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

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

e. demographic clusters. d.9-9 MARKET SEGMENTATION KNOWLEDGE __________ involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marking action. have different needs and respond similarly to market actions. a. c. have common needs and respond similarly to market actions. b. have different needs and have potential for future growth. have potential for future growth and have potential for increased profit or ROI. its members must a. Market diversification b. represent a large share of the entire market and have critical buying power. ultimate consumer e. market segments. Market differentiation c. organizational buyers. c. e. Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments 9-12 MARKET SEGMENTS AACSB: 3 KNOWLEDGE Each __________ consists of people who are relatively similar to each other in terms of their consumption behavior. Market segmentation d. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . demographic cluster c. a. 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. qualified prospects. Market augmentation e. 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. market segment b. organizational buyer d. b. d.

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

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

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

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

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

designing shoes for every type of occasion. the firm should a. e. b. offering the absolute best selection of shoes and the absolute best service. a firm should not attempt to segment its market. supplier geography. terminate as many employees as possible to save money. and return on investment. c. d. 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. and ROI. its pricing strategy. When expenses are greater than the potentially increased sales from segmentation. and return on investment. which will lower quality. recession sets in. e. having a well-educated customer base. profit. it expects that this will increase its sales. competitors enter the marketplace. 9-29 MARKET SEGMENTATION COMPREHENSION A business firm segments its markets when this strategy increases its sales revenue. When expenses are greater than the potentially increased sales from segmentation. profit. the environment becomes uncertain. profit. 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. e.228 LO: 1 LL: 2 AACSB: 3 Rationale: A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales. 9-28 MARKET SEGMENTATION COMPREHENSION A business firm goes to the trouble and expense of segmenting its markets when a. act as its own distributor.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. reduce production costs. b. 127 . d. b. it changes its advertising campaign. Answer: d Page: 227 . c. profit and return on investment. not attempt to segment its market. c. 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. income segmentation. one product and multiple market segments. segmenting organizational markets.S.S. c. the definition of a “one-product and multiple-market segments” situation. 128 . multiple products and multiple market segments. Four samples are shown in Figure 9-B. d. the magazine stories inside the cover. or mass customization. so the answer is “a.” Yet the 14 different covers enable the magazine with exactly the same stories to reach 14 different regional segments. this is an example of a. behavioral segmentation e. b. demographic segmentation d. Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: There is only a single product. What is the market segmentation strategy? a. geographic segmentation Answer: e Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: The magazine has 14 different covers to appeal to sports fans in 14 different geographic regions.STREET & SMITH COVERS 9-30 MARKET SEGMENTATION STRATEGY COMPREHENSION Street & Smith publishes the same baseball magazine with exactly the same stories but with 14 different covers to appeal to baseball fans in 14 different regions of the U. psychographic segmentation b. e. segments of one. clearly using the geographic variable as the basis for market segmentation. outlet-type segmentation c. Four samples are shown in Figure 9-B. In terms of market segmentation strategies.

manufacture products that appeal to different markets. and producing additional versions of the product. develop and produce another version of the product. and manufacturing expenses. creating a service gap c.9-32 MARKET SEGMENTATION STRATEGY APPLICATION One marketing action that can be taken to sell a single product or service to multiple market segments is a. indirect distribution and logistics problems d. d. 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. purchase another firm that has additional products that would appeal to multiple markets. 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. 129 . engineering. In this case. issue stock used for additional research and development for improved products. which often entail extremely high research. strategic planning e. b. which often results extremely high research. it avoids the extra costs of developing. 9-33 ONE PRODUCT. it avoids __________. the extra cost of developing and producing additional versions of the product b. a. 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. e. c. engineering. develop a separate promotional campaign. and manufacturing expenses. 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.

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

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

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

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

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

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

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

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

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

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

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SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

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

b. e. Campbell’s plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants. Answer: b Page: 231 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—geographic segmentation KNOWLEDGE 9-78 GEOGRAPHIC SEGMENTATION COMPREHENSION Campbell’s found that its canned nacho cheese sauce. which could be heated and poured directly onto nacho chips. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. Today. zip code segmentation. c. geographic e. 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. MSA segmentation. behavioral c. This is geographic segmentation. e. b. NAICS code segmentation. age b. d. socioeconomic d. was too hot for Americans in the East and not hot enough for those in the West and Southwest. 146 . GE built a downsized microwave oven to hang under kitchen cabinets. d. regional segmentation. geographic segmentation. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the area. a. Campbell’s is using __________ segmentation. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas.9-77 GEOGRAPHIC SEGMENTATION Segmentation based on where prospective customers live or work is called a. 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. 9-79 GEOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

