Market testing and commercialization, Other Management

Assignment Help:

Question:

A company faces a decision with respect to a product (code named M997) developed by one of its research laboratories. It has to decide whether to proceed to test market M997 or whether to drop it completely. It is estimated that test marketing will cost Rs100,000. Past experience indicates that only 30% of the products are successful in test market.

If M997 is successful at the test market stage then the company faces a further decision relating to the size of the plant to set up to produce M997. A small plant will cost Rs150,000 to build and produce 2,000 units a year whilst a large plant will cost Rs250,000 to build but produce 4,000 units a year.

The marketing department have estimated that there is a 40% chance that the competition will respond witha similar product and that the price per unit sold (in Rs) will be as follows: (assuming all production sold):

34_test market.png

Assuming that the life of the market for M997 is estimated to be 7 years and that the yearly plant running costs are Rs50,000 (both sizes of plant), should the company go ahead and test market M997?


Related Discussions:- Market testing and commercialization

reference section-staff activity area of library building, Reference Secti...

Reference Section-Staff Activity Area of library building in library management Reference activity is one of the most important activities of a library and very often it is th

Healthcare concept, #queYour role is to create a training presentation for ...

#queYour role is to create a training presentation for 2-3 of the tasks in the list below that could be used in Kyosha Valley''s Medical Facilities training. Think outside the box

Identification of potential risks, Question 1: Using as example an even...

Question 1: Using as example an event or conference and venue of your choice, explain how you would staff this event at this particular venue. Your answer should justify your c

What is competitive strategy, QUESTION 1 One of the key questions in de...

QUESTION 1 One of the key questions in determining the company situation analysis is to find out the firm's resource strengths and weaknesses and its external opportunities and

Response rate, Response Rate This is the percentage of responses genera...

Response Rate This is the percentage of responses generated through a direct marketing campaign.

Stages of organisational change, S t ages of organisational change Th...

S t ages of organisational change The Organisation change model chosen must be a data driven, enterprise wide, systemic approach to change. It should be planned in such a way

Organizational communication, Organizational Communication This is the ...

Organizational Communication This is the study of communication within companies, which fits well as a subset of corporate communication because it is enabled to the company to

Outline various steps of the policy analysis process, QUESTION 1 Policy...

QUESTION 1 Policy implementation is the most critical stage of the policy process. Critically analyse some of the main constraints that hinder the implementation of public poli

promotional management, What is promotional Mix? Mention and explain the e...

What is promotional Mix? Mention and explain the elements of promotional mix?

Explain the captive market, Question 1: Over the past years, the accom...

Question 1: Over the past years, the accommodation industry in general has had to move away from a captive market, diversify its range of products and services in order

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd