Marketing exam 1 - chapter 9

Which of the following would NOT be used in calculating the profitability of a segment? A. segment perceptions B. segment size C. segment adoption percentage D. profit margin percentage E. fixed costs

A A calculation of segment profitability uses segment size, estimated segment adoption percentage, purchase behavior (frequency and price), profit margin percentage, and fixed costs.

When Penguin Catering Services first opened, the owner decided to target only events at resorts in its geographic region. Penguin Catering was using a(n) __________ targeting strategy. A. concentrated B. micromarketing C. benefit-driven D. differentiated E. undifferentiated

A A concentrated targeting strategy is one in which the firm focuses its efforts on a single market segment, such as the resorts in Penguin Catering's geographic region.

Carlos has identified four potential market segments for his Rent-A-Nurse service. He will now compare the segments to see whether they are distinct from each other. Carlos is evaluating whether each segment is A. identifiable. B. responsive. C. profitable. D. reachable. E. substantial.

A A segment is identifiable if the marketer can identify who is in the segment, and distinguish it from other segments.

When Starbucks first opened, many critics suggested, "No one will pay $4.00 for a cup of coffee." Starbucks' critics suggested consumers would not be __________ to the company's offerings. A. responsive B. perceptive C. identifiable D. reachable E. quantifiable

A A segment is responsive if its members react similarly and positively to the marketing mix. Early critics did not believe that consumers would respond positively to the offer of a $4 cup of coffee.

Which of the following defines a value proposition? A. the unique value that a product or service provides to customers B. a special discount offer dropping the price C. an advertisement that talks about value D. a display of the position of products or brands in the consumer's mind E. the one feature that will prompt a customer to buy the produc

A A value proposition defines the unique value the product or service provides its customers, and how it differs from those of competitors.

Paul is considering psychographics as a way to segment the market for his small travel agency. This approach to segmentation offers him an advantage because A. it is based on underlying reasons people make choices. B. it is easier to use than demographics. C. the travel business doesn't respond well to other approaches to segmentation. D. psychographics is the preferred method for service businesses. E. psychographic segmentation is the least expensive method.

A Psychographics is related to the way we describe ourselves—our self-concept, values, and lifestyle. These characteristics are closely related to our behavior and to the reasons for the choices we make.

Overriding desires that drive how we live our lives are called A. self-values. B. self-concept. C. self-esteem. D. self-confidence. E. self-control.

A Self-values are goals for life, not just the goals one wants to accomplish in a day. They are the overriding desires that drive how a person lives his or her life.

In a classic example of segmentation strategy, years ago Swift Meat Company transformed turkey meat into Butterball turkeys. In the process, the company A. differentiated its product. B. streamlined its delivery process. C. created a new class of micromarketing. D. defined consumers' basic needs. E. redefined mass customization.

A Swift took an undifferentiated product—frozen turkeys—and differentiated its turkeys by branding it Butterball, enabling them to position its turkeys as something special.

The phrase "birds of a feather flock together" captures the idea of __________ segmentation. A. geodemographic B. benefit C. psychographic D. loyalty E. geographic

A The basis of geodemographic segmentation schemes like PRIZM is that the people who live in a neighborhood have more in common than geographic location.

Corporate pilot fish are former employees who start a new business based primarily on contacts and contracts with their old company. A corporate pilot fish would probably pursue a __________ targeting strategy. A. macromarketing B. micromarketing C. benefit-based D. differentiated E. undifferentiated

B A corporate pilot fish will probably start with a very small group of customers and contacts, leading to a micromarketing strategy in which very small segments are targeted.

Differences in weather and climate create opportunities for A. concentrated targeting. B. geographic segmentation. C. benefit segmentation. D. psychographic segmentation. E. demographic segmentation.

B Climate and weather are two factors that create geographic differences and, thus, opportunities to segment a market by geographic region.

Alex has found that both commercial and residential real estate buyers respond positively to his marketing communication message. Alex has identified __________ that respond similarly to his marketing efforts. A. mass customization consumers B. geographic segments C. market segments D. self-concept customers E. geodemographic segments

C Commercial and residential real estate buyers are two different market segments—groups of customers with similar wants and needs—that Alex can target by designing a marketing mix for each.

A __________ is often used to illustrate the position of a firm's products or brands in consumers' minds. A. mass marketing analysis B. psychographic profile C. perceptual map D. loyalty timeline E. PRIZM analysis

C Perceptual maps show the position of a firm's products and those of competitors in the minds of consumers.

