CHAPTER 9

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

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

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

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

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

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

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

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

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

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

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

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

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

124,125,126,127

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

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

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

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

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

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

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

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

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

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CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

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

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

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

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

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

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

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

discontinue manufacturing any products that are not in the mature stage of their product life cycle. d. b. it changes its advertising campaign. having a well-educated customer base. b. 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. c. e. 9-28 MARKET SEGMENTATION COMPREHENSION A business firm goes to the trouble and expense of segmenting its markets when a. profit and return on investment. offering the absolute best selection of shoes and the absolute best service. recession sets in. c. which will lower quality.9-27 ZAPPOS SEGMENTATION STRATEGY COMPREHENSION The Zappos segmentation strategy is based on a. 127 . and return on investment. profit. 9-29 MARKET SEGMENTATION COMPREHENSION A business firm segments its markets when this strategy increases its sales revenue. the environment becomes uncertain. and ROI.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. When expenses are greater than the potentially increased sales from segmentation. a firm should not attempt to segment its market. supplier geography. d. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: The Zappos segmentation strategy is based on selling service elements that lead to a positive customer experience and repeat purchases—the absolute best selection of shoes and the absolute best service. profit. e. and return on investment. not attempt to segment its market. c. profit. terminate as many employees as possible to save money. competitors enter the marketplace. act as its own distributor. Answer: d Page: 227 . its pricing strategy. it expects that this will increase its sales. d. designing shoes for every type of occasion. reduce production costs. e. When expenses are greater than the potentially increased sales from segmentation. the firm should a. 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. the definition of a “one-product and multiple-market segments” situation. this is an example of a. clearly using the geographic variable as the basis for market segmentation. multiple products and multiple market segments. What is the market segmentation strategy? a.S. In terms of market segmentation strategies. income segmentation.S. Four samples are shown in Figure 9-B. or mass customization. one product and multiple market segments.” Yet the 14 different covers enable the magazine with exactly the same stories to reach 14 different regional segments. so the answer is “a. b.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. Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: There is only a single product. e. the magazine stories inside the cover. demographic segmentation d. behavioral segmentation e. 128 . segmenting organizational markets. outlet-type segmentation c. geographic segmentation Answer: e Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: The magazine has 14 different covers to appeal to sports fans in 14 different geographic regions. Four samples are shown in Figure 9-B. c. d. psychographic segmentation b. segments of one.

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

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

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

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

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

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

e. Many firms are now offering different products or services to high-end or low-end segments. b. each targeted at a different type of user. decreases the cost of the physical plant. 9-46 MULTIPLE PRODUCTS. one product and multiple market segments. and adds to the manufacturer’s sales revenues and profits. b. e. MULTIPLE MARKET SEGMENTS APPLICATION You can go to your nearest Hallmark card store and buy a birthday greeting card for a friend and pay $4. c. price discrimination. Manufacturing these different cereals is clearly more expensive than producing one type of cereal but seems worthwhile if it serves customers' needs better. d. 135 . synergy. or you can buy a card that's not quite as nice but just as sentimental from the store's new $. mass customization. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Manufacturing multiple products for multiple market segments is worthwhile if it serves customers’ needs better. d. conforms to all union regulations. and a.50. are an example of multiple products aimed at multiple markets. doesn’t reduce quality or increase price. adds to the manufacturer's sales revenues and profits. reduces the number of employees required. This is an example of a.9-45 MULTIPLE PRODUCTS.99 line of greeting cards. stabilizes the sales revenues and profits. 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. doesn't reduce quality or increase price. a “Tiffany/Wal-Mart” strategy. MULTIPLE MARKET SEGMENTS APPLICATION Kellogg's different types of cereals.

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

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

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

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

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SYNERGY

KNOWLEDGE

The key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer’s individual wants and achieving organizational __________, the increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently. a. segregation b. synergy c. segmentation d. selection e. value add Answer: b Page: 229 LO: 1 Rationale: Key term definition—synergy 9-60 SYNERGY LL: 1 AACSB: 3 COMPREHENSION

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

there are fewer of them than any other user segment. b. the segment is at the top of the chart. heavy users are most important to a fast-food restaurant because a. the usage index is highest for that segment. 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. their consumption percentage is higher than the percentage that they represent of the total users and non-users. d. c.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users. Giving the light users an index of 100. the heavy users have an index of 467. e. 158 . there are less of them than any other segment.00 spent by a light user in one of these restaurants in a month. each heavy user spends $4.67. For every $1.

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

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

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

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

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

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

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

c. d. 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). b. the meals eaten at the restaurant. 166 . whether the student has the discretionary income to eat at Wendy’s. e.FIGURE 9-8 9-130 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. The best way to describe how the student market is segmented is by a. combining the factors of where the student lives and when (s)he is on campus. whether the student is a faculty or staff member. whether the student lives near the campus or far away.

assume the medium market (shown by a “2”) is twice the size of the small market. Similarly. The largest potential market segment is for a. d. The meal occasion (product grouping) that comprises the largest market is a. b. e. 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. For example. after-dinner snack. students that live in a dormitory. e. 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”). b. between-meal snack customers. b.9-131 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. 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. 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. 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. e. dinner customers. dinner. breakfast. c. dormitory customers. after-dinner snack customers. 167 . students that are night commuters. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the market segment rows horizontally shows that students that live in an apartment is the largest segment with 9 “units” of sales. assume the medium market (shown by a “2”) is twice the size of the small market. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. d. faculty or staff members. lunch. between-meal snack. 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. students that are day commuters. lunch customers. Similarly. c. d. c.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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