Question

Philip Morris bought Miller Brewing and launched low-calorie beer, at a time when consumers had the impression that low-calorie beer does not taste as good as normal beer. What did the company try to build when they conveyed the fact that the beer contained one third less calories and hence it is less filling?

a, points-of-difference
b, points-of-conflict
c, points-of-parity
d, points-of-presence
e, points-of-inflection

Answer 1

Answer: Points of indifference

Step-by-step explanation: Point of indifference can be defined as that level of EBIT at which two alternative financial plans have same amount of net income. It is used by managers as an evaluating tool, when it comes to choose between two cost structures which are alternative of one other.

In the given case, the company must have build point of indifference before launching of new product, and must have expected higher profits than normal beer.