MINISTRY OF EDUCATION AND TRAINING PRODUCT MANAGEMENT

NATIONAL ECONOMICS UNIVERSITY

Mode of study: Full time. Intake: 62
Exam place: online LMS
Exam date: Dec 13, 2021
School of Advanced Education Programs
Exam time: Session 1
Allowed time: 90 minutes

INSTRUCTIONS
1. Do read the questions or look at the exam paper until you are advised to.
2. Read these instructions carefully before starting.
3. There are two parts to the examination
4. ALL students must complete PART A – Case study (40%)
5. ALL students must complete PART B - 04 short answer questions (60%)

PART A – COMPULSORY CASE STUDY ANALYSIS (40% OF TOTAL MARKS)

ALL STUDENTS MUST COMPLETE PART A.
Toyota

The world’s largest automaker, Toyota has come a long way in its nearly 80-year history. The
company launched its first passenger car, the Model AA, in 1936, copying the body design of
Chrysler’s landmark Airflow and the engine of a 1933 Chevrolet. Toyota then suffered several
challenges, including a financial crisis in 1950. However, when consumers wanted smaller, more customer
fuel-efficient automobiles during the 1973 oil crisis, the company responded. The Toyota Corona voice
and Toyota Corolla offered basic features and acted as the company’s new entry-level cars. Toyota
also launched the Cressida, with the fuel efficiency consumers desired but space and amenities
like air conditioning and AM-FM radio.

During the 1980s and 1990s, Toyota gradually added more models ranging in price, size, and
features. In 1982, the company introduced the Camry—a four-door, mid-sized car that offered
product line more space than the Corona and became the best-selling passenger car in North America. The first
of the company’s popular SUVs, the 4Runner, appeared in 1984 looking and acting much like a
pickup truck. It later morphed into more of a passenger vehicle and led the way for the Rav4,
Highlander, and LandCruiser. Toyota also introduced a full-sized pickup truck—today’s Tundra—
and several sporty and affordable cars that targeted young adults. TA

In 1989, it launched Lexus, its luxury division, promising an unparalleled experience starting with
white-glove treatment at the dealership. Toyota understood, however, that each country defines
luxury differently. In the United States, it meant comfort, size, and dependability; in Europe,
attention to detail and brand heritage. As a result, the company varied its advertising depending on
the country and culture.
 In 1997, Toyota launched the Prius, the first massproduced hybrid car, for $19,995—between the
Corolla and the Camry. The company’s keen focus on developing a clean-energy car was
timing brilliantly timed. Before the second-generation Prius hit showrooms in 2002, dealers had already
received 10,000 orders. Over the next decade, Ford, Nissan, GM, and Honda followed the Prius
with models of their own. market leader, follow by other, first company enter this segment

Toyota also started creating vehicles for specific target groups, like the Scion for young adults.
Having learned this market wanted more personalization, the company now builds the car “mono-
spec” at the factory, with just one well-equipped trim level, letting customers choose from dozens
of customization elements at dealerships. Toyota marketed the Scion at music events and has
showrooms where “young people feel comfortable hanging out and not a place where they just go
stare at a car,” said Scion Vice President Jim Letz.
customer Another big reason behind Toyota’s success is its mastery of lean manufacturing and continuous
voice +
improvement. Its plants can make as many as eight models at the same time, bringing huge
increases in productivity and market responsiveness. The company also relentlessly innovates; a
typical Toyota assembly line makes thousands of operational changes in a year. Employees see
their purpose as threefold: making cars, making cars better, and teaching everyone how to make
cars better. The company encourages problem solving, always looking to improve the process by
which it improves all other processes. problem solving

Toyota has integrated its assembly plants around the world into a single giant network that can
customize cars for local markets and shift production quickly to meet surges in demand from
markets worldwide. The company is thus able to fill market niches inexpensively as they emerge, fill market
without building whole new assembly operations. “If there’s a market or market segment where niches
they aren’t present, they go there,” said Tatsuo Yoshida, auto analyst at Deutsche Securities Ltd.

Over the years, Toyota automobiles have consistently ranked high in quality and reliability. In
2009 and 2010, however, the company recalled more than 8 million cars for potential perceived
problems ranging from sticking accelerator pedals to sudden acceleration to software glitches in
the braking system. The Lexus, Prius, Camry, Corolla, and Tundra brands were all affected. Next,
Toyota lost billions of dollars when an earthquake and tsunami in Japan destroyed the company’s
plants and parts suppliers in 2011. TMC President Akio Toyoda said, “We have faced many
challenges since 2009, but have learned valuable lessons including the need for Toyota to maintain
sustainable growth.”

Despite these challenges, Toyota recouped its losses. Its strong focus on hybrid vehicles has proved
profitable and helped the company rebound. It sold its 4 millionth unit in 2012 and plans to
continue to innovate hybrids, believing “there are many more gains we can achieve with hybrids.”
Today, Toyota offers a full line of cars for the global market, from family sedans and sport utility
vehicles to trucks and minivans. In 2013, the company earned more than 22 trillion yen (or $217
billion) and sold 8.87 million automobiles, edging past General Motors to become the world’s
largest carmaker.
Questions

1. Using appropriate product marketing terminology, explain how Toyota’s product

development strategies have enabled company to achieve growth and shift their market
position of the years. (CLO 1.1.1; CLO 1.3.4)
2. Looking to the future, what strategic challenges and opportunities should Toyota’s product
development strategies be addressing? As a product manager, what approaches could you
recommend to senior managers at Toyota? (CLO 1.2.3; CLO 1.3.4)

Answer the questions using appropriate product marketing theory and terminology.

PART 2 – SHORT ANSWER QUESTIONS (60%)

Each question below is worth 15% of the total examination mark. Students must answer all
four questions.

Question 1 (15%)
a) Using a diagram, identify and explain the stages of the new product development process
and the possible actions upon completion of each stage. (CLO 1.1.1; CLO 1.2.3)
b) Identify and explain five kinds of risk that a new product development or ‘go-to-market’
process can help the product manager to mitigate. (CLO 1.1.1; CLO 1.1.2)

Question 2 (15%)

Organisations must be effective at generating ideas for new products to maintain and grow their
positions in the marketplace.

a) List and explain five drivers for generating new product ideas. (CLO 1.1.1; CLO 1.1.2)
b) Identify and explain the use of five types of new product category in terms of their
‘newness’ to the company and market. (CLO 1.1.1; CLO 1.1.2)
c) Describe five common barriers that organisations can encounter in generating new ideas.
(CLO 1.1.1; CLO 1.1.2)

Question 3 (15%)

When developing new services, marketing managers must consider the characteristics that
differentiate them from tangible products.

a) Describe the flower of service and why this framework is a useful tool for Product
Managers. (CLO 1.1.1; CLO 1.1.2)
b) List the eight ‘petals’ of the flower of service providing at least three examples of product
attributes for each. (CLO 1.1.1; CLO 1.1.2; CLO 1.3.4)
Question 4 (15%)
Identify four methods of market testing which can be utilized by Product Managers though the
new product development process. For each of the four types of market test:
a) Explain why each method might be used by Product Managers Provide. (CLO 1.2.3; CLO
1.3.4)
b) Explain what is involved in conducting the market test. (CLO 1.2.3)
c) List the key limitations of each approach and how Product Managers can overcome these.
(CLO 1.2.3; CLO 1.3.4)