Chapter 9 IDENTIFYING MARKET SEGMENTS AND TARGETS Test Item Table

Major Section of the Chapter Level 1: Definition (Knows Basic Terms & Facts) Sneakers Marketing Wars: Heelys, Air Pumps, and Three Billion Trillion Choices (pp. 185-186) Why Segment Markets? (pp. 186-191) Steps in Segmenting and Targeting Markets (pp. 191-201) Level of Learning Level 2: Conceptual (Understands Concepts & Principles) 1, 2 Level 3: Application (Applies Principles)

3, 4, 6, 7, 23, 24, 35, 39, 41, 43

5, 8, 9, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 29, 30, 32, 42, 44, 45, 148, 149, 150, 151, 152 49, 50, 51, 52, 53, 54, 56, 106, 112, 113, 114, 115, 118, 119, 120, 132, 153, 155, 156, 158, 159, 160, 161, 162 138, 142, 163, 164

10, 11, 12, 13, 14, 15, 28, 31, 33, 34, 36, 37, 38, 40

46, 47, 55, 63, 64, 71, 74, 75, 76, 84, 90, 92, 94, 95, 96, 97, 99, 100, 108, 129, 131

Positioning the Product (pp. 201-202) Video Case: Nokia (pp. 203-205)

133, 134, 137, 139, 140, 141

48, 57, 58, 59, 60, 61, 62, 65, 66, 67, 68, 69, 70, 72, 73, 77, 78, 79, 80, 81, 82, 83, 85, 86, 87, 88, 89, 91, 93, 98, 101, 102, 103, 104, 105, 107, 109, 110, 111, 116, 117, 121, 122, 123, 124, 125, 126, 127, 128, 130, 154, 157 135, 136, 143

144, 145, 146, 147

Note: Bold numbers indicate short essay questions.

CHAPTER 9 IDENTIFYING MARKET SEGMENTS AND TARGETS MULTIPLE CHOICE QUESTIONS
9-1 CHAPTER OPENING EXAMPLE: SNEAKERS CONCEPTUAL

Heely Sports Ltd. used __________ in its search for a market for the latest sneaker craze. a. b. c. d. e. market segmentation financial analysis geographic segmentation organizational marketing sales forecasting

Answer: a Page: 186 Rationale: All sneaker manufacturers search for new market segments of consumers and ways to differentiate their products from the competition. 9-2 CHAPTER OPENING EXAMPLE: SNEAKERS Which of the following statements about U.S. trends for sneakers is true? a. b. c. d. e. Teenagers are 31 percent of total sales and are willing to spend more for sneakers than older consumers. The average price paid for a pair of sneakers is over $100 and expected to increase. Baby boomers are the largest market for sneakers. Most sneakers bought for use in some sport are bought for tennis. In the sneakers market, the growth potential for women is lower, but women will pay a higher average price for a pair. CONCEPTUAL

Answer: a Page: 186 Rationale: Over 60 percent of sneakers purchased in 2000 cost less than $50 per pair. Teenagers are the largest market for sneakers and are willing to pay more for them. Most sneakers that are bought for use in some sport are bought for running. Women are buying more and more sneakers, but men on average buy more and are willing to pay more than women. 9-3 MARKET SEGMENTATION DEFINITION

Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is called: a. b. c. d. e. consumer differentiation. psychographics. market segmentation. market delineation. aggregation marketing.

Answer: c Page: 187 Rationale: Key term definition—market segmentation

9-4 MARKET SEGMENTATION

DEFINITION

Market segmentation involves aggregating prospective buyers into groups that have common needs and will: a. b. c. d. e. pay attention to marketing messages. respond similarly to a marketing action. be responsive to marketing research. use the same payment methods. go shopping on a regular basis.

Answer: b Page: 187 Other Location: web Rationale: Key term definition—market segmentation 9-5 MARKET SEGMENTATION To be identified as a market segment, its members must: a. b. c. d. e. represent a large share of the entire market and have critical buying power. have common needs and respond similarly to market actions. have different needs and have potential for future growth. have different needs and respond similarly to market actions. have potential for future growth and have potential for increased profit or ROI. CONCEPTUAL

Answer: b Page: 187 Rationale: An organization develops its segments by aggregating prospective buyers on the basis of common needs and similar response to a marketing action. 9-6 MARKET SEGMENTATION DEFINITION

__________ involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marking action. a. b. c. d. e. Diversification Divestment Market segmentation Market augmentation Repositioning

Answer: c Page: 187 Rationale: Key term definition—market segmentation.

516

ultimate consumers. market differentiation. dual distribution. d. b. such as product features or advertising. c. qualified prospects. c. Answer: a Page: 187 Rationale: Key term definition—market segments 9-8 MARKET SEGMENTS CONCEPTUAL Each __________ consists of people who are relatively similar to each other in terms of their consumption behavior. 9-9 PRODUCT DIFFERENTIATION CONCEPTUAL A firm strategy of using different marketing mix activities. d. d. full coverage marketing. c. market segment demographic cluster organizational buyer ultimate consumer qualified prospect Answer: a Page: 187 Rationale: A market segment is a relatively homogeneous group of prospective buyers. consisting of people who are relatively similar to each other in terms of their consumption behavior. Answer: c Page: 187 Other Location: web Rationale: Key term definition—product differentiation . to help consumers perceive a product as being different and better than competing products is called: a.9-7 MARKET SEGMENTS DEFINITION The phrase “relatively homogeneous groups of prospective buyers” is most descriptive of: a. e. b. a. product differentiation. b. e. demographic clusters. market segments. organizational buyers. market penetration. e.

to help consumers perceive a product as being different and better than competing products. 518 . Mahogany. it was intended for use by children and was therefore given a child-appealing bubblegum flavor. b. Hallmark uses a __________ strategy to reach several different market segments. d. d. product sampling product extrapolation product differentiation usage segmentation psychographic segmentation Answer: c Page: 187 Rationale: Product differentiation is a strategy of using different marketing mix activities. What is this marketing strategy called? a. e.9-10 PRODUCT DIFFERENTIATION APPLICATION When Procter & Gamble introduced Crest toothpaste. c. c. and Tree of Life cards—all made by Hallmark for sale in its stores. Maxine. to help consumers perceive a product as being different and better than competing products. e. 9-11 PRODUCT DIFFERENTIATION APPLICATION At a Hallmark store you can find several different brands of greeting cards. such as product features (in this case the toothpaste flavor) or advertising. the first fluoride toothpaste. Shoebox. product sampling product extrapolation product differentiation usage segmentation behavioral segmentation Answer: c Page: 187 Rationale: Product differentiation is a strategy of using different marketing mix activities. Nature's Sketchbook. Some time later the same basic formula was given a fresh. a. minty flavor to appeal to adults. b. including Fresh Ink. such as product features (in this case the brand of card) or advertising.

e. In opened its 500th restaurant in China in 2001 and is more popular than McDonald's in that country. Answer: c Page: 187 Rationale: Product differentiation is a strategy of using different marketing mix activities. market sectioning.S. which includes Chicky. b. such as product features or advertising (in this case. d. a friendly chicken character) to help consumers perceive a product as being different and better than competing products. c. e. d. market segmentation. b. Today you can buy Original Alka-Seltzer. product base development. Answer: c Page: 187 Rationale: Product differentiation is a strategy of using different marketing mix activities. product differentiation. KFC used: a. Chicky. a friendly chicken character that has a strong appeal for children. and Canada. c. Extra Strength Alka-Seltzer.9-12 PRODUCT DIFFERENTIATION APPLICATION Alka-Seltzer was made originally as a hangover remedy that cured the headache and settled the stomach. product segmentation. product positioning. To succeed in China. product base development. The maker of AlkaSeltzer is using: a. market sectioning. One of the reasons is that when the company entered the Chinese market. such as product features (in this case the various types of Alka-Seltzer) or advertising. This has been useful in coping with local Chinese governments and developing a distinctly different Chinese strategy. product differentiation. Each Alka-Seltzer product is targeted to a slightly different market segment. product segmentation. it recruited its managers from Taiwan and the Chinese communities in the U. 9-13 PRODUCT DIFFERENTIATION APPLICATION KFC is a popular fast-food restaurant in the U. . and Alka-Seltzer Heartburn Relief.S. to help consumers perceive a product as being different and better than competing products. Alka-Seltzer Morning Relief (for morning headaches and fatigue.

Rolex watches are distributed more selectively. competition is extreme. 9-15 PRODUCT DIFFERENTIATION APPLICATION Some Timex wristwatches can be purchased for less than $30. e. product positioning. and are often available only in fine jewelry stores or specialty shops. The Rolex brand tends to be perceived as an expensive status symbol. However. product base development. develop similar products. such as product features (in this case the type of starchy food offered) or advertising. build customer loyalty through direct competition. create cognitive dissonance in consumers who are considering the purchase of a wristwatch. 520 .9-14 PRODUCT DIFFERENTIATION APPLICATION KFC has modified its product to satisfy different market segments. the marketers of Timex and Rolex watches have attempted to: a. b. consumers view Timex watches as being dependable. In Holland the mashed potatoes are replaced with a potato-and-onion croquette. and inexpensive. In this example. For most products. In general. Timex watches can be purchased in drug stores. a customer gets fresh rice with soy or sweet chili sauce with his or her chicken. product differentiation. both the Timex and the Rolex wristwatches will satisfy the consumer's need to know the time of day. each marketer has attempted to create a distinct product image in the mind of the consumer. market segmentation. to help consumers perceive a product as being different and better than competing products. By using distinctly different pricing and distribution strategies. compete for the same segment. d. and department stores in all sizes of communities. market sectioning. The image of the Timex is very different from that of Rolex. some Rolex wristwatches carry a price tag of several thousand dollars. e. c. relatively accurate. b. many comparable alternatives are available to the consumer. discount stores. d. and in Thailand. Answer: c Page: 187 Rationale: In today's market place. use a product differentiation strategy. c. KFC uses: a. in order to compete in the wristwatch market. Answer: c Page: 187 Rationale: Product differentiation is a strategy of using different marketing mix activities.

b. c. . Figure 9-1 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to the organization’s marketing program. it relates supply (__________) to demand (the customer needs). In economist's terms. e. the organization's marketing program. d. e. d. the organization’s marketing program). a. b. self-regulatory industry standards government regulations top-level management market needs controllable environmental factors Answer: d Page: 187. c. self-regulatory industry standards. d. a. government regulations. top-level management. 9-18 MARKET SEGMENTATION CONCEPTUAL Market segmentation is only a means to an end. Figure 9-1 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to the organization’s marketing program.9-16 MARKET SEGMENTATION CONCEPTUAL The process of segmenting a market and selecting specific segments as targets is the link between __________ and the organization's marketing program. self-regulatory industry standards government regulations the organization's actions strategic objectives tactical goals Answer: c Page: 187. c. e. Figure 9-1 Rationale: Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to marketing action (in this case. b. Answer: c Page: 187. 9-17 MARKET SEGMENTATION CONCEPTUAL The process of segmenting a market and targeting specific segments is the link between various buyers' needs and: a. controllable environmental factors.

differentiate shareholders. Figure 9-1 Rationale: Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to marketing action on the part of the organization. do all of the above. b. develop specific marketing actions related to the 4 Ps. link market needs to an organization's marketing program. b. c. to relate supply to demand. 522 . e. e. market segmentation relates supply (the organization's actions) to demand (__________). d. b. a.9-19 MARKET SEGMENTATION CONCEPTUAL Market segmentation is only a means to an end. are legal. CONCEPTUAL Answer: e Page: 187 Other Location: web Rationale: Market segmentation is used to link market needs to marketing programs. Answer: c Page: 187. 9-20 MARKET SEGMENTATION CONCEPTUAL A basic test of the usefulness of the segmentation process is whether it leads to tangible marketing actions that: a. c. d. to develop marketing actions related to the 4Ps. tactical goals government regulations customer needs strategic objectives product positions. relate supply to demand in economic terms. profits and/or other organizational goals. increase overall sales. e. Answer: a Page: 187 Rationale: A basic test of the usefulness of the segmentation process is whether it leads to tangible marketing actions to increase sales and profitability. c. 9-21 MARKET SEGMENTATION Marketers use market segmentation to: a. are socially responsible. d. In economist's terms. create innovation. increase sales and profitability. and to increase sales and profitability.

d. Customatix targets those who wish to design their own shoes. c. Answer: c Page: 188 Rationale: Vans targets the rising wave of skateboard. e. c. 9-23 MARKET-PRODUCT GRID DEFINITION A __________ is a framework to relate the segments of a market to products offered or potential marketing actions by the firm. synergy. b. DEFINITION Answer: d Page: 188 Other Location: web Rationale: Key term definition—market-product grid . MSA and NAICS. e. estimated expenses for products sold to various market segments. sales forecasting. b. d.9-22 MARKETING NEWSNET CONCEPTUAL Small athletic shoe manufacturers such as Vans and Customatix have targeted niche markets and made shoes designed to satisfy needs of different customers. total anticipated revenue for each product to market segments. market segmentation. the segments of a market to products offered or potential marketing actions by the firm. the segments of a market to relative market share compared to closest competitor. b. mass customization. This strategy is an example of: a. growth-share matrix payoff table market-product grid product differentiation table cross tabulation Answer: c Page: 188 Rationale: Key term definition—market-product grid 9-24 MARKET-PRODUCT GRID A market-product grid is a framework to relate: a. c. d. snowboard. e. biking. total anticipated profit for each product to segments. a. and outdoor enthusiasts.

c. d. d. e. and manufacturing expenses. profit. d. relate likely sales of products to prospective market segments. b. CONCEPTUAL make optimal decisions under conditions of uncertainty. terminate as many employees as possible to save money. it should: a. a firm should not attempt to segment its market. which often results extremely high research. 9-26 MARKET SEGMENTATION CONCEPTUAL A business firm would segment its market when this strategy increases its sales revenue. screen many new product ideas in order to select the one with best long-run market potential. reduce production costs. select representative samples of consumers for marketing research studies. not attempt to segment its market. c. Answer: c Page: 188 Rationale: A market-product grid is a framework to relate the segments of a market to the products offered or potential marketing actions by the firm. and return on investment. e. engineering. and return on investment. which will lower quality. discontinue manufacturing any products that are not in the mature stage of their product life cycle. it avoids __________. the extra cost of developing and producing additional versions of the product creating a service gap indirect distribution and logistics problems strategic planning amortization costs Answer: a Page: 190 Other Location: web Rationale: The incremental costs of taking a product to new product segments are rarely as large as those for developing an entirely new product. When its increases in expenses more than offset the potentially increased revenues from segmentation. 524 . act as its own distributor. When expenses are greater than the potentially increased sales from segmentation. 9-27 ONE PRODUCT.9-25 MARKET-PRODUCT GRID One advantage of a market-product grid is that it can be used to: a. e. profit. relate the product life cycle to consumer demand. MULTIPLE MARKET SEGMENTS CONCEPTUAL When a firm produces only a single product or service and attempts to sell it to two or more market segments. Answer: d Page: 189 Rationale: A business firm goes to the trouble and expense of segmenting its market when it expects that this will increase its sales. b. a. c. b.

a one-product-andmultiple-market-segment strategy: a. MULTIPLE MARKET SEGMENTS CONCEPTUAL When compared to a multiple-products-multiple-market segments strategy. 9-29 ONE PRODUCT.9-28 ONE PRODUCT. Kellogg's and Post both make bran cereals with raisins. it avoids the extra cost of developing and producing additional versions of the product. running shoes. c. Answer: c Page: 190 Rationale: A one product and multiple market segment strategy simply involves producing a single product and selling it to two or more market segments. and manufacturing expenses. b. b. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. d. has significantly higher distribution costs. which often entails higher research. which are available in a soft. as is the case with Johnson's Baby Oil. walking shoes. d. . and hard bristle and a short or normal length head. e. e. MULTIPLE MARKET SEGMENTS CONCEPTUAL What is the most likely way for consumers to benefit because a firm uses a strategy of one product for multiple market segments? a. creates greater economies of scale (cost savings) in manufacturing costs. engineering. 9-30 ONE PRODUCT. Reebok shoes makes tennis shoes. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a single product with multiple market segments? a. b. e. is a more effective way of meeting organizational objectives. Reach Toothbrush makes several versions of its toothbrush. c. c. is much more profitable. d. increased satisfaction of consumer wants and needs increased number of choices lower retail prices because of lower production costs improved service lower retail prices because of lower marketing costs Answer: c Page: 190 Rationale: Producing a single product and selling it to multiple market segments gives important production economies of scale that may be passed on to consumers as lower prices (alternative c). Quaker Oats oatmeal sells both its hot cereals and cold cereals to people of all ages. and Weeboks. medium. is a much more effective means of meeting consumers' individual needs. Answer: c Page: 190 Rationale: When a firm produces only a single product or service and attempts to sell it to two or more market segments.

b.9-31 ONE PRODUCT. A new movie used several different advertisements. MULTIPLE MARKET SEGMENTS CONCEPTUAL Which of the following is an example of a multiple products and multiple markets strategy? a. none of the above. synergy. d. e. multiple products with multiple market segments. c. MULTIPLE MARKET SEGMENTS APPLICATION Seventh Heaven is a television show that is designed to have a broad appeal to a wide number of groups. This WB television show is an example of: a. b. It is a show that is appropriate to watch with young children without having to worry about being embarrassed. and another line of cake mixes for people with microwave ovens. It appeals to an older market because it is reminiscent of TV dramas of previous decades. Only alternative c does not involve only one product. c. Answer: c Page: 189 Rationale: A multiple products and multiple markets strategy has a number of distinct products each targeted to a different type of user. mass customization. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. 526 . 9-32 MULTIPLE PRODUCTS. e. It is a show that teaches the importance of moral values by showing teens on the show learning to cope with real-life problems without being too moralistic. Answer: a Page: 190 Rationale: Television shows are single products frequently directed to two or more distinct market segments. one product with multiple market segments.S. d. Betty Crocker carries one line of cake mixes for people with conventional ovens. One set of previews showed the action scenes in order to attract one audience. and the other set showed romantic scenes to attract another audience. College Football Magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U.

d. stabilizes the sales revenues and profits. MULTIPLE MARKET SEGMENTS APPLICATION You can go to your nearest Hallmark card store and buy a birthday greeting card for a friend and pay $4. conforms to all union regulations.9-33 MULTIPLE PRODUCTS. d. Many firms are now offering different product or services to highend or low-end segments. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it serves customers' needs better. Mass customization. Answer: a Page: 190 Rationale: Text term definition—mass customization . each targeted at a different type of user. One product and multiple market segments. b. Multiple products in multiple segments. or you can buy a card that's not quite as nice but just as sentimental from the store's new $. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. reduces the number of employees required. c. and: a. doesn't reduce quality or increase price. multiple products and multiple segments. b. adds to the manufacturer's sales revenues and profits. c. Answer: e Page: 190 Rationale: This is an example of multiple products (greeting cards at different price points) offered to multiple segments. Price discrimination.99 line of greeting cards. e. e.50. one product and multiple market segments. d. e. a. synergy. Answer: e Page: 190 Rationale: Manufacturing multiple products for multiple market segments is worthwhile under the conditions described if sales revenue and profits increase. c. decreases the cost of the physical plant. 9-35 MASS CUSTOMIZATION DEFINITION __________ is tailoring goods or services to the tastes of individual customers on a high-volume scale. b. This is an example of: a. are an example of multiple products aimed at multiple markets. mass customization. Synergy. price discrimination. 9-34 MULTIPLE PRODUCTS.

528 . textures and a style of sole. multiple products in multiple segments. synergy.800 in men's. d. Custom Foot guarantees your shoes will be ready within three weeks. how the 80/20 rule is implemented. price discrimination. but the only shoes on hand are display models. Answer: a Page: 190 Rationale: Mass customization is tailoring goods or services ( the CD art. b. d. and leather type. title. c. Once you choose a shoe style. mass customization. e. At first glance none look any different from your basic oldfashioned shoe store. e. color. and customers go home empty-handed—at least initially. market augmentation. and contents) to the tastes of individual customers on a high volume scale. colors.9-36 MASS CUSTOMIZATION APPLICATION Custom Foot runs six retail locations.000 tracks from record labels that include BMG and Sony Music Group. 9-37 MASS CUSTOMIZATION APPLICATION Yahoo's shopping portal recently began to offer people who visited the site the ability to buy songs from Imix's collection of more than 200.000 variations in women's shoes and 7.50. market melding. About 100 display shoes provide style guidelines. Customers browse the store. mass customization. and leather type of the shoes) to the tastes of individual customers on a high volume scale. one product and multiple market segments. Customers can choose up to 70 minutes of music for around $1 per song. Answer: a Page: 190 Rationale: Mass customization is tailoring goods or services (the style. c. Then they can choose an art design and a title for each CD and have a disc shipped for $2. This is an example of: a. mixing and matching design components such as style. b. color. you select materials. This is an example of: a. repositioning. The retailer sells 10. There's no inventory for sale.

you should recognize that Model E relies on: a. Answer: a Page: 190 Rationale: Mass customization is tailoring goods or services (their eyeglasses) to the tastes of individual customers on a high volume scale. using a system that eliminates the need to try on countless pairs of eyeglasses to find the right one. built-to-order (BTO). c. a. perceptual mapping. This is an example of: a. e. e. repositioning. d. . Answer: e Page: 190 Rationale: The comparison of the Model E to Dell is the phrase that should remove any doubt from students' minds about what kind of business this is. b. b. a one-product-one-market-segment strategy. "Think of Model E as the Dell of the auto industry. d. mass customization. a customer does not have the ability to specify an unlimited number of features. It is very similar to mass customization. d. mass aggregation. b. but because of production issues.9-38 MASS CUSTOMIZATION APPLICATION Paris Miki enables customers to help design their own eyeglasses. synergy. repositioning. president and CEO of Model E. Mass customization Synergy Build-to-order Price discrimination Multiple products in multiple segments Answer: c Page: 190 Rationale: Text term definition—build-to-order 9-40 BUILD-TO-ORDER APPLICATION Model E is a new type of car manufacturer that relies on the Internet to build new car designs for an individual from prototypes to marketable vehicles much faster than ever before possible. From this quote. target marketing. and direct delivery. 9-39 BUILD-TO-ORDER DEFINITION __________ is manufacturing a product only when there is an order from a customer. e. designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design." said William Santana Li. how the 80/20 rule is implemented. c. c. launch.

9-41 SYNERGY DEFINITION Marketing strategies provide the organization with __________. c. d. improved quality on existing products. easier access to product through improved distribution. the ability to be exposed to more informative advertising messages. the increased customer value achieved through performing organizational functions more efficiently. c. investors should make more money executives should get larger salaries products should be made more cheaply customers should be better off the government should collect more taxes Answer: d Page: 190 Other Location: web Rationale: The synergy called “increased customer value” can take the form of more products. e. e. b. b. b. DEFINITION Answer: a Page: 190 Rationale: Key term definition—synergy 530 . d. more tax revenues for government. e. 9-42 SYNERGY CONCEPTUAL The ultimate criterion in segmenting markets is that__________ as a result of increased synergy. higher trade-in values for older model cars. 9-43 SYNERGY Synergy is the increased customer value achieved through: a. larger rebates at the point of sale. a. and so on. the increased customer value achieved through performing organizational functions more efficiently. c. utopianization innovation dichotomy transmogrification synergy Answer: e Page: 190 Rationale: The key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer’s individual wants and achieving organizational synergy. a. but the ultimate criterion is that customers should be better off as a result of increased synergies. performing organizational functions more efficiently. d. lower prices.

develop a market-product grid DEFINITION Answer: b Page: 191. Figure 9-3 Rationale: The process of segmenting and targeting markets involves five key steps: (1) form prospective buyers into segments. b. product sampling product extrapolation mass customization usage segmentation psychographic segmentation Answer: c Page: 191 Rationale: Today’s Internet ordering and flexible manufacturing and marketing processes have made mass customization possible. This website would particularly appeal to people who exercise regularly and are very aware of what shoe styles fit comfortably on their feet. estimate size of the overall market. d. tailoring goods or services to the tastes of individuals on a high-volume scale. form prospective buyers into groups. c. psychographic demographic socioeconomic usage behavior Answer: a Page: 192 Other Location: web Rationale: Psychographic segmentation is used to divide people according to activities (exercise) and interests (comfort and technology). This would be descriptive of which type of market segmentation variable? a. recognize a need. and (5) take marketing actions to reach target markets. d. e.com allows customers to visit its website and design a sneaker to their own personal specifications. create product groupings. 9-46 SEGMENTING AND TARGETING MARKETS The first step in segmenting and targeting markets is to: a. b. a. (2) form products to be sold into groups. (4) select target markets. . e. b.9-44 MARKETING NEWSNET CONCEPTUAL To create a _________ strategy. c. (3) develop a marketproduct grid and estimate size of markets.com allows customers to visit its website and design a sneaker to their own personal specifications. d. cmax. 9-45 MARKETING NEWSNET CONCEPTUAL Cmax. c. e.

and (5) take marketing actions to reach target markets. recognizes similarities of needs of potential buyers within a segment. e. c. c. b. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments? a. What should a marketer do once he or she has selected a target market? a. Figure 9-3 Rationale: The process of segmenting and targeting markets involves five key steps: (1) form prospective buyers into segments. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. (3) develop a marketproduct grid and estimate size of markets. 9-48 CRITERIA FOR FORMING SEGMENTS APPLICATION Between two and three percent of the population have some degree of allergic reaction. d. usually mild. b. is simplest and least costly in assigning potential buyers to segments. the limited benefit to consumers in the segment. and the high cost of running a duplicate salad bar. makes it easiest to reach the segment. c.9-47 SEGMENTING AND TARGETING MARKETS DEFINITION There are five steps involved in segmenting and targeting a market. Restaurants might consider people with these "allergies" as a separate segment. (4) select target markets. d. to preservatives used in salad bars. d. b. maximizes the opportunity for future profit and return on investment. e. (2) form products to be sold into groups. instrumentality of sufficient marketing objectives to ignore that segment different needs of buyers among different segments similarity of needs of potential buyers within a segment simplicity and cost of assigning potential buyers to segments potential for increased profit and ROI Answer: e Page: 192 Rationale: The segment would probably not be profitable—given the size of the market. create product groupings develop a market-product grid estimate size of market take marketing actions to reach that target market form prospective buyers into market segments Answer: d Page: 192. 9-49 CRITERIA FOR FORMING SEGMENTS The best segmentation approach is the one that: a. e. CONCEPTUAL Answer: e Page: 192 Rationale: One of the best criteria to use in forming segments is the opportunity for increased profits and ROI. recognizes different needs of buyers among different segments. 532 .

potential for increased profit similarity of needs of potential buyers within a segment competitive position potential of a marketing action to reach a segment simplicity and cost of assigning potential buyers to segments CONCEPTUAL Answer: c Page: 192 Rationale: Competitive position is a reason for selecting a market. . increase the advertising budget try direct mail instead of broadcast advertising cancel current activities combine segments discontinue offering the good or service Answer: d Page: 192 Rationale: There should be a difference of needs of buyers among segments.9-50 CRITERIA FOR FORMING SEGMENTS CONCEPTUAL A different market segment usually requires a different marketing action that in turn means greater costs. 9-52 FORMING SEGMENTS Which of the following is NOT a criterion used in forming segments? a. it is best to combine segments and reduce the number of marketing actions. e. If the needs of the various segments aren’t very different. combine them into fewer segments. Reaching a segment requires a simple but effective marketing action. potential for increased profit and ROI. e. d. feasibility of marketing actions to reach the segment. c. d. don't segment. b. not for segmenting it. If no such action exists. 9-51 CRITERIA FOR FORMING SEGMENTS CONCEPTUAL When Mikki asked her father for his advice about marketing software for the disabled. e. c. d. Answer: a Page: 192 Rationale: One of the five criteria to use in forming segments is the potential of a marketing action to reach a segment. similarity of needs of potential buyers within a segment. simplicity and cost of assigning potential buyers to segments. If increased revenues don't offset extra costs. b. “Reaching a segment requires a simple but effective marketing action. don’t segment. b.” Mikki's father is expressing concern about the: a. a. c. he told her. If no such action exists. A different segment usually requires a different marketing action that means greater costs. a marketer should __________ to reduce the number of marketing actions. different needs of buyers among different segments. If increased sales don’t offset extra costs.

This means being able to recognize the characteristics of potential buyers and __________ without encountering excessive costs. c. 534 . c. potential for increased profit similarity of needs of potential buyers within a segment difference of needs of buyers among segments cost of reaching the segment simplicity and cost of assigning potential buyers to segments CONCEPTUAL Answer: d Page: 192 Rationale: Cost of reaching the segment is a reason for selecting a market. e. assign them to a segment e. maximize internal considerations b. b. diversify their interests c. 9-55 CONSUMER SEGMENTATION VARIABLES DEFINITION Two general categories used to segment consumer markets are __________ and buying situations. optimize their different needs d. not for segmenting it. a. 9-54 FORMING SEGMENTS CONCEPTUAL A marketing manager must be able to put a market segmentation plan into effect. d. b. d. a. This means being able to recognize the characteristics of potential buyers and then assigning them to a segment without encountering excessive costs. ignore any and all similarities Answer: d Page: 192 Rationale: A marketing manager must be able to put a market segmentation plan into effect. demand frequency demand volume demand characteristics customer characteristics customer lifestyles Answer: d Page: 192 Rationale: Two kinds of variables are generally used to segment consumer markets: (1) customer characteristics and (2) buying situations. e.9-53 FORMING SEGMENTS Which of the following is NOT a criterion used in forming market segments? a.

The easiest method for segmenting her market is to use __________ segmentation variables. b. . In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas. Inc. d. c. age behavior socioeconomic geographic perceptual Answer: d Page: 247 Other Location: web Rationale: The key phrase is North Carolina barbecue sauce. Answer: d Page: 192 Rationale: Two kinds of variables are generally used to segment consumer markets: (1) customer characteristics and (2) buying situations. d.B.9-56 CONSUMER SEGMENTATION VARIABLES CONCEPTUAL Variables used to segment markets can be divided into two general categories. psychographic variables and buying power. e. a company that makes Tongue Tinglin' B. e. She wants to target local people who like the special blend of flavors found only in North Carolina mustard-based barbecue sauce. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the area. which would mean that the easiest market to target would be North Carolinians. a. Answer: a Page: 192 Rationale: KFC has discovered that to be successful in globalization it must be willing to adapt to the taste preferences of different regions. Sauce. c. c. buying products and customer characteristics. b. demographics and buying situation. GE built a downsized microwave oven to hang under kitchen cabinets. psychographics and demographics. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. They are: a. d.Q. b.. customer characteristics and buying situations. 9-57 SEGMENTATION BY REGION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a. 9-58 SEGMENTATION BY REGION APPLICATION Doris Lewis owns Lewis Edibles. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. e.

c. demographic and geographic characteristics. usage patterns. b. e. a. demographic characteristics. lifestyle and demographic characteristics. 536 . d. d. c. psychographic characteristics. c. b. e.9-59 SEGMENTATION BY REGION APPLICATION Universal Concerts is planning on bringing a series of concerts to Canada next year. demographic characteristics. it was relying on a __________ segmentation variable to define a market based on serving size. regional demographic lifestyle geographic psychographic Answer: b Page: 192 Rationale: Household size is a demographic variable. usage rate and demographic characteristics. This consumer behavior requires Universal Concerts to segment its Canadian market according to: a. Answer: a Page: 192 Rationale: Psychographic includes consumer activities and interests—country music. In order for its concerts to be a success it needs to know that Western Canadians like country music and that a country music event in Eastern Canada is much more likely to have empty seats. usage rates. The market segment for Modern Maturity magazine was defined by: a. Answer: d Page: 192 Other Location: web Rationale: Age is a commonly used demographic segmentation variable. b. There are different music preferences in east and west Canada. d. e. 9-60 SEGMENTATION BY DEMOGRAPHICS APPLICATION Modern Maturity magazine is a publication that is sent to all AARP members who by organization definition have to be at least 50-years-old to join. 9-61 SEGMENTATION BY DEMOGRAPHICS APPLICATION When the Benihana Frozen Foods Corporation began to offer its Famous Restaurant Classics meals in single serving packages. buyer situations. geographic and psychographic characteristics.

. household size. and so on. not consumer markets. Whether the prospect is a homeowner indicates the use of which type of consumer segmentation variable? a. age. d. 9-63 SEGMENTATION BY DEMOGRAPHICS Which of the following is a demographic variable? a. NAIC code. b. c. the first question the telemarketer asks is if the person answering the phone is a homeowner. d. e. b. gender. d. b.9-62 SEGMENTATION BY DEMOGRAPHICS APPLICATION When a telemarketer calls to sell a consumer vinyl siding for his or her home. personality gender usage state needs MSA DEFINITION Answer: b Page: 192 Rationale: Demographics are observable differences among people. usage behavior demographic buying situation psychographic Answer: c Page: 192 Rationale: Residence tenure is a demographic variable. household size. age. e. c. c. 9-64 SEGMENTATION BY DEMOGRAPHICS All of the following are consumer demographic variables EXCEPT: a. race. e. DEFINITION Answer: c Page: 192 Rationale: Alternative c is a segmentation variable for organizational. such as gender. race.

race. Since the apparent target of these is traditional families. and restyled it to hang under cabinets. c. and so on. d. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. 538 . Campbell's makes spicier nacho cheese sauce for its distributors in Texas than it does in Maine. e. e. regional demographic socioeconomic geographic psychographic Answer: b Page: 192 Rationale: Demographics are observable differences among people. Because smaller households have smaller kitchens. c. age. 9-66 SEGMENTATION BY DEMOGRAPHICS APPLICATION Which of the following statements demonstrates the formation of a segment based on household size? a. a. GE downsized its microwave oven. b. such as gender. GE built a downsized microwave oven to hang under kitchen cabinets. it appears the State of Alabama Board of Tourism has segmented the market using __________ variables. b. Answer: b Page: 192 Rationale: Household size is a demographic customer characteristic. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the area.9-65 SEGMENTATION BY DEMOGRAPHICS APPLICATION The State of Alabama Board of Tourism ran a series of ads showing traditional families enjoying various attractions in the state. d. household size. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays.

Mahogany. age.9-67 SEGMENTATION BY DEMOGRAPHICS APPLICATION At a Hallmark store you can find several different product lines of greeting cards. The attitude that sedans are inadequate and that freedom and independence are desirable reflect psychographic segmentation variables. household size. This is an example of __________ segmentation. such as gender. and so on. c. usage rate demographic. Shoebox. 9-68 SEGMENTATION BY DEMOGRAPHICS. lifestyle geographic.” If the SUV campaign were simply geared to household size. d. psychographic Answer: e Page: 192 Rationale: Household size is a demographic variable. and Tree of Life cards—all made by Hallmark for sale in its stores and intended to appeal to different target markets. a. but because the campaign is trying to appeal to people who don't like the restrictions of a sedan. c. d. b. Nature's Sketchbook. a. socioeconomic. PSYCHOGRAPHICS APPLICATION Ford Motor Company uses the slogan “No Boundaries” for its ad campaigns for Ford SUVs. including Fresh Ink. it is relying on __________ segmentation. Maxine. The Mahogany line is designed to appeal to African-Americans. and who enjoy freedom and independence. . It invites people who want ultimate people-carrying and gear-storing capabilities “to be outfitted with the most far-reaching sports utility vehicle on earth. race. regional demographic lifestyle geographic psychographic Answer: b Page: 192 Rationale: Demographics are observable differences among people. e. demographic psychographic. usage rate demographic. e. who want to be able to pack up and leave at a moment's notice. it would be using __________ segmentation. b.

Selling to the market segment called “keepers” probably means that Nike is using which of the following types of customer characteristic variables to segment this market? a. c. Psychographic characteristics like personality (gregarious. b. DEFINITION Answer: d Page: 192 Rationale: Psychographic characteristics include personality (gregarious. psychological variables.9-69 SEGMENTATION BY PSYCHOGRAPHICS Magazines like Fitness. introverted. b. interests. e. keep them under their bed and when friends come over. demographic variables. age. b.” people who buy the shoes. Nike is targeting a market it identifies as “keepers. demographics psychographics usage benefits sought behavior Answer: b Page: 192 Other Locations: web Rationale: Alternative a refers to gender. 9-70 SEGMENTATION BY PSYCHOGRAPHICS APPLICATION Nike recently debuted the Air Jordan XVII with a price tag of $200. race. d. compulsive) and lifestyle (consumer activities. and opinions are considered: a. sociocultural. compulsive) and lifestyle (consumer activities. and Health all use a ____________________ segmentation strategy. c. d. age. interests. geographic. interests. 540 . and household size. psychographic. opinions). These magazines are designed to appeal to people who enjoy certain lifestyles. Golf Digest. Field & Stream. demographic. a. introverted. d. and e describe buying situation variables. e. for example. d. consumer behavior. show them the shoes. attitudes. psychographic variables. c. Alternatives c. opinions) describe this segmentation variable Nike is using. The shoes arrived at shoe stores in a metallic silver briefcase instead of a shoebox. APPLICATION Answer: e Page: 192 Rationale: Lifestyle is a psychographic variable. 9-71 SEGMENTATION BY PSYCHOGRAPHICS Consumer activities. e.

Answer: a Page: 192 Rationale: Customer characteristics used in segmenting consumer markets include geographic.S. b. a. and each is intended to appeal to different target markets. The Shoebox line is designed to appeal to people on limited budgets and is an example of __________ segmentation. which is a significantly lower price than some of the other Hallmark brands sell for. e. c. . socioeconomic variables. education and occupation. psychographic behavior buying situation socioeconomic geographic Answer: d Page: 192 Rationale: Socioeconomic variables include income. the MS-Integrated Marketing Communication. The MBA and MS degrees are targeted to people who already have a bachelor’s degree and are examples of __________ segmentation. psychographic behavior buying situation socioeconomic geographic Answer: d Page: 192 Rationale: Socioeconomic variables include income. education and occupation. Maxine. including Fresh Ink. d. Nature's Sketchbook. usage rate. The Shoebox line sells for $. time of purchase. d. the MS-Marketing Strategy. psychographics. Census and include: a. the MBA. and Tree of Life cards—all cards made by Hallmark for sale in its stores and intended to appeal to different target markets. e. b. type of retail store used. Mahogany. c. d. a. e. 9-73 SEGMENTATION BY SOCIOECONOMIC APPLICATION At the Daniels College of Business many different degrees are offered such as the Bachelor of Science. b.9-72 SEGMENTATION BY SOCIOECONOMIC APPLICATION At a Hallmark store you can find several different product lines of greeting cards. demographics.99. c. buying situation. Shoebox. 9-74 SEGMENTATION BY CUSTOMER CHARACTERISTICS DEFINITION Several customer characteristics used in segmenting consumer markets are based on those from the 2000 U. and psychographic characteristics.

buying situation. Census and include: a. c. usage rate. b. b. time of purchase. type of retail store used. 9-76 SEGMENTATION BY CUSTOMER CHARACTERISTICS DEFINITION Several customer characteristics used in segmenting consumer markets are based on those from the 2000 U. Nike is targeting a market it identifies as “keepers. b.S. d. and e describe customer characteristics. e. The benefit would be the ability to show the shoes and hopefully to have something that no one else did. 542 . keep them under their bed and when friends come over. 9-77 SEGMENTATION BY BENEFITS SOUGHT APPLICATION Nike recently debuted the Air Jordan XVII with a price tag of $200. socioeconomic variables. socioeconomic variables. d. geographic variables. demographics psychographics geographic benefits sought socioeconomic Answer: d Page: 193 Rationale: Alternatives a. demographics. Census and include: a. and psychographic characteristics. demographics.S. Selling to the market segment called “keepers” probably means that Nike is using which of the following types of buying situation variables to segment this market? a. c. e. Answer: b Page: 192 Rationale: Customer characteristics used in segmenting consumer markets include geographic. c. The shoes arrived at shoe stores in a metallic silver briefcase instead of a shoebox. b. e. buying situation usage rate demographics time of purchase type of retail store used Answer: c Page: 192 Rationale: Customer characteristics used in segmenting consumer markets include geographic. d.” people who buy the shoes. c.9-75 SEGMENTATION BY CUSTOMER CHARACTERISTICS DEFINITION Several customer characteristics used in segmenting consumer markets are based on those from the 2000 U. show them the shoes. and psychographic characteristics.

geographic socioeconomic benefits sought product knowledge demographic Answer: c Page: 193 Other Location: web Rationale: Nyquil is appealing to people who suffer from colds and who would really like to sleep and feel better. . sneezing. e.” From this information. aching. “5 Reasons Why You'll Sleep Better on a Sleep Number Bed. a. b. d. e. stuffy head. 9-79 SEGMENTATION BY BENEFITS SOUGHT APPLICATION The slogan for General Foods International Coffee is “It Stirs the Soul. d. e.9-78 SEGMENTATION BY BENEFITS SOUGHT APPLICATION The headline of the ad for the Sleep Number bed by Select Comfort read. coughing. c. a. you should realize the product is using a __________ segmentation strategy. sniffling. d. b. geographic socioeconomic benefits sought product knowledge demographic Answer: c Page: 193 Rationale: Benefits sought is a situational characteristic. fever” and helps you get the rest you need to get better. a. General Foods was trying to get consumers to think about how drinking a cup of rich-flavored coffee is indulgent. Nyquil uses a segmentation strategy based on __________ variables. c. b. benefits sought psychographic demographic socioeconomic behavior Answer: a Page: 193 Other Location: web Rationale: Benefits sought includes product features and customer needs. you know that Select Comfort uses __________ segmentation.” Based on that trademarked slogan. 9-80 SEGMENTATION BY BENEFITS SOUGHT APPLICATION Nyquil advertises that it alleviates “the nighttime. c. Customers and prospects for the Sleep Number bed are seeking the benefit of a better night's sleep.

