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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9-4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

behavioral c. d. geographic e. This is geographic segmentation. Campbell’s plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants. NAICS code segmentation. 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. 9-79 GEOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a. MSA segmentation. c. was too hot for Americans in the East and not hot enough for those in the West and Southwest. age b. perceptual Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Campbell’s is marketing a different sauce to different markets depending on where they are located. socioeconomic d. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. GE built a downsized microwave oven to hang under kitchen cabinets. which could be heated and poured directly onto nacho chips. b. 146 .9-77 GEOGRAPHIC SEGMENTATION Segmentation based on where prospective customers live or work is called a. b. e. 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. a. In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas. geographic segmentation. Today. d. Campbell’s is using __________ segmentation. regional segmentation. c. 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. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.

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

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

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

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

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

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

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

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

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

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

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

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

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

promote buyer loyalty. Answer: b Page: 234 LO: 3 LL: 2 AACSB: 3 Rationale: The nonusers part of the Wendy’s bar in Figure 9-5 also provides ideas. 9-116 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Evergreen Air Center in Marana. d. segment a consumer market. dry air where the operation is located serves as a cheap and effective airplane preservative. e. demographic. Airlines pay from $750 to $5. the North American Industry Classification System (NAICS) code.4 percent of the Wendy’s bar shown as prospects may be worth detailed thought.000 a month for its storage service. 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. New menu items or promotional strategies may succeed in converting these prospects into users that patronize Wendy’s. statistical area e. is the world's biggest parking lot for unwanted commercial aircraft. and number of employees are all examples of ways to a. 9-115 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Variables such as location. b. NAICS sector b. Arizona.9-114 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant. e. c. number of locations c. These adults use the product category (fast food) but do not go to Wendy’s. nonprospects may be the best segment to go after to increase Wendy’s sales. Answer: c Page: 235 LO: 3 LL: 2 AACSB: 3 Rationale: Variables for segmenting organizational markets are shown in Figure 9-6 and include geographic. The warm. 160 . b. and behavioral bases. c. McDonald’s is not a serious competitor to you. get around gatekeepers and reach buyers. It shows that 11 percent of adult Americans don’t go to fast-food restaurants in a typical month and are really nonprospects—unlikely to ever patronize your restaurant. area density d. Which organizational segmentation variable might Evergreen use to segment the market? a. your restaurant is a market leader. the information in Figure 9-5 suggests a. forecast sales to a consumer market. segment an organizational market. new menu items or promotional strategies may succeed in converting the prospects into users that patronize Wendy’s. d. Burger King is closing in on your market share. But the 56.

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

162 . Answer: c Page: 236 LO: 3 LL: 2 AACSB: 3 Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. which of the following product groupings would likely make the most sense? a. this isn’t a problem. so the product grouping that makes the most marketing sense is by meal or time of day. Wendy’s customers really buy an eating experience. but when it has dozens or hundreds.9-120 PRODUCT GROUPING COMPREHENSION If Wendy’s customers are buying an eating experience. grouping by usage e. Examples would be the pet food aisle or the paper product aisle. these must be grouped in some way so buyers can relate to them. grouping by product type such as types of drinks b. grouping by meal d. The groupings increase the number of market-product combinations on the marketproduct grid into a more manageable framework for subsequent analysis. Product groupings can be generated quantitatively to show which adhere to the 80/20 rule. All of the above are reasons why Safeway would use product groups. Product groupings should not be used in Wendy’s. but when it has dozens or hundreds. b. Why would Safeway display product groupings in this manner? a. If the firm has only one product or service. If the firm has only one product or service. 9-121 PRODUCT GROUPING APPLICATION Safeway displays the thousands of items it sells in aisles containing related items or product groupings. grouping by price c. The products are grouped so people can relate to these product groupings in a more meaningful way. d. 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. e. c. this isn’t a problem. or a meal occasion that satisfies a need at a particular time of day. Consumers buy more in illogically organized environments. these must be grouped in some way so buyers can relate to them.

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

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

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

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

The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. The largest potential market segment is for a. c. assume the medium market (shown by a “2”) is twice the size of the small market. students that live in an apartment. dinner. Similarly. e. lunch. 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. breakfast. 167 . b. e. b. Answer: e Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Marketing synergies and efficiencies run horizontally across the rows because a single kind of marketing action can reach customers that buy different “products”—in this case meals. after-dinner snack customers. The meal occasion (product grouping) that comprises the largest market is a. d. between-meal snack. Similarly. b. students that are day commuters. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). c. dormitory customers. e. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. d. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the meal columns vertically shows the “lunch” meal occasion to have the most “units” of sales (14) of any meal column. students that live in a dormitory. lunch customers. 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. d. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). dinner customers. a flyer placed on a bulletin board in a dormitory or under the door of dormitory residents could promote the entire restaurant and several of its meals to dormitory customers. assume the medium market (shown by a “2”) is twice the size of the small market. after-dinner snack. faculty or staff members. c. For example.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. 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. students that are night commuters. between-meal snack customers.

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

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

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

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

not be compatible with the company's current resources.9-146 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is NOT a criterion for selecting a market segment? a. competitive position d. This market would use the rehabilitation services that the company now provides. 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. 172 . Best Food's competitive position in the segment b. Best Food's created product groupings c. d. 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. b. e. 9-147 SELECT TARGET SEGMENTS APPLICATION Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. not for selecting one. expected growth c. size of the market segment e. be accurately described by all of the above. be readily accessible to the firm's marketing programs. 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. it would not be readily accessible by marketing programs. this market would a. Because it would be so small. c. have no expected growth. 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. 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. similarity of needs of potential buyers b. cost of reaching the segment e. expected growth of the market segment d. compatibility with Best Food's objectives and resources Answer: e Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: New equipment to reach a new market segment relates to the organization's resources. be very small.

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

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

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

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

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

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

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

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

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

judgments of existing products or brands with respect to important attributes d. 182 . 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.9-175 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. managerial judgments about how consumers perceive products c. 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. managerial judgments about how consumers perceive products c. a listing of all prospective brands and products b. All of the above data are collected from consumers. judgments of existing products or brands with respect to these attributes. and ratings of an “ideal” product’s or brand’s attributes. 9-176 PERCEPTUAL MAP COMPREHENSION Which of the following data are collected from consumers to develop a perceptual map for a particular product? a. and ratings of an “ideal” product’s or brand’s attributes. ratings of an “ideal” product’s or brand’s attributes d. 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. All of the above data are collected from consumers. a listing of all prospective brands and products b.

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

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

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

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

technological forecast b. d. direct forecast c. Delphi forecast e. C. Alternatives B. Delphi forecast. field sales forecast Answer: b Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: The decision-maker makes the forecast without having any data to work with. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts. APPLICATION AACSB: 3 COMPREHENSION 187 . direct forecast. survey of buyers intentions forecast. a. direct forecast d. trend extrapolation. Alternative D is a statistical method that involves the greatest cost in terms of time and money due to the data collection and analysis involved. c. sales force survey forecast.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. survey of knowledgeable groups forecast Answer: c Page: 246 LO: 6 LL: 1 Rationale: Key term definition—direct forecast 9-189 DIRECT FORECAST “How many quarts of milk should I buy?” is an example of a a. lost-horse forecast d. buildup forecast b. e. b. 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. statistical forecast e. Delphi forecast c.

lost-horse forecast. This is an example of a a. c. e. experimental estimation. b. technological c. Delphi forecast e. Answer: d Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. 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. jury of executive opinion b. technological forecast c. a. listing the facts that could affect the forecast. d. and making the final forecast. survey of buyers' intentions forecast.9-191 LOST-HORSE FORECAST KNOWLEDGE A __________ involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. statistical inference. Delphi d. lost-horse Answer: e Page: 246 LO: 6 LL: 1 Rationale: Key term definition—lost-horse forecast 9-192 LOST-HORSE FORECAST AACSB: 3 KNOWLEDGE A __________ forecast involves starting with the last known value of the item being forecasted. assessing whether they have a positive or negative impact. trend extrapolation d. lost-horse forecast b. 188 . a. statistical method e. linear trend extrapolation.

