Some Timex Wristwatches Can Be Purchased for Less Than $30

question 70

Multiple Choice

Some Timex wristwatches can be purchased for less than $30 while Rolex wristwatches may carry a price tag of several thousand dollars. In general, consumers view Timex watches as being dependable, relatively accurate, and inexpensive timepieces that can be purchased in drugstores, discount stores, and department stores. The Rolex brand is perceived as an expensive status symbol distributed in fine jewelry stores or specialty shops. By using distinctly different pricing and distribution strategies, the marketers of Rolex watches

• A) compete for the same segment through different channels of distribution.
• B) develop similar products as Timex but under different names.
• C) use a differentiation positioning strategy.
• D) compete for the same customers through similar retail outlets.
• E) create cognitive dissonance in consumers who purchased Timex wristwatches.

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Definitions:

Price Level

An index indicating the general pricing trends in an economy, reflecting the cost living and purchasing power.

Aggregate Output

A composite measure of all final goods and services produced in an economy during a given period; real GDP.

Aggregate Demand Curve

A curve that shows the relationship between the overall price level and the total demand for all goods and services in an economy.

Nominal Income

The total amount of money earned by an individual or entity before adjustments for inflation or deflation.