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

Jit component in an organization''s tqm program, QUESTION a) ISO 9001:2...

QUESTION a) ISO 9001:2008 series embraces eight quality management principles. By using relevant examples in the business context, discuss the potential benefits an organizatio

Car management system, Car Management System: You have been approached...

Car Management System: You have been approached by a Used Car Dealership who wishes to introduce an IT system to support their business. You are required to implement a protot

Definition of library classification, Definition of Library Classification:...

Definition of Library Classification: Having understood the meaning of classification in library science, let us now go through a few well-known definitions of library classif

Value chain, For our project we have to describe a value chain for an airpo...

For our project we have to describe a value chain for an airport. Could you help me with what I need to describe at all the primary procesess.

Binding organisation and management, BINDING ORGANISATION AND MANAGEMENT: ...

BINDING ORGANISATION AND MANAGEMENT: If we consider the practice in various libraries,  we can conclude that there is haphazard organisation of binding in most of the librarie

International marketing, define international marketing and furnish its fea...

define international marketing and furnish its features

Self-monitoring, Self-Monitoring This is a personality trait reflecting...

Self-Monitoring This is a personality trait reflecting an individual's ability to adjust behavior to match conditional factors. Individuals high in self- monitoring are very ad

Terminologies in library science, Relation to other Terminologies in Librar...

Relation to other Terminologies in Library Science: Classification is a vital discipline in the field of library and information science and pervadesall the other sub-fields o

Title catalogue , Title Catalogue: In a title catalogue, the titles of...

Title Catalogue: In a title catalogue, the titles of documents occupy at the leading section of entries, which are arranged in an alphabetical order. Queries of readers who re

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