Marketing Strategy Text and Cases 6th Edition by O. C. Ferrell -Test Bank

Marketing Strategy Text and Cases 6th Edition by O. C. Ferrell -Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

Chapter 5 Customers, Segmentation, and Target Marketing

 

MULTIPLE CHOICE

 

1. The consumer buying process begins when:

a.	marketing research discovers a new, untapped market segment.
b.	consumers recognize that they have unsatisfied needs.
c.	merchants offer goods and services for sale.
d.	a manufacturer develops a new product.
e.	consumers begin to seek information about an upcoming purchase.

 

 

ANS:  B                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Knowledge

 

2. From the viewpoint of the consumer buying process, what is the difference between a need and a want?

a.	Needs are absolute necessities, whereas wants are discretionary.
b.	Needs are related to specific products, whereas wants occur only when the consumer has the ability to purchase the product.
c.	Needs are based on discrepancies between actual and desired satisfaction, whereas wants occur relative to specific products that can fulfill a need.
d.	Needs focus on specific elements of a product’s quality, whereas wants are related to the “extras” that add value to the product.
e.	Needs and wants are essentially the same, except that consumers will pay more for products they need.

 

 

ANS:  C                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Comprehension

 

3. With respect to the consumer buying process, __________ is perhaps the most important factor that affects the time, effort, and expense dedicated to the search for information.

a.	the degree of risk	d.	the degree of competition
b.	the consumer’s expertise	e.	the extent of product differentiation
c.	the consumer’s brand loyalty

 

 

ANS:  A                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Knowledge

 

4. If a researcher were to ask consumers to quickly name the top 3 brands of computers they might consider purchasing, the most common brands in the __________ would most likely be Dell, Apple, and HP.

a.	brand set	d.	target group
b.	purchase set	e.	shopping list
c.	evoked set

 

 

ANS:  C                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Application

 

5. After enrolling in the MBA program at Minor State University, Sheri began having second thoughts. Although MSU seemed to be a good choice based on location, reputation, and price, Sheri was not convinced she had made the right choice. Sheri is suffering from:

a.	too many opportunity costs.	d.	cognitive dissonance.
b.	dissatisfaction.	e.	poor product quality.
c.	choice insufficiency.

 

 

ANS:  D                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Application

 

6. __________ is/are the primary reason why the consumer buying process varies across customers, products, and situations.

a.	Individual influences	d.	Social influences
b.	Situational influences	e.	The complexity of the purchase
c.	The cost of the product

 

 

ANS:  E                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Comprehension

 

7. Each of the following statements describes a unique characteristic of the business buying process EXCEPT:

a.	Business buyers have an easier time identifying their needs as compared to consumers.
b.	Business buyers must be keenly aware of both hard and soft costs.
c.	Groups of people, rather than individuals, often make purchase decisions.
d.	Business buyers are less likely to be dependent upon each other.
e.	Business buying is sometimes based on reciprocity where each firm buys products from the other.

 

 

ANS:  D                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Business Markets

KEY:  Bloom’s: Analysis

 

8. The basic assumption of __________ is that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program.

a.	holistic marketing	d.	focused marketing
b.	mass marketing	e.	single segment marketing
c.	market concentration

 

 

ANS:  B                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Comprehension

 

9. The main advantage of __________ is specialization, as it allows the firm to focus its resources toward understanding and serving a single segment.

a.	focused marketing	d.	multisegment marketing
b.	unidimensional marketing	e.	market concentration
c.	mass marketing

 

 

ANS:  E                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Comprehension

 

10. Firms that sell luxury products, custom-made products, and services often take the time to significantly modify their products in an effort to precisely match the needs of individual customers. These firms are pursuing what type of approach to market segmentation?

a.	individualized marketing	d.	focused marketing
b.	niche marketing	e.	one-to-one marketing
c.	pinpointed marketing

 

 

ANS:  E                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Comprehension

 

11. Advances in supply chain management now allow companies to customize products to meet the needs of individual customers on a mass scale. This individualized approach to market segmentation is called:

a.	individualization.	d.	customized marketing.
b.	one-to-one marketing.	e.	permission marketing.
c.	mass customization.

 

 

ANS:  C                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Knowledge

 

12. Which of the following IS NOT an example of mass customization?

a.	A college creates a custom degree program to match your unique needs.
b.	A customer orders a custom teddy bear from Build-A-BearWorkshop.com.
c.	Dell offers fully customized computers based on your needed configuration.
d.	A bank employee logs into the e-procurement system to browse a fully customized catalog of office supplies.
e.	You order a customized vase of flowers from 1-800-Flowers.com.

