A Business Firm Goes to the Trouble and Expense of Segmenting

question 65

Multiple Choice

A business firm goes to the trouble and expense of segmenting its markets when

• A)it changes its advertising campaign.
• B)competitors enter the marketplace.
• C)the environment becomes uncertain.
• D)it expects that this will increase its sales,profit,and return on investment.
• E)there is a recessionary economic environment.

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Definitions:

Marginal Cost

The cost of producing one additional unit of a good or service.

Markup

The gap between the purchase expense of a good or service and the price at which it's sold, represented as a percentage of the buying price.

Concentration Ratios

Measures that indicate the degree of concentration in an industry, often used to assess competition levels.

Market Shares

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in the industry.