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Chapter 06

Student: ___________________________________________________________________________


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
A. Target marketing
B. Market segmentation
C. Product positioning
D. Diversification


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 penetration
B. Market segmentation
C. Product development
D. Target marketing


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 extensions
B. Lower competition among products within a single market segment
C. Multimillion-dollar businesses that serve large market segments
D. Many new media that appeal to broad and wide interest groups


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 maturing
B. Social and economic forces have resulted in customers with less disposable incomes
C. An increasing trend toward microsegmentation exists in which extremely small market segments are
D. Competitive inertia during the market shakeout period as the market transitions from product maturity
to the decline stage


Which of the following is not an objective entailed in the market segmentation process?
A. Identifying a homogeneous segment that differs from other segments
B. Specifying criteria that define the segment
C. Developing strategic alliances in the decline stage of the product
D. Determining segment size and potential


All of the following are reasons why the segmentation criteria should describe the market segments
clearly except
A. Members can be readily identified and accessed
B. Marketers need to know whether a given prospective customer is or is not in the target market
C. To analyze customers' likely responses to differences in the elements of the marketing mix
D. To reach the prospective customer with advertising or other marketing communication messages


Which of the following statements emphasizes the impact of income in segmenting markets
A. Mobile service providers are focusing attention on the 65-plus segment to improve penetration
B. 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


Which of the following statements about geographic segmentation is incorrect?

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


"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. Demographic
B. Geographical
C. Behavioral
D. 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
B. In the United States, car companies have found ways to cater to the needs of the multicultural segment
C. The sales of certain kinds of products such as trade magazines are tied closely to occupational type
D. Over the years, Volvo has emphasized safety whereas Jaguar has emphasized styling, quickness, and
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 product
B. Buying situation for the consumer
C. Choice criteria of the consumer
D. Centralized purchasing structure
12. Principle-oriented consumers are consumers who
A. Are motivated by abstract and idealized criteria for products or services
B. Shop for products that demonstrate the consumer's success
C. Are guided by the need for social or physical activity, variety, and risk taking
D. 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 sought
B. Purchasing structure
C. Average income
D. 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 rebuy
B. New task rebuy
C. Modified rebuy
D. New buying situation

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 criteria
B. To prioritize different segments to decide which segments to target
C. To analyze how resources and marketing efforts should be allocated
D. 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 factors
B. Project future position for each segment
C. Rate segments on each factor, and plot results on matrices
D. 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 operations
B. Invest to improve position only in areas where the risk is low
C. Emphasize profitability by increasing productivity and build up ability to counter competition
D. 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.

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 marketattractiveness 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
Difficulty: Easy
Difficulty: Hard
Difficulty: Medium
Walker - Chapter 06

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