When Deciding How Far to Carry the Segmenting Process

question 89

Multiple Choice

When deciding how far to carry the segmenting process,

• A) profit should be the balancing point-determining how unique a marketing mix the firm can offer to some target market.
• B) it is easier to develop effective marketing mixes for larger, more heterogeneous segments.
• C) cost considerations encourage less aggregating.
• D) the threat of potential competitors suggests more aggregating.
• E) All of these alternatives are true.

---

Definitions:

Capitalized Lease

A lease arrangement that is recorded as an asset on the lessee's balance sheet, indicating that the lessee assumes some of the risks and benefits of ownership.

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Minimum Lease Payments

Minimum lease payments are the lowest amount that a lessee is obligated to pay over the lease term, including fixed payments, variable rent, guarantees, and residual value assurances.

Incremental Borrowing Rate

The interest rate a company would have to pay if it borrows funds on the day of the lease transaction, used in lease accounting.