Marketing International 17th Edition by Hult - Test Bank

Marketing International 17th Edition by Hult – Test Bank

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Sample Questions Are Posted Below

Chapter 5—Selecting Target Markets

ESSAY

How do business markets differ from consumer markets?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 05-01

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

What are the conditions under which an undifferentiated targeting strategy is effective? Why are these conditions essential?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-02

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

What are the major steps of the target market selection process?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 | LO: 05-03 | LO: 05-04 | LO: 05-05 | LO: 05-06

NAT: BUSPROG: Communication STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Compare and contrast the concentrated and differentiated targeting strategies of market segmentation.

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-02

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Would a person’s political views be an effective variable with which to segment a market? Why or why not?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-02

NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Identify the four major categories of segmentation of variables for consumer products, and give three examples of each.

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 05-02

NAT: BUSPROG: Communication STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 05-03

NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Comprehension

What variables are used to segment business markets?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 05-03

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

When evaluating market segments, which three major issues should be considered?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 05-05

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Why is it important for marketers to forecast sales potential for the entire industry as well as for the individual company?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-07

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Discuss the differences between the breakdown and buildup approaches to measuring company sales potential. What are the similarities between these two approaches?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-05

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Why is it important for marketers to assess competitors before entering a market segment?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-05

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Discuss the difference between sales forecasts and company sales potential. Why is it important for a marketer to be able to forecast sales?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-07

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-07

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Why would a firm survey its sales force to forecast company sales? Why would a firm choose an expert forecasting survey instead?

ANS:

Answer not provided.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 05-07

NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

MULTIPLE CHOICE

Any group of people who, as individuals or as organizations, have needs for products in a product class and who have the ability, willingness, and authority to buy such products is a(n)

a.	business market.
b.	market.
c.	undifferentiated market
d.	segmented market
e.	market variable

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Which of the following is not a characteristic of a consumer market?

a.	it consists of purchasers who intend to consume or benefit from the purchased products
b.	they do not buy products for the main purpose of making a profit
c.	they are sometimes referred to as B2C markets
d.	their purchasing decisions are always made by only one individual
e.	they may buy the product, but not use it themselves

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of these statements is not true about business markets?

a.	the purchase may be made to resell the item
b.	the purchase is always made by more than one individual
c.	the purchase may be made to use in general daily operations
d.	the purchase may be made to use in production of another product
e.	they can also be referred to as organizational markets

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Which of the following is not a requirement or characteristic of a market?

a.	The ability to purchase a product
b.	A large number of people or organizations
c.	The authority to buy a product
d.	The willingness to use buying power
e.	The need for a specific product in a specific product category

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

In order to be considered a market, people do not have to have

a.	a need or desire for a particular product.
b.	the ability to purchase the product.
c.	discretionary income to purchase the product.
d.	the willingness to use their buying power.
e.	the authority to buy the specific products.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Mia is pet-sitting for a friend’s dog while he is on vacation. Her friend has given Mia all sorts of information, including the veterinarian’s name and phone number, pet emergency center location, and the dog’s favorite bedtime snack. The first evening of the vacation, Mia realizes that her friend did not bring the dog’s food over, and she has no idea what the dog eats. Her friend’s cell phone is “out of range” at the moment, so Mia must go to the grocery store and shop for dog food, even though she has never bought it before now. In this case, even though Mia is not a dog owner, she is likely to be part of the market for dog food for all of the following reasons except _______.

a.	she has the authority to purchase the dog food.
b.	she possesses the buying power for purchasing dog food.
c.	she has the need or desire for dog food.
d.	her ability to purchase the dog food is questionable.
e.	she is willing to use her buying power.

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The ability to purchase a product is a function of

a.	buying power.
b.	desire.
c.	willingness.
d.	authority.
e.	needs.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Jack has just joined a law firm as its purchasing agent for all supplies, equipment, and service contracts. In his previous position at another company, Jack could make decisions for any purchase up to $1 million; however, at the new law firm, he can only make decisions for purchases less than $500,000. Recently, Jack has been working with a sales representative from a computer software firm about a contract for new program to process the firm’s billing statements. Jack signs the contract, even though it is for $950,000. In this case, Jack ___ part of the market for the software because _____.

a.	is; he has very little buying power.
b.	is; has the need for the software.
c.	is not; he is willing to spend the firm’s money.
d.	is; he has the desire for the software.
e.	is not; he does not have the authority to purchase.

ANS: E PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Generally speaking, individuals who are unemployed would not be considered a target market for lawn care services because

a.	they would not desire such products.
b.	they would not be willing to purchase such products.
c.	they would not have the ability to purchase such products.
d.	such markets are narrowly defined geographically.
e.	they would not be authorized to purchase such products.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Eighteen-year-old students do not form a market for alcoholic beverages because they

a.	lack sufficient buying power to form a market.
b.	lack the authority to purchase this type of product.
c.	do not want to purchase this type of product.
d.	do not have sufficient experience with this type of product.
e.	lack the money to purchase this type of product.

