CHAPTER 9

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

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

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

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

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

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

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

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

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

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

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

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

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

124,125,126,127

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

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

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

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

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

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

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

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

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

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CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

will pay attention to marketing messages. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 120 . go shopping on a regular basis. Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-7 MARKET SEGMENTATION KNOWLEDGE Market segmentation involves aggregating prospective buyers into groups that have common needs and will a. d. d. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-8 MARKET SEGMENTATION Other Location: web KNOWLEDGE Market segmentation involves aggregating prospective buyers into groups that will respond similarly to a marketing action and a. pay attention to marketing messages. be responsive to marketing research. b. consumer differentiation. b. market delineation. use the same payment methods. d. c. respond similarly to a marketing action. e. c.9-6 MARKET SEGMENTATION KNOWLEDGE Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is called a. go shopping on a regular basis. e. b. market segmentation. have common needs. psychographics. e. c. use the same payment methods. be responsive to marketing research. aggregation marketing.

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

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

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

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

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

just-in-time manufacturing. e. COMPREHENSION Answer: e Page: 227 LO: 1 LL: 2 AACSB: 3 Other Location: web Rationale: The process of segmenting a market and selecting specific segments as targets is the link between the various buyers’ needs and the organization’s marketing program (Figure 9-1). 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. 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. c. d. link market needs to an organization’s advertising. market segmentation. This strategy is an example of a. d. 9-25 MARKET SEGMENTATION APPLICATION Small athletic shoe manufacturers such as Vans have targeted niche markets and made shoes designed to satisfy the needs of different specific groups of customers. synergy. increase overall sales and profitability. b. just-in-time marketing. do all of the above. e. mass customization. market segmentation. c. mass customization. The Premier Control shoe is made for runners whose feet tend to turn out. synergy. link market needs to an organization's marketing program. This strategy is an example of a. The Premier Road is made with extra cushioning for pavement runners. b. c. Market segmentation is only a means to an end: to lead to tangible marketing actions that can increase sales and profitability. b. link market needs to an organization’s product or price.9-24 MARKET SEGMENTATION Marketers use market segmentation to a. e. sales forecasting. sales forecasting. d. 9-26 MARKET SEGMENTATION APPLICATION Reebok makes shoes with DMX Shear and Foam cushioning. Reebok targets the specific needs of particular types of runners with its different types of shoes. 126 .

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

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

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

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

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

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

e. and adds to the manufacturer’s sales revenues and profits. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes. are an example of multiple products aimed at multiple markets. 9-42 MULTIPLE PRODUCTS. MULTIPLE MARKET SEGMENTS COMPREHENSION Which of the following is an example of a “Tiffany/Wal-Mart” strategy? a. 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 APPLICATION Kellogg's different types of cereals. d. b. c. conforms to all union regulations. c. One set of previews showed the action scenes in order to attract one audience. whereas its Old Navy stores sell a slightly different version for $22.9-41 MULTIPLE PRODUCTS. doesn’t reduce quality or increase price. d. 133 .S. and the other set showed romantic scenes to attract another audience. stabilizes the sales revenues and profits. Answer: d Page: 229 LO: 1 LL: 2 AACSB: 3 Rationale: A “Tiffany/Wal-Mart” strategy is a two-tier marketing strategy. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women. and a. Many firms are now offering different variations of the same basic product or service to high-end and low-end segments. reduces the number of employees required. b. doesn't reduce quality or increase price. Gap’s Banana Republic chain sells blue jeans for $58. e. serves customers’ needs better. each targeted at a different type of user. 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. decreases the cost of the physical plant. A new movie used several different advertisements. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the U.

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

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

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

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

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

mass aggregation. president and CEO of Model E. It is very similar to mass customization.9-56 MASS CUSTOMIZATION KNOWLEDGE __________ is tailoring goods or services to the tastes of individual customers on a highvolume scale. built-to-order (BTO). e. a one-product-one-market-segment strategy. 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. customer relationship management (CRM). a customer does not have the ability to specify an unlimited number of features. b. d. repositioning. mass aggregation. b. Synergy c. "Think of Model E as the Dell of the auto industry. launch. built-to-order (BTO). synergy. but because of production issues. c. e. designing products based on what consumers truly want and leveraging best-in-class components and micro-factory approaches for rapid design. and direct delivery." said William Santana Li. synergy. 139 . c. a one-product-one-market-segment strategy. Model E manufactures a car only when there is an order from a customer. d. Model E relies on a. Customer relationship management b. Mass production e. Mass customization Answer: e Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—mass customization 9-57 BUILD-TO-ORDER KNOWLEDGE Manufacturing a product only when there is an order from a customer is called: a. a. 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. Target marketing d.

