CHAPTER 9

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

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

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

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

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

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

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

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

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

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

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

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

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

124,125,126,127

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

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

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

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

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

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

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

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

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

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CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

c. b. psychographics. 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. c. pay attention to marketing messages. aggregation marketing. e. market segmentation. respond similarly to a marketing action. have common needs. be responsive to marketing research. be responsive to marketing research. will pay attention to marketing messages. d. e. market delineation. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 120 . c. b. b. go shopping on a regular basis. Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-7 MARKET SEGMENTATION KNOWLEDGE Market segmentation involves aggregating prospective buyers into groups that have common needs and will a. d. go shopping on a regular basis. e.9-6 MARKET SEGMENTATION KNOWLEDGE Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is called a. use the same payment methods. use the same payment methods. d. consumer differentiation.

organizational buyer d. c. represent a large share of the entire market and have critical buying power. Market differentiation c. e. b. ultimate consumer e. e. d. have potential for future growth and have potential for increased profit or ROI. have common needs and respond similarly to market actions. its members must a. ultimate consumers. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . have different needs and have potential for future growth. c. a. market segment b. Market diversification b. demographic clusters. d.9-9 MARKET SEGMENTATION KNOWLEDGE __________ involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marking action. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-11 MARKET SEGMENTS KNOWLEDGE The phrase “relatively homogeneous collections of prospective buyers” is most descriptive of a. have different needs and respond similarly to market actions. Market augmentation e. demographic cluster c. qualified prospects. organizational buyers. market segments. Market segmentation d. 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. 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. a. b.

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

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

self-regulatory industry standards. c. government regulations c. 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. e. b. d. top-level management. market needs e. 9-1 LO: 1 LL: 2 AACSB: 3 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to an organization’s marketing program. 124 . 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. Answer: e Page: 227. Second. self-regulatory industry standards b. product based market development Answer: c Page: 226 . grouping people randomly in a market b. the organization's marketing program. controllable environmental factors. top-level management d.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. Fig. such needs and benefits must be related to specific marketing actions the organization can take. grouping people according to similar needs d. a. 9-19 MARKET SEGMENTATION COMPREHENSION The process of segmenting a market and selecting specific segments as targets is the link between __________ and the organization's marketing program. market sectioning c. Fig. splitting people randomly between markets e. government regulations. a. controllable environmental factors Answer: d Page: 227.9-18 MARKET SEGMENTATION COMPREHENSION Market segmentation stresses __________ and relating needs and benefits to specific marketing actions.

it relates supply (__________) to demand (the customer needs). strategic objectives e. a. Market segmentation is only a means to an end: in economist's terms. which includes price. Market segmentation is only a means to an end: in economist's terms. a. e. sustainable. customer needs e. product. Market segmentation relates the market needs or demand to the marketing program executed by the company. In economist's terms. increase sales and profitability. promotion. promotion. strategic objectives d. it relates supply (the organization's marketing program) to demand (the customer needs). market segmentation relates supply (the organization's marketing program) to demand (__________). tactical goals b. are socially responsible. and place. b. and place. 9-23 MARKET SEGMENTATION COMPREHENSION A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can a. self-regulatory industry standards b. create innovation. the organization's marketing program c. 9-22 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. which includes price. product positions Answer: d Page: 227 LO: 1 LL: 3 AACSB: 3 Other Location: SG Rationale: Economists relate supply and demand through price and quantity. product. In economist's terms. tactical goals Answer: b Page: 227 LO: 1 LL: 3 AACSB: 3 Rationale: Economists relate supply and demand through price and quantity. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: A basic test of the usefulness of the segmentation process is whether it leads to tangible marketing actions that can increase sales and profitability.9-21 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. Market segmentation relates the market needs or demand to the marketing program executed by the company. c. d. 125 . it relates supply (the organization's marketing program) to demand (the customer needs). government regulations d. are legal. government regulations c.

Market segmentation is only a means to an end: to lead to tangible marketing actions that can increase sales and profitability. Reebok targets the specific needs of particular types of runners with its different types of shoes. 9-26 MARKET SEGMENTATION APPLICATION Reebok makes shoes with DMX Shear and Foam cushioning. sales forecasting. b. mass customization. b. d. The Premier Control shoe is made for runners whose feet tend to turn out. just-in-time marketing. e. just-in-time manufacturing. 126 . d. market segmentation. d. link market needs to an organization's marketing program. 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. This strategy is an example of a. do all of the above. e. This strategy is an example of a. c. link market needs to an organization’s advertising. 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). c. market segmentation. 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. synergy. sales forecasting. increase overall sales and profitability. The Premier Road is made with extra cushioning for pavement runners. mass customization. synergy. 9-25 MARKET SEGMENTATION APPLICATION Small athletic shoe manufacturers such as Vans have targeted niche markets and made shoes designed to satisfy the needs of different specific groups of customers.9-24 MARKET SEGMENTATION Marketers use market segmentation to a. c. link market needs to an organization’s product or price. b. e.

competitors enter the marketplace. terminate as many employees as possible to save money. c. act as its own distributor. b. e. which will lower quality. Answer: d Page: 227 .228 LO: 1 LL: 2 AACSB: 3 Rationale: A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales. having a well-educated customer base. d. profit. the environment becomes uncertain. it expects that this will increase its sales. its pricing strategy. recession sets in. reduce production costs. d. 9-29 MARKET SEGMENTATION COMPREHENSION A business firm segments its markets when this strategy increases its sales revenue. When expenses are greater than the potentially increased sales from segmentation. offering the absolute best selection of shoes and the absolute best service. and return on investment. b. e. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: The Zappos segmentation strategy is based on selling service elements that lead to a positive customer experience and repeat purchases—the absolute best selection of shoes and the absolute best service. c. e. discontinue manufacturing any products that are not in the mature stage of their product life cycle. profit. profit and return on investment.9-27 ZAPPOS SEGMENTATION STRATEGY COMPREHENSION The Zappos segmentation strategy is based on a. When expenses are greater than the potentially increased sales from segmentation. a firm should not attempt to segment its market. the firm should a. not attempt to segment its market. designing shoes for every type of occasion. it changes its advertising campaign. profit. 9-28 MARKET SEGMENTATION COMPREHENSION A business firm goes to the trouble and expense of segmenting its markets when a. 127 . supplier geography. 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. and ROI. and return on investment. b. d.

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

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

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

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

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

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

b. A new movie used several different advertisements. 134 . c. 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. c. 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. Betty Crocker carries one line of cake mixes for people with conventional ovens. mass customization. d. d.9-43 MULTIPLE PRODUCTS. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. 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. 9-44 MULTIPLE PRODUCTS. price discrimination. one product and multiple market segments. and another line of cake mixes for people with microwave ovens. Many firms are now offering different products or services to high-end or low-end segments. 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. synergy. e.S. 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. 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. b. This is an example of a. a “Tiffany/Wal-Mart” strategy. e. MULTIPLE MARKET SEGMENTS APPLICATION Which of the following is an example of a multiple products and multiple markets strategy? a.

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

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

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

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

a. a one-product-one-market-segment strategy. synergy. b. a one-product-one-market-segment strategy. and direct delivery. Answer: e Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: The comparison of the Model E to Dell is the phrase that should remove any doubt from students' minds about what kind of business this is. Target marketing d. synergy. launch. Mass production e. Answer: e Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—mass customization 9-58 BUILD-TO-ORDER APPLICATION Model E is a new type of car manufacturer that relies on the Internet to build new car designs from prototypes to marketable vehicles much faster than ever before possible. Synergy c. 139 . e. a customer does not have the ability to specify an unlimited number of features." said William Santana Li. b. d. It is very similar to mass customization. customer relationship management (CRM). Model E relies on a. repositioning. c. mass aggregation. president and CEO of Model E. Customer relationship management b. c. built-to-order (BTO). e. designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design. d. "Think of Model E as the Dell of the auto industry. 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. Model E manufactures a car only when there is an order from a customer. mass aggregation.9-56 MASS CUSTOMIZATION KNOWLEDGE __________ is tailoring goods or services to the tastes of individual customers on a highvolume scale. built-to-order (BTO). but because of production issues.

