MKTG 380: Quiz 6

During the process of market segmentation, finalizing the marketing strategy and tactics helps firms to determine the costs of marketing and the expected level of resources it must commit.

True

Dividing an overall market into homogeneous groups based on gender and age would constitute demographic segmentation.

True

Engel observed that the percentage of income spent on household operations and clothing remains constant even when the household income increases.

True

Families, bachelors, and retirees could be considered separate market segments for a company promoting travel packages.

True

Firms must attempt to group consumers according to the presence or absence of those factors that affect purchase decisions.

True

Generation X is very family-oriented, well educated, and optimistic.

True

Geographic indicators such as job growth give useful guidance to marketers, depending on the type of products they sell.

True

Items can be classified as business products, not because of what they are, but because of how they will be used.

True

Market segmentation attempts to isolate traits that distinguish a certain group of consumers from the overall market.

True

Members of Generation Y gravitate to activities that provide constant entertainment and immediate gratification.

True

Micromarketing may cause a company to lose sight of other, larger markets.

True

Psychographic segmentation divides a population into groups with similar values and lifestyles.

True

Psychographic segmentation helps marketers to gain a sharper insight into consumer purchasing behavior.

True

Targeting a large number of small markets can produce an expensive, complex, and inefficient marketing strategy.

True

The market segmentation that is based on the stages of the family lifecycle is a form of demographic segmentation.

True

The marketing strategy that targets potential customers based on specific occupation or lifestyle is called micromarketing.

True

The number and size of the market segments chosen by a firm must match its marketing capabilities.

True

Up & Away Flying Corporation recently began manufacturing private helicopters. If they have a limited advertising budget, concentrated marketing would be the ideal marketing strategy for this firm.

True

Using AIO statements allows marketing researchers to develop lifestyle profiles.

True

Progresso Soup has a line of hearty soups that are promoted to all consumers using a single marketing mix. The company is utilizing ______ marketing.​

Undifferentiated

​The Bates Lighting Company has two divisions, business and consumer products. Because of poor profits, it may downsize the consumer division. This could mean loss of jobs for people involved with the marketing of:

- Flashlights for buildings that lose power - Desk lamps for officers or college dorms

The VALS system will categorize consumers who are influenced by symbols of success as:

Achievement-Motivated Consumers

AIO statements describe which of the following?

Activities, interests, and opinions

_____are those born between 1946 and 1964 and are a popular segment to target because of their numbers and income levels.

Baby Boomers

Title Nine is a specialty retailer targeting active women with a proprietary mix of apparel designed for active lifestyles and sports. The company began as a direct marketer - using only catalogs and its website to generate sales. However, over the years, Title Nine has opened retail outlets across the country. The company identifies strategic opportunities for new stores based upon the sales generated by current customers in the potential market area. For example, if Title Nine has a significant number of purchasers in the Boston area, they will further analyze the market and select a location for a retail outlet. What type of segmentation strategy is Title Nine utilizing when selecting a market for a new store location?

Benefit

A technology company that makes computers for professional use is trying to segment its customers. The company asked some professional computer users to evaluate the importance of various computer attributes that influence their purchase decisions and then used this data to segment the consumers based on similar response patterns. This is an example of segmentation by:

Benefits Sought

​June knows that the students who patronize her campus ice cream shop are looking to socialize as much as to consume a treat. In her advertising, she shows images of customers enjoying each other's company. June is segmenting based on:

Benefits sought

The product-related segmentation of consumers based on the strength of their attachment and allegiance to their preferred products is called _____ segmentation.

Brand Loyalty

Jacob is the facility manager for a senior living facility and is responsible for maintaining the facility and ensuring that it looks its best. He likes to repaint all surfaces in the facility every two years and has an exclusive contract with Sherwin Williams who supplies the paint and materials. The paint and materials that Jacob purchases from Sherwin Williams to be utilized in the senior living facility would be classified as _____ products.

Business

The lumber that a carpenter purchases to make a table for a customer can be classified as a(n):

Business Product

Iron ore and raw cotton are examples of:

Business Products

When a product is used in the production of another good that is destined for resale, the product is considered as a(n):

Business Products

_____ are goods and services purchased for use either directly or indirectly in the production of other goods and services for resale.

Business Products

American Express, a large firm with many financial products, recently introduced two new credit cards designed for very specific markets: The Knot, for engaged couples, and The Nest, for newlyweds. This is an example of _____ marketing.

Concentrated

An urban area that includes two or more primary metropolitan statistical areas (PMSA) is called a _____.

Consolidated Metropolitan Statistical Area (CMSA)

Cecile is an avid cook and enjoys spending time in the kitchen as well as watching shows on the Food Network. She recently remodeled her kitchen and purchased new appliances. Since she enjoys cooking so much, Cecile purchased a commercial range from a local restaurant supply store and it features double ovens and 12 burners. Her contractor had to make some modifications to enhance the safety of this stove for use in her home but no other changes were needed. What type of product is the stove in the context of this example?

Consumer

Kyle plans to buy new tires for a car that his family uses for camping trips. These tires are of the same type like those that are used on General Motors commercial trucks and can be purchased from Industrial Tire Company. The tires that Kyle will buy for his car can be classified as _____ products.

Consumer

Bobby Flay is a popular celebrity chef who is famous for his use of the grill to create his signature dishes. Recently, Bobby Flay debuted a line of grilling accessories and believes these products will be successful because he has a loyal following among men aged 30 to 60. What type of segmentation is utilized for this new line of grilling accessories?

Demographic

Clairol offers a line of hair color called "Nice n Easy" which allows women to touch-up their hair and easily cover their gray hairs conveniently and easily at home. Based on research, Clairol knows that women aged 30 and above are most likely to need some type of color product to hide their gray hair and maintain a youthful appearance. What type of segmentation does Clairol use by targeting women over 30?

Demographic

Socioeconomic market segmentation is another name for _____ segmentation.

Demographic

The most common method of market segmentation is:

Demographic Segmentation

_____ defines consumer groups according to variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family lifecycle.

Demographic Segregation

While researching on the idea of opening his own health club, Tom learned that there are 11 million health club members in the United States, and 90 percent of them are between the ages of 18 and 49. They prefer to exercise with people of their own gender, and the majority of them are urban dwellers. During the process of market segmentation, this information is most likely to be used by Tom for:

Developing a market segment profile.

A _____ marketing strategy focuses on producing several products and pricing, promoting, and distributing them with several marketing mixes designed to satisfy smaller segments

Differentiated

A _____ marketing strategy focuses on producing several products and pricing, promoting, and distributing them with several marketing mixes designed to satisfy smaller segments.

Differentiated

The VALS system divides consumers into _____categories.

Eight

A management-driven method for identifying market segments involves asking customers for the product attributes important to them.

False

A micropolitan statistical area will have at least one urbanized area of 50,000 or more inhabitants.

False

According to Engel's laws, the percentage of income spent on food increases with increased income.

False

As compared to undifferentiated marketing, applying a micromarketing strategy allows companies to reach larger markets.

False

Automobile manufacturers and food processing companies segment a particular geographic region based on the same factors.

False

Baby Boomers are decreasing in popularity as a market segment due to their declining disposable income.

False

Firms often purchase legal services from external consultants. However, as this does not directly contribute to the firm's production activities, legal services cannot be considered a business product.

False

Geographic segmentation is also called socioeconomic segmentation.

False

Home Depot introduced a new line of riding lawn mowers. The company decided to focus more on people living in the suburbs than those in the city because a survey showed the former category to be more inclined toward gardening. This is an example of a demographic segmentation by Home Depot.

False

If a company markets a consumer product, such as toilet paper, in bulk quantities to the entire market, it is involved in micromarketing.

False

Marketers rarely encounter differences among members of a target group, as they segment potential consumers into homogeneous groups.

False

Psychographic segmentation involves segmenting the consumers on the basis of the benefits they seek from a product.

False

Psychographic segmentation is the most common method of market segmentation.

False

Since rubber purchased by Goodyear is utilized to manufacture tires that are ultimately used by consumers for their automobiles, rubber is a consumer product for Goodyear.

False

The first stage in the market segmentation process, after identifying promising segments, is to produce a forecast of market potential within each segment.

False

The group born between 1968 and 1979, now generally in their early 30s to early 40s are referred to as Generation Y.

False

The revised VALS system categorizes consumers by their occupations.

False

Typically, a single marketing mix strategy attracts all sectors of a market.

False

Bose has developed a new high fidelity line of speakers and is attempting to determine the amount of sales that could be generated by target customers in various segments in order to determine whether or not they should proceed with introduction of the new speakers. Which step of the marketing segmentation process best describes this activity?​

Forecast Market Potential

CoreLogix Inc., has segmented the market as per product usage rates. They have also developed the relevant profile for each of their segments. What would be the next logical step for them in this process of segmentation?

Forecast Market Potential

You want to encourage your longtime customers to continue their relationship with the service your company provides, and so you implement an approach commonly used to segment a market by brand loyalty. What approach did you use?​

Frequent Purchase Program

"The Millennial Generation" is also known as _____.

Generation Next

_____ are computer systems that help marketers analyze marketing information by assembling, storing, manipulating, and displaying data by their location.

Geographic Information System (GIS)

Compared to undifferentiated marketing, the firm that practices differentiated marketing may generally expect:

Greater Promotional Costs

A micropolitan statistical area is an area that:

Has at least one town of 10,000 to 49,999 people.

Before beginning the market segmentation process, a firm should:

Identify bases for segmenting markets.

Which of the following changes is seen as a result of a rise in households with only one person?

Increase in single-serve food products

The division of the total market into smaller, homogenous groups is called _____.

Market Segmentation

Core regions are locations where marketers get majority of their sales.

True

Undifferentiated marketing is also called _____.

Mass Marketing

​Barnes and Noble ​encourages customers to pay $10 annually to become "members" in a loyalty program which rewards them by discounting their purchases. Barnes and Noble utilizes the membership program to analyze customer buying habits and routinely recommends books, magazines or other products which fit their purchasing profile. What type of marketing is Barnes and Nobles using?

Micromarketing

A company that chooses to focus its efforts on satisfying only one market segment for profit is using a(n) _____ strategy.

Niche Marketing

Sustainability has become an important value among individuals in the United States and some believe that man-made factors such as the increased use of diesel and gasoline in cars has led to global warming. Those worried about global warming and seeking ways to reduce their carbon footprint and have invested in products such as solar panels for their homes and electric or hybrid vehicles. What type of segmentation would be most appropriate for Toyota to utilize in marketing its Prius - a hybrid vehicle?

Psychographic

Which of the following segmentation approaches is most likely to help marketers quantify aspects of consumers' personalities and lifestyles to create goods and services for a target market?

Psychographic Segmentation

The revised VALS framework categories consumers by characteristics that correlate with _____.

Purchase Behavior

The 80/20 principle states that:

Roughly 80 percent of total product sales come from 20 percent of customers.

In the VALS system, action-motivated consumers are those who:

Seek physical activity, variety, and adventure.

When firms identify the factors that affect consumers' purchase decisions and develop strategies and tactics to appeal to specific types or groups of customers, they are practicing market _________.

Segmentation

A consumer goods company segments its markets on the basis of purchase patterns of their customers. The company groups its consumers who regularly buy their product into heavy, moderate, and light users, and nonusers. This segmentation approach is an example of _____.

Segmentation by usage rates

A television commercial shows several enthusiastic teens smiling widely and speaking in turn directly to the camera. Using the featured skincare product has changed their lives! It costs more than what you find in the corner drugstore, but it is worth every penny! After weeks of trying one product after another, embarrassed by acne breakouts and shy about socializing with others, now they have clear faces with a healthy-looking glow! What form of product-related segmentation has driven the development of this marketing campaign?​

Segmenting by benefits sought

The revised VALS segmentation system categorizes consumers based on _____.

Self-Motivation

Which of the following products would be the best choice to be marketed using an undifferentiated marketing strategy?

Table Salt

One of the reasons cited by the U.S. Department of Commerce for the trend toward smaller households is:

The Frequency of Divorce

Which of the following is a basic requirement for effective market segmentation?

The market segment must present measurable purchasing power and size.

Detergent packets purchased by a leading laundry service are considered business products.

True

Engel's laws state that, as household income increases:

The percentage of income spent on items such as recreation and education increases.

The determination of whether pencils are consumer products or business products is based on:

The purpose for which the pencils are purchased.

Psychographic segmentation divides a population into groups based on:

Their attitudes, values and lifestyles.

A consolidated metropolitan statistical area comprises of two or more primary metropolitan statistical areas.

True

A metropolitan statistical area (MSA) is a freestanding urban area with a population in the urban center of at least 50,000 and a total MSA population of 100,000 or more.

True

Asian Americans are an attractive target to marketers as they have the fastest rising income.

True

Business products contribute directly or indirectly to the production of other goods and services for resale.

True

Buyers in metropolitan statistical areas exhibit social and economic homogeneity.

True

Concentrated marketing is also known as niche marketing.

True

Concentrated marketing strategy ties a firm's growth to a specific market segment.

True

Adrienne has received her first solo assignment since she was hired as a junior marketing researcher for a national food and beverage distributor. She has been asked to formulate some preliminary ideas about new product development for coffee products sold in the distributor's on-premise consumption outlets. She understands that this assignment is a test to see whether she knows the process. She decides to start with the basics, adding a twenty-first-century twist. How will Adrienne begin the process of formulating ideas about new product development?​

​Adrienne will send online coupons to customers who are Facebook friends or have visited the company's website, and ask them to complete a brief online AIO lifestyle survey that inquires about their activities, interests, and opinions.

​Master Cookie Bakers sells customized cookies to restaurants and standardized cookies to individual buyers. The firm is using:

​Differentiated marketing, since it sells different products to different markets

Market segmentation can help marketers increase their accuracy in reaching the right markets, but it is best used flexibly with other marketing tools. Choose the statement below that best summarizes the market segmentation process.​

​Market segmentation is accomplished in four steps: it employs user profiles; forecasts the overall market; estimates the market share; and selects specific target markets.

Market segmentation is a tool for marketers to use, but its effectiveness depends on four basic requirements. Three of the requirements for effective market segmentation are as follows: (1) the segment must have measurable purchasing power and size; (2) marketers must be able to promote and serve the market; (3) the identified segment must be large enough to bring in a profit. Select the fourth requirement for effective market segmentation from the choices below.​

​The identified segments must match the company's marketing capabilities.

Because consumer needs and purchasing power vary widely, marketers try to identify those factors that affect the decision to buy and make a good target market. Which important characteristic of a market segment would make it an attractive target market?​

​The market segment shows a pattern of growth.

You have just completed an extensive marketing research project designed to determine the potential of a new service your company is considering launching. Using surveys, polling, face-to-face interviews, and mail-in questionnaires, you have determined that the consumers who are most inclined to use this new service live in densely populated urban areas within certain zip codes. What approach to market segmentation should you use?​

​Use geographic variables to segment the market

​Market segmentation has interested you ever since your first marketing course, and you want to work for the type of organization that uses this technique. This means you should avoid pursuing a job with:

​You could pursue a job with any of the above, since all would use market segmentation.