MAR Q3
Bath Boutique is a small company that sells specialty bath products at a premium price. They do not have much competition and are able to serve their small group of customers very well by providing excellent service. Bath Boutique uses which kind of targeting strategy? Group of answer choices -multisegment -mass marketing -concentration -segmentation -mass customization
-Concentration Lecture page 53 A) A multisegment approach focuses on serving multiple segments with products designed specifically to meet the needs of consumers in each segment. For example, General Motors produces different types of automobiles for different market segments. B) Mass marketing involves targeting a product or service to every potential segment and is employed when the market segments are not easily identifiable. Mass marketing is now rarely used as marketers have found innovative ways to segment markets. A good example of mass marketing was the Ford Model T which only came in one color and style. C) Concentration is a targeting strategy that involves pursuing a particular segment within a market, and is also known as niche marketing. Bath Boutique is employing a concentration strategy since they specialize in selling bath products. D) By definition market segmentation is the search for relatively homogeneous clusters in a heterogeneous market. E) Mass customization is a targeting strategy that attempts to effectively serve a segment of one. Each individual consumer is seen as a segment and is generally given a menu of item from which to design or create a customized product. Mass customization can also be defined as tailoring goods or services to the tastes of individual customers on a high-volume scale. More companies are beginning to use this approach to targeting. For example, Nike employs a mass customization strategy that allows its customers to create their own personal tennis shoe.
Golden Gallon convenience stores sell Golden Gallon brand milk. Every time a customer purchases a gallon of this brand and gives the clerk his or her Golden Gallon card, the card is punched. When the customer has accumulated enough punches, he or she gets a free gallon of milk. This is an example of segmentation by: Group of answer choices -usage rate. -psychographics. -demographics. -family size. -benefits offered.
-usage rate Text page 244 Golden Gallon is pursuing the "heavy half" of the market for milk by engaging in frequency marketing. Frequency marketing programs reward heavy users rather than occasional users, so they are implicitly using a usage rate segmentation approach. Presumably, heavy users would prefer to buy Golden Gallon over other brands because of the reward.
When Apple Computers were introduced, they decided to choose schools as their primary target market and not try to sell to businesses or individual consumers. This is an example of: Group of answer choices -Concentration -Mass Customization -Heavy Half -Benefit Segmentation -Mass Marketing
-Concentration Lecture page 53 A) Concentration is a targeting strategy that involves pursuing a particular segment within a market, and is also known as niche marketing. Apple's decision to target schools as their primary target market is an example of concentration. B) Mass customization is a targeting strategy that attempts to effectively serve a segment of one. Each individual consumer is seen as a segment and is generally given a menu of item from which to design or create a customized product. Mass customization can also be defined as tailoring goods or services to the tastes of individual customers on a high-volume scale. For example, Nike employs a mass customization strategy that allows its customers to create their own personal tennis shoe. C) Heavy half refers to the fact that a relatively small percentage of households purchasing a product generally account for a relatively large percentage of the purchases. Examples can be found on lecture page 43. For instance, fifty percent of the households that purchase frozen orange juice account for 84% of the frozen orange juice purchased. D) Benefit segmentation is segmenting on the basis of what benefits are important and is generally performed using a multi-attribute model. To date, benefit segmentation is the best available surrogate for true differential response measurement. E) Mass marketing involves targeting a product or service to every potential segment and is employed when the market segments are not easily identifiable. Mass marketing is now rarely used as marketers have found innovative ways to segment markets. A good example of mass marketing was the Ford Model T which only came in one color and style.
