Scenario 1-2 Chug Enterprises Is Considering Entering the Already-Crowded Sports Drink Market

question 8

Multiple Choice

Scenario 1-2
Chug Enterprises is considering entering the already-crowded sports drink market with a line of products. The first brand will be advertised to teenagers as being the best-tasting sports drink on the market. The second brand will be advertised to adults as being the lowest calorie sports drink you can buy. The third brand will be advertised to senior citizens as containing calcium, a mineral needed to maintain a healthy bone structure. Each brand will have separate, distinctive packaging. However, the drinks inside are actually identical to one another.
-(Scenario 1-2) If the brand aimed at senior citizens is successful in the U.S. market, Chug Enterprises plans to introduce it worldwide. However, appropriate images of senior citizens vary from culture to culture. Therefore, Chug Enterprises would be wise to engage in

• A) local advertising.
• B) regional advertising.
• C) national advertising.
• D) international advertising.

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Definitions:

Fair Value Enterprise Method

An approach to valuing a business by estimating the present value of foreseeable future earnings and the net asset value.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not have full control.

Dividends

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Straight Line Amortization

A method of allocating the cost of an intangible asset over its useful life in equal installments.