Chapter 7 Segmentation, Target Marketing, and Positioning 1) People's diverse interests and backgrounds divide them into numerous groups with distinct needs and wants, a condition most accurately described as ________. A) market aggregation B) market positioning C) economic aggregation D) differentiation E) market fragmentation Answer: E 2) Marketers must balance the ________ of mass marketing with the ________ of offering each individual customer exactly what he wants. A) efficiency; effectiveness B) effectiveness; efficiency C) investment; cost D) cost; investment E) positioning; scale Answer: A 3) Which of the following statements about the steps in the target marketing process is true? A) The first step in the target marketing process is setting marketing objectives. B) There are four steps in the target marketing process. C) The second step in the target marketing process is the identification of all segmentation variables. D) The final step in the target marketing process is positioning. E) The target marketing process is not related to positioning. Answer: D 4) Which of the following is NOT part of a target marketing strategy? A) dividing the market into segments based on customer characteristics B) identifying a market that is likely to buy a product C) selecting one or more segments as target markets D) developing a product to meet the needs of a specific market segment E) positioning a product Answer: B 5) What are the steps, in order, of the target marketing process? A) segmentation, positioning, and targeting B) segmentation, targeting, and positioning C) targeting, segmentation, and positioning D) targeting, positioning, and segmentation E) positioning, segmentation, and targeting Answer: B 6) Some people want healthy cereal that will help them lose weight or possibly prevent certain kinds of cancer. Some want presweetened cereal. Some want fruits and nuts in their cereal. Some people want whole wheat cereal while others want rice cereal. There are some who like hot cereal and others who like to eat their cereal right out of the box. The diversity of consumers for cereal is an example of ________. A) market aggregation B) market similitude C) economic aggregation D) disintermediation E) market fragmentation Answer: E 7) The direct cause of market fragmentation is the large number of new technological products introduced annually. Answer: False 8) A mass marketing approach involves more advertising costs than a target marketing approach does. Answer: False 9) What is market fragmentation? Why is market fragmentation of concern to marketers? Answer: Market fragmentation refers to how modern society is divided into groups with diverse interests and diverse backgrounds. Each group has distinctive wants and needs. Because of this diversity, the same good or service will not appeal to everyone. Marketers must understand a group's distinctive wants and needs in order to meet the needs of the group with a product or service. 10) Explain the major steps in the target marketing process. Answer: The first step is market segmentation: dividing a market into smaller groups based on one or more meaningfully shared characteristics. Each group might require separate products or marketing mixes. The second step is targeting: evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. The third step is positioning: developing a marketing strategy to influence how a target market segment perceives a good or service in comparison to the competition. 11) Why do marketers segment the market and use a target marketing strategy? Answer: Marketers divide heterogeneous markets into smaller groups that can be reached more efficiently with products and services that match their unique tastes; firms focus on buyers they can serve best and most profitably. 12) Which of the following is the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics? A) acculturation B) segmentation C) market fragmentation D) targeting E) positioning Answer: B 13) Age, gender, place of residence, and income are all examples of ________. A) segmentation variables B) positioning strategies C) market fragment strategies D) psychographics E) targeting strategies Answer: A 14) Which of the following best defines demographics? A) statistics that can be used to segment populations on the basis of what people do with a product B) statistics that can be used to segment populations on the basis of when people use a product C) qualitative data that can be used to explain why seemingly homogeneous consumer groups do not share core characteristics D) statistics that can be used to segment populations on the basis of shared attitudes, opinions, and interests E) statistics that measure observable aspects of a population Answer: E 15) Which of the following is NOT an example of a demographic segmentation variable? A) lifestyle B) income C) ethnic group D) gender E) age Answer: A 16) Which of the following best describes the market segment referred to as the bottom of the pyramid (BOP)? A) a national segment of lower income consumers B) a national segment of non-native language speakers C) a national segment of individuals with a high-school only education D) a global segment of consumers who earn less than $2 per day E) a global segment of children in lower income families Answer: D 17) Marketers often use generational marketing because members of a generation tend to share the same ________. A) lifestyle B) income and social class C) outlook and priorities D) psychographics and usage patterns E) geodemographics Answer: C 18) The group of American consumers born after 1994 is often called ________. A) Millennials B) Generation Y C) Generation X D) baby busters E) Generation Z Answer: E 19) The group of American consumers born between 1979 and 1994 is often