Toro decided to augment its traditional hardware retail distribution channel by also selling through mass merchandisers such as Walmart and Target and setting prices for its products substantially below those of its traditional hardware outlets. As a result, many hardware stores abandoned Toro products in favor of other manufacturers. This is an example of a firm failing to consider ________ effects when setting its final list or quoted price.

Question

Quizplus · Accepted Answer

The situation describes a failure to consider customer effects, as the decision to sell through mass merchandisers at lower prices led to the loss of traditional hardware store customers who felt undercut and switched to other manufacturers.

Toro Decided to Augment Its Traditional Hardware Retail Distribution Channel