Question

A company that focuses on a lower-income market segment: a. sells on non-price factors such as design and customer service. b. produces a basic offering to reduce cost structures. c. focuses its marketing efforts on brand building. d. relies on patent protections to keep costs low. e. customizes its marketing mix to different market segments.

Answer 1

Answer:

B. produces a basic offering to reduce cost structures.

Explanation:

In order to target the customers on the lower-income segment, the company will have the reduce the price of their products as low as possible.

This is why they will also made various efforts to reduce the cost their structure. They do this in order to ensure that they still able to obtain a good enough margin to continue obtaining enough income despite the lower price.

One thing that companies often do to reduce their cost structures is by transferring the operation to a less developed countries. Typically, the material cost and the labor cost in such countries are much cheaper.