Procter & Gamble Introduced Its Duncan Hines Ready-To-Spread Frosting in a Small

question 89

Multiple Choice

Procter & Gamble introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Foods became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction. This act illustrates ________.

• A) why many companies engage in test marketing
• B) one of the problems associated with test marketing
• C) why prototypes are so important
• D) how idea screening can make a product a commercial success
• E) the variety of sources for idea generation

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Definitions:

Laspeyres Price Index

A measure of price changes that uses the quantities of goods and services purchased in a base period to calculate the index.

Paasche Price Index

A price index that measures the price changes between the current and a base period, weighted by the current period's spending patterns.

Goods Double

A situation where the quantity of goods available or produced doubles without a change in quality.

Laspeyres Price Index

A price index used to measure the change in the cost of purchasing a fixed basket of goods and services of the type consumed during a base period.