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. b. go shopping on a regular basis. will pay attention to marketing messages.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. use the same payment methods. d. respond similarly to a marketing action. d. 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. be responsive to marketing research. c. consumer differentiation. e. c. e. aggregation marketing. use the same payment methods. market segmentation. pay attention to marketing messages. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 120 . market delineation. psychographics. b. e. b. 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. have common needs. go shopping on a regular basis. be responsive to marketing research. d.

market segments. qualified prospects. organizational buyers. Market segmentation d. ultimate consumers. demographic cluster c. d. have different needs and have potential for future growth. its members must a. represent a large share of the entire market and have critical buying power. demographic clusters. 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. c. 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. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . d. c. ultimate consumer e. b. e. a. b. Market diversification b. have different needs and respond similarly to market actions.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. 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. market segment b. have potential for future growth and have potential for increased profit or ROI. a. have common needs and respond similarly to market actions. Market augmentation e. organizational buyer d. Market differentiation c.

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

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

a. top-level management d. b. the organization's marketing program. e. 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. 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. Fig. 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. grouping people randomly in a market b. self-regulatory industry standards. splitting people randomly between markets e. 124 . self-regulatory industry standards b. market needs e. Answer: e Page: 227.9-18 MARKET SEGMENTATION COMPREHENSION Market segmentation stresses __________ and relating needs and benefits to specific marketing actions. controllable environmental factors. 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. controllable environmental factors Answer: d Page: 227.227 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. market sectioning c. such needs and benefits must be related to specific marketing actions the organization can take. government regulations. government regulations c. product based market development Answer: c Page: 226 . c. d. top-level management. grouping people according to similar needs d. Second.

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

126 . e. d. d. link market needs to an organization’s product or price. b. just-in-time marketing. c. e. 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. 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. synergy. 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). e. sales forecasting. mass customization. just-in-time manufacturing. do all of the above. This strategy is an example of a. synergy. b. Reebok targets the specific needs of particular types of runners with its different types of shoes. sales forecasting. Market segmentation is only a means to an end: to lead to tangible marketing actions that can increase sales and profitability. 9-26 MARKET SEGMENTATION APPLICATION Reebok makes shoes with DMX Shear and Foam cushioning. b. 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.9-24 MARKET SEGMENTATION Marketers use market segmentation to a. c. market segmentation. The Premier Control shoe is made for runners whose feet tend to turn out. This strategy is an example of a. The Premier Road is made with extra cushioning for pavement runners. increase overall sales and profitability. link market needs to an organization’s advertising. d. link market needs to an organization's marketing program.

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

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

which often entail extremely high research. indirect distribution and logistics problems d. which often results extremely high research. develop a separate promotional campaign. b. it avoids the extra costs of developing. strategic planning e. the extra cost of developing and producing additional versions of the product b. In this case. creating a service gap c. 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. 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. issue stock used for additional research and development for improved products. and producing additional versions of the product. it avoids __________. c. and manufacturing expenses. develop and produce another version of the product. a. engineering. 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. e. 129 . 9-33 ONE PRODUCT. d. manufacture products that appeal to different markets. and manufacturing expenses. purchase another firm that has additional products that would appeal to multiple markets.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. engineering. 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.

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

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

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.9-39 MULTIPLE PRODUCTS. b. 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. d. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. each targeted at a different type of user. and adds to the manufacturer’s sales revenues and profits. 132 . Ford manufactures SUVs for those who wish to carry lots of people and pickup trucks for those who wish to carry lots of products. 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. doesn't reduce quality or increase price. and a. e.S. One set of previews showed the action scenes in order to attract one audience. b. 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. MULTIPLE MARKET SEGMENTS COMPREHENSION Which of the following is an example of a multiple products and multiple markets strategy? a. c. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. conforms to all union regulations. and the other set showed romantic scenes to attract another audience. are an example of multiple products aimed at multiple markets. 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. c. serves customers' needs better. doesn’t reduce quality or increase price. reduces the number of employees required. d. 9-40 MULTIPLE PRODUCTS. stabilizes the sales revenues and profits. decreases the cost of the physical plant. e.

