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Assignment:
Quicken Business Software is considering introducing a new product, the mid-market SalesMgrPro. If the product is a big success, Quicken will make an extra $6 million in profit and a failure will result in a loss of $3 million. Not introducing this product will not change Quicken's profit from what it is today. The probability of each outcome is estimated at: big success 65%, failure 35%. Quicken's marketing manager is considering doing a concept test before making the decision. She knows that the test is not 100% accurate, in fact she knows from previous experience that for successful products the concept test approach is 80% positive and for failure products the test is 65% negative.
(a) If she does not do marketing research, should Quicken introduce SalesMgrPro, and why?
(b) Should Quicken introduce without research, not introduce without research, or conduct the concept test?
(c) What is the maximum amount the marketing manager should spend on the concept test?
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