Which of the following segmentation strategies would best support this plan?

A company plans to maximize profitability by charging more for its products at retail locations than on its website.

Which of the following segmentation strategies would best support this plan?

A. Group

B. Channel

C. Regional

D. Location

View Answer

Answer: B

Explanation:

Context: The company intends to charge different prices for products sold through retail locations versus online.

Options Breakdown:

A. Group: Refers to segmenting customers based on demographic or psychographic groups, which is not directly related to sales channels.

B. Channel: Involves segmenting the market based on the distribution channels used, such as online vs. retail.

C. Regional: Pertains to geographic segmentation, which is not directly relevant to the pricing strategy across different sales channels.

D. Location: While somewhat related to geographic segmentation, it does not specifically address the different pricing strategies for online vs. retail channels.

Correct Answer Justification: By segmenting based on channels, the company can implement different pricing strategies for products sold online versus in retail stores, aligning with the goal of maximizing profitability through differentiated pricing.

Reference: Marketing and distribution strategy literature

Case studies on multi-channel retail pricing strategies