9-59

SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

141

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

usually mild. “Would segmentation be worth doing and is it possible?” c. regional segmentation d. similarity of needs of potential buyers within a segment d. NAICS code segmentation Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-3 shows four general bases of segmentation and the typical variables that can be used to segment U. “Would segmentation be worth doing. and is it possible?” 9-75 CRITERIA FOR FORMING SEGMENTS APPLICATION Between two and three percent of the population have some degree of allergic reaction. and the high cost of running a duplicate salad bar. demand segmentation c. psychographic segmentation e. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. “Is there too much competition for this product?” e. supplier segmentation b.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a. (2) demographic segmentation. “Is the market loyal to the product?” Answer: b Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: It’s not always a good idea to segment a market. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question. 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. 145 . consumer markets. and behavioral segmentation. 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. “Is it possible to reposition this product?” d. “Is this product useful on a global scale?” b. different needs of buyers among different segments c. simplicity and cost of assigning potential buyers to segments e. 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. (3) psychographic segmentation. demographic segmentation. and (4) behavioral segmentation. the limited benefit to consumers in the segment. instrumentality of sufficient marketing objectives to ignore that segment b. a.S. to preservatives used in salad bars. Restaurants might consider people with these "allergies" as a separate segment. __________.

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

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

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

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

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

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

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

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

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

d. b.9-104 BEHAVIORAL SEGMENTATION BY USAGE APPLICATION Post Grape-Nuts cereal has been marketed since early in the 20 th century. demographics. lifestyle e. leads. 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. benefits offered. b. In this case. c. "over 40 weeks per year" is a measure of usage rate. Post recently launched a campaign to increase consumption of the cereal by inviting consumers to try the crunchy cereal on top of their yogurt. Post is using which segmentation variable? a. c. Answer: a Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Rate of use and user status are both behavioral segmentation variables. usage. nonqualified prospects. Answer: d Page: 233 LO: 3 LL: 1 AACSB: 3 Rationale: Among nonusers of a product. psychographic b. 9-106 NONPROSPECTS KNOWLEDGE People who do NOT use a firm's product or service. or their bowl of soup as a delicious addition. which Post is trying to increase by suggesting other product uses. and people who were familiar with the product to use it in a variety of different ways. demographic c. e. psychographics. people who might become users are prospects and people who are never likely to become users are nonprospects. 155 . e. Its market is likely segmented by a. disenfranchised prospects. geography. Its market share has been steadily declining as consumers began associating it with something their grandfather ate. 9-105 BEHAVIORAL SEGMENTATION BY USAGE APPLICATION A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. behavioral d. In this example. undefined prospects. nonprospects. d. their salad. and most likely never will. are called a. Post was trying to convince people who had never tried the cereal to try it.

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

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

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

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

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

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

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

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

Answer: d Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 9-126 MARKET-PRODUCT GRID Other Location: web KNOWLEDGE A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization. b. total anticipated revenue. market share compared to closest competitor e. d. total anticipated profit. a. estimated expenses for products sold. estimated expenses for products sold b. 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. estimated expenses for products sold to various market segments. the market segments of potential buyers to relative market share compared to closest competitor. c. total anticipated revenue c. c.9-125 MARKET-PRODUCT GRID KNOWLEDGE A market-product grid is a framework to relate a. e. the market segments of potential buyers to products offered or potential marketing actions by an organization. e. d. products offered or potential marketing actions by an organization. total anticipated revenue for each product to market segments. total anticipated profit for each product to segments. Answer: e Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 164 . market share compared to closest competitor. total anticipated profit d. b.

