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Chapter 06 - Targeting Attractive Market Segments

Chapter 06 Targeting Attractive Market Segments Multiple Choice Questions

1. _____ is the process by which a market is divided into distinct s bsets o! c stomers with simi"ar needs and characteristics that "ead them to respond in simi"ar ways to a partic "ar prod ct o!!ering and marketing program. A. Market capita"i#ation $. Market segmentation C. $rand positioning %. Marketing mi& Answer' b (eve" o! %i!!ic "ty' )asy *age' 1+1

,. _____ entai"s designing prod ct o!!erings and marketing programs that can estab"ish an end ring competitive advantage in the target market by creating a ni- e brand image. or position. in the c stomer/s mind. A. $rand positioning $. Market segmentation C. $rand pre!erence %. $rand di" tion Answer' a (eve" o! %i!!ic "ty' )asy *age' 1+1 0. 1denti!y the scenario emphasi#ing the impact o! income on cons mer markets that are segmented demographica""y. A. MobServ. a mobi"e service provider. !oc sing attention on the 62-p" s segments to improve market penetration $. Cars3or4omen 1nc. "a nching an on"ine in!ormation service aimed at women to direct"y in!" ence eight o t o! ten vehic"e p rchases C. Cyan Mobi"es "a nching a s bsidiary to create an "tra-e&c" sive mobi"e te"ephone targeting c stomers who b y " & rio s prod cts %. 5"o5arments creating needs !or specia"i#ed goods and services d e to increase in the n mber o! men opting !or neon c"othing Answer' c (eve" o! %i!!ic "ty' 6ard *age' 1+2
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Chapter 06 - Targeting Attractive Market Segments

+. Caro"/s Trio. an psca"e retai" chain. stocks and se""s on"y Spanish. 5erman. and 3rench prod cts. Trio is an e&amp"e o! segmenting a market by _____. A. age $. ethnic origin C. ed cation

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Chapter 06 - Targeting Attractive Market Segments

%. income Answer' b (eve" o! %i!!ic "ty' )asy *age' 1+2

2. _____ divides the market according to the characteristics o! the b ying organi#ation sing attrib tes s ch as age o! !irm. !irm si#e. and ind stry a!!i"iation. A. Microsegmentation $. 5eographic segmentation C. $ehaviora" segmentation %. Macrosegmentation Answer' d (eve" o! %i!!ic "ty' )asy *age' 1+6

6. 1n _____. c stomers are gro ped by the characteristics o! the individ a"s who in!" ence the p rchasing decision. A. microsegmentation $. geographic segmentation C. demographic segmentation %. macrosegmentation Answer' a (eve" o! %i!!ic "ty' )asy *age' 1+6

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Chapter 06 - Targeting Attractive Market Segments

9. Advent re$ikes targets wi"derness enth siasts and introd ced specia" rob st bikes !or them. *ower%rink/s target market comprises tennis p"ayers who need to rep"enish water and sa"ts "ost thro gh perspiration. These are e&amp"es o! _____ segmentation that is based on target cons mers/ activities. A. demographic $. geographica" C. geodemographic %. behaviora" Answer' d (eve" o! %i!!ic "ty' Medi m *age' 1+9

:. 4hen cons mers eva" ate prod ct a"ternatives on the basis o! desired characteristics and how va" ab"e each characteristic is to them. it is re!erred to as _____. A. benchmarking $. prod ctivity parado& C. choice criteria %. parado& o! thri!t Answer' c (eve" o! %i!!ic "ty' )asy

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Chapter 06 - Targeting Attractive Market Segments

*age' 1+9 ;. 4hich o! the !o""owing statements is tr e o! behaviora" segmentation< A. 1t is se! " in assessing the si#e and market potentia" o! a market segment de!ined by a partic "ar trade area. $. 1t identi!ies a common p rchasing str ct re across a"" organi#ationa" markets. C. 1t is based on who the target c stomers are and where they "ive. %. 1t identi!ies new markets even among homogeneo s demographic gro ps when segmented by "i!esty"e. Answer' d (eve" o! %i!!ic "ty' Medi m *age' 1+: 10. 4hich o! the !o""owing is tr e o! princip"e-oriented cons mers< A. They are motivated by abstract and idea"i#ed criteria. $. They shop !or prod cts that demonstrate the cons mer=s s ccess. C. They are g ided by the need !or socia" or physica" activity and variety. %. They are motivated by risk-taking. Answer' a (eve" o! %i!!ic "ty' Medi m *age' 1+; 11. A>n? _____ cons mer shops !or prod cts that demonstrate the cons mer/s s ccess. A. princip"e-oriented $. action-oriented C. reso rce-oriented %. stat s-oriented Answer' d (eve" o! %i!!ic "ty' )asy *age' 1+; 1,. _____ is the degree to which b ying activity is centra"i#ed and in!" ences a b yer to consider a"" transactions with a given s pp"ier on a g"oba" basis. to emphasi#e cost savings. and to minimi#e risk. A. $rand parity $. * rchasing str ct re C. Choice criteria %. * rchasing in!" ence Answer' b (eve" o! %i!!ic "ty' )asy *age' 1+; 10. A>n? _____ re!ers to a rec rring b ying sit ation hand"ed on a ro tine basis. A. straight reb y $. o"d reb y
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Chapter 06 - Targeting Attractive Market Segments

