Segmented pricing is only effective when ________.
A) the segments show similar degrees of demand
B) the cost of segmenting does not exceed the revenue obtained from the price difference
C) the segmented prices do not reflect real differences in customers' perceived value
D) the customers of different socio-economic classes are treated according to their rank
E) companies make their services and products accessible exclusively to wealthy patrons

Question

Quizplus · Accepted Answer

Segmented pricing can be effective only when the cost of splitting the market does not exceed the additional revenue earned from the different prices charged to each segment. If the cost of segmentation is higher than the additional profit obtained from higher prices, the pricing strategy may not be viable. Thus, managers should assess the costs and benefits of segmenting the market before implementing this pricing tactic.

Segmented Pricing Is Only Effective When ________