The correct statement among the options is : "it requires segmenting a market on the basis of different strengths of demand."
Markup pricing is less effective when competing products are similar, and it often requires businesses to analyze and segment their target market based on different levels of demand elasticity. This segmentation is necessary to set different markup percentages for different customer segments, taking into account their willingness to pay.
The challenge lies in accurately determining these markup percentages for various segments, and it can be a complex process. Therefore, the correct statement among the options is : "it requires segmenting a market on the basis of different strengths of demand."