MKTG 409 Ch. 6 Questions

An advantage of a differentiated strategy is that _______.

a company may increase sales because its marketing mixes are aimed at more customers

A market is a group of individuals and/or organizations that have a desire or need for products in a product class and have the ability, willingness, and authority to purchase those products. There are two types of markets. Cynthia's organization targets the

business market

A basic requirement of a market is that the consumer possesses the ability to purchase the product or service. This requirement is a function of a consumer's _______.

buying power

Using the breakdown approach to sales potential, estimates are made _______.

by starting with general economic conditions

The Buckle, based in Kearney, Nebraska, operates approximately 500 stores across the United States and is known for its denim which they design to fit a wide variety of body shapes and preferences for style for men and women. The Buckle has forecasted that it can sell 15% of all jeans or denim sold in the United States. This percentage represents The Buckle's _______ for denim.

company sales potential

A(n) _______ targeting strategy is one in which an organization targets a single market segment using one marketing mix.

concentrated

Ayush is a talented video game designer. He has recently developed a video game in which players take on the role of a sharp shooter in a military setting. Ayush realizes his game is not for everyone. There will be some violence and gore and a heavy emphasis on strategy. Ayush believes that his game is probably best suited for players 18 and older with an interest in the military. He will likely use a(n) _______ targeting strategy.

concentrated

The chief advantage of the _______ is that it allows the firm to specialize in satisfying the needs and characteristics of a specific customer group.

concentrated targeting strategy

Geodemographic segmentation allows marketers to engage in micromarketing, which _______.

involves focusing precise marketing efforts on very small geographic markets, such as community and even individual neighborhoods

Marketing managers at ACME Corp. have had experts create initial forecasts, averaged their results, and then returned the averages to the experts to refine their individual forecasts. This best describes _______.

the Delphi technique

Which of the following statements about sales estimates is correct

Market potential places absolute limits on company sales potential.

Which product would most likely use an undifferentiated market segmentation approach to marketing?

Beef

A person who has buying power also has the authority to buy.

False

An undifferentiated targeting strategy uses market segmentation.

False

_______ is defined as the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product.

Company sales potential

________ is the maximum percentage share of a market that an individual firm within an industry can expect to capture for a specific product.

Company sales potential

The company Patek Philippe is known for its high-quality, Swiss-made watches priced at $20,000 and above and targeted to a very upscale target market that could afford to pay $20,000 or more for a watch. The advertising for Patek Philippe's watches says, "You never actually own a Patek Philippe, you merely look after it for the next generation." What type of targeting strategy does Patek Philippe utilize?

Concentrated

Which of the following is calculated during the fourth step of the target market selection process, evaluating relevant market segments?

Cost estimates

At what stage of the target market selection process is the marketer first likely to unveil information that makes a segment less attractive than previously thought?

Develop market segment profiles

_______ is defined as the total amount of a product that consumers will purchase within a specified period at a specific level of industry-wide marketing activity.

Market potential

At what stage of the target market selection process is management likely to investigate whether the organization has sufficient financial resources, managerial skills, employee expertise, and facilities to compete effectively in selected segments?

Develop market segment profiles: Although marketers may initially believe certain segments are attractive, a market segment profile may unveil new information that makes a segment less attractive than thought.

Frito-Lay's Doritos snacks appeal to a wide range of consumers for consumption in their homes, and through a partnership with Taco Bell, Doritos brand shells under the name "Locos Tacos" are available in Taco Bell. What type of segmentation strategy is Frito-Lay utilizing with the Doritos and Locos Tacos products?

Differentiated

Lenovo has a variety of computer models to serve distinct consumer needs. A small tablet computer is targeted to young children, a sleek but powerful laptop is targeted to business people who frequently travel, and larger desktop models are targeted to businesses that purchase the computers for workers who use their computers at their desk in the office. What approach to market segmentation is Lenovo utilizing?

Differentiated

The Pillsbury company defines all individual consumers who are purchasers of flour as its target market. It also defines all businesses who purchase flour as its target market. What targeting strategy would be most appropriate in this case?

Differentiated

Which of the following would be a cost-effective, fairly accurate way of coming up with a sales forecast if product demand is relatively stable and managers at the firm have a long tenure in the field?

Executive judgment

Assume that Angel decides that he wants to specifically target those who suffer from celiac disease. Although he realizes that many consumers avoid gluten simply for health reasons, he believes putting his marketing muscle behind a marketing strategy that would target one specific market segment is the way to go. Angel is adopting a differentiated targeting strategy.

False

During the evaluation of relevant market segments, competitive assessment is used primarily to determine the possibility of additional competitors entering particular segments.

False

The five-step process usually used for target market selection includes identifying the appropriate targeting strategy, determining which segmentation variables to use, developing market segment profiles, evaluating relevant market segments, and deciding which targeting strategy to use.

False

Market potential is the amount of a product that an organization could sell during a specified time period.

False: Market potential is the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity.

