CHAPTER 9

SEGMENTING, POSITIONING, AND FORECASTING MARKETS
Test Item Table by Major Section of the Chapter and Level of Learning
Level of Learning Major Section of the Chapter Zappos.com (pp.225-226) Why Segment Markets? (pp.226-230) Steps in Segmenting and Targeting Markets (pp.230-243) 6,7,8,9,10,11,12,13,55,56, 57,59,61 77,81,90,94,101,106,108, 109,124,125,126,127 Level 1: Knowledge (Knows Basic Terms & Facts) Level 2: Comprehension (Understands Concepts & Principles) 1,2,3,4,5 18,19,20,23,24,27,28,29,30,31, 33,35,38,39,42,43,60,207,208,209 , 210,211 62,63,64,65,66,67,68,69,70,71,72, 73,76,78,82,83,91,95,96,102,103, 107,111,112,113,114,115,119,120, 128,129,130,131,132,136,137,138 , 139,140,141,212,213,215,217,218 , 219,220,221 142,143,144,145,146,150,152,153 , 159,162,163,164,173,174,175,176 , 222,223 184,185,186,187,189,201,203, 224,225 Level 3: Application (Applies Principles)

14,15,16,17,21,22,25,26,32,34, 36,37,40,41,44,45,46,47,48,49, 50,51,52,53,54,58 74,75,79,80,84,85,86,87,88,89, 92,93,97,98,99,100,104,105,110, 116,117,118,121,122,123,133, 134,135,147,148,149,151,214, 216

Positioning the Product (pp.243-245) Sales Forecasting Techniques (pp.245-247)

154,155,156,160,161,167, 168,170,171,172

157,158,165,166,169,177,178

179,180,181,182,183,188, 191,192,196,197,198,200, 202

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

Note: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.

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CHAPTER 9
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Test Item Table by Learning Objective and Level of Learning
Level of Learning Learning Objective Level 1: Knowledge (Knows Basic Terms and Facts) 6,7,8,9,10,11,12,13,55, 56,57,59,61 Level 2: Comprehension (Understands Concepts & Principles) 1,2,3,4,5,18,19,20,23,24,27, 28,29,30,31,32,33,35,38,39, 42,43,60,207,208,209,210,21 1 62,63,64,65,212 Level 3: Application (Applies Principles) 14,15,16,17,21,22,25,26,34, 36,37,40,41,44,45,46,47,48, 49,50,51,52,53,54,58,206

Explain what market segmentation is and when to use it. Identify the five steps involved in segmenting and targeting markets. Recognize the factors used to segment consumer and organizational markets. Develop a market-product grid to identify a target market and recommend resulting actions. Explain how marketing managers position products in the marketplace. Describe three approaches to developing a sales forecast for an organization.

77,81,90,94,101,106,108, 109

66,67,68,69,70,71,72,73,76, 78,82,83,91,95,96,102,103, 107,111,112,113,114,115, 119,120,205,213,215,217,218 130,131,132,136,137,138,139 , 140,141,142,143,144,145,146 , 150,152,153,219,220,221 159,162,163,164,173,174, 175,176,222,223

74,75,79,80,84,85,86,87,88, 89,92,93,97,98,99,100,104, 105,110,116,117,118,121, 122,123,204,214,216 134,135,147,148,149,151

124,125,126,127

154,155,156,160,161,167 , 168,170,171,172 179,180,181,182,183, 188,191,192,196,197, 198,200,202

157,158,165,166,169,177, 178

184,185,186,187,189,201,203 , 224,225

190,193,194,195,199,204, 226

Note: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.

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MULTIPLE CHOICE QUESTIONS 9-1 CHAPTER OPENING EXAMPLE: ZAPPOS.COM COMPREHENSION

The Zappos specific market segmentation strategy is to a. sell a huge selection of shoes to people who will buy them online. b. sell a wide selection of leather shoes and boots to retailers. c. sell all types of shoes, accessories, and clothing to department stores. d. use organizational segmentation to sell accessories to consumers. e. sell children’s shoes to online retailers. Answer: a Page: 225 LO: 1 LL: 2 AACSB: 3 Rationale: Hsieh, Lin, and founder Nick Swinmurn have given Zappos a clear, specific market segmentation strategy: Sell a huge selection of shoes to people who will buy them online. 9-2 CHAPTER OPENING EXAMPLE: ZAPPOS.COM COMPREHENSION

Which of the following statements about Zappos.com is true? a. Zappos.com only sells a small selection of designer, high-end shoes. b. Using only the Zappos.com website it is impossible to discover how to contact the company. c. Zappos.com uses the latest in whiz-bang technology. d. Zappos.com uses ads on the site to finance it. e. The Zappos.com home page is fast as lightning. Answer: e Page: 225 LO: 1 LL: 2 AACSB: 3 Rationale: The Zappos.com home page is “fast as lightning.” In fact, in late 2006 it was fastest of the top 50 Internet retailers to load on your computer: 0.879 seconds. 9-3 CHAPTER OPENING EXAMPLE: ZAPPOS.COM COMPREHENSION

Which of the following statements about Zappos is true? a. Zappos sells primarily sneakers. b. Zappos staff tries to spend most of its time on stuff that will improve customer-service levels. c. Baby boomers are the largest market Zappos products. d. The Zappos website is somewhat difficult to use when searching for a specific shoe size. e. The Zappos call center is closed only on Sundays from 7 a.m.-noon. Answer: b Page: 226 LO: 1 LL: 2 AACSB: 3 Rationale: Asked about the details of the Zappos website, Tony Hsieh almost yawns and says, “We try to spend most of our time on stuff that will improve customer-service levels.”

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9-4

CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

Which of the following statements about Zappos is true? a. Customer service and loyalty is so critical both the Zappos call center and headquarters are in the same place—Las Vegas. b. Customer service employees don’t use scripts and don’t try to keep calls short. c. Every new employee in Las Vegas spends four weeks on the phone as a customer service representative and a week in its Kentucky warehouse. d. Operating the warehouse 24/7 lets customers order shoes as late as 11 p.m. and still get their shoes the next day. e. All of the above are true. Answer: e Page: 226 LO: 1 LL: 2 AACSB: 3 Rationale: This focus on customer service for the Zappos niche of online customers is something the company lives, breathes, and implements. Examples include all of the choices offered in the question. 9-5 CHAPTER OPENING EXAMPLE: ZAPPOS.COM COMPREHENSION

Which of the following statements about Zappos is true? a. Customer service and loyalty is so critical both the Zappos call center and headquarters are in the same place—New York. b. Customer service employees use scripts and try to keep calls short. c. Every new employee in New York spends four weeks on the phone as a customer service representative and a week in its Kentucky warehouse. d. Operating the warehouse 24/7 lets customers order shoes as late as 11 p.m. and still get their shoes the next day. e. All of the above are true. Answer: d Page: 226 LO: 1 LL: 2 AACSB: 3 Rationale: This focus on customer service for the Zappos niche of online customers is something the company lives, breathes, and implements. Some examples include: (1) Customer service and loyalty is so critical both the Zappos call center and headquarters are in the same place—Las Vegas. (2) Customer service employees don’t use scripts and don’t try to keep calls short. (3) Every new employee in Las Vegas spends four weeks on the phone as a customer service representative and a week in its Kentucky warehouse. (4) Operating the warehouse 24/7 lets customers order shoes as late as 11 p.m. and still get their shoes the next day.

119

c. e. be responsive to marketing research. d. go shopping on a regular basis. respond similarly to a marketing action. go shopping on a regular basis. c. market segmentation. d. c. have common needs.9-6 MARKET SEGMENTATION KNOWLEDGE Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is called a. pay attention to marketing messages. will pay attention to marketing messages. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 120 . Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-8 MARKET SEGMENTATION Other Location: web KNOWLEDGE Market segmentation involves aggregating prospective buyers into groups that will respond similarly to a marketing action and a. b. consumer differentiation. b. e. e. use the same payment methods. market delineation. Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-7 MARKET SEGMENTATION KNOWLEDGE Market segmentation involves aggregating prospective buyers into groups that have common needs and will a. aggregation marketing. b. psychographics. use the same payment methods. d. be responsive to marketing research.

organizational buyers. market segments. d. Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments 9-12 MARKET SEGMENTS AACSB: 3 KNOWLEDGE Each __________ consists of people who are relatively similar to each other in terms of their consumption behavior. ultimate consumers. d. have different needs and have potential for future growth. have different needs and respond similarly to market actions. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . Market diversification b. Market augmentation e. qualified prospects. demographic clusters. Market segmentation d. market segment b. Market differentiation c.9-9 MARKET SEGMENTATION KNOWLEDGE __________ involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marking action. represent a large share of the entire market and have critical buying power. a. c. Repositioning Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-10 MARKET SEGMENTATION Other Location: SG KNOWLEDGE To be identified as a market segment. e. its members must a. b. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-11 MARKET SEGMENTS KNOWLEDGE The phrase “relatively homogeneous collections of prospective buyers” is most descriptive of a. c. have common needs and respond similarly to market actions. have potential for future growth and have potential for increased profit or ROI. demographic cluster c. e. a. ultimate consumer e. organizational buyer d. b.

product differentiation d. usage segmentation e. 9-15 PRODUCT DIFFERENTIATION APPLICATION E-Bay has many different groups on its website. product extrapolation c.9-13 PRODUCT DIFFERENTIATION KNOWLEDGE Which strategy involves a firm’s using different marketing mix activities. dual distribution b. product differentiation d. such as product features and advertising. a. market differentiation c. What is this marketing strategy called? a. behavioral segmentation Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm’s using different marketing mix activities. product extrapolation c. the change of flavor (a product feature) helped consumers to perceive the product as different as and better than competing products. such as product features and advertising. the first fluoride toothpaste. such as product features and advertising. to help consumers perceive the product as being different and better than competing products. usage segmentation e. minty flavor to appeal to adults. full coverage marketing Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—product differentiation 9-14 PRODUCT DIFFERENTIATION Other Location: web APPLICATION When Procter & Gamble introduced Crest toothpaste. In the case of Crest. In the case of e-Bay the groups (a product feature) encourage buyers and sellers of particular items to interact. to help consumers perceive the product as being different and better than competing products? a. E-bay uses a __________ strategy to reach several different market segments. product sampling b. Sometime later the same basic formula was given a fresh. 122 . Groups range from Collectors Clubs to the eBay Community Cookbook group. to help consumers perceive the product as being different and better than competing products. product differentiation d. product sampling b. psychographic segmentation Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm’s using different marketing mix activities. it was intended for use by children and was therefore given a child-appealing bubblegum flavor. market penetration e.

a customer gets fresh rice with soy or sweet chili sauce with his or her chicken. to help consumers perceive the product as being different and better than competing products. 9-17 PRODUCT DIFFERENTIATION APPLICATION KFC has modified its product to satisfy different market segments. 123 . market sectioning. Today you can buy Original Alka-Seltzer. e. product segmentation. d. e. c. b. Extra Strength Alka-Seltzer. such as product features and advertising. the maker of Alka-Seltzer. Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm’s using different marketing mix activities. c. Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm’s using different marketing mix activities. such as product features and advertising. product differentiation. Bayer. b. product segmentation. d. to help consumers perceive the product as being different and better than competing products. and in Thailand. product base development. market segmentation. market sectioning. The maker of Alka-Seltzer is using a. product base development. These examples best illustrate a. product differentiation. KFC changes the product features internationally to help consumers perceive the product as being different and better than competing products.9-16 PRODUCT DIFFERENTIATION APPLICATION Alka-Seltzer was made originally as a hangover remedy that cured the headache and settled the stomach. AlkaSeltzer Morning Relief (for morning headaches and fatigue). is selling four versions with different product features to appeal to different market segments. Each Alka-Seltzer product is targeted to a slightly different market segment. In Holland the mashed potatoes are replaced with a potato-and-onion croquette. and Alka-Seltzer Heartburn Relief. product positioning.

controllable environmental factors Answer: d Page: 227. Fig. controllable environmental factors. government regulations. government regulations c. product based market development Answer: c Page: 226 . 124 . 9-19 MARKET SEGMENTATION COMPREHENSION The process of segmenting a market and selecting specific segments as targets is the link between __________ and the organization's marketing program.227 LO: 1 LL: 2 AACSB: 3 Rationale: Market segmentation first stresses the importance of 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. a. such needs and benefits must be related to specific marketing actions the organization can take. grouping people according to similar needs d. market needs e. grouping people randomly in a market b. c. a. Fig. 9-1 LO: 1 LL: 2 AACSB: 3 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to an organization’s marketing program. d.9-18 MARKET SEGMENTATION COMPREHENSION Market segmentation stresses __________ and relating needs and benefits to specific marketing actions. 9-20 MARKET SEGMENTATION COMPREHENSION The process of segmenting a market and selecting specific segments as targets is the link between the various buyers’ needs and a. b. market sectioning c. top-level management. the organization's marketing program. splitting people randomly between markets e. e. 9-1 LO: 1 LL: 2 AACSB: 3 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to an organization’s marketing program. Second. Answer: e Page: 227. self-regulatory industry standards. top-level management d. self-regulatory industry standards b.

promotion. b. and place. Market segmentation is only a means to an end: in economist's terms. strategic objectives d. increase sales and profitability. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: A basic test of the usefulness of the segmentation process is whether it leads to tangible marketing actions that can increase sales and profitability. government regulations d. tactical goals Answer: b Page: 227 LO: 1 LL: 3 AACSB: 3 Rationale: Economists relate supply and demand through price and quantity. 9-22 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. promotion. In economist's terms. customer needs e. are socially responsible. a. it relates supply (the organization's marketing program) to demand (the customer needs). it relates supply (the organization's marketing program) to demand (the customer needs). self-regulatory industry standards b. Market segmentation relates the market needs or demand to the marketing program executed by the company. 125 . 9-23 MARKET SEGMENTATION COMPREHENSION A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can a. tactical goals b.9-21 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. product. d. sustainable. product. and place. Market segmentation is only a means to an end: in economist's terms. government regulations c. the organization's marketing program c. create innovation. are legal. e. strategic objectives e. Market segmentation relates the market needs or demand to the marketing program executed by the company. which includes price. c. In economist's terms. which includes price. market segmentation relates supply (the organization's marketing program) to demand (__________). it relates supply (__________) to demand (the customer needs). product positions Answer: d Page: 227 LO: 1 LL: 3 AACSB: 3 Other Location: SG Rationale: Economists relate supply and demand through price and quantity. a.

