CHAPTER 9

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

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

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

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

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

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

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

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

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

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

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

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

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

124,125,126,127

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

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

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

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

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

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

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

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

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

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CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

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

zip code segmentation. 146 . NAICS code segmentation. perceptual Answer: d Page: 231 LO: 3 LL: 2 AACSB: 3 Rationale: Campbell’s is marketing a different sauce to different markets depending on where they are located.9-77 GEOGRAPHIC SEGMENTATION Segmentation based on where prospective customers live or work is called a. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. behavioral c. This is geographic segmentation. geographic segmentation. Answer: b Page: 231 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—geographic segmentation KNOWLEDGE 9-78 GEOGRAPHIC SEGMENTATION COMPREHENSION Campbell’s found that its canned nacho cheese sauce. e. Answer: a Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: KFC has discovered that to be successful in globalization it must be willing to adapt to the taste preferences of different regions. In China KFC sells a much spicier chicken the farther away its restaurants are from the coastal areas. d. c. b. Campbell’s plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants. regional segmentation. age b. c. geographic e. socioeconomic d. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays. was too hot for Americans in the East and not hot enough for those in the West and Southwest. b. 9-79 GEOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on region? a. Today. a. Campbell’s is using __________ segmentation. d. which could be heated and poured directly onto nacho chips. MSA segmentation. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the area. e. GE built a downsized microwave oven to hang under kitchen cabinets.

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

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

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

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

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

an ad campaign. b. psychographic segmentation c. d. such as a new product. Magnavox uses behavioral segmentation to guide the types of TVs it sells since different consumers have different benefits they seek in a TV set. geographic segmentation d. MicroFridge is using which type of segmentation basis? a. e. an ad campaign. Magnavox is using which type of segmentation variable in this example? a. and freezer targeted to these students. socioeconomic segmentation. demographic segmentation b. such as a new product. or a distribution system. 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. 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. refrigerator. The small set is much less expensive and allows the viewer to watch a DVD without extra equipment. psychographic segmentation c. or a distribution system. behavioral segmentation. The larger sets can be outfitted with surround sound at a higher price than the small set. demographic segmentation b. such as a new product. or a distribution system.9-95 BEHAVIORAL SEGMENTATION COMPREHENSION Segmentation based on what features are important to different customers is known as a. c. their dorm rooms are often woefully short of space. 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. geographic segmentation. 9-96 BEHAVIORAL SEGMENTATION COMPREHENSION College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late night snack. geographic segmentation d. behavioral segmentation e. 152 . an ad campaign. However. MicroFridge understands this and markets a combination microwave. 9-97 BEHAVIORAL SEGMENTATION APPLICATION Magnavox sells its target markets many different types of TVs from flat screens to a 20” combination TV/DVD. psychographic segmentation. demographic segmentation. behavioral segmentation e.

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

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

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

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

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

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

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

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

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

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

it is more profitable to define product groupings in terms of large market segment because it reduces manufacturing and marketing costs. market segmentation of prospects. market-product grid development. product differentiation table e. but when it has dozens or hundreds. If the firm has only one product or service. If the firm has only one product or service. growth-share matrix b. e. d. Answer: b Page: 236 LO: 3 LL: 3 AACSB: 3 Other Location: web Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. b. a. you decide that what you are really selling is memory keeping. 9-123 PRODUCT GROUPINGS APPLICATION Hallmark placed its scrapbook supplies.9-122 PRODUCT GROUPING APPLICATION In developing a marketing strategy for your Hallmark store. Memory-keeping is the meaningful category in this case. b. e. c. target market selection. taking marketing actions to reach target markets. This strategy is an example of a. cross-tabulation Answer: c Page: 237 LO: 4 LL: 1 AACSB: 3 Rationale: Key term definition—market-product grid 163 . Memory-keeping is the category to which customers can best relate in this case. product grouping. payoff table c. customers better relate to these groupings. and related supplies. d. scrapbooks. not photo albums. You decide to display all of these products together to inspire your customers to create and keep memories. this isn’t a problem. it is easier to estimate the industry sales for fewer market-product combinations. these must be grouped in some way so buyers can relate to them. this isn’t a problem. 9-124 MARKET-PRODUCT GRID KNOWLEDGE A __________ is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. these must be grouped in some way so buyers can relate to them. c. photo albums and related supplies into one product group because a. market-product grid d. 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. but when it has dozens or hundreds. competitors better relate to these groupings for benchmarking purposes. its competitors engage in no product groupings.

