Chapter 10 - Identifying Market Segments and Selecting Target Markets

Multiple Choice Questions

5
p. 279 C 1. The first step in the target marketing process is:
A. mass marketing
B. market targeting
C. market segmentation
10 D. market concentration
E. market positioning

p. 279 A 2. Traditionally, mass marketing of a consumer product results in:

A. the largest potential market for that product
15 B. increased product prices due to the lack of differentiation and decreased
competition
C. easier channel selections
D. fewer competitors because there are fewer markets
E. lower profit margins
20
p. 279 D 3. Why do some marketers claim that mass marketing is dying?
A. the growing use of disintermediation
B. the development of e-commerce
C. comparison shopping is a growing consumer trend
25 D. the proliferation of advertising media and distribution channels
E. the declining number of consumer distribution channels

p. 279 B 4. The text would classify people who enjoy cooking as a(n) _____ because they may
differ as to what they cook, how they cook, and how much they are willing to invest
30 in cooking.
A. aggregated market
B. market sector
C. commercially-viable niche
D. market segment
35 E. integral market

p. 279 D 5. Segment marketing of a consumer product typically:

A. results in the largest potential market for that product
B. creates product prices determined by supply not demand
40 C. produces many more choices for promotional media than with a mass marketing
strategy
D. allows a clearer picture of the competition’s activities
E. results in more challenging distribution channel choices than with a mass
marketing strategy
45

1
 2 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

p. 280 A 6. A flexible marketing offering consists of two parts. They are:

A. a naked solution and discretionary options
B. feature-focused and benefit focused
C. AIDA-concentrated and hierarchically-arranged
5 D. a promotional stimulus and a micromarketing response
E. a benefit solution and feature differentiations

p. 280 E 7. Each edition of the Progressive Farmer magazine publishes several different
versions. Certain articles and ads appeared in all versions. In addition, other articles
10 and ads were added to appeal to hog farmers or cattle farmers or poultry farmers or
cotton farmers, etc. Each type of farmer receives a version that contains articles all
farmers would value, plus articles only he would value as a result of his agricultural
specialization. Progressive Farmer:
A. uses advocacy marketing
15 B. uses aggregated marketing
C. implements a single-segment marketing strategy
D. relies on focused segmentation
E. provides a flexible market offering

20 p. 280 E 8. A _____ consists of a naked solution, which contains the product elements all
segment members value, plus discretionary options that only some segment
members value.
A. advocacy promotion
B. aggregated marketing strategy
25 C. single-segment marketing offering
D. focus-on segmentation strategy
E. flexible market offering

p. 280 D 9. An exercise equipment company produces exercise equipment designed for people
30 with back injuries. Since this is a small market largely ignored by other exercise
equipment makers, this equipment manufacturer is engaged in _____ marketing.
A. local
B. aggregated
C. individual
35 D. niche
E. derived

p. 280 B 10. A(n) _____ market is characterized by a fairly narrowly defined market with a
complete and distinct set of needs, and a willingness to pay a premium to meet those
40 needs.
A. local
B. niche
C. individual
D. derived
45 E. homogeneous

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 Identifying Market Segments and Selecting Target Markets 3
p. 282 A 11. A southeastern chain of barbecue restaurants would find it advantageous to prepare a
vinegar-based sauce for Georgians, a mustard-based sauce for Carolinians, and a
tomato-based sauce for Tennesseans. If the chain engages in _____ marketing, it
will improve the likelihood of its success.
5 A. local
B. niche
C. individual
D. homogeneous
E. situational
10
p. 282 A 12. The average household income in Ontario is about $3,000 more than in British
Columbia. However, people in British Columbia spend approximately $600 more
on recreation and $500 more on alcohol and tobacco annually than people who live
in Ontario. Conversely, Ontarians spend more on food, clothing and personal care
15 than their western counterparts. This information would be relevant to a
hypermarket that was deciding whether to use a national marketing strategy or a(n)
_____ marketing strategy.
A. local
B. niche
20 C. individual
D. homogeneous
E. situational

p. 282 C 13. An argument against local marketing is that it:

25 A. makes it difficult to be profitable because of the small size of the market
B. makes it difficult to select a proper distribution channel
C. drives up marketing and manufacturing costs by reducing economies of scale
D. leads to a homogenization of the market
E. solidifies a brand’s overall image in the marketplace because it delivers the same
30 advertising message throughout its market

p. 282 C 14. The ultimate level of marketing segmentation is _____ marketing.

