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:

Homogeneous Product

A Homogeneous Product is one that is seen as identical or very similar in nature, quality, and performance, regardless of the producer.

Excess Capacity

A situation where a company produces less than the maximum amount it can produce due to lower demand.

Equilibrium

A state where supply equals demand in a market, resulting in an optimal distribution of goods and services.

Minimize Average Cost

The process of reducing the total cost per unit of goods or services produced.