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Marketing: Real People, Real Choices

1) People's diverse interests and backgrounds divide them into numerous groups with
distinct needs and wants, a condition most accurately described as ________.
a. market aggregation
b. market positioning
c. economic aggregation
d. disintermediation
e. market fragmentation
Answer: e
Diff: 1
Type: MC
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
2) Marketers must balance the ________ of mass marketing with the ________ of
offering each individual customer exactly what he wants.
a. efficiency; effectiveness
b. scale; positioning
c. investment; cost
d. cost; investment
e. positioning; scale
Answer: a
Diff: 2
Type: MC
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
3) Which of the following statements about the steps in the target marketing process is
true?
a. The first step in the target marketing process is setting marketing objectives.
b. There are four steps in the target marketing process.
c. The second step in the target marketing process is the identification of all segmentation
variables.
d. The final step in the target marketing process is positioning.
e. The target marketing process is not related to positioning.
Answer: d
Diff: 2
Type: MC
Page Reference: 177
Topic: Target marketing Strategy
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Marketing: Real People, Real Choices

Skill: Concept
Objective: 6-1 Target marketing Strategy
4) What are the steps, in order, of the target marketing process?
a. segmentation, positioning, targeting
b. segmentation, targeting, and positioning
c. targeting, segmentation, and positioning
d. targeting, positioning, and segmentation
e. positioning, segmentation, and targeting
Answer: b
Diff: 2
Type: MC
Page Reference: 177
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
5) Which of the following is the process of dividing a larger market into smaller pieces
based on one or more meaningfully shared characteristics?
a. acculturation
b. segmentation
c. market fragmentation
d. market aggregation
e. positioning
Answer: b
Diff: 2
Type: MC
Page Reference: 178
Topic: Segmentation
Skill: Concept
Objective: 6-2 Segmentation
6) Age, ethnicity, place of residence, and social class are all examples of ________.
a. segmentation variables
b. positioning strategies
c. market fragment strategies
d. psychographics
e. targeting strategies
Answer: a
Diff: 2
Type: MC
Page Reference: 179
Topic: Segmentation
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Marketing: Real People, Real Choices

Skill: Concept
Objective: 6-2 Segmentation
7) Which of the following best defines demographics?
a. statistics that can be used to segment populations on the basis of what people do with a
product
b. statistics that can be used to segment populations on the basis of when people use a
product
c. qualitative data that can be used to explain why seemingly homogeneous consumer
groups do not share core characteristics
d. statistics that can be used to segment populations on the basis of shared attitudes,
opinions, and interests
e. statistics that measure observable aspects of a population
Answer: e
Diff: 2
Type: MC
Page Reference: 184
Topic: Segmentation
Skill: Concept
Objective: 6-2 Segmentation
8) Which of the following is NOT an example of a demographic segmentation variable?
a. lifestyle
b. income and social class
c. ethnicity
d. gender
e. age
Answer: a
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
9) Marketers often use generational marketing because members of a generation tend to
share the same ________.
a. lifestyle
b. income and social class
c. outlook and priorities
d. psychographics and usage patterns
e. geodemographics
Answer: c
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Marketing: Real People, Real Choices

Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
10) The group of Canadian consumers born between 1980 and 1995 are often called
________.
a. baby busters
b. the silent majority
c. Generation Y
d. tweens
e. Generation X
Answer: c
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
11) Which of the following is the most accurate generalization of members of Generation
Y?
a. Many people in this segment seem determined to have stable families after growing up
as latchkey children.
b. Members of this generation are currently responsible for the majority of new start-up
businesses in the United States.
c. Members of this generation were born in the years immediately following the end of
World War II.
d. Members of this generation are willing to spend money to stay young, healthy, and
attractive.
e. Members of this generation are more difficult to reach through television advertising
than members of older generations are.
Answer: e
Diff: 2
Type: MC
Page Reference: 187
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
12) Which generation was referred to as "busters" and was thought of as slackers who are
cynical about marketing?
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Marketing: Real People, Real Choices

a. Generation Y
b. Generation X
c. Baby boomers
d. Millenial
e. Generation I
Answer: b
Diff: 2
Type: MC
Page Reference: 187
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
13) The group of Canadian consumers born between 1967 and 1979 are called ________.
a. baby boomers
b. the silent majority
c. Generation Y
d. tweens
e. Generation X
Answer: e
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
14) Baby boomers ________.
a. were born between 1965 and 1966
b. are currently in their 30s and 40s
c. are important to marketers because of the size and wealth of the segment
d. are 65 or older
e. are the parents of Generation X, not Generation Y
Answer: c
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
15) ________ is a term for men who are keenly interested in fashion, home design,
gourmet cooking, and personal care.
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Marketing: Real People, Real Choices

a. Tween
b. Buster
c. Metrosexual
d. Bachelor
e. Slacker
Answer: c
Diff: 1
Type: MC
Page Reference: 185
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
16) The supermarket sells boxes of pink diapers and blue diapers. This is an example of
segmenting by ________.
a. gender
b. age
c. ethnicity
d. social class
e. geocoding
Answer: a
Diff: 2
Type: MC
Page Reference: 185
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
17) Which of the following is a true statement about trends related to gender
segmentation?
a. The education and income gap between men and women has closed in the latest
recession.
b. In the recent recession, women held about three in four of the jobs that were lost.
c. Men are now increasingly likely to marry women with more education and income
than they have.
d. In recent decades, the economic gains of marriage have been greater for women than
men.
e. Women are now increasingly likely to marry men with more education and income
than they have.
Answer: c
Diff: 2
Type: MC
Page Reference: 185
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Marketing: Real People, Real Choices

Topic: Segment by Demographics


Skill: Concept
Objective: 6-2 Segmentation
18) Which of the following best explains why marketers do not consider social class
segments as strictly as they once did?
a. Many consumers buy according to the social class image they wish to portray rather
than according to where they actually fall in the social class framework.
b. Due to the Great Recession, members of the upper class have become members of the
middle class, and members of the middle class have become members of the lower class.
c. Data related to social class is more complicated and difficult to obtain and analyze than
it once was.
d. Social class in the Canada is more related to education and family history than to
wealth.
e. Members of the upper and middle classes are unlikely to be attracted to any products
marketed toward members of the lower classes.
Answer: a
Diff: 2
Type: MC
Page Reference: 189
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
19) French Canadians,Italian Canadians, and Asian Canadians are all examples of
________ demographic segments.
a. life cycle
b. psychographic
c. ethnicity
d. social class
e. geocoding
Answer: c
Diff: 2
Type: MC
Page Reference: 189
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
20) Which statement is NOT true about the French Canadian segment?
a. The French Canadian segment is becoming a less important segment to marketers.
b. The French Canadian segment is the second largest ethnic market in Canada.
c. French Canadians have an identity of their own.
d. French Canadians have a more regional than national focus.
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Marketing: Real People, Real Choices

e. Most French Canadians live in Quebec.


Answer: a
Diff: 2
Type: MC
Page Reference: 189
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
21) The Chinese Canadian segment of the population ________.
a. is the largest ethnic market segment
b. does not yet receive significant attention from marketers
c. has declined in the last 10 years
d. is the fastest growing minority group in Canada
e. is too geographically dispersed to form a meaningful market segment
Answer: d
Diff: 2
Type: MC
Page Reference: 190
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
22) The segmentation technique that combines geography with demographics is
called_____________________.
a. geodemography
b. cultural diversity
c. ethnic segmentation
d. psychography
e. social networking
Answer: a
Diff: 1
Type: MC
Page Reference: 191
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
23) Your firm has decided to localize its products and services to meet local market
demands. A good approach to use would be ________ segmentation.
a. geodemographic
b. psychographic
c. usage
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Marketing: Real People, Real Choices

d. positioning
e. social class
Answer: a
Diff: 1
Type: MC
Page Reference: 191
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
24) Which of the following is a segmentation technique that combines geography with
demographics?
a. geocoding
b. geodemography
c. geodiversity
d. regional generation
e. psychographics
Answer: b
Diff: 1
Type: MC
Page Reference: 191
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
25) Companies can customize offerings by ________ so that people who live in certain
area wil receive them and others will not.
a. Postal code
b. geodemography
c. geodiversity
d. psychographics
e. usage
Answer: a
Diff: 1
Type: MC
Page Reference: 191
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
26) Which of the following most accurately describes PSYTE?
a. a method of removing heterogeneous variables from a target market
b. a method of data mining used to implement market development strategies
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Marketing: Real People, Real Choices

c. a database that classifies the Canadian consumers into 60 clusters based on postal code
and demographic information
d. a database that classifies the international population into segments based on
demographic and geographic characteristics
e. a positioning strategy used in the introduction of new consumer products
Answer: c
Diff: 2
Type: MC
Page Reference: 191
Topic: Segment by Demographics
Skill: Concept
Objective: 6-2 Segmentation
27) ________ variables segment markets in terms of shared activities, interests, and
opinions.
a. Demographic
b. Ethnographic
c. Geodemographic
d. Socioeconomic
e. Psychographic
Answer: e
Diff: 1
Type: MC
Page Reference: 181
Topic: Segment by Psychographics
Skill: Concept
Objective: 6-2 Segmentation
28) The division of buyers into groups based on lifestyle or personality characteristics is
________ segmentation.
a. behavioral
b. psychographic
c. values
d. demographic
e. needs
Answer: b
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by Psychographics
Skill: Concept
Objective: 6-2 Segmentation

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Marketing: Real People, Real Choices

29) ________ is a well-known system based on psychological traits that correlate with
consumer behavior; it divides the entire U.S. population into segments and then sells
pieces of this information to clients for specific strategic applications.
a. VALS
b. Decitica
c. AIO
d. PRIZM
e. NAICS
Answer: a
Diff: 2
Type: MC
Page Reference: 183
Topic: Segment by Psychographics
Skill: Concept
Objective: 6-2 Segmentation
30) Which of the following most accurately describes VALS?
a. a system used for psychographic segmentation
b. a database of people who have purchased similar products
c. a strategy for implementing geodemographic segmentation
d. a method of confirming that a chosen target market is representative of the ideal
market segment
e. a method of removing heterogeneous variables from a target market
Answer: a
Diff: 2
Type: MC
Page Reference: 183
Topic: Segment by Psychographics
Skill: Concept
Objective: 6-2 Segmentation
31) Which three primary consumer motivations are key to the VALS system?
a. faith, family, and finances
b. age, gender, and ethnicity
c. place of usage, time of usage, and frequency of usage
d. ideals, achievement, and self-expression
e. income, education, and geographic location
Answer: d
Diff: 2
Type: MC
Page Reference: 183
Topic: Segment by Psychographics
Skill: Concept
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Marketing: Real People, Real Choices

Objective: 6-2 Segmentation


32) ________ segmentation variables classify consumers on the basis of how they act
toward, feel about, or use a product.
a. Demographic
b. Behavioral
c. Geodemographic
d. Socioeconomic
e. Psychographic
Answer: b
Diff: 1
Type: MC
Page Reference: 179
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
33) Markets can be segmented into group of nonusers, ex-users, potential users, heavy
users, and moderate users of a product. This is an example of ________ segmentation.
a. behavioral
b. occasion
c. demographic
d. psychographic
e. geocoding
Answer: a
Diff: 2
Type: MC
Page Reference: 180
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
34) The 80/20 rule is most directly related to ________ segmentation.
a. demographic
b. behavioral
c. geodemographic
d. socioeconomic
e. psychographic
Answer: b
Diff: 2
Type: MC
Page Reference: 180
Topic: Segment by Behaviour
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Marketing: Real People, Real Choices

Skill: Concept
Objective: 6-2 Segmentation
35) According to the long tail approach to selling, ________.
a. the Internet provides fewer opportunities for segmenting markets
b. companies can make the most money by focusing on the "bottom-of-pyramid" market
c. companies should focus on the 20 percent of customers who purchase the greatest
volume of their product
d. companies should focus on the 80 percent of customers who purchase the greatest
volume of their product
e. companies can make money by selling small amounts of items that only a few people
want
Answer: e
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
36) Which of the following is the best example of the long tail approach to selling?
a. Nearly 20% of the videos delivered by Netflix are older or obscure titles from its vast
collection of videos.
b. Kraft Foods focuses on the 20% of U.S. households that purchase 80% of the Miracle
Whip the company markets.
c. Barnes & Noble stocks the most popular books and magazines in its retail stores.
d. Google lets advertisers target certain ads to certain segments of search engine users.
e. Staples segments its business-to-business markets based on sales volume.
Answer: a
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
37) Which type of segmentation can center on the use of the word when, such as when
consumers get the idea to buy, when they actually make their purchase, or when they use
the purchased item?
a. behavioral
b. psychographic
c. needs
d. demographic
e. geocoding
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Marketing: Real People, Real Choices