A. local
B. niche
35 C. individual
D. homogeneous
E. mass

p. 282 A 15. Which of the following is an example of individual marketing?

40 A. the customization of a computer database to meet the needs of a client company
B. the providing of a multi-use computer database software program that will
perform nearly all the operations a typical company would need it to perform
C. the development of database software designed specifically for healthcare
professionals
45 D. the identification of an unserved, small group of companies who need database
software and the specific marketing activities aimed at this group
E. the use of a web site where a customer reviews a product catalog, selects what is
wanted, types in modifications desired, and places an order

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 4 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

p. 282 C 16. _____ is the ability to prepare, on a mass basis, individually designed products to
meet each customer's requirements.
A. Niching
B. Specialization
5 C. Mass-customization
D. Concentrated marketing
E. Clustered marketing

p. 282 E 17. “New York Life does a great job at mass-customization,” says Ken Hittel, corporate
10 vice president for the New York-based insurance and financial services company.
This means the company:
A. treats all of its customers the same
B. sells the same product features, advantages, and benefits to each of its customers
C. uses individualized communication channels to reach its customers
15 D. uses a Choiceboard
E. prepares, on a mass basis, products to meet individual customer’s requirements

p. 282 B 18. The trend toward greater interactive dialogue in marketing and less advertising
monologue favors the development of _____ marketing.
20 A. mass
B. individual
C. local
D. reverse-flow
E. aggregated
25
p. 282 E 19. A(n) _____ is an interactive online system that allows individual customers to
design their own products by choosing from a menu of attributes, components,
prices, and delivery options.
A. options list
30 B. personalized menu
C. selection bot
D. customerized menu
E. Choiceboard

35 p. 282 E 20. Which of the following statements describes a reason why marketers use
Choiceboards?
A. The Choiceboard facilitates upselling and cross-selling.
B. The Choiceboard provides real-time market research.
C. The Choiceboard reduces costs for manufacturers by avoiding the production of
40 unwanted goods.
D. The Choiceboard encourages repeat business by showing customers possibilities
they were unaware of.
E. All of the above statements describe reasons why marketers use Choiceboards.

45 p. 282 C 21. Customerization is most closely related to:

A. local marketing
B. heterogeneous market-preference patterns
C. the use of Choiceboards
D. demographic segmentation
50 E. mass marketing

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 Identifying Market Segments and Selecting Target Markets 5
p. 283 A 22 If everyone’s choice for a computer printer were a Canon BJC-5000 color bubble jet
printer, there would be a _____ market-preference in the computer printer market.
A. homogeneous
B. heterogeneous
5 C. diffused
D. stratified
E. clustered

p. 283 D 23. The opposite of a market with a homogeneous preference is a market with a_____
10 preference.
A. derived
B. stratified
C. randomized
D. diffused
15 E. clustered

p. 283 E 24. A marketer facing a market segment with natural market segments is dealing with a
market with _____ preferences.
A. diversified
20 B. stratified
C. heterogeneous
D. diffused
E. clustered

25 p. 283 E 25. The market for household cleaners is divided into four natural market segments:
people who want a multi-purpose cleaner, people who want an anti-bacterial cleaner,
people who want a stain-removing cleaner, and people who want a cleaner that is
fast. It can be described as:
A. diversified
30 B. stratified
C. heterogeneous
D. diffused
E. clustered

35 p. 283 E 26. The market for household cleaners is divided into four _____. They are people who
want a multi-purpose cleaner, people who want an anti-bacterial cleaner, people who
want a stain-removing cleaner, and people who want a cleaner that is fast.
A. concentrated market sectors
B. focused market segments
40 C. individualized targeted segments
D. customized market sectors
E. natural market segments

p. 283 E 27. Martha is thinking about buying a dog. Her first consideration is size. She chooses
45 a medium-sized dog. From the medium-sized dogs, she must choose hair length.
She decides she prefers shorthaired dogs. Last, from the medium-sized, shorthaired
dogs, she must decide on sex. In the end, she chooses a medium-sized, shorthaired,
female dog. This is an example of:
A. demographic segmentation
50 B. the selection of segment preference
C. benefit segmentation

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 6 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

D. market positioning
E. market partitioning

p. 286 B 28. The first step in market segmentation is:

5 A. the determination of segment profitability
B. needs-based segmentation
C. segment identification
D. the use of predetermined segment attractiveness criteria
E. segment positioning
10
p. 286 D 29. To be useful, a market segment must be:
A. small, reclusive, and qualitative
B. qualitative, but not quantifiable
C. unreachable by any other company
15 D. measurable, differentiable, and actionable
E. actionable, inaccessible, and positioned the same as the other segments being
served

p. 286 C 30. A sports car manufacturer considered marketing to a market segment made up of
20 individuals separated from their spouses, but not yet divorced. However,
investigation of the segment showed this group of individuals could not be reached
by any specific media. In effect, this group was not a(n) _____ market.
A. accessible and substantial
B. measurable, differentiable, and accessible
25 C. accessible, differentiable, and actionable
D. actionable, differentiable, and substantial
E. substantial and actionable

p. 286 D 31. A marketer wants to market to male archery enthusiasts who are wheelchair bound.
30 This market segment is _____ even if it meets none of the other characteristics
needed for a market segment to be useful.
A. measurable
B. substantial
C. accessible
35 D. differentiable
E. quantifiable

p. 287 C 32. If a toy marketer segments a market on the basis of geographic, demographic, and/or
psychographic information, its basis for segmentation is:
40 A. customer responses
B. preference segments
C. customer characteristics
D. customer behavior
E. market partitions
45
p. 287 A 33. While studying consumer-buying patterns for liquor, Joan has learned more gin,
vodka, and scotch are drunk in New York City on a per capita basis than in any other
city in the U.S. She is studying _____ data.
A. geographic
50 B. demographic

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 Identifying Market Segments and Selecting Target Markets 7
C. psychological
D. personality
E. lifestyle

5 p. 287 A 34. Marketing research showed that consumers in the West and the Southwest like
spicier foods than those in the Southeast and East. As a result, Campbell’s makes a
hotter nacho cheese sauce for its western and southwestern customers. The
differences in the nacho cheese sauce are the result of _____ segmentation.
A. geographic
10 B. demographic
C. psychological
D. personality
E. lifestyle

15 p. 287 A 35. Which of the following is an example of a demographic segmentation variable?

A. generation or social class
B. personality
C. attitude toward the product
D. lifestyle
20 E. user status

p. 289 C 36. Whitehall-Robins Healthcare makes Centrum Silver, a high potency multivitamin
for active men and women over 50. This is an example of ____ segmentation.
A. gender
25 B. generation
C. age and life-cycle
D. user status
E. usage rate

30 p, 290 E 37. As a new mother, Beth was pleased to find www.babycenter.com, a web site that
contains information a new mother needs. This web site has information on how to
deal with sleep deprivation and a baby that requires a lot of care, as well as a host of
products for the new mother and her baby. This web site uses _____ segmentation.
A. generation
35 B. usage rate
C. lifestyle
D. social class
E. life stage

40 p. 290 B 38. Which of the following statements best describes the difference between age and
life-cycle segmentation and generational segmentation?
A. Age and life-cycle segmentation is rigid and unchanging over time while
generational segmentation changes with each decade.
B. Age and life-cycle segmentation assumes people are influenced by where they
45 are in life, and generational segmentation assumes their are influenced by what
they grew up with.
C. Age and life-cycle segmentation is a relatively straightforward segmentation
strategy while generational segmentation is much harder to implement.
D. Age and life-cycle segmentation assumes the effect of time, and generational
50 segmentation is based on the effects of economic and social status.

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 8 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

E. There are no differences between age and life-cycle segmentation and

generational segmentation.

p. 290 A 39. 7-Up beverage is using an irreverent advertising campaign that pokes fun at other
5 campaigns that appeal to Generation X members who are cynical about advertising.
7-Up is using _____ to segment its market.
A. demographics
B. social class
C. lifestyle
10 D. usage rate
E. loyalty status

p. 291 D 40. Which of the following is an example of a psychographic segmentation variable?

