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Market segmentation is the process of doing what?
ASetting one price for every buyer in a whole market
BGrouping rival firms by the size of the share they hold
CSeparating and evaluating layers of a market to target
DAdding new models to a line that already exists today
Answer & Solution
Correct answer: C. Separating and evaluating layers of a market to target
1. Market segmentation separates, identifies and evaluates the layers of a market.
2. Its purpose is to identify the target market that will be most profitable to serve.
3. Cereal buyers, for instance, split into families with young children and families without.
4. Adding new models to a line is a line extension, which is a product decision instead.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 11 "Creating Products and Pricing Strategies to Meet Customers' Needs", section 11.5 Market Segmentation_
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