Answer: a
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
38) During tax season, you're likely to see more TurboTax ads on Google pages, even if
you aren't searching for tax software. This is an example of ________ segmentation.
a. geodemographic
b. psychographic
c. usage occasion
d. demographic
e. geocoding
Answer: c
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
39) Business-to-business marketers who look at the size of firms in terms of total sales or
number of employees are using ________ to segment their market.
a. Industrial psychographics
b. organizational demographics
c. organizational culture
d. behavior variables
e. usage variable
Answer: b
Diff: 2
Type: MC
Page Reference: 192
Topic: Segment Business to Business Markets
Skill: Concept
Objective: 6-2 Segmentation
40) Which of the following is the process of evaluating and selecting the most viable
market segment to enter?
a. segmentation
b. differentiation
c. targeting
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Marketing: Real People, Real Choices

d. market mixing
e. positioning
Answer: c
Diff: 2
Type: MC
Page Reference: 193
Topic: Targeting
Skill: Concept
Objective: 6-3 Targeting
41) A viable target market should ________.
a. have needs that can adequately be served by the marketer
b. not be reachable by other organizations
c. have the same needs as similar-sized groups
d. be the most profitable possible target market
e. be the largest possible market
Answer: a
Diff: 2
Type: MC
Page Reference: 193
Topic: Targeting
Skill: Concept
Objective: 6-3 Targeting
42) When the size and purchasing power of a target segment can be determined, it
possesses the requirement of having ________.
a. Market potential
b. accessibility
c. Substantial money
d. differentiability
e. profitability
Answer: a
Diff: 2
Type: MC
Page Reference: 193
Topic: Targeting
Skill: Concept
Objective: 6-3 Targeting
43) To evaluate the different target segments your company is considering, you would
look at all of the following factors EXCEPT which one?
a. segment size
b. segment growth
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Marketing: Real People, Real Choices

c. segment reachability
d. company culture
e. company resources
Answer: d
Diff: 3
Type: MC
Page Reference: 193
Topic: Evaluate Market segments
Skill: Concept
Objective: 6-3 Targeting
44) A(n)________ would probably include customer demographics, location, lifestyle
information, and a description of how frequently the customer buys the product.
a. geocode
b. NAICS classification
c. segment profile
d. internal market audit
e. customer guide
Answer: c
Diff: 2
Type: MC
Page Reference: 194
Topic: Develop segment profile
Skill: Concept
Objective: 6-3 Targeting
45) A company that uses a(n)________ targeting strategy is appealing to a broad
spectrum of people.
a. fragmented
b. undifferentiated
c. concentrated
d. differentiated
e. customized
Answer: b
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
46) Mass marketers such as Walmart often ignore market segment differences and target
the whole market with one offer. What is this approach to targeting?
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Marketing: Real People, Real Choices

a. undifferentiated targeting
b. differentiated targeting
c. target marketing
d. concentrated targeting
e. mass customization
Answer: a
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
47) Which of the following best explains why a company would adopt an undifferentiated
targeting strategy when there is so much evidence of the benefits of a differentiated
strategy?
a. to more efficiently focus on its CRM strategy
b. to remove the need for disintermediation
c. to move a product to the next stage of its product life cycle
d. to take advantage of economies of scale
e. to reach the underserved "bottom-of-pyramid" consumers
Answer: d
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
48) Using a ________ targeting strategy, a company develops one or more products for
each of several customer groups with different product needs.
a. fragmented
b. homogeneous
c. custom
d. differentiated
e. mass customization
Answer: d
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
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Marketing: Real People, Real Choices

49) When a firm offers one or more products to a single segment, it is using a ________
strategy.
a. fragmented
b. homogeneous
c. custom marketing
d. mass customization
e. concentrated targeting
Answer: e
Diff: 1
Type: MC
Page Reference: 196
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
50) An industrial manufacturer that works with one or a few large clients and develops
products that only these clients will use is most likely to implement a(n)________
strategy.
a. undifferentiated targeting
b. homogeneous
c. custom marketing
d. bottom-of-pyramid
e. differentiated targeting
Answer: c
Diff: 2
Type: MC
Page Reference: 198
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
51) Which of the following is the narrowest strategy?
a. undifferentiated targeting
b. custom marketing
c. differentiated targeting
d. concentrated targeting
e. mass marketing
Answer: b
Diff: 3
Type: MC
Page Reference: 198
Topic: Choose a Targeting strategy
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Marketing: Real People, Real Choices

Skill: Concept
Objective: 6-3 Targeting
52) Using ________, a company modifies a basic good or service to meet the needs of a
specific individual customer.
a. undifferentiated targeting
b. positioning
c. custom marketing
d. Custom marketing strategy
e. differentiated targeting
Answer: d
Diff: 2
Type: MC
Page Reference: 198
Topic: Choose a Targeting strategy
Skill: Concept
Objective: 6-3 Targeting
53) ________ means developing a marketing strategy aimed at influencing how a
particular market segment perceives a good or service in comparison to the competition.
a. Concentrated targeting
b. Positioning
c. Benefit segmentation
d. Mass customization
e. Customerization
Answer: b
Diff: 1
Type: MC
Page Reference: 199
Topic: Positioning
Skill: Concept
Objective: 6-4 Positioning
54) A product's position is based on important attributes as perceived by ________.
a. suppliers
b. competitors
c. market conditions
d. target consumers
e. resellers
Answer: d
Diff: 1
Type: MC
Page Reference: 199
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Marketing: Real People, Real Choices

Topic: Positioning
Skill: Concept
Objective: 6-4 Positioning
55) Which of the listed choices is NOT a positioning task?
a. identifying a set of possible competitive advantages
b. surveying frequent uses of the product
c. analyzing competitors' positions
d. finalizing the marketing mix
e. evaluating responses to the marketing mix
Answer: b
Diff: 3
Type: MC
Page Reference: 199-205
Topic: Positioning
Skill: Concept
Objective: 6-4 Positioning
56) The first step in developing a positioning strategy is to ________.
a. set the marketing communications budget
b. identify segmentation variables
c. Determine the strategic orientation
d. describe a product with a competitive advantage
e. create target markets
Answer: c
Diff: 2
Type: MC
Page Reference: 199
Topic: Steps in Positioning
Skill: Concept
Objective: 6-4 Positioning
57) Innovation, unique product features, and Quality are all examples of ________.
a. brand personalities
b. brand positions
c. perceptual maps
d. Product leadership strategy
e. customer touchpoints
Answer: d
Diff: 2
Type: MC
Page Reference: 199
Topic: Steps in Positioning
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Marketing: Real People, Real Choices

