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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

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

qualified prospects. represent a large share of the entire market and have critical buying power. Market differentiation c. ultimate consumer e. market segment b. a. organizational buyers. have common needs and respond similarly to market actions. have potential for future growth and have potential for increased profit or ROI. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . 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. have different needs and have potential for future growth. ultimate consumers. e.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. b. Market diversification b. d. market segments. demographic cluster c. c. 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. Market segmentation d. its members must a. e. Market augmentation e. demographic clusters. a. Repositioning Answer: c Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-10 MARKET SEGMENTATION Other Location: SG KNOWLEDGE To be identified as a market segment. organizational buyer d. have different needs and respond similarly to market actions. d. b.

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

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

124 . market sectioning c. Answer: e Page: 227. market needs e. a. product based market development Answer: c Page: 226 . self-regulatory industry standards. b. a. Second. government regulations c. grouping people randomly in a market b. top-level management d. 9-1 LO: 1 LL: 2 AACSB: 3 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to an organization’s marketing program. 9-1 LO: 1 LL: 2 AACSB: 3 Rationale: Figure 9-1 illustrates how the process of segmenting and targeting markets links market needs to an organization’s marketing program. 9-19 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. Fig. top-level management. such needs and benefits must be related to specific marketing actions the organization can take.227 LO: 1 LL: 2 AACSB: 3 Rationale: Market segmentation first stresses the importance of grouping people or organizations in a market according to the similarity of their needs and the benefits they are looking for in making a purchase. d. grouping people according to similar needs d.9-18 MARKET SEGMENTATION COMPREHENSION Market segmentation stresses __________ and relating needs and benefits to specific marketing actions. the organization's marketing program. splitting people randomly between markets e. 9-20 MARKET SEGMENTATION COMPREHENSION The process of segmenting a market and selecting specific segments as targets is the link between the various buyers’ needs and a. controllable environmental factors. c. controllable environmental factors Answer: d Page: 227. government regulations. e. self-regulatory industry standards b. Fig.

strategic objectives d. In economist's terms. 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. d. customer needs e. the organization's marketing program c. sustainable. which includes price.9-21 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. it relates supply (__________) to demand (the customer needs). strategic objectives e. a. increase sales and profitability. Market segmentation relates the market needs or demand to the marketing program executed by the company. c. government regulations d. and place. b. In economist's terms. government regulations c. which includes price. 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. a. 9-22 MARKET SEGMENTATION APPLICATION Market segmentation is only a means to an end. tactical goals b. Market segmentation is only a means to an end: in economist's terms. are socially responsible. self-regulatory industry standards b. Market segmentation is only a means to an end: in economist's terms. Answer: a Page: 227 LO: 1 LL: 2 AACSB: 3 Rationale: A basic test of the usefulness of the segmentation process is whether it leads to tangible marketing actions that can increase sales and profitability. are legal. tactical goals Answer: b Page: 227 LO: 1 LL: 3 AACSB: 3 Rationale: Economists relate supply and demand through price and quantity. e. 125 . create innovation. it relates supply (the organization's marketing program) to demand (the customer needs). 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. product. promotion. market segmentation relates supply (the organization's marketing program) to demand (__________). promotion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

9-59

SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

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

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

d. Figure 9-3 lists the most common segmentation variables classified as demographic. usage rate d. gender c. socioeconomic characteristics d. MSA Answer: b Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Demographics are objective. c. and so on. usage segmentation. income e. age Answer: a Page: 231 LO: 3 LL: 3 AACSB: 3 Rationale: Western Canadians prefer country music much more than do Eastern Canadians. Western Canadians much prefer country music. education level. behavioral segmentation. measurable.9-80 GEOGRAPHIC SEGMENTATION APPLICATION Universal Concerts is planning on bringing a series of concerts to Canada next year. In general. 9-81 DEMOGRAPHIC SEGMENTATION KNOWLEDGE Segmentation which is based on some objective physical. geographic characteristics b. age. measurable. needs segmentation. This requires Universal Concerts to best segment its Canadian market according to __________ if it hopes to have a sold-out concert. b. demographic characteristics c. personality b. COMPREHENSION 147 . e. income. or other classification attribute of prospective customers is called a. such as gender. demographic segmentation. personality segmentation. so Universal is using geographic characteristics in deciding where to hold a successful country music concert. yet in Eastern Canada a country music event is very likely to have lots of empty seats. a. or other classification attribute among people. Answer: b Page: 231 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—demographic segmentation 9-82 DEMOGRAPHIC SEGMENTATION Which of the following is a consumer demographic variable? a. needs e.

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

the first question the telemarketer asks is whether the person answering the phone has a family. Because smaller households need to cook less food. A fast food hamburger restaurant is open for breakfast on Sunday mornings but not on weekdays.9-86 DEMOGRAPHIC SEGMENTATION APPLICATION When a telemarketer calls to sell a consumer life insurance. c. GE built a downsized microwave oven to hang under kitchen cabinets. usage b. life stage. GE downsized its microwave oven. psychographic Answer: c Page: 232 LO: 3 LL: 3 Rationale: Life stage is a demographic variable. socioeconomic d. a. Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Household size is a demographic customer characteristic. 9-88 DEMOGRAPHIC SEGMENTATION APPLICATION Which of the following statements demonstrates the formation of a segment based on household size? a. e. demographic c. Whether the prospect has a family indicates the use of which type of consumer segmentation variable by the telemarketer? a. 9-87 DEMOGRAPHIC SEGMENTATION AACSB: 3 APPLICATION The State of Alabama Board of Tourism ran a series of ads showing traditional families enjoying various attractions in the state. it appears the State of Alabama Board of Tourism has segmented the market using __________ variables. behavior c. Since the apparent target of these ads is traditional families. and restyled it to hang under cabinets. regional b. d. 149 . Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. b. psychographic Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Marital status. demographic d. and household size are demographic variables. geographic e. Campbell's makes spicier nacho cheese sauce for its distributors in Texas than it does in Maine. 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. buying situation e.

e. b. geographic segmentation.9-89 DEMOGRAPHIC SEGMENTATION APPLICATION At a Hallmark store you can find several different product lines of greeting cards. 9-90 PSYCHOGRAPHIC SEGMENTATION KNOWLEDGE Segmentation based on some subjective mental or emotional attributes. a type of psychographic segmentation. d. This is an example of __________ segmentation. psychographic segmentation. Claritas uses lifestyle segmentation. regional b. psychographic Answer: b Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Ethnicity is a demographic segmentation variable.” This type of consumer segmentation is called a. or needs of prospective customers. d. Mahogany. socioeconomic segmentation. Answer: a Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Psychographic segmentation is based on some subjective mental or emotional attributes (personality). Answer: a Page: 232 LO: 3 LL: 1 AACSB: 3 Rationale: Text term definition—psychographic segmentation 9-91 PSYCHOGRAPHIC SEGMENTATION COMPREHENSION Claritas’ lifestyle segmentation is based on the belief that “birds of a feather flock together. likely including Fresh Ink. or needs of prospective customers is called a. 150 . situational segmentation. and Tree of Life cards—all made by Hallmark for sale in its stores and intended to appeal to different target markets. The Mahogany line is designed to appeal to African-Americans. demographic c. behavioral segmentation. e. Maxine. geographic e. behavioral segmentation. psychographic segmentation. c. aspirations. Nature's Sketchbook. situational segmentation. Shoebox. socioeconomic segmentation. c. lifestyle d. aspirations (lifestyle). geographic segmentation. a. b.

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

behavioral segmentation e. such as a new product. or a distribution system. MicroFridge is using which type of segmentation basis? a. behavioral segmentation. The larger sets can be outfitted with surround sound at a higher price than the small set. However. Magnavox is using which type of segmentation variable in this example? a. Magnavox uses behavioral segmentation to guide the types of TVs it sells since different consumers have different benefits they seek in a TV set. refrigerator. such as a new product. such as a new product. 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. their dorm rooms are often woefully short of space. or a distribution system. The small set is much less expensive and allows the viewer to watch a DVD without extra equipment. MicroFridge understands this and markets a combination microwave. psychographic segmentation. an ad campaign. e. c. psychographic segmentation c. demographic segmentation b. geographic segmentation d. 152 . Answer: d Page: 232 LO: 3 LL: 2 AACSB: 3 Rationale: Understanding what features are important to different customers (behavioral segmentation) is a useful way to segment markets because it can lead directly to specific marketing actions. and freezer targeted to these students. psychographic segmentation c.9-95 BEHAVIORAL SEGMENTATION COMPREHENSION Segmentation based on what features are important to different customers is known as a. 9-97 BEHAVIORAL SEGMENTATION APPLICATION Magnavox sells its target markets many different types of TVs from flat screens to a 20” combination TV/DVD. or a distribution system. socioeconomic segmentation. b. socioeconomic segmentation Answer: d Page: 232 LO: 3 LL: 3 AACSB: 3 Rationale: Understanding what features are important to different customers (behavioral segmentation) is a useful way to segment markets because it can lead directly to specific marketing actions. 9-96 BEHAVIORAL SEGMENTATION COMPREHENSION College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late night snack. demographic segmentation. d. geographic segmentation d. an ad campaign. behavioral segmentation e. demographic segmentation b. geographic segmentation. an ad campaign.

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

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

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

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

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

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

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

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

suburban. organizational markets include geographic. This basis of venue segmentation is a. It most likely will use which of the following strategies to segment its market? behavioral and geographic number of employees and behavioral purchase location and purchase type NAICS code and geographic behavioral and NAICS code Answer: d Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: Renewable Energy would most likely use the NAICS code to locate other fertilizer manufacturers and geographic segmentation to find prospects in rural areas where there is a ready supply of manure. buying condition. needs e. nature of good. and behavioral. d. psychographic. income d. Answer: c Page: 235 LO: 3 LL: 3 AACSB: 3 Rationale: Population density includes whether the area is urban. geographic. and that are located in rural areas. The company believes its target market is businesses that use a lot of energy like its first customer. geographic b.S. sells a $10 million device that converts manure into energy. e. small town or rural and is a geographic variable. 9-118 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Australia-based Renewable Energy Ltd.S. c. Imagine that the agency decided the singer would not perform at venues located in small town communities that have less than 100.000 people. psychographic c. education Answer: a Page: 235 LO: 3 LL: 2 AACSB: 3 Rationale: Figure 9-6 shows the segmentation bases for U. a fertilizer manufacturer. 9-119 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Which of the following is a basis used to segment U. usage. 161 . b. organizational markets? a. One of these devices is capable of generating energy equal to $2 million of natural gas per year.9-117 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. demographic.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. compete with competitors on similar product attributes in the same market. 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. head-to-head positioning. differentiation d. head-to-head positioning b. 9-163 DIFFERENTIATION POSITIONING COMPREHENSION COMPREHENSION When McDonald’s introduced its low-fat McLean Deluxe hamburger it used __________ positioning to avoid direct competition with Wendy’s and Burger King. compete against other products of the same company. d. compete with competitors on similar product attributes but in a different market. lateral positioning. differentiation positioning. lateral positioning c. cognitive positioning. c. smaller market niche in which to locate a brand. b. cognitive positioning Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. compete directly with competitors but emphasize unique product attributes. smaller market niche. b. d. seek a less competitive. e. firms often use a. repositioning. e. 177 . c. a. consumer positioning e. Differentiation positioning involves seeking a less competitive. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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. jury of executive opinion c. a.000 for the quarter. 190 . survey of experts e. Based on this information. This is an example of a __________ forecast. salesforce survey d. survey of buyers' intentions d. 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. 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. the forecast is set at $4. a. jury of executive opinion b. statistical method e. technological c. jury of executive opinion c. judgments of individuals b.750. 9-199 SALESFORCE SURVEY FORECAST APPLICATION All the salespeople in the Southwest regional office are asked to provide estimates of anticipated sales revenues for the next quarter. survey of experts e. salesforce survey d. a.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. judgments of individuals b.

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

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

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

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

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

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. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . 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. which link market needs of customers to the organization’s marketing program. it is now much more likely to serve its clients more effectively with the new segmentation strategy. The potential for increased profit and ROI is replaced by the potential for serving client users more effectively. Answer: The five key steps are: (1) group potential buyers into segments (2) group products to be sold into categories (3) develop a market-product grid and estimate size of markets (4) select target markets (5) take marketing actions to reach target markets Page: 230.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. Fig. List these important factors in marketing planning. Compared to the food bank's previous policy. It now wants to give free food only to people who go hungry on a regular basis. List these five key steps. 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. This will be the market segment it targets.

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

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

239 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-221 MARKETING SYNERGIES/PRODUCT SYNERGIES Explain the difference between marketing synergies and product synergies. To simplify product lines. Page: 244 LO: 5 LL: 2 AACSB: 3 199 . Product synergies run vertically down the market-product grid and each column represents an opportunity for efficiency in research and development and production. For example. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. For example. Marketing efforts can be streamlined with a focus on fewer segments."). Answer: Marketing synergies run horizontally across a market-product grid and represent an opportunity for efficiency in terms of a market segment. Five criteria can be used to select the target segments.9-220 CRITERIA TO SELECT THE TARGET SEGMENTS What are the criteria used to select target markets? COMPREHENSION Answer: There are two different kinds of criteria in the market segmentation process: those used to (1) divide the market into segments and (2) actually pick the target segments. Differentiation positioning involves seeking a smaller market niche that is less competitive in which to locate a brand. Page: 242 LO: 4 LL: 2 AACSB: 3 COMPREHENSION 9-222 APPROACHES TO PRODUCT POSITIONING What are two approaches to product positioning? Give an example of each approach. reduce R & D and production expenses. a company might only wish to manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product. (1) market size (2) expected growth (3) competitive position (4) cost of reaching the segment (5) compatibility with the organization’s objectives and resources Page: 238 . Dollar Rental Cars is positioned head-to-head with Avis and Hertz. Answer: There are two major approaches to positioning a product. Curtis Mathis positions its televisions as a high quality product ("The most expensive television sets money can buy.

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. Page: 245 . For industrial products with few prospective buyers. companies obtain three types of data from consumers.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. Sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts.246 LO: 6 LL: 2 AACSB: 3 COMPREHENSION 9-225 SURVEYS OF KNOWLEDGEABLE GROUPS What are the two common groups surveyed to develop sales forecasts? Describe the information contained in the forecasts that result. Sales forecast is also known as company forecast. 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: 246 LO: 6 LL: 2 AACSB: 3 200 . Answer: Market potential is also known as industry potential. 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. They are: (1) identification of the important attributes for a product class (2) judgments of existing products or brands with respect to these attributes (3) ratings of an "ideal" product’s or brand's attributes Page: 244 LO: 5 LL: 2 AACSB: 3 COMPREHENSION 9-224 MARKET POTENTIAL AND SALES FORECAST Differentiate between market potential and sales forecast. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers. this can be effective.

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

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