COMPREHENSION Answer: e Page: 227 LO: 1 LL: 2 AACSB: 3 Other Location: web Rationale: The process of segmenting a market and selecting specific segments as targets is the link between the various buyers’ needs and the organization’s marketing program (Figure 9-1). synergy. mass customization. This strategy is an example of a. c. market segmentation. 9-26 MARKET SEGMENTATION APPLICATION Reebok makes shoes with DMX Shear and Foam cushioning. e. This strategy is an example of a. market segmentation. 9-25 MARKET SEGMENTATION APPLICATION Small athletic shoe manufacturers such as Vans have targeted niche markets and made shoes designed to satisfy the needs of different specific groups of customers. e. 126 . b. c. b. The Premier Control shoe is made for runners whose feet tend to turn out. e. d. Reebok targets the specific needs of particular types of runners with its different types of shoes. Market segmentation is only a means to an end: to lead to tangible marketing actions that can increase sales and profitability. d. link market needs to an organization’s advertising.9-24 MARKET SEGMENTATION Marketers use market segmentation to a. mass customization. Answer: a Page: 227 LO: 1 LL: 3 AACSB: 3 Rationale: Market segmentation links market needs to an organization’s marketing program —specific marketing mix actions to satisfy those needs. The Premier Road is made with extra cushioning for pavement runners. just-in-time marketing. link market needs to an organization’s product or price. d. just-in-time manufacturing. link market needs to an organization's marketing program. sales forecasting. increase overall sales and profitability. c. Answer: d Page: 227 LO: 1 LL: 3 AACSB: 3 Rationale: Market segmentation links market needs to an organization’s marketing program —specific marketing mix actions to satisfy those needs. synergy. do all of the above. b. sales forecasting.

d. profit. d. and return on investment. e. it changes its advertising campaign. c. discontinue manufacturing any products that are not in the mature stage of their product life cycle. competitors enter the marketplace. e. profit and return on investment. terminate as many employees as possible to save money. its pricing strategy. When expenses are greater than the potentially increased sales from segmentation. designing shoes for every type of occasion. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: The Zappos segmentation strategy is based on selling service elements that lead to a positive customer experience and repeat purchases—the absolute best selection of shoes and the absolute best service. it expects that this will increase its sales. b. b. not attempt to segment its market. When expenses are greater than the potentially increased sales from segmentation. c. recession sets in. Answer: d Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales. d. and ROI. Answer: d Page: 227 . supplier geography. reduce production costs. and return on investment. act as its own distributor. c. which will lower quality. offering the absolute best selection of shoes and the absolute best service.9-27 ZAPPOS SEGMENTATION STRATEGY COMPREHENSION The Zappos segmentation strategy is based on a. 9-29 MARKET SEGMENTATION COMPREHENSION A business firm segments its markets when this strategy increases its sales revenue.228 LO: 1 LL: 2 AACSB: 3 Rationale: A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales. having a well-educated customer base. e. 127 . b. profit. a firm should not attempt to segment its market. the environment becomes uncertain. the firm should a. 9-28 MARKET SEGMENTATION COMPREHENSION A business firm goes to the trouble and expense of segmenting its markets when a. profit.

the magazine stories inside the cover. outlet-type segmentation c. or mass customization.” Yet the 14 different covers enable the magazine with exactly the same stories to reach 14 different regional segments. Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: There is only a single product. the definition of a “one-product and multiple-market segments” situation. segments of one. so the answer is “a. income segmentation. c. psychographic segmentation b. 9-31 MARKET SEGMENTATION STRATEGY COMPREHENSION Street & Smith publishes the same baseball magazine with exactly the same stories but with 14 different covers to appeal to baseball fans in 14 different regions of the U. d. geographic segmentation Answer: e Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: The magazine has 14 different covers to appeal to sports fans in 14 different geographic regions. What is the market segmentation strategy? a. behavioral segmentation e. e. clearly using the geographic variable as the basis for market segmentation. In terms of market segmentation strategies. b. segmenting organizational markets.STREET & SMITH COVERS 9-30 MARKET SEGMENTATION STRATEGY COMPREHENSION Street & Smith publishes the same baseball magazine with exactly the same stories but with 14 different covers to appeal to baseball fans in 14 different regions of the U.S. demographic segmentation d. this is an example of a. Four samples are shown in Figure 9-B. multiple products and multiple market segments.S. one product and multiple market segments. 128 . Four samples are shown in Figure 9-B.

9-33 ONE PRODUCT. the extra cost of developing and producing additional versions of the product b. develop and produce another version of the product. engineering. manufacture products that appeal to different markets. which often results extremely high research. creating a service gap c. and producing additional versions of the product. In this case. it avoids __________. c. a. purchase another firm that has additional products that would appeal to multiple markets. develop a separate promotional campaign. strategic planning e. and manufacturing expenses. and manufacturing expenses. engineering. e. which often entail extremely high research.9-32 MARKET SEGMENTATION STRATEGY APPLICATION One marketing action that can be taken to sell a single product or service to multiple market segments is a. it avoids the extra costs of developing. indirect distribution and logistics problems d. amortization costs Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Other Location: web Rationale: The incremental costs of taking a product into new product segments are rarely as large as those for developing an entirely new product. the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of distribution. b. MULTIPLE MARKET SEGMENTS COMPREHENSION When a firm produces only a single product or service and attempts to sell it to two or more market segments. 129 . issue stock used for additional research and development for improved products. Answer: c Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: When an organization produces only a single product or service and attempts to sell it to two or more market segments. d.

creates greater cost savings in manufacturing costs. is a more effective way of meeting organizational objectives. e. increased number of choices c. and hard bristle and a short or normal length head. c. 9-36 ONE PRODUCT. Answer: c Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: A one product and multiple market segment strategy simply involves producing a single product and selling it to two or more market segments. b. MULTIPLE MARKET SEGMENTS COMPREHENSION When compared to a multiple-products-multiple-market segments strategy. 130 . walking shoes. is a much more effective means of meeting consumers' individual needs. as is the case with Johnson's Baby Oil. is much more profitable. increased satisfaction of consumer wants and needs b. d. b. Reach Toothbrush makes several versions of its toothbrush. engineering. and Weeboks. 9-35 ONE PRODUCT. Kellogg's and Post both make bran cereals with raisins. marketing costs generally increase. c. improved service e. e. Reebok makes tennis shoes. which often entails higher research.9-34 ONE PRODUCT. and manufacturing expenses. medium. has significantly higher distribution costs. which are available in a soft. a one-product-andmultiple-market-segment strategy a. Answer: c Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: When a firm produces only a single product or service and attempts to sell it to two or more market segments. lower retail prices because of lower marketing costs Answer: c Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: Producing a single product and selling it to multiple market segments gives important production economies of scale and reduced costs that may be passed on to consumers as lower prices (alternative C). it avoids the extra cost of developing and producing additional versions of the product. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. Quaker Oats oatmeal sells both its hot cereals and cold cereals to people of all ages. not marketing economies of scale (alternative E) When using one product and multiple market segments. lower retail prices because of lower production costs d. d. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a single product with multiple market segments? a. MULTIPLE MARKET SEGMENTS APPLICATION What is the most likely way for consumers to benefit because a firm uses a strategy of one product for multiple market segments? a. running shoes.

9-38 ONE PRODUCT. multiple products with multiple market segments c. These books have been marketed to preteen. editions each targeted at unique geographic and demographic segments using a special mix of advertisements. Scholastic. MULTIPLE MARKET SEGMENTS APPLICATION Time magazine publishes 200 different U. and adult readers. mass customization e. the publisher of the Harry Potter books is using which of the following segmentation strategies? a. teen. mass customization e.S. teen. 131 . the Harry Potter series of books were often at the top of The New York Times fiction best-seller list. CRM Answer: a Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: Time is selling one magazine (product) to multiple geographic segments. synergy d. multiple products with multiple market segments c. one product with multiple market segments b. synergy d. Time is using which of the following segmentation strategies? a. The only difference in each magazine is that the advertisements in the magazine are different and are targeted to the appropriate geographic segment.9-37ONE PRODUCT. CRM Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: Scholastic is selling one book series (product) to multiple market segments— preteen. one product with multiple market segments b. MULTIPLE MARKET SEGMENTS COMPREHENSION In the United States. and adult readers around the world.

c.S. c. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. serves customers' needs better. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. A new movie used several different advertisements. d. 9-40 MULTIPLE PRODUCTS. conforms to all union regulations. doesn’t reduce quality or increase price. Answer: e Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: Manufacturing multiple products for multiple market segments is worthwhile if it serves customers’ needs better. b. and a. 132 . b. One set of previews showed the action scenes in order to attract one audience. Alternative C is an example of two types of vehicles for two different groups of consumers—those who wish to carry people and those who wish to carry products. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturer’s sales revenues and profits. MULTIPLE MARKET SEGMENTS COMPREHENSION Which of the following is an example of a multiple products and multiple markets strategy? a. d. and adds to the manufacturer’s sales revenues and profits. reduces the number of employees required. e. stabilizes the sales revenues and profits. doesn't reduce quality or increase price. Ford manufactures SUVs for those who wish to carry lots of people and pickup trucks for those who wish to carry lots of products.9-39 MULTIPLE PRODUCTS. and the other set showed romantic scenes to attract another audience. Answer: c Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: A multiple products and multiple markets strategy has a number of distinct products each targeted to a different type of user. each targeted at a different type of user. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. are an example of multiple products aimed at multiple markets. e. decreases the cost of the physical plant.

b. b. Gap’s Banana Republic chain sells blue jeans for $58. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. reduces the number of employees required. e. A new movie used several different advertisements. doesn’t reduce quality or increase price. e. 133 . d. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. and adds to the manufacturer’s sales revenues and profits. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. are an example of multiple products aimed at multiple markets. d. Many firms are now offering different variations of the same basic product or service to high-end and low-end segments.S. MULTIPLE MARKET SEGMENTS COMPREHENSION Which of the following is an example of a “Tiffany/Wal-Mart” strategy? a. One set of previews showed the action scenes in order to attract one audience. and a. stabilizes the sales revenues and profits. decreases the cost of the physical plant. and the other set showed romantic scenes to attract another audience. each targeted at a different type of user.9-41 MULTIPLE PRODUCTS. serves customers’ needs better. Answer: d Page: 229 LO: 1 LL: 2 AACSB: 3 Rationale: A “Tiffany/Wal-Mart” strategy is a two-tier marketing strategy. c. 9-42 MULTIPLE PRODUCTS. conforms to all union regulations. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturer’s sales revenues and profits. doesn't reduce quality or increase price. Answer: e Page: 228 LO: 1 LL: 3 AACSB: 3 Rationale: Manufacturing multiple products for multiple market segments is worthwhile if it serves customers’ needs better. whereas its Old Navy stores sell a slightly different version for $22. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. c.

