Marketing 2016 18th Edition Pride Test Bank Download

Test Bank for Marketing 2016 18th Edition Pride Ferrell
1285858344 9781305769786
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1. How do business markets differ from consumer markets?

ANSWER: Markets fall into one of two categories: consumer markets and business markets. These
categories are based on the characteristics of the individuals and groups that make up a
specific market and the purposes for which they buy products. A consumer market consists of
purchasers and household members who intend to consume or benefit from the purchased
products and do not buy products to make a profit. Consumer markets are sometimes also
referred to as business-to-consumer (B2C) markets. Each of us belongs to numerous
consumer markets for all the purchases we make in categories such as housing, food,
clothing, vehicles, personal services, appliances, furniture, recreational equipment, and so on.
A business market consists of individuals or groups that purchase a specific kind of product
for one of three purposes: resale, direct use in producing other products, or use in general
daily operations. For instance, a producer that buys electrical wire to use in the production of
lamps is part of a business market for electrical wire. Some products can be part of the
business or consumer market, depending on their end use. For instance, if you purchase a
chair for your home, that chair is part of the consumer market. However, if an office manager
purchases the same chair for use in a business’ office, it is part of the business market.
Business markets may be called business-to-business (B2B), industrial, or organizational
markets and can be sub-classified into producer, reseller, government, and institutional
markets.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: MARK.PRID.16.06.01 - LO: 06-01
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - AK - DISC: Strategy
TOPICS: A-Head: What Are Markets?
KEYWORDS: Bloom's: Knowledge
2. What are the conditions under which an undifferentiated targeting strategy is effective? Why are these conditions
essential?
ANSWER: The undifferentiated targeting strategy is effective under two conditions. First, a large
proportion of customers in a total market must have similar needs for the product, a situation
termed a homogeneous market. A marketer using a single marketing mix for a total market of
customers with a variety of needs would find that the marketing mix satisfies very few
people. For example, marketers would have little success using an undifferentiated strategy to
sell a “universal car” because different customers have varying needs. Second, the
organization must have the resources to develop a single marketing mix that satisfies
customers’ needs in a large portion of a total market and the managerial skills to maintain it.
POINTS: 1
DIFFICULTY: Moderate
TOPICS: A-Head: Step 1: Identify The Appropriate Targeting Strategy
KEYWORDS: Bloom's: Comprehension
3. What are the major steps of the target market selection process?
ANSWER: Although marketers may employ several methods for target market selection, they generally
follow a five-step process. These steps include:
Step 1: Identifying the appropriate targeting strategy
Step 2: Determining which segmentation variables to use
Step 3: Developing market segment profiles
Step 4: Evaluating relevant market segments
Step 5: Selecting specific target markets
POINTS: 1
MARK.PRID.16.06.04 - LO: 06-04
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NATIONAL STANDARDS: United States - BUSPROG: Communication
TOPICS: A-Head: Target Market Selection Process | A-Head: Step 1: Identify The Appropriate
Targeting Strategy | A-Head: Step 2: Determine Which Segmentation Variables To Use | A-
Head: Step 3: Develop Market Segment Profiles | A-Head: Step 4: Evaluate Relevant Market
Segments | A-Head: Step 5: Select Specific Target Markets
4. Compare and contrast the concentrated and differentiated targeting strategies of market segmentation.
ANSWER: When an organization directs its marketing efforts toward a single market segment using one
marketing mix, it is employing a concentrated targeting strategy. The chief advantage of the
concentrated strategy is that it allows a firm to specialize. The firm analyzes the
characteristics and needs of a distinct customer group and then focuses all its energies on
satisfying that group’s needs. If the group is big enough, a firm may generate a large sales
volume by reaching a single segment. Concentrating on a single segment can also permit a
firm with limited resources to compete with larger organizations that have overlooked
smaller market segments. Specialization, however, means that a company allocates all its
resources on one target segment, which can be hazardous. If a company’s sales depend on a
single segment and the segment’s demand for the product declines, the company’s financial
health also deteriorates. With a differentiated targeting strategy, an organization directs its
marketing efforts at two or more segments by developing a marketing mix for each segment.
A benefit of a differentiated approach is that a firm may increase sales in the aggregate
market because its marketing mixes are aimed at more customers. For this reason, a company
with excess production capacity may find a differentiated strategy advantageous because the
sale of products to additional segments may absorb excess capacity. Differentiated strategy,
however, often demands more production processes, materials, and people because the
different ingredients in each marketing mix will vary. Thus, production costs may be higher
than with a concentrated strategy.
POINTS: 1
5. Identify the four major categories of segmentation of variables for consumer products, and give three examples of each.
ANSWER: A marketer that uses segmentation to reach a consumer market can choose one or several
variables. Segmentation variables can be grouped into four major categories: demographic,
geographic, psychographic, and behavioristic. Demographic characteristics that marketers
commonly use include age, gender, race, ethnicity, income, education, occupation, family
size, family life cycle, religion, and social class. Age is a common variable for segmentation
purposes. For example, a trip to the shopping mall high-lights the fact that many retailers,
including Zara, Aeropostale, and American Eagle Outfitters, target teens and young adults.
Markets may be divided using geographic variables, because differences in location, climate,
and terrain will influence consumers’ needs. City size can be an important segmentation
variable. A classic example is Walmart, which initially was located only in small towns and
even today can be found in towns where other large retailers stay away. Marketers sometimes
use psychographic variables, such as personality characteristics, motives, and lifestyles, to
segment markets. Personality characteristics can be a useful means of segmentation. When
appealing to a personality characteristic, a marketer almost always selects one that many
people view positively. For example, the Ermenegildo Zegna advertisement for men’s luxury
clothing and accessories clearly appeals to customers who are motivated by personal
appearance and status and who care about fashion. Firms can divide a market according to
consumer behavior toward a product, which commonly involves an aspect of consumers’
product use. For example, a market may be separated into users—classified as heavy,
moderate, or light—and nonusers. To satisfy a specific group, such as heavy users, marketers
may create a distinctive product and price, or initiate special promotion and distribution
activities.
POINTS: 1
DIFFICULTY: Easy
TOPICS: A-Head: Step 2: Determine Which Segmentation Variables To Use
6. Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?
ANSWER: Demographers study aggregate population characteristics such as the distribution of age and
gender, fertility rates, migration patterns, and mortality rates. Demographic characteristics
that marketers commonly use include age, gender, race, ethnicity, income, education,
occupation, family size, family life cycle, religion, and social class. Marketers segment
markets by demographic characteristics because they are often closely linked to customers’
needs and purchasing behaviors and can be readily measured.
POINTS: 1
DIFFICULTY: Easy
7. Describe the variables used to segment business markets, and provide two examples of each.
ANSWER: Like consumer markets, business markets are frequently segmented for marketing purposes.
Marketers segment business markets according to geographic location, type of organization,
customer size, and product use. Geographic segmentation may be especially appropriate for
producers seeking to reach industries concentrated in certain locations, such as furniture and
textile producers concentrated in the Southeast. A company sometimes segments a market by
types of organization within that market because they often require different product features,
distribution systems, price structures, and selling strategies. An organization’s size may affect
its purchasing procedures and the types and quantities of products it needs. Size can thus be
an effective variable for segmenting a business market. To reach a segment of a specific size,
marketers may have to adjust one or more marketing mix ingredients. Because the needs of
large and small buyers tend to be distinct, marketers frequently use different marketing
practices to reach target customer groups. Certain products, particularly basic raw materials
such as steel, petroleum, plastics, and lumber, can be used numerous ways in the production
of goods. These variations will affect the types and amounts of products purchased, as well as
the purchasing method.
POINTS: 1
DIFFICULTY: Easy
8. Describe the three areas marketers should examine when they evaluate relevant market segments.
ANSWER: After analyzing the market segment profiles, a marketer should be able to narrow his or her
focus to several promising segments that warrant further analysis. Marketers should examine
sales estimates, competition, and estimated costs associated with each of these segments.
Potential sales for a market segment can be measured along several dimensions, including
product level, geographic area, time, and level of competition. Besides obtaining sales
estimates, it is crucial to assess competitors that are already operating in the segments being
considered. A market segment that initially seems attractive based on sales estimates may
turn out to be much less so after a competitive assessment. To fulfill the needs of a target
segment, an organization must develop and maintain a marketing mix that precisely meets the
wants and needs of that segment, which can be expensive.
POINTS: 1
DIFFICULTY: Easy
TOPICS: A-Head: Step 4: Evaluate Relevant Market Segments
9. Why is it important for marketers to estimate sales potential for the entire industry as well as for the individual
company?
ANSWER: The competitive level specifies whether sales are being estimated for a single firm or for an
entire industry. Market potential is the total amount of a product that customers will purchase
within a specified period at a specific level of industry-wide marketing activity. A segment’s
market potential is affected by economic, sociocultural, and other environmental forces. The
specific level of marketing effort will vary from one firm to another, and each firm’s
marketing activities together add up to the industry wide marketing effort total. A marketing
manager must also estimate whether and to what extent industry marketing efforts will
change over time. Company sales potential is the maximum percentage share of a market that
an individual firm within an industry can expect to capture for a specific product. Several
factors influence company sales potential for a market segment. First, the market potential
places absolute limits on the size of the company’s sales potential—a firm cannot exceed the
market potential. Second, the magnitude of industry-wide marketing activities has an indirect
but definite impact on the company’s sales potential. Third, the intensity and effectiveness of
a company’s marketing activities relative to competitors’ activities affect the size of the
company’s sales potential.
POINTS: 1
10. Discuss the differences between the breakdown and buildup approaches to measuring company sales potential. What
are the similarities between these two approaches?
ANSWER: The two general approaches that measure company sales potential are breakdown and
buildup. In the breakdown approach, the marketing manager first develops a general
economic forecast for a specific time period. Next, the manager estimates market potential
based on this forecast. The manager derives the company’s sales potential from the forecast
and an estimate of market potential. In the buildup approach, the marketing manager begins
by estimating how much of a product a potential buyer in a specific geographic area, such as
a sales territory, will purchase in a given period. The manager then multiplies that amount by
the total number of potential buyers in that area. The manager performs the same calculation
for each geographic area in which the firm sells products and then adds the totals to calculate
market potential. To determine company sales potential, the manager must estimate, based on
planned levels of company marketing activities, the proportion of the total market potential
the company can reasonably attain.
POINTS: 1
TOPICS: TOPICS: A-Head: Step 4: Evaluate Relevant Market Segments
11. Why is it important for marketers to assess competitors before entering a market segment?
ANSWER: Besides obtaining sales estimates, it is crucial to assess competitors that are already operating
in the segments being considered. A market segment that initially seems attractive based on
sales estimates may turn out to be much less so after a competitive assessment. Such an
assessment should ask several questions about competitors: How many exist? What are their
strengths and weaknesses? Do several competitors already have major market shares and
together dominate the segment? Can our company create a marketing mix to compete
effectively against competitors’ marketing mixes? Is it likely that new competitors will enter
this segment? If so, how will they affect our firm’s ability to compete successfully? Answers
to such questions are important for proper assessment of the competition in potential market
segments.
POINTS: 1
12. Discuss the difference between sales forecasts and company sales potential. Why is it important for a marketer to be
able to forecast sales?
ANSWER: After a company selects a target market or markets, it must develop a sales forecast—the
amount of a product the company expects to sell during a specific period at a specified level
of marketing activity. The sales forecast differs from the company sales potential in that it
concentrates on what actual sales will be at a certain level of company marketing effort. The
company sales potential assesses what sales are possible at various levels of marketing
activities, assuming certain environmental conditions exist. Businesses use the sales forecast
for planning, organizing, implementing, and controlling activities. The success of numerous
activities depends on the forecast’s accuracy. Common problems in failing companies are
improper planning and lack of realistic sales forecasts. For example, overly ambitious sales
forecasts can lead to overbuying, overinvestment, and higher costs that can weaken a firm’s
strength and position.
POINTS: 1
TOPICS: A-Head: Developing Sales Forecasts
13. Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.
ANSWER: Executive judgment is the intuition of one or more executives. This is an unscientific but
expedient and inexpensive approach to sales forecasting. It is not a very accurate method, but
executive judgment may work reasonably well when product demand is relatively stable and
the forecaster has years of market-related experience. However, because intuition is heavily
influenced by recent experience, the forecast may weight recent sales booms or slumps
excessively. Another drawback to intuition is that the forecaster has only past experience as a
guide for deciding where to go in the future.
POINTS: 1
14. Why would a firm survey its sales force to forecast company sales? Why would a firm choose an expert forecasting
survey instead?
ANSWER: In a sales force forecasting survey, the firm’s salespeople estimate anticipated sales in their
territories for a specified period. A marketer may survey sales staff for several reasons, the
most important being that the sales staff is the company personnel closest to customers on a
daily basis. They therefore have first-hand knowledge about customers’ product needs.
Moreover, when sales representatives assist in developing the forecast, they are invested in
the process and are more likely to work toward its achievement. When a company wants an
expert forecasting survey, it hires professionals to help prepare the sales forecast. These
experts are usually economists, management consultants, advertising executives, college
professors, or other individuals outside the firm with experience in a specific market.
Drawing on this experience and their analyses of available information about the company
and the market, experts prepare and present forecasts or answer questions. Using experts is a
quick way to get information and is relatively inexpensive.
POINTS: 1
15. Any group of people who, as individuals or as organizations, have needs for products in a product class and who have
the ability, willingness, and authority to buy such products is a(n)
a. business market.
b. market.
c. undifferentiated market
d. segmented market
e. market variable
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
STATE STANDARDS: United States - AK - DISC: Marketing Plan
16. Which of the following is not a characteristic of a consumer market?