called ________. A) baby busters B) the silent majority C) Generation Y D) tweens E) Generation X Answer: C 20) Which of the following is the most accurate generalization of Millennials? A) Many people in this segment seem determined to have stable families after growing up as latchkey children. B) Members of this generation are currently responsible for the majority of new start-up businesses in the United States. C) Members of this generation were born in the years immediately following the end of World War II. D) Members of this generation have more leisure time than members of other generations do. E) Members of this generation are more difficult to reach through television advertising than members of older generations are. Answer: E 21) Which generation was referred to as "busters" and was thought of as slackers who are cynical about marketing? A) Generation Y B) Generation X C) Baby boomers D) Millennial E) Generation Z Answer: B 22) The group of American consumers born between 1965 and 1978 are called ________. A) baby boomers B) the silent majority C) Generation X D) Generation Y E) Generation Z Answer: C 23) Baby boomers ________. A) were born between 1965 and 1978 B) are currently in their 30s and 40s C) are important to marketers because of the size and wealth of the segment D) are 75 or older E) are the parents of Generation X, not Generation Y Answer: C 24) Members of which generation were born in the years immediately following the end of World War II? A) Echo Boomers B) Millennials C) baby boomers D) the baby bust E) Generation Z Answer: C 25) Of the following generations, which has the youngest members? A) baby boomers B) echo boomers C) Generation X D) Generation Y E) Generation Z Answer: E 26) The supermarket sells boxes of pink diapers and blue diapers. This is an example of segmenting by ________. A) gender B) age C) ethnicity D) social class E) geocoding Answer: A 27) Which of the following is a true statement about trends related to gender segmentation? A) The education and income gap between men and women closed in the latest recession. B) In the recent recession, women held about three in four of the jobs that were lost. C) Men are now increasingly likely to marry women with more education and income than they have. D) In recent decades, the economic gains of marriage have been greater for women than for men. E) Women are now increasingly likely to marry men with more education and income than they have. Answer: C 28) ________ is a term for men who are keenly interested in fashion, home design, gourmet cooking, and personal care. A) Tween B) Buster C) Metrosexual D) Bachelor E) Slacker Answer: C 29) Because family needs and expenditures change over time, marketers may segment consumers by ________. A) age B) generation C) family life cycle stage D) social class E) psychographics Answer: C 30) Which of the following best explains why marketers do not consider social class segments as strictly as they once did? A) Many consumers buy according to the social class image they wish to portray rather than according to where they actually fall in the social class framework. B) Due to the Great Recession, members of the upper class have become members of the middle class, and members of the middle class have become members of the lower class. C) Data related to social class are more complicated and difficult to obtain and analyze than they once were. D) Social class in the United States is more related to education and family history than to wealth. E) Members of the upper and middle classes are unlikely to be attracted to any products marketed toward members of the lower classes. Answer: A 31) African Americans, Hispanic Americans, and Asian Americans are all examples of ________ segments. A) life cycle B) psychographic C) ethnic group D) social class E) geocoding Answer: C 32) ________ are the largest minority group in the United States. A) African Americans B) Asian Americans C) Pacific Islanders D) Hispanics E) American Indians Answer: D 33) Which statement is NOT true about the Hispanic American segment? A) The Hispanic American segment is becoming a less important segment to marketers. B) The Hispanic American segment is growing rapidly. C) Hispanic Americans tend to be brand loyal, especially to products made in their country of origin. D) Hispanic Americans are a relatively young segment. E) Hispanic American households are larger on average than other U.S. households. Answer: A 34) The Asian American segment of the population ________. A) is the largest ethnic group market segment B) does not yet receive significant attention from marketers C) has shrunk in the last 10 years D) is the fastest growing minority group in the United States E) is too geographically dispersed to form a meaningful market segment Answer: D 35) The management practice of ________ involves actively seeking people of different races, sexes, ethnic groups, and religions in an organization's employees, customers, suppliers, and distribution channel partners. A) geodemography B) cultural diversity C) ethnic segmentation D) psychography E) social networking Answer: B 36) Your firm has decided to tailor its products and services to meet local market demands. A good approach to use would be ________ segmentation. A) geographic B) psychographic C) usage D) positioning E) social class Answer: A 37) Which of the following is a segmentation technique that combines geography with demographics? A) geocoding B) geodemography C) geodiversity D) geotargeting E) psychographics Answer: B 38) Companies can customize online advertising by ________ so that people who log on in different places will see ad banners for local businesses. A) geotargeting B) geodemography C) geodiversity D) psychographics E) profiling Answer: A 39) Which of the following most accurately describes PRIZM? A) a method of removing heterogeneous variables from a target market B) a method of data mining used to implement market development strategies C) a database that classifies the U.S. population into segments based on socioeconomic data and lifestyle attributes D) a database that classifies the international population into segments based on demographic and geographic characteristics E) a positioning strategy used in the introduction of new consumer products Answer: C 40) ________ variables segment markets in terms of shared activities, interests, and opinions. A) Demographic B) Ethnographic C) Geodemographic D) Socioeconomic E) Psychographic Answer: E 41) The division of buyers into groups based on lifestyle or personality characteristics is ________ segmentation. A) behavioral B) psychographic C) values D) demographic E) needs Answer: B 42) ________ is a well-known system based on psychological traits that correlate with consumer behavior. It divides the entire U.S. population into segments and then sells pieces of this information to clients for specific strategic applications. A) VALS™ B) Decitica C) AIO D) PRIZM E) NAICS Answer: A 43) Identifying and targeting market segments that may be as small as just one individual is known as ________. A) geotargeting B) micromarketing C) psychographic segmenting D) geodemography E) usage segmenting Answer: B 44) Which three consumer motivations are key to the VALS™ system? A) faith, family, and finances B) age, gender, and ethnicity C) place of usage, time of usage, and frequency of usage D) ideals, achievement, and self-expression E) income, education, and geographic location Answer: D 45) Which of the following is a consumer group identified by the VALS™ system? A) Young Digerati B) Tweens C) Kids & Cul-de-Sacs D) Shotguns & Pickups E) Experiencers Answer: E 46) ________ segmentation variables classify consumers on the basis of how they act toward, feel about, or use a product. A) Demographic B) Behavioral C) Geodemographic D) Socioeconomic E) Psychographic Answer: B 47) Loyalty programs such as Marriott Rewards and American Airlines Advantage are examples of segmentation by ________. A) usage rate B) occasion C) geodemography D) psychographics E) geotargeting Answer: A 48) The 80/20 rule is most directly related to ________ segmentation. A) demographic B) behavioral C) geodemographic D) socioeconomic E) psychographic Answer: B 49) According to the long tail approach to selling, ________. A) the Internet provides reduced opportunities for segmenting markets B) companies can make the most money by focusing on the "bottom-of-pyramid" market C) companies should focus on the 20 percent of customers who purchase the greatest volume of their product D) companies should focus on the 80 percent of customers who purchase the greatest volume of their product E) companies can make money by selling small amounts of items that only a few people want Answer: E 50) According to the 80/20 rule, which of the following is true? A) 80 percent of a product's customers account for 20 percent of the product's marketing expenditures. B) 20 percent of a product's customers account for 80 percent of the product's marketing expenditures. C) 80 percent of a product's sales come from 20 percent of the product's purchasers. D) 80 percent of a product's marketing cost should be equal to 20 percent of the firm's total marketing budget. E) 80 percent of a product's market should be consumers who are 20 or older. Answer: C 51) Which type of segmentation can center on the use of the word when, such as when consumers get the idea to buy, when they actually make their purchase, or when they use the purchased item? A) usage occasions B) psychographic C) needs D) demographic E) geotargeting Answer: A 52) During tax season, you're likely to see more TurboTax ads on Google pages, even if you aren't searching for tax software. This is an example of ________ segmentation. A) geodemographic B) psychographic C) usage occasion D) demographic E) geotargeting Answer: C 53) Business-to-business marketers who look at the size of firms in terms of total sales or number of employees are using ________ to segment their market. A) organizational psychographics B) organizational demographics C) organizational culture D) behavior variables E) usage variables Answer: B 54) Which of the following would be the best source for information about the size and number of companies operating in a particular industry in the United States? A) PRIZM B) AIO C) VALS™ D) NAICS E) ISP Answer: D 55) Demographic variables are so frequently used in market segmentation because they ________. A) create smaller segments than other methods do B) create more easily reached segments than other methods do C) do not involve stereotypes D) are easy to measure in comparison to many other methods E) involve fewer attributes to consider than other methods do Answer: D 56) In developing a new shoe, Reebok targeted the youth market. It used ________ segmentation to define its target market. A) lifestyle B) behavioral C) socioeconomic D) demographic E) psychographic Answer: D 57) A retailer that wants to target prospective grooms between the ages of 21 and 40 who are within six months of their marriage is using ________ segmentation to define its target market. A) lifestyle B) behavioral C) socioeconomic D) demographic E) ethnicity Answer: D 58) When many men in the baby boomer segment started getting gray hair, they were reluctant to use hair dyes made for women even though they were just as eager as women to fight the aging process. To address this reluctance, hair care product manufacturers introduced hair dying systems for men to use on their head and their facial hair. The