ABC company sells a product to a group of customers who arc not very price sensi

Question

ABC company sells a product to a group of customers who arc not very price sensitive that is. if ABC raises its prices, its customers buy as much or almost as much as before. Bui which of the following changes would lend to make the customers more price sensitive'? ABC launches a large and very successful advertising campaign using a variety of media. ABC reduces its cost by making more effective use of its distribution corners. A competitor enters the market with a close substitute for ABC's product ABC is able to build greater brand loyalty with its customers.

Explanation / Answer

c. A competitor enters the market with a close substitue for ABC's Product.

Since if there is competitor available there is a strong probability that customers will shift due to price change. This is because there is a close substitute.

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