Marketing Principles, 2nd Edition by William M. Pride - Test Bank

Marketing Principles, 2nd Edition by William M. Pride – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

 

Chapter 5

Segmentation, target markets and positioning

SHORT ANSWER

 

1. What are the four criteria that constitute a market?

AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

2. How do business markets differ from consumer markets?

AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

3. What are the advantages of segmenting the market?

AACSB Outcomes: Communication

DF: M                         LO: 2                     Topic Heading: Market segmentation

Type: KN

 

4. What are the major steps of the target-market selection process?

AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Target-market selection process

Type: KN

 

5. Compare and contrast the undifferentiated, concentrated and differentiated targeting strategies of market segmentation. Under what conditions is each most effective?

AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Target-market selection process

Type: KN

 

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

AACSB Outcomes: Reflective thinking

DF: M                         LO: 2                     Topic Heading: Variables for segmenting consumer markets

Type: KN

 

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

AACSB Outcomes: Communication

DF: E                          LO: 2                     Topic Heading: Variables for segmenting consumer markets

Type: KN

 

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

AACSB Outcomes: Analytical

DF: M                         LO: 2                     Topic Heading: Variables for segmenting consumer markets

Type: KN

 

9. In evaluations of market segments, what are three major issues that should be considered?

AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

10. What variables are used to segment business markets?

AACSB Outcomes: Communication

DF: M                         LO: 2                     Topic Heading: Variables for segmenting business markets

Type: KN

 

MULTIPLE CHOICE

 

11. Any group of people who, as individuals or as organisations, have needs for products in a product class and have the ability, willingness and authority to buy such products is a(n):
12. A) marketing mix.
13. B)
14. C) reference group.
15. D)
16. E)

Ans: E                         AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

12. Which of the following is not a characteristic of a consumer market?
13. A) It consists of purchasers who intend to consume or benefit from the purchased products.
14. B) It is sometimes referred to as a B2C market.
15. C) Purchasing decisions are always made by one individual.
16. D) Everyone belongs to numerous markets of this type.

Ans: C                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

13. Which of the following is not true about business markets?
14. A) A purchase may be made in order to resell the item.
15. B) A purchase is always made by more than one individual.
16. C) They are sometimes referred to as B2B markets.
17. D) The purchase may be made to use in production of another product.
18. E) They are also referred to as organisational markets.

Ans: B                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market? 

Type: KN

 

14. In order to be considered a market, people do not have to have:
15. A) a need or desire for a particular product.
16. B) the ability to purchase the product.
17. C) discretionary income to purchase the product.
18. D) the willingness to use their buying power.
19. E) the authority to buy the specific products.

Ans: C                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

15. John has just joined a company as the merchandise buyer for giftware. He has the authority to place orders of up to $100 000 for his new company. He wants to place an order with a new supplier for $250 000. In this case, John __________ part of the market for the giftware because __________.
16. A) is; he has very little buying power
17. B) is; has the need for the giftware
18. C) is not; he is willing to spend the company’s money
19. D) is; he has the desire for the giftware
20. E) is not; he does not have the authority to purchase

Ans: E                         AACSB Outcomes: Reflective thinking

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: AP

 

16. Consumers who do not own dogs are not likely to be in the market for dog food because:
17. A) they lack the authority to purchase the dog food.
18. B) they do not possess the buying power for purchasing dog food.
19. C) their ability to purchase the dog food is questionable.
20. D) they do not have the need or desire for dog food.
21. E) they are willing to use their buying power.

Ans: D                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: AP

 

17. The ability to purchase a product is a function of:
18. A) buying power.
19. B)
20. C)
21. D)
22. E)

Ans: A                         AACSB Outcomes: Analytical

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

18. Adolescents are not considered part of the market for casinos because they:
19. A) have very little buying power.
20. B) do not have the desire to gamble.
21. C) are not willing to spend their money on gambling.
22. D) cannot afford to gamble their savings.
23. E) do not have the authority to gamble.

Ans: E                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: AP

 

19. Generally speaking, individuals who are unemployed would not be considered a target market for Mercedes or other luxury European import sedans because:
20. A) they do not desire such products.
21. B) they are not willing to purchase such products.
22. C) they do not have the ability to purchase such products.
23. D) such markets are narrowly defined geographically.
24. E) they are not authorised to purchase such products.

Ans: C                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market? 

Type: AP

 

20. When marketing research shows that a group of people does not desire a particular product, the people in that group:
21. A) are a market.
22. B) do not have the ability to purchase the product.
23. C) are not a market for the product.
24. D) are a market but will not purchase the product.

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market? 

Type: KN

 

21. Purchasers who intend to use or benefit from the purchased product and do not buy products to make profits are part of the:
22. A) consumer market.
23. B) end-use consumption group.
24. C) business market.
25. D) household purchasing group.
26. E) organisational market.

Ans: A                         AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

22. Markets fall into one of two categories. These categories are:
23. A) consumer and business.
24. B) consumer and customer.
25. C) organisational and business.
26. D) homogeneous and heterogeneous.
27. E) segments and mass markets.

Ans: A                         AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

23. The two primary categories of markets – consumer markets and business markets – are based on the characteristics of the individuals and groups that make up that market and:
24. A) their willingness to use their buying power.
25. B) the purposes for which they buy products.
26. C) the length of time until the product is consumed.
27. D) the level of need or desire for a specific product.
28. E) the particular product category involved.

Ans: B                         AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

24. In business markets, individuals or groups purchase products for one of three purposes. These purposes are:
25. A) resale, wholesale and direct use.
26. B) wholesale, direct use and use in producing other products.
27. C) resale, wholesale and use in producing other products.
28. D) resale, direct use in producing other products and use in general daily operations.
29. E) use in general daily operations, wholesale and resale.

Ans: D                         AACSB Outcomes: Communication

DF: D                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

25. Andrea makes frequent trips to Costco to make purchases for her catering business as well as her family. Andrea knows that she is considered as part of the business market when the items she buys are intended for resale, used directly in producing her food products or:
26. A) eaten by her family.
27. B) used in general daily operations for her catering business.
28. C) used in everyday cooking for her family and friends.
29. D) used as ingredients in making snacks for her employees.

Ans: B                         AACSB Outcomes: Analytical

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: AP

 

26. Hunter Fans buys electrical wire for use in producing its ceiling fans. Hunter is part of what type of market for electrical wire?
27. A) Resale
28. B) Wholesale
29. C) Customer
30. D) Consumer
31. E) Business

Ans: E                         AACSB Outcomes: Analytical

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: AP

 

27. Phillips, and General Electric are companiesin the __________ market.
28. A) wholesale
29. B) retail
30. C) end-user
31. D) producer
32. E) business

Ans: E                         AACSB Outcomes: Analytical

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: AP

 

28. The four types of business markets are:
29. A) local government, federal government, institutional and reseller.
30. B) wholesale, government, institutional and reseller.
31. C) producer, reseller, government and institutional.
32. D) wholesale, retail, government and institutional.
33. E) institutional, local government, reseller and retail.

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

29. The first step in the target-market selection process is:
30. A) determining which segmentation variables to use.
31. B) selecting specific target markets.
32. C) identifying an appropriate targeting strategy.
33. D) evaluating relevant market segments.
34. E) developing market segment profiles.

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 2                     Topic Heading: Market segmentation

Type: KN

 

30. To find a target market, a firm can use the:
31. A) total market strategy and the undifferentiated strategy.
32. B) product differentiation strategy and the customer differentiation strategy.
33. C) demographic strategy and the psychographic strategy.
34. D) socioeconomic strategy and the psychological strategy.
35. E) undifferentiated strategy, the concentrated strategy and the differentiated strategy.

Ans: E                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Target-market selection process

Type: KN

 

31. 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.
32. A) concentrated targeting
33. B) differentiated
34. C) heterogeneous market
35. D) undifferentiated
36. E) single mix

Ans: D                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

32. Why would a company use the undifferentiated strategy?
33. A) The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy them.
34. B) The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market.
35. C) The needs of individual consumers in the target market for a specific product are similar, so the organisation can satisfy most customers with a single marketing mix.
36. D) The undifferentiated strategy is expensive to implement but tends to produce the most sales.
37. E) The undifferentiated strategy requires less time and fewer resources.

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: CH

 

33. When the needs of individual consumers in a target market for a specific product are similar and the organisation can satisfy most customers with a single marketing mix, the best approach to use may be the __________ strategy.
34. A) undifferentiated
35. B) differentiated
36. C) segmented
37. D) concentrated
38. E) heterogeneous

Ans: A                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

34. Imagine Bic manufactures and sells only one type of ballpoint pen at just one price. All its advertising is the same and is directed at the mass market. What type of targeting strategy is Bic using?
35. A) Undifferentiated
36. B) Differentiated
37. C) Segmented
38. D) Concentrated
39. E) Heterogeneous

Ans: A                         AACSB Outcomes: Reflective thinking; Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

35. Byford Flour Mills defines all individual consumers who are purchasers of flour as its target market. It also defines all businesses that purchase flour as its target market. What targeting strategy would be most appropriate in this case?
36. A) Concentrated
37. B) Undifferentiated
38. C) Wide appeal
39. D) Differentiated
40. E) Clustered

Ans: D                         AACSB Outcomes: Reflective thinking

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

36. Which of the following statements about the undifferentiated targeting strategy is false?
37. A) It should be used when the needs of individual customers are similar.
38. B) It uses one promotional program aimed at everyone in the target market.
39. C) It is good for use with staple items, such as sugar and salt.
40. D) It uses multiple distribution systems to best reach individuals in the target market.