hair care product manufacturers used ________ segmentation to define their target markets. A) lifestyle B) behavioral C) socioeconomic D) demographic E) psychographic Answer: D 59) A soup company found its canned nacho cheese sauce was too spicy for Americans in the East and not spicy enough for those in the West and the Southwest. As a result, the company's plants in Texas and California produce a hotter nacho cheese sauce than is produced in its other plants. The company is using ________ segmentation. A) geographic B) life cycle C) psychographic D) lifestyle E) usage Answer: A 60) To market Suave shampoo, Unilever used PRIZM to identify neighborhoods with high concentrations of young working women. These women responded best to advertisements conveying the message that Suave is inexpensive, yet will make their hair "look like they spend a fortune on it." What segmentation tool did Unilever use in this example? A) geotargeting B) geodemography C) the hierarchy of needs D) projective techniques E) ethnography Answer: B 61) People who are regular visitors to SyFy.com (a website maintained by a science fiction cable network) and those who are regular visitors to BHG.com (a website maintained by the producers of BHG-TV and the publishers of a women's magazine) belong to different ________ segments. A) demographic B) ethnographic C) geodemographic D) socioeconomic E) psychographic Answer: E 62) Magazines targeted to people who love in-line skating, people who enjoy cooking, or people who prefer living more simply use ________ segmentation variables. A) demographic B) ethnographic C) geodemographic D) socioeconomic E) psychographic Answer: E 63) Harley-Davidson's user profile includes both thrill-seeking and affinity for a countercultural image. In addition to demographics, Harley-Davidson uses ________ segmentation to target markets. A) value analysis B) social class C) geodemographic D) socioeconomic E) psychographic Answer: E 64) Many people only entertain in their homes during November and December when their homes are decorated for the holidays. The increase in ads for prepared trays of food to be served at these functions is directly related to ________ segmentation. A) socioeconomic B) geodemographic C) geographic D) demographic E) usage occasion Answer: E 65) Starting in February and ending sometime in late April, department stores promote the fact that they stock a wide range of formal attire for high school proms. The dresses and tuxedos are available year-round, but the heaviest promotion of these products occurs in spring, when most proms are held. This spring promotion to high school students is based primarily on ________. A) social class B) psychographics C) lifestyle D) usage occasion E) geodemography Answer: D 66) Which of the following is the best example of the long tail approach to selling? A) Nearly 20 percent of the videos delivered by Netflix are older or obscure titles from its vast collection of videos. B) Kraft Foods focuses on the 20 percent of U.S. households that purchase 80 percent of the Miracle Whip the company markets. C) Barnes & Noble stocks the most popular books and magazines in its retail stores. D) Google lets advertisers target certain ads to certain segments of search engine users. E) Staples segments its business-to-business markets based on sales volume. Answer: A 67) Age and gender are examples of demographic segmentation variables. Answer: True 68) Kids between the ages of 8 and 14 are part of the tweens market segment. Answer: True 69) The members of Generation Y were born between 1965 and 1976. Answer: False 70) The majority of Generation Y consumers are unmarried. Answer: True 71) The number of Americans aged 65 or older has decreased since 2000. Answer: False 72) In 2012, women were more likely than men to marry someone with less education. Answer: True 73) Households making $100,000 or more represent only 20 percent of U.S. households but control more than half of all income earned in the United States. Answer: True 74) Hispanic Americans tend to be brand loyal, especially to products made in their country of origin. Answer: True 75) Hispanic Americans are the fastest-growing minority group in the United States. Answer: False 76) The VALS™ system is a crucial part of geodemographic segmentation. Answer: False 77) The long tail approach to segmentation indicates that companies can make money selling small amounts of items that only a few people want as long as they sell enough different items. Answer: True 78) Gamification refers to market segmentation using video gaming as a lifestyle. Answer: False 79) Because children have little influence over family purchases beyond toys and games, marketers tend to not focus on consumers under the age of 12. Answer: False 80) When Apple marketed its iPod to teens, it used a personality segmentation variable. Answer: False 81) Honor, a market researcher for a packaged goods company, is segmenting a population of consumers based on how frequently they buy different types of packaged goods. Honor is using behavioral segmentation. Answer: True 82) Describe several characteristics of Generation Y and Generation X that are important to marketers. Answer: Generation Y, also known as Millennials or Echo Boomers, consists of people born between 1979 and 1994. They are the first generation to grow up with the Internet, and their comfort with technology is reflected in their media choices. They are opting for streaming video rather than watching television and are heavy users of smartphones, tablets, and social media. Millennials are very racially diverse and only 26 percent are married. They are less likely to identify themselves as belonging to a political party or a religion. Members of Generation X are older than Millennials, born between the years of 1965 and 1978. Gen Xers are value-oriented and in the process of settling down, focusing on having stable families and homes rather than material success. 83) Explain why the Hispanic American population is particularly important to marketers. Answer: The Hispanic American population is the country's largest minority group, but that is not the only reason it is described as the "emerging superstar segment." Hispanic Americans are young, with a lower median age than the U.S. average, and have larger households than the U.S. average. They tend to be brand loyal and open to relationship-building approaches to marketing, so marketers see them as an attractive segment of potential life-long customers. 84) How do marketers use the assumption that "birds of a feather flock together"? Answer: Marketers have developed geodemography–a segmentation technique that combines demographics and regional marketing. Through geodemography, marketers segment markets of people who live near one another and share similar characteristics. They can construct segments including a number of households with a common pattern of preferences and know more precisely who will be interested in special offerings. 85) A new marketing buzzword is metrosexual. What are some characteristics of a person who would be classified in this segment? Answer: Metrosexual describes a man who is straight, urban, and in touch with his feminine side. A metrosexual is typically interested in fashion, home design, gourmet cooking, and personal care. 86) How has the education and income gap between husbands and wives changed? Answer: A growing number of women earn more money than their husbands, with 24 percent of women now making more than their husbands. This is a major shift from the 1960s, when only 6 percent of wives earned more than their husbands. Additionally, there are now more wives than husbands with spouses who have less education. In other words, men are increasingly likely to marry wives with more education and income than they have, and the reverse is true for women. 87) How do marketing organizations benefit from cultural diversity? Answer: Marketing organizations that hire people of different sexes, races, ethnic groups, and religions benefit from the diverse backgrounds, experiences, and points of views of their employees as they develop strategies for brands to appeal to diverse customer groups. 88) You work for a travel agency. Business has been slow, and you want to suggest some promotions targeted to specific market segments. What three demographic segmentation variables would you recommend using? Answer: Students' answers will vary. Their answers must identify specific demographic-based segments. Most students will list age, gender, income and social class, race and ethnicity, and stage of family cycle. I would recommend using variables such as age (targeting different age groups for family packages, senior discounts, etc.), income level (offering luxury travel packages for higher income brackets), and marital status (honeymoon packages for newlyweds, family vacation deals for married couples with children). 89) How might a marketer benefit most from using PRIZM? Answer: People and locations can be segmented into marketable groups of like-minded consumers, so marketers can more closely tailor their efforts to their target. 90) You work for a travel agency. Business has been slow, and you want to suggest some promotions targeted to specific market segments. What three psychographic segmentation variables would you recommend using? Answer: Students' answers will vary. Many students will list shared opinions, interests, and attitudes. Better students will include segments such as people who enjoy fishing, people who like to look at wildlife, vegetarians, people who are interested in adventure, and so forth. I would recommend using psychographic variables such as travel motivations (e.g., adventure-seeking, relaxation-focused), travel personalities (e.g., luxury travelers, budget-conscious travelers), and attitudes towards travel (e.g., eco-conscious travelers, cultural explorers). 91) Tropicana Essentials Healthy Heart targets consumers who like orange juice and who also want extra vitamins but no sodium. Explain how Tropicana uses behavioral segmentation in this example. Answer: Behavioral segmentation categorizes consumers on the basis of how they act toward, feel about, or use a product. Tropicana Essentials Healthy Heart targets consumers who want the healthy benefits of added vitamins and no sodium added to their orange juice. 92) A large chain amusement park sells tickets at its main gate for guests who are visiting the park for just that one day. The park also sells seasonal passes that can only be used on weekdays. What market segmentation is being implemented by the amusement park? Answer: The amusement park is using behavioral segmentation. Guests who are planning to visit once are one segment, and guests who are planning to visit repeatedly throughout the season are another. 