May decides to start a new clothing company. She is targeting those customers who want to be fashionable and trendy, yet different from everyone else. She sends out catalogs with a set of basic clothing styles and a long list of individual features (sleeve length, color, stitching detail, etc.) from which the consumer may select. May is using which targeting strategy? Group of answer choices -One Product/Multiple Segments -Mass Marketing -Multisegment -Mass Customization -Self Selection
-Mass Customization Lecture page 53 A) May is not producing only one product. She has a catalog of many possible product combinations. B) Mass marketing is a one size fits all strategy. This is obviously not May's strategy for her company. C) Multi-segment is when multiple segments of the market are targeted. Many products may be offered to appeal to all types of segments. May is offering customizable product strategy. D) Mass customization is described as "efficiently serving customers uniquely." May offers a basic product that is customizable to any customers need. She offers a menu of options and consumers design their own clothes the way they want them. E) Self Selection is when marketers use general media that reaches a lot of people and hope that consumers self-select their ad. It is not one of the four main targeting strategies.
Gary is trying to design a marketing campaign for a new online bookstore, BigBooks.com, using a "one size fits all" approach. Which of the following approaches to targeting is Gary using? Group of answer choices -Mass Customization -Mass Marketing -Differential response -Concentration -Multisegment
-Mass Marketing Lecture page 53 A) The Mass Customization approach can be described as "efficiently serving customers uniquely." Gary is not trying to uniquely serve his customers. B) Mass marketing consists of selling a single product, using one particular approach, to whoever wants to buy it. It is a "one size fits all" approach. C) Differential response is a segmentation criteria which means that the identified market segments respond differently co controllable marketing variables. D) Concentration consists of focusing on a single specific segment of the market. Gary is focusing on everyone, not just one segment. E) Multisegment means that multiple segments of the market are targeted.
Australia-based Renewable Energy Ltd. sells a device that converts manure into energy. One of the $10 million devices is capable of generating energy equal to $2 million of natural gas per year. The company believes its target market is made up primarily of fertilizer manufacturers. It should use which of the following approaches to target prospective customers? Group of answer choices -NAICS code. -past purchase history. -geographic. -psychographics. -purchase location.
-NAICS code Text page 247-248 Since Renewable Energy Ltd. is interested in targeting their product to fertilizer manufacturers in general, a good place to start looking for prospective customers is in the NAICS code which will classify firms accordingly. With the NAICS code Renewable Energy Ltd. will be able find a list of all of the fertilizer manufacturers and begin to target their customers.
Which of the following statements describes a product benefit positioning approach? Group of answer choices -Sony analyzes their possible market segments and finds that the middle-aged segment is the largest. Therefore, they decide to target this segment. -Pepsi claims that more people choose their brand in the "Pepsi Challenge" taste test. -Whirlpool announces that their new model of washing machine includes more cycle options than other brands. -Ben and Jerry's begins handing out fliers in Turlington Plaza. -Nyquil advertises that their medication will suppress cold symptoms so you can sleep.
-Nyquil advertises that their medication will suppress cold symptoms so you can sleep. Lecture page 55 A) This is a segment targeting approach based on market size or potential profitability. B) In this case Pepsi is using comparative advertising against other brands of cola. C) A product feature is something that is contained or inherent with in the product itself. Therefore a new feature on a washing machine is considered a product feature. The clean clothes that a washing machine delivers would be a product benefit. D) This is not a product positioning approach. Handing out fliers would be considered guerrilla marketing. E) A product benefit delivers something to the customer. The pain relief you receive from taking Tylenol, or in this case the suppression of cold symptoms from taking Nyquil are examples of product benefits. Since Nyquil is advertising that their medication will suppress cold symptoms, and the suppression of cold symptoms is a product benefit, Nyquil is using a product benefit positioning approach.
Starbucks discovered through marketing research that 30% of consumers buy over 90% of all coffee drinks. If Starbucks used this information to segment the market, it would be relying on what type of segmentation base? Group of answer choices -Subjective and Specific -User Category -Subjective and General -Objective and General -Objective and Specific
-Objective and Specific Lecture page 51 A) Subjective variables refer to internal psychological states that cannot be overtly observed, such as beliefs and perceptions. Past sales data is objective because it is overtly observable. B) User Category is not one of the segmentation bases. C) General variables are descriptions of the consumer like demographics. Data on past consumer purchases is specific. D) Starbucks' information objectively segmented but it is not general. E) An objective and specific segmentation base relies on data like past purchases. The data is objectively measurable and specific to a product category like coffee.
