Download Multiple Choice Questions

Chapter 6 Market Segmentation, Targeting, and Positioning
Multiple Choice Questions
1. The second most visited Roman Catholic shrine in the world is at Aparecida de Norte,
Brazil. More than eight million people visited the shrine annually. Because there is
little else in the town for tourists to do, Brazilian and Italian entrepreneurs are building
a religious theme park. When worshippers complete their visit to the shrine, they can
be whisked to the park. The shrine's visitors represent the _____ for the religious
theme park.
A) business user
B) target market
C) sales potential
D) market potential
E) demographic mix
Answer: B Type: Application Page: 142
2. Which of the following could be a target market for an all-natural herbicide?
A) suburban gardeners who worry about poisoning their pets
B) environmentalists who are worried about chemical run-off
C) park employees who want to do away with weeds and like the added benefit of
being able to do it safely
D) parents who worry about having poisonous chemicals in their garden sheds
E) all of the above
Answer: E Type: Application Page: 142
3. Morning Glory Gateway is a popular chain of retail stores in South Korea. It has
opened 150 stores around the world in areas where there are a lot of Korean
immigrants. Koreans are the retail chain's:
A) business user.
B) target market.
C) sales potential.
D) market potential.
E) demographic mix.
Answer: B Type: Application Page: 142
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Chapter 6 Market Segmentation, Targeting, and Positioning
4. _____ is the process of dividing the total market for a good or service into several
smaller groups such that the members of each group are similar with respect to the
factors that influence demand.
A) Market segmentation
B) Market aggregation
C) Diversification
D) Market development
E) Product development
Answer: A Type: Definition Page: 142
5. Market segmentation:
A) identifies and describes potential target markets.
B) often results in firms aiming at smaller and less profitable markets.
C) makes it possible for a company to use one marketing mix to reach the total
market.
D) implies each individual should be treated as a separate market segment.
E) is accurately described by all of the above.
Answer: A Type: Definition Page: 142
6. Land Rover is a European manufacturer of bicycles. It makes bikes especially
designed for men and for women. It also makes bikes that are designed for city riding,
mountain riding, and racing. By dividing the market for its bicycles into several small
groups, it is engaging in:
A) market segmentation
B) market aggregation
C) diversification
D) market development
E) product development
Answer: A Type: Application Page: 142
7. One purpose of market segmentation is to:
A) make it possible for the firm to benefit from economies of scale in production.
B) develop specific marketing programs that are tailor-made for one or more target
markets.
C) reduce the costs of marketing.
D) complicate demand forecasting.
E) distinguish among products that are basically the same.
Answer: B Type: Comprehension Page: 142 -145
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8. Frito-Lay produces Baked Lay's potato chips for the weight-conscious, Fritos for those
who prefer corn chips to potato chips, Doritos for those who like tortillas, and Cheetos
for those who like a cheesy taste and don't worry about calories. Frito-Lay uses:
A) market segmentation.
B) market aggregation.
C) diversification.
D) market development.
E) product development.
Answer: A Type: Application Page: 142-145
9. Kraft manufactures Kool-Aid drink mix for children, Country Time drink mix for
adults, and Tang for baby boomers who drank it as a child. This variety of products
all satisfying the same thirst need indicates that Kraft uses:
A) market segmentation.
B) market aggregation.
C) diversification.
D) market development.
E) product development.
Answer: A Type: Application Page: 142-145
10. Which of the following statements does NOT describe one of the benefits gained
through the use of market segmentation?
A) Products may be designed that really match market demands.
B) Advertising may be channeled to its potentially most profitable markets.
C) Companies can maximize economies of scale in production and advertising.
D) Firms can make more effective use of their marketing resources.
E) Medium-sized firms can achieve a rapid growth rate.
Answer: C Type: Comprehension Page: 142-144
11. The first step in the identification of market segments and the potential of those
segments is to:
A) see what products the competition offers and how the products are marketed.
B) identify the current and potential wants that exist within a market.
C) develop several new product concepts and test them with focus groups.
D) estimate the current demand and compare it to the existing industry capacity.
E) determine if a segment is being served.
Answer: B Type: Definition Page: 144
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12. For a segment to be chosen as a target market requires that:
A) the segment be measurable.
B) the segment be accessible through existing marketing institutions.
C) the segment be large enough to be profitable.
D) the data used to categorize each segment be available.
E) all of the above conditions exist.
Answer: E Type: Comprehension Page: 144-145
13. According to the obtainability criterion for effective segmentation described in your
textbook, which of the following represents the most viable market segment for a new
fat-free milkshake mix?
A) consumers who gorge on ice cream in private
B) consumers who like to eat frozen desserts
C) consumers who like late-night snacks
D) consumers with an annual income greater than $18,000
E) consumers who are overweight by more than 10 pounds
Answer: D Type: Application Page: 145
14. According to the obtainability criterion for effective segmentation described in your
textbook, which of the following represents the most viable market segment for a new
Whirlpool washer that uses 7 to 17 fewer gallons of than washers currently on the
market?
A) people who believe in protecting the environment but who really don't know how
to go about it
B) people who like clean clothes, but don't use any detergent additives
C) people who have at one time in their life owned or used a Whirlpool product
D) people who need a new washer
E) people living in areas with annual rainfall of less than 5 inches
Answer: E Type: Application Page: 145
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Chapter 6 Market Segmentation, Targeting, and Positioning
15. Imagine a publication that wants to target people who have abandoned the civilized
world and made a concerted effort to "get back to nature." This segmentation strategy
creates a target market that more than likely _____, one of the important conditions for
a useful segmentation strategy.
A) lacks accessibility
B) has too much mobility
C) requires continuity
D) lacks credibility
E) has an inelastic demand
Answer: A Type: Application Page: 145
16. For which of the following products would you expect to find its producer using
micro-marketing?
A) designer wedding gowns
B) hand tools
C) dairy products
D) filing cabinets
E) chewing gum
Answer: A Type: Application Page: 145
17. DLR Group is a company that designs and builds sports arenas. DLR Group must
adapt each plan to the physical location where the arena will be built, the available
financing for the arena, and the specific demands of the arena owner, such as
placement of the sound system, color schemes, seating arrangements, and concession
locations. DLR Group uses:
A) a concentrated segmentation strategy.
B) micromarketing.
C) marketing augmentation.
D) a compressed segmentation strategy.
E) a diversification strategy.
Answer: B Type: Application Page: 145
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Chapter 6 Market Segmentation, Targeting, and Positioning
18. If Whirlpool decided to target areas of the nation that receive 5 inches or less rain
annually for its new washer that is designed to use at least seven gallons per load less
than currently available washers, it would be an example of _____ segmentation.
A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic
Answer: D Type: Application Page: 146-147
19. Suppose a chain of hair salons that target children decides to locate its stores only in
the suburbs. This would be an example of _____ segmentation.
A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic
Answer: D Type: Application Page: 146-147
20. Since California has legislated that the state's drivers must begin using alternative fuel
vehicles, Ford Motor Company's has introduced just for that state a full-size truck that
runs on natural gas. This is an example of _____ segmentation.
A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic
Answer: D Type: Application Page: 146-147
21. The French prefer to buy top-loading clothes washers. The rest of Europe uses frontloaders. In developing its strategy for marketing to these nations, Whirlpool had to
use _____ segmentation to make sure its washers suited the tastes of the consumers in
each of the European countries.
