Module 5 - Industry Analysis and Competitive Advantage

Question 1

The more ____ the definition of a product class, the ____ the aggregation level of products and the ____ stable the product life-cycle curve.
A. generic; higher; more.
B. generic; lower; more.
C. specific; higher; more.
D. specific; lower; more.
E. generic; lower; less.

Answer 1

The correct answer is A. See section Challenges in Market.

Question 2

The main application of the plc in marketing is:
A. finding new market opportunities.
B. anticipating adjustments in current marketing programmes.
C. identifying areas needing additional resources.
D. identifying competitor actions.
E. It has no proactive value in marketing today.

Answer 2

The correct answer is B. See section Sustaining Competitive Advantage over the Product Life Cycle.

Question 3

The y-axis of the Product Life Cycle represents?
A. Adopter categories.
B. Life Cycle Stages.
C. Discrete Units of time.
D. Product category sales volume.
E. Cumulative Time.

Answer 3

The correct answer is D. See section Sustaining Competitive Advantage over the Product Life Cycle.

Question 4

All of the following are types of product life cycle curves except:
A. cycle–recycle.
B. classical.
C. innovative–maturity.
D. introduction.
E. growth–decline plateau.

Answer 4

The correct answer is D. See section Life Cycle Curves.

Question 5

Two of the most important reasons that products enter the decline stage of the product life cycle are:
A. the introduction of technologically superior substitutes and a shift in consumer tastes.
B. the undercapitalisation of the industry and fragmentation of industry strategic groups.
C. industry concentration and the consolidation of strategic groups.
D. industry fragmentation and the failure to develop industry production standards.
E. a decline of the general economy and the decline of particular subcultures within the society.

Answer 5

The correct answer is A. See section Marketing Mix Decisions in the Decline Stage.

Question 6

Fads typically follow which type of product life-cycle curve?
A. Growth maturity.
B. Cycle-recycle.
C. Cycle-half-cycle.
D. An inverted V-shape.
E. Stable maturity.

Answer 6

The correct answer is D. See section Sustaining Competitive Advantage over the Product Life Cycle.

Question 7

Forces which determine an industry’s attractiveness include:
A. threat of new entrants.
B. threat of substitutes.
C. bargaining power of suppliers.
D. A and B only.
E. A, B and C.

Answer 7

The correct answer is E. See section Porter’s Five Competitive Forces.

Question 8

A skimming pricing strategy is:
A. a two-tiered approach to product pricing.
B. designed to minimise the margin per unit and maximise total sales.
C. designed to move along the surface of the market from segment to segment, attempting to reach as many different segments as possible.
D. an illegal form of pricing.
E. designed to obtain as much margin per unit as possible.

Answer 8

The correct answer is E. See section Marketing Mix Decisions in the Introductory Stage.

Question 9

A pricing strategy thought to be particularly appropriate in niche markets and where consumers are relatively insensitive to price is termed:
A. penetration pricing.
B. demand function pricing.
C. skimming.
D. inelastic pricing.
E. pricing at the margin.

Answer 9

The correct answer is C. See section Marketing Mix Decisions in the Introductory Stage.

Question 10

A penetration pricing strategy is:
A. a two-tiered approach to product pricing.
B. an illegal form of pricing.
C. designed to exploit the protection that patents offer.
D. designed to maximise the per unit margin.
E. designed to enable the firm to quickly capture the market.

Answer 10

The correct answer is E. See section Marketing Mix Decisions in the Introductory Stage.

Question 11

A pricing strategy that makes sense when there is a steep experience curve, a large market and abundant competition is:
A. pricing at the margin.
B. penetration pricing.
C. elastic pricing.
D. skimming.
E. demand function pricing.

Answer 11

The correct answer is B. See section Marketing Mix Decisions in the Introductory Stage.

Question 12

During the growth stage of the product life cycle, promotion activities such as advertising and personal selling become more concerned with building ____ demand for the company’s brand than ____ demand for the product type.
A. selective; primary.
B. primary; selective.
C. selective; selective.
D. primary; primary.
E. secondary; secondary.

Answer 12

The correct answer is A. See section Marketing Mix Decisions in the Growth Stage.

Question 13

Elimination of weaker items from the product line is particularly advisable during the ____ stage of the product life cycle.
A. decline.
B. introduction.
C. maturity.
D. shake-out.
E. growth.

Answer 13

The correct answer is D. See section Marketing Mix Decisions in the Shakeout Stage.

