Marketing 3013 Exam 2

global marketing
Individuals and organizations utilizing a global vision to effectively market goods and services across the world are engaged in:
practicing global marketing
Basketball is played nearly everywhere in the world and is an easily understood sport. The National Basketball Association (NBA) finals reached more than 600 million televisions in 195 countries. From this information, you should be able to infer that the NBA is:
vision
Sawyer Components manufactures high-cost, customized roller parts for paper mills and is expanding into China because of the opportunity for significant growth in this developing country. The owner uses effective global strategies and is aware of threats from foreign competitors. This illustrates that the owner has a global:
foreign competitors have not gained significant market share in the United States
All of the following statements about global marketing are true EXCEPT:
a.Marketing to target markets throughout the world has become imperative for business.
b.Often a U.S. firm’s toughest domestic competition comes from foreign companies.
c.Marketing managers must develop a global vision not only to recognize and react to international marketing opportunities but also to remain competitive at home.
d.Adopting a global vision can be lucrative for a company, and global marketing can offset weak domestic performance.
e.Foreign competitors have not gained significant market share in the United States.
adopting a global vision can pay off
H. J. Heinz, the ketchup company, gets over half of its revenue from international sales. This shows that:
gross domestic product
The total market value of all final goods and services produced in a country for a given time period is called:
the United States depends more on international commerce than do any other countries
Which of the following statements about the impact of international business on the U.S. economy is NOT true?
a. The United States exports about 13 percent of its industrial production.
b. More than 10 million Americans hold jobs that are supported by exports.
c. Every U.S. state has realized net employment gains directly attributed to foreign trade.
d. The United States depends more on international commerce than do any other countries.
e. The United States exports over $2.1 trillion in goods and services each year.
causes some people to lose their jobs as production shifts abroad
Many people fear world trade because it:
outsourcing
The primary reason large U.S. companies send U.S. jobs abroad is because labor costs are higher in the United States. They are engaging in:
promotes economic freedom and increases the living standards
globalization:
multinational corporation
A(n) is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries.
multinationals often develop their global businesses in stages.
Which of the following statements about multinational firms is true?
a. Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy.
b. Multinationals are defined as companies heavily engaged in exporting and importing.
c. All multinationals must enter the fourth stage of globalization before they are fully internationalized.
d. Multinationals often develop their global businesses in stages.
e. The five stages of globalization closely mirror the five stages of the product life cycle.
multinational corporation
When European demand for a certain solvent declined, Dow Chemical instructed its German plant to switch to manufacturing a chemical that had been imported from Louisiana and Texas. Dow Chemical would be best described as a(n):
multinational corporation
Apple, Inc. has partnerships with wireless carriers in Japan, Spain, and a handful of other European countries. Apple works with suppliers and retailers worldwide. This means that Apple is a:
multinational corporation
Otis Elevators has entered into a strategic alliance with a company in France from which it gets its elevator door systems. It has a similar agreement with a manufacturer in Japan that provides it with special motor drives. A manufacturer in Spain has worked closely with Otis to create small geared parts necessary for the manufacture of elevators. The component parts are assembled at its plant in the United States. Otis elevators can be found in buildings all over the world. Otis Elevators is an example of a(n):
multinationals sometimes support reactionary and oppressive regimes
The Patton Awning Company produces tents, tarps, awnings, and other canvas products. The firm is in the first stage of creating its global business. This means that Patton Awning Company:
spends more on equipment than on labor
A company that is capital intensive:
global marketing standardization approach
With a , a firm produces standardized products to be sold the same way all over the world.
presumes markets throughout the world are becoming more alike
Global marketing standardization:
global marketing standardization approach
The Victorinox Swiss Army Knife is found all over the world. It is manufactured and marketed similarly to all consumers. Victorinox uses a(n):
multidomestic strategy
When multinational firms enable individual subsidiaries to compete independently in domestic nations, they are engaged in:
its marketing mix
A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:
culture
Central to any society is a common set of values shared by its citizens that determines what is socially acceptable.
Marketers refer to these values collectively as a country’s:
cultural
A soft drink manufacturer thinking of investing in a bottling plant in the Czech Republic should know the nation is proud of the fact it is among the world’s biggest beer drinkers. Czechs consume an average of onehalf liter of beer a day for every man, woman, and child in the country. The environment of this country could very easily prevent the soft drink bottling company from succeeding.
cultural
Muslim countries are receptive to most Disney products, but they have asked Disney not to include Piglet when it sells its Winnie the Pooh characters because Muslims (as a part of their religious beliefs) contend that pork in any form is unclean. This is an example of a ____ factor that directly affects Disney’s global operation.
language
Which of the following is an important cultural factor that should be considered by global marketers?
cultural
American firms should never try to do business in Europe in August because they will find that everyone has gone on vacation. Today, all European countries have laws requiring companies to provide employees with vacations of at least four to five weeks. This would be an important part of the European ____ environment that any multinational firm doing business there needs to be aware of.
cultural
When IKEA, the Swedish home furnishings retailer, first entered the Japanese market, it failed. It was more successful in its second try because it was aware of the need to adapt its furnishings to fit the smaller Japanese homes. The ___ environment had the greatest influence on IKEA’s first failure in Japan.
culture
A U.S. executive had no idea that Germans tend to be very risk-averse. When the executive arrived at a meeting in Berlin, he simply stressed the price of his firm’s products without emphasizing their bottomline benefits, promoting the company’s strong service support, or guaranteeing their effectiveness. As a result, the multimillion dollar deal failed. The U.S. executive overlooked the importance of which environmental factor?
norwegians
Who are the richest people in the world?
tariff
A tax levied on the goods entering a country is called a(n):
tariff
the government on all automobiles entering the country and is called a(n):
tariff
A(n) is a limit on the amount of a specific product that can enter a country.
quota
Since 1953, the United States has limited the amount of raw peanuts that can be imported to 1.7 million pounds a year. This is only about one-tenth of 1 percent of all domestic edible peanut consumption in the United States. This limitation is an example of a(n):
boycott
An exclusion of all products from certain countries or companies by a government or group is called a(n):
boycott
Several Arab nations refuse to allow CocaCola products to be sold within their borders because of the company’s
distributorships in Israel. This is an example of a(n):
exchange control
A(n) is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.
marketing groupings
____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.
mercosur
___ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela. This agreement eliminated the tariffs among these trading partners.
uruguay round
The ____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.
trade
Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate global exchange and remove barriers are called___ agreements.
uruguay round; world trade organization
The ___ of trade negotiations created the ____, which replaces GATT. This trade agreement dramatically lowers trade barriers worldwide.
substantially reduced economic growth in Mexico
The North American Free Trade Agreement did all of the following EXCEPT:
a. created the world’s largest free trade zone, which includes Canada, the United States, and Mexico
b. substantially reduced economic growth in Mexico
c. allowed U.S. and Canadian financial-services companies to own subsidiaries in Mexico
d. removed many tariffs and duties so that Mexico, Canada, and the United States can trade more freely
e. expanded opportunities for U.S. businesses in Mexico
doha round
Which of the following is the latest round of World Trade Organization?
moved toward protectionism
In the wake of the global recession of 2008-2009, many countries have:
mexico
All of the following are countries included in the Dominican Republic-Central America Free Trade Agreement EXCEPT:
a. the United States
b. Nicaragua
c. El Salvador
d. Guatemala
e. Mexico
establish a free trade agreement between the United States and certain Latin American countries.
The goal of the Central America Free Trade Agreement is to:
a. create free trade agreements between the United States and other industrialized nations.
b. eliminate all protectionism.
c. raise prosperity levels in all industrializing nations.
d. establish a free trade agreement between the United States and certain Latin American countries.
e. make sure all nations achieve the economic and technological development of a takeover economy or better.
the EU is the largest economy in the world.
