. innovation community
D. consortium
22. Product _____ refers to when a new product attracts sales from an existing product.
A. cannibalization
B. knockdown
C. scaffolding
D. benchmarking
23. _____ consists of the pursuit of a deliberate, ongoing strategy of developing and
Chapter 08 – Innovation and New-Product Strategy
introducing new products that attract the buyers of a company’s existing products.
A. Sustained innovation
B. Proactive cannibalization
C. Cross production
D. Planned obsolescence
24. The company’s _____ spells out management’s choice of the company’s most promising
opportunities for new products.
A. mission statement
B. vision consortium
C. innovation strategy
D. articles of incorporation
25. Which of the following is the first step in the new-product-planning process?
A. Idea generation
B. Marketing strategy development
C. Product development
D. Customer needs analysis
26. Which of the following is true of scanner-based tests?
A. It uses cable television and a computerized database to track new product.
B. It is the cheapest and quickest market test available.
C. Its findings are more accurate than actual market tests.
D. It is conducted in a fabricated shopping environment inside a research facility.
27. Which of the following marketing tests is conducted in an actual market environment?
A. Regression tests
B. Simulated tests
C. Traditional tests
D. Web-enabled tests
Chapter 08 – Innovation and New-Product Strategy
28. Which of the following is a description of the Generic (market-pull) products process
type?
A. The team begins with a market opportunity and selects appropriate technologies to meet
customer needs.
B. The team begins with a new technology, and then finds an appropriate market.
C. The team assumes that the new product will be built around an established technological
subsystem.
D. Characteristics of the product are highly constrained by the production process.
29. Which of the following are examples of quick-build products?
A. Sporting goods, furniture, tools
B. Software, cellular phones
C. Pharmaceuticals, space systems
D. Airplanes, jet engines, automobiles
30. Which of the following describes the process for platform products?
A. Characteristics of the product are highly constrained by the production process.
B. New products are slight variations of existing configurations.
C. System must be decomposed into several subsystems and many components.
D. The team assumes that the new product will be built around an established technological
subsystem.
31. How can innovations be classified? What are the different types of innovations?
32. Describe the various forms of innovation through collaborations?
Chapter 08 – Innovation and New-Product Strategy
33. What is proactive cannibalization and what is the strategic logic of this concept?
34. Describe how focus groups help generate new-product ideas.
35. Explain the importance of concept evaluation in new-product planning.