Question 14

An important factor to consider during the growth stage of the product’s life cycle is:
A. rapid evolution of the replacement or after market.
B. rationalisation of the production line of the predominant firms in the industry.
C. the relatively high degree of technical change in product design.
D. the acceptance of a relatively low rate of profitability.
E. the addition of new segments through lower pricing and product differentiation.

Answer 14

The correct answer is E. See section Marketing Mix Decisions in the Growth Stage.

Question 15

A surge in demand during the maturity of a product can occur because of:
A. an increase in the price of a close substitute.
B. a disproportionate increase in the size of a prime market segment.
C. reduced prices resulting from lower material costs.
D. a basic shift in derived demand.
E. all of the above.

Answer 15

The correct answer is E. See section Marketing Mix Decisions in the Mature Stage.

Question 16

When a product reaches technical maturity, substantial gains in sales can be achieved by adding value to the product through:
A. improving the ease of use with a new container.
B. selling systems rather than single products.
C. incorporating labour-saving features.
D. developing services as part of the total product package.
E. all of the above.

Answer 16

The correct answer is E. See section Marketing Mix Decisions in the Mature Stage.

Question 17

The major strength of the product life-cycle concept is that:
A. it moves in a predictable, bell-shaped curve.
B. it enables management to forecast demand.
C. it provides a framework for developing strategy alternatives, directing management attention to market dynamics.
D. different types of curves have been validated for particular types of products, enabling accurate prediction.
E. the curve for one product can be used as the model for others.

Answer 17

The correct answer is C. See section Strategic Implications of the Product Life Cycle.

Question 18

The five consecutive stages of the adoption process are:
A. trial, adoption, awareness, interest, evaluation.
B. interest, awareness, evaluation, trial, adoption.
C. awareness, evaluation, interest, trial, adoption.
D. adoption, awareness, interest, evaluation, trial.
E. awareness, interest, evaluation, trial, adoption.

Answer 18

The correct answer is E. See section The Adoption Process.

Question 19

The major weakness of the product life cycle is that it:
A. is culture bound.
B. takes a normative approach to a non-normative world.
C. does not recognise the forces which actually drive market change.
D. needs more stages to be useful.
E. does not properly define the product depicted.

Answer 19

The correct answer is C. See section Strategic Implications of the Product Life Cycle.

Question 20

What are the major forces driving the competitive environment?

Answer 20

• Driving forces are macro-environmental trends that effect not only market but industry as well
• They include:
  
  • changes in long term industry’s growth rate which directly effect investment decisions
  • changes in key buyer segments, which affect demand and strategic marketing programs
  • diffusion of proprietary knowledge which controls both the rate at which products become more alike and the entry of new firms
  • changes in cost and efficiency which could potentially make entry into the industry more difficult
  • change in govt regulations
• Gathering information on trends in these areas tell a marketer whether the industry is attractive

Question 21

What are the various levels at which products can be defined?

Answer 21

• The problem with the generic category level is that it typically includes an array of non competing products e.g. motor vehicle market, is a truck competing with BMW?
• Product class has similar issue to generic category – products may server diverse markets or segments e.g. cars vs. convertibles
• Product types are subsets of product class and contain items that are technically similar, e.g. cereals is a product class, with hot or cold as product types, and subtypes of hot include porridge

Question 22

Describe what is meant by the product life-cycle concept.

Answer 22

• The product life cycle is concerned within the sales history of a product or product class
• The concept is that a product’s sales change over time in a predictable way

Question 23

What are the characteristics and their implications of each of the product life-cycle stages?

Answer 23

Marketing mix decisions in the introductory stages

• The length of the product line in the introductory stage typically should be relatively short to reduce production costs and hold down inventories
• efforts to establish competitive advantage are typically focused on differentiating
• pricing is affected by
  
  • products value to user
  • how quickly it can be copied
  • close substitutes
  • how volume effects cost
• Strategy choices are skimming (obtain as much margin per unit as possible) and penetration (low pricing resulting in large initial market share)
• Distribution decisions depend on whether its B2B or B2C
• Promotion costs are usually high in introductory stages

The Marketing Mix in the Growth stage

• product line expands to attract new market segments
• prices tend to decline, price difference between brands increases
• producers set up channels or direct sales systems
• promotion costs are concerned more with branding than demand for the product class or type (primary demand)