A Subway advertisement features its line of seven sandwiches with six grams of fat or less and then contrasts it against McDonald's Big Mac that contains approximately 30 grams of fat. Which approaches to positioning has Subway undertaken? Group of answer choices -Against product category; against other brand -User category; product feature -Against the other brand; user category -Product feature; against other brand -Product benefit; against other brand
-Product feature; against other brand Lecture page 55 A) Subway is positioning itself against another brand in this case but not against the product category of fast food. They are positioning Subway as a much healthier fast food option. B) Subway is emphasizing a product feature (lower fat content), but they have not used the user category approach. User category places an emphasis on who would use the product and Subway did not do that in this example. C) Subway did take the "against the other brand" approach but not the user category approach. D) This is correct answer because Subway used both the product feature approach (low fat) and the against other brand approach (McDonald's). E) Product benefit was not an approach used by Subway. Fat content is clearly a feature, not a benefit. It is an objective characteristic of the sandwiches. The benefit of lower fat content (feature) would be weight loss and improved long-run health, etc.
Chingy's Shoelace Company sells all sorts of shoelaces. In the past, Chingy's has advertised in "Gym Shoe Weekly", a specialty magazine read by dedicated gym shoe enthusiasts. In an effort to increase sales, Chingy's has decided that it will now advertise in the magazine "Everyone" which has a huge following of readers from all different backgrounds. Chingy's hopes that potential consumers of their products notice it when they come across the Chingy's advertisement in "Everyone." Chingy's has shifted its strategy from _____ to _____. Group of answer choices -Assignment; Fine Tuning -Distinctiveness Across; Homogeneity Within -Self Selection; Selective Targeting -Selective Targeting; Self Selection -Homogeneity Within; Distinctiveness Across
-Selective Targeting; Self Selection Lecture page 50 A) Assignment and Fine Tuning were terms which were not discussed in class or the text book. B) Distinctiveness Across refers to the overlap between segments. The more overlap, the more the segmentation approach will be ineffective. Homogeneity within refers to the tightness of the segments. C) These are two techniques a firm uses to reach consumers. They are the correct strategies but reversed. Chingy's does not switch from Self Selection to Selective Targeting. It is the other way around. D) Selective Targeting occurs when firms communicate their message with a very specific target audience, like "Gym Shoe Weekly." Self selection is when a firm uses a more general media able to reach a lot of people and hopes people self-select the ad. This is the technique Chingy's switches to. E) Homogeneity or similarity within and distinctiveness across were not used in this example.
Patti, the product manager for Tide, decided to learn how much Tide was sold at the following stores: Target, Publix, and Wal-Mart. She compared the past purchase records for thousands of customers (as recorded by the check-out scanners) to see where her target customers were shopping. What type of measure did Patti use? Group of answer choices -General, Subjective -Specific, Objective -Objective, Subjective -Specific, Subjective -General, Objective
-Specific, Objective Lecture page 51 Objective means that the item is overtly observable and measurable, and specific refers to how detailed the information regarding the consumer is. Examining the past purchase records is an example of a specific/objective measure, since it is overtly observable and provides detailed information regarding consumer behavior.
Modern Maturity magazine is a publication that is sent to all AARP members, who have to be at least 50 years old to join. The market segment for Modern Maturity magazine was defined by: Group of answer choices -buyer situations. -usage patterns. -a demographic characteristic -a psychographic characteristic -usage rates.
-a demographic characteristic Text page 243 A) Buying situations have to do the outlet type, benefits sought, usage rate, product knowledge, and involvement. Age is not a buying situation segmentation variable. B) Usage patterns were not a factor in defining the market segment for the magazine. Age was the only factor mentioned. C) The market segment for this magazine is defined by age. Age is a demographic characteristic. D) Psychographic characteristics have to do with personality and lifestyle variables, not things like gender, age, or race. E) Usage rate is the quantity consumed or patronage during a specific time period. It has nothing to do with age of consumers.
A perceptual map can be used to identify a firm's product in terms of how closely it fits the "ideal" and where it fits in relationship to competitors. The map is based on perceptions of: Group of answer choices -independent rating organizations such as Consumer Reports. -intermediaries. -competitors, consumers, and the firm itself. -competitors. -consumers.
-consumers Text page 256-257 A) Independent rating organizations conduct research to compile perceptual maps, but their perceptions are not part of them. B) Intermediaries are not part of perceptual maps. C) Perceptual maps are only based on consumer perceptions. D) Competitors perceptions are not part of perceptual maps. E) A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands and then take marketing actions.
What is the most likely way for consumers to benefit because a firm uses a strategy of one product for multiple market segments? Group of answer choices -lower retail prices because of lower production costs -lower retail prices because of lower marketing costs -increased satisfaction of consumer wants and needs -improved service -increased number of choices
-lower retail prices because of lower production costs Text page 240 A) When a firm produces only a single product and attempts to sell it to two or more market segments, it avoids the extra costs of developing and producing additional versions of the product, which often entail high costs. B) Marketing costs are not lowered by using targeting multiple segments. The incremental cost of taking a product into a new market segment is typically the same as a separate promotion campaign. C) A firm using a strategy of one product for multiple market segments is not increasing consumer satisfaction of wants and needs. A different product or a customizable product would better increase customer satisfaction. D) Targeting multiple market segments is not going to necessarily lead to improved service. E) It is still only one product. Consumers are not getting more choices.
Grandpa Joe swears by Henry Ford's targeting strategy, "You can buy a Ford in any color you want, as long as it's black." Back in the day, Ford used to make the same car for all of its customers. Little Bobby disagrees. He likes to go on the Internet and, using a menu provided by the manufacturer, personally design his cars to fit his exact specifications. Grandpa believes in a _____ targeting strategy while Bobby believes in a _____ targeting strategy. Group of answer choices -mass marketing, mass customization -mass customization, mass marketing -multisegment, mass customization -multisegment, concentration -concentration, mass marketing
-mass marketing, mass customization Lecture page 53 A) Grandpa believes in mass marketing which is a one size fits all approach. It consists of selling a single product, using one particular approach to whoever wants to buy it. Bobby believes in mass customization which allows consumers to choose what they want from a menu of options and build a customized version of their product. B) This is the correct answer reversed. Grandpa believes in mass marketing, not mass customization and Bobby favors mass customization, not mass marketing. C) Multisegment marketing occurs when multiple segments of the market are targeted usually by offering wide selection of a product. Grandpa does not believe in this. He favor a "one size fits all," mass marketing approach. D) Market concentration consists of focusing on a single specific segment of the market. Instead of serving the entire market place, you find a niche to in the marketplace. Bobby does not believe in this he believes you can serve all customers in the marketplace by mass customization. E) Both Bobby and Grandpa do not believe in concentration or mass marketing as their preferred targeting strategy.
The best segmentation approach is the one that: Group of answer choices -maximizes the opportunity for future profit and ROI. -recognizes similarities of needs of potential buyers within a segment. -is simplest and least costly in assigning potential buyers to segments. -recognizes different needs of buyers among different segments. -makes it easiest to reach the segment.
-maximizes the opportunity for future profit and ROI. Text page 238 A) This is the best segmentation approach. If this potential is maximized without segmentation, then don't segment. B) Potential buyers within a segment should be similar in terms of a marketing action, such as product features sought, or advertising media used. However, the most important criterion for segmentation is that it will increase profit. C) This is also a criterion to use in forming market segments, but the best segmentation approach maximizes potential profits. D) A marketing manager should develop segments that recognize different needs and buyers among the different segments. But none of these segmentation approaches help a firm economically if they don't increase the potential for profit. E) Firms want to segment a market so that potential marketing action can easily reach the segment. Just because an approach makes it easier to reach the segment does not mean it is the best.
A business firm segments its market when this strategy is expected to increase its sales revenue, profit, and return on investment. When its increases in expenses due to segmentation exceed the potential increased revenues from segmentation, it should: Group of answer choices -reduce production costs, which will lower product quality. -terminate as many employees as possible to save money. -not attempt to segment its market any further. -discontinue manufacturing any products that are not in the mature stage of their product life cycle. -act as its own distributor to cut costs.
-not attempt to segment its market any further. Text page 238 A firm should only go through the trouble and expense of segmenting its markets when it expects that the benefit will be greater than the cost. When the costs (expenses) from segmentation exceed the benefits (sales, revenue, ROI) a firm should not attempt to segment its market.
A firm selling two or more products with different features targeted to different market segments is using: Group of answer choices -market differentiation. -product differentiation. -market penetration. -full coverage marketing. -dual distribution.
-product differentiation Text page 238 A) This is a made up term. B) Product differentiation is a marketing strategy that involves a firm's using different marketing mix activities, such as product features and advertising, to help consumer perceive the product as being different and better than competing products. C) Market penetration is a marketing strategy of increasing sales of present products in an existing market. It is one of the four basic market-product strategies. D) Full coverage refers to one of the combinations of synergy effects in relation to the market-product grid (discussed in Chapter 22). E) Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
At a Hallmark store you can find several different brands of greeting cards, including Fresh Ink, Nature's Sketchbook, Shoebox, Maxine, Mahogany, and Tree of Life cards all made by Hallmark for sale in its stores. Hallmark is using a _____ strategy to reach several different market segments. Group of answer choices -market concentration -product sampling -product extrapolation -product differentiation -mass marketing
-product differentiation Text page 238 By definition, a product differentiation strategy involves using different marketing mix activities, such as product features and advertising to help consumers perceive the product as being different and better than competing products. Each brand of greeting card is unique and will attract a different market segment. The diversity of greeting cards available to Hallmark customers represents a product differentiation strategy.
One advantage of a market-product grid is that it can be used to: Group of answer choices -relate the product life cycle to consumer demand. -relate likely sales of products to prospective market segments. -select representative samples of consumers for marketing research studies. -make optimal decisions under conditions of uncertainty. -screen many new product ideas in order to select the one with best long-run market potential.
-relate likely sales of products to prospective market segments. Text page 250 By definition a market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm. A market grid can be used to relate likely sales of products to prospective market segments. Each cell in the grid can also be used to show the estimated market size of a given product sold to a specific market. Figure 9-2 on page 234 is an example of a market-product grid.
With the recent surge in the showing of commercials to movie theater audiences, many companies have found it to be an innovative medium to reach large numbers of consumers. For instance, several beverage products, including sports drinks, soft drinks, and bottled water, advertise heavily in theaters, where they know a very broad and diffuse cross-section of consumers can be reached. Advertising in this medium relies on _________. Group of answer choices -homogeneity across segments -self selection -heterogeneity within segments -measurabilityselective targeting -selective targeting
-self selection Lecture page 51 A) Since advertisers are communicating with a broad and varied audience in a movie theater they are not relying on the homogeneity across segments. It does not matter how alike or not alike different segments are, advertisers are hoping members of their target segments pay attention to their ad. B) Self Selection is used when there is a more varied, mass audience. Marketers advertise in a general medium like a movie theater and hope that people self-select the ad. C) Since advertisers are trying to reach a broad and varied audience in a movie theater they are not relying on the heterogeneity within segments. It does not matter how similar consumers are within segments, advertisers are hoping members of their target segments pay attention to their ad. D) Measurability refers to firms having some basis on which they can measure the people who fall in their market so that they can assign them to different segments. Gender and age are commonly used because they are easy to measure. Advertising in this medium is not relying on the measurability of segments. E) Selective targeting is the opposite of self selection. Firms select a particular target through a particular media vehicle or distribution channel so they can easily reach their targeted segment.
Surf's Up Corporation is interested in improving the effectiveness of their advertising for their latest surfboard equipment. They began a few years ago by advertising in widely circulated magazines such as Maxim and Sports Illustrated. More recently, Surf's Up is placing their ads in Longboarder Magazine and Surf Guide. Their change of promotional strategy has been from: Group of answer choices -niche marketing to self selection -self selection to selective targeting -selective targeting to self selection -self selection to mass marketing -selective targeting to niche marketing
-self selection to selective targeting Lecture page 50 Self selection does not involve targeting a specific group of people, instead readers must self select the advertisements that they notice in the magazine. Originally Surfs Up is employing a self selection strategy by advertising in widely circulated magazines. In this advertising environment many of the readers are may not even be interested in surfboarding. In contrast, selective targeting involves pinpointing the customers you want to focus your advertisements on. This type of advertising is more efficient that self-selection since there is a greater likelihood that the average reader of Longboarder Magazine will be interested in the Surfs Up advertisement than the average reader of Maxim or Sports Illustrated.
Happy Daze Tours is attempting to segment the market for their new vacation package. They decide to survey consumers to discover if they include surfing the web as one of their favorite pastimes. Happy Daze is using which type of segmentation base to segment the market? Group of answer choices -objective and general -subjective and general -web-based research -objective and specific -subjective and specific
-subjective and general Lecture page 51: Objective is information is overtly observable, while subjective must be measured via a survey or other indirect means. General and specific indicate the extent to which the measure used is related directly to the product of interest. A) Objective and general uses demographic and socio-economic status information in order to form a basis for segmenting a market. B) Subjective and general uses information that pertains to a customer's activities, interests, or opinions in order to segment the market. The market could be segmented based upon different lifestyles. In this question Happy Daze is trying to discover whether or not consumers view surfing the web as a favorite pastime, thus they are using a subjective and general approach. C) This is a form of marketing research, not a segmentation approach. D) Objective and specific information could use the purchase history of customers, or any other overtly observable fact that is specific only to the product class or brand in order to assign customers to segments. E) Subjective and specific information is used to segment markets on the basis of what benefits are important to consumers. Here the importance weights individual consumers assign to various items plays an important role in segmenting.
What does the term product positioning refer to? Group of answer choices -the place a product offering occupies in consumers' minds on important attributes -a careful analysis of cross tabulations -an old and outdated concept that has been replaced by segmentation -geographic segmentation, often within major metropolitan areas -shelf locations in major chain, grocery, and department stores
-the place a product offering occupies in consumers' minds on important attributes Text page 256-257 A) This is the correct definition of product positioning. B) An analysis of cross tabulations is not a part of product positioning. C) Product positioning is not old and outdated. It is used in conjunction with segmentation. It is still a critical decision that determines how prospective buyers view a product in relation to products offered by competitors. D) Product positioning does not have to do geography or metropolitan areas. E) Positioning does not refer to any physical position of products whatsoever. The position is in reference to the a place in the minds of consumers.
Marketers use market segmentation: Group of answer choices -to develop specific marketing actions related to the 4 P's. -to relate supply to demand in economic terms. -to increase overall sales, profits and/or other organizational goals. -to link market needs to an organization's marketing program. -to do all of the above.
-to do all of the above. Text page 238 A) Marketers use segmentation to develop specific marketing actions that involve separate products or other aspects of the marketing mix such as price, advertising, and distribution strategies. B) Market segmentation helps marketers relate supply to demand in economic terms. C) A business firm goes to the trouble and expense of segmenting its markets when it expects that this will increase its sales, profits, and return on investment. D) The process of segmenting a marketing and selecting specific segments as targets is the link between the various buyers' needs and the organization's marketing program goals. E) All statements A-D are correct.