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

Materials handling devices, Materials Handling Devices  Materials  hand...

Materials Handling Devices  Materials  handing  devices are of three types: a. Lifting  and lowering devices ( vertical movement) b. Transporting devices( horizontal move

Challenges faced by the estate management team, Problem: a. Describe ho...

Problem: a. Describe how Integrated Resorts can be designed and managed to comply with the Government policy of "Maurice Ile Durable". b. What are the challenges faced by t

Organizational Behaviour IIBM Institute of Business Manageme, I agree with ...

I agree with post #2 in that, generous benefits and perks have a tendency to increase productivity and decrease absenteeism, not the opposite. So first you would need to look at th

Aacr 2- l c descriptive rules, AACR 2: Anglo-American cataloging rules...

AACR 2: Anglo-American cataloging rules/ Prepared by the American Library Association, the British Library, the Canadian Committee on Cataloguing, the Library Association, the

Cost - efficiency of document delivery service, Cost: DDS should be co...

Cost: DDS should be cost-effective. In devising a cost-effective service, all types of costs, viz, direct as well as indirect costs should be taken into consideration. Direct

Economic theories of wages, Question 1: What are the major issues relat...

Question 1: What are the major issues related to repatriation? Describe Repatriation Major isssues related to repariation   Question 2: Prepare a short

Developing procedures to facilitate recording, Developing Procedures to Fac...

Developing Procedures to Facilitate Recording: In  order  to have adequate account-of what was observed  during observation  some procedurrecordings should be  followed, eithe

Quality definition, Q uality definition The  initial  step  of  projec...

Q uality definition The  initial  step  of  project  quality management  is  to  define quality.  The project manager and the team must identify and define the quality standar

Need and purpose of library classification, NEED AND PURPOSE OF LIBRARY CLA...

NEED AND PURPOSE OF LIBRARY CLASSIFICATION: Library classification invariably requires written has of damps and their subdivisions arranged in a systematic way along with corr

Conflicting factors - problems in acquisition, Conflicting Factors: De...

Conflicting Factors: Demand, supply and finance are the three major factors governing collection development. Both demand and supply will be increasing while finance will be a

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