Marketing mix decisions in the shakeout stage

• Drop in overall growth and substantial price cuts
• rationalize the product line by eliminating weaker items

Marketing mix decisions in the mature stage

• as the product life cycle evolves, the various brands become more similar
• R&D can help differentiate the product during this stage
• extra functionality (e.g. ease of use) may be added to differentiate further
• service becomes more important
• promotion spending remains stable – in-store promotions increase

Marketing mix in decline stage

• this stage occurs because of technical innovation, shift in consumer tastes
• promotion decreases
• prices remain stable if rate of decline is slow
• prices can drop if rate of decline is fast
• marketing activity concentrates on distribution – persuading intermediates to stock goods
• harvesting occurs when a product is milked – no unnecessary spending or perhaps selling business unit

Strategic implications of the product life cycle

• generalizing typical responses to stages is risky
• the product life cycle model makes assumptions about features and characteristics of each stage – it doesn’t take into account that the product life cycle is actually driven by market forces: the market, technical and competition

Question 24

What are the strategic implications of the product life cycle?

Answer 24

Strategic implications of the product life cycle

• generalizing typical responses to stages is risky
• the product life cycle model makes assumptions about features and characteristics of each stage – it doesn’t take into account that the product life cycle is actually driven by market forces: the market, technical and competition

Question 25

What are the major limitations of the product life-cycle concept?

Answer 25

The product life cycle model makes assumptions about features and characteristics of each stage – it doesn’t take into account that the product life cycle is actually driven by market forces: the market, technical and competition

Question 26

Describe the adoption process.

Answer 26

This involves the attitudinal changes experienced by individuals from the time they first hear about new product and the time they adopt:

• awareness
• interest
• evaluation
• trial
• adoption

Question 27

What is the adoption rate a function of?

Answer 27

• the % of people adopting a new product is an S curve, with the length of time required differing between products
• the time dimension is function of the rate a person moves through the five stages of the adoption curve
• the speed of rate of adoption depends on
  
  • the risk - e.g. breakfast cereals have a fast rate of adoption compared to GlobeOffshore
  • the relative advantage over other products
  • the relative simplicity of the new product
  • its compatibility with previously adopted ideas
  • the extent to which its trial can be accomplished on a small scale basis
  • the ease with which the central idea of the new product can be communicated

Question 28

What are the various adopter categories?

Answer 28

• Innovators - 2.5% of people who eventually adopt the product, tend to be high income
• early adopters – 14%, part of local scene, opinion leaders
• early majority – 34%, risk averse
• late majority – 34%, forced to adopt because of economic or social reasons
• laggards – 16%

commercial sources of information (e.g. salespeople) are important at the awareness stage but more professional sources are required later on

Question 29

What are the major forces which determine industry competition?

Answer 29

• present competitors
• potential competitors
• bargaining power of suppliers
• bargaining power of buyers
• threat of substitute products

Question 30

Which of the following driving forces affect demand and strategic marketing programmes?
A. Changes in the industry’s long-term growth rate.
B. Changes in key buyer segments served by the industry.
C. Diffusion of proprietary knowledge.
D. Changes in cost and efficiency.
E. Changes in government regulations.

Answer 30

B

Question 31

Which of the following is an example of a product definition at the product-class level?
A. Food.
B. Restaurant-prepared fast food.
C. Hamburgers from fast-food restaurants.
D. Wendy’s fast-food restaurants.
E. The Wendy’s single.

Answer 31

B

Question 32

Which of the following is an example of a product definition at the product-type level?
A. Food.
B. Restaurant-prepared fast food.
C. Hamburgers from fast-food restaurants.
D. Wendy’s fast-food restaurants.
E. The Wendy’s single.

Answer 32

C

Question 33

All of the following are driving forces with the potential to shape the attractiveness of industries EXCEPT:
A. changes in the industry’s long-term growth rate.
B. changes in key buyer segments served by the industry.
C. diffusion of proprietary knowledge.
D. marketing mix elements.
E. changes in government regulations.

Answer 33

D

Question 34

Which of the following conditions is the biggest threat in the cellular phone industry in terms of new entrants?
A. Strong economies of scale and learning effects are present.
B. The industry has strong capital requirements at the outset.
C. Strong product differentiation exists.
D. Gaining distribution is difficult.
E. Buyer incurs switching costs in moving from one supplier to another.

