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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9-4

CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

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

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

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

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

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

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

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

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

so the answer is “a. d. geographic segmentation Answer: e Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: The magazine has 14 different covers to appeal to sports fans in 14 different geographic regions.STREET & SMITH COVERS 9-30 MARKET SEGMENTATION STRATEGY COMPREHENSION Street & Smith publishes the same baseball magazine with exactly the same stories but with 14 different covers to appeal to baseball fans in 14 different regions of the U.” Yet the 14 different covers enable the magazine with exactly the same stories to reach 14 different regional segments. psychographic segmentation b. 9-31 MARKET SEGMENTATION STRATEGY COMPREHENSION Street & Smith publishes the same baseball magazine with exactly the same stories but with 14 different covers to appeal to baseball fans in 14 different regions of the U. segmenting organizational markets. 128 . behavioral segmentation e. What is the market segmentation strategy? a. segments of one. multiple products and multiple market segments. Answer: a Page: 228 LO: 1 LL: 2 AACSB: 3 Rationale: There is only a single product.S. or mass customization. this is an example of a. e. outlet-type segmentation c. c. Four samples are shown in Figure 9-B. clearly using the geographic variable as the basis for market segmentation. b. Four samples are shown in Figure 9-B. demographic segmentation d.S. one product and multiple market segments. the definition of a “one-product and multiple-market segments” situation. the magazine stories inside the cover. income segmentation. In terms of market segmentation strategies.

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

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

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

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

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

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

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

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

9-52 MASS CUSTOMIZATION APPLICATION To create a __________ strategy. mass customization. target marketing. underarm ventilation slits. repositioning. 137 . e. e. 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. how the 80/20 rule is implemented. d. d.com. synergy. This is an example of a. a. synergy. c. target marketing. product sampling b. For $119 they will make a doll that looks just like a photograph. 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. and a key clip when you order from LandsEnd. b. c.com allows customers to visit its website and design a sneaker to their own personal specifications. nikeid. b. 9-51 MASS CUSTOMIZATION APPLICATION Lands’ End will custom fit the Marinac jacket and make it with additional features such as thumb loops. So. she could have a doll that is her twin! This is an example of a. mass customization d. repositioning. mass customization.9-50 MASS CUSTOMIZATION APPLICATION MyTwinn makes dolls that look like young girls. how the 80/20 rule is implemented. product extrapolation c. usage segmentation e. if you send in the money and a photo of your young niece. tailoring goods or services to the tastes of individuals on a high-volume scale. 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. b.95 per 12-foot roll. e.9-53 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. mass production e. customer relationship management b.95 to $32. c. d. repositioning. 9-55 CUSTOMER RELATIONSHIP MANAGEMENT KNOWLEDGE The essence of __________ is that each customer has unique needs and wants. synergy. mass customization Answer: a Page: 229 LO: 1 LL: 1 AACSB: 3 Rationale: Text term definition—customer relationship management 138 . 9-54 MASS CUSTOMIZATION APPLICATION Name Maker is an online company that sells high-end gift wrap printed with custom slogans. how the 80/20 rule is implemented. e. mass customization. and desires special tender loving care. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost. A customer can have gift wrap printed with the name of the person celebrating a birthday or the folks who are getting married. synergy. This made-to-order gift wrap is priced from $24. a. mass customization. c. target marketing. repositioning. d. how the 80/20 rule is implemented. b. This is an example of a. target marketing. target marketing d. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost.

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

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SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

9-76 CONSUMER SEGMENTATION VARIABLES COMPREHENSION Four general categories used to segment consumer markets are geographic segmentation. 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. to preservatives used in salad bars. “Is this product useful on a global scale?” b. “Is it possible to reposition this product?” d. 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. the limited benefit to consumers in the segment.9-74 CRITERIA FOR FORMING SEGMENTS APPLICATION Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question a. (3) psychographic segmentation. and behavioral segmentation. “Is the market loyal to the product?” Answer: b Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: It’s not always a good idea to segment a market. regional segmentation d. (2) demographic segmentation. psychographic segmentation e. “Would segmentation be worth doing. and the high cost of running a duplicate salad bar. These four segmentation bases are: (1) geographic segmentation. supplier segmentation b. simplicity and cost of assigning potential buyers to segments e. demographic segmentation. a. 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. usually mild. “Is there too much competition for this product?” e. “Would segmentation be worth doing and is it possible?” c. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question. instrumentality of sufficient marketing objectives to ignore that segment b. different needs of buyers among different segments c. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments? a. and is it possible?” 9-75 CRITERIA FOR FORMING SEGMENTS APPLICATION Between two and three percent of the population have some degree of allergic reaction. consumer markets. 145 . Restaurants might consider people with these "allergies" as a separate segment. and (4) behavioral segmentation. __________.S. demand segmentation c.

