When segmenting broad product-markets, cost considerations tend
A) to encourage managers to disregard the criterion that a product-market segment should be substantial.
B) to lead to more aggregating.
C) to be unimportant as long as the segmenting dimensions are operational.
D) to lead to a large number of small, but very homogeneous, product-market segments.
E) All of the above are true.

Question

Quizplus · Accepted Answer

Cost considerations tend to lead to more aggregating, as dividing a broad product-market into too many small segments can become too costly and time-consuming for a company. Therefore, managers often choose to group together similar segments to reduce costs and improve efficiency. The other options are not true as disregarding substantiality, considering only operational dimensions, or segmenting into small, homogeneous segments can all lead to ineffective segmentation and ultimately harm the company's profitability.

When Segmenting Broad Product-Markets, Cost Considerations Tend