Adidas Group owns Reebok, Rockport, and TaylorMade brands. Adidas uses the different brands to pursue a(n) __________ strategy. A. concentrated targeting B. micromarketing C. benefit targeting D. differentiated targeting E. undifferentiated targeting

D A differentiated targeting strategy is one in which different target markets are served by different marketing mixes.

Sally is in the new marketing department of a midsized lawn and garden company. She is working on the first marketing plan the firm has ever used. She has defined the mission and objectives, and she just finished a situation analysis for the firm. The next step is to A. develop an advertising plan to promote the upcoming sales. B. find marketing interns or hire new staff to help with implementation. C. create pro forma financial statements to complete the package. D. identify and evaluate opportunities by conducting segmentation, targeting, and positioning analysis. E. use the Internet, catalogs, and vendor information to draw up a list of new products.

D The third step of the strategic marketing planning process, following defining the mission and objectives and conducting a situation analysis, is the STP process.

Which of these is NOT one of the main components of a value proposition? A. The target market. B. The name of the product or brand being offered. C. The product/service category or concept being offered. D. The price of the product or service being offered. E. The unique point of difference or benefits offered.

D The value proposition consists of a target market, a brand/product name, a category or concept, and a unique point of difference or benefit. The price might be the unique point of difference in some cases, but otherwise price does not need to be part of the value proposition.

Talbots, an upscale women's clothing store, targets college-educated women between 35 and 55 years old with average household income of $75,000 or more. This is a form of __________ segmentation. A. benefit B. geodemographic C. psychographic D. demographic E. geographic

D This is a demographic segment because it is defined according to demographic variables: gender, age, and income.

For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm's marketing mix. In other words. the market segment must be A. substantial. B. perceptive. C. identifiable. D. reachable. E. responsive.

E A segment is responsive if its members react similarly and positively to the marketing mix.

Karen has identified four potential market segments for her Rent-A-Chef home meal catering service. The next step is to A. categorize each market segment by consumer demographics. B. establish her overall objectives. C. decide on a targeting strategy. D. develop a positioning strategy. E. evaluate the attractiveness of each segment.

E After identifying potential market segments, the next step is to evaluate the attractiveness of each segment.

Demographic segmentation is segmentation based on all of the following EXCEPT A. age. B. gender. C. education. D. income. E. lifestyle.

E Age, gender, education, and income are all demographic variables. Lifestyle is a psychographic variable.

__________ segmentation is the most common basis of consumer market segmentation because these segments are easy to define and usually easy to reach. A. Geographic B. Psychographic C. Behavioral D. Benefits E. Demographic

E Demographic segmentation tends to be easy to define because demographic factors are widely collected and so tend to be readily available.

Regina wants to position her financial services company. Regina can position her services according to all of the following EXCEPT A. the value proposition. B. product attributes. C. symbols. D. competitive comparisons. E. profitability.

E Each of these is an option to consider when positioning a product except profitability.

Caroline is assessing market growth, market competitiveness, and market access for each segment she has identified. Caroline is assessing the __________ of each potential market segment. A. substance B. responsiveness C. identification D. reach E. profitability

E Evaluation of profitability considers market growth, market competitiveness, and market access, along with ensuring that the profit margin will be sufficient to cover costs.

The perceptions of __________ are being measured in a perceptual map. A. competitors B. strategic planners C. the company's executive team D. the current R&D team E. consumers

E Perceptual maps measure perceptions of consumers, not of competitors or members of the firm.

Fiona wants to sell a local advertising calendar. There are 1,000 households in her community, and she estimates that 30 percent will buy a calendar. The printing company will charge a $100 setup fee, and calendars will cost $4.00 each to print. What price will she need to charge to cover all costs and make a $500 profit? A. $6.00 B. $7.00 C. $8.00 D. $9.00 E. $10.00

Segment profitability = (Segment size × Segment adoption percentage × Purchase frequency × Profit margin percentage) - Fixed costs.We will assume that Purchase frequency = 1 (that each household buys just one calendar)We don't know the Price or Profit margin percentage, but (Price × Profit margin %) can be restated as (Price - Variable cost) = Price - $4Substituting numbers, $500 = (1,000 × 30% × 1 × (Price - $4)) - $100$500 = (300 × (Price - $4)) - $100$600 = 300 × Price - $1,200$1,800 = 300 × Price$6 = Price

When Talbots, an upscale women's clothing store, tries to portray an image of "traditional, conservative, and with good taste," it is appealing to its target market's A. lifestyle. B. geodemographics. C. demographics. D. loyalty. E. PRIZM segment.

A This is a lifestyle (psychographic) segment because consumers are defined in terms of their lifestyle and self-concept.