a. it consists of purchasers who intend to consume or benefit from the purchased products
b. they do not buy products for the main purpose of making a profit
c. they are sometimes referred to as B2C markets
d. their purchasing decisions are always made by only one individual
e. they may buy the product, but not use it themselves
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
17. Which of these statements is not true about business markets?
a. the purchase may be made to resell the item
b. the purchase is always made by more than one individual
c. the purchase may be made to use in general daily operations
d. the purchase may be made to use in production of another product
e. they can also be referred to as organizational markets
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
18. Which of the following is not a requirement or characteristic of a market?

a. The ability to purchase a product
b. A large number of people or organizations
c. The authority to buy a product
d. The willingness to use buying power
e. The need for a specific product in a specific product category
ANSWER: b
POINTS: 1
19. Mia is pet-sitting for a friend’s dog while he is on vacation. Her friend has given Mia all sorts of information,
including the veterinarian’s name and phone number, pet emergency center location, and the dog’s favorite bedtime
snack. The first evening of the vacation, Mia realizes that her friend did not bring the dog’s food over, and she has no idea
what the dog eats. Her friend’s cell phone is “out of range” at the moment, so Mia must go to the grocery store and shop
for dog food, even though she has never bought it before now. In this case, even though Mia is not a dog owner, she is
likely to be part of the market for dog food for all of the following reasons except _______.
a. she has the authority to purchase the dog food.
b. she possesses the buying power for purchasing dog food.
c. she has the need or desire for dog food.
d. her ability to purchase the dog food is questionable.
e. she is willing to use her buying power.
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
KEYWORDS: Bloom's: Application
20. The ability to purchase a product is a function of

a. buying power.
b. desire.
c. willingness.
d. authority.
e. needs.
ANSWER: a
POINTS: 1
21. Jack has just joined a law firm as its purchasing agent for all supplies, equipment, and service contracts. In his
previous position at another company, Jack could make decisions for any purchase up to $1 million; however, at the new
law firm, he can only make decisions for purchases less than $500,000. Recently, Jack has been working with a sales
representative from a computer software firm about a contract for new program to process the firm’s billing statements.
Jack signs the contract, even though it is for $950,000. In this case, Jack ___ part of the market for the software because
_____.
a. is; he has very little buying power.
b. is; has the need for the software.
c. is not; he is willing to spend the firm’s money.
d. is; he has the desire for the software.
e. is not; he does not have the authority to purchase.
ANSWER: e
POINTS: 1
22. Generally speaking, individuals who are unemployed would not be considered a target market for lawn care services
because
a. they would not desire such products.
b. they would not be willing to purchase such products.
c. they would not have the ability to purchase such products.
d. such markets are narrowly defined geographically.
e. they would not be authorized to purchase such products.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
23. Eighteen-year-old students do not form a market for alcoholic beverages because they
a. lack sufficient buying power to form a market.
b. lack the authority to purchase this type of product.
c. do not want to purchase this type of product.
d. do not have sufficient experience with this type of product.
e. lack the money to purchase this type of product.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
24. Prodigy Placement is a private elementary school located in the center of Manhattan. Students at the school are
considered in the top 1% of their age group in terms of IQ scores and aptitude. Parents who want to send their children to
the school must get on a waiting list as soon as the child is 12 months old and must make a deposit of $5,000 to the school
in order to hold the child’s “application” until they reach the age of 5 years. Emma’s parents put her on the waiting list at
the age of 1 year and paid the deposit; however, when Emma became five years old, she did not want to attend the school
even though she tested above the requirement. Her parents made the decision to enroll her for the upcoming school year.
In this case, Emma ___ part of the market for Prodigy Placement, and her parents ____ part of the market
a. was; were; because Emma needed to attend school.
b. was; were; because Emma had the authority to attend the school.
c. was; were; because they had the authority.
d. was not; were; because Emma lacked the desire.
e. was not; were; because Emma lacked willingness.
ANSWER: d
POINTS: 1
25. The first step in the target market selection process is

