If a company wishes to test market a product, it would do so to:

• A. immediately maximize profits in all markets
• B. avoid any production costs
• C. eliminate competition entirely
• D. gather information about consumer preferences and demand

Answer: (D)

Verified step by step guidance

1. Understand the purpose of test marketing: it is a strategy used by companies to introduce a new product in a limited market to collect data on consumer preferences and demand before a full-scale launch.
2. Recognize that test marketing is not primarily aimed at maximizing profits immediately, as the focus is on learning rather than immediate financial gain.
3. Acknowledge that test marketing does not avoid production costs; in fact, it involves some production and marketing expenses to gather meaningful data.
4. Note that eliminating competition entirely is not feasible through test marketing, as it is a limited trial rather than a competitive strategy.
5. Conclude that the main goal of test marketing is to gather information about consumer preferences and demand, which helps the company make informed decisions about product adjustments, pricing, and marketing strategies.