Deck 7: Segmentation, Targeting, and Positioning

Question 1

For some consumer products such as cigarettes, soft drinks, and candy that have a low per-unit cost, income is often a more valuable segmentation variable than population.

Answer 1

False

Question 2

Ideally, GDP and other measures of national income converted to U.S.dollars should be calculated on the basis of purchasing power parities or through direct comparisons of actual prices for a given product.

Answer 2

True

Question 3

A fact found by demographic segmentation is that by the year 2030, 20% of the U.S.population or 70 million will be 65 years old or older.

Answer 3

True

Question 4

About two-thirds of world GNI is generated in the Triad countries, whereas only about 12% of the world's population is located in those countries.

Question 5

The fact that significant numbers of pizza-loving consumers are found in many countries indicates that they are eating the exact same thing in all parts of the world.

Question 6

Categories such as "successful idealists" and "affluent materialists" can be used to describe psychographic segments.

Question 7

The vast majority of India's population comprises a "bullock cart" segment whose households lack most comforts but typically own a television.

Question 8

Sushi, Falafel, Tandoori Chicken or Pizza are in demand in many parts of the world.This phenomenon can be due to pluralization of consumption and segment simultaneity.

Question 9

"Frugal Engineering" and "Reverse Innovation" are some of the terms that GE, Proctor & Gamble, Siemens, and Unilever are using to describe efforts to penetrate more deeply into emerging markets.

Question 10

The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers.

Question 11

Using averages alone, it is possible to underestimate a market's potential, for example, fast-growing, higher-income segments are present both in India and China.

Question 12

The United States ranks number one among nations in terms of both per capita income and in terms of income adjusted for purchasing power for the year 2009.

Question 13

The concentration of income in the high-income and large-population countries means that a company can be "global" by targeting buyers in 10 or fewer countries.

Question 14

For behavior segmentation, marketers use the 80/20 rule when assessing the consumers' usage rate, which means that 20% of the company's revenues or profits are accounted for by 80% of the firm's products or customers.

Question 15

In 2009, the 10 most populous countries in the world account for just under 50% of world income; whereas the 10 most populous countries in the world account for roughly 60% of the world's population.

Question 16

A psychographic study showed that Porsche buyers could be divided into several distinct categories, one consisting of "Top Guns" who buy Porsches and expect to be noticed.

Question 17

Global marketers must determine whether a standardized or an adapted marketing mix is required to best serve the wants and needs of the consumers.

Question 18

In industrialized countries, a significant portion of national income is the value of goods and services that would be free in a poor country.

Question 19

Global market segmentation is based on the premise that companies should attempt to identify consumers in different countries who share similar needs and desires.

Question 20

Sometimes it is preferable to market to a particular age group rather than a mind-set; in such an instance psychographic studies can help marketers arrive at a deeper understanding of consumer behavior than is possible with traditional segmentation variables.

Question 21

Lack of scale and a shortage of capital are just two of the problems associated with reaching the world's poor.Prices can also be a problem.There is an ample evidence that world's best known global marketers recognize this.For example, Adidas has developed a sneaker priced at one euro that it hopes to sell in Bangladesh.

Question 22

India is the world's fastest growing cell phone market with the industry expanding at a rate of 50% annually with 5 million new subscribers added every month.This is an indication of continued private-sector growth.

Question 23

There is a significant difference between the "mass market" and the "premium market." In the premium market customers are looking for a good deal whereas in the mass market customers are looking for a product that fulfills their expectations.

Question 24

Standardized global marketing is analogous to mass marketing in a single country and is also known as differentiated target marketing.

Question 25

One of the advantages of targeting a market segment globally is that although the segment in a single-country market might be small, even a narrow segment can be served profitably if the segment exists in several countries.

Question 26

One of the first-mover disadvantages is that a late-mover competitor may reap benefit from the investments made in marketing and establishing in a country.

Question 27

America's Hispanic population shares a common language, and so in ethnic segmentation they can be grouped as one segment.

Question 28

In India, refrigeration is not widely available and this restricts many foreign companies from marketing items that need refrigeration.This can be considered as one of the "enabling conditions" that needs to be considered in a marketing model.

Question 29

IKEA, the home furnishings retailer based in Sweden, wraps itself in the Swedish flag - literally, since inside and out, their stores are decorated in the national colors of blue and yellow.This is an example of local consumer culture positioning.

Question 30

In China, only about 1% of the population currently owns a credit card.Thus Visa is targeting persons with a monthly salary equivalent to $300 or more.

Question 31

Marketers must understand that many Hispanic Americans live in two worlds; although they identify strongly with the United States, there is also a sense of pride associated with brands that connect to their heritage.

Question 32

Pareto's Law suggests that 80% of a company's revenues or profits are account for by 20% of a firm's products or customers.

Question 33

About 1.3 million cars are sold each year in India; in absolute terms, this is a relatively small number.

Question 34

Global benefit segmentation is based on a marketer's understanding of the problem a product solves, the benefit it offers, or the issue it addresses, regardless of geography.

Question 35

Differentiated global marketing represents a more ambitious approach than concentrated target marketing.

Question 36

Benetton uses the slogan "United Colors of Benetton" to position itself as a brand concerned with the unity of humankind.This type of strategy is referred to as GCCP (global consumer culture positioning).

Question 37

BMW's slogan "the ultimate driving machine," is an example of an attribute or benefit which has proven successful in their positioning strategy.

Question 38

When assessing potential country target markets, management should rely heavily on its network of contacts as a primary criterion for targeting.

Question 39

Germany's DHL tried to enter the U.S.package-delivery market in 2003; to achieve scale, DHL acquired Airborne Express.However they could not compete with entrenched incumbents FedEx and UPS.This is an example of incorrect position and product mix.

Question 40

When making a decision about market entry timing, a company's management team should understand that the first-mover always becomes the market leader.

Question 41

In the study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?" the researchers identified four lifestyle groups.The group that represent mainstream European consumers was labeled as:

A)Successful Idealists.
B)Affluent Materialists.
C)Young Professionals.
D)Trendy Teens.
E)Disaffected Survivors.

Question 42

In response to increasing worldwide concerns about obesity, diabetes, and other food-related health issues, some of the world's largest food companies are developing new products.Nestle and Groupe Danone SA have developed several health-foods which include all of the following except:

A)Souvenaid.
B)Activa.
C)NutriChoice.
D)Nutraceuticals.
E)Medical Foods.

Question 43

When identifying global market segments, a fundamental guiding principle should be the need to determine:

A)shared demographic characteristics.
B)similar languages.
C)similar needs and buying behavior.
D)similar ethnic backgrounds.
E)similar geographic regions.

Question 44

Several years ago, the DMBB agency created a single-country psychographic profile that includes segment labels such as "Cossacks" and "kuptsy." What country does the survey cover?

A)India
B)Japan
C)Russia
D)China
E)Vietnam

Question 45

Porsche AG uses the label "Top Guns" to describe one segment of its customers, namely those who care about power and control and who expect to be noticed.Such a profile would be based on which type of segmentation?

A)demographic
B)occupational
C)psychographic
D)behavioral
E)gender

Question 46

Based on 2009 projections, the top ten nations ranked by per capita income do not include:

A)United States.
B)Japan.
C)Russia.
D)Spain.
E)Italy.

Question 47

A global segment is referred to as "global elite" which includes:

A)people between the ages of 12 and 19.
B)affluent, well-traveled persons.
C)graying population.
D)technology professionals.
E)persons having power.

Question 48

The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers.All of the following are variables that are commonly used except:

A)demographics.
B)polycentrics.
C)behavioral characteristics.
D)benefits sought.
E)psychographics.

Question 49

One writer suggested that some themes are universal and could be used in advertising around the globe.Examples of this theme include all of the following except:

A)the desire to be beautiful.
B)the desire to be healthy.
C)the desire to be free of pain.
D)the desire to copy others.
E)the love of mother and child.

Question 50

Global marketing authority Theodore Levitt has noted that many ethnic and regional foods sushi, for example are enjoying popularity in many countries of the world.This observation is known as:

A)the pluralization of consumption.
B)the ethnicitization of consumption.
C)the democratization of consumption.
D)the sophistication of consumption.
E)the domestication of consumption.

Question 51

McDonald's operates in over 118 countries; however, 80% of its restaurants are located in nine countries which does not include the following country market:

A)Australia.
B)Brazil.
C)Germany.
D)India.
E)Japan.

