QUESTION 11

A bicycle manufacturer produces a wide range of bicycles ranging in price from a couple hundred dollars to several thousand dollars. They have as customers (local independent bicycle shops) that stock their low- to mid-priced models but are hesitant to stock the more expensive bikes because they do not have the confidence that their customers are willing to pay that much for a bike. They know that if they do get a customer that wants a high-end bike, they can special order it. The bicycle manufacturer strongly believes that getting their high-end bikes in the shops where customers can see and touch them is critical in driving sales for these models, as well as helping to promote their brand, which ultimately drives sales for the lower-cost models. How can they convince their customers to carry the higher-end bicycles?

a. Offer a consignment inventory arrangement for the higher-end bicycles.

b. Provide free shipping to customers who carry the higher-end bicycles.

c. Require all new orders to include two of the higher-end bicycles.

d. Start a retail website and promote the higher-end bicycles.

e. None of the above