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

Selection and packaging - value-added information services, Selection and P...

Selection and Packaging: Added value is often claimed for information services on the grounds that they bring together, in a convenient form, items of information which would

Food and beverage management, Question 1: You have just been appointed ...

Question 1: You have just been appointed as Food & Beverage Manager of a medium-size hotel. (i) Explain in detail the various areas you would check on the first week of you

Library catalogue code - library management , Library catalogue code: ...

Library catalogue code: A library catalogue code, one or two of which (for, there are a score of the them), as you may have surely become familiar with to some extent, can be

Purchase request , Purchase Request  In the previous section, you learn...

Purchase Request  In the previous section, you learnt about purchase and buy decision where the production manager decides the right part so that it can be used effectively. No

History of mergers and acquisition, History of Mergers and Acquisition ...

History of Mergers and Acquisition In the previous section, we had an overview of merger and acquisition. In this section we will cover its history. The understanding of the hi

Measurement - methods of data collection, Measurement: The third metho...

Measurement: The third method of data collection is measurement where  standardized instruments are used  to measure variables. For example, scientific instruments such as  th

Explain the crm strategy at harrahs entertainment, Campaign management at H...

Campaign management at Harrah's Entertainment Harrah's Entertainment is the world's largest gaming organization. Through Harrah's Total Rewards programme customers earn credit

Quality management plan, Q uality management plan The quality manageme...

Q uality management plan The quality management plan is to give guidance on how the quality can be checked on the project through the design reviews, the documentation, and th

Discuss the major joints of thorax and pelvis, Question 1 Describe the ...

Question 1 Describe the external features of the heart. Add a note on circulation of blood within the heart 2 Discuss the major joints of thorax and pelvis 3 Explain the

Request for quote , Request for Quote  Request for Quote (RFQ), is a st...

Request for Quote  Request for Quote (RFQ), is a standard business process to invite suppliers into a bidding process to bid on specific products or services through Invitation

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