CH09TB

CHAPTER 9: MASTER TEST BANK
MARKET SEGMENTATION, TARGETING, AND POSITIONING

Test Item Table by Major Section of the Chapter and Blooms Level of Learning
Blooms Level of Learning (LL)

Major Section
of the Chapter
Level 1
Knowledge
(Knows Basic
Terms & Facts)
Level 2
Comprehension
(Understands Concepts &
Principles)
Level 3
Application
(Applies Principles)
1, 2, 3, 4, 5, 6, 7
Chapter
Opener:
Zappos.com
(pp. 218-220)
Why Segment
Markets?
(pp. 220-223)
8, 9, 16, 17, 20, 21,

33, 34, 57, 65, 67,
68, 70, 74
10, 11, 12, 13, 14, 15, 18, 19, 22,

25, 26, 27, 28, 29, 30, 37, 38, 39,
40, 41, 42, 43, 44, 45, 46, 47, 48,
51, 69, 71, 72, 75, 76, 77
224, 225, 226, 227, 228
23, 24, 31, 32, 35, 36, 49, 50,

52, 53, 54, 55, 56, 58, 59, 60,
61, 62, 63, 64, 66, 73
Steps in
Segmenting and
Targeting
Markets
(pp. 224-236)
97, 102, 111, 116,

126, 127, 139, 156,
157, 158
78, 79, 80, 81, 82, 83, 84, 85, 86,

87, 88, 89, 90, 91, 92, 93, 96, 98,
103, 110, 112, 114, 115, 117, 118,
119, 129, 130, 131, 132, 134,
135, 140, 142, 146, 147, 148,
152, 153, 159, 160, 161, 162,
163, 164, 165, 170, 171, 172,
173, 174, 175, 176, 177, 182,
185, 190, 191, 192
229, 230, 232, 234, 235, 236,
237, 238
94, 95, 99, 100, 101, 104,

105, 106, 107, 108, 109, 113,
120, 121, 122, 123, 124, 125,
128, 133, 136, 137, 138, 141,
143, 144, 145, 149, 150, 151,
154, 155, 166, 167, 168, 169,
178, 179, 180, 181, 183, 184,
186, 187, 188, 189
231, 233
Positioning the
Product
(pp. 236-238)
193, 194, 195, 196,

199, 201, 204, 209
202, 205, 206, 208, 210, 211,

212, 213, 214, 215, 216, 217, 218
239, 240
197, 198, 200, 203, 207, 219,

220
Video Case 9:
Prince Sports
(pp. 239-241)
221, 222, 223
NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.

Test Item Table by Learning Objective and Blooms Level of Learning
Blooms Level of Learning (LL)
Learning Objective
(LO)
LO1 Explain what market

segmentation is and
when to use it.
Level 1
Knowledge
(Knows Basic Terms
& Facts)
Level 2
Comprehension
(Understands Concepts
& Principles)
8, 9, 16, 17, 20, 21, 33,

34, 57, 65, 67, 68, 70,
74
1, 2, 3, 4, 5, 6, 7, 10, 11, 12,

13, 14, 15, 18, 19, 22, 25,
26, 27, 28, 29, 30, 37, 38,
39, 40, 41, 42, 43, 44, 45,
46, 47, 48, 51, 69, 71, 72,
75, 76, 77, 221, 222
224, 225, 226, 227, 228
23, 24, 31, 32, 35,

36, 49, 50, 52, 53,
54, 55, 56, 58, 59,
60, 61, 62, 63, 64,
66, 73
78, 79, 80, 81, 82, 83, 84,

85, 86, 87, 88, 89, 90, 91,
92, 93
229, 230
94, 95
231
97, 102, 111, 116, 126,

127, 139, 156, 157,
158
96, 98, 103, 110, 112, 114,

115, 117, 118, 119, 129,
130, 131, 132, 134, 135,
140, 142, 146, 147, 148,
152, 153, 223
232, 234, 235
99, 100, 101, 104,

105, 106, 107, 108,
109, 113, 120, 121,
122, 123, 124, 125,
128, 133, 136, 137,
138, 141, 143, 144,
145, 149, 150, 151,
154, 155
233
156, 157, 158
159, 160, 161, 162, 163,