Answer 34

B

Question 35

The x-axis of the Product Life Cycle represents:
A. adopter categories.
B. life-cycle stages.
C. discrete units of time.
D. cumulative profits.
E. cumulative time.

Answer 35

C

Question 36

All of the following are stages of the normal product life-cycle curve EXCEPT:
A. growth.
B. maturity.
C. introduction.
D. decline.
E. monopoly.

Answer 36

E

Question 37

What is the most common product life-cycle curve?
A. Growth-decline-plateau.
B. Cycle–recycle.
C. Innovative–maturity.
D. Classical.
E. Fad.

Answer 37

A

Question 38

When nylon was first used in parachutes, then in nylons and then in car tyres, what characteristic of this surge in demand for this product did this pattern represent?
A. Plateau.
B. Maturity.
C. Recycling.
D. Classical development.
E. Cycle-half-cycle development.

Answer 38

C

Question 39

At which stage of the normal product life cycle is purchase of the product limited because consumers in the target market are unaware of the product’s existence or because of its lack of availability?
A. Growth.
B. Maturity.
C. Decline.
D. Introduction.
E. Shakeout.

Answer 39

D

Question 40

In which stage of the product life cycle do prices tend to decline and price differences between leading brands decrease?
A. Introduction.
B. Growth.
C. Maturity.
D. Shakeout.
E. Decline.

Answer 40

B

Question 41

A drop in the overall growth rate first occurs during the ____ period of the product life cycle.
A. decline.
B. shakeout.
C. introduction.
D. growth.
E. maturity.

Answer 41

B

Question 42

The shakeout phase of the product life cycle is often marked by:
A. substantial price increases designed to skim margin from the market.
B. high levels of technical change in product design intended to appeal to volatile customer taste at this stage.
C. an increasing number of competitors throughout the period.
D. selective distribution in marketing channels.
E. substantial price cuts designed to move excess inventories at manufacturer and dealer levels.

Answer 42

E

Question 43

During the maturity stage of the product life cycle, media advertising for consumer goods typically ____ and in-store promotions, such as price deals, typically ____.
A. increases; increase.
B. increases; decline.
C. declines; increase.
D. declines; decline.
E. increase; stay the same.

Answer 43

C

Question 44

Prices tend to be set aggressively, even below cost, when the decline stage of the product life cycle:
A. is slow, there are no unique segments and exit barriers are high.
B. is fast, there are multiple unique segments and exit barriers are low.
C. is fast, there are no unique segments and exit barriers are high.
D. is slow, there are no unique segments and exit barriers are low.
E. is slow, there are multiple unique segments and exit barriers are high.

Answer 44

C

Question 45

Harvesting can be accomplished through:
A. concentration on features, intensive distribution and desegmentation.
B. branding, concentration on features and extensive distribution.
C. milking, internal asset transfer or sale of the business.
D. leveraged buyout, recapitalisation and merger.
E. resegmentation, milking and concentration on features.

Answer 45

C

Question 46

In the decline phase of the product life cycle, ____ has as its objective to increase cash flow by ____ the assets of the business.
A. harvesting; milking.
B. phase-out; increasing.
C. harvesting; increasing.
D. phase-out; stabilising.
E. runout; increasing.

Answer 46

A

Question 47

Milking implies:
A. selectively squeezing products from some product markets while feeding others.
B. taking out of the business all but the most essential investments over time.
C. sale of the business.
D. moving the assets of the business to another area of the corporation.
E. rapid disintegration of the strategic business unit.

Answer 47

B

Question 48

The objective of harvesting is to:
A. increase short-term cash flow.
B. generate a tax write-off.
C. increase the reputation of the brand among consumers.
D. diminish the reputation of the brand among consumers.
E. increase long-term cash flow.

Answer 48

A

Question 49

During the awareness stage of the adoption process:
A. consumers use the product on a continued basis.
B. consumers actually use the product – preferably on a limited basis – to minimise risk.
C. consumers mentally rehearse the use of the product and the results obtained.
D. consumers are motivated to find out more about the product but remain uncommitted in assessing its value.
E. consumers are exposed to the new product but lack full information about it.

Answer 49

E

Question 50

The stage of the product adoption process during which consumers mentally research the uses of the product and the results obtained is termed the:
A. adoption stage.
B. awareness stage.
C. trial stage.
D. evaluation stage.
E. interest stage.

Answer 50

D

Question 51

During which stage of the adoption process does the consumer actually use the product for the first time?
A. Awareness.
B. Adoption.
C. Interest.
D. Trial.
E. Evaluation.