and adding 3 new product models. we're going to increase prices across the board by 20 percent. The Ohio River Boatworks uses the __________ method of forecasting. survey of buyers' intentions forecast Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future.” a. But on the negative side. adding some sales representatives. 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 . technological b. survey of buyers' intentions Answer: c Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. All those things are positive.9-194 LOST-HORSE FORECAST APPLICATION When a marketing student overheard the following comments. I think sales will increase next year by 5 percent. Delphi forecast e. “We're increasing TV advertising. Delphi forecast e. technological forecast c. technological forecast c. lost-horse forecast b. Delphi e. trend extrapolation d. 9-195 LOST-HORSE FORECAST APPLICATION The Ohio River Boatworks uses last year’s sales as a starting point to estimate next year’s sales of its boats. a. lost-horse forecast b. trend extrapolation c. So on balance. trend extrapolation d. 9-196 SURVEY OF BUYERS’INTENTIONS FORECAST KNOWLEDGE A __________ forecast asks prospective customers whether they are likely to buy a good or service during some future time period. lost-horse d. a. lists factors that could affect the forecast. assesses whether they have a positive or negative impact. she knew the person who was talking was planning to use a __________. and makes the final forecast.

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

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

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

product sampling b.9-206 VIDEO CASE: ROLLERBLADE APPLICATION The 4D™ refers to an innovative. product differentiation d. e. to help consumers perceive the product as being different and better than competing products. Rollerblade is implementing a __________ strategy with its innovative skate technology. 193 . product extrapolation c. market differentiation Answer: c Page: 226 LO: 1 LL: 3 AACSB: 3 Rationale: Product differentiation involves a firm using different marketing mix activities. 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. a. such as product features and advertising. usage segmentation.

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

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

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

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

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. each cell in the grid can show the estimated market size of a given product sold to a specific market segment. and awareness/intentions are similar to the consumer market variables used for segmentation and may also be used to segment organizational markets. organizational markets? COMPREHENSION Answer: Organizational markets can be segmented by geographic. Page: 237 LO: 4 LL: 2 AACSB: 3 198 .9-217 ORGANIZATIONAL MARKET SEGMENTATION What are the segmentation bases for U.S. usage rate. Product features. In a complete marketproduct grid analysis. Page: 235 LO: 3 LL: 2 AACSB: 3 COMPREHENSION 9-218 CRITERIA TO FORM SEGMENTS What are the five essential criteria that segments should have to ensure the success of segmentation? Answer: (1) Simplicity and cost-effectiveness of assigning potential buyers to segments (2) Potential for increased profit (3) similarity of needs of potential buyers within a segment (4) difference of needs of buyers among segments (5) potential of a marketing action to reach a segment Page: 231 LO: 3 LL: 2 AACSB: 3 COMPREHENSION 9-219 MARKET-PRODUCT GRID Explain what a market-product grid is and how it is used. demographic or behavioral segments.

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

Page: 246 LO: 6 LL: 2 AACSB: 3 200 . Sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. this can be effective. They are: (1) identification of the important attributes for a product class (2) judgments of existing products or brands with respect to these attributes (3) ratings of an "ideal" product’s or brand's attributes Page: 244 LO: 5 LL: 2 AACSB: 3 COMPREHENSION 9-224 MARKET POTENTIAL AND SALES FORECAST Differentiate between market potential and sales forecast. Page: 245 . Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time.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. companies obtain three types of data from consumers. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers.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. Sales forecast is also known as company forecast. Answer: Market potential is also known as industry potential. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. For industrial products with few prospective buyers. Salespeople can be unreliable forecasters—painting too rosy a picture if they are enthusiastic about a new product and too grim a forecast if their sales quota and future compensation are based on it.

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