A) demographic
B) behavioral
C) usage-rate
D) geographic
E) psychographic
Answer: D Type: Application Page: 146-147
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22. Directo, Inc. was developed to provide banking services to Georgia's Hispanic
population, which numbers around 400,000. The bank was the first company in the
state to offer direct-deposit services to Hispanic workers For $6 a month Hispanics
can have their paycheck directly deposited and use a Directo card to withdraw money
from ATMs in the state. What kind of segmentation is Directo using?
A) psychological and demographic
B) demographic and geographic
C) geographic and behavioral
D) behavioral and demographic
E) psychographic and geographic
Answer: B Type: Application Page: 146-148
23. What is the most widely used basis for segmenting consumer markets?
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Fact Page: 147-148
24. Tower, Musicland, Wherehouse Entertainment, and Music Plus target urban
adolescents and postadolescents. They all use _____ segmentation.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Application Page: 147-148
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25. Land Rover is a manufacturer of bicycles for the European market. It recently
introduced a Land Rover Discovery Vogue pink bicycle that has been specifically
tailored to fit the female form. A female rider of the new bike said, "I was so much
happier riding this bike than I have ever been on another bike." Land Rover uses
_____ segmentation with this bicycle.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Application Page: 147-148
26. Nearly half of all new car purchases in the U.S. are made by women. To reach this
segment, car manufacturers are adding adjustable brake and gas pedals to
accommodate the fact that women are shorter than men. Car manufacturers are using
_____ segmentation.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Application Page: 147-148
27. Revlon targeted young females between the ages of 13 and 25 with its Street Wear
makeup. The cosmetics company used colors with names like Schmuts, Drab,
Whatever, and Tar for its eye makeup, lipstick, and nail polish to attract this group.
Revlon uses _____ segmentation.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Application Page: 147-148
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Chapter 6 Market Segmentation, Targeting, and Positioning
28. Since many middle-aged women are interested in looking as young as they feel, they
are demanding skin rejuvenation treatments such as those being supplied by Elizabeth
Arden's Intensive Repair Cream and Neutrogena Healthy Skin. The manufacturers of
these cosmetics are using _____ segmentation.
A) demographic
B) behavioral
C) psychographic
D) geographic
E) psychological
Answer: A Type: Application Page: 147-148
29. In most places in the United States where there is a concentration of Latinos, small
shopkeepers import south-of-the-border sodas like Topo Chico and Jarritos. These
store use _____ segmentation to identify its target market.
A) product-use
B) behavioral
C) life-style
D) demographic
E) personality
Answer: D Type: Application Page: 147-148
30. In 2004, the U.S. Coast Guard Academy surpassed its goal to generate interest in
exceptional high school seniors. The academy mailed out a package that listed the
academy's requirements, benefits, application information, and details of a typical
week. The academy was especially proud of how mail and female students were
different packages. The U.S. Coast Guard Academy relied on ______ segmentation to
reach high school seniors.
A) age and sex
B) social class and region
C) demographic and results-oriented
D) sex and psychographic
E) sex, age, race, and religion
Answer: A Type: Application Page: 147-148
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31. Which of the following is an indicator of an individual's social class?
A) ethnic background and educational level attained
B) attitudes, interests, and opinions
C) religion, ethnic background, and income
D) type of occupation and type of neighborhood lived in
E) family life cycle, income, and educational level attained
Answer: D Type: Definition Page: 148
32. _____ segmentation involves examining attributes such as personality and life-style.
A) Demographic
B) Psychological
C) Attitudinal
D) Behavioral
E) Psychographic
Answer: E Type: Definition Page: 148
33. An advertisement for Suisse Mocha, a General Foods International Coffee, reads,
"Drift into a chocolate daydream." This message is aimed at people who like to
pamper themselves and is an example of how _____ segmentation is used.
A) product-use
B) geographic
C) psychographic
D) demographic
E) usage-rate
Answer: C Type: Application Page: 148-150
34. An advertisement for Preference permanent creme-in hair color is aimed at women
who have a high self-concept. Its copy entices consumers to use L'Oreal's Preference
by saying, "I use nothing but Preference because I'm worth it." This is an example of
how advertisers can use _____ segmentation.
A) product-use
B) geographic
C) psychographic
D) demographic
E) behavioral
Answer: C Type: Application Page: 148-150
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35. Advertisers do not often use personality segmentation because:
A) personality characteristics are typically reflected in demographic variables and
make personality segmentation redundant.
B) most consumers resent being stereotyped as a particular personality type.
C) personality is seldom reflected in purchasing behavior.
D) segmentation based on personality characteristics tends to produce inefficiently
sized segments.
E) there is no advertising media that provides unique access to particular personality
types.
Answer: E Type: Comprehension Page: 148-149
36. Personality is not an ideal basis for segmentation because:
A) consumers seldom make purchases based on their personalities.
B) it is difficult to measure personality accurately.
C) there are over 200 different recognized personality types and developing a
marketing mix for each is expensive.
D) social class segmentation is much easier and reveals the same information.
E) personalities are the result of demography.
Answer: B Type: Comprehension Page: 148-149
37. Segmenting consumer markets on the basis of peoples' activities, interests, and
opinions is an example of _____ segmentation.
A) social class
B) demographic
C) attitudinal
D) ethnic origin
E) life-style
Answer: E Type: Definition Page: 149
38. The growth of the number of 30- to 40-year old parents with children who want resort
vacations with round-the-clock childcare has led Club Med to open more than 40
family resorts. This is an example of _____ segmentation.
A) product-use
B) behavioral
C) life-style
D) demographic
E) geographic
Answer: D Type: Application Page: 149
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Chapter 6 Market Segmentation, Targeting, and Positioning
39. To some people the speaker systems that came with the home entertainment units are
just speakers. To others stereo speakers are a way to invite the Philharmonic
Symphony into your home for a private concert. Manufacturers such as Bose and
Sony that want to reach these people who are interested in sound purity can use _____
segmentation.
A) geographic
B) psychographic
C) product-use
D) usage-rate
E) physiological
Answer: B Type: Application Page: 148-150
40. Canyon Gear designs sportswear for people who "know how utterly indescribable
those moments when you're heart is beating from the surge of adrenaline can be."
They want to appeal to the adventurer who is "at peace with his inner-most self."
Canyon Gear uses _____ segmentation.
A) geographic
B) life-style
C) product-use
D) usage-rate
E) physiological
Answer: B Type: Application Page: 149
41. The Linking Ring is the official magazine of the International Brotherhood of
Magicians. The publisher of this magazine use _____ segmentation.
A) demographic
B) physiological
C) geographic
D) psychographic
E) purchase situation
Answer: D Type: Application Page: 148-150
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Chapter 6 Market Segmentation, Targeting, and Positioning
42. To get our bodies into the physical shapes we imagine they could be, we know we
need to exercise, but many of us worry about what we look like while we're exercising
or want to exercise at odd times of the day when gyms are closed. Advertisers of
home fitness gadgets costing between $200 and $1300 have taken particular advantage
of these facts. They are using _____ segmentation.
A) geographic
B) life-style
C) product-use
D) usage-rate
E) psychological
Answer: B Type: Application Page: 149
43. According to psychologists, all of the following are examples of values that relate to
purchase behavior EXCEPT:
A) self-actualization.
B) excitement.
C) self-respect.
D) security.
E) a sense of accomplishment.
Answer: A Type: Definition Page: 148-150
44. From a customer-oriented perspective, the ideal method for segmenting a market is on
the basis of:
A) customer usage levels.
B) customer's desired benefits.
C) customer type.
D) demographics.
E) customer location.
