Chapter 8 Segmenting and Targeting Markets Study Guide

Fisher-Price developed a line of toys for infants in China. Babies make up the market for these products.
Fisher-Price is identifying Asian markets that are interested in their line of talking toys. Fisher-Price is engaged in the process of market segmentation.
Until the 1990s, few firms practiced market segmentation.
A market segment is deemed to have substantiality if it contains a large number of potential customers.
A segmentation plan must produce segments that exhibit responsiveness, which means all segments response similarly to a marketing mix.
Geography, psychographics, and benefits sought are examples of possible segmentation variables used by marketers.
U.S. paint manufacturers traditionally use different formulae for developing paint to be used in the humid Southeast, the frigid Midwest, and the hot and dry Southwest. This is an example of how demographic segmentation is used.
A market segmentation study done by the University of Thessaly in Greece classified recreational skiers in terms of their gender, age, and educational levels. The study used psychographic segmentation variables.
Clearing Skies Press published a book by Robert Ruark entitled Keeping the Baby Alive Till Your Wife Gets Home. It is an advice book for new fathers. The market for this books is based on demographics.
The Hispanic American market is best treated as a single segment.
With respect to stage in the family life cycle, research has found that the overriding factor in describing subsegments is the presence of children in the house.
In market segmentation, individual psychographic variables can be combined with other variables to provide more detailed descriptions of market segments.
Geodemographic segmentation combines geographic, demographic, and lifestyle segmentations.
The slogan used by GlaxoSmithKline, “Disease has no greater enemy” indicates the pharmaceutical company relies heavily on benefit segmentation variables.
Clorox describes individuals who buy lots of cleaning products as heavy users. This is an example of how companies use benefit segmentation.
The 80/20 principle implies that the majority of all demand is due to a minority of the customers.
The business market consists of four broad segments: producers, resellers, governments, and regions.
Company characteristics, such as geographic location, type of company, company size, and product use, can be important segmentation variables.
While it is important to understand potential business customers’ buying processes, this is not a helpful segmentation basis.
The first step in segmenting a market is to choose a basis or bases for segmenting the markets.
One reason marketers use market segmentation as a tool is that once completed, the process need not be repeated.
Dakin Farms in Vermont uses mass marketing. Marketers would call the strategy an undifferentiated targeting strategy.
Niche marketing is a form of concentrated targeting.
Procter & Gamble markets six different brands of laundry detergent, such as Tide, ERA, Gain, and Dreft, each targeting a different market segment. This is an example of concentrated targeting.
Increasing share of customer means getting more customers.
Marketers are realizing that the “one-size-fits-all” approach to marketing is still relevant.
A product’s position refers to where it is located on store shelves.
Product differentiation is a positioning strategy.
A product’s positioning could be based on product users.
Consumers’ perceptions regarding a product’s position cannot be changed.
A _____ is a group of people or organizations that has wants and needs that can be satisfied by particular product categories, has the ability to purchase these products, and is willing to exchange resources for the products.
a. firm
b. buyer
c. market
d. consumer
e. target
A market is people or organizations that have:
a. the ability, willingness, and power to buy
b. a medium of exchange and products they desire
c. needs and wants and an ability and willingness to buy
d. unmet needs or wants and products or services that satisfy those unmet needs or wants
e. communication, financial, and capital resources
A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have relatively similar product needs.
