Marketing Exam 2 Chapter 9

A graph displaying consumers’ perceptions of product attributes in two dimensions is referred to as a

perceptual map

A key to positioning a product or brand effectively is discovering the perceptions of its potential customers. In determining its positioning in the minds of customers, companies take four steps: (1) identify the important attributes for the product or brand class; (2) discover how target customers rate competing products or brands with respect to these attributes; (3) ___________; and (4) reposition the company’s product or brand in the minds of potential customers.

discover where the company’s product or brand is on these attributes in the minds of potential customers

One approach to positioning a new product in a market is __________ positioning, which involves competing directly with competitors on similar product attributes in the same target market.

head-to-head

Figure 9-9 above shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. The strategy most likely to exploit marketing synergies and efficiencies would be to target

dormitory consumers

Product differentiation refers to

a marketing strategy that involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products.

A recent study by the Aberdeen Group analyzed which segmentation bases were used by the top 20 percent of 220 organizations surveyed. Which segmentation base did these organizations use most?

geographic

Variables such as location, the North American Industry Classification System (NAICS) code, and type of buy are all examples of ways to

segment an organizational market.

The second step in segmenting and targeting markets that link customer needs to marketing actions is to

group products to be sold into categories.

A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization is referred to as a __________.

market-product grid

Which of the following is a criterion used in forming market segments?

simplicity and cost of assigning potential buyers to segments

The William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. Imagine that the agency decided the singer would not perform at venues located in small town communities that have less than 100,000 people. Thus, venues segmentation is a form of __________ segmentation.

geographic

A perceptual map refers to

a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand.

As an owner of a Wendy’s fast-food restaurant, the information in Figure 9-6 above suggests

new menu items or promotional strategies may succeed in converting the prospects into users.

Criteria for forming segments involve both similarities and differences. Which of the following statements is most accurate?

Within a segment, the needs of potential buyers should be similar; among segments, the needs of buyers should be different.

Segmentation based on where prospective customers live or work is referred to as

geographic segmentation.

Alamo, a car rental firm, targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. Alamo likely segments its market by

usage rate

usage rate refers to

quantity consumed or patronage (store visits) during a specific period.

Which of the following is an example of a "Tiffany/Walmart" strategy?

Gap’s Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores sell a slightly different version for $22.

Samsung sells its target markets many different types of TVs. The larger TVs can be outfitted with surround sound at a higher price than the smaller ones. Samsung is using which type of segmentation variable in this example?

behavioral segmentation

All of the following are criterion used for selecting target market segments EXCEPT:

simplicity and cost of assigning potential buyers to segments.

As an owner of a Wendy’s fast-food restaurant, the information in Figure 9-6 above suggests

a need to devise a marketing program to win customers from McDonald’s and Burger King.

A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. In terms of the criteria used for selecting a target segment, this market would

not be worth doing since its market size is very small.

The ultimate criterion for an organization’s marketing success is that __________ as a result of increased synergies.

customers should be better off

The O3 technology refers to an innovative tennis racquet Prince Sports developed that simultaneously delivers faster racquet speed and a bigger "sweet spot" in the middle of the frame. Prince Sports has implemented a __________ strategy with its O3 innovative tennis racquet technology.

product differentiation

According to the Apple market-product grid above, Apple would most likely get the LEAST market synergies from

college staff

Post Grape-Nuts cereal has been marketed since the early 20th century. Its market share has been steadily declining as consumers began associating it with something their grandfathers ate. Post recently launched a campaign to increase consumption of the cereal by inviting consumers to sprinkle the crunchy cereal on yogurt, salad, or soup as a delicious addition. Post wanted to convince people either who had never tried the cereal or who were familiar with the product to use it in a variety of different ways. In this example, Post is using which segmentation variable?

behavioral

Figure 9-9 above shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. Marketing synergies and efficiencies run __________ because a single kind of marketing action can reach customers that buy different product groupings.

horizontally across the rows

According to Figure 9-5 above, people who currently do not use a firm’s product or service but who might become users in the future are referred to as

prospects

Which marketing strategy does a firm use to sell a single product or service to multiple market segments?

developing separate promotional campaigns for each market

Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is referred to as

market segmentation.

Procter & Gamble (P&G) decided to skip a generation of consumers when it began to market Old Spice deodorant. The target market consists of men aged 18 to 34 years old (Generation Y) who don’t remember the Old Spice brand sold to their grandfathers (pre baby boomer) many years ago. P&G is using which type of segmentation variable?

demographic

The fourth step in segmenting and targeting markets that link customer needs to marketing actions is to __________.

select target markets

A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can

increase sales and profitability

The fifth step in segmenting and targeting markets that link customer needs to marketing actions is to __________.

take marketing actions to reach target markets

When a telemarketer calls to sell a consumer life insurance, the last questions asked is what category does the person’s household income fall into (less than $50,000; $50,000 to $99,999; and $100,000 and over). When the telemarketer asks about household income, this indicates the use of which type of consumer segmentation variable?

demographic

Frequency marketing is a market segmentation strategy that focuses on

usage rate

According to the Apple market-product grid above, Apple would most likely get the LEAST product synergies from the

Mac Pro and Mac Mini

Reebok makes shoes with DMX Shear and Foam cushioning. The Premier Control shoe is made for runners whose feet tend to turn out. The Premier Road is made with extra cushioning for pavement runners. This strategy is an example of

market segmentation.

A business firm segments its markets when this strategy increases its sales revenue, profit, and ROI. When expenses are greater than the potential increased sales from segmentation, the firm should

not consider market segmentation at this time.

Which of the following is NOT a reason to segment a market?

All the buyers in the entire market have similar wants and needs.

At a Hallmark store you can find several different product lines of greeting cards, likely including Fresh Ink, Nature’s Sketchbook, Shoebox, Maxine, Mahogany, and Tree of Life cards—all made by Hallmark for sale in its stores and intended to appeal to different target markets. The Mahogany line is designed to appeal to African-Americans. This is an example of __________ segmentation.

demographic

The segmentation strategy used by Prince Sports today is

behavioral

Which of the following is an example of a multiple products and multiple markets strategy?

Betty Crocker carries one line of cake mixes for people with conventional ovens and another line of cake mixes for people with microwave ovens.

Segmentation based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers is referred to as

psychographic segmentation.

Market segmentation involves aggregating prospective buyers into groups that (1) will respond similarly to a marketing action and (2)

have common needs

Lands’ End will custom fit a Marinac jacket and make it with additional features such as thumb loops, underarm ventilation slits, and a key clip when you order from LandsEnd.com. This is an example of

mass customization

Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which is to offer

different variations of the same basic offering to high-end and low-end segments.

Which of the following statements about market segmentation for organizational markets is most accurate?

Both consumer markets and organizational markets use demographic, geographic, and behavioral bases to segment markets.

When developing a new breakfast menu, Wendy’s had to consider not only the offerings of Burger King and McDonald’s but also the

quick-serve breakfast items from gas stations and convenience stores.

When Procter & Gamble introduced Crest toothpaste, the first fluoride toothpaste, it was intended for use by children and was therefore given a child-appealing bubblegum flavor. Sometime later, the same basic formula was given a fresh, minty flavor to appeal to adults. What marketing strategy did P&G use in this example?

product differentiation

Kellogg’s different types of cereals are each targeted at a different type of user. This is an example of multiple products aimed at multiple markets. Manufacturing these different cereals is clearly more expensive than producing one, but seems worthwhile if it serves customers’ needs better, doesn’t reduce quality or increase price, and

adds to the manufacturer’s sales revenues and profits.

Which of the following is a criterion used for selecting a target market?

competitive positioning

The quantity consumed or patronage (store visits) during a specific period is referred to as

usage rate.

Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the tin. This is an example of

mass customization

Market segmentation stresses __________ and relating them to specific marketing actions.

grouping people according to similar needs

To implement a __________ strategy, nikeid.com allows customers to visit its website and design a sneaker to their own personal specifications.

mass customization

Organizational synergy is the increased customer value achieved through

performing organizational functions more efficiently.

