A research team in your company's laboratories stumbled on a way to erase hard drives using radio waves. The scientists think it could turn into a great product that gives computer users an easy way to erase their drives before sending their devices to recycling or reselling them. What model of idea generation is this?
A) Exploratory
B) Top-down
C) Research-driven
D) Bottom-up
E) Incremental

D

The search for ________ is the starting point of new-product development.
A) viable ideas
B) unused brand names
C) distribution channels
D) profitable business models
E) customer value

A

When Varidesk responded to health concerns about the long-term effects of sitting by creating variable desks that allow people to change from sitting to standing throughout the day, it
used which model of idea generation?
A) Exploratory
B) Top-down
C) Research-driven
D) Bottom-up
E) Incremental

B

The Slinky toy was created after a naval engineer who was designing a power meter noticed how tension springs bounced when they fell to the floor. What model of idea generation is this?
A) Exploratory
B) Bottom-up
C) Research-driven
D) Top-down
E) Incremental

B

Innovation marries a customer need with a ________ that addresses this need.
A) brand
B) value proposition
C) creative idea
D) business model
E) distribution network

C

Top-down idea generation starts with a ________ that aims to identify an important unmet need that the company can fulfill in a way that is superior to its competitors.
A) business plan
B) market analysis
C) value proposition
D) market offering
E) prototype

B

________ 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

E

Some companies believe that interviewing customers does not always 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 often focus on their current needs, which can prevent breakthrough, forwardthinking
innovation.
D) It increases the cost of testing a product or service.
E) Having too much customer focus leads to a negative brand image.

C

A(n) ________ is a working model of the offering that aims to flesh out the original idea and weed out potential problems before the actual offering is created.
A) business model
B) tactical plan
C) alpha test
D) prototype
E) beta test

D

________ involves customers interacting with prototypes to see how they perform in different applications and to ensure that the final product will be well received in the market.
A) Beta testing
B) Alpha testing
C) Market testing
D) Omega testing
E) Lab testing

A

________ involves members of the firm interacting with prototypes to see how they perform in different applications and to ensure that the final product will be well received in the market.
A) Beta testing
B) Alpha testing
C) Market testing
D) Omega testing
E) Lab testing

B

Brown & Smith Inc. engages in the design, development, making, and retail selling of designer jewelry in North America. Before approving a new design, the company draws it on a computer and then produces models to show potential consumers and get their reactions. This allows the company to analyze the possible customer reaction. Identify the concept development method used here.
A) Conjoint analysis
B) Perceptual mapping
C) Virtual reality testing
D) Prototyping
E) Digital fabrication

D

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 inhouse 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

C

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

D

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

B

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 some of its customers to rank the packs in order to choose two best packs. Which of the following testing methods is being used in this scenario?
A) Virtual reality testing
B) Conjoint analysis
C) Perceptual mapping
D) Product fabrication
E) Rapid prototyping

B

________ testing of a prototype takes place within the firm to see how it performs in different applications.
A) Beta
B) Research
C) Sales-wave
D) Alpha
E) Simulated

D

Which of the following products normally undergo alpha and beta testing?
A) Food products
B) Expensive industrial goods
C) Consumer products
D) Commodities
E) FMCG products

B

During ________ testing, the company's technical people let customers use prototypes to see how they perform in different applications and to ensure that the final product will be well received in the market.
A) beta
B) research
C) sales-wave
D) alpha
E) simulated

A

With a product concept that has been deemed technologically feasible and desirable from the target customer's point of view, the ________ stage judges whether the concept has commercial viability.
A) concept validation
B) business-model design
C) idea generation
D) commercialization
E) offering development

B

In addition to identifying the target market and describing the market offering, the businessmodel design stage details the offering's ________.
A) distribution plan
B) branding
C) value proposition
D) financial payback
E) investment requirements

C

By losing money on most sales, the pioneering e-commerce site Pets.com ultimately failed because it didn't pass the ________ test of the business-model design stage.
A) visibility
B) desirability
C) demand
D) viability
E) popularity

D

Despite a massive promotional campaign, the clear, caffeine-free Crystal Pepsi offering did not succeed in the marketplace because it failed the ________ test of the business-model design stage.
A) visibility
B) desirability
C) demand
D) viability
E) popularity