a. market universe
b. market segment
c. aggregated market
d. segmentation base
e. population sample
_____ is the process of dividing a market into meaningful groups that are relatively similar and identifiable.
a. Perceptual mapping
b. Positioning
c. Micromarketing
d. Market sampling
e. Market segmentation
The purpose of market segmentation is to:
a. reduce the market down to a specific size that the firm can handle
b. divide the market into equal size and profit regions for sales territories
c. group a large number of markets together enabling a company to serve them simultaneously
d. develop a generalized definition of the market as a whole
e. enable the marketer to tailor marketing mixes to meet the needs of one or more specific groups
The process of market segmentation involves breaking down a heterogeneous market into homogeneous and identifiable segments. If this process is carried to its extreme, then one could say that:
a. this is the reason segmentation cannot be used by small firms
b. all individuals have the same needs in spite of cultural differences
c. everyone belongs to the same segment
d. segmentation controls the demand for products
e. every individual in the world is a market segment
Market segmentation can assist marketers to do all of the following EXCEPT:
a. develop more precise definitions of customer needs and wants
b. identify which variable base should be used for segmenting
c. more accurately define marketing objectives
d. improve resource allocation
e. evaluate performance
All of the following are criteria for successful market segmentation EXCEPT:
a. substantiality
b. identifiability and measurability
c. accountability
d. accessibility
e. responsiveness
To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria are:
a. segmentable, targetable, reliable and valid, and homogeneous
b. tangibility, inseparable, nonperishable, and unique
c. substantiality, identifiability and measurability, accessibility, and responsiveness
d. reliability, flexibility, tangibility, and unbiased
e. complexity, compatability, relative advantage, trialability, and observability
A manufacturer of lenses used in microscopes, binoculars, and telescopes has segmented its market into scientific equipment manufacturers, sporting equipment manufacturers, and retailers who sell replacement lenses. In order for this segmentation scheme to be successful, all of the following criteria must be met EXCEPT:
a. substantiality
b. accessibility
c. identifiability and measurability
d. complexity
e. responsiveness
According to the criterion of _____ a selected segment must be large enough to warrant developing and maintaining a special marketing mix. Serving the specific needs of this segment must be commercially viable, even if the number of potential customers is small.
a. causality
b. accountability
c. responsiveness
d. accessibility
e. substantiality
Which criterion of useable market segments means the firm must be able to reach members of targeted segments with customized marketing mixes?
a. substantiality
b. identifiability and measurability
c. accessibility
d. Responsiveness
The requirement for a market segment to be responsive means:
a. over half of the consumers in the identified segment will be actively interested in the product
b. all the segments identified by a marketer should respond to the marketing mix
c. all the segments identified by a marketer should not respond to the marketing mix
d. the segments identified by a marketer should not differ in the level of their responsiveness to the marketing mix
e. the segment identified by a marketer should differ in how it responds to the marketing mix when compared to another segment confronted with the same mix
If a market segment is especially motivated by coupons in newspapers, which segmentation success criterion is most influential in the success of this program?
a. responsiveness
b. identifiability and measurability
c. substantiality
d. accessibility
e. functionality
A health club has a new fitness program for expectant mothers. After fliers were placed at the offices of area obstetricians, classes filled up within two days. Which segmentation success criterion was most influential in the success of this promotion?
a. substantiality
b. identifiability
c. measurability
d. causality
e. responsiveness
_____ are characteristics of individuals, groups, or organizations that marketers use to divide a total market into segments.
a. Differentiation guides
b. Segmentation bases
c. Perceptual maps
d. Responsiveness quotients
e. Accessibility quotients
Consumers in Louisiana love hot sauce, and Tabasco and Crystal brands are particularly popular there. Consumers in Michigan do not like hot food, so they purchase very little hot sauce. A national chain of grocery stores would likely use _____ segmentation when stocking condiment merchandise.
a. geographic
b. economic
c. demographic
d. benefit
e. geodemographic
_____ is the segmenting of markets based on the region of the country or the world, market size, market density (number of people within a certain unit of land), or climate.
a. Community segmentation
b. Geographic segmentation
c. Geodemographic segmentation
d. PRIZM segmentation
e. Demonstratable regionalization
A manufacturer of blankets knows heavy 100 percent wool blankets sell better in the New England area where the winters are harsh and that lighter-weight blankets sell better in the Southeast market where mild winters require fewer and lighter covers for the bed. Segmenting the market according to climate is an example of _____ segmentation.
