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Problem

Explain why it is often necessary for the business marketer to develop a separate demand curve for various market segments. Would one total demand curve be better for making the industrial pricing decision? Explain.

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Step 1/3

Demand for all products in different market differs according to taste and preferences of local customers and their willingness and capacity to spend money in different market segments.

Step 2/3

Business marketers have to develop different demand curve for different market segments because of following reasons:

• Demand of different product is different in different market segment and that depends on the taste and preferences of local customers and their willing capacity to purchase the product.

• The requirement of each market segments is different. A segment would prefer cheap and quality product and on the other hand other segment would prefer quality product. Thus, companies are required to develop different demand curves for different segments.

• Demand of different products is also based on different seasons therefore, companies are required develop different demand curves for different segments.

Step 3/3

It would not be a rational decision for the business marketers to develop a single demand curve for making industrial pricing decision because a single demand curve would not take into consideration various aspects that are related with various segments.

The demands for different products vary according to the segments, tastes and preferences of the customers and also according to the seasons. Therefore, a single demand curve would not be ideal for making pricing decisions.