Alex Market Research carries out product trials on behalf of some of the biggest retail brands in the UK seeing what new products works well with retail customers in Staffordshire.
Businesses carry out product trials for new products to…?
Select ONE answer:
- guarantee sales
- reduce their margin of safety
- assess the likely levels of demand
- gather secondary research
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 3
- Not correct – because product trials do not guarantee sales as they do not take other factors into consideration e.g. competition
- Not correct – because product trials should increase the margin of safety not reduce it because consumers are more likely to purchase a product if they have already tried it as a free sample
- Correct – Product trials is launching a product on a limited scale to measure initial reactions. Feedback from customers can be used to adapt or modify the product. This will increase the likelihood of successful sales when the product is launched on a national basis.
- Not correct – because products trials are a method of primary research because they collect first hand information
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