SCENARIOS Continental Lite

Multiple Choice

SCENARIOS
Continental Lite
In the mid-1990s,Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized Continental's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then Continental tried to sell three "brands" at once--Lite,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to Specialty Cakes.There are many occasions for which people may need to buy a cake,but most people do not have the time or interest to learn about cakes and their bakers.These people who do not know about the quality of the Cecilia Villaveces Cakes might choose them because they:

A) equate price and quality
B) know cakes are in the mature stage of their product life cycle
C) realize that this is a monopolistic industry
D) believe there is not relationship between price and quality
E) desire value-added services