79. Which of the following statements about the European Union (EU) is true?
a. The EU creates a single Europroduct for a generic Euroconsumer.
b. The EU removes all internal trade barriers and standardizes regulations in European countries for easier trade.
c. The EU can correctly be called the “United States of Europe” because all European voters have agreed to
these changes.
d. The existence of the EU eliminates protectionist movements by United Europe against the Japanese and the United States.
e. The EU is the largest economy in the world.
world bank
Who offers low-interest loans to developing nations?
promote trade through financial cooperation and eliminate trade barriers in the process
The International Monetary Fund (IMF) was founded in 1945 to:
streamlining wages and price controls
The functions of the G-20 include all of the following EXCEPT:
a. discussing key issues in the global economy
b. promoting discussion between industrial and emerging-market countries
c. contributing to the strengthening of the international financial
d. streamlining wages and price controls
e. helping to support growth and development across the globe
demographic
When developing countries began encouraging foreign investors and imports, companies like Black & Decker and Pillsbury offered a wide array of products to countries throughout the world. Because of enormous populations in developing countries, these companies predicted a potential for strong annual sales. However, in addition to total population, companies must not overlook ____ factors such as distribution of people within a country and household incomes
demographic
A multinational company that makes a labor-intensive product would be interested in the ____ makeup of countries. Factors such as median age, gender, and literacy rates would determine the success of its global expansion.
natural resources
Zambia is internationally recognized as the world’s second leading producer of cobalt, which is used to make high speed and high-temperature cutting tools and dyes. A company that wanted to manufacture tools for shaping steel would be most attracted to which element of the Zambian environment?
export opportunities for countries with no natural resources
Vast differences in natural resources create all of the following EXCEPT:
a. potential for military intervention
b. shifts in wealth between nations
c. inflation and recession
d. global international dependencies
e. export opportunities for countries with no natural resources
exporting
Which method of entering the global marketplace would be LEAST risky?
direct investment
Which method of entering the global marketplace would be most risky?
exporting
The United States is selling more domestically produced products in other countries than any other country in the world. this means the unites states is the world leader in:
exporting, licensing and franchising, contract manufacturing, joint venture, and direct investment
Which list correctly ranks the methods of entering the global marketplace in increasing order of risk?
a. Exporting, licensing and franchising, contract manufacturing, joint venture, and direct investment
b. Importing, contract manufacturing, licensing and franchising, joint venture, and direct investment
c. Licensing, franchising, contract manufacturing, joint venture, direct investment, and exporting
d. Franchising, contract manufacturing, joint venture, direct investment, importing, and licensing
e. Importing, contract manufacturing, joint venture, direct investment, and exporting
sell the product to that merchant who resells the product in the foreign country without the aid or input of the original manufacturer.
The role of a domestic company that sells to an export merchant (also called a buyer for export) is to:
buyer for export
The ____ is an intermediary in the global market who assumes all risks and sells globally internationally for its own account. The domestic manufacturer usually treats it like a domestic customer.
buyer for export
Carlos Hernandez owns a company in Miami that purchases products from U.S. manufacturers for export to several countries in Central and South America. Carlos is a(n):
export broker
A(n) is a global intermediary who brings the buyer and seller together.
export broker
DeLouis owns an agency that specializes in bringing international buyers in contact with U.S. companies to facilitate global trade. What type of intermediary is DeLouis?
export agents
_____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations. They perform the same functions as domestic manufacturers’ agents who help with financing and shipping.
export agent
International Marketing, Inc. is a company located in Brazil that assists businesses exporting products to Brazil. This company helps with financing, shipping, and any aspect of marketing a product from another country to Brazil. This company is an example of a(n):
licensing
_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge in return for a fee or royalty.
licensing
Franchising is a form of:
licensing
When Krispy Kreme decided to expand its operation internationally, it chose to first make its doughnuts available in Canada to minimize its risk. In accordance with the policy of risk minimization, the company sold the right to manufacture and sell its doughnuts to Canadians. In other words, Krispy Kreme used:
locally registering patents and trademarks to the us firm, not to the license
A U.S. licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:
licensing
Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo. The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties. This is an example of:
chose a method of global marketing that created minimal risk
Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patented Spanish/English children’s frame tray puzzles. Because Patch uses licensing as its global marketing strategy, it:
contract manufacturing
Sony, Panasonic, and other Japanese manufacturers that build products to customer order instead of churning out products in anticipation of demand have decided to hire U.S. companies to produce electronics for them. The Japanese companies will handle the marketing of the products. Japanese electronics companies are using:
contract manufacturing
____ takes place when a foreign company produces goods to specification set by a domestic company, with the
domestic firm’s brand name affixed to the goods.
joint venture
With ____, a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity.
joint venture
Caterpillar, Inc. is the world’s largest manufacturer of earthmoving and construction equipment. Kirovsky is a large Russian manufacturer of the same type of products. The two companies entered into a(n) _____ and created NEVAMASH, a new company.
direct foreign investment
Belgian Beer brewer InBev bought Anheuser-Busch for $52 billion. This is an example of a(n):
direct foreign investment
____ is a global marketing strategy that requires active ownership (either a controlling interest or large minority interest) of a foreign company or overseas manufacturing or marketing facilities.
direct foreign investment
To enter the Chinese market, Walmart purchased the general merchandise chain Trust-Mart for about $1 billion. Walmart entered the Chinese market through the use of:
develop a thorough understanding of the global target market
The first step in creating the global marketing mix is to:
global marketing standardization
Apple, Inc. used its Mac and PC guy ad in countries around the world. The company simply modified the characters a bit to fit the culture. Apple is attempting to market the Mac using:
product adaptation
According to the text, which of the following is an example of a product strategy that would be appropriate for a global marketing company to implement?
product adaptation
When IKEA, the Swedish home furnishings retailer, first entered the Japanese market, it failed. It was more successful in its second try because it was aware of the need to adapt its furnishings to fit the smaller Japanese homes. It success on its second foray into Japan was based on its ability to give the Japanese consumer what he or she needed without abandoning its product strategy. IKEA had to adopt a strategy.
product adaptation
Chinese don’t like sweet cookies, and Kraft’s Oreos were not selling well. Chinese consumers also thought the package was too expensive. Kraft introduced packages containing fewer Oreos at a reduced price and also created a “Chinese Oreo” consisting of four layers of crispy wafer filled with vanilla and chocolate cream, coated in chocolate. Which of the marketing mix strategies did Kraft use?
promotion adaptation
AFLAC has had to ditch the AFLAC duck in its Japanese commercials because the Japanese consumer does not like to be yelled at. Since Japan is the source of about 70 percent of the insurance company’s business, it had no trouble adopting a strategy.
there is a lack of mass purchasing power
Once marketing managers have determined a global product and promotion strategy, they can select the remainder of the marketing mix. However, entry into many developing nations presents special pricing problems because:
floating exchange rates
Currency markets operate under a system in which the prices of different currencies move up or down based on the demand for and supply of each currency. This practice is called:
dumping
____ is generally defined as the sale of an exported product at a price lower than that charged for the same or a like product in the home market of the exporter.
attempting to avoid costly tariffs in the country to which the product is exported
All of the following are reasons for dumping EXCEPT:
a. lowering unit costs by exploiting large-scale productions
b. attempting to avoid costly tariffs in the country to which the product is exported
c. attempting to maintain stable prices during periods of exchange rate fluctuations
d. temporarily distributing products in overseas markets to offset slack demand in the home market
e. trying to increase an overseas market share
dumping
The European Union accused South Korea of selling ships at a loss in an attempt to push its European rivals out of the market. In other words, South Korea was accused of:
dumping
The Canadian magazine industry accused U.S. magazine publishers of ____, or selling the magazines in Canada at a lower price than in the United States.
dumping
In a newspaper release, Corning, Inc. announced it had received a favorable ruling from China’s Ministry of Commerce on allegations that it was selling its fiber more cheaply in China than in other countries. Corning was falsely accused of:
you will have to pay more for the auto than you would have paid three months ago
Suppose three months ago the dollar price of a yen was $0.012. Today the dollar price of one yen is $0.018. If you are in the market for a brand new Honda automobile today, you will find that:
countertrade
International trade does not always involve cash. Sometimes companies accept all or part of the payment for goods or services in the form of other goods or services. This is known as:
a complex matter due to tariffs, exchange rates, and transportation costs, insurance, and taxes
The pricing component of the global marketing mix is:
language barriers are limiting the potential of the Internet in international marketing.
All of the following statements about the use of the Internet in global marketing are true EXCEPT:
a. Opening an e-commerce site on the Internet immediately puts a company in the international marketplace.
b. The new Internet economy is being restrained by the old brick-and-mortar rules, regulations, and habits.
c. Software has been developed to ease currency conversions by allowing customers to pay for products in the currency of their choice.
d. FedEx is a global shipper that helps solve international e-commerce distribution.
e. Language barriers are limiting the potential of the Internet in international marketing.
using social media to expand beyond local markets
A small U.S. print studio uses Facebook and Pinterest to display its stationery and other products. The regular posts and reviews from customers have attracted attention from several British companies who like the printer’s style. What is this an effect of?
multinational corporation
Breathe Right
CNS, Inc. is the manufacturer of Breathe Right nasal strips, a spring-loaded adhesive device that sticks on your nose to open up the nasal passages. Since their introduction in the United States, Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow, snorers hoping for a sound night’s sleep, and allergy and cold sufferers looking for relief from their stuffy noses. Because CNS is a small company, it initially had trouble promoting its product. Then San Francisco 49er Jerry Rice started regularly wearing them, and U.S. sales took off. Today, Breathe Right strips are marketed in more than 40 countries. When CNS decided to expand globally, its size made it look for a partner. It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first aid product line.