This is an example of a. c. Many firms are now offering different products or services to high-end or low-end segments. b. one product and multiple market segments. b. MULTIPLE MARKET SEGMENTS COMPREHENSION The Walt Disney Company carefully markets two distinct Winnie-the-Poohs—such as the original line-drawn figures on fine china sold at Nordstrom and a cartoon-like Pooh on polyester bed sheets sold at Wal-Mart.S. 134 . and another line of cake mixes for people with microwave ovens. 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. synergy. 9-44 MULTIPLE PRODUCTS. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. d. Alternative C is an example of two types of cake mixes for two different groups of consumers—those with conventional ovens and those with microwave ovens. Answer: c Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: A multiple products and multiple markets strategy has a number of distinct products each targeted to a different type of user. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. c.9-43 MULTIPLE PRODUCTS. A new movie used several different advertisements. Answer: e Page: 229 LO: 1 LL: 2 AACSB: 3 Rationale: This is an example of the two-tiered strategy referred to as a “Tiffany/Wal-Mart” strategy. mass customization. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a multiple products and multiple markets strategy? a. price discrimination. e. a “Tiffany/Wal-Mart” strategy. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. e. and the other set showed romantic scenes to attract another audience. d.

synergy. one product and multiple market segments. This is an example of a. stabilizes the sales revenues and profits. are an example of multiple products aimed at multiple markets. adds to the manufacturer's 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. decreases the cost of the physical plant. conforms to all union regulations. and adds to the manufacturer’s sales revenues and profits. reduces the number of employees required. a “Tiffany/Wal-Mart” strategy. or you can buy a card that's not quite as nice but just as sentimental from the store's new $. doesn’t reduce quality or increase price. mass customization. price discrimination. d. b. Manufacturing these different cereals is clearly more expensive than producing one type of cereal but seems worthwhile if it serves customers' needs better.9-45 MULTIPLE PRODUCTS. e. Many firms are now offering different products or services to high-end or low-end segments. each targeted at a different type of user. doesn't reduce quality or increase price. b. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals.50. c.99 line of greeting cards. c. and a. e. 135 . 9-46 MULTIPLE PRODUCTS. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: This is an example of the two-tiered strategy referred to as a “Tiffany/Wal-Mart” strategy. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Manufacturing multiple products for multiple market segments is worthwhile if it serves customers’ needs better. d.

mass customization. Customers can make their shirts using any downloaded photo inserted into 600 templates or even design a shirt from scratch. 9-48 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Co. how the 80/20 rule is implemented. market melding. This is an example of a. synergy. color. d. This is an example of a. mass customization. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers on a high volume scale. market melding. Once you choose a boot style. but the only boots on hand are display models. At first glance none look any different from your basic old-fashioned shoe store. colors.000 tins or 360. in Santa Ana. mixing and matching design components such as style. e. The largest order has been for 15. c. c. mass customization. and textures. b. repositioning. one product and multiple market segments. e. synergy. CA sells organic cookies to corporate customers in tins with the customer’s corporate logo printed on it. b. About 100 display boots provide style guidelines. This is an example of a. and customers go home empty-handed—at least initially. Customers browse the store. b. market augmentation. 9-49 MASS CUSTOMIZATION APPLICATION ChoiceShirts is an online company that makes custom T-shirts. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes. repositioning. Custom Foot guarantees your boots will be ready within three weeks. c. e.000 cookies. and leather type. multiple products in multiple segments. d. how the 80/20 rule is implemented.9-47 MASS CUSTOMIZATION APPLICATION Custom Foot runs six retail locations. price discrimination. you select materials. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes. There's no inventory for sale. d. 136 .

c. mass customization. e. d. product sampling b. she could have a doll that is her twin! This is an example of a. target marketing. target marketing. product extrapolation c. if you send in the money and a photo of your young niece.com allows customers to visit its website and design a sneaker to their own personal specifications. So. psychographic segmentation Answer: c Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Today’s Internet ordering and flexible manufacturing and marketing processes have made mass customization possible. underarm ventilation slits. a. nikeid. For $119 they will make a doll that looks just like a photograph. tailoring goods or services to the tastes of individuals on a high-volume scale. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost.com. 137 . e. b. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost. d.9-50 MASS CUSTOMIZATION APPLICATION MyTwinn makes dolls that look like young girls. 9-52 MASS CUSTOMIZATION APPLICATION To create a __________ strategy. repositioning. and a key clip when you order from LandsEnd. synergy. mass customization. c. mass customization d. how the 80/20 rule is implemented. b. how the 80/20 rule is implemented. repositioning. This is an example of a. synergy. usage segmentation e. 9-51 MASS CUSTOMIZATION APPLICATION Lands’ End will custom fit the Marinac jacket and make it with additional features such as thumb loops.

target marketing. synergy. This is an example of a. b. e. synergy c. 9-54 MASS CUSTOMIZATION APPLICATION Name Maker is an online company that sells high-end gift wrap printed with custom slogans. synergy. mass customization Answer: a Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—customer relationship management 138 . customer relationship management b. mass production e. This is an example of a. how the 80/20 rule is implemented. b. mass customization. c.95 per 12-foot roll.95 to $32. d. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost. a.9-53 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. A customer can have gift wrap printed with the name of the person celebrating a birthday or the folks who are getting married. mass customization. and desires special tender loving care. e. target marketing. target marketing d. d. repositioning. This made-to-order gift wrap is priced from $24. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost. c. 9-55 CUSTOMER RELATIONSHIP MANAGEMENT KNOWLEDGE The essence of __________ is that each customer has unique needs and wants. how the 80/20 rule is implemented. repositioning.

synergy. mass aggregation. c. d. customer relationship management (CRM). c. Model E relies on a. a. It is very similar to mass customization. mass aggregation. "Think of Model E as the Dell of the auto industry. a customer does not have the ability to specify an unlimited number of features.9-56 MASS CUSTOMIZATION KNOWLEDGE __________ is tailoring goods or services to the tastes of individual customers on a highvolume scale. designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design. president and CEO of Model E. built-to-order (BTO). 139 ." said William Santana Li. launch. synergy. Model E manufactures a car only when there is an order from a customer. Target marketing d. Mass production e. b. Customer relationship management b. repositioning. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 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. e. built-to-order (BTO). a one-product-one-market-segment strategy. and direct delivery. d. but because of production issues. Mass customization Answer: e Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—mass customization 9-57 BUILD-TO-ORDER KNOWLEDGE Manufacturing a product only when there is an order from a customer is called: a. e. a one-product-one-market-segment strategy. b. Answer: e Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—mass customization 9-58 BUILD-TO-ORDER APPLICATION Model E is a new type of car manufacturer that relies on the Internet to build new car designs from prototypes to marketable vehicles much faster than ever before possible. Synergy c.

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SYNERGY

KNOWLEDGE

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 __________, the increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently. a. segregation b. synergy c. segmentation d. selection e. value add Answer: b Page: 229 LO: 1 Rationale: Key term definition—synergy 9-60 SYNERGY LL: 1 AACSB: 3 COMPREHENSION

The ultimate criterion for an organization’s marketing success in customer relationship management is that __________ as a result of increased synergies. a. investors should make more money b. executives should get larger salaries c. products should be made more cheaply d. customers should be better off e. the government should collect more taxes Answer: d Page: 229 LO: 1 LL: 3 AACSB: 3 Other Location: web Rationale: The synergy called increased customer value can take the form of more products, improved quality on existing products, lower prices, easier access to product through improved distribution, and so on. So the ultimate criterion for an organization’s marketing success in customer relationship management is that customers should be better off as a result of the increased synergies. 9-61 SYNERGY Synergy is the increased customer value achieved through a. performing organizational functions more efficiently. b. larger rebates at the point of sale. c. higher trade-in values for older model cars. d. the ability to be exposed to more informative advertising messages. e. more tax revenues for government. Answer: a Page: 229 LO: 1 Rationale: Key term definition—synergy LL: 1 AACSB: 3 Other Location: SG KNOWLEDGE

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

The five key steps in segmenting and targeting markets a. help identify market needs. b. provide guidance to reposition products. c. help create ideas for new products. d. link market needs of customers to the organization’s marketing program. e. are required by law. Answer: d Page: 230; Fig. 9-2 LO: 2 LL: 2 AACSB: 3 Rationale: Figure 9-2 shows the five key steps in segmenting and targeting markets link market needs of customers to the organization’s marketing program. 9-63 STEPS IN SEGMENTING AND TARGETING MARKETS The first step in segmenting and targeting markets is to a. recognize a need. b. group potential buyers into segments. c. create product groupings. d. estimate size of the overall market. e. develop a market-product grid. Answer: b Page: 230; Fig. 9-2 LO: 2 LL: 2 AACSB: 3 Rationale: The steps in segmenting and targeting markets include: (1)group potential buyers into segments; (2)group products to be sold into categories; (3)develop a market-product grid and estimate size of markets; (4) select target markets; (5) take marketing actions to reach target markets. 9-64 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION COMPREHENSION

There are five steps involved in segmenting and targeting a market. What should a marketer do once he or she has selected a target market? a. create product groupings b. develop a market-product grid c. estimate size of market d. take marketing actions to reach that target market e. form prospective buyers into market segments Answer: d Page: 230; Fig. 9-2 LO: 2 LL: 2 AACSB: 3 Rationale: The steps in segmenting and targeting markets include: (1)group potential buyers into segments; (2)group products to be sold into categories; (3)develop a market-product grid and estimate size of markets; (4) select target markets; (5) take marketing actions to reach target markets.

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

There are five steps involved in segmenting and targeting a market. What should a marketer do once he or she has selected a target market and grouped products to be sold into categories? a. create product groupings b. develop a market-product grid and estimate size of market c. identify market needs d. take marketing actions to reach that target market e. form prospective buyers into market segments Answer: b Page: 230; Fig. 9-2 LO: 2 LL: 2 AACSB: 3 Rationale: The steps in segmenting and targeting markets include: (1)group potential buyers into segments; (2)group products to be sold into categories; (3)develop a market-product grid and estimate size of markets; (4) select target markets; (5) take marketing actions to reach target markets. 9-66 CRITERIA FOR FORMING SEGMENTS COMPREHENSION

The best segmentation approach is the one that a. makes it easiest to reach the segment. b. recognizes different needs of buyers among different segments. c. recognizes similarities of needs of potential buyers within a segment. d. is simplest and least costly in assigning potential buyers to segments. e. maximizes the opportunity for future profit and ROI. Answer: e Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: The best segmentation approach is the one that maximizes the opportunity for future profit and ROI. If this potential is maximized without segmentation, don’t segment. 9-67 CRITERIA FOR FORMING SEGMENTS COMPREHENSION

A different market segment usually requires a different marketing action that in turn means greater costs. If increased revenues don't offset extra costs, a marketer should __________ to reduce the number of marketing actions. a. increase the advertising budget b. try direct mail instead of broadcast advertising c. cancel current activities d. combine segments e. discontinue offering the good or service Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Other Location: SG Rationale: If the needs of the various segments aren’t very different, combine them into fewer segments. A different segment usually requires a different marketing action that, in turn, means greater costs. If increased sales don’t offset extra costs, combine segments and reduce the number of marketing actions.

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CRITERIA FOR FORMING SEGMENTS Potential buyers within a segment should be a. difficult to reach to prevent competitors from reaching them first. b. similar to buyers among different segments. c. similar in terms of a marketing action. d. high cost to assign to segments. e. interested in direct mail services.

COMPREHENSION

Answer: c Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: One of the five criteria to use in forming segments is the similarity of needs of potential buyers within a segment. Potential buyers within a segment should be similar in terms of a marketing action, such as product features sought or advertising media used. 9-69 CRITERIA FOR FORMING SEGMENTS Which of the following is NOT a criterion used in forming segments? a. potential for increased profit b. similarity of needs of potential buyers within a segment c. competitive position d. potential of marketing action to reach a segment e. simplicity and cost of assigning potential buyers to segments Answer: c Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Competitive position is a reason for selecting a market, not for segmenting it. The five criteria to be used in forming segments include (1) potential for increased profit; (2) similarity of needs of potential buyers within a segment; (3) difference of needs of buyers among segments; (4) potential of a marketing action to reach a segment; (5) simplicity and cost of assigning potential buyers to segments. 9-70 CRITERIA FOR FORMING SEGMENTS Which of the following is NOT a criterion used in forming segments? a. competitive position b. similarity of needs of potential buyers within a segment c. difference of needs of buyers among segments d. potential of marketing action to reach a segment e. simplicity and cost of assigning potential buyers to segments Answer: a Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Competitive position is a reason for selecting a market, not for segmenting it. The five criteria to be used in forming segments include (1) potential for increased profit; (2) similarity of needs of potential buyers within a segment; (3) difference of needs of buyers among segments; (4) potential of a marketing action to reach a segment; (5) simplicity and cost of assigning potential buyers to segments. COMPREHENSION COMPREHENSION

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(3) difference of needs of buyers among segments. (4) potential of a marketing action to reach a segment. (4) potential of a marketing action to reach a segment. (2) similarity of needs of potential buyers within a segment. 144 . diversify their interests c. (2) similarity of needs of potential buyers within a segment.9-71 CRITERIA FOR FORMING SEGMENTS Which of the following is a criterion used in forming market segments? a. similarity of potential sellers within a segment d. simplicity and cost of assigning potential buyers to segments Answer: e Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: The five criteria to be used in forming segments include (1) potential for increased profit. (3) difference of needs of buyers among segments. difference of needs of retailers between segments e. company’s historical profitability b. potential of marketing action to reach a segment e. (3) difference of needs of buyers among segments. 9-73CRITERIA FOR FORMING SEGMENTS COMPREHENSION COMPREHENSION A marketing manager must be able to put a market segmentation plan into effect. This means being able to recognize the characteristics of potential buyers and __________ without encountering excessive costs. company’s historical profitability COMPREHENSION Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: The five criteria to be used in forming segments include (1) potential for increased profit. similarity of potential sellers within a segment c. competitive position c. (5) simplicity and cost of assigning potential buyers to segments. ignore any and all similarities Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: The five criteria to be used in forming segments include (1) potential for increased profit. optimize their different needs d. (4) potential of a marketing action to reach a segment. assign them to a segment e. a. (5) simplicity and cost of assigning potential buyers to segments. (2) similarity of needs of potential buyers within a segment. 9-72 CRITERIA FOR FORMING SEGMENTS Which of the following is a criterion used in forming market segments? a. competitive position b. (5) simplicity and cost of assigning potential buyers to segments. difference of needs of retailers between segments d. maximize internal considerations b.