Question 52

The concentration of income in the high-income and large-population countries means that a company can be "global" by targeting buyers in:

A)just 50 countries.
B)just 20 countries.
C)just 10 or fewer countries.
D)just 30 countries.
E)none of the above

Question 53

Diageo PLC, V&S Vin & Spirit AB, and Seagram and other marketers know that Russians consume a great deal of vodka.This type of market segmentation can be classified as:

A)demographic.
B)behavioral.
C)psychographic.
D)occupational.
E)benefit.

Question 54

Sony's U.S.Consumer segments included all of the following except:

A)Affluent.
B)Zoomers.
C)SoHo.
D)Gen Y.
E)Fashionists.

Question 55

Campbell Soup is making significant inroads into Japan's $500 million soup market as time-pressed homemakers place a premium on convenience.This type of consumer segmentation by Campbell Soup is referred to as:

A)demographic.
B)occupational.
C)psychographic.
D)benefit.
E)behavioral.

Question 56

Ericsson, IKEA, Saab, and other companies based in Sweden have looked beyond their borders for significant growth market because:

A)Sweden has high total annual income.
B)Sweden has low total annual income.
C)Sweden has a smaller population.
D)Sweden is land locked geographically.
E)Sweden has relaxed export policies.

Question 57

The efforts of global companies to reach low-income consumers in emerging markets highlight the importance of skillful global market segmentation and targeting.Market segmentation represents:

A)targeting prospective customers.
B)finding customers who can respond to advertisement.
C)promoting products and services internationally.
D)identifying customers who can help in promoting products.
E)an effort to identify and categorize customers based on common characteristics.

Question 58

A.Coskun Samli had developed a useful approach to global market segmentation that compares and contrasts "conventional" versus "unconventional" wisdom.An example of unconventional wisdom is:

A)since per capita income in India is about $1,180, assuming that all Indians have low incomes.
B)assuming that consumers in Europe and Latin America are interested in World Cup soccer whereas Americans are not.
C)assuming that there is a presence of a higher-income middle-class segment in India.
D)assuming that the potential Indian customer base for a McDonald's is larger than the size of entire developed countries.
E)assuming that there is no running water and electricity in India.

Question 59

"Usage rates" and "user status" are important criteria for which segmentation variable?

A)demographic
B)occupational
C)psychographic
D)behavioral
E)benefit

Question 60

Psychographic segmentation involves grouping people in terms of their:

A)combined household income.
B)age and income.
C)attitudes, values and lifestyle.
D)psychological well being.
E)gender.

Question 61

Which of the following criteria should marketers use when assessing opportunity in global target markets?

A)current size of the segment
B)anticipated growth potential
C)competition
D)compatibility with company's overall objectives
E)all of the above

Question 62

Ads by BMW advertise it as the "ultimate driving machine" which is described as positioning based on:

A)high touch.
B)" use / user ".
C)attribute/benefit.
D)competition.
E)quality/price.

Question 63

Which of the following is true of advertising for the Heineken and Foster's brands in the United States?

A)Both Heineken and Foster's utilize the GCCP strategy.
B)Both Heineken and Foster's utilize the FCCP strategy.
C)Heineken utilizes the GCCP strategy; Foster's utilizes the FCCP strategy.
D)Heineken utilizes the FCCP strategy; Foster's utilizes the GCCP strategy.
E)Heineken utilizes the LCCP strategy; Foster's utilizes the GCCP strategy.

Question 64

The world's best-known cosmetics companies are setting their sights on a lucrative new market segment: the emerging middle classes in countries such as Brazil, Russia, India, and China.However these companies have to understand:

A)that women's preferences in those countries are almost similar.
B)that Chinese consumers are not willing to invest in beauty products.
C)what beauty means to Chinese women.
D)that working Indian women prefer only local brands.
E)cosmetics are preferred mostly by the top end of the market in China.

Question 65

Three Mexican retailers Famso, Grupo Gigant SA, and Grupo Commercial Chedraui SA have opened stores in the United States.This is an indication of:

A)U.S.retailers were lagging behind in collecting demographic information.
B)the Mexican retailers provide better products than American stores.
C)the Hispanic American segments represent a great opportunity for marketers.
D)American businesses cannot compete with Mexican retailers.
E)the Mexican retailers would like to compete with businesses like Best Buy and Circuit City.