 

 

ANS:  A                    DIF:    Difficulty: Challenging                    NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Analysis

 

13. Although a market segment can meet all criteria for viability, a firm may choose to not pursue the segment. Which of the following is a reason why this might occur?

a.	A competitor has already targeted the segment.
b.	Targeting the segment could lead to antitrust concerns.
c.	The segment has no synergy with the firm’s mission.
d.	The segment is difficult to reach via communication and/or distribution.
e.	The segment’s members are not easily identifiable.

 

 

ANS:  C                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Analysis

 

14. __________ segmentation is the most powerful form of segmentation in consumer markets because it uses actual product usage to make distinctions among market segments.

a.	Demographic	d.	Lifestyle
b.	Behavioral	e.	Geographic
c.	Psychographic

 

 

ANS:  B                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Identifying Market Segments

KEY:  Bloom’s: Comprehension

 

15. What is the key to using behavioral segmentation successfully in consumer markets?

a.	The firm must clearly link behavioral characteristics with risk profiles.
b.	The firm must clearly link behavioral characteristics to demographic characteristics.
c.	The firm must determine whether consumers see their behaviors as being distinct from other behavioral segments.
d.	The firm must clearly link behavioral information with geography.
e.	The firm must clearly understand the basic needs and benefits sought by different consumer groups.

 

 

ANS:  E                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Identifying Market Segments

KEY:  Bloom’s: Analysis

 

16. What type of segmentation divides consumer markets into segments using individual factors such as gender, age, income, and education?

a.	psychographic segmentation	d.	behavioral segmentation
b.	demographic segmentation	e.	lifestyle segmentation
c.	benefit segmentation

 

 

ANS:  B                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Identifying Market Segments

KEY:  Bloom’s: Knowledge

 

17. One of the most successful and well-known tools of __________ segmentation is VALS^™ developed by Strategic Business Insights.

a.	psychographic	d.	geoclustering
b.	geographic	e.	emotional
c.	demographic

 

 

ANS:  A                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Identifying Market Segments

KEY:  Bloom’s: Knowledge

 

18. Which of the following IS NOT a typical basis used to segment business markets?

a.	type of organization	d.	organizational culture
b.	organizational characteristics	e.	relationship intensity
c.	benefits sought

 

 

ANS:  D                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Identifying Market Segments

KEY:  Bloom’s: Comprehension

 

19. Firms engage in __________ when their intimate knowledge and expertise in one market allows them to offer customized marketing programs that not only deliver needed products but also provide needed solutions to customers’ problems.

a.	single segment targeting	d.	product specialization
b.	market specialization	e.	mass market targeting
c.	selective targeting

 

 

ANS:  B                    DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Target Marketing Strategies

KEY:  Bloom’s: Comprehension

 

20. Only the largest firms can execute __________, which involves the development of multiple marketing programs to serve all customer segments simultaneously.

a.	single segment targeting	d.	product specialization
b.	market specialization	e.	mass market targeting
c.	selective targeting

 

 

ANS:  E                    DIF:    Difficulty: Easy                               NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Target Marketing Strategies

KEY:  Bloom’s: Comprehension

 

ESSAY

 

1. Identify and explain the five stages of the consumer buying process. Give examples of marketing activities designed to influence each stage.

 

ANS:

1. Need Recognition—The buying process begins when consumers recognize that they have an unmet need. This occurs when consumers realize that there is a discrepancy between their existing situation and their desired situation. Consumers can recognize needs in a variety of settings and situations. Some needs have their basis in internal stimuli such as hunger, thirst, and fatigue. Other needs have their basis in external stimuli such as advertising, window shopping, interacting with salespeople, or talking with friends and family.
2. Information Search—When done correctly, marketing stimuli can prompt consumers to become interested in a product, leading to a desire to seek out additional information. This desire can be passive or active. In a passive information search, the consumer becomes more attentive and receptive to information, such as noticing and paying attention to automobile advertisements if the customer has a want for a specific car brand. A consumer engages in active information search when he or she purposely seeks additional information, such as surfing the Internet, asking friends, or visiting dealer showrooms. The amount of time, effort, and expense dedicated to the search for information depends on a number of issues. The most important is the degree of risk involved in the purchase.
3. Evaluation of Alternatives—In evaluating the alternative product or brand choices among the members of the evoked set, the consumer essentially translates his or her need into a want for a specific product or brand. Consumers evaluate products as bundles of attributes that have varying abilities to satisfy their needs. The most important consideration for marketers during the evaluation stage is that the marketer’s products must be in the evoked set of potential alternatives. For this reason, marketers must constantly remind consumers of their company and its product offerings.
4. Purchase Decision—After the consumer has evaluated each alternative in the evoked set, he or she forms an intention to purchase a particular product or brand. However, a purchase intention and the actual act of buying are distinct concepts. The customer may postpone the purchase due to unforeseen circumstances. Marketers can often reduce or eliminate these problems by reducing the risk of purchase through warranties or guarantees, making the purchase stage as easy as possible, or by finding creative solutions to unexpected problems. The key issues for marketers during the purchase stage are product availability and possession utility.
5. Postpurchase Evaluation—In the context of attracting and retaining buyers, postpurchase evaluation is the connection between the buying process and the development of long-term customer relationships. In the postpurchase stage, buyers will experience one of these four outcomes:

 

Ÿ    Delight—The product’s performance greatly exceeds the buyer’s expectations.

Ÿ    Satisfaction—The product’s performance matches the buyer’s expectations.

Ÿ    Dissatisfaction—The product’s performance falls short of the buyer’s expectations.

Ÿ    Cognitive Dissonance (Postpurchase Doubt)—The buyer is unsure of the product’s performance relative to his or her expectations.

 

Consumers are more likely to experience dissatisfaction or cognitive dissonance when the dollar value of the purchase increases, the opportunity costs of rejected alternatives are high, or the purchase decision is emotionally involving. Firms can manage these responses by offering liberal return policies, providing extensive postpurchase support, or reinforcing the wisdom of the consumer’s purchase decision.

 

DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Synthesis

 

2. Although the stages of the consumer buying process are typically discussed in a linear fashion, consumers do not always follow the stages in sequence. Explain why this often occurs.

 

ANS:

The consumer buying process involves five stages of activities that consumers may go through in buying goods and services. The process begins with the recognition of a need and then passes through the stages of information search, evaluation of alternatives, purchase decision, and postpurchase evaluation. The buying process depicts the possible range of activities that may occur in making purchase decisions. Consumers, however, do not always follow these stages in sequence and may even skip stages en route to making a purchase. Likewise, consumers who are loyal to a product or brand will skip some stages and are most likely to simply purchase the same product they bought last time. Consequently, marketers have a difficult time promoting brand switching because they must convince these customers to break tradition and take a look at what their products have to offer.

 

The buying process often involves a parallel sequence of activities associated with finding the most suitable merchant of the product in question. That is, while consumers consider which product to buy, they also consider where they might buy it. In the case of name brand products, this selection process may focus on the product’s price and availability at different stores or online merchants. Conversely, in the case of private-label merchandise, the choice of product and merchant are made simultaneously. The choice of a suitable merchant may actually take precedence over the choice of a specific product. In some cases, customers are so loyal to a particular merchant that they will not consider looking elsewhere.

 

Consumers may spend relatively more or less time in certain stages, they may follow the stages in or out of sequence, or they may even skip stages entirely. This variation in the buying process occurs because consumers are different, the products that they buy are different, and the situations in which consumers make purchase decisions are different. A number of factors affect the consumer buying process, including the complexity of the purchase and decision, individual influences, social influences, and situational influences.

 

The complexity of the purchase and decision-making process is the primary reason why the buying process will vary across consumers and with the same consumer in different situations. For example, highly complex decisions, like buying a first home, a first car, selecting the right college, or choosing elective surgery, are very involving for most consumers. These purchases are often characterized by high personal, social, or financial risk; strong emotional involvement; and the lack of experience with the product or purchase situation. In these instances, consumers will spend a great deal of time, effort, and even money to help ensure that they make the right decision. In contrast, purchase tasks that are low in complexity are relatively noninvolving for most consumers. In some cases, these purchase tasks can become routine in nature. For example, many consumers buy groceries by selecting familiar items from the shelf and placing them in their carts without considering alternative products.

 

DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Consumer Markets

KEY:  Bloom’s: Synthesis

 

3. Describe how the business buying process differs from the consumer buying process. Include an explanation of the unique characteristics of business markets.

