MKTG 380 Quiz #6 (Ch. 9)
Which of the following statements is true of differentiated marketing?
Differentiated marketing helps a company to diversify and reach new customers.
Concentrated marketing strategy ties a firm's growth to a specific market segment.
T
Detergent packets purchased by a leading laundry service are considered business products.
T
Dividing an overall market into homogeneous groups based on gender and age would constitute demographic segmentation.
T
Which of the following factors sets the upper limit on demand generated by a particular market segment?
Market potential of the segment under analysis
Geographic indicators such as job growth give useful guidance to marketers, depending on the type of products they sell.
True
Micromarketing can target even individuals.
True
Not-for-profit organizations practice market segmentation.
True
When firms identify the factors that affect consumers' purchase decisions and develop strategies and tactics to appeal to specific types or groups of customers, they are practicing market _________.
segmentation
Concentrated marketing is also known as niche marketing.
True
The Asian American population is more geographically distributed than either Hispanics or African Americans.
F
Raw silk is an example of a consumer product.
False
The "empty nest" stage in the family lifecycle includes:
married couples whose children are living on their own.
The VALS system divides consumers into _____categories.
8
A market includes any person or entity that has the willingness and the purchasing power to buy a product.
T
The Asian Americans are currently the largest ethnic minority group in the United States.
F
Developing a relevant user profile is the first step in the market segmentation process. How are segment profiles used to identify the typical customer in each segment?
Segment profiles are used to describe similarities among members of a market segment, and to explain differences among members in separate market segments.
Market segmentation plays a very important role in developing a marketing strategy. Select the best definition of market segmentation from the choices below.
dividing the total available market into smaller, similar groups
Which of the following is a psychographic category created by the VALS system that categorizes consumers by characteristics that correlate with purchase behavior?
Achievers
The group born between 1968 and 1979, now generally in their early 30s to early 40s are referred to as Generation Y.
F
Which of the following racial/ethnic minority groups is an attractive target for marketers because of their fastest-growing income?
Asian Americans
The first stage in the market segmentation process, after identifying promising segments, is to produce a forecast of market potential within each segment.
FALSE
Firms often purchase legal services from external consultants. However, as this does not directly contribute to the firm's production activities, legal services cannot be considered a business product.
F
Psychographic segmentation involves segmenting the consumers on the basis of the benefits they seek from a product.
F
Since rubber purchased by Goodyear is utilized to manufacture tires that are ultimately used by consumers for their automobiles, rubber is a consumer product for Goodyear.
F
Which of the following factors falls under the resource dimension of the VALS system?
Eagerness to buy
A management-driven method for identifying market segments involves asking customers for the product attributes important to them.
F
A micropolitan statistical area will have at least one urbanized area of 50,000 or more inhabitants.
F
According to Engel's laws, the percentage of income spent on food increases with increased income.
F
Home Depot introduced a new line of riding lawn mowers. The company decided to focus more on people living in the suburbs than those in the city because a survey showed the former category to be more inclined toward gardening. This is an example of a demographic segmentation by Home Depot.
False
Which of the following is the largest racial/ethnic minority group in the United States?
Hispanic Americans
CoreLogix Inc., has segmented the market as per product usage rates. They have also developed the relevant profile for each of their segments. What would be the next logical step for them in this process of segmentation?
Forecast market potential
Which of the following is not one of the motivations used to classify consumers in the VALS framework?
Gender motivated
"The Millennial Generation" is also known as _____.
Generation Next
The group born between 1968 and 1979, now generally in their early 30s to early 40s, often are referred to as _____.
Generation X
_____ are computer systems that help marketers analyze marketing information by assembling, storing, manipulating, and displaying data by their location.
Geographic information systems (GIS)
Bill wants to use VALS to segment the market for his firm's costly but cutting-edge gaming software. He knows that his potential customers are likely to be:
Innovators?
Which of the following segmentation approaches is most likely to help marketers quantify aspects of consumers' personalities and lifestyles to create goods and services for a target market?
Psychographic segmentation
A company that practices differentiated marketing can generate more sales compared to those generated by undifferentiated marketing.
T
A metropolitan statistical area (MSA) is a freestanding urban area with a population in the urban center of at least 50,000 and a total MSA population of 100,000 or more.
T
Business products contribute directly or indirectly to the production of other goods and services for resale.
T
Buyers in metropolitan statistical areas exhibit social and economic homogeneity.
T
During the process of market segmentation, finalizing the marketing strategy and tactics helps firms to determine the costs of marketing and the expected level of resources it must commit.
T
Engel observed that the percentage of income spent on household operations and clothing remains constant even when the household income increases.