attractive and inexpensive disposable dishes for transporting food. c.9-81 SEGMENTATION BY BENEFITS SOUGHT APPLICATION Many families today hold potluck meals during holidays or special events. benefits sought. Answer: d Page: 193 Rationale: British Airways is offering customers important benefits in time. b. and desserts and all share the food. Promotions to frequent fliers stress that passengers can sleep in fully reclining seats and arrive refreshed to carry out a full day's schedule. Reynolds responded to this problem by creating Pot Lux cookware. Reynolds has recognized how to use _________ variables to segment its market. d. d. life stage. vegetables. a. 544 .” 9-82 SEGMENTATION BY BENEFITS SOUGHT APPLICATION Many companies have cut travel budgets. BA's strategy is an example of segmenting the market by: a. c. e. It is easy to forget to take the bowl that you brought to the dinner home with you. The slogan Reynolds uses with this new product says it all. Other airlines are rushing to compete because BA has captured market share in this profitable segment at their expense. psychographics. Despite the shrinking pool of business-class travelers. They are able to rest during the flight and to work more effectively upon arrival. so that very few business people are authorized to fly first class. lifestyle. breads. Participants bring casseroles. British Airways (BA) has grown market share for its transatlantic business class by offering greater comfort. industry sector. b. user status benefits sought demographics family size geographic Answer: b Page: 193 Rationale: Understanding what benefits are important to different customers is often a useful way to segment markets because it can lead directly to specific marketing actions. “Make every dish forgettable. e.

see it as a side dish. usage benefits sought demographics family size geographic Answer: a Page: 193 Rationale: Pepperidge Farm is trying to change light users into medium users and medium users into heavy users. b. What segmentation variable has it focused on with the newer approach? a. c. the quantity of beer consumed caused Miller to change its marketing message to appeal to the men 18 to 30 years of age—the heavier users. inventory. It is breakfast. Pepperidge Farm's ads advise consumers of this bread that this new product. d. is consumed by men 18 to 30 years of age. e. c.S. e. d. e. “doesn't go with breakfast. consumption rate. b. The company realizes most people who eat toast for breakfast." and ads showed elegant women in long white dresses sipping beer from crystal goblets. Answer: c Page: 193 Rationale: Key term definition—usage rate 9-85 SEGMENTATION BY USAGE APPLICATION Miller beer once called itself "the champagne of bottled beer. 9-84 SEGMENTATION BY USAGE DEFINITION The quantity consumed or patronage (store visits) during a specific period is called: a. turnover. Then the company discovered that most beer in the U.” Which segmentation variable is being used in this example? a. and it changed the thrust of its marketing message to reflect the more productive target market. usage rate. In this case. c. b. benefits sought usage product awareness buyer intentions buying condition Answer: b Page: 193 Rationale: The quantity consumed or patronage (store visits) during a specific period is called usage rate. trial. . d.9-83 SEGMENTATION BY USAGE APPLICATION Pepperidge Farm has developed a new thick-sliced French Toast Swirl bread.

Campbell's soup makes spicier nacho cheese sauce for its distributors in Texas than it does in Maine. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. GE built a downsized microwave oven to hang under kitchen cabinets. Post recently launched a campaign to increase consumption of the cereal by inviting consumers to try the crunchy cereal on top of their yogurt. their salad. 546 . and people who were familiar with the product to use it a variety of different ways. e. b. usage demographic behavior lifestyle life stage Answer: a Page: 193 Rationale: Usage rate refers to the quantity consumed. b. c. Post is using which segmentation variable to define its target market? a. the restaurant appears to have insufficient usage (patronage. Its market share has been steadily declining as consumers began associating it with something their grandfather ate. Post was trying to convince people who had never tried the cereal to try. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. d. or their bowl of soup as a delicious addition. c. 9-87 SEGMENTATION BY USAGE APPLICATION Post Grape-Nuts cereal has been marketed since early in the 20th century. during weekdays). which Post is trying to increase by suggesting other product uses. Answer: d Page: 193 Rationale: The quantity consumed or patronage (store visits) during a specific period is called the usage rate.9-86 SEGMENTATION BY USAGE APPLICATION Which of the following statements demonstrates the formation of a segment based on usage? a. and more potential usage for breakfast on weekends. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience Top 40 station in the area. d. e. In this case.

d. DEFINITION Answer: c Page: 194 Other Location: web Rationale: Key term definition—80/20 rule . eighty percent of a firm's products will ultimately be sold at the original markup price. 9-90 80/20 RULE The 80/20 rule is a concept. Every time a customer purchases a gallon of this brand and gives the clerk his or her Golden Gallon card. eighty percent of a firm's expenditures are tax deductible and twenty percent are not. 9-89 SEGMENTATION BY USAGE APPLICATION Golden Gallon convenience stores sell Golden Gallon brand milk. b. e. demographics. eighty percent of a firm's sales are obtained from twenty percent of its customers. the heavier users are those that get the Golden Gallon card punched enough to obtain a free gallon of milk. usage. d. eighty percent of a firm's first time users will become brand loyal and twenty percent of the firm's first time users will use the product only once. the card is punched. e. which suggests: a. In this case. usage. and twenty percent will not. psychographics. benefits offered. "more than 1.000 miles per week" is a measure of usage rate. e. c. d. Answer: a Page: 193 Rationale: The quantity consumed or patronage—store visits—during a specific period is the usage rate. Answer: a Page: 193 Rationale: The quantity consumed or patronage—store visits—during a specific period is the usage rate. b. psychographics. c. then he or she gets a free gallon of milk. b.9-88 SEGMENTATION BY USAGE APPLICATION A national car rental firm targets 50 percent of its advertising to salespeople who travel more than 1. eighty percent of a firm's inventory should be readily available. family size. This is an example of segmentation by: a. In this case. family size. Its market is segmented by: a. demographics. When the customer has accumulated enough marks. c. and twenty percent should be reserved for emergency demand.000 miles per week. benefits offered.

it would be: a. 9-93 80/20 RULE APPLICATION If the owners of a bakery want to increase sales of its baked goods by directing its marketing efforts towards the relatively small number of consumers who are responsible for the majority of the baked goods sold. e. a New York sales promotion agency. 9-92 80/20 RULE DEFINITION The 80/20 rule is most closely related to which consumer segmentation variable? a. geographic psychographic benefits sought behavior usage Answer: e Page: 194 Other Locations: web Rationale: According to the 80/20 rule. the rule is accurate in that there are heavy users of some products and services and a relatively small proportion of the buying public is responsible for a majority of the sales of those products. d. segmenting its market based on family size. segmenting its market according to consumer needs. segmenting its market based on the 80/20 rule. e. b. d. c. d. This is an example of what classic concept? a. segmenting its market according to consumer interest. c. 548 . augmenting its market. eighty percent of a firm's sales are obtained from twenty percent of its customers. b. e. b. Answer: b Page: 194 Rationale: Research has shown that approximately 80 percent of an organization's sales are accounted for by 20 percent of its customers. While the percentages are merely meant as a guideline. c. the law of inverse proportions the 80/20 rule the survival of the fittest the law of eminent domain the primogeniture rule Answer: b Page: 194 Rationale: The 80/20 rule is a concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers.9-91 80/20 RULE APPLICATION Todd Harris and Associates. discovered from analysis of its files that one-fifth of its clients accounted for more than three-quarters of its fees and commissions.

d. geographic. d. DEFINITION Answer: b Page: 194 Rationale: Buying situations include benefits sought (product features. c. c. b. convenience marketing quality marketing frequency marketing quantity marketing benefit marketing Answer: c Page: 193 Rationale: Text term definition—frequency marketing 9-95 SEGMENTATION BY BUYING SITUATION One buying situation used in segmenting consumer markets is: a. nonuser). service. usage rate. geographic.9-94 FREQUENCY MARKETING DEFINITION Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly—a technique sometimes called__________. e. socioeconomic. warranty) and usage (heavy user. . e. b. psychographics. light user. e. a. light user. demographics. quality. b. d. warranty) and usage (heavy user. 9-96 SEGMENTATION BY BUYING SITUATION One buying situation used in segmenting consumer markets is: a. benefits sought. service. psychographics. nonuser). DEFINITION Answer: b Page: 194 Rationale: Buying situations include benefits sought (product features. quality. socioeconomic. demographics. c.

b. ultimate consumers. prospects. Answer: c Page: 194 Rationale: Consumers who use a product category but not a particular brand are viewed as prospects. b. 9-99 PROSPECTS DEFINITION People who use the type of good or service your firm sells although they do NOT use your firm's product now are called: a. nonqualified prospects. e. b. leads. and are never likely to become users.9-97 NONPROSPECTS DEFINITION People who do NOT use a firm's product or service. people who might become users are prospects and people who are never likely to become users are nonprospects. 550 . e. a. cold leads nonqualified prospects remote chances undefined prospects nonprospects Answer: e Page: 194 Rationale: Among nonusers of a product. leads. d. are __________. undefined prospects. are called: a. d. e. c. non-prospects. Answer: d Page: 194 Rationale: Among nonusers of a product. undefined prospects. people who might become users are prospects and people who are never likely to become users are nonprospects. c. and most likely never will. disenfranchised prospects. d. 9-98 NONPROSPECTS APPLICATION The 11 percent of adult Americans who don't go to fast-food restaurants in a typical month. c. nonprospects.

nature of good psychographic location usage buying condition Answer: c Page: 195 Rationale: Population density is closely related to MSA classifications. The warm. and benefits sought. b.000 people. c. a. number of employees (related to usage). and number of employees are examples of ways to: a. promote buyer loyalty. 9-101 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Evergreen Air Center in Marana.000 a month for its storage service. Answer: c Page: 195 Rationale: There are a number of variables that might be used to segment organizational markets including location. 9-102 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION William Morris talent agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. the location segmentation variable. d. NAICS code.9-100 ORGANIZATIONAL MARKET SEGMENTATION DEFINITION Variables such as location. d. is the world's biggest parking lot for unwanted commercial aircraft. forecast sales to a consumer market. Also. This would be segmenting the market by __________ variables. dry air where the operation is located serves as a cheap and effective airplane preservative. . NAICS codes and benefits sought number of locations and benefits sought location and demographics NAICS sectors and number of locations number of employees and population density Answer: a Page: 195 Rationale: The NAICS sectors would reveal other companies that fly commercial planes that might be interested in Evergreen's services. the North American Industry Classification System (NAICS) code. get around gatekeepers and reach buyers. Arizona. c. e. c. Which organizational segmentation variable might Evergreen use to segment its market? a. d. the companies storing their planes at the facility want the planes preserved—a benefit sought. b. segment an organizational market. segment a consumer market. b. Airlines pay from $750 to $5. e. e. Imagine that the agency decided the singer would not perform at venues located in communities that had less than 100.

9-103 ORGANIZATIONAL MARKET SEGMENTATION

APPLICATION

Australia-based Renewable Energy Ltd. sells a device that converts manure into energy. One of the $10 million devices is capable of generating energy equal to $2 million of natural gas per year. The company believes its target market is businesses that use a lot of energy like its first customer, a fertilizer manufacturer, and that are located in rural areas. It will use which of the following strategies to segment its market: a. b. c. d. e. benefits sought and geographic. number of employees and benefits sought. purchase location and purchase type. NAICS codes and location. benefits sought and NAICS codes.

