AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Topic: The Basic New Products Process
Essay Questions
52.Discuss the terms "product innovation" and "process innovation."
Answer: The term "process innovation" usually applies to functions, especially the manufacturing or distribution process, and every new product benefits from this type of innovation.
The term "product innovation" applies to the total operation by which a new product is created and marketed, and it includes innovation in all of the functional processes.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Topic: How Product Development is Different
53.Describe the various categories of new products.
Answer: The various categories of new products are:
• New-to-the-world products or really-new products: These products are inventions that create a whole new market.
• New-to-the-firm products or new product lines: Products that take a firm into a category new to it. The products are not new to the world, but are new to the firm.
• Additions to existing product lines: These are "Flanker" brands, or line extensions, designed to flesh out the product line as offered to the firm's current markets.
• Improvements and revisions to existing products: Current products made better.
• Repositionings: Products that are retargeted for a new use or application. Also includes products retargeted to new users or new target markets.
• Cost reductions: New products that simply replace existing products in the line, providing the customer similar performance but at a lower cost. May be more of a "new product" in terms of design or production than marketing.
AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Topic: What is a New Product, and What Leads to Success?
54.Briefly explain the terms: new products process, product innovation charter, and product portfolio management.
Answer: The new products process is the procedure that takes the new product idea through concept evaluation, product development, launch, and post-launch.
The product innovation charter can be thought of as a strategy for new products. It ensures that the new product team develops products that are in line with firm objectives and strategies and that address marketplace opportunities.
Product portfolio management helps the firm assess which new products would be the best additions to the existing product line, given both financial and strategic objectives.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Topic: Does This Field of Activity Have a Unique Vocabulary?
55.What is a fuzzy gate? Explain with an example.
Answer: Evaluation tasks occur after every phase in the new products process. Each phase is always followed by a Go/No decision. An evaluation task that includes conditional Go decisions is sometimes called a fuzzy gate. For example, a new packaged food product might do reasonably well at a concept test, but management might feel they do not really have a read on the market until some product use testing is conducted. An On decision would mean that the product is approved to move to development, but the product use test must yield positive results, otherwise the project would be halted at that point. Fuzzy gates, therefore, speed up the process because time is not wasted in obtaining complete information before the decision is made. They are relatively common. The firm must indeed make a firm decision once the necessary information is obtained; in other words, fuzzy gates still have teeth.
AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Topic: The Basic New Products Process