the limited benefit to consumers in the segment. demographic segmentation. 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. Restaurants might consider people with these "allergies" as a separate segment. These four segmentation bases are: (1) geographic segmentation. “Is there too much competition for this product?” e. demand segmentation c. NAICS code segmentation Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-3 shows four general bases of segmentation and the typical variables that can be used to segment U. and behavioral segmentation. “Is this product useful on a global scale?” b. simplicity and cost of assigning potential buyers to segments e. to preservatives used in salad bars. different needs of buyers among different segments c. 145 . “Is it possible to reposition this product?” d. usually mild. supplier segmentation b. consumer markets. (2) demographic segmentation. psychographic segmentation e.S. “Would segmentation be worth doing and is it possible?” c. a. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. “Is the market loyal to the product?” Answer: b Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: It’s not always a good idea to segment a market. 9-76 CONSUMER SEGMENTATION VARIABLES COMPREHENSION Four general categories used to segment consumer markets are geographic segmentation. similarity of needs of potential buyers within a segment d. and (4) behavioral segmentation. (3) psychographic segmentation. __________. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a. potential for increased profit and ROI Answer: e Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: The segment would probably not provide increased profit and ROI—given the size of the market. “Would segmentation be worth doing. and is it possible?” 9-75 CRITERIA FOR FORMING SEGMENTS APPLICATION Between two and three percent of the population have some degree of allergic reaction. and the high cost of running a duplicate salad bar. instrumentality of sufficient marketing objectives to ignore that segment b. regional segmentation d.

d. perceptual Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Campbell’s is marketing a different sauce to different markets depending on where they are located. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. This is geographic segmentation. 146 . A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. 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. age b. Answer: b Page: 231 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—geographic segmentation KNOWLEDGE 9-78 GEOGRAPHIC SEGMENTATION COMPREHENSION Campbell’s found that its canned nacho cheese sauce. was too hot for Americans in the East and not hot enough for those in the West and Southwest. c. a. c. geographic segmentation. b. e. geographic e. d. Campbell’s plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants. 9-79 GEOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a. In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas. GE built a downsized microwave oven to hang under kitchen cabinets. e. MSA segmentation. behavioral c.9-77 GEOGRAPHIC SEGMENTATION Segmentation based on where prospective customers live or work is called a. Today. zip code segmentation. b. socioeconomic d. Campbell’s is using __________ segmentation. which could be heated and poured directly onto nacho chips. NAICS code segmentation. regional segmentation. Answer: a Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: KFC has discovered that to be successful in globalization it must be willing to adapt to the taste preferences of different regions.

such as gender. personality b. age. behavioral segmentation. so Universal is using geographic characteristics in deciding where to hold a successful country music concert. socioeconomic characteristics d. demographic segmentation. usage segmentation. needs segmentation. demographic characteristics c. usage rate d. COMPREHENSION 147 . Figure 9-3 lists the most common segmentation variables classified as demographic. or other classification attribute among people. e.9-80 GEOGRAPHIC SEGMENTATION APPLICATION Universal Concerts is planning on bringing a series of concerts to Canada next year. 9-81 DEMOGRAPHIC SEGMENTATION KNOWLEDGE Segmentation which is based on some objective physical. income. In general. c. or other classification attribute of prospective customers is called a. b. This requires Universal Concerts to best segment its Canadian market according to __________ if it hopes to have a sold-out concert. Answer: b Page: 231 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—demographic segmentation 9-82 DEMOGRAPHIC SEGMENTATION Which of the following is a consumer demographic variable? a. age Answer: a Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: Western Canadians prefer country music much more than do Eastern Canadians. d. Western Canadians much prefer country music. MSA Answer: b Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Demographics are objective. geographic characteristics b. a. personality segmentation. education level. yet in Eastern Canada a country music event is very likely to have lots of empty seats. gender c. measurable. measurable. income e. and so on. needs e.

S. lifestyle d. birth era. psychographic Answer: b Page: 232 LO: 3 LL: 3 Rationale: Age is a demographic variable. life stage. MSA c.9-83 DEMOGRAPHIC SEGMENTATION Which of the following is a consumer demographic variable? a. age. education b. geographic e. who don’t remember the Old Spice brand sold to their grandfathers many years ago. race/ethnicity. Campbell’s is using __________ to segment its market. so Campbell’s packages meals with only one or two servings—from Great Starts breakfasts to L’Orient dinners. AACSB: 3 148 . marital status. demographic c. Fig. NAICS code d. user status COMPREHENSION Answer: a Page: 232. a. income. regional b. 9-85 DEMOGRAPHIC SEGMENTATION APPLICATION Proctor & Gamble Co. 9-3 LO: 3 LL: 2 AACSB: 3 Rationale: Consumer demographic variables include gender. (P & G) decided to skip a generation of consumers when it began to market Old Spice deodorant. 9-84 DEMOGRAPHIC SEGMENTATION APPLICATION More than half of all U. household size. The target market is men aged 18 to 34. usage patterns c. usage rates b. and occupation. P & G is using which type of segmentation variable? a. psychographic characteristics Answer: d Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: The number of people in a household is a demographic characteristic that Campbell’s uses to segment the market. education. demographic characteristics e. households are made up of only one or two persons. buyer situations d. personality e.

GE downsized its microwave oven. a. Because smaller households need to cook less food. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. 9-88 DEMOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on household size? a. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. behavior c. Campbell's makes spicier nacho cheese sauce for its distributors in Texas than it does in Maine. demographic d. psychographic Answer: c Page: 232 LO: 3 LL: 3 Rationale: Life stage is a demographic variable. buying situation e. and restyled it to hang under cabinets. and household size are demographic variables. 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. b. geographic e. demographic c. 149 . it appears the State of Alabama Board of Tourism has segmented the market using __________ variables. usage b. e. Whether the prospect has a family indicates the use of which type of consumer segmentation variable by the telemarketer? a. life stage. GE built a downsized microwave oven to hang under kitchen cabinets. psychographic Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Marital status. socioeconomic d. c. d. the first question the telemarketer asks is whether the person answering the phone has a family. 9-87 DEMOGRAPHIC SEGMENTATION AACSB: 3 APPLICATION The State of Alabama Board of Tourism ran a series of ads showing traditional families enjoying various attractions in the state.9-86 DEMOGRAPHIC SEGMENTATION APPLICATION When a telemarketer calls to sell a consumer life insurance. regional b. Since the apparent target of these ads is traditional families. Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Household size is a demographic customer characteristic.

or needs of prospective customers. behavioral segmentation. c. 150 . Answer: a Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Psychographic segmentation is based on some subjective mental or emotional attributes (personality). Claritas uses lifestyle segmentation. d. socioeconomic segmentation. d. aspirations (lifestyle). demographic c. 9-90 PSYCHOGRAPHIC SEGMENTATION KNOWLEDGE Segmentation based on some subjective mental or emotional attributes. Shoebox. likely including Fresh Ink. Nature's Sketchbook. aspirations. situational segmentation. This is an example of __________ segmentation. or needs of prospective customers is called a.” This type of consumer segmentation is called a. a. e. geographic segmentation. Answer: a Page: 232 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—psychographic segmentation 9-91 PSYCHOGRAPHIC SEGMENTATION COMPREHENSION Claritas’ lifestyle segmentation is based on the belief that “birds of a feather flock together. psychographic segmentation. psychographic Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Ethnicity is a demographic segmentation variable. situational segmentation. a type of psychographic segmentation. lifestyle d. e. geographic segmentation. b. The Mahogany line is designed to appeal to African-Americans. c. geographic e. Mahogany. b. behavioral segmentation.9-89 DEMOGRAPHIC SEGMENTATION APPLICATION At a Hallmark store you can find several different product lines of greeting cards. Maxine. socioeconomic segmentation. psychographic segmentation. regional b. and Tree of Life cards—all made by Hallmark for sale in its stores and intended to appeal to different target markets.

psychographic b. b. demographic segmentation. c. 9-93 PSYCHOGRAPHIC SEGMENTATION APPLICATION Magazines like Fitness. These magazines are designed to appeal to people who enjoy certain lifestyles. outdoor life. behavioral segmentation. socioeconomic segmentation. buying situation d. a retail outdoor outfitter. a. Golf Digest. psychographic segmentation. d. what benefits they seek. 9-94 BEHAVIORAL SEGMENTATION KNOWLEDGE Segmentation based on some observable actions or attitudes by prospective customers—such as where they buy. and why they buy is called a.9-92 PSYCHOGRAPHIC SEGMENTATION APPLICATION People who live active. geographic d. psychographic Answer: e Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Lifestyle is a psychographic variable. how frequently they buy. sociocultural e. Answer: d Page: 232 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—behavioral segmentation 151 . age c. This suggests that REI would segment the market based on which type of customer variable? a. geographic Answer: a Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Psychographic segmentation includes lifestyle—including living an active. e. demographic b. Field & Stream. and Health all use a __________ segmentation strategy. behavior c. geographic segmentation. socioeconomic e. outdoor lives are part of the target market for REI.

e. socioeconomic segmentation. MicroFridge is using which type of segmentation basis? a. such as a new product. their dorm rooms are often woefully short of space. or a distribution system. 152 . psychographic segmentation c. d. behavioral segmentation e. and freezer targeted to these students. socioeconomic segmentation Answer: d Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Understanding what features are important to different customers (behavioral segmentation) is a useful way to segment markets because it can lead directly to specific marketing actions. demographic segmentation b. an ad campaign. behavioral segmentation. b. such as a new product. an ad campaign. MicroFridge understands this and markets a combination microwave. 9-96 BEHAVIORAL SEGMENTATION COMPREHENSION College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late night snack. demographic segmentation. demographic segmentation b. psychographic segmentation c. Magnavox uses behavioral segmentation to guide the types of TVs it sells since different consumers have different benefits they seek in a TV set. refrigerator. The small set is much less expensive and allows the viewer to watch a DVD without extra equipment. or a distribution system. socioeconomic segmentation Answer: d Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Understanding what features are important to different customers (behavioral segmentation) is a useful way to segment markets because it can lead directly to specific marketing actions. or a distribution system. The larger sets can be outfitted with surround sound at a higher price than the small set. psychographic segmentation. geographic segmentation. c. However. Magnavox is using which type of segmentation variable in this example? a. such as a new product. Answer: d Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Understanding what features are important to different customers (behavioral segmentation) is a useful way to segment markets because it can lead directly to specific marketing actions.9-95 BEHAVIORAL SEGMENTATION COMPREHENSION Segmentation based on what features are important to different customers is known as a. geographic segmentation d. behavioral segmentation e. 9-97 BEHAVIORAL SEGMENTATION APPLICATION Magnavox sells its target markets many different types of TVs from flat screens to a 20” combination TV/DVD. geographic segmentation d. an ad campaign.

behavioral c. b. BA's strategy is an example of a. 153 . Answer: d Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: BA is using behavioral segmentation (benefits the prospective customers seek) to sell airline tickets to frequent fliers who wish to sleep on a transatlantic flight. geographic Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Reynolds is using behavioral segmentation (benefits the prospective customers seek) to sell cookware that is disposable and can be left behind. It is easy to forget to take the bowl that you brought to the dinner home with you. e. demographic Answer: c Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Toyota is using behavioral segmentation (benefits the prospective customers seek) to sell two types of vehicles that provide exceptional gasoline mileage. demographic d. Both provide high mileage for the automobile class. Promotions to frequent fliers stress that passengers can sleep in fully reclining seats and arrive refreshed to carry out a full day's schedule. British Airways (BA) has grown market share for its transatlantic business class by offering greater comfort. breads. and desserts and all share the food. the Prius. industry sector segmentation. geographic b. psychographic e. behavioral d. family size e. so that very few business people are authorized to fly first class. the Highlander. Reynolds has recognized how to use _________ variables to segment its market. a small sedan. life stage segmentation. Reynolds responded to this problem by creating Pot Lux cookware. psychographic b. lifestyle segmentation. and an SUV. c. a. 9-99 BEHAVIORAL SEGMENTATION APPLICATION Many families today hold potluck meals during holidays or special events. behavioral segmentation. Toyota is using which type of segmentation variable to market these cars? a. 9-100 BEHAVIORAL SEGMENTATION APPLICATION Many companies have cut travel budgets.9-98 BEHAVIORAL SEGMENTATION APPLICATION Toyota makes two types of hybrid automobiles. d. psychographic segmentation. socioeconomic c. vegetables. Despite the shrinking pool of business-class travelers. Participants bring casseroles. attractive and inexpensive disposable dishes for transporting food.

buying condition segmentation. 9-103 BEHAVIORAL SEGMENTATION BY USAGE COMPREHENSION AACSB: 3 COMPREHENSION Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly. psychographic segmentation. e. sometimes called frequency marketing. c. b. turnover. trial. b. usage rate. d. trial. consumption rate. consumption rate. is a strategy that focuses on usage rate. Answer: c Page: 232 LO: 3 LL: 1 Rationale: Key term definition—usage rate 9-102 BEHAVIORAL SEGMENTATION BY USAGE Frequency marketing is a strategy that focuses on a. This technique. 154 . e.9-101 BEHAVIORAL SEGMENTATION BY USAGE KNOWLEDGE The quantity consumed or patronage—store visits—during a specific period is called a. service inventory. is a strategy that focuses on usage rate. b. This technique. usage rate. sometimes called frequency marketing. a type of behavioral segmentation. behavioral segmentation. c. d. turnover. d. demographic segmentation. This technique uses a. geographic segmentation. c. Answer: b Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly to create loyal customers. Answer: c Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly to create loyal customers. e. service inventory.