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Prodigy Placement is a private elementary school located in the center of Manhattan. Students at the school are considered in the top 1% of their age group in terms of IQ scores and aptitude. Parents who want to send their children to the school must get on a waiting list as soon as the child is 12 months old and must make a deposit of $5,000 to the school in order to hold the child’s “application” until they reach the age of 5 years. Emma’s parents put her on the waiting list at the age of 1 year and paid the deposit; however, when Emma became five years old, she did not want to attend the school even though she tested above the requirement. Her parents made the decision to enroll her for the upcoming school year. In this case, Emma ___ part of the market for Prodigy Placement, and her parents ____ part of the market

a.	was; were; because Emma needed to attend school.
b.	was; were; because Emma had the authority to attend the school.
c.	was; were; because they had the authority.
d.	was not; were; because Emma lacked the desire.
e.	was not; were; because Emma lacked willingness.

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The first step in the target market selection process is

a.	determining which segmentation variables to use.
b.	selecting specific target markets.
c.	identifying an appropriate targeting strategy.
d.	evaluating relevant market segments.
e.	developing market segment profiles.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

To find a target market, a firm can use the

a.	total market strategy and the undifferentiated strategy.
b.	product differentiation strategy and the customer differentiation strategy.
c.	demographic strategy and the psychographic strategy.
d.	socioeconomic strategy and the psychological strategy.
e.	undifferentiated strategy, the concentrated strategy, and the differentiated strategy.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

The Pillsbury company defines all individual consumers who are purchasers of flour as its target market. It also defines all businesses who purchase flour as its target market. What targeting strategy would be most appropriate in this case?

a.	Concentrated
b.	Undifferentiated
c.	Wide appeal
d.	Differentiated
e.	Clustered

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is using a(n) ____ strategy.

a.	concentrated targeting
b.	differentiated
c.	heterogeneous market
d.	undifferentiated
e.	single mix

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Why would a company use the undifferentiated strategy?

a.	The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy them.
b.	The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market.
c.	The needs of individual consumers in the target market for a specific product are similar, so the organization can satisfy most customers with a single marketing mix.
d.	The undifferentiated strategy is expensive to implement but tends to produce the most sales.
e.	The undifferentiated strategy requires less time and fewer resources.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

When the needs of individual consumers in a target market for a specific product are similar and the organization can satisfy most customers with a single marketing mix, the best approach to use may be the ____ strategy.

a.	undifferentiated
b.	differentiated
c.	segmented
d.	concentrated
e.	heterogeneous

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following statements about the undifferentiated targeting strategy is false?

a.	The undifferentiated targeting strategy should be used when the needs of individual customers are similar.
b.	The undifferentiated targeting strategy uses one promotional program aimed at everyone in the target market.
c.	The undifferentiated targeting strategy is good for use with staple items, such as sugar and salt.
d.	The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the target market.
e.	The opposite of the undifferentiated targeting strategy is the differentiated targeting strategy.

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

The ProMark Company manufactures a pencil that is about five inches long and has no eraser. It sells the product primarily to golf courses and universities. What type of targeting strategy is the ProMark Company using?

a.	Extensive
b.	Concentrated
c.	Undifferentiated
d.	Intensive
e.	Differentiated

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

The producers of C & H Cane Sugar sell the product in five-pound bags, one-pound bags, and one-pound boxes. When developing its advertising strategy, C & H will most likely use a(n) ____ approach in defining a target market.

a.	undifferentiated
b.	differentiated
c.	product strategy
d.	cost-benefit
e.	demographic

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be using the ____ strategy.

a.	directed
b.	undifferentiated
c.	segmented
d.	differentiated
e.	product-use

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Smart Balance produces a line of milk products that are lactose-free. The milk comes in pint, quart, and half-gallon cartons, as well as 16-ounce glass bottles. Smart Balance sells its pint cartons to school systems, its quart and half-gallon cartons to grocery stores, and its glass bottles to vending machine operators. Smart Balance appears to use a(n) _____ strategy in marketing its product to a target market that is likely to be _______.

a.	undifferentiated; homogeneous
b.	undifferentiated; heterogeneous
c.	differentiated; homogenous
d.	differentiated; heterogeneous
e.	concentrated; heterogeneous

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

The undifferentiated targeting strategy for finding a target market will likely not be successful if

a.	product positioning is needed.
b.	the firm defines the total market as its target market.
c.	people within the market have heterogeneous needs.
d.	people within the market have homogeneous needs.
e.	the firm is capable of developing a single marketing mix that satisfies all people’s needs.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Most markets for products are made up of individuals or groups with diverse needs for products and are called ____ markets.

a.	undifferentiated
b.	concentrated
c.	homogenous
d.	differentiated
e.	heterogeneous

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Knowledge

Walmart sells numerous products, including packaged food, produce, automotive maintenance services, eyeglasses, clothing, and toys. Walmart advertises itself as a store where “we save people money so they can live better,” focusing on its low prices as the customer’s most important need. Walmart’s advertising appears to use a(n) _____ strategy to a market that is _____.

a.	undifferentiated; homogeneous.
b.	undifferentiated; heterogeneous.
c.	differentiated; homogeneous.
d.	homogeneous; differentiated.
e.	heterogeneous; undifferentiated.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs are classified as

a.	market segments.
b.	heterogeneous markets.
c.	concentrated markets.
d.	demographic segments.
e.	strategic segments.

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Mattel views the toy market as composed of four age groupings, each with different needs and desires. Mattel is using a(n) ____ targeting strategy for its groups, which are known as _____.

a.	undifferentiated market; market segments
b.	undifferentiated market; heterogeneous.
c.	differentiated; market segments.
d.	differentiated; the marketing mix.
e.	concentrated market; heterogeneous.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The purpose of market segmentation is to

a.	differentiate products.
b.	divide a total market to enable a marketer to develop a more precise marketing mix.
c.	reduce the overall cost of marketing activities.
d.	identify a single marketing mix that will be satisfactory for the general market.
e.	meet the needs of homogeneous markets.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

The process of dividing a total market into market groups because people within each group have relatively similar product needs is called

a.	segmentation.
b.	diversification.
c.	target marketing.
d.	concentration.
e.	customization.

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Several conditions must exist for market segmentation to be successful. These conditions include all of the following except

a.	the total market should be divided so that segments can be compared on sales potential, costs, and profits.
b.	customers’ needs for the product must be homogeneous.
c.	the company must be able to reach the chosen segment with a particular marketing mix.
d.	segments must be identifiable and divisible.
e.	at least one segment must have enough profit potential to justify developing and maintaining a special marketing mix for that segment.

ANS: B PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

A business advantage of the concentrated targeting strategy for any company is that it

a.	requires less market research and information.
b.	requires less intensive analysis of customers’ characteristics and needs.
c.	allows a firm to utilize all of its production capacity.
d.	maintains the firm’s flexibility in moving into other market segments.
e.	allows a firm to develop a special marketing mix for a single market segment.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

A targeting strategy in which an organization targets a single market segment using one marketing mix is called a(n) ____ strategy.

a.	selective
b.	focused
c.	differentiated
d.	concentrated
e.	undifferentiated

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

When markets are comprised of people with differing product needs, the marketing manager should use a(n) ____ strategy.

a.	concentrated or differentiated targeting
b.	market-intensive
c.	integrated
d.	product-oriented
e.	undifferentiated

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

A disadvantage of the concentrated targeting strategy is that

a.	the firm’s financial condition is tied to a single and specialized marketing mix.
b.	large sales volumes cannot be generated.
c.	production costs may be higher than with other strategies.
d.	marketing personnel may become dissatisfied with the limited opportunities provided by this approach.
e.	marketing costs are often higher than for other strategies.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

If Georgia-Pacific, a producer of home siding, decking, and other wood products, focused its marketing efforts to home construction companies only, it would be using a(n) ____ strategy. If it sold the same products to both construction companies and DIY retailers such as Home Depot, it would be using a(n) ____ strategy.

a.	undifferentiated; undifferentiated
b.	undifferentiated; differentiated
c.	differentiated; multisegmented
d.	concentrated; differentiated
e.	concentrated; concentrated

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Tiffany’s markets its exclusive jewelry and gifts to high-income individuals interested in high-quality products and a well-known brand name. It uses the same marketing mix to reach this market. Tiffany’s uses a(n) ____ strategy.

a.	undifferentiated
b.	differentiated targeting
c.	exclusive targeting
d.	heterogeneous
e.	concentrated targeting

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories through sales representatives who are also interior designers. It also has another, slightly less expensive line that it sells through stores such as Nordstrom’s and Saks Fifth Avenue. Interior Designs Inc. is most likely using a(n) ____ targeting strategy.

a.	differentiated
b.	undifferentiated
c.	concentrated
d.	homogeneous
e.	heterogeneous

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

The primary advantage of a concentrated targeting strategy is

a.	it meets the needs of a wide range of consumers.
b.	it allows a firm to specialize to meet specific customer needs.
c.	it is more flexible than any other approach.
d.	it is the least risky targeting approach.
e.	its customers are the most willing to repurchase the same brands.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to families. Procter & Gamble is using a(n) ____ targeting strategy for laundry detergents.

a.	multiuse
b.	differentiated
c.	stratified
d.	undifferentiated
e.	concentrated

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Volkswagen markets its Routan to large families, its R32 racecar to men, and its Jetta to young singles. What targeting approach is Volkswagen using?

a.	Concentrated
b.	Strategic
c.	Differentiated
d.	Undifferentiated
e.	Multisegmented

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

A targeting strategy in which an organization directs its marketing efforts at several segments is called a(n) ____ targeting strategy.

a.	differentiated
b.	total market
c.	concentrated
d.	undifferentiated
e.	integrated

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following products is most likely to be marketed, using an undifferentiated approach?

a.	bicycle
b.	computer
c.	notebook
d.	seasoning salt
e.	oscillating fan

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

After a firm has identified an appropriate targeting strategy, the next step in the target market selection process is

a.	determining the demographic variables of the target market.
b.	developing market segment profiles.
c.	determining which segmentation variables to use.
d.	selecting specific target markets.
e.	evaluating relevant market segments.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Characteristics of individuals, groups, or organizations that are used for dividing a total market into smaller homogeneous groups are called ____ variables.