Answer: d Page: 195 Rationale: Renewable Energy could use NAICS codes to locate other fertilizer manufacturers and location segmentation because prospects need to be in rural areas where there is a ready supply of manure. 9-104 ORGANIZATIONAL SEGMENTATION BY LOCATION APPLICATION

When evaluating entry into the large Boston market, Seattle-based Starbucks Coffee Company found that Coffee Connection, a well-established local chain, already occupied many prime locations. Starbucks entered the market anyway because it based its decision on: a. b. c. d. e. number of employees, a geographic variable. the NAICS code, a demographic variable. population density, a location variable. nature of good, a customer characteristic variable. buying conditions, a demographic variable.

Answer: c Page: 195 Rationale: Coffee Connection was a strong competitor: well-established, locally owned, and occupying excellent locations. However, Starbucks' criteria still favored entry. Boston is a large market (population density-a location variable), with potential for growth in coffeehouses owing to many students and young professionals. Starbucks bought Coffee Connection and converted its locations to reach the segment faster and more effectively. None of the pairings in the alternatives is a correct combination except alternative c.

552

9-105 ORGANIZATIONAL MARKET SEGMENTATION

APPLICATION

Harmony Products makes fertilizers used on golf courses. Which organizational market segmentation variable would provide the greatest benefit to the organization? a. b. c. d. e. NAICS codes annual sales buying condition nature of good number of locations

Answer: a Page: 195 Rationale: Organizational market segmentation variables include location, NAICS code, number of employees, and benefits sought. In this case, Harmony could use the NAICS codes to find golf courses to sell its fertilizers to. 9-106 ORGANIZATIONAL MARKET SEGMENTATION CONCEPTUAL

Which of the following is NOT a basis used to segment organizational markets? a. b. c. d. e. location psychographic NAICS code number of employees benefits sought

Answer: b Page: 195 Rationale: Organizational market segmentation variables include location, NAICS code, number of employees, and benefits sought. Alternative b is a segmentation variable for consumer markets. 9-107 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION

Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. One criterion management wants to use to evaluate potential new geographic market segments is whether new equipment must be bought to serve each new segment. This is an example of which criterion used to pick new target market segments? a. b. c. d. e. Best Food's competitive position in the segment Best Food's created product groupings expected growth of the market segment size of the market segment compatibility with Best Food's objectives and resources

Answer: e Page: 195 Rationale: New equipment to reach a new market segment relates to the organization's resources.

9-108 PRODUCT GROUPING

DEFINITION

__________ occur(s) when products are put into meaningful categories so buyers can relate to them. a. b. c. d. e. Market-product combinations Categorical marketing 80/20 grouping Product groupings Organizational segmentation

Answer: d Page: 195 Rationale: Products are put into meaningful categories using product grouping, so buyers can relate to them. 9-109 PRODUCT GROUPING APPLICATION

Hallmark groups its products into five categories. They are flowers and gifts, cards and e-cards, Hallmark collectibles, gift wrappings, and photo albums and scrapbooks. Why does Hallmark use product groupings? a. b. c. d. e. The groupings increase the number of market-product combinations on the market-product grid into a more manageable framework for subsequent analysis. Consumers buy more in illogically organized environments. The products are grouped into meaningful categories using product grouping so buyers can relate to these products. Product groupings can be generated quantitatively to show which adhere to the 80/20 rule. All of the above are reasons why Hallmark would use product groups.

Answer: c Page: 195 Rationale: Products are put into meaningful categories using product grouping, so buyers can relate to them. 9-110 PRODUCT GROUPING APPLICATION

In developing a marketing strategy for Hallmark the company decides that what it was really selling was memory keeping, and not photo albums, scrapbooks, and related supplies. Thus, store layouts are defined to reflect this buyer experience, rather than a collection of books and related supplies. This is an example of: a. b. c. d. e. target market selection. product grouping. market-product grid development. taking marketing actions to reach target markets. market segmentation of prospects.

Answer: b Page: 195 Rationale: Products are put into meaningful categories (memory keeping) using product grouping (putting the photo albums, scrapbooks, and related supplies together in the store), so buyers can relate to them.

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e. it is more profitable to define product groupings in terms of large market segment because it reduces manufacturing and marketing costs. d. implementing a harvesting strategy. 9-113 SELECTING TARGET SEGMENTS Which of the following is a criterion used for selecting a target segment? a. d. e. its competitors engage in no product groupings.9-111 PRODUCT GROUPINGS APPLICATION Hallmark grouped its scrapbook supplies. b. In this case. the commuter student-lunch cell is being estimated. photo albums and such into one product group because: a. competitors relate to them better for benchmarking purposes. you determine that as many as 400 lunches per day are purchased by local college students who commute and eat at your restaurant. Answer: c Page: 196 Rationale: Estimating how many lunches (product) per day a market (commuter students) will eat at your restaurant is one of the activities in the process of developing a market-product grid and estimating the size of markets in each of the cells in the grid. developing a market-product grid and estimating size of markets. c. implementing the 80-20 rule. 9-112 MARKET-PRODUCT GRID CONCEPTUAL In developing a marketing strategy for your Wendy's restaurant. (4) cost of reaching the segment. (2) expected growth. c. size of the market expected growth cost of reaching the segment compatibility with the organization’s objectives and resources All of the above are used for selecting a target segment. e. it is easier to estimate the industry sales for fewer market-product combinations. b. c. CONCEPTUAL Answer: e Page: 197 Rationale: The five criteria to use in actually selecting the target segments are: (1) market size. Answer: b Page: 195 Other Location: web Rationale: Products are put into meaningful categories (items used to record memories) using product grouping (the scrapbook supplies and photo albums). so buyers can relate to them. d. . customers relate to them better since all of these products may be used to record memories. (3) competitive position. forming products to be sold into groups. repositioning a product. b. This is part of the process for: a. (5) compatibility with the organization’s objectives and resources.

(4) cost of reaching the segment. expected growth of the market. not for selecting one. e. not be compatible with the company's current resources. (5) compatibility with the organization’s objectives and resources. This market would use the rehabilitation services that the company now provides. e.9-114 SELECTING TARGET SEGMENTS CONCEPTUAL Which of the following is NOT a criterion used for selecting a target segment? a. d. have no expected growth. c. competitive position of the firm with respect to the market. d. be accurately described by all of the above. Because it would be so small. be very small. be readily accessible to the firm's marketing programs. this market would: a. They include the size of the market. In terms of the criteria used for selecting a target segment. The five criteria to use in actually selecting the target segments are: (1) market size. 9-115 SELECTING TARGET SEGMENTS CONCEPTUAL Five general criteria are often used to pick target segments. 9-116 SELECTING TARGET SEGMENTS APPLICATION A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. size of the market similarities of needs of potential buyers competitive position cost of reaching the segment compatibility with the organization’s objectives Answer: b Page: 197 Rationale: Similarities of needs of buyers within a segment is a criterion for segmenting a market. Answer: c Page: 197 Rationale: The market would grow as people continue skiing—although it may be slow growth. What is the fifth criterion? a. and compatibility with the organization's objectives and resources. cost of reaching the segment time required to create awareness need to conform to government regulations how long target market members have been customers amount of publicity likely to result Answer: a Page: 197 Other Location: web Rationale: There are two different kinds of criteria present in the market segmentation process: (1) those used to divide the market into segments. b. e. and (2) those used in picking the target segments. d. c. (3) competitive position. 556 . c. (2) expected growth. b. it would not be readily accessible by marketing programs. b.

d. taking marketing actions to reach target markets. Answer: a Page: 197 Rationale: A decision to concentrate on affluent teenagers is the selection of a target market segment. the more attractive the segment is. c. The five criteria to use in actually selecting the target segments are: (1) market size. developing a market-product grid and estimating size of markets. d. (4) cost of reaching the segment. . e. 9-118 SELECTING TARGET SEGMENTS Which of the following is a criterion for selecting a target segment? a. and (2) those used in picking the target segments.9-117 SELECTING TARGET SEGMENTS APPLICATION In developing a marketing strategy for the newly released Nike Air Jordan XVII with a price tag of $200. Competitive position is a criterion for selecting a target market. b. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. forming products to be sold into groups. This is an example of: a. (2) expected growth. (3) competitive position. similarity of needs of potential buyers within a segment difference of needs of sellers between segments feasibility of a marketing action to reach a segment amount of competition in the segment simplicity and cost of assigning potential buyers to segments CONCEPTUAL Answer: d Page: 197 Rationale: There are two different kinds of criteria present in the market segmentation process: (1) those used to divide the market into segments. selecting target market segments to reach. forming prospective buyers into segments. c. (5) compatibility with the organization’s objectives and resources. b. The less the competition. e.

The five criteria to use in actually selecting the target segments are: (1) market size. similarity of needs of potential buyers expected growth competitive position cost of reaching the segment compatibility with the company's objectives CONCEPTUAL Answer: a Page: 197 Rationale: There are two different kinds of criteria present in the market segmentation process: (1) those used to divide the market into segments. d. and (2) those used in picking the target segments. (3) competitive position. 558 . similarity of needs of potential buyers within a segment difference of needs of buyers between segments feasibility of a marketing action to reach a segment simplicity and cost of assigning potential buyers to segments expected growth of segment CONCEPTUAL Answer: e Page: 197 Rationale: There are two different kinds of criteria present in the market segmentation process: (1) those used to divide the market into segments.9-119 SELECTING TARGET SEGMENTS Which of the following is a criterion for selecting a target market? a. d. e. not for selecting one. perhaps it is growing significantly or is expected to grow in the future. (2) expected growth. (2) expected growth. Similarity of needs is a criterion for segmenting a market. Expected growth is a criterion for selecting a target market. b. e. (3) competitive position. c. b. The five criteria to use in actually selecting the target segments are: (1) market size. Although the size of market in the segment may be small now. (4) cost of reaching the segment. (4) cost of reaching the segment. and (2) those used in picking the target segments. (5) compatibility with the organization’s objectives and resources. 9-120 SELECTING TARGET SEGMENTS Which of the following is NOT a criterion for selecting a market segment? a. c. (5) compatibility with the organization’s objectives and resources.

d. a company that makes Tongue Tinglin' B. In developing a marketing strategy to sell the sauce. In developing a marketing strategy to sell her product line. taken marketing actions to reach target markets. that advertises local products and distributes them to local supermarkets and gourmet shops. formed prospective buyers into segments. formed products to be sold into groups. c. a specialty food association. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets.. developed a market-product grid and estimating size of markets. developed a market-product grid and estimating size of markets. 9-123 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen.B. 9-122 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen. b. e. formed products to be sold into groups. Sauce. selected target market segments to reach. formed prospective buyers into segments. e. Answer: d Page: 197 Other Locations: web Rationale: Alternative d is the final result in the process of segmenting and targeting markets. developed a market-product grid and estimating size of markets. c.9-121 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. .Q. she decided to buy an ad in the local shopper's newspaper that is well-read in her region of the country. taken marketing actions to reach target markets. d. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. Johnson has just: a. Johnson has just: a. formed products to be sold into groups. Lewis decided to join Goodness Grows in North Carolina. formed prospective buyers into segments. she decided to package her jams and jellies with a tag that indicates the products have been hand-made. d. Lewis has just: a. c. Inc. b. In developing a marketing strategy to sell her product line. taken marketing actions to reach target markets. She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce. e. selected target market segments to reach. b. selected target market segments to reach.

