Explanation : Multibranding offers a way to establish different features and appeal to different buying motives, by introducing additional brands in the same category. A product category is a grouping of products, often at retail level, which may be substituted for each other (Colgate-Palmolive different brands of toothpaste) or which in some way supplement each other (Colgate-Palmolive pre-rinses and dental loss).
Multibranding also allows a company to command more shell space allows the company to protect its major brand by setting
up flanker or fighter brands for example, Seiko uses different brand names for its higher-priced watches (Seiko Lasalle) and lower-priced
watches (Pulsar) to protect its mainstream Seiko brand Sometimes a company inherits different brand names in the process of
acquiring a competitor, and each brand name has a loyal following. Thus, Electrolux, the Swedish multinational, owns a stable of
acquired brand names for its appliance lines– Frigidaire, Kelvinator, Westinghouse and Zanussi. Finally, companies sometimes
develop separate brand named for different regions on countries, perhaps to suit different cultures or languages. For example, Procter
& Gamble dominates the US laundry detergent market with Tide, which in all its forms captures more than a 30 per cent market
share. In Europe, however, P&G leads with its Ariel detergent brand.
A major drawback of multibranding is that each brand might obtain only a small market share, and none may be very profitable. The
company could end up spreading its resources over many brands instead of building a few brands to a highly profitable level.
Explanation : Responding to Price Changes
For responding the Price Change, the firm needs to consider several issues: Why did the competitor change the price? Is the price
change temporary or permanent? What will happen to the company's market share and profits if it does not respond? Are other
competitors going to respond? Besides these issues, the company must also consider its own situation and strategy and possible
customer reactions to price changes. If the company decides that effective action can and should be taken, it might make any
of four responses. First, it could reduce its price to match the competitor’s price. It may decide that the market is price sensitive and
that it would lose too much market share to the lower-priced competitor. Cutting the price will reduce the company’s profits in the short
run. Some companies might also reduce their product quality, services, and marketing communications to retain profit margins, but
this will ultimately hurt the long-run market share. The company should try to maintain quality as it cuts prices.
Alternatively, the company might maintain its price but raise the perceived value of its offer. It could improve its communications,
stressing the relative value of its product over that of the lower-price competitor. The firm may find it cheaper to maintain price and
spend money to improve its perceived value than to cut price and operate at a lower margin, Or, the company might improve
quality and increase price, moving its brand into a higher price-value position. The higher quality creates greater customer value, which
justifies the higher price. In turn, the higher price preserves the company's higher margins. Finally, the company might launch a lowprice
“fighting brand”—adding a lower-price item to the' line or creating a separate lower price brand. This is necessary if the particular
market segment being lost is price sensitive and will not respond to arguments of higher quality.
Explanation : According to Zeithaml and colleagues, there are five dimensions of service: 1. Tangibles: Appearance of physical facilities, equipment, personnel and communication materials. 2. Reliability: Ability to perform the promised service dependably and accurately. 3. Responsiveness: Willingness to help customers and provide prompt service. 4. Assurances: Knowledge and courtesy of employees and their ability to convey trust and confidence. 5. Empathy: Caring, individualized attention provided to customers.
Explanation : Interstitials are online display ads that appear between screen changes on a Web site, especially while a new screen is loading. For
example, visit www.marketwatch.com and you’ll probably see a 10-second ad for Visa, Verizon, Dell or another sponsor before the
home page loads, Pop-ups are online ads that appear suddenly in a new window in front of the window being viewed. Such ads can
multiply out of control, creating a major annoyance. As a result, Internet services and Web browser providers have developed
applications that let users block most popups. But not to worry. Many advertisers have now developed pop-unders, new windows that
evade pop-up blockers by appearing behind the page you’re viewing.
Rich media ads attract and hold consumer attention better than traditional banner ads. They employ techniques such as float, fly,
and snapback—animations that jump out and sail over the Web page before retreating to their original space.