Principles of Marketing Ch. 8

Which of the following best illustrates frequency marketing?

Kroger grocery stores offer a loyalty card that allows consumer to accumulate points towards gas discounts.

Grouping products into meaningful categories makes it easier for consumers to relate to them. The most logical grouping in the fast food industry that buyers would relate to would be ______.

breakfast, lunch, dinner, and snacks

Manufacturing a product only when there is an order from a customer is known as ______.

build-to-order

A perceptual map is used in developing a positioning strategy in order to display the position of the products or brands in the ______ mind.

consumer's

When expenses are greater than the potentially increased sales from segmentation, a firm should ______.

not attempt to segment its market

Which of the following are specific segmentation strategies?

one product and multiple markets multiple product and multiple markets segments of one

The increased customer value associated with ________ may take the form of more products, improved quality on existing ones, or lower prices.

organizational synergy

In a weaker economy, some high-end brands may seek to become more attractive to additional customer segments. One way to do this is to __________ the brand.

reposition

U.S. dairies attempted to ________ chocolate milk on the perceptual map so that it was viewed as more nutritious and more appropriate for adults.

reposition

A business firm should ________ its markets so it can respond more effectively to the needs of its potential buyers, which should result in increased sales and profits.

segment

Mass customization is one of several ________ strategies.

segmentation

Developing a market-product grid is a step in the ______ process.

segmenting and targeting

A market-product grid shows various product offerings and ______.

segments of prospective buyers

The next step after developing a market-product grid and estimating market sizes in the segmentation process is to ________.

select target markets

Which of the following are costs that an organization incur when it produces only a single product and attempts to sell it in two or more different market segments? (Check all that apply.)

- Establishing a new channel of distribution - Creating a separate promotional campaign

Which three factors should a marketer consider when forming market segments?

- simplicity and cost-effectiveness of assigning. - potential buyers to segments potential of a marketing action to reach a segment. - potential for increased profit.

What three components are taken into consideration when calculating customer lifetime value?

- the costs required to serve customers - customer usage rate - customer loyalty

The 80/20 rule is a concept suggesting that ______.

80 percent of a firm's sales are obtained from 20 percent of its customers

__________ segmentation groups consumers on the basis of some observable actions such as usage rate or importance of product features.

Behavioral

_____ is based on some observable actions or attitudes by prospective customers—such as where they buy, what benefits they seek, how frequently they buy, and why they buy.

Behavioral segmentation

Which two statements are true of product positioning?

It is in relation to competitive products. It exists in the mind of the consumer.

A product differentiation strategy should achieve which of the following?

It should help consumers perceive the product as being different and better than competing ones.

________ is the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently.

Organizational synergy

________ refers to the place a product occupies in the consumer's mind on important attributes relative to competitive products.

Product positioning

_________ rate is the quantity consumed or store visits during a specific period, and it varies widely among different customer groups.

Usage

Positioning strategy using perceptual maps begins with identifying the most important _________ of the product class to the target customers.

attributes

Demographic, geographic, and behavioral are ______.

bases used to segment consumer markets

Segmenting on the bases of either product features desired by prospective customers or their actual usage rates are examples of _________ segmentation

behavioral

Usage rate is a variable used in ______ segmentation.

behavioral

Mass customization is a step beyond a ________ strategy, because although the latter allows for good choice with quick delivery, it does not allow customers unlimited options for features.

build-to-order

The 80/20 rule helps marketers _____.

calculate the usage rate

The Ann Taylor chain of stores has a problem with ________ from its sister chain Ann Taylor LOFT, whose sales have surpassed the the original Ann Taylor stores and have made it harder for them to reach their target customers.

cannibalization

When a business's own new product or new chain is stealing customers and sales from the older, existing ones it is known as ______.

cannibalization

What measurement represents the financial worth of a customer to a company over the course of their relationship?

customer lifetime value

Because more than half of all U.S. households are made up of only one or two persons, Campbell's packages meals with only one or two servings, which is an example of ________ segmentation.

demographic

Crest toothpaste markets its fruit flavored toothpaste to children, and its whitening toothpaste to adults. This is an example of ______ segmentation.

demographic

Segmentation based on gender, age, or occupation in would be considered ______ segmentation.

demographic

segmentation based on gender, age, or occupation in would be considered ______ segmentation.

demographic

When an organization produces only a single product and attempts to sell it to two or more market segments, it avoids which costs?

developing and producing several versions of the product

In head-to-head positioning a company positions its product to compete directly against competitor's products, while ________ positioning allows for more indirect competition.

differentiation

Synergies, in the context of segmentation, are ________ that can be achieved by focusing on horizontal or vertical lines within the market-product matrix.

efficiencies

Which of the following is not a part of the segmenting and targeting process?

evaluating the marketing mix

Potential for increased profit and similarity of needs of potential buyers within a segment are criteria used to ______.

form market segments

Frequent-flier programs used by airlines focus on increasing the usage rate, and are an example of ______.

frequency marketing

Select the variables that are typically used in demographic segmentation. (Select all that apply)

gender income marital status

What type of segmentation organizes prospective customers into groups on the basis of where they live or work?

geographic

When Macy's promotes and sells different apparel based on the location of its retail stores, it is an example of _____ segmentation.

geographic

What are the four general bases of segmentation used to segment consumer markets?

geographic psychographic behavioral demographic

McDonald's promotes coffee in Seattle and orange juice in Orlando. This is an example of __________

geographic segmentation

Segmentation based on the size of city in which prospective customers live would be considered _____.

geographic segmentation

What are two approaches to product positioning?

head-to-head differentiation

Market segments are the relatively ________ groups of prospective buyers that result from the segmentation process.

homogenous

The fundamental reason a business firm engages in market segmentation is to ______.

increase its sales and profits

A business goes to the trouble and expense of segmenting its markets when ______.

it expects that this will increase sales and profits

What is a variable used in psychographic segmentation?

lifestyle

The process of aggregating prospective buyers into groups with common needs that will respond similarly to a marketing action is called ______.

market segmentation

_______ ________ involves aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action.

market segmentation

The third step of the market segmentation process is to develop a(n) _________ grid and estimate the size of the markets.

market-product

An eyeglass manufacturer produces all of the frames for its reading glasses and then inserts the eyeglass lens based on the different magnification needs of its customers. This is an example of ______.

mass customization

Dell manufactures all the necessary components for its desktops and laptops. It assembles these components into basic computers that can be sold in stores and also assembles products to the exact specifications of customers. Dell is engaged in ______.

mass customization

Tailoring goods or services to the tastes of individual customers on a high-volume scale is a segmentation strategy known as ______.

mass customization

Today's Internet ordering and flexible manufacturing and marketing processes have made ________ possible.

mass customization

A _________ map can be used to help managers see how consumers perceive competing products or brands.

perceptual

"For upscale American families who desire a carefree driving experience, Volvo is a premium-priced automobile that offers the utmost in safety and dependability," would best be described as a ______.

positioning statement

The _________ strategy involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products.

product differentiation

in what two ways are markets segmented based on behavioral segmentation?

product features usage rate

Market segments are made up of ________ that are relatively similar to one another.

prospective buyers

Claritas PRIZM uses ________ segmentation to classify every U.S. household as one of 66 unique market segments based on the belief that "birds of a feather flock together," with groups living near one another having similar interests and buying similar offerings.

psychographic

John is a supporter of environmental issues. He is constantly examining the "green" credentials of the products he purchases. It may be very effective to reach John with marketing actions based on ________ segmentation.

psychographic

Personality traits, lifestyles, and needs of prospective customers provide the bases for _________ segmentation.

psychographic

Using breakfast, lunch, dinner, and snacks as categories helps consumers to ________ the products offered by a fast food brand that may have dozens of choices.

relate to

The third step of the market segmentation process is to develop a market-product grid and estimate the ___________ of the markets.

size

The market-product grid can be used to identify both product and market ________ that may be available.

synergies

The final step of the segmentation process is to ______.

take marketing actions to reach the target markets

A firm must choose its ________ carefully; if its picks too narrow a set it may fail to reach the volume of sales it needs but if it selects too broad a set, it may spread its marketing efforts too thin.

target market segments

The segmentation and targeting process should result in ______.

the development of an action plan in the form of a marketing program

The first step in positioning a product using a perceptual map is to identify ______.

the important attributes of the product

A market-product grid is used to relate

the market segments of potential buyers to the products offered.

Ideally, a positioning statement should identify which three things?

the target market and needs satisfied the product's unique benefits the category of the firm that the product belongs to