93) Which of the following is the process of evaluating and selecting the most viable market segment to enter? A) segmentation B) differentiation C) targeting D) market mixing E) positioning Answer: C 94) Before selecting a targeting strategy, marketers should ________. A) select media for an advertising campaign B) develop segment profiles C) compare target markets D) implement a positioning strategy E) finalize the marketing mix Answer: B 95) A viable target market should ________. A) have needs that can adequately be served by the marketer B) not be reachable by other organizations C) have the same needs as similar-sized groups D) be the most profitable possible target market E) be the largest possible market Answer: A 96) When the size and purchasing power of a target segment can be determined, the segment is ________. A) measurable B) accessible C) substantial D) differentiable E) profitable Answer: A 97) A(n) ________ would probably include customer demographics, location, lifestyle information, and a description of how frequently the customer buys the product. A) geocode B) NAICS classification C) segment profile D) internal market audit E) customer guide Answer: C 98) A company that uses a(n) ________ targeting strategy is appealing to a broad spectrum of people. A) fragmented B) undifferentiated C) concentrated D) differentiated E) customized Answer: B 99) Mass marketers such as Walmart often ignore market segment differences and target the whole market with one offer. What is this approach to targeting? A) undifferentiated targeting B) differentiated targeting C) target marketing D) concentrated targeting E) mass customization Answer: A 100) Which of the following best explains why a company would adopt an undifferentiated targeting strategy? A) to more efficiently focus on customer relationship management B) to remove the need for disintermediation C) to move a product to the next stage of its product life cycle D) to take advantage of economies of scale E) to reach the underserved "bottom-of-the-pyramid" consumers Answer: D 101) Using a ________ targeting strategy, a company develops one or more products for each of several customer groups with different product needs. A) fragmented B) homogeneous C) custom D) differentiated E) mass customization Answer: D 102) When a firm offers one or more products to a single segment, it is using a ________ strategy. A) fragmented B) homogeneous C) custom marketing D) mass customization E) concentrated targeting Answer: E 103) An industrial manufacturer that works with one or a few large clients and develops products that only these clients will use is most likely to implement a(n) ________ strategy. A) undifferentiated targeting B) homogeneous C) customized marketing D) bottom-of-the-pyramid E) differentiated targeting Answer: C 104) Which of the following is the narrowest strategy? A) undifferentiated targeting B) customized marketing C) differentiated targeting D) concentrated targeting E) mass marketing Answer: B 105) Using ________, a company modifies a basic good or service to meet the needs of a specific individual customer. A) undifferentiated targeting B) positioning C) customized marketing D) mass customization E) differentiated targeting Answer: D 106) Which of the following marketing strategies are most similar to one other? A) customized marketing and differentiated targeting B) mass customization and micromarketing C) undifferentiated targeting and concentrated targeting D) concentrated targeting and customized marketing E) differentiated targeting and micromarketing Answer: B 107) When marketers at P&G selected Generation Y, a demographic that includes college students, as an untapped group of potential customers for their Febreze line of products, they were executing which of the following? A) market segmenting B) undifferentiated targeting C) differentiation D) targeting E) positioning Answer: D 108) To evaluate the different target segments your company is considering, you would look at all of the following factors EXCEPT which one of the following? A) segment size B) segment growth C) segment reachability D) company culture E) company resources Answer: D 109) The Wright Bros. Collection is a catalog retailer that sells clothing and collectibles to aviation enthusiasts. Its ________ might be men and women between the ages of 25 and 55 who are risk takers. They belong to organizations such as the American Legion, the VFW, and the National Rifle Association of America. They are either pilots themselves or have close ties to a pilot. They prefer camping to taking a luxury cruise. Annually, they spend $900 on items purchased from non-store retailers. A) value analysis B) customer potential assessment C) segment profile D) internal market audit E) brand personality Answer: C 110) An undifferentiated marketing strategy is most likely to be successful in which of the following scenarios? A) The market has many competitors. B) The product or service has wide appeal. C) Growth of the market has stabilized. D) The market is slowly shrinking. E) The market has a few strong competitors. Answer: B 111) Jolene Enterprises mass produces an all-purpose floor cleaner, mass distributes it, and mass promotes it. This firm uses a(n)________. A) segmented strategy B) undifferentiated targeting strategy C) focused targeting strategy D) differentiated targeting strategy E) concentrated targeting strategy Answer: B 112) Using a concentrated targeting strategy, the marketer goes after a ________ but ________ consumer segment. A) small; undefined B) small; well-defined C) large; well-defined D) large; undefined E) medium-sized; local Answer: B 113) Favorite Memories is a small company that specializes in serving women over the age of 50 who are special occasion gift shoppers overlooked by major competitors. Which of the following best describes Favorite Memories' market targeting strategy? A) undifferentiated targeting B) custom marketing C) differentiated targeting D) concentrated targeting E) mass customization Answer: D 114) After segmentation, the customer group selected by a firm is referred to as the target market. Answer: True 115) A target market is not viable unless the segment is large enough to be profitable now and in the future. Answer: True 116) Differentiated marketing can involve connecting the same product with different market segments by communicating differently to each segment. Answer: True 117) Because Cruise Ships International currently has limited