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

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

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

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

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

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

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

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

c. e. consumption rate. c. consumption rate. d. usage rate. service inventory. demographic segmentation. is a strategy that focuses on usage rate. d. This technique uses a. trial. sometimes called frequency marketing. turnover. usage rate. d. 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. 154 . 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. behavioral segmentation. turnover. This technique. c. buying condition segmentation. b. This technique. 9-103 BEHAVIORAL SEGMENTATION BY USAGE COMPREHENSION AACSB: 3 COMPREHENSION Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly. a type of behavioral segmentation. Answer: c Page: 232 LO: 3 LL: 1 Rationale: Key term definition—usage rate 9-102 BEHAVIORAL SEGMENTATION BY USAGE Frequency marketing is a strategy that focuses on a. sometimes called frequency marketing. psychographic segmentation. b. service inventory. trial. is a strategy that focuses on usage rate. e. e.9-101 BEHAVIORAL SEGMENTATION BY USAGE KNOWLEDGE The quantity consumed or patronage—store visits—during a specific period is called a. b. geographic segmentation.

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

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

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

158 . d. c. b. there are fewer of them than any other user segment. Giving the light users an index of 100. their consumption percentage is higher than the percentage that they represent of the total users and non-users. For every $1. e. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users.67.00 spent by a light user in one of these restaurants in a month.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. the usage index is highest for that segment. 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. the segment is at the top of the chart. there are less of them than any other segment. heavy users are most important to a fast-food restaurant because a. each heavy user spends $4.

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

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

This basis of venue segmentation is a. psychographic. 9-119 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Which of the following is a basis used to segment U. geographic. d. demographic. and that are located in rural areas. c. suburban.9-117 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. income d. nature of good. a fertilizer manufacturer. small town or rural and is a geographic variable. 161 . 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. organizational markets include geographic. b.S.000 people. One of these devices is capable of generating energy equal to $2 million of natural gas per year. geographic b. The company believes its target market is businesses that use a lot of energy like its first customer. education Answer: a Page: 235 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-6 shows the segmentation bases for U. Answer: c Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: Population density includes whether the area is urban. psychographic c. buying condition. usage. 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. sells a $10 million device that converts manure into energy.S. needs e. e. organizational markets? a. and behavioral.

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

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

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

e. c. which products to be sold into groups. 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. make optimal decisions under conditions of uncertainty. e. 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. which product groupings to offer. determine which target market segments to select and which product groupings to offer. 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. 165 . d. which products to reposition. how to implement a harvesting strategy. how to implement the 80-20 rule. b. select representative samples of consumers for marketing research studies. d. relate the product life cycle to consumer demand. screen many new product ideas in order to select the one with best long-run market potential. c.

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

between-meal snack customers. e. students that live in an apartment. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”). e. e. c. assume the medium market (shown by a “2”) is twice the size of the small market. students that live in a dormitory. b. after-dinner snack. d. assume the medium market (shown by a “2”) is twice the size of the small market. 167 . 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. faculty or staff members. 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. students that are night commuters. The meal occasion (product grouping) that comprises the largest market is a. d. The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach a. between-meal snack.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. breakfast. dormitory customers. dinner customers. a flyer placed on a bulletin board in a dormitory or under the door of dormitory residents could promote the entire restaurant and several of its meals to dormitory customers. Similarly. b. Similarly. The other choices run vertically down the columns and correspond to operations/production synergies and efficiencies. c. For example. dinner. students that are day commuters. c. b. lunch. Answer: b Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: Totaling the meal columns vertically shows the “lunch” meal occasion to have the most “units” of sales (14) of any meal column. Answer: 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. 9-132 WENDY’S MARKET-PRODUCT GRID COMPREHENSION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. d. The largest potential market segment is for a. after-dinner snack customers. lunch customers. Assume the large market (shown by a “3”) is 3 times the size of the small market (shown by a “1”).

9-136 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size. b. faculty customers. e. who might be reached by this coupon that is intended to increase sales during the 2:00 PM to 4:30 PM time period. d. and compatibility with the organization’s objectives and resources. c.” This is a market segment. night commuter customers. 9-135 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. c. All of the above are criteria used for selecting a target market. expected growth. This is a “product” or “meal” in the market-product grid. day commuter customers. b. which is a horizontal row in Figure 9-8. cost of reaching the segment d.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. night commuter customers. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: The target here is potential 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. between-meal snack customers. e. competitive position. expected growth c. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Cars parked in student parking lots between 7:00 AM and 4:00 PM generally belong to day commuters. staff customers. Assume students who live in dormitories or apartments on or near the campus cannot use student parking lots. apartment customers. compatibility with the organization’s objectives and resources e. dinner customers. d. 168 . which is a vertical column in Figure 9-8. answer “c. dormitory customers. cost of reaching the segment. after-dinner snack customers. size of the market b.

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

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

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

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

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

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

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

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

Answer: d Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—differentiation positioning 9-162 DIFFERENTIATION POSITIONING To avoid cannibalization within company product lines. Differentiation positioning involves seeking a less competitive. lateral positioning. compete with competitors on similar product attributes in the same market. e. head-to-head positioning b. lateral positioning c. smaller market niche in which to locate a brand. 177 . consumer positioning e. differentiation positioning. repositioning. smaller market niche. compete with competitors on similar product attributes but in a different market. compete directly with competitors but emphasize unique product attributes. b. head-to-head positioning.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. c. cognitive positioning Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. e. firms often use a. 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. cognitive positioning. b. differentiation d. seek a less competitive. d. c. compete against other products of the same company. d. a. 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.

