Deck 6: Market Segmentation Targeting and Positioning

Question 1

Population distribution by age can be used to create approximate market segments for all products.

Answer 1

False

Question 2

Because some of the variables on which markets can be segmented are intangible, it is not necessary for a marketer to be able to measure how many customers are in a market segment for it to be a legitimate segment.

Answer 2

False

Question 3

Micromarketing is not a marketing strategy used in the business market.

Answer 3

False

Question 4

By tailoring marketing programs to individual market segments, management can make more efficient use of its marketing resources.

Question 5

A market aggregation strategy is also known as a mass-market strategy or an undifferentiated- market strategy.

Question 6

Demographic variables include education, occupation, life-style, personality, age, and gender.

Question 7

The ad for a Whirlpool stove said that it could be cleaned faster than any other stove currently on the market. This product feature would be an excellent tool for implementing a single- segment strategy.

Question 8

Unlike market potentials and sales potentials, which are estimates based on general facts and market assumptions, sales forecasts are based on a specific product's marketing plan.

Question 9

Like other marketers, the marketers of pine-scented room deodorizers are most interested in reaching the segment containing nonusers.

Question 10

The market for cereal could be segmented on the basis of the different benefits desired by customers, such as taste, vitamin-content, low-fat, and how it interacts with milk.

Question 11

A computer wholesale company that has some salespeople who regularly sell to small retailers and another sales force that sells to colleges and universities could be said to have segmented its market according to customer type.

Question 12

When marketers use life-style segmentation, they are looking at consumers' activities, interests, and opinions.

Question 13

Products like sugar, heating oil, and vinyl siding are more likely to be marketed using a market aggregation strategy than are breakfast cereals, toothpaste, and automobiles.

Question 14

A market factor is simply a market index expressed as a percentage.

Question 15

A multiple-segment strategy is unlikely to be used by a company that manufactures products that have seasonal demand.

Question 16

Most companies use personality segmentation because they realize compulsive people have different buying patterns than cautious ones.

Question 17

The market aggregation strategy is sometimes referred to as a "shotgun"
approach to marketing because it uses one marketing mix to reach the total market.

Question 18

The advent of television has made regional segmentation obsolete.

Question 19

Geodemographic clustering is used primarily by international marketers.

Question 20

A company can forecast sales by using either an internal or an external approach.

Question 21

A repositioning strategy is typically used just prior to a product entering the decline stage of its product life cycle.

Question 22

The Delphi technique is one specialized method of developing a sales force composite.

Question 23

The four bases used only for segmenting business markets and not for segmenting consumer markets are type of customer, size of customer, type of buying situation, and geographic location.

Question 24

When cellular phones were introduced, their manufacturer could not use correlation analysis to forecast market demand for the new product.

Question 25

Psychographics evolved from attempts by marketers to find measures more directly related to purchase and consumption than demographics.

Question 26

Which of the following could be a target market for an all-natural herbicide?

A) suburban gardeners who worry about poisoning their pets
B) environmentalists who are worried about chemical run-off
C) park employees who want to do away with weeds and like the added benefit of being able to do it safely
D) parents who worry about having poisonous chemicals in their garden sheds
E) all of the above

Question 27

Some health club users join the clubs to meet people. Others join because they want an aerobic workout. Some are interested in body sculpting. Knowing this, the advertisers of health clubs might most effectively use which of the following methods of segmentation?

A) demographic
B) age
C) personality
D) benefits desired
E) income level

Question 28

The growth of the number of 30- to 40-year old parents with children who want resort vacations with round-the-clock childcare has led Club Med to open more than 40 family resorts. This is an example of__________ segmentation.

A) product-use
B) behavioral
C) life-style
D) demographic
E) geographic

Question 29

The French prefer to buy top-loading clothes washers. The rest of Europe uses front-loaders. In developing its strategy for marketing to these nations, Whirlpool had to use_______ segmentation to make sure its washers suited the tastes of the consumers in each of the European
Countries.

A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic

Question 30

The three target-market strategies are:

A) market aggregation, undifferentiated, and concentration.
B) market aggregation, single-segment, and multiple-segment.
C) concentration, undifferentiated, and product differentiation.
D) product differentiation, market aggregation, and single-segment concentration.
E) differentiated-market, mass market, and product differentiation.

Question 31

With sales of mobile phones in the established western markets slowing down, Nokia (which has previously only sold to the consumer market) has decided to grow by systematically targeting large corporations that typically provide hundreds of their employees with mobile phones. Nokia apparently is segmenting the business market according to:

A) customer location.
B) buying situation.
C) customer size.
D) purchase criteria.
E) organization structure.

