Business Studies Multiple Choice Question – 12 August 2021

Alex Research Ltd specialise in carrying out product trials for very big companies such as car companies and big retailers. 

Businesses carry out product trials on new products in order to?

Select ONE answer:

1. guarantee sales levels
2. assess levels of demand
3. achieve economies of scale
4. collect secondary research

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct – market segmentation increases the range of products Lucy Shoes will need to ofNot correct – product trials are only assessing what consumers think about a product and the product could still fail even after product trials.
2. Correct – Definition: a launch of a product on a limited scale to measure initial reactions from potential customers. Big companies can use the feedback from customers to adapt or modify its products. If demand is low, products can be modified before a national launch, increasing the likelihood of a successful launch.
3. Not correct – product trials may not achieve economies of scale due to smaller production runs.
4. Not correct – products trials are a method of primary research as they are collecting first-hand information directly from the consumer.

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