Answer: d Page: 233 LO: 3 LL: 1 AACSB: 3 Rationale: Among nonusers of a product. Its market is likely segmented by a. nonprospects. psychographics. lifestyle e. benefits offered. and most likely never will. needs Answer: c Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Usage rate is a behavioral segmentation variable that refers to the quantity consumed. c. demographics. In this example. undefined prospects. d. d. psychographic b. usage. disenfranchised prospects. 155 . "over 40 weeks per year" is a measure of usage rate. b.9-104 BEHAVIORAL SEGMENTATION BY USAGE APPLICATION Post Grape-Nuts cereal has been marketed since early in the 20 th century. Post recently launched a campaign to increase consumption of the cereal by inviting consumers to try the crunchy cereal on top of their yogurt. leads. are called a. b. nonqualified prospects. e. people who might become users are prospects and people who are never likely to become users are nonprospects. Answer: a Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Rate of use and user status are both behavioral segmentation variables. Its market share has been steadily declining as consumers began associating it with something their grandfather ate. and people who were familiar with the product to use it in a variety of different ways. behavioral d. their salad. 9-105 BEHAVIORAL SEGMENTATION BY USAGE APPLICATION A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. which Post is trying to increase by suggesting other product uses. e. 9-106 NONPROSPECTS KNOWLEDGE People who do NOT use a firm's product or service. demographic c. c. Post was trying to convince people who had never tried the cereal to try it. In this case. Post is using which segmentation variable? a. geography. or their bowl of soup as a delicious addition.

eighty percent of a firm's sales are obtained from twenty percent of its customers. Answer: c Page: 234 LO: 3 LL: 1 Rationale: Key term definition—80/20 rule AACSB: 3 Other Location: SG 156 . undefined prospects. and are never likely to become users. e. nonqualified prospects. undefined prospects. e. 9-108 PROSPECTS KNOWLEDGE People who might become users of the type of good or service your firm sells are called a. eighty percent of a firm's expenditures are tax deductible and twenty percent are not. Answer: c Page: 233 LO: 3 LL: 1 AACSB: 3 Rationale: Among nonusers of a product. are called a. prospects. d. eighty percent of a firm's inventory should be readily available. b. b. and twenty percent will not. ultimate consumers. d. remote chances. non-prospects. 9-109 80/20 RULE KNOWLEDGE The 80/20 rule is a concept that suggests a. Answer: d Page: 233 LO: 3 LL: 2 AACSB: 3 Rationale: Among nonusers of a product. nonprospects. people who might become users are prospects and people who are never likely to become users are nonprospects. 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. d. b. c. c. leads. c. eighty percent of a firm's products will ultimately be sold at the original markup price. and twenty percent should be reserved for emergency demand. e. cold leads.9-107 NONPROSPECTS COMPREHENSION The nearly 14 percent of adult Americans who don't go to fast-food restaurants in a typical month. people who might become users are prospects and people who are never likely to become users are nonprospects.

geographic e. eighty percent of a firm's sales are obtained from twenty percent of its customers. benefits sought d. the law of inverse proportions b. This is an example of what classic concept? a. discovered from analysis of its files that one-fifth of its clients accounted for more than three-quarters of its fees and commissions.9-110 80/20 RULE APPLICATION Todd Harris and Associates. 9-111 80/20 RULE COMPREHENSION The 80/20 rule is most closely related to which consumer segmentation variable? a. This suggests that heavy users contribute disproportionately to a firm’s sales. 157 . the 80/20 rule c. psychographic c. the survival of the fittest d. a New York sales promotion agency. the primogeniture rule Answer: b Page: 234 LO: 3 LL: 3 AACSB: 3 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. geographic b. the law of eminent domain e. usage Answer: e Page: 234 LO: 3 LL: 2 AACSB: 3 Other Location: web Rationale: According to the 80/20 rule.

the segment is at the top of the chart. For every $1.00 spent by a light user in one of these restaurants in a month. e. d. there are fewer of them than any other user segment. heavy users are most important to a fast-food restaurant because a. Giving the light users an index of 100. Answer: c Page: 233 LO: 3 LL: 2 AACSB: 3 Rationale: The Usage Index per Person column in Figure 9-4 emphasizes the importance of the heavy-user group even more. each heavy user spends $4. the usage index is highest for that segment. 158 . This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. the heavy users have an index of 467. there are less of them than any other segment. their consumption percentage is higher than the percentage that they represent of the total users and non-users.67. c. b.

8 percent). most of the respondents think of Wendy’s as their primary fast food restaurant.FIGURE 9-5 9-113 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant. McDonald’s is not a serious competitor to you. primary (19. that you need to devise a marketing program to win customers from McDonald’s and Burger King. b. c. e. and secondary (12. the information in Figure 9-5 suggests a. your restaurant is a market leader. d. Answer: e Page: 234 LO: 3 LL: 2 AACSB: 3 Rationale: The Wendy’s bar in Figure 9-5 shows that your sole (0. Burger King is closing in on your market share.2 percent) user segments are somewhat behind Burger King and far behind McDonald’s.6 percent). so a natural strategy is to look at these two competitors and devise a marketing program to win customers from them. 159 .

New menu items or promotional strategies may succeed in converting these prospects into users that patronize Wendy’s. 160 . and behavioral bases. dry air where the operation is located serves as a cheap and effective airplane preservative. c. d. forecast sales to a consumer market. 9-116 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Evergreen Air Center in Marana. nonprospects may be the best segment to go after to increase Wendy’s sales. The warm. is the world's biggest parking lot for unwanted commercial aircraft. b. number of locations c. b. But the 56. McDonald’s is not a serious competitor to you. your restaurant is a market leader. d. number of employees Answer: a Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: The NAICS sectors would reveal other companies that fly commercial planes and might be interested in Evergreen's services. It shows that 11 percent of adult Americans don’t go to fast-food restaurants in a typical month and are really nonprospects—unlikely to ever patronize your restaurant. get around gatekeepers and reach buyers. Which organizational segmentation variable might Evergreen use to segment the market? a.4 percent of the Wendy’s bar shown as prospects may be worth detailed thought. the information in Figure 9-5 suggests a. statistical area e.000 a month for its storage service. c. Arizona. the North American Industry Classification System (NAICS) code. e. Burger King is closing in on your market share. Answer: b Page: 234 LO: 3 LL: 2 AACSB: 3 Rationale: The nonusers part of the Wendy’s bar in Figure 9-5 also provides ideas. e. segment an organizational market. segment a consumer market.9-114 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant. These adults use the product category (fast food) but do not go to Wendy’s. and number of employees are all examples of ways to a. area density d. demographic. 9-115 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Variables such as location. promote buyer loyalty. Answer: c Page: 235 LO: 3 LL: 2 AACSB: 3 Rationale: Variables for segmenting organizational markets are shown in Figure 9-6 and include geographic. new menu items or promotional strategies may succeed in converting the prospects into users that patronize Wendy’s. Airlines pay from $750 to $5. NAICS sector b.

and that are located in rural areas. Answer: c Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: Population density includes whether the area is urban. geographic. c. Imagine that the agency decided the singer would not perform at venues located in small town communities that have less than 100. This basis of venue segmentation is a. small town or rural and is a geographic variable. suburban. psychographic. 161 . nature of good. demographic. organizational markets include geographic. organizational markets? a. education Answer: a Page: 235 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-6 shows the segmentation bases for U. 9-118 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Australia-based Renewable Energy Ltd. geographic b. and behavioral. d. It most likely will use which of the following strategies to segment its market? behavioral and geographic number of employees and behavioral purchase location and purchase type NAICS code and geographic behavioral and NAICS code Answer: d Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: Renewable Energy would most likely use the NAICS code to locate other fertilizer manufacturers and geographic segmentation to find prospects in rural areas where there is a ready supply of manure.9-117 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. sells a $10 million device that converts manure into energy. 9-119 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Which of the following is a basis used to segment U. usage. One of these devices is capable of generating energy equal to $2 million of natural gas per year. needs e.000 people.S. The company believes its target market is businesses that use a lot of energy like its first customer. e.S. a fertilizer manufacturer. income d. buying condition. b. psychographic c.

Answer: c Page: 236 LO: 3 LL: 3 AACSB: 3 Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. The groupings increase the number of market-product combinations on the marketproduct grid into a more manageable framework for subsequent analysis. The products are grouped so people can relate to these product groupings in a more meaningful way. grouping by product type such as types of drinks b. this isn’t a problem. Consumers buy more in illogically organized environments. grouping by meal d. All of the above are reasons why Safeway would use product groups. 162 . d. Answer: c Page: 236 LO: 3 LL: 2 AACSB: 3 Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. Wendy’s customers really buy an eating experience. If the firm has only one product or service. or a meal occasion that satisfies a need at a particular time of day. this isn’t a problem. If the firm has only one product or service. which of the following product groupings would likely make the most sense? a. these must be grouped in some way so buyers can relate to them.9-120 PRODUCT GROUPING COMPREHENSION If Wendy’s customers are buying an eating experience. these must be grouped in some way so buyers can relate to them. Product groupings can be generated quantitatively to show which adhere to the 80/20 rule. e. Examples would be the pet food aisle or the paper product aisle. Why would Safeway display product groupings in this manner? a. 9-121 PRODUCT GROUPING APPLICATION Safeway displays the thousands of items it sells in aisles containing related items or product groupings. grouping by usage e. grouping by price c. b. but when it has dozens or hundreds. but when it has dozens or hundreds. Product groupings should not be used in Wendy’s. c. so the product grouping that makes the most marketing sense is by meal or time of day.

9-123 PRODUCT GROUPINGS APPLICATION Hallmark placed its scrapbook supplies. a. these must be grouped in some way so buyers can relate to them. Memory-keeping is the category to which customers can best relate in this case. b. e. b. you decide that what you are really selling is memory keeping. it is easier to estimate the industry sales for fewer market-product combinations. photo albums and related supplies into one product group because a. this isn’t a problem. it is more profitable to define product groupings in terms of large market segment because it reduces manufacturing and marketing costs. 9-124 MARKET-PRODUCT GRID KNOWLEDGE A __________ is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. Answer: b Page: 236 LO: 3 LL: 3 AACSB: 3 Other Location: web Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. and related supplies. e. market-product grid d. not photo albums. If the firm has only one product or service. cross-tabulation Answer: c Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 163 . product grouping. but when it has dozens or hundreds. scrapbooks. market segmentation of prospects. its competitors engage in no product groupings. d. these must be grouped in some way so buyers can relate to them. d. If the firm has only one product or service. c. taking marketing actions to reach target markets. c. competitors better relate to these groupings for benchmarking purposes. customers better relate to these groupings. Answer: b Page: 236 LO: 3 LL: 3 AACSB: 3 Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. This strategy is an example of a. but when it has dozens or hundreds. growth-share matrix b. payoff table c.9-122 PRODUCT GROUPING APPLICATION In developing a marketing strategy for your Hallmark store. Memory-keeping is the meaningful category in this case. market-product grid development. target market selection. product differentiation table e. this isn’t a problem. You decide to display all of these products together to inspire your customers to create and keep memories.

9-125 MARKET-PRODUCT GRID KNOWLEDGE A market-product grid is a framework to relate a. the market segments of potential buyers to relative market share compared to closest competitor. estimated expenses for products sold to various market segments. market segments of potential buyers Answer: e Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 9-127 MARKET-PRODUCT GRID KNOWLEDGE A market-product grid is a framework to relate the market segments of potential buyers to a. total anticipated profit. total anticipated revenue. total anticipated profit for each product to segments. total anticipated revenue for each product to market segments. c. estimated expenses for products sold b. Answer: e Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 164 . e. total anticipated revenue c. c. market share compared to closest competitor. e. a. the market segments of potential buyers to products offered or potential marketing actions by an organization. Answer: d Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 9-126 MARKET-PRODUCT GRID Other Location: web KNOWLEDGE A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization. total anticipated profit d. market share compared to closest competitor e. d. estimated expenses for products sold. b. products offered or potential marketing actions by an organization. b. d.

how to implement the 80-20 rule. relate the product life cycle to consumer demand. which products to reposition. select representative samples of consumers for marketing research studies. which products to be sold into groups. how to implement a harvesting strategy. screen many new product ideas in order to select the one with best long-run market potential. It is helpful in determining which target market segments to select and which product groupings to offer. determine which target market segments to select and which product groupings to offer. e. d. e. d. c. which product groupings to offer.9-128 MARKET-PRODUCT GRID COMPREHENSION One advantage of a market-product grid is that it can be used to a. b. c. 165 . make optimal decisions under conditions of uncertainty. Answer: d Page: 237 LO: 4 LL: 2 AACSB: 3 Rationale: Even “guesstimates” of the size of specific markets using a market-product grid are helpful in determining which target market segments to select and which product groupings to offer. b. Answer: c Page: 237 LO: 4 LL: 2 AACSB: 3 Other Location: SG Rationale: A market-product grid is a framework to relate the segments of a market to the products offered. 9-129 MARKET-PRODUCT GRID COMPREHENSION Determining the size of specific markets using a market-product grid is helpful in determining which target market segments to select and a.

