CLEP Marketing Practice Exam

Risk-taking in marketing generally refers to investing in new product development. This involves venturing into uncharted territory by creating and launching products that may not yet have a proven market or established consumer demand. Such investments require marketers to assess potential risks associated with product innovation, including financial implications, market acceptance, and competition.

Choosing to develop new products often means committing substantial resources without guaranteed success since new products can fail to resonate with consumers or may not meet expectations in terms of performance or quality. This is a fundamental aspect of marketing strategy, where the potential for high reward must be balanced against the inherent uncertainties and risks involved in creating something new.

In contrast, investing in advertising, assessing market demand, and minimizing costs are important marketing functions, but they generally involve less risk than launching new products. Advertising focuses on promoting existing products, assessing market demand is about understanding current consumer needs, and minimizing cost of goods sold pertains to efficiency in production—not necessarily the risk of bringing a new product to market.