Refer to Breathe Right. 3M is an example of a(n):
global marketing standardization
Refer to Breathe Right. The same Breathe Right nasal strips you can buy in any pharmacy in the United States can also be purchased in 40 other countries. CNS used a ____ strategy.
culture
Refer to Breathe Right. How people value a sound night’s sleep is an example of which element of the global
environment?
legal
Refer to Breathe Right. In the United States, one of the standard methods for introducing a new product is couponing, but many countries prohibit the issuing of coupons. This prohibition would represent a(n) _____ element of the global environment.
joint venture
Refer to Breathe Right. 3M and CNS entered into a:
promotion
Refer to Breathe Right. To market the nasal strips in countries outside the United States, CNS and 3M provided the strips to the national sports teams. For example, sales in South Africa took off when the entire South African rugby team wore the strips when they won the World Cup of rugby. This example primarily illustrates the use of which element of the global marketing mix?
global marketing
Kit Kat
The popular Kit Kat chocolate bar was created by Rowntree’s, a confectionary company in the United Kingdom, in 1935. By the 1940s, Rowntree’s was exporting Kit Kats to Australia, New Zealand, South Africa, and Canada.
The brand further expanded in the 1970s when Rowntree created a new distribution factory in Germany to meet European demand, and established agreements to distribute the brand in the USA and Japan, through the Hershey and Fujiya companies respectively. In June 1988, Nestlé acquired Kit Kat through the purchase of Rowntree’s, giving Nestlé global control over the brand—except in North America, where it is made under license by the Hershey Company. Variants in the traditional chocolate bar began to appear in the mid-1990s and have continued to develop ever since. Kit Kat Japan, in particular, has many unique flavors such as mango-flavored, cucumber, and wasabi Kit Kats. Today, Nestlé produces Kit Kat bars in 21 countries and has expanded its marketplace in Japan, Russia, Turkey, and South America, in addition to markets throughout Europe.
Refer to Kit Kat. Nestlé has utilized a global vision in marketing Kit Kat bars throughout the world. The company realizes different countries require different strategies but that effective global marketing is a key to success. Nestlé is practicing:
multinational corporation
Refer to Kit Kat. The Kit Kat manufacturing facilities in Egypt, Ukraine, Bulgaria, and 18 different countries are
only small parts of the Nestlé organization. Nestlé can be called a(n):
exporting
Refer to Kit Kat. When Rowntree’s, the original manufacturer of Kit Kats, first decided to enter the global market,
the company used which method?
hershey pays Nestlé a fee for the privilege of producing Kit Kat bars.
138. Refer to Kit Kat. Which of the following statements about the relationship between Nestlé and The Hershey
Company is probably TRUE?
a. Hershey is not allowed to market the bars as “Kit Kats” in North America.
b. Hershey does not need to consult Nestlé if it wants to make a unique Kit Kat flavor.
c. Hershey and Nestlé are in a joint venture together.
d. Hershey pays Nestlé a fee for the privilege of producing Kit Kat bars.
e. Nestlé has not given Hershey any proprietary knowledge about Kit Kat bars.
product adaptation
Refer to Kit Kat. Variants to the traditional chocolate Kit Kats are sold in various markets around the world. In
Japan, for example, you can purchase a cheese or lemonvinegar Kit Kat. Which strategy is Nestlé using?
stage three
Wataniya Mobile
Wataniya Mobile is offering cellular service in the Palestinian territories. It is only the second cell phone carrier in the region and is significant because it is owned by foreign companies and investors like the Qatari royal family and the Palestine Investment Fund. The new service is aimed at increasing cell phone penetration, which is only 35 percent, in this economically challenged area. It has not been easy for Wataniya, though. It took two years to gain the required license from Israel, which controls the Palestinian territories’ airwaves and bandwidth required for the service. Even though Wataniya is allowed bandwidth, it has only received 3.8 megahertz of bandwidth from Israel, which is not enough for it to offer 3G mobile services that enable Web browsing and e-mail.
Refer to Wataniya Mobile. In which stage of globalization is Wataniya Mobile?
cultural
Refer to Wataniya Mobile. Israel and the Palestinian territories have vastly different religious beliefs and are frequently at war. The differences between these two are attributed to which environmental factor?
economic
Refer to Wataniya Mobile. The fact that many potential customers in Wataniya’s market cannot afford a cellphone
is part of which environment?
direct foreign investment
Refer to Wataniya Mobile. Wataniya Mobile has spent $100 million on infrastructure so far and will spend another
$700 million over the next ten years. This is an example of which method of entering the global marketplace?
political and legal
Refer to Wataniya Mobile. Israel’s control of licensing and the limitation on the amount of bandwidth allotted to
Wataniya Mobile is part of which environment?
market
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.
expectant moms
The Belly Cast kit by Proud Body helps an expectant mom to make a cast of her pregnant body, decorate it, and keep it for a lifetime. The primary market segment for the Belly Cast kit is:
needs and wants and an ability and willingness to buy
A market is people or organizations that have:
market segment
A(n) is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have similar product needs.
no, they do not have the ability to purchase at this time
A group of middle school students stop by a bicycle store. The store has just received a new shipment of high-end racing bicycles. The bicycles range in price from $1,200 to $3,000. All of the students want one of these new bikes, but none has the means to buy one. Is this group of consumers a potential market for the expensive bikes?
market segmentation
Ford Motor Company produces passenger cars, commercial trucks and specialty vehicles, performance vehicles, and race cars. Ford uses a procedure called ____ to divide its large market.
market segmentation
____ is the process of dividing a market into meaningful groups that are relatively similar and identifiable.
enable the marketer to tailor marketing mixes to meet the needs of ones or more specific groups
The purpose of market segmentation is to:
it will enable them to build an accurate description of customer needs by group and to design a marketing mix to fit each segment
Home Cookin’ Catering would like to improve customer satisfaction and increase repeat business. When you ask the owners to describe a typical customer, they say it is impossible and explain that with corporate functions, family affairs, and fund-raisers, they do not have a typical customer. You suggest it is time for market segmentation because:
identify which variable base should be used for segmenting
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
accountability
All of the following are criteria for successful market segmentation EXCEPT:
substantiality, identifiability and measurability, accessibility, and responsiveness
To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria are:
complexity
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:
substantiality
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.
is large enough to permit a profitable market effort toward its members
The marketing researcher for Bubastis Cat Treats has noticed a growing number of cat owners purchasing organic treats for their pets. The researcher thinks there is a market for organic cat treats, but she’s not sure if the segment is substantial. In this case, substantiality means the segment:
identifiability and measurability
The marketing manager of Gevalia gourmet coffees wants to target the gay male consumer because he thinks this segment of consumers appreciates and consumes gourmet coffee. Even though gay lifestyles are becoming more accepted socially, the manager is finding it difficult to determine the market potential for this segment because many gay consumers are not willing to admit their lifestyle publicly. Which criterion of a useful segment does this illustrate?
accessibility
Which criterion of useable market segments means the firm must be able to reach members of targeted segments with customized marketing mixes?
accessibility
Many children on the autism spectrum like to chew on clothing, paper, or anything that they can find. Kid Companions manufactures nontoxic, plastic chewable jewelry for kids to wear. The product is a great way to keep kids from chewing on their clothes, while letting them work through their chewing tendencies. However, the company is unsure how to reach parents and therapists with information about their product. This illustrates a segmentation problem with:
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
The requirement for a market segment to be responsive means:
responsiveness
Altria Group, Inc.’s Phillip Morris failed at an attempt to target Americans looking for a potentially safer cigarette.
This market exhibits a lack of:
conduct a follow-up analysis to determine if the segments it might choose would respond differently than other segments to its marketing strategy.
A research firm has conducted marketing research on the market for metal roofing for homes. The research firm has determined there are thousands of homeowners who want the durability provided by metal roofs. These homeowners are generally married and between 25 and 54 years of age. They tend to live in suburban neighborhoods, and most subscribe to lifestyle magazines. If you were interpreting these results, you might suggest that the research firm:
responsiveness
If a market segment is especially motivated by coupons in newspapers, which segmentation success criterion is most influential in the success of this program?
responsiveness
A health club has a new fitness program for expectant mothers. After flyers 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?
segmentation bases
____ are characteristics of individuals, groups, or organizations that marketers use to divide a total market into segments.
segmentation base
Military Spouses is the only publication in the world that targets readers who are “married to the military.” Its content reflects the unique set of challenges, hardships, and rewards to those whose spouses are in the military. The marital status that has been used to distinguish the market for this magazine is an example of a(n):
Use a single-variable strategy, because it offers an inexpensive alternative that would not require much experience to employ
Scott owns Buffalo Mountain Coffee in Deer Park, Ohio. He understands the need to segment his market, and available marketing research indicates there is much demand in the community for unique coffee drinks. However, he has few resources and cannot engage in intensive consumer research to precisely identify a segment. Which of the following strategies would you suggest he employ?
geographic segmentation
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.
geographic
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.
geographic
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.
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.
geographic
Almost all cell phones sold in the United States are black or gray. Almost all cell phones sold in Europe are colorful, and very few black phones are sold. A cell phone manufacturer knowing this information could use ____ segmentation when selling its phones internationally.
a regional approach gives marketing managers control over the competitive environment.
