Chapter 06Student: ___________________________________________________________________________

1. Identify the process by which a market is divided into distinct subsets of customers with similar needs and characteristics that led them to respond in similar ways to a particular product offering and marketing program.

A. Target marketingB. Market segmentationC. Product positioningD. Diversification

2. Which of the following involves evaluating the firm's mission and capabilities to deliver what each segment wants, in order to choose which segments it will serve?

A. Market penetrationB. Market segmentationC. Product developmentD. Target marketing

3. If in a certain country, the population growth has slowed, and more product-markets are maturing the result is most likely to be one of

A. Intense competition and increase in brand extensionsB. Lower competition among products within a single market segmentC. Multimillion-dollar businesses that serve large market segmentsD. Many new media that appeal to broad and wide interest groups

4. The competitive environment in some industries is witnessing developments such as build-to-order processes, mass-customization of products, and computer-aided design technology. What reason can be attributed to the rising importance of marketing segmentation in such an environment?

A. Population growth has increased, and more product-markets are maturingB. Social and economic forces have resulted in customers with less disposable incomesC.

An increasing trend toward microsegmentation exists in which extremely small market segments are targeted

D.

Competitive inertia during the market shakeout period as the market transitions from product maturity to the decline stage

5. Which of the following is not an objective entailed in the market segmentation process?

A. Identifying a homogeneous segment that differs from other segmentsB. Specifying criteria that define the segmentC. Developing strategic alliances in the decline stage of the productD. Determining segment size and potential

6. All of the following are reasons why the segmentation criteria should describe the market segments clearly except

A. Members can be readily identified and accessedB. Marketers need to know whether a given prospective customer is or is not in the target marketC. To analyze customers' likely responses to differences in the elements of the marketing mixD. To reach the prospective customer with advertising or other marketing communication messages

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7. Which of the following statements emphasizes the impact of income in segmenting markets geographically?

A. Mobile service providers are focusing attention on the 65-plus segment to improve penetrationB.

Toyota has launched an online information service aimed at women as they directly influence eight out of ten vehicle purchases

C.

Nokia has launched a subsidiary to create an ultra-exclusive mobile telephone targeting customers buying prestige products

D. The increase in the number of working women has created needs for specialized goods and services

8. Which of the following statements about geographic segmentation is incorrect?

A. It is used only in consumer marketsB. It is used when customers are unwilling to travel very far to obtain the goods they requireC. It is particularly important in retailing and many services businessesD. It is helpful as regions vary in their sales potential, customer needs, etc

9. "Gatorade's" original target market consisted of athletes who needed to replenish water and salts lost through perspiration. "Specialized" and "Gary Fisher" target bicyclists who wish to ride on single-track trails or back-country terrain. Which type of segmentation do these examples highlight?

A. DemographicB. GeographicalC. BehavioralD. Geodemographic

10. Which of the following illustrations exemplifies behavioral segmentation?

A.

Uni-Marts, Inc., a convenience store, focuses on small towns and rural areas, thereby avoiding big competitors

B. In the United States, car companies have found ways to cater to the needs of the multicultural segmentC. The sales of certain kinds of products such as trade magazines are tied closely to occupational typeD.

Over the years, Volvo has emphasized safety whereas Jaguar has emphasized styling, quickness, and status

11. Consumers evaluate product or brand alternative on the basis of desired characteristics and how valuable each characteristic is. This is referred to as the

A. Purchase influence for the productB. Buying situation for the consumerC. Choice criteria of the consumerD. Centralized purchasing structure

12. Principle-oriented consumers are consumers who

A. Are motivated by abstract and idealized criteria for products or servicesB. Shop for products that demonstrate the consumer's successC. Are guided by the need for social or physical activity, variety, and risk takingD. Provide consumer-inputs to marketers during product development

13. _____ will influence a buyer to consider all transactions with a given supplier on a global basis, to emphasize cost savings, and to minimize risk.

A. Benefits soughtB. Purchasing structureC. Average incomeD. Purchase influence

14. Which of the following occurs when some element, such as price or delivery schedules, has changed in a clientsupplier relationship?

A. Straight rebuyB. New task rebuyC. Modified rebuyD. New buying situation

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15. All of the following are benefits managers gain from applying a common analytical framework across segments to evaluate the potential of alternative market segments except

A. To compare the future potential of different segments using the same set of criteriaB. To prioritize different segments to decide which segments to targetC. To analyze how resources and marketing efforts should be allocatedD. To portray how different segments represent equally attractive opportunities

16. Which of the following marketing questions underlines the marketattractiveness of a firm?

A. Are there unmet or underserved needs we can satisfy?B. Can we perform against critical success factors?C. Stage of competing products in product life cycle: Is the timing right?D. Can we differentiate?

17. Possible shifts in customer needs and behavior, the entry or exit of competitors, and changes in their strategies are considered during this step of constructing a market-attractiveness/competitive-position matrix for evaluating potential target markets.

A. Select market-attractiveness and competitive-position factorsB. Project future position for each segmentC. Rate segments on each factor, and plot results on matricesD. Weigh each of the market-attractiveness and competitive-position factors

18. Identify the action point that a firm must take when the market attractiveness is moderate and the competitive position is weak.

A. Attempt to expand without high risk or minimize investment and focus on operationsB. Invest to improve position only in areas where the risk is lowC. Emphasize profitability by increasing productivity and build up ability to counter competitionD. Seek ways to increase current earnings without speeding market's decline

19. Explain Step 5 of constructing a market-attractiveness/competitive-position matrix for evaluating potential target markets.

20. Explain niche-market and growth-market strategies. Provide relevant examples.

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Chapter 06 Key 1. (p. 131) B

2. (p. 131) D

3. (p. 131-132) A

4. (p. 132) C

5. (p. 133) C

6. (p. 133) C

7. (p. 133-134) C

8. (p. 135) A

9. (p. 135) C

10. (p. 136) D

11. (p. 136) C

12. (p. 138) A

13. (p. 138) B

14. (p. 138) C

15. (p. 139) D

16. (p. 141) A

17. (p. 143) B

18. (p. 144) A

19. (p. 144) Step 5 consists of choosing segments to target and allocate resources. Managers should consider a market segment to be a desirable target only if it is strongly positive on at least one of the two dimensions of market attractiveness and potential competitive position and at least moderately positive on the other. However, a business may decide to enter a market that currently falls in the moderate position for both market-attractiveness and competitive-position factors, under these conditions: (1) managers believe that the market's attractiveness or their competitive strength is likely to improve over the next few years; (2) they see such markets as stepping-stones to entering larger, more attractive markets in the future; or (3) shared costs or synergies are present, thereby benefiting another entry.

20. (p. 145-146) Niche-market strategy involves serving one or more segments that, while not the largest, consist of a sufficient number of customers seeking somewhat-specialized benefits from a good or service. For example, overall coffee consumption is down in some countries, but the sales of gourmet coffees in coffee bars such as Starbucks or Coffee Republic have boomed in recent years. Growth-market strategy: Businesses pursuing a growth-market strategy often target one or more fast-growth segments, even though these segments may not currently be very large. It is a strategy often favored by smaller competitors to avoid direct confrontations with larger firms while building volume and share. Such a strategy usually requires strong R&D and marketing capabilities to identify and develop products appealing to newly emerging user segments, plus the resources to finance rapid growth. The problem, however, is that fast growth, if sustained, attracts large competitors. This happened to Apple when IBM entered the personal computer industry. The goal of the early entrant is to have developed an enduring competitive position via its products, service, distribution, and costs by the time competitors enter.

Chapter 06 Summary Category # of Questions

Difficulty: Easy 5Difficulty: Hard 5Difficulty: Medium 10Walker - Chapter 06 20