a. psychographic
b. lifestyle
c. perceptual
d. demographic
e. geographic
The Coca-Cola Company has over 450 brands in over 195 countries. According to their web site, their products range from Samurai, an energy drink available in Asia to Vita, an African juice drink. It uses _____ segmentation in this marketing strategy.
a. geographic
b. economic
c. demographic
d. usage-rate
e. multi-positioning
All of the following statements are reasons why consumer goods companies take a regional approach to marketing rather than a national approach EXCEPT:
a. Many firms need to find new ways to generate sales because of sluggish and intensely competitive markets.
b. A regional approach gives marketing managers control over the competitive environment.
c. Computerized checkout stations with scanners enable retailers to assess accurately which brands sell the best in each region.
d. Many packaged goods manufacturers are introducing new regional brands intended to appeal to local preferences.
e. A more regional approach allows companies to react more quickly to competition.
Marketers use _____ to segment markets because this information is widely available, and factors such as age or gender are often related to consumer purchasing and consumption behavior.
a. benefits
b. psychographics
c. demographics
d. usage rates
e. sociocultural attributes
Income, ethnic background, gender, and age are all examples of _____ segmentation bases.
a. geodemographic
b. organizational
c. demographic
d. socioeconomic
e. psychographic
In Miami, several radio stations broadcast in Spanish and play Latin music for the Hispanic people living in South Florida. The radio stations are using _____ segmentation.
a. usage rate
b. ethnic
c. socioeconomic
d. geographic
e. Gender
Modern Bride is a publication that contains articles and lots of ads for the bride-to-be. Many young women consult this magazine as they plan their special day. The segmentation base used to define the publication’s target market is based on _____ variables.
a. geodemographic
b. geographic
c. family life-cycle
d. lifestyle
e. psychographic
A series of stages determined by a combination of age, marital status, and the presence or absence of children is known as the:
a. generation gap
b. family life cycle
c. maturation process
d. segmentation cycle
e. psychographic process
Evenflo makes baby-gates to keep toddlers off stairs. What demographic segmentation variable will Evenflo use to identify its target market?
a. gender
b. benefit
c. usage rate
d. family life cycle
e. ethnic
Which of the following businesses would be most likely to use family life-cycle segmentation?
a. businesses that produce and market computer software and hardware
b. the snack industry
c. fast-food restaurants
d. business-to-business marketers
e. wedding planners, couples-only resorts, and day-care centers
_____ segmentation is based on personality, motives, and lifestyle.
a. Psychographic
b. Demographic
c. Benefit
d. Family life cycle
e. Character
_____ divides individuals into groups according to the way they spend their time, the importance of items in their surroundings, their beliefs, and socioeconomic characteristics.
a. Life-cycle segmentation
b. Temporal segmentation
c. Lifestyle segmentation
d. Microsegmentation
e. Macrosegmentation
_____ is a method that clusters potential customers into neighborhood lifestyle categories and is a combination of geographic, demographic, and lifestyle segmentation.
a. Geodemographic segmentation
b. Microsegmentation
c. Sociocultural clustering
d. Acculturation
e. Lifestyle segmentation
_____ is the process of grouping customers into market segments according to what is sought from the product.
a. Benefit segmentation
b. Value-added segmentation
c. Lifestyle segmentation
d. Macrosegmentation
e. Psychographic segmentation
Heavenly Ham is a ham and sandwich store that stresses in its advertisements that customers should choose them “when taste matters.” Heavenly Ham uses _____ segmentation.
a. geographic
b. demographic
c. psychographic
d. benefit
e. usage rate
There are many furniture manufacturers. Tall Paul’s is the only one that makes furniture to meet the needs of people who are over 6’6″ tall. These people find furniture designed for average-sized people to be cramped and uncomfortable. Tall Paul’s uses _____ segmentation.