Patagonia is a California-based manufacturer of high-quality lifestyle clothing and clothing for outdoor enthusiasts such as mountain climbers. Patagonia operates specialty stores in selective areas which are chosen due to the high concentration of individuals within the chosen market area who are most likely to purchase Patagonia products. Patagonia's stores are located near areas which have natural rock formations or proximity to National Parks where people engage in outdoor activities such as hiking, snow skiing, or climbing. What type of segmentation variable does Patagonia utilize when selecting locations for its retail outlets?

Geographic

_______ markets are composed of individuals or organizations with diverse needs for products in a specific product class.

Heterogeneous

Which of the following is the first step in the target market selection process?

Identify the appropriate targeting strategy

_______ segmentation groups individuals according to how they spend their time, the importance of things in their surroundings, beliefs about themselves and broad issues, as well as some demographic characteristics.

Lifestyle

Firms can divide a market according to consumer behavior toward a product which commonly involves an aspect of product use. Which of the following is an example of a behavioristic variable relating to product use?

Loyalty to a brand

Assume that Mistine wants to break into the Kenyan market. It is entering the market for the first time and is unsure about how successful its products will be. Mistine's management team wants to develop a sales forecast for the area. Which of the following would be most appropriate in terms of accuracy?

Market tests

Scenario 6.2Angel wants to become a successful brewer. He analyzes the target market for beer and finds that there is a market niche for gluten-free beer. Angel considers the types of markets he can target with his beer. He knows that many people perceive gluten as unhealthy and might be inclined to buy his beer due to its gluten-free nature. However, he also knows there is a strong demand among those who suffer from Celiac disease. After doing sales and cost estimates, Angel feels ready to make a decision. Refer to Scenario 6.2. Angel is segmenting the market based on what type of segmentation variable?

Psychographic

Shawn works at a retail store that sells a variety of items, including umbrellas. Shawn knows that people buy umbrellas more in the summer season because of the higher frequency of storms. He has identified a formula based on past umbrella sales during the summer season. Shawn believes he can use this formula to predict future sales forecasts with a high degree of accuracy. This is an example of what type of sales forecast?

Regression analysis

_______ variables are the characteristics of individuals, groups, or organizations used to divide a market into segments.

Segmentation

Scenario 6.2 Angel wants to become a successful brewer. He analyzes the target market for beer and finds that there is a market niche for gluten-free beer. Angel considers the types of markets he can target with his beer. He knows that many people perceive gluten as unhealthy and might be inclined to buy his beer due to its gluten-free nature. However, he also knows there is a strong demand among those who suffer from Celiac disease. After doing sales and cost estimates, Angel feels ready to make a decision. Refer to Scenario 6.2. In making his decision, Angel is at what stage in the target market selection process?

Select specific target markets

Which of the following sales forecast methods uses historical sales data to discover a pattern in sales over time?

Time series analysis

Cynthia works at an engineering firm in Arizona that installs transmission lines and works with the electrical systems of buildings. She is in charge of strategic planning. Mostly her firm has worked with cities such as Tucson and Phoenix. Once in a while they will receive a major project from the state, such as renovating a government building in the capital. However, Cynthia's firm wants to expand its target market beyond government projects. Under her direction, the marketing team launched an initiative to target more potential clients in different areas. Two areas in which Cynthia would like to expand include colleges and large for-profit businesses. How is Cynthia's company segmenting the market for its services?

Type of organization

If segmentation analysis shows that customer needs are essentially homogenous, what action may be most appropriate?

Undifferentiated approach

The first step in the market segmentation process is to select the appropriate targeting strategy. Which of the following are the three strategies for market segmentation?

Undifferentiated, concentrated, and differentiated

Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to _______.

allow experts to work separately to reach a consensus as to their forecasts

The Gap has recently produced a new line of athletic wear that closely competes with a designer label in its quality, utility, and appearance. However, it is about half the cost of the designer brand. Product managers for The Gap line plan to use price sensitivity, brand loyalty, and end use as variables to segment its target market. These are all _______ variables for market segmentation.

behavioristic

Verizon Wireless uses a segmentation strategy for its mobile phone and data packages based on market characteristics such as number of devices, amount of download capacity, and volume of minutes or text messages. Based on these variables, Verizon Wireless is using _______ variables for segmentation.

behavioristic

Billabong was founded in Australia by surfer and surfboard shaper Gordon Merchant in the 1970s. Today, the brand has a strong presence and is known as a lifestyle brand for board-sports including skate, snow, and wake. Billabong has company-owned specialty stores located throughout the United States and plans to open additional outlets in the future. Billabong also markets its clothing and equipment through its website and catalog. Billabong would most likely use _______ variables as a segmentation base for its online and catalog sales but would benefit most from _______ segmentation to determine the locations for future company-owned stores.

behavioristic; geographic

Crest toothpaste is available in several different versions, such as Crest Whitening, Crest Tartar Control, Crest Whitening with mouthwash, and Crest Total Effects. Given these different variations of the product, it appears that the marketers of Crest are segmenting the market by using _______ segmentation.

benefit

The _______ approach to measure a company's sales potential begins by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period.

buildup

When a marketing manager estimates how much of a product a potential buyer in a specific geographic area will purchase in a given period, she is employing the _______.

buildup approach

Starwood Hotels and Resorts segments the market with different brands such as Four Points by Sheraton, Sheraton, W Hotels, Westin, and others. For market segmentation to succeed for Starwood, all of the following must be true, except _______.

customers' needs for the different hotel brands must be similar

PRIZM by Nielsen, is commonly used by marketers to segment by _______ variables and can also be used to segment by _______.

demographic; lifestyles

According to the text, the second step in the target market selection process is to _______.

determine which segmentation variables to use

If a furniture maker targets the consumer and business markets for office desks with separate marketing mixes for each, it is using the _______.

differentiated strategy

Justin Franklin's company is interested in locating areas where the average income is high, the average age range is 25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company would most likely find possible markets through _______.

geodemographic segmentation

A consumer's stage in the family life cycle is often utilized as a segmentation variable for target marketing. Two variables are associated with family life cycle and affect consumers' needs for housing, appliances, food, automobiles, and recreational equipment. These two variables are _______.

marital status and age of children living at home

Duracell Battery has determined that the total number of batteries sold to consumers in the next year by all battery producers is 5 billion units based on estimates of manufacturers and global expansion of firms. This amount represents the industry's _______.

market potential

The total amount of product that customers will purchase within a specified period at a specific level of industry-wide marketing activity is best described as _______.

market potential

The marketing manager for Pillsbury is attempting to determine a sales estimate for the line of products such as cinnamon rolls, pie crusts, and crescent rolls that are available in the refrigerated section of the grocery store and can be baked in the consumer's home for bakery-fresh taste and quality. The marketing manager estimates the _______ to be $20 million annually for the category of refrigerated or frozen bakery items, while Pillsbury's _______ is 25% of the overall market.

market potential; company sales potential

People and organizations have needs and wants they seek to satisfy through the purchase of goods and services. These people and organizations represent a _______ that marketers try to appeal to. Marketers will sometimes find it more advantageous to attempt to appeal to a subgroup of these people and organizations which is called a _______. This subgrouping process is accomplished through the use of _______ techniques.

market; market segment; market segmentation

Personal appearance, affiliation, status, safety, and health are examples of _______ affecting the types of products purchased and the choice of stores in which they are bought. They reflect the reasons consumers use when making a purchase.

motives

Sherwin Williams Company utilizes a sophisticated and mathematical approach to forecasting sales. They first utilize historical sales data incorporating a 10-year history of sales for each product category such as different brands of paint and supplies—brushes, ladders, tarps, and so on. Its sales forecasting manager uses Excel to perform _______ where sales is the dependent variable and a variety of other factors such as company size, annual purchases, and number of years as a customer are the independent variables. The sales forecasting manager is then able to identify the relationship between the independent variables and the dependent variables to determine an accurate sales forecast.

regression analysis

When marketing managers look for a relationship between past sales and one or more independent variables, such as population, per capita income, or gross domestic product, they are engaging in _______.

regression analysis

Ford Motor Company expects to spend $10 million to market the Ford F150 truck and expects to sell 75,000 units annually. These 75,000 units represent Ford's _______.

sales forecast

Guess? will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's _______.

sales forecast

The _______ is defined as the amount of product a company expects to sell during a specific period at a specified level of marketing activities.

sales forecast

Ethnicity, city size, benefit expectations, brand loyalty, and personality attributes are all examples of common _______ variables used to divide a market into segments.

segmentation

The first of two major components of developing a marketing strategy is to _______.

select a target market

The final step in the target market selection process is to select specific target markets. When making decisions about which segments to select, a marketing manager should _______.

select segments which provide significant opportunities to achieve organizational objectives

Meghan would like to open a house cleaning business and is considering several market segments. She has identified four segments for consideration; young urban singles, young married professionals, senior citizens, and college students. She has just completed an analysis of these four segments by assessing such factors as sales estimates, competition, and estimated costs. Meghan is now ready for the next step in the target market selection process, which is to _______.

select specific target markets

In general, an individual who is under 16 years of age and does not work full-time would NOT be considered part of the target market for photocopier machines because _______.

they would not have the ability to purchase the product

Canon Business Systems specializes in office automation services, photocopiers, and printers and employs a large number of sales representatives to market its products. Typically, sales representatives are provided with a territory and become specialists according to the type of customer most appropriate to them. Canon divides its market into categories including professional services (accountants, lawyers, and consultants), health care (hospitals, physician offices, and dentists), K-12 education, higher education, corporate, and governmental. Canon is utilizing _______ segmentation for its business markets.

type of organization

A large proportion of customers in the total market must be homogeneous in order to effectively use a(n) _______.

undifferentiated strategy