Chapter 6 Questions

STP stands for segmentation, targeting, and positioning.
TRUE
Occupation segmentation is very closely related to income segmentation, although the two are not perfectly correlated.
TRUE
For many marketing managers, segmentation by benefit sought is the best place to start the process of market segmentation.
TRUE
One of the easiest, most straightforward methods of segmentation is demographic.
TRUE
In general, B2B segmentation is more straightforward than B2C segmentation.
TRUE
ChristianMingle, the Christian online dating service, uses an undifferentiated target marketing approach.
FALSE
If a firm chooses more than one segment to attack, it should approach them sequentially, not all at the same time.
FALSE
A niche strategy is the same as Porter’s focus strategy or concentrated target marketing.
TRUE
Generation Y, people born between 1965 and 1977, tend to be pragmatic, optimistic, good team players, savvy, and edgy in nature.
TRUE
The largest generation is the Millennial Generation. Members of this group were born after 1994 and are characterized by being heavily Hispanic, African-American, and Asian.
FALSE
Family life cycle has declined in importance as a technique to segment the market as a result of so many people living in untraditional families.
TRUE
CRM software is best selected for purchase by the Information Technology department since the “techies” will need to maintain it and better understand the required functions.
FALSE
It is possible today to calculate the total financial return for each customer that we expected to be earned over the length of the customer relationship.
TRUE
Customer satisfaction and customer loyalty, two metrics used by brand managers, are metrics used in CRM.
TRUE
A company that uses positioning often uses a price-quality perceptual map to show where it is positioned versus the competition. This helps it understand if it needs to either change pricing strategy or quality standards.
TRUE
When a company decides its positioning strategy, it is impossible to overposition it against competition.
FALSE
McDonald’s fell victim to confused positioning with too many new products in the 1990s so that customers lost track of what the core brand was.
TRUE
Dell customers were eager to grab its new products such as TVs.
FALSE
Marketing planning is the first phase of the CRM process cycle.
FALSE
The sequential steps to successful segmentation are _________________.

A. Positioning, targeting, and segmenting

B. Research, fulfillment analysis, and churn rate

C. Segmenting, targeting, and positioning

D. Need identification, qualitative research, and positioning

E. Consumer analysis, content analysis, and segmenting

C. Segmenting, targeting, and positioning
Segmenting means _________.

A. Identifying the market into meaningful smaller markets based upon common characteristics

B. Selecting the markets to attack in the marketplace

C. Selecting a corporate position to communicate to potential customers

D. Identifying and calculating the churn rate in different markets

E. None of these

A. Identifying the market into meaningful smaller markets based upon common characteristics
Target marketing is the process by which __________.

A. The market is divided into cohesive groups

B. The company evaluates segments and decides which ones have the most potential for development

C. The company chooses which advertising strategy to use

D. Groups are evaluated on the basis of high or low churn to see which is the most profitable

E. The company collects cookies to track everyone who visits its website

B. The company evaluates segments and decides which ones have the most potential for development
Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between ________.

A. The cost of the product and the quality

B. The way the 4Ps work with one another

C. The customer’s needs and wants and what the product has to offer

D. The product and advertising

E. The salesperson and the customer at a personal level

C. The customer’s needs and wants and what the product has to offer
Having a product whose value proposition is a well-kept secret ________.

A. Is a good idea

B. Is not a good thing in marketing

C. Is a concept that uses subliminal messages

D. Is a superior concept used in targeting

E. Is a well-accepted idea in market segmentation

B. Is not a good thing in marketing
Differentiation is a concept that means _______.

A. Consumers like a variety of things

B. Each age segment views products exactly the same

C. Products need to appear to be different from one another to be successful in the marketplace

D. Communicating and delivering value in different ways to different customer groups

E. All of these

D. Communicating and delivering value in different ways to different customer groups
When Walter, the brand manager for a consumer packaged good, says that a segment has sufficient size, he means _________.

A. The market has a large enough television audience to be worth considering

B. The market is reachable

C. The market has an expected return on investment that is positive

D. The market has many customers in it

E. The market is homogeneous

C. The market has an expected return on investment that is positive
There are conditions necessary that a market needs to be able to segment properly. The item below that is not necessary is _______.