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

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

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

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

Assume students who live in dormitories or apartments on or near the campus cannot use student parking lots. cost of reaching the segment d. day commuter customers. c. dinner customers. compatibility with the organization’s objectives and resources e. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: The target here is potential between-meal snack customers. and compatibility with the organization’s objectives and resources. Answer: c Page: 238 LO: 4 LL: 3 AACSB: 3 Rationale: Cars parked in student parking lots between 7:00 AM and 4:00 PM generally belong to day commuters. d. size of the market b. e. expected growth. staff 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. cost of reaching the segment. This is a “product” or “meal” in the market-product grid. which is a vertical column in Figure 9-8. d. competitive position. b. dormitory customers. Sending out coupons for “10 percent off all purchases between 2:00 PM and 4:30 PM” during fall term would be especially targeted at potential a. which is a horizontal row in Figure 9-8. faculty customers. All of the above are criteria used for selecting a target market. who might be reached by this coupon that is intended to increase sales during the 2:00 PM to 4:30 PM time period. e. answer “c. night commuter customers. night commuter customers. between-meal snack customers. expected growth c. c. 168 . after-dinner snack customers.9-134 WENDY’S MARKET-PRODUCT GRID APPLICATION Figure 9-8 shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. b. Answer: e Page: 238 LO: 4 LL: 2 AACSB: 3 Rationale: There are five criteria used for selecting a target segment—market size.” This is a market segment. apartment customers. 9-136 SELECT TARGET SEGMENTS COMPREHENSION Which of the following is a criterion used for selecting a target segment? a. 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.

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

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

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

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

She wants to target local people who like the special blend of flavors found only in North Carolina barbecue sauce. 9-150 GOING ONLINE COMPREHENSION If you want to reach families in a particular income segment and believe the value of their home is a good indicator you would most likely go to a. Lewis decided to join Goodness Grows in North Carolina.com. the website of the local newspaper. In developing a marketing strategy to sell the sauce. zillow. taking marketing actions to reach target markets. taken marketing actions to reach target markets. forming products to be sold into groups.Q. c.B. Zillow is an online real estate service that answers the most important question. LexisNexis. Nike decided to concentrate on affluent teens rather than members of high school basketball teams. wsj. Lewis has just a. formed products to be sold into groups.com. a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops. e. 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. selecting target market segments to reach. d. b. This is an example of a. b. e. “How much is my home really worth?” 9-151 TAKING MARKETING ACTIONS APPLICATION Doris Lewis owns Lewis Edibles. 173 . formed prospective buyers into segments. Inc.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. d. Answer: d Page: 239 LO: 4 LL: 2 AACSB: 3 Rationale: Zillow provides “zillions” of data for the place(s) where your “pillow” is located. the neighborhood and look around there.. Sauce. d. c. forming prospective buyers into segments. a company that makes Tongue Tinglin' B. c. e. developing a market-product grid and estimating size of markets. b.com. developed a market-product grid and estimating size of markets. selected target market segments to reach. 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.

