Chapter 7 Segmentation, Target Marketing, and Positioning

_______ segmentation is sometimes referred to as segmentation by lifestyle or values. A) Occupational B) Psychographic C) Geographic D) Educational E) G ender

Correct answer: B Explanation: Psychographic segmentation is sometimes referred to as segmentation by lifestyle or values.

A marketing manager using the database called PRIZM is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational

Correct answer: C Explanation: Claritas continually updates a large database called PRIZM that is zip-code driven. PRIZM profiles every zip code in the United States by both demographic and lifestyle (psychographic) variables and is used in geodemographic segmentation

In the 1970s, Michelob beer changed its advertising messages frequently and saw sales plummet. Slogans like "Weekends were made for Michelob," "Put a little weekend into your weekday," and "Special times deserve a special beer" had consumers checking their calendars to find the right time to drink a Michelob. Michelob was suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning

Correct answer: D Explanation: Confused positioning is when frequent changes and contradictory messages confuse consumers regarding the positioning of the brand.

________ segmentation focuses on why people buy what they buy.

Correct answer: A Explanation: Benefits sought focuses on why people buy. That is, it focuses on the crucial value-adding properties of an offering.

A perceptual map is used to compare consumer perceptions of each competitor's delivery against specific paired attributes.

Correct answer: true Explanation: A useful visual tool for positioning is a perceptual map, which displays paired attributes in order to compare consumer perceptions of each competitor's delivery against those attributes.

One of the most straightforward and popular methods of segmentation is demographic.

Correct answer: true Explanation: Demographic segmentation is one of the most popular segmentation approaches because customer needs and wants tend to vary with some degree of regularity based on demographic differences and because of the relative ease of measurement of the variables.

A marketing manager using VALS is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational

Correct answer: B Explanation: One popular psychographic instrument is VALS (formerly known as Values and Lifestyles), a product of Strategic Business Insights (SBI).

At about 17 percent of the U.S. population, ________ remain the largest minority group. A) Hispanics/Latinos B) Asians C) Indians D) Native Americans E) African Americans

Correct answer: A Explanation: Hispanics/Latinos are the largest minority group, comprising 17 percent of the total U.S. population.

One of the basic principles behind segmentation is that subgroups of customers can be identified on some basis of similarity.

Correct answer: true Explanation: One of the principles behind segmentation is that subgroups of customers can be identified on some basis of similarity. It is important to note that the basic logic and principles behind segmentation are sound, regardless of the basis on which a market is segmented.

When a company only hires employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly, it achieves ________ leadership as a source of differentiation. A) personnel B) convenience C) image D) price E) service

Correct answer: A Explanation: A company's personnel leadership position implies that it hires employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly

The ________ race and ethnicity market segment is about 12 percent of the U.S. population and is not growing rapidly. A) African-American B) Hispanic C) Asian-American D) Caucasian E) Indian-American

Correct answer: A Explanation: African-Americans account for slightly more than 12 percent of the U.S. population, a figure that has not been growing.

________ segmentation divides customers into groups according to similarities in benefits sought or product usage patterns. A) Behavioral B) Income C) Geographic D) Gender E) Educational

Correct answer: A Explanation: Behavioral segmentation divides customers into groups according to similarities in benefits sought or product usage patterns.

Demographic segmentation is best described as using characteristics of ________ to segment the market. A) human populations B) geography C) economics D) political stability E) government regulations

Correct answer: A Explanation: Demographics are the statistical characteristics of human populations such as age or income that are used to identify markets.

Which of the following statements is TRUE of income segmentation? A) It is usually analyzed in incremental ranges. B) It is based on a very quantifiable geographic variable. C) Marketers seldom use income as a segmenting approach. D) It is time consuming to study consumers' buying habits based on their income. E) There is a direct correlation between income and price preferences.

Correct answer: A Explanation: Income segmentation is based on a very quantifiable demographic variable, and it is usually analyzed in incremental ranges.

Positioning strategy is a process that often starts with ________, which help(s) develop a set of attributes for further analysis. A) focus groups B) surveys C) case studies D) panel research E) interviews

Correct answer: A Explanation: Many positioning studies start with focus groups that allow participants to talk about aspects of their experiences with a product. From the focus groups, a set of attributes is developed for further analysis.

Segmenting markets means that a company is ________. A) dividing the market into meaningful smaller markets based upon common characteristics B) selecting the markets to attack in the marketplace C) selecting a corporate position to communicate to potential customers D) identifying and calculating the churn rate in different markets E) identifying the customers who have frequently purchased competitor's products or services

Correct answer: A Explanation: Market segmentation divides a market into meaningful smaller markets or submarkets based on common characteristics.

Age is a commonly used method of segmentation. Age alone, however, may be dangerous because ________. A) grouping older customers into one group is an approach that fails to consider the vast differences in other important variables B) chronological age and psychological age are the same C) older consumers exhibit very little differences from person to person on things such as income, mobility, and work status D) this approach ignores chronological age E) this approach presumes irregularity of consumer needs and wants by age

Correct answer: A Explanation: Marketers must take care to understand that age alone often is not sufficient for successful segmentation. Older consumers exhibit great differences from person to person on such things as income, mobility, and work status. In fact, marketing managers have come to realize that lumping older consumers into one group is not an effective segmentation approach because of the vast differences in other important variables.

________ segmentation recognizes that there may be a number of consistent needs and wants demonstrated by consumers based on what type of job they have. A) Occupational B) Social C) Age D) Gender E) Educational

Correct answer: A Explanation: Occupational segmentation recognizes that there may be a number of consistent needs and wants demonstrated by consumers based on what type of job they have.

Once market segments have been defined and analyzed and target markets have been selected for development, the firm must turn its attention to creating, communicating, delivering, and exchanging offerings that have value to the targetmarkets. This process is known as ________. A) positioning B) target marketing C) niche marketing D) outsourcing E) selling

Correct answer: A Explanation: Once market segments have been defined and analyzed and target markets have been selected for development, the firm must turn its attention to creating, communicating, delivering, and exchanging offerings that have value to the target markets—that is, positioning the product so that customers understand its ability to fulfill their needs and wants.

Primary target markets differ from secondary and tertiary target markets by the ________. A) expected level of ROI derived from the market B) difficulty of attacking the market C) consumers' ability to buy multiple units D) advertising effort needed for the market E) average age of the consumers

Correct answer: A Explanation: Primary target markets are those segments that clearly have the best chance of meeting ROI goals and the other attractiveness factors.

The local sandwich shop has always sold calorie-laden sandwiches and recently introduced six new sandwiches featuring vegetables and lower-calorie meats and cheeses to appeal to health-conscious customers. What strategy is the sandwichshop pursuing? A) repositioning B) one-to-one marketing C) concentration D) tertiary target marketing E) 80/20 rule

Correct answer: A Explanation: Repositioning changes the present consumer perceptions of a product.

HerboCare, a company that sells herbal soaps, has failed to increase its sales, as consumers could not understand how soaps made by HerboCare were different or better than other herbal soaps available in the market. In this scenario,HerboCare is suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning

Correct answer: A Explanation: Underpositioning occurs when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation.

Concentrated target marketing is often used by ________. A) large companies to dominate a market B) start-up firms to enter a market as a focus player C) multinational companies to enter a new market D) software consulting firms that use Internet marketing E) large e-commerce businesses to attract new customers

Correct answer: B Explanation: A concentrated target marketing approach, which Michael Porter refers to as a focus strategy and is also popularly called a niche strategy, involves targeting a large portion of a small market. Many start-up firms enter a marketplace as a focus player.

An approach to segmenting consumer markets is ________ segmentation, which relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. A) occupational B) psychographic C) geographic D) educational E) gender

Correct answer: B Explanation: An approach to segmenting consumer markets is psychographic segmentation, which relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. Psychographic segmentation is sometimes also referred to as segmentation by lifestyle or values.

Which of the following statements is TRUE of geographic segmentation? A) It divides consumer groups based on a variety of readily measurable descriptive factors about the group. B) In most instances, it is an insufficient criterion in and of itself. C) It does not consider climate while segmenting markets. D) It does not consider the size of population while segmenting markets. E) It is useful because the demand for all kinds of products is determined by where a person lives.

