Correct Response: D. A company would most likely conduct extensive test-marketing of a new product when the cost of introducing the new product is very high. High introduction cost implies high- risk, and test-marketing can help reduce risk by obtaining critical feedback and learning how the product will be received and how product expectations will be met. There is no need to conduct extensive test-marketing for a new product where there is little or no competition (A). Adding a new product to an already existing product line (B) is relatively low-risk since the product line already exists. Selecting an undifferentiated test-marketing strategy is more related to identifying a large target market with little market segmentation and does not necessarily imply that the new product will need to undergo extensive test-marketing (C).
