Deck 7: Customer-Driven Marketing Strategy: Creating Value for Target Customers

Question 1

Gilron Holidays runs a premium membership club that caters to customers whose annual salary exceeds $100,000. Members of this club are offered seasonal discounts on select luxury hotels in select cities worldwide. Gilron Holidays most likely follows a(n) ________ segmentation approach.

A) gender
B) income
C) occasion
D) benefit
E) geographic

Answer 1

B

Question 2

The customer-driven marketing strategy involves four steps: market segmentation, market targeting, positioning, and differentiation.

Answer 2

True

Question 3

Mass marketing involves identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.

Answer 3

False

Question 4

________ involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

A) Mass customization
B) Market targeting
C) Market segmentation
D) Differentiation
E) Positioning

Question 5

What is differentiation?

Question 6

Marketers who use ________ often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals.

A) demographic segmentation
B) geographic segmentation
C) benefit segmentation
D) psychographic segmentation
E) occasion segmentation

Question 7

________ calls for dividing the market into regions, states, counties, cities, or even neighborhoods.

A) Benefit segmentation
B) Geographic segmentation
C) Demographic segmentation
D) Psychographic segmentation
E) Occasion segmentation

Question 8

________ consists of evaluating each market segment's attractiveness and selecting one or more segments to enter.

A) Positioning
B) Mass customization
C) Market targeting
D) Market segmentation
E) Differentiation

Question 9

Delta Motorworks markets its cars based on the age, gender, and income of its customers. Which of the following types of market segmentation is evident here?

A) geographic segmentation
B) benefit segmentation
C) occasion segmentation
D) demographic segmentation
E) psychographic segmentation

Question 10

________ segmentation has long been used in clothing, cosmetics, toiletries, and magazines.

A) Behavioral
B) Gender
C) Benefit
D) Occasion
E) Geographic

Question 11

________ segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics.

A) Benefit
B) Occasion
C) Geographic
D) Demographic
E) Psychographic

Question 12

________ consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

A) Mass customization
B) Positioning
C) Segmentation
D) Differentiation
E) Targeting

Question 13

When marketers at Fair & Leigh Inc. selected the Millennials, a demographic group that includes many college students, as an untapped group of potential customers for their new line of products, they were engaging in ________.

A) occasion segmenting
B) local marketing
C) market diversification
D) market targeting
E) product positioning

Question 14

________ segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

A) Geographic
B) Benefit
C) Occasion
D) Psychographic
E) Demographic

Question 15

Explain the four major steps in designing a customer-driven marketing strategy.

Question 16

________ involves actually distinguishing the firm's market offering to create superior customer value.

A) Mass customization
B) Differentiation
C) Market segmentation
D) Diversifying
E) Targeting

Question 17

________ segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.

A) Behavioral
B) Psychographic
C) Age and life cycle
D) Gender
E) Geographic

Question 18

"Many companies today are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods." This is an example of ________.

A) geographic segmentation
B) product diversification
C) branding
D) psychographic segmentation
E) demographic segmentation

Question 19

________ segmentation refers to dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.

A) Gender
B) Psychographic
C) Occasion
D) Geographic
E) Income

Question 20

A company selling child-care products ran a television ad depicting women as being primarily responsible for childcare. Many women viewers considered this regressive, alleging that the ad failed to recognize the much more diversified role of women in today's world. This is an example of ________.

A) cause marketing
B) stereotyping
C) niche marketing
D) scapegoating
E) positioning

Question 21

Double Drill Inc. segments its foreign markets by per capita income. This firm segments the international markets based on ________.

A) political factors
B) legal factors
C) geographic location
D) economic factors
E) cultural factors

Question 22

Using ________ segmentation, marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

A) psychographic
B) demographic
C) occasion
D) benefit
E) intermarket

Question 23

Marketers often segment international markets according to the type and stability of government. In such instances, they segment markets based on ________.

A) geographic location
B) economic factors
C) cultural factors
D) political factors
E) socio-cultural factors

Question 24

Malcolm Sanders, a graduate student from Boston, makes customized snowboards for local snowboarding enthusiasts. The demand for snowboards peaks during the winter months, a busy time for Malcolm. He advertises more aggressively and sells most of his snowboards around this time. Which market segmentation approach does Malcolm most likely use?

A) gender segmentation
B) psychographic segmentation
C) occasion segmentation
D) geographic segmentation
E) age and life-cycle segmentation

Question 25

Pacific Fisheries divides its customers into different regional units, such as Asia, Australia, and the Americas. This is an example of ________ segmentation.

A) demographic
B) psychographic
C) geographic
D) occasion
E) benefit

Question 26

________ requires finding the major advantages people look for in a product class, the kinds of people who look for each positive aspect of a product, and the major brands that deliver it.

