Marketing The Core 7th Edition Kerin Test Bank

Marketing The Core 7th Edition Kerin
Test Bank
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Chapter 08
Test Bank
1. Tony Hsieh invested in the company Zappos and
A. immediately changed its product mix.
B. helped to develop its segmentation strategy.
C. focused on value-oriented customers.
D. focused on unknown brands.
E. helped to shift to a more transactional focus.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Learning Objective: 08-03 Recognize the bases used to segment consumer and organizational (business) markets.
Level of Difficulty: 1 Easy
Topic: Methods of Market Segmentation
Feedback: Zappos was founded by Nick Swinmurn when he couldn't find a pair of Airwalk desert boots at a local mall. Tony Hsieh invested in the
company and as an advisor helped it develop its segmentation strategy: Focus on people who will shop for and buy shoes online and like to use mobile
technology.
2. The primary focus of Zappos' market segmentation strategy is to sell

A. shoes and other products to people who will buy them online and like to use mobile technology.
B. a wide selection of leather shoes and boots to high-end retailers.
C. all types of shoes, accessories, and clothing to department and fashion discount stores for reasonable prices.
D. Spanish novelties and accessories to organizations that typically resell them.
E. shoes in its own retail stores to those who prefer face-to-face interaction.

Blooms: Understand
Learning Objective: 08-04 Develop a market-product grid to identify a target market and recommend resulting marketing actions.
Level of Difficulty: 2 Medium
Topic: Target Markets
Feedback: Tony Hsieh invested in the company and as an advisor helped it develop its segmentation strategy: Focus on people who will shop for and
buy shoes online and like to use mobile technology. From a limited initial selection of shoes, Zappos grew to offer more than 1,000 brands, and
eventually added lines of clothes, accessories, beauty aids, and housewares.
3. The Zappos segmentation strategy is based on

A. offering the best selection of shoes and the best service to online shoppers.
B. designing shoes for every type of occasion.
C. dividing all their customers into two distinct segments: people shopping for low price and people shopping for style.
D. offering the best access to fashionable shoes through multiple channels of distribution.
E. maintaining the simplest method of price points to make the purchase process easy.

Blooms: Understand
Feedback: Tony Hsieh invested in the company and as an advisor helped it develop its segmentation strategy: Focus on people who will shop for and
buy shoes online and like to use mobile technology. From a limited initial selection of shoes, Zappos grew to offer more than 1,000 brands, and
eventually added lines of clothes, accessories, beauty aids, and housewares. "We try to spend most of our time on stuff that will improve customer
service levels," Hsieh explains.
4. Which of the following statements about Zappos is most accurate?

A. Zappos limits its inventory to a selection of high-end fashion footwear.
B. Zappos carries more than 1,000 different brands.
C. Zappos can guarantee overnight shipping to all its customers because they know ahead of time what they will be charged for express service.
D. Zappos is so successful because it has chosen a single mission to "sell shoes and only shoes."
E. Zappos offers a 30/60/90 return policy whereby refunds are based on how long you had the shoes.

Blooms: Understand
Learning Objective: 08-01 Explain what market segmentation is and when to use it.
8-1
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McGraw-Hill Education.
Feedback: Zappos grew to offer more than 1,000 brands and eventually added lines of clothes, accessories, beauty aids, and housewares.
5. According to Tony Hsieh, CEO of Zappos, the company devotes the greatest amount of time to
A. seeking new and unusual styles of shoes from all over the world.
B. improving the website to make it faster, more interesting, and fun.
C. seeking new markets that will go beyond the Internet.
D. finding the fastest and least expensive modes of delivery for its products.
E. finding ways to improve customer service levels.

Blooms: Understand
Feedback: Asked about Zappos, Tony Hsieh says, "We try to spend most of our time on stuff that will improve customer-service levels." This customer
service obsession for its market segment of online customers means that all new Zappos employees—whether the chief financial officer or children's
footwear buyer—go through four weeks of customer-loyalty training.
6. Tony Hsieh, CEO of Zappos, offers $2,000 to anyone who

A. identifies a completely new market segment with a product to match it.
B. finds a way of improving service to online customers.
C. takes the customer loyalty training class and decides to quit anyway.
D. finds a shoe-related product that Zappos does not already carry.
E. creates a humorous theme for one of the monthly company meetings.

Blooms: Understand
Feedback: Hsieh offers $2,000 to anyone completing the training who wants to leave Zappos.com. The theory: If you take the money and run, you're not
right for Zappos.com. Few take the money!
7. Building open and honest relationships with communication is an example of one of Zappos'
A. target markets.
B. best practices being adapted from its new owner, Amazon.com.
C. ten core values.
D. supplier requirements.
E. long-term goals.

Blooms: Understand
Feedback: Ten core values are the foundation for the Zappos culture, brand, and business strategies. These include: deliver WOW through service,
create fun and a little weirdness, and build open and honest relationships with communication, just to name a few.
8. Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is referred to as
A. consumer differentiation.
B. psychographics.
C. market segmentation.
D. market delineation.
E. aggregation marketing.

Blooms: Remember
Feedback: Key term definition—market segmentation.
9. Market segmentation refers to

A. the philosophy that to do a truly excellent job of marketing, a company should concentrate on only one customer segment at a time.
B. sorting prospective buyers into groups that are willing to pay more than the cost of production for a good or service.
8-2
C. disaggregating prospective buyers from groups into segments of one (individuals) and then creating specific products that will satisfy this person's
unique needs.
D. aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action.
E. the belief that it is possible to satisfy every customer's needs if you can identify the correct segment within which they belong.

Blooms: Remember
Feedback: Key term definition—market segmentation.
10. Market segmentation involves aggregating prospective buyers into groups that __________ and will respond similarly to a marketing action.
A. respond similarly to marketing messages
B. have similar shopping styles
C. will become loyal customers
D. have common needs
E. will become stakeholders of the organization

Blooms: Understand
Feedback: Market segmentation first stresses the importance of grouping people or organizations in a market according to the similarity of their needs
and the benefits they are looking for in making a purchase. Second, such needs and benefits must be related to specific marketing actions that the
organization can take, such as a new product or special promotion.
11. Market segmentation involves aggregating prospective buyers into groups that have common needs and will
A. pay attention to marketing messages.
B. respond similarly to a marketing action.
C. be responsive to marketing research.
D. use the same payment methods.
E. comply with the organization's core values.

Blooms: Understand
12. Market segmentation stresses __________ and relating them to specific marketing actions.
A. aligning tasks to match competitor tactics
B. grouping people according to similar needs
C. dividing people within a market randomly into equally sized groups
D. dividing people into the smallest groups possible
E. identifying potential new buyers who are not yet familiar with a new product

Blooms: Understand
13. Small athletic shoe manufacturers such as Vans target niche markets and make shoes designed to satisfy the needs of different specific groups of
customers. This strategy is an example of
A. market segmentation.
B. mass customization.
C. customized manufacturing.
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D. single chain marketing.
E. market specific selection.
AACSB: Knowledge Application

Blooms: Apply
Level of Difficulty: 3 Hard
Feedback: Market segmentation links market needs to an organization's marketing program—its specific marketing mix actions designed to satisfy
those needs.
14. New Balance has many offerings. It makes the Minimus line of shoes with a Vibram outsole and REVlite cushioning for those who want to "feel the
trail." Its 1260v2 shoe incorporates Stabilicore technology to "deliver a plush, smooth, and stable ride." And its top of the line, 990v3 traditional
running/walking shoe uses a "premium pigskin upper with mesh inserts for breathability, a stability-enhancing ABZORB insole, and ENCAP to
promote a healthy gait." The strategy of appealing to different types of customers in this way is an example of
A. mass customization.
B. product definition.
C. market segmentation.
D. single chain marketing.
E. market specific selection.

Blooms: Apply
Feedback: Market segmentation links market needs to an organization's marketing program-specific marketing mix actions to satisfy those needs. New
Balance targets the specific needs of particular segments of runners with its different types of shoes.
15. Market segments refers to

A. the relatively heterogeneous groups of prospective buyers that result from the market segmentation process.
B. all buyers of a product or service who have previously purchased a particular firm's products or services and who intend to repeat that purchase
sometime in the future.
C. the smallest number of buyers that have similar needs but do not react similarly in a buying situation.
D. the relatively homogenous groups of prospective buyers that result from the market segmentation process.
E. all potential buyers of a product or service who intend to purchase a firm's products or services but who have not yet done so.

Blooms: Remember
Feedback: Text term definition—market segment.
16. A relatively homogenous group of prospective buyers that results from the market segmentation process is referred to as
A. a market segment.
B. a target market.
C. a customer base.
D. an ultimate consumer.
E. a preferred customer.

Blooms: Remember
Feedback: Text term definition—market segment.
17. To be identified as a market segment, members of the group must

A. be similar in terms of their consumption behavior.
B. represent a large share of the entire market and have buying power.
C. have diverse needs and have potential for future growth.
D. have diverse needs and be willing and able to purchase the product.
E. have the potential for future growth and increased profit or ROI.
8-4
Blooms: Understand
Feedback: Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process. Each
market segment consists of people who are relatively similar to each other in terms of their consumption behavior.
18. The phrase "relatively homogeneous collections of prospective buyers" is most descriptive of
A. demographic clusters.
B. organizational buyers.
C. ultimate consumers.
D. market segments.
E. qualified prospects.

Blooms: Understand
Feedback: Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process.
19. In marketing, each __________ consists of people who are relatively similar to each other in terms of their consumption behavior.
A. demographic cluster
B. organizational buyer group
C. market segment
D. ultimate consumer group
E. qualified prospect group

Blooms: Understand
Feedback: Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process. Each
market segment consists of people who are relatively similar to each other in terms of their consumption behavior.
20. A marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better
than competing products is referred to as
A. market penetration.
B. points of difference.
C. market differentiation.
D. product positioning.
E. product differentiation.

Blooms: Remember
Feedback: Key term definition—product differentiation.
21. Product differentiation refers to

A. a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs.
B. the unique combination of product benefits received by targeted buyers.
C. those characteristics of a product that make it superior to competitive substitutes.
D. a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better
than competing products.
E. the legal requirement that requires a specified degree of distinction between products to ensure an organization's intellectual property rights.

Blooms: Remember
8-5
Feedback: Key term definition—product differentiation.
22. Apple's iPhone has a feature known as Apple Pay that lets you use your phone to pay for credit purchases, meaning you could leave your wallet at
home. This feature sets the smartphone apart from its competitors and is part of Apple's ___________ strategy.
A. product segmentation
B. market expansion
C. product differentiation
D. usage segmentation
E. psychographic segmentation

Blooms: Apply
Feedback: Product differentiation involves a firm using different marketing mix actions, such as product features and advertising, to help consumers
perceive the product as being different and better than competing products. In the case of Apple, Apple Pay helps consumers to perceive the iPhone as
being different from and better than competing products from Samsung, LG, etc.
23. Recently Colgate-Palmolive introduced Colgate Enamel Health toothpaste, one that claims to replenish and polish tooth enamel, the hard outer layer
of the tooth that provides a protective barrier to inner layers. This new formula helps to separate the Colgate product from its top competitors, such as
Crest. What marketing strategy did Colgate-Palmolive use here?
A. product differentiation
B. product segmentation
C. market expansion

Blooms: Apply
Feedback: Product differentiation involves a firm using different marketing mix actions, such as product features and advertising, to help consumers
perceive the product as being different and better than competing products. In the case of Colgate, Enamel Health helps consumers to perceive the
toothpaste as being different from and better than competing products like Crest.
24. A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can
A. increase sales and profitability.
B. stand up to legal scrutiny.
C. be socially responsible.
D. create sustainable demand.
E. produce product differentiation.

Blooms: Understand
Feedback: Market segmentation is a means to an end: It leads to tangible marketing actions that can increase sales and profitability.
25. The process of segmenting a market and selecting specific segments as targets is the link between __________ and the organization's marketing
program.
A. self-regulatory industry standards
B. government regulations
C. top-level management
D. buyers' or market needs
E. controllable environmental factors

Blooms: Understand
8-6
Feedback: The process of segmenting a market and selecting specific segments as targets is the link between the various buyers' needs and the
organization's marketing program. See Figure 8-1.
26. The process of segmenting a market and selecting specific segments as targets is the link between the various buyers' or market needs and
A. industry standards.
B. government regulations.
C. top-level management.
D. controllable environmental factors.
E. the organization's marketing program.

