A new product is expected to have an average repurchase rate of four months. A test market is scheduled for two months. A problem with this test market situation may be that
A) only initial purchase rates and not repurchase rates can be studied.
B) short-run channel member reactions cannot be studied.
C) product modifications cannot be tested.
D) nontesting competitors can catch up with the innovative firm.

Question

Quizplus · Accepted Answer

The test market duration of two months is shorter than the expected average repurchase rate of four months, meaning that only initial purchase rates can be observed and analyzed within this timeframe. Repurchase rates, which are crucial for understanding long-term product success, cannot be studied in a two-month test market.

A New Product Is Expected to Have an Average Repurchase