Skill: Concept
Objective: 6-4 Positioning
58) Once a(n)________ is set, the next step in positioning is for marketers to finalize the
marketing mix.
a. segmentation variable
b. positioning strategy
c. demographic strategy
d. customer relationship management system
e. concentrated target
Answer: b
Diff: 2
Type: MC
Page Reference: 207
Topic: Implementing the Positioning Strategy
Skill: Concept
Objective: 6-4 Positioning
59) A(n)________ is a distinct image that captures the character and benefits of a good or
service.
a. perceptual map
b. target market
c. brand personality
d. segment profile
e. trade promotion
Answer: c
Diff: 1
Type: MC
Page Reference: 205
Topic: Brand Personality
Skill: Concept
Objective: 6-4 Positioning
60) A perceptual map is used to ________.
a. compare and contrast consumer psychographic segments
b. create consumer cross-tabulations for marketing research
c. locate consumers within a primary metropolitan statistical area (PMSA)
d. determine how consumers position products in relation to one another
e. identify the critical stage of the targeting process for the marketer
Answer: d
Diff: 2
Type: MC
Page Reference: 202
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Topic: Differentiation
Skill: Concept
Objective: 6-4 Positioning
61) Which of the following is true of perceptual maps?
a. They are only used during the new product development process.
b. They are the most effective method for predicting product success.
c. They identify consumer shopping preferences in terms of retail and nonretail locations.
d. They are not useful in business-to-business marketing.
e. They cannot be created without consumer research.
Answer: e
Diff: 2
Type: MC
Page Reference: 202
Topic: Differentiation
Skill: Concept
Objective: 6-4 Positioning
62) CRM stands for ________.
a. consumer relationship marketing
b. consumer retention management
c. customer relationship management
d. customer retention marketing
e. consumer response management
Answer: c
Diff: 1
Type: MC
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
63) A company's first step in customer relationship management should be to ________.
a. rank its customers in terms of sales volume
b. identify customers that cost the company money
c. identify types of transactions and determine which will be abandoned
d. identify customers and get to know them in as much detail as possible
e. determine which aspect of the product will be customized to meet the individual needs
of its customers
Answer: d
Diff: 2
Type: MC
Page Reference: 208
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Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
64) Many marketing experts advocate ________ programs that allow a company to talk
to individual customers and adjust elements of the marketing mix to satisfy the specific
needs of each customer.
a. customer relationship management
b. psychographic segmentation
c. transactional management
d. B2B marketing
e. C2C marketing
Answer: a
Diff: 1
Type: MC
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
65) In one-to-one marketing, after a marketer has identified customers and knows them in
as much detail as possible, the next step is for the marketer to ________.
a. interact with the customers and find ways to improve cost efficiency
b. make efficiency of interactions with customers the priority
c. differentiate these customers in terms of both their needs and their value to the
company
d. customize some aspects of the products or services offered to each customer
e. implement a mass customization program
Answer: c
Diff: 2
Type: MC
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
66) Which of the following statements about customer relationship management (CRM)
programs is true?
a. The success of a CRM program relies on its use of mass communication channels.
b. CRM programs include information gathered from each customer touchpoint.
c. Internet technology is a barrier to the successful implementation of CRM programs.
d. To succeed, all companies should engage in CRM every time they interact with a
customer.
e. Only consumer marketers can benefit from the use of CRM programs.
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Answer: b
Diff: 3
Type: MC
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
67) Which of the following is NOT a focus of customer relationship management?
a. customer prioritization
b. share of customer
c. lifetime value of the customer
d. customer equity
e. undifferentiated targeting
Answer: e
Diff: 2
Type: MC
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 Explain CRM
68) Companies that successfully practice customer relationship management measure
success by ________.
a. share of market and market growth rate
b. business potential and industry potential
c. share of customer and lifetime value of the customer
d. PRIZM and VALS2
e. cost of customer and duration of relationship with customer
Answer: c
Diff: 2
Type: MC
Page Reference: 209-210
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
69) CRM firms focus on increasing their ________, not share of market.
a. share of profit
b. share of audience
c. share of segment
d. share of usage
e. share of customers
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Answer: e
Diff: 2
Type: MC
Page Reference: 209-210
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
70) The ________ is the potential profit generated by a single customer's purchase of a
firm's products over the customer's lifetime.
a. lifetime value of a customer
b. priority of a customer
c. segmentation of a customer
d. share of a customer
e. equity of a customer
Answer: a
Diff: 2
Type: MC
Page Reference: 210
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
71) Which of the following statements about the lifetime value of a customer is true?
a. CRM helps companies identify their customers' lifetime value.
b. All customers have the same lifetime value.
c. A customer's lifetime value is easy to calculate.
d. A company can either increase customer share or a customer's lifetime value, but not
both.
e. The value of the customer is related to the value of the brand.
Answer: a
Diff: 2
Type: MC
Page Reference: 210
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
72) ________ is the financial value of a customer throughout the lifetime of the customer
relationship.
a. Share of customer
b. The customer perceptual map
c. CRM
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d. Customer equity
e. The 80/20 rule
Answer: d
Diff: 1
Type: MC
Page Reference: 210
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
73) An increasing number of companies are considering their relationships with
customers as financial assets. Such firms measure success by calculating the value of
their ________.
a. CRM
b. VALS 2
c. brand personality
d. customer equity
e. positioning
Answer: d
Diff: 2
Type: MC
Page Reference: 211
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
74) To determine ________, firms compare the investments they make in acquiring and
retaining customers to the financial return on those investments.
a. segmentation
b. share of customer
c. brand personality
d. customer equity
e. positioning
Answer: d
Diff: 2
Type: MC
Page Reference: 211
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
75) The owner of a pet grooming salon wants to calculate customer equity. Which of the
following would be a step the owner of this pet grooming salon should complete?
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a. Compare investments made by the salon owner in acquiring the customer to the total
amount of purchases made by the customer.
b. Compare investments made by the salon owner to retain this customer to the total
amount of taxes the salon owner pays.
c. Ask the customer if she is planning on getting any new pets.
d. Investigate how many other pet grooming salons are within five miles to determine the
likelihood of this pet owner returning to this salon.
e. Determine the age of the pet to estimate how much longer this customer may need the
services of the salon.
Answer: a
Diff: 2
Type: MC
Page Reference: 211
Topic: Characteristics of CRM
Skill: Concept
Objective: 6-5 Explain CRM
76) Some people want healthy cereal that will help them lose weight or possibly prevent
certain kinds of cancer. Some want presweetened cereal. Some want fruits and nuts in
their cereal. Some people want whole-wheat cereal while others want rice cereal. There
are some who like hot cereal and others who like to eat their cereal right out of the box.
The diversity of consumers for cereal is an example of ________.
a. market aggregation
b. market similitude
c. economic aggregation
d. disintermediation
e. market fragmentation
Answer: e
Diff: 2
Type: MC
Page Reference: 176
Topic: Target marketing Strategy
Skill: Application
Objective: 6-1 Target marketing Strategy
77) Demographic variables are so frequently used in market segmentation because they
________.
a. create smaller segments than other methods do
b. create more easily reached segments than other methods do
c. do not involve stereotypes
d. are easy to measure in comparison to many other methods
e. involve fewer attributes to consider than other methods do
Answer: d
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Diff: 3
Type: MC
Page Reference: 184
Topic: Segment by demographics
Skill: Concept
Objective: 6-2 Segmentation
78) In developing a new shoe, Reebok targeted the youth market. It used ________
segmentation to define its target market.
a. lifestyle
b. behavioral
c. socioeconomic
d. demographic
e. psychographic
Answer: d
Diff: 2
Type: MC
Page Reference: 184
Topic: Segment by demographics
Skill: Application
Objective: 6-2 Segmentation
79) A retailer that wanted to target prospective grooms between the ages of 21 and 40
who are within six months of their marriage is using ________ segmentation to define its
target market.
a. lifestyle
b. behavioral
c. socioeconomic
d. demographic
e. ethnicity
Answer: d
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by demographics
Skill: Application
Objective: 6-2 Segmentation
80) When many men in the baby boomer segment started getting gray hair, they were
reluctant to use hair dyes made for women even though they were just as eager as women
to fight the aging process. To address this reluctance, hair care product manufacturers
introduced hair dying systems for men to use on their head and their facial hair. The hair
care product manufacturers used ________ segmentation to define their target markets.
a. lifestyle
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b. behavioral
c. socioeconomic
d. demographic
e. psychographic
Answer: d
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by demographics
Skill: Application
Objective: 6-2 Segmentation
81) A soup company found its canned nacho cheese sauce was too hot for Americans in
the East and not hot enough for those in the West and the Southwest. As a result, the
company's plants in Texas and California produce a hotter nacho cheese sauce than is
produced in its other plants. The company is using ________ segmentation.
a. geographic
b. life cycle
c. psychographic
d. lifestyle
e. usage
Answer: a
Diff: 2
Type: MC
Page Reference: 186
Topic: Segment by demographics
Skill: Application
Objective: 6-2 Segmentation
82) To market Suave shampoo, Unilever used PRIZM to identify neighborhoods with
high concentrations of young working women. These women responded best to
advertisements conveying the message that Suave is inexpensive, yet will make their hair
"look like they spend a fortune on it." What segmentation tool did Unilever use in this
example?
a. geocoding
b. geodemography
c. the hierarchy of needs
d. projective techniques
e. ethnography
Answer: b
Diff: 2
Type: MC
Page Reference: 186
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Topic: Segment by demographics


