Chapter 8 Identifying Market Segments and Targets 1) Which of the following statements about market segmentation is true? A) It involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market. B) It is a process of evaluating each segment's attractiveness and selecting one or more to enter. C) It is a process of creating an image or identity of the product in the minds of the target market. D) It is a process of identifying and profiling distinct groups of buyers who differ in their needs and wants. E) It is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results. Answer: D 2) Establishing and communicating the distinctive benefit(s) of the company's market offering, for each target segment is called ________. A) market research B) market positioning C) marketing effectiveness D) market segmentation E) market dominance Answer: B 3) The process of selecting one or more market segments to enter is called ________. A) market targeting B) market dominance C) market positioning D) market segmentation E) market research Answer: A 4) A ________ consists of a group of customers who share a similar set of needs and wants. A) vertical marketing system B) market basket C) market share D) market segment E) market level Answer: D 5) Hilton Hotels customizes rooms and lobbies according to location. This is an example of ________ segmentation. A) demographic B) behavioral C) psychographic D) geographic E) cultural Answer: D 6) When Nike attempts to get close to its customers at the local level by sponsoring local school teams and providing shoes, equipment, and clothing to many of them, Nike is using which of the following marketing formats? A) differentiated marketing B) affiliate marketing C) guerrilla marketing D) affinity marketing E) grassroots marketing Answer: E 7) Regardless of the type of segmentation scheme used, the key is adjusting the marketing program to recognize ________. A) the level of disposable income earned by the target group B) customer differences C) the cost-benefit relationship of narrowing the target market D) customer complaints E) saturated markets Answer: B 8) If a marketer decides to segment a market based on neighborhoods, the marketer will have chosen the ________ method of segmentation. A) demographic B) psychographic C) geographic D) cultural E) behavioral Answer: C 9) If a marketing manager segments the market into culture-oriented, sports-oriented, or outdoor-oriented groups, he or she is segmenting on the basis of ________. A) loyalty status B) behavioral occasions C) user status D) psychographic lifestyle E) readiness stage Answer: D 10) Robert is the owner of an car manufacturing company. He calls for a board meeting and tells his directors that he wants to build a car that lets the users experience power and exhilaration. He tells them that the car must allow his users to soar from 0–60 mph in about 4 seconds. He also adds in that the price of the car must be affordable enough for anybody making a good salary. In accordance with the given scenario, Robert is trying to segment the market on the basis of ________. A) occupation B) family size C) benefits D) nationality E) user status Answer: C 11) In a growing trend called __________ marketing, such activities concentrate on getting as close and personally relevant to individual customers as possible. A) grassroots B) behavioral C) retail D) business E) VALS Answer: A 12) Pampers divides its market demographically on the basis of ________ into prenatal, new baby, baby, toddler, and preschooler. A) life stage B) gender C) age D) income E) social class Answer: C 13) Behavioral segmentation variables include: A) benefits, user status and income B) benefits, user status and usage rate C) benefits, user status and age D) benefits, user status and occupation E) benefits, user status and culture Answer: B 14) __________ defines a person’s major concern, such as going through a divorce, going into a second marriage, taking care of an older parent, deciding to cohabit with another person, deciding to buy a new home, and so on. A) Product stage B) Age stage C) Life stage D) Income stage E) Occupation stage Answer: C 15) By mapping the densest areas, the retailer can resort to ____________, assuming that the best prospects live where most of his customers come from. A) product cloning B) service cloning C) customer cloning D) cluster cloning E) human cloning Answer: C 16) Even when the target market is described in __________ terms (say, a personality type), the link back to demographic characteristics is needed to estimate the size of the market and the media that should be used to reach it efficiently. A) non-demographic B) non-geographic C) non-behavioral D) non-psychographic E) demographic Answer: A 17) Men and women tend to have different ________________________, based partly on genetic make-up and partly on socialization. A) needs and wants B) needs, wants and demands C) logistical requirements D) attitudinal and behavioral orientations E) communication needs Answer: D 18) Newlyweds are an example of a(n) ________ segment. A) life stage B) age C) behavior D) user status E) income Answer: A 19) Joe and Emily have just divorced. Which of the following demographic segmentation sub-segment formats might