MKT 380 New Product Development

Answers to Test 2 Review Questions

Chapter 7
1. What is Trade-Off (Conjoint) analysis? What does it consist of?
- Used in generating high-potential product concepts for future evaluation.
- Consists of putting the determinant attributes together in combinations or sets.
- Respondents then rank these sets in order of preference.
- Conjoint analysis finds the optimal levels of each attribute.
2. What is Dimensional Analysis?
- lists all the physical features of a product type. Product concept creativity is then
triggered by thinking how that feature could be changed. Example: list of features of a
flashlight

3. How are Checklists used to generate product concept creativity?

uses questions that generate product concept creativity. Example: checklist for
industrial products

4. What is Relationship Analysis?

forces the respondent to find relationships among dimensions to generate new product
concepts. Example: Two-dimensional matrix of event insured/insured person

5. How does the Analogy technique work to create new concepts?

- gets a better idea of something by looking at it through something else. Example:
amusement park lines

Chapter 8
1. What evaluation tool is used at Phase I of the Product Development Process? What is
its purpose? How does it do it?
Phase I An opportunity is identified and assessed
a. Evaluation tool used: Opportunity identification and evaluation.
b. Purpose of evaluation: To keep the firm out of product developments where it
stands a poor chance of winning.
c. How does it do it: By specifying the firms core competencies (the arena where
we need to play). Opportunities that do not entail core competencies are then
eliminated.
2. What evaluation tool is used at Phase II of the Product Development Process? What is
its purpose? How does it do it?
Phase II Concept generation
a. Evaluation tool used: Initial review
b. Purpose of evaluation: To avoid the big loser or the sure loser. Also, to try to spot
potential big winners.
c. How does it do it: No one set screening procedure, but should assess the ideas in
terms of the following criteria:
3. What are the 5 criteria that are used for early stage screening?
i. Uniqueness: Is the idea original? Is it easily copied by competitors?
ii. Need fulfillment: Does it meet a customer need?
iii. Feasibility: Can we develop and launch it?
iv. Impact: How will our firm be affected?
v. Scalability: Can we become more efficient in production?
vi. Strategic fit: Does it match with corporate strategy and culture?

4. What evaluation tool is used at Phase III of the Product Development Process? What is
its purpose? How does it do it?
Phase III Concept/project evaluation
a. Evaluation tool used: Full screen
b. Purpose of evaluation: To decide whether to send the concept into full-scale
development or not.
c. How does it do it: By using a very thorough scoring model
5. What evaluation tools are used in Phase IV of the Product Development Process? What
is its purpose? How do they do it?
Phase IV Development
a. Evaluation tools used: Protocol checks, prototype tests, concept tests, product
use tests
b. Purpose of evaluation: To determine when the product technically meets its
intended purpose.
c. How does it do it: Through a series of technical tests

6. What evaluation tool are used in Phase V of the Product Development Process? What is
its purpose? How do they do it?
Phase V Launch
a. Evaluation tool used: Market testing
b. Purpose of the evaluation: To determine if the firm is able to market the product
on a commercial scale
 c. How does it do it: Through different forms of test marketing

7. What are the characteristics of the Rolling Evaluation?

a. Project is assessed continuously (rather than a single Go/No Go decision)
b. Financial analysis also needs to be built up continuously
c. Not enough data early on for complex financial analyses
d. Run risk of killing off too many good ideas early
e. Marketing begins early in the process
f. Key: new product participants avoid "good/bad" mindsets, avoid premature
closure

8. What are Potholes in the development process?

Know what the really damaging problems are for your firm and focus on them when
evaluating concepts.
Examples of potential potholes:
Campbell Soup focuses on manufacturing cost and taste.
Drug companies focus on FDA approval.
Software developers may focus on customer unwillingness to learn how to use
complex software.

9. What are Surrogate Questions and why they may be needed?

Many important questions have to wait until the product is developed or
commercialized, but surrogate questions may give early clues to the real answer.

10. What do the letters in the A-T-A-R model represent?

Four steps are required for a person to adopt and innovation:
a. Must become AWARE that it exists
b. Must decide to TRY it
c. It must be AVAILABLE for use
d. Must decide to REPEAT USE

Chapter 9
1. What is a Product Concept Statement? What are its purposes?
a. A statement about anticipated product features (form or technology) that will
yield selected benefits relative to other products or problem solutions already
available.
b. Therefore, the Product Concept is a claim of proposed satisfactions.
c. Example: A new electric razor whose screen is so thin it can cut closer than any
other electric razor on the market.
 2. What does a non-commercialized concept statement consist of?
Noncommercialized concept statement (stripped description): just facts, can be in
bullet points.

3. What does a commercialized concept statement consist of?

Commercialized concept statement (embellished description): sounds like the way the
product would be promoted or advertised.

