Marketing 3650 Ch. 7 Practice Test

To effectively segment markets, the following conditions must be met:

Segments should be "homogeneous within" and "heterogeneous between" Segments must be large enough to be profitable Segments must be accessible via communications and distribution channels Firms must have adequate resources to target these segments

From a customer-oriented perspective, the ideal basis for segmenting a market is with customer demographics.

false Customer's desired benefits or needs is the ideal basis for segmenting a market.

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there is a large number of different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, within the category of ales exists the subcategory of English ales which might be considered a simple market segment.

false, english ales would be considered a micro segment or niche

The large, heterogeneous market from which specific submarkets (market segments) are drawn is called the aggregate market.

false, mass market or total market would be a good name for this

Mediagraphics is not a category of variables commonly used to profile market segments once these segments are created.

false, mediagraphics is a category of variables used

Some firms find it attractive to target "niches" because the number of potential customers is largest.

false, niches tend to be the smallest segments

Because of the small size of most niches (also called micro-segments), it is tough for marketers targeting niche segments to establish a differential advantage over competing brands.

false, the opposite is true

Market definition is the process of subdividing heterogenous consumer or organizational markets into more homogeneous submarkets in which members share common consumption, demographic, psychographic, and attitudinal characteristics.

false, this process is market segmentation

The young married couples with no children stage in the family lifecycle is associated with consumers who prefer sports cars, recreational products, entertainment, and fashion clothing? This is also the first stage in the lifecycle.

false, young singles fits this description

The requirement that market segments be "large, measureable, and profitable" means that firms must be able to precisely identify the geographic locations of customer segments.

false. The large measureable, and profitable requirement does not create this requirement.

A single firm's potential unit or dollar sales for a specific product to a specific target segment during a specified period of time is that firm's market potential.

false. sales potential is the correct term

Lucas is marketing manager for Monster, a producer of energy drinks. A primary market segment targeted by Monster is the fitness market. Lucas estimates that the size of this market exceeds $6.3 billion per year. In addition, Lucas estimates that Monster can garner 12% of this market, worth about $.756 billion. The upper estimate of $6.3 billion is ________ .

the market potential for all energy drinks

"Mass marketing" is most consistent with the production concept.

true

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there are a large range on different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, they might define the category of ales to be:

A macro segment

Which of the following is least characteristic of "niches" as market segments?

Because of their small sizes, it is tough to establish a differential advantage over competing brands.

Gillette advertised its line of Mach 3 razors as the first triple-bladed razor. Which type of segmentation base is implied?

Benefits or product attributes

Procter & Gamble individually brands most of its products. P&G's detergent line is comprised of a number of brands including Tide, Cheer, Dash, Ivory Snow, Gain, Era, and Bold. Quite possibly, one brand's sales may be cannibalizing sales from another brand in the same product line and reducing profits across the entire line. P&G may need to reposition one or more brands to reduce cannibalization. This scenario illustrates which of the following situations in which repositioning may be necessary?

Brands are insufficiently differentiated from one another Sales are insufficient to justify the current position

The need to reposition a brand arises in all of the following situation except:

Census data suggests that the brand's existing customer demographic is declining in size Perceptual mapping shows that the brand is not sufficiently differentiated from competing brands

Which of the following is not one of the three steps in the market segmentation process described in the text?

Estimate demand in segments that have been identified.

When marketers segment consumer markets into heavy, light, and moderate users of products they are employing a usage occasion segmentation scheme.

False, Usage rate is the correct segmentation scheme.

Mass marketing (as contrasted with market segmentation) is most likely to be a viable strategy when the market contains a large number of competitors, all of whom target one or more specific market segments within the overall product/market.

False, mass marketing is not a viable strategy in this case

Market definition can be viewed as the process of aggregating together "similar" consumers or organizations based on similarities in their consumption, demographic, attitudinal, and psychographic characteristics.

False, this process is market segmentation

Black & Decker produces a number of product lines of power tools. The Black & Decker line targets DIYS (Do It Your Self) consumers, the DeWalt line, a premium higher priced brand, is geared more to professional builders. Porter-Cable, a recent acquisition, is positioned similarly to Black & Decker. The Mac Tools brand targets professional automotive mechanics. Black & Decker treats each line and its associated customers as distinct target markets toward which they direct unique marketing programs. Black & Decker is employing a focused targeting strategy.

False. Differentiated targeting is the proper terminology for this strategy.

Jennifer is marketing manager for a major consumer goods firm. She is interested in determining if market opportunity exists for the sales of a new brand of organic, gluten free line of ready-made dinners. Jennifer knows that the market for ready-made dinners is very large and heterogeneous and wants to more precisely pinpoint those customers within this market that are most likely to respond favorably to the new brand. Apparently, Jennifer is interested in how to best promote her new brand.

False. Jennifer should be more interested in market segmentation at this point

Most consumers know that they must exercise to get into better physical condition. But many worry about what they look like while exercising. Some consumers also may want to exercise at odd times of the day when most gyms are closed. Advertisers of home fitness equipment have taken particular advantage of these facts. They are, in part, probably using usage-rate segmentation.

False. Life-style segmentation fits this example, not usage-rate segmentation.

Those characteristics that allow marketers to define market segments and distinguish one market segment from another are called segmentation dimensions.

False. Segmentation bases allow marketers to define market segments and distinguish them.

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there is a large number of different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, they might define the entire beer market as a niche.

False. The entire beer market would be the mass market or total product market.

Some firms find it attractive to target "niches" because niches are typically larger and, therefore, attract more competitors.

False: Niches are small segments, and tend to have less competitors.

The requirement that market segments be "actionable" includes all of the following except:

Firms can effectively differentiate their products from those of competitors in targeted segments.

some firms find it attractive to target "niches" because:

Firms can gain a competitive advantage by 'specializing' on serving the more narrowly defined needs of customers in niches.

The requirement that market segments be "actionable" means that:

Firms have the financial resources to target the market segments desired Firms' employees possess the necessary skill sets to capture sales in the desired segments There exist adequate media channels to communicate with customers in targeted segments There exist proper distribution channels to move products into the hands of consumer in targeted segments

To reverse a downward trend in sales, Mazda introduced its MPV minivan. Mazda positioned its van as a cross between a standard minivan and a sport utility vehicle. Mazda knew that it needed to use a market segmentation strategy to correctly target the MPV. The first thing Mazda had to do when it segmented the automobile-buyer market was to:

Identify the current and potential needs of the market (assuming that a benefit segmentation base is desirable).

Which of the following is not an advantage to mass-marketing?

Individual customers' wants and needs can be more directly targeted.

_______________ is the process of subdividing heterogenous consumer or organizational markets into more homogeneous submarkets in which members share common consumption, demographic, psychographic, and attitudinal characteristics.

Market segmentation more homogeneous submarkets in which members share common consumption, demographic, psychographic, and attitudinal characteristics.

The large, heterogeneous market from which specific submarkets (market segments) are drawn is also called the:

Mass market Total product-market

Insufficient sales and changing demographics in a brands currently targeted market may suggest the brand needs to be repositioned. Which of the following brands were repositioned as a result of these critical market changes?

Miller High Life beer Marlboro cigarettes Pepsi Mercedes

The need to reposition a brand arises in all of the following situation except:

Perceptual mapping shows that the brand is perceived as very different from competing brands.

The firm's primary purpose for segmenting larger markets into more homogeneous submarkets in which members share common consumption, demographic, psychographic, and attitudinal characteristics is that members of such segments tend to:

Prefer similar products possessing similar product features, attributes, and benefits. Respond similarly to a given promotional messages React similarly to the same pricing strategies Prefer to buy through the same distribution channels

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there are a large range on different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, they might define the entire beer market as:

The mass market or total product-market

Mass marketing (as contrasted with market segmentation) is most likely to be a viable strategy when:

The product is in the introductory stage of the life cycle. Few competitors exist, the product is rather undifferentiated, and consumers' wants & needs are rather basic or simple with respect to the product in question.

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there are a large range on different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, within the category of ales exists the subcategory of English ales which might be considered:

a micro segment or niche

thin the fitness market, dedicated bodybuilding clubs exist that amount to "sweat shops" serving the needs of amateur and professional bodybuilders. These clubs focus on traditional free weights with limited machines, support facilities, and services. This market represents:

a niche

Which of the following segmentation bases best illustrates how market segments were created in Russell Haley's toothpaste segmentation study which segmented toothpaste users into the categories of worriers, sensories, socialbles, and general?

benefits

Some firms find it attractive to target "niches" because the number of potential customers in largest.

false

Since Texas and a handful of other states have legislated incentives that encourage their states' drivers to buy alternative fuel vehicles, Ford Motor Company has introduced just for those states a full-size truck that runs on natural gas. This is an example of ________________ segmentation.

geographic

Jennifer is marketing manager for a major consumer goods firm. She is interested in determining if market opportunity exists for the sales of a new brand of organic, gluten free line of ready-made dinners. Jennifer knows that the market for ready-made dinners is very large and heterogeneous and wants to more precisely pinpoint those customers within this market that are most likely to respond favorably to the new brand. Apparently, Jennifer is interested in:

how to best segment the ready-made dinner market

The term AIO stands for a series of measures designed to assess consumers' ____________.

lifestyles

___________ can be viewed as the process of aggregating "similar" consumers or organizations based on similarities in their consumption, demographic, attitudinal, and psychographic characteristics.

market segmentation

_______________ is the process of subdividing heterogenous consumer or organizational markets into more homogeneous submarkets.

market segmentation

Price competition between firms is most likely with which of the following target marketing strategies?

mass marketing

When marketers determine the types of communications and promotional media consumers prefer they are assessing their:

mediagraphics

The smallest operational market segment is referred to as a:

micro segment or niche

Insufficient sales and changing demographics in a brands currently targeted market may suggest the brand needs to be repositioned. All but one of the following brands were repositioned as a result of these critical market changes. Which one is the exception?

nike

_____________ is the process of strategically changing the brand's current image or personality.

repositioning

A single firm's potential unit or dollar sales for a specific product to a specific target segment during a specified period of time is that firm's:

sales potential

Lucas is marketing manager for Monster, a producer of energy drinks. A primary market segment targeted by Monster is the fitness market. Lucas estimates that the size of this market exceeds $6.3 billion per year. In addition, Lucas estimates that Monster can garner 12% of this market, worth about $.756 billion. The lower estimate of $.756 billion is ________ .

sales potential for monster energy drinks

To effectively segment markets, the following conditions must be met:

segments should be "homogeneous within" and "heterogeneous between" Segments must be large enough to be profitable Segments must be accessible via communications and distribution channels Firms must have adequate resources to target these segments

Because data are easily collected, readily available in secondary sources, and often are highly correlated with consumer wants and needs, demographic segmentation is the most commonly employed segmentation base used in marketing applications.

true

Candice is the marketing manager for a consumer goods firm. Based on results from a market segmentation study, Candice has decided to segment the firm's market into 'usage rate' or 'consumption rate' segments. The results of the study identified a sizable 'heavy half' that Samantha decided to target because she has always assumed that the most profit potential exists with this segment. Samantha may be guilty of committing the majority fallacy.

true

Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the alcoholic portion of the market there is a large number of different types of alcoholic drinks, including wines, beers, hard liquors, etc. In addition, each of these later alcoholic lines of beverages can be further subdivided. For example, beers can be, as a minimum, divided into ales and lagers, with many subcategories within these broader groups. If one is seeking to enter the beer brewing business and is conducting an MOA, they might define the category of ales to be a macro-segment.

true

Consumer lifestyle characteristics are normally measured with a combination of measures that assess what are called AIO characteristics.

true

Estimating demand in segments that have been identified is not one of the three steps in the market segmentation process described in the text.

true

Gatorade AM is targeted to consumers who desire an energy drink in the morning instead of traditional coffee or tea. Gatorade is clearly trying to increase consumption of its brand by targeting additional usage occasion segments.

true

Lucas is marketing manager for Monster, a producer of energy drinks. A primary market segment targeted by Monster is the fitness market. Lucas estimates that the size of this market exceeds $6.3 billion per year. In addition, Lucas estimates that Monster can garner 12% of this market, or $.756 billion. The upper estimate of $6.3 billion is the market potential for all energy drinks.

true

Market segmentation is the process of subdividing heterogenous consumer or organizational markets into more homogeneous submarkets.

true

Mass marketing (as contrasted with market segmentation) is more likely to be a viable strategy when the firm anticipates that scale economies will lead to cost reductions and lower prices for customers.

true

Once a firm identifies relevant market segments within a larger, more heterogeneous market it then must determine which market segment or segments to pursue. This is the process of market targeting.

true

Rural grocery stores often stock products geared to the average customer in its market area. Management assumes there are negligible differences in needs between customers. Consequently, an "average" range of products will appeal to the most people. The implied target market strategy is undifferentiated targeting

true

The benefit segmentation base is most consistent with the tenets of the marketing concept. In other words, if you are a strong advocate of the marketing concept, the benefit segmentation base will be most consistent with your "philosophy of doing business?"

true

The firm's primary purpose for segmenting larger markets into more homogeneous submarkets in which members share common consumption, demographic, psychographic, and attitudinal characteristics is that members of such segments tend to prefer similar products possessing similar product features, attributes, and benefits.

true

The process of evaluating a series of market segments to determine which segment or segments the firm should pursue is called market targeting.

true

The smallest operational market segment is referred to as a micro-segment or niche.

true

To reverse a downward trend in sales, Mazda introduced its MPV minivan. Mazda positioned its van as a cross between a standard minivan and a sport utility vehicle. Mazda knew that it needed to use a market segmentation strategy to correctly target the MPV. The first thing Mazda had to do when it segmented the automobile-buyer market was to identify the current and potential needs of the market (assuming that a benefit segmentation base was desirable).

true

Which stage in the family lifecycle is the fastest growing, on limited income, with preferences for smaller food portions, smaller and more efficient apartments, less expensive childcare, and time-saving appliances?

young singles or divorced with children