Which of the following is a disadvantage of customer grouping?

• A. It ensures all customer needs are identical
• B. Duplication of resources can occur
• C. It eliminates marketing costs
• D. It cannot work for large businesses

Answer: (B)

Dividing customers into groups with similar needs to tailor products and marketing is segmentation. When you target multiple segments, each may require its own set of resources—different messages, channels, and sometimes product variations. That can lead to duplication of resources: creating several versions of ads and collateral, running separate campaigns, and maintaining multiple data and analytics streams. These overlaps can raise overall costs even though segmentation aims to use resources more efficiently by focusing on specific groups. The other options don’t fit: segmentation doesn’t guarantee identical needs across all customers, it doesn’t eliminate marketing costs (it can even increase them if over-applied), and it can be applied effectively in large businesses to manage diverse markets.