4. What are 2 ways of describing a concept for testing purposes?

Noncommercialized and commercialized
Chapter 10
1. What is a Full Screen? What are its objectives?
a. The Full Screen is an evaluation process that involves the use of a scoring model.
b. It is often seen as a necessary evil, yet it is very powerful and with long-lasting
effects.
c. It forces pre-technical evaluation, and summarizes what must be done.
d. Methods range from simple checklists to complex mathematical models.
Objectives??

2. What are some alternatives methods to do a Full Screen?

a. Profile Sheet a graphical arrangement of the scores on the different factors.
b. Project NewProd Screening Model combines checklists with scoring models.
c. Analytic Hierarchy Process (AHP) uses expert judgment to make optimal decisions.

3. Who should be in the Scoring Team?

Major Functions (marketing, technical, operations, finance)
New Products Managers
Staff Specialists (IT, distribution, procurement, PR, HR)

4. What is a Profile Sheet?

a. Profile Sheet a graphical arrangement of the scores on the different factors.

5. What does the Project NewProd screening model combine?

Project NewProd Screening Model combines checklists with scoring models.

6. What does the Analytic Hierarchy Process (AHP) use to make optimal decisions?
a. uses expert judgment to make optimal decisions.
Chapter 11
1. What are some of the reasons why financial analysis for new products is difficult?
a. Target users dont know what the new product will do for them.If they know,
they might not tell us.
b. Poor execution of market research.
c. Market dynamics (competition)
d. Uncertainties about marketing support.
e. Biased internal attitudes.
f. Poor accounting.
g. Rushing products to market.
h. Basing forecasts on history (new products dont have a history).
i. Technology revolutions (rapidly changing technologies).

2. What are some considerations to keep in mind when developing sales forecasts?
a. A products potential may be high, but sales may not materialize because of poor
marketing efforts.
b. Products initially go through a period of sales growth, but sales eventually
stabilize over time.
c. Sales will also depend on our competitors strategies and programs as well as our
own.

3. How is forecasting done using Purchase Intentions from concept testing?

Use the top-two-boxes scores obtained in concept testing, appropriately adjusted
or calibrated.

4. How is forecasting done using the A-T-A-R Model?

a. Formula: MS = T x R x AW x AV
b. Where:
MS = long-run market share
T = ultimate long-run trial rate (the percentage of all buyers who ultimately try
the product at least once)
R = ultimate long-run repeat purchase rate (share of purchases of the product
among those who tried the product)
AW = percent awareness
AV = percent availability

5. What is diffusion of innovations?

Diffusion is the process by which an innovation spreads through the population.
 6. What are the 5 categories of adopters?
a. Innovators = first to adopt
b. Early adopters = next to adopt
c. Early Majority = next after that
d. Late Majority = next after that
e. Laggards = last to adopt

7. What does the Life Cycle of Assessment recommend about financial analysis?
That Financial Analysis needs to be done at every stage of the new product development
Chapter 12
1. What is the Product Protocol?
It is a written statement that outlines how the different members of the development
team will work together.

Product requirements
Product definition
Deliverables
In other words
what is the final package of output from the development system,
what benefits or performance will the product deliver to the customer, and
what changes will the marketing program bring in the marketplace?

2. How can a product be viewed?

A product can be viewed as a bundle of benefits that the customer actually buys.

3. What are the 3 components of a product?

a. the core component
b. the packaging component
c. the support services component

4. What part(s) of the product must the New Product Manager focus on?
New Product Managers must focus on all three components.

5. Why must technical and marketing departments communicate and cooperate when
deciding on product benefits?
Technical and marketing departments depend on each other to work on their specific
benefits; decisions on one benefit will affect others, therefore the need for
communication and cooperation among the departments.

6. What are the purposes of the Product Protocol? What are deliverables?
 To determine what it is that the marketing and technical groups need to do in their work.
a. Try to identify what each department will deliver to the final product that the
customer buys (the key deliverables).
To communicate essentials to all players, helps to lead them to integrate their actions,
directing outcomes consistent with the full screen and financials.
To set boundaries on development process or cycle time (better product definition can
help cut development time).
To permit the development process to be managed (i.e., what needs to be done, when,
why, how, by whom, whether).

7. What is the Toyota Oobeya Room?

Big room to accommodate all team members for a new product project.

8. What does the End-User I Want List list?

The benefits you want the product to provide

9. What is the Voice of the Customer? Why should you not ask the customers what they
want? What should you ask them instead?
VOC: complete set of customer wants and needs, expressed in customers own
language, prioritized in terms of importance and performance.
Dont ask what are your needs or requirements as this will give you better sameness,
not revolutionary new products.
Ask about experiences or desired outcomes: What are the most difficult tasks? What do
you like and dislike? What was your worst experience?

1. Opportunity Identification and Selection

Product Innovation Charter
Product Portfolio
2. Concept Generation
3. Concept Testing
4. Full Screen
5. Sales Forecasting
6. The Product Protocol