Blooms: Understand
Feedback: The process of segmenting a market and selecting specific segments as targets is the link between the various buyers' needs and the
organization's marketing program. See Figure 8-1.
27. _______ links market needs to an organization's marketing program.

A. Market segmentation
B. Market need
C. Marketing protocol
D. Marketing program actions
E. Product selection

Blooms: Understand
organization can take, such as a new product or special promotion. Market segmentation links market needs to an organization's marketing
program—specific marketing mix actions to satisfy those needs. Refer to Figure 8-1.
28. Zappos' original target market customers consisted of people who wanted all of the following except which?
A. to receive quick delivery of their merchandise
B. to buy sustainable shoes, accessories, and clothing
C. to shop online in the convenience of their own homes
D. to allow for free returns of goods if dissatisfied
E. to have a wide selection of shoes

Blooms: Understand
Feedback: The Zappos.com target customer segment originally consisted of people who wanted to (1) have a wide selection of shoes, (2) shop online in
the convenience of their own homes, and (3) receive quick delivery and free returns.
29. A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization is referred to as
a
A. needs table.
B. cross-tabulation.
C. market-product grid.
D. growth-share matrix.
E. product differentiation table.

Blooms: Remember
Feedback: Key term definition—market-product grid.
8-7
30. Market-product grid refers to
A. a visual representation of all products offered within a specific product class.
B. a framework used to compare the relative market share of one firm's product offerings to those of its competitors.
C. a technique that seeks opportunities by finding the optimum balance between marketing efficiencies versus R&D-manufacturing efficiencies.
D. a framework used to relate the market segments of potential buyers to products offered or potential marketing actions by an organization.
E. a technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products.

Blooms: Remember
31. A market-product grid is a framework to relate

A. total estimated expenses for each product sold to each market segment.
B. total anticipated revenue for each product-market segment combination.
C. total anticipated profit for each product sold to each market segment.
D. the market segments of potential buyers to relative market share compared to the largest competitor.
E. the market segments of potential buyers to products offered or potential marketing actions by an organization.

Blooms: Remember
32. A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization.
A. market segments of potential buyers
B. marketing objectives of potential products
C. total anticipated revenue from specific groups of buyers
D. total anticipated profit from specific groups of buyers
E. market share of the closest competitor

Blooms: Remember
Feedback: A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions.
33. A market-product grid is a framework to relate the market segments of potential buyers to
A. estimated expenses for products sold.
B. products offered or potential marketing actions by an organization.
C. total anticipated revenue for products sold.
D. total anticipated profit for products sold.
E. market share of the closest competitor.

Blooms: Remember
34. Pairing side sleepers with firm pillows, back sleepers with medium pillows, and stomach sleepers with soft pillows would be done with a
A. needs table.

Blooms: Understand
8-8
The market-product grid in Figure 8-2 shows the different market segments for bed pillows—the side, back, and stomach sleepers—in the horizontal
rows. The product offerings—the pillows—appear in the vertical columns and are based on three different pillow firmnesses—firm, medium, and soft.
See Figure 8-2.
Figure 8-2
Figure 8-2
35. The table in Figure 8-2 is known as a

A. needs table.

Blooms: Understand
The market-product grid in Figure 8-2 shows the different market segments for bed pillows—the side, back, and stomach sleepers—in the horizontal
rows. The product offerings—the pillows—appear in the vertical columns and are based on three different pillow firmness levels—firm, medium, and
soft. See Figure 8-2.
36. Consider Figure 8-2. My Pillow uses infomercials and product demonstrations at events such as state fairs to market its line of pillows that are
guaranteed to be "the most comfortable pillow you'll ever own!" Based on the market research shown in Figure 8-2, which market-product combination
should My Pillow target?
A. stomach sleeper-firm pillow
B. back sleeper-medium pillow
C. side sleeper-firm pillow
D. stomach sleeper-soft pillow
E. side sleeper-soft pillow

Blooms: Understand
Feedback: A market segmentation research study among users of pillows revealed the size of each sleeper segment, which is shown in Figure 8-2. The
sizes and percentages of the circles tells pillow manufacturers the relative importance of each of the three market segments and three pillow offerings in
terms of their firmness level. The figure depicts the importance of the firm pillow product targeted at the side sleeper market segment, which is almost
three times the size of the other two market-product combinations shown. Therefore, meeting the needs of this market segment with the right pillow
firmness is especially important. See Figure 8-2.
37. The purpose of market segmentation is to respond more effectively to the wants of groups of potential buyers in order to
A. maintain market share.
B. increase sales and profits.
C. assume social responsibility.
D. use the firm's resources most efficiently.
E. provide the best quality products on the market.

8-9
Blooms: Understand
Feedback: A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales, profit, and return
on investment.
38. Which of the following statements regarding when and how to segment markets is most accurate?
A. Even if a firm finds uniform needs across all users, it should take advantage of the method to avoid falling behind its competitors.
B. Market segmentation is only feasible for large corporations; small businesses don't have the resources to engage in the process.
C. Governments should not attempt market segmentation because the strategy is only applicable for consumer and organizational markets.
D. If a business firm goes to the trouble and expense of segmenting its markets, it expects to increase its sales, profits, and return on investment.
E. Market segmentation strategies work less than 10 percent of the time.

Blooms: Understand
Feedback: A business goes to the trouble and expense of segmenting its markets when it expects that the effort will increase its sales, profit, and return
on investment.
39. When expenses are greater than the potential increased sales from market segmentation, a firm should
A. not consider market segmentation at this time.
B. combine departments within the company to make the process more streamlined.
C. reduce production costs or increase prices to facilitate the segmentation process.
D. seek alternate channels of distribution, including Internet sales.
E. discontinue manufacturing any products that are not in the mature stage of their product life cycle.

Blooms: Understand
Feedback: A business goes to the trouble and expense of segmenting its markets when it expects that the effort will increase its sales, profit, and return
on investment. When expenses are greater than the potentially increased sales from segmentation, a firm should not attempt to segment its market.
40. All of the following are market segmentation strategies except which?
A. build-to-order
B. multiple products, multiple market segments
C. one product, multiple market segments
D. multiple products, one segment
E. mass customization

Blooms: Understand
Feedback: Three specific segmentation strategies are (1) one product and multiple market segments, (2) multiple products and multiple market
segments, and (3) segments of one, or mass customization (which is a step beyond build-to-order).
41. When a firm produces only a single product or service and attempts to sell it to two or more market segments, it avoids
A. the extra cost of developing and producing additional versions of the product.
B. creating a customer service gap.
C. indirect distribution and logistics problems.
D. restructuring the firm's strategic planning.
E. amortization costs of product enhancements.

Blooms: Understand
Feedback: When an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the extra
8-10
costs of developing and producing additional versions of the product. In this case, the incremental costs of taking the product into new market segments
are typically those of a separate promotional campaign or a new channel of distribution.
42. When compared to a multiple products, multiple market segments strategy, a one product, multiple market segment strategy
A. is a much more effective means of meeting consumers' individual needs.
B. creates greater savings in production costs.
C. is a more effective way of meeting organizational objectives.
D. has significantly higher distribution costs.
E. is more profitable since a firm can charge the new segments higher prices without changing the product.

Blooms: Understand
43. One marketing action that can be taken to sell a single product or service to multiple market segments is to
A. develop and produce another version of the product.
B. manufacture products that appeal to different markets.
C. develop separate promotional campaigns.
D. purchase another firm that has additional products that would appeal to multiple markets.
E. issue stock to fund additional research and development for new products.

Blooms: Understand
44. The annual Sporting News Baseball Yearbook had exactly the same stories but with 17 different covers to appeal to baseball fans in 17 of the U.S.
regions. What is the basis of its market segmentation strategy?
A. psychographic segmentation
B. retail outlet segmentation
C. demographic segmentation
D. behavioral segmentation
E. geographic segmentation

Blooms: Understand
Feedback: The annual Sporting News Baseball Yearbook has 17 different covers featuring a baseball star from each of its regions in the United States,
yet each regional issue has the same magazine content.
45. The annual Sporting News Baseball Yearbook uses 17 different covers featuring a baseball star from each of its regions in the United States, yet each
regional issue has the same magazine content. The publisher is using which of the following segmentation strategies?
A. multiple products with one segment
B. one product with one channel of distribution
C. one product with multiple market segments
D. one product with changes based on customer behavior
E. multiple products with multiple segments

Blooms: Understand
Feedback: Magazines are single products frequently directed at two or more distinct market segments. The annual Sporting News Baseball Yearbook
8-11
uses 17 different covers featuring a baseball star from each of its regions in the United States, yet each regional issue has the same magazine content.
46. Which of the following is a disadvantage of employing a multiple products, multiple market segments strategy if not implemented well?
A. higher sales but lower profits
B. reduced quality and higher prices
C. meeting customer needs but at the expense of higher prices
D. lower prices but with higher production costs
E. higher quality but lower prices

Blooms: Understand
Feedback: Producing multiple products for multiple segments is clearly more expensive than producing only a single product. But this strategy is very
effective if it meets customers' needs better, doesn't reduce quality or increase price, and adds to sales revenues and profits. The proliferation of different
models and options can reduce quality and raise prices, especially in relation to foreign imports.
47. Which of the following is an example of a multiple products, multiple market segments strategy?
A. College Football magazine selects different covers for essentially the same written content in order to appeal to different geographic markets in the
United States.
B. A new movie used several different movie trailers. One set of previews showed the action scenes in order to attract one audience and the other set
showed romantic scenes to attract another audience.
C. Ford manufactures SUVs for those who wish to carry lots of people and pickup trucks for those who wish to carry lots of cargo.
D. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and cat litter boxes.
E. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup remover for women.

Blooms: Apply
Feedback: A multiple products, multiple markets strategy has a number of distinct products, each targeted to different types of users. Ford's SUVs and
pickups are two different types of vehicles targeted at two different groups of consumers—those who wish to carry people and those who wish to carry
cargo.
48. Which of the following is an example of a multiple products, multiple market segments strategy?
A. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the United
States.
B. A new movie used several different movie trailers. One set of previews showed the action scenes in order to attract one audience and the other set
showed romantic scenes to attract another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes.
D. Betty Crocker carries one line of cake mixes for people with conventional ovens and another line of cake mixes for people with microwave ovens.

Blooms: Apply
Feedback: A multiple products, multiple markets strategy has a number of distinct products, each targeted to a different type of user. Betty Crocker's
two types of cake mixes are marketed to two different groups of consumers—those with conventional ovens and those with microwave ovens.
49. Kellogg's has several cereals targeted at different types of users. This is an example of multiple products aimed at multiple markets. Manufacturing
these different cereals is clearly more expensive than producing only one but is worthwhile if it
A. conforms to all FDA guidelines.
B. uses the same promotion and packaging for all segments.
C. decreases the cost of the physical plant.
D. stabilizes competition.
E. better serves customers' needs.

Blooms: Apply
8-12
Feedback: Manufacturing multiple products for multiple market segments is worthwhile if it meets customers' needs better, doesn't reduce quality or
increase price, and adds to the manufacturer's sales revenues and profits.
50. Kellogg's has several cereals targeted at different types of users. This is an example of multiple products aimed at multiple markets. Manufacturing
these different cereals is clearly more expensive than producing one, but is worthwhile if it
A. allows for new product testing.
B. creates economy of scale.
C. doesn't reduce quality or increase price.
D. cannibalizes the earliest products.
E. stabilizes the sales revenues and profits.

Blooms: Apply
Feedback: Manufacturing multiple products for multiple market segments is worthwhile if it meets customers' needs better, doesn't reduce quality or
increase price, and adds to the manufacturer's sales revenues and profits.
51. Tailoring products or services to the tastes of individual customers on a high-volume scale is referred to as
A. family branding.
C. product differentiation.
D. economies of scale marketing.
E. build-to-order.

Blooms: Remember
Feedback: Text term definition—mass customization.
52. Custom Foot operates six retail locations. At first glance, none looks different from a typical boot store. But here the only boots on hand are display
models. There is no inventory for sale and customers go home empty-handed, awaiting their orders. Customers browse the store, choosing style, color,
and leather type, with about 100 displays to provide style guidelines. Custom Foot guarantees your boots will be ready within three weeks. This is an
example of
B. specialty customization.
C. virtual merchandising.
D. one product and multiple market segments.
E. multiple products and multiple market segments.