Answer: B Type: Comprehension Page: 150-151
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Chapter 6 Market Segmentation, Targeting, and Positioning
45. Many people have been known to hit the snooze alarm on their alarm clock and keep
on hitting it. A new kind of alarm clock has been invented. The clock is covered in
shag carpeting. It rolls away and hides after its owner hits the snooze alarm the first
time. That way, the owner has to get up and find it the second time the alarm goes off.
This eliminates many problems associated with oversleeping. The manufacturer of
this alarm clock would use _____segmentation to reach oversleepers.
A) benefit desired
B) geographic
C) psychographic
D) demographic
E) usage-rate
Answer: A Type: Application Page: 148-150
46. Some health club users join the clubs to meet people. Others join because they want
an aerobic workout. Some are interested in body sculpting. Knowing this, the
advertisers of health clubs might most effectively use which of the following methods
of segmentation?
A) demographic
B) age
C) personality
D) benefits desired
E) income level
Answer: D Type: Application Page: 150-151
47. Some people use mouthwash to help prevent colds. Others use it to make their breath
smell pleasant. Still others use it to help clean their teeth. Knowing this, the
advertiser of mouthwash might most effectively use which of the following methods
of segmentation?
A) demographic
B) age
C) personality
D) benefits desired
E) income level
Answer: D Type: Application Page: 150-151
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Chapter 6 Market Segmentation, Targeting, and Positioning
48. Hair dye is the latest fashion accessory for style-conscious men. No longer are men
simply dying their hair to cover gray; but they are also dying to change their looks. To
reach this market L'Oreal has developed colors with masculine sounding names like
Camel and Gothic. L'Oreal is using _____ segmentation.
A) demographic and behavioral
B) psychographic
C) values, life-style, and personality
D) demographic and geographic
E) geographic, demographic, psychographic, and behavioral
Answer: A Type: Application Page: 147-148; 150-151
49. Many people are waiting until they are financially able to support a child before
starting their families. These parents tend to want the very best for their infants, and
money is no object. Because they enjoy pampering themselves with products
containing all-natural ingredients such as Australian tea tree, chamomile, primrose,
and lavender oils, they naturally look for these ingredients in baby shampoos and
lotions. Manufacturers of baby shampoos with these ingredients should use _____
segmentation.
A) demographic
B) age
C) personality
D) benefits desired
E) geographic
Answer: D Type: Application Page: 150-151
50. The Real Estate Network is an Internet service that allows people to find Christian real
estate agents and loan officers across the country. Its owner says, "Home buyers and
sellers are looking for people they can trust and that "the faith connection is very
important." This Internet service is basing its segmentation strategy on:
A) usage rate
B) age
C) personality
D) benefits desired
E) geography
Answer: D Type: Application Page: 150-151
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Chapter 6 Market Segmentation, Targeting, and Positioning
51. New York Telephone segments its customers according to how much leisure calling
they do. It distinguishes between "chatterboxes," young people who seem to live on
the phone, and "balanced" users, busy women who do not have time for idle chatter.
New York Telephone uses _____ segmentation.
A) behavioral
B) geographic
C) demographic
D) gender
E) psychological
Answer: A Type: Application Page: 150-151
52. Avon first marketed its Skin-So-Soft as a skin lotion. Then, when customers started
buying it to use as a bug and tick repellent, Avon changed its advertising strategy.
Now it promotes Skin-So-Soft for those times when "you can't outrun the
mosquitoes." By emphasizing in its ads the benefits customers desired from its
products, Avon is using _____ segmentation.
A) behavioral
B) geographic
C) usage-type
D) psychological
E) psychographic
Answer: A Type: Application Page: 150-151
53. Which of the following activities could be used to identify which benefits a
manufacturer of cake decorating kits should target?
A) a brainstorming session where all the possible benefits, such as ease of use,
convenience, and appearance, could be listed
B) a focus group to screen out unlikely benefits and to clarify other benefits
C) a large-scale survey to see how important ease of use and convenience are to
consumers
D) observational research on how people select which cake decorating kit to buy
E) all of the above
Answer: E Type: Application Page: 152
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Chapter 6 Market Segmentation, Targeting, and Positioning
54. The market for bourbon and scotch is continuing to age. Assume a distiller is
interested in increasing the usage rate among light drinkers. Which of the following
strategies could be used?
A) Use 20- to 30-year-old people in ads for bourbon and scotch.
B) Lower prices.
C) Use multiple packaging.
D) Promote a contest for bartenders who develop new, marketable drinks containing
those type of liquors.
E) Do any of the above
Answer: E Type: Application Page: 152-153
55. Which of the following statements about segmentation in the business market is true?
A) Rarely is the business market segmented.
B) Each business user usually constitutes a separate market segment.
C) There are more buyers in business markets than in consumer markets.
D) Some of the bases used to segment the consumer market can also be used to
segment the business market.
E) The type of buying decision is determined by the customer size.
Answer: D Type: Comprehension Page: 152-153
56. The bases used for segmenting the business market include:
A) customer location.
B) buying situation.
C) customer size.
D) purchase criteria.
E) all of the above.
Answer: E Type: Definition Page: 152, Table 6.2
57. With sales of mobile phones in the established western markets slowing down, Nokia
(which has previously only sold to the consumer market) has decided to grow by
systematically targeting large corporations that typically provide hundreds of their
employees with mobile phones. Nokia apparently is segmenting the business market
according to:
A) customer location.
B) buying situation.
C) customer size.
D) purchase criteria.
E) organization structure.
Answer: C Type: Application Page: 152, Table 6.2
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Chapter 6 Market Segmentation, Targeting, and Positioning
58. Which of the following is an example of a transaction condition that could be used to
segment the business market?
A) organization structure
B) order size
C) purchase criteria
D) region
E) size of company
Answer: B Type: Definition Page: 152-153, Table 6.2
59. In 1926, the Jell-O Company introduced chocolate flavor pudding mix for schools,
convalescent homes, orphanages, sanitariums, hospitals, and similar institutions.
What kind of segmentation did the company use in the business market?
A) customer type
B) purchase criteria
C) organization structure
D) demographic
E) buying situation
Answer: A Type: Application Page: 152-153
60. A manufacturer of stained-glass windows needs to use different strategies to reach
church building societies, home owners, and contractors. This is an example of
segmentation by:
A) geographic area.
B) size of customer.
C) usage rate.
D) type of buying situation.
E) type of customer.
Answer: E Type: Application Page: 152-153
61. Tuttle Aluminum & Bronze makes aluminum railings used in stadiums, educational
facilities, hospitals, and nursing homes. To reach each of its target markets and to
satisfy the specific needs associated with each, Tuttle uses segmentation by:
A) geographic area.
B) organization structure.
C) usage rate.
D) type of buying situation.
E) type of customer.
Answer: E Type: Application Page: 152-153
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Chapter 6 Market Segmentation, Targeting, and Positioning
62. A large wholesaler of tires has separate marketing strategies for dealer-owned car
repair centers, retail chains like Wal-Mart and Kmart, and small local tire dealers.
This is an example of segmentation by:
A) geographic area.
B) size of customer.
C) demographics.
D) type of buying situation.
E) benefits desired.
Answer: B Type: Application Page: 153
63. For the 15th year in a row, C&K Caterers was selected to cater all the luncheons for
the Savannah Bridge Club. A different strategy was used when the caterer went after
new business and tried to land the contract for the weekly Rotarian lunches. In terms
of the business market, the different strategies required to make each sale was the
result of the:
A) size of the customer.
B) customer location.
C) type of product.
D) type of buying situation.
E) benefits desired.
Answer: D Type: Application Page: 153
64. The primary benefit inherent in a market aggregation strategy is:
A) its ability to cope with seasonal demand.
B) its ability to allow extensive market penetration into one segment.
C) the reduced need for innovation.
D) its cost minimization.
E) none of the above.
Answer: D Type: Comprehension Page: 154
65. The three target-market strategies are:
A) market aggregation, undifferentiated, and concentration.
B) market aggregation, single-segment, and multiple-segment.
C) concentration, undifferentiated, and product differentiation.
D) product differentiation, market aggregation, and single-segment concentration.
E) differentiated-market, mass market, and product differentiation.
Answer: B Type: Definition Page: 154-156
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Chapter 6 Market Segmentation, Targeting, and Positioning
66. Concentration strategy and multiple-segment strategy are two of the three target
market strategies. The other type is called:
A) divestment.
B) market aggregation.
C) diversification.
D) market development.
E) product development.
Answer: B Type: Definition Page: 154-156
67. Market aggregation:
A) is a strategy in which a company treats its total market as one unit.
B) groups together people with similar market characteristics.
C) implies that each individual should be treated as a separate market segment.
D) usually results in firms aiming at smaller and less profitable markets.
E) is a "rifle" approach to developing marketing activities.
Answer: A Type: Definition Page: 154-155
68. Lego, the Danish toymaker, treats all of its customers--whether a small independent
toy store or a large chain like Target--exactly the same. In other words, Lego uses:
A) divestment.
B) market aggregation.
C) diversification.
D) market development.
E) product development.
Answer: B Type: Application Page: 154-156
69. If it adopts a strategy of _____, a firm will use only one combination of marketing mix
variables.
A) product differentiation
B) multiple segmentation
C) product heterogeneity
D) market development
E) market aggregation
Answer: E Type: Definition Page: 154-155
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Chapter 6 Market Segmentation, Targeting, and Positioning
70. A company is most likely to use a market aggregation strategy when:
A) market potential is declining.
B) the company is operating in a highly competitive market.
C) the product is highly differentiated.
D) the company wants to reduce production and marketing expenses.
E) the firm is very customer-oriented.
Answer: D Type: Comprehension Page: 154-155
71. Which of the following products would be most suited to a market aggregation
strategy?
A) baking soda
B) movie videos
C) automobiles
D) dog food
E) mouthwash
Answer: A Type: Application Page: 154-155
72. Shawn Walters operates a kennel behind his home. He charges $7 per day for any dog
he boards and advertises weekly in the local newspaper. He believes all any boarded
animal needs is dry food once a day and an adequate water supply. He most likely
uses a _____ strategy.
A) product differentiation
B) multiple segmentation
C) target marketing
D) market development
E) market aggregation
Answer: E Type: Application Page: 154-155
73. _____ is the strategy by which one firm attempts to distinguish its product from
competitive brands offered to the same aggregate market.
A) Market development
B) Product differentiation
C) Market segmentation
D) Product development
E) Market differentiation
Answer: B Type: Definition Page: 155
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Chapter 6 Market Segmentation, Targeting, and Positioning
74. While other real estate agents advertise in The Yellow Pages, Maryland Christian Real
Estate advertises in The Shepherd's Guide, a Christian business phone directory. Its
owner Philip DeLizio has actually discouraged young couples from buying a home
when he believed they couldn't comfortably afford it. By emphasizing honesty and
empathy above concerns about making the sale, Maryland Christian Real Estate has
implemented a _____ strategy.
A) market development
B) product differentiation
C) product segmentation
D) product development
E) market differentiation
Answer: B Type: Application Page: 155
75. There are over 160 magazines on the market aimed at children between the ages of 8
and 13. How can a new magazine differentiate itself?
A) by giving away copies of its magazines in school classrooms
B) by using a differentiated marketing mix
C) by dividing the whole market into several homogeneous subsegments
D) by developing and promoting a unique focus that is not currently being offered
E) by not advertising at all, but relying on word of mouth
Answer: D Type: Application Page: 155
76. While most people consider automobile features to be similar, Ford has added a new
feature--adjustable brake and gas pedals. These pedals allow short drivers to get close
enough to the pedals to operate the car properly without having to get too close to the
steering wheel. Ford is using a _____ strategy.
A) market development
B) product differentiation
C) product segmentation
D) product development
E) market differentiation
Answer: B Type: Application Page: 155
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Chapter 6 Market Segmentation, Targeting, and Positioning
77. If a woman wants to color her hair, there are many products to choose from; most of
them are alcohol-based. In order to make use of a ______ strategy, Clairol developed
the first water-based permanent color crème called Hydrience.
A) market development
B) product differentiation
C) product segmentation
D) product development
E) market differentiation
Answer: B Type: Application Page: 155
78. Land Rover is a manufacturer of bicycles for the European market. It recently
introduced a Land Rover Discovery Vogue pink bicycle that has been specifically
tailored to fit the female form. With the design of this new bicycle, Land Rover has
used:
A) market development
B) product differentiation
C) product segmentation
D) product development
E) market differentiation
Answer: B Type: Application Page: 155
79. Which of the following is the best example of product differentiation?
A) Revlon advertises that its ColorStay lipsticks "won't kiss off" like other kinds of
lipstick.
B) Marriott resort hotels provide guests with swimming pools, tennis courts, and a
golf course.
C) Kroger's carries Pepperidge Farm products.
D) Cedartown Hardware provides its customers with an inexpensive picture-framing
service.
E) Carmike Cinemas charges less for its matinee movies.
Answer: A Type: Application Page: 155
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80. Which of the following is the best example of product differentiation?
A) La-Z-Boy expands the number of retailers that carry its recliners.
B) Florida orange growers market their orange juice under the brand name Florida's
Natural.
C) Duracell Ultra batteries claim to be more powerful and last longer in high-drain
devices than any other battery.
D) The dentist gives a free toothbrush with every cleaning.
E) Dillard's department store carries Calvin Klein jeans.
Answer: C Type: Application Page: 155
81. A strategy of _____ involves selecting as the target market one homogeneous segment
from within the total market.
A) undifferentiated marketing
B) multiple-segment positioning
C) single-segment concentration
D) mass marketing
E) market aggregation
Answer: C Type: Definition Page: 155
82. Another name for a single-segment strategy is a(n) _____ strategy.
A) aggregated
B) mass market
C) differentiated
D) undifferentiated
E) concentration
Answer: E Type: Definition Page: 155
83. The only product line that Fresenius Medical Care has is dialysis equipment. Its only
customers are health care facilities that provide dialysis service. Fresenius uses a(n)
_____ strategy.
A) aggregated
B) mass market
C) differentiated
D) undifferentiated
E) single-segment
Answer: E Type: Application Page: 155
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84. An office cleaning service that did not want to compete with many firms in a broad
market could adopt a strategy of:
A) diversification.
B) mass marketing.
C) demographic segmentation.
D) single-segment concentration.
E) multiple segmentation.
Answer: D Type: Application Page: 155
85. The market for the whips made by Westfield Whip Manufacturing has narrowed until
only one real market for its product exists--participants in harness racing. Knowing
this, you could say that Westfield uses a _____ strategy.
A) diversification
B) demographic
C) aggregation
D) single-segment
E) mass marketing
Answer: D Type: Application Page: 155
86. Rolls-Royce does not want to market to every driver in the U.S. The company has
identified a small group of people whose incomes and lifestyles make them most
likely to purchase a Rolls. Since the car manufacturer's marketing efforts are
concentrated on this group, Rolls can be said to be using a _____ strategy.
A) undifferentiated marketing
B) multiple-segment
C) single-segment
D) mass marketing
E) market aggregation
Answer: C Type: Application Page: 155
87. Firms that pursue single segments are often called:
A) functional sellers.
B) utility brokers.
C) niche marketers.
D) fragmentation marketers.
E) substantive sellers.
Answer: C Type: Definition Page: 155
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Chapter 6 Market Segmentation, Targeting, and Positioning
88. A retail clothing store that caters to men shorter than 5' 6" is an example of a:
A) functional seller.
B) utility broker.
C) niche marketer.
D) fragmentation marketer.
E) substantive seller.
Answer: C Type: Application Page: 155
89. What is the major reason why many marketers do not use a single-segment strategy?
A) the potential for economic loss if that single segment declines in market potential
B) the inability to use such a strategy with products that have only seasonal demand
C) the inability to be truly creative in promoting their product
D) the need for a higher sales volume with this approach than when using a multiplesegment approach
E) the way the strategy inhibits the sale of intangible products
Answer: A Type: Comprehension Page: 155
90. In the strategy of _____, two or more different groups of potential customers are
identified and a separate marketing mix is developed to reach each group.
A) undifferentiated marketing
B) multiple-segment target marketing
C) mass marketing
D) market aggregation
E) market differentiation
Answer: B Type: Definition Page: 155-156
91. Marketers of office furniture have developed different marketing strategies to reach
home office owners, small business owners, large corporations, and professional
people such as lawyers and physicians. What kind of a strategy is being used by these
companies?
A) market augmentation
B) multiple-segment
C) single-segment
D) product development
E) diversification
Answer: B Type: Application Page: 155-156
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Chapter 6 Market Segmentation, Targeting, and Positioning
92. Tuttle Aluminum & Bronze manufactures and markets aluminum railings used in
stadiums, sports facilities, educational facilities, banks, commercial buildings, nursing
homes, hospitals, sewer, and water plants. Tuttle uses a _____ strategy.
A) market augmentation
B) multiple-segment
C) single-segment
D) product development
E) diversification
Answer: B Type: Application Page: 155-156
93. Which of the following products would be most likely to benefit from a multiplesegment strategy?
A) office products, such as computer diskettes
B) staple food products, such as milk
C) luxury items, such as diamond bracelets
D) seasonal products, such as ski resorts
E) services, such as a placement office
Answer: D Type: Application Page: 155-156
94. The founder of Marriott began with an A&W root beer stand, which attracted tourists
during the summer. To maintain his business, he had to add a line of hot foods during
the winter months for local residents. In those early years, Marriott dealt with a
seasonal business by using a _____ strategy.
A) market augmentation
B) multiple-segment
C) single-segment
D) product development
E) diversification
Answer: B Type: Application Page: 155-156
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Chapter 6 Market Segmentation, Targeting, and Positioning
95. Which of the following statements about multiple-segment target marketing is true?
A) A multiple-segment strategy normally results in a lower total sales volume than a
single-segment approach.
B) Multiple segmentation should not be used for a seasonally demanded product.
C) Unit costs of production and marketing decrease when a multiple-segment strategy
is used.
D) A multiple-segment strategy identifies several different target markets to which
the same marketing mix is applicable.
E) None of the above statements about multiple-segment target marketing is true.
Answer: E Type: Comprehension Page: 155-156
96. The biggest drawback inherent in a multiple-segment strategy is the:
A) potential for economic loss if any single segment declines in market potential.
B) inability to use such a strategy with products that have only seasonal demand.
C) increase in unit costs of production and marketing when multiple segments are
targeted.
D) need for a higher sales volume with this approach than with a single-segment
approach.
E) way the strategy inhibits the sale of intangible products.
Answer: C Type: Comprehension Page: 155-156
97. A company that implements a multiple-segment strategy can anticipate:
A) total inventory costs decreasing.
B) advertising costs going down.
C) reduced distribution costs.
D) lower general administrative costs.
E) none of the above.
Answer: E Type: Comprehension Page: 155-156
98. The ad for Era laundry detergent portrays it as cheaper and just as effective at
removing stains as any other brand of detergent. Its manufacturer Procter & Gamble
is using a _____ strategy to describe Era in relation to all its competitors.
A) market development
B) product penetration
C) positioning
D) diversification
E) targeting
Answer: C Type: Application Page: 157-158
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Chapter 6 Market Segmentation, Targeting, and Positioning
99. Barber Foods markets a line of frozen chicken dinners. Its ad states that it wants its
consumers to think of its chicken dinners as the “best frozen entrée” they have ever
had. This statement describes its _____ strategy.
A) market development
B) product penetration
C) positioning
D) diversification
E) targeting
Answer: C Type: Application Page: 157-159
100. The first step in a developing a positioning strategy is to:
A) brainstorm all the possible features, advantages, and benefits.
B) locate target markets.
C) create product differentiation.
D) determine what dimensions the target market considers most important.
E) make sure the product is conveying a consistent message with its integrated
marketing communications.
Answer: D Type: Definition Page: 158
101. At one time Kraft was on the verge of discontinuing Cheez Whiz because its sales
were so low. Then Kraft determined it could launch a new ad campaign showing
Cheez Whiz as a fast, convenient microwavable cheese sauce. This _____ strategy
made Cheez Whiz a strong product within the Kraft product line.
A) market development
B) product diversification
C) target market divestment
D) repositioning
E) market aggregation
Answer: D Type: Application Page: 159
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Chapter 6 Market Segmentation, Targeting, and Positioning
102. Phillips is a manufacturer of various electrical and electronic items. It has been
described as a "dodo in waiting," especially when compared to its competitors like
Samsung and Sony. The new CEO of Phillips is determined to make Phillips "a cool
brand name. In other words, he is planning on implementing a _____ strategy.
A) market development
B) product diversification
C) target market divestment
D) repositioning
E) market aggregation
Answer: D Type: Application Page: 159
103. Merloni Elettrodomestici is an Italian-based manufacturer of appliances. It also is the
company that manufactures Hotpoint appliances. To show its global marketing thrust,
the company is changing its name to Indesit, a word that is more easily pronounced
outside of Italy, and trying to adapt a more international feel to its products and
promotion. The company is implementing a _____ strategy.
A) market development
B) product diversification
C) target market divestment
D) repositioning
E) market aggregation
Answer: D Type: Application Page: 159
104. _____ refers to the proportion of total sales of a product during a stated period in a
specific market that is captured by a particular firm.
A) Market share
B) Sales potential
C) Sales index
D) Economic potential
E) Market index
Answer: A Type: Definition Page: 160
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Chapter 6 Market Segmentation, Targeting, and Positioning
105. Indesit, an Italian appliance manufacturer, sold 15.5 percent of all appliances sold in
Europe in 2004. This was the company's:
A) sales potential.
B) market potential.
C) economic index.
D) market share.
E) economic share.
Answer: D Type: Application Page: 160
106. Within three months of its introduction, Proctor & Gamble's Easy-Up brand
disposable training pants had 7 percent of the $1 billion training pants market in the
United States. This seven percent represented P&G's _____ for that period.
A) economic potential
B) sales index
C) market potential
D) market index
E) market share
Answer: E Type: Application Page: 160
107. A _____ is an item or element that (1) exists in a market, (2) may be measured
quantitatively, and (3) relates to the demand for a good or service.
A) market factor
B) demand forecast
C) sales catalyst
D) profit consideration
E) sales potential
Answer: A Type: Definition Page: 160-161
108. A _____ underlying the demand for watch batteries is the number of people who own
and wear watches.
A) market factor
B) differential advantage
C) sales catalyst
D) profit consideration
E) product-market growth strategy
Answer: A Type: Application Page: 160-161
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Chapter 6 Market Segmentation, Targeting, and Positioning
109. "The number of dogs in U.S. that are 7 years old or older" is related to the demand for
senior dog food. This is an example of a _____ because the number of older dogs
determines how many bags of senior dog food can be sold.
A) market index
B) market share
C) market factor
D) market potential
E) sales potential
Answer: C Type: Application Page: 160-161
110. The number of people in the Dallas-Fort Worth area who are planning to take a
vacation outside the continental U.S. this year is an example of a _____ for the airlines
serving that airport that make international flights.
A) market index
B) market share
C) market factor
D) market potential
E) sales potential
Answer: C Type: Application Page: 160-161
111. Morning Glory Gateway is a retail chain that operates 200 stores in South Korea and
150 others around the world in regions that have a large Korean immigrant population.
A _____ for the retail chain would be the number of Koreans that apply for permission
to immigrate to a particular region.
A) market index
B) market share
C) market factor
D) market potential
E) sales potential
Answer: C Type: Application Page: 160-161
112. _____ is the total sales volume that all organizations selling a product during a stated
time period in a specific market can expect to achieve under ideal conditions.
A) Market share
B) Market potential
C) Market index
D) Sales potential
E) Profit analysis
Answer: B Type: Definition Page: 161
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Chapter 6 Market Segmentation, Targeting, and Positioning
113. Market potential is the:
A) total sales volume that all organizations selling a product during a stated time
period in a specific market can expect to achieve under ideal conditions.
B) total dollar value of sales estimated for all organizations selling a product during a
stated time period in a specific geographical market.
C) portion of market forecast a specific company can reasonably expect to achieve.
D) portion of economic potential a specific company can reasonably expect to
achieve.
E) total dollar value of sales estimated for a specific company with a trend analysis.
Answer: A Type: Definition Page: 161
114. Sales potential is the:
A) total dollar value of sales estimated for all organizations selling a product during a
stated time period in a specific geographical market.
B) total sales volume that all organizations selling a product during a stated time
period in a specific market can expect to sell under ideal conditions.
C) portion of economic potential a specific company can reasonably expect to
achieve.
D) portion of market potential a specific company could expect to achieve under ideal
conditions.
E) total dollar value of sales estimated for a specific company with a trend analysis.
Answer: D Type: Definition Page: 161
115. _____ is the portion of market potential a specific company could expect to achieve
under ideal conditions.
A) Market share
B) Sales index
C) Market index
D) Sales potential
E) Profit analysis
Answer: D Type: Definition Page: 161
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Chapter 6 Market Segmentation, Targeting, and Positioning
116. A(n) _____ is an estimate of probable sales for one company's brand of a product
during a stated period in a specific market, assuming a defined marketing plan is used.
A) market index
B) economic forecast
C) market share
D) economic index
E) sales forecast
Answer: E Type: Definition Page: 161
117. Thor Industries manufacturers motor homes and prides itself on knowing its markets
and understanding market demand for its products. The _____ for the company was
unable to predict its actual growth. In 2003, the company had a six-month backlog of
$250 million orders.
A) market index
B) economic forecast
C) market share
D) economic index
E) sales forecast
Answer: E Type: Application Page: 161
118. Sales forecasts:
A) are typically expressed as percentages.
B) should be developed as if the organization operated in a vacuum.
C) are best prepared after market potential and sales potential have been determined.
D) are typically developed for ten-year periods.
E) should never be based on assumptions.
Answer: C Type: Comprehension Page: 161
119. Which of the following statements about a sales forecast is true?
A) A sales forecast is an estimate based on general factors and assumptions.
B) A sales forecast should be prepared before market potential and sales potential are
estimated.
C) Once the sales forecast has been prepared, it becomes the key controlling factor in
all operational planning throughout the organization.
D) Sales forecasts are always expressed in product units because of the dynamic
nature of the economic environment.
E) Sales forecasts typically have an error factor of at least 10 percent.
Answer: C Type: Comprehension Page: 161
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Chapter 6 Market Segmentation, Targeting, and Positioning
120. Which of the following is a commonly used method for forecasting sales?
A) market-factor analysis
B) survey of buyer intentions
C) executive judgment
D) test marketing
E) all of the above
Answer: E Type: Definition Page: 161-164
121. _____ assumes the future demand for a product is related to the behavior of certain
market factors and, as a result, involves determining what those factors are, then
measuring their relationship to sales activity.
A) Market-share analysis
B) Market-response audit
C) Positioning strategy
D) Market-factor analysis
E) Consumer-demand analysis
Answer: D Type: Definition Page: 162
122. In order for a marketer to use market-factor analysis, he or she must assume:
A) competitors will not have access to the same information sources.
B) future demand for a product is related to the behavior of certain market factors.
C) people will answer the survey honestly.
D) the survey was statistically random.
E) the sample was not biased.
Answer: B Type: Comprehension Page: 162
123. The two methods used for translating market-factor behavior into demand forecasts
are correlation analysis and:
A) multiple regression.
B) the standard-deviation method.
C) the sales-force composite.
D) the Delphi method.
E) the direct-derivation method.
Answer: E Type: Definition Page: 162
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Chapter 6 Market Segmentation, Targeting, and Positioning
124. The direct-derivation method:
A) requires little statistical analysis.
B) measures the probability of whether consumers will buy a new product.
C) is a statistical refinement of market-share analysis.
D) is expensive and time-consuming.
E) adds a flat percentage increase to last year's sales figures to predict this year's.
Answer: A Type: Definition Page: 162
125. What is the major limitation of the direct-derivation method for demand forecasting?
A) Random surveys are costly and time-consuming.
B) The computer simulation can use only a limited number of market factors.
C) Demand for the product of interest must be derived from a factor that is easily
measurable.
D) To use this method, an executive must be an expert in statistics.
E) Samples are easily biased.
Answer: C Type: Comprehension Page: 162
126. The two methods used for translating market-factor behavior into demand forecasts
are the direct-derivation method and:
A) linear regression.
B) the standard-deviation method.
C) the sales-force composite.
D) the Delphi method.
E) correlation analysis.
Answer: E Type: Definition Page: 162
127. Correlation analysis:
A) should not be used to predict market demand.
B) is a slightly more complicated version of sales factor analysis.
C) is based entirely on industry sales figures.
D) is a statistical refinement of the direct-derivation method.
E) is a nonstatistical method of expressing the relationship between market factors
and future market demand.
Answer: D Type: Definition Page: 162
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Chapter 6 Market Segmentation, Targeting, and Positioning
128. Which of the following describes a limitation associated with the use of correlation
analysis to forecast demand?
A) The method is imprecise.
B) Not all marketing executives understand how it is used.
C) No assumptions must be used when using correlation analysis to forecast demand.
D) Correlation analysis does not use market factors to predict demand.
E) Correlation analysis is a statistical refinement of hypothesis testing.
Answer: B Type: Comprehension Page: 162
129. How does multiple correlation differ from correlation analysis as a forecasting tool?
A) Multiple correlation allows consideration of more than one market factor.
B) Multiple correlation does not use any assumptions.
C) Multiple correlation is more easily understood by marketing practitioners.
D) Multiple correlation includes qualitative data.
E) None of the above statements describes how multiple correlation differs from
correlation analysis as a forecasting tool.
Answer: A Type: Definition Page: 162
130. A survey of buyer intentions:
A) refers to a sample of former customers.
B) is inexpensive.
C) often shows an inflated market potential.
D) is extremely reliable for mass marketed products.
E) provides useful information quickly.
Answer: C Type: Definition Page: 163
131. Before opening a new consignment shop in a neighborhood with a large ethnic
population, the retailer could ask people living in the area if they have merchandise
they would like to sell at the store and how many plan to shop there. The retailer
would be using _____ to forecast store sales.
A) correlation analysis
B) a survey of buyer intentions
C) the direct-derivation method
D) linear programming
E) the Delphi method
Answer: B Type: Application Page: 163
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Chapter 6 Market Segmentation, Targeting, and Positioning
132. Habros Industry has developed a new low-energy refrigeration unit that could save the
average supermarket money on its electrical bills as well as being good for the
environment. Before adding the product to its product line, Hasbros surveyed grocery
store managers to see if they would consider replacing their current refrigeration units
with new one. What method of forecasting sales did Hasbros use?
A) survey of buyer intentions
B) brainstorming
C) the sales force composite
D) test marketing
E) the Delphi method
Answer: A Type: Application Page: 163
133. A survey of buyer intentions is most likely to be accurate for which of the following
products?
A) bottled water
B) gaskets used to manufacture small engines
C) bedding plants for home landscaping
D) cereal
E) ice cream
Answer: B Type: Application Page: 163
134. Before Proctor & Gamble introduced its Easy-Up disposable training pants to the
European market, it test marketed the new product in Greece and in regions of
Scandinavia in order to gauge demand. P&G used test markets as a:
A) sales forecasting tool.
B) method to correlate buying trends.
C) customer sales-composite.
D) market-factor analysis.
E) market share index predictor.
Answer: A Type: Application Page: 163-164
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Chapter 6 Market Segmentation, Targeting, and Positioning
135. To determine if there is sufficient demand for a new product in Great Britain,
marketers often first offer the product in Northern Ireland, a limited geographic area.
Sales data from Northern Ireland can be used to forecast demand throughout the rest
of the British Isles. This example shows how _____ can be used to project sales over
a larger area.
A) survey of buyer intentions
B) past sales analysis
C) test marketing
D) sales-force composite
E) Delphi method
Answer: C Type: Application Page: 163
136. To forecast sales using _____, management can apply a flat percentage increase to last
year's sales volume.
A) correlation analysis
B) past sales analysis
C) the direct-derivation method
D) linear programming
E) the Delphi method
Answer: B Type: Definition Page: 163
137. E-Z Moving Company has operated in the Des Moines area for almost 20 years. To
forecast the number of households it would move in 2004, E-Z's owner assumed the
three percent growth rate the company has experienced in 2002 and in 2003 would
continue. Which method for forecasting sales was being used in this example?
A) correlation analysis
B) past sales analysis
C) the direct-derivation method
D) linear programming
E) the Delphi method
Answer: B Type: Definition Page: 163
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Chapter 6 Market Segmentation, Targeting, and Positioning
138. Which one of the following businesses would be most likely to use a past sales
analysis to forecast sales?
A) a publisher of a new ecology-oriented magazine for children
B) an art gallery that specializes in finding and selling the work of new artists
C) a mobile home dealer in an economically depressed area
D) a hospital pharmacy in an efficiently operated hospital
E) a tourist hotel in Cairo, Egypt, that features cruises down the Nile River
Answer: D Type: Application Page: 163
139. Which procedure for forecasting demand for next year would most likely be used by a
car repair center whose motto is "More than thirty satisfied years in the same
location"?
A) survey of buyer intentions
B) past sales analysis
C) test marketing
D) sales-force composite
E) Delphi method
Answer: B Type: Application Page: 163
140. Which method of forecasting sales would most likely be affected if the company using
that method compensated its sales people by how well they achieved their sales
quotas?
A) survey of buyer intentions
B) past sales analysis
C) test marketing
D) sales-force composite
E) Delphi method
Answer: D Type: Comprehension Page: 163-164
141. Which of the following organizations would probably determine the most accurate
prediction of forecasted demand using the sales-force composite?
A) a manufacturer of adhesives
B) a retailer of women's shoes
C) a manufacturer of anti-aircraft tanks
D) a wholesaler of grocery products
E) a superstore, like Bed, Bath & Beyond
Answer: C Type: Application Page: 163-164
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Chapter 6 Market Segmentation, Targeting, and Positioning
142. Sales-force composite as a method of forecasting demand is most effective when:
A) the macroeconomic environment is dynamic.
B) the market is not segmented.
C) the product is new to its market.
D) competition for sales dollars is intense.
E) the market is composed of a relatively few, but large, customers.
Answer: E Type: Comprehension Page: 163-164
143. The use of executive judgment to forecast sales:
A) typically produces pessimistic forecasts.
B) is risky because the executives are giving answers based on their intuition.
C) is superior to other methods of forecasting sales.
D) should never be used when past sales analysis is feasible.
E) should never be used in combination with other sales forecasting methods.
Answer: B Type: Comprehension Page: 164
144. Before introducing a magazine devoted to Internet gambling, its publisher asked top
management in the casino industry their opinions of the potential success of the
venture. The magazine publisher used _____ to forecast sales for the new product.
A) trend analysis
B) executive opinion
C) sales-force composite
D) past sales analysis
E) correlation analysis
Answer: B Type: Application Page: 164
145. Business owners who use _____ demand forecasting find it avoids the biasing
influence of one individual on another.
A) a consumer panel
B) brainstorming
C) the sales force composite
D) test marketing
E) the Delphi method
Answer: E Type: Comprehension Page: 164
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Chapter 6 Market Segmentation, Targeting, and Positioning
146. The Delphi method is a specialized form of:
A) executive judgment.
B) brainstorming.
C) the sales force composite.
D) test marketing.
E) the survey of buyer intentions.
Answer: A Type: Definition Page: 164
True/False Questions
147. By tailoring marketing programs to individual market segments, management can
make more efficient use of its marketing resources.
Answer: True Type: Comprehension Page: 143
148. Because some of the variables on which markets can be segmented are intangible, it is
not necessary for a marketer to be able to measure how many customers are in a
market segment for it to be a legitimate segment.
Answer: False Type: Comprehension Page: 144-145
149. Micromarketing is not a marketing strategy used in the business market.
Answer: False Type: Comprehension Page: 145
150. The advent of television has made regional segmentation obsolete.
Answer: False Type: Comprehension Page: 146-147
151. Demographic variables include education, occupation, life-style, personality, age, and
gender.
Answer: False Type: Definition Page: 147-148
152. Population distribution by age can be used to create approximate market segments for
all products.
Answer: False Type: Comprehension Page: 147-148
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Chapter 6 Market Segmentation, Targeting, and Positioning
153. Geodemographic clustering is used primarily by international marketers.
Answer: False Type: Definition Page: 148
154. Most companies use personality segmentation because they realize compulsive people
have different buying patterns than cautious ones.
Answer: False Type: Comprehension Page: 148-149
155. Psychographics evolved from attempts by marketers to find measures more directly
related to purchase and consumption than demographics.
Answer: True Type: Fact Page: 148-150
156. When marketers use life-style segmentation, they are looking at consumers' activities,
interests, and opinions.
Answer: False Type: Definition Page: 149
157. The market for cereal could be segmented on the basis of the different benefits desired
by customers, such as taste, vitamin-content, low-fat, and how it interacts with milk.
Answer: True Type: Application Page: 148-150
158. Like other marketers, the marketers of pine-scented room deodorizers are most
interested in reaching the segment containing nonusers.
Answer: False Type: Application Page: 148-150
159. The four bases used only for segmenting business markets and not for segmenting
consumer markets are type of customer, size of customer, type of buying situation, and
geographic location.
Answer: False Type: Definition Page: 152
160. A computer wholesale company that has some salespeople who regularly sell to small
retailers and another sales force that sells to colleges and universities could be said to
have segmented its market according to customer type.
Answer: True Type: Application Page: 152-153
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Chapter 6 Market Segmentation, Targeting, and Positioning
161. A market aggregation strategy is also known as a mass-market strategy or an
undifferentiated-market strategy.
Answer: True Type: Definition Page: 154
162. The market aggregation strategy is sometimes referred to as a "shotgun" approach to
marketing because it uses one marketing mix to reach the total market.
Answer: True Type: Definition Page: 154
163. Products like sugar, heating oil, and vinyl siding are more likely to be marketed using
a market aggregation strategy than are breakfast cereals, toothpaste, and automobiles.
Answer: True Type: Application Page: 154-155
164. The ad for a Whirlpool stove said that it could be cleaned faster than any other stove
currently on the market. This product feature would be an excellent tool for
implementing a single-segment strategy.
Answer: False Type: Application Page: 155
165. A multiple-segment strategy is unlikely to be used by a company that manufactures
products that have seasonal demand.
Answer: False Type: Comprehension Page: 155-156
166. A repositioning strategy is typically used just prior to a product entering the decline
stage of its product life cycle.
Answer: False Type: Comprehension Page: 159
167. A market factor is simply a market index expressed as a percentage.
Answer: False Type: Definition Page: 159-160
168. Unlike market potentials and sales potentials, which are estimates based on general
facts and market assumptions, sales forecasts are based on a specific product's
marketing plan.
Answer: True Type: Definition Page: 161
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Chapter 6 Market Segmentation, Targeting, and Positioning
169. A company can forecast sales by using either an internal or an external approach.
Answer: False Type: Comprehension Page: 161
170. When cellular phones were introduced, their manufacturer could not use correlation
analysis to forecast market demand for the new product.
Answer: True Type: Application Page: 162
171. The Delphi technique is one specialized method of developing a sales force composite.
Answer: False Type: Definition Page: 164
Fill in the Blank Questions
172. A _____ _____ is the group of customers (people or organizations) for whom the
seller designs a particular marketing mix.
Answer: target market
Type: Definition Page: 142
173. _____ _____ is the process of dividing the total market for a good or a service into
several smaller groups such that the members of each group are similar with respect to
the factors that influence demand.
Answer: Market segmentation
Type: Definition Page: 143
174. _____ segmentation can be done on the basis of regions, cities, urban-rural status, or
climate.
Answer: Geographic
Type: Definition Page: 146-147
175. _____ is the most common basis for segmenting consumer markets.
Answer: Demographics
Type: Fact Page: 147-148
176. _____ segmentation involves examining attributes related to how a person thinks,
feels, and behaves.
Answer: Psychographic
Type: Definition Page: 148-150
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Chapter 6 Market Segmentation, Targeting, and Positioning
177. _____ segmentation examines attributes related to how a person thinks, feels, and
behaves.
Answer: Psychographics
Type: Definition Page: 148-150
178. Men who buy Haggar brand slacks fall into several different groups--those who prefer
all-natural fabrics and those who demand wrinkle-free, no iron slacks, as well as those
who want a fit that conforms to their bodies and those who want relaxed fit. A
marketing strategy based on _____ segmentation would be most appropriate for this
market.
Answer: behavioral Type: Application Page: 150-151
179. A provider of daycare service who assumes everyone who needs childcare has
basically the same characteristics would be likely to use a _____ _____ strategy.
Answer: market aggregation
Type: Application Page: 154
180. As part of its product _____ strategy, Post has introduced the first children's cereal
that is a good source of calcium.
Answer: differentiation
Type: Application Page: 155
181. When Xerox first started selling its copying machines, it concentrated its sales efforts
on firms with high-volume copying requirements by offering a high-priced,
sophisticated copier. At that time, Xerox used a _____ strategy.
Answer: single-segment
Type: Application Page: 155
182. Under a _____ strategy, two or more different groups of potential customers are
identified as target markets, and a separate marketing mix is developed to reach each
segment.
Answer: multiple-segment
Type: Definition Page: 155-156
183. Tagamet HB is a heartburn medication that is taken prior to eating. Pepcid is taken to
relieve heartburn once it has begun. Tums describes itself as providing faster relief
from heartburn than the other two. This describes the _____ strategy used for these
medications to create a brand image in the minds of their target markets.
Answer: positioning
Type: Application Page: 157-158
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Chapter 6 Market Segmentation, Targeting, and Positioning
184. _____ _____ refers to the proportion of total sales of a product during a stated period
in a specific market that is captured by a single firm.
Answer: Market share
Type: Definition Page: 160
185. _____ _____ is a statistical refinement of the direct-derivation method of forecasting
demand.
Answer: Correlation analysis
Type: Definition Page: 162
Mini-Case Questions
Use the following to answer questions 186-192:
Jell-O is a brand name recognized by 99 percent of all Americans and found regularly in the
homes of 72 percent of all Americans. Jell-O began in 1897, when Pearl B. Wait, a carpenter
and cough medicine manufacturer, developed strawberry, raspberry, orange and lemon
flavored gelatins. The first Jell-O recipe book appeared in 1904. In the 1920s, Jell-O recipe
booklets contained recipes that reflected the flamboyance of the decade like Jellied Manhattan
Salad and Egg Slices en Gelée. In the 1940s, Jell-O published war-related recipe booklets
showing how the use of Jell-O could help make the most of every bit of fruit, egg or cream.
In the 1950s, Jell-O was no longer promoted as a food-stretcher; instead; it was as a treat and
a festive dessert to be served with pride. Jell-O is a continually evolving product. Recently, it
introduced X-treme Jell-O in wild berry, green apple, and watermelon flavors to reach the
tweens market. The company describes the X-treme Jell-O brand gelatin as “Jell-O with an
attitude.”
186. In the 1940s, the _____ for Jell-O was thrifty homemakers who were trying to feed
their families tasty meals with the rationed food that was available.
A) business user
B) target market
C) sales potential
D) market potential
E) demographic mix
Answer: B Page: 142
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Chapter 6 Market Segmentation, Targeting, and Positioning
187. What kind of segmentation strategy is Jell-O using to decide to focus its effort on this
tweens market?
A) demographic
B) personality
C) purchase situation
D) usage rate
E) income level
Answer: A Page: 147-148
188. What segmentation base did Jell-O use during the 1920s?
A) usage rate
B) geographic
C) psychographic
D) demographic
E) buying situation
Answer: C Page: 148-150
189. In the 1940s, Jell-O was marketed using _____ segmentation.
A) demographic
B) age
C) personality
D) benefits desired
E) income level
Answer: D Page: 150-151
190. Over the years, Jell-O has employed a _____ strategy to reach several different groups
of potential customers.
A) single-segment
B) niche
C) sales-oriented
D) concentration
E) multiple-segment
Answer: E Page: 155-156
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Chapter 6 Market Segmentation, Targeting, and Positioning
191. When Jell-O was promoted as a food stretcher in 1940s, it was an example of the use
of _____ strategy.
A) market differentiation
B) market aggregation
C) product aggregation
D) positioning
E) niche
Answer: D Page: 157-159
192. During the 1950s, The Jell-O Company implemented a _____ strategy to mark the end
of the food rationing that was commonplace during the 1940s due to World War II.
A) repositioning
B) product diversification
C) target market divestment
D) market development
E) market aggregation
Answer: A Page: 159
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