Answer to Question 1A product/communications extension (dual extension) promotional strategy extends the same home-market product and marketing promotion into target markets. Under certain conditions, it can be the simplest and most profitable strategy. For example, because of a common language and other cultural similarities, companies based in English-speaking Canadian provinces can sell the same product with packaging and advertising identical to that in the U.S. market provided the product is not required by the U.S. government to carry any special statements or warnings. The Canadian companies contain costs by developing a single product and one promotional campaign for both markets. Yet it is important for Canadian companies not to ignore any subtle cultural differences that could cause confusion in interpreting the promotional message.
As the information age continues to knit the world more tightly together, this method will probably grow more popular. Today, consumers in seemingly remote parts of the world are rapidly becoming aware of the latest worldwide fads and fashions. But this strategy appears to be better suited for certain groups of buyers, including brand-conscious teenagers, business executives, and wealthy individuals. The strategy also tends to be better suited for companies that use a global strategy with their products, such as upscale personal items with global brand names examples include Rolex watches, Hermes scarves and ties, and Coco Chanel (
www.chanel.com) perfumes. It can also be appropriate for global brands that have mass appeal and cut across all age groups and social classessuch as Canon, Mars, and Nokia. The strategy also is useful to companies that are the low-cost leaders in their industries: one product and one promotional message keep costs down.
Answer to Question 2FALSE