Blooms: Apply
Feedback: Mass customization is tailoring products or services to the tastes of individual customers on a high-volume scale—the situation with Custom
Foot.
53. ChoiceShirts is an online company that makes made-to-order T-shirts. Its online customers can order their shirts using any downloaded photo
inserted into 600 templates or even design a shirt from scratch. This is an example of
A. family branding.
C. multiple products and multiple market segments.
D. one product and multiple market segments.
E. specialty customization.

Blooms: Apply
8-13
Feedback: Mass customization is tailoring products or services to the tastes of individual customers on a high-volume scale—the situation with
ChoiceShirts.
54. Lands' End will custom-fit a Marinac jacket and make it with additional features such as thumb loops, underarm ventilation slits, and a key clip
when you order from LandsEnd.com. This is an example of
A. family branding.
C. "Tiffany/Walmart" marketing.
D. market melding.

Blooms: Apply
Feedback: Mass customization is tailoring products or services to the tastes of individual customers on a high-volume scale—the situation with Lands'
End.
55. Nike employs a __________ strategy at its website, nikeid.com, which allows customers to design a sneaker to their own personal specifications.
A. product sampling
B. product clustering
C. mass customization

Blooms: Apply
Feedback: Mass customization is tailoring products or services to the tastes of individual customers on a high-volume scale—the situation with Nike.
56. Name Maker is an online company that sells, among other items, high-end gift wrapping that can have custom slogans or names printed on it, such
as the name of a person celebrating a birthday or a couple who is getting married. It is available for purchase for as little as per 12-foot roll. This is an
example of
A. family branding.
C. synergistic marketing.
D. "Tiffany/Walmart" marketing.

Blooms: Apply
Feedback: Mass customization is tailoring products or services to the tastes of individual customers on a high-volume scale—the situation with Name
Maker.
57. Manufacturing a product only when there is an order from a customer is referred to as
A. order customization.
B. a one product, one market segment strategy.
C. synergistic marketing.
D. build-to-order.

Blooms: Remember
Feedback: Text term definition—build-to-order.
58. Wonk is a unique furniture company that design, builds, and retails in Brooklyn, NY. You can customize your design with creative input, including
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personalizing items with wood and lacquer options or environmentally conscious materials and finishes, though the options are not unlimited. Wonk
relies on
A. order customization.
B. a one product, one market segment strategy.
C. build-to-order manufacturing.
D. specialty customization.
E. mass customization.

Blooms: Apply
Feedback: Build-to-order (BTO) means manufacturing a product only when there is an order from a customer. It gives customers a good choice with
quick delivery. But this system falls a bit short of total mass customization because customers do not have an unlimited number of features from which
to choose.
59. Organizational synergy is the increased customer value achieved through

A. performing organizational functions more efficiently.
B. more discounts or larger rebates at the point of sale.
C. involvement of the ultimate consumer in product design.
D. an increase in the knowledge of competitors.
E. shared ownership of the organization through publicly traded stock.

Blooms: Remember
Topic: Product Value Creation
Feedback: Text term definition—organizational synergy.
60. The increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently is
referred to as
A. aggregation.
B. organizational synergy.
C. segmentation.
D. amalgamation.
E. valuation.

Blooms: Remember
Feedback: Text term definition—organizational synergy.
61. The ultimate criterion for an organization's marketing success is that __________ as a result of increased synergies.
A. costs decrease
B. market share increases
C. product deficiencies decrease
D. customers should be better off
E. new products flourish

Blooms: Understand
Feedback: The key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer's
individual wants and achieving organizational synergy, the increased customer value achieved through performing organizational functions such as
marketing or manufacturing more efficiently. The "increased customer value" can take many forms: more products, improved quality of existing
products, lower prices, easier access to products through improved distribution, and so on.
62. All of the following are examples of increased customer value from organizational synergy except which?
A. lower prices
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B. increased brand awareness
C. more products
D. improved distribution
E. improved quality of existing products

Blooms: Understand
Feedback: The key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer's
individual wants and achieving organizational synergy, the increased customer value achieved through performing organizational functions such as
marketing or manufacturing more efficiently. The "increased customer value" can take many forms: more products, improved quality of existing
products, lower prices, easier access to products through improved distribution, and so on. Brand awareness is beneficial to the firm, but not a
component of customer value likely to occur here.
63. When a new product or a new retail chain steals customers and sales from the organization's older products and retail outlets, it is referred to as
A. cannibalization.
B. amortization.
C. product appropriation.
D. product pilfering.
E. marketing Darwinism.

Blooms: Remember
Feedback: Text term definition—cannibalization.
64. When Ann Taylor, a well-known retailer of sophisticated women's clothing, started losing sales to its own Loft outlets that feature moderately priced
casual clothes, Ann Taylor was dealing with the marketing phenomenon known as
A. amortization.
B. guerrilla marketing.
C. shrinkage.
D. marketing Darwinism.
E. cannibalization.

Blooms: Understand
Feedback: When the increased customer value involves adding new products or a new chain of stores, the product differentiation-market segmentation
trade-off raises a critical issue: Are the new products or new chain simply stealing customers and sales from the company's older existing ones? This is
known as cannibalization.
65. Suppose marketers want to use product differentiation and market segmentation strategies. What question should they ask when considering the
potential for cannibalization with these strategies?
A. Will our new products steal customers or sales from our older ones?
B. Will the products compete head-to-head with those of a competitor?
C. Can this action successfully draw customers away from competitors?
D. Are there enough similarities within the market segment to warrant such high costs?
E. Will this action eliminate the need for individualized advertising and promotion?

Blooms: Understand
Feedback: When the increased customer value involves adding new products or a new chain of stores, the product differentiation-market segmentation
trade-off raises a critical issue: Are the new products or new chain simply stealing customers and sales from the company's older existing ones? This is
known as cannibalization.
66. Cannibalization would most likely occur if

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A. Dell adds high-end speaker systems to its line.
B. General Mills launches Caramel Crunch Cheerios.
C. General Motors markets a motorcycle similar to the Can-Am Spyder Roadster three-wheel bike.
D. Pillsbury adds boxed sugar to its product mix.
E. Procter & Gamble adds a new line of baby clothing to its Pampers stable of products.

Blooms: Apply
Feedback: Cannibalization occurs if the new products or new chain are stealing customers and sales from the company's older existing ones. Consumers
who buy Caramel Crunch Cheerios may have chosen not to buy MultiGrain Cheerios or Honey Nut Cheerios Medley Crunch. Thus, Caramel Crunch
Cheerios could cannibalize sales from the other Cheerios products in the General Mills line.
67. Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which is to offer
A. a low-priced product to a high-income or high net worth segment.
B. a high-priced product to a low-income or low net worth segment.
C. different variations of the same basic offering to high-end and low-end segments.
D. a high-priced and a low-priced offering to a single market segment.
E. entirely different offerings to high-end and low-end segments.

Blooms: Remember
Feedback: Marketers increasingly emphasize a two-tier, Tiffany/Walmart strategy. Many firms now offer different variations of the same basic offering
to high-end and low-end segments.
68. Which of the following is an example of a Tiffany/Walmart strategy?

A. College Football magazine selects different covers for essentially the same magazine in order to appeal to different geographic markets in the United
States.
B. A new movie used several different movie trailers; one showed the action scenes in order to attract one audience and the other showed romantic
scenes to attract another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors from refrigerators and litter boxes.
D. Gap's Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores sell a slightly different version for $22.

Blooms: Understand
Feedback: Tiffany/Walmart marketers increasingly emphasize a two-tier, Tiffany/Walmart strategy. Many firms now offer different variations of the
same basic offering to high-end and low-end segments—the situation for Gap's Banana Republic and Old Navy.
69. The Walt Disney Co. carefully markets two distinct Winnie-the-Poohs; one is the original line-drawn figure on fine china sold at Nordstrom and the
other is a cartoon-like Pooh on polyester bed sheets sold at Target. This is an example of
B. a Tiffany/Walmart strategy.
C. one product and multiple market segments.
D. price discrimination.
E. psychographic market segmentation.

Blooms: Apply
same basic offering to high-end and low-end segments—the situation for Disney's Pooh offerings at Nordstrom and Target.
70. You can go to your nearest Hallmark card store and buy a birthday greeting card for a friend and pay $4.50. Or you can buy a Hallmark card from its
new $0.99 line of greeting cards, made with lesser-quality materials but just as sentimental, sold at Barnes & Noble bookstores. This is an example of
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B. organizational synergy.
C. one product and multiple market segments.
D. price discrimination.
E. a Tiffany/Walmart strategy.

Blooms: Apply
same basic offering to high-end and low-end segments—the situation for Hallmark's various greeting cards.
71. The purpose of the five key steps in segmenting and targeting markets is to
A. identify competitors that provide similar products that satisfy a firm's customers' needs.
B. provide guidance to reposition a firm's products.
C. generate new-product ideas for firms that are not growing in market share.
D. link market needs of customers to the organization's marketing program.
E. correlate directly to each of the five environmental forces.

Blooms: Understand
Learning Objective: 08-02 Identify the five steps involved in segmenting and targeting markets.
Topic: Steps in Market Segmentation
Feedback: Figure 8-3 shows the five key steps in segmenting and targeting markets that link customers' needs to the organization's marketing program.
72. The first step in segmenting and targeting markets that links customer needs to marketing actions is to
A. group potential buyers into segments.
B. develop a market-product grid and estimate size of the overall market.
C. select target markets.
D. group products to be sold into categories.
E. take marketing actions to reach target markets.

Blooms: Understand
Feedback: The five key steps in segmenting and targeting markets that link the market needs of customers to the organization's marketing program are:
(1) Group potential buyers into segments, (2) group products to be sold into categories, (3) develop a market-product grid and estimate size of markets,
(4) select target markets, and (5) take marketing actions to reach target markets. See Figure 8-3.
73. The final step in segmenting and targeting markets that links customer needs to marketing actions is to
A. take marketing actions to reach target markets.
B. group potential buyers into segments.
C. select target markets.
D. group products to be sold into categories.
E. develop a market-product grid and estimate size of the overall market.

Blooms: Understand
74. There are five steps involved in segmenting and targeting markets. What should a marketer do after he or she has grouped products to be sold into
categories?
A. Create product groupings.
B. Identify market needs.
C. Take marketing actions to reach target markets.
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D. Develop a market-product grid and estimate size of markets.
E. Form prospective buyers into market segments.

Blooms: Understand
75. A marketing manager goes through several steps to put a market segmentation plan into effect. This includes being able to form market segments
and then __________ without encountering excessive costs.
A. eliminate potential nonbuyers
B. identify segmentation variables
C. select the market segment(s) to target
D. redirect their purchase behaviors
E. ignore any and all similarities

Blooms: Understand
Feedback: A marketing manager must be able to put a market segmentation plan into effect. This means identifying the characteristics of potential
buyers in a market and then cost-effectively assigning them to a segment.
76. All of the following are criteria used for forming market segments except which?
A. difference of needs of buyers among segments
B. potential for increased profit
C. cost of reaching the segment
D. potential of a marketing action to reach a segment
E. simplicity and cost-effectiveness of assigning potential buyers to segments

Blooms: Understand
Feedback: The five criteria to be used in forming segments include: (1) simplicity and cost-effectiveness of assigning potential buyers to segments, (2)
potential for increased profit, (3) similarity of needs of potential buyers within a segment, (4) difference of needs of buyers among segments, and (5)
potential of a marketing action to reach a segment. The cost of reaching the segment is a criterion for selecting a target segment.
77. Which of the following is a criterion used in forming market segments?

A. similarity of segments to competitors' segments
B. differences between potential suppliers or distributors
C. differences of needs of buyers within a segment
D. market size of the segment
E. potential of a marketing action to reach a segment

Blooms: Understand
Feedback: The five criteria to be used in forming segments include: (1) simplicity and cost-effectiveness of assigning potential buyers to segments, (2)
potential for increased profit, (3) similarity of needs of potential buyers within a segment, (4) difference of needs of buyers among segments, and (5)
potential of a marketing action to reach a segment.
78. The best segmentation approach is the one that

A. makes it easiest to reach the segment.
B. maximizes the opportunity for future profit and ROI.
C. recognizes different needs of buyers among different segments.
D. recognizes similarities of needs of potential buyers within a segment.
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E. is simplest and least costly in assigning potential buyers to segments.

Blooms: Understand
Feedback: The best segmentation approach is the one that maximizes the opportunity for future profit and ROI. If this potential is maximized without
segmentation, don't segment.
79. Which of the following is not a reason to segment a market?

A. The ability to assign buyers to a segment is simple and cost-effective.
B. It would cause an increase in market share or profit.
C. All the buyers in the entire market have similar wants and needs.
D. There is a potential marketing action to reach it.
E. There are different wants and needs of buyers in the entire market.

Blooms: Understand
Feedback: You would not break a market into segments if all the buyers within it have similar wants and needs. The other alternatives are all reasons to
form a segment.
80. Which of the following is not a criterion that would support forming market segments?
A. The ability to assign buyers to a segment is cost-effective and simple.
B. The result of segmenting will cause an increase in market share or profit.
C. There are significant similarities among buyers in the market segment.
D. There is a potential marketing action to reach the segment.
E. The cost to reach the segment exceeds the expected returns.

Blooms: Understand
Feedback: The cost to reach the segment is a criterion to select a segment.
81. Selling a product to a different market segment usually requires a different marketing action that, in turn, means greater costs. If increased revenues
don't offset extra costs of this action, a marketer should
A. increase the advertising budget.
B. prune the product offerings.
C. family brand the products.
D. combine segments.
E. group products into categories.

Blooms: Understand
Feedback: If the needs of the various segments aren't very different, combine buyers into fewer segments. A different segment usually requires a
different marketing action that, in turn, means greater costs. If increased sales don't offset extra costs, combine segments to reduce the number and total
costs of marketing actions.
82. Criteria for forming segments involve both similarities and differences. In terms of the needs of buyers, the similarities must be __________ a
segment, and the differences must be __________ segments.
A. between; among
B. throughout; absent in
C. within; among
D. absent in; throughout
E. among; across
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Blooms: Understand
Feedback: Two criteria used in forming segments answer this question: similarity of needs of potential buyers within a segment and difference of needs
of buyers among segments.
83. Criteria for forming segments involve both similarities and differences. Which of the following statements is most accurate?
A. Within a segment, the needs of potential buyers should be different; among segments, the needs of buyers should be similar.
B. Within a segment, the needs of potential buyers should be similar; among segments, the needs of buyers should be different.
C. The needs of buyers should be different, both between segments and within segments.
D. The needs of buyers should be the same, both between segments and within segments.
E. If there are any differences at all, you should forgo any segmentation.

Blooms: Understand
Feedback: Two criteria used in forming segments answer this question: similarity of needs of potential buyers within a segment and difference of needs
of buyers among segments.
84. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the following question:
A. Is this product useful on a global scale?
B. Is it possible to reposition this product?
C. Is there too much competition for this product?
D. Is the market loyal to the product?
E. Would segmentation be worth doing and is it possible?

Blooms: Understand
Feedback: It's not always a good idea to segment a market. Grouping potential buyers into meaningful segments involves meeting some specific criteria
that answer the questions, "Would segmentation be worth doing?" and "Is it possible?" If so, a marketer must find specific variables that can be used to
create these various segments.
85. About 3 percent of the population has some degree of allergic reaction, usually mild, to preservatives used in salad bars. Restaurants might consider
people with these allergies as a separate segment. To implement this segmentation strategy, restaurants would have to prepare a regular salad bar and a
special salad bar for the allergies segment. This multiple product, multiple market segment strategy would have the greatest difficulty meeting which of
the following criteria used to form market segments?
A. different needs of buyers among different segments
B. similarity of needs of potential buyers within a segment
C. simplicity and cost-effectiveness of assigning potential buyers to segments
D. potential for increased profit and ROI

Blooms: Apply
Feedback: The allergies market segment would probably not provide sufficient profit and ROI given its small estimated size, the limited benefit to
consumers in the segment, and the high cost of running a duplicate salad bar. Bottom line: The cost probably exceeds the profits gained.
86. Four general categories are used to segment consumer markets. Which of these is one of them?
A. supplier segmentation
B. demand segmentation
C. industry segmentation
E. product segmentation

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Blooms: Understand
Feedback: Figure 8-4 shows four general bases, variables, and breakdowns for U.S. consumer markets: (1) geographic segmentation, (2) demographic
segmentation, (3) psychographic segmentation, and (4) behavioral segmentation.
87. Segmentation based on where prospective customers live or work is referred to as

A. zip code segmentation.
B. geographic segmentation.
C. trade area segmentation.
D. MSA segmentation.
E. NAICS code segmentation.

Blooms: Remember
Feedback: Text term definition—geographic segmentation.
88. Region and city size are both variables used to employ __________ segmentation.
A. geographic
B. behavioral
C. district
D. psychographic
E. demographic

Blooms: Understand
Feedback: Geographic segmentation is based on where prospective customers live or work (region, city size).
89. Campbell Soup Co. found that its canned nacho cheese sauce, which could be heated and poured directly onto nacho chips, was too spicy for
Americans in the East and not spicy enough for those in the West and Southwest. Today, Campbell's plants in Texas and California produce a spicier
nacho cheese sauce than what is produced in the other plants. Campbell's is using __________ segmentation.
A. demographic
B. behavioral
C. economic
D. geographic
E. psychographic

Blooms: Understand
Feedback: Campbell's is marketing a different sauce to different markets depending on where they are located. This is geographic segmentation.
90. Which of the following statements best illustrates geographic segmentation?

A. GE builds a smaller microwave oven to hang under kitchen cabinets.
B. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.
C. In China, KFC sells a spicier chicken the farther away its restaurants are from the coastal areas.
D. A fast-food hamburger restaurant is only open for breakfast on weekdays and Saturdays but not Sundays.
E. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the
area.

Blooms: Apply
Feedback: KFC has discovered that to be a successful global marketer, it must be willing to adapt to the taste preferences of different geographic
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regions.
91. Universal Concerts wants to bring a series of music concerts to Canada next year. In general, western Canadians prefer country music while eastern
Canadians prefer rock. In fact, a country music event in eastern Canada is very likely to have lots of empty seats. To maximize revenue, Universal
Concerts should segment its Canadian market according to
A. geographic characteristics.
B. demographic characteristics.
C. music format characteristics.
D. behavioral characteristics.
E. psychographic characteristics.

Blooms: Apply
Feedback: Western Canadians prefer country music much more than do eastern Canadians. To avoid losses on country music concerts in the east,
Universal Concerts should use geographic characteristics in deciding where to hold a successful country music concert.
92. Variables that are based on some objective physical (gender, ethnicity), measurable (age, income), or other classification attribute (occupation) of
prospective customers are used in which segmentation basis?
A. personality
B. usage
C. needs
D. demographic
E. behavioral

Blooms: Remember
Feedback: Text term definition—demographic segmentation.
93. Which of the following is a consumer market demographic segmentation variable?

A. personality
B. occupation
C. usage rate
D. needs
E. region

Blooms: Understand
Feedback: Demographic segmentation is based on some objective physical (gender, race), measurable (age, income), or other classification attribute
(birth era, occupation) of prospective customers.
94. More than half of all U.S. households are composed of only one or two persons, so Aunt Jemima offers one serving meals, such as its Ham & Egg
Scramble and Oatmeal Pancakes. Aunt Jemima is using __________ as the basis to segment its market.
A. usage rates
B. usage patterns
C. demographic characteristics
D. behavior characteristics
E. psychographic characteristics

Blooms: Apply
Feedback: The number of people in a household is a demographic characteristic that Aunt Jemima uses to segment the market.
95. Procter & Gamble (P&G) decided to skip a generation of consumers when it began to market Old Spice deodorant. The target market consists of
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men aged 18 to 34 years old (Generation Y) who don't remember the Old Spice brand sold to their grandfathers (pre-baby boomer) many years ago.
P&G is using which type of segmentation variable?
A. behavioral
B. demographic
C. lifestyle
D. geographic
E. psychographic

Blooms: Apply
Feedback: Birth era (based on age) is a demographic segmentation variable.
96. The State of Alabama Board of Tourism ran a series of ads showing traditional families enjoying various attractions in the state. Since the apparent
target of these ads is the traditional family, it appears that the State of Alabama Board of Tourism has segmented the market using __________
variables.
A. demographic
B. regional
C. socioeconomic
D. geographic
E. psychographic

Blooms: Apply
Feedback: Marital status, life stage, and household/family size are demographic variables.
97. Which of the following statements demonstrate the formation of a segment based on household size?
A. Campbell's makes a spicier nacho cheese sauce for its distributors in Texas than it does in Maine.
B. GE built a smaller microwave oven to hang under kitchen cabinets.
C. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.
D. A fast-food hamburger restaurant is only open for breakfast on weekdays and Saturdays but not Sundays.
E. A gourmet grocer advertises its services on a small-audience classical music station even though there is a much larger-audience rock station in the
area.

Blooms: Apply
Feedback: Household size is a demographic customer characteristic. Because smaller households need to cook less food, GE downsized its microwave
oven and restyled it to hang under cabinets.
98. At a Hallmark store you can find several lines of greeting cards, including Fresh Ink, Nature's Sketchbook, Shoebox, Maxine, Mahogany, and Tree
of Life cards—all made by Hallmark for sale in its stores and intended to appeal to different target markets. The Mahogany line is designed to appeal to
African Americans. This is an example of __________ segmentation.
A. regional
B. lifestyle
C. demographic
D. geographic
E. psychographic

Blooms: Apply
Feedback: Race/ethnicity is a demographic segmentation variable.
99. Which of the following statements regarding segmentation bases is most accurate?
A. The identification of demographic variables is more objective than the identification of psychographic variables, which is more subjective.
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B. Marketers should use segmentation bases in this order to reduce potential costs: behavioral, demographic, psychographic, and geographic.
C. The identification of psychographic variables is more objective than the identification of demographic variables, which is more subjective.
D. Behavioral segmentation is based primarily on personality.
E. Psychographic segmentation is based primarily on product features.

Blooms: Understand
Feedback: Demographic segmentation is based on some objective physical (gender, race), measurable (age, income), or other classification attribute
(birth era, occupation) of prospective customers. Psychographic segmentation is based on some subjective mental or emotional attributes (personality,
aspirations, lifestyle) or needs of prospective customers.
100. Segmentation based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers is referred to as
A. behavioral segmentation.
B. affective segmentation.
C. socioeconomic segmentation.
D. psychographic segmentation.
E. sociocultural segmentation.

Blooms: Remember
Feedback: Text term definition—psychographic segmentation.
101. All of the following are psychographic segmentation variables except which?
A. lifestyle
B. needs
C. birth era
D. PRIZM
E. personality

Blooms: Understand
Feedback: Psychographic segmentation is based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of
prospective customers. Birth era is a demographic segmentation variable.
102. Personality and lifestyle are both variables used to employ __________ segmentation.
A. geographic
B. behavioral
C. attitudinal
D. psychographic
E. demographic

Blooms: Understand
prospective customers.
103. Magazines such as Fitness, Field & Stream, Golf Digest, and Health focus on how people live their lives, and thus all use a __________
segmentation strategy.
A. psychographic
B. behavioral
C. situational
D. socioeconomic
E. geographic
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Blooms: Apply
prospective customers. These magazines are designed to appeal to people who enjoy certain lifestyles.
104. The Nielsen PRIZM lifestyle segmentation is based on the belief that "birds of a feather flock together." This type of consumer segmentation is
referred to as
A. situational segmentation.
B. socioeconomic segmentation.
C. geographic segmentation.
D. psychographic segmentation.
E. behavioral segmentation.

Blooms: Understand
prospective customers. Nielsen PRIZM uses the lifestyle segmentation variable, a type of psychographic segmentation.
105. Segmentation based on some observable actions or attitudes by prospective customers, such as what benefits they seek, as well as where, how
frequently, and why they buy, is referred to as
A. demographic segmentation.
B. psychographic segmentation.
C. geographic segmentation.
D. behavioral segmentation.
E. socioeconomic segmentation.

Blooms: Remember
Feedback: Text term definition—behavioral segmentation.
106. Segmentation based on what product features are important to different customers is known as
A. demographic segmentation.
B. behavioral segmentation.
C. psychographic segmentation.
D. geographic segmentation.
E. socioeconomic segmentation.

Blooms: Understand
Feedback: Understanding what features are important to different customers is a useful way to segment markets because it can lead directly to specific
marketing actions, such as a new product, an ad campaign, or a distribution system.
107. Product features and usage rate are both variables used to employ __________ segmentation.
A. geographic
B. demographic
C. loyalty
D. psychographic
E. behavioral

Blooms: Understand
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Feedback: Behavioral segmentation is based on some observable actions or attitudes by prospective customers, such as where they buy, what benefits
they seek, how frequently they buy, and why they buy.
108. Behavioral segmentation may be based on

A. lifestyles and demographics.
B. retailer and wholesaler behaviors.
C. geographic and demographic criteria.
D. product features and retail store type.
E. demand and supply.