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 consumer goods companies to react more quickly to competition.
demographics
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.
demographic
Income, ethnic background, gender, and age are all examples of segmentation bases.
demographic
Colgate manufactures a fruit-flavored SpongeBob Squarepants toothpaste for kids. The age-based variable that distinguishes the market for this product is an example of segmentation.
demographic
Modern Maturity magazine is targeted toward adults aged 50 years and older. It has articles on health and fitness as well as the arts and finance. What segmenting base is Modern Maturity using?
age
Fisher-Price developed a rugged, waterproof camera for children. This product uses ____ segmentation.
age
While most marketing to Generation Y tries so hard to be hip that it borders on parody, Vans has kept the decades- old brand real and vital for Gen Yers. Marketing programs the footwear manufacturer uses to reach Gen Yers include the Vans Skate Parks, which operate in malls around the country; the wildly successful Vans Warped Tour for alternative music; and the Vans Triple Crown, the brand’s answer to the X Games. The segmentation plan used by Vans relies heavily on ____ segmentation.
demographic and psychographic
Redbook magazine targets what it calls “Redbook jugglers,” defined as 25 to 44yearold women who must juggle family, husband, and job. According to a Redbook ad, “She’s the product of the ‘me generation,’ the thirty something woman who balances home, family, and career—more than any generation before her, she refuses to
put her pleasures aside. She’s old enough to know what she wants, and young enough to get it.” This is an example
of ____ segmentation.
teens have considerable influence over major family purchase decisions.
Which of the following statements about the teen market is TRUE?
a. Teens represent half of all spending in the United States.
b. Teens have considerable influence over major family purchase decisions.
c. Teens typically have very little influence over major family purchase decisions.
d. Teens spend a considerable amount of money on health-related purchases.
e. All of the above are true.
income
Deal$ stores sell a wide variety of low-priced merchandise: party supplies, cleaning products, toys, food, housewares, and health and beauty products for both men and women. Many items in the store are priced no higher than one dollar. Which type of demographic segmentation is Deal$ using?
gender
H&M plans to open a new store in Saudi Arabia. It will be staffed completely by women. Saudi Arabia has strict laws about women interacting with men other than their husbands, so only women will be permitted to shop there. Which type of demographic segmentation is H&M using?
gender and family cycle stage
Abbeville Press published a book by Armin Brott and Jennifer Ash entitled The Expectant Father: Facts, Tips, and Advice for Dads-to-Be. It is an advice book for men whose partners are expecting a baby. What demographic variables have been used to define the market for this book?
demographic
Coca-Cola launched a new Black History television commercial on BET to coincide with the Martin Luther King Jr. holiday. The ad is just one element of a strategy for connecting with African American consumers. CocaCola’s segmentation plan for this promotional campaign is based on ___ segmentation.
ethnic
Johnson Publishing Company, the world’s largest African Americanowned publishing company and home of Ebony magazine, has forged an alliance with Dan River, Inc. to create luxury bed and bath products for the newly developed Ebony Home brand. This brand will use the strong relationship the publisher has with the African American market to sell the brand. What form of demographic segmentation will be used to market the Ebony Home brand?
ethnic
In a Miami broadcast in Spanish and play Latin music for the Hispanic people living in South Florida. The radio stations are using ____ segmentation.
geographic
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.
family life cycle
A series of stages determined by a combination of age, marital status, and the presence or absence of children is known as the:
family life cycle
Jane graduated from high school in 1978, is married, and has two teenage children. Most of Jane’s friends from high school have children who have already graduated from college and gotten married, and some have grandchildren. Jane and her former classmates are at different stages of the:
family life cycle
Evenflo makes baby gates to keep toddlers away from stairs. What demographic segmentation variable will Evenflo use to identify its target market?
wedding planners, couples-only resorts, and day care centers
Which of the following businesses would be most likely to use family life cycle segmentation?
psychographic
_____segmentation is based on personality, motives, and lifestyles.
benefits
All of the following are bases for psychographic segmentation EXCEPT:
psychographic
A Small World is a nonprofit retail store that sells gift items made by artisans from over 30 different countries. This store provides employment to craftspeople in developing nations and markets their handiwork at a fair price. The store defines its market segment as people who believe in helping others and who feel good about helping others whenever possible. The store uses____ segmentation.
psychographic
NASCAR racing fans are some of the most diverse and loyal fans in the world. They will stand in the pouring rain, the freezing cold, or the blistering heat for hours to shake the hand and get the autograph of a NASCAR driver. These fans are not concentrated in any one area but are dispersed throughout the United States. A Web site designed to market NASCAR memorabilia would be most likely to be successful if it used _____ segmentation to determine its target market.
psychographic
Wine Spectator is a magazine that targets people who appreciate good wine and food. However, the discriminating reader of this magazine is also interested in travel and health, so the magazine features travel and health-related stories. This publication relies on variables to identify its target market.
psychographic
Magazines like Martha Stewart Living, Better Homes & Gardens, and other magazines targeted to people who are interested in improving their personal spaces rely on ___ segmentation.
motives
The James Hardie Siding Company sells concrete siding. It was having little luck targeting contractors because concrete siding is difficult to install and shows every flaw if a house is incorrectly framed. So Hardie decided to target homeowners who wanted the security of knowing their siding was guaranteed not to rot or crack for 50 years. In terms of psychographic segmentation, the siding company used the ____ variable.
lifestyle segmentation
______ divides individuals into groups according to the way they spend their time, the importance of items in their surroundings, their beliefs, and socioeconomic characteristics.
geodemographic segmentation
____ is a method that clusters potential customers into neighborhood lifestyle categories and is a combination of geographic, demographic, and lifestyle segmentations.
geodemographic
In Baton Rouge, Louisiana, everyone who is anybody in society can’t wait to get a copy of 225 magazine. The magazine is targeted to the upper middle and upper classes in Baton Rouge and features articles on how they work and play. The editor of 225 magazine is relying on ____ segmentation.
birds of a feather flock together
Which of the following statements best describes the reason marketers find geodemographic segmentation so effective?
geodemographic
Kraft Foods plans to tailor different ads for different neighborhoods in the same region. For example, viewers watching a cable show in a Hispanic neighborhood in Chicago would see different ads during the same commercial breaks as nonHispanics living in a different neighborhood. Kraft’s strategy best exemplifies ____ segmentation
benefit segmentation
_____ is the process of grouping customers into market segments according to the benefits sought from the product.
benefit
Miller Lite’s longrunning “Great Taste…Less Filling!” advertising campaign was ranked by Advertising Age magazine as the 8th-best advertising campaign in history. Miller Lite was using ___ segmentation in this ad campaign.
benefit
ThermaCare air-activated heat wraps are meant to be wrapped around sore muscles and joints. The product is advertised as a powerful pain reliever and a source of deep muscle relaxation. Its soothing warmth can work at night while you sleep to restore your body. The manufacturer of ThermaCare heat wraps is using ____
benefit
KarryLite, the manufacturer of lightweight suitcases with wheels, uses as its slogan, “Takes the ‘lug’ out of luggage.” This slogan illustrates the use of____segmentation.
benefit
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 averagesized people to be cramped and uncomfortable. Tall Paul’s uses ____segmentation.
benefit
When asked to name a brand of sports drink, most people will answer Gatorade, and some will respond with POWERade. But people with diabetes who still need to replenish electrolytes lost during activity or illness cannot drink these sports drinks because they are high in sugar and thus cannot be consumed by diabetics. As a result, a manufacturer has developed Champion Lyte, which contains no sugar. The manufacturer of Champion Lyte has used_____segmentation to identify its market.
benefit
Many people find it difficult to peel hard-boiled eggs. Eggies is a kitchen gadget designed to help make cooking hard boiled eggs quicker and easier. The product allows customers to hard-boil eggs without the shell. Consumers simply crack an egg, pour it into the plastic “Eggie,” boil, then twist to enjoy hardboiled eggs without the messy peeling of the eggshell after they’re done. Eggies is using___segmentation.
usage-rate segmentation
Which type of segmentation divides a market by the amount of product bought or consumed?
usage-rate
Most airline frequent flyer programs reward the most frequent flyers with business class upgrades and flight lounge privileges. Airlines are using these rewards as a means of implementing____segmentation.
usage-rate
The public transportation system in the San Francisco area conducted a survey that revealed respondents could be assigned to one of four categories: (1) people who never utilized mass transit, (2) people who utilized mass transit in the past but not now, (3) people who utilized mass transit occasionally, and (4) people who utilized mass transit regularly. These groups have significantly different perceptions about transportation alternatives. This is an example of_____segmentation.
usage-rate
ThinkGeek is an online retailer that caters to computer enthusiasts and other “geeky” social groups. Their merchandise includes clothing, electronic and scientific gadgets, unusual computer peripherals, office toys, pet toys, child toys, and caffeinated drinks and candy. ThinkGeek runs a points-for-reward system called Geek Points, under which customers can earn rewards for buying more products. This is an example of segmentation by:
usage-rate
General Mills offers a deal where its cereal users can collect box tops and submit them to General Mills to earn money for their children’s schools. This program, called the Box Tops for Education Program, is a means of changing light users into heavier users. In other words, it is a form of_____ segmentation.
roughly 20 percent of a firm’s customers purchase 80 percent of the sales volume of the product.
What does the 80/20 principle propose?