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

differentiation e. repositioning e. psychological c. which involves competing directly with competitors on similar product attributes in the same target market. compete with competitors using unique attributes. Heelys is practicing __________ positioning. In the sneaker business.9-166 DIFFERENTIATION POSITIONING APPLICATION Heelys sneakers come with an imbedded. compete with competitors on similar product attributes in the same market. 9-167 HEAD-TO-HEAD POSITIONING KNOWLEDGE An approach to positioning a new product in the market is __________ positioning. segmentation d. e. which involves seeking a smaller market niche that is less competitive in which to locate a brand. compete against other products of the same company. head-to-head Answer: e Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 9-168 HEAD-TO-HEAD POSITIONING Other Location: SG KNOWLEDGE Head-to-head positioning requires a product to a. c. Answer: b Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 179 . Heelys practices differentiation positioning. a. distinction d. perceptual b. and thereby reduce or avoid cannibalization. detachable wheel in the shoe’s heel. b. a. parallel market c. seek out its own market niche. 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. head-to-head b. compete with competitors on similar product attributes but in a different 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 . with respect to the geographic areas in which they are manufactured. database. a. d. c. Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes. indicating accessibility by consumers. normally in major metropolitan areas. consumer d. two-dimensional graph. head-to-head Answer: e Page: 244 LO: 5 LL: 3 AACSB: 3 Rationale: In the sneaker market.9-169 HEAD-TO-HEAD POSITIONING APPLICATION In the sneaker market. 9-170 PERCEPTUAL MAP KNOWLEDGE Marketers use perceptual maps as a means to display or graph in two dimensions the location of products or brands a. within selected retail outlets. c. distinction c. consumer map of likes and dislikes. as they are clustered by type of outlet. differentiation e. within distribution channels. Nike and Reebok practice head-to-head positioning. parallel market b. 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. e. which involves competing directly with competitors on similar product attributes in the same target market. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. three-dimensional cube. in the minds of consumers. b. d. pyramid design. e.

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

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

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

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

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

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

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

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

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

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

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

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

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

product differentiation relates to market segmentation. AND FORECASTING MARKETS SHORT ESSAY QUESTIONS 9-207 MARKET SEGMENTATION COMPREHENSION Define market segmentation. 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. where perhaps the same or similar target markets are more likely to buy the product differentiated as having greater reliability or lower price. it can contribute to increased revenues for the firm. to help consumers perceive the product as being different and better than competing products. In its broadest sense it involves a firm's using different marketing mix activities. 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. Differences may involve nonphysical features as well. Segmentation links needs to actions. Thus. In a narrower sense. Page: 226 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-208 PRODUCT DIFFERENTIATION What is product differentiation? How does it relate to market segmentation? How does it potentially improve a firm's revenues? Answer: Product differentiation is a strategy that has come to have two different but related meanings. such as product features and advertising. because clearly defined and different target markets have different needs that can be satisfied with different products of the same general type. As long as a new product does not take a significant amount of sales away from an existing product. tangible marketing actions the firm can take to satisfy those needs. Page: 226 LO: 1 LL: 2 AACSB: 3 194 .CHAPTER 9 SEGMENTING. POSITIONING. as the text points out in connection with Zappos. product differentiation involves a firm's selling two or more products with different features targeted to different market segments. Such needs and benefits must be related to specific. such as image or price.

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

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

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

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

Page: 244 LO: 5 LL: 2 AACSB: 3 199 . For example. 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. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. Marketing efforts can be streamlined with a focus on fewer segments. 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."). Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. To simplify product lines. Five criteria can be used to select the target segments.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. Answer: There are two major approaches to positioning a product. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. 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. (1) market size (2) expected growth (3) competitive position (4) cost of reaching the segment (5) compatibility with the organization’s objectives and resources Page: 238 . Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Dollar Rental Cars is positioned head-to-head with Avis and Hertz.

Page: 246 LO: 6 LL: 2 AACSB: 3 200 . this can be effective. For industrial products with few prospective buyers. Sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Salespeople can be unreliable forecasters—painting too rosy a picture if they are enthusiastic about a new product and too grim a forecast if their sales quota and future compensation are based on it. Page: 245 . Answer: Market potential is also known as industry potential.246 LO: 6 LL: 2 AACSB: 3 COMPREHENSION 9-225 SURVEYS OF KNOWLEDGEABLE GROUPS What are the two common groups surveyed to develop sales forecasts? Describe the information contained in the forecasts that result. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. companies obtain three types of data from consumers. 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. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers. Sales forecast is also known as company forecast.9-223 DATA NEEDED FOR PERCEPTUAL MAP COMPREHENSION What are the three types of data needed from consumers to develop a perceptual map? Answer: In determining a brand's position and the preferences of consumers. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time.

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

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