Why are marketing costs high in the introductory stage of the product life cycle?
a. Cutthroat competition during the introductory stage can lead to price wars.
b. Sales increase rapidly during the introductory stage, requiring greater investment for marketing.
c. High dealer margins are often needed to obtain adequate distribution.
d. Product and manufacturing costs need to be identified and corrected.
ANSWER: c
Marketing costs in the introductory stage are normally high for several reasons. High dealer margins are often needed to obtain adequate distribution, and incentives are needed to get consumers to try the new product. Advertising expenses are high because of the need to educate consumers about the new product's benefits.
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