Blooms: Understand
Feedback: Behavioral segmentation is based on observable actions or attitudes of prospective customers, such as where they buy, what benefits they
seek, how frequently they buy, and why they buy.
109. A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. The company is using
__________ segmentation.
A. geographic
B. demographic
C. loyalty
D. psychographic
E. behavioral

Blooms: Apply
Feedback: Usage rate and user status are both behavioral segmentation variables. In this case, salespersons who rent a car are "heavy users" and "over
40 weeks per year" is a measure of usage rate.
110. College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late-night snack. However, their
dorm rooms are often woefully short of space. MicroFridge marketers understand this and offer a combination microwave, refrigerator, and freezer
targeted to these students. MicroFridge is most likely using which basis of segmentation?
A. sociocultural segmentation
B. psychographic segmentation
C. geographic segmentation
E. socioeconomic segmentation

Blooms: Understand
Feedback: Understanding what product features are important to different customers is a useful way to segment markets because it can lead directly to
specific marketing actions, such as a new product, an ad campaign, or a distribution system.
111. Samsung sells a variety of TVs, from simple and small ones to large smart TVs with Internet connectivity and 3-D technology. Customers prefer
different features, so Samsung uses which type of segmentation variable based on their viewing preferences?
A. demographic segmentation
B. psychographic segmentation
C. behavioral segmentation
D. geographic segmentation
E. socioeconomic segmentation

Blooms: Apply
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Feedback: Understanding what product features are important to different customers is a useful way to segment markets because it can lead directly to
specific marketing actions. Samsung uses behavioral segmentation to guide the types of TVs it sells since different consumers seek different product
features/benefits in a TV.
112. Many companies have cut travel budgets so that very few businesspeople are authorized to fly first class. Despite the shrinking pool of
business-class travelers, British Airways has grown market share for its trans-Atlantic business class by offering greater comfort. Promotions to
frequent fliers stress that passengers can sleep in fully reclining seats and arrive refreshed to carry out a full day's schedule. The segmentation strategy
of British Airways is an example of
A. life stage segmentation.
B. geographic segmentation.
C. social class segmentation.
D. behavioral segmentation.
E. psychographic segmentation.

Blooms: Apply
Feedback: British Airways is using behavioral segmentation (benefits the prospective customers seek) to sell airline tickets to frequent fliers who value
comfort and wish to sleep on a trans-Atlantic flight.
113. ExxonMobil targets consumers that fill up their gas tanks more than once a week with its Chase Visa fuel card. In this example, ExxonMobil is
using which segmentation variable?
A. needs
B. lifestyle
C. behavioral
D. psychographic
E. demographic

Blooms: Apply
Feedback: Behavioral segmentation is based on some observable actions or attitudes by prospective customers, such as where they buy, what benefits
they seek, how frequently they buy, and why they buy.
114. The quantity consumed or patronage (store visits) during a specific period is referred to as
A. usage rate.
B. purchase metric.
C. consumption index.
D. consumption rate.
E. demand amount.

Blooms: Remember
Feedback: Key term definition—usage rate.
115. Usage rate refers to

A. the percentage of total possible users divided by the total number of consumers who actually use a product or service.
B. the number of times a customer uses or recommends a product or service annually.
C. quantity consumed or patronage (store visits) during a specific period.
D. the maximum number of times a customer has used a product or service historically.
E. the profits a firm earns from customers who consume a particular product or service.

Blooms: Remember
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Feedback: Key term definition—usage rate.
116. Frequency marketing is a strategy that focuses on

A. demographics.
B. benefits offered.
C. usage rate.
D. geography.
E. lifestyle.

Blooms: Remember
Feedback: Text term definition—frequency marketing.
117. The market segmentation strategy known as frequency marketing focuses on

A. trial.
B. the average number of times a person in the target audience is exposed to an advertisement.
C. consumption preferences.
D. turnover.
E. usage rate.

Blooms: Remember
Feedback: Text term definition—frequency marketing.
118. Airlines have developed frequent-flyer programs to encourage passengers to use the same airline repeatedly. This marketing strategy is based on
A. geographic segmentation.
B. behavioral segmentation.
C. psychographic segmentation.
D. demographic segmentation.
E. buying condition segmentation.

Blooms: Understand
Feedback: Airlines have developed frequent-flyer programs to encourage passengers to use the same airline repeatedly to create loyal customers. This
technique, sometimes called frequency marketing, is a strategy that focuses on usage rate, a type of behavioral segmentation.
119. Airline programs that encourage passengers to repeatedly use the same airline focus on usage rate and employ a __________ strategy.
A. rate of recurrence
B. product utilization
C. incidence
D. frequency marketing
E. consumption index

Blooms: Understand
Feedback: Airlines have developed frequent-flyer programs to encourage passengers to use the same airline repeatedly to create loyal customers. This
technique, sometimes called frequency marketing, is a strategy that focuses on usage rate.
120. A recent study by the Aberdeen Group analyzed which segmentation bases were used by the 20 percent most profitable organizations of the 220
surveyed. Which segmentation base did these organizations use the most?
A. behavioral
B. psychographic
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C. geographic
D. demographic
E. product

Blooms: Understand
Feedback: A recent study by the Aberdeen Group analyzed which segmentation bases were used by the 20 percent most profitable organizations of the
220 surveyed. From highest to lowest, the segmentation bases were: geographic (88 percent), behavioral (65 percent), demographic (53 percent), and
psychographic (43 percent).
121. The 80/20 rule suggests that

A. 80 percent of a firm's inventory should be readily available while 20 percent should be reserved for emergency demand.
B. 80 percent of a firm's first-time users will become brand loyal while 20 percent will use the product only once and then abandon it.
C. 80 percent of a firm's sales are obtained from 20 percent of its customers.
D. 80 percent of a firm's marketing program expenses are tax deductible while 20 percent are not.
E. 80 percent of a firm's products will be sold to ultimate consumers while 20 percent to organizational buyers.

Blooms: Remember
Feedback: Key term definition—80/20 rule.
122. The 80/20 rule is most closely related to which basis of segmentation?
A. geographic
B. psychographic
C. opportunistic
D. demographic
E. behavioral

Blooms: Understand
Feedback: The 80/20 rule is a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers. This is related to usage
rate, a common behavior segmentation variable.
123. Todd Harris and Associates, a New York sales promotion agency, discovered from an analysis of its files that one-quarter (or 25 percent) of its
clients generated more than three-quarters (or 75 percent) of its fees and commissions. This is an example of what classic concept?
A. the two quarter gap
B. the 80/20 rule
C. the law of usage
D. the 75/25 exchange
E. Paget's Law

Blooms: Apply
Feedback: The 80/20 rule is a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers.
124. As an owner of a Wendy's fast-food restaurant located near a large urban university, you need to analyze your customers and determine which
segmentation base and its associated variable(s) you will use to segment your target market. Which segmentation base and associated variable(s) should
you use?
A. psychographic: VALS and personality
B. demographic: gender and age
C. behavioral: students and nonstudents
D. geographic: city size and zip code
E. transportation mode: car, bike, public transportation, and none (walking)
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Blooms: Understand
Feedback: To analyze your Wendy's customers, you need to identify which variables to use to segment them. Because the restaurant is located near a
large urban university, the most logical starting point for segmentation is really behavioral: Are the prospective customers students or nonstudents?
125. Which of the following is a basis used to segment U.S. organizational markets?
A. geographic
B. psychographic
C. income
D. prospects
E. education

Blooms: Understand
Feedback: The segmentation bases for U.S. organizational markets include geographic, demographic, and behavioral.
126. Variables such as location, the North American Industry Classification System (NAICS) code, and number of employees are all examples of ways
to
A. differentiate products.
B. forecast sales to a consumer market.
C. segment an organizational market.
D. promote NAFTA.
E. segment a consumer market.

Blooms: Understand
Feedback: Variables for segmenting organizational markets include geographic (location), demographic (NAICS code), and demographic (number of
employees) segmentation bases.
127. Which of the following statements about market segmentation for organizational markets is most accurate?
A. Criteria for segmenting markets are the same whether the market is composed of consumers or organizations.
B. Both consumer markets and organizational markets use demographic, geographic, and behavioral bases to segment markets.
C. Psychographic criteria are just as important in segmenting organizational markets as they are in segmenting consumer markets.
D. Consumer markets use market segmentation criteria while organizational markets do not.
E. The greatest difference in market segmentation strategies between consumer and organizational markets is the number of employees employed in the
segmentation process.

Blooms: Understand
Feedback: Variables for segmenting organizational markets include geographic, demographic, and behavioral segmentation bases. These bases are also
used to segment consumer markets, though the variables themselves may differ.
128. Evergreen Air Center in Marana, Arizona, is the world's biggest parking lot for unwanted commercial aircraft. Airlines pay from $750 to $5,000 a
month for its storage service. The warm, dry air where the operation is located serves as a cheap and effective airplane preservative. Which
segmentation variable might Evergreen use to segment the market?
A. NAICS sector, such as manufacturers, or retailers, or lawyers
B. number of locations
C. who buys, such as individual buyer or buying groups
D. metropolitan statistical area
E. number of employees
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Blooms: Apply
Feedback: The NAICS sector variable in the demographics segmentation base would reveal companies that fly commercial aircraft in industries that
already use Evergreen's services or might be potential customers.
129. The William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. Imagine that
the agency decided the singer would not perform at venues located in communities that have fewer than 100,000 residents. Thus, the agency is using
__________ segmentation.
A. entertainment
B. psychographic
C. geographic
D. usage rate
E. behavioral

Blooms: Apply
Feedback: Population density is a geographic variable that includes whether the area is urban, suburban, small town, or rural.
130. Australia-based Renewable Energy Ltd. sells a $10 million device that converts manure into energy. One of these devices is capable of generating
energy equal to $2 million of natural gas per year. The company believes its target market consists of businesses similar to its first customer, a fertilizer
manufacturer that was located in a rural area. If the firm expands to the United States, it most likely will use which of the following strategies to segment
its market?
A. behavioral and geographic
B. number of employees and behavioral
C. purchase location and purchase type
D. NAICS code and geographic
E. behavioral and NAICS code

Blooms: Apply
Feedback: Renewable Energy would first use the NAICS code to locate other fertilizer manufacturers and then use geographic segmentation to find
prospects located in rural areas in the United States where there is a ready supply of manure.
131. If Wendy's customers are buying an eating experience, which of the following rationales would make the most sense if you were to group the
products Wendy's sells?
A. grouping by caloric intake
B. grouping by price
C. grouping by meal occasion
D. grouping by usage rate
E. grouping by level of uniqueness

Blooms: Understand
Feedback: Wendy's customers really buy an eating experience, a meal occasion that satisfies a need at a particular time of day. The product groupings
that make the most marketing sense are the five "meals" based on time of day consumers buy them: breakfast, lunch, between-meal snack, dinner and
after-dinner snack.
132. Grocery retailer Safeway displays the thousands of items it sells in aisles containing related items or product groupings. Examples would be the pet
food aisle or the soft drink aisle. Why would Safeway display and sell product groupings in this manner?
A. The groupings increase the number of market-product combinations on the market-product grid, which makes it a more manageable framework for
subsequent analysis.
B. This form of product groupings makes it easier for customers to get in and out of the store more quickly, creating time utility.
C. The products are grouped so people can relate to them in a more meaningful way when they shop.
D. Product groupings can be generated quantitatively to show which adhere to the 80/20 rule.
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E. Suppliers get preferential treatment based upon the number of different UPCs they provide.

Blooms: Apply
Feedback: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. If the
firm has only one product or service, this isn't a problem. But when it has many, these must be grouped in some way so buyers can relate to them.
133. Hallmark placed its scrapbook supplies, photo albums, and related supplies into one product group because
A. it was easier to forecast future sales since there were fewer market-product combinations.
B. customers could buy in quantity and take advantage of quantity discounts.
C. their suppliers provided free displays and shelving to highlight Hallmark's products.
D. it helped buyers relate to the products and make decisions in a more meaningful way.
E. it allowed customers to compare price and quality with competitors who displayed their products in a similar manner.

Blooms: Apply
Feedback: Finding a means of grouping the products a firm sells into meaningful categories is as important as grouping customers into segments. If the
firm has only one product or service, this isn't a problem. But when it has many, these must be grouped in some way so buyers can relate to them.
134. A market-product grid is a framework to relate

A. total estimated expenses for each product sold to each market segment.
B. total anticipated revenue for each product-market segment combination.
C. total anticipated profit for each product sold to each market segment.
D. the market segments of current buyers to relative market share compared to the largest competitor.
E. the market segments of potential buyers to meaningful product groupings.