C. modi!ied reb y %. new b y Answer' a (eve" o! %i!!ic "ty' )asy *age' 120

1+. 4hich o! the !o""owing b ying sit ations occ rs when some e"ement. s ch as price or de"ivery sched "es. has changed in a c"ient@s pp"ier re"ationship< A. A straight reb y $. An o"d reb y C. A modi!ied reb y %. A new b ying sit ation Answer' c (eve" o! %i!!ic "ty' )asy *age' 120 12. 4hat is the !irst step in constr cting a market attractivenessAcompetitive position matri& !or eva" ating potentia" target markets< A. Se"ecting market attractiveness and competitive position !actors $. Choosing segments to target and a""ocate reso rces C. Bating segments on each !actor and p"otting res "ts on matrices %. *roCecting ! t re position !or each segment Answer' a (eve" o! %i!!ic "ty' )asy *age' 12, 16. 1n which o! the !o""owing steps o! eva" ating potentia" target markets is the marketattractivenessAcompetitive-position matri& p"otted< A. Choosing segments to target and a""ocating reso rces $. *roCecting ! t re position !or each segment C. Bating segments on each !actor %. Assigning n merica" weights to the !actors Answer' c (eve" o! %i!!ic "ty' Medi m *age' 12+-122 19. $ased on the market attractivenessAcompetitive position matri&. which o! the !o""owing strategies sho "d a !irm consider when the market attractiveness is moderate and the competitive position is weak< A. 1t sho "d e&pand witho t high risk or minimi#e investment and !oc s on operations.
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Chapter 06 - Targeting Attractive Market Segments

$. 1t sho "d withdraw i! indications o! s stainab"e growth are "acking. C. 1t sho "d emphasi#e pro!itabi"ity by increasing prod ctivity. %. 1t sho "d seek ways to increase c rrent earnings witho t speeding market=s dec"ine. Answer' a (eve" o! %i!!ic "ty' 6ard

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Chapter 06 - Targeting Attractive Market Segments

*age' 129 1:. $ased on the market attractivenessAcompetitive position matri&. which o! the !o""owing strategies sho "d a !irm consider when the market attractiveness is "ow and the competitive position is strong< A. 1t sho "d b i"d se"ective"y on strengths and invest to improve position on"y in areas where risk is "ow. $. 1t sho "d emphasi#e pro!itabi"ity by increasing prod ctivity and b i"d p abi"ity to co nter competition. C. 1t sho "d protect c rrent strengths o! the !irm and seek ways to increase c rrent earnings witho t speeding market/s dec"ine. %. 1t sho "d invest more to grow at a ma&im m rate and concentrate on maintaining strength. Answer' c (eve" o! %i!!ic "ty' )asy *age' 129 1;. $ased on the market attractivenessAcompetitive position matri&. which o! the !o""owing strategies sho "d a !irm consider when the market attractiveness is high and the competitive position is strong< A. 1t sho "d protect e&isting strengths and invest to improve position on"y in areas where risk is "ow. $. 1t sho "d de!end its c rrent position and stop a"" ! rther investments. C. 1t sho "d se"" when possib"e to ma&imi#e cash va" e and c t !i&ed costs in the meantime. %. 1t sho "d invest more to grow at a ma&im m rate and concentrate on maintaining strengths. Answer' d (eve" o! %i!!ic "ty' )asy *age' 129 ,0. 4hich o! the !o""owing is tr e o! a mass-market strategy< A. 1t invo"ves serving one or more segments with c stomers seeking somewhat-specia"i#ed bene!its !rom a prod ct. $. 1t works on the princip"e that an ndi!!erentiated marketing strategy generates more sa"es than a di!!erentiated strategy. C. 1t invo"ved sing a di!!erentiated marketing strategy to decrease man !act ring and promotion costs. %. 1t invo"ves designing a sing"e prod ct-and-marketing program that wi"" appea" to the "argest n mber o! cons mers. Answer' d (eve" o! %i!!ic "ty' Medi m *age' 129 ,1. 4hich o! the !o""owing market strategies is o!ten !avored by sma""er companies to avoid direct con!rontations with "arger !irms whi"e b i"ding vo" me and share< A. A niche-market strategy $. A growth-market strategy
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Chapter 06 - Targeting Attractive Market Segments