a. determining which segmentation variables to use.
b. selecting specific target markets.
c. identifying an appropriate targeting strategy.
d. evaluating relevant market segments.
e. developing market segment profiles.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
TOPICS: A-Head: Target Market Selection Process
26. To find a target market, a firm can use one of these targeting strategies.
a. total market strategy and the undifferentiated strategy.
b. product differentiation strategy and the customer differentiation strategy.
c. demographic strategy and the psychographic strategy.
d. socioeconomic strategy and the psychological strategy.
e. undifferentiated strategy, the concentrated strategy, and the differentiated strategy.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
27. The Pillsbury company defines all individual consumers who are purchasers of flour as its target market. It also
defines all businesses who purchase flour as its target market. What targeting strategy would be most appropriate in this
case?
a. Concentrated
b. Undifferentiated
c. Wide appeal
d. Differentiated
e. Clustered
ANSWER: d
POINTS: 1
28. When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is
using a(n) ____ strategy.
a. concentrated targeting
b. differentiated
c. heterogeneous market
d. undifferentiated
e. single mix
ANSWER: d
POINTS: 1
29. Why would a company use the undifferentiated strategy?

a. The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy them.
b. The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market.
c. The needs of individual consumers in the target market for a specific product are similar, so the organization
can satisfy most customers with a single marketing mix.
d. The undifferentiated strategy is expensive to implement but tends to produce the most sales.
e. When a market is made up of individuals or organizations with diverse need for products in a specific product
class.
ANSWER: c
POINTS: 1
30. When the needs of individual consumers in a target market for a specific product are similar and the organization can
satisfy most customers with a single marketing mix, the best approach to use may be the ____ strategy.
a. undifferentiated
b. differentiated
c. segmented
d. concentrated
e. heterogeneous
ANSWER: a
POINTS: 1
31. Which of the following statements about the undifferentiated targeting strategy is false?
a. The undifferentiated targeting strategy should be used when the needs of individual customers are similar.
b. The undifferentiated targeting strategy uses one promotional program aimed at everyone in the target market.
c. The undifferentiated targeting strategy is good for use with staple items, such as sugar and salt.
d. The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the target
market.
e. The opposite of the undifferentiated targeting strategy is the differentiated targeting strategy.
ANSWER: d
POINTS: 1
32. The ProMark Company manufactures a pencil that is about five inches long and has no eraser. It sells the product
primarily to golf courses and universities. What type of targeting strategy is the ProMark Company using?
a. Extensive
b. Concentrated
c. Undifferentiated
d. Intensive
e. Differentiated
ANSWER: b
POINTS: 1
33. The producers of C & H Cane Sugar sell the product in five-pound bags, one-pound bags, and one-pound boxes.
When developing its advertising strategy, C & H will most likely use a(n) ____ approach in defining a target market.
a. undifferentiated
b. differentiated
c. product strategy
d. cost-benefit
e. demographic
ANSWER: a
POINTS: 1
34. If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be
using the ____ strategy.
a. directed
b. undifferentiated
c. segmented
d. differentiated
e. product-use
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
35. Smart Balance produces a line of milk products that are lactose-free. The milk comes in pint, quart, and half-gallon
cartons, as well as 16-ounce glass bottles. Smart Balance sells its pint cartons to school systems, its quart and half-gallon
cartons to grocery stores, and its glass bottles to vending machine operators. Smart Balance appears to use a(n) _____
strategy in marketing its product to a target market that is likely to be _______.
a. undifferentiated; homogeneous
b. undifferentiated; heterogeneous
c. differentiated; homogenous
d. differentiated; heterogeneous
e. concentrated; heterogeneous
ANSWER: c
POINTS: 1
36. The undifferentiated targeting strategy for finding a target market will likely not be successful if
a. product positioning is needed.
b. the firm defines the total market as its target market.
c. people within the market have heterogeneous needs.
d. people within the market have homogeneous needs.
e. the firm is capable of developing a single marketing mix that satisfies all people's needs.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
37. Most markets for products are made up of individuals or groups with diverse needs for products and are called ____
markets.
a. undifferentiated
b. concentrated
c. homogenous
d. differentiated
e. heterogeneous
ANSWER: e
POINTS: 1
38. Walmart sells numerous products, including packaged food, produce, automotive maintenance services, eyeglasses,
clothing, and toys. Walmart advertises itself as a store where “we save people money so they can live better,” focusing on
its low prices as the customer’s most important need. Walmart’s advertising appears to use a(n) _____ strategy to a
market that is _____.
a. undifferentiated; homogeneous.
b. undifferentiated; heterogeneous.
c. differentiated; homogeneous.
d. homogeneous; differentiated.
e. heterogeneous; undifferentiated.
ANSWER: a
POINTS: 1
39. Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product
needs are classified as
a. market segments.
b. heterogeneous markets.
c. concentrated markets.
d. demographic segments.
e. strategic segments.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
40. Mattel views the toy market as composed of four age groupings, each with different needs and desires. Mattel is using
a(n) ____ targeting strategy for its groups, which are known as _____.
a. undifferentiated market; market segments
b. undifferentiated market; heterogeneous.
c. differentiated; market segments.
d. differentiated; the marketing mix.
e. concentrated market; heterogeneous.
ANSWER: c
POINTS: 1
41. The purpose of market segmentation is to

a. differentiate products.
b. divide a total market to enable a marketer to develop a more precise marketing mix.
c. reduce the overall cost of marketing activities.
d. identify a single marketing mix that will be satisfactory for the general market.
e. meet the needs of homogeneous markets.
ANSWER: b
POINTS: 1
42. The process of dividing a total market into market groups because people within each group have relatively similar
product needs is called
a. segmentation.
b. diversification.
c. target marketing.
d. concentration.
e. customization.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
43. Several conditions must exist for market segmentation to be successful. These conditions include all of the following
except
a. the total market should be divided so that segments can be compared on sales potential, costs, and profits.
b. customers' needs for the product must be homogeneous.
c. the company must be able to reach the chosen segment with a particular marketing mix.
d. segments must be identifiable and divisible.
e. at least one segment must have enough profit potential to justify developing and maintaining a special
marketing mix for that segment.
ANSWER: b
POINTS: 1
44. A business advantage of the concentrated targeting strategy for any company is that it
a. requires less market research and information.
b. requires less intensive analysis of customers' characteristics and needs.
c. allows a firm to utilize all of its production capacity.
d. maintains the firm's flexibility in moving into other market segments.
e. allows a firm to develop a special marketing mix for a single market segment.
ANSWER: e
POINTS: 1
45. A targeting strategy in which an organization targets a single market segment using one marketing mix is called a(n)
____ strategy.
a. selective
b. focused
c. differentiated
d. concentrated
e. undifferentiated
ANSWER: d
POINTS: 1
46. When markets are comprised of people with differing product needs, the marketing manager should use a(n) ____
strategy.
a. concentrated or differentiated targeting
b. market-intensive
c. integrated
d. product-oriented
e. undifferentiated
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
47. A disadvantage of the concentrated targeting strategy is that