 

ANS:

Business markets differ from consumer markets in important ways. One of the most important differences involves the consumption of the purchased products. Consumers buy products for their personal use or consumption. In contrast, organizational buyers purchase products for use in their operations. These uses can be direct, as in acquiring raw materials to produce finished goods; or indirect, as in buying office supplies or leasing cars for salespeople. There are four types of business markets: commercial markets, reseller markets, government markets, and institutional markets. These markets differ from consumer markets in at least four major ways.

 

• The Buying Center—The first key difference relates to the role of the buying center—the group of people responsible for making purchase decisions. In consumer markets, the buying center is fairly straightforward: The adult head-of-household tends to make most major purchase decisions for the family, with input and assistance from children and other family members as applicable. In an organization, however, the buying center tends to be much more complex and difficult to identify, in part because it may include three distinct groups of people—economic buyers, technical buyers, and users—each of which may have its own agenda and unique needs that affect the buying decision.
• Hard and Soft Costs—The second difference between business and consumer markets involves the significance of hard and soft costs. Consumers and organizations both consider hard costs, which include monetary price and associated purchase costs such as shipping and installation. Organizations, however, must also consider soft costs, such as downtime, opportunity costs, and human resource costs associated with the compatibility of systems, in the buying decision.
• Reciprocity—The third key difference involves the existence of reciprocal buying relationships. With consumer purchases, the opportunity for buying and selling is usually a one-way street: The marketer sells and the consumer buys. Business marketing, however, is more often a two-way street, with each firm marketing products that the other firm buys.
• Mutual Dependence—Finally, in business markets, the buyer and seller are more likely to be dependent on one another. For consumer–marketer relationships, this level of dependence tends to be low. If a store is out of a product or a firm goes out of business, customers simply switch to another source to meet their needs. Likewise, the loss of a particular customer through brand switching, relocation, or death is unfortunate for a company but not in itself particularly damaging. The only real exception to this norm is when consumers are loyal to a brand or merchant. This is not the case in business markets where sole-source or limited-source buying may leave an organization’s operations severely distressed when a supplier shuts down or cannot deliver. The same is true for the loss of a customer. The selling firm has invested significantly in the client relationship, often modifying products and altering information or other systems central to the organization.

 

DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Buyer Behavior in Business Markets

KEY:  Bloom’s: Evaluation

 

4. Identify and discuss the various traditional market segmentation strategies. Include in your answer a discussion of the relative advantages and disadvantages of each strategy.

 

ANS:

Many segmentation approaches are traditional in the sense that firms have used them successfully for decades. Many of today’s most successful firms use these tried-and-true approaches. Some organizations actually use more than one type of segmentation, depending on the brand, product, or market in question.

 

• Mass Marketing—Mass marketing involves no segmentation whatsoever. Companies aim mass-marketing campaigns at the total (whole) market for a particular product. Companies that adopt mass marketing take an undifferentiated approach that assumes that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program. Mass marketing works best when the needs of an entire market are relatively homogeneous. Mass marketing is also advantageous in terms of production efficiency and lower marketing costs. However, the strategy is inherently risky. By offering a standard product to all customers, the organization becomes vulnerable to competitors that offer specialized products that better match customers’ needs. In industries where barriers to entry are low, mass marketing runs the risk of being seen as too generic. This situation is very inviting for competitors who use more targeted approaches. Mass marketing is also very risky in global markets where even global brands like Coca-Cola must be adapted to match local tastes and customs.
• Differentiated Marketing—Most firms use some form of market segmentation by (1) dividing the total market into groups of customers having relatively common or homogeneous needs and (2) attempting to develop a marketing program that appeals to one or more of these groups. Within the differentiated approach, there are two options: the multisegment approach and the market concentration approach. Firms using the multisegment approach seek to attract buyers in more than one market segment by offering a variety of products that appeal to different needs. Firms using this option can increase their share of the market by responding to the heterogeneous needs of different segments. The multisegment approach is the most widely used segmentation strategy in medium- to large-sized firms. It is extremely common in packaged goods and grocery products. Firms using the market concentration approach focus on a single market segment. These firms often find it most efficient to seek a maximum share in one segment of the market. The main advantage of market concentration is specialization because it allows the firm to focus all its resources toward understanding and serving a single segment. Specialization is also the major disadvantage of this approach. By “putting all of its eggs in one basket,” the firm can be vulnerable to changes in its market segment, such as economic downturns and demographic shifts.
• Niche Marketing—Some companies narrow the market concentration approach even more and focus their marketing efforts on one small, well-defined market segment, or niche, that has a unique, specific set of needs. Customers in niche markets will typically pay higher prices for products that match their specialized needs. The key to successful niche marketing is to understand and meet the needs of target customers so completely that, despite the small size of the niche, the firm’s substantial share makes the segment highly profitable. An attractive market niche is one that has growth and profit potential but is not so appealing that it attracts competitors.

 

DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Market Segmentation

KEY:  Bloom’s: Evaluation

 

5. Explain the five different target marketing strategies and give examples of firms that use each one. Also, discuss how firms might approach the targeting of noncustomers.

 

ANS:

Once the firm has completed segmenting a market, it must then evaluate each segment to determine its attractiveness and whether it offers opportunities that match the firm’s capabilities and resources. Just because a market segment meets all criteria for viability does not mean the firm should pursue it. Attractive segments might be dropped for several reasons including a lack of resources, no synergy with the firm’s mission, overwhelming competition in the segment, an impending technology shift, or ethical and legal concerns over targeting a particular segment. Based on its analysis of each segment, the firm’s current and anticipated situation, and a comprehensive SWOT analysis, a firm might consider five basic strategies for target market selection.

 

Ÿ    Single Segment Targeting—Firms use single segment targeting when their capabilities are intrinsically tied to the needs of a specific market segment. Many consider the firms using this targeting strategy to be true specialists in a particular product category. Good examples include New Belgium Brewing (craft beer), Porsche, and Ray-Ban. These and other firms using single segment targeting are successful because they fully understand their customers’ needs, preferences, and lifestyles. These firms also constantly strive to improve quality and customer satisfaction by continuously refining their products to meet changing customer preferences.

Ÿ    Selective Targeting—Firms that have multiple capabilities in many different product categories use selective targeting successfully. This strategy has several advantages including diversification of the firm’s risk and the ability to “cherry pick” only the most attractive market segment opportunities. Procter & Gamble (P&G) uses selective targeting to offer customers many different products in the family care, household care, and personal care markets. Besides the familiar deodorants, laundry detergents, and hair care products, P&G also sells products in the cosmetics, snack food and beverages, cologne, and prescription drug markets.

Ÿ    Mass Market Targeting—Only the largest firms have the capability to execute mass market targeting, which involves the development of multiple marketing programs to serve all customer segments simultaneously. For example, Coca-Cola offers roughly 400 branded beverages across many segments that fulfill different consumer needs in over 200 countries around the world. Likewise, Frito-Lay sells hundreds of different varieties of snack foods around the world.

Ÿ    Product Specialization—Firms engage in product specialization when their expertise in a product category can be leveraged across many different market segments. These firms can adapt product specifications to match the different needs of individual customer groups. For example, many consider Littmann Stethoscopes, a division of 3M, as the worldwide leader in auscultation technology. Littmann offers high-performance electronic stethoscopes for cardiologists, specially designed stethoscopes for pediatric/infant use, lightweight stethoscopes for simple physical assessment, and a line of stethoscopes for nursing and medical students. The company also offers a line of veterinary stethoscopes.

Ÿ    Market Specialization—Firms engage in market specialization when their intimate knowledge and expertise in one market allows them to offer customized marketing programs that not only deliver needed products but also provide needed solutions to customers’ problems. The Follett Corporation is a prime example. Follett specializes in the education market by serving over 760 schools, colleges, and universities in the United States and Canada. The company’s slogan “Simplifying the delivery of education everywhere” is based on the firm’s goal to be the leading provider of educational solutions, services, and products to schools, libraries, colleges, students, and lifelong learners.

 

In addition to targeting a subset of current customers within the product/market, firms can also take steps to target noncustomers. There are many reasons why noncustomers do not purchase a firm’s products. These reasons can include unique customer needs, better competing alternatives, high switching costs, lack of product awareness, or the existence of long-held assumptions about a product. The key to targeting noncustomers lies in understanding the reasons why they do not buy and then finding ways to remove these obstacles. Removing obstacles to purchase, whether they exist in product design, affordability, distribution convenience, or product awareness, is a major strategic issue in developing an effective marketing program.

 

DIF:    Difficulty: Moderate                        NAT:  BUSPROG: Analytic

STA:   DISC: Customer                              TOP:   A-Head: Target Marketing Strategies

KEY:  Bloom’s: Evaluation