PCM Product Development & Launch 3 — Questions and Answers
Question 1: A firm conducting a product concept test presents descriptions or mock-ups to potential customers before building the actual product. The PRIMARY goal is to:
- Finalize the product's packaging design
- Measure purchase intent and refine the concept before investing in development (Correct answer)
- Train the sales force on product features
- Determine distribution channel partners
Correct answer: Measure purchase intent and refine the concept before investing in development
Concept testing evaluates consumer reactions to a product idea early in development to avoid costly failures before full production investment.
Question 2: A company launches a new product line that targets a segment its existing brands already serve, resulting in reduced sales of the current product. This is known as:
- Market cannibalization (Correct answer)
- Brand extension failure
- Product obsolescence
- Line stretching
Correct answer: Market cannibalization
Cannibalization occurs when a new product takes sales away from an existing product within the same company's portfolio.
Question 3: In the NPD process, what does 'business analysis' (Stage 3 in many models) primarily evaluate?
- Technical feasibility and engineering specifications
- The product's projected sales, costs, and profitability (Correct answer)
- Customer satisfaction with the prototype
- Competitive response to the product launch
Correct answer: The product's projected sales, costs, and profitability
Business analysis estimates the product's financial viability, including projected revenues, costs, break-even, and ROI before committing to full development.
Question 4: When launching a new B2B product, a company first sells to two pilot clients to work out operational issues before a full rollout. This approach is called:
- Beta testing
- Market rollout
- Limited market testing (Correct answer)
- Controlled experiment
Correct answer: Limited market testing
Limited market testing (or test marketing) with select clients allows B2B companies to identify and fix problems before committing to a full-scale launch.
Question 5: A brand launches a product extension using the same brand name but in a completely different product category (e.g., a fashion brand launching perfume). This strategy is called a:
- Line extension
- Brand extension (Correct answer)
- Multi-brand strategy
- New brand strategy
Correct answer: Brand extension
A brand extension uses an established brand name to enter a new, different product category, leveraging existing brand equity.
Question 6: Which metric BEST measures the success of a product launch in terms of consumer behavior adoption?
- Advertising recall rate
- Trial rate and repeat purchase rate (Correct answer)
- Share of voice in media
- Number of distribution outlets secured
Correct answer: Trial rate and repeat purchase rate
Trial rate shows how many consumers tried the product, while repeat purchase rate indicates whether they found sufficient value to buy again — together they signal true adoption.
Question 7: A new consumer electronics product is in the ideation phase. Which tool would be MOST useful for systematically generating a large number of new product ideas from a cross-functional team?
- Perceptual mapping
- Brainstorming or mind mapping session (Correct answer)
- Conjoint analysis
- Positioning statement development
Correct answer: Brainstorming or mind mapping session
Brainstorming and mind mapping are divergent thinking techniques designed to generate many ideas quickly in a group setting.
PCM Product Development & Launch 3
A firm conducting a product concept test presents descriptions or mock-ups to potential customers before building the actual product.
The PRIMARY goal is to: