MKTG Exam 2 Essays
The Crayola brand is currently placed on a wide variety of products, including crayons (standard and fluorescent colors packaged in a wide variety of box sizes), markers (regular and washable), paints (watercolor and acrylic), scissors, glue, and children's clothing. Using Crayola as an example, describe the concepts of product item, product line, and product mix.
A PRODUCT ITEM is a specific version of a product that can be designated as a distinct offering among an organization's products. Any single product identified in the Crayola example could be an item. Examples include a crayon package with 64 colors and a sharpener, an eight-pack of washable markers, and so on. A PRODUCT LINE is a group of closely related products offered by the organization. One could identify two Crayola product lines: arts and crafts, and clothing. Alternatively, three product lines could be identified: clothing, drawing/painting items, and supplies. Finally, as many as six product lines could be interpreted: crayons, markers, paints, scissors, glue, and clothing. A PRODUCT MIX includes all of the products and item varieties that the company offers for sale. All Crayola items and package variations identified above make up Crayola's product mix.
Explain the differences among the terms brand, brand name, brand mark, trademark, and service mark.
A brand is a name, term, symbol, design, or combination of these that identifies a seller's products and differentiates them from competitors' products. A brand name is that part of a brand that can be spoken. The brand mark is the part of the brand that cannot be spoken--a picture, logo, special decoration, or design. A trademark is a legal term indicating the owner has the exclusive right to use a brand or part of a brand; others are prohibited from using the brand without permission. A service mark performs the same functions as a trademark but is reserved for services.
14. What is a buying center? What are some implications of buying centers for the marketing manager?
A buying center includes all those persons in an organization who become involved in the purchase decision. Membership and influence vary from company to company. Marketers must identify who is in the decision-making unit, each member's relative influence in the buying decision, and each member's evaluative criteria. Successful selling strategies often focus on determining the most important buying influences and tailoring sales presentations to the evaluative criteria most important to these buying-center members.
Define multisegment targeting and discuss the advantages and disadvantages of this targeting strategy.
A firm that chooses to serve two or more well-defined market segments and develops a distinct marketing mix for each has a multisegment targeting strategy. This strategy offers many potential benefits to firms, including greater sales volume, higher profits, larger market share, and economies of scale in manufacturing and marketing. Yet it may also involve greater product design, production, promotion, inventory, marketing research, and management costs. Another potential disadvantage is cannibalization, which occurs when sales of a new product cut into sales of a firm's existing products.
Distinguish between manufacturer's brands and private brands. From the reseller's perspective, what are they key advantages of carrying each type of brand?
A manufacturer's brand (also sometimes called a national brand) is the brand name of a manufacturer. A private brand (also sometimes called a private label or store brand) is a brand name owned by a wholesaler or retailer. The key advantages of carrying manufacturer's brands include: • Heavy advertising to the consumer by manufacturers helps develop strong consumer loyalties. • Well-known manufacturer's brands can attract new customers and enhance the dealer's prestige. • Many manufacturers offer rapid delivery, allowing the dealer to carry less inventory. • If a dealer sells a manufacturer's brand that is of poor quality, the customer may simply switch brands but remain loyal to the dealer. The key advantages of carrying private brands include: • A dealer can usually earn higher profits on its own brand, and there is less pressure to mark prices down to meet competition. • Manufacturers can decide to drop a brand or reseller at any time or even to become a direct competitor to its dealers. • Private brands tie the customer to the reseller. • Resellers have no control over the intensity of distribution of manufacturer's brands.
What is a market segment? Define market segmentation and discuss why market segmentation is important to the well-being of most companies.
A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have relatively similar product needs. All people and all organizations within a given segment have some similar characteristics and needs. The process of dividing a market into meaningful segments or groups that are relatively similar and identifiable is called market segmentation. The purpose of segmentation is to enable the marketer to tailor marketing mixes to meet the needs of one or more specific segments. Market segmentation is important to the well-being of most companies because it helps decision makers more accurately define marketing objectives and allocate resources. As well, it helps marketers define customer needs and wants more precisely.
How would a marketer define the term product?
A product is everything, both favorable and unfavorable, that a consumer receives in an exchange. A product may be a tangible good, a service, an idea, or any combination of these three.
What is a segmentation base (or segmentation variable)? Name the common segmentation bases used by marketers to segment consumer markets.
A segmentation base (or variable) is a characteristic of individuals, groups, or organizations that marketers use to divide a total market into segments. Consumer goods marketers commonly use one or more of the following characteristics to segment markets: ∙ geography--by region, market size, market density, or climate ∙ demographics--such as age, gender, ethnic background, income, or family life cycle stage ∙ psychographics--such as motives, lifestyles, or personality ∙ benefits sought--such as less filling or great taste ∙ usage rate--heavy, medium, or light
What is a strategic alliance? How is it linked to relationship marketing?
A strategic alliance, sometimes called a strategic partnership, is a cooperative agreement between business firms. Strategic alliances can take the form of licensing or distribution agreements, joint ventures, research and development consortia, and partnerships, sometimes on a multinational level. The two key features that characterize most successful strategic alliances are commitment and trust. Strategic alliances are therefore connected to relationship marketing, which is defined as a strategy that entails seeking and establishing long-term partnerships with customers.
What is a universal product code (UPC)? How does the use of UPCs benefit retailers?
A universal product code—often called a bar code—is a series of thick and thin vertical lines, readable by computerized optical scanners that represent numbers used to track products. They print information on cash register tapes and help retailers rapidly and accurately prepare records of customer purchases, control inventories, and track sales.
Compare and contrast an express warranty and an implied warranty.
An express warranty is made in writing and may range from a simple statement to an extensive document. An implied warranty is an unwritten guarantee that the good or service is fit for the purpose for which it was sold. All sales have an implied warranty under the Uniform Commercial Code.
Assume that you have decided to purchase a new automobile. Describe your internal information search. Then name the two types of external information sources. For each source, give two specific examples of information sources you might use.
An internal information search is the process of recalling past information stored in memory. This stored information would come from previous experience with automobiles. By searching your memory, you could remember good and bad features--such as gas mileage, style, reliability, and so one--that you have experienced. MARKETING-CONTROLLED information sources could include mass media advertising (radio, television, newspaper, or direct mail); sales promotion (e.g., rebates); salespeople at dealerships; and finally, product characteristics like warranties. NONMARKETING-CONTROLLED information sources could include personal experience, personal sources (family, friends, acquaintances, and coworkers), and public sources (Consumer Reports or other consumer rating organizations).
