Multiple choice

Which of the following is NOT a demerit of the Product Diversification?

  1. Risk involved

  2. Trap of full-line competition

  3. Huge investment

  4. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Product diversification involves expanding the product range, which has several drawbacks. Risk involvement means entering unknown markets with uncertain outcomes. The trap of full-line competition occurs when competitors attack across all product lines, and huge investment is required for R&D, production, and marketing of new products. Since all options A, B, and C are actual demerits of product diversification, option D correctly identifies that none of these is 'NOT a demerit' - meaning all are demerits.

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