80/20 principle
The____proposes that a minority of a firm’s customers purchase a majority of the volume of the product.
80/20 principle
Pocket-knife collector Sam Penley decided to open The Knife Depot, a store that sells pocket knives and related paraphernalia. After 18 months in business, Sam has noticed that most of his sales are to the same small group of customers (about 40 people) even though he has records to show there are over 200 active pocket-knife collectors within a 50mile radius of his store. Sam’s retailing experience is supportive of the:
reposition
H&R Block launched a $100 million marketing campaign to parlay the company’s intimate knowledge of 20 million customers’ finances into other services like mortgages and investment advice. Block has great brand recognition, but consumers only care about it four months out of the year. H&R Block is attempting to_____itself to make people think of it as a company offering services year-round.
households
Business marketers focus on all of the following market segments EXCEPT:
company characteristics
Zatarains offers packaged spice mixes for jambalaya, gumbo, and red beans and rice. Consumers can buy the product in the store, so Zatarains sells individual household-size packages to resellers. It also sells institutional-size packages to military bases, schools, restaurants, and other large organizations. The marketers of Zatarains would most likely segment the business market according to:
psychographic variables
Tower Fasteners developed a commanding position in the fastener industry by having in stock over 150,000 different types of fasteners. Tower’s primary market is defined as companies with a need for specialized fasteners. All of the following are characteristics of the buying organization that Tower can use for segmentation EXCEPT:
satisficers
Firms can be categorized by the type of purchasing strategy they use. _____usually contact familiar suppliers and place an order with the first that can meet product and delivery requirements.
satisficers
Hank operates a plumbing and electrical supply store. He has categorized its business customers by their purchasing strategy. Hank has found it much easier to serve and satisfy the ___, who usually recontact familiar suppliers and place an order immediately if product and delivery requirements are acceptable.
optimizers
Firms can be categorized by the type of purchasing strategy used. ____consider numerous, even unfamiliar, suppliers and solicit and analyze options.
optimizers
The Green Earth, a landscaping company, finds that the most difficult firms to get business from are the____, because this group considers numerous and even unfamiliar suppliers, solicits bids, and carefully analyzes options; therefore, it requires a higher levels of customer service.
select a market or product category for the study
What is the first step in segmenting a market?
determining the objectives of the segmenting strategy
All of the following are steps in the market segmenting process EXCEPT:
profiling and analyzing her market segments
June LaVista owns a health and fitness gym. After dividing her customers into four segments based on income range, age, level of fitness, and other selected segmentation descriptors, she wrote out a description of each segment’s size, expected growth, frequency of exercise, and overall profit potential. Which step in segmenting a market is LaVista engaged in?
descriptors
After selecting a market for study and choosing bases for segmenting that market, the marketer must select the segmentation ______, which identify the specific segmentation variables to use.
they should do them regularly because of the rapidly changing nature of most markets
Thompson Pools installs and maintains swimming pools. They group their customers according to their needs: new installs, regular maintenance, and frequent product consumers. When do they need a new segmentation analysis?
should be redone periodically
Market segmentation:
target market
A(n) is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
target market
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:
target market
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.
effectively protects firm from competition
Which of the following is NOT an advantage of an undifferentiated marketing strategy?
unimaginative product offerings
Which of the following is a potential disadvantage associated with an undifferentiated strategy?
niche
One segment of a market is called a:
undifferentiated
Which target marketing strategy views the market as one big market with no individual segments and thus uses a single marketing mix?
undifferentiated strategy
Candace Popwell makes and markets Festive Holiday Truffles candy. The confectionary company owner views the world as one big market with no individual segments and tries to reach it with only one marketing mix. Her essentially mass-market philosophy indicates she probably uses a(n) strategy.
undifferentiated targeting
When Henry Ford made the Model T, he said that consumers “can have their car in any color they want, as long as it’s black.” This was a case of:
cannibalization
All of the following are advantages of using a concentrated targeting strategy EXCEPT:
concentrated strategy
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.
concentrated
Tall Paul’s designs and sells household furniture and furnishings to people who are over 6’6″ tall–a rather small target market. Tall Paul’s uses a(n) targeting strategy.
offer a highly specialized marketing mix
When a firm uses a concentrated targeting strategy, it can:
concentrated targeting
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?
dont put all your eggs in one basket
Companies that adopt a concentrated marketing strategy violate which of the following old sayings?
multisegment
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.
multisegment
Piper Corporation makes aircrafts. It produces several different planes for three categories of customer: Professional, Personal, and Trainer. What type of targeting strategy is Piper using?
multisegment targeting
Stouffer’s offers gourmet entrees for one segment of the frozen dinner market and Lean Cuisine for another segment that wants both good taste and low calories. When Stouffer’s chose to serve two welldefined market segments and develop distinct marketing mixes for each, it was implementing a(n)____strategy.
greater product design and management cost
With multisegment targeting, a company could benefit from all of the following EXCEPT:
cannibalization
A potential disadvantage of multisegment targeting is____, which occurs when sales of a new product cut into
sales of a firm’s existing products.
cannibalization
_____is one of the potential disadvantages associated with a multisegment strategy.
cannibalization
Pharmaceutical firms have introduced new over-the-counter antacids that block the production of stomach acids while still marketing traditional antacids. Traditional antacids treat heartburn by neutralizing stomach acid. If sales of the new acid blockers reduce sales of the traditional antacids, then ______has occurred.
cannibalization
When Procter & Gamble (P&G) introduced Liquid Tide to a new segment, consumers in the traditional powdered detergent segment switched to the liquid product. Rather than real sales growth, P&G simply experienced the shifting of existing customers to a new product. This exemplifies a drawback of multisegment targeting strategy called:
cannibalization
Clorox saw sales of its bleach products suffer when it introduced laundry detergents with bleach as an added ingredient. This is an example of:
customer relationship management
A marketing method that tracks interaction with customers to optimize customer satisfaction and long-term company profits is referred to as:
personalization
Mirage Resorts in Las Vegas has a system that allows hotel clerks instantaneous access to a client’s gambling history to determine what sort of room or complimentary services will provide the guests with the highest level of service. This is an example of which trend contributing to CRM?
technology
Lands’ End offers customers the option using special software to accurately gauge what size customers are in Lands’ End clothes using a web cam image, and the ability to store size preferences. This is an example of which trend contributing to CRM?
most customers resent how companies use their information
All of the following are true about CRM except:
a. Most customers resent how companies use their information.
b. CRM is a huge commitment.
c. Marketers often have to completely rethink how they target customers.
d. Loyalty programs use CRM to thank customers for their business and reinforce the decision to shop at that store.
e. CRM makes purchase decisions more routine for regular customers, which offers time savings.
product differentiation
All of the following have been identified as trends that will lead to the continuing growth of CRM EXCEPT:
personalization
The Ritz-Carlton hotel chain is renowned for its service and individual treatment of its customers. All service staff and employees have note pads and are taught to record every little piece of information they learn about a customer. If a business traveler ordered soft pillows, only wanted martinis in his mini bar, and needed access to a fax machine, he would find all of these amenities in his room when he arrived. The Ritz-Carlton is basing its CRM on which of the following trends?
creating the desired image of the firm’s product
Product positioning is the process of:
positioning
_____is the development of a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general and is related to the place a product occupies in consumers’ minds relative to competing offerings.
positioning
Chandler Kumar owns two antique stores. One is in an upscale neighborhood, and its merchandise is artfully arranged and priced to indicate product rarity. The other is in a run-down strip mall and contains some of the same type of merchandise, but the items are left in open boxes and placed haphazardly on shelves. Customers of either store have entirely different perceptions of the stores and would be surprised to know Kumar operates each of them because he uses such differing_____strategies.
position
The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings is referred to as a product’s:
position
Elaine perceives Cadillac automobiles to be for older men, not for young professional women such as herself.