Compare and contrast beliefs and attitudes.
Beliefs and attitudes are closely linked to values. A belief is defined as an organized pattern of knowledge that an individual holds as true about his or her world. Consumers form beliefs about products based on knowledge, faith, or hearsay. Sets of beliefs form the basis for an attitude. An attitude is a learned tendency to respond consistently toward a given object. Attitudes tend to be more enduring and complex than beliefs. Attitudes also encompass an individual's value system, which represents personal standards of good and bad, right and wrong, and so forth.
What is benefit segmentation? For toothpaste, list six benefits that might be sought by consumers. For each benefit, give an existing brand name that best exemplifies segmentation according to that benefit.
Benefit segmentation is the process of grouping customers into market segments according to different benefits sought from the product. Student answers are likely to vary greatly. Possible benefits for toothpaste could include: Cavity/Decay Prevention: Crest White/Bright Teeth: Ultra Brite, Gleem, MacLeans, Plus White, Rembrandt Fresh Breath: Close-up, Pepsodent Tartar Control: Tartar Control Crest, Tartar Control Colgate Plaque Reduction: Dental Care, Viadent, Dentagard, Peak, Mentadent Stain Remover: Pearl Drops, Topol, Caffree, Zact, Clinomyn, Rembrandt Gingivitis/Gum Disease Prevention: Crest, Colgate, Mentadent Flavor/Great Taste: Aim, Colgate, StripeFun for Kids: Crest Sparkle, Oral-B Sesame Street, Colgate Jr. No Mess: Pump, neat-squeeze, and specially capped toothpastes Sensitive Teeth: Sensodyne, Denquel, PromiseAll-in-One: Aquafresh Denture Cleaning: Dentu-Creme, Dentu-Gel, Complete Baking Soda: Arm & Hammer, Mentadent Low Price: Arm & Hammer, store brands, brands on sale
What purposes does branding serve?
Branding has three main purposes: identification, repeat sales, and new-product sales. In terms of identification, branding allows marketers to distinguish their products from all others. Brands become familiar to consumers as indicators of quality. Brand equity refers to the value of a well-recognized brand name. Repeat sales come from satisfied customers who recognize which brands to purchase again and which brands to avoid. Branding also helps word-of-mouth and mass media promotion. Brand loyalty occurs when a consumer consistently prefers one brand over all others. The third main purpose of branding is to facilitate new-product sales. Brands with high equity are extremely useful when introducing new products.
What is business marketing, and what distinguishes business products from consumer products?
Business marketing is the marketing of goods and services to individuals and organizations for purposes other than personal consumption. Business products include those that are used to manufacture other products, become part of another product, or aid the normal operations of an organization. The key characteristic distinguishing business products from consumer products is intended use, not physical characteristics. A product that is purchased for personal or family consumption or as a gift is a consumer good. If that same product is bought for use in a business, it is a business product.
Apply the three methods of changing attitudes or beliefs about brands to possibilities for the marketing activities of Kellogg's Corn Flakes (or another breakfast cereal you are more familiar with).
CHANGING BELIEFS ABOUT ATTRIBUTES. Kellogg's could work to promote the image of a family cereal by changing consumers' beliefs about children's cereals. Any negative beliefs or misconceptions should also be changed. For example, consumers may believe the cereal is high in sugar, when actually it is not. CHANGING THE IMPORTANCE OF BELIEFS. Kellogg's could start emphasizing certain attributes that already exist. These might include environmental concerns (a package made of 100 percent recycled materials) or consumer preferences (the favorite choice of all consumers).ADDING NEW BELIEFS. Kellogg's could try to expand the consumption habits of consumers by stating, "Corn flakes are not just for breakfast anymore." Kellogg's could also emphasize additional attributes to the ones already in use, such as more nutrients (100 percent of the U.S. Recommended Daily Allowance), cancer prevention (high fiber), or patriotism (the American family and a red, white, and blue package).
Packaging is an important component of the product strategy. List and briefly describe the four major functions of packaging.
CONTAIN AND PROTECT PRODUCTS. Packaging contains products in liquid, granular, or other divisible forms. Packaging allows firms to market products in specific quantities. Physical protection of the product is also necessary because most products are handled often between manufacture and final consumption. Packages protect products from breakage, light, heat, cold, infestation, spoilage, and so on. PROMOTE PRODUCTS. A key role of packaging is promotion. Labels not only provide brand identification, ingredient listings, feature specifications, and directions but also use designs, colors, shapes, and materials to influence consumers' perceptions and buying behavior. A package differentiates a product from competing products and may associate a new product with a family of other products from the same manufacturer. Packages are the last opportunity marketers have to influence buyers before they make purchase decisions. This promotional role differentiates the product from competitors' products and establishes the brand's image. FACILITATE STORAGE, USE, AND CONVENIENCE. Packages can make products easier to ship, store, and stock on shelves. Additionally, package features or designs can make packages convenient. Features such as disposable packages, easy opening devices, and reusability are a plus. Package size can also be used to segment markets. FACILITATE RECYCLING AND REDUCE ENVIRONMENTAL DAMAGE. Environmental compatibility is preferred, if not demanded, by consumers. Packages should be recyclable, biodegradable, and reusable.
Name and briefly define the four categories of consumer products. For each category, list three specific examples of products that would most likely be classified in that category.
CONVENIENCE PRODUCTS are relatively inexpensive items that require little shopping effort. The products are bought regularly, usually without significant planning. Convenience products may include candy, soft drinks, aspirin, small hardware items, dry cleaning, car wash services, and so on. SHOPPING PRODUCTS are usually more expensive than convenience products and are found in fewer stores. Consumers spend some effort comparing brands and stores. Shopping products may include washers, dryers, refrigerators, televisions, furniture, clothing, housing, choice of university, and so on. SPECIALTY PRODUCTS are those exclusive items for which consumers are willing to search extensively. Consumers are extremely reluctant to accept substitutes for specialty products. Brand names and service quality are important. Fine watches, luxury cars, expensive stereo equipment, gourmet restaurants, and specialized medical services could all be considered specialty products. UNSOUGHT PRODUCTS are those that the buyer does not know about or does not actively seek to buy. These products include insurance, burial plots, and other similar items.