financial and personnel resources, it should avoid a concentrated targeting strategy until its resources are more substantial. Answer: False 118) Explain how a marketer determines whether an identified market segment is viable. Answer: A viable target segment should satisfy several requirements. First, members of the segment should be similar to each other in their product needs and wants and, at the same time, different from consumers in other segments. Second, the segment should be measureable. Marketers need to know whether the size and purchasing power of the segment make it a worthwhile target. If the segment is measureable, marketers need to decide whether it is large enough to be profitable now and in the future. Another critical consideration is whether marketing communications can reach the identified segment. Finally, marketers must be able to adequately serve the needs of the identified segment. 119) Discuss the advantages and disadvantages of undifferentiated targeting, differentiated targeting, and concentrated targeting. Answer: An undifferentiated targeting strategy ignores market segment differences and targets the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than on what is different. Undifferentiated targeting provides economies of scale, but does not allow for individualization of the marketing mix. In contrast, a differentiated strategy targets several market segments and designs separate offers for each. Companies hope for higher sales and a stronger position within each market segment. Concentrated targeting goes after a large share of one segment instead of going after a share of a large market. These segments may be overlooked, unimportant, or under worked. Concentration offers smaller companies an opportunity to compete by focusing their limited resources more effectively. 120) Explain how a computer company might use mass customization to meet the needs of its customers. Answer: Using mass customization, a company modifies its products or services to meet the needs of its individual customers. A computer company might do this by offering customized computer systems over the Internet. Users could create their own computers, everything from personal computers to networking systems, selecting the specific hardware and software they want from a menu of possible options. 121) Explain why correctly segmenting and then targeting consumers will help a company target its marketing dollars more effectively. Answer: Instead of using mass advertising in an attempt to reach as many people as possible, the company can use advertising that will reach only consumers who are strong potential customers. 122) The cosmetics giant L'Oreal offers several product lines at a variety of prices. It targets the luxury market with its brand Helena Rubinstein, while less expensive offerings such as Elseve are targeted to large department stores and discounters. Is this practice a differentiated targeting strategy or an undifferentiated targeting strategy? Explain your answer. Answer: This company is implementing a differentiated targeting strategy, which involves offering different products for several customer groupings with different product needs. 123) XYZ Computers, Inc., a business with limited resources, uses a concentrated targeting strategy. How might XYZ benefit from this? Answer: XYZ Computers will have an opportunity to compete by focusing its limited resources on serving small segments that may be unimportant to or overlooked by larger competitors. 124) BMW allows customers to design their own vehicles from a set of options at BMW's Web site. What is this called? Answer: This is mass customization. This is called "mass customization," where customers can personalize and configure their products based on predefined options to meet their specific preferences and needs. 125) ________ means developing a marketing strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition. A) Concentrated targeting B) Positioning C) Benefit segmentation D) Mass customization E) Customization Answer: B 126) A product's position is based on important attributes as perceived by ________. A) suppliers B) competitors C) channel members D) target consumers E) resellers Answer: D 127) Which of the listed choices is NOT a positioning task? A) identifying a set of possible competitive advantages B) surveying frequent uses of the product C) analyzing competitors' positions D) finalizing the marketing mix E) evaluating responses to the marketing mix Answer: B 128) The first step in developing a positioning strategy is to ________. A) set the marketing communications budget B) identify segmentation variables C) analyze the competitors' positions in the marketplace D) describe a product with a competitive advantage E) create target markets Answer: C 129) When McDonald's failed to realize that Applebee's and Chili's were providing products that met consumers' needs for a quick, tasty, and convenient meal, McDonald's failed to consider its ________. A) marketing mix B) mass customization C) direct competition D) indirect competition E) competitive advantage Answer: D 130) Superior image, unique product features, and better service are all examples of ________. A) brand personalities B) brand positions C) perceptual maps D) competitive advantages E) customer touchpoints Answer: D 131) Once a ________ is defined, the next step in positioning is for marketers to finalize the marketing mix. A) segmentation variable B) competitive advantage C) demographic strategy D) customer relationship management system E) concentrated target Answer: B 132) The elements of the marketing mix must match the ________. A) competitive advantage B) perceptual map C) selected segment D) indirect competition E) direct competition Answer: C 133) The last step in developing a positioning strategy is to ________. A) evaluate responses and modify as needed B) identify segmentation variables C) analyze the competitors' positions in the marketplace D) describe a product with a competitive advantage E) finalize the marketing mix Answer: A 134) A company that tries to modify its brand image to keep up with changing times is using a ________ strategy. A) concentrated B) repositioning C) competitive advantage D) personality E) perceptual Answer: B 135) A ________ is a distinct image that captures the character and benefits of a good or service. A) perceptual map B) target market C) brand personality D) segment profile E) trade promotion Answer: C 136) A perceptual map is used to ________. A) compare and contrast consumer psychographic segments B) create consumer cross-tabulations for marketing research C) locate consumers within a geographic information system D) determine how consumers position products in relation to one another E) identify the critical stage of the targeting process for the marketer Answer: D 137) Which of the following would most likely be used in the process of developing and implementing a positioning strategy? A) a perceptual map B) a geographic information system C) NAICS D) PRIZM E) VALS™ Answer: A 138) Saturn is "a different kind of company, different kind of a car;" the Hummer is "like nothing else." These statements indicate a firm's ________. A) product portfolio B) target markets C) positioning D) brand personality E) segmentation Answer: C 139) Jaygo Food Stores hires better employees than the competition by conducting lengthy searches and interviews. Management also trains employees much better than competitors. Jaygo has gained a strong competitive advantage through which type of differentiation? A) image B) people C) services D) product features E) cost Answer: B 140) Zappos, the online shoe and clothing marketer, promises free shipping and free returns on any of its products, no questions asked. This is an example of how Zappos has a strong competitive advantage through ________. A) image B) people C) services D) product features E) cost Answer: C 141) If Sam describes Coca-Cola as an all-American, Pepsi-Cola as a young daredevil, and Dr. Pepper as a nonconformist, he would be describing the sodas' ________. A) VALS™ profiles B) target markets C) brand personalities D) NAICS classifications E) trade promotions Answer: C 142) Which of the following is true of perceptual maps? A) They are only used during the new product development process. B) They are the most effective method for predicting product success. C) They identify consumer shopping preferences in terms of retail and nonretail locations. D) They are not useful in business-to-business marketing. E) They cannot be created without consumer research. Answer: E 143) Competitive advantage can be created by offering a lower price for a product that is similar to the competition's product. Answer: True 144) Once a brand's position is established, marketers rarely attempt to change it. Answer: False 145) Perceptual maps are tools for identifying the positions of brands in consumers' minds. Answer: True 146) Holiday Inn has divided the total customer market into smaller segments and selected the most promising segments. Deciding what position it wants to occupy in these segments is called targeting. Answer: False 147) Explain the concept of positioning and the steps marketers take to develop and implement a positioning strategy. Answer: A product's position is the way the product is perceived by a particular market segment. Positioning involves conveying the brand's unique benefits and differentiation to customers. To carry out effective positioning, a company should first analyze its competitors' positions. Then a company should identify the competitive advantages that can be built upon differentiation. The company must then effectively communicate and deliver the chosen position to the market through the marketing mix. Ultimately, a brand's position should deliver a valued benefit to the target, offer a superior benefit that can be communicated to consumers, and be affordable to the target. 148) Why is it important for marketers to analyze the positions of both direct and indirect competitors? Give an example of direct and indirect competitors for a supermarket. Answer: Marketers need to understand the positions of both their direct and indirect competitors in order to develop a winning position for their own product. Indirect competitors that provide similar benefits to direct competitors may signal an emerging consumer trend that marketers need to be aware of. For a supermarket, direct competitors would be other supermarkets and grocery stores. An indirect competitor could be a convenience store that begins to stock a small selection of fresh fruits and vegetables. 149) Identify three forms of competitive advantage a product could offer. Answer: Marketers could choose to focus on offering the competitive advantage of a lower price, superior image, unique product feature, better service, or better-qualified employees. 150) Why might a marketer of laundry detergent be interested in viewing a perceptual map? Answer: Perceptual maps show consumer perceptions of a brand versus competing products on important buying dimensions. Laundry detergent, for example, may be placed on a perceptual map based on price and cleaning power; this lets marketers see how consumers perceive their product with respect to others' products along those dimensions. Test Bank for Marketing: Real People, Real Choices Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart 9780132948937, 9780135199893, 9780134292663, 9780135209929
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