chapter 7

companies need more information to offer the right products to the right customers

1) Companies know they cannot appeal to all buyers in the marketplace, or at least not in the same way. Reasons for this include all of the following EXCEPT ________.

The first step is market segmentation: dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors, who might require separate products or marketing mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments. The second step is market targeting: evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. The third step is differentiation: actually differentiating the firm's market offering to create a superior customer value. Finally, the last step is market positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers. AACSB: Application of knowledge; Written and oral communication

11) Explain the four major steps in designing a customer-driven marketing strategy.

ethical

12) Which of the following is NOT one of the major variables used in segmenting consumer markets?

Geographic segmentation

13) ________ calls for dividing the market into regions, states, counties, cities, or even neighborhoods.

geographic segmentation

14) Many companies today are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods. This is an example of

Demographic

15) ________ segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

demographic segmentation

16) Delta Motorworks markets its cars based on the age, gender, and income of its customers. Which of the following types of market segmentation is evident here?

Psychographic

17) ________ segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics.

stereotyping

18) A company selling child-care products ran a television ad depicting women as being primarily responsible for childcare. Many women viewers considered this regressive, alleging that the ad failed to recognize the much more diversified role of women in today's world. This is an example of ________.

demographic

19) Which of the following variables are the most popular for marketers to use in segmenting customer groups?

Market targeting

2) ________ consists of evaluating each market segment's attractiveness and selecting one or more segments to enter.

Age

20) ________ can be a poor predictor of a person's health, work or family status, needs, or buying power.

Gender

21) ________ segmentation has long been used in clothing, cosmetics, toiletries, and magazines

income

22) Gilron Holidays runs a premium membership club that caters to customers whose annual salary exceeds $100,000. Members of this club are offered seasonal discounts at select luxury hotels in select cities worldwide. Gilron Holidays most likely follows a(n) ________ segmentation approach.

Psychographic

23) ________ segmentation divides buyers into different segments based on lifestyle or personality characteristics.

psychographic segmentation

24) Marketers who use ________ often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals.

Behavioral

25) ________ segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.

Occasion

26) ________ segmentation refers to dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.

occasion segmentation

27) Malcolm Sanders, a graduate student from Boston, makes customized snowboards for local snowboarding enthusiasts. The demand for snowboards peaks during the winter months, a busy time for Malcolm. He advertises more aggressively and sells most of his snowboards around this time. Which market segmentation approach does Malcolm most likely use?

occasion segmentation

28) Tropicana promotes drinking orange juice at any time of day as a cool, refreshing drink. The market segmentation approach Tropicana is using is ________.

Benefit segmentation

29) ________ requires finding the major advantages people look for in a product class, the kinds of people who look for each positive aspect of a product, and the major brands that deliver it.

Market segmentation

3) ________ involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

benefit segmentation

30) Calypso Motors recently rolled out its Proteus hatchback. Proteus combines the attractiveness of a luxury car with the excellent agility of a sports car. Calypso Motors is confident that Proteus will appeal to both sports car enthusiasts as well as the luxury segment. Which of the following types of market segmentation is evident here?

user status

31) Which of the following refers to a behavioral segmentation variable that involves segmenting markets into nonusers, ex-users, potential users, first-time users, and regular users of a product?

Anita, who recently had a baby

32) In the context of behavioral segmentation, who among the following is a potential user?

usage rate

33) In the context of behavioral segmentation, markets segmented by ________ can be categorized into light, medium, and heavy product users.

segmentation by usage rate

34) A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage of the market. The study indicated that less than 7 percent of all shoppers buy nearly 71 percent of Estelle's products in the United States. This is an example of ________.

degree of loyalty

35) Consumers who show their allegiance to brands, stores, or companies help marketers to segment consumers by their ________.

By looking at customers who are shifting away from its brand, a company can learn about its marketing weaknesses and take actions to correct them.

36) Which of the following is true about behavioral segmentation on the basis of the loyalty variable?

Multiple segmentation bases help identify smaller, better-defined target groups.

37) Which of the following is true about multivariable segmentation systems?

help companies more accurately price their products to appeal to key customer segments

38) Which of the following is NOT a benefit of using multivariable segmentation systems?

operating characteristics

39) Which of the following is NOT a common variable used by both consumer and business marketers while segmenting markets?

Differentiation

4) ________ involves actually distinguishing the firm's market offering to create superior customer value.

personal characteristics

40) Business marketers use geographic, demographic, benefit, user status, usage rate, and loyalty status to segment their markets. They also use ________, customer operating characteristics, purchasing approaches, and situational factors.

Geographic

41) ________ segmentation assumes that nations close to one another will have many common traits and behaviors.

economic factors

42) Double Drill Inc. segments its foreign markets by per capita income. This firm segments the international markets based on ________.

geographic

43) Pacific Fisheries divides its customers into different regional units, such as Asia, Australia, and the Americas. This is an example of ________ segmentation. A) demographic

political factors

44) Marketers often segment international markets according to the type and stability of government. In such instances, they segment markets based on ________.

market targeting

5) When marketers at Fair & Leigh Inc. selected the Millennials, a demographic group that includes many college students, as an untapped group of potential customers for their new line of products, they were engaging in ________.

Positioning

6) ________ consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

FALSE

7) Mass marketing involves identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.

TRUE

8) The customer-driven marketing strategy involves four steps: market segmentation, market targeting, positioning, and differentiation.

FALSE

9) With technology advances making it simple to contact many customers at once, companies have moved toward mass marketing over target marketing.

Differentiation refers to differentiating the market offering to create superior customer value.

What is differentiation?