Johnson has just: a. taken marketing actions to reach target markets. selected target market segments to reach.9-124 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen. taken marketing actions to reach target markets. she decided to hire an independent sales agent to sell her product on the East coast. developed a market-product grid and estimating size of markets. formed prospective buyers into segments. taken marketing actions to reach target markets. c. she decided to develop a website so that she could sell her product all across the United States. developed a market-product grid and estimating size of markets. formed products to be sold into groups. d. Johnson has just: a. c. In developing a marketing strategy to sell her product line. 560 . In developing a marketing strategy to sell her product line. formed products to be sold into groups. d. e. c. formed prospective buyers into segments. but also to ultimate consumers using a website. d. selected target market segments to reach. selected target market segments to reach. b. 9-126 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen. developed a market-product grid and estimating size of markets. Johnson has just: a. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. b. she decided to sell her product not only to retailers. 9-125 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. formed prospective buyers into segments. In developing a marketing strategy to sell her product line. e. e. formed products to be sold into groups. b.

taken marketing actions to reach target markets. In developing a marketing strategy to sell her product line. competitors. profits. Answer: b Page: 199 Rationale: Apple’s lack of a segmentation strategy in the early 1980s has been replaced by one which Steve Jobs is using to compete in what he sees as the Age of the Digital Lifestyle. Johnson has just: a. c.000 units had been sold. she decided to use overnight shipping during the holidays so that customers would receive her products in time. b. By the end of the year. e. e. selected target market segments to reach. . b. introducing the iMac—the most innovative PC ever created according to many PC and business analysts. competitive advertising. target market segments. In 1998 Apple re-targeted the consumer and education markets. formed products to be sold into groups. delivering a powerful new PC at a lower price. d. Answer: d Page: 199 Rationale: Steve Jobs returned to Apple in 1997 and changed its segmentation strategy. coherent product lines targeted to identifiable market segments. developed a market-product grid and estimating size of markets. b. important corporate computer needs. Introducing colorful iMac in five fruit flavors in 1999 enhanced appeal to these target market segments. This strategy was successful primarily because it identified: a. formed prospective buyers into segments. c. investment capital. Answer: d Page: 197 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. distributors. innovative distributors.9-127 TAKING MARKETING ACTIONS APPLICATION Kellie Johnson makes jams and jellies that sell under the brand name of Yesterday's Kitchen. 9-128 APPLE'S SEGMENTATION STRATEGY APPLICATION In 1998 Apple re-focused on the consumer and education markets. d. 800. d. usage rates among younger consumers. making the iMac the greatest PC product launch ever. c. e. 9-129 MARKETING NEWSNET DEFINITION In the early 1980s Apple Computer Company was often called "Camp Runamok" because the innovative company had no: a.

” such as iTunes. iDVD. c. d. delivering a powerful new PC at a lower price. one example is focusing on a single product. d. Figure 9-8 Rationale: Steve Jobs returned to Apple in 1997 and changed its segmentation strategy. and iPhoto. a. bundled as iLife. Both of these minimize costs but do not take into account synergies. Product synergies are opportunities for efficiency in terms of research and development and production. a. iMovie. one example is focusing on a single consumer segment. Jobs proclaimed that “the Mac can become the digital hub of this new digital lifestyle. e. Introducing colorful iMac in five fruit flavors in 1999 enhanced appeal to these target market segments. b. e. repositioning distributing targeting using underestimating Answer: a Page: 201. c.” By __________ Apple as the “digital hub” with “killer apps. Product perceptions Relative positionings Competitive positionings Market-product synergies Selective perceptions Answer: d Page: 200 Rationale: Marketing synergies are opportunities for efficiency in terms of a market segment. which may come about by overlap in positioning several products to one or more market segments or selling one product to multiple segments. Steve Jobs believed that the personal computer entered the Age of the Digital Lifestyle.9-130 APPLE'S REPOSITIONING STRATEGY APPLICATION In 2001. In 1998 Apple re-targeted the consumer and education markets. 9-131 MARKET-PRODUCT SYNERGIES DEFINITION __________ are opportunities for efficiency in terms of market segments and research and development and production. Jobs believe consumers can take full advantage of the new digital lifestyle era. 562 . b.

Product synergies are opportunities for efficiency in terms of research and development and production. e. b. d. one example is focusing on a single consumer segment. vital to success in selecting target market segments. Both of these synergies are vital to success in both selecting target market segments and making marketing decisions. c. CONCEPTUAL opportunities for efficiency in terms of market segments. described by all of the above statements. b. competitive positioning. product positioning. relative positioning. selective perception. and department stores geographic segmentation. Answer: e Page: 200 Rationale: Marketing synergies are opportunities for efficiency in terms of a market segment. grocery. a careful analysis of cross tabulations shelf locations in major chain. opportunities for efficiency in terms of research and development and production. c. d. c. often within major metropolitan areas the place a product offering occupies in consumers' minds on important attributes an old and outdated concept no longer worthy of consideration in marketing planning DEFINITION Answer: d Page: 201 Rationale: Key term definition—product positioning . one example is focusing on a single product. Answer: d Page: 201 Rationale: Key term definition—product positioning 9-134 PRODUCT POSITIONING What does the term product positioning refer to? a. b. product perception. d.9-132 MARKET-PRODUCT SYNERGIES Market-product synergies are: a. 9-133 PRODUCT POSITIONING DEFINITION The place an offering occupies in consumers' minds on important attributes relative to competitive offerings is called: a. e. e. vital to success in making marketing decisions.

b. e. product positioning. normally in major metropolitan areas. lateral positioning. 9-136 PRODUCT POSITIONING APPLICATION There are a lot of skateboard manufacturers on the market. In this case Advil is positioned as faster and longer-lasting than Tylenol.9-135 PRODUCT POSITIONING APPLICATION Children's Advil pain reliever positioned itself against Children's Tylenol pain reliever by running ads. as they are clustered by type of outlet. 9-137 PERCEPTUAL MAP DEFINITION Marketers use perceptual maps as a means to display or graph in two dimensions the location of products or brands: a. d. This technology gives the BMW Streetcarver better control at high speeds and around sharp turns than any other brand. c. differentiation. with respect to the geographic areas in which they are manufactured. What type of positioning is BMW using with its $495 skateboard? a. which claimed that the Advil brand is superior because it works faster and longer than the Tylenol brand. within selected retail outlets. but the BMW Streetcarver is the only one with stabilizers and wheel design based on BMW's automobile. Answer: a Page: 201 Rationale: Product positioning refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive offerings. consumer positioning. This is an example of: a. cognitive positioning. d. c. Answer: d Page: 201 Rationale: Key term definition—perceptual map 564 . c. parallel market positioning distinction positioning competitive positioning product positioning head-to-head positioning Answer: d Page: 201 Other Location: web Rationale: Product positioning refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive offerings. e. b. within distribution channels. e. indicating accessibility by consumers. d. b. In this case BMW has positioned their skateboard as having important attributes (better control at high speeds and around sharp turns) relative to competitive offerings. in the minds of consumers.

c. consumers. c. CONCEPTUAL Answer: c Page: 201 Other Location: web Rationale: Key term definition—perceptual map 9-139 PERCEPTUAL MAP DEFINITION A perceptual map can be used to identify a firm's product in terms of how closely it fits the "ideal" and where it fits in relationship to competitors. three-dimensional cube. b. c. market-product grid. payoff table. database. The map is based on perceptions of: a.9-138 PERCEPTUAL MAP A perceptual map is most like a: a. d. e. . growth matrix. two-dimensional graph. consumer map of likes and dislikes. competitors. Answer: d Page: 201 Rationale: A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands and then take marketing actions. b. consumers. and the firm itself. pyramid design. independent rating organizations such as Consumer Reports. intermediaries. b. perceptual map. d. d. consumer preference matrix. Answer: c Page: 201 Rationale: Key term definition—perceptual map 9-140 PERCEPTUAL MAP DEFINITION A graph displaying consumers' perceptions of product attributes across two or more dimensions is a: a. e. competitors. e.

d. In this case. product positioning. d. more importantly because it wanted to target the same customers. c. Post recently launched a campaign which invited consumers to try the crunchy cereal on top of their yogurt. the company began operations again with the hope of attracting its previous customers back. c. it failed and had to declare bankruptcy. DEFINITION Answer: d Page: 201. After much effort. segmentation differentiation repositioning probability inference Answer: c Page: 201 Other Location: web Rationale: SwissAir did not believe that its customers would forgive it for the cutbacks it made and. but because of a variety of reasons. 9-142 REPOSITIONING CONCEPTUAL SwissAir recently tried to expand. psychographics. e. Prior to declaring bankruptcy. 566 . e. expanding the use of the product from breakfast time to all day is the repositioning strategy. a. repositioning. b. perceptual mapping product positioning product differentiation repositioning psychographics Answer: d Page: 201. a. e.9-141 REPOSITIONING Changing a the product's position in consumers' minds is called: a. a repositioning strategy was inappropriate. b. Its market share has been steadily declining as consumers began associating it with something their grandfather ate. 9-143 REPOSITIONING APPLICATION Post Grape-Nuts cereal has been marketed since early in the 20th century. Figure 9-8 Rationale: Repositioning is changing the position a product holds in the consumer’s mind. b. or their bowl of soup as a delicious addition. This is an example of a __________ strategy. Because it feared that a __________ strategy would not undo the damage to the brand name. c. their salad. Figure 9-8 Rationale: Repositioning is changing a product's place in consumers' minds. product differentiation. d. the company opted for a totally new name and new look. perceptual mapping. SwissAir engaged in several cost-cutting efforts. which alienated its customer base.

market delineation. Since Nokia is considering both. market segmentation. e. which includes a built-in stopwatch. a. demography. b. Answer: c Page: 204 Rationale: Marketing synergies represent efficiency in terms of reaching a market segment such as young adults. . Nokia is using: a. consumer differentiation. and Communicator. a thermometer. Answer: d Page: 204 Rationale: Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action. d. lifestyles. penetration rates were different for different areas of the world. aggregation marketing. which includes a built-in stopwatch. a thermometer. geography. c. a personalized logo. downloaded game packs. product extrapolation strategy. which it labels Basic. Expression. b. Classic. product sampling strategy. Answer: a Page: 204 Rationale: Although market segmentation began with geography. c. d. 9-146 VIDEO CASE: NOKIA APPLICATION By developing and introducing a communication device. they are taking advantage of market-product synergy. buying situations. Product synergies represent efficiency in terms of developing the device. market-product synergy. Fashion. Premium. e. c.9-144 VIDEO CASE: NOKIA APPLICATION The segmentation strategy used by first generation cellular phones was based on: a. market differentiation. a personal information manager and a cellular phone. Market segmentation helps Nokia best service different consumers’ needs. 9-145 VIDEO CASE: NOKIA APPLICATION By dividing its market into categories. Nokia is taking advantage of __________. Nokia’s strategy later changes to focus on different types of customers. usage segmentation. downloaded game packs. a personalized logo. socioeconomics. a personal information manager and a cellular phone that appeals to young adults. since over time. d. e. behavioral segmentation variables. b.

b. a personalized logo. 568 .strategy. to help consumers perceive the product as being different and better than competing products. downloaded game packs. e. c. product sampling strategy product extrapolation strategy product differentiation usage segmentation market differentiation Answer: c Page: 204 Rationale: Product differentiation involves a firm’s using different marketing mix activities. Nokia is using a __________. such as product features and advertising. In this case Nokia is using physical product features to differentiate their product.9-147 VIDEO CASE: NOKIA APPLICATION By developing and introducing a communication device. a thermometer. a. a personal information manager and a cellular phone. which includes a built-in stopwatch. d.