Blooms: Remember
Feedback: A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by
an organization. See Figure 8-6.
135. Each cell of the complete market-product grid shows the

A. relative market share.
B. estimated market size.
C. investment required to reach the market.
D. market growth rate.
E. estimated profit.

Blooms: Understand
Feedback: Developing a market-product grid means identifying and labeling the markets (or horizontal rows) and product groupings (vertical columns).
Each cell in the grid can show the estimated market size of a given product sold to a specific market segment. See Figure 8-6.
136. After establishing the market segments and product groupings on a market-product grid, the next step is to
A. fill in the appropriate cells with precise statistical data from primary and/or secondary sources.
B. estimate, with intelligent guesstimates as necessary, the market size for each cell.
C. total the vertical columns to identify the greatest marketing synergies and efficiencies.
D. total the horizontal rows to identify greatest operations/production synergies and efficiencies.
E. identify a marketing action for every product-market combination in the grid.

Blooms: Understand
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Feedback: Developing a market-product grid means identifying and labeling the markets (or horizontal rows) and product groupings (vertical columns).
The next step is to estimate the market size of each cell. The market size estimates in Figure 8-6 vary from a large market (3) to no market at all (0) for
each cell in the market-product grid.
137. One advantage of a market-product grid is that it can be used to

A. make cost-cutting decisions under conditions of uncertainty.
B. screen many new-product ideas in order to select the one with the best long-run market potential.
C. determine which target market segments to select and which product groupings to offer.
D. select representative samples of consumers for marketing research studies.
E. relate the product life cycle to consumer demand.

Blooms: Understand
Feedback: A market-product grid is a framework to relate the segments of a market to the products offered. Now the size of the market in each cell (the
unique market-product combination) of the market-product grid must be estimated. But even such crude estimates of the size of specific markets using
a market-product grid are helpful in determining which target market segments to select and which product groupings to offer.
138. Determining the size of specific markets within a market-product grid is helpful in determining which target market segments to select and
A. how to implement the 80-20 rule.
B. which products to group into meaningful categories.
C. how to implement a harvesting strategy.
D. which product groupings to offer.
E. which products to reposition.

Blooms: Understand
Feedback: Even crude estimates of the size of specific market-product combinations using a market-product grid are helpful in determining which target
market segments to select and which product groupings to offer.
Figure 8-6
Figure 8-6
139. Figure 8-6 shows the market-product grid for a Wendy's restaurant next to a large urban university campus. The best way to describe how the
student market is segmented is
A. whether the student is a faculty or staff member.
B. whether the student lives near the campus or far away.
C. whether the student has the disposable income to eat at Wendy's.
D. combining where the student lives, if on campus, or what time the student commutes.
E. the meals eaten at the Wendy's restaurant.

Blooms: Understand
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Feedback: The method of segmenting the student market combines where they live if they are not commuters (dormitory or apartment) and when they
are on campus if they are commuters (day or night). See Figure 8-6.
140. Figure 8-6 shows the market-product grid for a Wendy's restaurant next to a large urban university campus. Assume a large market (shown by a 3)
is three times the size of a small market (shown by a 1) and a medium market (shown by a 2) is twice the size of a small market. The meal occasion
(product grouping) that comprises the largest product grouping is
A. breakfast.
B. lunch.
C. between-meal snack.
D. dinner.
E. after-dinner snack.

Blooms: Understand
Feedback: Totaling the meal columns vertically shows the "lunch" meal occasion to have the most "units" of sales (14) of the five product grouping
columns. See Figure 8-6.
141. Figure 8-6 shows the market-product grid for a Wendy's restaurant next to a large urban university campus. Assume a large market (shown by a 3)
is three times the size of a small market (shown by a 1) and a medium market (shown by a 2) is twice the size of a small market. The largest potential
market segment consists of
A. students that live in a dormitory.
B. that live in an apartment.
C. students that are day commuters.
D. students that are night commuters.
E. faculty or staff members.

Blooms: Understand
Feedback: Totaling the market segment rows horizontally shows that students living in an apartment is the largest segment with 9 "units" of sales of the
student market segments. See Figure 8-6.
142. All of the following are criterion used for selecting target market segments except which?
A. compatibility with the organization's objectives and resources
B. market size
C. simplicity and cost of assigning potential buyers to segments
D. competitive position
E. cost of reaching the segment

Blooms: Understand
Feedback: The five criteria used for selecting a target segment include: (1) market size, (2) expected growth, (3) competitive position, (4) cost of
reaching the segment, and (5) compatibility with the organization's objectives and resources. Simplicity and cost of assigning potential buyers is a
criterion used in forming market segments.
143. Which of the following is a criterion used for selecting a target market?
A. similarity of needs of potential buyers within a segment
B. difference of needs of sellers between segments
C. feasibility of a marketing action to reach a segment
D. expected market growth
E. simplicity and cost of assigning potential buyers to segments

Blooms: Understand
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reaching the segment, and (5) compatibility with the organization's objectives and resources.
144. Which of the following is a criterion used for selecting a target segment?
A. potential for increased profit
B. competitive position
C. similarity of needs of potential buyers within a segment
D. difference of needs of buyers among segments

Blooms: Understand
145. It is not recommended that a firm select a target segment that

A. would require entry in a global marketplace.
B. requires more than one marketing action.
C. has few competitors that target this same segment.
D. is incompatible with its company's goals or objectives.
E. has a growth potential that would require increasing the current workforce.

Blooms: Understand
146. Best Foods Co. is considering expanding beyond the regional market segments now served by its Hellmann's mayonnaise. One criterion
management wants to use to evaluate potential new geographic market segments is whether additional real estate must be purchased or leased to serve
new segments. This is an example of which criterion used to select target market segments?
A. Best Foods' competitive position in the segment
B. Best Foods' product groupings
C. expected growth of the market segment
D. size of the market segment
E. cost of reaching the segment

Blooms: Apply
reaching the segment, and (5) compatibility with the organization's objectives and resources. New real estate to reach a new market segment can be too
costly to justify the strategy, an example of the cost of reaching the segment.
147. A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. In terms
of the criteria used for selecting a target segment, this market may
A. have no expected growth.
B. not be compatible with the company's current resources.
C. not be worth targeting since its market size is very small.
D. not be readily accessible to the firm's marketing programs.
E. be relatively expensive to reach.

Blooms: Apply
reaching the segment, and (5) compatibility with the organization's objectives and resources. This market could grow, albeit slowly, as women continue
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skiing, some of whom will likely need the rehabilitation services that the company provides. However, this segment is probably too small for the
rehabilitation center to develop a marketing program to reach it.
148. During its market segmentation process for the Nike LeBron X basketball shoe, which sells for more than $200 a pair, Nike decided to concentrate
on affluent teens rather than members of high school basketball teams. This is an example of
A. selecting target market segments to reach.
B. forming products to be sold into groups.
C. developing a market-product grid and estimating size of markets.
D. taking marketing actions to reach target markets.
E. forming prospective buyers into segments.

Blooms: Apply
Feedback: A decision to concentrate on affluent teenagers is the selection of a target market segment.
149. Doris Lewis owns Lewis Edibles, Inc., a company that makes Tongue Tinglin' BBQ Sauce. She wants to target local people who like the special
blend of flavors found only in North Carolina barbecue sauce. In developing a marketing strategy to sell the sauce, Lewis decided to join Goodness
Grows in North Carolina, a specialty food association that advertises local products and distributes them to local supermarkets and gourmet shops.
Lewis has just
A. formed a market segment using critical product features.
B. formed products to be sold into groups.
C. developed a market-product grid and estimating size of markets.
D. taken a marketing action to reach a target market segment.
E. formed prospective buyers into segments.

Blooms: Apply
Feedback: The final step in the market segmentation process is taking marketing actions to reach target markets. This can be accomplished by joining
the food association that will assist her in two aspects of the marketing program—advertising and distribution.
150. Which of the following competitors mentioned in the textbook should the owner of a Wendy's restaurant monitor closely due to its explosive
growth in the number of current and proposed locations—one that is or may soon be near this Wendy's?
A. Burger King
B. In-N-Out Burger
C. McDonald's
D. Five Guys
E. Smashburger

Blooms: Understand
Topic: Competitive Environment
Feedback: From 2003 to 2012, Five Guys exploded, with more than 1,000 locations nationwide and 1,500 new restaurants planned.
151. When considering the quick-service restaurant competition, it will be most important for Wendy's to consider not only the offerings of Burger
King, McDonald's, Five Guys, and other hamburger chains but also the
A. meals at golf and country clubs.
B. dormitory meal plans at surrounding colleges and universities.
C. items for sale at gas stations and convenience stores.
D. local farmer's markets that sell produce.
E. nearly every food item sold at local grocery stores.

Blooms: Understand
Topic: Competitive Environment
Feedback: In considering the competition, Wendy's must include the nonhamburger chains. Many are now selling food items and trying to gain market
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share from the Big Three. These include convenient store chains like 7-Eleven, coffee shops like Starbucks, smoothie outlets like Jamba Juice, and gas
stations with prepared and reheatable packaged food.
152. In the early 1980s, Apple was often called "Camp Runamok" because
A. every employee was encouraged to do his or her own thing.
B. it was concentrating on laptops while everyone else was concentrating on personal computers.
C. all the employees were so young, so they often played more than they worked.
D. there were no coherent product lines targeted at identifiable market segments.
E. its personal computers were running amok with viruses, spyware, and other problems.

Blooms: Understand
Feedback: Camp Runamok was the nickname given to Apple in the early 1980s because the innovative company had no coherent series of product lines
directed at identifiable market segments. See Marketing Matters in the textbook.
153. According to the Apple Market-Product Grid, Apple would most likely get the least product synergies from the
A. Mac Pro and MacBook Pro.
B. Mac Pro and iMac.
C. Mac Pro and MacBook Air.
D. Mac Pro and Mac Mini.
E. iMac and Mac Mini.

Blooms: Understand
Feedback: The Mac Pro and Mac Mini products are designed to serve the needs of only two or three market segments, whereas the other products are
designed to serve five or more segments.
154. Two key types of synergies are

A. supplier and distributor synergies.
B. marketing and product synergies.
C. industry-dominated and consumer-dominated.
D. product and production synergies.
E. consumer and market synergies.

Blooms: Understand
Feedback: Recognizing opportunities for key synergies—that is, efficiencies—are vital to success in selecting target market segments and making
marketing program decisions. Two key synergies are marketing and product which represent an opportunity for efficiency in terms of a market segment
and product in the form of research and development (R&D) and production.
155. Marketing synergies often come at the expense of product synergies because
A. product synergies are more effective for penetrating a market rather than creating one.
B. multiple market segments usually require multiple products.
C. it is easier to change a product than to completely develop a new marketing plan.
D. a single customer segment will likely require a variety of products, each of which must be designed and manufactured.
E. no company can afford to do both at the same time.

Blooms: Understand
Feedback: Marketing synergies often come at the expense of product synergies because a single customer segment will likely require a variety of
products, each of which will have to be designed and manufactured.
156. The place a product occupies in consumers' minds on important attributes relative to competitive products is referred to as
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A. product repositioning.
B. relative positioning.
C. competitive positioning.
D. product positioning.
E. selective perception.

Blooms: Remember
Learning Objective: 08-05 Explain how marketing managers position products in the marketplace.
Topic: Positioning
Feedback: Key term definition—product positioning.
157. Product positioning refers to

A. an outdated concept that assigns product value by association with social class.
B. the place a product offering occupies in consumers' minds on important attributes.
C. the competitive advantage of one product over another.
D. changing the place a product occupies in a consumer's mind relative to competitive products.
E. using a market-product grid to place products in their appropriate places on that grid to identify potential untapped markets.

Blooms: Remember
Topic: Positioning
Feedback: Key term definition—product positioning.
158. Changing the place an offering occupies in consumers' minds relative to competitive products is referred to as
A. product placement.
B. perceptual mapping.
C. product positioning.
D. product repositioning.
E. product differentiation.

Blooms: Remember
Topic: Positioning
Feedback: Key term definition—product repositioning.
159. Product repositioning refers to

A. the place a product offering occupies in consumers' minds on important attributes.
B. using a market-product grid to place products in their appropriate places on that grid to identify potential untapped markets.
C. changing the place an offering occupies in consumers' minds relative to competitive products.
D. the practice of selling a firm's least successful product line and redirecting that revenue into a totally new product.
E. the competitive advantage of one product over another.

