1. SK Electronics offers a range of home and kitchen appliances targeted towards the economy segment. An analysis of their profit and loss statement has revealed that their profits have declined over the years. Their analysis of the household electronics market and recent market research conducted by the company has pointed out that pursuing the mid-priced and the premium segment could be a way to increase the profitability of the company. a) What type of line stretching strategy would you suggest for the company and why? b) What will be the challenges associated with the type of line stretching that you suggested? Provide suggestions to overcome such challenges? Make appropriate assumptions to answer the question.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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1. SK Electronics offers a range of home and kitchen appliances targeted towards the
economy segment. An analysis of their profit and loss statement has revealed that their
profits have declined over the years. Their analysis of the household electronics market
and recent market research conducted by the company has pointed out that pursuing the
mid-priced and the premium segment could be a way to increase the profitability of the
company.
a) What type of line stretching strategy would you suggest for the company and why?
b) What will be the challenges associated with the type of line stretching that you
suggested? Provide suggestions to overcome such challenges? Make appropriate
assumptions to answer the question.
Transcribed Image Text:1. SK Electronics offers a range of home and kitchen appliances targeted towards the economy segment. An analysis of their profit and loss statement has revealed that their profits have declined over the years. Their analysis of the household electronics market and recent market research conducted by the company has pointed out that pursuing the mid-priced and the premium segment could be a way to increase the profitability of the company. a) What type of line stretching strategy would you suggest for the company and why? b) What will be the challenges associated with the type of line stretching that you suggested? Provide suggestions to overcome such challenges? Make appropriate assumptions to answer the question.
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