be used by marketers to reach Joe and Emily? A) life stage B) benefits C) age segment D) personality type E) social class Answer: A 20) ________ are products such as Kiehl's skin care and Kendall-Jackson wines that are priced between average middle-market and superpremium old luxury brands and are also based on emotions. A) Old Luxury brand extensions B) Accessible superpremium products C) Luxury items D) Hourglass products E) Masstige goods Answer: E 21) ________ are products such as the Mercedes Benz C-class and the American Express Blue card, that extend historically high-priced brands down-market while retaining their cachet. A) Hourglass products B) Mass market products C) Old luxury brand extensions D) Masstige goods E) Accessible superpremium products Answer: C 22) Which of the following statements about Gen Yers is true? A) They are often turned off by overt branding practices and “hard sell”. B) They are more likely to associate retirement with “the beginning of the end”. C) They are more pragmatic and individualistic. D) They were born between 1964 and 1978. E) They were the first generation to find surpassing their parents' standard of living a serious challenge. Answer: A 23) Rock band Foo Fighters created a digital street team that sends targeted email messages to members who receive exclusive news, previews, and opportunities to win prizes. The Foo Fighters are using ________ to reach Generation Y. A) student ambassadors B) unconventional sports C) cool events D) computer games E) online buzz Answer: E 24) If a marketing manager employs such marketing techniques as online buzz, student ambassadors, cool events, and street teams to reach target markets, the manager is most likely appealing to the ________ market. A) Generation Z B) Generation X C) Generation Y D) Silent generation E) Baby boomers Answer: C 25) China’s Gen Y are significantly more entrepreneurial and _______ than their parents, and with market reform, can more easily become entrepreneurs. A) computer game savvy B) capitalistic C) conventional D) simplistic E) pessimistic Answer: B 26) Which of the following statements about Gen Xers is true? A) Gen Xers are more optimistic and team-oriented. B) Gen Xers are selective, confident, and impatient. C) Gen Xers are highly socially conscious and concerned about environmental issues. D) Gen Xers share many of the same values toward work, family, and society as baby boomers. E) Technology is a barrier for Gen Xers. Answer: D 27) Each ________ or cohort is profoundly influenced by the times in which it grew up—the music, movies, politics, and defining events of that period. A) consumer B) baby boomer C) Generation Yer D) generation E) person Answer: D 28) ________ is the science of using psychology and demographics to better understand consumers. A) Psychographics B) Interactionism C) Clustering D) Demographic transition E) Customerization Answer: A 29) According to the VALS segmentation system, ________ are successful, sophisticated, active, “take-charge” people with high self-esteem. Their purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services. A) innovators B) thinkers C) achievers D) experiencers E) believers Answer: A 30) According to the VALS segmentation system, ________ are successful, goal-oriented people who focus on career and family. They favor premium products that demonstrate success to their peers. A) thinkers B) innovators C) achievers D) believers E) experiencers Answer: C 31) According to the VALS segmentation framework, consumers primarily motivated by ideals are guided by ________. A) knowledge B) social activity C) products that demonstrate success to their peers D) variety E) risk Answer: A 32) Kim is a young professional who enjoys wakeboarding and going to rock concerts with her friends. According to the VALS eight-part typology segmentation system, Kim is best described as a(n) ________. A) thinker B) achiever C) experiencer D) striver E) survivor Answer: C 33) Mature and reflective people who seek durability, functionality, and value in products are most likely to be categorized as ________ in the VALS system. A) innovators B) thinkers C) achievers D) experiencers E) strivers Answer: B 34) A hardware store is interested in reaching people who are characterized by the VALS system as being practical, down-to-earth, and self-sufficient, who like to work with their hands, or the ________ category. A) believers B) strivers C) survivors D) experiencers E) makers Answer: E 35) According to the VALS segmentation system, ________ are considered to be elderly, passive people who are concerned about change and are loyal to their favorite brands. A) believers B) strivers C) makers D) strugglers E) experiencers Answer: D 36) According to the VALS segmentation system, ________ are considered to be trendy and fun-loving people who are resource-constrained. They favor stylish products that emulate the purchases of those with greater material wealth. A) strivers B) survivors C) experiencers D) makers E) believers Answer: A 37) According to the VALS segmentation system, ________ are conservative, conventional, and traditional people with concrete beliefs. A) survivors B) strivers C) believers D) makers E) innovators Answer: C 38) Dennis