A. occupation
15 B. education level
C. readiness stage
D. lifestyle
E. usage rate

20 p. 291 C 41. The Itawa Retreat Center is open to people of all religious faiths and is a place
people can go to unwind from the stressful rigors of daily life. Which of the
following is an example of a psychographic variable the owner of the retreat could
use in its marketing strategy?
A. occupation
25 B. age
C. lifestyle
D. social class
E. income
p. 291 C 42. A segmentation study of people who would be interested in subscribing to a cooking
30 magazine discovered three distinct groups of potential subscribers: those who
wanted to cook the same foods their mothers cooked for them, those who wanted to
learn about the latest cooking trends and fads, and those who were interested in
learning about a variety of different international cuisines. This magazine
discovered its market could be segmented using _____ variables.
35 A. demographic
B. social class
C. lifestyle
D. generation
E. geographic
40
p. 292 B 43. Which of the following is an example of a behavioral segmentation variable?
A. generation
B. user status
C. personality
45 D. religion
E. social class

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 Identifying Market Segments and Selecting Target Markets 9
p. 292 D 44. Since two-thirds of the sales of new policies Prudential Insurance Company makes
are to current policyholders, it should use a _____ segmentation strategy.
A. education-based
B. benefit
5 C. demographic
D. behavioral
E. psychographic

p. 293 E 45. For years Ocean Spray cranberry sauce has been on thousands of Thanksgiving
10 tables. Ocean Spray is working hard to implement other segmentation strategies
beyond the limited _____ strategy it used in the past.
A. user rate
B. lifestyle
C. family life cycle
15 D. benefit
E. occasion

p. 293 D 46. MicroFridge is a combination microwave, refrigerator, and freezer that is designed
for people who are short on living space and need to make the best possible use of
20 every inch of space they do have. MicroFridge uses a(n) _____ segmentation
strategy.
A. user rate
B. lifestyle
C. family life cycle
25 D. benefit
E. occasion

p. 294 B 47. Research by New York Telephone revealed that it serves two different kinds of
consumers, chatterboxes who seem to live on the phone and those that don’t have
30 time to spend in idle conversation. Based on this research, it should use a _____
segmentation strategy
A. age-based
B. usage rate
C. user status
35 D. loyalty status
E. occupation-based

p. 294 C 48. When dealing with loyalty status, buyers can be segmented in a variety of ways.
When given a choice of canned vegetables at the supermarket, Aaron will select
40 either Green Giant or Del Monte, and no other brand. He makes his selection based
on which brand first catches his eye. In terms of his brand loyalty status, Aaron is an
example of a:
A. hard-core loyal
B. split loyal
45 C. shifting loyal
D. switcher
E. splinter loyalist

p. 294 C 49. A marketing study showed that more than seventy percent of all consumers
50 worldwide believe all paper towels are alike. Given this information, the
manufacturer of Bounty paper towels should:
Copyright 2003 © Prentice Hall. All Rights Reserved
 10 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

A. use brand loyal segmentation

B. use geographic segmentation
C. engage in product differentiation
D. use a mass marketing strategy
5 E. use a niche marketing strategy

p. 294 A 50. Forty percent of all sales made by Prudential Insurance Company are initiated by the
buyer rather than by Prudential’s agents. Before purchasing any insurance, the
buyers had researched and compared Prudential to other insurance companies; they
10 felt that Prudential best satisfied their needs. Given this information, Prudential
should develop a strategy around which of the behavioral segmentation strategies?
A. buyer-readiness
B. income
C. education
15 D. occupation
E. lifestyle

p. 295 B 51. If you go to a Target store on the eastside of Phoenix, you will find prayer candles,
but no bicycle child carriers. The Target store in Scottsdale sells trailers, but does
20 not stock portable heaters. You’d have to go to the Target store in Mesa to find
heaters. Target realizes the people in each of these neighborhoods do not have the
same needs and should therefore not be offered the same products. This is an
example of:
A. situational segmentation
25 B. geoclustering
C. demographic segmentation
D. behavioral segmentation
E. psychographic segmentation

30 p. 295 B 52. When Time Warner introduced Vibe magazine it was described as, “a new
publication that covers urban music and culture.” From this statement, you should
be able to describe the segmentation strategy used for this magazine as:
A. personal segmentation
B. geoclustering
35 C. demographic segmentation
D. behavioral segmentation
E. psychographic segmentation

p. 296 A 53. According to Bonoma and Shapiro, the most important segmentation variable for
40 business markets is:
A. demographic characteristics
B. operating variables
C. situational factors
D. purchasing approaches
45 E. personal characteristics

p. 297 E 54. According to Bonoma and Shapiro, which segmentation variable for business
markets is least useful?
A. demographic characteristics
50 B. operating variables

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 Identifying Market Segments and Selecting Target Markets 11
C. purchasing approaches
D. situational factors
E. personal characteristics

5 p. 298 C 55. Which of the following statements describing business buyers is true?
A. Novices want speed in maintenance and repair.
B. Sophisticates want easy-to-read manuals and hot lines.
C. First-time prospects prefer informed, trustworthy salespeople whom they can
understand and who explain things well.
10 D. First-time prospects want a high level of training and knowledgeable
salespeople.
E. Sophisticates prefer catalogs because they consider themselves knowledgeable
enough to not need salespeople.