Ans: D                         AACSB Outcomes: Analytical

DF: D                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: CH

 

37. If Cheetham Salt viewed all table salt customers as pretty much alike and thus offered only one marketing mix, it would be using the __________ strategy.
38. A) directed
39. B) undifferentiated
40. C) segmented
41. D) differentiated
42. E) product-use

Ans: B                         AACSB Outcomes: Analytical; Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

38. Which of the following products is most likely to be marketed using an undifferentiated approach?
39. A) Bicycle
40. B) Computer
41. C) Notebook
42. D) Seasoning salt
43. E) Oscillating fan

Ans: D                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

39. A market in which a large proportion of customers have similar needs for a product is called a(n) __________ market.
40. A) undifferentiated
41. B) heterogeneous
42. C) homogeneous
43. D) differentiated
44. E) concentrated

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

40. The undifferentiated targeting strategy for finding a target market will likely not be successful if:
41. A) product positioning is needed.
42. B) the firm defines the total market as its target market.
43. C) people within the market have heterogeneous needs.
44. D) people within the market have homogeneous needs.
45. E) the firm is capable of developing a single marketing mix that satisfies all people’s needs.

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

41. CSR sells its sugar in 2-kg, 1-kg and 0.5-kg packages. When developing its advertising strategy, CSR will most likely use a(n) __________ approach
42. A) undifferentiated
43. B) differentiated
44. C) product strategy
45. D) cost-benefit
46. E) demographic

Ans: A                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

42. Individuals, groups or organisations with one or more similar characteristics that cause them to have similar product needs are classified as:
43. A) market segments.
44. B) heterogeneous markets.
45. C) concentrated markets.
46. D) demographic segments.
47. E) strategic segments.

Ans: A                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

43. Mattel views the toy market as composed of four age groupings, each with different needs and desires. Each of these groups is known as:
44. A) an undifferentiated market.
45. B)
46. C) a market segment.
47. D) a marketing mix.
48. E) a concentrated market.

Ans: C                         AACSB Outcomes: Analytical; Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

44. The purpose of market segmentation is to:
45. A) differentiate products.
46. B) divide a total market to enable a marketer to develop a more precise marketing mix.
47. C) reduce the overall cost of marketing activities.
48. D) identify a single marketing mix that will be satisfactory for the general market.
49. E) meet the needs of homogeneous markets.

Ans: B                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

45. The process of dividing a total market into market groups containing people with relatively similar product needs is called:
46. A)
47. B)
48. C) target marketing.
49. D)
50. E)

Ans: A                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

46. Several conditions must exist for market segmentation to be successful. These conditions include all of the following except:
47. A) the total market should be divided so that segments can be compared on sales potential, costs and profits.
48. B) customers’ needs for a product must be homogeneous.
49. C) a company must be able to reach the chosen segment with a particular marketing mix.
50. D) segments must be identifiable and divisible.
51. E) at least one segment must have enough profit potential to justify developing and maintaining a special marketing mix for that segment.

Ans: B                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: CH

 

47. A business advantage of the concentrated targeting strategy for any company is that it:
48. A) requires less market research and information.
49. B) requires less intensive analysis of customers’ characteristics and needs.
50. C) allows a firm to use all of its production capacity.
51. D) maintains the firm’s flexibility in moving into other market segments.
52. E) allows a firm to develop a special marketing mix for a single market segment.

Ans: E                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

48. A targeting strategy in which an organisation targets a single market segment using one marketing mix is called a(n) __________ targeting strategy.
49. A) selective
50. B) focused
51. C) differentiated
52. D) concentrated
53. E) undifferentiated

Ans: D                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

49. When markets are comprised of people with differing product needs, the marketing manager should use a(n) __________ strategy.
50. A) concentrated or differentiated targeting
51. B) market-intensive
52. C) integrated
53. D) product-oriented
54. E) undifferentiated

Ans: A                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

50. A disadvantage of the concentrated targeting strategy is that:
51. A) the firm’s financial condition is tied to a single and specialised marketing mix.
52. B) large sales volumes cannot be generated.
53. C) production costs may be higher than with other strategies.
54. D) marketing personnel may become dissatisfied with the limited opportunities provided by this approach.
55. E) marketing costs are often higher than for other strategies.

Ans: A                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

51. If the Jaguar division of Tata Motors focused all its marketing efforts on professionals earning more than $250 000, it would be using a(n) __________ strategy.
52. A) homogeneous
53. B) undifferentiated
54. C) multi-segmented
55. D) concentrated
56. E) stratified

Ans: D                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

52. Kmart sells numerous products including clothing, toys and some packaged foodstuffs. It focuses itself as a store with everyday low prices. Kmart’s advertising appears to use a(n) __________strategy to market that is __________.
53. A) undifferentiated; homogeneous
54. B) undifferentiated; heterogeneous
55. C) differentiated; homogeneous
56. D) homogeneous; differentiated
57. E) heterogeneous; undifferentiated

Ans: A                         AACSB Outcomes: Reflective thinking

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

53. Tiffany & Co. markets its exclusive jewellery 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 & Co. uses a(n) __________ strategy.
54. A) undifferentiated
55. B) differentiated targeting
56. C) exclusive targeting
57. D) heterogeneous
58. E) concentrated targeting

Ans: E                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

54. Interior Workroom sells expensive custom-made draperies, bedding and accessories using a single marketing mix. It is therefore most likely using a(n) __________ targeting strategy.
55. A) concentrated
56. B) differentiated
57. C) exclusive
58. D) focused
59. E) undifferentiated

Ans: A                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

55. The primary advantage of a concentrated strategy is that:
56. A) it meets the needs of a wide range of consumers.
57. B) it allows a firm to specialise to meet specific customer needs.
58. C) it is more flexible than any other approach.
59. D) it is the least risky targeting approach.
60. E) its customers are the most willing to repurchase the same brands.

Ans: B                         AACSB Outcomes: Analytical; Strategy

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

56. Unilever markets Omo Blackwash liquid to singles and Omo Sensitive liquid to families. Unilever is using a(n) __________ targeting strategy for laundry detergents.
57. A) multi-use
58. B) differentiated
59. C) stratified
60. D) undifferentiated
61. E) concentrated

Ans: B                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

57. Volkswagen markets the Caravelle to large families, the Scirocco R to men, and the up! to young singles. What targeting approach is Volkswagen using?
58. A) Concentrated
59. B) Strategic
60. C) Differentiated
61. D) Undifferentiated
62. E) Multi-segmented

Ans: C                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

 

58. A targeting strategy in which an organisation directs its marketing efforts at several segments is called a(n) __________ targeting strategy.
59. A) differentiated
60. B) total market
61. C) concentrated
62. D) undifferentiated
63. E) integrated

Ans: A                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

59. Characteristics of individuals, groups or organisations that are used for dividing a total market into smaller homogeneous groups are called __________ variables.
60. A) marketing
61. B) classification
62. C) segmentation
63. D) stratification
64. E) dividing

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

60. Age, rate of product use, location and gender are all examples of common:
61. A) demographic variables.
62. B) geographic characteristics.
63. C) targeting strategies.
64. D) psychographic variables.
65. E) segmentation variables.

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

61. Which of the following is true with respect to segmenting markets?
62. A) Segmentation variables should be selected on a random basis.
63. B) A company’s resources and capabilities should have little effect on how markets are segmented.
64. C) The best way to segment markets is by using demographic variables.
65. D) There is no ideal way to segment markets.
66. E) Lifestyle variables provide the best means of segmenting a market.

Ans: D                         AACSB Outcomes: Analytical; Communication

DF: D                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: CH

 

62. After a firm has identified an appropriate targeting strategy, the next step in the target-market selection process is:
63. A) to determine the demographic variables of the target market.
64. B) to develop market segment profiles.
65. C) to determine which segmentation variables to use.
66. D) to select specific target markets.
67. E) to evaluate relevant market segments.

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

63. McDonald’s uses a segmentation strategy for its fast-food meals based on market characteristics such as age, gender and income. Which segmentation variable is McDonald’s using?
64. A) Demographic
65. B) Geographic
66. C) Psychographic
67. D) Product-related
68. E) Education

Ans: A                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

64. Occupation, family size and family life cycle are all __________ variables for segmenting consumer markets.
65. A) behaviouristic
66. B) demographic
67. C) geographic
68. D) psychographic
69. E) usage

Ans: B                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

65. Segmentation variables are usually grouped into four categories:
66. A) demographic, geographic, religion and income.
67. B) geopolitical, income, behaviouristic and psychographic.
68. C) attitudes, lifestyles, behaviours and gender.
69. D) geographic, demographic, psychographic and attitudes.
70. E) demographic, geographic, psychographic and behaviouristic.

Ans: E                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

66. Which of the following is not one of the major categories of consumer market segmentation variables?
67. A) Demographic characteristics
68. B) Geographic variables
69. C) Psychographic dimensions
70. D) Situational variables
71. E) Behaviouristic characteristics

Ans: D                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

67. Imagine Designer Kidz is a home-based business that sells high-quality children’s clothing at reasonable prices using in-home parties. These in-home parties typically cater to families with small children and middle- to upper-middle-class income. Designer Kidz is using __________ variables to segment its market.
68. A) demographic
69. B) psychographic
70. C) sociographic
71. D) behaviouristic
72. E) geographic

Ans: A                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

68. With its Venus razor, Gillette was the first marketer to offer a triple-blade razor designed specifically for women. This is an example of market segmentation using __________ variables.
69. A) demographic
70. B) psychographic
71. C) geographic
72. D) family life cycle
73. E) product use

Ans: A                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

69. For products such as Cosmopolitan magazine, Rexona deodorant and Olay skin-care items, marketers use segmentation based on:
70. A)
71. B)
72. C) product use.
73. D)
74. E)

Ans: D                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

70. Which of the following products is most likely to have its market segmented based on age?
71. A) Blundstone boots
72. B) Lipton Ice Tea
73. C) Bic pens
74. D) Lego
75. E) Duracell batteries

Ans: D                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

71. If Campbell were to offer single-serving ‘Soup for One’ packages to small household markets, it would be using segmentation based on:
72. A)
73. B)
74. C)
75. D) geographic considerations.
76. E) family life cycle.

Ans: E                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

72. Which of the following products is least likely to be segmented according to stages in the family life cycle?
73. A) Single-family homes
74. B) Ford automobiles
75. C) European holidays
76. D) Diet Coke
77. E) General Electric appliances

Ans: D                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

73. Family life cycle is most typically based on:
74. A)
75. B) geographic location.
76. C) marital status and age of children.
77. D)
78. E) buying power.

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

74. A marketer who targets customers based on marital status and the presence and age of children is using:
75. A) behaviouristic segmentation.
76. B) lifestyle variables.
77. C) psychographic variables.
78. D) family life cycle.
79. E) phase of life segmentation.

Ans: D                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

75. Castrol markets its radiator liquid as a coolant in the summer and in the northern parts of Australia, and as an antifreeze in the southern part of Australia for use in winter. Which of the following segmentation variables is Castrol using?
76. A) Demographic
77. B) Psychographic
78. C) Life cycle
79. D) Geographic
80. E) Product use

Ans: D                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

76. Subaru is marketing a new crossover vehicle with all-wheel drive. Which of the following would be a likely variable for segmenting the market for this new model?
77. A) Religion
78. B) Geographic location
79. C) Income
80. D) Political views
81. E) Ethnicity

Ans: B                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

77. Lawnmowers, pool accessories, shrubs and swimsuits are all products likely to be segmented by which of the following variables?
78. A) Volume usage
79. B) Lifestyles
80. C) Market density
81. D) Occupation
82. E) Climate

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

78. The practice of focusing a firm’s marketing efforts on very small markets is known as micromarketing. Which segmentation variable is used to engage in micromarketing?
79. A) Behaviouristic
80. B) Demographic
81. C) Psychographic
82. D) Geographic
83. E) Geodemographic

Ans: E                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: CH

 

79. Population density and city size are __________ variables used for market segmentation.
80. A) geographic
81. B) demographic
82. C) psychographic
83. D) environmental
84. E) geodemographic

Ans: A                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

80. Jay Freeland’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:
81. A) the Australian Bureau of Statistics.
82. B) geographic segmentation variables.
83. C) geodemographic segmentation.
84. D) climate information.
85. E) psychographic segmentation.

Ans: C                         AACSB Outcomes: Analytical; Strategy

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

81. 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?
82. A) Micromarketing
83. B) Population
84. C) Market density
85. D) MSA
86. E) PMSA

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

82. Micromarketing involves:
83. A) a market segmentation approach in which firms focus precise marketing efforts on very small geographic markets.
84. B) developing a very small marketing mix that will effectively meet the needs of only a small segment of the market.
85. C) marketing efforts that are tightly controlled by high-level executives in the organisation.
86. D) segmenting the market to meet the needs of individuals with the same motives and personality attributes.
87. 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                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

83. Retail site-location analyses, unique product offerings and special advertising campaigns are all examples of the use of:
84. A) market density.
85. B) demographic segmentation.
86. C) behaviouristic segmentation.
87. D) environmental segmentation.
88. E)

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

84. When research indicated that Bluetooth’s products were not reaching the correct target market, marketers of Bluetooth decided to change from demographic segmentation to psychographic segmentation. Which group of new segmentation variables will Bluetooth now be using?
85. A) Geographic location of customers
86. B) Age, sex and socioeconomic characteristics
87. C) Social class variables
88. D) Personality characteristics, motives and lifestyles
89. E) Family life cycle, social class and religion

Ans: D                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

85. Which of the following is the biggest drawback to using psychographic variables?
86. A) They are not strongly reflective of consumer behaviour.
87. B) They are difficult to measure.
88. C) They give poor information about consumer needs.
89. D) They do not reflect socioeconomic characteristics of consumers.
90. E) The resulting segments are difficult to reach

Ans: B                         AACSB Outcomes: Analytical; Communication

DF: D                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: CH

 

86. The three most commonly used psychographic segmentation variables are:
87. A) personality, perception and learning.
88. B) personality, perception and behaviour.
89. C) motives, attitudes and lifestyles.
90. D) attitudes, personality and perception.
91. E) personality, motives and lifestyles.

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

87. Earth Choice is a company that produces products that reduce their impact on the environment. Its product line includes laundry liquid that is safe to use in greywater systems. The company is now considering expanding its range to include toilet paper, paper towels and tissue paper made from recycled materials. Their research shows that they should use psychographic segmentation in their marketing strategy. Which group of segmentation variables should they be using?
88. A) Geographic location
89. B) Age, sex and socioeconomic characteristics
90. C) Social class variables
91. D) Personality characteristics, motives and lifestyles
92. E) Family life cycle, social class and religion

Ans: D                         AACSB Outcomes: Reflective thinking

DF: D                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

88. When using personality characteristics as a market segmentation variable, marketers generally:
89. A) conduct personality assessments of their potential target market to determine which personality characteristics they possess.
90. B) use research developed by clinical psychologists to determine which personality characteristics consumers using their products are most likely to have.
91. C) use generic characteristics that all members of the population have.
92. D) use a positively viewed characteristic they assume much of their target market has or would like to have.
93. E) conduct a series of focus groups to determine both the positive and negative characteristics that members of their target market are perceived to have.

