Question 158 / 200:  Your home-made organic gelato has received such rave reviews from family and friends that you have decided to turn it into a business. Due to the high cost of organic ingredients, your product is expensive to produce, resulting in a relatively small customer base willing to pay the high retail price in grocery stores. Fortunately, you have found a co-packer who will produce your product to your exacting standards; however, the distribution network for frozen desserts is geared toward high-volume producers. Also, since the frozen dessert market has many entries, investors are reluctant to become involved. Why is your situation doomed to failure?
A  There is no reason for the company to fail. If the product is good, consumers will buy it.
B  Without investors, a company cannot survive.
C  The organic market is too small for any company to make a profit.
D  Without access to an effective distribution network, coupled with the inability to take advantage
of economies of scale, the product and the market do not appear to be suitable.
E  Only a market with full coverage can be successful in this product category
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Advertising & Promotion BUS210

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Attribution:  Charles Jumper and Melinda Salzer. Advertising & Promotion (The Saylor Academy 2014), http://www.saylor.org/courses/bus306/
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