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

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

c. its members must a. have different needs and respond similarly to market actions. e. Market segmentation d. have potential for future growth and have potential for increased profit or ROI. have different needs and have potential for future growth. Market differentiation c. organizational buyer d. Market diversification b. ultimate consumers. demographic cluster c. a. Market augmentation e. a. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . organizational buyers. market segment b. have common needs and respond similarly to market actions. d. ultimate consumer e. c. b. e. b.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. 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. market segments. represent a large share of the entire market and have critical buying power. d. 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. demographic clusters. Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments 9-12 MARKET SEGMENTS AACSB: 3 KNOWLEDGE Each __________ consists of people who are relatively similar to each other in terms of their consumption behavior. qualified prospects.

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

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

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

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

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

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

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

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

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

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

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

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

and the other set showed romantic scenes to attract another audience. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U. d. d. synergy. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. Many firms are now offering different products or services to high-end or low-end segments. c. Betty Crocker carries one line of cake mixes for people with conventional ovens. A new movie used several different advertisements. b. and another line of cake mixes for people with microwave ovens. c. 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. one product and multiple market segments. 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. e. mass customization. Answer: e Page: 229 LO: 1 LL: 2 AACSB: 3 Rationale: This is an example of the two-tiered strategy referred to as a “Tiffany/Wal-Mart” strategy. a “Tiffany/Wal-Mart” strategy. This is an example of a. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a multiple products and multiple markets strategy? a. 9-44 MULTIPLE PRODUCTS. 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.9-43 MULTIPLE PRODUCTS. 134 . e.S. b. price discrimination. One set of previews showed the action scenes in order to attract one audience.

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

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

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

a. c. target marketing. This is an example of a. c. 9-55 CUSTOMER RELATIONSHIP MANAGEMENT KNOWLEDGE The essence of __________ is that each customer has unique needs and wants. 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. e. d. mass customization. d. synergy c. synergy. how the 80/20 rule is implemented. 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. mass customization Answer: a Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—customer relationship management 138 . target marketing. repositioning. A customer can have gift wrap printed with the name of the person celebrating a birthday or the folks who are getting married.95 per 12-foot roll. customer relationship management b. This made-to-order gift wrap is priced from $24.95 to $32.9-53 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. how the 80/20 rule is implemented. and desires special tender loving care. 9-54 MASS CUSTOMIZATION APPLICATION Name Maker is an online company that sells high-end gift wrap printed with custom slogans. b. mass production e. b. mass customization. target marketing d. repositioning. e. This is an example of a.

designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design. mass aggregation. president and CEO of Model E. Customer relationship management b. "Think of Model E as the Dell of the auto industry. Mass production e. e. Model E relies on a. d. a one-product-one-market-segment strategy. c. Model E manufactures a car only when there is an order from a customer. c. a customer does not have the ability to specify an unlimited number of features. d. Target marketing d. launch. but because of production issues. synergy. built-to-order (BTO). repositioning. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: The comparison of the Model E to Dell is the phrase that should remove any doubt from students' minds about what kind of business this is. b.9-56 MASS CUSTOMIZATION KNOWLEDGE __________ is tailoring goods or services to the tastes of individual customers on a highvolume scale. a one-product-one-market-segment strategy. 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. b. Synergy c. built-to-order (BTO). mass aggregation. synergy. customer relationship management (CRM). e. It is very similar to mass customization. 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. a. 139 . and direct delivery." said William Santana Li.

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

a. and behavioral segmentation. the limited benefit to consumers in the segment. “Would segmentation be worth doing. 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. instrumentality of sufficient marketing objectives to ignore that segment b. 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. usually mild. and the high cost of running a duplicate salad bar. and (4) behavioral segmentation. These four segmentation bases are: (1) geographic segmentation.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a. simplicity and cost of assigning potential buyers to segments e. to preservatives used in salad bars. regional segmentation d. consumer markets. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question. “Would segmentation be worth doing and is it possible?” c. Restaurants might consider people with these "allergies" as a separate segment. similarity of needs of potential buyers within a segment d.S. “Is there too much competition for this product?” e. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments? a. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. demand segmentation c. (3) psychographic segmentation. different needs of buyers among different segments c. NAICS code segmentation Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-3 shows four general bases of segmentation and the typical variables that can be used to segment U. “Is it possible to reposition this product?” d. “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. 145 . (2) demographic segmentation. 9-76 CONSUMER SEGMENTATION VARIABLES COMPREHENSION Four general categories used to segment consumer markets are geographic segmentation. psychographic segmentation e. demographic segmentation. “Is this product useful on a global scale?” b. __________.

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

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

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

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

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

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

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

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

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

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

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

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

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

Burger King is closing in on your market share. the information in Figure 9-5 suggests a. so a natural strategy is to look at these two competitors and devise a marketing program to win customers from them. c. Answer: e Page: 234 LO: 3 LL: 2 AACSB: 3 Rationale: The Wendy’s bar in Figure 9-5 shows that your sole (0. e. McDonald’s is not a serious competitor to you.FIGURE 9-5 9-113 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant. primary (19.8 percent). and secondary (12. b. most of the respondents think of Wendy’s as their primary fast food restaurant.6 percent).2 percent) user segments are somewhat behind Burger King and far behind McDonald’s. that you need to devise a marketing program to win customers from McDonald’s and Burger King. 159 . d. your restaurant is a market leader.

