One of Your Classmates Asserts That Advertising, Marketing Research, and Brand

question 226

Multiple Choice

One of your classmates asserts that advertising, marketing research, and brand management are redundant expenditures because a firm can obtain the same information by simply looking at what customers are already buying.Which of the following is not a response you might offer her?

• A)Conducting market research is a good way for firms to keep abreast of changing consumer tastes and preferences.
• B)Advertising and brand management allow a firm to create an entry barrier which will insulate the firm from competition and from undertaking further product innovations.
• C)Marketing research could allow a firm to identify new market opportunities and at least, in the short run, a firm can make a profit supplying products to this market segment.
• D)If a firm successfully manages its brand, customers become less price sensitive as they perceive fewer substitutes for the firm's brand.

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Definitions:

Joint Profits

The combined profits earned by two or more firms when they cooperate on a project or merge their operations.

Tacit Price Agreement

An unspoken understanding among competitors to set prices at a certain level without explicit communication.

Kinked Demand Curve

A demand curve in oligopoly market structures, characterized by a distinct bend or kink, indicating different elasticity above and below the current price.

Buying Power

The ability of consumers or businesses to purchase goods and services, influenced by income levels and the price of goods and services.