Question 1

Relying on executive judgment for forecasting may be adequate when:
A) levels of marketing efforts put forth by competitors vary considerably.
B) recent events give the executive specific impressions of product demand.
C) product demand is erratic.
D) the executive conducts surveys.
E) the executive has considerable experience and product demand is relatively stable.

Accepted Answer

Relying on executive judgment for forecasting may be adequate when the executive has considerable experience and product demand is relatively stable. In this case, the executive's expertise and intuition may be enough to make accurate predictions about future demand.

Question 2

When selecting specific target markets, a firm should:
A) revert to an undifferentiated approach if the market is deemed heterogeneous.
B) choose the segments most in line with the firm's objectives and long-term growth.
C) choose all segments that are determined to be profitable for the organization.
D) choose the minimum number of segments necessary to achieve company sales potential.
E) pick the segments with the best sales forecasts for the upcoming period of time.

Accepted Answer

The best choice is for the firm to choose the segments that are most in line with the firm's objectives and long-term growth. The other options are not as effective as they either ignore the importance of differentiation, focus solely on profitability or sales, or strive for minimal effort rather than strategic growth.

Question 3

The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the .
A) company sales potential
B) revenue estimate
C) company sales prediction
D) market potential
E) sales forecast

Accepted Answer

The term "sales forecast" refers to the amount of product a company expects to sell during a specific period at a specified level of marketing activity. Option A (company sales potential) refers to the maximum amount of product a company can possibly sell in a given market, while option B (revenue estimate) refers to the total revenue a company expects to earn from sales. Option C (company sales prediction) is not a commonly used term in marketing, and option D (market potential) refers to the total possible sales volume for all companies in a given market.

Question 4

Using the breakdown approach to sales potential, estimates are made:
A) by referring to specific geographic factors.
B) by establishing levels of marketing effort that will be required to achieve specific levels of sales.
C) without reference to industry marketing efforts.
D) without reference to general economic conditions.
E) by starting with general economic conditions.

Accepted Answer

The answer of Using the breakdown approach to sales potential,...

Question 5

The buildup approach measure of sales potential:
A) starts with broad estimates of general economic activity.
B) ends with an estimate of a single firm's sales of a specific product.
C) starts with forecasts about demand for a specific product within a relatively small area.
D) does not use sales estimates.
E) is seldom employed by industrial firms.

Accepted Answer

The buildup approach measure of sales potential starts with forecasts about demand for a specific product within a relatively small area, and then builds up the estimate to the potential sales for a single firm. Therefore, choice C is the correct answer. Choices A, B, D, and E are incorrect because they do not accurately describe the buildup approach measure of sales potential.

Question 6

The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the _.
A) sales forecast
B) market potential
C) company sales potential
D) company sales objective
E) market share goal

Accepted Answer

Company sales potential refers to the maximum share or percentage of market potential that an individual firm can expect to capture or obtain for a specific product. This considers the company's resources, competition, and market conditions.

Question 7

When evaluating market segments, assessment of competitors is important because:
A) it is difficult to segment a market when it has multiple competitors.
B) an absence of competitors usually creates difficulties in accurately measuring segment sales potential.
C) sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that together have a large share of that segment.
D) a competitive analysis may lead to confusion as to who are the key competitors.
E) competition is generally not a major problem as long as a marketer is aware of it.

Accepted Answer

Sales estimates may not provide an accurate picture of segment potential if there are strong competitors. The presence of competitors can impact market share and the size of the segment.

Question 8

Intuition and expediency are primary characteristics of the sales forecasting method of .
A) surveys
B) executive judgment
C) cycle analysis
D) market tests
E) industry indicators

Accepted Answer

Executive judgment relies on the intuition and experience of executives to make sales forecasts, emphasizing quick decision-making and practical solutions.

Question 9

Estimating the cost of entering a market and focusing on a specific target segment is important because:
A) cost estimates are crucial to assess sales potential accurately.
B) higher costs will keep other potential competitors from entering that particular segment.
C) customers are more likely to be attracted to marketers that invest heavily in the target segment.
D) the organization's marketers need to know if they can reach the segment at costs equal to or below competitors' costs.
E) higher cost generally ensures long-term success.

Accepted Answer

Estimating costs helps marketers determine if they can reach the target segment efficiently and competitively, ensuring they can offer competitive pricing and maintain profitability.

Question 10

Guess Inc. will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's:
A) sales potential.
B) market potential.
C) sales forecast.
D) market sales.
E) selected market.

Accepted Answer

The sales forecast is an estimate of the number of units a company expects to sell in a specific period, which in this case is 30 million pairs of jeans.

Question 11

General Electric Corp calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's:
A) sales potential.
B) market potential.
C) target growth rate.
D) sales forecast.
E) sales objective.

Accepted Answer

Market potential refers to the maximum total sales of a product by all firms in a market under ideal conditions, such as full market coverage and optimal marketing efforts. The 1 billion light bulbs figure represents the industry's market potential.

Question 12

Company sales forecasts are least likely to be based on:
A) executive judgment.
B) customer surveys or sales force surveys.
C) time series analysis.
D) market tests.
E) single-variable segmentation.

Accepted Answer

Single-variable segmentation is unlikely to be used in company sales forecasts as it only focuses on one factor or characteristic of the target market, ignoring other important variables that could impact sales. The other options, such as executive judgment, customer/sales force surveys, time series analysis, and market tests, are all commonly used methods for forecasting sales.

Question 13

Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments, they have completed competitive assessments and cost estimates. The next major step they must take is to:
A) determine which segmentation variables to use.
B) develop market segment profiles.
C) identify the appropriate targeting strategy.
D) select specific target markets.
E) develop sales forecasts.

Accepted Answer

After completing competitive assessments and cost estimates for several segments, the next major step for Frito-Lay Snack Foods would be to select specific target markets. This involves evaluating the attractiveness of each segment and selecting one or more segments to focus on, based on factors such as market size, growth potential, profitability, and fit with the company's capabilities and resources. Once specific target markets have been selected, Frito-Lay can then develop market segment profiles, identify the appropriate targeting strategy, and develop sales forecasts. However, without first selecting specific target markets, these other steps would be premature.

Question 14

Alex Wren of Owens Corning Fiberglass Corp talks to Terry Jones, a homebuilder, to find out how much fiberglass insulation he intends to use in building homes during the next year. Albert then multiplies that number by the total number of builders in the territory. He is using a approach to measure sales potential.
A) multivariable
B) use of product
C) breakdown
D) regression
E) buildup

Accepted Answer

The buildup approach involves estimating sales potential by determining the potential sales for each customer or segment and then aggregating these estimates to get a total sales potential. Alex Wren is estimating the sales potential by calculating the expected usage of fiberglass insulation by one builder and then multiplying it by the total number of builders.

Question 15

When a business has a relatively small number of customers, a preferred method of forecasting is .
A) regression analysis
B) trend analysis
C) the Delphi technique
D) a market test
E) a customer forecasting survey

Accepted Answer

A customer forecasting survey is particularly effective for businesses with a small customer base, as it allows for direct feedback and predictions from the customers themselves, making the forecasting more accurate and tailored to the specific clientele.

Question 16

Meghan intends to open a house-cleaning business and is considering several market segments. She has identified four segments for consideration; young urban singles, young married professionals, senior citizens, and college students. She has just completed an analysis of these four segments by assessing such factors as sales estimates, competition, and estimated costs. Meghan is now ready for implementing the next step in the target market selection process, which is to:
A) identify the appropriate targeting strategy.
B) determine which segmentation variables to use.
C) develop market segment profiles.
D) evaluate relevant market segments.
E) select specific target markets.

Accepted Answer

Meghan has already completed the analysis of the market segments, so the next step is to select specific target markets based on her findings.

Question 17

If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United States, this percentage would represent the ice cream marketer's .
A) target growth rate
B) sales forecast
C) sales objective
D) company sales potential
E) market potential

Accepted Answer

The percentage represents the company's sales potential, which is the maximum share of the market that a firm can expect to capture for a specific product.

Question 18

The final step in the target market selection process is:
A) implementing the appropriate marketing mix for the target market.
B) evaluating relative market segments.
C) eliminating market segments that are cost prohibitive.
D) selecting specific target markets.
E) revising the final segmentation variables based on target selection.

Accepted Answer

The answer of The final step in the target market...

Question 19

The total amount of a product that customers will purchase within a specified period at a specific level of industry- wide marketing activity is the .
A) competitor sales potential
B) sales objective
C) forecasted sales
D) company sales potential
E) market potential

Accepted Answer

Market potential refers to the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity.

Question 20

Nathan, the manager at a local recreational vehicle store, Off-Road Rage, believes the next two years will be difficult because of an economic recession. Using this forecast, he determines the effect on the industry's market potential and then estimates how his company's potential sales will look based on this outlook. This manager is using a approach to estimate sales potential.
A) breakdown
B) recessionary
C) buildup
D) pyramid
E) dimensional

Accepted Answer

Nathan is using a breakdown approach, where he starts with the overall market potential and then breaks it down to estimate his company's potential sales.

Quiz 5: Target Markets: Segmentation and Evaluation

Relying on executive judgment for forecasting may be adequate when:

When selecting specific target markets, a firm should:

The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the .

Using the breakdown approach to sales potential, estimates are made:

The buildup approach measure of sales potential:

The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the _.

When evaluating market segments, assessment of competitors is important because:

Intuition and expediency are primary characteristics of the sales forecasting method of .

Estimating the cost of entering a market and focusing on a specific target segment is important because:

Guess Inc. will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's:

General Electric Corp calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's:

Company sales forecasts are least likely to be based on:

Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments, they have completed competitive assessments and cost estimates. The next major step they must take is to:

When a business has a relatively small number of customers, a preferred method of forecasting is .

If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United States, this percentage would represent the ice cream marketer's .

The final step in the target market selection process is:

The total amount of a product that customers will purchase within a specified period at a specific level of industry- wide marketing activity is the .