15 p. 298 A 56. Rangan, Moriarty, and Swartz identify _____ as the most profitable segment to sell
to in a mature commodity market.
A. programmed buyers
B. relationship buyers
C. transformational buyers
20 D. transactional buyers
E. bargain hunters

p. 298 E 57. Anderson-King is a chicken processing company. Meat packaging trays are very
important to its operation. The meat processor demands a deep discount and a high
25 level of service from its supplier of the trays. It is ready to switch at the slightest
dissatisfaction. Anderson-King is an example of which of the following business
segments?
A. programmed buyers
B. relationship buyers
30 C. transformational buyers
D. transactional buyers
E. bargain hunters

p. 298 B 58. Fairfax Processing Company buys vegetables in bulk and repackages them in net
35 bags. The company’s buyers are knowledgeable about netting products, but
continue to place routine monthly orders with Zip-Net, Inc. because Zip-Net
provides Fairfax with a small discount, a modest amount of service, and Zip-Net’s
prices are in line with its competitors. Fairfax Processing is an example of which of
the following business segments?
40 A. programmed buyers
B. relationship buyers
C. transformational buyers
D. transactional buyers
E. bargain hunters
45
p. 299 B 59. A marketer who selected a _____segmentation strategy would find this segmentation
strategy has the greatest amount of risk associated with it.
A. selective specialization
B. single-segment concentration
50 C. full market coverage
D. market specialization

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 12 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

E. product specialization

p. 299 D 60. A manufacturer of china that decided it was only going to sell to restaurants would
have adopted a _____ segmentation strategy.
5 A. selective specialization
B. single-segment concentration
C. full market coverage
D. market specialization
E. product specialization
10
p. 299 E 61. A manufacturer of various types of protective eyewear that sells its products to
chemical laboratories, amateur athletes participating in contact sports, teams that
clean hazardous waste sites, and hospitals has adopted a _____ segmentation
strategy.
15 A. selective specialization
B. single-segment concentration
C. full market coverage
D. market specialization
E. product specialization
20
p. 299 C 62. For years, Sears used the slogan, “Sears Has Everything.” Which of the following
strategies does this slogan most likely support?
A. differentiated marketing
B. single-segment concentration
25 C. undifferentiated marketing
D. market specialization
E. product specialization

p. 300 B 63. The major benefit of following an undifferentiated approach is:

30 A. less competition
B. cost economies
C. greater profit
D. greater consumer satisfaction
E. broad product lines
35
p. 300 A 64. The Limited caters to affluent women. It owns retailing chains including Victoria's
Secret (lingerie), Lane Bryant (clothes for hard-to-fit women), Limited Too (a
children's fashion store), and Lerner New York (women's fashions). The Limited is
practicing _____ marketing:
40 A. differentiated
B. single-segment concentration
C. undifferentiated
D. market specialization
E. product generalization
45
p. 300 A 65. VF Corporation makes Lee, Wrangler, Britannia, and Rustler jeans. Lee jeans were
originally targeted to women, and Wrangler jeans to men. Rustler brand is the
company’s low-price entry into the market, and Britannia is its high-priced entry into
the jean market. VF uses _____ marketing.
50 A. differentiated
B. single-segment concentration
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 Identifying Market Segments and Selecting Target Markets 13
C. undifferentiated
D. market specialization
E. product generalization

5 p. 300 A 66. Firms that offer tailored programs for several different market segments engage in
_____ marketing.
A. differentiated
B. single-segment concentration
C. undifferentiated
10 D. market specialization
E. product specialization

p. 300 E 67. In terms of its affect on the marketing process, differentiated marketing:
A. lowers total sales, which increases profits by increasing the margin on each sale
15 B. significantly decreases manufacturing costs
C. keeps advertising costs low
D. reduces inventory costs
E. increases administrative and production costs