a. the firm's financial condition is tied to a single and specialized marketing mix.
b. large sales volumes cannot be generated.
c. production costs may be higher than with other strategies.
d. marketing personnel may become dissatisfied with the limited opportunities provided by this approach.
e. marketing costs are often higher than for other strategies.
ANSWER: a
POINTS: 1
48. If Georgia-Pacific, a producer of home siding, decking, and other wood products, focused its marketing efforts to
home construction companies only, it would be using a(n) ____ strategy. If it sold the same products to both construction
companies and DIY retailers such as Home Depot, it would be using a(n) ____ strategy.
a. undifferentiated; undifferentiated
b. undifferentiated; differentiated
c. differentiated; multisegmented
d. concentrated; differentiated
e. concentrated; concentrated
ANSWER: d
POINTS: 1
49. Tiffany's markets its exclusive jewelry and gifts to high-income individuals interested in high-quality products and a
well-known brand name. It uses the same marketing mix to reach this market. Tiffany's uses a(n) ____ strategy.
a. undifferentiated
b. differentiated targeting
c. exclusive targeting
d. heterogeneous
e. concentrated targeting
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
50. Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories through sales representatives
who are also interior designers. It also has another, slightly less expensive line that it sells through stores such as
Nordstrom’s and Saks Fifth Avenue. Interior Designs Inc. is most likely using a(n) ____ targeting strategy.
a. differentiated
b. undifferentiated
c. concentrated
d. homogeneous
e. heterogeneous
ANSWER: a
POINTS: 1
51. The primary advantage of a concentrated targeting strategy is
a. it meets the needs of a wide range of consumers.
b. it allows a firm to specialize to meet specific customer needs.
c. it is more flexible than any other approach.
d. it is the least risky targeting approach.
e. its customers are the most willing to repurchase the same brands.
ANSWER: b
POINTS: 1
52. Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to families. Procter &
Gamble is using a(n) ____ targeting strategy for laundry detergents.
a. multiuse
b. differentiated
c. stratified
d. undifferentiated
e. concentrated
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
53. Volkswagen markets its Routan to large families, its R32 racecar to men, and its Jetta to young singles. What targeting
approach is Volkswagen using?
a. Concentrated
b. Strategic
c. Differentiated
d. Undifferentiated
e. Multisegmented
ANSWER: c
POINTS: 1
54. Which of the following products is most likely to be marketed, using an undifferentiated approach?
a. bicycle
b. computer
c. notebook
d. seasoning salt
e. oscillating fan
ANSWER: d
POINTS: 1
55. After a firm has identified an appropriate targeting strategy, the next step in the target market selection process is
a. determining the demographic variables of the target market.
b. developing market segment profiles.
c. determining which segmentation variables to use.
d. selecting specific target markets.
e. evaluating relevant market segments.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
56. Characteristics of individuals, groups, or organizations that are used for dividing a total market into smaller
homogeneous groups are called ____ variables.
a. marketing
b. classification
c. segmentation
d. stratification
e. dividing
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
57. Age, rate of product use, location, and gender are all examples of common
a. demographic variables.
b. geographic characteristics.
c. targeting strategies.
d. psychographic variables.
e. segmentation variables.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
STATE STANDARDS: United States - AK - DISC: Customer
58. Segmentation variables are usually grouped into four categories:

a. demographic, geographic, religion, and income.
b. geopolitical, income, behavioristic, and psychographic.
c. attitudes, lifestyles, behaviors, and gender.
d. geographic, demographic, psychographic, and attitudes.
e. demographic, geographic, psychographic, and behavioristic.
ANSWER: e
POINTS: 1
STATE STANDARDS: United States - AK - DISC: International Perspectives
59. Which of the following is not one of the major categories of consumer market segmentation variables?
a. Demographic characteristics
b. Geographic variables
c. Psychographic dimensions
d. Situational variables
e. Behavioristic characteristics
ANSWER: d
POINTS: 1
60. Alpine Ski Shops is looking for new markets for both its brick and mortar retail stores and its catalog division. Alpine
Ski Shops would most likely use a(n) ______ base for market segmentation of its stores and a(n) ______ base for market
segmentation of its catalog division?
a. behavioristic; geographic
b. geographic; demographic
c. demographic; psychographic
d. environmental; demographic
e. geographic; behavioristic
ANSWER: e
POINTS: 1
61. TimeWarner Cable uses a segmentation strategy for its cable TV packages based on market characteristics such as
age, gender, or income. Which of the following segmentation variables is TimeWarner using?
a. Demographic
b. Geographic
c. Psychographic
d. Product-related
e. Education
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Analysis
62. With its Venus razor, Gillette was the first marketer to offer a triple blade razor specifically designed for women. This
is an example of market segmentation using ____ variables.
a. demographic
b. psychographic
c. geographic
d. family life cycle
e. product use
ANSWER: a
POINTS: 1
63. Kelly's Kids is a home-based business that sells high-quality children's clothing at premium prices using in-home
parties. These in-home parties typically cater to families with small children and middle- to upper-middle-class income.
Kelly's Kids is using ____ variables to segment its market.
a. demographic
b. psychographic
c. sociographic
d. behavioristic
e. geographic
ANSWER: a
POINTS: 1
64. A marketer that targets customers based on marital status and the presence and age of children is using
a. behavioristic segmentation.
b. lifestyle variables.
c. psychographic variables.
d. family life cycle.
e. phase of life segmentation.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
65. Which of the following products is most likely to have its market segment based on age?
a. Nike shoes
b. Lipton Iced Tea
c. Bic pens
d. Legos
e. Carpet
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
United States - AK - DISC: Strategy
66. If Campbell were to offer single serving "Soup for One" packages to household markets, it would be using
segmentation based on
a. income.
b. age.
c. preferences.
d. geographic considerations.
e. family life cycle.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
67. Family life cycle is most typically based on

a. income.
b. geographic location.
c. marital status and age of children.
d. occupation.
e. buying power.
ANSWER: c
POINTS: 1
68. Population density and city size are ____ variables used for market segmentation.
a. geographic
b. demographic
c. psychographic
d. environmental
e. geodemographic
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
69. Many marketers are concerned about the number of potential customers within a certain area of land because of the
different requirements to serve dissimilar areas. What is this segmentation variable called?
a. Micromarketing
b. Population
c. Market density
d. MSA
e. PMSA
ANSWER: c
POINTS: 1
70. Subaru is producing a new seven-passenger van with all-wheel drive. Which of the following would be the best
variables for segmenting the market for this new model?
a. Gender and age
b. Geographic location and family life cycle
c. Income and geographic location
d. Family life cycle and income
e. Geographic location and gender
ANSWER: b
POINTS: 1
71. Systems such as PRIZM and Acorn provide companies with lifestyle and demographic information about
neighborhoods throughout the United States. This information is used to aid
a. behavioristic segmentation.
b. geodemographic segmentation.
c. market density analysis.
d. demographic segmentation.
e. geographic segmentation.
ANSWER: b
POINTS: 1
72. Justin Franklin's company is interested in locating areas where the average income is high, the average age range is
25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company
would most likely find possible markets through
a. U.S. Census Bureau information.
b. geographic segmentation variables.
c. geodemographic segmentation.
d. climate information.
e. psychographic segmentation.
ANSWER: c
POINTS: 1
73. Micromarketing is
a. a market segmentation approach in which firms focus precise marketing efforts on very small geographic
markets.
b. developing a very specific marketing mix that will effectively meet the needs of only a small segment of the
market.
c. marketing efforts that are tightly controlled by high-level executives in the organization.
d. a way to segment the market to meet the needs of individuals with the same motives and personality attributes.
e. creating advertising that is so specific to a certain type of individual that few people outside that micromarket
will respond to the message.
ANSWER: a
POINTS: 1
74. Which of the following is the biggest drawback to using psychographic variables?
a. They are very costly to collect.
b. They are difficult to measure.
c. They give poor information about consumer needs.
d. They do not reflect socioeconomic characteristics of consumers.
e. The resulting segments are difficult to be reached.
ANSWER: b
POINTS: 1
75. Seventh Generation is a company producing products that limit the amount of negative impact on the environment.
Their product line includes dishwashing liquid, toilet paper, paper towels, baby wipes, and laundry detergent, to name a
few. Seventh Generation is now interested in producing a new line of clothing; mostly t-shirts, shorts, and long pants for
both men and women. Their research indicates that they should use psychographic segmentation in their marketing
strategy. Which group of segmentation variables will Seventh Generation be using?
a. Geographic location
b. Age, sex, and socioeconomic characteristics
c. Social class variables
d. Personality characteristics, motives, and lifestyles
e. Family life cycle, social class, and religion
ANSWER: d
POINTS: 1
76. When using personality characteristics as a market segmentation variable, marketers generally
a. conduct personality assessments of their potential target market to determine which personality characteristics
they possess.
b. use research developed by clinical psychologists to determine which personality characteristics consumers
using their products are most likely to have.
c. use generic characteristics that all members of the population have.
d. use a positively viewed characteristic they assume much of their target market has or would like to have.
e. conduct a series of focus groups to determine both the positive and negative characteristics members of their
target market are perceived to have.
ANSWER: d
POINTS: 1
77. The psychographic variable that includes numerous characteristics related to people's activities, interests, and opinion
is
a. motive.
b. social class.
c. personality.
d. stage in family life cycle.
e. lifestyle.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
78. If a company segments its market on the basis of their reasons for purchasing a particular product, the primary
segmentation variable in use is
a. lifestyle.
b. motives.
c. personality.
d. benefit expectations.
e. personality attributes.
ANSWER: b
POINTS: 1
79. Demographic variables such as income and occupation, as well as how people spend their time and the importance of
things in their surroundings, are all factors considered in ____ segmentation.
a. psychographic
b. social class
c. lifestyle
d. personality
e. family life cycle
ANSWER: c
POINTS: 1
80. A widely used system for classifying individuals on the basis of lifestyle is
a. CMSA.
b. PRIZM.
c. CMSA.
d. LIFO.
e. Prospect Zone.
ANSWER: b
POINTS: 1
81. Which of the following is an example of a behavioristic segmentation variable?