requests his father to buy him a PlayStation® for his birthday. With respect to consumer decision roles, which role is Dennis currently playing? A) initiator B) influencer C) decider D) buyer E) gatekeeper Answer: A 39) The key to attracting potential users, or even possibly nonusers, is ________. A) understanding the reasons they are not using B) offering financial incentives for first-time use C) increasing the usage rate of existing users D) developing a new product that better meets their needs E) increasing advertising expenditures Answer: A 40) The sale of turkeys in Singapore is highest in December, as people buy turkeys to serve at Christmas. Supermarkets who specifically advertise turkeys at this time of year are segmenting on the basis of ________. A) benefits B) user status C) buyer-readiness stage D) demographics E) occasion Answer: E 41) Linda was buying all her groceries from Home Needs supermarket for the past 5 years. She recently came across The Convenience Store, another supermarket just a few miles away from her place and started buying her groceries from them. Linda can be best described as ________. A) a split loyal B) an antiloyal C) a shifting loyal D) a hard-core loyal E) a switcher Answer: C 42) When Amy goes shopping for clothes, she goes into every store in the mall looking for the best deal. She is very price-conscious. On the basis of loyalty status, Amy can be described as ________. A) a switcher B) a split loyal C) a shifting loyal D) a hard-core loyal E) an antiloyal Answer: A 43) Mothers-to-be are potential users who will turn into heavy users of infant products and services. By targeting mothers-to-be as future heavy users, producers of these products and services are segmenting consumers on the basis of ________. A) attitude B) buyer-readiness stage C) loyalty status D) user status E) benefits Answer: D 44) If a buyer is loyal to two or three different brands of soap, this buyer's loyalty status can be described as being among the ________. A) switchers B) shifting loyals C) split loyals D) hard-core loyals E) antiloyals Answer: C 45) Pete always buys Purina dog food for his dog because he believes that it is the best value for the nutritional content. Pete's loyalty status is best described as ________. A) split loyal B) shifting loyal C) consistent loyal D) hard-core loyal E) switcher Answer: D 46) A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own. A) hard-core loyals B) split loyals C) shifting loyals D) switchers E) antiloyals Answer: B 47) A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can help identify the products' strengths. A) switchers B) split loyals C) antiloyals D) shifting loyals E) hard-core loyals Answer: E 48) If a marketer is seeking to segment a business market, which of the following variables is generally felt to be the most important? A) personal characteristics B) demographic variables C) situational factors D) operating variables E) purchasing approaches Answer: B 49) In segmenting its markets, an aluminum company first looked at which end-use market to serve: automobile, residential, or beverage containers. This is an example of ________. A) macrosegmentation B) microsegmentation C) geographic segmentation D) global segmentation E) short-term segmentation Answer: A 50) A marketer is interested in segmenting a business market on ________ if the marketer intends to segment the market based on industries and geographical areas to serve. A) demographic variables B) situational factors C) operating variables D) purchasing approaches E) personal characteristics Answer: A 51) A marketer is interested in segmenting a business market based on urgency of delivery and the size of the order. Which of the following major segmentation variables would the marketer most likely use to assist with the task? A) purchasing approaches B) situational factors C) operating variables D) personal characteristics E) demographic variables Answer: B 52) A marketer is interested in segmenting a business market based on technology and customer capabilities. Which of the following major segmentation variables would the marketer most likely use to assist with the task? A) demographic variables B) purchasing approaches C) situational factors D) personal characteristics E) operating variables Answer: E 53) A marketer is interested in segmenting a business market on ________ if the marketer intends to eventually segment the market based on loyalty and attitudes toward risk. A) situational factors B) purchasing approaches C) personal characteristics D) operating variables E) demographic variables Answer: C 54) A marketer interested in segmenting a business market based on ________ intends to eventually segment the market based on power structure and nature of existing relationship. A) situational factors B) purchasing approaches C) personal characteristics D) operating variables E) demographic variables Answer: B 55) A company can be said to have used ________ if the company distinguished among customers buying on the basis of price, service, and quality. A) global segmentation B) microsegmentation C) short-term segmentation D) macrosegmentation E) geographic segmentation Answer: B 56) During which step of the segmentation process