e. MULTIPLE MARKET SEGMENTS COMPREHENSION Which of the following is an example of a “Tiffany/Wal-Mart” strategy? a. doesn’t reduce quality or increase price. conforms to all union regulations. 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. e. 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. b. One set of previews showed the action scenes in order to attract one audience. doesn't reduce quality or increase price.S. decreases the cost of the physical plant. whereas its Old Navy stores sell a slightly different version for $22. and adds to the manufacturer’s sales revenues and profits.9-41 MULTIPLE PRODUCTS. and a. Many firms are now offering different variations of the same basic product or service to high-end and low-end segments. and the other set showed romantic scenes to attract another audience. 9-42 MULTIPLE PRODUCTS. stabilizes the sales revenues and profits. Answer: d Page: 229 LO: 1 LL: 2 AACSB: 3 Rationale: A “Tiffany/Wal-Mart” strategy is a two-tier marketing strategy. each targeted at a different type of user. serves customers’ needs better. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. b. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. c. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. c. 133 . Gap’s Banana Republic chain sells blue jeans for $58. reduces the number of employees required. are an example of multiple products aimed at multiple markets. d. A new movie used several different advertisements. 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: 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. A new movie used several different advertisements. This is an example of a. one product and multiple market segments. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. mass customization. One set of previews showed the action scenes in order to attract one audience. synergy. 134 . b. 9-44 MULTIPLE PRODUCTS. Betty Crocker carries one line of cake mixes for people with conventional ovens. and the other set showed romantic scenes to attract another audience. c.S.9-43 MULTIPLE PRODUCTS. d. 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. d. e. a “Tiffany/Wal-Mart” strategy. c. b. and another line of cake mixes for people with microwave ovens. 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. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a multiple products and multiple markets strategy? a. Many firms are now offering different products or services to high-end or low-end segments. e. price discrimination. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes.

99 line of greeting cards. and adds to the manufacturer’s sales revenues and profits. stabilizes the sales revenues and profits. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals. This is an example of a. d. and a. 135 .9-45 MULTIPLE PRODUCTS. b. Manufacturing these different cereals is clearly more expensive than producing one type of cereal but seems worthwhile if it serves customers' needs better. decreases the cost of the physical plant. are an example of multiple products aimed at multiple markets. 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. e. d. mass customization. each targeted at a different type of user. b. adds to the manufacturer's sales revenues and profits. one product and multiple market segments. Many firms are now offering different products or services to high-end or low-end segments. conforms to all union regulations. 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. or you can buy a card that's not quite as nice but just as sentimental from the store's new $. MULTIPLE MARKET SEGMENTS APPLICATION You can go to your nearest Hallmark card store and buy a birthday greeting card for a friend and pay $4. c. doesn't reduce quality or increase price. a “Tiffany/Wal-Mart” strategy. 9-46 MULTIPLE PRODUCTS. reduces the number of employees required.50. synergy. price discrimination. doesn’t reduce quality or increase price. e. c.

price discrimination.000 tins or 360. d. Customers browse the store. d. in Santa Ana. repositioning. repositioning. c. This is an example of a. and leather type. and customers go home empty-handed—at least initially. and textures. This is an example of a. 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. 136 . 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. mixing and matching design components such as style. The largest order has been for 15. d. c. e. CA sells organic cookies to corporate customers in tins with the customer’s corporate logo printed on it.000 cookies. colors. e. market melding. market augmentation. you select materials. c. synergy. Once you choose a boot style. mass customization. one product and multiple market segments. e. b. color. 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. 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. but the only boots on hand are display models.9-47 MASS CUSTOMIZATION APPLICATION Custom Foot runs six retail locations. About 100 display boots provide style guidelines. how the 80/20 rule is implemented. market melding. There's no inventory for sale. At first glance none look any different from your basic old-fashioned shoe store. Custom Foot guarantees your boots will be ready within three weeks. b. multiple products in multiple segments. b. 9-49 MASS CUSTOMIZATION APPLICATION ChoiceShirts is an online company that makes custom T-shirts. This is an example of a. how the 80/20 rule is implemented. mass customization. synergy.

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

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

Model E relies on a. d. built-to-order (BTO). customer relationship management (CRM). b. d. a one-product-one-market-segment strategy. and direct delivery. 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. 139 . synergy. built-to-order (BTO). c. Target marketing d.9-56 MASS CUSTOMIZATION KNOWLEDGE __________ is tailoring goods or services to the tastes of individual customers on a highvolume scale. launch. c. e. a customer does not have the ability to specify an unlimited number of features. synergy. but because of production issues. Synergy c. designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design. Mass production e. a one-product-one-market-segment strategy. e. 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. mass aggregation. b. "Think of Model E as the Dell of the auto industry." said William Santana Li. It is very similar to mass customization. repositioning. Model E manufactures a car only when there is an order from a customer. mass aggregation. Customer relationship management b. 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. a. president and CEO of Model E.

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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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company’s historical profitability b.9-71 CRITERIA FOR FORMING SEGMENTS Which of the following is a criterion used in forming market segments? a. (3) difference of needs of buyers among segments. 9-72 CRITERIA FOR FORMING SEGMENTS Which of the following is a criterion used in forming market segments? a. 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. (5) simplicity and cost of assigning potential buyers to segments. difference of needs of retailers between segments e. (5) simplicity and cost of assigning potential buyers to segments. assign them to a segment e. (4) potential of a marketing action to reach a segment. a. (2) similarity of needs of potential buyers within a segment. (3) difference of needs of buyers among segments. potential of marketing action to reach a segment e. 144 . (2) similarity of needs of potential buyers within a segment. 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. (4) potential of a marketing action to reach a segment. diversify their interests c. similarity of potential sellers within a segment c. (4) potential of a marketing action to reach a segment. (5) simplicity and cost of assigning potential buyers to segments. competitive position b. (3) difference of needs of buyers among segments. difference of needs of retailers between segments d. competitive position c. (2) similarity of needs of potential buyers within a segment. similarity of potential sellers within a segment d. optimize their different needs d. maximize internal considerations b. 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. 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.

consumer markets. __________. “Would segmentation be worth doing. similarity of needs of potential buyers within a segment d. to preservatives used in salad bars. 9-76 CONSUMER SEGMENTATION VARIABLES COMPREHENSION Four general categories used to segment consumer markets are geographic segmentation. “Would segmentation be worth doing and is it possible?” c. “Is this product useful on a global scale?” b. Restaurants might consider people with these "allergies" as a separate segment. 145 . psychographic segmentation e. simplicity and cost of assigning potential buyers to segments e. a. “Is there too much competition for this product?” e. supplier segmentation b.S. 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. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. 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. the limited benefit to consumers in the segment. usually mild.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a. instrumentality of sufficient marketing objectives to ignore that segment b. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question. 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. (2) demographic segmentation. 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. demand segmentation c. and behavioral segmentation. These four segmentation bases are: (1) geographic segmentation. and (4) behavioral segmentation. demographic segmentation. “Is it possible to reposition this product?” d. different needs of buyers among different segments c. regional segmentation d. (3) psychographic segmentation. “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.

zip code segmentation. 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. 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. b. Campbell’s is using __________ segmentation. behavioral c. In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas. 146 . which could be heated and poured directly onto nacho chips. NAICS code 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. a. socioeconomic d. d. e. b. age b. d. geographic e. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. MSA segmentation. 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. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. c. 9-79 GEOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a. c. This is geographic segmentation. was too hot for Americans in the East and not hot enough for those in the West and Southwest. geographic segmentation. regional segmentation. GE built a downsized microwave oven to hang under kitchen cabinets. e.9-77 GEOGRAPHIC SEGMENTATION Segmentation based on where prospective customers live or work is called a. Today. Campbell’s plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants.