Skill: Application
Objective: 6-2 Segmentation
83) People who are regular visitors to SyFy.com (a Web site maintained by a science
fiction cable network) and those who are regular visitors to BHG.com (a Web site
maintained by the producers of BHG-TV and the publishers of a women's magazine)
belong to different ________ segments.
a. demographic
b. ethnographic
c. geodemographic
d. socioeconomic
e. psychographic
Answer: e
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by psychographics
Skill: Application
Objective: 6-2 Segmentation
84) Magazines targeted to people who love to in-line skate, to people who enjoy cooking,
and to people who prefer a simpler lifestyle use ________ segmentation variables.
a. demographic
b. ethnographic
c. geodemographic
d. socioeconomic
e. psychographic
Answer: e
Diff: 2
Type: MC
Page Reference: 182
Topic: Segment by psychographics
Skill: Application
Objective: 6-2 Segmentation
85) Harley-Davidson's user profile includes both thrill-seeking and affinity for a
countercultural image. In addition to demographics, Harley-Davidson uses ________
segmentation to target markets.
a. value analysis
b. social class
c. geodemographic
d. socioeconomic
e. psychographic
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Answer: e
Diff: 2
Type: MC
Page Reference: 185
Topic: Segment by psychographics
Skill: Application
Objective: 6-2 Segmentation
86) The only time many people entertain is during November and December when their
homes are decorated for the holidays. The increase in ads for prepared trays of food to be
served at these functions is directly related to ________ segmentation.
a. socioeconomic
b. geodemographic
c. geographic
d. demographic
e. usage occasion
Answer: e
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by behaviour
Skill: Application
Objective: 6-2 Segmentation
87) Airlines have developed frequent-flyer programs to encourage passengers to use the
same airlines repeatedly. These programs and other similar ones use ________
segmentation to target their markets.
a. demographic
b. behavioral
c. geodemographic
d. organizational
e. generational
Answer: b
Diff: 2
Type: MC
Page Reference: 181
Topic: Segment by behaviour
Skill: Application
Objective: 6-2 Segmentation
88) Starting in February and ending sometime in late April, department stores promote
the fact that they stock a wide range of formal attire for high school proms. The dresses
and tuxedoes are available year-round, but the heaviest promotion of these products
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occurs in spring, when most proms are held. This spring promotion to high school
students is based primarily on ________.
a. social class
b. psychographics
c. lifestyle
d. usage occasion
e. geodemography
Answer: d
Diff: 3
Type: MC
Page Reference: 181
Topic: Segment by behaviour
Skill: Application
Objective: 6-2 Segmentation
89) When marketers at Procter & Gamble selected Generation Y, a demographic that
includes college students, as an untapped group of potential customers for their Febreze
line of products, they were executing which of the following?
a. market segmenting
b. undifferentiated targeting
c. differentiation
d. targeting
e. positioning
Answer: d
Diff: 3
Type: MC
Page Reference: 193
Topic: Targeting
Skill: Application
Objective: 6-3 Targeting
90) The Wright Bros. Collection is a catalog retailer that sells clothing and collectibles to
aviation enthusiasts. Its ________ might be men and women between the ages of 25 and
55 who are risk takers. They belong to organizations such as the American Legion, the
VFW, and the National Rifle Association of America. They are either pilots themselves or
have close ties to a pilot. They prefer camping to taking a luxury cruise. Annually, they
spend $900 on items purchased from nonstore retailers.
a. value analysis
b. customer potential assessment
c. segment profile
d. internal market audit
e. brand personality
Answer: c
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Diff: 3
Type: MC
Page Reference: 193
Topic: Develop segment profiles
Skill: Application
Objective: 6-3 Targeting
91) An undifferentiated marketing strategy is most likely to be successful in which of the
following scenarios?
a. The market has many competitors.
b. The product or service has wide appeal.
c. Growth of the market has stabilized.
d. The market is slowly shrinking.
e. The market has a few strong competitors.
Answer: b
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
92) Jolene Enterprises mass produces an all-purpose floor cleaner, mass distributes it, and
mass promotes it. This firm uses a(n)________.
a. segmented strategy
b. undifferentiated targeting strategy
c. focused targeting strategy
d. differentiated targeting strategy
e. concentrated targeting strategy
Answer: b
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
93) Using a concentrated targeting strategy, the marketer goes after a ________ but
________ consumer segment.
a. small; undefined
b. small; well-defined
c. large; well-defined
d. large; undefined
e. medium-sized; local
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Answer: b
Diff: 3
Type: MC
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
94) Favorite Memories is a small company that specializes in serving women over the
age of 50 who are special occasion gift shoppers overlooked by major competitors.
Which of the following best describes Favorite Memories' market targeting strategy?
a. undifferentiated targeting
b. custom marketing
c. differentiated targeting
d. concentrated targeting
e. mass customization
Answer: d
Diff: 2
Type: MC
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
95) Saturn is "a different kind of company, different kind of a car"; the Hummer is "like
nothing else." These statements indicate a firm's ________.
a. product portfolio
b. target markets
c. positioning
d. brand personality
e. segmentation
Answer: c
Diff: 2
Type: MC
Page Reference: 199
Topic: Positioning
Skill: Application
Objective: 6-4 Positioning
96) Jaygo Food Stores hires better employees than the competition by conducting lengthy
searches and interviews. Management also trains employees much better than
competitors. Jaygo has gained a strong competitive advantage through which type of
differentiation?
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a. image
b. people
c. services
d. product features
e. cost
Answer: b
Diff: 3
Type: MC
Page Reference: 201
Topic: Differentiation
Skill: Application
Objective: 6-4 Positioning
97) If Sam described Coca-Cola as an all-American, Pepsi-Cola as a young daredevil,
and Dr. Pepper as a nonconformist, he would be describing the sodas' ________.
a. VALS2 profiles
b. target markets
c. brand personalities
d. NAICS classifications
e. trade promotions
Answer: c
Diff: 2
Type: MC
Page Reference: 205
Topic: Brand personality
Skill: Application
Objective: 6-4 Positioning
98) The dentist's office calling to remind you of your scheduled appointment for the next
day is an example of ________.
a. CRM
b. customer equity
c. undifferentiated targeting
d. share of customer
e. repositioning
Answer: a
Diff: 2
Type: MC
Page Reference: 208
Topic: CRM
Skill: Application
Objective: 6-5 CRM

