CHAPTER 9

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

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

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

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

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

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

190,193,194,195,199,226

Video Case: Nokia (pp.249-251)

205

204,206

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

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

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

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

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

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

124,125,126,127

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

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

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

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

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

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

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

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

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

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CHAPTER OPENING EXAMPLE: ZAPPOS.COM

COMPREHENSION

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

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

119

aggregation marketing. use the same payment methods. use the same payment methods. market delineation. will pay attention to marketing messages. d. e. market segmentation. c. go shopping on a regular basis. Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 120 . d. psychographics.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. consumer differentiation. have common needs. d. c. respond similarly to a marketing action. 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. b. c. be responsive to marketing research. 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. be responsive to marketing research. e. e. pay attention to marketing messages. go shopping on a regular basis. b. b.

Answer: b Page: 226 LO: 1 LL: 1 AACSB: 3 Rationale: Key term definition—market segmentation 9-11 MARKET SEGMENTS KNOWLEDGE The phrase “relatively homogeneous collections of prospective buyers” is most descriptive of a. qualified prospects. demographic cluster c. Market differentiation c. Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments 9-12 MARKET SEGMENTS AACSB: 3 KNOWLEDGE Each __________ consists of people who are relatively similar to each other in terms of their consumption behavior. b. Market augmentation e. a. market segment b. demographic clusters. organizational buyer d. e. have common needs and respond similarly to market actions. ultimate consumers. Market diversification b. have different needs and have potential for future growth. d. b. ultimate consumer e. d. market segments. represent a large share of the entire market and have critical buying power. c. qualified prospect Answer: a Page: 226 LO: 1 LL: 1 Rationale: Key term definition—market segments AACSB: 3 121 . 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.9-9 MARKET SEGMENTATION KNOWLEDGE __________ involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marking action. e. have different needs and respond similarly to market actions. organizational buyers. c. have potential for future growth and have potential for increased profit or ROI. its members must a. Market segmentation d. a.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

mass customization. target marketing. b. how the 80/20 rule is implemented. b. customer relationship management b. 9-54 MASS CUSTOMIZATION APPLICATION Name Maker is an online company that sells high-end gift wrap printed with custom slogans. This is an example of a. c. This is an example of a. This made-to-order gift wrap is priced from $24. 9-55 CUSTOMER RELATIONSHIP MANAGEMENT KNOWLEDGE The essence of __________ is that each customer has unique needs and wants. Answer: a Page: 229 LO: 1 LL: 3 AACSB: 3 Rationale: Mass customization is tailoring goods or services to the tastes of individual customers at high volumes for a relatively low cost. mass production e. A customer can have gift wrap printed with the name of the person celebrating a birthday or the folks who are getting married. mass customization. a. synergy. e. c. e. and desires special tender loving care. repositioning.95 per 12-foot roll. target marketing d. synergy. synergy c. d. repositioning. 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.95 to $32.9-53 MASS CUSTOMIZATION APPLICATION Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. target marketing. how the 80/20 rule is implemented. d.

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

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SYNERGY

KNOWLEDGE

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

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

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STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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9-65STEPS IN SEGMENTING AND TARGETING MARKETS

COMPREHENSION

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

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

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

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

COMPREHENSION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

00 spent by a light user in one of these restaurants in a month.FIGURE 9-4 9-112 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION According to the data displayed in Figure 9-4. This is the reason for the emphasis in almost all marketing strategies on effective ways to reach these heavy users. b. the segment is at the top of the chart. d. heavy users are most important to a fast-food restaurant because a. 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. there are fewer of them than any other user segment. Giving the light users an index of 100. 158 . each heavy user spends $4.67. c. e. there are less of them than any other segment. their consumption percentage is higher than the percentage that they represent of the total users and non-users. the heavy users have an index of 467. the usage index is highest for that segment.

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

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. dry air where the operation is located serves as a cheap and effective airplane preservative. 9-116 ORGANIZATIONAL MARKET SEGMENTATION APPLICATION Evergreen Air Center in Marana. c. statistical area e. and behavioral bases.000 a month for its storage service. get around gatekeepers and reach buyers. c. d. segment a consumer market. forecast sales to a consumer market. and number of employees are all examples of ways to a. It shows that 11 percent of adult Americans don’t go to fast-food restaurants in a typical month and are really nonprospects—unlikely to ever patronize your restaurant. the information in Figure 9-5 suggests a. your restaurant is a market leader. b.9-114 SIMMONS FAST-FOOD MARKET RESEARCH COMPREHENSION As an owner of a Wendy’s fast food restaurant.4 percent of the Wendy’s bar shown as prospects may be worth detailed thought. demographic. 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. NAICS sector b. Burger King is closing in on your market share. is the world's biggest parking lot for unwanted commercial aircraft. Airlines pay from $750 to $5. 9-115 ORGANIZATIONAL MARKET SEGMENTATION COMPREHENSION Variables such as location. e. e. Arizona. But the 56. These adults use the product category (fast food) but do not go to Wendy’s. segment an organizational market. New menu items or promotional strategies may succeed in converting these prospects into users that patronize Wendy’s. McDonald’s is not a serious competitor to you. 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. nonprospects may be the best segment to go after to increase Wendy’s sales. the North American Industry Classification System (NAICS) code. d. promote buyer loyalty. The warm. 160 . number of locations c. new menu items or promotional strategies may succeed in converting the prospects into users that patronize Wendy’s. b. area density d. Which organizational segmentation variable might Evergreen use to segment the market? a.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

lateral positioning c. repositioning. Differentiation positioning involves seeking a less competitive. e. compete with competitors on similar product attributes in the same market.9-161 DIFFERENTIATION POSITIONING KNOWLEDGE Differentiation positioning requires a product to a. compete directly with competitors but emphasize unique product attributes. seek 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. compete with competitors on similar product attributes but in a different market. differentiation positioning. c. a. lateral positioning. firms often use a. smaller market niche in which to locate a brand. b. d. smaller market niche. differentiation d. head-to-head positioning. cognitive positioning. consumer positioning e. d. b. Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Companies use a differentiation positioning strategy among brands within their own product line to minimize cannibalization of a brand's sales or market share. e. compete against other products of the same company. cognitive positioning Answer: c Page: 244 LO: 5 LL: 2 AACSB: 3 Rationale: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market. 9-163 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. head-to-head positioning b. c. 177 .

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

compete with competitors using unique attributes. psychological c. which involves seeking a smaller market niche that is less competitive in which to locate a brand. and thereby reduce or avoid cannibalization. differentiation e. Answer: b Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 179 . a. a. In the sneaker business. compete with competitors on similar product attributes but in a different market. e. d. segmentation d. b. 9-167 HEAD-TO-HEAD POSITIONING KNOWLEDGE An approach to positioning a new product in the market is __________ positioning.9-166 DIFFERENTIATION POSITIONING APPLICATION Heelys sneakers come with an imbedded. repositioning e. head-to-head Answer: e Page: 244 LO: 5 LL: 1 AACSB: 3 Rationale: Text term definition—head-to-head positioning 9-168 HEAD-TO-HEAD POSITIONING Other Location: SG KNOWLEDGE Head-to-head positioning requires a product to a. head-to-head b. compete with competitors on similar product attributes in the same market. Heelys practices differentiation positioning. perceptual b. compete against other products of the same company. Heelys is practicing __________ positioning. which involves competing directly with competitors on similar product attributes in the same target market. detachable wheel in the shoe’s heel. c. distinction d. seek out its own market niche. parallel market c. 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.

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

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

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

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

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

industry potential. e. industry potential d. b. a. environmental forecast.9-181 MARKET POTENTIAL KNOWLEDGE The term market potential or industry potential refers to what important marketing factor? a. c. market share. the total of all products sold nationally c. the sum of products in a particular industry sold domestically under normal economic conditions d. d. the minimum anticipated sales in related industries not including federal. market share Answer: a Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—sales or company forecast 185 . and local taxes e. sales forecast b. state. 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. Delphi forecast c. the maximum total sales of a product by all firms to a segment under specified environmental conditions and marketing efforts of the firms Answer: e Page: 245 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—market or industry potential 9-182 SALES (COMPANY) FORECAST Another commonly used term for sales forecast is a. total industrial products sold worldwide b. market potential. market potential e. company forecast.