would the marketer group customers into segments based on similar needs and benefits sought by the customer in solving a particular consumption problem? A) Step 2—segment identification B) Step 3—segment attractiveness C) Step 6—segment “acid test” D) Step 1—needs-based segmentation E) Step 7—marketing-mix strategy Answer: D 57) If an organization's marketing department wished to create “segment storyboards” to test the attractiveness of each segment's positioning strategy, this action would most likely occur in the ________ step of the segmentation process. A) needs-based segmentation B) segment identification C) segment profitability D) segment "acid test" E) marketing-mix strategy Answer: D 58) In the ________ step of the market segmentation process, the marketer evaluates the segment using criteria such as market growth and market access. A) need-based segmentation B) segment identification C) segment attractiveness D) segment profitability E) segment “acid test” Answer: C 59) In the ________ step of the market segmentation process, the marketer determines which demographics, lifestyles, and usage behaviors make each needs-based segment distinct and identifiable. A) segment “acid test” B) segment attractiveness C) segment profitability D) need-based segmentation E) segment identification Answer: E 60) A ________ consists of two parts: a naked solution and discretionary options. A) differentiated market offering B) flexible market offering C) rigid market offering D) vertical market offering E) horizontal market offering Answer: B 61) According to the ________ criterion for useful market segments, a segment should be the largest possible homogenous group worth going after with a tailored marketing program. A) measurable B) substantial C) accessible D) differentiable E) actionable Answer: B 62) Anderson and Narus have urged marketers to present flexible market offerings to all members of a segment. A flexible market offering consists of two parts. Which part contains the product and service elements that all segment members value? A) naked solution B) discretionary solution C) maximum solution D) pseudo solution E) virtual solution Answer: A 63) If your assignment was to create a value proposition and product-price positioning strategy for each segment, based on the segment's unique customer needs and characteristics, you would be in which of the following steps of the segmentation process? A) needs-based segmentation B) segment identification C) segment attractiveness D) segment positioning E) segment "acid-test" Answer: D 64) In evaluating different market segments, the firm must look at two factors: the segment's overall attractiveness and ________. A) the company's objectives and resources B) the effectiveness of the suppliers C) the flexibility of legal rules governing the business D) the socio-economic infrastructure E) the global nature of the product Answer: A 65) To meet the ________ criterion of useful market segments, it must be possible to formulate effective programs for attracting and serving the segments. A) measurable B) substantial C) accessible D) differentiable E) actionable Answer: E 66) If married and unmarried women respond similarly to a sale on perfume, these hypothetical segments fail the ________ criterion for useful market segments. A) measurable B) substantial C) accessible D) differentiable E) actionable Answer: D 67) Which of the following statements is true about the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment? A) A segment is unattractive if the company's suppliers are unable to raise prices or reduce quantity supplied. B) A segment is unattractive if buyers possess strong or growing bargaining power. C) A segment is attractive when there are actual or potential substitutes for the product. D) A segment is attractive if it already contains numerous, strong, or aggressive competitors. E) The most attractive segment is one in which entry barriers are low and exit barriers are high. Answer: B 68) In ________ marketing, the firm ignores segment differences and goes after the whole market with one offer. A) niche B) mass C) guerrilla D) segmented E) differentiated Answer: B 69) A segment should be the largest possible ___________ group worth going after with a tailored marketing program. A) homogeneous B) heterogeneous C) diffused D) clustered E) scattered Answer: A 70) In ________ marketing, the firm operates in several market segments and designs different products for each segment. A) individual B) undifferentiated C) differentiated D) concentrated E) niche Answer: C 71) Cosmetics firm Estée Lauder markets brands that appeal to women (and men) of different tastes: The flagship brand, the original Estée Lauder, appeals to older consumers; Clinique caters to middle-aged women; M.A.C. to youthful hipsters; Aveda to aromatherapy enthusiasts; and Origins to eco-conscious consumers who want cosmetics made from natural ingredients. This is an example of ________ marketing. A) undifferentiated B) differentiated C) concentrated D) niche E) micro Answer: B 72) Coca Cola's original marketing strategy that offered a single drink Coca Cola Classic in a single sized bottle with the advertising theme “Coke is it,” is an example of ________ marketing. A) concentrated B) niche C) differentiated D) micro E) undifferentiated Answer: E 73) Marketers usually identify niches by ________. A) dividing a segment into subsegments B) conducting VALS tests C) allowing consumers to gravitate toward product brands D) examining the demographics section of the handbook of marketing E) producing products that can be used in a variety of ways Answer: A 74) ________ combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product service offering of their choice. A) Consumptionism B) Viral marketing C) Virtual marketing D) Regionalization E) Customerization Answer: E 75) Volkswagen concentrates on the small-car market and Porsche on the sports car market. These would be examples of what is called ________. A) single-segment concentration B) selective specialization C) product specialization D) market specialization E) full market coverage Answer: A 76) All of the following are benefits of following the ________ approach to target market selection: a strong knowledge of the segment’s needs, a strong market presence, operating economies through specializing in production, distribution, and promotion. A) single-segment concentration B) selective specialization C) product specialization D) market specialization E) full market coverage Answer: A 77) When a symphony orchestra targets people who have broad cultural interests, rather than only those who regularly attend concerts, the orchestra is targeting ________. A) market mavens B) strategic segments C) supersegments D) occasion segments E) psychodemographic segments Answer: C 78) Which of the following best represents the chief advantage of pursuing a selective specialization multisegment strategy? A) It makes the company almost bulletproof to competitors’ actions. B) It diversifies the firm's risk. C) It creates synergy between markets. D) It is a low-cost strategy. E) It treats all buyers the same and, therefore, lowers promotion costs. Answer: B 79) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is that ________. A) no synergy exists B) logistics can become a nightmare C) the product may be supplanted by an entirely new technology D) competitors can easily copy any new product introductions E) e-commerce becomes difficult for the company Answer: C 80) With ________ as a target market strategy, the firm concentrates on serving many needs of a particular customer group. A) single-segment concentration B) selective specialization C) product specialization D) market specialization E) full market coverage Answer: D 81) Effective target marketing requires that marketers use market segmentation, market targeting, and market positioning to achieve success in the marketplace. Answer: True 82) A market segment consists of a group of consumers who share a similar set of needs and wants. Answer: True 83) Customer cloning is the practice of identifying the key characteristics of a market segment and then identifying multiple geographic areas where the majority of the population possesses those characteristics. Answer: False 84) Illustrations of personality segmentation would include culture-oriented, sports-centered, or outdoor-oriented subsegments. Answer: False 85) In a growing trend called grassroots marketing, such activities concentrate on getting as close and personally relevant to individual customers as possible. Answer: True 86) A local service company has decided to segment its market based on occupation; therefore, it has chosen a form of demographic segmentation for its approach. Answer: True 87) Members of a cohort don’t share the same major cultural, political, and economic experiences. Answer: False 88) Demographic variables are popular because they are often associated with consumer needs and wants and they are easy to measure. Answer: True 89) Life stage defines a person’s age. Answer: False 90) Income segmentation is a long-standing practice in such product and service categories as cars, clothing, cosmetics, financial services, and travel. Answer: True 91) Members of the same generational cohort share the same major cultural, political, and economic experiences and have similar outlooks and values. Answer: True 92) Because Gen X members are often turned off by overt branding practices and “hard sell,” marketers use different approaches to reach and persuade them. Answer: False 93) Members of Generation Y are generally open to overt branding practices and a “hard sell,” making product placements in computer and video games a popular way to reach this cohort. Answer: False 94) Marketers often advertise to a cohort group by using the icons and images prominent in their experiences. Answer: True 95) One of the most popular commercially available classification systems based on psychographic measurements is Strategic Business Insights’ VALS framework. Answer: True 96) People within the same demographic group can exhibit very different psychographic profiles. Answer: True 97) Psychographics is the science of using psychology and demographics to better understand consumers. Answer: True 98) People motivated by achievement look for products and services that demonstrate success to their peers. Answer: True 99) The main dimensions of the VALS segmentation framework are consumer motivation and consumer resources. Answer: True 100) In the VALS segmentation system, thinkers are characterized as being successful, sophisticated, active, “take-charge” people with high self-esteem. Answer: False 101) Everyone who buys a given product wants the same benefits from it. Answer: False 102) Believers favor stylish products that emulate the purchases of those with greater material wealth. Answer: False 103) Heavy users of a particular product are often a small percentage of the market but account for a high percentage of total consumption. Answer: True 104) With respect to loyalty status, if a consumer is loyal to two or three brands, he or she is called shifting loyal. Answer: False 105) Hard-core loyals can show the firm which brands are most competitive with its own. Answer: False 106) Door-to-door workers in a political campaign use attitude to determine how much time to spend with each voter. Answer: True 107) Purchasing approaches segmentation variables in the business marketplace include technology, user and nonuser status, and general purchasing policies. Answer: False 108) Situational factor segmentation variables in the business marketplace include urgency, specific application, and size of order. Answer: True 109) The last step in the seven-step marketing segmentation process would be to develop a marketing-mix strategy reflective of segment positioning strategies. Answer: True 110) To be useful, market segments must be measurable. Answer: True 111) With respect to market offerings, if a marketer emphasizes a naked solution, he or she is emphasizing the product and service elements that all segment members value. Answer: True 112) The most attractive segment is one in which entry barriers are low and exit barriers are high. Answer: False 113) A segment is attractive when there are actual or potential substitutes for the product. Answer: False 114) A segment is unattractive if the company's suppliers are able to raise prices or reduce quantity supplied. Answer: True 115) An undifferentiated marketing approach to full market coverage designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers. Answer: True 116) An attractive niche consists of customers having a distinct set of needs. Answer: True 117) The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing.” Answer: True 118) Companies following a market specialization strategy offer one product to as many markets as possible. Answer: False 119) A company is customerized when it is able to respond to individual customers by customizing its products, services, and messages on a one-to-one basis. Answer: True 120) Customization is not for every company. It may be very difficult to implement for complex products such as cars. Answer: True 121) There are several major segmentation variables that might be used by a marketer to address a consumer market. If the marketer were to use social class, psychographic lifestyle, and readiness stage to segment its market, identify possible segmentation subcategories under each of the three. Answer: First, social class would yield the subcategories of lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, and upper uppers. Second, psychographic lifestyles would yield culture-oriented, sports-oriented, and outdoor-oriented. Lastly, readiness stage would yield unaware, aware, informed, interested, desirous, and intending to buy. Other sub-categories might be possible. 122) Explain geographic segmentation. Answer: Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. The company can operate in one or a few areas, or operate in all but pay attention to local variations. In that way, it can tailor marketing programs to the needs and wants of local customer groups in trading areas, neighborhoods, and even individual stores. 123) Identify and describe the three main types of New Luxury products. Answer: The three main types of New Luxury products are: 1) Accessible superpremium products—They carry a significant premium over middle-market brands, yet consumers can readily trade up to them because they are relatively low-ticket items in affordable categories. (2) Old Luxury brand extensions—They extend historically high-priced brands down-market while retaining their cachet. (3) Masstige goods—They are priced between average middle-market brands and superpremium Old Luxury brands. They are “always based on emotions, and consumers have a much stronger emotional engagement with them than with other goods.” 124) What are the three primary motivations of consumers? Answer: Consumers are inspired by one of three primary motivations: ideals, achievement, and self-expression. Those primarily motivated by ideals are guided by knowledge and principles. Those motivated by achievement look for products and services that demonstrate success to their peers. Consumers whose motivation is self-expression desire social or physical activity, variety, and risk. 125) Generation Y members are often turned off by overt branding practices and “hard sell.” List the different approaches tried by the marketers to reach and persuade them. Answer: The different approaches tried by the markets to reach and persuade Generation Y members include: 1) Online buzz 2) Student ambassadors 3) Product placements in computer games 4) Sponsoring cool events. 