A) Gender segmentation
B) Psychographic segmentation
C) Benefit segmentation
D) Geographic segmentation
E) Age and life-cycle segmentation

Question 27

Which of the following is true about behavioral segmentation on the basis of the loyalty variable?

A) Consumers tend to pay more for products that are targeted at their respective age group or generation.
B) By looking at customers who are shifting away from its brand, a company can learn about its marketing weaknesses and take actions to correct them.
C) Highly loyal customers of a brand are less likely to engage in word-of-mouth publicity than those who are not.
D) Completely loyal customers of a brand are typically loyal to two or three brands of a given product.
E) Only consumers who seek premium or luxury services are subjected to behavioral segmentation based on the loyalty variable.

Question 28

Teen Mania Inc., a company marketing adventure sports merchandise for teenagers, targets the world's teenagers, who have similar needs and buying behavior even though they are located in different countries. Which of the following market segmentation is evident here?

A) income segmentation
B) psychographic segmentation
C) gender segmentation
D) intermarket segmentation
E) occasion segmentation

Question 29

Calypso Motors recently rolled out its Proteus hatchback. Proteus combines the attractiveness of a luxury car with the excellent agility of a sports car. Calypso Motors is confident that Proteus will appeal to both sports car enthusiasts as well as the luxury segment. Which of the following types of market segmentation is evident here?

A) gender segmentation
B) income segmentation
C) benefit segmentation
D) geographic segmentation
E) age and life-cycle segmentation

Question 30

Consumers who show their allegiance to brands, stores, or companies help marketers to segment consumers by their ________.

A) user status
B) degree of loyalty
C) income
D) geographic location
E) benefit-seeking attitudes

Question 31

Orion Inc. markets luxury watches. It targets the wealthy global elite segment, regardless of their geographic location. Orion most likely uses ________ segmentation.

A) income
B) age-group
C) occasion
D) benefit
E) cross-market

Question 32

In the context of behavioral segmentation, markets segmented by ________ can be categorized into light, medium, and heavy product users.

A) benefits sought
B) loyalty status
C) usage rate
D) user status
E) occasion

Question 33

Which of the following refers to a behavioral segmentation variable that involves segmenting markets into nonusers, ex-users, potential users, first-time users, and regular users of a product?

A) user status
B) usage rates
C) gender status
D) income status
E) loyalty status

Question 34

Which of the following is true about multivariable segmentation systems?

A) Marketers using multiple segmentation bases tend to ignore smaller markets.
B) Marketers often use multiple segmentation bases to control inflation.
C) Multiple segmentation rarely involves the use of demographic data.
D) Multiple segmentation is ineffective in large markets.
E) Multiple segmentation bases help identify smaller, better-defined target groups.

Question 35

An American cola-manufacturing company that primarily targets rebellious and adventurous people most likely uses ________ segmentation.

A) occasion
B) geographic
C) income
D) benefit
E) psychographic

Question 36

________ segmentation assumes that nations close to one another will have many common traits and behaviors.

A) Geographic
B) Occasion
C) Psychographic
D) Benefit
E) Demographic

Question 37

Which of the following is NOT a common variable used by both consumer and business marketers while segmenting markets?

A) operating characteristics
B) loyalty status
C) usage rate
D) geographic location
E) benefits sought

Question 38

In the context of behavioral segmentation, who among the following is a potential user?

A) Anita, who recently had a baby
B) Peter, who recently changed his job
C) Mary, who enrolled as a graduate student in a university last year
D) Gina, who opened a dental clinic in Orange County
E) Raj, who is planning a trip to Hawaii with friends

Question 39

A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage of the market. The study indicated that less than 7 percent of all shoppers buy nearly 71 percent of Estelle's products in the United States. This is an example of ________.

A) benefit segmentation
B) segmentation by loyalty status
C) segmentation by usage rate
D) psychographic segmentation
E) occasion segmentation

Question 40

Which of the following refers to a cultural factor in the context of segmenting international markets?

A) receptivity of foreign firms
B) economic development of the country
C) population income levels
D) stability of the government
E) values and attitudes

Question 41

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Marketers usually limit their segmentation analysis to only one major variable.

Question 42

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Benefit segmentation requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.

Question 43

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
In the scenario, Ruben has segmented his market based on ________.

A) geography
B) benefits sought
C) occasion
D) degree of loyalty
E) demographics

Question 44

Market segments that can be effectively reached and served are ________.

A) measurable
B) accessible
C) substantial
D) actionable
E) profitable

Question 45

A market segment that is large enough or profitable enough to serve is ________.