Question 32

Imagine a publication that wants to target people who have abandoned the civilized world and made a concerted effort to "get back to nature." This segmentation strategy creates a target market that more than likely_______, one of the important conditions for a useful segmentation strategy.

A) lacks accessibility
B) has too much mobility
C) requires continuity
D) lacks credibility
E) has an inelastic demand

Question 33

Before opening a new consignment shop in a neighborhood with a large ethnic population, the retailer could ask people living in the area if they have merchandise they would like to sell at the store and how many plan to shop there. The retailer would be using________to forecast store sales.

A) correlation analysis
B) a survey of buyer intentions
C) the direct-derivation method
D) linear programming
E) the Delphi method

Question 34

Firms that pursue single segments are often called:

A) functional sellers.
B) utility brokers.
C) niche marketers.
D) fragmentation marketers.
E) substantive sellers.

Question 35

A survey of buyer intentions is most likely to be accurate for which of the following products?

A) bottled water
B) gaskets used to manufacture small engines
C) bedding plants for home landscaping
D) cereal
E) ice cream

Question 36

Which of the following statements about segmentation in the business market is True?

A) Rarely is the business market segmented.
B) Each business user usually constitutes a separate market segment.
C) There are more buyers in business markets than in consumer markets.
D) Some of the bases used to segment the consumer market can also be used to segment the business market.
E) The type of buying decision is determined by the customer size.

Question 37

Tuttle Aluminum & Bronze makes aluminum railings used in stadiums, educational facilities, hospitals, and nursing homes. To reach each of its target markets and to satisfy the specific needs associated with each, Tuttle uses segmentation by:

A) geographic area.
B) organization structure.
C) usage rate.
D) type of buying situation.
E) type of customer.

Question 38

Suppose a chain of hair salons that target children decides to locate its stores only in the suburbs. This would be an example of ________segmentation.

A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic

Question 39

Within three months of its introduction, Proctor & Gamble's Easy-Up brand disposable training pants had 7 percent of the $1 billion training pants market in the United States. This seven percent represented P&G's________ for that period.

A) economic potential
B) sales index
C) market potential
D) market index
E) market share

Question 40

Which of the following statements does NOT describe one of the benefits gained through the use of market segmentation?

A) Products may be designed that really match market demands.
B) Advertising may be channeled to its potentially most profitable markets.
C) Companies can maximize economies of scale in production and advertising.
D) Firms can make more effective use of their marketing resources.
E) Medium-sized firms can achieve a rapid growth rate.

Question 41

In the strategy of________, two or more different groups of potential customers are identified and a separate marketing mix is developed to reach each group.

A) undifferentiated marketing
B) multiple-segment target marketing
C) mass marketing
D) market aggregation
E) market differentiation

Question 42

To get our bodies into the physical shapes we imagine they could be, we know we need to exercise, but many of us worry about what we look like while we're exercising or want to exercise at odd times of the day when gyms are closed. Advertisers of home fitness gadgets costing between $200 and $1300 have taken particular advantage of these facts. They are using________segmentation.

A) geographic
B) life-style
C) product-use
D) usage-rate
E) psychological

Question 43

Nearly half of all new car purchases in the U.S. are made by women. To reach this segment, car manufacturers are adding adjustable brake and gas pedals to accommodate the fact that women are shorter than men. Car manufacturers are using________ segmentation.

A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological

Question 44

To forecast sales using ________, management can apply a flat percentage increase to last year's sales volume.

A) correlation analysis
B) past sales analysis
C) the direct-derivation method
D) linear programming
E) the Delphi method

Question 45

Some people use mouthwash to help prevent colds. Others use it to make their breath smell pleasant. Still others use it to help clean their teeth. Knowing this, the advertiser of mouthwash might most effectively use which of the following methods of segmentation?

A) demographic
B) age
C) personality
D) benefits desired
E) income level

Question 46

According to psychologists, all of the following are examples of values that relate to purchase behavior EXCEPT:

A) self-actualization.
B) excitement.
C) self-respect.
D) security.
E) a sense of accomplishment.

Question 47

Canyon Gear designs sportswear for people who "know how utterly indescribable those moments when you're heart is beating from the surge of adrenaline can be." They want to appeal to the adventurer who is "at peace with his inner-most self."Canyon Gear uses________segmentation.

A) geographic
B) life-style
C) product-use
D) usage-rate
E) physiological

Question 48

Morning Glory Gateway is a popular chain of retail stores in South Korea. It has opened 150 stores around the world in areas where there are a lot of Korean immigrants. Koreans are the retail chain's:

A) business user.
B) target market.
C) sales potential.
D) market potential.
E) demographic mix.

Question 49

Land Rover is a European manufacturer of bicycles. It makes bikes especially designed for men and for women. It also makes bikes that are designed for city riding, mountain riding, and racing. By dividing the market for its bicycles into several small groups, it is engaging in:

A) market segmentation
B) market aggregation
C) diversification
D) market development
E) product development

Question 50

If Whirlpool decided to target areas of the nation that receive 5 inches or less rain annually for its new washer that is designed to use at least seven gallons per load less than currently available washers, it would be an example of ________segmentation.

A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic

Question 51

New York Telephone segments its customers according to how much leisure calling they do. It distinguishes between "chatterboxes," young people who seem to live on the phone,And "balanced"Users, busy women who do not have time for idle chatter. New York Telephone uses________segmentation.

A) behavioral
B) geographic
C) demographic
D) gender
E) psychological

Question 52

Which of the following statements about a sales forecast is True?

A) A sales forecast is an estimate based on general factors and assumptions.
B) A sales forecast should be prepared before market potential and sales potential are Estimated.
C)Once the sales forecast has been prepared, it becomes the key controlling factor in all Operational planning throughout the organization.
D)Sales forecasts are always expressed in product units because of the dynamic nature of the Economic environment.
E) Sales forecasts typically have an error factor of at least 10 percent

Question 53

Tower, Musicland, Wherehouse Entertainment, and Music Plus target urban adolescents and postadolescents. They all use________ segmentation.

A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological

Question 54

The primary benefit inherent in a market aggregation strategy is:

A) its ability to cope with seasonal demand.
B) its ability to allow extensive market penetration into one segment.
C) the reduced need for innovation.
D) its cost minimization.
E) none of the above.

Question 55

For a segment to be chosen as a target market requires that:

A) the segment be measurable.
B) the segment be accessible through existing marketing institutions.
C) the segment be large enough to be profitable.
D) the data used to categorize each segment be available.
E) all of the above conditions exist.

Question 56

Frito-Lay produces Baked Lay's potato chips for the weight-conscious, Fritos for those who prefer corn chips to potato chips, Doritos for those who like tortillas, and Cheetos for those who like a cheesy taste and don't worry about calories. Frito-Lay uses:

A) market segmentation.
B) market aggregation.
C) diversification.
D) market development.
E) product development.

Question 57

Which one of the following businesses would be most likely to use a past sales analysis to forecast sales?

A) a publisher of a new ecology-oriented magazine for children
B) an art gallery that specializes in finding and selling the work of new artists
C) a mobile home dealer in an economically depressed area
D) a hospital pharmacy in an efficiently operated hospital
E) a tourist hotel in Cairo, Egypt, that features cruises down the Nile River

Question 58

If a woman wants to color her hair, there are many products to choose from; most of them are alcohol-based. In order to make use of a________strategy, Clairol developed the first water- based permanent color crème called Hydrience.

A) market development
B) product differentiation
C) product segmentation
D) product development
E) market differentiation

Question 59

The use of executive judgment to forecast sales:

A) typically produces pessimistic forecasts.
B) is risky because the executives are giving answers based on their intuition.
C) is superior to other methods of forecasting sales.
D) should never be used when past sales analysis is feasible.
E) should never be used in combination with other sales forecasting methods.

Question 60

The ad for Era laundry detergent portrays it as cheaper and just as effective at removing stains as any other brand of detergent. Its manufacturer Procter & Gamble is using a ________strategy to describe Era in relation to all its competitors.

A) market development
B) product penetration
C) positioning
D) diversification
E) targeting

Question 61

Which of the following describes a limitation associated with the use of correlation analysis to forecast demand?

A) The method is imprecise.
B) Not all marketing executives understand how it is used.
C) No assumptions must be used when using correlation analysis to forecast demand.
D) Correlation analysis does not use market factors to predict demand.
E) Correlation analysis is a statistical refinement of hypothesis testing.

Question 62

For which of the following products would you expect to find its producer using micro- marketing?

A) designer wedding gowns
B) hand tools
C) dairy products
D) filing cabinets
E) chewing gum

Question 63

Phillips is a manufacturer of various electrical and electronic items. It has been described as a "dodo in waiting," especially when compared to its competitors like Samsung and Sony. The new CEO of Phillips is determined to make Phillips "a cool brand name. In other words, he is planning on implementing a ________strategy.

