In a Sluggish Economy,consumers Will Buy Even the Most Modest

question 145

Multiple Choice

In a sluggish economy,consumers will buy even the most modest of products with the same discretion once shown only to big-ticket items,like computers,airfares,and designer clothes.The results are a growing popularity of cheaper private-label products and the likelihood that price wars among consumer goods could lead to the same kind of consolidation that occurred in the airline and electronics industries.Moreover,analysts say changing buying habits will force premium brand marketers to lower their prices to protect their positions.These companies may also upgrade products to distinguish them from private labels and promote their brands more aggressively than ever.
One analyst says that consumers are forcing product innovation.Products have to be sold on merit.As a result,there will be fewer brands of significance,but the significant brands will be stronger.Brand loyalty is believed to exist only when,or if,value is provided.How do the significant brands compete? One analyst says that a combination of sensible pricing and innovation with a strong brand name can stabilize market share.Reformulated or repackaged products are typical examples of innovative attempts to solidify market share.
-Refer to Consumer Buying Habits.To compete against the private labels,the significant brands can upgrade products to distinguish them from private labels and advertise their brands more aggressively than ever.Most of the ads will feature cents-off coupons.What does this pricing strategy clearly involve manipulation of?

• A)promotion strategy
• B)product mix strategy
• C)distribution strategy
• D)advertising strategy

Understand the allocation of operating expenses and support department charges in profit centers.

Recognize the financial measures used to gauge a manager's performance in a profit center.

Distinguish between direct and indirect expenses and their impact on departmental performance.

Understand the concept of operating income, both before and after support department allocations.

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Definitions:

Phenotype Frequency

The ratio of individuals possessing a particular phenotype to the total population size, often used in genetic and population studies.

Allele Frequency

The relative frequency of different alleles of a particular gene in a given population.

Antibiotic Resistant

Refers to bacteria that have evolved the ability to survive and grow in the presence of antibiotics that were originally effective against them.

Directional Selection

A mode of natural selection where an extreme phenotype is favored over other phenotypes, causing the allele frequency to shift over time.