A Producer of Electrical Components Combined Electrical Supply Wholesalers and Manufacturers

question 91

Multiple Choice

A producer of electrical components combined electrical supply wholesalers and manufacturers of electrical equipment into the same market segment-one of several segments it was targeting. Soon it lost the manufacturers' business to a competitor. It seems that the firm failed to consider the risk of

• A) too much aggregating.
• B) insulting the manufacturers by putting them in the same market segment with the wholesalers.
• C) picking market segments based on qualifying dimensions.
• D) selecting market segments that were not substantial.
• E) using too many segmenting dimensions.

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Definitions:

Stock Price

The amount of money it would cost to purchase one share of a company; determined by supply and demand in the market.

Strike Price

The predetermined price at which the holder of an option can buy or sell the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock, bond, commodity, or other asset at a specified price within a specific time frame.

Market Price

The current price at which a good or service can be bought or sold in the open market.