a.	marketing
b.	classification
c.	segmentation
d.	stratification
e.	dividing

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Age, rate of product use, location, and gender are all examples of common

a.	demographic variables.
b.	geographic characteristics.
c.	targeting strategies.
d.	psychographic variables.
e.	segmentation variables.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Segmentation variables are usually grouped into four categories:

a.	demographic, geographic, religion, and income.
b.	geopolitical, income, behavioristic, and psychographic.
c.	attitudes, lifestyles, behaviors, and gender.
d.	geographic, demographic, psychographic, and attitudes.
e.	demographic, geographic, psychographic, and behavioristic.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Which of the following is not one of the major categories of consumer market segmentation variables?

a.	Demographic characteristics
b.	Geographic variables
c.	Psychographic dimensions
d.	Situational variables
e.	Behavioristic characteristics

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Analytic STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Alpine Ski Shops is looking for new markets for both its brick and mortar retail stores and its catalog division. Alpine Ski Shops would most likely use a(n) ______ base for market segmentation of its stores and a(n) base for market segmentation of its catalog division?

a.	behavioristic; geographic
b.	geographic; demographic
c.	demographic; psychographic
d.	environmental; demographic
e.	geographic; behavioristic

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

TimeWarner Cable uses a segmentation strategy for its cable TV packages based on market characteristics such as age, gender, or income. Which of the following segmentation variables is TimeWarner using?

a.	Demographic
b.	Geographic
c.	Psychographic
d.	Product-related
e.	Education

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Analytic STA: DISC: Marketing Plan

KEY: Bloom’s: Analysis

With its Venus razor, Gillette was the first marketer to offer a triple blade razor specifically designed for women. This is an example of market segmentation using ____ variables.

a.	demographic
b.	psychographic
c.	geographic
d.	family life cycle
e.	product use

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Kelly’s Kids is a home-based business that sells high-quality children’s clothing at premium prices using in-home parties. These in-home parties typically cater to families with small children and middle- to upper-middle-class income. Kelly’s Kids is using ____ variables to segment its market.

a.	demographic
b.	psychographic
c.	sociographic
d.	behavioristic
e.	geographic

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Cosmopolitan magazine, Car and Driver magazine, Secret deodorant, and Axe body wash are all products whose marketers have used segmentation based on

a.	behavior.
b.	psychographics.
c.	product use.
d.	gender.
e.	income.

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Communication

STA: DISC: Strategy | DISC: Customer KEY: Bloom’s: Comprehension

A marketer that targets customers based on marital status and the presence and age of children is using

a.	behavioristic segmentation.
b.	lifestyle variables.
c.	psychographic variables.
d.	family life cycle.
e.	phase of life segmentation.

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following products is most likely to have its market segment based on age?

a.	Nike shoes
b.	Lipton Iced Tea
c.	Bic pens
d.	Legos
e.	Carpet

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Analytic

STA: DISC: Strategy | DISC: Customer KEY: Bloom’s: Comprehension

If Campbell were to offer single serving “Soup for One” packages to household markets, it would be using segmentation based on

a.	income.
b.	age.
c.	preferences.
d.	geographic considerations.
e.	family life cycle.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Analytic

STA: DISC: Strategy | DISC: Customer KEY: Bloom’s: Comprehension

Which of the following products is least likely to be segmented according to stages in the family life cycle?

a.	Single-family homes
b.	Cars and SUVs
c.	European vacations
d.	Soft drinks
e.	General Electric appliances

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Analytic

STA: DISC: Strategy | DISC: Customer KEY: Bloom’s: Comprehension

Family life cycle is most typically based on

a.	income.
b.	geographic location.
c.	marital status and age of children.
d.	occupation.
e.	buying power.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Population density and city size are ____ variables used for market segmentation.

a.	geographic
b.	demographic
c.	psychographic
d.	environmental
e.	geodemographic

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Zerex markets its radiator liquid to different markets; one as a coolant and the other as antifreeze. Which of the following segmentation variables is Zerex most likely using?

a.	Demographic
b.	Psychographic
c.	Environmental
d.	Geographic
e.	Behavioristic

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Many marketers are concerned about the number of potential customers within a certain area of land because of the different requirements to serve dissimilar areas. What is this segmentation variable called?

a.	Micromarketing
b.	Population
c.	Market density
d.	MSA
e.	PMSA

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Subaru is producing a new seven-passenger van with all-wheel drive. Which of the following would be the best variables for segmenting the market for this new model?

a.	Gender and age
b.	Geographic location and family life cycle
c.	Income and geographic location
d.	Family life cycle and income
e.	Geographic location and gender

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: Strategy | DISC: Customer KEY: Bloom’s: Application

Systems such as PRIZM and Acorn provide companies with lifestyle and demographic information about neighborhoods throughout the United States. This information is used to aid

a.	behavioristic segmentation.
b.	geodemographic segmentation.
c.	market density analysis.
d.	demographic segmentation.
e.	geographic segmentation.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Justin Franklin’s company is interested in locating areas where the average income is high, the average age range is 25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company would most likely find possible markets through

a.	U.S. Census Bureau information.
b.	geographic segmentation variables.
c.	geodemographic segmentation.
d.	climate information.
e.	psychographic segmentation.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Micromarketing is

a.	a market segmentation approach in which firms focus precise marketing efforts on very small geographic markets.
b.	developing a very specific marketing mix that will effectively meet the needs of only a small segment of the market.
c.	marketing efforts that are tightly controlled by high-level executives in the organization.
d.	a way to segment the market to meet the needs of individuals with the same motives and personality attributes.
e.	creating advertising that is so specific to a certain type of individual that few people outside that micromarket will respond to the message.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Retail-site location analyses, unique product offerings, and special advertising campaigns are all examples of the use of

a.	market density.
b.	demographic segmentation.
c.	behavioristic segmentation.
d.	environmental segmentation.
e.	micromarketing.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following is the biggest drawback to using psychographic variables?

a.	They are not strongly reflective of consumer behavior.
b.	They are difficult to measure.
c.	They give poor information about consumer needs.
d.	They do not reflect socioeconomic characteristics of consumers.
e.	The resulting segments are difficult to be reached.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

The three most commonly used psychographic segmentation variables are

a.	personality, perception, and learning.
b.	personality, perception, and behavior.
c.	motives, attitudes, and lifestyles.
d.	attitudes, personality, and perception.
e.	personality, motives, and lifestyles.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Seventh Generation is a company producing products that limit the amount of negative impact on the environment. Their product line includes dishwashing liquid, toilet paper, paper towels, baby wipes, and laundry detergent, to name a few. Seventh Generation is now interested in producing a new line of clothing; mostly t-shirts, shorts, and long pants for both men and women. Their research indicates that they should use psychographic segmentation in their marketing strategy. Which group of segmentation variables will Seventh Generation be using?

a.	Geographic location
b.	Age, sex, and socioeconomic characteristics
c.	Social class variables
d.	Personality characteristics, motives, and lifestyles
e.	Family life cycle, social class, and religion

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: Strategy | DISC: Research KEY: Bloom’s: Application

When using personality characteristics as a market segmentation variable, marketers generally

a.	conduct personality assessments of their potential target market to determine which personality characteristics they possess.
b.	use research developed by clinical psychologists to determine which personality characteristics consumers using their products are most likely to have.
c.	use generic characteristics that all members of the population have.
d.	use a positively viewed characteristic they assume much of their target market has or would like to have.
e.	conduct a series of focus groups to determine both the positive and negative characteristics members of their target market are perceived to have.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

The psychographic variable that includes numerous characteristics related to people’s activities, interests, and opinion is

a.	motive.
b.	social class.
c.	personality.
d.	stage in family life cycle.
e.	lifestyle.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

If a company segments its market on the basis of their reasons for purchasing a particular product, the primary segmentation variable in use is

a.	lifestyle.
b.	motives.
c.	personality.
d.	benefit expectations.
e.	personality attributes.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Demographic variables such as income and occupation, as well as how people spend their time and the importance of things in their surroundings, are all factors considered in ____ segmentation.

a.	psychographic
b.	social class
c.	lifestyle
d.	personality
e.	family life cycle

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

A widely used system for classifying individuals on the basis of lifestyle is

a.	VALS.
b.	PRIZM.
c.	CMSA.
d.	LIFO.
e.	Prospect Zone.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following is an example of a behavioristic segmentation variable?

a.	Family size
b.	Climate
c.	Age
d.	Usage rate
e.	Personality characteristics

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Budweiser may choose to segment its market based on heavy, moderate, and light drinkers of its alcoholic beverages. This is an example of market segmentation based on

a.	behavioristic variables.
b.	benefits.
c.	lifestyles.
d.	psychographic variables.
e.	demographic variables.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The Gap has recently produced a new line of athletic wear that closely competes with a designer label in its quality, utility, and appearance. However, it is about half the cost of the designer brand. Product managers for The Gap line plan to use price sensitivity, brand loyalty, and end use as variables to segment their target market. These are all _______ variables for market segmentation.

a.	psychographic
b.	usage
c.	demographic
d.	lifecycle
e.	behavioristic

ANS: E PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Alli segments its diet pills based on those who have morning cravings, those who tend to overeat near the end of the day, those who need all day long appetite suppression, and those who want appetite control and more energy. This is an example of market segmentation based on variables of

a.	demographics.
b.	lifestyles.
c.	psychographics.
d.	behavior.
e.	personality characteristics.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Crest toothpaste is available in several different versions, such as Crest Whitening, Crest Tartar Control, Crest Whitening with mouthwash, and Crest Total Effects. Given these different variations of the product, it appears that the marketers of Crest are segmenting the market by using ____ segmentation.

a.	behavioristic
b.	product usage
c.	benefit
d.	end-purpose
e.	advantage

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

Variables such as geographic location, type of organization, customer size, and type of product usage are used to segment ____ markets.

a.	consumer
b.	business
c.	government
d.	international
e.	most target

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Dell segments its business markets into small business, corporate, government agencies, K-12 schools, and higher education institutions. The primary segmentation variable used in this example is

a.	geographic location.
b.	type of organization.
c.	secondary product use.
d.	customer size.
e.	market potential.

ANS: B PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Which of the following variables would most likely be used to segment a business market?

a.	An attitude of the company’s CEO
b.	The geographic location of the company
c.	The lifestyle of the company’s buying agent
d.	Net income generated by the company
e.	Common opinions of the company’s employees

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International Paper segments its market based on

a.	customer size.
b.	psychographics.
c.	demographics.
d.	use of product.
e.	geographic location.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have different needs for the steel and thus Bethlehem has to prepare the raw steel differently depending on how customers will use it in their production processes. The primary business segmentation variable in this example is

a.	geographic location.
b.	customer size.
c.	product use.
d.	customer importance.
e.	organization classification.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

After an organization has determined which of the many segmentation variables it will use, the next step in the target market selection process is

a.	evaluating each of the relevant market segments.
b.	selecting the specific target markets.
c.	reviewing the appropriate marketing strategy.
d.	analyzing the interaction between segmentation variables.
e.	developing market segment profiles.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

____ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments.

a.	Market segmentation variables
b.	Market segment profiles
c.	Segmentation grids
d.	Market differentiation indexes
e.	Market concentrations

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Yvonne and Garret are looking at information about how their organization’s products could fit potential customers’ needs. This information deals with demographic characteristics, product benefits sought, lifestyles, geographic factors, brand preferences, and usage rates. They are most likely looking at

a.	the sales force survey results.
b.	the results of sales forecasting.
c.	a market trend analysis.
d.	a market segmentation discrimination analysis.
e.	a market segment profile.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within a specified time period at a given 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.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

General Electric 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.

ANS: B PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

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.

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

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.

ANS: E PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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 estimating sales potential.

a.	breakdown
b.	recessionary
c.	buildup
d.	pyramid
e.	dimensional

ANS: A PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Alex Wren of Owens Corning Fiberglass 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

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

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.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

a.	cost estimates are crucial to estimating 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.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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.

ANS: D PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Meghan would like 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 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.

ANS: E PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Application

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.

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan

KEY: Bloom’s: Comprehension

Evaluating and making product positioning decisions is important for

a.	new products only.
b.	existing products only.
c.	new and existing products.
d.	product deletions only.
e.	new products and product deletions.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Pedigree^TM is a leading brand of dog food in the United States. Suppose the maker of Pedigree^TM decided to extend its line of products by offering a different version made with more natural ingredients. Pedigree^TM must be sure that its marketing communications distinctly position this product (i.e., separate it from the other products in the line) or the result could be

a.	poor product positioning.
b.	product deletion.
c.	product repositioning.
d.	cannibalization.
e.	new-product failure.

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Guess? 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.

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

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.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Intuition and expediency are primary characteristics of which of the following sales forecasting methods?

a.	Surveys
b.	Executive judgment
c.	Cycle analysis
d.	Market tests
e.	Industry indicators

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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.

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

The most important reason that a firm might use a sales force forecasting survey to determine its sales forecast is

a.	salespeople are generally optimistic about the future and will provide excellent forecast targets.
b.	most salespeople tend to have a pessimistic outlook, which is more likely to result in an achievable sales forecast.
c.	this tends to be the fastest way to determine a good sales forecast for the upcoming period.
d.	the averaging and other statistical techniques applied to these forecasts result in extremely accurate numbers.
e.	the sales staff is closer to the actual customers on a regular basis than anyone else in the organization.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

When a company has its sales forecasts prepared by management consultants, economists, or college professors, it is using a(n)

a.	expert forecasting survey.
b.	Delphi technique.
c.	random factor analysis.
d.	external judgment survey.
e.	market test.

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to

a.	allow an opportunity to obtain diverse expert opinions.
b.	allow experts to work separately to reach a consensus as to their forecasts.
c.	reach an accurate sales forecast through the use of multiple sales forecasting techniques.
d.	determine if the expert forecasting survey is superior to regression analysis.
e.	assess the extent to which this year’s sales forecast is more accurate than that of previous years.

ANS: B PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The forecasting techniques that assume past sales patterns will continue into the future are all variations of

a.	regression analysis.
b.	random factor analysis.
c.	seasonal analysis.
d.	time series analysis.
e.	past sales forecasting surveys.

ANS: D PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A forecasting method that predicts sales based on relationships between past sales and other variables is called

a.	regression analysis.
b.	customer forecasting surveys.
c.	the Delphi technique.
d.	random factor analysis.
e.	time series analysis.

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Brian works for a manufacturer of sports equipment and is currently developing a company sales forecast for golf clubs. While reviewing data, he discovered a pattern in sales volume over the past ten years that peaked during two months of each year. Brian likely used which sales forecasting technique?

a.	the Delphi technique
b.	Executive judgment
c.	Time series analysis
d.	Market tests
e.	Regression analysis

ANS: C PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Katy Ramirez is a marketer for a company that produces in-ground swimming pools. When forecasting company sales, she finds a direct association between past sales and per capita income. Which sales forecasting technique is Katy using?

a.	The Delphi technique
b.	Executive judgment
c.	Time series analysis
d.	Market tests
e.	Regression analysis

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The sales prediction technique based on the correlation between sales and other factors¾such as population density, per capita income, or family size¾is

a.	executive judgment.
b.	time series analysis.
c.	regression analysis.
d.	a market test.
e.	an expert survey.

