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Chapter 06
Targeting Attractive Market Segments
1. _____ is the process by which a market is divided into distinct subsets of customers with
similar needs and characteristics that lead them to respond in similar ways to a particular
product offering and marketing program.
A. Market capitalization
B. Market segmentation
C. Brand positioning
D. Marketing mix
Answer: b
Level of Difficulty: Easy
Page: 141
2. _____ entails designing product offerings and marketing programs that can establish an
enduring competitive advantage in the target market by creating a unique brand image, or
position, in the customer’s mind.
A. Brand positioning
B. Market segmentation
C. Brand preference
D. Brand dilution
Answer: a
Level of Difficulty: Easy
Page: 141
3. Identify the scenario emphasizing the impact of income on consumer markets that are
segmented demographically.
A. MobServ, a mobile service provider, focusing attention on the 65-plus segments to
improve market penetration
B. CarsForWomen Inc. launching an online information service aimed at women to directly
influence eight out of ten vehicle purchases
C. Cyan Mobiles launching a subsidiary to create an ultra-exclusive mobile telephone
targeting customers who buy luxurious products
D. GloGarments creating needs for specialized goods and services due to increase in the
number of men opting for neon clothing
Answer: c
Level of Difficulty: Hard
Page: 145
4. Carol’s Trio, an upscale retail chain, stocks and sells only Spanish, German, and French
products. Trio is an example of segmenting a market by _____.
A. age
B. ethnic origin
C. education
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
D. income
Answer: b
Level of Difficulty: Easy
Page: 145
5. _____ divides the market according to the characteristics of the buying organization using
attributes such as age of firm, firm size, and industry affiliation.
A. Microsegmentation
B. Geographic segmentation
C. Behavioral segmentation
D. Macrosegmentation
Answer: d
Level of Difficulty: Easy
Page: 146
6. In _____, customers are grouped by the characteristics of the individuals who influence the
purchasing decision.
A. microsegmentation
B. geographic segmentation
C. demographic segmentation
D. macrosegmentation
Answer: a
Level of Difficulty: Easy
Page: 146
7. AdventureBikes targets wilderness enthusiasts and introduced special robust bikes for
them. PowerDrink’s target market comprises tennis players who need to replenish water and
salts lost through perspiration. These are examples of _____ segmentation that is based on
target consumers’ activities.
A. demographic
B. geographical
C. geodemographic
D. behavioral
Answer: d
Level of Difficulty: Medium
Page: 147
8. When consumers evaluate product alternatives on the basis of desired characteristics and
how valuable each characteristic is to them, it is referred to as _____.
A. benchmarking
B. productivity paradox
C. choice criteria
D. paradox of thrift
Answer: c
Level of Difficulty: Easy
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
Page: 147
11. A(n) _____ consumer shops for products that demonstrate the consumer’s success.
A. principle-oriented
B. action-oriented
C. resource-oriented
D. status-oriented
Answer: d
Level of Difficulty: Easy
Page: 149
12. _____ is the degree to which buying activity is centralized and influences a buyer to
consider all transactions with a given supplier on a global basis, to emphasize cost savings,
and to minimize risk.
A. Brand parity
B. Purchasing structure
C. Choice criteria
D. Purchasing influence
Answer: b
Level of Difficulty: Easy
Page: 149
13. A(n) _____ refers to a recurring buying situation handled on a routine basis.
A. straight rebuy
B. old rebuy
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
C. modified rebuy
D. new buy
Answer: a
Level of Difficulty: Easy
Page: 150
14. Which of the following buying situations occurs when some element, such as price or
delivery schedules, has changed in a client–supplier relationship?
A. A straight rebuy
B. An old rebuy
C. A modified rebuy
D. A new buying situation
Answer: c
Level of Difficulty: Easy
Page: 150
15. What is the first step in constructing a market attractiveness/competitive position matrix
for evaluating potential target markets?
A. Selecting market attractiveness and competitive position factors
B. Choosing segments to target and allocate resources
C. Rating segments on each factor and plotting results on matrices
D. Projecting future position for each segment
Answer: a
Level of Difficulty: Easy
Page: 152
16. In which of the following steps of evaluating potential target markets is the market-
attractiveness/competitive-position matrix plotted?
A. Choosing segments to target and allocating resources
B. Projecting future position for each segment
C. Rating segments on each factor
D. Assigning numerical weights to the factors
Answer: c
Level of Difficulty: Medium
Page: 154-155
17. Based on the market attractiveness/competitive position matrix, which of the following
strategies should a firm consider when the market attractiveness is moderate and the
competitive position is weak?
A. It should expand without high risk or minimize investment and focus on operations.
B. It should withdraw if indications of sustainable growth are lacking.
C. It should emphasize profitability by increasing productivity.
D. It should seek ways to increase current earnings without speeding market's decline.
Answer: a
Level of Difficulty: Hard
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
Page: 157
18. Based on the market attractiveness/competitive position matrix, which of the following
strategies should a firm consider when the market attractiveness is low and the competitive
position is strong?
A. It should build selectively on strengths and invest to improve position only in areas where
risk is low.
B. It should emphasize profitability by increasing productivity and build up ability to counter
competition.
C. It should protect current strengths of the firm and seek ways to increase current earnings
without speeding market’s decline.
D. It should invest more to grow at a maximum rate and concentrate on maintaining strength.
Answer: c
Level of Difficulty: Easy
Page: 157
19. Based on the market attractiveness/competitive position matrix, which of the following
strategies should a firm consider when the market attractiveness is high and the competitive
position is strong?
A. It should protect existing strengths and invest to improve position only in areas where risk
is low.
B. It should defend its current position and stop all further investments.
C. It should sell when possible to maximize cash value and cut fixed costs in the meantime.
D. It should invest more to grow at a maximum rate and concentrate on maintaining strengths.
Answer: d
Level of Difficulty: Easy
Page: 157
21. Which of the following market strategies is often favored by smaller companies to avoid
direct confrontations with larger firms while building volume and share?
A. A niche-market strategy
B. A growth-market strategy
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
C. A resource-market strategy
D. A mass-market strategy
Answer: b
Level of Difficulty: Medium
Page: 158
Essay Questions
23. Briefly discuss the market attractiveness and competitive position factors.
Answer: Market Attractiveness Factors: Assessing the attractiveness of markets or market
segments involves determining the market’s size and growth rate and assessing various
trends— demographic, sociocultural, economic, political/ legal, technological, and natural—
that influence demand in that market. An even more critical factor in determining whether to
enter a new market or market segment, however, is the degree to which unmet customer
needs, or needs that are currently not being well served, can be identified. In the absence of
unmet or underserved needs, it is likely to be difficult to win customer loyalty, regardless of
how large the market or how fast it is growing. “Me-too” products often face difficult going in
today’s highly competitive markets.
Competitive Position Factors: Understanding the attractiveness of the industry in which one
competes is also important. Entering a segment in a way that would place the firm in an
unattractive industry or increase its exposure therein may not be wise. Of more immediate and
salient concern, however, is the degree to which the firm’s proposed product will be
sufficiently differentiated from its competitors, given the critical success factors and product
life-cycle conditions already prevalent in the category. Similarly, decision makers need to
know whether their firm has or will be able to acquire the resources it will take—human,
financial, and otherwise—to effectively compete in the new segment. Simply put, most new
goods or services need to be either better from a consumer point of view or cheaper than those
they hope to replace. Entering a new market or market segment without a source of
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 06 - Targeting Attractive Market Segments
6-7
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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