Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 1MC
To determine
Optimal segmentation strategy.
Expert Solution & Answer
Explanation of Solution
When the advanced version is available with the same price as the old version, selling only the old version is not the optimal segmentation strategy. Thus, option ‘b’ is correct.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
In advertising, a business is not only making consumers aware of the existence of the product and its positive features but is purposely trying to persuade consumers to purchase the product. As a piece of economics which of the following best characterises what advertisers are trying to do?
(a) Shift the demand curve to the right and make it more income elastic;
(b) Shift the demand curve to the right and make it less income elastic;
(c) Shift the demand curve to the right and make it less price elastic;
(d) Shift the demand curve to the right and make it more price elastic.
In which of the following situations would a company have a lower chance of losing customers when it raises the price of its product?
a) There are low switching costs.
b) Companies advertise their prices.
c) Customers have many sellers to choose from.
d) The product is differentiated across companies.
How does the “LIVE TESTS” campaign demonstrate the characteristic ofintegrated marketing communication? What grade would you give “LIVE TESTS” on integrated effectiveness? (was it effective? Explain).
Chapter 14 Solutions
Managerial Economics: A Problem Solving Approach
Knowledge Booster
Similar questions
- The fill-in-the-blank options are "not to advertise" or "to advertise" Thank you!arrow_forwardA fish farmer in central Malaysia is looking at marketing channels for his fishes. There are three general marketing channels available to the fish farmer: Sell to wholesaler a) b) c) Sell to retailer Sell directly to consumers i. Discuss the advantages and disadvantages of each marketing channel for the fish farmer. ii. State and justify which marketing channel would be most profitable for the fish farmer.arrow_forwardMarket Entry Strategy Thinking Through Marketing Strategy Pretend that you are the Chief Marketing Officer at Alibaba. Thus far, Ali Baba has grown there business throughout most of the world, but they have not yet penetrated the US market. Assignment: Outline a detailed marketing strategy for Alibaba that will help them penetrate the US market. Be sure to cover the following: I. Target market and why. I. A single product category you think is most appropriate, and why. II. Pricing strategy (skimming, status quo or penetration) and why. IV. Promotion strategy: How you will convince an American consumer to buy from Alibaba V. Distribution (you do not need to cover)arrow_forward
- How will you recall price? List five other words that mean the same thing as price. Compare and contrast fixed and variable costs and give an example of each. Explain market-skimming and market-penetration pricing strategies. Why marketers of innovative high-tech products choose market-skimming pricing rather than market-penetration pricing when launching a new product? Justify your answer.arrow_forwardRefer to the Front Page to answer two questions. FRONT PAGE Pricing Disney+ Disney decided it wanted to provide streaming services directly to customers, rather than renting its library of films and television shows to other streaming services like Netflix. But how successful would a streaming service be? In other words, what did the demand for a "Disney+" streaming service look like? Disney knew that the number of subscribers would depend not just on the attractiveness of the Disney archives, but also on the subscription price. After doing some market research, Disney decided to launch Disney+ at a price of $6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019, 10 million people signed up on the first day-a resounding success!arrow_forwardWhich of the following gives the customers better products that are not offered by other competitors? Select one: a. Competitive advantage b. Branding c. Advertisements d. Marketing Strategyarrow_forward
- Which of the scenarios below is not an example of no price competition? The flower shop on the corner has the prettiest roses in town. The flower shop is selling roses at a discounted price this week. The flower shop next door has the best customer service in town. The flower shop near the restaurant has the best location in town.arrow_forwardAs a basic rule of thumb, business owners should differentiate their products as much as possible when: a) price competition is intense. b) price competition is subdued. c) costs are low. d) costs are high.arrow_forwardEveryday-low pricing is a pricing strategy that is consistent with a goal of achieving long-term profitability through volume. ( ) a) True () b) Falsearrow_forward
- Discuss to what extent you agree with the following statements. Advertising helps raise revenue for the firms and provides information to the customers; therefore, expenditures on advertising are justified.arrow_forwardWhich of the following facilitates targeted marketing to specific consumers? Data mining Permission marketing Virtual marketing Cookiesarrow_forwardSuppose that the restaurant industry in Honolulu is monopolistically competitive and is currently in Stage 2 equilibrium (firms currently make zero profit). The graph below shows the cost curves for a typical restaurant in this industry. (a) Draw a demand curve and an MR that is consistent with this market being in Stage 2 equilibrium. (b) Show the equilibrium price Now suppose an highly-infectious new virus comes to the island, causing demand for restanrant meals to shift in. (c) What would you expect this change in restaurant demand when the number of firms is fixed? Explain. (d) What would you expect the change in demand to do to the number of meals sold, prices and profits of firms in the long run if firms can enter and exit? What happens to the mumber of restaurants?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co