a. geodemographic
b. usage rate
c. demographic
d. psychographic
e. benefit
Private Ears are earphones that a person with limited hearing can use to hear the television without turning the volume up full blast. That way, other family members with normal hearing can watch the television at the appropriate volume for them. Private Ears is using _____ segmentation.
a. usage-rate
b. demographic
c. geodemographic
d. competitive
e. benefit
Which type of segmentation divides a market by the amount of product bought or consumed?
a. benefit segmentation
b. characteristic segmentation
c. usage-rate segmentation
d. demographic segmentation
e. psychographic segmentation
What does the 80/20 principle propose?
a. Roughly 80 percent of the profit comes from 20 percent of the sales.
b. Roughly 80 percent of a firm’s customers are repeat business.
c. Roughly 50 percent of a firm’s customers purchase 80 percent of the sales volume of the product.
d. Roughly 20 percent of a firm’s customers purchase 80 percent of the sales volume of the product.
e. Sales are equally divided among heavy, medium, and light users, but they all need slightly different products.
The _____ proposes that a minority of a firm’s customers purchase a majority of the volume of the product.
a. majority fallacy
b. equity fallacy
c. 80/20 principle
d. cannibalization rule
e. optimizer principle
Business marketers focus on all of the following market segments EXCEPT:
a. institutions
b. producers
c. households
d. resellers
e. governments
What is the first step in segmenting a market?
a. set the segmentation goals
b. choose a basis or bases for segmenting the market
c. select a market or product category for study
d. profile and analyze segments
e. select target markets
All of the following are steps in the market segmenting process EXCEPT:
a. determine the objectives of the segmentation strategy
b. profile and analyze segments
c. design, implement, and maintain appropriate marketing mixes
d. select a market or product category for study
e. choose a basis or bases for segmenting the market
Market segmentation:
a. is a scientific technique for selecting ways to attract specific population samples
b. is rarely done by consumer products companies
c. only needs to be done once for each product
d. should be redone periodically
e. should be done every time a product enters a new stage of its life cycle
A(n) _____ is a group of people or organizations for whom an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
a. heterogeneous segment
b. target market
c. responsive segment
d. aggregated market
e. undifferentiated target
The debate over gay marriages is causing a great deal of furor, but it has done little to deplete the importance of the affluent gay market to businesses. Georgia Pacific and Mitchell Gold, a furniture manufacturer, are two companies that have implemented and maintained marketing mixes designed to meet the needs of lesbians and gays. To these companies and others, lesbians and gays are a desirable:
a. market sample
b. target market
c. perceived market
d. functional market
e. market base
Sure Fit, Inc. has begun a rebranding strategy to let customers know it no longer only produces slipcovers, but now also carries a line of rugs, window treatments, and bedding. Its _____ is described as women with average annual household income of $60,000 or more.
a. market audience
b. market differentiation
c. perceived market
d. target market
e. aggregated market
Which target marketing strategy views the market as one big market with no individual segments and thus uses a single marketing mix?
a. undifferentiated
b. concentrated
c. niche
d. uniform
e. multisegmented
When Henry Ford first made the model T, he said consumers “can have any color they want as long as it is black.” This was a case of _____.
a. repositioning
b. reengineering
c. one-to-one marketing
d. undifferentiated targeting
e. niche marketing
A(n) _____ strategy entails selecting one segment of a market to target, and focuses on understanding the needs, motives, and satisfactions of the members of that segment, as well as on developing a highly specialized marketing mix.
a. universal product
b. undifferentiated targeting
c. concentrated targeting
d. market development
e. product development
All of the following are advantages of using a concentrated targeting strategy EXCEPT:
a. concentration of resources
b. can better meet the needs of a narrowly defined segment
c. allows some small firms to better compete with larger firms
d. strong positioning
e. high cannibalization
When a firm uses a concentrated targeting strategy, it can:
a. view the total market as receptive to its product
b. offer a highly specialized marketing mix
c. reach customers in two or more segments that might otherwise be missed
d. avoid the danger of putting all resources in one micromarket
e. concentrate on one generalized product to fit the mass market, maximizing sales volume
E&V Bridal Studios, a wedding consulting business, only works with Eastern Asian customers who want to use their cultural heritage in their wedding ceremonies. What type of segmentation strategy does the wedding consultant use?
