Department Store Owner Brendan McGowan Decided to Make a Gutsy

question 271

Multiple Choice

Department store owner Brendan McGowan decided to make a gutsy move with his high-end Western Son stores. Rather than focus on the upscale, luxury market that the store attracted earlier in the decade, he focused on bringing in clothing with more mass appeal. The stores succeeded in turning around downward trending sales. In conjunction with your understanding of the product life cycle, which of the following statements summarizes the marketing strategy?

• A) Western Son recognized that it was not competing well with its traditional higher income market. It decided to change its product offering and price to appeal to a broader market and increase sales and profits.
• B) Western Son stores recognized several markets that it could reach with its upscale clothing lines.
• C) Western Son positioned itself against, rather than with, the competition. It decided to adhere to its price leadership position.
• D) Western Son knew that in order to re-invent itself, it was going to have to practice the same marketing strategy followed by Walmart and other discount stores. It would make all marketing decisions based on cost. The price on an item need only exceed what it cost to make and ship it. Falling prices became the norm.

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Definitions:

Price Changes

Adjustments in the price levels of goods, services, or securities in the market.

Market Efficiency

A financial market attribute where prices of securities fully reflect all available information at any moment in time.

Excess Return

The return achieved by an investment over and above the return of a benchmark index or risk-free rate, signifying performance attributable to the investment's risk.

Information

In the context of finance, information refers to data regarding market trends, individual securities, economic indicators, and other factors that influence investment decisions.