When Victoria's Secret offers different product lines, such as its Pink line, it is trying to capture the market by A. segmenting, targeting, and positioning. B. offering everything to everyone. C. trying lots of options to find out which one works. D. continual test marketing. E. focusing exclusively on its Pink brand.

A Victoria's Secret uses segmentation, targeting, and positioning by offering color, fabrics, and styles designed to appeal to different target audiences.

Firms use a differentiated targeting strategy because A. it is easier than mass marketing. B. it helps to obtain a bigger share of the market. C. it is better than focusing on individual or small groups of potential customers. D. most market segments are too small to be profitable. E. banks are more willing to extend credit to companies with this strategic approach.

B A differentiated targeting strategy builds a different marketing mix for each of several market segments. This allows the firm to target a larger portion of the market and gain a greater market share.

The manager of Plantation River Country Club wanted members of the very upscale club to use the bar and dining facilities more frequently. He offered a two-for-one happy hour special but few members showed up. The manager did not have a grasp of what would make his target market A. substantial. B. responsive. C. identifiable. D. reachable. E. quantifiable.

B A segment is responsive if its members react similarly and positively to the marketing mix. The country club members did not respond positively to the happy hour special.

Adidas Group owns Reebok, Rockport, and TaylorMade brands. Having a variety of brands allows Adidas to A. engage in micromarketing for hard-to-fit shoe customers. B. obtain a bigger share of the shoe market. C. use mass marketing techniques. D. use geographic segmentation. E. generate economies of scale in advertising expenditures.

B Adidas can adopt a differentiated targeting strategy, in which it builds a different marketing mix around each of its brands to serve a different target market. By doing so, Adidas can target a larger portion of the shoe market and gain a greater market share.

__________ is an extreme form of a targeting strategy. A. Macromarketing B. Micromarketing C. Benefit marketing D. Differentiated targeting E. Concentrated targeting

B Micromarketing is an extreme form of targeting, where a company caters to extremely small segments.

We often see advertisements touting a product as being made with natural ingredients, or being long-lasting. Marketers using these types of promotions are positioning their products based primarily on A. the value proposition. B. product attributes. C. symbols. D. competitive comparisons. E. profitability.

B Natural ingredients and long-lasting effects are examples of attributes that may be salient (important) to the target market.

Beverage companies often use television commercials with images of young people laughing and enjoying themselves on a beach or in a club. These images are designed to appeal to consumers' __________, suggesting "be like me." A. geographic choices B. self-concepts C. loyalty references D. benefit perceptions E. demographics

B Self-concept is the way we see ourselves. Beverage companies hope that consumers will identify with the ads, seeing themselves (or the way they wish to be).

What is the best situation in the Circles for a Successful Value Proposition framework? A. The firm's benefits overlap with both customer needs/wants and competitors' benefits. B. The firm's benefits overlap with customer needs/wants but not with competitors' benefits. C. The firm's benefits overlap with competitors' benefits but not with customer needs/wants. D. Customer needs/wants overlap with both the firm's benefits and competitors' benefits. E. None of the three circles overlaps.

B The best situation is if the firm's benefits overlap with customer needs (indicating that the firm's offerings meet at least some customer needs) but there is no overlap with competitors' benefits (indicating that the firm's product offering is distinctly different from competitors' offerings).

Marketers often create a special marketing mix for loyalty segments because these segments are A. too large to service with ordinary targeting. B. difficult to identify. C. costly to acquire. D. generally profitable. E. constantly changing.

D Loyal customers often maintain profitable relationships with companies, and many firms develop special marketing mixes for loyal customers in the hope of preserving and building these relationships.

Marketers often employ a combination of segmentation methods, using __________ to identify and target their customers, and __________ to design products and messages to appeal to them. A. loyalty segmentation; demographics B. undifferentiated targeting; differentiated targeting C. loyalty segmentation; geodemographics D. geodemographic segmentation; lifestyle or benefit segmentation E. lifestyle segmentation; geographic segmentation

D Marketers may start with a segmentation method such as geodemographic segment to identify a segment to target; after that, lifestyle or benefits may be considered when designing the marketing mix to make sure that it meets customers' needs.

Airlines were among the first retailers to embrace loyalty segmentation when they created A. business-class seating. B. 30-day advance pricing. C. fuel surcharges. D. in-flight movies. E. frequent flyer programs.

E Airline frequent flyer programs offer an example of a marketing mix based on loyalty segmentation, since only those who fly on the airline frequently are eligible.