a. market aggregation
b. undifferentiated targeting
c. multisegment marketing
d. concentrated targeting
e. limited demand
Companies that adopt a concentrated marketing strategy violate which of the following old sayings?
a. You can’t bake a pie without breaking some eggs.
b. Don’t count your chickens before they hatch.
c. Don’t put all of your eggs in one basket.
d. The grass is always greener on the other side of the fence.
e. A rolling stone gathers no moss.
When a firm serves two or more well-defined market segments with a distinct marketing mix for each, it is using a(n) _____ targeting strategy.
a. undifferentiated
b. concentrated
c. niche
d. multisegment
e. pluralistic
A potential disadvantage of multisegment targeting is _____, which occurs when sales of a new product cut into sales of a firm’s existing products.
a. cannibalization
b. synergy
c. positioning
d. demarketing
e. inelastic demand
_____ is one of the potential disadvantages associated with a multisegment strategy.
a. Inadequate demand
b. Demarketing
c. Lower profits
d. Cannibalization
e. Loss of synergy
Clorox saw sales of its bleach products suffer when it introduced laundry detergents with bleach as an added ingredient. This is an example of:
a. demarketing
b. cannibalization
c. undifferentiation
d. repositioning
e. perceptual confusion
An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer is referred to as:
a. 80/20 marketing
b. interpersonal marketing
c. zoned marketing
d. one-to-one marketing
e. individual marketing
Increasing share of customer means:
a. selling more products to each customer
b. increasing the number of customers
c. winning market share from competitors
d. the sales due to a customer relative to the costs of attaining and retaining that customer
e. individual customer revenue minus costs to satisfy that customer
The basic goal of one-to-one marketing is to:
a. increase the market for the product category to new and current customers
b. eliminate the use of mass media for promotion and locate a direct communications channel
c. increase operating costs and locate new customers
d. reduce the number of company employees and increase overall sales
e. reduce costs through customer retention and increase revenue through customer loyalty
The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings is referred to as a product’s:
a. status
b. equity
c. frame
d. role
e. position
Which of the following is a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds?
a. perceptual mapping
b. product positioning
c. market segmentation
d. product tracing
e. laddering
A (n) _____ could help determine whether or not snacking consumers consider Kashi Tasty Little Crackers healthy and tasty in comparison to other brands..
a. predictive modeling
b. perceptual map
c. product positioning
d. trend analysis
e. internal marketing audit
The closer together two brands are on a perceptual map the:
a. less perceptually alike they are
b. closer their prices are
c. more objectively alike they are
d. more likely an undifferentiated marketing strategy is in effect
e. more similarly perceived by consumers they are
All of the following are typical bases for positioning EXCEPT:
a. attribute
b. price and quality
c. distribution
d. emotion
e. product user
In 2008, Apple, Inc. introduced Mobile Me, which keeps everything on a consumer’s Mac, PC, iPod or iPhone on an online server Apple calls the “Cloud” so that it can be accessed at any time. Apple is catering to on-the-go consumers who use multiple platforms. This positioning strategy is based on the _____.
a. product class
b. price and quality
c. use or application
d. product user
e. competitor
To be successful, most businesses focus on customer service. However, the cable industry has a history of poor customer service. Cable companies are facing competition for TV customers who once had no choice but cable if they wanted to see more than local programs. In the face of this competition from direct broadcast satellites, cable companies are trying to use a _____ strategy to show that they have become customer-oriented.
a. segmentation
b. product differentiation
c. targeting
d. repositioning
e. demarketing