MKT 380 New Product Development

Test 1 Review Questions

Chapter 1
1. What is innovation? The overall process whereby an invention is transformed into
marketable products or services.
2. What is a disruptive innovation? Process by which a product or service takes root initially
in simple applications at the bottom of a market and then relentlessly moves up the
market, eventually displacing established competitiors. It is an innovation that hasnt
been seen before in the marketplace.
3. What are the different categories of new products ( know examples)? New to the world
products , new to the firm products ,additions to existing product lines(line extension) ,
improvements and revisions to existing products,repositionings, cost reductions
4. What are the 5 phases of the Basic New Product Process?
a. Opportunity identification/selection- internal mandate, external mandate,
underutilized resource , new resource
b. concept generation- form , technology, need/benefit
c. concept/ product evaluation- screening , concept testing, full screen, project
evaluation
d. development prototype , marketing plan
e. launch market testing
Chapter 2
1. What is a new product concept? a form or technology plus a clear statement of the
need/benefit

2. What are the different categories of opportunities? An underutilized resource (a

manufacturing process, an operation, a strong franchise)
A new resource (the discovery of a new material with many potential uses)
An external mandate (a stagnant market combined with competitive threat that forces
the firm to search for new opportunities.)
An internal mandate (new products used to close long-term sales gap, or to fill senior
management desires)

3. What are the stages of the concept/project evaluation? 1. Screening( pre tech eval), 2.
Concept testing(with customers), 3. Full screen( scoring model), 4 project evaluation
4. What is a full screen? The use of a scoring model to determine to go ahead with
development or not
5. At what phase of the NPD process is the prototype created? Phase 4 development
6. At what phase of the NPD process is the marketing plan developed? development
7. At what phase of the NPD process does market testing take place? In the launch phase
 8. What is spiral development many iterations between the firm and the customer ( back
and forth comments ) build test- feedback revise
Chapter 3
1. What is a product platform? product families that share similarities in design,
development, or production process. These are cost time efficient
2. What is a Product Innovation Charter (PIC)? It contains the reasons the project has been
started, the goals, objectives, guidelines, and boundaries of the project.
Document prep by senior mgmt. designed to provide guidance to the strategic business units on
the innovation
It is the who, what, where, when, and why of the product development project.
Background, focus/area, goals and objectives , guidelines
1. What are the contents of the PIC? Background:
What is our business?
Why did we develop this strategy?
Focus, or Area:
What are our companys core competencies / technology strengths?
What is our competitive advantage? What value can we bring to our target market?
What advantages do we have in relation to our target markets needs, wants, and
consumption trends?What are our marketing capabilities?
Goals and Objectives:
What are our measurable short-term objectives and long-term goals of the new
product? (profit, market share, etc.)
Guidelines:
What special requirements are imposed by upper management? (innovativeness,
time and entry to market, costs, product quality, etc.)

2. What are the four core competencies that a company could use to define their focus?
Technology strength
Product experience (focus on a specific business)
Customer franchise (focus on the type of customer) End-use experience (focus on the
end-use)
3. What is the Product Portfolio? What are its objectives?
It is a statement of how the new product is going to fit within the organizations
other products
4 Objectives: number of projects, project balance, assessing portfolio value ,
strategic alignment
Strategic alignment: the portfolio ensures that the mix of products reflects the PIC; new
products should be on strategy.
 Assessing portfolio value: projects should be selected so that the commercial value of
products in pipeline is maximized.
Project balance: the portfolio should make it easy to select products that balance the
existing product line.
Number of projects: avoid resource commitments to too many projects as it could lead
to underfunding.

Chapter 4
1. What are some techniques that management can use to stimulate creativity among
creative people? Techniques include:Competitive teams, Idea bank of unused ideas for
possible reuse, Encourage interaction even in how offices are laid out

2. What are some of the barriers to firm creativity?

Cross-functional diversity: Diversity leads to more creative stimulation but also to

problem solving difficulties.
Allegiance to functional areas: Team members need to have a stake in the teams
success, or wont be loyal to the team. ( ex too much allegiance to marketing)
Social cohesion: If interpersonal ties among team members are too strong, candid
debate may not occur, resulting in less innovative ideas.
Role of top management: Management should encourage the teams to be adventurous,
otherwise only incremental changes will occur

3. What are the 3 required inputs to creating a concept?

Form (the physical thing created, or, for a service, the set of steps by which the service
will be created)
Technology (the source by which the form is to be attained)
Benefit/Need (benefit to the customer for which the customer sees a need or desire)
Technology permits us to develop a form that provides the benefit.
Rule: You need at least two of the three inputs to have a feasible new product concept,
and all three to have a new product.
 4. What would be the best sequence of inputs when generating a concept?