a. Family size
b. Climate
c. Age
d. Usage rate
e. Personality characteristics
ANSWER: d
POINTS: 1
82. Budweiser may choose to segment its market based on heavy, moderate, and light drinkers of its alcoholic beverages.
This is an example of market segmentation based on
a. behavioristic variables.
b. benefits.
c. lifestyles.
d. psychographic variables.
e. demographic variables.
ANSWER: a
POINTS: 1
83. The Gap has recently produced a new line of athletic wear that closely competes with a designer label in its quality,
utility, and appearance. However, it is about half the cost of the designer brand. Product managers for The Gap line plan
to use price sensitivity, brand loyalty, and end use as variables to segment their target market. These are all _______
variables for market segmentation.
a. psychographic
b. usage
c. demographic
d. lifecycle
e. behavioristic
ANSWER: e
POINTS: 1
84. Alli segments its diet pills based on those who have morning cravings, those who tend to overeat near the end of the
day, those who need all day long appetite suppression, and those who want appetite control and more energy. This is an
example of market segmentation based on variables of
a. demographics.
b. lifestyles.
c. psychographics.
d. behavior.
e. personality characteristics.
ANSWER: d
POINTS: 1
85. Crest toothpaste is available in several different versions, such as Crest Whitening, Crest Tartar Control, Crest
Whitening with mouthwash, and Crest Total Effects. Given these different variations of the product, it appears that the
marketers of Crest are segmenting the market by using ____ segmentation.
a. behavioristic
b. product usage
c. benefit
d. end-purpose
e. advantage
ANSWER: c
POINTS: 1
86. Variables such as geographic location, type of organization, customer size, and type of product usage are used to
segment ____ markets.
a. consumer
b. business
c. government
d. international
e. most target
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
87. Dell segments its business markets into small business, corporate, government agencies, K-12 schools, and higher
education institutions. The primary segmentation variable used in this example is
a. geographic location.
b. type of organization.
c. secondary product use.
d. customer size.
e. market potential.
ANSWER: b
POINTS: 1
88. Which of the following variables would most likely be used to segment a business market?
a. An attitude of the company's CEO
b. The geographic location of the company
c. The lifestyle of the company's buying agent
d. Net income generated by the company
e. Common opinions of the company's employees
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
89. Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International
Paper segments its market based on
a. customer size.
b. psychographics.
c. demographics.
d. use of product.
e. geographic location.
ANSWER: d
POINTS: 1
90. Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have different needs for the
steel and thus Bethlehem has to prepare the raw steel differently depending on how customers will use it in their
production processes. The primary business segmentation variable in this example is
b. customer size.
c. product use.
d. customer importance.
e. organization classification.
ANSWER: c
POINTS: 1
91. After an organization has determined which of the many segmentation variables it will use, the next step in the target
market selection process is
a. evaluating each of the relevant market segments.
b. selecting the specific target markets.
c. reviewing the appropriate marketing strategy.
d. analyzing the interaction between segmentation variables.
e. developing market segment profiles.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
TOPICS: A-Head: Step 3: Develop Market Segment Profiles
92. ____ describe the similarities among potential customers within a market segment and explain the differences among
people in different market segments.
a. Market segmentation variables
b. Market segment profiles
c. Segmentation grids
d. Market differentiation indexes
e. Market concentrations
ANSWER: b
POINTS: 1
93. Yvonne and Garret are looking at information about how their organization's products could fit potential customers'
needs. This information deals with demographic characteristics, product benefits sought, lifestyles, geographic factors,
brand preferences, and usage rates. They are most likely looking at
a. the sales force survey results.
b. the results of sales forecasting.
c. a market trend analysis.
d. a market segmentation discrimination analysis.
e. a market segment profile.
ANSWER: e
POINTS: 1
94. The total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within
a specified time period at a given level of industry-wide marketing activity, is the
a. competitor sales potential.
b. sales objective.
c. forecasted sales.
d. company sales potential.
ANSWER: e
POINTS: 1
95. The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the
a. sales forecast.
b. market potential.
c. company sales potential.
d. company sales objective.
e. market share goal.
ANSWER: c
POINTS: 1
96. General Electric calculates that the total number of light bulbs sold to consumers in the next year by all light bulb
producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's
a. sales potential.
c. target growth rate.
d. sales forecast.
e. sales objective.
ANSWER: b
POINTS: 1
97. If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United States, this
percentage would represent the ice cream marketer's
a. target growth rate.
b. sales forecast.
c. sales objective.
d. company sales potential.
ANSWER: d
POINTS: 1
98. Using the breakdown approach to sales potential, estimates are made
a. by referring to specific geographic factors.
b. by establishing levels of marketing effort that will be required to achieve specific levels of sales.
c. without reference to industry marketing efforts.
d. without reference to general economic conditions.
e. by starting with general economic conditions.
ANSWER: e
POINTS: 1
99. The manager at a local recreational vehicle store, Off-Road Rage, believes the next two years will be difficult because
of an economic recession. Using this forecast, he determines the effect on the industry's market potential and then
estimates how his company's potential sales will look based on this outlook. This manager is using a ____ approach to
estimating sales potential.
a. breakdown
b. recessionary
c. buildup
d. pyramid
e. dimensional
ANSWER: a
POINTS: 1
100. Alex Wren of Owens Corning Fiberglass talks to Terry Jones, a homebuilder, to find out how much fiberglass
insulation he intends to use in building homes during the next year. Albert then multiplies that number by the total number
of builders in the territory. He is using a ____ approach to measure sales potential.
a. multivariable
b. use of product
c. breakdown
d. regression
e. buildup
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
101. The buildup approach measure of sales potential

a. starts with broad estimates of general economic activity.
b. ends with an estimate of a single firm's sales of a specific product.
c. starts with forecasts about demand for a specific product within a relatively small area.
d. does not use sales estimates.
e. is seldom employed by industrial firms.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
102. When evaluating market segments, assessment of competitors is important because

a. it is difficult to segment a market when it has multiple competitors.
b. an absence of competitors usually creates difficulties in accurately measuring segment sales potential.
c. sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that
together have a large share of that segment.
d. a competitive analysis may lead to confusion as to who are the key competitors.
e. competition is generally not a major problem as long as a marketer is aware of it.
ANSWER: c
POINTS: 1
103. Estimating the cost of entering a market and focusing on a specific target segment is important because
a. cost estimates are crucial to estimating sales potential accurately.
b. higher costs will keep other potential competitors from entering that particular segment.
c. customers are more likely to be attracted to marketers that invest heavily in the target segment.
d. the organization's marketers need to know if they can reach the segment at costs equal to or below competitors'
costs.
e. higher cost generally ensures long-term success.
ANSWER: d
POINTS: 1
104. The final step in the target market selection process is

a. implementing the appropriate marketing mix for the target market.
b. evaluating relative market segments.
c. eliminating market segments that are cost prohibitive.
d. selecting specific target markets.
e. revising the final segmentation variables based on target selection.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
TOPICS: A-Head: Step 5: Select Specific Target Markets
105. Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments, they have
completed competitive assessments and cost estimates. The next major step they must take is to
a. determine which segmentation variables to use.
b. develop market segment profiles.
c. identify the appropriate targeting strategy.
d. select specific target markets.
e. develop sales forecasts.
ANSWER: d
POINTS: 1
106. Meghan would like to open a house cleaning business and is considering several market segments. She has identified
four segments for consideration; young, urban singles, young married professionals, senior citizens, and college students.
She has just completed an analysis of these four segments by assessing such factors as sales estimates, competition, and
estimated costs. Meghan is now ready for the next step in the target market selection process, which is to
a. identify the appropriate targeting strategy.
b. determine which segmentation variables to use.
c. develop market segment profiles.
d. evaluate relevant market segments.
e. select specific target markets.
ANSWER: e
POINTS: 1
107. When selecting specific target markets, a firm should