Ans: D                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

89. If a company segments its market on the basis of people’s reasons for purchasing a particular product, the primary segmentation variable in use is:
90. A)
91. B)
92. C)
93. D) benefit expectations.
94. E) personality attributes.

Ans: B                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

90. The psychographic variable that includes numerous characteristics related to people’s activities, interests and opinions is:
91. A)
92. B) social class.
93. C)
94. D) stage in family life cycle.
95. E)

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

91. Demographic variables, such as income and occupation, how people spend their time and the importance of things in their surroundings are all factors considered in __________ segmentation.
92. A) psychographic
93. B) social class
94. C) lifestyle
95. D) personality
96. E) family life cycle

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

 

93. Which of the following is an example of a behaviouristic segmentation variable?
94. A) Family size
95. B) Climate
96. C) Age
97. D) Usage rate
98. E) Personality characteristics

Ans: D                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

94. XXXX beer may choose to segment its market based on heavy, moderate and light drinkers of its beverages. This is an example of market segmentation based on:
95. A) behaviouristic variables.
96. B)
97. C)
98. D) psychographic variables.
99. E) demographic variables.

Ans: A                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

95. Uniqlo has recently arrived in Australia. It closely competes with designer brands in its athletic wear, but at half the price. Uniqlo plan to use price sensitivity, brand loyalty and end use as variables to segment its market. These are all __________ variables for market segmentation.
96. A) psychographic
97. B) usage
98. C) demographic
99. D) lifecycle
100. E) behaviouristic

Ans: E                         AACSB Outcomes: Reflective thinking

DF: D                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

96. Slim Secrets segments its snack bars based on those who have morning cravings, those who crave something extra in the afternoon slump time and those looking for a healthier snack at any time of the day. This is an example of market segmentation based on variables of:
97. A)
98. B)
99. C)
100. D)
101. E) personality characteristics.

Ans: D                         AACSB Outcomes: Analytical; Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

97. End use, price sensitivity and brand loyalty are all __________ variables that can be used in market segmentation.
98. A) psychographic
99. B) usage
100. C) demographic
101. D) geodemographic
102. E) behaviouristic

Ans: E                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

98. The division of a market based on what benefits consumers want from the product is called __________ segmentation.
99. A) behaviouristic
100. B) product usage
101. C) benefit
102. D) end-purpose
103. E) advantage

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

99. Variables such as geographic location, type of organisation, customer size and type of product usage are used to segment __________ markets.
100. A) consumer
101. B) business
102. C) government
103. D) international
104. E) most target

Ans: B                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

100. Which of the following variables would most likely be used to segment a business market?
101. A) An attitude of the company’s CEO
102. B) The geographic location of the company
103. C) The lifestyle of the company’s buying agent
104. D) Net income generated by the company
105. E) Common opinions of the company’s employees

Ans: B                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

101. By marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International Paper segments its market based on:
102. A) customer size.
103. B)
104. C)
105. D) use of product.
106. E) geographic location

Ans: D                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

102. BlueScope Steel provides steel for a variety of uses to its various customers in Australia and around the world. Customers have different needs for the steel, and thus BlueScope 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:
103. A) geographic location.
104. B) customer size.
105. C) product use.
106. D) customer importance.
107. E) organisation classification.

Ans: C                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

 

103. After an organisation has determined which of the many segmentation variables it will use, the next step in the target-market selection process is:
104. A) evaluating each of the relevant market segments.
105. B) selecting the specific target markets.
106. C) reviewing the appropriate marketing strategy.
107. D) analysing the interaction between segmentation variables.
108. E) developing market segment profiles.

Ans: E         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

104. __________ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments.
105. A) Market segmentation variables
106. B) Market segment profiles
107. C) Segmentation grids
108. D) Market differentiation indexes
109. E) Market concentrations

Ans: B                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

105. Val and Norman are looking at information about how their organisation’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:
106. A) the sales force survey results.
107. B) the results of sales forecasting.
108. C) a market trend analysis.
109. D) a market segmentation discrimination analysis.
110. E) a market segment profile.

Ans: E                         AACSB Outcomes: Analytical; Communication

DF: D                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: AP

 

106. __________ the total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within a specified period at a given level of industry-wide marketing activity.
107. A) Competitor sales potential is
108. B) Sales objective is
109. C) Company sales potential is
110. D) Market potential is

Ans: D                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

107. Philips calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers, given their anticipated marketing efforts, will be one billion. This figure represents the industry’s:
108. A) sales potential.
109. B) market potential.
110. C) target growth rate.
111. D) sales forecast.
112. E) sales objective.

