1. A company that sells organic cosmetics wants to expand

its market share by launching a new product line. The

company has conducted a market research and identified

four segments of potential customers based on their needs,

preferences and lifestyles. Which of the following is the

best way for the company to select a target market for its

new product line?

a) Choose the segment that has the highest income and

spending power.

b) Choose the segment that has the lowest competition and

entry barriers.

c) Choose the segment that is most aligned with the

company's mission and values.

d) Choose the segment that is most responsive and

profitable to the company's marketing efforts.*

Rationale: The best way to select a target market is to

evaluate the attractiveness of each segment based on its

size, growth, profitability, accessibility and responsiveness

to the company's marketing efforts. Option d) reflects this

criterion, while the other options are either too narrow or

too broad.

2. A company that produces sports equipment has

developed a new type of running shoe that uses advanced

technology to enhance performance and comfort. The

company wants to position its new product as a premium

and innovative offering in the market. Which of the

following is the most appropriate pricing strategy for the

company to adopt?