In her proposal to management, Stephanie suggests creating a variety o

QUESTION

In her proposal to management, Stephanie suggests creating a variety of new services that will help Spa World satisfy unrecognized needs. Spa World’s investors are skeptical.

Some point out that Spa World customers have never purchased these services in the past, nor have they asked for them. Which of the following is the best reply Stephanie could offer to this objection?
A) When a new product or service is introduced into the market, other companies often find ways to improve on that product or service.
B) With proper attention to cost control, Spa World’s expenditures on these services could be only a small portion of Spa World’s overall budget.
C) Effective market research can identify customers’ underlying needs and measure their interest in new products and services that meet those needs.
D) The costs of servicing some customers can be so high that a business can be more profitable by ending the relationship with those customers.
E) Organizations that offer new products and services often need to spend resources explaining features and benefits to customers who are unfamiliar with those products and services.

ANSWER

Answer: C
Explanation: C) What would be the best reply to the objection that customers have never bought or even asked for the new services? As Choice C points out, effective market research can help Spa World figure out what new products and services would interest its customers. So Choice C is an effective retort. Choice A weakens Stephanie’s case by suggesting that the first company to produce something will produce a worse version than later companies will produce. Choice B suggests that the new services won’t cost so much, but that’s not a reason to produce them. The investors don’t claim that the new services are too expensive. Rather, the investors aren’t convinced that customers want the new services in the first place. Choice D is true but irrelevant here. Cutting off unprofitable customers tells us nothing about Stephanie’s ideas or the objection. Choice E suggests that the new products will be more expensive, which doesn’t help Stephanie’s case.