20 p. 300 D 68. VF Corporation makes Lee, Wrangler, Britannia, and Rustler jeans. Research
showed Lee jeans were the jeans of choice of women in their 30’s and 40’s. VF
introduced the Buddy Lee promotional campaign to attract a younger male and
female market to the brand. This broadening of the customer base for Lee jeans is
referred to as:
25 A. deep marketing
B. disintermediation
C. cannibalization
D. countersegmentation
E. cross-marketing
30
p. 301 C 69. Research shows that professional wrestling appeals to 6 to 17 year old boys, 18 to 24
year old women, and 18 to 44 year old men. Because these groups only exploitable
similarity is their love of professional wrestling, this would be an example of a(n):
A. interrelated segment
35 B. market niche
C. supersegment
D. blocked market
E. intersegment cooperative

40 p. 302 B 70. When companies encounter blocked markets, the best approach to those markets is
to:
A. use a segment-by-segment invasion plan
B. use a megamarketing approach
C. forget the blocked market and approach easier to enter markets
45 D. study intersegment cooperation and use it to enter the blocked markets
E. find an exploitable similarity and create a megamarket

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 14 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

p. 302 C 71. _____ is strategic coordination of economic, psychological, political, and public-
relations skills to gain the cooperation of a number of parties in order to enter and/or
operate in a given market.
A. Segment-by-segment invasion planning
5 B. Market niching
C. Megamarketing
D. Intersegment cooperation
E. Turbomarketing

10
True-False Questions

p. 279 F 72. Companies that are frustrated with attempting to effectively segment markets are
increasingly turning to mass marketing.
15
p. 279 F 73. Consumers who belong to the same market segment have identical needs and wants.

p. 280 T 74. Because niche markets require decentralization of effort for large companies, and are
by definition small markets, they tend to attract few competitors.
20
p. 283 T 75. In cases where consumers in a market have very homogeneous preferences, the
different brands in that market will tend to be quite similar.

p. 283 F 76. If a marketer is facing a market with clustered preferences, the only sensible course
25 of action is to choose the largest cluster as its target market.

p. 287 F 77. If marketing researchers are looking at benefits sought, use occasions, or brands,
they are basing their market segmentation on consumer characteristics rather than
consumer responses.
30
p. 287 T 78. One of the reasons demographic variables are the most popular variables for
segmenting the consumer market is because usage rates are often associated with
demographic characteristics.

35 p. 287 T 79. Marketers should be cautious in using age as a segmentation variable because age is
often a poor predictor of a person's interests and needs.

p. 290 F 80. By and large, income is an excellent predictor of who will buy what products.

40 p. 291 F 81. People with similar demographic characteristics will generally exhibit similar
psychographic profiles as well.

p. 293 T 82. Many marketers believe behavioral variables are the best starting point for
constructing market segments.
45
p. 293 F 83. When the Florida Orange Juice Growers Association used the slogan "It's not just for
breakfast any more," it was using usage rate as a segmentation variable.

p. 294 T 84. What appear to be brand-loyal purchase patterns may often be attributed to other
50 factors.

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 Identifying Market Segments and Selecting Target Markets 15

p. 295 T 85. Geoclustering is a technique for segmenting markets on the basis of multiple
attributes.

5 p. 298 F 86. In business market segmentation, operating variables are the most important
segmentation variable.

p. 300 F 87. Firms that engage in product specialization must also engage in undifferentiated
marketing.
10
p. 300 F 88. Since undifferentiated marketing and concentrated marketing each have only one
marketing mix, they are essentially the same thing.

p. 300 T 89. While differentiated marketing costs more than undifferentiated marketing, it also
15 tends to create more total sales.

p. 301 T 90. One danger of using a supersegmentation strategy is that a competitor may target a
subset of the supersegment and deliver a higher level of satisfaction.

20 p. 301 T 91. Unfortunately, too many companies fail to develop a long-term invasion plan in
which they plot the sequence and timing of market-segment entries.

Essay Questions
25
p. 279 92. Markets can be segmented at four levels. Briefly describe each and explain
the benefits associated with segmenting the market at each of the four levels.

Answer: · Segment marketing consists of a large identifiable group within a market with
30 similar wants, purchasing power, geographical location, buying attitudes, or buying
habits. With segment marketing, the marketer can create a more fine-tuned product
or service offering than with mass marketing. The product can be priced
appropriately for its target audience. The choice of distribution and communication
channels becomes easier. The company also faces fewer competitors in the
35 segment.
· A niche is a more narrowly defined group, typically a small market whose needs
are not well served. With niche marketing, a marketer finds customers with a
distinct set of needs that will pay premium prices to the firm that best satisfies that
need. The niche is not likely to attract other competitors. The nicher gains certain
40 economies through specialization, and the niche has size, profit, and growth
potential.
· Tailoring marketing programs to the needs and wants of local customer groups
(trading areas, neighborhoods, and even individual stores) is called local marketing.
National advertising could be wasteful because it often fails to address local needs.
45 · The ultimate level of segmentation is individual marketing. Marketers benefit
from increased sales and profits by realizing that their customers want to express
their individuality.