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99) Average collectors of an artist's miniatures will buy four new ones each year. The
collectibles are available at a number of retail locations and from several catalog retailers.
To ensure she gets a greater ________, the owner of The Door Gift Shop sends her
customers who are collectors a postcard every time the store adds a new one to her store's
inventory.
a. share of communication
b. segment profile
c. customer allocation
d. share of customer
e. brand perception
Answer: d
Diff: 3
Type: MC
Page Reference: 208
Topic: Characteristics of CRM
Skill: Application
Objective: 6-5 CRM
100) A building supply company has many high-volume customers and many lowvolume customers. A CRM system would be LEAST likely to help the company
management decide to use which of the following methods for communicating with lowvolume customers?
a. Every November, send each customer a new calendar that has the phone number of the
building supply company printed on the cover.
b. Once or twice a year, mail a new product catalog to each customer.
c. Every few months, have a customer service representative from the building supply
company call each customer.
d. Have a sales representative make a personal one-on-one appointment with every lowvolume customer at least twice a month.
e. Give each low-volume customer the company Web address to check building supply
products sold by the company.
Answer: d
Diff: 3
Type: MC
Page Reference: 208
Topic: Characteristics of CRM
Skill: Application
Objective: 6-5 CRM
101) The direct cause of market fragmentation is the large number of new products
introduced annually.
a. True
b. False

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Answer: b
Diff: 1
Type: TF
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
102) Age and gender are examples of segmentation variables .
a. True
b. False
Answer: a
Diff: 1
Type: TF
Page Reference: 185-186
Topic: Segment by demographics
Skill: Concept
Objective: 6-2 Segmentation
103) The members of Generation Y were born between 1965 and 1966.
a. True
b. False
Answer: b
Diff: 2
Type: TF
Page Reference: 187
Topic: Segment by demographics
Skill: Concept
Objective: 6-2 Segmentation
104) French Canadians account for 22 percent of Canadians.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 189
Topic: Segment by demographics
Skill: Concept
Objective: 6-2 Segmentation
105) Chinese Canadians are the fastest-growing minority group in the United States.
a. True
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b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 190
Topic: Segment by demographics
Skill: Concept
Objective: 6-2 Segmentation
106) The VALS system is a crucial part of geodemographic segmentation.
a. True
b. False
Answer: b
Diff: 2
Type: TF
Page Reference: 189
Topic: Segment by psychographics
Skill: Concept
Objective: 6-2 Segmentation
107) The long tail approach to segmentation indicates that companies can make money
selling small amounts of items that only a few people want as long as they sell enough
different items.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 181
Topic: Segment by behaviour
Skill: Concept
Objective: 6-2 Segmentation
108) After segmentation, the customer group selected by a firm is referred to as the target
market.
a. True
b. False
Answer: a
Diff: 1
Type: TF
Page Reference: 193
Topic: Targeting
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Skill: Concept
Objective: 6-3 Targeting
109) A target market is not viable unless the segment is large enough to be profitable now
and in the future.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 193
Topic: Targeting
Skill: Concept
Objective: 6-3 Targeting
110) Differentiated marketing can involve connecting the same product with different
market segments by communicating differently to each segment.
a. True
b. False
Answer: a
Diff: 3
Type: TF
Page Reference: 196
Topic: Targeting
Skill: Concept
Objective: 6-3 Targeting
111) Perceptual maps are tools for identifying the positions of brands in consumers'
minds.
a. True
b. False
Answer: a
Diff: 1
Type: TF
Page Reference: 203
Topic: Differentiation
Skill: Concept
Objective: 6-4 Positioning
112) Customer relationship management (CRM) programs are often called interactive
marketing programs.
a. True
b. False
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Answer: b
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
113) Customer relationship management (CRM) programs can systematically track
customers' preferences and behaviors over time.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
114) A CRM strategy allows a company to identify its best customers, stay on top of their
needs, and increase their satisfaction.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
115) Niche Marketing is a type of concentrated marketing strategy where the market
segment chosen is relatively small.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 197
Topic: Choose a targeting strategy
Skill: Concept
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Objective: 6-3 Targeting