FIGURE 9-8 9-130 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. combining the factors of where the student lives and when (s)he is on campus. 166 . whether the student is a faculty or staff member. The best way to describe how the student market is segmented is by a. Answer: d Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: The method of segmenting the student market combines where they live if they are not a commuter (dormitory or apartment) and when they are on campus if they are a commuter (day or night). whether the student lives near the campus or far away. e. b. c. the meals eaten at the restaurant. d. whether the student has the discretionary income to eat at Wendy’s.

students that are night commuters. assume the medium market (shown by a “2”) is twice the size of the small market. 9-132 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. d. b. students that are day commuters. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). students that live in an apartment. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. 167 . d. Similarly. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the market segment rows horizontally shows that students that live in an apartment is the largest segment with 9 “units” of sales. assume the medium market (shown by a “2”) is twice the size of the small market. lunch customers. b. e. students that live in a dormitory. The largest potential market segment is for a. between-meal snack customers. b. c. e. dormitory customers. faculty or staff members. after-dinner snack. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). e. 9-133 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. The meal occasion (product grouping) that comprises the largest market is a. c. c. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies.9-131 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. between-meal snack. Answer: e Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Marketing synergies and efficiencies run horizontally across the rows because a single kind of marketing action can reach customers that buy different “products”—in this case meals. a flyer placed on a bulletin board in a dormitory or under the door of dormitory residents could promote the entire restaurant and several of its meals to dormitory customers. For example. lunch. dinner customers. after-dinner snack customers. dinner. Similarly. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the meal columns vertically shows the “lunch” meal occasion to have the most “units” of sales (14) of any meal column. breakfast. d.

and compatibility with the organization’s objectives and resources. day commuter customers. which is a horizontal row in Figure 9-8. expected growth. which is a vertical column in Figure 9-8. apartment customers. 9-135 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. 168 . after-dinner snack customers. e. dormitory customers. This is a “product” or “meal” in the market-product grid. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Cars parked in student parking lots between 7:00 AM and 4:00 PM generally belong to day commuters. d.” This is a market segment. d. All of the above are criteria used for selecting a target market. b. Placing flyers under windshield wipers of cars parked in student parking lots on weekdays between 7:00 AM and 4:00 PM that offer a $2 off coupon on any meal during spring term would be especially targeted at potential a. Assume students who live in dormitories or apartments on or near the campus cannot use student parking lots. faculty customers. dinner customers. Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. cost of reaching the segment d. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: The target here is potential between-meal snack customers. competitive position. staff customers. night commuter customers. c. Sending out coupons for “10 percent off all purchases between 2:00 PM and 4:30 PM” during fall term would be especially targeted at potential a. between-meal snack customers. cost of reaching the segment. night commuter customers. e. size of the market b. compatibility with the organization’s objectives and resources e. c. who might be reached by this coupon that is intended to increase sales during the 2:00 PM to 4:30 PM time period. answer “c. expected growth c. b.9-134 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. 9-136 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a.

competitive position. potential for increased profit b. similarity of needs of potential buyers within a segment. potential of a marketing action to reach a segment e. competitive position. cost of reaching the segment and compatibility with the organization’s objectives and resources. expected growth. potential for increased profit b. 169 . To form segments the criteria include potential for increased profit. simplicity and cost of assigning potential buyers to segments. competitive position d. To form segments the criteria include potential for increased profit. and compatibility with the organization’s objectives and resources.9-137 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion used for selecting a market segment? a. size of the market b. There are also five criteria to use in forming the segments. potential of a marketing action to reach a segment. compatibility with the organization’s objectives and resources Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. 9-139 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. which are often confused with those used to select segments. 9-138 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. expected growth Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. which are often confused with those used to select segments. cost of reaching the segment. competitive position. expected growth. similarity of needs of potential buyers within a segment c. simplicity and cost of assigning potential buyers to segments. There are also five criteria to use in forming the segments. market size Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. expected growth. similarity of needs of potential buyers within a segment c. difference of needs of buyers among segments d. Similarities of needs of buyers within a segment is a criterion for segmenting a market. potential of a marketing action to reach a segment. difference of needs of buyers among segments. cost of reaching the segment and compatibility with the organization’s objectives and resources. potential of a marketing action to reach a segment e. similarities of needs of potential buyers c. difference of needs of buyers among segments d. cost of reaching the segment e. not for selecting one. similarity of needs of potential buyers within a segment. difference of needs of buyers among segments.

cost of reaching the segment Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. competitive position. potential for increased profit b. To form segments the criteria include potential for increased profit. difference of needs of buyers among segments.9-140 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. need to conform to government regulations d. There are also five criteria to use in forming the segments. competitive position of the firm with respect to the market. simplicity and cost of assigning potential buyers to segments. difference of needs of buyers among segments d. There are also five criteria to use in forming the segments. how long target market members have been customers e. expected growth. similarity of needs of potential buyers within a segment c. expected growth. potential of a marketing action to reach a segment e. expected growth of the market. 170 . which are often confused with those used to select segments. What is the fifth criterion? a. potential of a marketing action to reach a segment e. potential of a marketing action to reach a segment. cost of reaching the segment and compatibility with the organization’s objectives and resources. similarity of needs of potential buyers within a segment c. potential of a marketing action to reach a segment. similarity of needs of potential buyers within a segment. potential for increased profit b. competitive position. amount of publicity likely to result Answer: a Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. and cost of reaching the segment. difference of needs of buyers among segments. which are often confused with those used to select segments. cost of reaching the segment and compatibility with the organization’s objectives and resources. similarity of needs of potential buyers within a segment. difference of needs of buyers among segments d. They include the size of the market. cost of reaching the segment and compatibility with the organization’s objectives and resources. 9-141 SELECT TARGET MARKETS COMPREHENSION Five general criteria are often used to pick target segments. competitive position Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. expected growth. 9-142 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. competitive position. To form segments the criteria include potential for increased profit. time required to create awareness c. compatibility with the organization’s objectives b. simplicity and cost of assigning potential buyers to segments.

similarity of needs of potential buyers within a segment c. difference of needs of buyers between segments c. difference of needs of sellers between segments c. the more attractive the segment is. which are often confused with those used to select segments. perhaps it is growing significantly or is expected to grow in the future. To form segments the criteria include potential for increased profit. 9-145 SELECT TARGET SEGMENTS Which of the following is a criterion for selecting a target market? a. difference of needs of buyers among segments d.9-143 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. The less the competition. competitive position. Although the size of market in the segment may be small now. potential for increased profit b. feasibility of a marketing action to reach a segment d. potential of a marketing action to reach a segment e. 9-144 SELECT TARGET SEGMENTS Which of the following is a criterion for selecting a target market? a. feasibility of a marketing action to reach a segment d. potential of a marketing action to reach a segment. expected growth of segment Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Other Location: SG Rationale: Expected growth is a criterion for selecting a target market. similarity of needs of potential buyers within a segment b. expected growth. similarity of needs of potential buyers within a segment. There are also five criteria to use in forming the segments. COMPREHENSION COMPREHENSION 171 . similarity of needs of potential buyers within a segment b. compatibility with the organization’s objectives and resources Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. cost of reaching the segment and compatibility with the organization’s objectives and resources. competitive position. simplicity and cost of assigning potential buyers to segments. simplicity and cost of assigning potential buyers to segments e. simplicity and cost of assigning potential buyers to segments Answer: d Page: 238 LO: 4 LL: 2 AACSB: 3 Other Location: SG Rationale: Competitive position is a criterion for selecting a target market. difference of needs of buyers among segments. or amount of competition in the segment e.

not for selecting one. e. compatibility with the company's objectives Answer: a Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Similarity of needs is a criterion for segmenting a market. This market would use the rehabilitation services that the company now provides. size of the market segment e. This is an example of which criterion used to select target market segments? a. 9-148 SELECT 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. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: The market would grow as people continue skiing—although it may be slow growth.9-146 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion for selecting a market segment? a. be very small. cost of reaching the segment e. Best Food's created product groupings c. it would not be readily accessible by marketing programs. Best Food's competitive position in the segment b. b. 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. d. In terms of the criteria used for selecting a target segment. competitive position d. expected growth c. compatibility with Best Food's objectives and resources Answer: e Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: New equipment to reach a new market segment relates to the organization's resources. this market would a. have no expected growth. be readily accessible to the firm's marketing programs. not be compatible with the company's current resources. be accurately described by all of the above. Because it would be so small. 9-147 SELECT TARGET SEGMENTS APPLICATION Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. c. 172 . expected growth of the market segment d. similarity of needs of potential buyers b.

formed products to be sold into groups. This is an example of a. Lewis decided to join Goodness Grows in North Carolina. Sauce. zillow. d. b. Answer: d Page: 239 LO: 4 LL: 2 AACSB: 3 Rationale: Zillow provides “zillions” of data for the place(s) where your “pillow” is located. In developing a marketing strategy to sell the sauce. Answer: d Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. e. developing a market-product grid and estimating size of markets. selecting target market segments to reach. c. selected target market segments to reach. developed a market-product grid and estimating size of markets. taken marketing actions to reach target markets. forming prospective buyers into segments. e. forming products to be sold into groups. b.9-149 SELECT TARGET SEGMENTS APPLICATION In developing a marketing strategy for the recently released Nike Air Jordan XVII with a price tag of $200. taking marketing actions to reach target markets. b. She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce. Lewis has just a. the website of the local newspaper. Nike decided to concentrate on affluent teens rather than members of high school basketball teams.B. d. Zillow is an online real estate service that answers the most important question. wsj.com. Inc. “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. 173 .Q. d. a company that makes Tongue Tinglin' B. Answer: a Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: A decision to concentrate on affluent teenagers is the selection of a target market segment. formed prospective buyers into segments.com. 9-150 GOING ONLINE COMPREHENSION If you want to reach families in a particular income segment and believe the value of their home is a good indicator you would most likely go to a.com. e.. LexisNexis. the neighborhood and look around there. a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. c. c.

e. 9-154 PRODUCT POSITIONING KNOWLEDGE The place an offering occupies in consumers' minds on important attributes relative to competitive products is called a. marketing. product positioning. Answer: b Page: 243 LO: 4 LL: 2 AACSB: 3 Rationale: Apple’s lack of a segmentation strategy in the early 1980s and its current segmentation strategy are described in the Marketing Matters. The company saves money on __________ but spends more on __________. d. selective perception. each of which will have to be designed and manufactured.9-152 MARKET-PRODUCT SYNERGIES COMPREHENSION A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. a. profits. marketing b. relative positioning. production e. competition. b. competition Answer: d Page: 242 LO: 4 LL: 2 AACSB: 3 Rationale: A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. 9-153 MARKETING MATTERS COMPREHENSION In the early 1980s Apple Computer Company was often called "Camp Runamok" because the innovative company had no a. competitive positioning. each of which will have to be designed and manufactured. production. product perception. Answer: d Page: 243 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product positioning 174 . marketing. The company saves money on marketing but spends more in production. distributors. marketing c. competitors. marketing d. d. investment capital. c. c. b. coherent product lines targeted to identifiable market segments. marketing research. e.

The dairies wanted to __________ milk in the minds of the consumer. e. c. perceptual mapping. 175 . shelf locations in major chain. represent Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Changing the place an offering occupies in consumers’ minds is called repositioning. segment b. psychographics.9-155 PRODUCT POSITIONING KNOWLEDGE What does the term product positioning refer to? a. an old and outdated concept no longer worthy of consideration in marketing planning Answer: d Page: 243 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product positioning 9-156 REPOSITIONING Other Location: SG KNOWLEDGE Changing the place an offering occupies in consumers' minds relative to competitive products is called a. product differentiation. reposition d. struggling to increase milk sales. b. the place a product offering occupies in consumers' minds on important attributes e. U.S. dairies. repositioning. geographic segmentation. often within major metropolitan areas d. differentiate c. grocery. The dairy industry tried to reposition milk in the minds of adult consumers. and department stores c. a careful analysis of cross tabulations b. product positioning. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product repositioning 9-157 REPOSITIONING APPLICATION Recently. d. explain e. a. tried to change the way adults thought about milk.

Differentiation d. c. Motts was using a __________ strategy. Motts Applesauce was attempting to expand the use of the product from a dinnertime side dish to a baking ingredient. Segment b. e. competitive and distinctive. Competitive e. product positioning c. The advertising message was that using applesauce in baking cuts calories and also makes the resulting baked good healthier. a. competitive and differentiation. head-to-head and differentiation. 9-159 PRODUCT POSITIONING Two major types of product positioning are a. differentiation and parallel market.9-158 REPOSITIONING APPLICATION Motts Applesauce used an advertising campaign to change the way consumers thought about applesauce from a dinnertime side dish to a replacement for cooking oil in baking. In this case. 9-160 DIFFERENTIATION POSITIONING KNOWLEDGE COMPREHENSION __________ positioning involves seeking a less competitive. psychographics Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Repositioning is changing a product's image in consumers' minds. repositioning e. d. Head-to-head c. product differentiation d. smaller market niche in which to locate a brand. a. Consumer Answer: c Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 176 . perceptual mapping b. head-to-head and parallel market. b. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Two main approaches to positioning a new product in the market are head-tohead and differentiation.

smaller market niche in which to locate a brand. smaller market niche. a. b. lateral positioning. seek a less competitive. head-to-head positioning b. c. c. cognitive positioning. compete against other products of the same company. lateral positioning c. 177 . e. consumer positioning e. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Companies use a differentiation positioning strategy among brands within their own product line to minimize cannibalization of a brand's sales or market share. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 9-162 DIFFERENTIATION POSITIONING To avoid cannibalization within company product lines. differentiation d. compete with competitors on similar product attributes but in a different market. head-to-head positioning.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. repositioning. firms often use a. d. d. compete with competitors on similar product attributes in the same market. Differentiation positioning involves seeking a less competitive. compete directly with competitors but emphasize unique product attributes. differentiation positioning. 9-163 DIFFERENTIATION POSITIONING COMPREHENSION COMPREHENSION When McDonald’s introduced its low-fat McLean Deluxe hamburger it used __________ positioning to avoid direct competition with Wendy’s and Burger King. e. b. cognitive positioning Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market.