ANS: C PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The Sara Lee Company is attempting to forecast sales for a new ice cream cake. To come up with an accurate forecast, Sara Lee places the product in Atlanta supermarkets for a period of four months. In this instance, Sara Lee is using which forecasting method?

a.	Time series analysis
b.	Market test
c.	Executive judgment
d.	Regression analysis
e.	Survey

ANS: B PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

The sales forecasting method that consists of making a product available to buyers in one or more locations and measuring purchase response is

a.	a market test.
b.	regression analysis.
c.	trend analysis.
d.	a survey.
e.	the Delphi technique.

ANS: A PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

The forecasting method that utilizes a firm’s historical sales data to find patterns in the firm’s sales volume over time is

a.	the regression method.
b.	customer forecasting.
c.	a market test.
d.	sales force forecasting.
e.	time series analysis.

ANS: E PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

DeShon has just become the new marketing analyst for a company that produces vinyl siding for homes. In an effort to forecast his firm’s sales for the coming year, he needs to find where the greatest opportunities are for selling his product. DeShon looks at the sales for the last five years and calculates a growth trend. He then collects data from a combination of other factors, such as population density, family size, home ownership, and per capita income. Finally, DeShon looks at the correlation between the sales trend data and the various combination of demographic data. DeShon is employing the ____ forecasting method for the sales growth trend and the ________ method for the correlation.

a.	Time series analysis; regression analysis
b.	Executive judgment; regression analysis
c.	Market tests; regression analysis
d.	Regression analysis; time series analysis
e.	Market tests; time series analysis

ANS: A PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Which of the following sales forecasting techniques would generally be most suitable for estimating sales of a new product?

a.	Executive judgment
b.	Customer surveys
c.	Time series analysis
d.	Market tests
e.	Regression methods

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Which of the following forecasting methods is least dependent on historical sales data?

a.	Regression analysis
b.	Trend analysis
c.	Time series analysis
d.	Cycle analysis
e.	A market test

ANS: E PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

What is the main problem with using a market test as a forecasting tool?

a.	Difficult to interpret
b.	Expensive
c.	Inaccurate
d.	Unacceptable to consumers
e.	Overused

ANS: B PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Comprehension

Scenario 5.1

Use the following to answer the questions.

Lil’ Angels Kids Spa offers various treatments designed to appeal to the younger customer. Treatment options include manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party package. Currently, Lil’ Angels offers its services only to girls under the age of 14. Originally begun in Delaware, Lil’ Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to 17. The company realizes that some changes may be needed. For example, management wants to find out if the older girls will be interested in their birthday party and tea party services.

Refer to Scenario 5.1. Lil’ Angels Kids Spa is currently using a(n)____ targeting strategy.

a.	undifferentiated
b.	exclusive
c.	concentrated
d.	differentiated
e.	selective

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Refer to Scenario 5.1. Which of the following best describes Lil’ Angels’ current approach to the market?

a.	It is segmenting the market according to demographic variables.
b.	It is segmenting the market according to product-related variables.
c.	It has chosen a segment that is not identifiable and divisible.
d.	Its market is impossible to reach because of legal constraints.
e.	It is not segmenting the market but is attempting to reach everyone with the product.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 | LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: Strategy KEY: Bloom’s: Application

Refer to Scenario 5.1. In calculating the sales forecast for the next year, marketers at Lil’ Angels use data from the past five years in order to identify any trends that surface. Additionally, marketers want to find out what family variables relate to those sales. Which of the following variables should the marketers use in relating to sales? What type of forecast method will they be using to relate the variables to sales trends?

a.	behavioristic; time series analysis
b.	psychographic; time series analysis
c.	demographic; regression analysis
d.	income; regression analysis
e.	family life cycle; market tests

ANS: C PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-03 | LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: Strategy KEY: Bloom’s: Application

Refer to Scenario 5.1. What method should Lil’ Angels use to forecast sales in new regions?

a.	Sales force survey
b.	Time series analysis
c.	Correlation method
d.	Market test
e.	Regression analysis

ANS: D PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Scenario 5.2

Use the following to answer the questions.

GE Transportation produces locomotive engines for sale in countries around the world. After looking at the total market for locomotive engines, the company found that various rail lines wanted different types of engines. Major rail lines in the U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a cleaner, greener locomotive engine. Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country. GE Transportation is currently manufacturing its GE 4400 for heavy freight, its Hybrid Eco-Engine, and its Dash 9, suited for shortline transport.

Refer to Scenario 5.2. GE Transportation is most likely using a(an) ______ targeting strategy, segmenting by ________ variables.

a.	Undifferentiated; benefit expectations
b.	Differentiated; benefit expectations
c.	Differentiated; volume usage
d.	Concentrated; volume usage
e.	Concentrated; geographic location

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 | LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: Strategy KEY: Bloom’s: Application

Refer to Scenario 5.2. Currently, GE uses several sales forecasting methods. One method is to sell the different locomotive engines to buyers in different countries, and then measuring the purchasing response in each. In this case, GE Transportation is using the _____ method to forecast future sales.

a.	Delphi
b.	Market test
c.	Regression analysis
d.	Volume usage
e.	Trend analysis

ANS: B PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Refer to Scenario 5.2. Suppose that GE Transportation decided to produce only locomotive engines for rail lines in the United States. The segmentation variable then would be

a.	geographic location.
b.	type of organization.
c.	market density.
d.	product use.
e.	customer size.