Elaine’s perception represents Cadillac’s in her mind.
product differentiation
There are a number of devices that parents can buy to prevent their children from hearing objectionable language while they watch television. ProtecTV is the only product of its kind that has an expandable dictionary. Parents can add words and phrases they find offensive, and the additional words will be deleted from soundtracks and captioning. ProtecTV uses a(n) ____strategy.
product differentiation
Products such as bleaches, aspirin, unleaded regular gasoline, and some soaps are distinguished by differences such as brand names, packaging, color, smell, or “secret” additives. With these products, marketers attempt to convince customers that their product is significantly different from the others and should therefore be demanded over competing brands. These marketers are using:
product differentiation
For years, fryer chickens sold in grocery stores were perceived to be a rather generic product–one brand of chicken was much like another. Then Frank Perdue began an advertising campaign to tell consumers that his brand of chicken was more tender, therefore a better choice. Perdue brought____to the marketing of fryer chickens.
product differentiation
When the Sara Lee Bakery Group introduced Iron Kids Crustless bread (to save mothers the time and effort of slicing the crusts off sandwiches), it was using:
perceptual mapping
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?
perceptual map
A(n) ____could help determine whether or not snacking consumers consider Kashi Tasty Little Crackers healthy and tasty in comparison to other brands.
distribution
All of the following are typical bases for positioning EXCEPT:
product user
In 2012, Apple, introduced iCloud, a cloud storage service that stores users data and media on remote computer servers so that they can be accessed on multiple devices and updated from anywhere. Apple is catering to on-the- go consumers who use multiple platforms. This positioning strategy is based on the:
competitor
Ad campaigns for Aleve pain reliever emphasize the fact that to get the same relief offered by one Aleve, you would need to take six aspirin or Tylenol and four Advil. These promotions are using the positioning base of:
emotion
The advertisements for Kay Jewelers usually show a man presenting a woman with a ring or necklace and
receiving a kiss in return. The ad then shows the slogan “Every Kiss Begins with Kay.” This is an example of_____positioning.
repositioning
166. Changing consumers’ perceptions of a brand in relation to competing brands is known as:
repositioning
The Southern Company is the largest provider of utilities in the southeastern United States. It has also been accused of being the biggest source of industrial air pollution in the area. Southern is trying to change consumers’ perceptions of the company by sponsoring a series of television programs on how to preserve our environment. The Southern Company is hoping the programming will lead to:
repositioning
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 television 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.
market segment
Turkey Hunting Equipment
Around the beginning of fall each year, about 2.7 million turkey hunters all over the United States start looking at catalogs for the perfect item to guarantee that this year they will kill a wild turkey, the most elusive game bird in North America. The devoted turkey stalker can stock up on everything from camouflaged turkey hunting socks, turkey license plate holders, vests with huge pockets for toting dead birds, and hunting videos to turkey decoys, turkey earrings, and turkey callers. Neil Cost is considered the best manufacturer of turkey callers in the world. It is his only product, and each is highly prized by turkey hunters. It is not unusual for a turkey hunter to pay $5,000 for Refer to Turkey Hunting Equipment. Wild turkey hunters would be defined as a:
substantiality
Refer to Turkey Hunting Equipment. Given that the wild turkey hunters number approximately 2.7 million, it meets the segmentation criterion of:
psychographic
Refer to Turkey Hunting Equipment. Segmenting a market based on the fact that people who enjoy hunting typically exhibit a particular lifestyle is an example of ____segmentation.
concentrated targeting
Refer to Turkey Hunting Equipment. What kind of strategy does Cost use to select his target market?
product differentiation
Refer to Turkey Hunting Equipment. Primos Hunting Calls is another company that manufactures wild turkey callers. It claims each of its callers is able to cluck, shriek, and kee-kee (three sounds that have been known to attract the wild turkey). If you buy one of Cost’s callers, you are limited to one sound. In this way, Primos has implemented a(n)_____strategy.
market segment
Wrestling Merchandise
Market research has shown that 6- to 17-year-old males, 18- to 24-year-old females, and 18- to 44-year-old males are most likely to watch a televised professional wrestling event or attend a live match. Wrestling events are regularly broadcast in 120 different countries. Merchandise licensed by World Wrestling Entertainment (formerly known as the World Wrestling Federation) can be purchased at JCPenney and Walmart. Clothes for adults are used to reach markets that may not buy action figures, video games, and novelty candy, but who are still proud to sport World Wrestling Entertainment (WWE) trademarks.
Refer to Wrestling Merchandise. The group identified as strong wrestling fans can be described as a(n):
geographic
Refer to Wrestling Merchandise. Most wrestling fans live in the southern United States. Based on this information, what segmentation base would be appropriate?
demographic
Refer to Wrestling Merchandise. The marketing research revealed that_____segmentation can be used to identify the biggest fans of professional wrestling.
multisegment targeting
Refer to Wrestling Merchandise. Since the WWE must use different methods to reach its three largest target markets, it must use:
repositioning
Refer to Wrestling Merchandise. Prior to the 1990s, professional wrestling tried to compete as a legitimate sport just like football and baseball. Now it uses the term sports entertainment when talking about what it is marketing to its fans. This is an example of the implementation of a(n) strategy.
market
Mercedes-Benz
Daimler AG, the maker of Mercedes-Benz automobiles, is planning to launch a new line of downsized luxury vehicles in the United States by 2012. Daimler has experienced a recent drop in global sales attributed to its product mix that focuses on larger luxury automobiles. With increasing fuel prices and stricter U.S. fuel-economy standards coming down the pipeline, Daimler doesn’t want to be left behind. Daimler is behind its competition, though. Its German rivals, Audi and BMW, have been relatively successful in the United States. BMW’s Mini Cooper, demanding as much as $34,000, has already driven away with some of Daimler’s potential sales. While Daimler already offers the Smart car in the United States, the new offerings will not be going after the same consumers.
Refer to Mercedes-Benz. Baby boomers have money to burn and will be the primary target for the downsized luxury vehicles offered by Mercedes. Many of them will want this type of car to feel young again. This group is considered a(n):
niche creativity
Refer to MercedesBenz. MercedesBenz’s baby boomers are a useful segment because they meet certain
criteria. Which of the following is not one of those criteria?
geodemographic
Refer to Mercedes-Benz. Daimler plans to introduce the downsized luxury vehicles in major U.S. cities, such as Los Angeles, New York, Miami, Atlanta, Dallas, and Chicago because market research has shown that these metropolitan areas have the greatest potential with respect to the consumers able to purchase a $30,000+ smaller luxury vehicle. Which type of psychographic segmentation does this represent?
cannibalization
Refer to MercedesBenz. One potential problem is that some of the purchasers of Daimler’s downsized luxury vehicles could be consumers who would have purchased a larger, higher-priced Mercedes-Benz. This situation is called:
product user
Refer to Mercedes-Benz. Which positioning base will Daimler be using if the company emphasizes the type of people who buy Mercedes-Benz automobiles in its promotional efforts?
immediate profits
New products are important to a company for all the following reasons EXCEPT:
discontinous innovations
New-to-the-world products, where the product category itself is new, are also called:
discontinous innovation
Sony has developed a wireless speaker that sits unobtrusively on a desktop. The tiny yet strong twin speakers use Bluetooth to stream music directly from a PC or MP3 player. This small Sony wireless speaker, which is radically different from anything currently on the market, would be classified as a(n):
All of these choices
Which of the following would be considered a new product?
a. A new product line
b. A new-to-the-world product
c. An addition to an existing product line
d. An improvement or revision of an existing product
e. All of these choices
a 2014 model year automobile with the same style, parts, and color as the 2013 model.
Marketers consider all of the following examples of new products EXCEPT:
a. a 2014 model year automobile with the same style, parts, and color as the 2013 model.
b. the addition of a management consultant service to a company that once specialized in investment management.
c. a new design for Reach brand toothbrushes.
d. a new flavor of Ben & Jerry’s brand ice cream.
e. the development of a less-painful procedure for the treatment of varicose veins.
addition to existing product line
When P&G began marketing Tide Free & Gentle, which is dye- and perfume-free, this represented which new product category?
addition to existing product line
Heinz is expected to introduce more than 400 new products in the next two years. One of the products is a spicier ketchup aimed at the baby boomer market. The spicier ketchup would be considered what type of new product?
repositioning
For years, Diet Dr. Pepper has been considered a diet drink. After declining sales, the company is attempting to present Diet Dr. Pepper as an alternative to having a dessert. This is an example of a ____strategy.
improvement or revision of the existing product
Apple recently introduced a newly designed iPod nano with Multi-Touch capability, a built-in FM radio, and mix- making Genius. Since it was not trying to reach a new target market, Apple was using which new product strategy?
new product line
When Procter & Gamble wanted to enter the hair-care market, it purchased Wella, a leading German company specializing in hair-care products. What new product category does this acquisition represent for P&G?
addition to existing product line
Oakley, a manufacturer of protective eyewear for various kinds of sports, has introduced sunglasses that play music. The glasses weigh just a few ounces and can hold up to 120 songs. These sunglasses would be an example of a(n):
new product line
Dial Corporation has introduced Dial Basics, a premium soap product with an emphasis on value. Dial Basics would be an example of which strategy to create a new product?
repositioning
_____occurs when an existing product is targeted toward new market segments. It is another type of new-product development because the product is new to that segment.
new product strategy
____A(n) links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.
establishing the new product strategy
The first stage of the new-product development process is:
is accurately described by all of these
A new-product strategy:
a. links the new-product development process with the objectives of the marketing department, the business unit, and the corporation
b. is part of an organization’s overall marketing strategy
c. specifies the roles new products play in the organization’s overall plans
d. describes the characteristics of products the organization wants to offer and the markets it wants to serve
e. is accurately described by all of these
its financial lenders
Which of the following is the LEAST likely source for new-product ideas?
all of these
A manufacturer of office furnishings is finding it difficult to compete with cheaper imported merchandise. Which of the following is a potential source of new-product ideas that would allow it to compete more effectively?
a. R&D
b. Its foreign competitors
c. The company’s employees
d. Customers who have requested its catalogs
e. All of these
product development
The process of converting applications for new technologies into marketable products is called:
brainstorming
_______is a process where a group thinks of as many ways to vary a product or solve a problem as possible without considering the practicality of the ideas.