The Rolex brand tends to be perceived as an expensive status symbol. c. compete for the same segment. both the Timex and the Rolex wristwatches will satisfy the consumer's need to know the time of day. competition is extreme. create cognitive dissonance in consumers who are considering the purchase of a wristwatch. Rolex watches are distributed more selectively. For most products. In general. In this example. 178 . use a product differentiation strategy. consumers view Timex watches as being dependable. Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In today's market place. distinction positioning c.9-164 DIFFERENTIATION POSITIONING COMPREHENSION Which type of product positioning would most likely be used to avoid cannibalization? a. Timex watches can be purchased in drug stores. each marketer has attempted to create a distinct product image in the mind of the consumer. b. e. d. and department stores in all sizes of communities. relatively accurate. many comparable alternatives are available to the consumer. and inexpensive. build customer loyalty through direct competition. develop similar products. parallel market positioning b. and are often available only in fine jewelry stores or specialty shops. 9-165 DIFFERENTIATION POSITIONING APPLICATION Some Timex wristwatches can be purchased for less than $30. The image of the Timex is very different from that of Rolex. the marketers of Timex and Rolex watches have attempted to a. some Rolex wristwatches carry a price tag of several thousand dollars. By using distinctly different pricing and distribution strategies. However. in order to compete in the wristwatch market. differentiation positioning e. discount stores. head-to-head positioning Answer: d Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Companies follow a differentiation strategy among brands within their own product line to minimize cannibalization of a brand's sales or market share. repositioning d.

perceptual b.9-166 DIFFERENTIATION POSITIONING APPLICATION Heelys sneakers come with an imbedded. 9-167 HEAD-TO-HEAD POSITIONING KNOWLEDGE An approach to positioning a new product in the market is __________ positioning. seek out its own market niche. head-to-head b. parallel market c. repositioning e. Heelys is practicing __________ positioning. differentiation e. distinction d. psychological c. compete with competitors on similar product attributes but in a different market. and thereby reduce or avoid cannibalization. Heelys practices differentiation positioning. c. a. compete with competitors using unique attributes. which involves seeking a smaller market niche that is less competitive in which to locate a brand. e. d. compete against other products of the same company. detachable wheel in the shoe’s heel. differentiation Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. compete with competitors on similar product attributes in the same market. b. In the sneaker business. segmentation d. Answer: b Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 179 . a. which involves competing directly with competitors on similar product attributes in the same target market. head-to-head Answer: e Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 9-168 HEAD-TO-HEAD POSITIONING Other Location: SG KNOWLEDGE Head-to-head positioning requires a product to a.

pyramid design. two-dimensional graph. consumer d. e. d. which involves competing directly with competitors on similar product attributes in the same target market.9-169 HEAD-TO-HEAD POSITIONING APPLICATION In the sneaker market. three-dimensional cube. b. with respect to the geographic areas in which they are manufactured. Answer: d Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map 9-171 PERCEPTUAL MAP A perceptual map is most like a a. head-to-head Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In the sneaker market. within selected retail outlets. c. c. Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes. indicating accessibility by consumers. b. 9-170 PERCEPTUAL MAP KNOWLEDGE Marketers use perceptual maps as a means to display or graph in two dimensions the location of products or brands a. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. parallel market b. a. distinction c. normally in major metropolitan areas. in the minds of consumers. within distribution channels. d. database. Answer: c Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map AACSB: 3 Other Location: web AACSB: 3 KNOWLEDGE 180 . e. consumer map of likes and dislikes. Nike and Reebok practice head-to-head positioning. as they are clustered by type of outlet. differentiation e.

b. intermediaries. and the firm itself. a listing of all prospective brands and products b. Answer: d Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map 9-173 PERCEPTUAL MAP AACSB: 3 Other Location: SG COMPREHENSION 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. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: A key to positioning a product or brand effectively is the perceptions of customers.9-172 PERCEPTUAL MAP KNOWLEDGE A graph displaying consumers' perceptions of product attributes across two dimensions is a a. competitors. e. rank order of the ratings of a existing brand's preference relative to its competitors e. three types of data are needed: identification of important attributes for a product class. consumer preference matrix. perceptual map. market-product grid. c. 9-174 PERCEPTUAL MAP COMPREHENSION Which of the following data are collected from consumers to develop a perceptual map for a particular product? a. payoff table. identification of the important attributes for a product class d. b. All of the above types of data are collected from consumers. 181 . c. competitors. growth matrix. independent rating organizations such as Consumer Reports. d. e. consumers. consumers. The map is based on perceptions of a. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: To develop a perceptual map. managerial judgments about how consumers perceive products c. d. judgments of existing products or brands with respect to these attributes. and ratings of an “ideal” product’s or brand’s attributes.

182 . Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: To develop a perceptual map. All of the above data are collected from consumers. 9-176 PERCEPTUAL MAP COMPREHENSION Which of the following data are collected from consumers to develop a perceptual map for a particular product? a. rank order of the ratings of a existing brand's preference relative to its competitors e. a listing of all prospective brands and products b. rank order of the ratings of a existing brand's preference relative to its competitors e. All of the above data are collected from consumers. and ratings of an “ideal” product’s or brand’s attributes. three types of data are needed: identification of important attributes for a product class. judgments of existing products or brands with respect to these attributes.9-175 PERCEPTUAL MAP COMPREHENSION Which of the following data are collected from consumers to develop a perceptual map for a particular product? a. and ratings of an “ideal” product’s or brand’s attributes. judgments of existing products or brands with respect to these attributes. three types of data are needed: identification of important attributes for a product class. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: To develop a perceptual map. ratings of an “ideal” product’s or brand’s attributes d. managerial judgments about how consumers perceive products c. managerial judgments about how consumers perceive products c. a listing of all prospective brands and products b. judgments of existing products or brands with respect to important attributes d.

c. e. both sugared soft drinks and skinny lattes. Its advertising agency recommends that it run ads showing that coffee is healthier than one or more competitive drinks shown in the figure. fruit-flavored drinks. the coffee producer should position its coffee against drinks in the figure that are lower than coffee on the vertical nutrition axis. The only such drink in the figure is sugared soft drinks. d. Answer: b Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: For the planned ads. Such drinks are seen as less nutritious. b. 183 . In the ads. coffee should be compared with a. fruit-flavored drinks and sugared soft drinks. skinny lattes. sugared soft drinks. Suppose a coffee producer wants to increase sales.FIGURE 9-10 9-177 PRODUCT POSITIONING APPLICATION The perceptual map in Figure 9-10 shows how various drinks are seen in the minds of adult consumers.

more adult than a skinny latte. on the horizontal scale. mineral water must be above the drink compared. b. sales forecast. c. company growth potential. e. A likely reason I drink mineral water according to this perceptual map is that I see it as a. Answer: a Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential KNOWLEDGE 184 . Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: On the vertical nutrition scale. sales forecast. more nutritious than a milk shake. c. top-down forecast. market share. I am very concerned about nutrition and don’t want to look like a kid. this is not true for either diet drinks or skinny latte (choices a or c). mineral water must be to the right of the drink compared.. e. this is true for fruit-flavored drinks (choice e) but not tea or milk shakes (choices b or d). I am a heavy consumer of mineral water. So fruitflavored drinks (choice e) is the correct answer. Answer: b Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential 9-180 MARKET POTENTIAL Another commonly used term for market potential is a. b. As an adult. Delphi forecast. d. growth potential. d. 9-179 MARKET POTENTIAL KNOWLEDGE The maximum total sales of a product by all firms to a segment under specified environmental conditions and marketing efforts of the firms are called a. d. market forecast. e. more nutritious than a fruit-flavored drink. c. more nutritious than tea. industry potential. more adult than nutritionally-designed diet drinks. Also.9-178 PRODUCT POSITIONING APPLICATION The perceptual map in Figure 9-10 shows how various drinks are seen in the minds of adult consumers. Suppose this map describes accurately how I see the drinks shown. market potential. b. Additionally.

b. the sum of products in a particular industry sold domestically under normal economic conditions d. the minimum anticipated sales in related industries not including federal. the total of all products sold nationally c. market potential e. Delphi forecast c. d. c. sales forecast b. and local taxes e. industry potential d. company forecast. state. environmental forecast. Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 9-183 SALES (COMPANY) FORECAST KNOWLEDGE KNOWLEDGE The term __________ is defined as the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. market potential. e.9-181 MARKET POTENTIAL KNOWLEDGE The term market potential or industry potential refers to what important marketing factor? a. industry potential. market share. market share Answer: a Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 185 . total industrial products sold worldwide b. the maximum total sales of a product by all firms to a segment under specified environmental conditions and marketing efforts of the firms Answer: e Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential 9-182 SALES (COMPANY) FORECAST Another commonly used term for sales forecast is a. a.

Answer: c Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: 99% of all sales forecasts are judgments of the person who must act on the results of the forecast—the individual decision maker. (2) surveys of knowledgeable groups. 9-187 JUDGMENTS OF THE DECISION MAKER The most commonly used forecasting technique is the a. government document survey analysis Answer: a Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Three main sales forecasting techniques are often used: (1) judgments of the decision maker. technological methods e. surveys of competitors c. 9-186 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. 186 COMPREHENSION COMPREHENSION COMPREHENSION . government document survey analysis Answer: a Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Three main sales forecasting techniques are often used: (1) judgments of the decision maker. survey of knowledgeable groups. statistical method. surveys of competitors c. c. d. technological methods e. judgments of trade associations d. (2) surveys of knowledgeable groups. technological methods e. b. judgments of the decision maker b. e. and (3) statistical methods. linear trend extrapolation method. 9-185 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. government document survey analysis COMPREHENSION Answer: a Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Three main sales forecasting techniques are often used: (1) judgments of the decision maker. statistical methods b. and (3) statistical methods.9-184 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. surveys of competitors c. (2) surveys of knowledgeable groups. judgments of trade associations d. technological method. and (3) statistical methods. surveys of knowledgeable groups b. judgments of trade associations d. judgment of the decision maker.

buildup forecast b. technological forecast b. a. c. survey of knowledgeable groups forecast Answer: c Page: 246 LO: 6 LL: 1 Rationale: Key term definition—direct forecast 9-189 DIRECT FORECAST “How many quarts of milk should I buy?” is an example of a a. Alternative D is a statistical method that involves the greatest cost in terms of time and money due to the data collection and analysis involved. direct forecast d.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. Delphi forecast c. statistical forecast e. Delphi forecast. direct forecast c. APPLICATION AACSB: 3 COMPREHENSION 187 . field sales forecast Answer: b Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: The decision-maker makes the forecast without having any data to work with. Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: Alternative A is correct because a direct forecast is developed using the heuristic judgment of the decision maker. lost-horse forecast d. trend extrapolation. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts. Alternatives B. b. survey of buyers intentions forecast. direct forecast. Delphi forecast e. sales force survey forecast. C. d. e.

survey of buyers' intentions forecast.9-191 LOST-HORSE FORECAST KNOWLEDGE A __________ involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. a. and making the final forecast. Delphi d. lost-horse forecast b. statistical method e. lost-horse forecast. e. trend extrapolation d. technological c. a. c. jury of executive opinion b. 188 . lost-horse Answer: e Page: 246 LO: 6 LL: 1 Rationale: Key term definition—lost-horse forecast 9-192 LOST-HORSE FORECAST AACSB: 3 KNOWLEDGE A __________ forecast involves starting with the last known value of the item being forecasted. Delphi forecast e. b. linear trend extrapolation. technological forecast c. listing the facts that could affect the forecast. statistical inference. This is an example of a a. survey of buyers' intentions forecast Answer: a Page: 246 LO: 6 LL: 1 Rationale: Key term definition—lost-horse forecast 9-193 LOST-HORSE FORECAST AACSB: 3 APPLICATION Deluxe Cleaners uses last year's sales as a starting point to estimate next year's sales and then looks at positive and negative influences that may affect sales. experimental estimation. assessing whether they have a positive or negative impact. Answer: d Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. d.

lists factors that could affect the forecast. 9-195 LOST-HORSE FORECAST APPLICATION The Ohio River Boatworks uses last year’s sales as a starting point to estimate next year’s sales of its boats. and adding 3 new product models.9-194 LOST-HORSE FORECAST APPLICATION When a marketing student overheard the following comments. technological forecast c.” a. a. she knew the person who was talking was planning to use a __________. Delphi forecast e. survey of buyers' intentions Answer: c Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. we're going to increase prices across the board by 20 percent. Delphi forecast e. technological b. technological forecast c. lost-horse forecast b. survey of buyers' intentions forecast Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. trend extrapolation d. So on balance. But on the negative side. I think sales will increase next year by 5 percent. trend extrapolation d. The Ohio River Boatworks uses the __________ method of forecasting. 9-196 SURVEY OF BUYERS’INTENTIONS FORECAST KNOWLEDGE A __________ forecast asks prospective customers whether they are likely to buy a good or service during some future time period. All those things are positive. assesses whether they have a positive or negative impact. lost-horse d. survey of buyers' intentions forecast Answer: e Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—survey of buyers’ intentions forecast 189 . a. Delphi e. “We're increasing TV advertising. trend extrapolation c. and makes the final forecast. lost-horse forecast b. adding some sales representatives.

judgments of individuals b. a. Based on this information. jury of executive opinion c.750. salesforce survey d. This is an example of a __________ forecast. statistical Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. survey of buyers' intentions d.000 for the quarter. judgments of individuals b. technological c. 9-199 SALESFORCE SURVEY FORECAST APPLICATION All the salespeople in the Southwest regional office are asked to provide estimates of anticipated sales revenues for the next quarter. statistical Answer: c Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. jury of executive opinion c. a. a. salesforce survey d. statistical method e. survey of experts e. 190 . jury of executive opinion b.9-197 SURVEY OF BUYERS' INTENTIONS FORECAST KNOWLEDGE A __________ forecast asks prospective customers whether they are likely to buy a good or service during some future time period. the forecast is set at $4. survey of experts e. lost-horse Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—survey of buyers' intentions forecast 9-198 SALESFORCE SURVEY FORECAST KNOWLEDGE A __________ forecast involves asking the firm’s sales people to estimate sales during a coming period.