ANS: A PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Refer to Scenario 5.2. Researchers at GE Transportation estimate that 1,000 rail lines throughout the world will purchase some kind of locomotive engine next year. That number represents the

a.	company sales potential.
b.	breakdown approach.
c.	market potential.
d.	buildup approach.
e.	company sales forecast.

ANS: C PTS: 1 DIF: Difficulty: Challenging

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

Refer to Scenario 5.2. If a GE Transportation researcher analyzes monthly sales data for a four-year time frame, looking for periodic fluctuations, the researcher is doing a ____ analysis.

a.	trend
b.	seasonal
c.	cycle
d.	random factor
e.	regression

ANS: C PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Application

TRUE/FALSE

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.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Individuals’ ability to buy depends on the amount of their buying power.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A person who has buying power also has the authority to buy.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-01 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The five-step process usually used for target market selection includes identifying the appropriate targeting strategy, determining which segmentation variables to use, developing market segment profiles, evaluating relevant market segments, and deciding which targeting strategy to use.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 | LO: 05-03 | LO: 05-04 | LO: 05-05 | LO: 05-06

NAT: BUSPROG: Reflective Thinking STA: DISC: International Perspective

KEY: Bloom’s: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

A firm using a concentrated targeting strategy aims its marketing activities at one segment of a market.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

The undifferentiated strategy can be effective for an organization that has a homogeneous market and can develop and maintain a single marketing mix.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Only one variable can be used to segment a market.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A firm operating in a one-state market would not regionalize its market.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

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

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Motives can be used to segment markets.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Lifestyle is a product-related variable.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Lifestyle analysis focuses on people’s activities, interests, and opinions.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The ways in which customers use a particular product may be a basis for segmenting the market.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

One way marketers can segment business markets is according to their geographic location.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A marketer may segment a market in terms of the benefits that customers expect to receive from a particular product.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-03 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A market segment profile deals primarily with demographic characteristics.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A market segment profile describes the similarities among potential customers within a segment and explains the differences among people across market segments.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A market segment profile may cover such aspects as demographic characteristics, geographic factors, product benefits sought, lifestyles, brand preferences, and usage rates.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A market segment profile provides customers with an understanding of how a business can use its capabilities.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Market segment profiles help determine the most desirable segment or segments in relation to the firm’s strengths, weaknesses, objectives, and resources.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The information yielded by market segment profiles usually is not very useful later in the marketing process.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-04 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The two general approaches to measuring company sales potential are the breakdown and the buildup approach.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Company sales potential is the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Market potential is the amount of a product that an organization could sell during a specified time period.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The size of the market potential places limits on the size of the company sales potential.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

During the evaluation of relevant market segments, competitive assessment is used primarily to determine the possibility of additional competitors entering particular segments.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The sum of firms’ marketing efforts equals industry marketing efforts.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

When evaluating relevant market segments, cost estimates are important to determine if an organization entering a particular segment can operate at costs equal to or below those of competitors.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-05 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

It is likely that during the fifth step of the target market selection process, marketers will decide not to enter and compete in any market segments.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

When a firm’s management is making the final selection of specific target markets to enter, it should consider whether the organization has the financial resources, managerial skills, expertise, and facilities needed to effectively compete in the selected segments.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

Consideration of the firm’s overall objectives usually does not influence the final selection of a target market segment.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

At times, after doing segmentation analysis, marketers in an organization decide not to enter any segments.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-06 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy

KEY: Bloom’s: Knowledge

A company sales forecast is the amount of a product that a firm actually expects to sell during a specific time period.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Sales forecasts are always long-range in nature.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The executive judgment method of sales forecasting is very accurate in predicting future sales.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

In developing a company sales forecast, the forecasting methods are limited to surveys and correlation methods.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Communication

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

The types of surveys used to forecast sales are customer, executive, and competitor surveys.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Surveys are sometimes used to forecast sales.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

In a customer survey, a marketer would question customers about the types and quantities of products they intend to buy during a specific time period.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Customer surveys as a means of forecasting sales are not appropriate for a firm that has relatively few customers.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

One limitation of the sales force survey technique is that salespeople often believe that their sales goals are determined by their sales estimates.

ANS: T PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Trend analysis is a sales forecasting technique based on historical sales data.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A marketer can use regression analysis techniques to predict the sales of new products.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Through market tests, a forecaster gains data regarding consumers’ intended purchases.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

A firm ordinarily uses the same sales forecasting method for determining short-range and long-range sales forecasts.

ANS: F PTS: 1 DIF: Difficulty: Moderate

OBJ: LO: 05-07 NAT: BUSPROG: Reflective Thinking

STA: DISC: International Perspective KEY: Bloom’s: Knowledge

Marketing International 17th Edition by Hult - Test Bank

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Marketing International 17th Edition by Hult - Test Bank

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