If a Product Has a Positive Segment Margin but Is

question 160

Essay

If a product has a positive segment margin but is not as profitable as other products, what should managers do? What if the segment margin is negative?

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Definitions:

Evoked Set

a set of particular brands or products a consumer considers during the decision-making process.

Inept Set

A group of brands that a consumer excludes from purchase consideration because they are viewed as unacceptable.

Inert Set

A group of brands or products that a consumer is aware of but feels indifferent towards when making a purchase decision.

Lexicographic Rule

A decision-making rule where alternatives are compared based on the most important attribute first; if one option is superior, the decision is made, otherwise the next most important attribute is considered.