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

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

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

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

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

e. demographic segmentation b. socioeconomic segmentation. such as a new product. psychographic segmentation c. geographic segmentation d. However. d.9-95 BEHAVIORAL SEGMENTATION COMPREHENSION Segmentation based on what features are important to different customers is known as a. behavioral segmentation. such as a new product. behavioral segmentation e. c. 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. an ad campaign. demographic segmentation b. their dorm rooms are often woefully short of space. an ad campaign. psychographic segmentation c. 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. geographic segmentation d. Magnavox is using which type of segmentation variable in this example? a. 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. MicroFridge understands this and markets a combination microwave. 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. behavioral segmentation e. or a distribution system. MicroFridge is using which type of segmentation basis? a. b. or a distribution system. or a distribution system. Magnavox uses behavioral segmentation to guide the types of TVs it sells since different consumers have different benefits they seek in a TV set. 9-97 BEHAVIORAL SEGMENTATION APPLICATION Magnavox sells its target markets many different types of TVs from flat screens to a 20” combination TV/DVD. psychographic segmentation. 152 . and freezer targeted to these students. an ad campaign. refrigerator. The larger sets can be outfitted with surround sound at a higher price than the small set. geographic segmentation. such as a new product. The small set is much less expensive and allows the viewer to watch a DVD without extra equipment. demographic segmentation.

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

b. d. d. service inventory. a type of behavioral segmentation. turnover. behavioral segmentation. b. service inventory. trial. This technique. 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: 1 Rationale: Key term definition—usage rate 9-102 BEHAVIORAL SEGMENTATION BY USAGE Frequency marketing is a strategy that focuses on a. 154 . sometimes called frequency marketing. This technique uses a. usage rate. consumption rate.9-101 BEHAVIORAL SEGMENTATION BY USAGE KNOWLEDGE The quantity consumed or patronage—store visits—during a specific period is called a. This technique. e. trial. usage rate. is a strategy that focuses on usage rate. d. c. 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. c. sometimes called frequency marketing. consumption rate. b. c. is a strategy that focuses on usage rate. buying condition segmentation. demographic segmentation. e. psychographic segmentation. e. geographic segmentation. turnover. 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 b. c. e. 9-106 NONPROSPECTS KNOWLEDGE People who do NOT use a firm's product or service. or their bowl of soup as a delicious addition. geography. 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. benefits offered. In this example. Its market share has been steadily declining as consumers began associating it with something their grandfather ate. behavioral d. lifestyle e. their salad. d. demographics. Post is using which segmentation variable? a.9-104 BEHAVIORAL SEGMENTATION BY USAGE APPLICATION Post Grape-Nuts cereal has been marketed since early in the 20 th century. undefined prospects. nonqualified prospects. leads. Answer: d Page: 233 LO: 3 LL: 1 AACSB: 3 Rationale: Among nonusers of a product. c. d. Answer: a Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Rate of use and user status are both behavioral segmentation variables. demographic c. people who might become users are prospects and people who are never likely to become users are nonprospects. 155 . disenfranchised prospects. usage. e. In this case. Post recently launched a campaign to increase consumption of the cereal by inviting consumers to try the crunchy cereal on top of their yogurt. 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. b. and most likely never will. nonprospects. Post was trying to convince people who had never tried the cereal to try it. Its market is likely segmented by a. and people who were familiar with the product to use it in a variety of different ways. b. psychographics. are called a. which Post is trying to increase by suggesting other product uses. "over 40 weeks per year" is a measure of usage rate.

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

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

b.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. there are fewer of them than any other user segment. d. Giving the light users an index of 100. heavy users are most important to a fast-food restaurant because a. the segment is at the top of the chart. the usage index is highest for that segment. c. 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.67. 158 . each heavy user spends $4. e.00 spent by a light user in one of these restaurants in a month. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users. their consumption percentage is higher than the percentage that they represent of the total users and non-users. For every $1. the heavy users have an index of 467. there are less of them than any other segment.

Burger King is closing in on your market share. and secondary (12.8 percent). 159 . the information in Figure 9-5 suggests a. so a natural strategy is to look at these two competitors and devise a marketing program to win customers from them. primary (19. most of the respondents think of Wendy’s as their primary fast food restaurant. that you need to devise a marketing program to win customers from McDonald’s and Burger King.FIGURE 9-5 9-113 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant. d. McDonald’s is not a serious competitor to you. c. your restaurant is a market leader. Answer: e Page: 234 LO: 3 LL: 2 AACSB: 3 Rationale: The Wendy’s bar in Figure 9-5 shows that your sole (0. b.6 percent).2 percent) user segments are somewhat behind Burger King and far behind McDonald’s. e.

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

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

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

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

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

which products to reposition. 165 . which product groupings to offer. d. relate the product life cycle to consumer demand. c. 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. 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. e. b. how to implement a harvesting strategy. e. It is helpful in determining which target market segments to select and which product groupings to offer. b. screen many new product ideas in order to select the one with best long-run market potential. d. c. determine which target market segments to select and which product groupings to offer. how to implement the 80-20 rule. make optimal decisions under conditions of uncertainty.9-128 MARKET-PRODUCT GRID COMPREHENSION One advantage of a market-product grid is that it can be used to a. select representative samples of consumers for marketing research studies. 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. which products to be sold into groups.

The best way to describe how the student market is segmented is by a. whether the student lives near the campus or far away. the meals eaten at the restaurant. e. 166 . d. whether the student has the discretionary income to eat at Wendy’s. whether the student is a faculty or staff member.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. b. 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). combining the factors of where the student lives and when (s)he is on campus. c.

c. b. after-dinner snack customers. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. 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. dinner. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). 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. students that are night commuters. Similarly. 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. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. after-dinner snack. assume the medium market (shown by a “2”) is twice the size of the small market. Similarly. c. 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. between-meal snack customers. dormitory customers. b.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. e. lunch customers. 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. e. The meal occasion (product grouping) that comprises the largest market is a. students that live in a dormitory. between-meal snack. d. dinner customers. The largest potential market segment is for a. 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. assume the medium market (shown by a “2”) is twice the size of the small market. 167 . b. d. c. lunch. d. For example. 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. faculty or staff members. students that are day commuters. e. breakfast.

168 .” This is a market segment. answer “c. Assume students who live in dormitories or apartments on or near the campus cannot use student parking lots. night commuter customers. dinner customers. cost of reaching the segment. e. competitive position. apartment customers. between-meal snack customers. faculty customers. which is a horizontal row in Figure 9-8. 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.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. expected growth. staff customers. dormitory customers. d. day commuter customers. This is a “product” or “meal” in the market-product grid. cost of reaching the segment d. c. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: The target here is potential between-meal snack 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. and compatibility with the organization’s objectives and resources. expected growth c. Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. e. who might be reached by this coupon that is intended to increase sales during the 2:00 PM to 4:30 PM time period. compatibility with the organization’s objectives and resources e. after-dinner snack customers. c. d. 9-136 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. which is a vertical column in Figure 9-8. All of the above are criteria used for selecting a target market. size of the market b. 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. night commuter customers. 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. b. b.

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

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

COMPREHENSION COMPREHENSION 171 . difference of needs of buyers between segments c. the more attractive the segment is. competitive position. 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. feasibility of a marketing action to reach a segment d. 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 b. which are often confused with those used to select segments. 9-145 SELECT TARGET SEGMENTS Which of the following is a criterion for selecting a target market? a. There are also five criteria to use in forming the segments. difference of needs of sellers between segments c. difference of needs of buyers among segments d. potential for increased profit b. potential of a marketing action to reach a segment e. feasibility of a marketing action to reach a segment d. simplicity and cost of assigning potential buyers to segments e. similarity of needs of potential buyers within a segment b. The less the competition. perhaps it is growing significantly or is expected to grow in the future. 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. 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. competitive position. Although the size of market in the segment may be small now. or amount of competition in the segment e. To form segments the criteria include potential for increased profit. difference of needs of buyers among segments. similarity of needs of potential buyers within a segment.9-143 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. 9-144 SELECT TARGET SEGMENTS Which of the following is a criterion for selecting a target market? a. similarity of needs of potential buyers within a segment c. expected growth. simplicity and cost of assigning potential buyers to segments.

172 . c. 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. Because it would be so small. be accurately described by all of the above. 9-147 SELECT TARGET SEGMENTS APPLICATION Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. this market would a. This market would use the rehabilitation services that the company now provides. e. 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. competitive position d. have no expected growth. cost of reaching the segment e. Best Food's created product groupings c. be very small. 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. In terms of the criteria used for selecting a target segment.9-146 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion for selecting a market segment? a. 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. not for selecting one. not be compatible with the company's current resources. d. it would not be readily accessible by marketing programs. This is an example of which criterion used to select target market segments? a. expected growth c. similarity of needs of potential buyers b. Best Food's competitive position in the segment b. be readily accessible to the firm's marketing programs. 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. expected growth of the market segment d. size of the market segment e. 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. d. This is an example of a. taking marketing actions to reach target markets. Zillow is an online real estate service that answers the most important question. 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. the neighborhood and look around there. 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. selecting target market segments to reach. LexisNexis. formed prospective buyers into segments. Lewis decided to join Goodness Grows in North Carolina. Lewis has just a. She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce.B. zillow. Inc. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. c. forming products to be sold into groups. forming prospective buyers into segments. developing a market-product grid and estimating size of markets. b. selected target market segments to reach. 173 . “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. c. wsj. the website of the local newspaper. Sauce. d.. developed a market-product grid and estimating size of markets.com.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. e. In developing a marketing strategy to sell the sauce. c. b. e.com. a company that makes Tongue Tinglin' B. d. taken marketing actions to reach target markets. formed products to be sold into groups.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.Q. e. b.

a. marketing b. e. Answer: d Page: 243 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product positioning 174 . marketing c. competitors. The company saves money on marketing but spends more in production. investment capital. production e. b. d. marketing d. competitive positioning. c. product positioning. coherent product lines targeted to identifiable market segments.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. 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. b. marketing research. 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. distributors. product perception. marketing. competition. c. selective perception. each of which will have to be designed and manufactured. 9-153 MARKETING MATTERS COMPREHENSION In the early 1980s Apple Computer Company was often called "Camp Runamok" because the innovative company had no a. d. each of which will have to be designed and manufactured. The company saves money on __________ but spends more on __________. profits. e. marketing. production. 9-154 PRODUCT POSITIONING KNOWLEDGE The place an offering occupies in consumers' minds on important attributes relative to competitive products is called a. relative positioning.

a careful analysis of cross tabulations b. d. c. psychographics. struggling to increase milk sales. a. geographic segmentation. grocery. The dairy industry tried to reposition milk in the minds of adult consumers. U. and department stores c. e. tried to change the way adults thought about milk. segment b. represent Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Changing the place an offering occupies in consumers’ minds is called repositioning. the place a product offering occupies in consumers' minds on important attributes e.S. The dairies wanted to __________ milk in the minds of the consumer. product positioning. b. shelf locations in major chain. often within major metropolitan areas d. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product repositioning 9-157 REPOSITIONING APPLICATION Recently. reposition d. product differentiation. 175 . perceptual mapping. dairies. repositioning. 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.9-155 PRODUCT POSITIONING KNOWLEDGE What does the term product positioning refer to? a. differentiate c. explain e.

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

cognitive positioning. d. compete with competitors on similar product attributes but in a different market.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. head-to-head positioning. e. compete directly with competitors but emphasize unique product attributes. b. 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. lateral positioning c. differentiation positioning. lateral positioning. repositioning. compete against other products of the same company. consumer positioning e. 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. firms often use a. c. 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. 177 . b. seek a less competitive. compete with competitors on similar product attributes in the same market. c. head-to-head positioning b. d. a. smaller market niche in which to locate a brand. Differentiation positioning involves seeking a less competitive. 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. smaller market niche.

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

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

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

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

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

coffee should be compared with a. Suppose a coffee producer wants to increase sales. Such drinks are seen as less nutritious. c. skinny lattes. the coffee producer should position its coffee against drinks in the figure that are lower than coffee on the vertical nutrition axis. fruit-flavored drinks and sugared soft drinks. Answer: b Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: For the planned ads. The only such drink in the figure is sugared soft drinks. d. fruit-flavored drinks.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. 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. In the ads. 183 . e. b. sugared soft drinks.

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

sales forecast b. market share. the total of all products sold nationally c. the minimum anticipated sales in related industries not including federal. c. Delphi forecast c. industry potential d. b. a. the sum of products in a particular industry sold domestically under normal economic conditions d. market share Answer: a Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 185 . 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. environmental forecast. state. company forecast. total industrial products sold worldwide b. and local taxes e. market potential e.9-181 MARKET POTENTIAL KNOWLEDGE The term market potential or industry potential refers to what important marketing factor? a. e. industry potential. 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. d.

(2) surveys of knowledgeable groups. b. 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. and (3) statistical methods. 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. judgments of trade associations d. 9-186 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a.9-184 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. d. judgment of the decision maker. c. surveys of competitors c. statistical methods b. survey of knowledgeable groups. 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. technological methods e. judgments of the decision maker b. judgments of trade associations d. judgments of trade associations d. technological methods e. 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. 9-187 JUDGMENTS OF THE DECISION MAKER The most commonly used forecasting technique is the a. 186 COMPREHENSION COMPREHENSION COMPREHENSION . technological method. surveys of competitors c. and (3) statistical methods. statistical method. surveys of competitors c. (2) surveys of knowledgeable groups. 9-185 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. and (3) statistical methods. linear trend extrapolation method. surveys of knowledgeable groups b. e. technological methods e.

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. Delphi forecast e. technological forecast b. survey of buyers intentions forecast. 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. sales force survey forecast. b. statistical forecast e. 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. trend extrapolation. e. lost-horse forecast d. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts. direct forecast d. direct forecast c. APPLICATION AACSB: 3 COMPREHENSION 187 . C. Alternatives B. d. buildup forecast b. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. Delphi forecast. 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. c.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. Delphi forecast c. direct forecast. a.

188 . jury of executive opinion b. survey of buyers' intentions forecast. e. b. a. d. This is an example of a a. c. statistical method e. 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. assessing whether they have a positive or negative impact. Delphi forecast e. listing the facts that could affect the forecast. lost-horse forecast. a.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. 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. technological c. 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. Delphi d. and making the final forecast. linear trend extrapolation. lost-horse forecast b. trend extrapolation d. technological forecast c. experimental estimation. statistical inference.

But on the negative side. Delphi forecast e. a. we're going to increase prices across the board by 20 percent. So on balance. Delphi forecast e. technological 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. lists factors that could affect the forecast. trend extrapolation d. trend extrapolation c. Delphi e. 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 . All those things are positive. lost-horse forecast b. trend extrapolation d. technological forecast c. she knew the person who was talking was planning to use a __________. 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. technological forecast c. lost-horse d. 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. assesses whether they have a positive or negative impact.9-194 LOST-HORSE FORECAST APPLICATION When a marketing student overheard the following comments. I think sales will increase next year by 5 percent. The Ohio River Boatworks uses the __________ method of forecasting. a. and adding 3 new product models. lost-horse forecast b. 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.” a. adding some sales representatives. “We're increasing TV advertising. and makes the final forecast.

survey of experts e.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. jury of executive opinion b. 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. jury of executive opinion c. survey of experts e. 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. salesforce survey d.000 for the quarter. judgments of individuals b. 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. a.750. the forecast is set at $4. This is an example of a __________ forecast. 190 . statistical method e. salesforce survey d. 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. judgments of individuals b. technological c. Based on this information. survey of buyers' intentions d. a. a.

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

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

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

product differentiation involves a firm's selling two or more products with different features targeted to different market segments. Thus. such as image or price.CHAPTER 9 SEGMENTING. because clearly defined and different target markets have different needs that can be satisfied with different products of the same general type. POSITIONING. to help consumers perceive the product as being different and better than competing products. 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 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. as the text points out in connection with Zappos. it can contribute to increased revenues for the firm. Differences may involve nonphysical features as well. tangible marketing actions the firm can take to satisfy those needs. In its broadest sense it involves a firm's using different marketing mix activities. product differentiation relates to market segmentation. 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. AND FORECASTING MARKETS SHORT ESSAY QUESTIONS 9-207 MARKET SEGMENTATION COMPREHENSION Define market segmentation. Segmentation links needs to actions. Such needs and benefits must be related to specific. In a narrower sense. Page: 226 LO: 1 LL: 2 AACSB: 3 194 . where perhaps the same or similar target markets are more likely to buy the product differentiated as having greater reliability or lower price.

9-209 SINGLE PRODUCT. Build-to-order involves manufacturing a product only when there is an order from a customer. and adds to the organization’s sales revenues and profits. Although these expenses can be high. 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. Answer: Mass customization involves the tailoring of goods or services to the tastes of individual customers on a high-volume scale. doesn’t reduce quality or increase price. engineering. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-211 MASS CUSTOMIZATION Explain the difference between mass customization and build-to-order. In this case. and manufacturing expenses. 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. 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. 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. they are rarely as large as those for developing an entirely new product. which often entails high research. Page: 229 LO: 1 LL: 2 AACSB: 3 195 . Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-210 MULTIPLE PRODUCTS.

This will be the market segment it targets. List these five key steps. which link market needs of customers to the organization’s marketing program.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. It now wants to give free food only to people who go hungry on a regular basis. Fig. 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. 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. Compared to the food bank's previous policy. it is now much more likely to serve its clients more effectively with the new segmentation strategy. 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. List these important factors in marketing planning. Page: 231 LO: 3 LL: 3 AACSB: 3 196 .

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

In a complete marketproduct grid analysis. 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. Page: 237 LO: 4 LL: 2 AACSB: 3 198 .S. demographic or behavioral segments. and awareness/intentions are similar to the consumer market variables used for segmentation and may also be used to segment organizational markets. 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. Product features. each cell in the grid can show the estimated market size of a given product sold to a specific market segment. usage rate.9-217 ORGANIZATIONAL MARKET SEGMENTATION What are the segmentation bases for U. organizational markets? COMPREHENSION Answer: Organizational markets can be segmented by geographic.

Answer: There are two major approaches to positioning a product.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. For example. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. Marketing efforts can be streamlined with a focus on fewer segments. Five criteria can be used to select the target segments. 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. For example."). reduce R & D and production expenses. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. To simplify product lines. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . 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. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Dollar Rental Cars is positioned head-to-head with Avis and Hertz.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. (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 .

Page: 245 . companies obtain three types of data from consumers. Sales forecast is also known as company forecast. 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. For industrial products with few prospective buyers.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. 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. 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. 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. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time.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. this can be effective. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . Answer: Market potential is also known as industry potential. 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.

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

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