In September 2021, Electromac launched three new PearPhones with features such as fingerprint registration technology, better cameras, and a range of seasonal colours.
The main reason for Electromac to launch new PearPhones is to ……?
Select ONE answer
- reduce the number of suppliers
- increase its product portfolio
- reduce its advertising budget
- increase income elasticity of demand
Show the workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Business Studies KS4 & KS5 classes
The answer is 2
- Not correct – these PearPhones has more features and comes in a range of colours that may mean Electromac will
require more suppliers. - Correct – Definition of product portfolio e.g. the range of products or services offered by a business. The new PearPhones are different from the existing models on the market/possible extension strategy. Which increases the total number of products available and is more likely to appeal to a wider range of Customers.
- Not correct – Electromac will have to increase rather than decrease its advertising budget in order to promote the new and wider range of PearPhones.
- Not correct – income elasticity of demand is affected by external factors such as the state of the economy and not by decisions that Electromac might make about its product range.
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