164, 165, 170, 171, 172,
173, 174, 175, 176, 177,
182, 185, 190, 191, 192
236, 237, 238
166, 167, 168, 169,

178, 179, 180, 181,
183, 184, 186, 187,
188, 189
193, 194, 195, 196,

199, 201, 204, 209
202, 205, 206, 208, 210,

211, 212, 213, 214, 215,
216, 217, 218
239, 240
197, 198, 200, 203,

207, 219, 220
(pp. 220-223)
LO2 Identify the five steps

involved in segmenting
and targeting markets.
(pp. 224-225)
LO3 Recognize the bases
used to segment
consumer and
organizational
(business) markets.
(pp. 225-231)
LO4 Develop a marketproduct grid to

identify a target
market and
recommend resulting
actions.
Level 3
Application
(Applies
Principles)
(pp. 231-236)
LO5 Explain how
marketing managers
position products in
the marketplace.
(pp. 236-238)
NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.

MULTIPLE CHOICE QUESTIONS
9-1 CHAPTER OPENER: ZAPPOS.COM
COMPREHENSION
The company name Zappos was chosen because it

a. was the founders family name.
b. conveyed in Spanish the type of product sold.
c. inferred how quickly you could access the product.
d. contained letters from the names of the three founders.
e. reflected the brand name of the first line of shoes they sold.
Answer: b
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The company name is derived from the Spanish word zapatos, which means shoes.
COMPREHENSION
The primary focus of Zappos market segmentation strategy is to sell

a. a wide selection of shoes, clothes, accessories, and housewares to people who will buy them
online.
b. a wide selection of leather shoes and boots to retailers.
c. all types of shoes, accessories, and clothing to department stores.
d. Spanish novelties and accessories to organizations.
e. shoes in its own retailer stores.
Answer: a
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Hsieh, Lin, and founder Nick Swinmurn have given Zappos a clear, specific market
segmentation strategy: sell a huge selection of shoes, clothes, accessories, and housewares to
people who will buy them online.
COMPREHENSION
According to Toney Hsieh, CEO of Zappos, the greatest amount of time is spent
a. seeking out new and unusual styles of shoes from all over the world.
b. improving the website to make it faster, more interesting, and fun.
c. seeking out new markets that will go beyond the Internet.
d. finding the fastest and least expensive modes of delivery for its products.
e. finding ways to improve customer-service levels.
Answer: e
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Asked about Zappos, Tony Hsieh says, We try to spend most of our time on stuff that
will improve customer-service levels. This customer service obsession for its market segment of
online customers means that all new Zappos employeeswhether the chief financial officer or
childrens footwear buyergo through four weeks of customer-loyalty training.
COMPREHENSION
-3-
Tony Hsieh, CEO of Zappos, offers $2,000 to anyone who

a. identifies a completely new market segment with a product to match it.
b. finds a way of improving service to online customers.
c. takes the customer loyalty training class and decides to quit anyway.
d. finds a shoe-related product that Zappos does not already carry.
e. creates a theme for Weirdo Wednesday when company meetings are held.
Answer: c
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Hsieh offers $2,000 to anyone who wants to leave Zappos after completing the
training. The theory: If you take the money and run, youre not right for Zappos. Few take the
money!
COMPREHENSION
Building open and honest relationships with communication is an example of Zappos

__________.
a. profile of its target market
b. core values with its new ownerAmazon.com
c. ten core values for Zappos employees
d. qualities required of Zappos suppliers
e. qualities required of Zappos retailers
Answer: c
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Ten core values are the foundation for the Zappos culture, brand, and business
strategies. These include: deliver WOW through service, create fun and a little weirdness, and
build open and honest relationships with communication, just to name a few.
COMPREHENSION
Which of the following statements about Zappos is most accurate?