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

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

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

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

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

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

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

between-meal snack customers. dormitory customers. c. lunch.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. breakfast. assume the medium market (shown by a “2”) is twice the size of the small market. students that live in an apartment. assume the medium market (shown by a “2”) is twice the size of the small market. e. 9-133 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. The largest potential market segment is for a. students that are night commuters. For example. 9-132 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. lunch customers. 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. e. 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. 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. b. d. 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. Similarly. c. 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. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). d. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. between-meal snack. c. after-dinner snack. d. dinner. b. e. after-dinner snack customers. dinner customers. 167 . faculty or staff members. students that live in a dormitory. students that are day commuters. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. b. Similarly.

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

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

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

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

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

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

competition. e. e. marketing. competitors. marketing. marketing c. profits. each of which will have to be designed and manufactured. product positioning. Answer: b Page: 243 LO: 4 LL: 2 AACSB: 3 Rationale: Apple’s lack of a segmentation strategy in the early 1980s and its current segmentation strategy are described in the Marketing Matters. selective perception. relative positioning. 9-154 PRODUCT POSITIONING KNOWLEDGE The place an offering occupies in consumers' minds on important attributes relative to competitive products is called a.9-152 MARKET-PRODUCT SYNERGIES COMPREHENSION A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. competition Answer: d Page: 242 LO: 4 LL: 2 AACSB: 3 Rationale: A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. marketing research. 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 d. b. b. c. investment capital. The company saves money on marketing but spends more in production. d. product perception. d. Answer: d Page: 243 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product positioning 174 . marketing b. The company saves money on __________ but spends more on __________. c. distributors. each of which will have to be designed and manufactured. a. production. coherent product lines targeted to identifiable market segments. production e. competitive positioning.

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

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

head-to-head positioning b. d. cognitive positioning. compete directly with competitors but emphasize unique product attributes. compete with competitors on similar product attributes in the same market. differentiation positioning. lateral positioning c. smaller market niche. 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. b. b. d. compete against other products of the same company.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. e. 9-163 DIFFERENTIATION POSITIONING COMPREHENSION COMPREHENSION When McDonald’s introduced its low-fat McLean Deluxe hamburger it used __________ positioning to avoid direct competition with Wendy’s and Burger King. repositioning. 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. consumer positioning e. seek a less competitive. a. head-to-head positioning. c. compete with competitors on similar product attributes but in a different market. Differentiation positioning involves seeking a less competitive. c. differentiation d. 177 . 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. firms often use a. lateral positioning. smaller market niche in which to locate a brand. e.

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

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

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

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

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

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

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

industry potential d. d. e. 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 . market share.9-181 MARKET POTENTIAL KNOWLEDGE The term market potential or industry potential refers to what important marketing factor? a. industry potential. the minimum anticipated sales in related industries not including federal. a. c. total industrial products sold worldwide b. sales forecast b. state. market potential. the sum of products in a particular industry sold domestically under normal economic conditions d. the total of all products sold nationally c. and local taxes e. market potential e. 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. Delphi forecast c. environmental forecast. company forecast.

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

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

d. experimental estimation. linear trend extrapolation. c. survey of buyers' intentions forecast. lost-horse forecast b. and making the final forecast. 188 . Delphi forecast e. Answer: d Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. trend extrapolation d. lost-horse forecast. jury of executive opinion b. e. listing the facts that could affect the forecast. Delphi d. a. This is an example of a a. technological c.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. statistical method e. b. technological forecast c. a. statistical inference. 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. assessing whether they have a positive or negative impact. 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.

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

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

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

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

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

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

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

The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. List these important factors in marketing planning. Answer: The five criteria are: (1) potential for increased profit and ROI (2) similarity of needs of potential buyers within a segment (3) difference of needs of buyers among segments (4) potential of a marketing action to reach a segment (5) simplicity and cost of assigning potential buyers to segments Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-214 CRITERIA FOR FORMING SEGMENTS A nonprofit food bank was gathering and handing out food to anyone who requested it. Compared to the food bank's previous policy. it is now much more likely to serve its clients more effectively with the new segmentation strategy. List these five key steps. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . which link market needs of customers to the organization’s marketing program. 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: 230.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. This will be the market segment it targets. It now wants to give free food only to people who go hungry on a regular basis. Fig. 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.

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

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

Answer: There are two major approaches to positioning a product. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. Five criteria can be used to select the target segments. 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. reduce R & D and production expenses. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . a company might only wish to manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product. Dollar Rental Cars is positioned head-to-head with Avis and Hertz. (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 . To simplify product lines.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies.").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. For example. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. For example. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. Page: 242 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-222 APPROACHES TO PRODUCT POSITIONING What are two approaches to product positioning? Give an example of each approach.

Answer: Market potential is also known as industry potential. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time. companies obtain three types of data from consumers. 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. 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. For industrial products with few prospective buyers.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 is also known as company 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. this can be effective. Page: 245 . Page: 246 LO: 6 LL: 2 AACSB: 3 200 . 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. 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.

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

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