B

In addition to creating value for the company and for its collaborators, a key part of the business-model design stage is making the sure an offering will create value for ________.
A) distributors
B) advertisers
C) sales representatives
D) suppliers
E) customers

E

Before a new-offering team transitions to the business-model design stage, it should successfully pass the ________ stages.
A) idea generation and concept development
B) concept development and offering development
C) concept development and commercial development
D) offering development and commercial development
E) commercialization and commercial development

A

When a new-offering team has successfully made it past the business-model validation gate, it is ready to begin the ________ stage.
A) idea generation
B) concept development
C) offering development
D) commercial development
E) product launch

C

Describing how the company will create, communicate, and deliver value to its target customers, collaborators, and the company stakeholders is embodied in which component of business-model design?
A) Target market
B) Value proposition
C) Market offering
D) Marketing plan
E) Business plan

C

Which of these is NOT one of the entities that needs to be identified as part of the target market definition task in the business-model design stage?
A) Target customers
B) Distribution collaborators
C) Customer service collaborators
D) Competitors
E) Advertising partners

E

Building a forecast on the basis of ________ means putting the product into a test market to measure buyer response.
A) what customers intended to do
B) what customers say they will do
C) what customers do
D) what customers have done
E) what researchers predict customers will do

C

Which of these is NOT one the resources identified as a requirement to launch a new product?
A) Business facilities
B) Supply channels
C) Distribution channels
D) Corporate heritage
E) Skilled employees

D

Which of these products would potentially benefit the most from market testing?
A) An all-new model of Chevrolet pickup truck
B) A larger version of a Samsung smartphone
C) An update to the Duolingo language-learning app
D) A new flavor of Cheerios breakfast cereal
E) A spinoff of a successful mutual fund that targets a different investment sector

A

Why does Gucci test market many of it luxury products in China?
A) To benefit from proximity to Chinese manufacturing facilities.
B) The Chinese government demands first access to new products.
C) Consumer preferences in China indicate where the global market is moving.
D) To avoid "signaling" the new product to the rest of the world.
E) To test a representative demographic cross-section.

C

Developing the market offering involves turning the ________ into a market-ready
commodity.
A) brand
B) business model
C) prototype
D) product idea
E) marketing plan

C

Why does General Mills prefer to launch new products in 25 percent of the country?
A) This keeps its plants operating at optimal capacity.
B) It's an area too large for rivals to disrupt.
C) This makes the best use of retailer capacity.
D) Retailers won't cooperate with larger launches.
E) Retailers won't cooperate with smaller launches.

B

Which of these is a reason many consumer-goods companies like to test-market new products in South Korea?
A) They can hide the prelaunch test from the rest of the world.
B) Its well-developed marketing infrastructure prevents other companies from spying.
C) Its consumers are known to be demanding but fair-minded.
D) Its consumers reflect the tastes of the majority of the world's cultures.
E) The South Korean government offers subsidies to defray the costs of test marketing.

C

Implementing the offering involves two key aspects: developing the ________ to put the business model into action and developing the market offering.
A) branding strategy
B) necessary resources
C) employee motivation
D) top-management approval
E) advertising plan

B

________ informs target customers about the company's offering and makes the offering available to these customers.
A) Advertising
B) Commercialization
C) Integrated marketing communication
D) A distribution plan
E) A business plan

B

In addition to ramping up the facilities involved in the offering's production and promoting the offering to all target customers, market expansion involves ________.
A) ensuring that the offering is available to the entire target market
B) ensuring that the offering is available to the next chosen subsegment of the target market
C) explaining the brand essence to target customers
D) announcing the product launch to the news media
E) preparing the workforce for the product launch

A

The term ________ refers to the way knowledge of a product, service, or idea spreads to the marketplace and the speed with which it is purchased or used.
A) product learning
B) customer education
C) leaders and laggards
D) diffusion of innovation
E) customer adoption

D

The key aspects of commercialization are ________ followed by market expansion.
A) launch planning
B) selective market deployment
C) test marketing
D) market preparation
E) offering development

B

Your roommate refuses to get a smartphone, no matter how many cool apps you show him or how many times you explain all the ways its helps you manage your life and your studies. What type of consumer does he represent in the Rogers or Moore models of adoption?
A) Innovator
B) Early adopter
C) Pragmatist
D) Laggard/Skeptic
E) Late majority