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 16 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

p. 283 93. Suppose cereal buyers are asked how much they value taste, texture, and nutritional
content as product attributes. Describe the three different preference patterns that
should emerge from this research?

5 Answer: The attributes would reveal three basic-market preference graphs:

· The term homogeneous preferences describes a market where all the consumers
have roughly the same preferences for value and nutritional content. The market
shows no natural segments. Cereal brands would cluster around the center of the
scale.
10 · The term diffused preferences is at the other extreme. Consumer preferences vary
greatly. The first brand to enter the market is likely to position itself in the center to
appeal to the most people. A brand in the center minimizes the sum of total
customer dissatisfaction. A second competitor could locate next to the first and
fight for market share, or locate in the corner to attract those not satisfied with the
15 center brand.
· Clustered preferences occur when the market reveals distinct preference clusters
called natural market segments, like a group that preferred a vitamin-enriched flake
cereal. The first firm would have three options. It might position itself in the
center, hoping to appeal to all groups. It might position itself in the largest
20 marketing segment. It might develop several brands, each positioned in different
segments. If the first firm developed only one brand, than competitors would enter
and introduce brands in the other segments.

p. 287 94. Greenwood Press publishes a book entitled How to Feed a Family of 7 on Less than
25 $50 per Week. The book is a cookbook with advice on gardening, canning, and
freezing food. Discuss which major segmentation variables for the consumer market
Greenwood Press can use to market this book.

Answer: Student answers will vary. Possible answers may include the following:
30 Geographic segmentation would work. Obviously, this book should be marketed to
those living in rural areas or suburbs where there is room to grow a garden. In terms
of the relevant demographic variables, family size and family life cycle are obvious
from the title. Income segmentation would also be a reasonable way to segment the
market. In addition, educational level might be important to understanding how to
35 implement the book’s plan. Those with a more back-to-nature lifestyle are likely to
be most interested in this book, so psychographic segmentation is quite feasible. In
terms of behavioral segmentation, benefits segmentation is also obvious from the
title. Readiness stage for implementing such a plan could also be another useful
segmentation variable.
40
p. 298 95. As multinational companies look for ways to improve their efficiency, one solution
is the purchase of executive jet planes. It is quite often necessary for management to
fly to other operations around the world. Having a corporate jet removes time
constraints from these trips. Discuss which major segmentation variables for
45 business markets a manufacturer of corporate jets can use.

50 Answer: Student answers will vary. Possible answers may include the following:

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 Identifying Market Segments and Selecting Target Markets 17
Industry and its location are both potential demographic variables than can be used.
Businesses can be segmented according to heavy or light usage of air travel; this
would be an example of an operating variable. All five of the purchasing approaches
would be applicable as segmentation variables: purchasing-function organization,
5 power structure of organization, nature of existing relationships, general purchase
policies of buyer, and buyer’s purchasing criteria. The approach that is least likely
to be used is nature of existing relationships, but it is possible that a company would
need and purchase more than one corporate jet. In terms of situational factors as
segmentation variables, how the buyer will use the jet falls under the category of
10 specific application. Personal characteristics might include buyer’s willingness to
take risks. Buyer-seller similarities could also be a viable segmentation variable in
this example.

15 Mini-Case 10-1
A group of investors are starting a for-profit college to be called Haven University. They
have identified a small segment of society that is displeased with the high cost of college and is
willing to forego all social and sporting extracurricular activities in order to get an inexpensive,
quality education in four years. The university investors will advertise nationally. Its target audience
20 is individuals between 22 and 40 years of age, who have either not started earning a college degree
or who did not finish one they began in the last ten years. The investors want to attract students who
are currently working at a job with which they are dissatisfied. Haven will only offer three degree
programs, which cannot be modified to individual student needs. Research has shown these are
degrees this market segment repeatedly seeks. Students can earn their degrees over the Internet and
25 only have to attend a one-week seminar on campus twice a year.

p. 280 B 96. Refer to Mini-Case 10-1. These university investors are using _____ marketing to
identify their target market.
A. mass
30 B. niche
C. local
D. aggregated
E. individual