116) CRM programs facilitate communication from a company to its customers and from
customers to the company.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
117) During the interact stage of one-to-one marketing, companies should focus on ways
to improve the cost efficiency and effectiveness of the interaction.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
118) Historically, marketers have measured success in a product category by their market
share.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 209
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
119) The term share of customer is synonymous with share of market.
a. True
b. False
Answer: b
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Diff: 2
Type: TF
Page Reference: 209
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
120) Using a CRM approach, customers are prioritized and communication customized
accordingly.
a. True
b. False
Answer: a
Diff: 2
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
121) When Apple marketed its iPod to teens, it used a personality segmentation variable.
a. True
b. False
Answer: b
Diff: 2
Type: TF
Page Reference: 186
Topic: Segment by Demographics
Skill: Application
Objective: 6-2 Segmentation
122) Honor, a market researcher for a packaged goods company, is segmenting a
population of consumers based on how frequently they buy different types of packaged
goods. Honor is using behavioral segmentation.
a. True
b. False
Answer: a
Diff: 3
Type: TF
Page Reference: 186
Topic: Segment by Demographics
Skill: Application
Objective: 6-2 Segmentation

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123) Because Cruise Ships International currently has limited financial and personnel
resources, it should avoid a concentrated targeting strategy until its resources are more
substantial.
a. True
b. False
Answer: b
Diff: 3
Type: TF
Page Reference: 197
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
124) Holiday Inn has divided the total customer market into smaller segments and
selected the most promising segments. Deciding what position it wants to occupy in these
segments is called targeting.
a. True
b. False
Answer: b
Diff: 2
Type: TF
Page Reference: 199
Topic: Positioning
Skill: Application
Objective: 6-4 Positioning
125) The Union Express Web site tracking a lost package is an example of CRM.
a. True
b. False
Answer: a
Diff: 3
Type: TF
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
126) What is market fragmentation? Why is market fragmentation of concern to
marketers?
Answer:

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Market fragmentation refers to how modern society is divided into groups with diverse
interests and diverse backgrounds. Each group has distinctive wants and needs. Because
of this diversity, the same good or service will not appeal to everyone.
Diff: 1
Type: ES
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
127) Explain the major steps in the target marketing process.
Answer:
The first step is market segmentation: dividing a market into smaller groups based on one
or more meaningfully shared characteristics. Each group might require separate products
or marketing mixes. The second step is targeting: evaluating each market segment's
attractiveness and selecting one or more of the market segments to enter. The third step is
positioning: developing a marketing strategy to influence how a target market segment
perceives a good or service in comparison to the competition.
Diff: 3
Type: ES
Page Reference: 177
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
128) How do marketers use the assumption that "birds of a feather flock together"?
Answer:
Marketers have developed geodemography--a segmentation technique that combines
demographics and regional marketing. Through geodemography, marketers segment
markets of people who live near one another and share similar characteristics. They can
construct segments including a number of households with a common pattern of
preferences and know more precisely who will be interested in special offerings.
Diff: 2
Type: ES
Page Reference: 191
Topic: Segment by Demographics
Skill: Application
Objective: 6-2 Segmentation
129) Compare and contrast the advantages and disadvantages of undifferentiated
targeting, differentiated targeting, and concentrated targeting.
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Answer:
An undifferentiated targeting strategy ignores market segment differences and targets the
whole market with one offer. This mass-marketing strategy focuses on what is common
in the needs of consumers rather than on what is different. Undifferentiated targeting
provides economies of scale, but does not allow for individualization of the marketing
mix. In contrast, a differentiated strategy targets several market segments and designs
separate offers for each. Companies hope for higher sales and a stronger position within
each market segment. Concentrated targeting goes after a large share of one segment
instead of going after a share of a large market. These segments may be overlooked,
unimportant, or under worked. Concentration offers smaller companies an opportunity to
compete by focusing their limited resources more effectively.
Diff: 2
Type: ES
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
130) Explain how a computer company might use custom marketing to meet the needs of
its customers.
Answer:
Using custom marketing, a company modifies its products or services to meet the needs
of its individual customers. A computer company might do this by offering customized
computer systems over the Internet. Users could create their own computers, everything
from personal computers to networking systems, selecting the specific hardware and
software they want from a menu of possible options.
Diff: 3
Type: ES
Page Reference: 198
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
131) Explain the concept of positioning.
Answer:
A product's position is the way the product is perceived by a particular market segment.
Positioning involves conveying the brand's unique benefits and differentiation to
customers. To carry out effective positioning, a company should first analyze its
competitors' positions. Then a company should identify the competitive advantages that
can be built upon differentiation. The company must then effectively communicate and
deliver the chosen position to the market through the marketing mix. Ultimately, a brand's
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position should deliver a valued benefit to the target, offer a superior benefit that can be
communicated to consumers, and be affordable to the target.
Diff: 2
Type: ES
Page Reference: 199
Topic: Positioning
Skill: Concept
Objective: 6-4 Positioning
132) Explain the philosophy of customer relationship management (CRM).
Answer:
Customer relationship management (CRM) programs allow companies to talk to
individual customers and adjust elements of their marketing programs in light of how
each customer reacts to elements of the marketing mix. Communication with customers
is key, as is fostering a long-term relationship with each profitable customer. Using CRM,
companies take the view that share of customer is more important than share of market,
and that relationships with customers are financial assets.
Diff: 2
Type: ES
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
133) Explain the relationship between one-to-one marketing and CRM.
Answer:
One-to-one marketing is the concept of the company identifying and then addressing the
specific needs and demands of its individual customers. The key to doing this is the
implementation of CRM, customer relationship management. CRM helps companies get
to know customers in as much detail as possible, differentiate among these customers,
and then interact with customers in more cost-efficient and effective ways. Finally, a
CRM system will help a company customize some or all aspects of its goods and services
based on what has been learned through customer interactions.
Diff: 3
Type: ES
Page Reference: 208
Topic: CRM
Skill: Concept
Objective: 6-5 CRM

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Marketing: Real People, Real Choices

134) Compare and contrast the concepts of lifetime value of a customer and customer
equity.
Answer:
The lifetime value of a customer is the potential profit generated by a single customer's
purchase of a firm's products over the customer's lifetime. Customer equity takes this
concept one step further, comparing the investment a firm must make to acquire a
customer and maintain a relationship with that customer to the financial return that could
be expected from the customer.
Diff: 3
Type: ES
Page Reference: 210-211
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
135) A firm has categorized its customers into two groups, high-volume customers and
low-volume customers. Explain the different styles of communication the firm should
implement to reach each group of customers.
Answer:
A firm should look at the cost and time factors involved in the communication with
customers within each group. These factors should then be compared to the possible
profit generated by a long-term relationship with each customer group. The high-volume
customers may require frequent contact from a personal sales representative. This may be
an expensive means of communication, but without such communication the firm may
lose the valuable customer to a competitor. The low-volume customer may be adequately
serviced by less expensive means such as mailed literature or occasional verbal
communication via the telephone.
Diff: 3
Type: ES
Page Reference: 211
Topic: CRM
Skill: Concept
Objective: 6-5 CRM
136) Why do marketers segment the market and use a target marketing strategy?
Answer:
Marketers divide heterogeneous markets into smaller groups that can be reached more
efficiently with products and services that match their unique tastes; firms focus on
buyers they can serve best and most profitably.
Diff: 3
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Marketing: Real People, Real Choices

