Marketing Management Topic 8

1) Which of the following statements about market segmentation is true?
A) It involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
B) It is a process of evaluating each segment’s attractiveness and selecting one or more to enter.
C) It is a process of creating an image or identity of the product in the minds of the target market.
D) It is a process of identifying and profiling distinct groups of buyers who differ in their needs and wants.
E) It is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results.

D Page Ref: 213 Objective: 2 Difficulty: Moderate

2) Establishing and communicating the distinctive benefit(s) of the company’s market offering, for each target segment is called ________.
A) market research
B) market positioning
C) marketing effectiveness
D) market segmentation
E) market dominance

B Page Ref: 213 Objective: 2 Difficulty: Easy

3) The process of selecting one or more market segments to enter is called ________.
A) market targeting
B) market dominance
C) market positioning
D) market segmentation
E) market research

A Page Ref: 213 Objective: 2 Difficulty: Easy

4) A ________ consists of a group of customers who share a similar set of needs and wants.
A) vertical marketing system
B) market basket
C) market share
D) market segment
E) market level

D Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Easy

5) Hilton Hotels customizes rooms and lobbies according to location. Northeastern hotels are sleeker and more cosmopolitan. Southwestern hotels are more rustic. This is an example of ________ segmentation.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) cultural

D Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

6) When Nike attempts to get close to its customers at the local level by sponsoring local school teams and providing shoes, equipment, and clothing to many of them, Nike is using which of the following marketing formats?
A) differentiated marketing
B) affiliate marketing
C) guerrilla marketing
D) affinity marketing
E) grassroots marketing

E Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

7) Regardless of the type of segmentation scheme used, the key is adjusting the marketing program to recognize ________.
A) the level of disposable income earned by the target group
B) customer differences
C) the cost-benefit relationship of narrowing the target market
D) customer complaints
E) saturated markets

B Page Ref: 214 Objective: 2 Difficulty: Easy

8) If a marketer decides to segment a market based on neighborhoods, the marketer will have chosen the ________ method of segmentation.
A) demographic
B) psychographic
C) geographic
D) cultural
E) behavioral

C Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Easy

9) If a marketing manager segments the market into culture-oriented, sports-oriented, or outdoor-oriented groups, he or she is segmenting on the basis of ________.
A) loyalty status
B) behavioral occasions
C) user status
D) psychographic lifestyle
E) readiness stage

D Page Ref: 215 Objective: 2 AACSB: Analytic skills Difficulty: Easy

10) Robert is the owner of an automobile manufacturing company. He calls for a board meeting and tells his directors that he wants to build a car that lets the users experience power and exhilaration. He tells them that the car must allow his users to soar from 0-60 mph in about 4 seconds. He also adds in that the price of the car must be affordable enough for anybody making a good salary. In accordance with the given scenario, Robert is trying to segment the market on the basis of ________.
A) occupation
B) family size
C) benefits
D) nationality
E) user status

C Page Ref: 215 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

11) If a marketing researcher uses such names (categories) as Blue Blood Estates, Winner’s Circle, Hometown Retired, or Shotguns and Pickups, when doing segmentation research, the marketing researcher is using ________ clusters.
A) PRIZM
B) behavioral
C) psychographic
D) demographic
E) VALS

A Page Ref: 215 Objective: 2 Difficulty: Easy

12) Pampers divides its market demographically on the basis of ________ into prenatal, new baby, baby, toddler, and preschooler.
A) life stage
B) gender
C) age
D) income
E) social class

C Page Ref: 216 Objective: 2 AACSB: Analytic skills Difficulty: Easy

13) According to PRIZM, the ________ cluster is characterized as being in their late forties and fifties, college-educated, upper-middle-class homeowners that married late, and are still raising children in comfortable suburban subdivisions and pursuing kid-centered lifestyles.
A) cosmopolitans
B) beltway boomers
C) young digerati
D) winner’s circle
E) old milltowns

B Page Ref: 216 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

14) According to PRIZM, the ________ cluster is characterized by educated, midscale, and multiethnic, urbane couples in America’s fast-growing cities. Concentrated in a handful of metros such as Las
Vegas, Miami, and Albuquerque, these households feature older home owners, empty nesters, and college graduates.
A) beltway boomers
B) old milltowns
C) cosmopolitans
D) young digerati
E) winner’s circle

C Page Ref: 216 Objective: 2 Difficulty: Easy

15) According to PRIZM, the ________ cluster is characterized as the nation’s tech-savvy singles and couples, living in areas typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants, and all types of bars-from juice to coffee to microbrew.
A) beltway boomers
B) old milltowns
C) young digerati
D) cosmopolitans
E) winner’s circle

C Page Ref: 216 Objective: 2 Difficulty: Easy

16) According to PRIZM, the ________ cluster is characterized by retired singles and couples, living on downscaled incomes in pre-1960 homes and apartments, who enjoy gardening, sewing, socializing at veterans clubs, and eating out at casual restaurants.
A) old milltowns
B) young digerati
C) winner’s circle
D) beltway boomers
E) cosmopolitans

A Page Ref: 216 Objective: 2 Difficulty: Easy

17) Those who favor localized marketing see national advertising as wasteful because ________.
A) it gets too up close and personal with consumers
B) it drives up manufacturing and marketing costs by reducing economies of scale
C) it magnifies logistical problems
D) it fails to address local needs
E) it sends conflicting marketing messages