35 p. 283 A 97. Refer to Mini-Case 10-1. The target market shows a ____ preference pattern.
A. homogeneous
B. stratified
C. heterogeneous
D. diffused
40 E. clustered

p. 283 B 98. Refer to Mini-Case 10-1. To identify their market segment, the investors had to
undertake a three-step segmentation procedure. In the first step of this procedure,
the investors would have:
45 A. done a factor analysis
B. done exploratory research
C. used cluster analysis
D. profiled the segments
E. created a hierarchy of attributes
50

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 18 Part II - ANALYZING MARKET OPPORTUNITIES - Chapter 10

p. 287 E 99. Refer to Mini-Case 10-1. The investors have identified their market through the use
of _____ segmentation variables.
A. behavioral, geographic, and demographic
B. psychographic and behavioral
5 C. geographic and demographic
D. psychographic, behavioral, and geographic
E. demographic, psychographic, and behavioral

p. 293 D 100. Refer to Mini-Case 10-1. The investors discovered there was a segment of the
10 population who was being passed over for promotions because they lacked a college
degree. These people had always assumed getting a degree was impossible because
they did not have time to attend classes. What kind of segmentation variable would
be used to identify this segment?
A. occasion
15 B. personality
C. values
D. benefit
E. lifestyle

20 p. 299 D 101. Refer to Mini-Case 10-1. After the investors identified the target market, they had to
select its market segmentation strategy. Which of the following segmentation
strategies is most appropriate for Haven University?
A. single-segment concentration
B. selective specialization
25 C. product specialization
D. market specialization
E. full market coverage

MINI-CASE 10-2
30 Sunglasses are commonplace products. Nearly everyone owns at least one pair, but it is a
product that comes in a variety of different styles, colors, and prices. If you were to examine those
designed for bicyclists, you would be surprised at the variety of different types. Oakley makes a pair
priced $150 that have no hinges, which means they can’t be folded and stuck in a pocket; this is not a
feature some people like. Since not all people are the same size, Smith Sports makes a pair of
35 glasses that will fit people with larger than average heads. Zeal Optics makes sunglasses for people
with smaller than average heads. For those who want a brand name that is indicative of style, Ralph
Lauren makes a pair of Polo sunglasses that retails for $125. If you’re a fan of Blade Runner, Native
Eyewear makes sunglasses like those in the movie for $95. For those who need prescription lenses
but who want high performance eyewear, Arriko Klip sells frames to fit over your regular glasses for
40 $100.

p. 283 A 102. Refer to Mini-Case 10-2. The bicyclists’ market for sunglasses appears to have a
_____ pattern.
A. diffused
45 B. homogenous
C. heterogeneous
D. flexible
E. differentiated

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 Identifying Market Segments and Selecting Target Markets 19
p. 290 D 103. Refer to Mini-Case 10-2. If Smith Sports and Zeal Optics wanted to further
segment the market to people who ride bicycles, they could use _____
segmentation variables, such as age and life-cycle stage and gender.
A. usage rate
5 B. benefit
C. social class
D. demographic
E. personality

10 p. 291 D 104. Refer to Mini-Case 10-2. Sunglasses designed to appeal to serious bicyclists are
using _____ segmentation.
A. behavioral
B. geographic
C. demographic
15 D. psychographic
E. readiness stage

p. 292 C 105 Refer to Mini-Case 10-2. People who have to own Ralph Lauren sunglasses
because wearing highly sought after brands like Polo define who are they are
20 would be an example of what kind of segmentation variable?
A. occasions
B. demographic
C. personality
D. values
25 E. social class

p. 293 E 106. Refer to Mini-Case 10-2. People who hate getting sun in their eyes would find the
one-piece wraparound Oakley sunglasses, which block light from all angles,
appealing. Oakley could use which variable to better define its target market?
30 A. values
B. demographics
C. occasions
D. user status
E. benefits
35
p. 294 C 107. Refer to Mini-Case 10-2. How can the manufacturers of Arriko Clip sunglasses
identify its target market within the market of bicyclists?
A. use age segmentation
B. use a cluster segmentation strategy
40 C. use benefits segmentation
D. identify loyalty status
E. use a single-variable strategy

p. 294 A 108. Refer to Mini-Case 10-2. Sunglass manufacturers should use _____ to identify
45 smaller, better-defined markets for their sunglasses.
A. multiattribute segmentation
B. behavioral segmentation
C. segmentation on the basis of FAB
D. attitudinal segmentation
50 E. psychographic segmentation

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