Ans: B                         AACSB Outcomes: Analytical

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

 

108. If Baskin-Robbins calculates that it could sell up to 25 per cent of all ice-cream cones sold in the Australia, this percentage would represent the ice cream marketer’s:
109. A) target growth rate.
110. B) sales forecast.
111. C) sales objective.
112. D) company sales potential.
113. E) market potential.

Ans: D                         AACSB Outcomes: Analytical

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

 

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

Ans: E                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

110. 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.
111. A) breakdown
112. B) recessionary
113. C) buildup
114. D) pyramid
115. E) dimensional

Ans: A                         AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

 

111. Alex Wren of Owens Corning talks to Terry Jones, a home builder, to find out how much fibreglass insulation he intends to use in building homes during the next year. Alex then multiplies that number by the total number of builders in the territory. He is using a __________ approach to measure sales potential.
112. A) multivariable
113. B) use of product
114. C) breakdown
115. D) regression
116. E) buildup

Ans: E                         AACSB Outcomes: Analytical

DF: E                          LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

 

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

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

113. When market segments are being evaluated, assessment of competitors is important because:
114. A) it is difficult to segment a market when it has multiple competitors.
115. B) an absence of competitors usually creates difficulties in accurately measuring segment sales potential.
116. 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.
117. D) a competitive analysis may lead to confusion as to who the key competitors are.
118. E) competition is generally not a major problem as long as a marketer is aware of it.

Ans: C                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

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

Ans: D                         AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

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

Ans: D                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

116. Smith’s is currently conducting market segmentation studies. For several segments, it has completed competitive assessments and cost estimates. The next major step it must take is to:
117. A) determine which segmentation variables to use.
118. B) develop market segment profiles.
119. C) identify the appropriate targeting strategy.
120. D) select specific target markets.
121. E) develop sales forecasts.

Ans: D                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: AP

 

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

Ans: B                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

118. When a marketer is engaged in the target-market selection process and has assessed relevant market segments by considering such factors as sales estimates, competition and estimated costs, the marketer is ready for the next step, which is to:
119. A) identify the appropriate targeting strategy.
120. B) determine which segmentation variables to use.
121. C) develop market segment profiles.
122. D) evaluate relevant market segments.
123. E) select specific target markets.

Ans: E                         AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

Narrbegin: Lil’ Angels Kids Spa

Use the following hypothetical to answer questions 119–23:

 

Lil’ Angels Kids Spa offers various treatments designed to appeal to the young customer. Treatment options include manicures, pedicures, facials, tea parties and dress-up photos. Parents can even purchase a birthday party package. Lil’ Angels offers its services only to girls under the age of 14. Originally started in Melbourne, Lil’ Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14–17. The company realises 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.

Narrend

 

119. Lil’ Angels Kids Spa is currently using a(n)__________ targeting strategy.
120. A) undifferentiated
121. B) exclusive
122. C) concentrated
123. D) differentiated
124. E) selective

Ans: C                         AACSB Outcomes: Analytical

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

NAR: Lil’ Angels Kids Spa

 

120. Which best describes Lil’ Angels’ current approach to the market?
121. A) It is segmenting the market according to demographic variables.
122. B) It is segmenting the market according to product-related variables.
123. C) It has chosen a segment that is not identifiable and divisible.
124. D) Its market is impossible to reach because of legal constraints.
125. E) It is not segmenting the market but is attempting to reach everyone with the product.

Ans: A                         AACSB Outcomes: Analytical; Strategy

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

NAR: Lil’ Angels Kids Spa

 

121. Which of the following bases is Lil’ Angels using to segment its market?
122. A) Behaviouristic
123. B) Frequency of use
124. C) Age
125. D) Income
126. E) Family life cycle

Ans: C                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

NAR: Lil’ Angels Kids Spa

 

122. What method should Lil’ Angels use to forecast sales in new regions?
123. A) Sales force survey
124. B) Time series analysis
125. C) Correlation method
126. D) Market test
127. E) Regression analysis

Ans: D                         AACSB Outcomes: Analytical; Marketing plan

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

NAR: Lil’ Angels Kids Spa

 

123. Which variable should the marketers at Lil’ Angels use in relation to sales, and what type of forecast method should they use to relate the variables to sales trends?
124. A) Behaviouristic; time series analysis
125. B) Psychographic; time series analysis
126. C) Demographic; regression analysis
127. D) Income; regression analysis
128. E) Family life cycle; market tests

Ans: C                         AACSB Outcomes: Analytical; Reflective thinking

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

NAR: Lil’ Angels Kids Spa

 

Narrbegin: GE Transportation

Use the following to answer questions 124–8:

 

GE Transportation produces train engines for sale in countries around the world. After looking at the total market for train engines, the company found that different rail lines wanted different engines. Major rail lines in the USA and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a cleaner, greener train engine. Rail lines operated by several Eastern European countries wanted train 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 short distances.