D

In the Rogers model of adoption, customers who are technology enthusiasts, venturesome, and who enjoy tinkering with new products and mastering their intricacies are called ________.
A) innovators
B) early adopters
C) early majority
D) investigators
E) experimenters

A

Troma Inc. is a famous manufacturer of cookware that follows a traditional distributor-retailer system to distribute its products. The company abstains from the use of automated supply chain management (SCM) systems mainly due to the fear of unknown. However, rapidly escalating operational costs and inefficiencies have made it necessary for the company to implement an SCM system. The company goes for a big-bang installation of SCM system to become more competitive and cost effective. Identify the adopter group to which Troma belongs.
A) Innovator
B) Early adopter
C) Early majority
D) Laggard
E) Late majority

D

Jason is a technology enthusiast who is happy to conduct alpha and beta testing and report on early weaknesses of consumer electronics products. He is most likely to fall in the ________ adopter category.
A) late majority
B) early
C) early majority
D) innovator
E) laggard

D

Which of the following characteristics is closely associated with late majority adopter groups?
A) Superior technological knowledge
B) Low price sensitiveness
C) Opinion leadership
D) Deliberate pragmatism
E) High risk aversion

E

________ involves 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.

A) Supplemental innovation
B) Incremental innovation
C) Disruptive innovation
D) New-market innovation
E) Breakthrough innovation

B

Which of these is identified in the chapter as one reason companies continue to pursue incremental innovation over new-to-the-world innovations?

A) Tax laws favor incremental innovation.
B) Employees dislike the disruption of breakthrough innovation.
C) Customers are rarely interested in breakthrough innovation.
D) It is increasingly difficult to identify blockbuster products that will transform a market.
E) Breakthrough innovations invite vigorous competitive responses

D

What is the estimated failure rate of new products?

A) Less than 10 percent
B) Between 10 and 20 percent
C) Around 25 percent
D) Around 50 percent
E) As high as 95 percent

E

4) Intrapreneurs working on new product designs and plans are mostly to be found working in ________.

A) product management departments
B) venture teams
C) new-product departments
D) communities of practice
E) skunk squads

B

Which of these is NOT one of the stages found in the stage-gate framework?

A) Idea generation
B) Concept development
C) Business-model design
D) Offering development
E) Sales prospecting

E

Which stage in the stage-gate framework must come before concept development?

A) Business-model design
B) Idea generation
C) Commercial deployment
D) Offering development
E) Sales prospecting

B

When a firm has a valid business model in hand for a new offering, what is its next step in the stage-gate framework?

A) Concept development
B) Idea generation
C) Commercial deployment
D) Offering development
E) Sales prospecting

D

In addition to creating offerings that are desirable to customers and technologically feasible, the stage-gate framework aims to create offerings that are ________.

A) viable (creating value for the company and its collaborators)
B) unique (unmatched by any other company)
C) cutting-edge (using only the latest technologies and concepts)
D) low cost (marketable using minimal resources)
E) buzz-worthy (capable of generating broad media attention)

A

Designing and validating a prototype version of a potential offering occurs during the ________ stage of the stage-gate framework.

A) concept development
B) idea generation
C) commercial deployment
D) offering development
E) business-model design

A

The offering's target market, the value created by the offering in this market, and the key attributes of the offering are all defined in the ________ stage of the stage-gate framework.

A) concept development
B) idea generation
C) commercial deployment
D) offering development
E) business-model design

E

Making the case for how the company and its collaborators will benefit from launching the offering occurs in the ________ stage of the stage-gate framework.

A) concept development
B) idea generation
C) business-model design
D) commercial deployment
E) offering development

C

Conducting a market test occurs in the ________ stage of the stage-gate framework.

A) offering implementation
B) idea generation
C) business-model design
D) commercial deployment
E) offering development

A

When General Mills is finalizing the key attributes of a new cereal offering, including the brand name, price, incentives, communication, and distribution plan, it is in the ________ stage of the stage-gate framework.

A) offering implementation
B) idea generation
C) business-model design
D) commercial deployment
E) offering development

C

When Apple released the third generation of the iPad Pro tablet, this was an example of which kind of innovation?