What is the difference between culture and subculture? Why do marketing managers need to understand culture and subculture?
CULTURE is the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next. Culture is environmentally oriented and dynamic. It also gives order to society by establishing common expectations. SUBCULTURES are subdivisions of culture on the basis of such things as demographic characteristics, geographic regions, national and ethnic background, political beliefs, and religious beliefs. Subcultures are homogeneous groups that share elements of the overall culture as well as unique elements. Within subcultures, there are even greater similarities in people's attitudes, values, and actions than within the broader culture. Without understanding culture, a firm has little chance of effectively penetrating the market. As more companies expand their operations globally, the need to understand the cultures of foreign countries becomes more important. Marketers should become familiar with the culture and adapt to it, or marketers can attempt to bring their own culture to other countries. Marketers should also identify subcultures and then design special marketing programs to serve their needs.
Define cannibalization. Is it always bad? Explain.
Cannibalization occurs when sales of a new product cut into sales of a firm's existing products. Cannibalization would be preferred over losing sales to a competitor. Cannibalization can also help to build new business.
Marketers use a variety of terms to refer to different age groups. Name several examples and describe some characteristics of each.
Common terms used to refer to different age groups include: • newborns • infants • young children • tweens • teens and young adults (Generation Y) • adults (Generation X) • baby boomers • seniors In the U.S., tweens (roughly age 8-12) spend billions of their own dollars each year on purchase for themselves. They also have considerable influence over major family purchase decisions. They are tech-savy and very social consumers. Generation Y (or Millennials) were born between 1982 and 2003 and make up about one-third of the U.S. population. They have considerable purchasing power and tend to be more civic-minded than baby boomers. They respond to companies that show deep commitment to causes. They also embrace personalization and self-expression. Generation Xers were born after the baby boomers. They tend to be disloyal to brands and skeptical of big business. Many make purchasing decisions with input from their families. Xers desire an experience, not just a product. Baby boomers account for half of all spending in the U.S. They were born between 1946 and 1964. They expect attention and service when they shop. They are not especially brand loyal, but they are very diverse. Today's boomers refuse to believe they are aging, so marketers need to appeal to their interests, lifestyles, and values—anything but age. Seniors include consumers in their early 60s (the War Generation), those in their late 60s to mid 70s (the Depression Generation), and those age 77 and up (the G.I. Generation). Many in this group strive to remain active and use their retirement time to explore new knowledge, travel, volunteer, and spend time with family and friends. However, health concerns are a major issue with this market.
You have decided to work all summer to save money for the ultimate $2,000 HD television with surround sound. Trace the steps of your decision process for purchasing your new television.
For this high-involvement decision process, you would use extensive decision making and go through the following steps: 1. NEED RECOGNITION. Your present television has wavy lines and poor sound quality, and you desire a new television set. 2. INFORMATION SEARCH. You check both internal and external sources of information, such as your own knowledge, opinions of peers, information from magazines, and the advice of television sales personnel. 3. EVALUATION OF ALTERNATIVES. You consider product attributes of various television brands and models in an evoked set. These attributes might include sound quality, looks, price, warranty, brand name reputation, components, and so on. 4. PURCHASE. You buy the HD television after judging alternatives. 5. POSTPURCHASE BEHAVIOR. You are satisfied with your purchase, which was the result of extensive decision making. Alternatively, you are dissatisfied with your purchase, return the television, and begin the process again.
What is geographic segmentation? Name four reasons why a company would use a regional marketing approach. Then give a specific example of a company marketing its product(s) regionally.
Geographic segmentation refers to segmenting markets based on region of the country or the world, market size, market density, or climate. Marketers might adopt a regional approach for the following reasons: ∙ Firms need to find new ways to generate sales volume because of sluggish and intensely competitive markets. ∙ Computerized checkout stations with scanners enable retailers to accurately assess which brands are selling well in their region. ∙ Packaged-goods manufacturers are introducing new regional brands intended to appeal to local preferences. ∙ Consumer goods companies use a regional approach because it allows them to react more quickly to competition. Examples of companies using a regional approach include: ∙ The "My Macy's" program at Macy's department stores, which tailors each store's merchandise mix to reflect local tastes. ∙ any company selling climate-dependent products such as snow blowers, water and snow skis, and air-conditioning and heating systems
What is the difference between a homogeneous shopping product and a heterogeneous shopping product? Give specific examples of products that fit into each category to help illustrate your answer.
HOMOGENEOUS SHOPPING PRODUCTS are those that consumers see as being basically the same. The main purpose of shopping is to find the lowest-priced product that has the required features. Appliances and televisions are homogeneous shopping products for many people. HETEROGENEOUS SHOPPING PRODUCTS are those that consumers see as different in terms of quality, style, suitability, and lifestyle compatibility. Comparisons among heterogeneous shopping products are difficult because the alternatives possess unique features as well as different prices and quality levels. These products may include furniture, clothing, housing, and the choice of a university.
List and briefly describe the five different roles various family members can play to influence the purchase decision-making process when deciding on a family vacation.
INITIATOR. The person who initiates or suggests the purchase process. INFLUENCER. The person whose opinion is valued in the decision-making process. DECISION MAKER. The person who actually makes the decision to buy. PURCHASER. The individual who actually exchanges money for the product. CONSUMER. The person who actually uses the product.
You are the U.S. brand manager of the Fluffit family of products. The products include a wide variety of synthetic and natural stuffing materials for furniture cushions, sleeping bags, quilts, and winter coats. The brand is a favorite among home repair enthusiasts and hobbyists of various kinds. Your firm would like to enter several foreign markets. Name and describe the three major alternative brand name choices for this global strategy. Discuss the viability of each alternative for Fluffit.
ONE BRAND NAME EVERYWHERE. This strategy is useful when the company markets mainly one product and the brand name does not have negative connotations in any local market. Advantages of a one-brand strategy are greater identification of the product from market to market and ease of coordinating promotion from market to market. This strategy may be difficult for Fluffit because the variety of products are sold. Additionally, it is not likely that "fluff" carries the same meaning in all languages or communicates the benefits of the product. ADAPTATIONS AND MODIFICATIONS. If the Fluffit name is not pronounceable in the local language, the brand name is owned by someone else, or the brand has a negative connotation in the local language, minor modifications can make the brand name more suitable. This could be a viable alternative for Fluffit. DIFFERENT BRAND NAMES IN DIFFERENT MARKETS. Local brand names are often used when translation or pronunciation problems occur, when the marketer wants the brand to appear to be a local brand, or when regulations require localization. This could also be a viable alternative for Fluffit.
