A flooring manufacturer has experienced an increase in sales of laminate flooring in the stores located in the southeastern region of the United States.A recent marketing plan identifies that cork flooring will be introduced in the same stores before rolling out to the rest of the country.What effect is this manufacturer at risk of experiencing with this strategy?
A)shop bot
B)bundling
C)price fixing
D)dual pricing
E)cannibalization

Question

A flooring manufacturer has experienced an increase in sales of laminate flooring in the stores located in the southeastern region of the United States.A recent marketing plan identifies that cork flooring will be introduced in the same stores before rolling out to the rest of the country.What effect is this manufacturer at risk of experiencing with this strategy? ​
A)​shop bot
B)​bundling
C)​price fixing
D)​dual pricing
E)​cannibalization

Quizplus · Accepted Answer

The manufacturer is at risk of experiencing cannibalization, which is when sales of a new product reduce sales of an existing product. Since the manufacturer has experienced an increase in sales of laminate flooring in the southeastern region of the United States, introducing a new product (cork flooring) in the same stores before rolling out to the rest of the country may cannibalize the sales of laminate flooring in that region.

A Flooring Manufacturer Has Experienced an Increase in Sales of Laminate