126) Identify the four market segment groups based on brand loyalty status and list what a company can learn from analyzing the degrees of brand loyalty. Answer: Marketers usually envision four groups based on brand loyalty status: (1) hard-core loyals, (2) split loyals, (3) shifting loyals, and (4) switchers. Hard-core loyals can help identify the products' strengths. Split loyals can show the firm which brands are most competitive with its own. By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses and attempt to correct them. 127) Briefly describe the steps in the segmentation process. Answer: The seven steps in the segmentation process include: 1) Needs-Based Segmentation—Group customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem. 2) Segment Identification—For each needs-based segment, determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable (actionable). 3) Segment Attractiveness—Using predetermined segment attractiveness criteria (such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment. 4) Segment Profitability—Determine segment profitability. 5) Segment Positioning—For each segment, create a “value proposition” and product-price positioning strategy based on that segment's unique customer needs and characteristics. 6) Segment “Acid Test”—Create “segment storyboard” to test the attractiveness of each segment's positioning strategy. 7) Marketing-Mix Strategy—Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, and place. 128) Briefly describe single-segment concentration with an example. Answer: With single-segment concentration, the firm markets to only one particular segment. Volkswagen concentrates on the small-car market and Porsche on the sports car market. Through concentrated marketing, the firm gains a strong knowledge of the segment’s needs and achieves a strong market presence. Further, the firm enjoys operating economies through specializing its production, distribution, and promotion. If it captures segment leadership, the firm can earn a high return on its investment. 129) Briefly describe product specialization and market specialization. Answer: With product specialization, the firm sells a certain product to several different market segments. A microscope manufacturer, for instance, sells to university, government, and commercial laboratories, making different instruments for each and building a strong reputation in the specific product area. The downside risk is that the product may be supplanted by an entirely new technology. With market specialization, the firm concentrates on serving many needs of a particular customer group, such as by selling an assortment of products only to university laboratories. The firm gains a strong reputation among this customer group and becomes a channel for additional products its members can use. The downside risk is that the customer group may suffer budget cuts or shrink in size. 130) List the three premises on which Anderson's long tail theory is based and the two aspects of internet shopping that supports these premises. Answer: Anderson's long tail theory is based on three premises: (1) Lower costs of distribution make it economically easier to sell products without precise predictions of demand; (2) The more products available for sale, the greater the likelihood of tapping into latent demand for niche tastes unreachable through traditional retail channels; and (3) If enough niche tastes are aggregated, a big new market can result. Anderson identifies two aspects of Internet shopping that support these premises. First, the increased inventory and variety afforded online permit greater choice. Second, the search costs for relevant new products are lowered due to the wealth of information online, the filtering of product recommendations based on user preferences that vendors can provide, and the word-of-mouth network of Internet users. 131) Local marketing reflects a growing trend called grassroots marketing. What are the characteristics of grassroots marketing? Answer: In grassroots marketing, marketing activities concentrate on getting as close and personally relevant to individual customers as possible. 132) What is customer cloning and how is it used? Answer: Customer cloning is a way of identifying new prospects by assuming that the best prospects live where most of a company's existing customers come from. 133) What is geoclustering? Answer: Geoclustering captures the increasing diversity of the population. It combines geographic data with demographic data to yield even richer descriptions of consumers and neighborhoods. 134) Identify ways in which shopping behaviors differ between men and women. Answer: Women tend to be more communal minded and men tend to be more self-expressive and goal directed. Women tend to take in more of the data in their immediate environment, whereas men focus on the part of the environment that helps them achieve a goal. When shopping, men often need to be invited to touch a product, whereas women are likely to pick it up without prompting. Men like to read product information, whereas women may relate to a product on a more personal level. 