total anticipated profit for each product to segments. total anticipated profit d. the market segments of potential buyers to products offered or potential marketing actions by an organization. estimated expenses for products sold to various market segments. c. b. estimated expenses for products sold. d. e. b. estimated expenses for products sold b. the market segments of potential buyers to relative market share compared to closest competitor. total anticipated profit. Answer: e Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 164 . total anticipated revenue c. a. market share compared to closest competitor. market segments of potential buyers Answer: e Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 9-127 MARKET-PRODUCT GRID KNOWLEDGE A market-product grid is a framework to relate the market segments of potential buyers to a. total anticipated revenue for each product to market segments. c. products offered or potential marketing actions by an organization. d. market share compared to closest competitor e. total anticipated revenue.9-125 MARKET-PRODUCT GRID KNOWLEDGE A market-product grid is a framework to relate a. e. Answer: d Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 9-126 MARKET-PRODUCT GRID Other Location: web KNOWLEDGE A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization.

9-128 MARKET-PRODUCT GRID COMPREHENSION One advantage of a market-product grid is that it can be used to a. how to implement the 80-20 rule. 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. determine which target market segments to select and which product groupings to offer. make optimal decisions under conditions of uncertainty. which products to reposition. c. select representative samples of consumers for marketing research studies. 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. 165 . 9-129 MARKET-PRODUCT GRID COMPREHENSION Determining the size of specific markets using a market-product grid is helpful in determining which target market segments to select and a. how to implement a harvesting strategy. which products to be sold into groups. c. b. b. screen many new product ideas in order to select the one with best long-run market potential. d. relate the product life cycle to consumer demand. e. e. It is helpful in determining which target market segments to select and which product groupings to offer.

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

Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). a flyer placed on a bulletin board in a dormitory or under the door of dormitory residents could promote the entire restaurant and several of its meals to dormitory customers. The 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. 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. lunch. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). 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. students that are night commuters. dinner. c. e. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. d. students that live in an apartment. c. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the meal columns vertically shows the “lunch” meal occasion to have the most “units” of sales (14) of any meal column. 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. b. assume the medium market (shown by a “2”) is twice the size of the small market. b. e. faculty or staff members. b. after-dinner snack. lunch customers. dinner customers. between-meal snack customers. assume the medium market (shown by a “2”) is twice the size of the small market. c. dormitory customers. Similarly. 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. after-dinner snack customers. e. For example. students that are day commuters. d.9-131 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. students that live in a dormitory. 167 . Similarly. d. between-meal snack. The meal occasion (product grouping) that comprises the largest market is a.

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

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

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

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

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

a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. 173 . zillow. a company that makes Tongue Tinglin' B. b. wsj.com. formed prospective buyers into segments. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. developed a market-product grid and estimating size of markets. Answer: d Page: 239 LO: 4 LL: 2 AACSB: 3 Rationale: Zillow provides “zillions” of data for the place(s) where your “pillow” is located. d. c.. Sauce. Lewis decided to join Goodness Grows in North Carolina. Zillow is an online real estate service that answers the most important question. the neighborhood and look around there. taking marketing actions to reach target markets. selected target market segments to reach. the website of the local newspaper. 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. 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.Q. Lewis has just a. In developing a marketing strategy to sell the sauce. Inc.B. 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. “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. c.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. Answer: d Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Alternative d is the final result in the process of segmenting and targeting markets. e. d. b. developing a market-product grid and estimating size of markets.com. e. formed products to be sold into groups. c. taken marketing actions to reach target markets. d. LexisNexis. e. This is an example of a.

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

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

repositioning e. d. 9-160 DIFFERENTIATION POSITIONING KNOWLEDGE COMPREHENSION __________ positioning involves seeking a less competitive. In this case. product differentiation d. c. Consumer Answer: c Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 176 . Motts Applesauce was attempting to expand the use of the product from a dinnertime side dish to a baking ingredient. perceptual mapping b. b. Competitive e. e. The advertising message was that using applesauce in baking cuts calories and also makes the resulting baked good healthier. competitive and distinctive. smaller market niche in which to locate a brand. psychographics Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: Repositioning is changing a product's image in consumers' minds. Motts was using a __________ strategy. product positioning c. Differentiation d. a. 9-159 PRODUCT POSITIONING Two major types of product positioning are a. a.9-158 REPOSITIONING APPLICATION Motts Applesauce used an advertising campaign to change the way consumers thought about applesauce from a dinnertime side dish to a replacement for cooking oil in baking. competitive and differentiation. 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. differentiation and parallel market. Head-to-head c. head-to-head and parallel market. head-to-head and differentiation. Segment 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. compete against other products of the same company.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. cognitive positioning Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 9-162 DIFFERENTIATION POSITIONING To avoid cannibalization within company product lines. a. b. c. firms often use a. lateral positioning. c. d. differentiation positioning. 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. compete with competitors on similar product attributes in the same market. e. head-to-head positioning b. smaller market niche. compete directly with competitors but emphasize unique product attributes. seek a less competitive. compete with competitors on similar product attributes but in a different market. lateral positioning c. differentiation d. 177 . repositioning. Differentiation positioning involves seeking a less competitive. consumer positioning e. b. cognitive positioning. smaller market niche in which to locate a brand. head-to-head positioning. d. e.