Correct answer: B Explanation: Geographic segmentation is useful but, in most instances, is an insufficient segmentation criterion in and of itself. Because people in the United States are extremely mobile and because the demand for many products is not determined by where a person lives, additional types of segmentation are needed to successfully target customers.

Target marketing is the process by which ________. A) the market is divided into cohesive groups B) a company evaluates market segments and decides which ones have the most potential for development C) a company chooses which advertising strategy to use D) the customer groups are evaluated on the basis of high or low churn to see which is the most profitable E) a company collects cookies to track everyone who visits its website

Correct answer: B Explanation: Once a segmentation approach is developed, marketing managers engage in target marketing, which involves evaluating the segments and deciding which shows the most promise for development.

Organizations communicate one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Execution of this approach is referredto as a firm's ________ strategy. A) segmentation B) positioning C) production D) sales E) distribution

Correct answer: B Explanation: Organizations communicate one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Execution of this approach is referred to as a firm's positioning strategy.

Catalina was born in 1940. She is a member of ________. A) the baby boomer generation B) the silent generation C) Generation Y D) Generation X E) the Millennial generation

Correct answer: B Explanation: People born 1925-1945 constitute the silent generation.

Which of the following statements is TRUE of repositioning? A) It involves targeting a large portion of a small market. B) It involves understanding the marketing mix approach necessary to change present consumer perceptions of the product. C) It is popularly called a focus strategy or a niche strategy. D) It involves developing different value offerings for different targeted segments. E) It advocates that firms should direct energy and resources into establishing a learning relationship with each customer.

Correct answer: B Explanation: Perceptual maps aid in repositioning a product, which involves understanding the marketing mix approach necessary to change present consumer perceptions of the product.

When a retail chain sells winter coats, it sends them to different stores at different times of the year. Which of the following approaches to geographic segmentation in the United States does this scenario exemplify? A) by region B) by climate C) by size of population D) by growth in population E) by density of population

Correct answer: B Explanation: This is an example of the geographic segmentation by climate. Target, a reputed winter apparel seller, for example, segments its target market by geographic climate. Starting in early September, Target begins marketing winter coats in its Minneapolis-area stores, an activity that won't begin until much later in Houston, where customers are still expecting several more months of 80 to 90 degrees. The chain's South Florida stores might never even stock traditional cold-weather apparel except in small quantities for travelers. Target wisely recognizes different customer needs across different climates and builds its marketing plans accordingly.

Social class has declined as a method of segmentation as a result of ________. A) higher education rates in the United States B) readily available credit flattening the classes C) the increase in minority consumers D) stores appealing to everyone E) wealthy individuals spending lavishly on luxury products

Correct answer: B Explanation: Today, many mitigating factors might affect one's inclusion in one or the other of the class strata. Readily available credit has flattened the classes and made many luxury products affordable to a broad spectrum of consumers who in the past would not have been able to purchase them.

Companies sometimes pick a one-market strategy. This marketing approach is called ________. A) mass approach B) undifferentiated target marketing C) differentiated strategy D) low-cost approach E) efficiency marketing

Correct answer: B Explanation: Undifferentiated target marketing is essentially a one-market strategy, sometimes referred to as an unsegmented mass market.

Firms that develop such close relationships with customers that they seem to deliver customized goods and services are engaged in ________ marketing. A) concentrated target marketing B) one-to-one marketing C) differentiated marketing D) undifferentiated marketing E) shotgun marketing

Correct answer: B Explanation: With the proliferation of CRM, firms are able to develop more customized approaches to target marketing. Customized (one-to-one) marketing advocates that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a manner as possible.

Michael believes that the only motorcycle anyone should ever buy is a Harley-Davidson. Whenever he sees the Harley Davidson logo on a product, he knows that product is a leader in the market. What source of differentiation has HarleyDavidson achieved? A) personnel B) convenience C) image D) price E) service

Correct answer: C Explanation: A company's image leadership position reflects symbols, atmosphere, and creative media

Which of the following would NOT be a good product for using gender segmentation? A) Nail polish B) Perfume C) Toothpaste D) Cigars E) Pregnancy tests

Correct answer: C Explanation: A wide variety of products are clearly marketed for the primary consumption of either men or women, but not both—think Rogaine, cigars, and athletic supporters versus pregnancy tests, lipstick, and bras, for example.

Differentiated target marketing means that a company is ________. A) offering different prices for different markets B) developing different products for the same market C) developing different value offerings for different targeted markets D) using the push and pull strategy to differentiate markets E) using a one-market strategy for different markets

Correct answer: C Explanation: Differentiated target marketing, often referred to as simply differentiation, means developing different value offerings for different targeted segments.

Everything else being equal, ________ segmentation might lead a firm to offer its products based on some anticipated future payoff from the consumer. A) income B) occupational C) educational D) lifestyle E) gender

Correct answer: C Explanation: Everything else being equal, educational segmentation might lead a firm to offer its products based on some anticipated future payoff from the consumer.

The ability to get secondary and/or primary data on a market being considered for segmentation relates to which of the following questions about marketing? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?

Correct answer: C Explanation: For effective segmentation, managers should ask if the segment is readily identifiable and can it be measured. Segmentation most often requires data and if secondary data on the markets of interest aren't available or if primary data can't be easily collected, it may not be possible to do segmentation.

The razor is an example of a product that appeals to both men and women, but companies figured out that ________. A) the same product class cannot be used to attack different gender markets B) grooming equipment may be needed by men but certainly not by women C) there are different needs and wants for the same product category among different genders D) markets should not be segmented based on gender E) all products are clearly marketed for the primary consumption of both men and women

Correct answer: C Explanation: Gillette learned some years ago that generally, women don't like to use a man's razor, which they had to do for decades because no thought was given to differences in gender usage preference. Research in the 1980s revealed that most women viewed men's razors as too bulky, with too many bells and whistles, and not feminine in color or design.

In the context of positioning errors, when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation, it is called ________. A) repositioning B) overpositioning C) underpositioning D) uninformed positioning E) fuzzy positioning

Correct answer: C Explanation: When consumers have only a vague idea about the company and its products, and do not perceive any real differentiation, it is called underpositioning.

At one time, specialized companies catered to markets segmented by race. Today ________. A) the segments are indistinguishable B) the segments have declined in size C) the segments have become targets of mainstream businesses that offer specialized products D) the segments consist of such people who tend to buy the same type of products E) the segments lack differentiation

Correct answer: C Explanation: In years past, very few products were marketed specifically to the African-American segment other than by firms specializing only in that segment. Hair and beauty product pioneer Johnson Products, founded in 1954, was an early believer in the power of developing products such as Ultra Sheen, Afro Sheen, Classy Curl, and others that brought the company consistently double-digit sales increases throughout the 1970s and 1980s. Ultimately, the product line became so attractive that it was acquired by mainstream beauty care manufacturer L'Oréal and eventually by Well a Corporation, another broad-line marketer of beauty care products. Today, almost all major cosmetic and beauty aid firms, from Avon to P&G, market products specifically designed to appeal to this vital market segment.

Sociologists look for defining events such as major economic upheaval, wars, and ________ as triggers for generational change. A) political stability B) marketing opportunities C) sociocultural revolution D) foreign policy changes E) population growth

Correct answer: C Explanation: Much research has been done on understanding differences in groups of people by generation. What defines a generational group and how does one know when a new generational group is emerging? Sociologists look for defining events such as wars, major economic upheaval, or sociocultural revolution as triggers for generational change.

Offering credit cards to high school seniors is an example of ________ segmentation. A) income B) occupational C) educational D) lifestyle E) gender

Correct answer: C Explanation: Offering credit cards to high school seniors is an example of educational segmentation. Credit card providers are eager to market themselves to college-bound high school seniors because they know that, even with low beginning credit limits, gaining usage early increases the chances of loyalty to the card over the long run—after the student finishes college, gains professional employment, and starts making a bigger salary.

Which of the following is one of the basic principles behind segmentation? A) All customers are alike. B) Subgroups of customers are not similar. C) Subgroups will be smaller and more homogeneous than the overall market. D) Members of a heterogeneous market cannot allow for dividing the market into subgroups. E) In an undifferentiated market, each person has unique needs and wants.

Correct answer: C Explanation: One of the basic principles behind segmentation is that the subgroups will be smaller and more homogeneous than the overall market.

Marketers use geographic segmentation when ________. A) certain geographic regions have more diverse populations B) geography determines one's likes and dislikes C) there is evidence that consumers respond differently to marketing strategies and programs based on where they live D) there is a strong demand for the products and services of the company in some geographic regions E) people in some regions are richer than people in other regions

Correct answer: C Explanation: One of the most straightforward approaches to segmentation is when evidence exists that consumers respond differently to marketing strategies and programs based on where they live. Thus, geographic segmentation divides consumer groups based on physical location.

NovoTech Inc. is a manufacturer of PCs, and most of its revenue is generated by selling PCs to consumers. However, the company is struggling to extend the brand into other lucrative product lines such as tablets and smartphones. In thisscenario, NovoTech is suffering from the error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning

Correct answer: C Explanation: Overpositioning occurs when consumers have too narrow an understanding of the company, product, or brand.

Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between the ________. A) cost of the product and the quality B) way the 4Ps of the marketing mix work with one another C) customer's needs and wants and what the product has to offer D) product and its advertising E) salesperson and the customer at a personal level

Correct answer: C Explanation: Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer.

Harold buys most of his groceries at Aldi because it has the cheapest groceries even though he has to bring his own bags and bag his own groceries. Aldi demonstrates ________ leadership. A) innovative B) image C) price D) personnel E) service

Correct answer: C Explanation: Price leadership is defined as efficiencies in cost of labor, materials, supply chain, or other operational elements enabling the price leader to charge less.

While developing a segmentation approach, Walter, the brand manager of a soft drinks manufacturing company says that a segment has sufficient size. He means that the market ________. A) has a large enough television audience to be worth considering B) is reachable C) can provide a positive return on investment D) has many customers in it E) is homogeneous

Correct answer: C Explanation: There is no point doing market segmentation unless a positive return on investment is expected. Size of a segment doesn't necessarily mean number of customers but the financial size of the transaction.

In the context of positioning errors, when the claims made for the product or brand are not regarded as credible by consumers, it is called ________. A) underpositioning B) repositioning C) doubtful positioning D) fuzzy positioning E) overpositioning

Correct answer: C Explanation: When the claims made for the product or brand are not regarded as credible by consumers, it is called doubtful positioning.

Demographic segmentation is one of the most popular segmentation approaches because ________. A) it takes into account the climate of different regions. B) the needs and wants of customers remain constant based on demographic differences C) it uses easily identifiable characteristics of human populations such as lifestyle D) it is relatively easy to measure the variables used in this approach to segmentation E) the demand for all kinds of products is determined by where a person lives

Correct answer: D Explanation: Demographic segmentation is one of the most popular segmentation approaches because customer needs and wants tend to vary with some degree of regularity based on demographic differences and because of the relative ease of measurement of the variables.

American credit card companies would like to offer their services to people in a country in East Africa. However, they are finding it difficult because of language barriers and infrastructure challenges. These issues are related to which of the following questions about market segmentation? A) Do the people in this market segment have access to sufficient financial resources? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?

Correct answer: D Explanation: Firms must ask if the segment can be reached (both in terms of communication and physical product) in order to deliver the value of the product, and subsequently if it can be effectively and efficiently managed. Barriers to reaching a segment might include language, physical distance, or, as in the case of some developing markets, transportation, technology, and infrastructure challenges.

Generation X is often referred to as the ________. A) spoiled generation B) nonconsumption generation C) millennial generation D) baby bust generation E) optimistic generation

Correct answer: D Explanation: Gen X is often referred to as the "baby bust" because it represents a natural cyclical downturn in birthrates.

Which of the following statements is TRUE of the baby boomers generational group? A) The baby boomers have been traditionally ignored by the marketing managers. B) The majority of baby boomers are in their early 80s. C) The baby boomers have an old outlook of life and the future. D) The baby boomers think that they don't age. E) The baby boomers will have limited impact on marketing decisions in the future.

Correct answer: D Explanation: Much of the research on baby boomers indicates that—at least in their minds—they don't age. Recall that a marketer must be cognizant of the difference between chronological age and attitudinal age.

Katherine was born in 1970. She is environmentally conscious and media-savvy. She is most likely to be a member of which generational group? A) baby boomer generation B) GI generation C) silent generation D) Generation X E) Generation Y

Correct answer: D Explanation: People born 1965-1977 constitute Generation X.

Advertisements with messages like "Orange juice—It's not just for breakfast anymore!" or "Soup can be a delicious way to start a cold winter's day" are using ________ segmentation. A) benefits sought B) lifestyle C) psychographic D) usage patterns E) geographic

Correct answer: D Explanation: Segmentation by usage patterns includes usage occasions, usage rate, and user status. Occasions means specifically when the product is used. Many of consumer purchases are driven by an occasion, and marketers are very savvy at playing to consumers' desires to use occasions as a reason to buy.

In marketing, differentiation is a concept that means ________. A) consumer choices remain similar around the globe B) each age segment views products exactly the same C) products need to appear to be different from one another to be successful in the marketplace D) communicating and delivering value in different ways to different customer groups E) evaluating different market segments and deciding which shows the most promise for development

Correct answer: D Explanation: Segmentation seeks to find one or more factors about members of a heterogeneous market that allow for dividing the market into smaller, more homogeneous subgroups for the purposes of developing different marketing strategies to best meet the segments' distinct needs and wants. The operative word is different, as in differentiation, which means communicating and delivering value in different ways to different customer groups.

In analyzing the attractiveness of market segments, which of the following is NOT one of the most important variables? A) segment size B) growth potential C) strategic fit with the firm's goals D) location of the segment E) competitive forces related to the segment

Correct answer: D Explanation: Several factors should be considered when analyzing segment attractiveness. The following are among the most important: segment size and growth potential, competitive forces related to the segment, and overall strategic fit of the segment to the company's goals and value-adding capabilities.

Which of the following criteria for market segmentation is least likely to enable successful segmentation? A) It should be measurable. B) It should be of sufficient size. C) It should be readily identifiable. D) It should be undifferentiated. E) It should be reachable in terms of communication.

Correct answer: D Explanation: The segment must be clearly differentiated on one on more important dimensions when communicating the value of the product. For segmentation to work properly, it must allow for the creation and execution of different marketing strategies to the different submarkets identified.

Approaches to geographic segmentation include all of these EXCEPT ________. A) region B) density of population C) size of population D) gender of population E) climate

Correct answer: D Explanation: Within the United States, some of the popular approaches to geographic segmentation include: by region, by density population, by size of population, by growth of population, and by climate.

When a company tries to make the product or service significantly easier to obtain than the competition, it is trying to achieve ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) convenience

Correct answer: E Explanation: Convenience leadership is making the product or service significantly easier to obtain.

Which of the following questions about market segmentation relates to creation and execution of different marketing strategies to the different submarkets identified? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?

Correct answer: E Explanation: For segmentation to work properly, it must allow for the creation and execution of different marketing strategies to the different submarkets identified. It relates to the question, "Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?"

When a company tries to constantly develop the "next new thing," it is trying to establish ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) innovative

Correct answer: E Explanation: Innovative leadership involves constantly developing the "next new thing." Example: Apple.

Cateleya was born in 2001. She is a member of ________. A) the baby boomer generation B) the millennial generation C) Generation Y D) Generation X E) Generation Z

Correct answer: E Explanation: People born 1994 to present constitute Generation Z.

Pamela only bought her cars from Lexis because they made it so easy to get them serviced by picking her car up and bringing it back to her. Lexis shows ________ leadership. A) innovative B) image C) price D) personnel E) service

Correct answer: E Explanation: Service leadership is defined as having an unusual and notable commitment to providing service to customers.

Millie prefers to stay at the Omni Hotel rather than the Embassy Suites because she knows the Omni provides high-end bedding, luxurious robes and toiletry products for every customer. What differentiation factor is affecting Millie'sdecision? A) innovative B) convenience C) price D) personnel E) service

Correct answer: E Explanation: Service leadership is reflected in companies that have an unusual and notable commitment to providing service to customers.

The region, the density of the population, and the size of the population are various approaches to use in ________. A) positioning B) differentiation C) democratic segmentation D) population parameter estimation E) geographic segmentation

Correct answer: E Explanation: Within the United States, some of the popular approaches to geographic segmentation include: by region, by density population, by size of population, by growth of population, and by climate.

Define the terms market segmentation, target marketing, and positioning.

Correct answer: Market segmentation is dividing a market into meaningful smaller markets or submarkets based on common characteristics. Targetmarketing is evaluating the market segments, then making decisions about which among them is most worthy of investment for development. Positioning is communicating one or more sources of value to customers in ways that connect needs and wants to what the product has to offer. Positioning strategies are executed through the development of unique combinations of the marketing mix variables

Describe the VALS framework.

Correct answer: The VALS framework is a tool used to measure psychographics. VALS™ segments U.S. adults age 18 and older into eight consumer groups on the basis of a standardized questionnaire and proprietary algorithm. According to SBI (Strategic Business Insights, the owner and operator of VALS), "Each of us is an individual. Yet each of us also has personality traits, attitudes, or needs that are similar to those of other people. VALS™ measures the underlying psychological motivations and resources that groups of consumers share that explain and predict each group's most likely choices as consumers." VALS™ has shown consistently strong evidence of reliability and validity. Participants are grouped into categories based on low resources (survivors) and high resources (innovators) and ideals, achievement, and self-expression. These categories include: thinkers, achievers, experiencers, believers, strivers, and makers.

What are perceptual maps? How are they used to reposition a product

Correct answer: The data generated from the above analysis can be used to develop a useful visual tool for positioning called a perceptual map, which displays paired attributes in order to compare consumer perceptions of each competitor's delivery against those attributes. Today, this is usually accomplished by computer statistical software applications that plot each competitor's relative positioning on the attributes. Perceptual maps can be very useful in helping visualize where to make strategic changes to either move your product closer to the main market (clusters of competition) or further differentiate your product away from the competitive cluster and into more unique market space. In this way, perceptual maps aid in repositioning a product, which involves understanding the marketing mix approach necessary to change present consumer perceptions of the product.

Describe the four basic approaches to target marketing

Correct answer: The four basic approaches to target marketing range from very broad (undifferentiated) to very narrow (customized). Undifferentiated target marketing is a one-market strategy and is sometimes referred to as an unsegmented mass market. Southwest Airlines uses this strategy by basing its business on cost advantages. Differentiated target marketing is referred to as simply differentiation which means developing different value offerings for different targeted segments. This differentiation might be based on product quality, service, employees, convenience, or corporate social responsibility. Concentrated target marketing is also called a niche strategy and involves targeting a large portion of a small market. Customized (one-to-one) marketing promotes the idea that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a way as possible. Netflix ability to predict and recommend content demonstrates this approach.

What are the four consumer market segmentation approaches? Give an example of when you might use each one.

Correct answer: The four questions are: 1. Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? 2. Is the segment readily identifiable and can it be measured? 3. Is the segment clearly differentiated on one or more important decisions when communicating the value of the product? 4. Can the segment be reached (in terms of both communication and physical product) in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed?

What are the questions a marketing manager must answer in order to create effective segmentation

Correct answer: The four questions are: 1. Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? 2. Is the segment readily identifiable and can it be measured? 3. Is the segment clearly differentiated on one or more important decisions when communicating the value of the product? 4. Can the segment be reached (in terms of both communication and physical product) in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed?

Describe the three steps in target marketing. Explain what factors/options should be considered for each step.

Correct answer: The three steps in target marketing are: 1. Analyze market segments. 2. Develop profiles of each potential target market. 3. Select a target marketing approach. Several factors should be considered when analyzing segment attractiveness. The following are among the most important: segment size and growth potential, competitive forces related to the segment, and overall strategic fit of the segment to the company's goals and value-adding capabilities. Once the market segments have been analyzed, marketing managers need to develop profiles of each segment under consideration for investment as a target market. Usually, this analysis results in segments that fall within four basic levels of priority for development: 1. Primary target markets—those segments that clearly have the best chance of meeting ROI goals and the other attractiveness factors. 2. Secondary target markets—those segments that have reasonable potential but for one reason or another are not best suited for development immediately. 3. Tertiary target markets—those segments that may develop emerging attractiveness for investment in the future but that do not appear attractive at present. 4. Target markets to abandon for future development.

Occupation segmentation and income segmentation are essentially the same thing.

Correct answer: false Explanation: As a segmentation variable, occupation is very closely related to income, although the two are not perfectly correlated. That is, many traditionally blue-collar jobs may pay higher wages than white-collar positions depending in part on the strength of the union within the firm and industry.

Business market segmentation is less straightforward than segmentation of consumer markets.

Correct answer: false Explanation: In some ways, business market segmentation is more straightforward than that of consumer markets. This is partly because there is often a more defined universe of potential customers.

The largest generation is the Silent Generation.

Correct answer: false Explanation: Millennials are now the largest single generational segment in the population.

In overpositioning, consumers have a very broad understanding of the company, product, or brand.

Correct answer: false Explanation: Overpositioning occurs when consumers have too narrow an understanding of the company, product, or brand.

Effective positioning is not affected by competitive forces.

Correct answer: false Explanation: Positioning doesn't occur in a vacuum; firms must position their offerings against competitors' offerings.

Firms that engage in unethical business practices are always aware of the magnitude of damage being done to their brand.

Correct answer: false Explanation: Sadly, firms that engage in unethical business practices often do not realize the magnitude of damage being done to their brand. When the claims made for the product or brand are not regarded as credible by consumers, it leads to doubtful positioning.

A tertiary target market has reasonable potential but is not suited for development immediately.

Correct answer: false Explanation: Tertiary target markets are those segments that may develop emerging attractiveness for investment in the future but that do not appear attractive at present. Secondary target markets are those segments that have reasonable potential but for one reason or another are not best suited for development immediately.

The final step in target marketing is to develop profiles of each segment under consideration for investment as a target market.

Correct answer: false Explanation: The final step in target marketing is to select the target marketing approach.

A niche strategy is the same as Porter's focus strategy and is a concentrated target marketing approach.

Correct answer: true Explanation: A concentrated target marketing approach, which Michael Porter refers to as a focus strategy and is also popularly called a niche strategy, involves targeting a large portion of a small market.

McDonald's fell victim to confused positioning in the 1990s after introducing too many new products which caused customers to lose track of what the core brand was.

Correct answer: true Explanation: Confused positioning occurs when frequent changes and contradictory messages confuse consumers regarding the positioning of the brand. McDonald's found itself the victim of confused positioning as it moved out of the 1990s. It had tried (and failed) at so many diverse new product launches in the restaurants that many customers lost track of what the core of the brand was.

For many marketing managers, segmentation by benefit sought is the best place to start the process of market segmentation.

Correct answer: true Explanation: For many marketing managers, segmentation by benefits sought is the best place to start the process of market segmentation. You might begin by identifying groups interested in the specific bundle of benefits afforded by your offering and then move toward utilizing the other segmentation variables to further hone the profile of the core group that is attracted to your product's benefits.

Generation Y, people born between 1978 and 1994, tend to be pragmatic, optimistic, good team players, savvy consumers, and edgy in nature.

Correct answer: true Explanation: Generation Y, people born between 1978 and 1994, tend to be pragmatic, optimistic, good team players, savvy consumers, and edgy.

Family and household segmentation has become more complex due to a variety of differing family arrangements.

Correct answer: true Explanation: In years past, the concepts of family and household were fairly easy for marketers to define—a married man and woman, likely with children, and sometimes with other relatives such as a grandparent who had moved back in. Now, family and household segmentation can be more complex because of all kinds of different family arrangements.

Marcia wanted a car she could drive for 10 years, so she bought a Toyota because they are known for their reliability and longevity. This BEST demonstrates the product leadership source of differentiation.

Correct answer: true Explanation: Product leadership is characterized by performance, features, durability, reliability, style, and so on.

Strategic fit means there is a good match of a target market to the firm's culture and resource capabilities.

Correct answer: true Explanation: Strategic fit means there is a good match of a target market to the firm's internal structure, culture, goals, and resource capabilities.

Marketing (Big M) is not just identifying existing segments but also creating new ones.

Correct answer: true Explanation: When considering segmentation, it is important to remember that an essential part of Marketing (Big M)—strategic marketing—is not just identifying existing segments but also creating new ones through product development strategies.