T
Firms must attempt to group consumers according to the presence or absence of those factors that affect purchase decisions.
T
Generation X is very family-oriented, well educated, and optimistic.
T
Geographic information systems (GIS) simplify the job of analyzing marketing information by relating data to their locations.
T
Geographic segmentation provides useful distinctions when regional preferences or needs exist.
T
Items can be classified as business products, not because of what they are, but because of how they will be used.
T
Majority-minority counties are places where more than half the population is a single racial or ethnic group other than non-Hispanic white.
T
Market segmentation attempts to isolate traits that distinguish a certain group of consumers from the overall market.
T
Primary metropolitan statistical areas (PMSAs) are identified within areas of 1-million-plus populations.
T
Psychographic segmentation helps marketers to gain a sharper insight into consumer purchasing behavior.
T
The target market for a product is the specific segment of consumers most likely to purchase that particular product.
T
Using AIO statements allows marketing researchers to develop lifestyle profiles.
T
Very few residents of a micropolitan statistical area commute outside the area.
T
A consolidated metropolitan statistical area comprises of two or more primary metropolitan statistical areas.
TRUE
Families, bachelors, and retirees could be considered separate market segments for a company promoting travel packages.
TRUE
Once the total market potential has been estimated by a firm, the next step in the market segmentation process is to forecast the probable market share.
TRUE
The United States population is increasingly diverse and more companies are recognizing the opportunity to target the Hispanic population since they are expected to become the dominant ethnic group in the near future. Which requirement of segmentation does the growing number of Hispanic customers fulfill?
The growing number of Hispanics in the United States relates to the requirement of "size" for segmentation - a segment large enough to provide a good profit potential.
In recent years, consumers have become increasingly concerned about the use of pesticide and other chemicals in the agricultural industry. Some are worried that the increased use of chemicals has led to higher incidences of disease such as cancer. Consumers who share these opinions will often purchase products labeled "organic" and "natural". Marketers who are utilizing these words on product packaging or in their promotions are implementing _______ segmentation.
This is an example of psychographic segmentation
_____ is the largest metropolitan area in the world.
Tokyo
The product-related segmentation of consumers based on the strength of their attachment and allegiance to their preferred products is called _____ segmentation.
brand loyalty
A frequent flyer program used by an airline is an example of _____.
brand loyalty segmentation
In your regular goods and services consumption activities, you purchase products from the wholesaler for resale and for use in your store's daily operations. You also purchase products that you will feature in the gift baskets you make. On the basis of this information, which of the following best describes the market component you are part of?
business
American Express, a large firm with many financial products, recently introduced two new credit cards designed for very specific markets: The Knot, for engaged couples, and The Nest, for newlyweds. This is an example of _____ marketing.
concentrated
Goods and services purchased by the ultimate consumer for personal use are called _____ products.
consumer
If a company markets its breakfast cereal to children, it is using _____ segmentation to segment its markets.
demographic
Socioeconomic market segmentation is another name for _____ segmentation.
demographic
The most common method of market segmentation is:
demographic segmentation.
While researching on the idea of opening his own health club, Tom learned that there are 11 million health club members in the United States, and 90 percent of them are between the ages of 18 and 49. They prefer to exercise with people of their own gender, and the majority of them are urban dwellers. During the process of market segmentation, this information is most likely to be used by Tom for:
developing a market segment profile.
A _____ marketing strategy focuses on producing several products and pricing, promoting, and distributing them with several marketing mixes designed to satisfy smaller segments.
differentiated
Oscar Mayer, a maker of various meat products, introduced Lunchables, a product specifically aimed at children. This is an example of:
differentiated marketing.
Segmentation by benefits sought is a product-related segmentation approach that:
focuses on the attributes that people seek in a product.
In the process of market segmentation, once the market potential of the segments has been estimated, the next step is to:
forecast probable market share.
North Face is a well known brand affiliated with active lifestyles such as backpacking, snow skiing, and camping. The company's products are available in a wide number of retail outlets as well as their company-owned specialty stores. The mix of products sold in the retail outlets varies widely depending on the market location. For example, stores in Northern California stock technical products suitable for customers who are avid backpackers, hikers and rock climbers while retailers in the Midwest states offer a greater selection of apparel. What type of segmentation is reflected by stores carrying the North Face brand?
geographic
Title Nine is a specialty retailer targeting active women with a proprietary mix of apparel designed for active lifestyles and sports. The company began as a direct marketer - using only catalogs and its website to generate sales. However, over the years, Title Nine has opened retail outlets across the country. The company identifies strategic opportunities for new stores based upon the sales generated by current customers in the potential market area. For example, if Title Nine has a significant number of purchasers in the Boston area, they will further analyze the market and select a location for a retail outlet. What type of segmentation strategy is Title Nine utilizing when selecting a market for a new store location?
geographic
A micropolitan statistical area is an area that:
has at least one town of 10,000 to 49,999 people.
An undifferentiated marketing strategy:
is efficient from a production point of view.
The Fayetteville-Springdale-Rogers region of Arkansas has approximately 340,000 people. Fayetteville is an urban center and it alone has a population of 60,000. The Fayetteville-Springdale-Rogers region would be classified as a:
metropolitan statistical area (MSA).
Places where more than half the population is a single racial or ethnic group other than non-Hispanic white are called as _____.
majority-minority counties
The marketing strategy that focuses on producing a single product and marketing it to all customers is called:
mass marketing.
Barnes and Noble encourages customers to pay $10 annually to become "members" in a loyalty program which rewards them by discounting their purchases. Barnes and Noble utilizes the membership program to analyze customer buying habits and routinely recommends books, magazines or other products which fit their purchasing profile. What type of marketing is Barnes and Nobles using?
micromarketing
A company that chooses to focus its efforts on satisfying only one market segment for profit is using a(n) _____ strategy.
niche marketing
A _____ is an urbanized county or set of counties with social and economic ties to nearby areas.
primary metropolitan statistical area
The four basic determinants of a market-specific segmentation strategy include company resources, competitors' strategies, stage in the product lifecycle, and:
product homogeneity.
Sustainability has become an important value among individuals in the United States and some believe that man-made factors such as the increased use of diesel and gasoline in cars has led to global warming. Those worried about global warming and seeking ways to reduce their carbon footprint and have invested in products such as solar panels for their homes and electric or hybrid vehicles. What type of segmentation would be most appropriate for Toyota to utilize in marketing its Prius - a hybrid vehicle?
psychographic
The 80/20 principle states that:
roughly 80 percent of total product sales come from 20 percent of customers.
A consumer goods company segments its markets on the basis of purchase patterns of their customers. The company groups its consumers who regularly buy their product into heavy, moderate, and light users, and nonusers. This segmentation approach is an example of _____.
segmentation by usage rates
The revised VALS segmentation system categorizes consumers based on _____.
self-motivation
According to the VALS framework, achievement-motivated consumers are influenced by:
symbols of success.
One of the reasons cited by the U.S. Department of Commerce for the trend toward smaller households is:
the frequency of divorce.
Engel's laws state that, as household income increases:
the percentage of income spent on items such as recreation and education increases.
Five years ago, Joshua spent 28 percent of his $45,000 yearly income on his bachelor apartment. Today, Joshua is earning $60,000 annually. According to Engel's laws, the percentage of income he will spend on his new apartment will be:
the same as it was back then, about 28 percent.
You've started a business on your college campus to sell luxurious blue dorm room rugs with the college logo. You plan to target male freshmen who come from local towns, like the color blue, can afford luxury products, want rugs for their rooms, and are enthusiastic about boosting the school. You can easily and efficiently promote to all freshmen, including this segment, with Facebook and other social media tools. But your marketing professor cautions that you may be unable to meet certain criteria for effective segmentation. Which criteria does she cite?
the segment must be large enough to offer significant profit potential. The segment must present measurable purchasing power and size.
The cohort effect describes:
the tendency of members of a generation to be influenced and bound together by events occurring during their key formative years.
The _____ principle recognizes that a large percentage of a product's revenue stream is generated by a relatively small, loyal portion of total customers.
80/20
Adrienne has received her first solo assignment since she was hired as a junior marketing researcher for a national food and beverage distributor. She has been asked to formulate some preliminary ideas about new product development for coffee products sold in the distributor's on-premise consumption outlets. She understands that this assignment is a test to see whether she knows the process. She decides to start with the basics, adding a twenty-first-century twist. How will Adrienne begin the process of formulating ideas about new product development?
Adrienne will send online coupons to customers who are Facebook friends or have visited the company's website, and ask them to complete a brief online AIO lifestyle survey that inquires about their activities, interests, and opinions.
June knows that the students who patronize her campus ice cream shop are looking to socialize as much as to consume a treat. In her advertising, she shows images of customers enjoying each other's company. June is segmenting based on:
Benefits sought
In the first part of your presentation to potential investors, you covered the first two steps in the market segmentation process. In the second part of your presentation, you will need to discuss:
Developing income measures for each segment Selection of specific market segments
Market segmentation can help marketers increase their accuracy in reaching the right markets, but it is best used flexibly with other marketing tools. Choose the statement below that best summarizes the market segmentation process.
Market segmentation is accomplished in four steps: it employs user profiles; forecasts the overall market; estimates the market share; and selects specific target markets.
There are many tools available to a savvy marketer who uses geographic segmentation, including national population data published by the U.S. government. This statistical data is classified as core based, metropolitan, micropolitan, primary metropolitan, and consolidated metropolitan. Select the statement below that best reflects population data published by the federal government.
Most of the U.S. population is evenly distributed over the land surface.?
Psychographic segmentation is not an exact science. While it helps to paint an overall picture of the psychological motivations of consumers, those motivations are influenced by countless variables, such as family, occupation, and culture. Select the statement below that gives an accurate description of the effective use of psychographic segmenting.
Psychographic segmentation is effective when it helps to match a company's product offering with the types of consumers who use its products.
Market segmentation is a tool for marketers to use, but its effectiveness depends on four basic requirements. Three of the requirements for effective market segmentation are as follows: (1) the segment must have measurable purchasing power and size; (2) marketers must be able to promote and serve the market; (3) the identified segment must be large enough to bring in a profit. Select the fourth requirement for effective market segmentation from the choices below.
The identified segments must match the company's marketing capabilities.
Because consumer needs and purchasing power vary widely, marketers try to identify those factors that affect the decision to buy and make a good target market. Which important characteristic of a market segment would make it an attractive target market?
The market segment shows a pattern of growth.
Market segmentation has interested you ever since your first marketing course, and you want to work for the type of organization that uses this technique. This means you should avoid pursuing a job with:
You could pursue a job with any of the above, since all would use market segmentation.
Marketers must consider the advantages and disadvantages of each marketing strategy as they choose which one is the best fit for their firm. You have chosen to market your company's product using a differentiated marketing strategy. What disadvantage will you face?
Your marketing costs will be higher and you will have more production processes.
You have just been promoted to vice president of marketing for your firm. Unlike your predecessor, you believe the firm can increase its sales in a market by focusing on more than one segment of the market. You recognize that doing this means your firm will incur higher production costs. Based on this information, which of the following targeting strategies are you advocating?
a differentiated targeting strategy
The Bates Lighting Company has two divisions, business and consumer products. Because of poor profits, it may downsize the consumer division. This could mean loss of jobs for people involved with the marketing of:
desk lamps for offices or college dorms flashlights for buildings that lose power
The company, Eco Nuts was featured on Shark Tank and has become one of the show's success stories due to the growing acceptance of their product as an alternative to traditional laundry detergent. The company typically targets women, aged 40 to 65 who have total annual household income above $60,000 and are concerned about sustainability. What step in the market segmentation process has Eco Nuts utilized with this description?
develop a relevant profile for each segment
Bose has developed a new high fidelity line of speakers and is attempting to determine the amount of sales that could be generated by target customers in various segments in order to determine whether or not they should proceed with introduction of the new speakers. Which step of the marketing segmentation process best describes this activity?
forecast market potential
You want to encourage your longtime customers to continue their relationship with the service your company provides, and so you implement an approach commonly used to segment a market by brand loyalty. What approach did you use?
frequent purchase program
The United States population is increasingly diverse and more companies are recognizing the opportunity to target the Hispanic population since they are expected to become the dominant ethnic group in the near future. Which requirement of segmentation does the growing number of Hispanic customers fulfill?
large market segment offering good profit potential
Dell Computer offers a variety of desk top, tablet and laptop computers. One popular product line is Dell's Alienware - built for gamers with high speed processors, enhanced memory and special graphics cards. What marketing principle is Dell utilizing with its Alienware product line?
market segmentation
Marketers adopt different strategies in order to promote their products in the market. But what is a market? Select the best definition of market from the choices below.
people and organizations with purchasing power, authority, and willingness to buy goods and services
When firms identify the factors that affect consumers' purchase decisions and develop strategies and tactics to appeal to specific types or groups of customers, they are practicing market _________.
segmentation
A television commercial shows several enthusiastic teens smiling widely and speaking in turn directly to the camera. Using the featured skincare product has changed their lives! It costs more than what you find in the corner drugstore, but it is worth every penny! After weeks of trying one product after another, embarrassed by acne breakouts and shy about socializing with others, now they have clear faces with a healthy-looking glow! What form of product-related segmentation has driven the development of this marketing campaign?
segmenting by benefits sought
A present-day marketer is reviewing data attempting to differentiate a target group of consumers that meets the four basic requirements of effective segmentation. One group stands out above the rest, and he will direct his marketing efforts toward that group. Toward what group will he direct his marketing efforts?
women