To Be Useful, a Segmentation Scheme Must Produce Segments That

question 29

Multiple Choice

To be useful, a segmentation scheme must produce segments that:

• A)are composed of people with different product needs.
• B)are composed of people with different characteristics.
• C)are large enough to warrant developing and maintaining a special marketing mix.
• D)are divided according to the North American Industry Classification System.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal circumstances.

Machine-Hours

Machine-hours refer to the total time that machinery is in operation, often used as a basis for allocating manufacturing overhead costs.

Unused Capacity

The portion of a company's production capability or resources that is not currently being utilized to generate revenue or output.

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and activity levels, used to allocate overhead costs to products.