In Response to Price Cuts from Competitors, a Cereal Company

question 129

Multiple Choice

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

• A) raising the perceived value of a product
• B) improving product quality
• C) accepting a reduced market share
• D) launching a "fighter brand"
• E) using high-low pricing

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Definitions:

Lean Manufacturing

A production philosophy that focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity.

Maximum Amount

The highest possible quantity or degree of something that can be achieved or allowed.

Bullwhip Effect

A phenomenon in supply chain management where small fluctuations in demand at the retail level cause increasingly larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.

Manufacturing

The process of producing goods through the combination of labor, machinery, tools, chemical or biological processing, or formulation.