CHAPTER 7

MARKET SEGMENTATION, TARGETING, AND POSITIONING

FOR COMPETITIVE ADVANTAGE
MULTIPLE CHOICE QUESTIONS
1. At one time, firms scattered their marketing efforts (a shotgun approach) to reach
consumers. Today, a firm is more likely to use:
a. a baooka approach, !here special effects are used to e"plode into the buyer#s
consciousness.
b. a knife approach, !here the firm tries to cut to the most important product
ad$antage.
c. a rifle approach, !here the firm focuses on the buyers !ho ha$e greater
interest in the $alues that the firm creates best.
d. a pistol approach, !here the firm realies that it has multiple chances to gain
consumer interest.
Answer: (c D!""!c#$%&: (' P()e: '*+
%. &&&&&&&&&&&&&&&& is the process of di$iding a market into smaller groups of buyers
!ith distinct needs, characteristics, or beha$iors !ho might re'uire separate products
or marketing mi"es.
a. (ass marketing
b. (arket segmentation
c. Target marketing
d. (arket positioning
Answer: (, D!""!c#$%&: (- P()e: '*+
). &&&&&&&&&&&&&&&&&& is the process of e$aluating each market segment#s
attracti$eness and selecting one or more segments to enter.
a. (ass marketing
b. (arket segmentation
c. (arket targeting
d. (arket positioning
Answer: (c D!""!c#$%&: (' P()e: '*+
*. +etting the competiti$e positioning for the product and creating a detailed marketing
mi" is called:
a. mass marketing.
b. target marketing.
c. market segmentation.
d. marketing positioning.
1*1
Answer: (. D!""!c#$%&: (- P()e: '*+
,. -uring !hich step of the marketing segmentation, targeting, and positioning process
does the firm de$elop a marketing mi" for each segment.
a. market segmentation
b. market targeting
c. market positioning
d. The firm does not go through the de$elopment during any of the abo$e steps.
Answer: (c D!""!c#$%&: (' P()e: '*+, F!)#re 7/-
/. -uring one of the steps in the marketing segmentation, targeting, and positioning
process, the marketer de$elops measures of segment attracti$eness. This procedure
belongs in the category of:
a. market segmentation.
b. market targeting.
c. market massing.
d. market positioning.
Answer: (, D!""!c#$%&: (' P()e: '*+, F!)#re 7/-
0. 1hen companies di$ide large, heterogeneous markets into smaller segments that can
be reached more efficiently !ith products and ser$ices that match their uni'ue needs,
they are conducting a &&&&&&&&&&&&&&&&&&& process.
a. marketing aggregation
b. marketing positioning
c. marketing target
d. marketing segmentation
Answer: (. D!""!c#$%&: (- P()e: '*0
2. (arket segmentation can be carried out at se$eral different le$els. 1hich of the
follo!ing 1345- 63T 78 among these le$els.
a. micromarketing
b. segment marketing
c. competition marketing
d. niche marketing
Answer: (c D!""!c#$%&: (- P()e: '*0
9. Another !ord for complete segmentation is:
a. macromarketing.
b. micromarketing.
c. niche marketing.
d. mass marketing.
1*%
Answer: (, D!""!c#$%&: (' P()e: '*0
1:. ;or most of the %:th century, firms practiced !hich of the follo!ing forms of
marketing.
a. mass marketing
b. micromarketing
c. niche marketing
d. segment marketing
Answer: (( D!""!c#$%&: (' P()e: '*0
11. 1hich of the follo!ing marketers epitomied the mass marketing strategy.
a. <enry ;ord
b. 7ill =ates
c. ;.1. 1ool!orth
d. Thomas A. 8dison
Answer: (( D!""!c#$%&: (* P()e: '*0
1%. 1hich of the follo!ing statements is closest to the traditional argument for mass
marketing.
a. ;ind a need and fill it.
b. The largest potential market can lead to the lo!est costs, !hich translates into
either lo!er prices or higher margins.
c. The rifle approach rarely hits !hat it is aiming at.
d. The consumer is king. 5ong li$e the king.
Answer: (, D!""!c#$%&: (' P()e: '*0
1). >solating broad segments that make up a market and adapting the marketing to match
the needs of one or more segments is called &&&&&&&&&&&&&&&&&.
a. niche marketing
b. mass marketing
c. segment marketing
d. micromarketing
Answer: (c D!""!c#$%&: (- P()e: '*7
1*. 1hen =eneral (otors designs specific models for different income and age groups, it
is practicing !hich of the follo!ing marketing formats.
a. micromarketing
b. macromarketing
c. mass marketing
d. segment marketing
1*)
Answer: (. D!""!c#$%&: (- P()e: '*7
1,. +egment marketing offers se$eral benefits o$er mass marketing. All of the follo!ing
!ould be among those benefits 8?@8AT:
a. the company can market more efficiently and target its programs to!ard only
those consumers that it can ser$e best.
b. the company can fineBtune its programs to meet the needs of carefully defined
segments.
c. the company can reduce costs because of the ability to sell to customers oneBonB
one.
d. the company may face fe!er competitors if fe!er competitors are focusing on the
company#s chosen market segment.
