When Natalie and Chris analyze the results from a recently completed test market to determine if any changes in the marketing mix of the product are needed, they are in the phase of the new-product development process.
a. idea generation
b. commercialization
c. concept testing
d. business analysis
e. screening
The correct answer and explanation is :
The correct answer is d. business analysis.
Explanation:
In the new-product development process, after a product idea has been generated, it undergoes various phases of development to assess its feasibility, potential profitability, and market acceptance. One of the key steps in this process is business analysis, where detailed research is conducted to determine whether the product makes sense financially and strategically within the company’s existing operations.
Business analysis includes an evaluation of various factors such as:
- Cost Analysis: Determining the cost of production and distribution.
- Profitability: Estimating sales, profits, and pricing strategies.
- Market Potential: Assessing whether the product can compete in the target market and achieve the desired market share.
- Break-even Analysis: Calculating how much sales volume is required to cover costs.
- Demand Forecasting: Projecting how much demand the product will generate, based on market testing or earlier concepts.
Natalie and Chris are analyzing the results from a recently completed test market. This is a critical step in the business analysis phase, where companies test their product in a real-world environment to gauge its success before a full launch. The test market provides valuable data on customer response, market trends, competitive reactions, and any potential changes needed in the product’s marketing mix (such as price, promotion, or distribution).
The results from the test market help the company fine-tune its product and marketing strategies, ensuring that the product will be profitable once it’s fully commercialized. This phase helps minimize risk and makes it easier to predict the product’s success in the broader market.
Other phases of new-product development:
- Idea generation: The process of coming up with new product ideas.
- Commercialization: The final stage where the product is introduced to the market on a large scale.
- Concept testing: The phase where initial product ideas are tested with potential consumers to gauge their interest.
- Screening: The process of narrowing down ideas based on feasibility and alignment with the company’s objectives.
