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Essay / Clean Edge Case Analysis - 1668
First, the niche positioning strategy requires lower marketing costs than the mainstream. Therefore, the company should be more successful in achieving a return on investment and reaping significant profits. Second, it helps prevent cannibalization. Cannibalization occurs when a company offers a lower quality product, which decreases the demand for higher quality products (Moorthy and Png, 1992). Third, as Rosenberg mentioned, it will complement Paramount's existing product line. However, this recommendation has some implications. The company might lose some customers because Pro and Avail lack advanced technology. According to Quelch and Beckham (2011), “he responded: “Albert, research shows that our consumers are becoming more sophisticated and expect more advanced technology. » Additionally, targeted consumers may think the product is unsophisticated, which may lead to an inappropriate niche positioning strategy.