D Page Ref: 216 Objective: 2 AACSB: Reflective thinking Difficulty: Moderate

18) Newlyweds in the United States buy more in the first six months than an established household does in five years. Newlyweds are an example of a(n) ________ segment.
A) life stage
B) age
C) behavior
D) user status
E) income

A Page Ref: 217 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

19) Jose and Erika have just divorced. Which of the following demographic segmentation subsegment formats might be used by marketers to reach Jose or Erika?
A) life stage
B) benefits
C) age segment
D) personality type
E) social class

A Page Ref: 217 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

20) ________ are products such as Kiehl’s skin care and Kendall-Jackson wines that are priced between average middle-market and superpremium old luxury brands and are also based on emotions.
A) Old Luxury brand extensions
B) Accessible superpremium products
C) Luxury items
D) Hourglass products
E) Masstige goods

E Page Ref: 218 Objective: 2 AACSB: Analytic skills Difficulty: Easy

21) ________ are products such as the Mercedes Benz C-class and the American Express Blue card, that
extend historically high-priced brands down-market while retaining their cachet.
A) Hourglass products
B) Mass market products
C) Old Luxury brand extensions
D) Masstige goods
E) Accessible superpremium products

C Page Ref: 218 Objective: 2 Difficulty: Easy

22) Which of the following statements about Gen Yers is true?
A) They are selective, confident, and impatient.
B) They are more likely to associate retirement with "the beginning of the end".
C) They are more pragmatic and individualistic.
D) They were born between 1964 and 1978.
E) They were the first generation to find surpassing their parents’ standard of living a serious challenge.

A Page Ref: 219 Objective: 2 Difficulty: Easy

23) Rock band Foo Fighters created a digital street team that sends targeted e-mail messages to members who receive exclusive news, previews, and opportunities to win prizes. The Foo Fighters are using ________ to reach Generation Y.
A) student ambassadors
B) unconventional sports
C) cool events
D) computer games
E) online buzz

E Page Ref: 220 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

24) If a marketing manager employs such marketing techniques as online buzz, student ambassadors, cool events, and street teams to reach target markets, the manager is most likely appealing to the ________ market.
A) Generation Z
B) Generation X
C) Generation Y
D) Silent generation
E) Baby boomers

C Page Ref: 220 Objective: 2 AACSB: Communications Difficulty: Easy

25) As part of an antismoking crusade, the American Legacy Foundation hires teens as the "Truth Squad" to hand out T-shirts, bandanas, and dog tags at teen-targeted events. The American Legacy Foundation is using ________ to reach Generation Y.
A) computer games
B) street teams
C) unconventional sports
D) online buzz
E) videos

B Page Ref: 221 Objective: 2 Difficulty: Easy

26) Which of the following statements about Gen Xers is true?
A) Gen Xers are more optimistic and team-oriented.
B) Gen Xers are selective, confident, and impatient.
C) Gen Xers are highly socially conscious and concerned about environmental issues.
D) Gen Xers feel self-sufficiency and the ability to handle any circumstance are key.
E) Technology is a barrier for Gen Xers.

D Page Ref: 221 Objective: 2 Difficulty: Easy

27) Which of the following statements accurately describes what demographers are calling the "boom-boom effect"?
A) consumers are demanding more "bang for their buck"
B) Baby boomers still rule the marketplace
C) Generation Y and their concern about environmental issues will dominate the market in the future
D) products that appeal to 21-year-olds also appeal to baby boomers
E) companies must gain success quickly

D Page Ref: 221 Objective: 2 Difficulty: Moderate

28) ________ is the science of using psychology and demographics to better understand consumers.
A) Psychographics
B) Interactionism
C) Clustering
D) Demographic transition
E) Customerization

A Page Ref: 225 Objective: 2 AACSB: Analytic skills Difficulty: Easy

29) According to the VALS segmentation system, ________ are successful, sophisticated, active, "take-charge" people with high self-esteem. Their purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services.
A) innovators
B) thinkers
C) achievers
D) experiencers
E) believers

A Page Ref: 226 Objective: 2 AACSB: Analytic skills Difficulty: Easy

30) According to the VALS segmentation system, ________ are successful, goal-oriented people who focus on career and family. They favor premium products that demonstrate success to their peers.
A) thinkers
B) innovators
C) achievers
D) believers
E) experiencers

C Page Ref: 226 Objective: 2 Difficulty: Easy

31) According to the VALS segmentation framework, consumers primarily motivated by ideals are guided by ________.
A) knowledge
B) social activity
C) products that demonstrate success to their peers
D) variety
E) risk

A Page Ref: 226 Objective: 2 Difficulty: Easy

32) Kim is a young professional who enjoys snowboarding and going to rock concerts with her friends. According to the VALS eight-part typology segmentation system, Kim is best described as a(n) ________.
A) thinker
B) achiever
C) experiencer
D) striver
E) survivor

C Page Ref: 226 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

33) Mature and reflective people who seek durability, functionality, and value in products are most likely to be categorized as ________ in the VALS system.
A) innovators
B) thinkers
C) achievers
D) experiencers
E) strivers

B Page Ref: 226 Objective: 2 AACSB: Analytic skills Difficulty: Easy

34) A hardware store is interested in reaching people who are characterized by the VALS system as being practical, down-to-earth, and self-sufficient, who like to work with their hands, or the ________ category.
A) believers
B) strivers
C) survivors
D) experiencers
E) makers

E Page Ref: 227 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

35) According to the VALS segmentation system, ________ are considered to be elderly, passive people who are concerned about change and are loyal to their favorite brands.
A) believers
B) strivers
C) makers
D) survivors
E) experiencers

D Page Ref: 227 Objective: 2 AACSB: Analytic skills Difficulty: Easy

36) According to the VALS segmentation system, ________ are considered to be trendy and fun-loving people who are resource-constrained. They favor stylish products that emulate the purchases of those with greater material wealth.
A) strivers
B) survivors
C) experiencers
D) makers
E) believers

A Page Ref: 227 Objective: 2 Difficulty: Easy

37) According to the VALS segmentation system, ________ are conservative, conventional, and traditional
people with concrete beliefs. They prefer familiar, U.S.-made products and are loyal to established brands.
A) survivors
B) strivers
C) believers
D) makers
E) innovators

C Page Ref: 227 Objective: 2 Difficulty: Easy

38) Dennis requests his father to buy him a PlayStation® for his birthday. With respect to consumer decision roles, which role is Dennis currently playing?
A) initiator
B) influencer
C) decider
D) buyer
E) gatekeeper

A Page Ref: 227 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

39) The key to attracting potential users, or even possibly nonusers, is ________.
A) understanding the reasons they are not using
B) offering financial incentives for first-time use
C) increasing the usage rate of existing users
D) developing a new product that better meets their needs
E) increasing advertising expenditures

A Page Ref: 228 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

40) The sale of turkeys in the United States is highest in mid-to late November, as people buy turkeys to serve at Thanksgiving. Grocery stores who specifically advertise turkeys at this time of year are segmenting on the basis of ________.
A) benefits
B) user status
C) buyer-readiness stage
D) demographics
E) occasion

E Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

41) Linda was buying all her groceries from Home Needs supermarket for the past 5 years. She recently
came across The Convenience Store, another supermarket just a few miles away from her place and started buying her groceries from them. Linda can be best described as ________.
A) a split loyal
B) an antiloyal
C) a shifting loyal
D) a hard-core loyal
E) a switcher

C Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

42) When Amy goes shopping for clothes, she goes into every store in the mall looking for the best deal. She
is very price conscious. On the basis of loyalty status, Amy can be described as ________.
A) a switchcer
B) a split loyal
C) a shifting loyal
D) a hard-core loyal
E) an antiloyal

A Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

43) Mothers-to-be are potential users who will turn into heavy users of infant products and services. By targeting mothers-to-be as future heavy users, producers of these products and services are segmenting consumers on the basis of ________.
A) attitude
B) buyer-readiness stage
C) loyalty status
D) user status
E) benefits

D Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Easy

44) If a buyer is loyal to two or three different brands of soap, this buyer’s loyalty status can be described as being among the ________.
A) switchers
B) shifting loyals
C) split loyals
D) hard-core loyals
E) antiloyals

C Page Ref: 228 Objective: 2 Difficulty: Easy

45) Pete always buys Purina dog food for his dog because he believes that it is the best value for the nutritional content. Pete’s loyalty status is best described as ________.
A) split loyal
B) shifting loyal
C) consistent loyal
D) hard-core loyal
E) switcher

D Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

46) A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own.
A) hard-core loyals
B) split loyals
C) shifting loyals
D) switchers
E) antiloyals

B Page Ref: 228 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

47) A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can
help identify the products’ strengths.
A) switchers
B) split loyals
C) antiloyals
D) shifting loyals
E) hard-core loyals

E Page Ref: 228 Objective: 2 Difficulty: Easy

48) If a marketer is seeking to segment a business market, which of the following variables is generally felt to be the most important?
A) personal characteristics
B) demographic variables
C) situational factors
D) operating variables
E) purchasing approaches

B Page Ref: 230 Objective: 4 AACSB: Analytic skills Difficulty: Easy

49) In segmenting its markets, an aluminum company first looked at which end-use market to serve: automobile, residential, or beverage containers. This is an example of ________.
A) macrosegmentation
B) microsegmentation
C) geographic segmentation
D) global segmentation
E) short-term segmentation

A Page Ref: 230 Objective: 4 AACSB: Analytic skills Difficulty: Easy

50) A marketer is interested in segmenting a business market on ________ if the marketer intends to segment the market based on industries and geographical areas to serve.
A) demographic variables
B) situational factors
C) operating variables
D) purchasing approaches
E) personal characteristics

A Page Ref: 230 Objective: 4 Difficulty: Easy

51) A marketer is interested in segmenting a business market based on urgency of delivery and the size of the order. Which of the following major segmentation variables would the marketer most likely use to assist with the task?
A) purchasing approaches
B) situational factors
C) operating variables
D) personal characteristics
E) demographic variables

B Page Ref: 230 Objective: 4 Difficulty: Easy

52) A marketer is interested in segmenting a business market based on technology and customer capabilities. Which of the following major segmentation variables would the marketer most likely use to assist with the task?
A) demographic variables
B) purchasing approaches
C) situational factors
D) personal characteristics
E) operating variables

E Page Ref: 230 Objective: 4 AACSB: Analytic skills Difficulty: Easy

53) A marketer is interested in segmenting a business market on ________ if the marketer intends to eventually segment the market based on loyalty and attitudes toward risk.
A) situational factors
B) purchasing approaches
C) personal characteristics
D) operating variables
E) demographic variables

C Page Ref: 230 Objective: 4 Difficulty: Easy

54) A marketer interested in segmenting a business market based on ________ intends to eventually segment the market based on power structure and nature of existing relationship.
A) situational factors
B) purchasing approaches
C) personal characteristics
D) operating variables
E) demographic variables

B Page Ref: 230 Objective: 4 AACSB: Analytic skills Difficulty: Easy

55) A company can be said to have used ________ if the company distinguished among customers buying on the basis of price, service, and quality.
A) global segmentation
B) microsegmentation
C) short-term segmentation
D) macrosegmentation
E) geographic segmentation

B Page Ref: 230- 231 Objective: 4 Difficulty: Easy

56) During which step of the segmentation process would the marketer group customers into segments based on similar needs and benefits sought by the customer in solving a particular consumption problem?
A) Step 2—segment identification
B) Step 3—segment attractiveness
C) Step 6—segment "acid test"
D) Step 1—needs-based segmentation
E) Step 7—marketing-mix strategy

D Page Ref: 231 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

57) If an organization’s marketing department wished to create "segment storyboards" to test the attractiveness of each segment’s positioning strategy, this action would most likely occur in the ________ step of the segmentation process.
A) needs-based segmentation
B) segment identification
C) segment profitability
D) segment "acid test"
E) marketing-mix strategy

D Page Ref: 231 Objective: 3 AACSB: Analytic skills Difficulty: Easy

58) In the ________ step of the market segmentation process, the marketer evaluates the segment using criteria such as market growth and market access.
A) need-based segmentation
B) segment identification
C) segment attractiveness
D) segment profitability
E) segment "acid test"

C Page Ref: 231 Objective: 3 Difficulty: Easy

59) In the ________ step of the market segmentation process, the marketer determines which demographics, lifestyles, and usage behaviors make each needs-based segment distinct and identifiable.
A) segment "acid test"
B) segment attractiveness
C) segment profitability
D) need-based segmentation
E) segment identification

E Page Ref: 231 Objective: 3 Difficulty: Easy

60) A ________ consists of two parts: a naked solution and discretionary options.
A) differentiated market offering
B) flexible market offering
C) rigid market offering
D) vertical market offering
E) horizontal market offering

B Page Ref: 231 Objective: 4 AACSB: Analytic skills Difficulty: Easy

61) According to the ________ criterion for useful market segments, a segment should be the largest possible homogenous group worth going after with a tailored marketing program.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable

B Page Ref: 231 Objective: 3 AACSB: Analytic skills Difficulty: Easy

62) Anderson and Mervin have urged marketers to present flexible market offerings to all members of a segment. A flexible market offering consists of two parts. Which part contains the product and service elements that all segment members value?
A) naked solution
B) discretionary solution
C) maximum solution
D) pseudo solution
E) virtual solution

A Page Ref: 231 Objective: 4 AACSB: Analytic skills Difficulty: Easy

63) If your assignment was to create a value proposition and product-price positioning strategy for each segment, based on the segment’s unique customer needs and characteristics, you would be in which of the following steps of the segmentation process?
A) needs-based segmentation
B) segment identification
C) segment attractiveness
D) segment positioning
E) segment "acid-test"

D Page Ref: 231 Objective: 3 AACSB: Analytic skills Difficulty: Easy

64) In evaluating different market segments, the firm must look at two factors: the segment’s overall attractiveness and ________.
A) the company’s objectives and resources
B) the effectiveness of the suppliers
C) the flexibility of legal rules governing the business
D) the socio-economic infrastructure
E) the global nature of the product

A Page Ref: 232 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

65) To meet the ________ criterion of useful market segments, it must be possible to formulate effective programs for attracting and serving the segments.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable

E Page Ref: 232 Objective: 3 AACSB: Analytic skills Difficulty: Easy

66) If married and unmarried women respond similarly to a sale on perfume, these hypothetical segments fail the ________ criterion for useful market segments.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable

D Page Ref: 232 Objective: 3 Difficulty: Easy

67) Which of the following statements is true about the five forces identified by Michael Porter, that
determine the intrinsic long-run attractiveness of a market or market segment?
A) A segment is unattractive if the company’s suppliers are unable to raise prices or reduce quantity supplied.
B) A segment is unattractive if buyers possess strong or growing bargaining power.
C) A segment is attractive when there are actual or potential substitutes for the product.
D) A segment is attractive if it already contains numerous, strong, or aggressive competitors.
E) The most attractive segment is one in which entry barriers are low and exit barriers are high.

B Page Ref: 232 Objective: 5 Difficulty: Moderate

68) In ________ marketing, the firm ignores segment differences and goes after the whole market with one offer.
A) niche
B) mass
C) guerrilla
D) segmented
E) differentiated

B Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Easy

69) If a marketing manager observes that his or her market shows no natural segments and consumers seem to have roughly the same preferences, the marketing manager will most likely be faced with a ________ preferences pattern.
A) homogeneous
B) heterogeneous
C) diffused
D) clustered
E) scattered

A Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

70) In ________ marketing, the firm operates in several market segments and designs different products for each segment.
A) individual
B) undifferentiated
C) differentiated
D) concentrated
E) niche

C Page Ref: 233 Objective: 1 Difficulty: Easy

71) General Motors, a leading American multinational automaker, sells cars for every purpose, purse, and personality. This is an example of ________ marketing.
A) undifferentiated
B) differentiated
C) concentrated
D) niche
E) micro

B Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

72) Coca Cola’s original marketing strategy that offered a single drink Coca Cola Classic in a single sized
bottle with the advertising theme "Coke is it," is an example of ________ marketing.
A) concentrated
B) niche
C) differentiated
D) micro
E) undifferentiated

E Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

73) Marketers usually identify niches by ________.
A) dividing a segment into subsegments
B) conducting VALS tests
C) allowing consumers to gravitate toward product brands
D) examining the demographics section of the handbook of marketing
E) producing products that can be used in a variety of ways

A Page Ref: 234 Objective: 1 Difficulty: Easy

74) ________ combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product service offering of their choice.
A) Consumptionism
B) Viral marketing
C) Virtual marketing
D) Regionalization
E) Customerization

E Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

75) Volkswagen concentrates on the small-car market and Porsche on the sports car market. These would be examples of what is called ________.
A) single-segment concentration
B) selective specialization
C) product specialization
D) market specialization
E) full market coverage

A Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

76) All of the following are benefits of following the ________ approach to target market selection: a strong knowledge of the segment’s needs, a strong market presence, operating economies through specializing in production, distribution, and promotion.
A) single-segment concentration
B) selective specialization
C) product specialization
D) market specialization
E) full market coverage

A Page Ref: 234 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

77) When a symphony orchestra targets people who have broad cultural interests, rather than only those who regularly attend concerts, the orchestra is targeting ________.
A) market mavens
B) strategic segments
C) supersegments
D) occasion segments
E) psychodemographic segments

C Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

78) Which of the following best represents the chief advantage of pursuing a selective specialization multisegment strategy?
A) It makes the company almost bulletproof to competitors’ actions.
B) It diversifies the firm’s risk.
C) It creates synergy between markets.
D) It is a low-cost strategy.
E) It treats all buyers the same and, therefore, lowers promotion costs.

B Page Ref: 234 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

79) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is that ________.
A) no synergy exists
B) logistics can become a nightmare
C) the product may be supplanted by an entirely new technology
D) competitors can easily copy any new product introductions
E) e-commerce becomes difficult for the company

C Page Ref: 234 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

80) With ________ as a target market strategy, the firm concentrates on serving many needs of a particular customer group.
A) single-segment concentration
B) selective specialization
C) product specialization
D) market specialization
E) full market coverage

D Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

81) Effective target marketing requires that marketers use market segmentation, market targeting, and market positioning to achieve success in the marketplace.

TRUE Page Ref: 213 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

82) A market segment consists of a group of consumers who share a similar set of needs and wants.

TRUE Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Easy

83) Customer cloning is the practice of identifying the key characteristics of a market segment and then identifying multiple geographic areas where the majority of the population possesses those characteristics.

FALSE Page Ref: 214 Objective: 2 Difficulty: Easy

84) Illustrations of personality segmentation would include culture-oriented, sports-centered, or outdoor-oriented subsegments.

FALSE Page Ref: 215 Objective: 2 AACSB: Analytic skills Difficulty: Easy

85) Local marketing reflects a growing trend called macromarketing.

FALSE Page Ref: 214 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

86) A local service company has decided to segment its market based on occupation; therefore, it has chosen a form of demographic segmentation for its approach.

TRUE Page Ref: 216 Objective: 2 AACSB: Analytic skills Difficulty: Easy

87) Beltway Boomers are the nation’s tech-savvy singles and couples living in fashionable neighborhoods on the urban fringe.

FALSE Page Ref: 216 Objective: 2 Difficulty: Easy

88) Demographic variables are popular because they are often associated with consumer needs and wants and they are easy to measure.

TRUE Page Ref: 216 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

89) Life stage defines a person’s age.

FALSE Page Ref: 217 Objective: 2 Difficulty: Easy

90) Income always predicts the best customers for a given product.

FALSE Page Ref: 218 Objective: 2 Difficulty: Easy

91) Members of the same generational cohort share the same major cultural, political, and economic experiences and have similar outlooks and values.

TRUE Page Ref: 219 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

92) Baby boomers are consumers who have been "wired" almost from birth—playing computer games, navigating the Web, downloading music, connecting with friends via instant messaging and mobile phones.

FALSE Page Ref: 219 Objective: 2 Difficulty: Easy

93) Members of Generation Y are generally open to overt branding practices and a "hard sell," making product placements in computer and video games a popular way to reach this cohort.

FALSE Page Ref: 220 Objective: 2 Difficulty: Easy

94) Unlike the more optimistic, team-oriented Gen Xers, Gen Yers are more pragmatic and individualistic.

FALSE Page Ref: 221 Objective: 2 Difficulty: Easy

95) Baby boomers are also less likely to associate retirement with "the beginning of the end" and see it instead as a new chapter in their lives with new activities, interests, careers, or even relationships.

TRUE Page Ref: 221 Objective: 2 Difficulty: Easy

96) The norms, language nuances, buying habits, and business practices of multicultural markets need to be factored into the initial formulation of a marketing strategy, rather than added as an afterthought.

TRUE Page Ref: 222 Objective: 2 Difficulty: Easy

97) Psychographics is the science of using psychology and demographics to better understand consumers.

TRUE Page Ref: 225 Objective: 2 AACSB: Analytic skills Difficulty: Easy

98) People in the same demographic group generally exhibit similar psychographic profiles.

FALSE Page Ref: 226 Objective: 2 Difficulty: Easy

99) The main dimensions of the VALS segmentation framework are consumer motivation and consumer
resources.

TRUE Page Ref: 226 Objective: 2 Difficulty: Easy

100) In the VALS segmentation system, thinkers are characterized as being successful, sophisticated, active, "take-charge" people with high self-esteem.

FALSE Page Ref: 226 Objective: 2 AACSB: Analytic skills Difficulty: Easy

101) Everyone who buys a given product wants the same benefits from it.

FALSE Page Ref: 227 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

102) Believers favor stylish products that emulate the purchases of those with greater material wealth.

FALSE Page Ref: 227 Objective: 2 Difficulty: Easy

103) Heavy users of a particular product are often a small percentage of the market but account for a high percentage of total consumption.

TRUE Page Ref: 228 Objective: 2 Difficulty: Easy

104) With respect to loyalty status, if a consumer is loyal to two or three brands, he or she is called shifting loyal.

FALSE Page Ref: 228 Objective: 2 AACSB: Analytic skills Difficulty: Easy

105) Hard-core loyals can show the firm which brands are most competitive with its own.

FALSE Page Ref: 228 Objective: 2 Difficulty: Easy

106) Door-to-door workers in a political campaign use attitude to determine how much time to spend with each voter.

TRUE Page Ref: 229 Objective: 2 Difficulty: Easy

107) Purchasing approaches segmentation variables in the business marketplace include technology, user and nonuser status, and general purchasing policies.

FALSE Page Ref: 230 Objective: 4 Difficulty: Easy

108) Situational factor segmentation variables in the business marketplace include urgency, specific application, and size of order.

TRUE Page Ref: 230 Objective: 4 AACSB: Analytic skills Difficulty: Easy

109) The last step in the seven-step marketing segmentation process would be to develop a marketing-mix strategy reflective of segment positioning strategies.

TRUE Page Ref: 231 Objective: 3 Difficulty: Easy

110) To be useful, market segments must be measurable.

TRUE Page Ref: 231 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

111) With respect to market offerings, if a marketer emphasizes a naked solution, he or she is emphasizing the product and service elements that all segment members value.

TRUE Page Ref: 231 Objective: 4 AACSB: Analytic skills Difficulty: Easy

112) The most attractive segment is one in which entry barriers are low and exit barriers are high.

FALSE Page Ref: 232 Objective: 5 Difficulty: Easy

113) A segment is attractive when there are actual or potential substitutes for the product.

FALSE Page Ref: 232 Objective: 5 Difficulty: Easy

114) A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied.

TRUE Page Ref: 232 Objective: 5 Difficulty: Easy

115) An undifferentiated marketing approach to full market coverage designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers.

TRUE Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Easy

116) An attractive niche consists of customers having a distinct set of needs.

TRUE Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

117) The ultimate level of segmentation leads to "segments of one," "customized marketing," or "one-to-one marketing."

TRUE Page Ref: 234 Objective: 1 Difficulty: Easy

118) Companies following a market specialization strategy offer one product to as many markets as possible.

FALSE Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Easy

119) A company is customerized when it is able to respond to individual customers by customizing its products, services, and messages on a one-to-one basis.

TRUE Page Ref: 235 Objective: 1 AACSB: Analytic skills Difficulty: Easy

120) All attempts to target marketing to children, minorities, or other special segments are discriminatory and unethical.

FALSE Page Ref: 236 Objective: 5 AACSB: Ethical understanding and reasoning abilities Difficulty: Easy

121) There are several major segmentation variables that might be used by a marketer to address a consumer market. If the marketer were to use social class, psychographic lifestyle, and readiness stage to segment its market, identify possible segmentation subcategories under each of the three.

First, social class would yield the subcategories of lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, and upper uppers. Second, psychographic lifestyles would yield culture-oriented, sports-oriented, and outdoor-oriented. Lastly, readiness stage would yield unaware, aware, informed, interested, desirous, and intending to buy. Other sub-categories might be possible. Page Ref: 215 Objective: 2 Difficulty: Easy

122) PRIZM was developed by Claritas Inc. What was the purpose of PRIZM?

PRIZM stands for Potential Rating Index by Zip Markets. It is a method for geoclustering that classifies over half a million U.S. residential neighborhoods into 14 distinct groups and 66 distinct lifestyle segments called PRIZM Clusters. The groupings take into consideration 39 factors in five broad categories: (1) education and affluence, (2) family life cycle, (3) urbanization, (4) race and ethnicity, and (5) mobility. The neighborhoods are broken down by zip code, zip+4, or census tract and block group. The clusters have descriptive titles such as Blue Blood Estates, Winner’s Circle, Hometown Retired, Shotguns and Pickups, and Back Country Folks. The inhabitants in a cluster tend to lead similar lives, drive similar cars, have similar jobs, and read similar magazines. Page Ref: 215 Objective: 2 Difficulty: Moderate

123) Identify and describe the three main types of New Luxury products.

The three main types of New Luxury products are: 1) Accessible superpremium products-They carry a significant premium over middle-market brands, yet consumers can readily trade up to them because they are relatively low-ticket items in affordable categories. (2) Old Luxury brand extensions-They extend historically high-priced brands down-market while retaining their cachet. (3) Masstige goods-They are priced between average middle-market brands and superpremium Old Luxury brands. They are "always based on emotions, and consumers have a much stronger emotional engagement with them than with other goods." Page Ref: 218 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

124) Briefly describe the characteristics of the Millennials.

Born between 1979 and 1994, Millennials, also called Gen Y, number 78 million with annual spending power estimated at $187 billion. Also known as the Echo Boomers, these consumers have been "wired" almost from birth— playing computer games, navigating the Web, downloading music, connecting with friends via instant messaging and mobile phones. They have a sense of entitlement and abundance from growing up during the economic boom and being pampered by their boomer parents. Yet they are highly socially conscious and concerned about environmental issues. They are selective, confident, and impatient. Page Ref: 219 Objective: 2 Difficulty: Moderate

125) Generation Y members are often turned off by overt branding practices and "hard sell." List and provide examples for the different approaches tried by the marketers to reach and persuade them.

The different approaches tried by the markets to reach and persuade Generation Y members include: 1) Online buzz—Rock band Foo Fighters created a digital street team that sends targeted e-mail blasts to members who "get the latest news, exclusive audio/video sneak previews, tons of chances to win great Foo Fighters prizes, and become part of the Foo Fighters Family." 2) Student ambassadors—Red Bull enlisted college students as Red Bull Student Brand Managers to distribute samples, research drinking trends, design on-campus marketing initiatives, and write stories for student newspapers. 3) Unconventional sports—Chick-fil-A sponsored the National Amateur Dodgeball Association, "a recreational pursuit for nontraditional sport enthusiasts." 4) Cool events—Hurley, which defined itself as an authentic "Microphone for Youth" brand rooted in surf, skate, art, music, and beach cultures, became the title sponsor of the U.S. Open of Surfing. Other sponsors included Casio, Converse, Corona, Paul Mitchell, and Southwest Airlines. 5) Computer games—Product placement is not restricted to movies or TV: Mountain Dew, Oakley, and Harley-Davidson all made deals to put logos on Tony Hawk’s Pro Skater 3 from Activision. 6) Videos—Burton ensures its snowboards and riders are clearly visible in any videos that are shot. 7) Street teams—As part of an antismoking crusade, the American Legacy Foundation hires teens as the "Truth Squad" to hand out T-shirts, bandanas, and dog tags at teen-targeted events. Page Ref: 220- 221 Objective: 2 Difficulty: Moderate

126) Identify the four market segment groups based on brand loyalty status and list what a company can learn from analyzing the degrees of brand loyalty.

Marketers usually envision four groups based on brand loyalty status: (1) hard-core loyals, (2) split loyals, (3) shifting loyals, and (4) switchers. Hard-core loyals can help identify the products’ strengths. Split loyals can show the firm which brands are most competitive with its own. By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses and attempt to correct them. Page Ref: 228 Objective: 2 AACSB: Reflective thinking Difficulty: Moderate

127) Briefly describe the steps in the segmentation process.

The seven steps in the segmentation process include: 1) Needs-Based Segmentation-Group customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem. 2) Segment Identification-For each needs-based segment, determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable (actionable). 3) Segment Attractiveness-Using predetermined segment attractiveness criteria (such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment. 4) Segment Profitability-Determine segment profitability. 5) Segment Positioning-For each segment, create a "value proposition" and product-price positioning strategy based on that segment’s unique customer needs and characteristics. 6) Segment "Acid Test"-Create "segment storyboard" to test the attractiveness of each segment’s positioning strategy. 7) Marketing-Mix Strategy-Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, and place. Page Ref: 231 Objective: 3 Difficulty: Moderate

128) Briefly describe single-segment concentration with an example.

With single-segment concentration, the firm markets to only one particular segment. Porsche concentrates on the sports car market and Volkswagen on the small-car market—its foray into the large-car market with the Phaeton was a failure in the United States. Through concentrated marketing, the firm gains deep knowledge of the segment’s needs and achieves a strong market presence. It also enjoys operating economies by specializing its production, distribution, and promotion. If it captures segment leadership, the firm can earn a high return on its investment. Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

129) Briefly describe product specialization and market specialization.

With product specialization, the firm sells a certain product to several different market segments. A microscope manufacturer, for instance, sells to university, government, and commercial laboratories, making different instruments for each and building a strong reputation in the specific product area. The downside risk is that the product may be supplanted by an entirely new technology. With market specialization, the firm concentrates on serving many needs of a particular customer group, such as by selling an assortment of products only to university laboratories. The firm gains a strong reputation among this customer group and becomes a channel for additional products its members can use. The downside risk is that the customer group may suffer budget cuts or shrink in size. Page Ref: 234 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

130) List the three premises on which Anderson’s long tail theory is based and the two aspects of internet shopping that supports these premises.

Anderson’s long tail theory is based on three premises: (1) Lower costs of distribution make it economically easier to sell products without precise predictions of demand; (2) The more products available for sale, the greater the likelihood of tapping into latent demand for niche tastes unreachable through traditional retail channels; and (3) If enough niche tastes are aggregated, a big new market can result. Anderson identifies two aspects of Internet shopping that support these premises. First, the increased inventory and variety afforded online permit greater choice. Second, the search costs for relevant new products are lowered due to the wealth of information online, the filtering of product recommendations based on user preferences that vendors can provide, and the word-of-mouth network of Internet users. Page Ref: 235 Objective: 1 Difficulty: Moderate

131) Local marketing reflects a growing trend called grassroots marketing. What are the characteristics of grassroots marketing?

In grassroots marketing, marketing activities concentrate on getting as close and personally relevant to individual customers as possible. Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Easy

132) What is customer cloning and how is it used?

Customer cloning is a way of identifying new prospects by assuming that the best prospects live where most of a company’s existing customers come from. Page Ref: 214 Objective: 2 AACSB: Analytic skills Difficulty: Easy

133) Not everyone is in favor of local marketing. Identify two arguments made against local marketing.

Those against local marketing argue that it drives up manufacturing and marketing costs by reducing economies of scale and magnifying logistical problems. A brand’s overall image might be diluted if the product and message are different in different localities. Page Ref: 216 Objective: 2 AACSB: Analytic skills Difficulty: Easy

134) Identify ways in which shopping behaviors differ between men and women.

Women tend to be more communal minded and men tend to be more self-expressive and goal directed. Women tend to take in more of the data in their immediate environment, whereas men focus on the part of the environment that helps them achieve a goal. When shopping, men often need to be invited to touch a product, whereas women are likely to pick it up without prompting. Men like to read product information, whereas women may relate to a product on a more personal level. Page Ref: 217 Objective: 2 AACSB: Reflective thinking Difficulty: Moderate

135) Increasingly, companies are finding that their markets are "hourglass shaped." What does this mean for consumers and for marketers?

Middle-market U.S. consumers are migrating toward both discount and premium products. Companies that miss out on this new market risk being "trapped in the middle" and seeing their market share steadily decline. Page Ref: 218 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

136) Although we can make distinctions between them, different generational cohorts also influence each other. Give an example of this.

Many members of Generation Y are living with their boomer parents, because of which parents are being influenced by what demographers are calling a "boom-boom" effect. Page Ref: 221 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

137) Characterize psychographic segmentation.

In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values. Page Ref: 225- 226 Objective: 2 Difficulty: Easy

138) The VALS segmentation system has evolved into an eight-part typology. List the categories of the
eight-part typology.

The eight parts of the VALS segmentation system include the following: (1) innovators, (2) thinkers, (3) achievers, (4) experiencers, (5) believers, (6) strivers, (7) makers, and (8) survivors. Page Ref: 226- 227 Objective: 2 Difficulty: Easy

139) Professor Albert advises his students to purchase the book "Microbiology by Pelczar," to acquaint themselves with the fundamentals of microbiology. What role does he play in the buying decision of his students?

Professor Albert plays the role of an influencer in the buying decision of his students. An influencer is a person who explicitly or implicitly has some influence on the final buying decision of others. Page Ref: 227 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

140) List the four groups of consumers based on loyalty status.

The four groups of consumers based on loyalty status are: 1) hard-core loyals, 2) split loyals, 3) shifting loyals, and 4) switchers. Page Ref: 228 Objective: 2 Difficulty: Easy

141) Consumer attitudes are an interesting way to segment a market. What are the five different consumer attitudes about a product that can be found in the market?

The five attitude groups are: (1) enthusiastic, (2) positive, (3) indifferent, (4) negative, and (5) hostile. Page Ref: 229 Objective: 2 AACSB: Analytic skills Difficulty: Easy

142) A flexible market offering consists of two parts. Identify and describe these two parts.

A flexible market offering consists of two parts: a naked solution containing the product and service elements that all segment members value, and discretionary options that some segment members value. Page Ref: 231 Objective: 4 Difficulty: Easy

143) To be useful, market segments must rate favorably on five key criteria. What are those criteria?

To be useful, market segments must be: (1) measurable, (2) substantial, (3) accessible, (4) differentiable, and (5) actionable. Page Ref: 231- 232 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

144) List the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment.

The five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment are industry competitors, potential entrants, substitutes, buyers, and suppliers. Page Ref: 232 Objective: 5 Difficulty: Easy

145) List the threats posed by the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment.

The threats posed by the five forces are: 1) Threat of intense segment rivalry 2) Threat of new entrants 3) Threat of substitute products 4) Threat of buyers’ growing bargaining power 5) Threat of suppliers’ growing bargaining power Page Ref: 232 Objective: 5 Difficulty: Easy

146) Give an example of how a company might target products to children in an ethical way.

The public is concerned when marketers take unfair advantage of vulnerable groups, such as children. However, not all attempts to target children draw criticism. Socially responsible marketing calls for targeting that serves not only the company’s interests, but also the interests of those targeted. For example, Colgate Junior toothpaste has special features designed to get children to brush longer and more often. Page Ref: 232 Objective: 5 AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate

147) Explain the concept of mass marketing.

In mass marketing, the firm ignores segment differences and goes after the whole market with one offer. It designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers via mass distribution and mass communications. Page Ref: 233 Objective: 1 AACSB: Analytic skills Difficulty: Easy

148) Explain the concept of differentiated marketing.

In differentiated marketing, the firm sells different products to all the different segments of the market. Page Ref: 233 Objective: 1 Difficulty: Easy

149) Assume that you have decided to use a niche strategy to advance your marketing goals. Characterize an attractive niche.

An attractive niche is distinguished as follows: (1) The customers in the niche have a distinct set of needs; (2) they will pay a premium to the firm that best satisfies their needs; (3) the niche is not likely to attract other competitors; (4) the niche gains certain economies through specialization; and (5) the niche is fairly small but has size, profit, and growth potential. Page Ref: 234 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

150) A new trend in marketing is toward customerization. Describe what customerization is and how marketers are using it.

Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product or service offering of their choice. A company is customerized when it is able to respond to individual customers by customizing its products, services, and messages on a one-to-one basis. Page Ref: 234- 235 Objective: 1 Difficulty: Easy