The Purpose of Market Segmentation Is to Respond More Effectively

question 192

Multiple Choice

The purpose of market segmentation is to respond more effectively to the wants of groups of potential buyers in order to

• A)maintain market share.
• B)increase sales and profits.
• C)assume social responsibility.
• D)use the firm's resources most efficiently.
• E)provide the best quality products on the market.

---

Definitions:

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in revenue, indicating the proportion of fixed versus variable costs.

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period.

Contribution Margin Ratio

The percentage of each sales dollar that remains after deducting variable costs, calculated as contribution margin divided by sales.

Net Operating Income

The profit of a business after operating expenses are subtracted from gross income.