A Company Decides to Give Some Product Units to Its

question 124

Multiple Choice

A company decides to give some product units to its target market for free.Which of the following is most likely to be the objective of this initiative?

• A)Increasing the switching costs associated with the product
• B)Empathizing with the problems and issues faced by customers
• C)Building a channel for communicating with customers
• D)Promoting brand trial of the product
• E)Signaling that the product is of high quality by improving its tangibles

---

Definitions:

Manufacturing Departments

Units within a manufacturing organization, each specializing in a different stage or aspect of the production process.

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead costs in some costing systems.

Markup

The amount added to the cost price of goods to cover overhead and profit; it calculates the selling price.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as maintenance, depreciation, and utilities.