CLEP Marketing

Answer: D - ZipIt car sharing company has arranged a marketing evaluation study, which showed that market segmentation has led to both increased profits and greater costs in what is termed sales-cost trade-off. Sales-cost trade-off is an example of a market segmentation strategy. When the market is segmented, there are greater sales, which lead to higher profits. With these greater sales, there are increased costs because the implementation of a multi-product development strategy is more expensive than a strategy developing only one product. This is because manufacturing and promoting multiple products in a segmented market is much more costly than manufacturing and promoting a single product.