Answer 51

D

Question 52

During which stage of the adoption process does the consumer continue to purchase the product instead of purchasing substitutes for the product?
A. Adoption.
B. Interest.
C. Evaluation.
D. Trial.
E. Awareness.

Answer 52

A

Question 53

Early adopters tend to be ____ active in community activities and are ____ likely to act as opinion leaders than are later adopters.
A. less; more.
B. more; more.
C. more; less.
D. less; less.
E. more; equally.

Answer 53

B

Question 54

In terms of the rate of diffusion of a product, the ____ complex and ____ expensive the product, the ____ the rate of diffusion.
A. more; more; slower.
B. more; more; faster.
C. less; more; slower.
D. less; less; slower.
E. more; less; slower.

Answer 54

A

Question 55

Which of the following five forces best describes the relationship of personal digital assistants to cellular phones?
A. Threats of new entrants.
B. Threat of substitute products.
C. Bargaining power of supplier.
D. Bargaining power of buyers.
E. Rivalry among existing industry firms.

Answer 55

B

Question 56

In the case of rivalry among firms, the similarity of passenger car tyres between different producers has resulted in:
A. high switching costs.
B. high investment intensity.
C. many small firms.
D. little product differentiation.
E. little need for working capital.

Answer 56

D

Question 57

What type of industry-shaping force would Internet-based virtual universities be to a campus-based university?
A. Competition among existing rivals.
B. Threat of a new entrant.
C. Threat of a substitute.
D. All of the above are plausible.
E. Only A and B above are plausible.

Answer 57

D

Question 58

When a major department store chain, such as Marks & Spencer, makes strong demands on its suppliers to reduce their costs so that Marks & Spencer can reduce its need for clearance sales, which force among competitors does this represent?
A. Threat of new entrants.
B. Bargaining strength of suppliers.
C. Threat of substitute products.
D. Bargaining strength of buyers.
E. Little rivalry.

Answer 58

D

Question 59

What are some examples of product types from the following product classes?

a. Ready-to-eat cereals.
b. Automobiles (not including pickup trucks).
c. Television sets.
d. Men’s dress shirts.

Answer 59

Product types for ready-to-eat cereals could be defined in terms of raisin bran, cornflakes, sugared cereal, etc. Automobiles could be defined in terms of types such as luxury cars, economy cars, vans, and off-road vehicles. Television sets might be defined by screen size and quality of picture. Men’s dress shirts could be defined by collar and cuff type, such as button-down and French cuffs, fabric type, such as cotton versus silk, sleeve length, and perhaps colour.

Question 60

What are the advantages in using the product life cycle? What are the concept’s limitations?

Answer 60

The product life-cycle model provides a conceptual framework which signals the occurrence of opportunities and threats in the marketplace and the investment requirements for success. It also indicates how the firm’s strategy and marketing programmes must change as the product moves through the various life-cycle stages. The major weakness of the concept lies in its normative approach to prescribing strategies based on assumptions about the characteristics of each stage. More specifically, it fails to take into account the major forces driving the life cycle – the evolution of consumer preferences, technology, and competition.

Question 61

A few years ago, pet rocks were a fad and basic Levi’s or Wranglers blue jeans were a fashion among younger customers. Graph the life-cycle curves of the two products on the same chart. How do the two curves differ from one another? What are the major marketing implications for each product?

Answer 61

The life cycles of the two products – pet rocks (P) and jeans (J) – might look like this:

The two curves differ in that the fad rises and falls sharply, is less spread out from side to side (i.e. comes and goes in less time) and ends as a product within a brief time period. The fashion rises and falls less sharply (i.e. comes and goes over longer periods of time) and maintains some existence throughout the time period. Among the marketing implications are those relating to profitability, product management and the portfolio mix. Because of its volatility, the fad will only be profitable if it is produced with little or no committed capital. The pet rock was profitable for this reason, but companies producing faddish clothing, toys or games can become vulnerable to commitment of capital to a product whose demand may drop precipitously. Such products must be managed for maximum initial return; thus, a skimming price might be advisable. People purchasing fads are generally price inelastic in the short run. If fads were predictable (i.e. replicable), and if they could be generated to utilise common skills, the marketing manager might assemble a portfolio of fads over time. The more likely portfolio is of fashions, balancing the cycles of one fashion item against another.