Answer: (c D!""!c#$%&: (* P()e: '*7
1/. A company is practicing &&&&&&&&&&&&&&&& if it focuses on subsegments !ith
distincti$e traits that may seek a special combination of benefits.
a. micromarketing
b. niche marketing
c. mass marketing
d. segment marketing
Answer: (, D!""!c#$%&: (' P()e: '*7
10. As an e"ample of &&&&&&&&&&&&&&&, a company could build sport utility $ehicles
and direct marketing efforts to!ards the lu"ury +4C market (as does 5e"us).
a. micromarketing
b. niche marketing
c. mass marketing
d. segment marketing
Answer: (, D!""!c#$%&: (* P()e: '*7
12. American 8"press offers not only its traditional green cards but also gold cards,
corporate cards, and e$en a black card, called the @enturian, !ith a D1,::: annual
fee aimed at a small group of superpremium customers. 1hich of the follo!ing
marketing efforts is American 8"press follo!ing !ith their credit card policies.
a. macromarketing
b. segment marketing
c. niche marketing
d. selfBmarketing
Answer: (c D!""!c#$%&: (' P()e: '*7
1**
19. &&&&&&&&&&&&&&&&& is the practice of tailoring products and marketing programs to
suit the tastes of specific indi$iduals and locations.
a. 6iche marketing
b. (icromarketing
c. +egment marketing
d. (ass marketing
Answer: (, D!""!c#$%&: (' P()e: '*1
%:. (icromarketing includes:
a. segment marketing and niche marketing.
b. mass marketing and demographic marketing.
c. local marketing and indi$idual marketing.
d. indi$idual marketing and selfBmarketing.
Answer: (c D!""!c#$%&: (' P()e: '*1
%1. &&&&&&&&&&&&&& in$ol$es tailoring brands and promotions to the needs and !ants of
specific small groups such as cities, neighborhoods, and e$en specific stores.
a. 6iche marketing
b. 5ocal marketing
c. -etail marketing
d. >ndi$idual marketing
Answer: (, D!""!c#$%&: (- P()e: '*1
%%. All of the follo!ing are considered to be dra!backs of local marketing 8?@8AT:
a. it can dri$e up manufacturing and marketing costs by reducing economies of
scale.
b. it can create logistical problems !hen the company tries to meet $aried
re'uirements.
c. it can attract un!anted competition.
d. it can dilute the brand#s o$erall image.
Answer: (c D!""!c#$%&: (* P()e: '*1
%). &&&&&&&&&&&&&&&& is tailoring products and marketing programs to the needs and
preferences of indi$idual customers.
a. 6iche marketing
b. 5ocal marketing
c. +elfBmarketing marketing
d. >ndi$idual marketing
Answer: (. D!""!c#$%&: (- P()e: '*1
1*,
%*. >ndi$idual marketing is kno!n by a $ariety of names. All of the follo!ing !ould
appropriately be called indi$idual marketing 8?@8AT:
a. monoBmarketing.
b. oneBtoBone marketing.
c. customied marketing.
d. marketsBofBone marketing.
Answer: (( D!""!c#$%&: (' P()e: '*1
%,. &&&&&&&&&&&&&& is the process through !hich firms interact oneBtoBone !ith
masses of customers to create customerBuni'ue $alue by designing products and
ser$ices tailorBmade to indi$idual needs.
a. (ass marketing
b. -etail marketing
c. (ass globaliation
d. (ass customiation
Answer: (. D!""!c#$%&: (' P()e: '*2
%/. The mo$e to!ard indi$idual marketing mirrors the trend in consumer &&&&&&&&&.
a. backlash
b. selfBmarketing.
c. dialog marketing
d. niche marketing
Answer: (, D!""!c#$%&: (- P()e: '3'
%0. All of the follo!ing are considered to be maEor $ariables for segmenting markets
8?@8AT:
a. geographic $ariables.
b. trait $ariables.
c. demographic $ariables.
d. psychographic $ariables.
Answer: (, D!""!c#$%&: (' P()e: '3*, T(,$e 7/-
%2. >f a marketer attempts segmentation of a market by di$iding the market into different
units based on nations, regions, states, counties, cities, or e$en neighborhoods, then
the marketer is practicing &&&&&&&&&&&& segmentation.
a. demographic
b. geographic
c. political
d. cartographic
Answer: (, D!""!c#$%&: (- P()e: '3*, T(,$e 7/-
1*/
%9. 1hen @ampbell +oup makes @aEun gumbo soup for 5ouisiana and (ississippi and
nacho cheese soup for Te"as and @alifornia, it is practicing &&&&&&&&&&&&&&&
segmentation.
a. geographic
b. demographic
c. psychographic
d. beha$ioral $ariable
Answer: (( D!""!c#$%&: (' P()e: '3'
):. All of the follo!ing !ould be !ays to segment !ithin the category of psychographic
segmentation 8?@8AT:
a. social class.
b. occupation.
c. lifestyle.
d. personality.
Answer: (, D!""!c#$%&: (* P()e: '3*, T(,$e 7/-
)1. All of the follo!ing !ould be !ays to segment !ithin the category of beha$ioral
$ariable segmentation 8?@8AT:
a. occasions.
b. user status.
c. loyalty status.
d. lifestyle.