9-59

SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

“Is there too much competition for this product?” e. NAICS code segmentation Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-3 shows four general bases of segmentation and the typical variables that can be used to segment U. psychographic segmentation e. (3) psychographic segmentation. supplier segmentation b. 145 . simplicity and cost of assigning potential buyers to segments e. “Would segmentation be worth doing. and (4) behavioral segmentation. demographic segmentation. regional segmentation d. usually mild. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question. a. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. similarity of needs of potential buyers within a segment d. and is it possible?” 9-75 CRITERIA FOR FORMING SEGMENTS APPLICATION Between two and three percent of the population have some degree of allergic reaction. and the high cost of running a duplicate salad bar. demand segmentation c. “Is it possible to reposition this product?” d. (2) 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. Restaurants might consider people with these "allergies" as a separate segment. the limited benefit to consumers in the segment. and behavioral segmentation. “Would segmentation be worth doing and is it possible?” c. instrumentality of sufficient marketing objectives to ignore that segment b. 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 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. __________. consumer markets. different needs of buyers among different segments c.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a.S. These four segmentation bases are: (1) geographic segmentation. to preservatives used in salad bars. “Is this product useful on a global scale?” b.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

9-129 MARKET-PRODUCT GRID COMPREHENSION Determining the size of specific markets using a market-product grid is helpful in determining which target market segments to select and a. b. how to implement the 80-20 rule. c. which products to be sold into groups. screen many new product ideas in order to select the one with best long-run market potential. d. make optimal decisions under conditions of uncertainty. which product groupings to offer. relate the product life cycle to consumer demand. e. 165 . Answer: d Page: 237 LO: 4 LL: 2 AACSB: 3 Rationale: Even “guesstimates” of the size of specific markets using a market-product grid are helpful in determining which target market segments to select and which product groupings to offer. 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. e. d. It is helpful in determining which target market segments to select and which product groupings to offer. b.9-128 MARKET-PRODUCT GRID COMPREHENSION One advantage of a market-product grid is that it can be used to a. c. how to implement a harvesting strategy. select representative samples of consumers for marketing research studies. which products to reposition. determine which target market segments to select and which product groupings to offer.

Answer: d Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: The method of segmenting the student market combines where they live if they are not a commuter (dormitory or apartment) and when they are on campus if they are a commuter (day or night). b. whether the student lives near the campus or far away. whether the student is a faculty or staff member. the meals eaten at the restaurant. 166 . The best way to describe how the student market is segmented is by a. e. d.FIGURE 9-8 9-130 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. whether the student has the discretionary income to eat at Wendy’s. c. combining the factors of where the student lives and when (s)he is on campus.

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

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

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

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

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

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

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

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

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

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

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

178 . both the Timex and the Rolex wristwatches will satisfy the consumer's need to know the time of day. For most products. In general. develop similar products. build customer loyalty through direct competition. differentiation positioning e. b. repositioning d. head-to-head positioning Answer: d Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Companies follow a differentiation strategy among brands within their own product line to minimize cannibalization of a brand's sales or market share. Rolex watches are distributed more selectively. The image of the Timex is very different from that of Rolex. some Rolex wristwatches carry a price tag of several thousand dollars. consumers view Timex watches as being dependable. 9-165 DIFFERENTIATION POSITIONING APPLICATION Some Timex wristwatches can be purchased for less than $30. in order to compete in the wristwatch market. e.9-164 DIFFERENTIATION POSITIONING COMPREHENSION Which type of product positioning would most likely be used to avoid cannibalization? a. Timex watches can be purchased in drug stores. parallel market positioning b. In this example. many comparable alternatives are available to the consumer. d. and inexpensive. compete for the same segment. the marketers of Timex and Rolex watches have attempted to a. distinction positioning c. relatively accurate. Answer: c Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In today's market place. create cognitive dissonance in consumers who are considering the purchase of a wristwatch. competition is extreme. and department stores in all sizes of communities. The Rolex brand tends to be perceived as an expensive status symbol. and are often available only in fine jewelry stores or specialty shops. However. By using distinctly different pricing and distribution strategies. use a product differentiation strategy. discount stores. c. each marketer has attempted to create a distinct product image in the mind of the consumer.

