Chapter 9

The Asian Americans are currently the largest ethnic minority group in the United States. t/f

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

In the process of market segmentation, once the market potential of the segments has been estimated, the next step is to:

XXX

Iron ore and raw cotton are examples of: -personal products -shopping products -impulse products -business products

business products

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

consolidated metropolitan statistical area (CMSA)

Before beginning the market segmentation process, a firm should:

identify bases for segmenting markets.

The four basic determinants of a market-specific segmentation strategy include company resources, competitors' strategies, stage in the product lifecycle, and: -product demand -product homogeneity -environmental constraints -organizational efficiencies

product homogeneity

You have just been promoted to vice president of marketing for your firm. Unlike your predecessor, you believe the firm can increase its sales in a market by focusing on more than one segment of the market. You recognize that doing this means your firm will incur higher production costs. Based on this information, which of the following targeting strategies are you advocating?​

a differentiated targeting strategy

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. -business -service -MRO -consumer

consumer

A firm that divides its customers into homogeneous groups based on their locations is said to be practicing _____ segmentation.

geographic

Compared to undifferentiated marketing, the firm that practices differentiated marketing may generally expect: -less sales by segment. -lower total production costs. -greater promotional costs. -lower inventory costs.

greater promotional costs

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. t/f

False

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

False

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

False

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

False

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

False

​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

Which of the following factors sets the upper limit on demand generated by a particular market segment?

Market potential of the segment under analysis

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. t/f

True

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

True

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

True

Geographic information systems (GIS) simplify the job of analyzing marketing information by relating data to their locations. t/f

True

Majority-minority counties are places where more than half the population is a single racial or ethnic group other than non-Hispanic white. t/f

True

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

True

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

True

Micromarketing can target even individuals. t/f

True

Once the total market potential has been estimated by a firm, the next step in the market segmentation process is to forecast the probable market share. t/f

True

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

True

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

True

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

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. t/f

True

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 _________. ​~complexity ​~differentiation ​~uniformity ​~segmentation

segmentation

Which of the following changes in the family lifecycle behavior is noted by researchers in the past decade? -Young unmarried people buying new homes and expensive furnishings -Newly married people cooking almost every meal at home instead of dining out -"Boomerang" children returning home, sometimes with their own families -Parents with a second or subsequent child buying new sets of cribs, changing tables, and so forth

"Boomerang" children returning home, sometimes with their own families

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. ​-Adrienne will include a customer questionnaire in a local bulk mail package asking consumers about their coffee consumption habits and what kind of new coffee products they would like to see. ​-Adrienne will mail a brief printed AIO lifestyle survey to retail outlets in their core regions that inquires about customer activities, interests, and opinions. The survey will be placed in customers' bags along with their food purchases. ​-Adrienne will take a "man on the street" poll at the nearest retail outlet and process the feedback from customers about their coffee consumption habits and what kinds of coffee products they would like to see. ​-Adrienne will telephone retail outlets in the company's core regions to ask whether they have had any feedback from customers about what kinds of new coffee products they would like.

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.

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 segmentation

Which of the following statements is true of differentiated marketing? ~A company practicing differentiated marketing attempts to satisfy everyone in the market with one standard product. ~As compared to undifferentiated marketing, differentiated marketing leads to lower inventory and promotional cost. ~Differentiated marketing approach can appeal to a small company that lacks the financial resources of its competitors. ~Differentiated marketing helps a company to diversify and reach new customers.

Differentiated marketing helps a company to diversify and reach new customers.

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

False

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

False

Competition in the market usually forces firms to adopt a differentiated marketing strategy. t/f

False

Division of the total market into smaller, relatively homogeneous groups is known as market optimization. t/f

False

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

False

The group born between 1968 and 1979, now generally in their early 30s to early 40s, often are referred to as _____. -baby boomers -teenagers -seniors -Generation X

Generation X

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

Core-Based statistical areas (CBSA) are comprised of metropolitan and micropolitan statistical areas. t/f

True

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

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 is:

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

​A junior member of your marketing department has recommended demographic segmentation for your fast food brand. In a memo, he wrote: "We should be marketing to females who are Hispanic, low-income, unmarried, and have four or more children." You express at least one strong concern about this recommendation. What concern(s) do you express? ​~Marital status is not a demographic segmentation variable. ​~The recommendation could lead to stereotyping and market alienation. ​~Ethnicity is not a demographic segmentation variable. ​~The recommendation is clearly outdated. ​~Gender is not a demographic segmentation variable.

The recommendation could lead to stereotyping and market alienation.

A company that practices differentiated marketing can generate more sales compared to those generated by undifferentiated marketing. t/f

True

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

True

A hotel purchases towels for use in its rooms. In this context, these towels will be considered business products. t/f

True

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

True

Buyers in metropolitan statistical areas exhibit social and economic homogeneity. t/f

True

A frequent flyer program used by an airline is an example of _____. ~brand loyalty segmentation ~psychographic segmentation ~socioeconomic segmentation ~segmentation by benefits sought

XXX

A present-day marketer is reviewing data attempting to differentiate a target group of consumers that meets the four basic requirements of effective segmentation. One group stands out above the rest, and he will direct his marketing efforts toward that group. Toward what group will he direct his marketing efforts?​

XXX

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

XXX

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.​

XXX

Segmentation by benefits sought is a product-related segmentation approach that:

XXX

The Fayetteville-Springdale-Rogers region of Arkansas has approximately 340,000 people. Fayetteville is an urban center and it alone has a population of 60,000. The Fayetteville-Springdale-Rogers region would be classified as a: ~micropolitan statistical area (µSA). ~consolidated metropolitan statistical area (CMSA). ~metropolitan statistical area (MSA). ~primary metropolitan region (PMR).

XXX

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?​

XXX

​Bill wants to use VALS to segment the market for his firm's costly but cutting-edge gaming software. He knows that his potential customers are likely to be:

XXX

​In the first part of your presentation to potential investors, you covered the first two steps in the market segmentation process. In the second part of your presentation, you will need to discuss:

XXX

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? ~geographic ~demographic ~psychographic ~benefit

demographic

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?

demographic segmentation

The company, Eco Nuts was featured on Shark Tank and has become one of the show's success stories due to the growing acceptance of their product as an alternative to traditional laundry detergent. ​The company typically targets women, aged 40 to 65 who have total annual household income above $60,000 and are concerned about sustainability. What step in the market segmentation process has Eco Nuts utilized with this description?

develop a relevant profile for each segment

Oscar Mayer, a maker of various meat products, introduced Lunchables, a product specifically aimed at children. This is an example of: -undifferentiated marketing -differentiated marketing -mass marketing -micromarketing

differentiated marketing

According to Engel's laws, the percentage of income spent on food increases with increased income. t/f

false

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

false

Psychographic segmentation is the most common method of market segmentation. t/f

false

Typically, magazines can be successfully marketed to consumers through mass marketing strategies. t/f

false

A firm that divides its customers into homogeneous groups based on their locations is said to be practicing _____ segmentation. -psychographic -product-based -geographic -demographic

geographic

Dell Computer offers a variety of desk top, tablet and laptop computers. One popular product line is Dell's Alienware - built for gamers with high speed processors, enhanced memory and special graphics cards. What marketing principle is Dell utilizing with its Alienware product line?

market segmentation

The division of the total market into smaller, homogenous groups is called _____. -customer aggregation -market capitalization -market segmentation -brand segmentation

market segmentation

A firm that chooses to target potential customers by zip code, specific occupation, or even lifestyle is said to be practicing:

micromarketing.

In recent years, consumers have become increasingly concerned about the use of pesticide and other chemicals in the agricultural industry. Some are worried that the increased use of chemicals has led to higher incidences of disease such as cancer. Consumers who share these opinions will often purchase products labeled "organic" and "natural". Marketers who are utilizing these words on product packaging or in their promotions are implementing _______ segmentation.

psychographic segmentation

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 segmentation

A young single person setting up an apartment for the first time is most likely to be a good prospect for: ~expensive furnishings ~luxury cars, personalized gifts, and power tools ~small home appliances such as coffee makers and toasters ~health care products and insurance policies

small home appliances such as coffee makers and toasters.

Which of the following products would be the best choice to be marketed using an undifferentiated marketing strategy? -Luxury automobiles -Healthy snack foods -Table salt -Imported wine

table salt

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

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

The cohort effect describes: ~how Generation X uses its financial power to influence product trends, and gets closely followed by the marketers. ~why members of the same psychographic group decide to vote the same way and have a lot of similarities in their choices. ~the tendency of members of a generation to be influenced and bound together by events occurring during their key formative years. ~the effect of demographic characteristics in analyzing purchase habits, product usage rates, and brand preference.

the tendency of members of a generation to be influenced and bound together by events occurring during their key formative years.

Psychographic segmentation divides a population into groups based on:

their attitudes, values and lifestyles.

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

true

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

true

Married couples enter the "empty nest" stage once their children start living on their own. t/f

true

Products bought by ultimate customers for personal use are known as consumer products. t/f

true

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

There are many tools available to a savvy marketer who uses geographic segmentation, including national population data published by the U.S. government. This statistical data is classified as core based, metropolitan, micropolitan, primary metropolitan, and consolidated metropolitan. Select the statement below that best reflects population data published by the federal government.​

​Most of the U.S. population lives in urban environments, which is also true worldwide.

Psychographic segmentation is not an exact science. While it helps to paint an overall picture of the psychological motivations of consumers, those motivations are influenced by countless variables, such as family, occupation, and culture. Select the statement below that gives an accurate description of the effective use of psychographic segmenting.​

​Psychographic segmentation is effective when it helps to match a company's product offering with the types of consumers who use its products.