a. revert to an undifferentiated approach if the market is deemed heterogeneous.
b. choose the segments most in line with the firm's objectives and long-term growth.
c. choose all segments that are determined to be profitable for the organization.
d. choose the minimum number of segments necessary to achieve company sales potential.
e. pick the segments with the best sales forecasts for the upcoming period of time.
ANSWER: b
POINTS: 1
108. Guess? will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans.
These 30 million pairs represent the company's
a. sales potential.
c. sales forecast.
d. market sales.
e. selected market.
ANSWER: c
POINTS: 1
109. The amount of product a company expects to sell during a specific period at a specified level of marketing activity is
called the
a. company sales potential.
b. revenue estimate.
c. company sales prediction.
d. market potential.
e. sales forecast.
ANSWER: e
POINTS: 1
110. Relying on executive judgment for forecasting may be adequate when

a. levels of marketing efforts put forth by competitors vary considerably.
b. recent events give the executive specific impressions of product demand.
c. product demand is erratic.
d. the executive conducts surveys.
e. the executive has considerable experience and product demand is relatively stable.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
111. Intuition and expediency are primary characteristics of which of the following sales forecasting methods?
a. Surveys
b. Executive judgment
c. Cycle analysis
d. Market tests
e. Industry indicators
ANSWER: b
POINTS: 1
112. When a business has a relatively small number of customers, a preferred method of forecasting is
a. regression analysis.
b. trend analysis.
c. the Delphi technique.
d. a market test.
e. a customer forecasting survey.
ANSWER: e
POINTS: 1
113. The most important reason that a firm might use a sales force forecasting survey to determine its sales forecast is
a. salespeople are generally optimistic about the future and will provide excellent forecast targets.
b. most salespeople tend to have a pessimistic outlook, which is more likely to result in an achievable sales
forecast.
c. this tends to be the fastest way to determine a good sales forecast for the upcoming period.
d. the averaging and other statistical techniques applied to these forecasts result in extremely accurate numbers.
e. the sales staff is closer to the actual customers on a regular basis than anyone else in the organization.
ANSWER: e
POINTS: 1
114. When a company has its sales forecasts prepared by management consultants, economists, or college professors, it is
using a(n)
a. expert forecasting survey.
b. Delphi technique.
c. random factor analysis.
d. external judgment survey.
e. market test.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
115. Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to
a. allow an opportunity to obtain diverse expert opinions.
b. allow experts to work separately to reach a consensus as to their forecasts.
c. reach an accurate sales forecast through the use of multiple sales forecasting techniques.
d. determine if the expert forecasting survey is superior to regression analysis.
e. assess the extent to which this year's sales forecast is more accurate than that of previous years.
ANSWER: b
POINTS: 1
116. The forecasting techniques that assume past sales patterns will continue into the future are all variations of
b. random factor analysis.
c. seasonal analysis.
d. time series analysis.
e. past sales forecasting surveys.
ANSWER: d
POINTS: 1
117. A forecasting method that predicts sales based on relationships between past sales and other variables is called
b. customer forecasting surveys.
c. the Delphi technique.
d. random factor analysis.
e. time series analysis.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
118. Brian works for a manufacturer of sports equipment and is currently developing a company sales forecast for golf
clubs. While reviewing data, he discovered a pattern in sales volume over the past ten years that peaked during two
months of each year. Brian likely used which sales forecasting technique?
a. the Delphi technique
c. Time series analysis
d. Market tests
e. Regression analysis
ANSWER: c
POINTS: 1
119. Katy Ramirez is a marketer for a company that produces in-ground swimming pools. When forecasting company
sales, she finds a direct association between past sales and per capita income. Which sales forecasting technique is Katy
using?
a. The Delphi technique
d. Market tests
ANSWER: e
POINTS: 1
120. The sales prediction technique based on the correlation between sales and other factors⎯such as population density,
per capita income, or family size⎯is
a. executive judgment.
b. time series analysis.
c. regression analysis.
d. a market test.
e. an expert survey.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
121. The Sara Lee Company is attempting to forecast sales for a new ice cream cake. To come up with an accurate
forecast, Sara Lee places the product in Atlanta supermarkets for a period of four months. In this instance, Sara Lee is
using which forecasting method?
a. Time series analysis
b. Market test
c. Executive judgment
d. Regression analysis
e. Survey
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
122. The sales forecasting method that consists of making a product available to buyers in one or more locations and
measuring purchase response is
a. a market test.
b. regression analysis.
c. trend analysis.
d. a survey.
e. the Delphi technique.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
123. The forecasting method that utilizes a firm's historical sales data to find patterns in the firm's sales volume over time
is
a. the regression method.
b. customer forecasting.
c. a market test.
d. sales force forecasting.
e. time series analysis.
ANSWER: e
POINTS: 1
124. DeShon has just become the new marketing analyst for a company that produces vinyl siding for homes. In an effort
to forecast his firm's sales for the coming year, he needs to find where the greatest opportunities are for selling his
product. DeShon looks at the sales for the last five years and calculates a growth trend. He then collects data from a
combination of other factors, such as population density, family size, home ownership, and per capita income. Finally,
DeShon looks at the correlation between the sales trend data and the various combination of demographic data. DeShon is
employing the ____ forecasting method for the sales growth trend and the ________ method for the correlation.
a. Time series analysis; regression analysis
b. Executive judgment; regression analysis
c. Market tests; regression analysis
d. Regression analysis; time series analysis
e. Market tests; time series analysis
ANSWER: a
POINTS: 1
125. Which of the following sales forecasting techniques would generally be most suitable for estimating sales of a new
product?
a. Executive judgment
b. Customer surveys
d. Market tests
e. Regression methods
ANSWER: d
POINTS: 1
126. Which of the following forecasting methods is least dependent on historical sales data?
a. Regression analysis
b. Trend analysis
d. Cycle analysis
e. A market test
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
127. What is the main problem with using a market test as a forecasting tool?
a. Difficult to interpret
b. Expensive
c. Inaccurate
d. Unacceptable to consumers
e. Overused
ANSWER: b
POINTS: 1
128. Scenario 6.1

Use the following to answer the questions.
Lil' Angels Kids Spa offers various treatments designed to appeal to the younger customer. Treatment options include
manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party package.
Currently, Lil' Angels offers its services only to girls under the age of 14. Originally begun in Delaware, Lil' Angels is
considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to
17. The company realizes that some changes may be needed. For example, management wants to find out if the older girls
will be interested in their birthday party and tea party services.
Refer to Scenario 6.1. Lil' Angels Kids Spa is currently using a(n)____ targeting strategy.
a. undifferentiated
b. exclusive
c. concentrated
d. differentiated
e. selective
ANSWER: c
POINTS: 1
129. Scenario 6.1

Refer to Scenario 6.1. Which of the following best describes Lil' Angels' current approach to the market?
a. It is segmenting the market according to demographic variables.
b. It is segmenting the market according to product-related variables.
c. It has chosen a segment that is not identifiable and divisible.
d. Its market is impossible to reach because of legal constraints.
e. It is not segmenting the market but is attempting to reach everyone with the product.
ANSWER: a
POINTS: 1
MARK.PRID.16.06.04 - LO: 06-04
TOPICS: A-Head: Step 1: Identify The Appropriate Targeting Strategy | A-Head: Step 2: Determine
Which Segmentation Variables To Use
130. Scenario 6.1

Refer to Scenario 6.1. In calculating the sales forecast for the next year, marketers at Lil’ Angels use data from the past
five years in order to identify any trends that surface. Additionally, marketers want to find out what family variables relate
to those sales. Which of the following variables should the marketers use in relating to sales? What type of forecast
method will they be using to relate the variables to sales trends?
a. behavioristic; time series analysis
b. psychographic; time series analysis
c. demographic; regression analysis
d. income; regression analysis
e. family life cycle; market tests
ANSWER: c
POINTS: 1
MARK.PRID.16.06.08 - LO: 06-08
TOPICS: A-Head: Step 2: Determine Which Segmentation Variables To Use | A-Head: Developing
Sales Forecasts
131. Scenario 6.1

Refer to Scenario 6.1. What method should Lil' Angels use to forecast sales in new regions?
a. Sales force survey
b. Time series analysis
c. Correlation method
d. Market test
ANSWER: d
POINTS: 1
132. Scenario 6.2

