When Wendy's tracks the profits of its "single hamburger" versus a test market result of a new product (a hot dog)to determine the impact on profits of adding the hot dog to the menu,Wendy's is testing for a(n):
A)quasi-effect.
B)contamination effect.
C)multiple time-series effect.
D)cannibalization rate.
E)one-shot effect.

Question

Quizplus · Accepted Answer

The concept being tested here is cannibalization rate, which refers to the extent to which sales of a new product will come at the expense of existing products. In this case, Wendy's wants to know if adding a hot dog to the menu will cannibalize sales of the existing single hamburger, and will thus be able to calculate the impact on profits.

When Wendy's Tracks the Profits of Its "Single Hamburger" Versus