While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix. The manager has asked the auditor for advice about increasing advertising of various products. During which stage of the life cycle would it be appropriate to advertise that the company's product is the lowest price and best quality of all competitors?
Answer(s): C
The maturity stage is the ideal time for advertising lower prices and superior quality because this is the period during a product's life when competition is greatest. Due to the availability of many substitutes, a firm has reasons to set itself apart. Because price and quality are both concerns of customers during the maturity stage, it is an ideal time for the firm to differentiate its product by advertising low prices and higher quality.
According to Michael E Porter, evolutionary processes involving both internal and external factors operate to move an industry from its initial structure to its potential structure. A likely structural effect of the major evolutionary processes is that:
Answer(s): D
Diffusion of proprietary knowledge may result from reverse engineering (a form of imitation) or another form of competitive intelligence (e.g., that obtained from suppliers, distributors, or customers), expiration of patents, purchase, migration of personnel to new firms, and spinoffs of operating segments. Thus, because barriers created by proprietary knowledge and specialized personnel tend to disappear, new competitors may emerge, and vertical integration becomes more likely. However, if further technological advances are feasible, economies of scale in R&D may create a protective barrier against new competition. The problem of diffusion may be met by creation of a substantial capacity to develop new proprietary knowledge.
Firms in a fragmented industry have insignificant market shares and little influence on such matters as market price and total output. A likely economic cause of this fragmentation is the existence of:
Answer(s): B
Important diseconomies of scale may favor fragmentation. For example, small, flexible firms have an advantage when the following needs are important:quick responses to style changes, the maintenance of low overhead, customization of a diverse product line to the special requirements of particular customers, substantial creative content in the product, individualized personal service, and local contacts and image.
The opportunity for franchising comes from the ability to:
Standardizing products means to maintain the same product or to standardize the production, operations, and facilities in different locations or markets. Franchises all use standardized products to reduce costs.
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K.Tho Commented on October 05, 2023 Very helpful UNITED STATES
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