brainstorming
Mosaic Labs has developed a chemical compound that prevents mildew in even the most humid climates. The week after the compound was invented, a group of the firm’s employees got together and listed ways the product might be used. This is an example of:
focus group
The same manufacturer produces Hanes, Playtex, and Bali clothing for women. This manufacturer assembled a group of nine regular customers and asked them to discuss what they like and do not like about its current product line for full-figured women and to suggest new-product ideas, such as jewelry, wide shoes, and belts. The manufacturer used a research technique called a:
idea screening
Which of the following stages of the new-product development process is the first filter, which serves to eliminate newproduct ideas that are inconsistent with the organization’s newproduct strategy or are obviously inappropriate for some other reason?
idea screening
After the research team at Nabisco had generated more than two dozen new-product ideas for a substitute for partially hydrogenated oils that tastes the same but has zero trans fat, the company formed a committee to analyze whether the product ideas were consistent with the organization’s newproduct strategy. This is called:
idea screening
Top managers at a commercial real estate firm that specializes in site location and installation of cell phone towers considered providing the same service for windmill location and installation but decided this was not within the company’s corporate mission. Which stage of the newproduct development process was reached?
idea screening
A European dairy that is famous for its rich ice creams has introduced basil-, tomato-, fennel-, and oregano- flavored ice creams. In the process of developing these new flavors, the dairy surveyed world-famous chefs to determine which nontraditional flavors had the greatest level of marketability. This survey would have happened during which stage of the product development process?
eliminate undesirable ideas and predict consumer acceptance
The screening and concept testing stage of the new-product development process is used to:
concept tests
_____evaluate new-product ideas usually before any prototype has been created.
concept testing
After Mattel evaluated many new products to add to its Barbie product line and before any prototype was created, the toy manufacturer instructed a committee to select three of the ideas to present to a group of consumers. The consumer group was asked to evaluate the ideas in terms of their marketability. This stage of new-product development is called:
business analysis
In the_____stage of new-product development, preliminary demand, cost, sales, and profitability estimates are made.
which celebrity spokesperson can we hire to promote the product?
Which of the following questions is NOT likely to be asked during the business analysis stage?
all of the above
The accuracy of revenue projections for products are affected by:
a. the newness of the product.
b. the size of the market.
c. the nature of the competition.
d. all of the above.
e. none of the above.
development
In the____stage of new-product development, the technical feasibility of manufacturing the new product is examined as a prototype is produced.
simultaneous product development
A team-oriented approach to new-product development is referred to as:
the Internet has not yet proven to be a useful tool for implementing simultaneous product development.
Which of the following statements about simultaneous product development is FALSE?
a. Simultaneous product development refers to the practice of developing multiple new products at the same time.
b. With simultaneous product development, all relevant functional areas and outside suppliers participate in all stages of the development process.
c. All departments within the company work together at the same time, but to maintain a high level of secrecy, no one outside the company is involved in simultaneous product development.
d. Simultaneous product development actually increases the length of time it takes to get a product to market and the time the product will stay in the growth stage of its product life cycle.
e. The Internet has not yet proven to be a useful tool for implementing simultaneous product development.
test marketing
_____is a limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
where the demographics and purchasing habits mirror the overall market for the product.
When selecting a test market city, a researcher should look for a city:
simulated market test
A(n) ____typically entails showing members of the product’s target market advertising and other promotional materials for several products, including the test product. These people are then taken to a mock or real store, where their purchases are recorded.
simulated market test
The maker of Purell hand sanitizer tested consumers’ reactions to its Purell Sanitizing Wipes by getting consumers to look through a newspaper with grocery store ads, make out a grocery list, and then “shop” in a mock store filled with real products, including the new product. This is an example of a(n):
online test marketing
Which of the following has been found to be an efficient substitute for traditional methods of conducting test markets?
commercialization
The final stage in the new-product development process is:
commercialization
During the____stage of the new-product development process, production starts, inventories are built up, the product is shipped to distribution points, the sales force is trained, and advertising and promotion begin.
commercialization
Jeni’s Splendid Ice Creams has decided to put its new Beet Cake with Black Walnut ice cream on the market. This
product has entered the____stage of new-product development.
a good match between the product and market needs
The MOST important factor in successful new-product introduction is:
introducing ten new products every year
Companies that are most likely to succeed in the development and introduction of new products typically are characterized by all of the following EXCEPT:
a. establishing an environment conducive to achieving new-product objectives.
b. making the long-term commitment needed to support innovation and new-product development.
c. capitalizing on experience to achieve and maintain competitive advantage.
d. using a company-specific approach, driven by corporate objectives and strategies, with a well-defined new- product strategy at its core.
e. introducing ten new products every year.
develop every product for potential worldwide distribution and adaptation to other countries
The main goal of the global product development process is to:
innovation
A product that is perceived as new by a potential adopter, whether the product is “new to the world” or simply new
to the individual, is called a(n):
innovation
Roger has lots of nice photos of his family on his digital camera and wishes he could display them on his desk at work without having to print them out. A coworker told him that he could purchase a digital photo frame to download and display his digital photos. Because Roger did not know such a product existed, digital photo frames represented a(n) _____to him.
diffusion
The process by which the adoption of an innovation spreads is referred to as:
diffusion
The process by which the adoption of 3D printing spreads is an example of:
innovators
_____are eager to try new ideas and products. They typically have higher incomes, are better educated, and are more cosmopolitan than other categories of adopters.
innovator
Kathy purchased an Amazon Kindle e-book reader as soon as they came onto the market. She paid $399 for the product, which she bought the first day it was released. Kathy works in Information Technology and is always looking for new electronic products to buy. She would best be described as a(n):
early adopters
_____embrace products relatively early in the product life cycle, are likely to be community oriented, and often are opinion leaders themselves.
early adopters
Joaquin didn’t buy a tablet computer when they first came out, but he did purchase one a year after they were introduced to the market. He is very active in his church and local arts council, and many of his friends asked him which brand to buy when they were considering purchasing a tablet. Joaquin is best described as a(n):
adopters
_____tend to be suspicious of new products and alienated from a rapidly advancing society.
early adopter
Which of the following adopters is MOST likely to become an opinion leader?
skepticism
A dominant characteristic of the late majority is:
there are three categories of consumers who will eventually adopt an innovation
All of the following statements about how adopters participate in the diffusion process are true EXCEPT:
a. early adopters may also be opinion leaders
b. laggards are the last consumers to adopt a new product
c. there are three categories of consumers who will eventually adopt an innovation
d. the dominant characteristic of members of the late majority is skepticism
e. innovators are the first to purchase a new product
doubters
All of the following are categories of adopters in the diffusion process of innovations EXCEPT:
early majority
A company has learned that members of its target market are likely to collect more information and evaluate more brands than early adopters. They are cautious and thoughtful and do not try the product without asking someone else. The customers’ dominant characteristic is deliberateness. In terms of the diffusion process, these customers are most likely:
early majority
Liz tends to adopt new products sooner than a lot of other people, but she weighs the pros and cons before buying. She does considerable product research, but her friends don’t really look to her for information. She really deliberates before she makes a purchase. Liz is best described as a(n):
late majority
The____adopt a product because most of their friends have already done so, and their adoption is usually the result of pressure to conform because they rely on group norms.
late majority
Which category of adopters adopt a new product because most of their friends have already adopted it?
late majority
Leon is not very quick to purchase innovative products when they come out, but after a while he breaks down and buys if after most of his friends have bought it. He gets most of his information from them when he decides to buy something. He is very skeptical of marketing, so he trusts his friends more than anything. Leon is best described as a(n):
word of mouth communications
Among the late majority group, adoption of a product primarily results from:
laggards
In the adopter categories, the final 16 percent to adopt are similar to innovators in that they do not rely on the norms of the group but are independent because they are bound to tradition. They tend to have the lowest socioeconomic status, are suspicious of new products, and are alienated from a rapidly advancing society. They are called:
laggards
Which is the last adopter category to adopt an innovation?
distribution
All of the following are product characteristics influencing the rate of adoption EXCEPT:
complexity
Which product factor influencing the rate of adoption represents the degree of difficulty involved in understanding and using a new product?
complexity
Oakley, the manufacturer of protective eyewear for sports enthusiasts, has recently introduced Oakley’s Thump, UV sunglasses that allow the wearer to store and listen to 120 different songs. Which of the following product characteristics would likely exert the greatest influence on the market success of these new glasses?
compatibility
Which product characteristic affecting the rate of adoption represents the degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs?
compatibility
Jeni’s Splendid Ice Creams is famous for its unusual flavors, such as Wildberry Lavender, Goat Cheese with Red Cherries, and Sweet Corn and Black Raspberries. Which of the following product characteristics would most likely influence the market success of these flavors?