Question 62

Growth in the UK cellular phone market seems to be slowing. If you were the marketing manager for a large UK cellular phone company, what would you do to stimulate sales of your brand and position your company for increased competition?

Answer 62

I would attempt to do several things. First, I would try to find ways to differentiate my product in terms of such features as (for voice dialling) size, range, and sound fidelity. I would also increase my line of ‘alternative’ products and rate structures so as to cater to larger audiences. I would both advertise and promote aggressively (special sign-up deals). And I would do all I could to reduce costs without negatively impacting the quality of my service or product.

Question 63

Although Levi’s basic blue jeans experienced a period of increased popularity and sales growth a few years ago, the product’s life-cycle curve had undergone several ‘cycle- recycle’ phases throughout its history. Which factors might account for this life-cycle pattern?

Answer 63

As discussed in answer 5.42, jeans are a fashion. Essentially, they are a high- involvement, highly differentiated product class. As such, the product is prone to a sort of ‘social variety seeking’. They continue to grow in sales over time, and then because they have been socially visible for a prolonged period, decline in popularity (i.e. ‘go out of fashion’ ).

Question 64

Suppose you are the product manager for a new aseptic packaging material, which preserves milk and other dairy products without refrigeration. The product is in the introductory stage of its life cycle. What are the implications of this position in the decisions you must make about each of the 4 Ps when designing a strategic marketing programme for this product? When (and if) this product reaches the growth stage, what changes will you have to make in your marketing plan, including its objectives?

Answer 64

Aseptic packages are in the introductory stage of their life cycle, where there are few segments and a small number of competitors. The essential marketing objective is primary demand stimulation (building up a market for the product) rather than secondary demand stimulation (building up a market for the brand). The company should seek quality improvement, keep its product line narrow, price to penetrate the market, use its own salesforce and seek publicity in trade journals. As the market grows, the company should seek to build market share, continue to make quality improvements, widen its product line, reduce its price and build a strong sales service organisation.

Question 65

Suppose you are the product manager responsible for General Electric’s line of trash compactors. After more than 10 years, the product has yet to gain acceptance by many consumers. Use the diffusion of innovations theory discussed in the text to explain why trash compactors have achieved such poor market penetration. What does this imply concerning the shape of the rest of the trash compactor’s life-cycle curve? What action might you consider taking to increase the market penetration for this product?

Answer 65

Among the factors that affect the rate of adoption are risk, simplicity, availability for trial and ease with which the core concept can be communicated. The rubbish compactor replaces the garbage can, and yet is higher in (financial) risk, is somewhat more complex to operate and typically is not displayed in a situation where trial is convenient. The core concept (the convenience and time savings of reducing the frequency of rubbish-to-garbage-can trips) is somewhat difficult to communicate. Because it replaces one product with another, substantially different, product, it is likely to gain slow acceptance. The most important communications mode is likely to be word of mouth, as people see rubbish compactors in use in daily life in the homes of opinion leaders. Yet this effect is likely to be subdued by the fact that this is not a visible, prestigious item. Thus, the product life cycle is likely to be slow growth, stable maturity, slow decline.

Question 66

Taking into account the major forces driving industry competition, what do you think lies ahead for the worldwide automobile industry?

Answer 66

Several things lie ahead for the worldwide automobile industry, including fewer full- line producers, longer product lines, more and more production transferred to developing countries, more world models resulting in fewer basic platforms, and continued efforts to make cars safer, more economical to drive, and more in harmony with the environment. In addition, continued efforts to reduce costs, but still provide a production system which will lend itself to mass customisation.

Question 67

Your company produces a line of television sets – both colour and black-and-white. It is considering producing a line of digital colour television sets, which will sell at substantially higher prices than your present line of colour sets.

Based on what you know about the diffusion of innovation, what marketing decisions would you recommend your company make with respect to the product and product line, price, channels and promotion if it decides to produce a digital line?

Answer 67

I would make the following marketing decisions:

Product/product line – High quality and as error free as possible. Strong service warranty designed to keep sets working for demonstration purposes by owners. Attractive appearance. Short line.

Price – High skimming price sufficient to provide high margins to channel members.

Channels – Direct to major dealers including those large chains who agree to provide a certain level of display and personal demonstration, installation where necessary (e.g. where special ‘hook ups’ are desired, as with satellite dishes).

Advertising – National and local media – the latter linked with local dealer(s).

Promotions – Special promotions designed to generate store traffic for in-store demonstrations.