The Purpose of Test Marketing Is To

question 56

Multiple Choice

The purpose of test marketing is to:

• A)eliminate ideas that are inconsistent with an organization's new-product strategy.
• B)shorten the development process of a product and reduce costs.
• C)assess how well various aspects of the marketing mix fit together.
• D)evaluate a new-product idea before any prototype is created.

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Definitions:

Maximize Profits

The process of adjusting inputs and outputs to achieve the highest possible return on investment.

Marginal Revenue Product

The additional revenue a firm generates from employing one more unit of input, such as labor or capital.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for work performed, typically expressed on an hourly, daily, or piecework basis.

Marginal Product

The incremental output produced by adding one more unit of a specific input while holding other inputs constant.