Narrative 8-1 India Has the Fastest-Growing Demand for Consumer Products in the in the World

question 38

Multiple Choice

Narrative 8-1
India has the fastest-growing demand for consumer products in the world. In recent years, Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged, which led to the company losing 20 billion Indian rubles. In that first attempt, Coca-Cola purchased Thumbs Up, the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market, Coca-Cola built five plants, cut costly staff, revamped transport, shrunk bottles, and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
-Refer to the Narrative 8-1.Which of the following is reflected by the need for Coca-Cola to create a promotional strategy specifically targeted to the Indian market?

• A) a diversification strategy
• B) an awareness of cultural differences
• C) the desire to maintain a high contribution margin
• D) an insular approach to strategy

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Definitions:

Welfare Loss

The decrease in social welfare, usually measured as lost economic efficiency, due to factors like taxes, subsidies, or market distortions.

Welfare Loss

The decrease in social welfare, usually measured as the loss of consumer and producer surplus, resulting from inefficient market conditions or government policies.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they do pay.

Net Social Gain

The overall benefit to society from an economic transaction or policy, taking into account both benefits and costs.