Deck 3: Choosing Which Customers to Serve

Question 1

Segmenting customers by demographic variables is

A)highly effective.
B)cost-effective.
C)time-consuming.
D)rarely effective.
E)superior to using psychographic variables.

Answer 1

D

Question 2

Business success depends on segmenting markets in a way that is

A)based on marketing research.
B)determined by the sales function.
C)different from competitors.
D)based on geographic distribution.
E)determined by the marketing function.

Answer 2

C

Question 3

How did General Motors compete against Henry Ford,the consummate mass marketer?

A)by offering only one automobile colour
B)by increasing advertising spending
C)by expanding the sales force
D)by segmenting the customer base
E)by expanding distribution

Answer 3

D

Question 4

Cessna,the aircraft manufacturer,focuses its efforts on serving the needs of the corporate customer.This is an example of

A)a product strategy.
B)customer segmentation.
C)sales execution.
D)cross-functional alignment.
E)a marketing communications strategy.

Question 5

Businesses that try to be all things to all people

A)conduct extensive marketing research.
B)lack a differentiated position in the marketplace.
C)save money on marketing communications.
D)manage customer value.
E)understand customer needs.

Question 6

The business world has seen an explosion of

A)advertising agencies.
B)research firms.
C)websites.
D)competitors.
E)customer segments.

Question 7

To overcome the limitations of demographics as a segmentation variable,researchers turned to

A)geographic segmentation.
B)income segmentation.
C)age segmentation.
D)gender segmentation.
E)psychographic segmentation.

Question 8

The easiest way to segment customers is by

A)psychographics.
B)beliefs.
C)opinions.
D)attitudes.
E)geography.

Question 9

If a health clinic decides to offer one-on-one prenatal counselling to every expectant couple regardless of customer needs,it is

A)wasting resources.
B)creating value for the customer.
C)segmenting its customers.
D)devising a positioning strategy.
E)saving time and resources.

Question 10

In a survey of executives at 200 large firms,this percentage reported they had conducted a major segmentation exercise during the previous two years.

A)14%
B)25%
C)42%
D)59%
E)70%

Question 11

Supermarkets and drug stores require manufacturers to pay for putting products on the shelves.This process is known as

A)merchandising fees.
B)markups.
C)marketing fees.
D)cooperative advertising.
E)listing fees.

Question 12

Businesses must focus on fewer customer segments and serve them well with fewer brands,otherwise they face

A)increased competition.
B)increased distribution.
C)escalating costs.
D)smaller product development budgets.
E)smaller marketing communications budgets.

Question 13

Targeting upmarket travellers and training staff to accommodate their every need is an example of the Ritz-Carlton's

A)research strategy.
B)financial strategy.
C)marketing communications strategy.
D)segmentation strategy.
E)public relations strategy.

Question 14

W.L.Gore & Associates successfully marketed its shred-proof dental floss,Glide,by targeting

A)supermarkets.
B)drug stores.
C)seniors.
D)dentists.
E)children.

Question 15

With only one value proposition,a business wastes resources because

A)it is segmenting its customers.
B)it is building brand image.
C)customer satisfaction levels are high.
D)it is over-serving or under-serving customer needs.
E)it is creating value for the customer.

Question 16

Customers differ based on

A)their willingness to pay.
B)the size of the sales force.
C)the market share of the business.
D)the marketing communications strategy.
E)the sales execution plan.

Question 17

A marketer that does not recognize customer needs and provides all customers with only one offer is practising

A)market segmentation.
B)mass marketing.
C)personal selling.
D)competitive positioning.
E)narrowcasting.

Question 18

Without market segmentation,salespeople

A)do not know what to offer customers.
B)increase prices.
C)charge for the value they create.
D)withhold too much from the customer.
E)determine the marketing communications strategy.

Question 19

By offering all customers the same value proposition,businesses run the risk of

A)customers becoming less price-sensitive.
B)a competitor entering the market to satisfy unmet needs.
C)customer segmentation.
D)providing direction to the sales force.
E)reducing resources.

Question 20

Segmenting and targeting customers enables a business to dramatically

A)expand its distribution.
B)increase its advertising spending.
C)improve its profitability.
D)expand product development.
E)increase market share.

Question 21

The ideal method for segmenting customers on the internet is

A)demographic segmentation.
B)psychographic segmentation.
C)geographic segmentation.
D)usage segmentation.
E)online segmentation.

Question 22

When selecting target markets,it is important to balance revenue potential with

A)market research.
B)the cost to serve the segment.
C)geographic variables.
D)demographic variables.
E)psychographic variables.

Question 23

Targeting large customers may not be profitable because

A)of higher sales volumes.
B)of their attractiveness.
C)they may be more expensive to serve.
D)of demographic variables.
E)of psychographic variables.

Question 24

Market segmentation has a profound impact on

A)the rest of the organization.
B)competitive activity.
C)emerging markets.
D)new product development.
E)the size of the target group.

Question 25

In selecting target customers,businesses should analyze

A)feedback from the sales force.
B)customer attractiveness.
C)competitive activity.
D)segmentation methodology.
E)emerging segments.

Question 26

One of the common pitfalls in market segmentation is

A)segmenting by product,not by market.
B)always using a different segmentation approach.
C)using a different segmentation strategy than competitors.
D)never targeting the largest segment.
E)understanding that segments change.

Question 27

In addition to customer needs in the segmentation effort,businesses must also look at

A)customer attractiveness.
B)the competition.
C)geographic location.
D)ethnographies.
E)sales execution strategies.

Question 28

Market segmentation will only be successful if

A)it guides the sales force.
B)it is a complex scheme.
C)it is not implemented before all market research is complete.
D)it follows the same model as competitors.
E)it remains unchanged over time.

Question 29

A business that first segments its customers by geography,then by size of firm,and finally by customer needs data is

A)targeting too many customers with one offering.
B)over-segmenting.
C)not investing in emerging markets.
D)using the same segmentation as competitors.
E)relying on the easiest segmentation approach.

Question 30

Sony focused on this emerging segment when it introduced the transistor radio almost 60 years ago.

A)teens
B)adults
C)married couples
D)seniors
E)small business owners

Question 31

Emerging segments are often the source of

A)product research.
B)audience research.
C)future product development.
D)new revenue growth.
E)irrelevant segmentation.

Question 32

The Body Shop gained a competitive advantage in combining profits with ethics when its segmentation efforts uncovered

A)an emerging segment.
B)a customer need.
C)a changing segment.
D)the largest segment.
E)a product segment.

Question 33

A large grocery chain's analysis of its customer segments showed that even making small changes to ________________ would have a significant impact on profitability.

A)pricing strategies
B)distribution strategies
C)marketing communications strategies
D)sales strategies
E)customers' behaviours

Question 34

The founders of Apple avoided the classic pitfalls in market segmentation by

A)becoming big.
B)not imitating their competitors.
C)relying on the easiest segmentation methods.
D)forgetting that segments change.
E)always using the same segmentation approach.

Question 35

In business-to-consumer markets,demographic segmentation would look at factors such as

A)buying behaviours.
B)attitudes.
C)beliefs.
D)opinions.
E)income.

Question 36

A method of classifying individuals into nine psychological types based on their lifestyles,attitudes,interests,and personality is known as

A)the market segmentation plan.
B)the Value and Lifestyles (VALS)program.
C)geographic segmentation.
D)demographic variable segmentation.
E)mass marketing.

Question 37

Dell's pioneering the direct-to-customer model of selling computers is a good example of

A)over-segmenting.
B)segmenting by product,not market.
C)a complex segmentation approach.
D)investing in emerging segments.
E)segmenting differently from competitors.

Question 38

The first basic principle of market segmentation is that

A)market share is the most important factor.
B)all customers are created equal.
C)becoming bigger means becoming more profitable.
D)the size of the business matters to customers.
E)a business exists to be profitable.

Question 39

Grouping customers by their individual behaviour on the internet at a point in time is referred to as

A)aggregate online behaviour.
B)psychographic segmentation.
C)occasionalization.
D)demographic segmentation.
E)online segmentation.

Question 40

Segmentation should be based on

A)demographic and geographic variables.
B)competitors' segmentation models.
C)customer needs and customer attractiveness.
D)psychographic variables only.
E)easy-to-access data.

Question 41

The founders of Apple avoided the classic pitfalls in market segmentation by becoming a big company.

Question 42

By dividing the entire industry into domestic customers and export customers,Arbol Industries was basing its segmentation on

A)demographic variables.
B)geography.
C)psychographic variables.
D)the VALS program.
E)sales history.

Question 43

The business world has seen an explosion of customer segments,products,channels,and media.

Question 44

Customer segments differ not only in needs,but also in their willingness to pay for your goods and services..

Question 45

Occasionalization segmentation recognizes that customers have different moods and use the internet for different reasons at different points in time.

Question 46

Not segmenting customers means that the business chooses to ignore the fact that different customers have different needs.

Question 47

The most effective way to segment customers is by geography or demographic variables.

Question 48

Arbol Industries' offers to provide their industrial customer segment with advice on how to cut manufacturing costs and to provide the home builder segment with guaranteed shipping schedules are examples of their

A)marketing communications strategy.
B)public relations strategy.
C)sales strategy.
D)differentiated value proposition for each segment.
E)single value proposition.

Question 49

To overcome the limitations of demographics as a segmentation variable,researchers turned to geographic segmentation.

Question 50

Arbol Industries began offering differentiated value propositions to each of their customer segments based on

A)sales volume.
B)size of the firm.
C)their needs.
D)competitive concentration.
E)client attractiveness.

Question 51

If a business offers all its customers only one value proposition,it is preserving its resources.

Question 52

Emerging segments are often the source of new revenue growth.

Question 53

Psychographics do not tell companies what markets to enter,what products to introduce,and how to price these products.

Question 54

Usage segmentation studies psychographic variables for segmenting customers on the internet.

Question 55

MasterCard's priceless message was intended to target the end-user who feels that everything is becoming commoditized and that companies treat customers as mere numbers on a credit card.

Question 56

Even with customer segmentation,salespeople do not know which customers to target or which value propositions to deliver.

Question 57

Research has shown that to ensure profitability,a business should select the largest customer based on sales volume as its target.

Question 58

Smart businesses use their segmentation to direct every business activity.

Question 59

Every business needs to decide whether it wants to chase customers or chase profitability.It usually cannot have both.

Question 60

A business can never have too many market segments.

Question 61

Starbucks gained a competitive advantage by segmenting the market based on where coffee was consumed and how it was viewed.

Question 62

Dell differentiated itself from the competition by segmenting the market based on where computers were bought and by pioneering the direct-to-customer model.

Question 63

If a business is using the same segmentation approach as its competitors,it is not garnering a competitive advantage for itself.

Question 64

Market segmentation is a pillar of any business' success or failure.

Question 65

What is the ideal method for segmenting customers on the internet?

Question 66

Define the term "mass marketing" and provide an example.

Question 67

What is the Values and Lifestyles (VALS)program?

Question 68

Why is a business wasting resources if it only offers customers one value proposition? Provide an example.

Question 69

Although customer needs change over time,market segments tend to stay relevant.

Question 70

Explain how segmenting and targeting customers was the key to W.L.Gore & Associates' successful introduction of its shred-proof dental floss,Glide.

Question 71

A business that divides its customers into those who want corporate videos developed,those who want sales conferences organized,and those who want ecommerce solutions is segmenting by product.

Question 72

The best way to segment customers is by examining their needs and their attractiveness to you.

Question 73

Explain why segmenting customers by demographic variables is rarely effective.

Question 74

Segmenting by market,not by product,is a common pitfall in marketing segmentation.