9-200 TREND EXTRAPOLATION KNOWLEDGE The best-known statistical method of forecasting is called __________. information extension d. deductive interpolation Answer: a Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—trend extrapolation 9-201 TREND EXTRAPOLATION The key strength of trend extrapolation is a. Answer: d Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Trend extrapolation assumes that the underlying relationships in the past will continue into the future. When the pattern of data is described with a straight line. d. exponential interpolation c. e. which is the basis of the method’s key strength: simplicity. a. its near-perfect accuracy of prediction. d. exponential extrapolation. e. information extension. inductive extrapolation. inductive extrapolation e. simplicity. Answer: e Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—linear trend extrapolation 191 . 9-202 LINEAR TREND EXTRAPOLATION KNOWLEDGE COMPREHENSION The best-known statistical method of forecasting involves extending a pattern observed in past data into the future. c. lack of assumption. reliance on computers for computation. trend extrapolation b. reliance on facts. it is referred to as a. the Delphi method. b. linear trend extrapolation. b. c. which involves extending a pattern observed in past data into the future.

which it labels Urban/Street skaters. buildup Answer: d Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: The best-known statistical method of forecasting is trend extrapolation. aggregation marketing. 9-205 VIDEO CASE: ROLLERBLADE COMPREHENSION APPLICATION By dividing its market into categories. and the sales for 2008 were 1000 units higher than 2007. Potential buyers within a segment should be similar in terms of their needs and the resulting marketing action. “The sales for 2007 were 1000 units higher than 2006. consumer differentiation. Rollerblade is using a. market segmentation. behavioral segmentation variables. and Race skaters. psychographic. jury of executive opinion c. c.” The CEO was most likely using a __________ forecast. Fitness/Recreation skaters. linear trend extrapolation e. e. such as product features. b. Rollerblade segments on consumer needs. resource based. demographic.9-203 LINEAR TREND EXTRAPOLATION COMPREHENSION The CEO says to her marketing manager. a. d. 192 . direct d. b. d. 250 LO: 3 LL: 3 AACSB: 3 Rationale: Psychographic segmentation is based on some subjective mental or emotional attributes. 9-204 VIDEO CASE: ROLLERBLADE The segmentation strategy used by Rollerblade is a. it is linear trend extrapolation as is the case here. When the pattern is described with a straight line. Answer: d Page: 250 LO: 3 LL: 2 AACSB: 3 Rationale: Market segmentation helps Rollerblade best service different consumers’ needs. e. Delphi b. Junior skaters. socioeconomic. Answer: c Page: 231. which involves extending a pattern observed in past data into the future. aspirations. market delineation. geographic. I'd say we’re safe in forecasting 2009 sales as 1000 units greater than 2008. or needs of prospective customers. c.

193 . adjustable aluminum frame Rollerblade developed that when shorter allows for tighter turns and when longer permits more speed. usage segmentation. product sampling b.9-206 VIDEO CASE: ROLLERBLADE APPLICATION The 4D™ refers to an innovative. Having a variety of products available allows consumers in each segment to select skate best suited to their usage needs. product differentiation d. Rollerblade is implementing a __________ strategy with its innovative skate technology. market differentiation Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm using different marketing mix activities. e. to help consumers perceive the product as being different and better than competing products. a. such as product features and advertising. product extrapolation c.

product differentiation relates to market segmentation. such as image or price. POSITIONING. How does it link needs with marketing actions? Answer: Market segmentation involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action.CHAPTER 9 SEGMENTING. as the text points out in connection with Zappos. In its broadest sense it involves a firm's using different marketing mix activities. Thus. because clearly defined and different target markets have different needs that can be satisfied with different products of the same general type. AND FORECASTING MARKETS SHORT ESSAY QUESTIONS 9-207 MARKET SEGMENTATION COMPREHENSION 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. As long as a new product does not take a significant amount of sales away from an existing product. Page: 226 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-208 PRODUCT DIFFERENTIATION 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. such as product features and advertising. it can contribute to increased revenues for the firm. In a narrower sense. Segmentation links needs to actions. tangible marketing actions the firm can take to satisfy those needs. 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. Differences may involve nonphysical features as well. product differentiation involves a firm's selling two or more products with different features targeted to different market segments. Such needs and benefits must be related to specific. Page: 226 LO: 1 LL: 2 AACSB: 3 194 . to help consumers perceive the product as being different and better than competing products.

Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-210 MULTIPLE PRODUCTS. Although these expenses can be high. In this case. MULTIPLE MARKETS COMPREHENSION 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. and manufacturing expenses. the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of distribution.9-209 SINGLE PRODUCT. they are rarely as large as those for developing an entirely new product. Build-to-order involves manufacturing a product only when there is an order from a customer. engineering. Answer: Mass customization involves the tailoring of goods or services to the tastes of individual customers on a high-volume scale. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-211 MASS CUSTOMIZATION Explain the difference between mass customization and build-to-order. and adds to the organization’s sales revenues and profits. Producing these different products or services is clearly more expensive than producing only one product or service but is effective if it meets customers’ needs better. Page: 229 LO: 1 LL: 2 AACSB: 3 195 . doesn’t reduce quality or increase price. MULTIPLE MARKETS Why would an organization produce multiple products or services and then attempt to sell them to two or more market segments? Answer: Organizations may target different products or services to multiple market segments. which often entails high research.

List these important factors in marketing planning. It now wants to give free food only to people who go hungry on a regular basis. Compared to the food bank's previous policy.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. 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) potential of a marketing action to reach a segment (5) simplicity and cost of assigning potential buyers to segments Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-214 CRITERIA FOR FORMING SEGMENTS A nonprofit food bank was gathering and handing out food to anyone who requested it. This will be the market segment it targets. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. 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 not-for-profit criteria. which link market needs of customers to the organization’s marketing program. List these five key steps. 9-2 LO: 2 LL: 2 AACSB: 3 COMPREHENSION 9-213 CRITERIA FOR FORMING SEGMENTS A marketing manager should develop segments for a market that meet five principal criteria. Answer: The five key steps are: (1) group potential buyers into segments (2) group products to be sold into categories (3) develop a market-product grid and estimate size of markets (4) select target markets (5) take marketing actions to reach target markets Page: 230. Fig. it is now much more likely to serve its clients more effectively with the new segmentation strategy.

but also the means to dine at the restaurant. which is based on some subjective mental or emotional attributes (personality). young adults. race). census tract. perhaps related to occupations. occupation) of prospective customers.] However. The psychographic dimension would include variables such as extroverted. and economy relative to more expensive restaurants. those people who might dine at The Outback more than once a month. and explaining why each variable is appropriate. or subdivision.9-215 CONSUMER SEGMENTATION VARIABLES COMPREHENSION What are the four general bases by which consumer markets can be segmented? Answer: Four general bases of segmentation are: (1) geographic segmentation. it would be well to seek medium and heavy users including. They could be defined by ZIP Code. The next dimension should be demographics. including homeowners. Answer: [Students might select any segmentation variables from Figure 9-3. income) or other classification attribute (birth era. what benefits they seek. perhaps. Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-216 SEGMENTATION VARIABLES Assume you are manager of The Outback Steak House. gregarious. As for the usage dimension. since repeat business is the key to success in this sort of venture. 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. probably with children. Also important would be household income. measurable (age. which is based on some observable actions or attitudes by prospective customers—such as where they buy. which is based on some objective physical (gender. aspirations (lifestyle). Page: 232 LO: 3 LL: 3 AACSB: 3 197 . The Outback manager would seek those people who had not only the need. a franchised restaurant that has newly opened in St. and why they buy. which is based on where prospective customers live or work (region. Describe how you would segment the market according to segmentation bases. using as many segmentation variables as you can. and demographic correlations can be rather easily made with regard to those factors. (3) psychographic segmentation. or needs of prospective customers. Louis. married. and those fond of pleasures such as eating out. city size). (2) demographic segmentation. how frequently they buy. Segmentation according to the benefits dimension could include convenience. and (4) behavioral segmentation.

In a complete marketproduct grid analysis. and awareness/intentions are similar to the consumer market variables used for segmentation and may also be used to segment organizational markets. Page: 237 LO: 4 LL: 2 AACSB: 3 198 . organizational markets? COMPREHENSION Answer: Organizational markets can be segmented by geographic. usage rate. Answer: A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. Page: 235 LO: 3 LL: 2 AACSB: 3 COMPREHENSION 9-218 CRITERIA TO FORM SEGMENTS What are the five essential criteria that segments should have to ensure the success of segmentation? Answer: (1) Simplicity and cost-effectiveness of assigning potential buyers to segments (2) Potential for increased profit (3) similarity of needs of potential buyers within a segment (4) difference of needs of buyers among segments (5) potential of a marketing action to reach a segment Page: 231 LO: 3 LL: 2 AACSB: 3 COMPREHENSION 9-219 MARKET-PRODUCT GRID Explain what a market-product grid is and how it is used. each cell in the grid can show the estimated market size of a given product sold to a specific market segment.9-217 ORGANIZATIONAL MARKET SEGMENTATION What are the segmentation bases for U. demographic or behavioral segments.S. Product features.

Page: 244 LO: 5 LL: 2 AACSB: 3 199 .9-220 CRITERIA TO SELECT THE TARGET SEGMENTS What are the criteria used to select target markets? COMPREHENSION Answer: There are two different kinds of criteria in the market segmentation process: those used to (1) divide the market into segments and (2) actually pick the target segments. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. a company might only wish to manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product. Marketing efforts can be streamlined with a focus on fewer segments.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. (1) market size (2) expected growth (3) competitive position (4) cost of reaching the segment (5) compatibility with the organization’s objectives and resources Page: 238 . For example."). For example. Page: 242 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-222 APPROACHES TO PRODUCT POSITIONING What are two approaches to product positioning? Give an example of each approach. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. Answer: There are two major approaches to positioning a product. To simplify product lines. Five criteria can be used to select the target segments. Dollar Rental Cars is positioned head-to-head with Avis and Hertz. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. reduce R & D and production expenses.

companies obtain three types of data from consumers. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time. this can be effective. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers. Sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. They are: (1) identification of the important attributes for a product class (2) judgments of existing products or brands with respect to these attributes (3) ratings of an "ideal" product’s or brand's attributes Page: 244 LO: 5 LL: 2 AACSB: 3 COMPREHENSION 9-224 MARKET POTENTIAL AND SALES FORECAST Differentiate between market potential and sales forecast. Page: 245 . For industrial products with few prospective buyers. Page: 246 LO: 6 LL: 2 AACSB: 3 200 .246 LO: 6 LL: 2 AACSB: 3 COMPREHENSION 9-225 SURVEYS OF KNOWLEDGEABLE GROUPS What are the two common groups surveyed to develop sales forecasts? Describe the information contained in the forecasts that result. Sales forecast is also known as company forecast. Answer: Market potential is also known as industry potential.9-223 DATA NEEDED FOR PERCEPTUAL MAP COMPREHENSION 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. Salespeople can be unreliable forecasters—painting too rosy a picture if they are enthusiastic about a new product and too grim a forecast if their sales quota and future compensation are based on it.

Trend extrapolation assumes the underlying relationships in the past will continue into the future. the forecaster may choose to use linear trend extrapolation). What statistical method of forecasting future sales might you use? Answer: The best-known statistical method of forecasting is trend extrapolation. or extending a pattern observed in past data into the future.9-226 TREND EXTRAPOLATION APPLICATION Suppose you are a sales forecaster for 3M Company. and the history so excellent that a trend extrapolation would make great sense. and had actual sales revenue figures on adhesives for the past ten years. the volume is so great. (If the trend is thought to be a straight line. In the case of 3M's adhesives. the quality is so good. Page: 246 LO: 6 LL: 3 AACSB: 3 201 .

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