Principles of Marketing Ch. 8
Which of the following best illustrates frequency marketing?
Kroger grocery stores offer a loyalty card that allows consumer to accumulate points towards gas discounts.
Grouping products into meaningful categories makes it easier for consumers to relate to them. The most logical grouping in the fast food industry that buyers would relate to would be ______.
breakfast, lunch, dinner, and snacks
Manufacturing a product only when there is an order from a customer is known as ______.
build-to-order
A perceptual map is used in developing a positioning strategy in order to display the position of the products or brands in the ______ mind.
consumer's
When expenses are greater than the potentially increased sales from segmentation, a firm should ______.
not attempt to segment its market
Which of the following are specific segmentation strategies?
one product and multiple markets multiple product and multiple markets segments of one
The increased customer value associated with ________ may take the form of more products, improved quality on existing ones, or lower prices.
organizational synergy
In a weaker economy, some high-end brands may seek to become more attractive to additional customer segments. One way to do this is to __________ the brand.
reposition
U.S. dairies attempted to ________ chocolate milk on the perceptual map so that it was viewed as more nutritious and more appropriate for adults.
reposition
A business firm should ________ its markets so it can respond more effectively to the needs of its potential buyers, which should result in increased sales and profits.
segment
Mass customization is one of several ________ strategies.
segmentation
Developing a market-product grid is a step in the ______ process.
segmenting and targeting
A market-product grid shows various product offerings and ______.
segments of prospective buyers
The next step after developing a market-product grid and estimating market sizes in the segmentation process is to ________.
select target markets
Which of the following are costs that an organization incur when it produces only a single product and attempts to sell it in two or more different market segments? (Check all that apply.)
- Establishing a new channel of distribution - Creating a separate promotional campaign
Which three factors should a marketer consider when forming market segments?
- simplicity and cost-effectiveness of assigning. - potential buyers to segments potential of a marketing action to reach a segment. - potential for increased profit.
What three components are taken into consideration when calculating customer lifetime value?
- the costs required to serve customers - customer usage rate - customer loyalty
The 80/20 rule is a concept suggesting that ______.
80 percent of a firm's sales are obtained from 20 percent of its customers
__________ segmentation groups consumers on the basis of some observable actions such as usage rate or importance of product features.
Behavioral
_____ is based on some observable actions or attitudes by prospective customers—such as where they buy, what benefits they seek, how frequently they buy, and why they buy.
Behavioral segmentation
Which two statements are true of product positioning?
It is in relation to competitive products. It exists in the mind of the consumer.
A product differentiation strategy should achieve which of the following?
It should help consumers perceive the product as being different and better than competing ones.
________ is the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently.
Organizational synergy
________ refers to the place a product occupies in the consumer's mind on important attributes relative to competitive products.
Product positioning
_________ rate is the quantity consumed or store visits during a specific period, and it varies widely among different customer groups.
Usage
Positioning strategy using perceptual maps begins with identifying the most important _________ of the product class to the target customers.
attributes
Demographic, geographic, and behavioral are ______.
bases used to segment consumer markets
Segmenting on the bases of either product features desired by prospective customers or their actual usage rates are examples of _________ segmentation
behavioral
Usage rate is a variable used in ______ segmentation.
behavioral
Mass customization is a step beyond a ________ strategy, because although the latter allows for good choice with quick delivery, it does not allow customers unlimited options for features.
build-to-order
The 80/20 rule helps marketers _____.
calculate the usage rate
The Ann Taylor chain of stores has a problem with ________ from its sister chain Ann Taylor LOFT, whose sales have surpassed the the original Ann Taylor stores and have made it harder for them to reach their target customers.
cannibalization
When a business's own new product or new chain is stealing customers and sales from the older, existing ones it is known as ______.
cannibalization
What measurement represents the financial worth of a customer to a company over the course of their relationship?
customer lifetime value
Because more than half of all U.S. households are made up of only one or two persons, Campbell's packages meals with only one or two servings, which is an example of ________ segmentation.
demographic
Crest toothpaste markets its fruit flavored toothpaste to children, and its whitening toothpaste to adults. This is an example of ______ segmentation.
demographic
Segmentation based on gender, age, or occupation in would be considered ______ segmentation.
demographic
segmentation based on gender, age, or occupation in would be considered ______ segmentation.
demographic
When an organization produces only a single product and attempts to sell it to two or more market segments, it avoids which costs?
developing and producing several versions of the product
In head-to-head positioning a company positions its product to compete directly against competitor's products, while ________ positioning allows for more indirect competition.
differentiation
Synergies, in the context of segmentation, are ________ that can be achieved by focusing on horizontal or vertical lines within the market-product matrix.
efficiencies
Which of the following is not a part of the segmenting and targeting process?
evaluating the marketing mix
Potential for increased profit and similarity of needs of potential buyers within a segment are criteria used to ______.
form market segments
Frequent-flier programs used by airlines focus on increasing the usage rate, and are an example of ______.
frequency marketing
Select the variables that are typically used in demographic segmentation. (Select all that apply)
gender income marital status
What type of segmentation organizes prospective customers into groups on the basis of where they live or work?
geographic
When Macy's promotes and sells different apparel based on the location of its retail stores, it is an example of _____ segmentation.
geographic
What are the four general bases of segmentation used to segment consumer markets?
geographic psychographic behavioral demographic
McDonald's promotes coffee in Seattle and orange juice in Orlando. This is an example of __________
geographic segmentation
Segmentation based on the size of city in which prospective customers live would be considered _____.
geographic segmentation
What are two approaches to product positioning?
head-to-head differentiation
Market segments are the relatively ________ groups of prospective buyers that result from the segmentation process.
homogenous
The fundamental reason a business firm engages in market segmentation is to ______.
increase its sales and profits
A business goes to the trouble and expense of segmenting its markets when ______.
it expects that this will increase sales and profits
What is a variable used in psychographic segmentation?
lifestyle
The process of aggregating prospective buyers into groups with common needs that will respond similarly to a marketing action is called ______.
market segmentation
_______ ________ involves aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action.
market segmentation
The third step of the market segmentation process is to develop a(n) _________ grid and estimate the size of the markets.
market-product
An eyeglass manufacturer produces all of the frames for its reading glasses and then inserts the eyeglass lens based on the different magnification needs of its customers. This is an example of ______.
mass customization
Dell manufactures all the necessary components for its desktops and laptops. It assembles these components into basic computers that can be sold in stores and also assembles products to the exact specifications of customers. Dell is engaged in ______.
mass customization
Tailoring goods or services to the tastes of individual customers on a high-volume scale is a segmentation strategy known as ______.
mass customization
Today's Internet ordering and flexible manufacturing and marketing processes have made ________ possible.
mass customization
A _________ map can be used to help managers see how consumers perceive competing products or brands.
perceptual
"For upscale American families who desire a carefree driving experience, Volvo is a premium-priced automobile that offers the utmost in safety and dependability," would best be described as a ______.
positioning statement
The _________ strategy involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products.
product differentiation
in what two ways are markets segmented based on behavioral segmentation?
product features usage rate
Market segments are made up of ________ that are relatively similar to one another.
prospective buyers
Claritas PRIZM uses ________ segmentation to classify every U.S. household as one of 66 unique market segments based on the belief that "birds of a feather flock together," with groups living near one another having similar interests and buying similar offerings.
psychographic
John is a supporter of environmental issues. He is constantly examining the "green" credentials of the products he purchases. It may be very effective to reach John with marketing actions based on ________ segmentation.
psychographic
Personality traits, lifestyles, and needs of prospective customers provide the bases for _________ segmentation.
psychographic
Using breakfast, lunch, dinner, and snacks as categories helps consumers to ________ the products offered by a fast food brand that may have dozens of choices.
relate to
The third step of the market segmentation process is to develop a market-product grid and estimate the ___________ of the markets.
size
The market-product grid can be used to identify both product and market ________ that may be available.
synergies
The final step of the segmentation process is to ______.
take marketing actions to reach the target markets
A firm must choose its ________ carefully; if its picks too narrow a set it may fail to reach the volume of sales it needs but if it selects too broad a set, it may spread its marketing efforts too thin.
target market segments
The segmentation and targeting process should result in ______.
the development of an action plan in the form of a marketing program
The first step in positioning a product using a perceptual map is to identify ______.
the important attributes of the product
A market-product grid is used to relate
the market segments of potential buyers to the products offered.
Ideally, a positioning statement should identify which three things?
the target market and needs satisfied the product's unique benefits the category of the firm that the product belongs to