Which strategy involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products?

product differentiation

By dividing its tennis racquet market into three categories, which it labels Performance, Recreational, and Junior tennis players, Prince Sports is using a marketing strategy called

market segmentation

Custom Foot runs six retail locations. At first glance, none looks any different from your basic old-fashioned shoe store, but the only boots on hand are display models. There’s no inventory for sale and customers go home empty-handed—at least initially. Customers browse the store, mixing and matching design components such as style, color, and leather type. About 100 display boots provide style guidelines. Once you choose a boot style, you select materials, colors, and textures. Custom Foot guarantees your boots will be ready within three weeks. This is an example of

mass customization

A key question to ask before using the product differentiation and market segmentation strategies is

"Will our new products steal customers or sales from our older ones?"

All of the following are behavioral segmentation variables EXCEPT:

needs

The increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently is referred to as __________.

organizational synergy

The phrase "relatively homogeneous collections of prospective buyers" is most descriptive of

market segments

In Figure 9-1 above, "B" represents which stage of the market segmentation process?

link needs to actions

Frequency marketing is a strategy that focuses on usage rate. In market segmentation studies,

some measure of usage by, or sales obtained from, various segments is central to the analysis.

Which of the following statements demonstrate the formation of a segment based on household size?

GE built a downsized microwave oven to hang under kitchen cabinets.

As an owner of a Wendy’s fast-food restaurant located near a large urban university, you need to analyze your customers and determine which segmentation base and its associated variable(s) you will use to segment your target market. Which segmentation base and associated variable (s) should you use?

behavioral: students and nonstudents

Product repositioning refers to

changing the place an offering occupies in consumers’ minds relative to competitive products.

The perceptual map in Figure 9-11 above shows how various drinks are seen in the minds of adult consumers. Suppose this map describes accurately how adults see the drinks shown. As one of these adults, you are a heavy consumer of mineral water. Moreover, you are very concerned about nutrition and tend not to consume children’s drinks. From this perceptual map, you conclude that mineral water is

a more adult-oriented beverage than sports drinks.

All of the following are geographic segmentation variables EXCEPT:

VALS

Which of the following data are collected from consumers to develop a perceptual map for a particular product?

the important attributes for a product or brand class

According Figure 9-5 above, heavy users are the most important segment to a fast-food restaurant because

the usage index per person is highest for that segment.

It is not recommended that a firm select a target segment that

is incompatible with its company’s goals or objectives.

The purpose of the five key steps in segmenting and targeting markets that link customer needs to marketing actions is to

link market needs of customers to the organization’s marketing program.

Hallmark placed its scrapbook supplies, photo albums, and related supplies into one product group because

it helped buyers relate to the products and make decisions in a more meaningful way.

A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand, is referred to as a

perceptual map

Zappos’ original target market customers consisted of people who wanted all of the following EXCEPT:

to buy sustainable shoes, accessories, and clothing.

A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. Its market is likely segmented by

usage

According to Figure 9-5 above, people who most likely will never use a firm’s product or service are referred to as

nonprospects

Four general categories used to segment consumer markets are geographic segmentation, demographic segmentation, __________, and behavioral segmentation.

psychographic segmentation

Many families today hold potluck meals during holidays or special events. Participants bring casseroles, vegetables, breads, and desserts to share. It is easy to forget to take the bowl that you brought to the dinner home with you. Reynolds responded to this problem by creating PotLux cookware, attractive and inexpensive disposable dishes for transporting food. Reynolds has recognized how to use _________ variables to segment its market.

behavioral

The Walt Disney Company carefully markets two distinct Winnie-the-Poohs—such as the original line-drawn figures on fine china sold at Nordstrom and a cartoon-like Pooh on polyester bed sheets sold at Walmart. This is an example of

a "Tiffany/Walmart" strategy.

A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization.

market segments of potential buyers

A key to effectively positioning a product or brand is discovering its perception in the minds of potential customers. To do this, companies take four steps: (1) __________; (2) discover how target customers rate competing products or brands with respect to these attributes; (3) discover where the company’s product or brand is on these attributes in the minds of potential customers; and (4) reposition the company’s product or brand in the minds of potential customers.

identify the important attributes for the product or brand class

Australia-based Renewable Energy Ltd. sells a $10 million device that converts manure into energy. One of these devices is capable of generating energy equal to $2 million of natural gas per year. The company believes its target market consists of businesses that use a lot of energy like its first customer, a fertilizer manufacturer that was located in a rural area. If the firm decides to expand to the U.S., it most likely will use which of the following strategies to segment its market?

NAICS code and geographic

The best segmentation approach is the one that

maximizes the opportunity for future profit and ROI.

According to Toney Hsieh, CEO of Zappos, the greatest amount of time is spent

finding ways to improve customer-service levels.

An analysis of the pillow market using a market-product grid suggests that the most important segment to target is

side sleepers

When a new product or a new chain steals customers and sales from older existing ones, it is referred to as

cannibalization

Figure 9-9 above shows the market-product grid for a Wendy’s restaurant next to a large urban university campus. The best way to describe how the student market is segmented is

combining the factors of where the student lives and when (s)he is on campus.

Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question

"Would segmentation be worth doing and is it possible?"

Nielsen PRIZM (part of Nielsen Claritas) segmentation classifies every household into one of 66 demographically and __________ distinct neighborhood segments to identify lifestyles and purchase behavior within a defined geographic market area, such as zip code.

behaviorally

In marketing, each __________ consists of people who are relatively similar to each other in terms of their consumption behavior.

market segment

Kellogg’s different cereals are each targeted at a different type of user. This is an example of multiple products aimed at multiple markets. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturer’s sales revenues and profits, doesn’t reduce quality or increase price, and

better serves customers’ needs

A market-product grid relates the market segments to the products offered or potential marketing actions. With respect to pillows, what would be the most effective way to segment the pillow market? One should segment this market by

how the sleeper sleeps: side, back, or stomach.

The purpose of market segmentation is to respond more effectively to the wants of groups of potential buyers in order to

increase sales and profits.

Universal Concerts wants to bring a series of country music concerts to Canada next year. In general, Western Canadians much prefer country music while Eastern Canadians prefer rock. Thus, a country music event in eastern Canada is very likely to have lots of empty seats even though it is more populous than the western part of the country. If it can book only one venue, Universal Concerts should segment its Canadian market according to __________ if it hopes to have a sold out concert.

geographic characteristics

If Wendy’s customers are buying an eating experience, which of the following rationales would make the most sense if you were to group the products Wendy’s sells?

grouping by meal occasion

In the sneaker market, Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes.

head-to-head

Mott’s used an advertising campaign to change the way consumers thought about its applesauce from a dinnertime side dish to a replacement for cooking oil in baking. The advertising message was that using applesauce in baking cuts calories and also makes the resulting baked good healthier. Mott’s used a __________ strategy.

product repositioning

The first step in segmenting and targeting markets that link customer needs to marketing actions is to

group potential buyers into segments.

Product positioning refers to

the place a product offering occupies in consumers’ minds on important attributes.

During its market segmentation process for the Nike Air Jordan XVII, Nike decided to concentrate on affluent teens rather than members of high school basketball teams. This is an example of

selecting target market segments to reach.

When compared to a multiple products, multiple market segments strategy, a one product, multiple market segment strategy

creates greater cost savings in manufacturing costs.

A market-product grid is a framework to relate

the market segments of potential buyers to products offered or potential marketing actions by an organization.

Model E is a new type of car manufacturer that relies on the Internet to build new car designs from prototypes to marketable vehicles much faster than ever before. "Think of Model E as the Dell of the auto industry. We design just a few products that consumers truly want, leveraging best-in-class components and micro-factory approaches for rapid design, launch, and direct delivery," said William Santana Li, president and CEO of Model E. Model E manufactures a car only when there is an order from a customer. Model E relies on

built-to-order

Differentiation positioning requires a product to

seek a less-competitive, smaller market niche in which to locate a brand.

Which of the following statements regarding market segmentation is most accurate?

If a business firm goes to the trouble and expense of segmenting its markets, it expects to increase its sales, profits, and return on investment.

Manufacturing a product only when there is an order from a customer is referred to as

built-to-order

Building open and honest relationships with communication is an example of Zappos’ __________.

ten core values for Zappos’ employees

A marketing manager must be able to put a market segmentation plan into effect. This means being able to recognize the characteristics of potential buyers and __________ without encountering excessive costs.

assigning them to a segment

Best Foods Company is considering expanding beyond the regional market segments now served by its Hellmann’s mayonnaise. One criterion management wants to use to evaluate potential new geographic market segments is whether new equipment must be bought to serve each new segment. This is an example of which criterion used to select target market segments?

cost of reaching the segment

All of the following are market segmentation strategies EXCEPT:

multiple products, one segment

Which of the following statements regarding segmentation bases is most accurate?

The identification of demographic variables is more objective than the identification of psychographic variables, which is more subjective.

A key to positioning a product or brand effectively is discovering the perceptions of its potential customers. In determining its positioning in the minds of customers, companies take four steps: (1) identify the important attributes for the product or brand class; (2)__________; (3) discover where the company’s product or brand is on these attributes in the minds of potential customers; and (4) reposition the company’s product or brand in the minds of potential customers.

discover how target customers rate competing products or brands with respect to these attributes

In the Apple market-product grid shown above for its computer line, the "individuals" consumer segment seems willing to purchase each item in Apple’s product line. This allows Apple to enjoy __________.

marketing synergies

College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late night snack. However, their dorm rooms are often woefully short of space. MicroFridge understands this and markets a combination microwave, refrigerator, and freezer targeted to these students. MicroFridge is using which basis of segmentation?

behavioral segmentation

The 80/20 rule is most closely related to which consumer segmentation variable?

usage rate

ChoiceShirts is an online company that makes made-to-order T-shirts. Its online customers can order their shirts using any downloaded photo inserted into 600 templates or even design a shirt from scratch. This is an example of

mass customization

Segmentation that is based on some objective physical (gender, ethnicity), measurable (age, income), or other classification attribute (occupation) of prospective customers is referred to as

demographic segmentation

When Ann Taylor, a well-known retailer of sophisticated women’s clothing, started losing sales to its own LOFT outlets that feature moderately priced casual clothes, Ann Taylor was dealing with the marketing phenomenon of __________.

cannibalization

The Zappos segmentation strategy is based on

offering the absolute best selection of shoes and the absolute best service.

Which of the following is a basis used to segment U.S. organizational markets?

geographic

Which of the following in NOT a criterion to use in forming market segments?

Buyers throughout the entire market have very similar wants and needs.

All of the following are psychographic segmentation variables EXCEPT:

birth era

The place a product occupies in consumers’ minds on important attributes relative to competitive products is referred to as

product positioning

Criteria for forming segments involve both similarities and differences. The similarities must be ____________ a segment, and the differences must be __________ segments.

within; among

In the early 1980s, Apple, Inc. was often called "Camp Runamok" because

there were no coherent product lines targeted at identifiable market segments.

One advantage of a market-product grid is that it can be used to

determine which target market segments to select and which product groupings to offer.

Between 2 and 3 percent of the population have some degree of allergic reaction, usually mild, to preservatives used in salad bars. Restaurants might consider people with these "allergies" as a separate segment. To implement this segmentation strategy, restaurants would have to have a regular salad bar and a special salad bar for the allergies segment. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments?

potential for increased profit and ROI

Which of the following is a consumer demographic segmentation variable?

gender

Selling a product to a different market segment usually requires a different marketing action that in turn means greater costs. If increased revenues don’t offset extra costs of this action, a marketer should __________.

combine segments

When a firm produces only a single product or service and attempts to sell it to two or more market segments, it avoids __________, which often results in extremely high research, engineering, and manufacturing expenses.

the extra cost of developing and producing additional versions of the product

Behavioral segmentation encompasses

product features and user status

After establishing the market segments and product groupings on a market-product grid, the next step is to

make intelligent "guesstimates" of the market size for each cell using a simple scale from zero to three ("0" = no market; "1" = a small market; "2" = a medium market; and "3" = a large market).

There are five steps involved in segmenting and targeting markets. What should a marketer do after he or she has grouped products to be sold into categories?

develop a market-product grid and estimate size of markets