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

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

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

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

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

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

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

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

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

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

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

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

judgments of trade associations d. surveys of competitors c. technological methods e. and (3) statistical methods. judgments of the decision maker b. surveys of competitors c. technological methods e. statistical methods b. b. government document survey analysis Answer: a Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Three main sales forecasting techniques are often used: (1) judgments of the decision maker. technological method.9-184 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. 9-185 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. judgments of trade associations d. (2) surveys of knowledgeable groups. c. statistical method. government document survey analysis COMPREHENSION Answer: a Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: Three main sales forecasting techniques are often used: (1) judgments of the decision maker. (2) surveys of knowledgeable groups. 186 COMPREHENSION COMPREHENSION COMPREHENSION . 9-186 SALES FORECAST Which of the following is one of the main sales forecasting techniques? a. 9-187 JUDGMENTS OF THE DECISION MAKER The most commonly used forecasting technique is the a. 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. d. and (3) statistical methods. judgment of the decision maker. linear trend extrapolation method. (2) surveys of knowledgeable groups. survey of knowledgeable groups. e. and (3) statistical methods. judgments of trade associations d. 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. surveys of knowledgeable groups b. technological methods e. surveys of competitors 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. direct forecast d. and E are surveys of knowledgeable groups that are more time-consuming and costly than judgment forecasts. a. buildup forecast b. direct forecast c. b. d. lost-horse forecast d. survey of buyers intentions forecast.9-188 DIRECT FORECAST KNOWLEDGE A __________ is an estimate of the value to be forecast without any intervening steps. APPLICATION AACSB: 3 COMPREHENSION 187 . C. 9-190 DIRECT FORECAST The least complex sales forecasting technique is likely the a. e. Delphi forecast c. technological forecast b. trend extrapolation. Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: Alternative A is correct because a direct forecast is developed using the heuristic judgment of the decision maker. c. Delphi forecast. Alternatives B. field sales forecast Answer: b Page: 246 LO: 6 LL: 2 AACSB: 3 Rationale: The decision-maker makes the forecast without having any data to work with. 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. statistical forecast e. Delphi forecast e. direct forecast. sales force survey forecast.

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

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

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

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

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

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

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

which often entails high research.9-209 SINGLE PRODUCT. and adds to the organization’s sales revenues and profits. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-211 MASS CUSTOMIZATION Explain the difference between mass customization and build-to-order. Page: 229 LO: 1 LL: 2 AACSB: 3 195 . the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of distribution. 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. 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. and manufacturing expenses. In this case. Page: 228 LO: 1 LL: 2 AACSB: 3 COMPREHENSION 9-210 MULTIPLE PRODUCTS. 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. engineering. Although these expenses can be high. Build-to-order involves manufacturing a product only when there is an order from a customer. they are rarely as large as those for developing an entirely new product.

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. 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. Fig. It now wants to give free food only to people who go hungry on a regular basis. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . Answer: The five criteria are: (1) potential for increased profit and ROI (2) similarity of needs of potential buyers within a segment (3) difference of needs of buyers among segments (4) potential of a marketing action to reach a segment (5) simplicity and cost of assigning potential buyers to segments Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-214 CRITERIA FOR FORMING SEGMENTS A nonprofit food bank was gathering and handing out food to anyone who requested it. 9-2 LO: 2 LL: 2 AACSB: 3 COMPREHENSION 9-213 CRITERIA FOR FORMING SEGMENTS A marketing manager should develop segments for a market that meet five principal criteria. List these five key steps.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. This will be the market segment it targets. it is now much more likely to serve its clients more effectively with the new segmentation strategy. Compared to the food bank's previous policy. List these important factors in marketing planning.

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

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

Page: 242 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-222 APPROACHES TO PRODUCT POSITIONING What are two approaches to product positioning? Give an example of each approach. reduce R & D and production expenses. Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy. Dollar Rental Cars is positioned head-to-head with Avis and Hertz. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. Five criteria can be used to select the target segments. For example. Answer: There are two major approaches to positioning a product. Marketing efforts can be streamlined with a focus on fewer segments."). For example. a company might only wish to manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product.239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. To simplify product lines. Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. (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 .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. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand.

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

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

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