Answer: (. D!""!c#$%&: (* P()e: '3*, T(,$e 7/-
)%. &&&&&&&&&&&&&&& factors are the most popular bases for segmenting customer
groups.
a. =eographic
b. -emographic
c. Asychographic
d. 7eha$ioral
Answer: (, D!""!c#$%&: (* P()e: '33
)). &&&&&&&&&&&&&&&&& factors or $ariables are generally easier to measure than most of
the other types of $ariables or factors.
a. =eographic
b. -emographic
c. Asychographic
d. 7eha$ioral
Answer: (, D!""!c#$%&: (* P()e: '33
1*0
)*. Age is often a poor predictor of a person#s lifeBcycle, health, !ork, or family status.
Therefore, !hen using age and lifeBcycle segmentation, the marketer must guard
against:
a. stereotyping.
b. gender bias.
c. racial bias.
d. intellectual bias.
Answer: (( D!""!c#$%&: (' P()e: '33/'3+
),. Aroctor F =amble Eoined a gro!ing list of marketers !ho use &&&&&&&&&&
segmentation !hen they de$eloped +ecret, a brand specially formulated for a
!oman#s chemistry.
a. geographic
b. income
c. benefit
d. gender
Answer: (. D!""!c#$%&: (- P()e: '3+
)/. All of the follo!ing 1eb sites !ould be e"amples of sites !ishing to make gender
segmentation appeals as their primary marketing segmentation strategy 8?@8AT:
a. !!!.iCillage.com.
b. !!!.girlson.com.
c. !!!.playboy.com.
d. !!!.neimanmarcus.com.
Answer: (. D!""!c#$%&: (- P()e: '30
)0. &&&&&&&&&&&&&&&&&&& is the process of di$iding a market into different groups
based on social class, lifestyle, or personality characteristics.
a. =ender segmentation
b. 7eha$ioral segmentation
c. Asychological segmentation
d. Asychographic segmentation
Answer: (. D!""!c#$%&: (' P()e: '37
)2. (any marketers belie$e that &&&&&&&&&&&&&&&& are the best starting point for
building market segments and programs.
a. beha$ioral $ariables
b. geographic $ariables
c. demographic $ariables
d. psychographic $ariables
1*2
Answer: (( D!""!c#$%&: (* P()e: '37
)9. @oke in the morning is an attempt to segment according to !hich of the follo!ing.
a. gender segmentation
b. psychographic segmentation
c. benefit segmentation
d. occasion segmentation
Answer: (. D!""!c#$%&: (' P()e: '31
*:. The orange Euice manufacturers kno! that orange Euice is most often consumed in the
mornings. <o!e$er, they !ould like to change this and make the drink acceptable
for other time periods during the day. 1hich form of segmentation !ould they need
to !ork !ith to establish a strategy reflecti$e of their desires.
a. gender segmentation
b. benefit segmentation
c. occasion segmentation
d. age and lifeBcycle segmentation
Answer: (c D!""!c#$%&: (' P()e: '31
*1. 1hen companies market products on the basis of !hat the product#s attributes !ill do
for a gi$en segment of consumers, they are using a po!erful form of beha$ioral
segmentation kno!n as:
a. occasion segmentation.
b. benefit segmentation.
c. user status segmentation.
d. usage rate segmentation.
Answer: (, D!""!c#$%&: (' P()e: '32
*%. >f people that take cruise ship $acations do so because of gambling, fun, or for
ad$enture or educational purposes, then it is possible to segment this market based
on !hat might be called:
a. psychographic segmentation.
b. benefit segmentation.
c. demographic segmentation.
d. gender segmentation.
Answer: (, D!""!c#$%&: (- P()e: '32
1*9
*). A marketing firm classifies customers as nonusers, e"Busers, potential users, firstB
time users, and regular users. 1hich of the follo!ing classifications is the firm most
likely using to segment its market and de$ise strategies for selling its products and
ser$ices.
a. user status
b. user rate
c. loyalty status
d. benefit status
Answer: (( D!""!c#$%&: (- P()e: '32
**. 3ne of the most promising de$elopments in multi$ariable segmentation is called
&&&&&&&&&&&&&&&&&, !here a host of demographic and socioeconomic factors are
used.
a. terragraphic segmentation
b. fermagraphic segmentation
c. geothermal segmentation
d. geodemographic segmentation
Answer: (. D!""!c#$%&: (' P()e: '+4
*,. All of the follo!ing are maEor $ariables that can be used to segment business markets
8?@8AT:
a. operating characteristics.
b. psychographics.
c. demographics.
d. situational factors.
Answer: (, D!""!c#$%&: (' P()e: '+4
*/. &&&&&&&&&&&&&&&&&&&& is forming segments of consumers !ho ha$e similar needs
and buying beha$ior e$en though they are located in different countries.
a. 8"ternal segmentation
b. >nternational segmentation
c. >ntermarket segmentation
d. 8nriched segmentation
Answer: (c D!""!c#$%&: (' P()e: '+*
*0. 1hen (ercedesB7en targets the !orld#s !ellBtoBdo, regardless of their country, they
are most likely follo!ing a segmentation strategy called:
a. e"ternal segmentation.
b. international segmentation.
c. enriched segmentation.
d. intermarket segmentation.
1,:
Answer: (. D!""!c#$%&: (' P()e: '+*
*2. @learly, there are many !ays to segment markets. <o!e$er, not all segmentations are
effecti$e or successful. To be useful, market segments must ha$e all the follo!ing
characteristics 8?@8AT being:
a. measurable.
b. plausible.
c. accessible.
d. actionable.