For each target market, General Imaging Corporation, a manufacturer of imaging equipment, will engage in positioning, adjusting its marketing mix variables to give customers A. a more flexible supply chain strategy. B. a perceptual map of the imaging landscape. C. more product features than the competition offers. D. lower prices than the competition offers. E. a clear, distinctive, and desirable understanding of its products relative to competing products.

E Positioning is the process of defining marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

Four frequently used targeting strategies are the micromarketing, undifferentiated, differentiated, and __________ targeting strategies. A. geographic B. benefit-based C. economic D. global E. concentrated

E The four targeting strategies are micromarketing, undifferentiated, differentiated, and concentrated.

Golden Years Vitamin Corporation targets consumers living in Florida who are over age 65. Golden Years is using __________ segmentation. A. benefit B. self-actualization C. psychographic D. loyalty E. geodemographic

E This is an example of geodemographic segmentation because it has an element of geographic segmentation (residence in Florida) combined with demographic segmentation (age greater than 65).

When Mr. How, a Pennsylvania-based discount lumber and hardware chain, sent snow blowers to its Augusta, Georgia, store in April, it was engaged in A. concentrated segmentation. B. geodemographic segmentation. C. benefit segmentation. D. psychographic segmentation. E. misguided geographic segmentation.

E This is an example of geographic segmentation—segmentation by geographic region—but is misguided because snow blowers are not needed in Georgia in April.

Karen has identified four potential market segments for her Rent-A-Chef home meal catering service. She will now evaluate whether each segment is attractive relative to all of the following EXCEPT A. substantial. B. responsive. C. profitable. D. reachable. E. realistic.

E When evaluating a segment's attractiveness, we consider whether the segment is substantial, responsive, profitable, reachable, and identifiable.

Greta is concerned that one of the potential market segments she has identified for her dog grooming service is too small and has too little income to have sufficient buying power. Greta is concerned with whether the segment is A. substantial. B. responsive. C. profitable. D. reachable. E. identifiable.

A A segment is substantial if it is large enough to be worth targeting, and if the segment members have sufficient buying power. "Substantial" is a better answer than "Profitable" because even a small segment with few people who can afford the product could be profitable in some circumstances, depending on price, margin, and so on.

Beer marketers know that high school educated, working-class males from the ages of 25 to 40 make an attractive market for their products. This is a __________ segment of the beer market. A. demographic B. psychographic C. behavioral D. benefits E. geographic

A Age, education, social class, and gender are demographic variables.

Godiva Chocolates produces specially decorated boxes of candies for Valentine's Day, Easter, and Christmas. This is an example of ________ segmentation. A. occasion B. loyalty C. geographic D. psychographic E. demographic

A Behavioral segmentation based on when a product or service is purchased or consumed is called occasion segmentation.

Which of the following segmentation methods is being used when M&M's offers special wedding-themed packaging for customized M&M's (imprinted with the names of the bride and groom)? A. occasion segmentation B. geographic segmentation C. lifestyle segmentation D. benefit segmentation E. loyalty segmentation

A Behavioral segmentation based on when a product or service is purchased or consumed is called occasion segmentation.

Whenever the president of the local public university promotes the institution, he emphasizes the university's price (much lower than neighboring private colleges) and high quality. He is positioning the institution based primarily on A. the value proposition. B. product attributes. C. symbols. D. competitive comparisons. E. profitability.

A By emphasizing the low price and high quality, the university president is focusing on value.

Education marketers have learned that the primary motivations of most nontraditional college students are self-respect and self-fulfillment. Understanding the values of this market segment allows marketers to A. emphasize the benefits these consumers are looking for in a college education. B. lower the price for this market segment. C. offer alternative courses based on geographic location. D. employ loyalty marketing strategies. E. use micromarketing strategies.

A By understanding the values of nontraditional college students, education marketers can create a marketing mix that meets these customers' needs, and can emphasize the benefits these customers seek.

After assessing the market growth potential and market competitiveness for his company's baby products in Mexico, Harmon wanted to evaluate market access. To do this, Harmon would consider A. ease of accessing or developing distribution channels and brand familiarity. B. the current size of the market and the expected growth rate. C. ease of pricing control and number of promotional outlets. D. the number of competitors, entry barriers, and product substitutes. E. profitability and customer buying behavior.

A Evaluation of profitability considers market growth, market competitiveness, and market access, along with ensuring that the profit margin will be sufficient to cover costs. Market access includes ease of developing or accessing distribution channels, and brand familiarity.

When evaluating the attractiveness of the segment, if a segment is expected to react positively to the firm's offering, we say that the segment is A. responsive. B. identifiable. C. reachable. D. substantial. E. reactive.

A For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm's offering. This is referred to as a responsive segment.

Television advertising has recently expanded to include mini-ads, which are short ads lasting five to ten seconds. These ads are most useful in advertising to men, since men are more likely than women to channel surf during commercial breaks. This type of advertising will be more useful to marketers engaged in __________ segmentation. A. demographic B. psychographic C. behavioral D. benefits E. geographic

A Gender is a demographic variable.

Retail store chains often use __________ data to identify other locations with similar characteristics and purchasing behavior where it might make sense to open additional stores. A. geodemographic B. benefit C. psychographic D. loyalty E. geographic

A Geodemographic data can help retail store chains to characterize the types of customers who live near their current stores, and to identify similar areas where they do not currently have stores.

One of the reasons marketers use loyalty segmentation is A. the high cost of finding new customers. B. government tax incentives. C. accounting difficulties associated with identifying new customers. D. rapid population increases. E. the failure of micromarketing as a workable strategy.

A It is generally much more expensive to find a new customer than to keep an existing one; thus, it is in the best interests of a firm to retain current customers. For this reason, many firms develop loyalty segmentation-based marketing mixes.

PRIZM and Tapestry divide and sort small geographic areas into categories using 60 or more demographic and lifestyle characteristics. These market research tools are examples of __________ segmentation. A. geodemographic B. benefit C. psychographic D. loyalty E. geographic

A PRIZM and ESRI start with geographic segmentation and then layer on demographic and lifestyle variables, creating geodemographic segmentation schemes.

A university using benefit segmentation and targeting students who want to get a degree quickly while still working full time would focus on A. providing classes at convenient times and offering online courses. B. discount pricing for students taking more than twelve credit hours. C. the higher average salaries earned by college graduates. D. the great variety of classes offered. E. the number of Nobel Prize winners on the faculty.

A The benefit sought by the target market is speed and convenience of getting a degree; thus, convenient class times and the ability to take classes online would be important criteria.

Toothpastes sold in supermarkets and pharmacies promise various results, such as whiter teeth, protection against gum disease, tartar control, or fresh breath. Toothpaste marketers are using __________ segmentation. A. benefit B. geodemographic C. psychographic D. loyalty E. demographic

A These promised results are all benefits that a target market might seek.

Many companies use the Internet to allow consumers to design customized products; for example, Nike allows customers to order shoes with custom color combinations. This is a form of A. micromarketing. B. concentrated targeting. C. psychographic segmentation. D. differentiated targeting. E. undifferentiated targeting.

A This is a form of micromarketing—on a one-to-one scale—since each consumer receives a customized product.

Segmentation, targeting, and positioning A. are terms that can be used interchangeably in developing marketing plans. B. are part of a firm's marketing strategy. C. should be done simultaneously so synergies can help streamline the effort. D. are part of the marketing plan but bear little direct relationship to the marketing mix. E. are optional elements of a marketing plan.

B The third step of the strategic marketing planning process, following defining the mission and objectives and conducting a situation analysis, is the STP process. Segmentation, targeting, and positioning are not interchangeable concepts—they are three separate steps of the process, and are not executed simultaneously.

Social networking sites that compete directly with Facebook have a difficult time surviving; however, LinkedIn has survived by focusing on the needs of business professionals, who seek to network with colleagues, share their expertise, post online resumés, and look for new jobs. What segmentation method is LinkedIn using? A. loyalty segmentation. B. benefit segmentation. C. psychographic segmentation. D. geodemographic segmentation. E. demographic segmentation.

B This is benefit segmentation. Many LinkedIn users also have a Facebook account, but LinkedIn offers them the opportunity to network with their colleagues and contacts in a professional environment. It might seem like demographic segmentation, but LinkedIn spans a very wide range of ages, occupations, and income levels.

Whenever Donald calls on potential pest control customers, he emphasizes the fact that, unlike the national franchise competitors, he is a local business person and has been in business over twenty years. Donald is __________ his business relative to his competition. A. segmenting B. packaging C. positioning D. pricing E. targeting

C Donald is positioning his business relative to the competition by focusing on his investment in the local neighborhood and his years of experience serving local customers.

NASCAR redirected its marketing efforts when a survey indicated that almost 50 percent of race fans were female. This is an example of __________ segmentation. A. geographic B. psychographic C. demographic D. benefits E. behavioral

C Gender is a demographic factor.

Kim's Kayak Tours initially identified active retirees living in the retirement community nearby as one of its target markets. Kim then tailored her service and marketing message to the interests and schedules of that audience. Kim initially used __________ segmentation and then used __________ segmentation. A. micromarketing; loyalty B. lifestyle; macromarketing C. geodemographic; lifestyle D. geographic; loyalty E. behavioral; geodemographic

C Kim starts by identifying a geodemographic segment (active retirees in a nearby community). She then moves on to design a marketing mix based on the lifestyle of her target market.

If values provide goals, and self-concept is the way we see ourselves, lifestyles are A. visual images of how we should live our lives. B. our underlying motivations. C. the way we live our lives to achieve our goals. D. motivations turned into perceptual maps. E. determined by demographics.

C Lifestyle (which is one aspect of psychographic segmentation) is the way we live our lives—activities, interests, and so on.

Jim wants to position his firm against his competitors. In doing so he should A. never select a competitor in the same neighborhood. B. avoid making the competitor's product look undesirable. C. avoid looking too much like the competitor so that he'd confuse the target segment. D. avoid discussing the strengths of his product so that competitors won't be aware of his product quality. E. avoid discussing the weaknesses of his competitors so they won't retaliate.

C One danger in positioning against competitors is that the firm may end up confusing customers unless a clear distinction is made between the firm's products and those of competitors.

Psychographics is the segmentation method that delves into how consumers A. adjust to demographic changes. B. allocate scarce incomes to a variety of goods and services. C. describe themselves. D. value their livelihoods. E. believe other people see them.

C Psychographics is related to the way we describe ourselves—our self-concept, values, and lifestyle

Marketers have found that __________ segmentation is often more useful for predicting consumer behavior than __________ segmentation. A. demographic; psychographic B. geographic; geodemographic C. psychographic; demographic D. demographic; behavioral E. demographic; benefit

C Psychographics, with its focus on values and lifestyles, is often more useful for predicting behavior than are demographics, which generalize across groups with similar ages, incomes, education levels, ethnicity, and/or gender. On the other hand, demographic information is usually much more readily available at lower expense.

Gloria is opening an upscale women's clothing store in a growing suburban residential area. Gloria knows her target market is upper-income women living within twenty miles. She can't afford to purchase a PRIZM or Tapestry analysis, so she will most likely use __________ as a basis for targeting her market. A. voter registration lists B. the city phone book C. real estate values by subdivision D. public school enrollment data E. new construction data

C Real estate values by subdivision for neighborhoods near her store would give Gloria an idea of the neighborhoods in which more affluent women lived. She could use this information to identify potential customers to whom she could promote her store. The other suggestions do not include financial information that would be helpful in identifying customers by income level.

Almost all U.S. political candidates use some combination of red, white, and blue in their campaign posters. They are trying to position themselves in voters' minds using A. the value proposition. B. salient attributes. C. symbols. D. the competition. E. perceptual maps.

C Red, white, and blue colors serve as symbols in this context because they call to mind the U.S. flag.

Geodemographic segmentation can be particularly useful for __________, because customers typically patronize stores close to their neighborhood. A. Internet marketers B. wholesalers C. retailers D. consumer goods manufacturers E. cable TV networks

C Retailers can benefit from geodemographic segmentation because it can help to define the types of customers who live near stores. The other examples given are not particularly dependent on geographic proximity.

Baby Boomers represent a huge demographic segment for travel marketers. Baby Boomers are also heavily motivated by self-fulfillment, which creates the possibility of __________ segmentation. A. geographic B. self-concept C. psychographic D. benefit E. behavioral

C Segmentation based on self-values is a form of psychographic segmentation.

One of the benefits of a differentiated targeting strategy is that it allows the firm to diversify its business and A. decrease advertising spending. B. focus on a single market segment. C. lower overall risk. D. use undifferentiated strategies in micro markets. E. more widely market basic commodities.

C Since a differentiated targeting strategy addresses multiple target markets, the firm can diversify its approach and potentially lower overall risk by not relying entirely on one target market. On the other hand, differentiated strategies can be expensive because of the need to communicate with multiple market segments.

The first step in the STP process is to A. identify the segmentation methods to be used. B. produce a list of strengths and weaknesses of the firm's past marketing strategies. C. clearly articulate the firm's vision or marketing strategy objectives. D. select target markets. E. develop a marketing mix, so that an appropriate segment can later be identified.

C The first step in the segmentation, targeting, and positioning process is to clearly identify the firm's strategy and objectives to ensure that the segmentation process supports those objectives.

In the Circles for a Successful Value Proposition framework, the value proposition is represented by A. the intersection between customer needs/wants and competitors' benefits. B. the intersection between the firm's benefits and competitors' benefits. C. the intersection between customer needs/wants and the firm's product's benefits. D. the intersection between all three of the circles. E. the part of the firm's benefits that doesn't overlap with anything.

C The value proposition is the intersection between customer needs/wants and the benefits offered by the firm. This is the area in which customer needs/wants match the benefits the firm can offer.

__________ involves defining the firm's marketing mix variables so that target customers have a clear, distinctive, and desirable understanding of the firm's offerings relative to competitors' offerings. A. Processing B. Perceptualizing C. Positioning D. Proportioning E. Prospecting

C This is the definition of positioning, the final step in the STP process.

VALS is the most widely used __________ segmentation tool. A. geographic B. behavioral C. psychographic D. benefits E. geodemographic

C VALS, which segments consumers according to primary motivation and resources, is a psychographic segmentation tool.

A differentiated targeting strategy can allow a firm to obtain a bigger share of the overall market; this strategy A. is the cheapest option. B. requires the use of advanced advertising techniques. C. rarely works. D. is likely more costly than an undifferentiated strategy. E. is ineffective without multiple brand names.

D A differentiated targeting strategy can be extremely effective, since it allows the firm to target multiple market segments. This can be done with a single brand or with multiple brands, depending on the target markets and on the overall strategy. But because of the need to communicate with multiple target markets, differentiated targeting strategies tend to be expensive.

"Why create a perceptual map?" asked David. Andreas, the senior marketing manager, gave him four reasons. Which of the following is NOT a valid reason? A. "It's a quick way for senior managers to see not only our product but each of our competitors, all at once." B. "It's a way to demonstrate the dimensions that our customers think are important." C. "It shows where we aren't—and where our competitors aren't—in our customers' and prospects' minds." D. "It's a way to show the position of the company throughout the product's life cycle." E. "We can easily show where we are positioned and how large the market is."

D A perceptual map shows the current position of a company's products, not a future position.

With access to the Internet nearly universal in the United States, many potential market segments have become more A. substantial. B. perceptive. C. identifiable. D. reachable. E. quantifiable.

D A segment is reachable if it can be reached for marketing communication and product distribution. Internet access has opened up many new ways to reach consumers.

Ryan wants to sell personal website services to American soldiers in Afghanistan. Because of the difficulty of communicating with people in a war zone, Ryan may have trouble with this segment not being A. substantial. B. perceptive. C. identifiable. D. reachable. E. quantifiable.

D A segment is reachable if it can be reached for marketing communication and product distribution. Troops in Afghanistan may be difficult to reach for these purposes.

Ronaldo wants to develop an Internet auction-based business and is working through the STP process. After establishing his objectives, describing potential market segments, and evaluating the attractiveness of each segment, Ronaldo now has to A. differentiate his product line. B. consider future customer loyalty. C. create a perceptual map. D. select a target market. E. divide geographic segments into lifestyle groups.

D After setting objectives, forming segments, and evaluating segment attractiveness, the next step of the STP process is to select one or more target markets.

College students can be a less __________ market segment because students' media habits are quite diverse. A. substantial B. perceptive C. identifiable D. reachable E. quantifiable

D Although there are many potential ways to reach college students, their media habits diverge so much that it can be difficult to reach them without using a wide variety of media.

For products like clothespins, which provide the same benefit for all consumers, marketers should probably use a(n) ________ strategy. A. concentrated targeting B. lifestyle segmentation C. benefit segmentation D. undifferentiated targeting E. differentiated segmentation

D An undifferentiated targeting strategy is appropriate for products for which almost anyone can be a target customer, and where customer needs and wants are similar across all groups. In this strategy, a single marketing mix is designed for all customers.

__________ segmentation is the segmentation method most directly related to value creation for consumers. A. Geographic B. Demographic C. Psychographic D. Benefit E. Geodeomographic

D Benefits segmentation seeks to segment customers based on the benefits they seek—in other words, the value they will obtain—from the product.

While demographic and geographic segmentation of retail customers are relatively easy, these characteristics do NOT help marketers determine A. how old their customers are. B. what their customers need. C. where their customers live. D. which customers have young children. E. what income brackets their customers are in.

D Demographic and geographic segmentation of retail customers is fairly easy to do with readily available data; however, translating segment membership to actual needs is more complex. Firms often follow up initial demographic and/or geographic segmentation with segmentation based on lifestyles or benefits, which are more closely connected with customer needs.

After assessing the market growth potential for his company's baby products in Mexico, Harmon wanted to evaluate market competitiveness. To do this, Harmon would consider A. mass marketing distribution potential and logistical support. B. the current size of the market and the expected growth rate. C. ease of pricing control and number of promotional outlets. D. the number of competitors, entry barriers, and product substitutes. E. profitability and customer buying behavior.

D Evaluation of profitability considers market growth, market competitiveness, and market access, along with ensuring that the profit margin will be sufficient to cover costs. Market competitiveness includes the number of competitors, entry barriers, and product substitutes.

When selecting a target market, firms will be most successful if they A. decide between demographic and geographic segmentation methods. B. seek out opportunities to customize products. C. develop a strong communication plan. D. match the firm's competencies with a market segment's attractiveness. E. reposition the brand.

D Firms will usually find the most success if they choose attractive segments whose needs match the firm's competencies.

Let's Dish is a meal-preparation service operating in three states. Customers visit a Let's Dish store to select and partially prepare their meals, which are then packaged for the freezer. At home, the customer can pull a meal out of the freezer and warm it in the oven or microwave. If Let's Dish wanted to expand into new areas of the U.S., what segmentation method would probably be most useful in choosing new locations? A. loyalty segmentation. B. benefit segmentation. C. psychographic segmentation. D. geodemographic segmentation. E. demographic segmentation.

D Geodemographic segmentation is the best choice because Let's Dish needs to be located near its customers. It could compare demographic profiles for neighborhoods near successful current locations, and seek out similar neighborhoods in other geographic areas.

Marco was assigned to help create a positioning strategy for his employer's products based on product attributes. He should consider A. the features the engineers feel are most important. B. the ways the sales representatives have been positioning the firm's products. C. the characteristics that helped his firm win a statewide award for excellence in manufacturing. D. what the target market would consider the most important features. E. the safety record of the firm and its products.

D Positioning should be done with the target market's needs in mind. What matters is which attributes are salient (important) to potential customers.

Although marketers have found that psychographics are often more useful for predicting consumer behavior than demographics, psychographic segmentation A. is available only in limited geographic areas. B. is rarely used and unproven. C. offers only one-to-one marketing potential. D. is a more expensive method for identifying potential customers. E. is still an unproven area.

D Psychographic segmentation is by no means unproven, and can be used for many applications unrelated to one-to-one marketing. Psychographic segmentation, though, is generally more expensive than demographic segmentation because demographic information is so much more readily available.

To develop psychographic segments, the marketer must understand consumers' A. age, income, and education. B. gender, race, and religion. C. disposable personal income, benefit perceptions, and alternative egos. D. self-values, self-concept, and lifestyles. E. buying patterns and behaviors.

D Psychographics is related to the way we describe ourselves—our self-concept, values, and lifestyle.

When Ron complained to his bank about the unprofessional behavior of one teller, the branch manager added a code into his accounts alerting all tellers that Ron was a valued customer and to provide whatever service he requests. The branch management included Ron in its __________ segmentation. A. benefit B. geodemographic C. psychographic D. loyalty E. geographic

D Ron has been identified as a loyal customer, to be handled via the marketing mix the bank has designed via loyalty segmentation.

The Lite beer commercial with the slogan, "less filling, tastes great," was based on __________ segmentation. A. geographic B. geodemographic C. psychographic D. benefit E. loyalty

D The ad clearly sets out two benefits: the beer is less filling and yet still tastes great.

Within a perceptual map, a(n) __________ represents where a particular market segment's desired product would lie. A. point of parity B. strategic target C. PRIZM cluster D. ideal point E. benefit centroid

D The ideal point is the point representing the target market's perfect product offering.

Paula is trying to determine whether the segments she is considering for her day care center will be profitable. Which of the following will NOT specifically help her in this analysis? A. The number of children needing day care in the immediate area. B. The fixed costs of operating the center. C. The percentage of parents in the area who can both afford to send their child or children to day care and who are willing to do so. D. The average number of school-age children in families sending a child to the day care center. E. The price she would charge minus the variable cost of providing service to each child.

D The number of children needing day care and the percentage of parents able and willing to send a child to day care are factors that will help to determine the segment size. The fixed costs and price minus variable cost will help to determine costs and profit margin. School-age siblings of day care center children are not relevant to the calculation unless the day care center also has an after-school program of some sort, and the question does not mention any such program.

In the Circles for a Successful Value Proposition framework, the portion of the customer needs/wants circle that doesn't overlap with anything else represents A. the firm's value proposition. B. competitors' value propositions. C. low-priority needs and wants that customers are willing to give up. D. unmet customer needs/wants. E. unknown customer needs/wants that the firm does not understand.

D The portion of the customer needs/wants circle that doesn't overlap with anything represents customer needs/wants that are at present unmet by any offering. These represent an opportunity to serve the customers by meeting these needs.