Question 66

Consumers shopping for high-touch products such as fine perfume are generally energized by ________ motives.

A)emotional
B)rational
C)both emotional and rational
D)neither emotional nor rational
E)high tech

Question 67

Global automakers are targeting the U.S.market with SUVs.All of the following SUVs are assembled or manufactured in the listed country except:

A)Porsche in Germany.
B)Honda in Japan.
C)Volkswagen in Slovakia.
D)Kia in India.
E)Mercedes-Benz in the United States.

Question 68

For years, ads for Volvo automobiles stressed safety features and protection in the event of a crash.Thus, Volvo automobiles developed a reputation based on which positioning strategy?

A)" use / user "
B)attribute/benefit
C)competition
D)high touch
E)quality/price

Question 69

Basic criteria that marketers should keep in mind while assessing opportunities in global markets include all of the following except:

A)current size of the market segment.
B)anticipated growth potential of the market.
C)compatibility with company's overall objectives.
D)competition in the market.
E)securing first mover advantage.

Question 70

When a marketer understands that a product satisfies a buyer's rational criteria while also evoking an emotional response, the marketer should:

A)only target consumers in high-income countries.
B)utilize a multitiered targeting strategy rather than a concentrated strategy.
C)commission psychographic segmentation studies to augment demographic data.
D)create advertising that reflects a bipolar, high-tech and high-touch approach.
E)follow normal targeting strategy.

Question 71

Some of Body Shop's recent advertising has emphasized the difference between the company's principles and those of "mainstream" cosmetics companies on such issues as animal testing.As described here, Body Shop's ads illustrate positioning by ________.

A)competition
B)niche
C)quality/price
D)attribute/benefit
E)culture

Question 72

Which of the following is true about efforts by automakers to target the Hispanic segment in the United States?

A)Honda, Toyota, Ford, and GM all began targeting the segment years ago.
B)Honda and Toyota began targeting the segment years ago; Ford and GM launched their efforts more recently.
C)Ford and GM began targeting the segment years ago; Honda and Toyota launched their efforts more recently.
D)Only Ford and GM are targeting the Hispanic segment.
E)none of the above

Question 73

Which of the following is generally true about the marketing of high-touch products such as fine china and crystal?

A)It relies equally on specialized information and image.
B)It relies less on image and more on specialized information.
C)It relies less on specialized information and more on image.
D)Neither image nor specialized information is relevant to the marketing of high-touch products.
E)It relies partially on specialized information and partially on image.

Question 74

The basis for global marketing expert David Arnold's framework for screening intercountry comparisons include:

A)demographic data.
B)"top-down" segmentation analysis.
C)"bottom-up" segmentation analysis.
D)income level.
E)population data.

Question 75

The Swatch Group markets watches in all price ranges, from the Swatch brand at the low end to luxury brands such as Longines, Blancpain, and Breguet.Which target market strategy does this illustrate?

A)standardized global marketing
B)concentrated global marketing
C)differentiated global marketing
D)psychographic global marketing
E)none of the above

Question 76

Managers must decide how well a company's product fits the country market by asking the following questions except:

A)Will adaptation be required?
B)Will import restriction drive up the product price?
C)Is it advisable to source locally?
D)Will strong home currency have an adverse impact on product price?
E)Will it be possible to neglect home-country regulations?

Question 77

Positioning refers to the act of:

A)determining on what points on the globe to target.
B)ensuring a choice retail shelf location.
C)differentiating a brand in customer's mind.
D)formulating a private label strategy.
E)formulating a companion product.

Question 78

The feasibility of targeting a particular market segment can be negatively impacted by various factors which does not include:

A)regulatory hurdles.
B)cultural barriers.
C)lack of distribution system.
D)time required to establish business.
E)surplus demand.

Question 79

Companies like Coca-Cola had the first-mover advantage since they were the first company to enter a global market.However, there are also first-mover disadvantages which include:

A)best chance of becoming world leader.
B)advantage in adapting to the local culture.
C)lead in advertising and promotion exposure.
D)gain business experience.
E)substantial investments in marketing.

Question 80

Procter & Gamble has identified a group of consumers in Europe who are willing to pay premium prices for pet food that will improve the health of their pets.This is an example of ________ segmentation:

A)demographic
B)psychographic
C)ethnic
D)behavioral
E)benefit