GE Transportation produces locomotive engines for sale in countries around the world. After looking at the total market
for locomotive engines, the company found that various rail lines wanted different types of engines. Major rail lines in the
U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a
cleaner, greener locomotive engine. Rail lines operated by several Eastern European countries wanted locomotive engines
for running short distances between cities in their own country. GE Transportation is currently manufacturing its GE 4400
for heavy freight, its Hybrid Eco-Engine, and its Dash 9, suited for shortline transport.
Refer to Scenario 6.2. GE Transportation is most likely using a(an) ______ targeting strategy, segmenting by ________
variables.
a. Undifferentiated; benefit expectations
b. Differentiated; benefit expectations
c. Differentiated; volume usage
d. Concentrated; volume usage
e. Concentrated; geographic location
ANSWER: b
POINTS: 1
MARK.PRID.16.06.04 - LO: 06-04
TOPICS: A-Head: Step 1: Identify The Appropriate Targeting Strategy | A-Head: Step 2: Determine
Which Segmentation Variables To Use
133. Scenario 6.2

Refer to Scenario 6.2. Currently, GE uses several sales forecasting methods. One method is to sell the different
locomotive engines to buyers in different countries, and then measuring the purchasing response in each. In this case, GE
Transportation is using the _____ method to forecast future sales.
a. Delphi
b. Market test
c. Regression analysis
d. Volume usage
e. Trend analysis
ANSWER: b
POINTS: 1
134. Scenario 6.2

Refer to Scenario 6.2. Suppose that GE Transportation decided to produce only locomotive engines for rail lines in the
United States. The segmentation variable then would be
b. type of organization.
c. market density.
d. product use.
e. customer size.
ANSWER: a
POINTS: 1
135. Scenario 6.2

Refer to Scenario 6.2. Researchers at GE Transportation estimate that 1,000 rail lines throughout the world will purchase
some kind of locomotive engine next year. That number represents the
a. company sales potential.
b. breakdown approach.
c. market potential.
d. buildup approach.
e. company sales forecast.
ANSWER: c
POINTS: 1
136. Scenario 6.2

Refer to Scenario 6.2. If a GE Transportation researcher analyzes monthly sales data for a four-year time frame, looking
for periodic fluctuations, the researcher is doing a ____ analysis.
a. trend
b. seasonal
c. cycle
d. random factor
e. regression
ANSWER: c
POINTS: 1
137. A market is a group of people who, as individuals, have needs for products in a product class and have the ability,
willingness, and authority to purchase such products.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
138. Individuals' ability to buy depends on the strength of their buying power.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
139. The four requirements of a market are that the individuals in the market must have a need for the product and the
ability, willingness, and authority to buy it.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
140. A person who has buying power also has the authority to buy.
a. True
b. False
ANSWER: False
POINTS: 1
141. The five-step process usually used for target market selection includes identifying the appropriate targeting strategy,
determining which segmentation variables to use, developing market segment profiles, evaluating relevant market
segments, and deciding which targeting strategy to use.
a. True
b. False
ANSWER: False
POINTS: 1
142. There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the
concentrated targeting strategy.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
143. A company sometimes defines a total market as its target market.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
144. One condition for effective segmentation is that at least one segment must have substantial profit potential.
a. True
b. False
ANSWER: True
POINTS: 1
145. The undifferentiated strategy can be effective for an organization that has a homogeneous market and can develop
and maintain a single marketing mix.
a. True
b. False
ANSWER: True
POINTS: 1
146. An undifferentiated targeting strategy does not target a single market with one marketing mix.
a. True
b. False
ANSWER: False
POINTS: 1
147. The concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single
market segment through one marketing mix.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
148. A differentiated targeting strategy is when the organization targets two or more markets by developing a single
marketing mix.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
149. Only one variable can be used to segment a market.

a. True
b. False
ANSWER: False
POINTS: 1
150. Segmentation variables are characteristics of individuals, groups, or organizations in a total market.
a. True
b. False
ANSWER: True
POINTS: 1
151. A segmentation variable is used to group smaller markets into one larger market.
a. True
b. False
ANSWER: False
POINTS: 1
152. Demographic characteristics are commonly used to segment a market because they are closely related to consumers'
product needs and purchasing behavior.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
153. Family life cycle is a psychological dimension used for segmenting markets.
a. True
b. False
ANSWER: False
POINTS: 1
154. The term market density refers to the number of potential customers per unit of land area, such as per square mile.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
155. One problem with using psychographic variables for segmentation purposes is that they are difficult to measure
accurately.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
156. Motives can be used to segment markets.

a. True
b. False
ANSWER: True
POINTS: 1
157. Lifestyle is a product-related variable.

a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
158. Lifestyle analysis focuses on people's activities, interests, and opinions.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
159. The ways in which customers use a particular product may be a basis for segmenting the market.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
160. One way marketers can segment business markets is according to their geographic location.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
161. A marketer may segment a market in terms of the benefits that customers expect to receive from a particular product.
a. True
b. False
ANSWER: True
POINTS: 1
162. A market segment profile deals primarily with demographic characteristics.

a. True
b. False
ANSWER: False
POINTS: 1
163. A market segment profile describes the similarities among potential customers within a segment and explains the
differences among people across market segments.
a. True
b. False
ANSWER: True
POINTS: 1
164. A market segment profile may cover such aspects as demographic characteristics, geographic factors, product
benefits sought, lifestyles, brand preferences, and usage rates.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
165. A market segment profile provides customers with an understanding of how a business can use its capabilities.
a. True
b. False
ANSWER: False
POINTS: 1
166. Market segment profiles help determine the most desirable segment or segments in relation to the firm's strengths,
weaknesses, objectives, and resources.
a. True
b. False
ANSWER: True
POINTS: 1
167. The information yielded by market segment profiles usually is not very useful later in the marketing process.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
168. The two general approaches to measuring company sales potential are the breakdown and the buildup approach.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
169. Company sales potential is the maximum percentage of market potential that an individual firm within an industry
can expect to obtain for a specific product.
a. True
b. False
ANSWER: True
POINTS: 1
170. Market potential is the amount of a product that an organization could sell during a specified time period.
a. True
b. False
ANSWER: False
POINTS: 1
171. The size of the market potential places limits on the size of the company sales potential.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
172. During the evaluation of relevant market segments, competitive assessment is used primarily to determine the
possibility of additional competitors entering particular segments.
a. True
b. False
ANSWER: False
POINTS: 1
173. The sum of firms' marketing efforts equals industry marketing efforts.
a. True
b. False
ANSWER: True
POINTS: 1
174. When evaluating relevant market segments, cost estimates are important to determine if an organization entering a
particular segment can operate at costs equal to or below those of competitors.
a. True
b. False
ANSWER: True
POINTS: 1
175. It is likely that during the fifth step of the target market selection process, marketers will decide not to enter and
compete in any market segments.
a. True
b. False
ANSWER: False
POINTS: 1
176. When a firm's management is making the final selection of specific target markets to enter, it should consider
whether the organization has the financial resources, managerial skills, expertise, and facilities needed to effectively
compete in the selected segments.
a. True
b. False
ANSWER: True
POINTS: 1
177. Consideration of the firm's overall objectives usually does not influence the final selection of a target market
segment.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
178. If long-term prospects look poor, a marketer may ultimately choose not to target a segment because it would be
difficult to recoup expenses.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
179. A company sales forecast is the amount of a product that a company expects to sell during a specific time period at a
specified level of marketing activities.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
180. Sales forecasts are always long-range in nature.

