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:

Net Investment

The total amount spent by a company on capital assets, such as plants and machinery, minus depreciation.

Nonsystematic Standard Deviation

A measure of the dispersion of returns on an investment due to factors specific to an individual asset or company, not the market.

Equally-Weighted Portfolio

An investment portfolio in which each asset is invested in with an equal amount of capital, providing diversification and reducing risk.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.