135) Increasingly, companies are finding that their markets are “hourglass shaped.” What does this mean for consumers and for marketers? Answer: Middle-market consumers migrate toward both discount and premium products. Companies that miss out on this new market risk being “trapped in the middle” and seeing their market share steadily decline. 136) Explain the five roles in a buying decision: initiator, influencer, decider, buyer, and user. Answer: Assume a wife initiates a purchase by requesting a new treadmill for her birthday. The husband may then seek information from many sources, including his best friend who has a treadmill and is a key influencer in what models to consider. After presenting the alternative choices to his wife, he then purchases her preferred model which, as it turns out, ends up being used by the entire family. 137) Characterize psychographic segmentation. Answer: In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values. 138) The VALS segmentation system has evolved into an eight-part typology. List the categories of the eight-part typology. Answer: The eight parts of the VALS segmentation system include the following: (1) innovators, (2) thinkers, (3) achievers, (4) experiencers, (5) believers, (6) strivers, (7) makers, and (8) strugglers. 139) Professor Albert advises his students to purchase the book “Microbiology by Pelczar,” to acquaint themselves with the fundamentals of microbiology. What role does he play in the buying decision of his students? Answer: Professor Albert plays the role of an influencer in the buying decision of his students. An influencer is a person who explicitly or implicitly has some influence on the final buying decision of others. 140) List the four groups of consumers based on loyalty status. Answer: The four groups of consumers based on loyalty status are: 1) hard-core loyals, 2) split loyals, 3) shifting loyals, and 4) switchers. 141) Consumer attitudes are an interesting way to segment a market. What are the five different consumer attitudes about a product that can be found in the market? Answer: The five attitude groups are: (1) enthusiastic, (2) positive, (3) indifferent, (4) negative, and (5) hostile. 142) A flexible market offering consists of two parts. Identify and describe these two parts. Answer: A flexible market offering consists of two parts: a naked solution containing the product and service elements that all segment members value, and discretionary options that some segment members value. 143) To be useful, market segments must rate favorably on five key criteria. What are those criteria? Answer: To be useful, market segments must be: (1) measurable, (2) substantial, (3) accessible, (4) differentiable, and (5) actionable. 144) List the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment. Answer: The five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment are industry competitors, potential entrants, substitutes, buyers, and suppliers. 145) List the threats posed by the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment. Answer: The threats posed by the five forces are: 1) Threat of intense segment rivalry 2) Threat of new entrants 3) Threat of substitute products 4) Threat of buyers' growing bargaining power 5) Threat of suppliers' growing bargaining power 146) Give an example of how a company might target products to children in an ethical way. Answer: The public is concerned when marketers take unfair advantage of vulnerable groups, such as children. However, not all attempts to target children draw criticism. Socially responsible marketing calls for targeting that serves not only the company's interests, but also the interests of those targeted. For example, Colgate Junior toothpaste has special features designed to get children to brush longer and more often. 147) Explain the concept of mass marketing. Answer: In mass marketing, the firm ignores segment differences and goes after the whole market with one offer. It designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers via mass distribution and mass communications. 148) Explain the concept of differentiated marketing. Answer: In differentiated marketing, the firm sells different products to all the different segments of the market. 149) Assume that you have decided to use a niche strategy to advance your marketing goals. Characterize an attractive niche. Answer: An attractive niche is distinguished as follows: (1) The customers in the niche have a distinct set of needs; (2) they will pay a premium to the firm that best satisfies their needs; (3) the niche is not likely to attract other competitors; (4) the niche gains certain economies through specialization; and (5) the niche is fairly small but has size, profit, and growth potential. 150) A new trend in marketing is toward customerization. Describe what customerization is and how marketers are using it. Answer: Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product or service offering of their choice. A company is customerized when it is able to respond to individual customers by customizing its products, services, and messages on a one-to-one basis. Test Bank for Marketing Management: A South Asian Perspective Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha 9789810687977, 9780132102926
Download
Close
Close
