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Product Development and Management Flashcards

7 cards from real CMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Product Development and Management flashcards as text

  1. In the BCG Growth-Share Matrix, a product with high relative market share in a low-growth market is classified as a:

    Answer: Cash Cow

    Cash Cows hold high market share in slow-growth markets, generating more cash than they consume, which funds investment in other portfolio products.

  2. What is the primary purpose of concept testing in new product development?

    Answer: To evaluate consumer reactions to a product idea before physical development begins

    Concept testing gathers consumer feedback on product descriptions or visual representations before investing in costly physical prototypes or development.

  3. Which pricing strategy is commonly used when launching an innovative new product to quickly recover R&D costs by charging a high initial price?

    Answer: Price skimming

    Price skimming sets a high initial price to extract maximum value from early adopters willing to pay a premium, then gradually lowers the price to attract more price-sensitive segments.

  4. What does 'product mix width' (also called product breadth) refer to in portfolio management?

    Answer: The number of different product lines a company offers

    Product mix width refers to how many distinct product lines a company carries — the broader the mix, the more diverse its market coverage.

  5. During which new product development stage is the product first introduced to real customers in a limited geographic market to gauge genuine consumer response?

    Answer: Test marketing

    Test marketing launches the product in a limited, representative market to measure actual consumer behavior and refine the marketing plan before a full national rollout.

  6. In the BCG Matrix, a product with low relative market share in a high-growth market is classified as a:

    Answer: Question Mark

    Question Marks have low share in rapidly growing markets and require significant investment to determine whether they can capture enough share to become Stars.

  7. What does the 'diffusion of innovation' framework primarily illustrate?

    Answer: The rate at which different consumer segments adopt a new product over time

    The diffusion of innovation curve categorizes consumers — from innovators and early adopters to early majority, late majority, and laggards — based on when they adopt a new product.