CMA CMA Product Development & Innovation 2 — Questions and Answers
Question 1: What is 'disruptive innovation' as defined by Clayton Christensen?
- An innovation that initially targets overlooked customer segments with simpler, cheaper products and eventually displaces incumbents (Correct answer)
- Any technological breakthrough that radically changes how an industry operates overnight
- An aggressive competitor's strategy to poach customers from market leaders
- A new product that disrupts a company's existing supply chain operations
Correct answer: An innovation that initially targets overlooked customer segments with simpler, cheaper products and eventually displaces incumbents
Christensen's disruptive innovation starts in low-end or new market footholds with simpler, more affordable products, then improves over time to challenge established market leaders.
Question 2: In the context of product-market fit, what does the 'Sean Ellis test' measure?
- The percentage of users who would be 'very disappointed' if a product disappeared, with 40%+ indicating product-market fit (Correct answer)
- The revenue growth rate required to confirm market viability
- Customer satisfaction scores above a specific threshold
- The number of organic referrals needed to prove product-market fit
Correct answer: The percentage of users who would be 'very disappointed' if a product disappeared, with 40%+ indicating product-market fit
Sean Ellis's test asks users how disappointed they'd feel if the product vanished; if 40%+ say 'very disappointed,' the product has achieved product-market fit.
Question 3: A 'conjoint analysis' in product development helps marketers understand:
- How customers value different product features by analyzing trade-off decisions (Correct answer)
- The relationship between price and demand for a product
- How products perform jointly when bundled together
- The correlation between product design and manufacturing costs
Correct answer: How customers value different product features by analyzing trade-off decisions
Conjoint analysis presents respondents with sets of product profiles featuring different attribute combinations and measures their preferences to determine the relative value of each feature.
Question 4: What is 'cannibalization' in product portfolio management?
- When a new product takes sales away from an existing product within the same company's portfolio (Correct answer)
- When a company acquires a competitor to eliminate market competition
- When a product's price is cut so deeply it erodes its own profit margins
- When counterfeit products steal market share from authentic branded goods
Correct answer: When a new product takes sales away from an existing product within the same company's portfolio
Product cannibalization occurs when a new offering by the same company attracts customers away from its existing products, reducing the net gain from the new launch.
Question 5: The 'jobs-to-be-done' (JTBD) framework approaches product development by focusing on:
- Understanding the underlying tasks or goals customers are trying to accomplish, rather than product features (Correct answer)
- Defining the job titles of the target customers who will use the product
- Mapping out the internal development tasks required to build a product
- Identifying job market trends to align products with employment growth sectors
Correct answer: Understanding the underlying tasks or goals customers are trying to accomplish, rather than product features
JTBD theory, popularized by Clayton Christensen, posits that customers 'hire' products to accomplish specific jobs or goals, so innovation should address those underlying needs.
Question 6: What is the purpose of a 'product concept test' in new product development?
- To evaluate how potential customers respond to a product idea before committing to full development (Correct answer)
- To test a fully built prototype in controlled laboratory conditions
- To assess whether manufacturing processes can produce the product at scale
- To compare the product concept against existing competitor products
Correct answer: To evaluate how potential customers respond to a product idea before committing to full development
Concept testing exposes target customers to a product description or prototype to gauge interest, understand purchase intent, and identify potential issues before costly development begins.
CMA CMA Product Development & Innovation 2
What is 'disruptive innovation' as defined by Clayton Christensen?