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

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

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

9-195 LOST-HORSE FORECAST APPLICATION The Ohio River Boatworks uses last year’s sales as a starting point to estimate next year’s sales of its boats. trend extrapolation c. technological forecast c. assesses whether they have a positive or negative impact. “We're increasing TV advertising. a. trend extrapolation d. The Ohio River Boatworks uses the __________ method of forecasting. she knew the person who was talking was planning to use a __________. lost-horse forecast b. 9-196 SURVEY OF BUYERS’INTENTIONS FORECAST KNOWLEDGE A __________ forecast asks prospective customers whether they are likely to buy a good or service during some future time period. a. 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. trend extrapolation d. Delphi e. So on balance.” a. I think sales will increase next year by 5 percent. technological forecast c. survey of buyers' intentions forecast Answer: e Page: 246 LO: 6 LL: 1 AACSB: 3 Rationale: Key term definition—survey of buyers’ intentions forecast 189 . and adding 3 new product models. Delphi forecast e. lists factors that could affect the forecast. lost-horse forecast b. and makes the final forecast. adding some sales representatives. survey of buyers' intentions forecast Answer: a Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future. technological b. But on the negative side.9-194 LOST-HORSE FORECAST APPLICATION When a marketing student overheard the following comments. lost-horse d. All those things are positive. Delphi forecast e. we're going to increase prices across the board by 20 percent.

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. This is an example of a __________ forecast.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.750. jury of executive opinion b. a. judgments of individuals b. survey of experts e. jury of executive opinion c. survey of buyers' intentions d.000 for the quarter. salesforce survey d. statistical method e. 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. a. 190 . technological c. survey of experts e. a. the forecast is set at $4. salesforce survey d. jury of executive opinion c. Based on this information. statistical Answer: c Page: 246 LO: 6 LL: 3 AACSB: 3 Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a coming period. 9-199 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.

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

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

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

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

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

The potential for increased profit and ROI is replaced by the potential for serving client users more effectively.9-212 STEPS IN SEGMENTING AND TARGETING MARKETS COMPREHENSION There are five key steps in segmenting and targeting markets. Page: 231 LO: 3 LL: 3 AACSB: 3 196 . It now wants to give free food only to people who go hungry on a regular basis. List these five key steps. This will be the market segment it targets. which link market needs of customers to the organization’s marketing program. 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. How will the evaluation of its market segment strategy differ from that used for a retail store? Answer: There is one difference between for-profit and not-for-profit criteria. Answer: The five criteria are: (1) potential for increased profit and ROI (2) similarity of needs of potential buyers within a segment (3) difference of needs of buyers among segments (4) potential of a marketing action to reach a segment (5) simplicity and cost of assigning potential buyers to segments Page: 231 LO: 3 LL: 2 AACSB: 3 APPLICATION 9-214 CRITERIA FOR FORMING SEGMENTS A nonprofit food bank was gathering and handing out food to anyone who requested it. List these important factors in marketing planning. it is now much more likely to serve its clients more effectively with the new segmentation strategy. Fig. Compared to the food bank's previous policy. 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.

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

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

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

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. Answer: Survey of buyers' intentions asks prospective customers whether they are likely to purchase a specific product during a specified future period of time. For industrial products with few prospective buyers.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. 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. Market potential refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. Salesforce survey forecast asks the firm's salespeople to estimate product sales during a specified future period of time since they are in close contact with their current and prospective customers. Page: 246 LO: 6 LL: 2 AACSB: 3 200 . 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. this can be effective. Page: 245 .9-223 DATA NEEDED FOR PERCEPTUAL MAP COMPREHENSION What are the three types of data needed from consumers to develop a perceptual map? Answer: In determining a brand's position and the preferences of consumers. Answer: Market potential is also known as industry potential. Sales forecast is also known as company forecast. companies obtain three types of data from consumers.

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

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