Step 1: Understanding the Concept
Benzene diazonium chloride couples with phenol to form p-hydroxyazobenzene (an azo dye) through electrophilic substitution at the para position.
Step 2: Role of the Medium
In mild alkaline medium (pH about 9 to 10), phenol forms the phenoxide ion, which is much more reactive towards the weak electrophile.
Step 3: Conclusion
A strongly acidic medium suppresses phenoxide formation. A strongly basic medium destroys the diazonium ion. So mild alkaline medium is needed.
Final Answer:
The coupling needs a mild alkaline medium.
\[ \boxed{\text{(B) }\text{Mild alkaline}} \]