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

e. database. e. c. consumer d. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. with respect to the geographic areas in which they are manufactured. indicating accessibility by consumers. which involves competing directly with competitors on similar product attributes in the same target market. d. Answer: c Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map AACSB: 3 Other Location: web AACSB: 3 KNOWLEDGE 180 . as they are clustered by type of outlet. pyramid design. c. within distribution channels. Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes. parallel market b. b. distinction c. a. b. Answer: d Page: 244 LO: 5 LL: 1 Rationale: Key term definition—perceptual map 9-171 PERCEPTUAL MAP A perceptual map is most like a a. two-dimensional graph. consumer map of likes and dislikes. Nike and Reebok practice head-to-head positioning. three-dimensional cube. 9-170 PERCEPTUAL MAP KNOWLEDGE Marketers use perceptual maps as a means to display or graph in two dimensions the location of products or brands a. head-to-head Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In the sneaker market. within selected retail outlets. in the minds of consumers.9-169 HEAD-TO-HEAD POSITIONING APPLICATION In the sneaker market. normally in major metropolitan areas. differentiation e. d.

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

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

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

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

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

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

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

jury of executive opinion b. survey of buyers' intentions forecast Answer: a Page: 246 LO: 6 LL: 1 Rationale: Key term definition—lost-horse forecast 9-193 LOST-HORSE FORECAST AACSB: 3 APPLICATION Deluxe Cleaners uses last year's sales as a starting point to estimate next year's sales and then looks at positive and negative influences that may affect sales. linear trend extrapolation. b. survey of buyers' intentions forecast. lost-horse forecast. lost-horse Answer: e Page: 246 LO: 6 LL: 1 Rationale: Key term definition—lost-horse forecast 9-192 LOST-HORSE FORECAST AACSB: 3 KNOWLEDGE A __________ forecast involves starting with the last known value of the item being forecasted. assessing whether they have a positive or negative impact. This is an example of a a. a. 188 . c. listing the facts that could affect the forecast. and making the final forecast. trend extrapolation d. Delphi d. d. a. Delphi forecast e.9-191 LOST-HORSE FORECAST KNOWLEDGE A __________ involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. statistical method e. experimental estimation. e. technological c. statistical inference. lost-horse forecast b. Answer: d Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. technological forecast c.

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

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

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

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

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

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

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

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. Answer: The five criteria are: (1) potential for increased profit and ROI (2) similarity of needs of potential buyers within a segment (3) difference of needs of buyers among segments (4) potential of a marketing action to reach a segment (5) simplicity and cost of assigning potential buyers to segments Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-214 CRITERIA FOR FORMING SEGMENTS A nonprofit food bank was gathering and handing out food to anyone who requested it. it is now much more likely to serve its clients more effectively with the new segmentation strategy. which link market needs of customers to the organization’s marketing program. List these important factors in marketing planning. Fig. This will be the market segment it targets. Compared to the food bank's previous policy. 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. List these five key steps. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. Answer: The five key steps are: (1) group potential buyers into segments (2) group products to be sold into categories (3) develop a market-product grid and estimate size of markets (4) select target markets (5) take marketing actions to reach target markets Page: 230. It now wants to give free food only to people who go hungry on a regular basis. Page: 231 LO: 3 LL: 3 AACSB: 3 196 .9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets.

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

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

Answer: There are two major approaches to positioning a product.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. Five criteria can be used to select the target segments. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market."). Marketing efforts can be streamlined with a focus on fewer segments. 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. reduce R & D and production expenses. 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. (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 . Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. For example. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. Dollar Rental Cars is positioned head-to-head with Avis and Hertz. To simplify product lines. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. 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. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy.

For industrial products with few prospective buyers.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: Market potential is also known as industry potential. 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 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.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. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . Page: 245 . Sales forecast is also known as company forecast. 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. 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. 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. this can be effective. companies obtain three types of data from consumers.

and the history so excellent that a trend extrapolation would make great sense. the quality is so good. In the case of 3M's adhesives. 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. Trend extrapolation assumes the underlying relationships in the past will continue into the future. Page: 246 LO: 6 LL: 3 AACSB: 3 201 . (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. or extending a pattern observed in past data into the future. the volume is so great.

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