Which of the following stages in the new product development process involves the firm estimating how many units must be sold in order to cover the cost of production?
A. Idea generation
B. Screening and evaluation
C. Business analysis
D. Test marketing
E. Development and testing
Answer: (C) The firm would make a business project for a break-even point in units during the business analysis phase. Idea generation (A) is incorrect. This is the process of developing a useful pool of ideas to turn into products. Screening and evaluation (B) is also incorrect. This involves internal and external evaluations of the new product ideas allowing the elimination of those ideas that don't appear to be profitable or feasible. Test marketing (D) involves exposing the new product to realistic purchase conditions in order to test the marketing mix variables, as well as repurchase rates. Development and testing (E) involves turning an idea into a prototype and testing this prototype for numerous things such as safety and packaging.