compatibility
When the Segway Human Transporter was introduced in 2002, many people expected the product to be a phenomenal success. While the Segway is still on the market, it has never been the success so many expected. A recent Wall Street Journal article suggested that the Segway, while brilliant technologically, seemed impractical to most people since it could not be used to replace their current method of transportation. In other words, the Segway had problems with:
compatibility
Many product failures such as Cucumber antiperspirant spray, Toaster Eggs, and Health-Sea sea-sausages most likely did not succeed because they did not conform to the product characteristic of:
relative advantage
The product characteristic affecting the rate of adoption characterized by the degree to which a product is perceived as superior to existing substitutes is:
relative advantage
Biopure Corp. is developing a human blood substitute called Hemopure. Unlike donated human blood that needs to be refrigerated and expires after a short period of time, Hemopure is shelf stable and can be stored for two years or more. Also, it does not need to be matched to a person’s blood type. These factors make it wellsuited for trauma cases where blood must be transfused at an accident site or on the battlefield. Which product characteristic influencing the rate of adoption does this represent?
observability
Which product characteristic affecting the rate of adoption of a new product represents the degree to which the benefits or other results of using the product can be communicated to target customers?
observability
Razor scooters gained instant popularity because walkers and runners frequently saw people on the scooters zipping by them and having fun. This information suggests the adoption rate of the Razor scooter was most affected by which product characteristic?
observability
A new medication to eliminate fungal growths on people’s toenails may have a slow rate of adoption because it is not a highly visible item in homes. Also, this item is not often discussed among friends and coworkers. This is an example of how the characteristic of___can work to slow the adoption process.
trialability
The degree to which a product can be used on a limited basis represents which product characteristic influencing the rate of adoption?
surgically implanted hearing aids
Which of the following products has the lowest level of trialability?
trialability
When CocaCola North American debuted Gold Peak iced tea, a spokesperson for the company said, “In looking at the ready-to-drink tea market, we found that the one place that nobody seemed to be playing was in the category of classic iced teas like mother used to make. Gold Peak is a quality product that brings back that classic taste. We’re going to do a lot of sampling with this product because we believe that if people try it, they’re going to love it and stick with it.” In other words, its adoption rate will rely on its:
product life cycle
A biological metaphor that traces the stages of a product’s acceptance, from its introduction (birth) to its decline
(death) is called the:
introduction, growth, maturity, decline
The stages of the product life cycle, in order, are:
product category
All the brands that satisfy a particular type of need such as shaving products, laundry detergent, soft drinks, and furniture make up a(n):
product categories
Microwave ovens, staplers, frozen yogurt, and purses are examples of:
introduction
A brand of high-end athletic clothing called Ignition has high marketing costs as well as high production costs. Promotions for Ignition products are aimed at gaining distribution and informing consumers of their high-quality fabrics. In which stage of the product life cycle is Ignition?
product characteristics, such as advantages over substitute products
The length of the introductory stage of the product life cycle for a new product is largely determined by:
growth
The phase of the product life cycle in which healthy profits usually begin to appear is the_____stage.
profits peak
During the growth stage of the product life cycle:
increase at a decreasing rate
At the beginning of the maturity stage of the product life cycle, sales typically:
maturity
Normally, the longest stage of the product life cycle is the stage.
maturity
In which stage of the product life cycle do marginal competitors start dropping out of the market?
decline
A long-run drop in sales signals the beginning of which stage in the product life cycle?
dvd players
Which of the following products is most likely to be in the decline stage of its product life cycle?
how rapidly consumers tastes change or substitute products are adopted
The rate of sales decline during the decline stage of the product life cycle is largely governed by:
promote trampolines heavily to dealers and customers
You are a product manager for a manufacturer of trampolines. You have determined that the trampoline is in the maturity stage of the product life cycle. To keep your product from entering the decline stage, you should:
maturity
Washing machines and refrigerators are in the____stage of the product life cycle.
new product line
Fitbit
The pedometer is getting kicked up a notch with the new Fitbit device. The Fitbit is a $99 motion-detecting sensing device that can measure the user’s activity even when asleep. It digitally records the distance a user walks or runs, right down to the number of steps, and calories burned. The device wirelessly sends data to its Web site, fitbit.com, giving users minute-by-minute details. Users can add consumption information at the Web site, allowing an accurate picture of calorie consumption and expenditures. Unlike other devices, like the Nike + iPod Sport Kit that monitors walking and running and sells for $29 or the Zeo Personal Sleep Coach that records brainwaves while the user is sleeping and sells for $399, the Fitbit combines both functions. The firsttime Fitbit setup isn’t very easy for users, but once over that hurdle, it’s relative easy to use.
Refer to Fitbit. The company marketing the Fitbit does not currently market a product like this. Which of the following best represents the category of new product the Fitbit is for this company?
brainstorming
Refer to Fitbit. The idea for the Fitbit was generated from an employee retreat in which everyone was encouraged to think of unlimited product ideas for the fitness-minded consumer. Participants did not critique any of the ideas, as the goal at that point was just to generate ideas. What idea-generating technique does this illustrate?
commercialization
Refer to Fitbit. In terms of the newproduct development process, Fitbit’s availability in retail stores and online
shows that it is in the___stage.
diffusion process
Refer to Fitbit. The process by which the adoption of this innovative product spreads is called the:
relative advantage
Refer to Fitbit. The fact that Fitbit can monitor motion while awake and asleep makes it different from competing products that might increase its rate of adoption. Which product characteristic affecting the rate of adoption does this illustrate?
addition to existing product line
Rapala VMC Corporation
Finlandbased Rapala VMC Corporation is the world’s largest fishing lure manufacturer. It developed its first fishing lure–a cigarshaped minnow–in 1962. The annual market for fishing lures in terms of retail sales is approximately $600 million. Rapala VMC garnered one-third of that amount in 2008. New lures must be introduced each year in order to stay competitive in this industry. Like other lure manufacturers, Rapala focuses on two questions in developing and making new lures: Does it work, and does it look good? Developing a new lure takes two or three years and involves extensive field testing by tournament professionals and fishing guides. At the annual fishing industry trade show in 2008, Rapala unveiled the “dream lure for the 21st century.”
Refer to Rapala. The “dream lure for the 21st century” will more than likely be an example of a(n):
product development
Refer to Rapala. The testing of new lures by tournament professionals and fishing guides would take place in which stage of new-product development?
commercialization
Refer to Rapala. After the trade show, the newest lure made by Rapala will enter which stage of the new-product development process?
innovators
Refer to Rapala. Because buyers of fishing lures want to have the newest, most technologically improved lure,
most of Rapala’s customers would more than likely fall into the____category of adopters.
relative advantage
Refer to Rapala. The degree to which the newest lures are perceived as superior to earlier models refers to their____, a characteristic used to predict the rate of adoption.
maturity
Refer to Rapala. Fishing lures are most likely in the____stage of their product life cycle.
revision of existing product
Going to the Dogs
Demand for pet services is greatly increasing across the United States. In fact, Americans will spend nearly $44 billion dollars on their pets this year. Many American dog owners are seeking out “doggy day cares” that are more like a resort or spa than an ordinary kennel for their canine companion. Day care services for dogs now include toy rooms, outside play areas, doggie massages, treadmills, swimming pools, and cushy beds for nap time. Pet owners can watch their pets via a webcam, and some doggy day cares have a phone where owners can talk to their dogs when they feel their pets need to hear their voices. Rates vary from $20 to $45 a day per pet, depending on the amenities that the pet owner chooses.
Refer to Going to the Dogs. The doggy day care center is more like a dog resort than a dog kennel. A dog day care represents what type of new product?
a focus group
Refer to Going to the Dogs. Suppose that before opening the It’s a Dog’s Life doggy resort the owners gathered together a group of ten dog owners to discuss what they would want to see in the ideal dog day care center. This would be an example of:
business analysis
Refer to Going to the Dogs. Before opening the It’s a Dog’s Life doggy resort, the potential company owners projected the costs involved in providing the services the target market (dog owners) appears to desire. Unfortunately, a decision was made to not proceed with the doggy resort, as the owners felt the cost to provide the services was too high considering the rates the target market would be willing to pay. This would be an example of:
innovation
Refer to Going to the Dogs. Laura felt a little bad about leaving her dog, Toby, at home all day while she was at work. She remarked to a coworker one day about her concerns and was surprised when the coworker told her about the local “doggy daycare” business, which she had never heard of before. Because Laura did not know such a service existed, “doggy daycare” represented a(n) to her.
observability
Refer to Going to the Dogs. For many dog owners, it may be hard to understand the difference between a traditional kennel and a dog day care, especially given the price differential. As a result, dog day cares may offer special low rates for first-time users in an effort to reduce which of the following issues concerning the rate of diffusion?
compatibility
Refer to Going to the Dogs. One challenge to adoption of the dog day care is the fact that dog owners are used to paying a somewhat minimal fee for boarding their dogs in a kennel, while a day care center may demand many times as much for the same time span. This suggests that the____of the new product may affect the rate of diffusion.
growth
Refer to Going to the Dogs. Central Bark Doggie Day Care currently has 31 locations, with a new Gainesville, Florida, location coming soon. With the opening of competition in the form of Camp Bow Wow and others, it appears that the dog day care product is moving into the____stage of the product life cycle.