Narrend

 

124. Which of the following targeting strategies is GE Transportation most likely using?
125. A) Undifferentiated
126. B) Differentiated
127. C) Concentrated
128. D) Selective
129. E) Market diffusion

Ans: B                         AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: AP

NAR: GE Transportation

 

125. What segmentation variable is GE Transportation using to select a target market?
126. A) Demographic
127. B) Benefit expectations
128. C) Income
129. D) Volume usage
130. E) Psychographic

Ans: B                         AACSB Outcomes: Analytical; Strategy

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

NAR: GE Transportation

 

126. Suppose that GE Transportation decided to produce only train engines for rail lines in the USA. The segmentation variable then would be:
127. A) geographic location.
128. B) type of organisation.
129. C) market density.
130. D) product use.
131. E) customer size.

Ans: A                         AACSB Outcomes: Analytical; Strategy

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: AP

NAR: GE Transportation

 

127. Researchers at GE Transportation estimate that 1000 rail lines throughout the world will purchase some kind of train engine next year. That number represents the:
128. A) company sales potential.
129. B) breakdown approach.
130. C) market potential.
131. D) buildup approach.
132. E) company sales forecast.

Ans: C                         AACSB Outcomes: Analytical; Strategy

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

NAR: GE Transportation

 

128. If a GE Transportation researcher analyses monthly sales data for a four-year time frame and looks for periodic fluctuations, the researcher is doing a __________analysis.
129. A) trend
130. B) seasonal
131. C) cycle
132. D) random factor
133. E) regression

Ans: C                         AACSB Outcomes: Reflective thinking

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: AP

NAR: GE Transportation

 

TRUE OR FALSE

 

129. T F        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: True                   AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

130. T F        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: True                   AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

131. T F        Marketers select and evaluate relevant market segments by understanding the market needs.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

133. T F        A consumer market consists of buyers intending to use the product with the main purpose of making a profit.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

134. T F        A person with the ability, willingness and authority to buy products and who intends to consume them is a part of a consumer market.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

135. T F        The owner of a trucking business who buys petrol from the nearby service station for the company trucks is a part of a business market.

Ans: True                   AACSB Outcomes: Analytical; Communication

DF: E                          LO: 1                     Topic Heading: What is a market?

Type: KN

 

136. T F        The four categories of consumer markets are producer, reseller, government and institutional.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 1                     Topic Heading: What is a market?

Type: KN

 

137. T F        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: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Target-market selection process

Type: KN

 

138. T F        A company sometimes defines a total market as its target market.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

143. T F        The concentrated targeting strategy is one in which an organisation directs its marketing efforts towards a single market segment through one marketing mix.

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

145. T F        A differentiated targeting strategy is used when an organisation targets two or more markets by developing a single marketing mix.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 1: Identify the appropriate targeting strategy

Type: KN

 

146. T F        Only one variable can be used to segment a market.

Ans: False                  AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

147. T F        Segmentation variables are characteristics of individuals, groups or organisations in a total market.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

149. T F        Demographic characteristics are commonly used to segment a market because they are closely related to consumers’ product needs and purchasing behaviour.

Ans: True                   AACSB Outcomes: Analytical; Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

153. T F        Motives can be used to segment markets.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

154. T F        Lifestyle is a product-related variable.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

155. T F        Lifestyle analysis focuses on people’s activities, interests and opinions.

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 2: Determine which segmentation variables to use

Type: KN

 

158. T F        A market segment profile deals primarily with demographic characteristics.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

162. T F        Market segment profiles help determine the most desirable segment or segments in relation to a firm’s strengths, weaknesses, objectives and resources.

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

163. T F        The information yielded by market segment profiles is usually not very useful late in the marketing process.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 3: Develop market segment profiles

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

165. T F        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: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

166. T F        Market potential is the amount of a product that an organisation could sell during a specified period.

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

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

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: D                         LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

169. T F        When relevant market segments are evaluated, cost estimates are important in determining if an organisation entering a particular segment can operate at costs equal to or below those of competitors.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

170. T F        The sum of firms’ marketing efforts equals industry marketing efforts.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 4: Evaluate relevant market segments

Type: KN

 

171. T F        When a firm’s management is making the final selection of specific target markets to enter, it should consider whether the organisation has the financial resources, managerial skills, expertise and facilities needed to effectively compete in the selected segments.

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

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

Ans: False                  AACSB Outcomes: Communication

DF: M                         LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

173. T F        After segmentation analysis, marketers in an organisation sometimes decide not to enter any segments.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 3                     Topic Heading: Step 5: Select specific target markets

Type: KN

 

174. T F        A product’s position is a result of customers perceptions of the product attributes relative to those competing brands.

Ans: True                   AACSB Outcomes: Communication

DF: E                          LO: 4                     Topic Heading: Bases for positioning

Type: KN

 

175. T F        A product can only be positioned on price, quality or brand reputation.

Ans: False                  AACSB Outcomes: Communication

DF: E                          LO: 4                     Topic Heading: Bases for positioning

Type: KN

 

176. T F        When a new product is introduced into a product line, one or more existing brands may need to be repositioned to minimise cannibalisation of existing brands.

Ans: True                   AACSB Outcomes: Communication

DF: M                         LO: 4                     Topic Heading: Bases for positioning

Type: KN