A. Market has to be measurable

B. Market has to be bigger than 10,000 people

C. Market has to be responsive to communications

D. Market has to be reachable via supply chain

E. Market has to be reachable with communications

B. Market has to be bigger than 10,000 people
When it is said that a market can be reached, it means that _______.

A. The market can be reached by transportation

B. The market can be reached by language

C. The market can be reached by technology

D. The market can be reached by communication

E. All of these

E. All of these
Approaches to geographic segmentation include all except _____.

A. Region

B. Density of population

C. Size of population

D. Sensitivity of population

E. Climate

D. Sensitivity of population
Some companies, like insurance and credit card, would like to target recent high school graduates as a segment but find them hard to capture. This is an example of a market lacking one of the criteria for segmentation called _______.

A. Reachable—the ability to reach the segment in terms of communication

B. Responsiveness—the feeling that the market will buy more if targeted

C. Sufficient size—the size of the market is large enough to be worth considering

D. Measurable—information can be obtained about the market

E. None of these

A. Reachable—the ability to reach the segment in terms of communication
The region, the density of the population, and the size of the population are terms for techniques to use in ________.

A. Positioning

B. Differentiation

C. Democratic segmentation

D. Population parameter estimation

E. Geographic segmentation

E. Geographic segmentation
The concept of being able to get either secondary and/or primary data on a market being considered for segmentation means _______.

A. Differentiation

B. Targeting

C. The market is accessible to media

D. The market is readily identifiable and can be measured

E. The market is primed to be attacked by media

D. The market is readily identifiable and can be measured
Marketers use geographic segmentation because ____________________.

A. People are different based on where they live

B. Geography determines one’s likes and dislikes

C. Consumers respond differently to marketing strategies and programs based on where they live

D. The East Coast, West Coast, and Midwest are the most important market segments based on size

E. It is the most important way to segment markets

C. Consumers respond differently to marketing strategies and programs based on where they live
When Target sells winter coats, it sends them to stores at different times of the year. This is an example of _______.

A. Demographic segmentation

B. Climate segmentation

C. Geographic biases

D. Lack of winter in the South

E. Climate change

B. Climate segmentation
Geographic segmentation is a useful but ________

A. Necessary criterion in all segmentation schemes

B. Insufficient criterion in and of itself

C. Overlooked method by many marketers

D. Unnecessary method in P2P marketing

E. All of these

B. Insufficient criterion in and of itself
Demographic segmentation is one of the most popular segmentation approaches because _________.

A. It is readily measurable

B. Customer needs and wants tend to vary with some degree of regularity based on demographic differences

C. It uses the easily identifiable characteristics of human populations such as age or income

D. It is easy to measure the variables like age or income

E. All of these

D. It is easy to measure the variables like age or income
Age is a commonly used method of segmentation. Age alone, however, may be dangerous because _________.

A. Lumping older or younger customers together in one group may not truly reflect the market

B. Family life cycle may be a better method

C. Sometimes marketers miss a less-than-obvious segment based on assumptions instead of research

D. Chronological age and attitudinal age may be different

E. All of these

A. Lumping older or younger customers together in one group may not truly reflect the market
Demographic segmentation is best described as _______.

A. Using characteristics of human populations to segment the market

B. Using characteristics of geography to segment the market

C. Using characteristics of lifestyle to segment the market

D. Using characteristics of virtual communities to segment the market

E. All of these

A. Using characteristics of human populations to segment the market
An advergame is a video game that _______.

A. Has an advertiser inserted into the game

B. Has sponsors of the game on the cover of the game but not in the game itself

C. Has been specifically designed to promote a brand

D. Has been advertised on television with good results

E. None of these

C. Has been specifically designed to promote a brand
Sociologists look for defining events such as wars, major economic upheaval, and social cultural revolution to create _________.

A. Social movements

B. Marketing opportunities

C. Generational groups for segmentation purposes

D. New product ideas

E. None of these

C. Generational groups for segmentation purposes
Baby boomers represent a huge segment of the population. There is some evidence that they, in their own minds, do not think they age. This is an example of _______.

A. Lack of aging

B. Age discrimination

C. Ethical dilemmas in segmentation through the calling of baby boomers older

D. Difference between chronological age and attitudinal age

E. Aging diagnostics of different groups of people

D. Difference between chronological age and attitudinal age
Among the generations used for segmentation, one stands out as the largest and most affluent of all the generations. This generation is known as ______.

A. Millennial generation

B. Generation X

C. Generation Y

D. Lost generation

E. Baby boomer generation

E. Baby boomer generation
Generation X is often referred to as the ________.

A. Spoiled generation

B. Nonconsumption generation

C. Millennial generation

D. Baby bust generation

E. None of these

D. Baby bust generation
Serenity was born in 1970. Her parents met at the famous Woodstock music festival. She is a member of _____________.

A. The baby boomer generation

B. The GI generation

C. The silent generation

D. Generation X

E. the Millennial generation

D. Generation X
Apple Cora Anderson was born in 2001. She is a member of __________.

A. The baby boomer generation

B. The GI generation

C. The silent generation

D. Generation X

E. The Millennial generation or Generation Z

E. The Millennial generation or Generation Z
___________ would not be a good product for using gender segmentation.

A. Underwear

B. Perfume

C. Toothpaste

D. Cigars

E. Pregnancy tests

C. Toothpaste
The ____________ race and ethnicity market segment is not growing at a fast rate.

A. African-American

B. Hispanic

C. Asian-American

D. Caucasian

E. Catholic

A. African-American
Family life cycle segmentation factors include all but ____________.

A. Income

B. Age

C. Marital status

D. Number of children

E. Cohabitation

A. Income
At one time, specialized companies catered to markets segmented by race. Today ______.

A. The segments are indistinguishable

B. The segments have declined in size

C. The segments have become targets of mainstream businesses that offer specialized products

D. The segments all buy the same products

E. The segments lack differentiation

C. The segments have become targets of mainstream businesses that offer specialized products
The razor is an example of a product that appeals to both men and women but reveals that ___________.

A. The same product class cannot be used to attack different gender markets

B. By slightly altering a product you can attack different gender markets

C. There are different needs and wants for the same product category based on gender

D. Women are always different than men

E. Both by slightly altering a product you can attack different gender markets and there are different needs and wants for the same product category based on gender

C. There are different needs and wants for the same product category based on gender
_____________ are the largest minority group with a total population of ______.

A. Hispanics, 50 million

B. African-Americans, 60 million

C. Hispanics, 28 million

D. Asians, 40 million

E. African-Americans, 50 million

A. Hispanics, 50 million
Most Asians in the United States live in __________________.

A. New York state

B. Oregon

C. California

D. Washington state

E. Washington, D.C.

C. California
Most Hispanics in the United States live in __________________.

A. New York state

B. Texas

C. California

D. Washington state

E. Washington, D.C.

C. California
______________ have a minority-majority population.

A. Georgia, Florida, Texas, New York, and Louisiana

B. Hawaii, District of Columbia, California, New Mexico, and Texas

C. California, Florida, Texas, District of Columbia, and New York

D. California, Texas, Alabama, Rhode Island, and Alaska

E. Vermont, North Carolina, Illinois, Montana, and Washington state

B. Hawaii, District of Columbia, California, New Mexico, and Texas
Income segmentation is a commonly used segmentation technique. It has some problems, however, such as ___________.

A. It is difficult to collect quality marketing research on income due to people purposely misstating or refusing to reveal their income

B. It is too simple to use

C. It correlates with occupation so it is difficult to know which is better

D. It is time-consuming to study consumers’ buying habits based on their income

E. None of these

A. It is difficult to collect quality marketing research on income due to people purposely misstating or refusing to reveal their income
There are many variables in demographic segmentation, but _____________ is the most accurate statement about demographic segmentation.

A. Income, education, and occupation are very closely correlated

B. Income is the most important variable to know about someone

C. Age is usually not a factor in segmentation

D. The youth culture is the most important segmentation variable

E. It is easy to segment the middle strata using social class segmentation

A. Income, education, and occupation are very closely correlated
Occupational segmentation recognizes that _________.

A. Workplace peers are a strong reference group that influence purchasing decisions

B. What kind of products you buy may be related to the kind of job you have

C. The Bureau of Census gives you good ideas on occupational segments

D. There may be needs and wants demonstrated by consumers based on the job they have

E. All of these.

E. All of these.
Offering credit cards to high school seniors is an example of ________ segmentation.

A. Income

B. Occupation

C. Education

D. Lifestyle

E. All of these

C. Education
Social class as a segmentation tool takes into account _______.

A. Income

B. Education

C. Occupation

D. None of these

E. A, B, and C

E. A, B, and C
Social class has declined as a method of segmentation as a result of ______.

A. Higher education rates in the United States

B. Readily available credit flattening the classes

C. The increase in minority consumers

D. Stores appealing to everyone

E. None of these

B. Readily available credit flattening the classes
Every zip code in the United States falls into profiles provided by Nielsen’s Claritas in its database called _________.

A. GEO-FIX

B. PRIZM

C. AIO

D. VALS

E. Psychovision

B. PRIZM
A marketing manager using PRIZM is interested in ____________ segmentation.

A. Geographic

B. Psychographic

C. Geodemographic

D. Occasion

E. Benefits sought

C. Geodemographic
A marketing manager using VALS is interested in ____________ segmentation.

A. Geographic

B. Psychographic

C. Geodemographic

D. Occasion

E. Benefits sought

B. Psychographic
AIOs are one way to measure consumer variables using the psychographic segmentation approach. AIO stands for _______.

A. Attraction, intellect, and opinions

B. Activities, interests, and opinions

C. Attention, interests, and offerings

D. Activities, intellect, and offerings

E. Advertising, innovation, and occupation

B. Activities, interests, and opinions
VALS, a form of segmentation based on values and lifestyles, allows marketers to _________.

A. Better communicate with consumers

B. Understand consumers’ level of resources and motivation

C. Connect to consumers either with their ideals, achievement, or self-expression

D. View eight groups of consumers

E. All of these

E. All of these
The benefit sought method of segmentation focuses on ______.

A. The different benefits consumers seek

B. The product features

C. The service offerings

D. The positioning of the benefits

E. The location of the store

A. The different benefits consumers seek
Ads with messages like “Orange juice—It’s not just for breakfast anymore!” or “Soup can be a delicious way to start a cold winter’s day” are using _______ segmentation.

A. Benefits sought

B. Lifestyle

C. Psychographic

D. Usage

E. Geographic

D. Usage
_______ segmentation focuses on why people buy what they buy.

A. Benefits sought

B. Usage rate

C. Demographic

D. Social class

E. Occasion

A. Benefits sought
In analyzing the attractiveness of market segments, ____________ is not one of the most important variables.

A. Segment size

B. Segment potential

C. Strategic fit with the firm’s goals

D. Location of the segment

E. Competitive forces related to the segment

D. Location of the segment
Primary markets differ from secondary and tertiary markets by _______.

A. The expected level of ROI derived from the market

B. The difficulty of attacking the market

C. The consumers’ ability to buy multiple units

D. The advertising effort needed for the market

E. All of these

A. The expected level of ROI derived from the market
Companies sometimes pick a one-market strategy. This segmentation approach is called ________.

A. Mass approach

B. Undifferentiated target marketing

C. Differentiated strategy

D. Low-cost approach

E. Efficiency marketing

B. Undifferentiated target marketing
Differentiated target marketing means ______.

A. Different prices to different markets

B. The same value offering to every market segment

C. Different value offerings for different target markets

D. Using the push and pull strategy to differentiate markets

E. None of these

C. Different value offerings for different target markets
Concentrated target marketing is often used by ________.

A. Large companies to dominate a market

B. Start-up firms to enter a market as a focus player

C. All firms

D. Virtual firms that use Internet marketing

E. Michael Porter in a consulting capacity

B. Start-up firms to enter a market as a focus player
Firms that develop such close relationships with customers that they seem to deliver customized goods and services are engaged in ____________ marketing.

A. Concentrated target marketing

B. One-to-one marketing

C. Differentiated marketing

D. Undifferentiated marketing

E. Shotgun marketing

B. One-to-one marketing
Positioning is not what the company does to the product but what the company does to ______________________.

A. The mind of the customer

B. The supply chain

C. The competition

D. Advertising

E. Sales promotion

A. The mind of the customer
Positioning strategy is a process that often starts with ______.

A. Focus groups

B. Surveys of customers

C. Perceptual maps

D. Panel research data

E. None of these

A. Focus groups
Companies often try to draw the attributes necessary to position a firm. The process of drawing two attributes at a time to visualize the market is called ________.

A. Virtual mapping

B. Perception training

C. Visual mapping

D. Perceptual mapping

E. Flow charting

D. Perceptual mapping
Firms considering their positioning statements frequently use perceptual maps. The simplest of these maps rank the firm on ____________ dimensions.

A. One

B. Two

C. Three

D. Four

E. Five

B. Two
Differentiation strategy implies that a company is able to compete on a basis that is ________.

A. The same as competition

B. Unique and where customers are willing to pay a premium

C. A leadership price position

D. Driven by customer contact

E. Derived product demand

B. Unique and where customers are willing to pay a premium
A personnel leadership position implies that a company ________.

A. Has employees who are more talented than the competition

B. Has the lowest-cost employees

C. Has the highest-cost benefit package

D. Has the intent to hire employees already trained

E. Has systems to monitor employee benefits

A. Has employees who are more talented than the competition
When a company tries to make the product or service significantly easier to obtain than the competition, it is employing ______.

A. Service leadership

B. Image leadership

C. Competitive intelligence

D. Perceptual mapping

E. Convenience leadership

E. Convenience leadership
When consumers have too narrow an understanding of the company, brand, or product, it is called ________.

A. Underachieving

B. Overpositioning

C. Underpositioning

D. Perplexing positioning

E. Lack of positioning

B. Overpositioning
When a company has doubtful positioning, consumers view the claims made by the company as ________.

A. Being exaggerated

B. Lacking efficiency

C. Lacking credibility

D. Exceeding performance

E. Lacking performance

C. Lacking credibility
Tiffany’s offers many pieces of jewelry at prices below $200. Many consumers would never enter the store because they think the store’s jewelry costs thousands of dollars. Tiffany’s is suffering from the error of ______.

A. Underpositioning

B. Doubtful positioning

C. Overpositioning

D. Confused positioning

E. No positioning

C. Overpositioning
In the 1970s, Michelob beer changed its advertising messages frequently and saw sales plummet. Slogans like “Weekends were made for Michelob,” “Put a little weekend into your weekday,” and “Special times deserve a special beer” had consumers checking their calendars to find the right time to drink a Mich. Michelob was suffering from _________.

A. Underpostioning

B. Doubtful positioning

C. Overpositioning

D. Confused positioning

E. No positioning

D. Confused positioning
When customers struggle to identify salient points of differentiation between a brand and its competitors, the brand is suffering from _____________________.

A. Underpositioning

B. Doubtful positioning

C. Overpositioning

D. Confused positioning

E. No positioning

A. Underpositioning
CRM stands for _________________.

A. Consumer retention management

B. Customer related metrics

C. Customer relationship management

D. Consumer rights monitor

E. Customer retention management

C. Customer relationship management
CRM is _______________.

A. A software system

B. A business strategy

C. Able to maximize profitability through serving the best customers

D. Customer-centric

E. All of these

E. All of these
Customer loyalty is defined as ______________.

A. Repeat purchases

B. The degree to which an individual will resist switching from one offering to another

C. The level of liking an individual harbors for an offering

D. Customer laziness in trying new products

E. The likelihood that a customer become a buzz marketer

B. The degree to which an individual will resist switching from one offering to another
Customer satisfaction is defined as ________________.

A. The degree to which an individual will resist switching from one offering to another

B. The level of liking an individual harbors for an offering

C. Customer laziness in trying new products

D. The likelihood that a customer become a buzz marketer

E. The number of purchases in a defined period of time

B. The level of liking an individual harbors for an offering
Garrett is moving into retirement and wants to cut his client base in half so he can work part time. In deciding which customers to keep, Garrett should look at the monetary prediction called _______________.

A. Customer longevity spending

B. Total customer spending

C. Total customer gross margin

D. Customer lifetime value

E. Total transaction spending

D. Customer lifetime value
The CRM process cycle may be divided into _____ elements.

A. Four

B. Five

C. Eight

D. Ten

E. Twelve

A. Four
_______________ is the first element in the process cycle for CRM.

A. Analysis and refinement

B. Supplier interface

C. Customer interaction

D. Knowledge discovery

E. Marketing planning

D. Knowledge discovery
_______________ is the second element in the process cycle for CRM.

A. Analysis and refinement

B. Supplier interface

C. Customer interaction

D. Marketing planning

E. Knowledge discovery

D. Marketing planning
_______________ is the third element in the process cycle for CRM.

A. Analysis and refinement

B. Supplier interface

C. Customer interaction

D. Knowledge discovery

E. Marketing planning

C. Customer interaction
_______________ is the fourth element in the process cycle for CRM.

A. Analysis and refinement

B. Supplier interface

C. Marketing planning

D. Knowledge discovery

E. Customer interaction

A. Analysis and refinement