Personal Devices Inc. is a manufacturer of premium cell phones. Most of the company's handsets are equipped with high-end features such as large internal memory, sophisticated texting, camera and music functionalities, and data transfer capabilities. The company is planning to enter the Indian market. One of the senior managers argues that a stripped-down, low-priced model without any extras could be the starting point. The company can sell additional features added to the base model at higher price points.
Extensive analysis reveals that if Personal Devices offered Indian customers products at multiple price points, the company would initially earn more profits but damage the brand in the long term. Which of the following, if true, would weaken the argument that Personal Devices should offer products at multiple price points?
The Indian market is sufficiently large to support offerings at multiple price points.
Taiwanese manufacturers have focused on the low to medium end when selling to their domestic markets.
Brand image is the sum total of customer perceptions about a company.
Research shows that the average domestic consumer tends to associate price with quality.
Niche companies that try to be everything to everyone usually lose their edge in their core business.

Question

Quizplus · Accepted Answer

The Answer of Personal Devices Inc. is a manufacturer of premium cell phones. Most of the company's handsets are equipped with high-end features such as large internal memory, sophisticated texting, camera and music functionalities, and data transfer capabilities. The company is planning to enter the Indian market. One of the senior managers argues that a stripped-down, low-priced model without any extras could be the starting point. The company can sell additional features added to the base model at higher price points.
Extensive analysis reveals that if Personal Devices offered Indian customers products at multiple price points, the company would initially earn more profits but damage the brand in the long term. Which of the following, if true, would weaken the argument that Personal Devices should offer products at multiple price points?
The Indian market is sufficiently large to support offerings at multiple price points.
Taiwanese manufacturers have focused on the low to medium end when selling to their domestic markets.
Brand image is the sum total of customer perceptions about a company.
Research shows that the average domestic consumer tends to associate price with quality.
Niche companies that try to be everything to everyone usually lose their edge in their core business.