Question

of As the newest member of the marketing department, your immediate boss has asked you to comment on the company's proposal to add two new shoes to the company's product-line. The first pair will retail for $ 40 and is targeted at the "bargain" shopper. The second pair will retail for $200 and is targeted at the "sophisticated shopper." In relation to product-line strategy, what is the company trying to accomplish with these two new items Rubrics Recognize the product line strategy being adopted in the situation mentioned. (2 marks) А - В І % $$ I

what is the answer?

Answer 1

1. A. Product line strategy which is being adopted in the first product which is bargain shopper product is penetration strategy. This is offered by companies to target a large group of customer and these products are already available in market so company wants to gain through cutting of prices and this will attract a large number of volume so this kind of strategy is known as price penetration strategy.

1. B. second pair of retail which is targeted at sophisticated customers is an example of product skimming because this is offered a targeted group of customer by charging a relatively larger price for a relatively new product which is not offered by the other companies,so, this kind of strategy is known as product skimming strategy.

Company is trying to gain More market through first pair of product while the company is trying to gain more profit margin through second kind of pair.