Australia-based Renewable Energy Ltd.sells a $10 million device that converts manure into energy.One of these devices is capable of generating energy equal to $2 million of natural gas per year.The company believes its target market consists of businesses that use a lot of energy like its first customer,a fertilizer manufacturer that was located in a rural area.If the firm decides to expand to the U.S.,it most likely will use which of the following strategies to segment its market?

Question

Quizplus · Accepted Answer

The company is likely to use NAICS code (North American Industry Classification System) to segment its market as they are looking for businesses that use a lot of energy like its first customer, a fertilizer manufacturer. NAICS codes are used to categorize and identify different industries, so it would be helpful for Renewable Energy Ltd. to target businesses within a certain industry that fit their target market. Geographic segmentation alone may not be as effective as the company is not limited to a specific location in the U.S. and behavioral segmentation may not be as applicable as the purchasing behavior may vary across different industries.

Australia-Based Renewable Energy Ltd