C. A reso rce-market strategy %. A mass-market strategy Answer' b (eve" o! %i!!ic "ty' Medi m *age' 12: Essay Questions ,,. 4hat are the steps in a market segmentation process< Answer' There are three important steps in the market segmentation process' 1? 1denti!y a homogeneo s segment that di!!ers !rom other segments' The process sho "d identi!y one or more re"ative"y homogeneo s gro ps o! prospective b yers with regard to their wants and needs andAor their "ike"y responses to di!!erences in the e"ements o! the marketing mi&. ,? Speci!y criteria that de!ine the segment' The segmentation criteria sho "d meas re or describe the segments c"ear"y eno gh so that members can be readi"y identi!ied and accessed. in order !or the marketer to know whether a given prospective c stomer is or is not in the target market and in order to reach the prospective c stomer with advertising or other marketing comm nication messages. 0? %etermine segment si#e and potentia"' 3ina""y. the segmentation process sho "d determine the si#e and market potentia" o! each segment !or se in prioriti#ing which segments to p rs e. (eve" o! %i!!ic "ty' Medi m *age' 1+0@1++ ,0. $rie!"y disc ss the market attractiveness and competitive position !actors. Answer' Market Attractiveness 3actors' Assessing the attractiveness o! markets or market segments invo"ves determining the market/s si#e and growth rate and assessing vario s trends D demographic. socioc "t ra". economic. po"itica"A "ega". techno"ogica". and nat ra"Dthat in!" ence demand in that market. An even more critica" !actor in determining whether to enter a new market or market segment. however. is the degree to which nmet c stomer needs. or needs that are c rrent"y not being we"" served. can be identi!ied. 1n the absence o! nmet or nderserved needs. it is "ike"y to be di!!ic "t to win c stomer "oya"ty. regard"ess o! how "arge the market or how !ast it is growing. EMe-tooF prod cts o!ten !ace di!!ic "t going in today/s high"y competitive markets. Competitive *osition 3actors' Gnderstanding the attractiveness o! the ind stry in which one competes is a"so important. )ntering a segment in a way that wo "d p"ace the !irm in an nattractive ind stry or increase its e&pos re therein may not be wise. H! more immediate and sa"ient concern. however. is the degree to which the !irm/s proposed prod ct wi"" be
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Chapter 06 - Targeting Attractive Market Segments

s !!icient"y di!!erentiated !rom its competitors. given the critica" s ccess !actors and prod ct "i!e-cyc"e conditions a"ready preva"ent in the category. Simi"ar"y. decision makers need to know whether their !irm has or wi"" be ab"e to ac- ire the reso rces it wi"" takeDh man. !inancia". and otherwiseDto e!!ective"y compete in the new segment. Simp"y p t. most new goods or services need to be either better !rom a cons mer point o! view or cheaper than those they hope to rep"ace. )ntering a new market or market segment witho t a so rce o!

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Chapter 06 - Targeting Attractive Market Segments

s stainab"e competitive advantage is o!ten a trap. (eve" o! %i!!ic "ty' Medi m *age' 120

,+. )&p"ain niche-market and growth-market strategies with re"evant e&amp"es. Answer' 8iche-market strategy invo"ves serving one or more segments that. whi"e not the "argest. consist o! a s !!icient n mber o! c stomers seeking somewhat-specia"i#ed bene!its !rom a good or service. 3or e&amp"e. overa"" co!!ee cons mption is down in some co ntries. b t the sa"es o! go rmet co!!ees in co!!ee bars s ch as Starb cks or Co!!ee Bep b"ic have boomed in recent years. $ sinesses p rs ing a growth-market strategy o!ten target one or more !ast-growth segments. even tho gh these segments may not c rrent"y be very "arge. 1t is a strategy o!ten !avored by sma""er companies to avoid direct con!rontations with "arger !irms whi"e b i"ding vo" me and share. S ch a strategy s a""y re- ires strong BI% and marketing capabi"ities to identi!y and deve"op prod cts appea"ing to new"y emerging ser segments. p" s the reso rces to !inance rapid growth. The prob"em. however. is that !ast growth. i! s stained. attracts "arge competitors. This happened to App"e when 1$M entered the persona" comp ter ind stry. The goa" o! the ear"y entrant is to have deve"oped an end ring competitive position via its prod cts. service. distrib tion. and costs by the time competitors enter. (eve" o! %i!!ic "ty' 6ard *age' 129@12;

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