The Market Subsegment That a Company Exclusively Caters to May

question 94

Multiple Choice

The market subsegment that a company exclusively caters to may dry up, or it might grow to the point that it attracts larger competitors. This is why such companies practice ________.

• A) multiple niching
• B) mass marketing
• C) overall cost leadership
• D) low-price strategies
• E) dumping

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Definitions:

Soft Rationing

Internal limitations set by a company on the amount of funds allocated for new investments or projects.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, demonstrating the proportion of fixed versus variable costs a company has.

Fixed Costs

Expenses that remain constant regardless of how much is produced or sold, including rent, salaries, and insurance costs.

Accounting Break-Even

The point where total sales equal total expenses, and the company makes no profit but also incurs no loss.