Blooms: Remember
Topic: Positioning
Feedback: Key term definition—product repositioning.
160. Recently, U.S. dairies, struggling to increase milk sales, tried to change the way adults thought about chocolate milk. The dairies wanted to
__________ chocolate milk in the minds of adult consumers.
A. segment
B. differentiate
C. explain
D. promote
E. reposition

Blooms: Understand
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Topic: Positioning
Feedback: Changing the place an offering occupies in consumers' minds is called repositioning. The dairy industry tried to reposition chocolate milk in
the minds of adult consumers.
161. Carmaker Kia has used its 10-year/100,000 mile warranty program to improve consumer perceptions of the reliability of its vehicles. This would
be considered a __________ strategy.
A. product repositioning
B. perceptual mapping
C. product positioning
D. product differentiation
E. psychographic

Blooms: Apply
Topic: Positioning
Feedback: Product repositioning changes the place a product occupies in consumers' minds. In this case, Kia is improving the reliability perceptions
among consumers.
162. Positioning that involves competing directly with competitors on similar product attributes in the same target market is referred to as
A. competitive repositioning.
B. position downsizing.
C. differentiation positioning.
D. head-to-head positioning.
E. product distinction positioning.

Blooms: Remember
Topic: Positioning
Feedback: Text term definition—head-to-head positioning.
163. One approach to positioning a new product in a market is __________ positioning, which involves competing directly with competitors on similar
product attributes in the same target market.
A. perceptual
B. head-to-head
C. psychological
D. differentiation
E. market

Blooms: Remember
Topic: Positioning
Feedback: Text term definition—head-to-head positioning.
164. Head-to-head positioning requires a product to

A. compete with products from competitors of the same size and country of origin.
B. compete with competitors on similar product attributes but in a different market.
C. compete with competitors on similar product attributes in the same market.
D. compete against very similar products from its own company.
E. compete against a single competitor with an identical offering.

Blooms: Understand
Topic: Positioning
Feedback: Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market.
8-40
165. In the athletic shoe market, Adidas AG and Nike, Inc. practice __________ positioning since both companies vie for the same customers with
technologically advanced products.
A. psychological
B. perceptual
C. differentiation
D. head-to-head
E. market

Blooms: Apply
Topic: Positioning
Feedback: In the athletic shoe market, Nike and Adidas practice head-to-head positioning, which involves competing directly with competitors on
similar product attributes in the same target market.
166. A positioning approach that involves seeking a less competitive, smaller market niche in which to locate a brand is referred to as
A. competitive repositioning.
B. head-to-head positioning.
C. differentiation positioning.
D. downsize positioning.
E. product repositioning.

Blooms: Remember
Topic: Positioning
Feedback: Text term definition—differentiation positioning.
167. Differentiation positioning requires a product to

A. emphasize unique product attributes to compete directly with competitors.
B. compete directly with competitors on similar product attributes in the same target market.
C. compete with competitors on similar product attributes but in a different market.
D. seek a less-competitive, smaller market niche in which to locate a brand.
E. develop marketing actions to move a product or brand to an ideal position.

Blooms: Understand
Topic: Positioning
Feedback: Differentiation positioning involves seeking a less competitive, smaller market niche in which to locate a brand.
168. In the sneaker business, Heelys practiced __________ positioning when it introduced a line of Heelys sneakers that came with an imbedded,
detachable wheel in the shoe's heel marketed to young teens.
A. head-to-head
B. parallel market
C. reflexive
D. revised
E. differentiation

Blooms: Apply
Topic: Positioning
Feedback: Differentiation positioning involves seeking a less competitive, smaller market niche in which to locate a brand. Heelys used this strategy to
compete in the kids sneaker market, when it made product modifications (the wheel in the heel) to differentiate its shoes from those of its competitors.
169. While many energy drinks target teen and young adult males with extreme sports themes, 5-hour Energy frequently advertises toward adults
needing a quick and easy way to get through a busy workday. The strategy for 5-hour Energy would be described as ________ positioning.
A. alternate
B. head-to-head
C. lateral
8-41
D. differentiation
E. revised

Blooms: Apply
Topic: Positioning
Feedback: Differentiation positioning involves seeking a less competitive, smaller market niche in which to locate a brand. 5-hour Energy used this
strategy to compete in the energy drink market when it advertised its product as an antidote to a tough workday.
170. Some Timex wristwatches can be purchased for less than $30 while Rolex wristwatches may carry a price tag of several thousand dollars. In
general, consumers view Timex watches as being dependable, relatively accurate, and inexpensive timepieces that can be purchased in drugstores,
discount stores, and department stores. The Rolex brand is perceived as an expensive status symbol distributed in fine jewelry stores or specialty shops.
By using distinctly different pricing and distribution strategies, the marketers of Rolex watches
A. compete for the same segment through different channels of distribution.
B. develop similar products as Timex but under different names.
C. use a differentiation positioning strategy.
D. compete for the same customers through similar retail outlets.
E. create cognitive dissonance in consumers who purchased Timex wristwatches.

Blooms: Apply
Topic: Positioning
Feedback: Differentiation positioning involves seeking a less competitive, smaller market niche in which to locate a brand. Both the Timex and the
Rolex wristwatches will satisfy consumers' basic need to know the time of day. However, in order to compete in the wristwatch market, each marketer
has attempted to create a distinct product position in the minds of consumers. The image of the Timex (dependable, relatively accurate, and
inexpensive) is very different from that of Rolex (an expensive status symbol).
171. "For upscale American families who desire a carefree driving experience, Volvo is a premium-priced automobile that offers the utmost in safety
and dependability" is a __________ statement for Volvo in North America.
A. perception
B. positioning
C. market-product
D. vision
E. differentiation

Blooms: Understand
Topic: Positioning
Feedback: Marketing managers often convert their positioning ideas for the offering into a succinct written positioning statement. Ideally, the statement
identifies the target market and needs satisfied, the product (service) class or category in which the organization's offering competes, and the offering's
unique attributes or benefits provided. This is the Volvo positioning statement for the North American market.
172. "For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books as well as
a combination of extraordinary convenience and low prices." is a __________ statement for Amazon.com in North America.
A. perception
B. positioning
C. market-product
D. vision
E. differentiation

Blooms: Apply
Topic: Positioning
Feedback: Marketing managers often convert their positioning ideas for the offering into a succinct written positioning statement. Ideally, the statement
identifies the target market and needs satisfied, the product (service) class or category in which the organization's offering competes, and the offering's
unique attributes or benefits provided. This is the Amazon positioning statement for its book sales.
8-42
173. A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how
consumers perceive competing products or brands, as well as its own product or brand, is referred to as a(n)
A. awareness matrix.
B. growth-share matrix.
D. perceptual map.
E. product differentiation chart.

Blooms: Remember
Topic: Positioning
Feedback: Key term definition—perceptual map.
174. Perceptual map refers to

A. a framework used to compare one firm's product offerings with another firm's offerings in relationship to their relative market share.
B. a framework used to demonstrate the growth or decline of specific market segments within an industry.
C. a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how
consumers perceive competing products or brands, as well as its own product or brand.
D. a framework to relate the market segments of potential buyers to the products offered or potential marketing actions by an organization.
E. the place a product occupies in a single consumer's mind on unimportant attributes relative to competitive products.

Blooms: Remember
Topic: Positioning
Feedback: Key term definition—perceptual map.
175. Marketers use perceptual maps as a means to display or graph in two dimensions the location of products or brands
A. against large market segments in a market-product grid.
B. against small market segments in a market-product grid.
C. in virtual space that represents the business or product's time in existence and growth.
D. in the minds of consumers.
E. against the revenues generated by other products or brands within the company.

Blooms: Understand
Topic: Positioning
Feedback: A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers. This
enables a manager to see how consumers perceive competing products or brands, as well as the firm's own product or brand.
176. A perceptual map enables a manager to see how __________ perceive competing products or brands, as well as the firm's own product or brand.
A. stakeholders
B. competitors
C. independent rating organizations such as Consumer Reports
D. consumers
E. the CEO of the firm

Blooms: Understand
Topic: Positioning
enables a manager to see how consumers perceive competing products or brands, as well as the firm's own product or brand.
177. The axes on a perceptual map are

A. sales and profitability.
B. two important product attributes, ranging from high to low on that attribute.
C. market share and market growth rate.
D. product variety and profitability.
8-43
E. customer perceptions of the firm's product versus the brand of the firm's principal competitor.

Blooms: Understand
Topic: Positioning
enables a manager to see how consumers perceive competing products or brands, as well as the firm's own product or brand. An attribute such as
nutrition could be listed as high at one end and low at the opposite end. See Figure 8-8.
178. Which of these is collected from consumers to develop a product's perceptual map?
A. consumer judgments about the important attributes for a product or brand class
B. a listing of all prospective brands and products
C. managerial judgments about how consumers perceive products
D. rank order of the ratings of an existing brand's preference relative to its competitors
E. detailed explanations of why consumers make the choices they do

Blooms: Understand
Topic: Positioning
Feedback: To develop a perceptual map, three types of data are needed: identification of important attributes for a product or brand class; judgments of
consumers about existing products or brands with respect to these attributes; and identification of where the company's product or brand is on these
attributes in the minds of potential customers. See Figure 8-8.
179. Which of the following is a step necessary in determining effective positioning of one of its products?
A. decide whether to keep or delete the market segment that your product offering targets
B. identify the key differentiators for competitors' brands
C. discover how target customers rate a company's product or brand on important attributes
D. create a marketing plan based on customers' perceptions
E. identify market niches that were not selected during the market segmentation process

Blooms: Understand
Topic: Positioning
Feedback: In determining positioning in the minds of customers, companies take four steps: (1) identify the important attributes for the product or brand
class, (2) discover how target customers rate competing products or brands with respect to these attributes, (3) discover where the company's product or
brand is on these attributes in the minds of potential customers, and (4) reposition the company's product or brand in the minds of potential customers.
Figure 8-8
Figure 8-8
180. Figure 8-8 is a depiction of a __________ for beverages in the minds of adults.
A. hierarchy of needs
B. perceptual map
C. marketing matrix
D. growth-share matrix
8-44
E. perception matrix

Blooms: Understand
Topic: Positioning
Feedback: A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to
enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand.
181. The perceptual map in Figure 8-8 shows adult perceptions for beverages. Suppose a marketer is introducing a new beverage that is
higher-than-average in nutrition and is intended for adults. It will probably be most useful to promote the drink as similar to what?
A. tea
B. fruit-flavored drinks
C. sugared soft drinks
D. regular milk
E. coffee

Blooms: Apply
Topic: Positioning
Feedback: For the planned ads, the beverage producer should position its drink against drinks in Figure 8-8 that are high on the vertical nutrition axis
and on the right, adult-oriented. The most appropriate beverage for this comparison might be tea.
182. Assume that the perceptual map in Figure 8-8 is an accurate representation for adult consumers. A heavy consumer of mineral water is likely to
think that mineral water is
A. more nutritious than tea.
B. more nutritious and a more adult-oriented beverage than milk shakes.
C. a more adult-oriented beverage than nutritionally designed diet drinks.
D. less nutritious and a more adult-oriented beverage than fruit-flavored drinks.
E. a more adult-oriented beverage than sports drinks.

Blooms: Apply
Topic: Positioning
Feedback: Mineral water ranks as a more adult-oriented beverage on the horizontal axis than sports drinks.
183. By dividing its tennis racquet market into three categories, which it labels Performance, Recreational, and Junior tennis players, Prince Sports is
using a marketing strategy called
A. product differentiation.
B. product innovation.
C. market delineation.
D. market segmentation.
E. product groupings.