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

distinction d. a. perceptual b. a. 9-167 HEAD-TO-HEAD POSITIONING KNOWLEDGE An approach to positioning a new product in the market is __________ positioning. compete with competitors on similar product attributes in the same market. which involves seeking a smaller market niche that is less competitive in which to locate a brand. compete with competitors using unique attributes. In the sneaker business. Heelys is practicing __________ positioning. compete against other products of the same company. 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. repositioning e. psychological c. parallel market c. differentiation e. b. d. compete with competitors on similar product attributes but in a different market. e. segmentation d. head-to-head Answer: e Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 9-168 HEAD-TO-HEAD POSITIONING Other Location: SG KNOWLEDGE Head-to-head positioning requires a product to a. Heelys practices differentiation positioning. 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 . head-to-head b. detachable wheel in the shoe’s heel. and thereby reduce or avoid cannibalization. c.9-166 DIFFERENTIATION POSITIONING APPLICATION Heelys sneakers come with an imbedded. seek out its own market niche.

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

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

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

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

sales forecast. Delphi forecast.9-178 PRODUCT POSITIONING APPLICATION The perceptual map in Figure 9-10 shows how various drinks are seen in the minds of adult consumers. this is not true for either diet drinks or skinny latte (choices a or c). Answer: b Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential 9-180 MARKET POTENTIAL Another commonly used term for market potential is a. Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: On the vertical nutrition scale. b. c. c. d. e. Additionally. Also. b. growth potential. Suppose this map describes accurately how I see the drinks shown. 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. So fruitflavored drinks (choice e) is the correct answer. A likely reason I drink mineral water according to this perceptual map is that I see it as a. top-down forecast. sales forecast. Answer: a Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential KNOWLEDGE 184 . market share. more nutritious than a fruit-flavored drink. I am very concerned about nutrition and don’t want to look like a kid. industry potential. e. mineral water must be to the right of the drink compared. more adult than nutritionally-designed diet drinks. e. c. market potential.. 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. mineral water must be above the drink compared. more nutritious than tea. market forecast. As an adult. on the horizontal scale. d. company growth potential. b. more nutritious than a milk shake. d.

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

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

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

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

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

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

e. d. a. Answer: e Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—linear trend extrapolation 191 . its near-perfect accuracy of prediction. inductive extrapolation. inductive extrapolation e. b. which involves extending a pattern observed in past data into the future. c. trend extrapolation b. 9-202 LINEAR TREND EXTRAPOLATION KNOWLEDGE COMPREHENSION The best-known statistical method of forecasting involves extending a pattern observed in past data into the future. c. information extension. exponential extrapolation. e. d. exponential interpolation c.9-200 TREND EXTRAPOLATION KNOWLEDGE The best-known statistical method of forecasting is called __________. information extension d. simplicity. Answer: d Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Trend extrapolation assumes that the underlying relationships in the past will continue into the future. which is the basis of the method’s key strength: simplicity. lack of assumption. it is referred to as a. reliance on computers for computation. the Delphi method. b. 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. reliance on facts. When the pattern of data is described with a straight line. linear trend extrapolation.

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

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

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

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

which link market needs of customers to the organization’s marketing program. List these important factors in marketing planning. 9-2 LO: 2 LL: 2 AACSB: 3 COMPREHENSION 9-213 CRITERIA FOR FORMING SEGMENTS A marketing manager should develop segments for a market that meet five principal criteria. 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.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. It now wants to give free food only to people who go hungry on a regular basis. Compared to the food bank's previous policy. 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. 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. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. it is now much more likely to serve its clients more effectively with the new segmentation strategy. This will be the market segment it targets. Fig. List these five key steps. Page: 231 LO: 3 LL: 3 AACSB: 3 196 .

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

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

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

Page: 245 . For industrial products with few prospective buyers. 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. 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. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . 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. 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. 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. Answer: Market potential is also known as industry potential.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. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time. Sales forecast is also known as company forecast. companies obtain three types of data from consumers.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.

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

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