A) measurable
B) accessible
C) substantial
D) profitable
E) differentiable

Question 46

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Psychographic segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics.

Question 47

________ segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.

A) Complex
B) Measurable
C) Competitive
D) Differentiable
E) Homogeneous

Question 48

Different soft drinks target different personalities. This is an example of ________ segmentation.

A) psychographic
B) demographic
C) occasion
D) life-cycle
E) benefits

Question 49

Briefly describe geographic segmentation.

Question 50

Papillon, a popular retailer of chic women's clothing, segments its market according to consumer lifestyles. Papillon most likely uses ________ segmentation for segmenting its market.

A) geographic
B) psychographic
C) benefit
D) age and life-cycle
E) occasion

Question 51

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
When segmenting by user status, markets are segmented into light, medium, and heavy product users.

Question 52

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Geographic segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Question 53

When an effective program can be designed for attracting and serving a particular segment, the segment is best described as ________.

A) accessible
B) measurable
C) competitive
D) actionable
E) differentiable

Question 54

When the size, purchasing power, and profile of a market segment can be calculated, the market is ________.

A) measurable
B) profitable
C) substantial
D) actionable
E) competitive

Question 55

Bailey's Burgers promotes the Bailey's Jumbo Burger as a fun snack for teens and young adults. In this instance, Bailey's Burgers is practicing ________ segmentation.

A) benefit
B) age and life-cycle
C) psychographic
D) geographic
E) gender

Question 56

Venus Inc., a company designing and marketing branded diamond jewelry, targets wealthy consumers with similar needs and buying behaviors, even though the consumers are located in different countries. This is an example of ________ segmentation.

A) intermarket
B) loyalty
C) life-cycle
D) income
E) psychographic

Question 57

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Demographic segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.

Question 58

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines.

Question 59

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
When segmenting by usage rate, markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product.

Question 60

Refer to the scenario below to answer the following question(s).
Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind.
With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business."
Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers.
"At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes."
Inter-market segmentation refers to forming segments of consumers who have different needs and buying behaviors in a given geographical region.

Question 61

Why do international markets need to be segmented?

Question 62

Sanguine Services is a small company that uses a marketing strategy in which its limited resources are employed to target a large share of two small market segments. Sanguine most likely uses which of the following marketing strategies?

A) individual marketing
B) one-to-one marketing
C) mass marketing
D) concentrated marketing
E) trigger-based marketing

Question 63

What are the primary requirements for effective market segmentation?

Question 64

With a(n) ________ marketing strategy, a firm goes after a large share of one or a few smaller niches.

A) individual
B) mass
C) concentrated
D) differentiated
E) local

Question 65

Briefly describe occasion segmentation.

Question 66

A segment is less attractive if it ________.

A) is difficult for new entrants to enter
B) is substantial
C) is actionable
D) already contains many strong and aggressive competitors
E) contains weak suppliers

Question 67

Explain the different segmentation variables used in segmenting consumer markets.

Question 68

Describe how marketers use multiple segmentation bases to their advantage.

Question 69

A ________ consists of a set of buyers who share common needs or characteristics that the company decides to serve.

A) marketing channel
B) citizen-action group
C) distribution channel
D) target market
E) customer franchise

Question 70

Why must marketers guard against stereotypes when using age and life-cycle segmentation?

Question 71

Which of the following is true about the concentrated marketing strategy?

A) Companies that rely on a few segments for all of their business will suffer if a segment turns sour.
B) Concentrated marketing is not profitable for most firms.
C) Niche marketing involves few risks for most firms.
D) Concentrated marketing involves going after a small share of a large market.
E) The Internet has limited the use and benefits of niche marketing.

Question 72

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each is known as ________.

A) mass marketing
B) differentiated marketing
C) concentrated marketing
D) individual marketing
E) cross-marketing

Question 73

________ refers to a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

A) Individual marketing
B) Local marketing
C) Niche marketing
D) Undifferentiated marketing
E) Segmented marketing

Question 74

Why are demographic factors the most popular bases for segmenting customer groups?

Question 75

Why do companies opt for market segmentation?

Question 76

List three variables that are used in segmenting business markets.

Question 77

How does loyalty status enhance a company's understanding of its consumers?

Question 78

Which of the following is a disadvantage of using a differentiated marketing strategy?

A) generates far lower sales compared to an undifferentiated marketing strategy
B) customer loyalty is negatively impacted and difficult to obtain
C) the costs of doing business increase
D) quality control problems increase
E) product safety decreases

Question 79

Define psychographic segmentation.

Question 80

Which of the following is LEAST relevant when a firm evaluates different market segments?

A) segment size and growth
B) company resources
C) segment structural attractiveness
D) core competencies of competitors
E) company objectives