Chapter 8

Question 1

New-product development

Answer 1

The development of original products, product improvements, product modifications and new brands through the company’s own RandD efforts

Question 2

Idea generation

Answer 2

The systematic search for new-product ideas

Question 3

Crowdsourcing

Answer 3

Inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new-product innovation process

Question 4

Idea screening

Answer 4

Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible

Question 5

Product concept

Answer 5

The idea that consumers favour products that offer the most quality, performance and features, and that the organisation should therefor devote its energy to making continuous product improvements; a detailed version of the new-product idea stated in meaningful consumer terms

Question 6

Product image

Answer 6

The way consumers perceive an actual or potential product

Question 7

Concept testing

Answer 7

Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

Question 8

Marketing strategy development

Answer 8

Designing an initial marketing strategy for a new product based on the product concept

Question 9

Business analysis

Answer 9

A review of the sales, costs and profit projections for a new product to find out whether these factors satisfy the company’s objectives

Question 10

Product development

Answer 10

A strategy for promoting company growth by offering modified or new products to current market segments; developing the product concept into a physical product to ensure that the product idea can be turned into a workable product

Question 11

Test marketing

Answer 11

The stage of new-product development in which the product and marketing program are introduced in more realistic market settings

Question 12

Commercialisation

Answer 12

Introducing a new product into the market

Question 13

Customer-centred new-product development

Answer 13

Focuses on finding new ways to solve customers’ problems and create more customer-satisfying experiences

Question 14

Sequential product development

Answer 14

A new-product development approach in which one company department works individually to complete its stage of the process before passing the new product along to the next department and stage

Question 15

Team-based new-product development

Answer 15

An approach in which company departments work together in cross-functional teams, overlapping the steps in the product development process to save time and increase effectiveness

Question 16

Product life cycle

Answer 16

The course of a product’s sales and profits during its lifetime. It involves five distinct stages: product development, introduction, growth, maturity and decline

Question 17

Style

Answer 17

A basic and distinctive mode of expression

Question 18

Fashion

Answer 18

A currently accepted or popular style in a given field

Question 19

Fad

Answer 19

A fashion that enters quickly, is adopted with great zeal, peaks early and declines quickly

Question 20

Introduction stage

Answer 20

The stage in the product life cycle when the new product is first distributed and made available for purchase

Question 21

Growth stage

Answer 21

The stage in the product life cycle when a product’s sales start climbing quickly

Question 22

Maturity stage

Answer 22

The stage in the product life cycle when sales growth slows or levels off

Question 23

Decline stage

Answer 23

The stage in the product life cycle when a product’s sales decline

Question 24

Drawing analogies

Answer 24

Making connections among facts, ideas or experiences that are normally considered separately

Question 25

Accounting equation

Answer 25

Assets = Liabilities + Owner’s equity

Question 26

Balance sheet

Answer 26

Accounting report that summarises a business’ financial position (assets, liabilities an owner’s equity) on a given date; also known as a statement of financial position

Question 27

Classified balance sheet

Answer 27

Balance sheet that shows subtotals for assets, liabilities and owner’s equity in related groupings

Question 28

Assets

Answer 28

A business’ economic resources that it expects will provide future benefits to the business

Question 29

Long-term investments

Answer 29

Items such as notes receivable, government bonds, bonds and capital stock of companies, and other securities which a business intends to hold for more than one year

Question 30

Current assets

Answer 30

Cash and other assets that a business expects to convert into cash, sell or use up within one year

Question 31

Financial assets

Answer 31

Items such as notes receivable, government bonds, bonds and share capital of companies, and other securities

Question 32

Property and equipment

Answer 32

All of the physical (tangible), long-term assets a business uses in its operations

Question 33

Book value

Answer 33

Asset’s original cost minus the related accumulated depreciation

Question 34

Accumulated depreciation

Answer 34

Total amount of depreciation expense recorded over the life of an asset to date

Question 35

Liabilities

Answer 35

A business’ economic obligations (debts) owed to its creditors

Question 36

Creditors equity

Answer 36

Claims by creditors against the assets of a business

Question 37

Current liabilities

Answer 37

Obligations that a business expects to pay within one year by using current assets

Question 38

Non-current liabilities

Answer 38

Obligations that a business does not expect to pay within one year

Question 39

Owner’s equity

Answer 39

Owner’s current investment in the assets of a business