a. True
b. False
ANSWER: False
POINTS: 1
181. The executive judgment method of sales forecasting is very accurate in predicting future sales.
a. True
b. False
ANSWER: False
POINTS: 1
182. In developing a company sales forecast, the forecasting methods are limited to surveys and correlation methods.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
183. The types of surveys used to forecast sales are customer, executive, and competitor surveys.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
184. Surveys are sometimes used to forecast sales.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
185. In a customer forecasting survey, a marketer would question customers about the types and quantities of products
they intend to buy during a specific time period.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
186. Customer forecasting surveys as a means of forecasting sales are not appropriate for a firm that has relatively few
customers.
a. True
b. False
ANSWER: False
POINTS: 1
187. Trend analysis is a sales forecasting technique that focuses on aggregate sales data over a period of many years to
determine general trends in annual sales.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
188. A marketer can use regression analysis techniques to predict the sales of new products.
a. True
b. False
ANSWER: False
POINTS: 1
189. Through market tests, a forecaster gains data regarding consumers' intended purchases.
a. True
b. False
ANSWER: False
POINTS: 1
190. A firm ordinarily uses the same sales forecasting method for determining short-range and long-range sales forecasts.
a. True
b. False
ANSWER: False
POINTS: 1
191. In your regular goods and services consumption activities, you purchase products for resale and for use in your daily
operations. You also purchase products that you will use to produce other products. Based on this information, which of
the following best describes the type of market you are part of?
a. B2C market
b. Business market
c. Consumer market
d. Distributor market
e. Reseller market
ANSWER: b
POINTS: 1
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking
TOPICS: A-Head: What are Markets?
192. The target market selection process involves _______ steps. The first step is ____________, and the last step is
_____________.
a. Five; Select the target market; Identify the targeting strategy
b. Five; Identify the targeting strategy; Select the target market
c. Six; Select the target market; Evaluate the potential of the target market
d. Five; Determine segmentation variables; Select the target market
e. Six; Develop market segment profiles; Select the target market
ANSWER: b
POINTS: 1
193. You have just been promoted to vice president of marketing for your firm. Unlike your predecessor, you believe the
firm can increase its sales in a market by focusing on more than one segment of the market. You recognize to do this
means your firm will incur higher production costs. Based on this information, which of the following targeting strategies
are you advocating?
a. A concentrated targeting strategy
b. An undifferentiated targeting strategy
c. A broad-based targeting strategy
d. A differentiated targeting strategy
e. A heterogeneous targeting strategy
ANSWER: d
POINTS: 1
194. The marketer uses segmentation variables to divide a market into segments. All of the following statements are true
about segmentation variables except:
a. The variables should be related to the customer’s needs relative to the product being marketed.
b. The variables must be measurable.
c. The variables should be based solely on demographic characteristics.
d. The variables should be related to the customer’s behavior relative to the product being marketed.
e. The variables should be related to the customer’s uses of the product being marketed.
ANSWER: c
POINTS: 1
195. Market segment profiles are used to describe _____________ members of a market segment, and to explain
______________members in separate market segments.
a. Differences between; Similarities among
b. Differences between; Differences between
c. Similarities among; Similarities among
d. Preferences among; Preferences among
e. Similarities among; Differences between
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
196. You are an analyst in the marketing department for a major grocery store chain, and you recently submitted a report
to your boss regarding potential market segments the company should consider targeting. Your boss just sent the report
back to you with the following questions:
• What are the strengths and weaknesses of the competitors who are also targeting these markets?
• Does any firm dominate the market currently?
• Can we create a compelling marketing mix to effectively compete for business in this market segment?
Based on the questions being asked, it appears your boss is using which one of the following segment evaluation
approaches?
a. Company sales potential approach
b. SWOT analysis approach
c. Breakdown approach
d. Competitive assessment approach
e. Buildup approach
ANSWER: d
POINTS: 1
197. Your marketing team is having a brainstorming session to finalize your target marketing strategy. To make sure all
team members are on the same page, you make the following statement to keep the discussions focused:
If we determine that the needs of the customers we are targeting are ______________, then we need to pursue a
_______________ targeting strategy.
a. Homogeneous; Undifferentiated
b. Heterogeneous; Undifferentiated
c. Heterogeneous; Concentrated
d. Homogeneous; Correlated
e. Heterogeneous; Concentrated
ANSWER: a
POINTS: 1
198. ____________ is a useful sales forecasting method as long as a precise relationship between past sales figures and
one or more variables can be established. Without these relationships, this method is useless in forecasting future sales.
a. Trend analysis
b. Random factor analysis
c. Delphi technique
d. Cycle analysis
ANSWER: e
POINTS: 1
199. People and organizations have needs and wants they seek to satisfy through the purchase of goods and services.
These people and organizations represent a _____________ that marketers try to appeal to. Marketers will sometimes find
it more advantageous to attempt to appeal to a subgroup of these people and organizations which is called a
________________. This subgrouping process is accomplished through the use of _______________ techniques.
a. Market segment; Cohort group; Marketing
b. Market segment; Market; Product mix
c. Market; Target market; Target marketing
d. Market; Market segment; Market segmentation
e. Market; Market segmentation; Marketing
ANSWER: d
POINTS: 1
TOPICS: A-Head: What are Markets?
200. Your marketing team is currently working through the target market selection process to identify which customers
your firm will target with a new technology product being developed. You are currently in the process step where you
must consider the target market characteristics, the product attributes, and the firm’s objectives and resources. Which of
the five steps in the target market selection process are you currently working on?
a. Step #1 – Identify the appropriate targeting strategy
b. Step #2 – Determine which segmentation variables to use
c. Step #3 – Develop market segment profiles
d. Step #4 – Evaluate relevant market segments
e. Step #5 – Select specific target markets
ANSWER: a
POINTS: 1
201. If your firm uses a ______________ targeting strategy, you can expect to need __________ production processes to
support the strategy.
a. Concentrated; More
b. Differentiated; More
c. Undifferentiated; More
d. Differentiated; Less
e. Undifferentiated; More
ANSWER: b
POINTS: 1
202. Marketers use a variety of characteristics to segment markets they are interested in pursuing. When segmenting
consumer markets, demographic variables are normally used. All of the following are demographic characteristics used by
marketers to segment markets except:
a. Age
b. Social class
c. Family size
d. Hometown
e. Marital status
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
203. Which of the following statements about market segment profiles is true?
a. They can be used to calculate a lifetime value for each customer in a segment.
b. They are used to describe differences among people in different market segments.
c. They can only deal with demographic characteristics.
d. They provide marketers with a cost estimate for serving potential customer groups.
e. They cannot be used to describe similarities among potential customers.
ANSWER: b
POINTS: 1
204. Your firm’s finance department has just issued new guidelines for how market segments are to be evaluated based on
sales expectations. In general, the new guidelines require the marketers to measure company sales potential based on a
general economic forecast for a time period. Which one of the following types of market segment evaluation approaches
is the finance department advocating?
a. Breakdown approach
b. Economic analysis approach
c. Buildup approach
d. Market potential approach
e. Gross margin approach
ANSWER: b
POINTS: 1
205. In order for the marketer to achieve effective market segmentation, which of the following conditions must exist:
a. The segments must be small enough to manage effectively.
b. It must be possible to do a regression analysis on potential segments.
c. Consumers’ needs for the product must be homogeneous.
d. The firm must be able to sell effectively to the chosen segment with a specific sales price.
e. The segment must have enough profit potential to justify the development of a special marketing mix for the
segment.
ANSWER: e
POINTS: 1
206. Like marketing research, sales forecasting utilizes a wide array of tools and techniques to enhance the accuracy of the
forecast. For example, ____________ combines and averages the outlooks of top executives from different functional
areas in a firm or firms. ______________ weighs each year’s sales data, giving greater weight to results from the most
recent years.
a. Delphi technique; Jury of executive opinion
b. Simple random sampling; Exponential smoothing
c. Sampling; Linear regression
d. Jury of executive opinion; Exponential smoothing
e. Statistical averaging; Linear regression
ANSWER: d
POINTS: 1

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Test Bank for Marketing 2016 18th Edition Pride Ferrell

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1. How do business markets differ from consumer markets?

16. Which of the following is not a characteristic of a consumer market?

18. Which of the following is not a requirement or characteristic of a market?

20. The ability to purchase a product is a function of

25. The first step in the target market selection process is

29. Why would a company use the undifferentiated strategy?

41. The purpose of market segmentation is to

47. A disadvantage of the concentrated targeting strategy is that

58. Segmentation variables are usually grouped into four categories:

67. Family life cycle is most typically based on

81. Which of the following is an example of a behavioristic segmentation variable?

101. The buildup approach measure of sales potential

102. When evaluating market segments, assessment of competitors is important because

104. The final step in the target market selection process is

107. When selecting specific target markets, a firm should

110. Relying on executive judgment for forecasting may be adequate when

128. Scenario 6.1

129. Scenario 6.1

130. Scenario 6.1

131. Scenario 6.1

132. Scenario 6.2

133. Scenario 6.2

134. Scenario 6.2

135. Scenario 6.2

136. Scenario 6.2

143. A company sometimes defines a total market as its target market.

149. Only one variable can be used to segment a market.

156. Motives can be used to segment markets.

157. Lifestyle is a product-related variable.

158. Lifestyle analysis focuses on people's activities, interests, and opinions.

162. A market segment profile deals primarily with demographic characteristics.

180. Sales forecasts are always long-range in nature.

184. Surveys are sometimes used to forecast sales.

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