Name and describe the two labeling forms.
PERSUASIVE LABELING focuses on a promotional theme or logo, with information for the consumer of secondary importance. The promotional theme may contain the words "new," "improved," or "super." INFORMATIONAL LABELING is designed to help consumers make proper product selections and lower postpurchase cognitive dissonance. These labels may explain construction standards, color selection, cleaning instructions, or other use information.
Define each level of Maslow's hierarchy of needs. For each of the five levels, briefly describe a marketing message appealing to the need level.
PHYSIOLOGICAL NEEDS are the most basic level of human needs. These needs include food, water, and shelter. Text examples include thirst-quenching Gatorade or satisfying hunger by eating a hamburger. SAFETY NEEDS include security and freedom from pain and discomfort. Text examples include health screenings to relieve consumer fears and anxieties and an image campaign to reassure consumers about the safety of air travel. SOCIAL NEEDS involve a sense of belonging and love. Examples could include any messages advertising that the use of the product will bring love. These products might include clothes, cosmetics, and vacation packages. ESTEEM NEEDS include self-respect, feelings of accomplishment, prestige, fame, and recognition. Text examples include Mont Blanc pens, Mercedes-Benz automobiles, and Neiman Marcus stores. SELF-ACTUALIZATION is the highest human need. It refers to self-fulfillment and self-expression. Text examples include American Express ads, Microsoft, and the U.S. Army slogan.
Briefly describe the four major categories of customers in business marketing. Give examples of companies or organizations in each category.
PRODUCERS include individuals and organizations that purchase goods and services for the purpose of making a profit by using them to produce other goods, to become part of other goods, or to facilitate the daily operations of a firm. Examples include General Motors, Coca-Cola, and Kraft Foods. RESELLERS include those wholesale and retail businesses that buy finished goods and resell them for a profit. Examples could include any grocery store, furniture store, or retail clothing store. GOVERNMENT organizations include a large number of buying units that purchase goods and services. The federal government, as well as state, county, and city governments, are all examples of such organizations. INSTITUTIONS are nonprofit organizations that have different primary goals from ordinary businesses. This category includes schools, hospitals, colleges and universities, churches, labor unions, fraternal organizations, civic clubs, foundations, and other so-called nonbusiness organizations.
What is planned obsolescence? Give at least two examples. Is planned obsolescence ethical, or does it serve a function? Explain your answer.
Planned obsolescence is the practice of modifying products so those that have already been sold become obsolete before they actually need replacement. Examples include products such as printers, computers, and cell phones, which often become outdated before they stop working and need to be replaced. Students' arguments about the ethics of planned obsolescence will vary. Arguments could be made that the practice is unethical because it uses up resources to make changes to a product that are not of great value to the customer. Arguments could also be made that planned obsolescence simply gives customers what they want (e.g., changes the appearance of goods such as autos) and that it drives technological advances and speeds innovation.
Compare and contrast the three types of product modifications and give an example of how each could be implemented.
QUALITY MODIFICATIONS entail changing the product's dependability or durability. A company could reduce the product quality of some of its offerings to enable a lower price, which would appeal to a broader or price-sensitive target market. It could also increase quality, which would give the corporation a competitive advantage, encourage brand loyalty, allow higher prices, or provide new market segmentation opportunities. FUNCTIONAL MODIFICATIONS are changes in a product's versatility, effectiveness, convenience, or safety. A company could add further capabilities to its patio furniture such as making it mildew resistant, designing it to fold and store easily, and adding wider seats for greater comfort. The furniture could also add a safety feature to prevent unfolded furniture from collapsing when someone sits in it. STYLE MODIFICATIONS are aesthetic product changes. A company could make its product more fashionable.
Assume that you are the VP of marketing in a medium-sized company that includes the following departments: sales, marketing, finance, purchasing, data processing, and production. The sales force manager has mentioned to you that one of the salespersons thought a Web-based sales force automation service would help the sales force become more efficient. The sales force manager requests that this service be purchased. Illustrate the six buying decision roles that would take place for the purchase of this service.
The INITIATOR of the buying decision could be identified as the salesperson who identified the need but more likely would be the sales force manager who suggested the purchase be made. INFLUENCERS/EVALUATORS might include the finance office (which would control the amount of dollars available for spending), members of the sales force (who might provide information about the services competitors are using), and the data-processing department (which would have a good knowledge of alternative services). GATEKEEPERS could include the data processing department (which would approve of only certain services that are compatible with existing systems) and the purchasing department (which would recommend matches with likely service providers). The DECIDER might be the president of the company, the VP of marketing, or the sales force manager; the decider is the person with the power to approve the service provider. The PURCHASER could be the purchasing agent in the purchasing department, who will negotiate the terms of the sale. USERS would include all sales force members who will use the service.
A Brazilian manufacturer of solar cells used as a renewable source of energy in all types of structures would like to begin distribution and sales in the United States, Canada, and Mexico. The manufacturer has hired you to investigate NAICS data for such products in North America. What is the NAICS system? What are some of the benefits of using this system?
The North American Industry Classification System (NAICS) is a detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes. NAICS is a valuable tool for business marketers engaged in analyzing, segmenting, and targeting markets, as goods- or service-producing firms using identical or similar production processes are grouped together. The number, size, and geographic dispersion of firms can also be identified through the use of NAICS codes. This information can then be converted to market potential estimates, market share estimates, and sales forecasts.
Assume that you have been invited to join a social club whose members typically wear leather bombardier jackets. You have never bought or worn a leather jacket before. List and briefly describe four factors that could influence your level of involvement in the purchase of the leather jacket. How involved will you be in this purchase and why?
The factors that affect involvement level are previous experience, interest, perceived risk of negative consequences, situation, and social visibility. PREVIOUS EXPERIENCE. Because there is no previous experience with the product, the level of involvement will be higher because of unfamiliarity with the product. INTEREST. Areas of interest vary by individual. The student may or may not be interested in leather jackets. However, purchasing the leather jacket indicates an interest in the social group and probably a high level of involvement. PERCEIVED RISK OF NEGATIVE CONSEQUENCES. Several types of risks are involved in the purchase. With an expensive jacket, loss of purchasing power and opportunity costs result in financial risk. A social risk is taken because wearing a leather jacket may cause a positive or negative reaction from other peer groups. For example, animal rights activists might criticize the purchase of a leather jacket, or other peer groups might view the purchase as frivolous. Finally, there is a psychological risk involved in the form of anxiety or concern about whether the "right" jacket has been purchased and is acceptable to other members of the social club. SITUATION. The circumstances of the social club make the leather jacket a high-involvement purchase. SOCIAL VISIBILITY. Because a leather jacket is a social and public display, wearing the jacket makes a statement about the individual. This would also make the purchase one of high involvement.
What is the family life cycle (FLC)? Briefly describe the lifestyle and purchasing needs of consumers in the following FLC stages: (1) young single, (2) young married without children, (3) young married with children, (4) middle-aged married without children, and (5) older unmarried.
The family life cycle (FLC) is a series of stages determined by a combination of age, marital status, and the presence or absence of children. The FLC is a valuable basis for segmenting markets, because families' needs, income, resources, and expenditures are different in each life cycle stage. YOUNG SINGLE. Members of this group have few financial burdens, are fashion opinion leaders, and are recreation oriented. They buy basic kitchen equipment, basic furniture, cars, vacations, and items necessary for the "dating game." YOUNG MARRIED WITHOUT CHILDREN. This group is financially better off than they will be in the near future, so members purchase at a high rate. Many durables are bought, such as cars, home appliances, and furniture. Additionally, vacations are still bought. YOUNG MARRIED WITH CHILDREN. This group concentrates on home ownership and raising children, so liquid assets are low. They like new and advertised products. They tend to buy appliances, baby items, televisions, and some medical products. MIDDLE-AGED MARRIED WITHOUT CHILDREN. Members of this group enjoy a better financial position and are interested in travel, recreation, and self-education. They tend to buy home improvements, vacations, and luxuries. OLDER UNMARRIED. Cuts in income curtail spending of this group. Purchases are more focused on medical care and medical products.
Business buyers use a variety of criteria to evaluate alternative products and suppliers. Name and define specific aspects of the three most important criteria.
The three criteria, in order of importance, are quality, service, and price. QUALITY. Quality refers to technical suitability. Evaluation of quality also applies to the salesperson and the company: The salesperson should be reputable, and the company should be financially responsible. SERVICE. Buyers want satisfactory service as well as satisfactory products. Services may include a survey of the buyer's needs, installation of equipment, training, maintenance, and repairs. Service also entails delivering what was ordered when it is scheduled to be delivered. Buyers also welcome services that help them sell their finished products. PRICE. Business buyers usually want to buy at the lowest prices without compromise of quality.
The purchasing strategies of business buyers may provide useful segments. Two purchasing profiles for business buyers have been identified. Name and describe them.
The two purchasing profiles for business buyers are satisficers and optimizers. Satisficers are business customers who place an order with the first familiar supplier to satisfy product and delivery requirements. Optimizers consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one.
You are given the following limited information about a market consisting of ten people. Describe all the possible ways to segment this market. Gender Income Male Medium Female Low Female Low Male High Female Low Male Low Male Medium Male High Female High Female High
There are five possible ways to segment this market: ∙ one homogeneous market consisting of ten people (one segment) ∙ a market consisting of ten individual segments ∙ a market composed of two segments based on gender (five males and five females) ∙ a market composed of three segments based on income (four low, two medium, four high) ∙ a market composed of five segments based on gender and income level (one Male/Low, two Male/Medium, two Male/High, three Female/Low, two Female/High)
Name and briefly describe five of the major differences between business and consumer markets.
There were several points of differentiation discussed in the chapter, and students can discuss any five: DEMAND. There are several differences between business and consumer demand. Business demand is derived from the demand of consumer products, tends to be price inelastic, has joint demand with related products used in combination with the final product, and tends to be less stable than consumer demand. PURCHASE VOLUME. Business customers buy in much larger quantities than consumers. NUMBER OF CUSTOMERS. Business marketers tend to have far fewer customers than consumer marketers. LOCATION OF BUYERS. Unlike consumers, business customers tend to be much more geographically concentrated. DISTRIBUTION STRUCTURE. Channels of distribution tend to be much shorter in business marketing. Direct channels are also more common. NATURE OF BUYING. Business buying is usually more formalized with responsibility assigned to buying centers or purchasing agents. NATURE OF BUYING INFLUENCE. More people are involved in business purchasing decisions than in consumer purchases, because many levels and departments of the firm are involved in the purchase. TYPE OF NEGOTIATIONS. Consumers are used to negotiating pricing of automobiles and real estate; however, American consumers usually expect sellers to set the price and other conditions of a sale. In contrast, negotiating is common in business marketing, with buyers and sellers negotiating product specifications, delivery dates, payment terms, and other pricing matters. USE OF RECIPROCITY. Business purchasers often buy from their customers and vice versa. USE OF LEASING. Businesses often lease equipment, unlike consumers who more often purchase products. PRIMARY PROMOTIONAL METHOD. Personal selling is often emphasized in business marketing, while advertising is emphasized in consumer marketing.
What is usage-rate segmentation? What is the 80/20 principle, and how does it apply to usage-rate segmentation?
Usage-rate segmentation divides a market based on the amount of product customers purchase or consume. The 80/20 principle states that 80 percent of the demand for a product is generated by 20 percent of all customers. While the percentages are not always exact for all product categories, the principle highlights the disproportionate share of the total consumption of many products and focuses marketers on heavy users.
Assume that you have gone to the corner convenience store to pick up your usual brand of potato chips. What type of decision making will take place? How would this differ from the decision making that would take place if the store was out of your regular brand?
With a low-involvement product such as potato chips, routine response behavior would take place because the product is low priced and the same brand is frequently purchased. The purchase would be habitual. If the store was out of the regular brand, limited decision making, or acquiring information about an unfamiliar brand in a familiar product category (such as chips), would take place. Some effort would have to be expended on evaluating alternatives or comparing prices if the consumer were price sensitive.
What are the four criteria that are necessary to define a market?
A market has the following characteristics: ∙ composed of people or organizations ∙ the people or organizations have needs and wants that can be satisfied by particular product categories ∙ the people or organizations have the ability to purchase the sought products ∙ the people or organizations are willing to exchange resources for desired products
Products can be classified as either business/industrial or consumer products. Explain what distinguishes business products from consumer products and why it is important to understand this distinction.
A product's classification depends on the buyer's intentions. Business products are purchased (1) for use in the manufacture of other goods or services, (2) to facilitate an organization's operations, or (3) to resell the products to other customers. Consumer products are purchased to satisfy an individual's personal wants. The same item can be classified as either a business or a consumer product depending on the intended use. It is important to know about these product classifications because business and consumer products are marketed differently. These two target markets require different distribution, promotion, and pricing strategies.
Discuss the benefits for organizations by organizing related items into product lines.
ADVERTISING ECONOMIES. Product lines provide economies of scale because several products can be advertised under the umbrella of the line. Additionally, advertising a product line can enhance the corporate name. PACKAGE UNIFORMITIES. All packages in the line may have a common look without causing any product item to lose its individual identity. Thus, one item in a line can advertise another. STANDARDIZED COMPONENTS. Product lines provide an opportunity to standardize components, thus reducing manufacturing and inventory costs. EFFICIENT SALES AND DISTRIBUTION. Product lines enable sales personnel to provide a full range of product alternatives to their customers. Distributors and retailers are often more willing to stock the company's products if a full line is offered. Transportation and warehousing costs are also likely to be less for product lines than for a collection of individual items. EQUIVALENT QUALITY. A brand name symbolizes a certain quality level to buyers. Purchasers expect all products in a line to be of comparable quality, so further evaluation of individual product items need not take place.
The use of the Internet to facilitate activities between organizations has evolved and grown rapidly throughout its short history. Define B2B e-commerce and describe the various tools that B-to-B marketers are using online. Also discuss the evolution of e-business initiatives.
B2B e-commerce is business-to-business e-commerce, which is the use of the Internet to facilitate the exchange of goods, services, and information between organizations. Paid search accounts for 70 percent of B-to-B online spending and there have been recent increases in search engine optimization (SEO) and social media as well. Most B-to-B marketers primarily use e-mail marketing, SEO organic, online ads and banners, search keywords, webinars, and viral videos. Other tools used by B-to-B marketers include blogs, social networking sites such as Facebook and LinkedIn, microblogs such as Twitter, videos, and mobile marketing.
Define cognitive dissonance and describe how can consumers and marketers can reduce it.
Cognitive dissonance is the inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Consumers can take steps to reduce dissonance by justifying their decision, seeking new information, avoiding contradictory information, or returning the product. Marketers can help consumers reduce dissonance by sending a postpurchase thank you or letter, displaying product superiority in ads, and offering guarantees.
Marketers use demographic information to segment markets because it is widely available and often related to consumers' purchasing and consumption behavior. List five common bases used by marketers for demographic segmentation. For each base listed, give an example of a product specifically targeted to the needs and wants of the segment identified within the base.
Common bases used in demographic segmentation include: ∙ age ∙ gender ∙ income ∙ ethnic background ∙ family life cycle Some examples: AGE. Cell phones, magazines, and clothing marketed to teens, beer, wine, and spirits marketed to people 20 to 40 years of age, and retirement properties, health and wellness products, and Vespa scooters marketed to baby boomers are examples of products/services targeted at specific age groups. GENDER. Marketers of clothing, cosmetics, personal-care items, magazines, jewelry, and gifts commonly use gender as a segmentation variable. INCOME. The housing, clothing, automobile, and food markets are often segmented by income. Sam's Club is aimed at lower-income consumers, while Costco attracts more upscale consumers. ETHNIC BACKGROUND. Many products are targeted specifically to various ethnic groups, especially African Americans, Hispanics, and Asian Americans. FAMILY LIFE CYCLE. Marketers target people in different stages of the family life cycle by noting spending needs. Young singles and marrieds buy more cars, furniture, appliances, and vacations. Marrieds with children buy more toys and baby products. Those middle-aged buy more luxury items and home improvements. The elderly focus spending on medical care.
Why do marketers study consumer behavior?
Consumers' product and service preferences are constantly changing. Marketing managers must understand these desires in order to create a proper marketing mix for a well-defined market. So it is critical that marketing managers have a thorough knowledge of consumer behavior, which describes how consumers make purchase decisions and how they use and dispose of the purchased goods or services. The study of consumer behavior also includes factors that influence purchase decisions and product use.
Explain the four concepts of business demand.
DERIVED DEMAND. The demand for business products is derived from the demand for consumer products. This is because organizations buy products to be used in the production of consumer products. Therefore, firms must carefully monitor demand patterns in final consumer markets. INELASTIC DEMAND. The demand for business products tends to be price inelastic. This means that changes in price will not significantly affect demand for the product. JOINT DEMAND. Most business products involve the combination of many components into a final product. Joint demand occurs when two or more items are used in combination in a final product. The text provides an example of microcomputer disk drives and memory chips. FLUCTUATING DEMAND. The demand for business products tends to be more unstable than the demand for consumer products. The multiplier effect explains how a slight change in consumer demand can result in a significant change in demand for the facilities and equipment needed to make the consumer product.
Discuss the difference between disintermediation and reintermediation. Why has Internet disintermediation occurred less frequently than many expected?
Disintermediation is eliminating intermediaries such as wholesalers or distributors from a marketing channel. Reintermediation is reintroducing an intermediary between producers and users. Internet disintermediation occurred less frequently than many expected because distributors often perform important functions such as providing credit, aggregation of supplies from multiple sources, delivery, and processing returns. Many business customers, especially small firms, depend on knowledgeable distributors for information and advice that are not available to them online.
What is extensive decision making? Discuss the purchase of a product in which you would use extensive decision making when purchased for the first time and would require limited decision making in subsequent purchases.
Extensive decision making is the most complex type of consumer decision making and is used when buying an unfamiliar, expensive product or an infrequently bought item. Such decision making requires the use of several criteria for evaluating options and much time for seeking information. Buying a car, an appliance, a stereo system, or other expensive, durable item would require extensive decision making for the first purchase. However, as the purchase is repeated, the buyer may feel experienced in decision making and may step back to limited decision making. For example, a person who has bought several cars may resort to the heuristic, "I have always bought Fords and have been satisfied, so my next car will be a Ford."
Marketers are interested in social class for two main reasons. What are they? Give a real-world example for each.
First, social class often indicates which medium to use for advertising. For example, an insurance company seeking to sell its policies to middle-class families might advertise during the local evening news because middle-class families tend to watch more television than other classes. Second, knowing what products appeal to which social class can help marketers determine where to best distribute their products. For example, affluent Americans spend nearly twice as much on restaurants, alcohol, and sporting events than less-affluent Americans.
Discuss the four trends that will lead to the continuing growth of one-to-one marketing.
First, the one-size-fits-all marketing of yesteryear no longer fits. Customers do not want to be treated like the masses. Second, direct and personal marketing efforts will continue to grow to meet the needs of consumers who no longer have the time to spend shopping and making purchase decisions. Third, consumers will be loyal to those companies and brands that have earned their loyalty and reinforced it at every purchase occasion. Fourth, mass-media approaches will continue to decline in importance as advances in market research and database technology allow marketers to collect more detailed information on their customers, not just the approximations allowed by demographics but the specific names and addresses.
What is geodemographic segmentation? What is the result of geodemographic segmentation? Give one specific example that illustrates this type of segmentation.
Geodemographic segmentation clusters potential customers into neighborhood lifestyle categories. It is a combination of geographic, demographic, and lifestyle segmentation. The result of geodemographic segmentation is micromarketing, which is the targeting of small geographic regions with specially designed marketing programs. The text example is H-E-B Grocery Company tailoring merchandise in each store to patron preferences.
Discuss how institutional customers differ from other types of business customers such as producers or resellers. Give two points of differentiation.
Institutions seek to achieve goals that differ from ordinary producer or reseller business goals such as profit, market share, and return on investment. The institutional market also is characterized by great diversity. Institutional organizations include schools, hospitals, colleges and universities, churches, labor unions, civic clubs, foundations, and so on.
Briefly define and describe each of the categories of business products. Give two specific examples of goods or services that fit into each category.
MAJOR EQUIPMENT (or installations) consists of capital goods that are depreciated over time. These goods are often custom designed and therefore often sold by personal selling and distributed directly. Text examples include large machinery, mainframe computers, blast furnaces, generators, airplanes, and buildings. ACCESSORY EQUIPMENT is generally less expensive and shorter-lived than major equipment and is often charged as an expense in the year it is purchased. Advertising and local distributors play an important role in the sale of accessory equipment. Text examples include portable drills, power tools, microcomputers, and fax machines. RAW MATERIALS are unprocessed extractive or agricultural products that become part of finished products. Personal selling, direct channels, and price inflexibility characterize the marketing of raw materials. Text examples include mineral ore, lumber, wheat, corn, fruits, vegetables, and fish. COMPONENT PARTS are either finished items ready for assembly or products that need very little processing to become part of another product. Component parts sometimes retain their identity, often need replacement in the final product, and are marketed through original equipment manufacturer and replacement markets. Text examples include spark plugs, tires, and electric motors for automobiles. PROCESSED MATERIALS are products used directly in the manufacturing of other products and do not retain their identity in the final product. Text examples include sheet metal, chemicals, specialty steel, treated lumber, corn syrup, and plastics. The materials are generally bought according to customer specifications or industry standards, so price and service are important in vendor selection. SUPPLIES (or MRO items) are consumable items that are not part of the final product. They are relatively inexpensive and have a short life. Text examples include lubricants, detergents, paper towels, pencils, and paper. BUSINESS SERVICES are expense items that are not part of the final product. When it is cost-effective, firms often retain outside companies to provide services. Text examples include janitorial, advertising, legal, management consulting, marketing research, and maintenance services.
Discuss the advantages and disadvantages of single-variable segmentation and multiple-variable segmentation.
Markets can be segmented using a single variable, such as age group, or several variables, such as age group, gender, and education. Although it is less precise, single-variable segmentation has the advantage of being simpler and easier to use than multiple-variable segmentation. Disadvantages of multiple-variable segmentation include: ∙ It is often more difficult to employ than single-variable segmentation. ∙ Usable secondary data are less likely to be available. ∙ As the number of segmentation bases increases, the size of individual segments decreases.
Cascade Landscaping Service (CLS) has decided to purchase computer-aided design (CAD) software for landscape design. Describe the conditions under which each of the three business buying situations would take place.
NEW BUY. A new buy is a situation requiring the purchase of a product or service for the first time. In this case, CLS either has no experience buying such software or has not established any relationship with a vendor of the CAD software. CLS may be a new or small company that currently does not have any type of CAD software. Alternatively, CLS may be value engineering and finding a less expensive alternative than drawing the designs by hand or simply attempting to work them out as the project progresses. MODIFIED REBUY. In this case, CLS would have experience with CAD software in general and an established relationship with software vendors. The focus would be on the new need of more structured plans to show customers. STRAIGHT REBUY. In this case, the purchase of CAD software would be a routine purchase decision or a reorder of previously ordered software from the same vendor. Perhaps, CLS is a reseller of supplies for landscaping including software.
What is one-to-one marketing, and what is the primary goal for companies that adopt the one-to-one approach? Describe the difference between a one-to-one marketing approach and the traditional approach to mass marketing.
One-to-one marketing is an individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer. The goal is to reduce costs through customer retention and increase revenue through customer loyalty. The difference between one-to-one marketing and the traditional mass-marketing approach can be compared to shooting a rifle and a shotgun. If you have good aim, a rifle is the more efficient weapon to use. A shotgun, on the other hand, increases your odds of hitting the target when it is more difficult to focus. Instead of scattering messages far and wide across the spectrum of mass media (the shotgun approach), one-to-one marketers look for opportunities to communicate with each individual customer (the rifle approach).
Define perception and describe the three types of selective perception. Use personal examples in your discussion.
Perception is the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. There are three types of selective perception: SELECTIVE EXPOSURE is the process whereby a consumer notices certain stimuli and ignores others. The consumer is exposed only to those messages he or she wishes to process. SELECTIVE DISTORTION occurs when consumers change or distort information that conflicts with their feelings or beliefs. SELECTIVE RETENTION is the process whereby a consumer remembers only that information that supports personal feelings or beliefs.
Explain what is meant by positioning. Describe the bases marketers use to position products and services.
Positioning is a process that influences potential customers' overall perception of a brand, product line, or organization in general. Firms use a variety of bases for positioning: ATTRIBUTE. Products may be associated with an attribute, feature, or particular customer benefit. PRICE AND QUALITY. Firms may stress high price as a signal of quality or low price as a signal of value. USE OR APPLICATION. Stressing use situations or special applications effectively positions the product with buyers. PRODUCT USER. This position base associates the product with a personality or type of user. PRODUCT CLASS. The product is associated with a particular category of products. COMPETITOR. Positioning against a competitor would be demonstrated by Avis Rent A Car positioning itself as number two compared to Hertz. EMOTION. Focuses on how the product makes customers feel.
What is product differentiation, and how can it be achieved?
Product differentiation distinguishes one firm's products from those of competitors. Differences can be either real or perceived. Products can be differentiated by brand names, packaging, color, smell, or other means.
Binney & Smith's Crayola makes various products, all targeted toward elementary schoolchildren. Drawing, painting, and supply items are sold at convenience stores, toy stores, and grocery stores. Clothing is sold in department stores. Crayola might arrange its product items in the following way: ... What is the product mix width for Crayola? What is its product line depth?
Product mix width refers to the number of product lines that an organization offers. In this case, the width of the product mix is three. Product line depth is the number of product items in a product line. There are seven items in the drawing/painting line, five items in the supplies line, and three items in the clothing line.
What is psychographic segmentation? Discuss why marketers use the basis for segmenting markets.
Psychographic segmentation is market segmentation on the basis of personality, motives, lifestyles, and geodemographics. While age, gender, income, ethnicity, family life cycle stage, and other demographic variables are usually helpful in developing segmentation strategies, often they do not paint the entire picture. Psychographics provide more detailed descriptions of market segments. Psychographic variables alone can be used to segment markets, or they can be combined with other segmentation variables.
What is reciprocity? Is it illegal or unethical?
Reciprocity occurs when business purchasers choose to buy from their own customers. The practice is neither unethical nor illegal unless one party coerces the other and the result is unfair competition. Reciprocity is generally considered to be a reasonable business practice.
For marketers, reference groups have three important implications. Describe them.
Reference groups serve as information sources and influence perceptions; they affect an individual's aspiration levels; and their norms either constrain or stimulate consumer behavior.
To be useful, a segmentation scheme must produce segments that meet four basic criteria. Name and briefly describe each of these four criteria.
SUBSTANTIALITY. A selected segment must be large enough to warrant developing and maintaining a special marketing mix (commercially viable). IDENTIFIABILITY AND MEASURABILITY. The segments must be identifiable and their size measurable. Descriptive data regarding demographic, geographic, and/or other relevant characteristics of segment members must be available. ACCESSIBILITY. The firm must be able to reach members of targeted segments with customized marketing mixes. RESPONSIVENESS. The market segment must respond differently than other segments to marketing mixes; otherwise, there is no need to treat that segment separately.
Define self-concept. Choose a product (i.e., a good, service, or idea), and use that product to illustrate how a marketer would apply the idea of self-concept to market the product.
Self-concept is how an individual perceives himself or herself in terms of attitudes, perceptions, beliefs, and self-evaluations. Through self-concepts, consumers define their identity, which in turn provides for consistent and coherent behavior. Self-concept is a combination of the ideal self-image and the real self-image. For any product chosen, the marketer would promote the product as a match to the real self-image or a support for attaining the ideal self-image. The concept of self is important to marketers because it helps explain the relationship between individuals' perceptions of themselves and their consumer behavior as expressed through their personalities. For examples, marketers of deodorant develop promotional ads linking use of the product with success and popularity.
Define stimulus generalization and stimulus discrimination and give an example of how each is used.
Stimulus generalization is a form of learning that occurs when one response is extended to a second stimulus similar to the first. Any product line extension will be a satisfactory example. Stimulus discrimination is a learned ability to differentiate among similar products. There are many examples of stimulus discrimination. Students' examples should indicate how superficial differences are emphasized in promotions.
List, in correct order, the steps in segmenting a market.
The four segmentation steps are to: 1. select a market or product category for study 2. choose a basis or bases for segmenting the market 3. select segmentation descriptors 4. profile and analyze segments 5. select target markets 6. design, implement, and maintain appropriate marketing mixes
Describe the reseller market. Why do businesses use the services of business product distributors?
The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit. Retailers sell to final consumers, and wholesalers sell to retailers and other organizational customers. Business product distributors are wholesalers that buy business products and resell them to business customers. These distributors often carry much stock and have sales forces that call on business customers. Businesses that wish to purchase items typically buy from local distributors rather than from large manufacturers.
Discuss how businesses measure online success.
Three of the most important measures of online success are recency, frequency, and monetary value. Recency relates to the fact that customers who have made a purchase recently are more likely to purchase again in the near future than customers who haven't purchased for a while. Frequency data help marketers identify frequent purchasers who are definitely more likely to repeat their purchasing behavior in the future. The monetary value of sales is important because big spenders can be the most profitable customers for a business. Another measure of success is a site's stickiness factor, which is a measure determined by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit (site reach). By measuring the stickiness factor of a Web site before and after a design or function change, the marketer can quickly determine whether visitors embraced the change.
Name and describe the three targeting strategies. For each strategy, name one advantage and one disadvantage of using the strategy.
UNDIFFERENTIATED TARGETING STRATEGY. This strategy adopts a mass-market philosophy, viewing the market as one big market with no individual segments. Advantages include potential savings on production and lower marketing costs. Disadvantages include susceptibility to competitive inroads and a higher likelihood of unimaginative product offerings with little appeal. CONCENTRATED (OR NICHE) TARGETING STRATEGY. This strategy entails the selection of one segment of a market for targeting. Advantages include concentrated efforts on a highly specialized marketing mix that meets target needs, concentration of resources, the ability to compete against larger firms, and the ability to establish a strong position in a desirable market segment. Disadvantages include segments that are too small, changing segments, and threat of competitive advances. MULTISEGMENT TARGETING STRATEGY. When a firm chooses to serve two or more well-defined market segments and develops distinct marketing mixes for each segment, it is practicing multisegment targeting. Advantages potentially include greater sales volume, higher profits, larger market share, and economies of scale in manufacturing and marketing. Disadvantages include high costs and cannibalization.