Answer: (, D!""!c#$%&: (' P()e: '+3
*9. >t is a fact that there are )%., million leftBhanded people in the 4nited +tates.
<o!e$er, most marketers do not attempt to appeal to or design products for this
group because there is little in the !ay of census data about this group. Therefore,
this group fails in one of the re'uirements for effecti$e segmentation. 1hich of the
follo!ing is most likely to apply in this case.
a. actionable
b. substantial
c. differentiable
d. measurable
Answer: (. D!""!c#$%&: (' P()e: '+3
,:. Gno!ing the sie, purchasing po!er, and profiles of a market segment are all part of
!hich of the follo!ing characteristics.
a. substantiality
b. measurability
c. actionability
d. accessibility
Answer: (, D!""!c#$%&: (' P()e: '+3
,1. The ability to reach and ser$e a market segment defines the characteristic of:
a. measurability.
b. actionability.
c. accessibility.
d. substantiality.
Answer: (c D!""!c#$%&: (- P()e: '+3
1,1
,%. (arried and unmarried !omen may use the same perfume, and might respond in a
similar !ay to promotional sales of this fragrance. >t might, therefore, be difficult to
consider that marital status designates separate segments in this case. 1hich of the
follo!ing re'uirements of effecti$e segmentation !ould probably rule out
segmentation based on marital status in this case.
a. actionable
b. substantial
c. differentiable
d. measurable
Answer: (c D!""!c#$%&: (' P()e: '+3
,). +tephanie @ross has a small clothing store, and has identified se$en separate
categories of clothing buyers that form the general market for clothing stores in her
city. <er problem is that because of a limited ad$ertising budget, she cannot
effecti$ely reach these $arious segments (especially since se$eral of the segments are
distant from her store). 1hich of the follo!ing re'uirements of effecti$e
segmentation !ould probably rule out segmentation based on +tephanie#s current
segmentation classification scheme.
a. actionable
b. substantial.
c. differentiable
d. measurable
Answer: (( D!""!c#$%&: (* P()e: '+3

,*. >n market targeting, a firm looks at all of the follo!ing factors 8?@8AT:
a. segment sie and gro!th.
b. segment structural attracti$eness.
c. company obEecti$es and resources.
d. segment public relations $alue.
Answer: (. D!""!c#$%& (' P()e: '++
,,. All of the follo!ing factors can affect the attracti$eness of a market segment
8?@8AT:
a. the presence of many strong and aggressi$e competitors.
b. the likelihood of go$ernment monitoring.
c. actual or potential substitute products.
d. the po!er of buyers in the segment.
Answer: (, D!""!c#$%&: (' P()e: '+0
1,%
,/. A(n) &&&&&&&&&&&&&&&&&& is a set of buyers sharing common needs or
characteristics that the company decides to ser$e.
a. undifferentiated market
b. market segment
c. target market
d. differentiated market
Answer: (c D!""!c#$%&: (- P()e: '++
,0. A marketBco$erage strategy in !hich a firm decides to ignore market segment
differences and go after the !hole market !ith one offer is called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
Answer: (( D!""!c#$%&: (- P()e: '++, '+0, F!)#re 7/*
,2. -eciding to target se$eral market segments and design separate offers for each is
called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
Answer: (, D!""!c#$%&: (- P()e: '+0, F!)#re 7/*
,9. A gro!ing number of firms ha$e adopted differentiated marketing. <o!e$er, one
dra!back to this approach is that it:
a. is hard for managers to understand.
b. increases the costs of doing business.
c. alerts competitors as to your strategy.
d. is a poor strategy internationally.
Answer: (, D!""!c#$%&: (' P()e: '+0
/:. The practice of going after a large share of a smaller market or subsets of a fe!
markets is called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
Answer: (c D!""!c#$%&: (- P()e: '+7, F!)#re 7/*
1,)
/1. All of the follo!ing !ould be among the chief factors to consider !hen choosing a
marketBco$erage strategy 8?@8AT:
a. organiational culture.
b. product $ariability.
c. product#s lifeBcycle.
d. market $ariability.
Answer: (( D!""!c#$%&: (- P()e: '+1
/%. The !ay the product is defined by consumers on important attributes is called
&&&&&&&&&&&&&&&&.
a. market segmentation
b. image psychology
c. product position
d. market targeting
Answer: (c D!""!c#$%&: (- P()e: '04
/). The positioning task consists of three steps. 1hich of the follo!ing does not belong.
a. >dentifying a set of possible competiti$e ad$antages upon !hich to build a position.
b. @hoosing the right competiti$e ad$antages.
c. @omparing the position !ith ethical and legal guidelines established by the trade.
d. +electing an o$erall positioning strategy.
Answer: (c D!""!c#$%&: (' P()e: '04
/*. The key to !inning and keeping customers is to understand their needs and buying
processes better than competitors do and:
a. ad$ertise constantly to let customers kno! about changes in products and
ser$ices.
b. hire the best sales people.
c. ha$e an updated 1eb presence.
d. to deli$er more $alue.
Answer: (. D!""!c#$%&: (- P()e: '04
/,. Aroduct differentiation can be along all of the follo!ing lines 8?@8AT:
a. consistency.
b. durability.
c. reliability.
d. competiti$e parity.
Answer: (. D!""!c#$%&: (' P()e: '0-
1,*
//. =aining competiti$e ad$antage through speedy or careful deli$ery is an e"ample of
!hich type of differentiation.
a. product
b. ser$ices
c. personnel
d. image
Answer: (, D!""!c#$%&: (' P()e: '0-
/0. The strategy of choosing one attribute to e"cel at to create competiti$e ad$antage is
kno!n as (the):
a. uni'ue selling proposition.
b. underpositioning.
c. o$erpositioning.
d. confused positioning.
Answer: (( D!""!c#$%&: (- P()e: '0'
/2. >n general, a company needs to a$oid three maEor positioning errors. 1hich of the
follo!ing is 63T one of those errors.
a. underpositioning
b. repositioning
c. o$erpositioning
d. confused positioning
Answer: (, D!""!c#$%&: (' P()e: '0*
/9. >n determining !hich differences to promote, focusing on a difference that deli$ers a
highly $alued benefit to target buyers !ould mean selecting the difference that is
most:
a. important.
b. distincti$e.
c. superior.
d. communicable.
Answer: (( D!""!c#$%&: (* P()e: '0*
0:. @hoosing a product difference that competitors cannot easily copy !ould be !hich
kind of differentiation criterion.
a. important
b. distincti$e
c. superior
d. preempti$e
Answer: (. D!""!c#$%&: (* P()e: '0*
1,,
01. A brand#s &&&&&&&&&&&&& is the full positioning of the brandHthe full mi" of
benefits upon !hich it is positioned.
a. distincti$e proposition
b. preempti$e proposition
c. $alue proposition
d. superior proposition
Answer: (c D!""!c#$%&: (' P()e: '0*
0%. The te"t describes a series of $alue propositions. 3f these propositions, +outh!est
Airlines has chosen to adopt the:
a. more for less proposition.
b. less for much less proposition.
c. same for less proposition.
d. more for more proposition.
Answer: (, D!""!c#$%&: (* P()e: '0*/'02, F!)#re 7/3, M(r5e%!n) (% 67r5 7/*
TRUE8FALSE QUESTIONS
0). @ompanies today realie that they can appeal to all buyers in the marketplace by
using concentrated marketing.
Answer: (F($se D!""!c#$%&: (' P()e: '*+
0*. 7ecause of profit pressures and the threat of the >nternet, most companies ha$e no!
mo$ed a!ay from market segmentation and targeting and to!ard mass marketing.
Answer: (F($se D!""!c#$%&: (' P()e: '*+
0,. 1ith respect to markets, the shotgun approach in marketing efforts seems to be
better than the rifle approach.
Answer: (F($se D!""!c#$%&: (' P()e: '*+
0/. (arket segmentation is the process of taking a market and di$iding the buyers into
distinct groups for !hich marketing mi"es can be constructed.
Answer: (Tr#e D!""!c#$%&: (- P()e: '*+
00. Today, most companies are rushing to!ard mass marketing because of the changing
nature of the marketplace.
Answer: (F($se D!""!c#$%&: (' P()e: '*0
1,/
02. A good illustration of the niche marketing approach !as !hen <enry ;ord said
(!ith respect to cars) they can ha$e any color they !ant as long as it#s black.
Answer: (F($se D!""!c#$%&: (' P()e: '*0
09. (icromarketing is focusing on subsegments or niches !ith distincti$e traits that may
seek a special combination of benefits.
Answer: (F($se D!""!c#$%&: (' P()e: '*7
2:. >f a marketer !ere to tailor products and marketing programs to the needs and !ants
of specific indi$iduals and local customer groups, the marketer !ould be practicing
micromarketing.
Answer: (Tr#e D!""!c#$%&: (- P()e: '*1
21. 3ne of the dra!backs for adopting a policy of local marketing is that it can dri$e up
manufacturing and marketing costs by reducing economies of scale.
Answer: (Tr#e D!""!c#$%&: (- P()e: '*1
2%. 7ecause buyers ha$e uni'ue needs and !ants, each buyer is potentially a separate
market.
Answer: (Tr#e D!""!c#$%&: (- P()e: '*1
2). @ustomied marketing is often called indi$idual marketing.
Answer: (Tr#e D!""!c#$%&: (- P()e: '*1
2*. An e"ample of a firm that practices indi$idual marketing is (attel, !ith its (y
-esign page of its 7arbie 1eb site.
Answer: (Tr#e D!""!c#$%&: (' P()e: '34/'3', M(r5e%!n) (% 67r5 7/-
2,. The mo$e to!ard indi$idual marketing mirrors the trend in consumer concentration
strategy.
Answer: (F($se D!""!c#$%&: (* P()e: '*2
2/. The most popular base for segmenting markets and customer groups is geographic
segmentation.
Answer: (F($se D!""!c#$%&: (' P()e: '3', '3*
1,0
20. -emographic $ariables are easier to measure than most other types of $ariables !ith
respect to segmentation.
Answer: (Tr#e D!""!c#$%&: (- P()e: '33
22. >ncome segmentation is used not only !ith the affluent, but also !ith the consumers
!ith lo!er spending po!er.
Answer: (Tr#e D!""!c#$%&: (' P()e: '37
29. Asychographic segmentation occurs !hen a market is di$ided into different groups
based on social class, lifestyle, or personality characteristics.
Answer: (Tr#e D!""!c#$%&: (- P()e: '37
9:. 3ne of the forms of beha$ioral segmentation !ould be lifestyle segmentation.
Answer: (F($se D!""!c#$%&: (' P()e: '3*, '37, T(,$e 7/-
91. >f a marketer !ere to link 4.+. @ensus data !ith lifestyle patterns to better segment
markets, this !ould be an e"ample of geodemographic segmentation.
Answer: (Tr#e D!""!c#$%&: (' P()e: '+4
9%. A common !ay to segment a business market !ould be to segment based on
operating characteristics and situational factors.
Answer: (Tr#e D!""!c#$%&: (' P()e: '+4
9). +egmenting international markets on the basis of geographic, economic, political,
cultural, and other factors is called international psychographics.
Answer: (F($se D!""!c#$%&: (' P()e: '+*
9*. To be useful, a market segment must be substantial.
Answer: (Tr#e D!""!c#$%&: (- P()e: '+3
9,. To be useful, a market segment must be conspicuous.
Answer: (F($se D!""!c#$%&: (- P()e: '+3
9/. A market segment is a set of buyers sharing common needs or characteristics that the
company decides to ser$e.
Answer: (F($se D!""!c#$%&: (* P()e: '++
1,2
90. @oncentrated marketing is a marketBco$erage strategy in !hich a firm decides to
ignore market segment differences and go after the !hole market !ith one offer.
Answer: (F($se D!""!c#$%&: (' P()e: '++
92. >f a firm decides to go after a large share of one or a fe! segments or niches, then
the firm !ill probably be follo!ing a concentrated marketing strategy.
Answer: (Tr#e D!""!c#$%&: (' P()e: '+7
99. >n market targeting, the issue is not how and for what, but who is targeted.
Answer: (F($se D!""!c#$%&: (* P()e: '+2
1::. A product#s position is the !ay the product is defined by consumers on important
attributes.
Answer: (Tr#e D!""!c#$%&: (- P()e: '04
1:1. 3ne of the maEor positioning errors that a company needs to a$oid is that of
confused positioning.
Answer: (Tr#e D!""!c#$%&: (- P()e: '0*
1:%. A difference is !orth establishing to the e"tent that it satisfies the criterion of
cultural imperati$e.
Answer: (F($se D!""!c#$%&: (' P()e: '0*
1:). According to the nine cell matri" that describes possible $alue propositions, the
cell that produces a higher price for reduced benefits should be pursued by the
marketer.
Answer: (F($se D!""!c#$%&: (' P()e: '03, F!)#re 7/3
1:*. According to the $alue proposition presented by +outh!est Airlines, the customer
gets less for much less.
Answer: (Tr#e D!""!c#$%&: (' P()e: '07, M(r5e%!n) (% 67r5 7/*
1,9
ESSA9 QUESTIONS
1:,. Aroctor F =amble makes eight brands of laundry detergent (Tide, @heer, 7old,
=ain, 8ra, -reft, ;ebree, and >$ory +no!). 8ach of these brands is directed to!ard a
different segment of the $ast laundry detergent market. @omment on Aroctor F =amble#s
strategy for this market. -escribe the company#s attitude to!ard intracompany brand
competition and competition from other competitors. ;inally, gi$e e"amples of ho! the
$arious laundry detergent brands are directed to!ard specific market segments by Aroctor
F =amble.
Answer:
The $arious Aroctor F =amble brands compete !ith one another on the same
supermarket shel$es. 1hy !ould the company allo! this to happen. The ans!er lies in
the fact that different people !ant different mi"es of benefits from the products that they
buy. ;or e"ample, laundry detergent customers !ant se$eral different things: to get
clothes clean, economy, bleaching po!er, fabric softening, fresh smell, strength or
mildness (depending on the cleaning chore), and lots of suds. The $arious Aroctor F
=amble products address these issues. The company !ill accept intracompany brand
competition (and by doing so, it !ill keep all the money from the $arious brands in one
common pocket rather than gi$ing it to competition). The company has also de$eloped a
separate brand for each of the eight important laundry detergent segments. ;or e"ample
(for other information see the introductory comments in the chapter !here all eight
segments are identified):
a) TideHan allBpurpose family detergent that is tough on greasy stains.
b) @heerHguards against fading, color transfer, and fuy buildBup.
c) 7oldHhas a builtBin fabric softener.
d) =ainHthe enyme fresh smelling detergent.
e) 8raHbuiltBin stain remo$ers.
f) -reftHremo$es baby stains.
g) ;ebree @lean 1ashHgets out difficult odors.
h) >$ory +no!Hmild product for cleaning fine !ashables and baby clothes.
D!""!c#$%&: (' P()e: '**/'*+
1:/. -efine market segmentation, market targeting, and market positioning. -emonstrate
through the steps of a model ho! these concepts fit together to aid the decision maker in
his or her attempt to use market segmentation in the marketing process.
Answer:
(arket segmentation is the process of di$iding a market into distinct groups of buyers
!ith different needs, characteristics, or beha$ior !ho might re'uire separate products or
marketing mi"es. (arket targeting in$ol$es e$aluating each segment#s attracti$eness and
deciding !hich segment(s) to enter. (arket positioning is arranging for a product to
occupy a clear, distincti$e, and desirable place relati$e to competing products in the
minds of target consumers. The marketer formulates a competiti$e position for a product
and a detailed marketing mi".