A) market development
B) product diversification
C) target market divestment
D) repositioning
E) market aggregation

Question 64

In 2004, the U.S. Coast Guard Academy surpassed its goal to generate interest in exceptional high school seniors. The academy mailed out a package that listed the academy's requirements, benefits, application information, and details of a typical week. The academy was especially proud of how mail and female students were different packages. The U.S. Coast Guard Academy relied on ________ segmentation to reach high school seniors.

A) age and sex
B) social class and region
C) demographic and results-oriented
D) sex and psychographic
E) sex, age, race, and religion

Question 65

The biggest drawback inherent in a multiple-segment strategy is the:

A) potential for economic loss if any single segment declines in market potential.
B) inability to use such a strategy with products that have only seasonal demand.
C) increase in unit costs of production and marketing when multiple segments are targeted.
D) need for a higher sales volume with this approach than with a single-segment approach.
E) way the strategy inhibits the sale of intangible products.

Question 66

What is the major reason why many marketers do not use a single-segment strategy?

A) the potential for economic loss if that single segment declines in market potential
B) the inability to use such a strategy with products that have only seasonal demand
C) the inability to be truly creative in promoting their product
D) the need for a higher sales volume with this approach than when using a multiple-segment approach
E) the way the strategy inhibits the sale of intangible products

Question 67

________is the strategy by which one firm attempts to distinguish its product from competitive brands offered to the same aggregate market.

A) Market development
B) Product differentiation
C) Market segmentation
D) Product development
E) Market differentiation

Question 68

A ________underlying the demand for watch batteries is the number of people who own and wear watches.

A) market factor
B) differential advantage
C) sales catalyst
D) profit consideration
E) product-market growth strategy

Question 69

In most places in the United States where there is a concentration of Latinos, small shopkeepers import south-of-the-border sodas like Topo Chico and Jarritos. These store use________ Segmentation to identify its target market.

A) product-use
B) behavioral
C) life-style
D) demographic
E) personality

Question 70

Personality is not an ideal basis for segmentation because:

A) consumers seldom make purchases based on their personalities.
B) it is difficult to measure personality accurately.
C) there are over 200 different recognized personality types and developing a marketing mix for each is expensive.
D) social class segmentation is much easier and reveals the same information.
E) personalities are the result of demography.

Question 71

One purpose of market segmentation is to:

A) make it possible for the firm to benefit from economies of scale in production.
B) develop specific marketing programs that are tailor-made for one or more target markets.
C) reduce the costs of marketing.
D) complicate demand forecasting.
E) distinguish among products that are basically the same.

Question 72

Lego, the Danish toymaker, treats all of its customers--whether a small independent toy store or a large chain like Target--exactly the same. In other words, Lego uses:

A) divestment.
B) market aggregation.
C) diversification.
D) market development.
E) product development.

Question 73

__________is the total sales volume that all organizations selling a product during a stated time period in a specific market can expect to achieve under ideal conditions.

A) Market share
B) Market potential
C) Market index
D) Sales potential
E) Profit analysis

Question 74

Business owners who use________demand forecasting find it avoids the biasing influence of one individual on another.

A) a consumer panel
B) brainstorming
C) the sales force composite
D) test marketing
E) the Delphi method

Question 75

A retail clothing store that caters to men shorter than 5' 6" is an example of a:

A) functional seller.
B) utility broker.
C) niche marketer.
D) fragmentation marketer.
E) substantive seller.

Question 76

What is the major limitation of the direct-derivation method for demand forecasting?

A) Random surveys are costly and time-consuming.
B) The computer simulation can use only a limited number of market factors.
C) Demand for the product of interest must be derived from a factor that is easily measurable.
D) To use this method, an executive must be an expert in statistics.
E) Samples are easily biased.

Question 77

The two methods used for translating market-factor behavior into demand forecasts are correlation analysis and:

A) multiple regression.
B) the standard-deviation method.
C) the sales-force composite.
D) the Delphi method.
E) the direct-derivation method.

Question 78

The first step in the identification of market segments and the potential of those segments is to:

A) see what products the competition offers and how the products are marketed.
B) identify the current and potential wants that exist within a market.
C) develop several new product concepts and test them with focus groups.
D) estimate the current demand and compare it to the existing industry capacity.
E) determine if a segment is being served.

Question 79

An advertisement for Preference permanent creme-in hair color is aimed at women who have a high self-concept. Its copy entices consumers to use L'Oreal's Preference by saying, "I use nothing but Preference because I'm worth it." This is an example of how advertisers can use________Segmentation.

A) product-use
B) geographic
C) psychographic
D) demographic
E) behavioral

Question 80

Which of the following products would be most suited to a market aggregation strategy?

A) baking soda
B) movie videos
C) automobiles
D) dog food
E) mouthwash