The innovation process can start with any of the three inputs:
Best form::::::: Customer need firm develops technology produces form (most
common)
Firm develops technology finds match to need in a customer segment produces
form
Firm envisions form develops technology to product form tests with customer to
see what benefits are delivered (very risky a solution looking for a problem)

5. When does a new product really come into being? When it is successful in the
marketplace
6. How are user toolkits used in the innovation process?
: A set of design tools that customers can use to customize a product best suited to them.
Customers use the toolkit to build the product they want . Ex: nike ID
Product configurators are a kind of user toolkit (build your own product).
7. What is crowdsourcing and how is it used in the innovation process? open idea
solicitation from customers at the beginning to generate a concept
8. Who are lead users and how are they used in the innovation process? firms or
individuals that are at the front end of a significant current trend. Ex: professional
athletes. Are an important source for new product ideas
Can be an important source of new product ideas.
They have the best understanding of the problems faced, and can gain from solutions to
these problems.
In many cases, they have already begun to solve their own problems, or can work with
product developers to anticipate the next problem in the future.
Example: X-Games athletes for new high-performance snowboards.
They provide design requirements and are also early adopters and good at
stimulating word-of-mouth.
 9. What is open innovation and what are its benefits?
The process by which a firm searches externally for research, innovation, technologies,
and products. ( comes from outside sources)
Open innovation is both inwards( take in technologies) and outwards( share ideas and
technologies)
Increases speed of research and innovation, cuts risks, and generates new innovative
ideas. Sources such as inventors, startup companies, or university laboratories are
actively sought out.
Chapter 5
1. What is the most common source for the needs and problems of a firms customers?
Internal records (routine contacts with customers, i.e., sales call reports) (this is the most
common source)
a. Other sources direct inputs from tech and mkt dept, problem analysis w
cutomers, scenatio analysis ( anticipating future problems)

2. What are the 4 methodologies that a firm can use to contact their customers?
Problem analysis sources and methodologies ( experts, published sources, contacts w your
business customers or consumers)
1. Interviewing (one-on-one) 2. Focus groups
3. Observation of product in use 4. Role playing
(not common)

3. What is the most productive methodology that a firm can use to use for gathering a list
of consumer problems?directly contact your customers ( interviewing)
4. How are focus groups used in analyzing customer problems? The focus group is designed
to yield the exploratory and depth probing type of discussion required. ( they give ideas
on where to look)
5. What does the observation method of gathering information about customer problems
consist of? Firms serve customers using the products
6. What is scenario analysis? Solving future problems by posing a what if question
7. What is brainstorming? A group creativity method where people react to eachothers
thoughts.
8. What is an online community and their use in the innovation process?
Any group that interacts using online social networks, their use: they help to solve the
customers problems.
Chapter 6
1. What is the difference between a feature, a function, and a benefit of a product?
a. Feature : what product consists of
b. Function : what it does and how it works
c. Benefit : How the product provides satisfaction to the user
2. What are the 3 techniques of perceptual mapping?
1. Determinant gap map( done without consulting customers , what management thinks
customers will perceive , the AR perceptual gap map ( customers rate different attributes
of different competitors , Os perceptual map based on overall similarity ratings by
customers)
3. What is gap analysis? Analyzing product attributes to find an unserved gap.
4. Who decides on the relative positions of the brands in determinant gap mapping?
a. Management
5. Who decides on the relative positions of the brands on AR perceptual gap mapping?
a. The customer
6. What is the basis of OS perceptual gap mapping? What weakness of AR mapping does it
address?
a. How similar products are to eachother, some people find it difficult to rank
different attributes.