Blooms: Understand
Feedback: Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a
marketing action. Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process,
which helps Prince Sports develop products with the features and at the prices that serve the different needs and skills of the three categories or segments
of tennis players. See Video Case 9: Prince Sports, Inc.: Tennis Racquets for Every Segment.
184. The O3 technology refers to an innovative tennis racquet Prince Sports developed that simultaneously delivers faster racquet speed and a bigger
sweet spot in the middle of the frame. Prince Sports has implemented a __________ strategy with its O3 innovative tennis racquet technology.
A. competitive segmentation
B. head-to-head
C. product differentiation
E. market segmentation
8-45
Blooms: Understand
Feedback: Product differentiation involves a firm using different marketing mix activities, such as product features, to help consumers perceive the
product as being different and better than competing products. By developing the O3 technology for the Performance segment, Prince Sports is focusing
on a product feature that provides great feel, control, and spin, which both professional and amateur tennis players are willing to pay for. See Video Case
9: Prince Sports, Inc.: Tennis Racquets for Every Segment.
185. The segmentation strategy used by Prince Sports today is

A. geographic.
B. behavioral.
C. psychographic.
D. socioeconomic.
E. resource-based.

Blooms: Understand
Feedback: Behavioral segmentation is based on some observable actions of prospective customers, such as the benefits they seek, which usually relates
to the product features they want—developed as part of the marketing program. Potential buyers within a segment should be similar in terms of their
needs and the resulting marketing action, such as product features. Prince Sports segments on a behavioral basis, trying to put features into its racquets
that appeal to different levels of players.
186. What is market segmentation and why is it important?
People have different needs and wants, even though it would be easier for marketers if they didn't. Market segmentation involves aggregating
prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Market segments are the
relatively homogeneous groups of prospective buyers that result from the market segmentation process. Each market segment consists of people who
are relatively similar to each other in terms of their consumption behavior. The existence of different market segments has caused firms to use a
marketing strategy of product differentiation. This strategy involves a firm using different marketing mix actions, such as product features and
advertising, to help consumers perceive the product as being different and better than competing products. The perceived differences may involve
physical features, such as size or color, or nonphysical ones, such as image or price.

Blooms: Understand
187. What is product differentiation? How does it relate to market segmentation? How does it potentially improve a firm's revenues?
Product differentiation involves a firm using different marketing mix actions, such as product features and advertising, to help consumers perceive the
product as being different and better than competing products. The perceived differences may involve physical features, such as size or color, or
nonphysical ones, such as image or price. Thus, product differentiation relates to market segmentation, where perhaps the same or similar target markets
are more likely to buy the product differentiated as having greater reliability or lower price.

Blooms: Understand
188. Describe the market segmentation process.
Market segmentation first stresses the importance of grouping people or organizations in a market according to the similarity of their needs and the
benefits they are looking for in making a purchase. Second, such needs and benefits must be related to specific marketing actions that the organization
can take, such as a new product or special promotion. Market segmentation links market needs to an organization's marketing program—specific
marketing mix actions to satisfy those needs. The stages in the market segmentation process are: identify market needs, link needs to actions, and
execute marketing program actions. Refer to Figure 8-1.

Blooms: Understand
8-46
189. Why would an organization produce a single product or service and then attempt to sell it to two or more market segments?
An organization would produce a single product or service and then attempt to sell it to two or more market segments to avoid the added cost of
developing additional versions of the product, which often entails high research and development, engineering, and manufacturing expenses. In this
case, the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of
distribution. Although these expenses can be high, they are rarely as large as those for developing an entirely new product.

Blooms: Understand
190. Why would an organization produce multiple products or services and then attempt to sell them to two or more market segments?
Organizations may target different products or services to multiple market segments. Producing these different products or services is clearly more
expensive than producing only one product or service but is effective if it meets customers' needs better, doesn't reduce quality or increase price, and
most importantly, adds to the organization's sales revenues and profits.

Blooms: Understand
191. Explain the difference between mass customization and build-to-order.
Mass customization involves tailoring goods or services to the tastes of individual customers on a high-volume scale. Build-to-order (BTO), upon
which mass customization is based, involves manufacturing a product only when there is an order from a customer. In a BTO system, customers do not
have an unlimited number of product features they can choose from.

Blooms: Understand
192. There are five key steps in segmenting and targeting markets, which link market needs of customers to the organization's marketing program. List
these five key steps.
The five key steps in segmenting and targeting markets are: (1) group potential buyers into segments, (2) group products to be sold into categories, (3)
develop a market-product grid and estimate size of markets, (4) select target markets, and (5) take marketing actions to reach target markets. See Figure
8-3.

Blooms: Understand
193. A marketing manager should develop segments for a market that meet five principal criteria. List these important factors in forming market
segments.
The five criteria are: (1) simplicity and cost-effectiveness of assigning potential buyers to segments, (2) potential for increased profit and ROI, (3)
similarity of needs of potential buyers within a segment, (4) difference of needs of buyers among segments, and (5) potential of a marketing action to
reach a segment.

Blooms: Understand
194. A nonprofit food bank was handing out food to anyone who requested it on a weekly basis. It now wants to give free food only to people who go
hungry on a daily basis. This will be the market segment it targets. How does the formation of its market segments differ from the strategy used for a
retail store?
There is one key difference between for-profit and not-for-profit organizations, and that is the criterion related to the potential for increased profit and
ROI. For nonprofits, this criterion is replaced by the potential for serving clients' needs more effectively while achieving the organization's goals.

Blooms: Apply
8-47
195. Describe the four general bases that are used to segment consumer markets.
The four general bases of segmentation are: (1) geographic segmentation, which is based on where prospective customers live or work (region, city
size); (2) demographic segmentation, which is based on some objective physical (gender, race), measurable (age, income), or other classification
attribute (birth era, occupation) of prospective customers; (3) psychographic segmentation, which is based on some subjective mental or emotional
attributes (personality), aspirations (lifestyle), or needs of prospective customers; and (4) behavioral segmentation, which is based on some observable
actions or attitudes by prospective customers, such as where they buy, what benefits they seek, how frequently they buy, and why they buy.

Blooms: Understand
196. Assume you are manager of the Outback Steakhouse, a franchised restaurant that has opened at new location in St. Louis. Describe which
segmentation base(s) and possible segmentation variable(s) you would use to segment its market and explain why each supports the appropriate market
segmentation strategy.
Students should choose from the segmentation base(s) and may also apply segmentation variable(s). The most likely basis of segmentation would be
geographic. The likely segmentation variables would be region (near St. Louis) and city size or density (more urban than rural). Demographic variables
could be used based on the necessary income of at least $35,000 to afford the $10 to $25 per person cost of a meal at Outback. Although a psychographic
basis of segmentation could be chosen, it would be too difficult and costly to select a psychographic variable (like personality—extroverted, gregarious)
to identify and assign consumers into distinct segments and then develop marketing actions to reach them; two criteria are necessary to segment
markets. With respect to behavioral segmentation, usage status may be feasible if an effective customer loyalty/frequency marketing program can be
easily developed to identify and classify the "heavy users" that would patronize Outback, say, more than once a month, since repeat business is the key
to success in the sit-down restaurant industry.

Blooms: Apply
197. Explain the 80/20 rule.
Usage rate is sometimes referred to in terms of the 80/20 rule, a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its
customers. The percentages in the 80/20 rule are not really fixed at exactly 80 percent and 20 percent, but suggest that a small fraction of customers
provide a large fraction of a firm's sales.

Blooms: Understand
198. What are the segmentation bases for U.S. organizational (business) markets?
Organizational (business) markets can be segmented by geographic, demographic, or behavioral bases. A psychographic basis is not used for
organizational market segmentation.

Blooms: Understand
199. Explain what a market-product grid is and how it is used.
A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an
organization. Developing a market-product grid means identifying and labeling the markets (or horizontal rows) and product groupings (or vertical
columns). In a complete market-product grid analysis, each cell in the grid can show the estimated market size of a given product sold to a specific
market segment.

Blooms: Understand
8-48
200. What are the criteria used to select target markets?
There are two different kinds of criteria in the market segmentation process: those used to (1) divide the market into segments and (2) actually pick the
target segments. Five criteria can be used to pick the target segments. They are: (1) market size, (2) expected growth, (3) competitive position, (4) cost
of reaching the segment, and (5) compatibility with the organization's objectives and resources.

Blooms: Understand
201. Explain the difference between marketing synergies and product synergies.
Synergy analysis seeks opportunities by finding the optimum balance between marketing efficiencies versus product efficiencies and is vital to a
marketer's success in selecting target market segments and making marketing program action decisions. Marketing synergies run horizontally across the
rows in a market-product grid and represent an opportunity for efficiency in terms of a market segment. Marketing efforts can be streamlined with a
focus on fewer segments. Product synergies run vertically down the columns in a market-product grid and each column represents an opportunity for
efficiency in research and development and production. To simplify product lines and reduce R&D and production expenses, a firm might only wish to
manufacture one or a few products and could determine which to make based on the number of segments with an interest in that product. See the Apple
Segmentation Strategy in the Marketing Matters box.

Blooms: Understand
202. Define product positioning. What are two approaches to product positioning? Give an example of each approach.
Product positioning refers to the place a product occupies in consumers' minds based on important attributes relative to competitive products. There are
two major approaches to positioning a product. Head-to-head positioning involves competing directly with competitors on similar product attributes in
the same target market. For example, Dollar Rental Cars competes head-to-head or directly with Avis and Hertz. Differentiation positioning involves
seeking a smaller market niche that is less competitive in which to locate a brand. Companies also follow a differentiation positioning strategy among
brands within their own product line to seek a less-competitive, smaller market niche in which to locate a brand. For example, McDonald's tried to
appeal to the health-conscious segment when it introduced the low-fat McLean Deluxe hamburger a few years ago to avoid competing directly with
Wendy's and Burger King's (and its own) higher fat-content offerings.

Blooms: Apply
Topic: Positioning
203. What are the three types of data needed from consumers to develop a perceptual map?
In determining a brand's position and the preferences of consumers, companies obtain three types of data from consumers: (1) important attributes for a
product class, (2) judgments of target customers about existing products or brands with respect to these attributes, and (3) where the company's product
or brand is on these attributes in the minds of potential consumers. See Figure 8-9.

Blooms: Understand
Topic: Positioning
204. What are the four steps to positioning a product with a perceptual map?
A key to positioning a product or brand effectively is discovering the perceptions in the minds of potential customers by taking four steps. (1) Identify
the important attributes for a product or brand class. (2) Discover how target customers rate competing products or brands with respect to these
attributes. (3) Discover where the company's product or brand is on these attributes in the minds of potential customers. (4) Reposition the company's
product or brand in the minds of potential customers. As shown in Figure 8-9, from these data it is possible to develop a perceptual map, a means of
displaying in two dimensions the location of products or brands in the minds of consumers.

Blooms: Understand
Topic: Positioning
Category # of Questions
AACSB: Analytical Thinking 153
8-49
AACSB: Knowledge Application 51
Accessibility: Keyboard Navigation 177
Blooms: Apply 51
Blooms: Remember 37
Blooms: Understand 116
Learning Objective: 08-01 Explain what market segmentation is and when to use it. 76
Learning Objective: 08-02 Identify the five steps involved in segmenting and targeting markets. 18
Learning Objective: 08-03 Recognize the bases used to segment consumer and organizational (business) markets. 53
Learning Objective: 08-04 Develop a market-product grid to identify a target market and recommend resulting marketing actions. 27
Learning Objective: 08-05 Explain how marketing managers position products in the marketplace. 30
Level of Difficulty: 1 Easy 37
Level of Difficulty: 2 Medium 116
Level of Difficulty: 3 Hard 51
Topic: Competitive Environment 2
Topic: Methods of Market Segmentation 118
Topic: Positioning 30
Topic: Product Value Creation 12
Topic: Steps in Market Segmentation 18
Topic: Target Markets 24
8-50

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AACSB: Analytical Thinking

2. The primary focus of Zappos' market segmentation strategy is to sell

AACSB: Analytical Thinking

3. The Zappos segmentation strategy is based on

AACSB: Analytical Thinking

4. Which of the following statements about Zappos is most accurate?

AACSB: Analytical Thinking

AACSB: Analytical Thinking

6. Tony Hsieh, CEO of Zappos, offers $2,000 to anyone who

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

Feedback: Key term definition—market segmentation.

9. Market segmentation refers to

AACSB: Analytical Thinking

Feedback: Key term definition—market segmentation.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Knowledge Application

AACSB: Knowledge Application

15. Market segments refers to

AACSB: Analytical Thinking

Feedback: Text term definition—market segment.

AACSB: Analytical Thinking

Feedback: Text term definition—market segment.

17. To be identified as a market segment, members of the group must

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

Feedback: Key term definition—product differentiation.

21. Product differentiation refers to

AACSB: Analytical Thinking

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

27. _______ links market needs to an organization's marketing program.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

Feedback: Key term definition—market-product grid.

AACSB: Analytical Thinking

Feedback: Key term definition—market-product grid.

31. A market-product grid is a framework to relate

AACSB: Analytical Thinking

Feedback: Key term definition—market-product grid.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

35. The table in Figure 8-2 is known as a

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking