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

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

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

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

splitting people randomly between markets e. product based market development Answer: c Page: 226 . controllable environmental factors. 124 . government regulations. grouping people according to similar needs d. grouping people randomly in a market b. government regulations c. 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. such needs and benefits must be related to specific marketing actions the organization can take. market needs e. c. a. a. 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. b.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. e. d.9-18 MARKET SEGMENTATION COMPREHENSION Market segmentation stresses __________ and relating needs and benefits to specific marketing actions. market sectioning c. controllable environmental factors Answer: d Page: 227. Fig. Answer: e Page: 227. top-level management. Fig. self-regulatory industry standards. 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. 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. the organization's marketing program. top-level management d. Second. self-regulatory industry standards b.

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

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

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

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

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

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

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

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

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

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. b. and another line of cake mixes for people with microwave ovens. One set of previews showed the action scenes in order to attract one audience. Betty Crocker carries one line of cake mixes for people with conventional 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. 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.9-43 MULTIPLE PRODUCTS. d. This is an example of a. e. synergy. d. c. b. c. 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. and the other set showed romantic scenes to attract another audience.S. 134 . College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. 9-44 MULTIPLE PRODUCTS. Many firms are now offering different products or services to high-end or low-end segments. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. A new movie used several different advertisements. price discrimination. e. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. a “Tiffany/Wal-Mart” strategy. one product and multiple market segments. mass customization. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a multiple products and multiple markets strategy? a.

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

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

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

synergy c. target marketing d. a. b. mass customization. e.95 to $32. how the 80/20 rule is implemented. and desires special tender loving care. target marketing. mass customization. e. repositioning. synergy. 9-55 CUSTOMER RELATIONSHIP MANAGEMENT KNOWLEDGE The essence of __________ is that each customer has unique needs and wants.9-53 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. b. 9-54 MASS CUSTOMIZATION APPLICATION Name Maker is an online company that sells high-end gift wrap printed with custom slogans. This is an example of a. This is an example of a. A customer can have gift wrap printed with the name of the person celebrating a birthday or the folks who are getting married. repositioning. customer relationship management b. how the 80/20 rule is implemented. d. mass production e. target marketing. d. c. synergy. 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. This made-to-order gift wrap is priced from $24.95 per 12-foot roll. c. 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. mass customization Answer: a Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—customer relationship management 138 .

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

9-59

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

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

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

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

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

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

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

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

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

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

consumption rate. 154 . trial. This technique uses a. usage rate. 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. 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. d. e. e. c. sometimes called frequency marketing. b. service inventory. consumption rate. usage rate. service inventory. buying condition segmentation. e. c. demographic segmentation. a type of behavioral segmentation.9-101 BEHAVIORAL SEGMENTATION BY USAGE KNOWLEDGE The quantity consumed or patronage—store visits—during a specific period is called a. psychographic segmentation. turnover. is a strategy that focuses on usage rate. behavioral segmentation. is a strategy that focuses on usage rate. trial. b. sometimes called frequency marketing. b. c. d. This technique. 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. 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. This technique. geographic segmentation. turnover. d.

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

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

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

c. d.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. For every $1.00 spent by a light user in one of these restaurants in a month. their consumption percentage is higher than the percentage that they represent of the total users and non-users. the usage index is highest for that segment. the segment is at the top of the chart. 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. e. there are less of them than any other segment. heavy users are most important to a fast-food restaurant because a. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users. the heavy users have an index of 467. 158 . there are fewer of them than any other user segment. each heavy user spends $4.67. b. Giving the light users an index of 100.

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

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

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

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

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

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

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

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

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

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

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

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

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

this market would a. 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. 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 be compatible with the company's current resources. Because it would be so small. be readily accessible to the firm's marketing programs. 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.9-146 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion for selecting a market segment? a. 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. 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. Best Food's created product groupings c. This market would use the rehabilitation services that the company now provides. 172 . b. competitive position d. 9-147 SELECT TARGET SEGMENTS APPLICATION Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. c. cost of reaching the segment e. d. Best Food's competitive position in the segment b. size of the market segment e. not for selecting one. it would not be readily accessible by marketing programs. expected growth c. This is an example of which criterion used to select target market segments? a. be accurately described by all of the above. have no expected growth. similarity of needs of potential buyers b. e. In terms of the criteria used for selecting a target segment. be very small.

b. d. c. Zillow is an online real estate service that answers the most important question. b. taken marketing actions to reach target markets. c. LexisNexis. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. Answer: d Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. e. formed prospective buyers into segments. In developing a marketing strategy to sell the sauce.com. selected target market segments to reach. taking marketing actions to reach target markets. zillow. 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. Sauce. d. developed a market-product grid and estimating size of markets. e. Lewis has just a. Lewis decided to join Goodness Grows in North Carolina. formed products to be sold into groups.com. the website of the local newspaper. the neighborhood and look around there. developing a market-product grid and estimating size of markets.. a company that makes Tongue Tinglin' B. wsj.B. This is an example of a. c. selecting target market segments to reach. Inc. d. 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. e. forming 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. “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles.Q. forming prospective buyers into segments. 173 . a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. 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. b.com. She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce.

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

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

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

compete with competitors on similar product attributes in the same market. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Companies use a differentiation positioning strategy among brands within their own product line to minimize cannibalization of a brand's sales or market share. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 9-162 DIFFERENTIATION POSITIONING To avoid cannibalization within company product lines. d. a. smaller market niche in which to locate a brand. repositioning. consumer positioning e. seek a less competitive. b. 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. b. Differentiation positioning involves seeking a less competitive. e. differentiation d. cognitive positioning. differentiation positioning. c. smaller market niche. d. e. 177 . lateral positioning. firms often use a. compete with competitors on similar product attributes but in a different market. head-to-head positioning. compete directly with competitors but emphasize unique product attributes. head-to-head positioning b.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. c. lateral positioning c. compete against other products of the same company. 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.

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

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

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

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

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

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

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

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

d. 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.9-184 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. judgments of trade associations d. 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. b. surveys of competitors c. 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. 9-185 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. judgments of trade associations d. survey of knowledgeable groups. (2) surveys of knowledgeable groups. technological methods e. 186 COMPREHENSION COMPREHENSION COMPREHENSION . 9-187 JUDGMENTS OF THE DECISION MAKER The most commonly used forecasting technique is the a. surveys of competitors c. judgment of the decision maker. (2) surveys of knowledgeable groups. and (3) statistical methods. e. surveys of competitors c. c. surveys of knowledgeable groups b. linear trend extrapolation method. judgments of trade associations d. 9-186 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. statistical method. and (3) statistical methods. statistical methods b. technological method. 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. and (3) statistical methods. judgments of the decision maker b. 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. lost-horse forecast d. d. C. Delphi forecast. trend extrapolation. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. technological forecast b. direct forecast d. statistical forecast e.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. direct forecast. a. direct forecast c. 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. Delphi forecast c. 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. APPLICATION AACSB: 3 COMPREHENSION 187 . survey of buyers intentions forecast. sales force survey 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. buildup forecast b. c. Alternatives B. Delphi forecast e. b. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts.

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

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

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

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

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

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

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

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

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

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

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

Dollar Rental Cars is positioned head-to-head with Avis and Hertz. 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. Five criteria can be used to select the target segments. Page: 244 LO: 5 LL: 2 AACSB: 3 199 ."). For example. reduce R & D and production expenses.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. Answer: There are two major approaches to positioning a product. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. To simplify product lines. 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.9-220 CRITERIA TO SELECT THE TARGET SEGMENTS What are the criteria used to select target markets? COMPREHENSION Answer: There are two different kinds of criteria in the market segmentation process: those used to (1) divide the market into segments and (2) actually pick the target segments. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. For example. (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: 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.

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

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

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