Thus. Page: 187. Page: 187 . product differentiation relates to competitive positioning.CHAPTER 9 IDENTIFYING MARKET SEGMENTS AND TARGETS SHORT ESSAY QUESTIONS 9-148 MARKET SEGMENTATION CONCEPTUAL Define market segmentation. where perhaps the same or similar target markets are more likely to buy the product differentiated as having greater reliability or lower price. Such needs and benefits must be related to specific. to help consumers perceive the product as being different and better than competing products. Segmentation links needs to actions. tangible marketing actions the firm can take. Differences may involve nonphysical features as well. it can contribute to increased revenues for the firm. such as product features and advertising. As long as a new product does not take a significant amount of sales away from an existing product. such as image or price. In its broadest sense it involves a firm's using different marketing mix activities. How does it link needs with marketing actions? Answer: Market segmentation is aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action. Figure 9-1 9-149 PRODUCT DIFFERENTIATION CONCEPTUAL What is product differentiation? How does it relate to market segmentation? How does it potentially improve a firm's revenues? Answer: Product differentiation is a strategy that has come to have two different but related meanings. product differentiation involves a firm's selling two or more products with different features targeted to different market segments. In a narrower sense. though. as the text points out in connection with Reebok. It stresses the importance of aggregating—or grouping—people or organizations in a market according to the similarity of their needs and the benefits they are looking for in making a purchase. because clearly defined and different target markets have different needs that can be satisfied with different products of the same general type.

Synergy is the increased customer value achieved through performing organizational functions more efficiently. which often entails high research. multiple-market strategy—primarily in connection with promotion and distribution—are usually relatively low. The “increased customer value” can take many forms: more products. and/or 2) the marginal production costs could be lowered because of increased economies of scale (if existing excess capacity rather than new plant capacity were used. has unique wants and needs. The trade off is finding the ideal balance between these two concepts.. manufacturing. Page: 189 9-151 MULTIPLE PRODUCTS. lower prices. and desires exceptional service from the seller.9-150 SINGLE PRODUCT. easier access to product through improved distribution. Be sure to define CRM and synergy in your answer. and marketing expenses. MULTIPLE MARKETS CONCEPTUAL Why would an organization produce multiple products or services and then attempt to sell them to two or more market segments? Answer: 1) The additional profits derived from increased sales would exceed the additional research. improved quality of existing products. and manufacturing expenses. Page: 190 570 . Answer: CRM recognizes that every customer is unique. and so on. MULTIPLE MARKETS CONCEPTUAL Why would an organization produce a single good or service and then attempt to sell it to two or more market segments? Answer: An organization would produce a single good or service and then attempt to sell it to two or more market segments to avoid the added cost of developing additional versions of the product. The additional marketing costs of a single-product. engineering. The ultimate criterion for an organization’s marketing success is that customers should be better off as a result of the increased synergies. Page: 189 9-152 SYNERGY CONCEPTUAL Explain the segmentation trade-off: customer relationship management (CRM) versus synergies. engineering.

2) Form products to be sold into groups. How will the evaluation of its market segment strategy differ from that used for a retail store? Answer: There is one difference between for-profit and nonprofit criteria. Figure 9-3 CONCEPTUAL . Answer: The five criteria are: 1) potential for increased profit and ROI 2) similarity of needs of potential buyers within a segment 3) difference of needs of buyers among segments 4) feasibility of a marketing action to reach a segment 5) simplicity of cost of assigning potential buyers to segments. Page: 192 9-155 SEGMENTING AND TARGETING A MARKET What are the steps needed to segment and target a market? Answer: The process of segmenting and targeting a market includes five steps. 3) Develop a market-product grid to relate the market segments to the firm's products and estimate the size of the market in each cell. List these important factors in marketing planning. 1) Form prospective buyers into segments. Based on the food bank's previous policy. Page: 192. it is much more likely to serve its clients more effectively with the new segmentation strategy. It now wants to only give free food to people who go hungry on a regular basis.9-153 CRITERIA FOR FORMING SEGMENTS CONCEPTUAL A marketing manager should develop segments for a market that meet five principal criteria. Each relates to efficiency and productivity with respect to allocation of the firm's resources. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. This will be the market segment it targets. 4) Select the target market segments toward which the firm will direct its marketing actions. 5) Take marketing actions to reach target markets. Page: 192 9-154 CRITERIA FOR FORMING SEGMENTS APPLICATION A nonprofit food bank was gathering and handing out food to anyone who requested it.

The next dimension should be demographics. Page: 192 9-157 SEGMENTATION VARIABLES APPLICATION Assume you are manager of The Outback Steak House. including homeowners. young adults. The Outback manager would seek those people who had not only the need. However. Louis. if it selects too broad a group of segments. socioeconomic and psychographic customer characteristics. it would be well to seek medium and heavy users including. Segmentation according to the benefits dimension could include convenience. using as many segmentation variables as you can. perhaps. Answer: Students might select any segmentation variables described on pages 192-193. probably with children. and benefits sought. Page: 192 CONCEPTUAL 572 . On the other hand. if it picks too narrow a group of segments. under which consumer markets are segmented according to the following factors: geographic. gregarious. and economy relative to more expensive restaurants. since repeat business is the key to success in this sort of venture. or subdivision. it may spread its marketing efforts so thin that the extra expenses more than cancel out the increased sales and profits. They could be defined by ZIP Code. married. demographic. As for the usage dimension. and demographic correlations can be rather easily made with regard to those factors. perhaps related to occupations.9-156 CONSUMER SEGMENTATION VARIABLES What are the dimensions by which consumer markets can be segmented? CONCEPTUAL Answer: Major divisions are customer characteristics and buying situations. and those fond of pleasures such as eating out. The psychographic dimension would include variables such as extroverted. it may fail to reach the volume of sales and profits it needs. and usage buying situations. Page: 192-193 9-158 CHOOSING TARGET MARKET SEGMENTS Why is it important for a firm to choose its target market segments carefully? Answer: A firm must choose its target market segments carefully because. Describe how you would segment the market according to dimension. a franchised restaurant that has opened in St. Also important would be household income. those people who might dine at The Outback more than once a month. census tract. the most likely include these: The first dimension would be geographic with segmentation variables designed to describe those people within a reasonable draw area around the restaurant. and explaining why each variable is appropriate. but also the means to dine at the restaurant.

and compatibility with the organization's objectives and resources. Page: 197 CONCEPTUAL CONCEPTUAL . and nonusers. (3) number of employees. CONCEPTUAL Answer: The 80/20 rule suggests that 80 percent of a firm’s sales are obtained from 20 percent of its customers. Clearly the 20 percent of customers referred to above in the description of the 80/20 rule are heavy users and are important to any company. (4) benefits sought. One of the segmentation variables is buying situation. expected growth. As is often the case in marketing decisions. cost of reaching the segment. Page: 193-194 9-160 WAYS TO SEGMENT ORGANIZATIONAL MARKETS What are the variables that may be used to segment organizational markets? Answer: There are 4 variables that may be used to segment organizational markets: (1)location. a particular segment may appear attractive according to some criteria. competitive position. The percentages in the 80/20 rule are not really fixed at exactly 80 percent and 20 percent but suggest that a small fraction of customers provide a large fraction of a firm’s sales.9-159 80/20 RULE Explain the 80/20 rule and explain how it is used in market segmentation. a light user. Page: 195 9-161 CHOOSING TARGET MARKET SEGMENTS What are the criteria to be used in selecting target segments? Answer: The five criteria to be used in actually selecting the target segments are size of market. (2) NAICS code. Under this are included benefits sought and usage in terms of a heavy user. and unattractive according to others.

which costs more time and money. the PowerBook G4. Page: 200-201 9-164 DATA NEEDED FOR PERCEPTUAL MAP CONCEPTUAL What are the three types of data needed from consumers to develop a perceptual map? Answer: In determining a brand's position and the preferences of consumers. the iMac. if product synergies are emphasized. In Apple’s case. while the products include the Power Macintosh G4. The market-product combination is then shown in each cell and evaluated for use in the segmentation strategy. marketing will have to address the concerns of a wide variety of consumers. They are: 1) the important attributes for a product class 2) judgments of where existing products or brands are located on these attributes 3) the location of the firm’s own product or brand on these attributes Page: 201 574 . Conversely. whereas the iMac could be positioned in the mind of both the consumer and the professional as meeting their respective needs. the markets served are the consumer and professional markets.9-162 APPLE’S MARKET-PRODUCT GRID CONCEPTUAL Explain how Apple Computer uses a market-product grid to target its various lines of Macintosh computers at specific market segments. and the iPod (as of mid-2003). Marketing managers responsible for developing a company’s product line must thus balance both product and marketing synergies as they try to increase the company’s profits. the eMac. but spends more in production. the iBook. companies obtain three types of data from consumers. A consumer or small home office might be targets for all of the products except the iPod. The company saves money on marketing. Answer: A market-product grid is a figure that is developed labeling the horizontal rows as the markets and the vertical rows as the product offerings. Page: 199 9-163 MARKET-PRODUCT SYNERGIES CONCEPTUAL Why is it that achieving market-product synergies may be something of a balancing act? Answer: A choice to take advantage of marketing synergies can often come at the expense of production synergies because a single consumer segment will likely require a variety of products—each of which will have to be designed and manufactured.

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