1/:
A model that might sho! the relationships bet!een these three terms is found in
;igure 0B1 in the chapter. The steps sho!n in this model are: (1) >dentify bases for
segmenting the market, (%) -e$elop profiles of resulting segmentsHthese t!o steps are
related to market segmentationI ()) -e$elop measures of segment attracti$eness, (*)
+elect the target segment(s)Hthese t!o steps are related to market targetingI (,) -e$elop
positioning for each target segment, and (/) -e$elop marketing mi"(es) for each target
segmentHthese t!o steps are related to marketing positioning.
D!""!c#$%&: (' P()e: '*+, F!)#re 7/-
1:0. >dentify the differences bet!een the mass marketing, segment marketing, niche
marketing, and micromarketing strategies.
Answer:
;or most of this century, businesses practiced mass marketing. They mass produced,
mass distributed, and mass promoted the same product in almost the same !ays to all
consumers. The argument for this approach !as that mass marketing creates the largest
potential market, !hich leads to lo!er costs, !hich in turn can translate into either lo!er
prices or higher margins. This approach has gi$en !ay to segment marketing, !here
marketers isolate broad segments that make up a market and adapt the marketing to
match the needs of one or more segments. The benefits of this approach are that the
company can market more effecti$ely and efficiently by creating programs that are
directed only to!ard those consumers that can be most effecti$ely ser$ed. >n niche
marketing, there is a focus on subsegments or niches !ith distincti$e traits that may seek
a special combination of benefits. 6iche marketers presumably understand their niches#
needs so !ell that their customers !illingly pay a price premium. The ne!est form of
segmentation is called micromarketing, !here the marketer tailors products and
marketing programs to suit the tastes of specific indi$iduals and locations. This can take
the form of either local or indi$idual marketing.
D!""!c#$%&: (' P()e: '*0/'3*, F!)#re 7/'
1:2. 5ist and briefly discuss the maEor bases for segmenting consumer markets.
-emonstrate ho! these maEor bases !ould compare to the bases used in segmenting
business markets (!hat are the differences and similarities.).
Answer:
The maEor bases for segmenting consumer markets are (1) geographic, (%) demographic,
()) psychographic, and (*) beha$ioral. 8"amples !ithin these categories might be:
geographic (country, region, density, or climate), demographic (age, gender, family sie,
income, occupation, or race), psychographic (social class, lifestyle, or personality), or
beha$ioral (occasions, benefits, user status, usage rate, loyalty, readiness stage, or attitude
to!ard the obEect). These bases are contrasted to the maEor bases for segmenting
business markets, !hich include (1) demographics, (%) operating $ariables, ())
purchasing approaches, (*) situational factors, and (,) personal characteristics. 8"amples
1/1
!ithin these categories might be demographics (industry, company sie, or location),
operating $ariables (technology, userJnonuser status, or customer capabilities),
purchasing approaches (purchasing function organiation, po!er structure, nature of
e"isting relationships, or purchasing policies), situational factors (urgency, specific
application, or sie of order), and personal characteristics (buyerBseller similarity,
attitudes to!ard risk, or loyalty). 6otice that similarities e"ist bet!een some of the
demographic and personal characteristics (beha$ioral) categories.
D!""!c#$%&: (* P()e: '3*/'+3, T(,$e 7/-
1:9. @onsumer and business markets use many of the same $ariables to segment their
markets. <o!e$er, there are also differences. 4sing the approach suggested in the te"t,
list and briefly describe the additional $ariables that !ould be important to the business
marketer !ho !ished to segment markets.
Answer:
+ome additional $ariables !ould include:
a). 3perating characteristicsHho! does the customer operate !ithin the industry.
b). Aurchasing approachesHare buying centers used.
c). +ituational factorsHare there certain times of the year !hen the buyer is more likely
to purchase.
d). Aersonal characteristicsHare there characteristics about the purchasing unit or the
senior managers that might impact the purchase decision.
D!""!c#$%&: (* P()e: '+4/'+'
11:. -efine and gi$e a specific e"ample of intermarket segmentation.
Answer:
To conduct intermarket segmentation, an international marketer forms segments of
consumers !ho ha$e similar needs and buying beha$ior e$en though they are located in
different countries. The te"t uses the e"amples of (TC (!ho targets the !orld of the
teen) and (ercedesB7en (!ho targets the affluent no matter !here they li$e).
D!""!c#$%&: (' P()e: '+*/'+3
111. As demonstrated in the te"t, there are se$eral !ays to segment a market. <o!e$er,
not all of these !ays are al!ays effecti$e. To be useful and effecti$e, market segments
should ha$e fi$e different characteristics. 5ist these and briefly e"plain each.
Answer:
(arket segments must be (1) measurable (in terms of sie, purchasing po!er, and clear
profiles), (%) accessible (can be effecti$ely reached and ser$ed), ()) substantial (large or
profitable enough), (*) differentiable (the segments are distinguishable and respond
differently to different marketing mi"es), and (,) actionable (can design programs for
attracting customers effecti$ely).