A) Supplemental innovation
B) Incremental innovation
C) Disruptive innovation
D) New-market innovation
E) Breakthrough innovation

B

Oreo Carrot Cake flavored cookies are an example of which kind of innovation?

A) Supplemental innovation
B) Disruptive innovation
C) Incremental innovation
D) New-market innovation
E) Breakthrough innovation

C

Which of these is NOT one of the characteristics of highly innovative companies?

A) A positive attitude toward innovation
B) A positive attitude toward risk-taking
C) Strict boundaries on risk-taking with appropriate negative consequence
D) A methodical approach to generating, developing, and commercializing new offerings.
E) An embrace of experimentation and acceptance of failure

C

The Keurig single-serving coffee pod represents what kind of innovation?

A) Supplemental innovation
B) New-to-the-world innovation
C) Incremental innovation
D) New-market innovation
E) Predicted innovation

B

What does the term "intrapreneur" suggest in terms of innovation development?

A) These employees are focused on internal innovation only.
B) These non-employees are temporary brought inside as consultants.
C) These employees take an entrepreneurial approach within their companies.
D) These innovators work only with like-minded people in the company.
E) These employees get a profit cut of any products they help invent.

C

Which of these statements about the stage-gate framework is NOT true?

A) Typically, most ideas raised at the beginning of the process do not survive to the commercialization stage.
B) The number of potential offerings decreases as the company works through the process.
C) The number of potential offerings increases as the company works through the process.
D) The cost of moving a potential offering through each stage increases as the process moves forward.
E) The process doesn't always move in a strictly linear flow from left to right; sometimes ideas are "kicked back" to an earlier stage and reworked.

C

Which of these statements about the business-model design stage of the stage-gate model is true?

A) The validated business model is still only a plan, not a market-ready offering.
B) The business model is validated based primarily on how innovative the idea is.
C) Customer needs are not considered during the business-model design stage.
D) This is strictly a "business case" stage; the product concept hasn't been development yet.
E) The business-model design stage produces a fairly complete plan for bringing the new offering to market.

A

After developed product concepts are validated by assessing their technological feasibility and potential to fulfill an uncovered customer need, what is a company's next step toward commercialization?

A) Offering implementation
B) Idea generation
C) Business-model design
D) Commercial deployment
E) Offering development

C

In addition to ensuring that new offerings are technologically feasible and financially viable for the company and its collaborators, the stage-gate framework aims to create offerings that are ________.

A) desirable (providing value for target customers)
B) unique (unmatched by any other company)
C) cutting-edge (using only the latest technologies and concepts)
D) low cost (marketable using minimal resources)
E) buzz-worthy (capable of generating broad media attention)

A

Which stages of the stage-gate framework typically require the greatest investment of company resources?

A) Idea generation and concept development
B) Concept development and business-model design
C) Business-model design and offering implementation
D) Offering implementation and commercialization
E) Commercialization and test marketing

D

If Caterpillar is developing a new compact front-end loader for use on residential construction sites but determines that the product won't create enough value for the company or its distribution collaborators, which gate in the stage-gate framework stopped the project?

A) Idea validation
B) Concept validation
C) Business-model validation
D) Offering validation
E) Test market

C

In the context of the stage-gate framework of product development, the product concept can be thought of as the ________ the company will offer to its target customers.

A) value proposition
B) product design
C) value proposal
D) product idea
E) business model

A

A limited geographic introduction of a new offering, perhaps in just one city, designed to validate the offering and see how well the various elements will perform, is known as a ________.

A) regional market
B) sales simulation
C) focus group
D) market test
E) business-model validation

D

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

D

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

D

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

A

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 focused on managing existing lines.
D) They will find it difficult to gain support from employees.
E) Product managers are less likely to use participative management.

C

________ teams are cross-functional groups charged with developing a specific product or business.

A) Virtual
B) Venture
C) Fundamental
D) Elemental
E) Transitory

B

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 develop new products. This team is called a(n) ________ team.

A) virtual
B) venture
C) fundamental
D) elemental
E) transitory

B

A team formed at Intercom Inc. to develop new products conducts most of its meetings 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

A

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

C

________ 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

B

During which of the following stages in new product development does the company develop a prototype that has the core functionality of the proposed offering?

A) Idea generation
B) Idea screening
C) Business analysis
D) Concept development
E) Product development

D