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

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

after-dinner snack customers. e. after-dinner snack. students that are night commuters. 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. c. c. dinner. students that live in a dormitory. d. e. d. dormitory customers. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. Similarly. faculty or staff members. b. assume the medium market (shown by a “2”) is twice the size of the small market. assume the medium market (shown by a “2”) is twice the size of the small market. students that live in an apartment. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the market segment rows horizontally shows that students that live in an apartment is the largest segment with 9 “units” of sales. d. lunch customers. dinner customers. c. 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. Answer: e Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Marketing synergies and efficiencies run horizontally across the rows because a single kind of marketing action can reach customers that buy different “products”—in this case meals. Similarly. 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. b. The meal occasion (product grouping) that comprises the largest market is a. lunch. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). For example. e. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). between-meal snack. a flyer placed on a bulletin board in a dormitory or under the door of dormitory residents could promote the entire restaurant and several of its meals to dormitory customers. The largest potential market segment is for a. breakfast. students that are day commuters. 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. 167 .

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

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

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

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

be readily accessible to the firm's marketing programs. Best Food's competitive position in the segment b. In terms of the criteria used for selecting a target segment. This is an example of which criterion used to select target market segments? a. One criterion management wants to use to evaluate potential new geographic market segments is whether new equipment must be bought to serve each new segment. e.9-146 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion for selecting a market segment? a. Best Food's created product groupings c. This market would use the rehabilitation services that the company now provides. expected growth of the market segment d. not be compatible with the company's current resources. this market would a. compatibility with the company's objectives Answer: a Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Similarity of needs is a criterion for segmenting a market. 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. d. 9-148 SELECT TARGET SEGMENTS APPLICATION A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. b. size of the market segment e. be accurately described by all of the above. 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. similarity of needs of potential buyers b. cost of reaching the segment e. c. 172 . have no expected growth. Because it would be so small. expected growth c. 9-147 SELECT TARGET SEGMENTS APPLICATION Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. it would not be readily accessible by marketing programs. not for selecting one. competitive position d. be very small.

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

distributors. selective perception. each of which will have to be designed and manufactured. c. competitive positioning. Answer: b Page: 243 LO: 4 LL: 2 AACSB: 3 Rationale: Apple’s lack of a segmentation strategy in the early 1980s and its current segmentation strategy are described in the Marketing Matters. Answer: d Page: 243 LO: 5 LL: 1 AACSB: 3 Rationale: Key term definition—product positioning 174 . marketing research. profits. a. e. coherent product lines targeted to identifiable market segments. d. e. production e. 9-154 PRODUCT POSITIONING KNOWLEDGE The place an offering occupies in consumers' minds on important attributes relative to competitive products is called a. marketing d. The company saves money on marketing but spends more in production. each of which will have to be designed and manufactured. d. marketing c. b. product perception. product positioning. competition Answer: d Page: 242 LO: 4 LL: 2 AACSB: 3 Rationale: A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. b. marketing. marketing.9-152 MARKET-PRODUCT SYNERGIES COMPREHENSION A choice to take advantage of marketing synergies can often come at the expense of production ones because a single customer segment will likely require a variety of products. competition. marketing b. The company saves money on __________ but spends more on __________. relative positioning. production. 9-153 MARKETING MATTERS COMPREHENSION In the early 1980s Apple Computer Company was often called "Camp Runamok" because the innovative company had no a. competitors. investment capital. c.

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

c. The advertising message was that using applesauce in baking cuts calories and also makes the resulting baked good healthier. Head-to-head c. perceptual mapping b. product positioning c. smaller market niche in which to locate a brand. competitive and distinctive. product differentiation d. Segment b.9-158 REPOSITIONING APPLICATION Motts Applesauce used an advertising campaign to change the way consumers thought about applesauce from a dinnertime side dish to a replacement for cooking oil in baking. Consumer Answer: c Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 176 . psychographics Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Repositioning is changing a product's image in consumers' minds. 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. 9-160 DIFFERENTIATION POSITIONING KNOWLEDGE COMPREHENSION __________ positioning involves seeking a less competitive. d. a. head-to-head and parallel market. b. differentiation and parallel market. 9-159 PRODUCT POSITIONING Two major types of product positioning are a. competitive and differentiation. repositioning e. Motts was using a __________ strategy. e. Differentiation d. Competitive e. Motts Applesauce was attempting to expand the use of the product from a dinnertime side dish to a baking ingredient. In this case. head-to-head and differentiation. a.

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

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

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

indicating accessibility by consumers. three-dimensional cube. database. pyramid design. within selected retail outlets. e. Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes. Answer: d Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map 9-171 PERCEPTUAL MAP A perceptual map is most like a a. b. consumer d. c. distinction c. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. two-dimensional graph. in the minds of consumers. with respect to the geographic areas in which they are manufactured. 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. c. normally in major metropolitan areas. Nike and Reebok practice head-to-head positioning. consumer map of likes and dislikes. within distribution channels. as they are clustered by type of outlet. parallel market b.9-169 HEAD-TO-HEAD POSITIONING APPLICATION In the sneaker market. differentiation e. a. d. e. b. which involves competing directly with competitors on similar product attributes in the same target market. d. Answer: c Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map AACSB: 3 Other Location: web AACSB: 3 KNOWLEDGE 180 . head-to-head Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In the sneaker market.

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

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

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

b. b. e. Suppose this map describes accurately how I see the drinks shown. 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. Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: On the vertical nutrition scale. more nutritious than tea. more adult than a skinny latte. market share. I am a heavy consumer of mineral water. A likely reason I drink mineral water according to this perceptual map is that I see it as a. b. 9-179 MARKET POTENTIAL KNOWLEDGE The maximum total sales of a product by all firms to a segment under specified environmental conditions and marketing efforts of the firms are called a. Additionally. more adult than nutritionally-designed diet drinks. Answer: a Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential KNOWLEDGE 184 . sales forecast. e. d. on the horizontal scale. mineral water must be to the right of the drink compared. I am very concerned about nutrition and don’t want to look like a kid. market potential. sales forecast.9-178 PRODUCT POSITIONING APPLICATION The perceptual map in Figure 9-10 shows how various drinks are seen in the minds of adult consumers. So fruitflavored drinks (choice e) is the correct answer. e. this is true for fruit-flavored drinks (choice e) but not tea or milk shakes (choices b or d).. market forecast. industry potential. c. c. growth potential. company growth potential. As an adult. mineral water must be above the drink compared. d. this is not true for either diet drinks or skinny latte (choices a or c). c. more nutritious than a milk shake. more nutritious than a fruit-flavored drink. top-down forecast. Delphi forecast. Also. d.

c. the total of all products sold nationally c. market potential. the minimum anticipated sales in related industries not including federal. environmental forecast. d. Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 9-183 SALES (COMPANY) FORECAST KNOWLEDGE KNOWLEDGE The term __________ is defined as the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. market share. e. industry potential d. 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. market share Answer: a Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 185 . sales forecast b. b. and local taxes e. Delphi forecast c. state. total industrial products sold worldwide b. market potential e. a.9-181 MARKET POTENTIAL KNOWLEDGE The term market potential or industry potential refers to what important marketing factor? a. the sum of products in a particular industry sold domestically under normal economic conditions d. industry potential. company forecast.

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

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

b. This is an example of a a. technological forecast c. lost-horse forecast. d. a. technological c. e. 188 . a. Delphi forecast e. listing the facts that could affect the forecast. assessing whether they have a positive or negative impact. experimental estimation. 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. linear trend extrapolation. 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. Delphi d. c. jury of executive opinion b. Answer: d Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. statistical inference.9-191 LOST-HORSE FORECAST KNOWLEDGE A __________ involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. lost-horse forecast b. trend extrapolation d. and making the final forecast. statistical method e. survey of buyers' intentions forecast.

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

190 .750. survey of buyers' intentions d. judgments of individuals b. the forecast is set at $4. survey of experts e. salesforce survey d. Based on this information. 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. 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.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. salesforce survey d. statistical Answer: c Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. jury of executive opinion c. This is an example of a __________ forecast. a. statistical method e.000 for the quarter. jury of executive opinion b. statistical Answer: c Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. a. survey of experts e. technological c. a. judgments of individuals b. jury of executive opinion c.

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

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

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

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

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

9-2 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. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . This will be the market segment it targets. Fig. 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. How will the evaluation of its market segment strategy differ from that used for a retail store? Answer: There is one difference between for-profit and not-for-profit criteria. which link market needs of customers to the organization’s marketing program. it is now much more likely to serve its clients more effectively with the new segmentation strategy. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. Compared to the food bank's previous policy. List these five key steps. It now wants to give free food only to people who go hungry on a regular basis. List these important factors in marketing planning. Answer: The five key steps are: (1) group potential buyers into segments (2) group products to be sold into categories (3) develop a market-product grid and estimate size of markets (4) select target markets (5) take marketing actions to reach target markets Page: 230.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets.

a franchised restaurant that has newly opened in St. or needs of prospective customers. aspirations (lifestyle). Segmentation according to the benefits dimension could include convenience. Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-216 SEGMENTATION VARIABLES Assume you are manager of The Outback Steak House. what benefits they seek. using as many segmentation variables as you can. perhaps related to occupations. probably with children. race). since repeat business is the key to success in this sort of venture. which is based on some observable actions or attitudes by prospective customers—such as where they buy. Also important would be household income. (3) psychographic segmentation. including homeowners. young adults. income) or other classification attribute (birth era. which is based on where prospective customers live or work (region. occupation) of prospective customers. The next dimension should be demographics. The psychographic dimension would include variables such as extroverted.9-215 CONSUMER SEGMENTATION VARIABLES COMPREHENSION What are the four general bases by which consumer markets can be segmented? Answer: Four general bases of segmentation are: (1) geographic segmentation. and economy relative to more expensive restaurants. Describe how you would segment the market according to segmentation bases. city size).] However. Page: 232 LO: 3 LL: 3 AACSB: 3 197 . and explaining why each variable is appropriate. and demographic correlations can be rather easily made with regard to those factors. census tract. gregarious. and (4) behavioral segmentation. how frequently they buy. or subdivision. measurable (age. which is based on some subjective mental or emotional attributes (personality). and why they buy. which is based on some objective physical (gender. married. those people who might dine at The Outback more than once a month. 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. (2) demographic segmentation. it would be well to seek medium and heavy users including. but also the means to dine at the restaurant. and those fond of pleasures such as eating out. Louis. As for the usage dimension. Answer: [Students might select any segmentation variables from Figure 9-3. perhaps. The Outback manager would seek those people who had not only the need. They could be defined by ZIP Code.

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

Dollar Rental Cars is positioned head-to-head with Avis and Hertz. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. 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. To simplify product lines. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production."). reduce R & D and production expenses.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. Five criteria can be used to select the target segments. Answer: There are two major approaches to positioning a product. For example. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. (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 . Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. Marketing efforts can be streamlined with a focus on fewer segments. For example. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment.9-220 CRITERIA TO SELECT THE TARGET SEGMENTS What are the criteria used to select target markets? COMPREHENSION Answer: There are two different kinds of criteria in the market segmentation process: those used to (1) divide the market into segments and (2) actually pick the target segments. a company might only wish to manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product.

Salespeople can be unreliable forecasters—painting too rosy a picture if they are enthusiastic about a new product and too grim a forecast if their sales quota and future compensation are based on it. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers. this can be effective. Sales forecast is also known as company forecast. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . 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. 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. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time. Answer: Market potential is also known as industry potential. companies obtain three types of data from consumers.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. For industrial products with few prospective buyers.246 LO: 6 LL: 2 AACSB: 3 COMPREHENSION 9-225 SURVEYS OF KNOWLEDGEABLE GROUPS What are the two common groups surveyed to develop sales forecasts? Describe the information contained in the forecasts that result. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. Page: 245 .

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

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