Firms Use a Differentiated Targeting Strategy Because

question 31

Multiple Choice

Firms use a differentiated targeting strategy because

• A) it is easier than mass marketing.
• B) it helps to obtain a bigger share of the market.
• C) it is better than focusing on individual or small groups of potential customers.
• D) most market segments are too small to be profitable.
• E) banks are more willing to extend credit to companies with this strategic approach.

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Definitions:

Operating Profit Test

A financial metric used to assess a company's profitability from its core operations, excluding effects of financing and taxes.

Operating Segment

A component of an enterprise that engages in business activities from which it may earn revenues and incur expenses.

Separate Disclosures

Financial reporting requirement for specific information to be provided separately in financial statements to enhance clarity and understanding.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs associated with sustaining the activity.