1/%
D!""!c#$%&: (' P()e: '+3
11%. A firm can adopt one of three marketBco$erage strategies !hen attempting to market
its goods and ser$ices. 5ist and describe each of these possible marketBco$erage
strategies and pro$ide and e"ample of each.
Answer:
Undifferentiated marketingHa marketBco$erage strategy in !hich a firm decides to
ignore market segment differences and go after the !hole market !ith one offer. >t relies
on mass marketing techni'ues. -istributing salt might be an e"ample of this form.
Differentiated marketingHa marketBco$erage strategy in !hich a firm decides to target
se$eral market segments and designs separate offers for each. Automobiles might be
e"amples of this strategy.
Concentrated marketingHa marketBco$erage strategy in !hich a firm goes after a large
share of one or a fe! subBmarkets. A specialty truck producer might be an e"ample of
this strategy.
D!""!c#$%&: (' P()e: '++/'+1, F!)#re 7/*
11). 1hat factors might a company need to consider !hen choosing a marketBco$erage
strategy. 8"plain and Eustify your choices.
Answer:
The te"t suggests the follo!ing factors:
a). company resources
b). product $ariability
c). the product#s life cycle
d). market $ariability
e). competitor#s marketing strategies
>f students present others, make sure they are Eustified.
D!""!c#$%&: (' P()e: '+1
11*. >n general, a company needs to a$oid three maEor positioning errors. 1hat are these
errors. Aresent a brief description and illustration of each.
Answer:
The maEor errors are:
a). 4nderpositioningHfailing to really position the company at all.
b). 3$erpositioningHgi$ing buyers too narro! a picture of the company.
c). @onfused positioningHlea$ing buyers !ith a confused image of a company.
1/)
+tudents are free to suggest their o!n illustrations. >f you !ould like more structure,
suggest this structure prior to assigning this 'uestion.
D!""!c#$%&: (' P()e: '03
11,. @ompanies are often faced !ith the problem of deciding !hich differences of a
product or ser$ice to promote. This is especially rele$ant to product positioning.
According to the te"t, a difference is !orth promoting if it satisfies se$en criteria. 1hat
are those criteria. 7riefly e"plain each.
Answer:
The se$en criteria suggested by the te"t include:
a). ImportantHthe difference deli$ers highly $alued benefit to target buyers.
b). DistinctiveHcompetitors do not offer the difference, or the company can offer it in a
more distincti$e !ay.
c). SuperiorHthe difference is superior to other !ays that customers might obtain the
same benefit.
d). CommunicableHthe difference is communicable and $isible to buyers.
e). PreemptiveHcompetitors cannot easily copy the difference.
f). AffordableHbuyers can afford to pay for the difference.
g). ProfitableHthe company can introduce the difference profitably.
D!""!c#$%&: (* P()e: '0*
APPLICATION QUESTION
11/. 6e! 7alance athletic shoe company has a difficult problemHho! to compete in the
highly competiti$e athletic shoe market against such industry giants as 6ike and Keebok.
The company does ha$e certain ad$antages (it makes a 'uality product, has a good
reputation !ith distributors, and is the only athletic shoe that offers !idth sies as !ell as
length sies) that it hopes !ill help meet the challenges of the industry giants. Lour Eob
as a strategic planning consultant is to formulate a marketBco$erage strategy for 6e!
7alance. Lou ha$e three optionsHundifferentiated marketing, differentiated marketing,
and concentrated marketing. @hoose one of these methods and support your choice !ith
a logical e"planation.
Answer:
+tudents are free to pick any method they !ish, ho!e$er, considering the competition,
the undifferentiated marketing method !ould be hard to support. This massBmarketing
strategy focuses on !hat is common in the needs of consumers, rather than !hat is
different. The company designs a product and a marketing program that !ill appeal to
the largest number of buyers. >t relies on mass distribution and mass ad$ertising, and it
aims to gi$e the product a superior image in people#s minds.
1/*
1ith the differentiated approach (the method most likely chosen by 6ike and Keebok), a
firm decides to target se$eral market segments or niches and designs separate offers for
each. 7y offering product and marketing $ariations, the company using this method
hopes for higher sales and a stronger position !ithin each market segment. The student
could make a case for this method, ho!e$er, this method re'uires e"pensi$e outlays such
as e"tra marketing research, forecasting, sales analysis, promotion planning, and channel
management.
1ith the concentrated approach (!hich generally appeals to companies !ith limited
resources), the company goes after a large share of a small market rather than a small
share of a large market. This method allo!s small companies to get a foothold against
larger, more resourceful competitors. The company is usually able to achie$e a strong
market position because of its greater kno!ledge of the segment#s needs and special
re'uirements. The company may also achie$e economies in the $arious *A areas.
<o!e$er, the segment that the company selects for attention must be carefully chosen
because all the eggs are in one basket. 6e! 7alance currently sells !ell in specialied
shoe stores (such as orthopedic stores) because of their !idth feature, their response to
dealer needs, and a limited but 'uality line. (ass merchandisers do not tend to carry this
brand.
5astly, students should consider (!hen selecting the strategy) a company#s resources, the
degree of product $ariability, the stage in the product#s lifecycle, market $ariability, and
competitor#s marketing strategies !hen making a final selection.
D!""!c#$%&: (* P()e: '++/'+2, F!)#re 7/*
1/,