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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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

there are less of them than any other segment. heavy users are most important to a fast-food restaurant because a.00 spent by a light user in one of these restaurants in a month. Giving the light users an index of 100. c. Answer: c Page: 233 LO: 3 LL: 2 AACSB: 3 Rationale: The Usage Index per Person column in Figure 9-4 emphasizes the importance of the heavy-user group even more.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. the segment is at the top of the chart. 158 . d. For every $1. the usage index is highest for that segment. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users. there are fewer of them than any other user segment.67. their consumption percentage is higher than the percentage that they represent of the total users and non-users. the heavy users have an index of 467. each heavy user spends $4. b. e.

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

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

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

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

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

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

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

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

after-dinner snack customers. d. b. d. 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. lunch customers. 9-133 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. students that are day commuters. dinner customers. The largest potential market segment is for a. The meal occasion (product grouping) that comprises the largest market is a. e. d. breakfast. c. 167 . For example. after-dinner snack. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). e. b. 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. Similarly. between-meal snack customers. Similarly. 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. dinner. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the market segment rows horizontally shows that students that live in an apartment is the largest segment with 9 “units” of sales. between-meal snack. c. b. students that live in a dormitory. students that are night commuters. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. 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. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. assume the medium market (shown by a “2”) is twice the size of the small market. faculty or staff members. students that live in an apartment. 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. c. dormitory customers. assume the medium market (shown by a “2”) is twice the size of the small market.

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

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

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

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

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

com.B. 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. wsj. c. forming products to be sold into groups.9-149 SELECT TARGET SEGMENTS APPLICATION In developing a marketing strategy for the recently released Nike Air Jordan XVII with a price tag of $200. In developing a marketing strategy to sell the sauce.Q. the neighborhood and look around there. e. a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. Inc. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. This is an example of a. c. Zillow is an online real estate service that answers the most important question. formed prospective buyers into segments. c.. zillow. Lewis decided to join Goodness Grows in North Carolina. b.com. d. d. developed a market-product grid and estimating size of markets. forming prospective buyers into segments. 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. 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. selected target market segments to reach. selecting target market segments to reach. 173 . e. e. a company that makes Tongue Tinglin' B.com. formed products to be sold into groups. b. Lewis has just a. “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. LexisNexis. d. the website of the local newspaper. 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. taken marketing actions to reach target markets. She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce. Sauce. taking marketing actions to reach target markets. b. developing a market-product grid and estimating size of markets.

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

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

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

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

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

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

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

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

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

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

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

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

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

c. survey of buyers intentions forecast. statistical forecast e. direct forecast. direct forecast d. C. sales force survey forecast. technological forecast b. APPLICATION AACSB: 3 COMPREHENSION 187 . b. Delphi forecast c. Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: Alternative A is correct because a direct forecast is developed using the heuristic judgment of the decision maker. direct forecast c. Alternatives B.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. lost-horse forecast d. 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. buildup forecast b. Delphi forecast e. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts. trend extrapolation. d. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. 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. 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. Delphi forecast. a.

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

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

This is an example of a __________ forecast. a. the forecast is set at $4. jury of executive opinion c. survey of experts e. jury of executive opinion c. Based on this information. salesforce survey d.750. salesforce survey d. 9-199 SALESFORCE SURVEY FORECAST APPLICATION All the salespeople in the Southwest regional office are asked to provide estimates of anticipated sales revenues for the next quarter. statistical method e. judgments of individuals b. statistical Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. survey of buyers' intentions d. technological c. 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. a.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. judgments of individuals b. survey of experts e. a. jury of executive opinion b. 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.000 for the quarter. 190 .

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

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

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

As long as a new product does not take a significant amount of sales away from an existing product. such as product features and advertising. Differences may involve nonphysical features as well. AND FORECASTING MARKETS SHORT ESSAY QUESTIONS 9-207 MARKET SEGMENTATION COMPREHENSION Define market segmentation. Segmentation links needs to actions. tangible marketing actions the firm can take to satisfy those needs. Page: 226 LO: 1 LL: 2 AACSB: 3 194 . product differentiation relates to market segmentation. as the text points out in connection with Zappos. Thus. product differentiation involves a firm's selling two or more products with different features targeted to different market segments. 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. where perhaps the same or similar target markets are more likely to buy the product differentiated as having greater reliability or lower price. such as image or price. 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 its broadest sense it involves a firm's using different marketing mix activities. Such needs and benefits must be related to specific. In a narrower sense. POSITIONING. it can contribute to increased revenues for the firm. to help consumers perceive the product as being different and better than competing products. because clearly defined and different target markets have different needs that can be satisfied with different products of the same general type. 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 manufacturing expenses. Page: 229 LO: 1 LL: 2 AACSB: 3 195 . Producing these different products or services is clearly more expensive than producing only one product or service but is effective if it meets customers’ needs better. MULTIPLE MARKETS Why would an organization produce multiple products or services and then attempt to sell them to two or more market segments? Answer: Organizations may target different products or services to multiple market segments. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-210 MULTIPLE PRODUCTS. the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of distribution. which often entails high research. Build-to-order involves manufacturing a product only when there is an order from a customer. and adds to the organization’s sales revenues and profits. In this case. engineering. MULTIPLE MARKETS COMPREHENSION Why would an organization produce a single good or service and then attempt to sell it to two or more market segments? Answer: An organization would produce a single good or service and then attempt to sell it to two or more market segments to avoid the added cost of developing additional versions of the product.9-209 SINGLE PRODUCT. Although these expenses can be high. they are rarely as large as those for developing an entirely new product. doesn’t reduce quality or increase price. Answer: Mass customization involves the tailoring of goods or services to the tastes of individual customers on a high-volume scale. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-211 MASS CUSTOMIZATION Explain the difference between mass customization and build-to-order.

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. it is now much more likely to serve its clients more effectively with the new segmentation strategy. This will be the market segment it targets. It now wants to give free food only to people who go hungry on a regular basis. List these important factors in marketing planning. 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. Fig. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. How will the evaluation of its market segment strategy differ from that used for a retail store? Answer: There is one difference between for-profit and not-for-profit criteria. which link market needs of customers to the organization’s marketing program. List these five key steps. 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. Page: 231 LO: 3 LL: 3 AACSB: 3 196 .

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

and awareness/intentions are similar to the consumer market variables used for segmentation and may also be used to segment organizational markets. usage rate. Product features.S. 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. demographic or behavioral segments.9-217 ORGANIZATIONAL MARKET SEGMENTATION What are the segmentation bases for U. each cell in the grid can show the estimated market size of a given product sold to a specific market segment. Page: 237 LO: 4 LL: 2 AACSB: 3 198 . organizational markets? COMPREHENSION Answer: Organizational markets can be segmented by geographic. 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: 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.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. 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. To simplify product lines. Marketing efforts can be streamlined with a focus on fewer segments. (1) market size (2) expected growth (3) competitive position (4) cost of reaching the segment (5) compatibility with the organization’s objectives and resources Page: 238 . Answer: There are two major approaches to positioning a product. Five criteria can be used to select the target segments. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. For example. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. For example. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. reduce R & D and production expenses. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment.").

this can be effective. 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.9-223 DATA NEEDED FOR PERCEPTUAL MAP COMPREHENSION What are the three types of data needed from consumers to develop a perceptual map? Answer: In determining a brand's position and the preferences of consumers. Salespeople can be unreliable forecasters—painting too rosy a picture if they are enthusiastic about a new product and too grim a forecast if their sales quota and future compensation are based on it. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . Page: 245 . 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. 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. companies obtain three types of data from consumers. Answer: Market potential is also known as industry potential. 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. 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. For industrial products with few prospective buyers.

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

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