Type: ES
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
137) What is 80/20 rule?
Answer:
80/20 rule is a marketing rule of thumb that 20 percent of purchasers typically account
for 80 percent of product sales.
Diff: 2
Type: ES
Page Reference: 180
Topic: Segment by Behaviour
Skill: Concept
Objective: 6-2 Segmentation
138) You work for a travel agency. Business has been slow, and you want to suggest some
promotions targeted to specific market segments. What three demographic segmentation
variables would you recommend using?
Answer:
Students' answers will vary. Their answers must identify specific demographic-based
segments. Most students will list age, gender, income and social class, race and ethnicity,
and stage of family cycle.
Diff: 3
Type: ES
Page Reference: 180
Topic: Segment by Demographics
Skill: Application
Objective: 6-2 Segmentation
139) How might a marketer benefit most from using PSYTE?
Answer:
People and locations can be segmented into marketable groups of like-minded
consumers, so marketers can more closely tailor their efforts to their target.
Diff: 3
Type: ES
Page Reference: 191
Topic: Segment by Demographics
Skill: Application
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Marketing: Real People, Real Choices

Objective: 6-2 Segmentation


140) You work for a travel agency. Business has been slow, and you want to suggest some
promotions targeted to specific market segments. What three psychographic segmentation
variables would you recommend using?
Answer:
Students' answers will vary. Many students will list shared opinions, interests, and
attitudes. Better students will include segments such as people who enjoy fishing, people
who like to look at wildlife, vegetarians, people who are interested in adventure, and so
forth.
Diff: 3
Type: ES
Page Reference: 182
Topic: Segment by Psychographics
Skill: Application
Objective: 6-2 Segmentation
141) Tropicana Essentials Healthy Heart targets consumers who like orange juice and
who also want extra vitamins but no sodium. Explain how Tropicana uses behavioral
segmentation in this example.
Answer:
Behavioral segmentation categorizes consumers on the basis of how they act toward, feel
about, or use a product. Tropicana Essentials Healthy Heart targets consumers who want
the healthy benefits of added vitamins and no sodium added to their orange juice.
Diff: 3
Type: ES
Page Reference: 180
Topic: Segment by Behaviour
Skill: Application
Objective: 6-2 Segmentation
142) A large chain amusement park sells tickets at its main gate for guests who are
visiting the park for just that one day. The park also sells seasonal passes that can only be
used on weekdays. What market segmentation is being implemented by the amusement
park?
Answer:
The amusement park is using behavioral segmentation. Guests who are planning to visit
once are one segment, and guests who are planning to visit repeatedly throughout the
season are another.
Diff: 3
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Marketing: Real People, Real Choices

Type: ES
Page Reference: 180
Topic: Segmentation 179-191
Skill: Application
Objective: 6-2 Segmentation
143) Explain why correctly segmenting and then targeting consumers will help a
company target its marketing dollars more effectively.
Answer:
Instead of using mass advertising in an attempt to reach as many people as possible, the
company can use advertising that will reach only consumers who are strong potential
customers.
Diff: 3
Type: ES
Page Reference: 176
Topic: Target marketing Strategy
Skill: Concept
Objective: 6-1 Target marketing Strategy
144) The cosmetics giant L'Oreal offers several product lines at a variety of prices. It
targets the luxury market with its brand Helena Rubinstein, while less expensive offerings
such as Elseve are targeted to large department stores and discounters. Is this practice a
differentiated targeting strategy or an undifferentiated targeting strategy? Explain your
answer.
Answer:
This company is implementing a differentiated targeting strategy, which involves offering
different products for several customer groupings with different product needs.
Diff: 2
Type: ES
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
145) XYZ Computers, Inc., a business with limited resources, uses a concentrated
targeting strategy. How might XYZ benefit from this?
Answer:
XYZ Computers will have an opportunity to compete by focusing its limited resources on
serving small segments that may be unimportant to or overlooked by larger competitors.
Diff: 3
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Marketing: Real People, Real Choices

Type: ES
Page Reference: 196
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
146) BMW allows customers to design their own vehicles from a set of options at
BMW's Web site. What is this called?
Answer:
This is custom marketing.
Diff: 2
Type: ES
Page Reference: 199
Topic: Choose a targeting strategy
Skill: Application
Objective: 6-3 Targeting
147) Why might a marketer of laundry detergent be interested in viewing a perceptual
map?
Answer:
Perceptual maps show consumer perceptions of a brand versus competing products on
important buying dimensions. Laundry detergent, for example, may be placed on a
perceptual map based on price and cleaning power; this lets marketers see how
consumers perceive their product with respect to others' products along those dimensions.
Diff: 3
Type: ES
Page Reference: 203
Topic: Differentiation
Skill: Application
Objective: 6-4 Understand positioning
148) What are two ways the airline industry can benefit from the implementation of CRM
systems? Explain your answer.
Answer:
CRM systems could help flyers by automating crucial information and reducing phone
call volume. CRM could also be used to identify customers' flying patterns, favored
destinations, and frequency of usage so that extra perks can be given to the "best"
customers.
Diff: 2
Type: ES
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Marketing: Real People, Real Choices

Page Reference: 208-209


Topic: CRM
Skill: Application
Objective: 6-5 Explain CRM
149) Explain how a firm benefits from customers purchasing many times from the firm
versus just one time.
Answer:
A firm's profitability and long-term success will be far greater if it develops long-term
relationships with its customers so that those customers buy from this firm again and
again. Costs will be far higher and profits lower if each customer purchase is a first-time
sale, as it is more expensive to attract a new customer than it is to maintain a relationship
with a current customer.
Diff: 2
Type: ES
Page Reference: 211
Topic: CRM
Skill: Application
Objective: 6-5 Explain CRM
150) Identify any product or service. How can a marketer calculate the lifetime value of a
customer relating to the purchase of this product or service? Explain your answer.
Answer:
A firm must estimate a customer's future purchases across all products from the firm. The
lifetime value of a customer would be the total profit generated from purchases from this
customer.
Diff: 2
Type: ES
Page Reference: 210
Topic: CRM
Skill: Application
Objective: 6-5 Explain CRM

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