If a Product Is Tried by 20 Percent of the Target

question 40

Multiple Choice

If a product is tried by 20 percent of the target market during test marketing,and the repeat purchase rate in this test market is 20 percent,the estimated market share for this product would be approximately:

• A)0.4 percent
• B)4 percent
• C)40 percent
• D)400 percent

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Definitions:

Variable Cost

The costs that vary directly with the level of production or with the volume of services provided.

Fixed Cost

Expenses that remain constant for a company regardless of its level of production or sales volume, such as leases and managerial salaries.

Salvage Company

A firm that specializes in recovering and processing materials from failed projects or discarded products.

Net Working Capital

The disparity between a company's immediate assets and immediate liabilities, showcasing its short-term economic well-being.