Question 1

The first step of the target market selection process is identifying the appropriate targeting strategy; the last step is evaluating relevant market segments.

Accepted Answer

The first step of the target market selection process is identifying potential target markets based on various factors such as demographic, psychographic, and behavioral characteristics. The last step is selecting the most viable market segments and evaluating them based on criteria such as size, growth potential, competition, and profitability. Identifying the appropriate targeting strategy comes after identifying potential target markets.

Question 2

Leah is an award-winning fiction writer. She works out of her apartment. She recently purchased a new desk in which to store her manuscripts and for use when typing up stories for publication. Leah is part of the business market for the desk manufacturer.

Accepted Answer

Leah's purchase of a desk for her home office indicates that she is a part of the business market for the desk manufacturer.

Question 3

Family life cycle is a psychological dimension used for segmenting markets.

Accepted Answer

The family life cycle is considered a sociological dimension used for market segmentation, focusing on the stages through which families typically progress, such as single, married without children, married with young children, etc., rather than a psychological dimension.

Question 4

The term market density refers to the number of potential customers per unit of land area, such as per square mile.

Accepted Answer

Market density refers to the number of potential customers in a given area, usually measured in terms of population or households per unit of land area such as per square mile.

Question 5

The concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single market segment through one marketing mix.

Accepted Answer

The concentrated targeting strategy is also known as niche marketing where the organization focuses on a narrowly defined market segment and tailors its marketing mix to meet the specific needs of that segment.

Question 6

A market is a group of people who, as individuals, have needs for products in a product class and have the ability, willingness, and authority to purchase such products.

Accepted Answer

This is the definition of a market, where individuals with needs, ability, willingness, and authority to purchase belong to a group.

Question 7

A segmentation variable is used to group smaller markets into one larger market.

Accepted Answer

A segmentation variable is used to divide a large market into smaller, more defined segments or groups based on specific characteristics.

Question 8

One problem with using psychographic variables for segmentation purposes is that they are difficult to measure accurately.

Accepted Answer

Psychographic variables such as values, beliefs, attitudes, and lifestyle are subjective and may be difficult to measure accurately. They often rely on self-reported data, which may not be entirely reliable, and may also be affected by social desirability bias. Additionally, there may be cultural or language barriers that hinder accurate measurement across different populations.

Question 9

Motives can be used to segment markets.

Accepted Answer

Motives refer to the underlying reasons or needs that drive a person's behavior. These motives can vary among different groups of people and can therefore be used to segment markets based on their specific needs and desires.

Question 10

A differentiated targeting strategy is when the organization targets two or more markets by developing a single marketing mix.

Accepted Answer

A differentiated targeting strategy involves targeting two or more segments with a unique marketing mix for each, rather than using a single marketing mix for all segments.

Question 11

One condition for effective segmentation is that at least one segment must have substantial profit potential.

Accepted Answer

In order for a company to invest resources into targeting and serving specific segments, it is important that at least one segment has the potential to generate significant profits. Otherwise, the cost of segmentation may outweigh the benefits.

Question 12

Individuals' ability to buy depends on the strength of their buying power.

Accepted Answer

Buying power refers to an individual's ability to purchase goods and services based on the amount of money they have available or their access to credit. Therefore, individuals' ability to buy is directly related to the strength of their buying power.

Question 13

An undifferentiated targeting strategy does not target a single market with one marketing mix.

Accepted Answer

An undifferentiated targeting strategy targets the entire market with one marketing mix, without attempting to tailor the mix to individual segments.

Question 14

Segmentation variables are characteristics of individuals, groups, or organizations in a total market.

Accepted Answer

Segmentation variables are used to identify subsets of a total market that share similar needs, wants, or characteristics. These variables can include demographic, geographic, psychographic, and behavioral factors.

Question 15

Demographic characteristics are commonly used to segment a market because they are closely related to consumers' product needs and purchasing behavior.

Accepted Answer

Demographic characteristics such as age, gender, income, education, and occupation are often used in market segmentation as they can provide insights into consumers’ preferences, buying behavior, and product needs. For example, a company may target women aged 18-35 with a higher education level and an income over $50,000 with luxury skincare products as they are more likely to have a demand for such products.

Question 16

Only one variable can be used to segment a market.

Accepted Answer

While it is often practical and efficient to use one variable for market segmentation, it is not a requirement. In fact, many markets are segmented by multiple variables such as age, income, location, and behavior.

Question 17

There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the concentrated targeting strategy.

Accepted Answer

There are actually three basic strategies for selecting target markets: undifferentiated (mass) marketing, differentiated (segmented) marketing, and concentrated (niche) marketing.

Question 18

Sellers of farm produce would be likely to use an undifferentiated targeting strategy.

Accepted Answer

Undifferentiated targeting strategy involves targeting a large group of consumers with a similar marketing mix. In the case of sellers of farm produce, they typically do not customize their marketing mix based on individual preferences and needs of consumers, but rather target a broad market segment.

Question 19

The four requirements of a market are that the individuals in the market must have a need for the product and the ability, willingness, and authority to buy it.

Accepted Answer

The four requirements of a market are that the individuals in the market must have a need for the product and the ability, willingness, and authority to buy it.

Question 20

A company sometimes defines a total market as its target market.

Accepted Answer

It is possible for a company to define the entire market for their product or service as their target market. This approach is often used when the product or service is relevant to a wide range of people or businesses.

Quiz 5: Target Market Segmentation and Evaluation

The first step of the target market selection process is identifying the appropriate targeting strategy; the last step is evaluating relevant market segments.

Leah is an award-winning fiction writer. She works out of her apartment. She recently purchased a new desk in which to store her manuscripts and for use when typing up stories for publication. Leah is part of the business market for the desk manufacturer.

Family life cycle is a psychological dimension used for segmenting markets.

The term market density refers to the number of potential customers per unit of land area, such as per square mile.

The concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single market segment through one marketing mix.

A market is a group of people who, as individuals, have needs for products in a product class and have the ability, willingness, and authority to purchase such products.

A segmentation variable is used to group smaller markets into one larger market.

One problem with using psychographic variables for segmentation purposes is that they are difficult to measure accurately.

Motives can be used to segment markets.

A differentiated targeting strategy is when the organization targets two or more markets by developing a single marketing mix.

One condition for effective segmentation is that at least one segment must have substantial profit potential.

Individuals' ability to buy depends on the strength of their buying power.

An undifferentiated targeting strategy does not target a single market with one marketing mix.

Segmentation variables are characteristics of individuals, groups, or organizations in a total market.

Demographic characteristics are commonly used to segment a market because they are closely related to consumers' product needs and purchasing behavior.

Only one variable can be used to segment a market.

There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the concentrated targeting strategy.

Sellers of farm produce would be likely to use an undifferentiated targeting strategy.

The four requirements of a market are that the individuals in the market must have a need for the product and the ability, willingness, and authority to buy it.

A company sometimes defines a total market as its target market.