a. Zappos limits its inventory to an extensive selection of high-end fashion footwear.
b. Zappos carries more than 1,000 different brands.
c. Zappos can guarantee overnight shipping to all its customers because they know ahead of
time what they will be charged for express service.
d. Zappos is so successful because it has chosen a single mission to sell shoes and nothing
else.
e. Zappos offers a 30/60/90 return policy whereby refunds are based on how long youve had
the shoes.
Answer: b
Page(s): 219
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The choices for its online customers are staggering. Zappos carries more than 1,000
different brands. Recently, Zappos has added lines of clothes, accessories, and housewares.
COMPREHENSION
The Zappos segmentation strategy is based on

a. offering the absolute best selection of shoes and the absolute best service.
b. designing shoes for every type of occasion.
-4-
c. dividing all their customers into two distinct segments: people shopping for low price and
people shopping for style.
d. offering the best selection of shoes through multiple channels of distribution.
e. maintaining the simplest method of price points to make the purchase process as simple as
possible for its customers.
Answer: a
Page(s): 221
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The Zappos segmentation strategy is based on selling service elements that lead to a
positive customer experience and repeat purchasesthe absolute best selection of shoes and its
other lines, and the absolute best service.
9-8 MARKET SEGMENTATION
KNOWLEDGE
Aggregating prospective buyers into groups that have common needs and will respond similarly
to a marketing action is referred to as
a. consumer differentiation.
b. psychographics.
c. market segmentation.
d. market delineation.
e. aggregation marketing.
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
Rationale: Key term definitionmarket segmentation.
QD: Easy
KNOWLEDGE
Market segmentation refers to

a. the philosophy that to do a truly excellent job of marketing, a company should concentrate
only one customer segment at a time.
b. aggregating prospective buyers into groups that have common needs but who respond
differently to a marketing action.
c. aggregating prospective buyers into groups that have common needs and will respond
similarly to a marketing action.
d. disaggregating prospective buyers from groups into segments of one (individuals) and
creating or designing specific products that will satisfy each individuals unique needs.
e. the belief that it is possible to satisfy every customers needs if you can identify the correct
segment within which they belong.
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
Rationale: Key term definitionmarket segmentation.
QD: Easy
COMPREHENSION
Which of the following statements regarding market segmentation is most accurate?

a. Even if a firm finds only one potential market segment, it should take advantage of the
opportunity, no matter what.
b. Market segmentation only works for large corporations because small businesses dont have
the resources to engage in the process or implement the resulting marketing actions.
c. Governments should not attempt market segmentation because there is no need for them to do
so.
-5-
d. If a business firm goes to the trouble and expense of segmenting its markets, it expects to
increase its sales, profits, and return on investment.
e. Market segmentation strategies work less than 25 percent of the time. However, for the
instances that it does work, the benefits more than compensate for previous failures.
Answer: d
Page(s): 220-221
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A business firm segments its markets so it can respond more effectively to the wants
of groups of potential buyers and thus increase its sales, profits, and ROI.
COMPREHENSION
Market segmentation involves aggregating prospective buyers into groups that have common
needs and will
a. pay attention to marketing messages.
b. respond similarly to a marketing action.
c. be responsive to marketing research.
d. use the same payment methods.
e. comply with the organizations core values.
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segmentation involves aggregating prospective buyers into groups, or
segments, that (1) have common needs and (2) will respond similarly to a marketing action.
COMPREHENSION
Market segmentation involves aggregating prospective buyers into groups that (1) will respond
similarly to a marketing action and (2)
a. respond similarly to marketing messages.
b. have common needs.
c. have similar shopping styles.
d. will become loyal customers.
e. will become stakeholders of the organization.
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
The aggregation of prospective buyers into groups that (1) have common needs and (2) will
respond similarly to a marketing action is referred to as __________.
a. market diversification
b. market differentiation
c. market segmentation
d. market augmentation
e. market repositioning
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
-6-
COMPREHENSION
To be identified as a market segment, its members must

a. represent a large share of the entire market and have buying power.
b. have common needs and respond similarly to a marketing action.
c. have different needs and have potential for future growth.
d. have different needs and respond similarly to market actions.
e. have the potential for future growth and increased profit or ROI.
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
Market segmentation stresses __________ and relating them to specific marketing actions.
a. grouping people randomly within a market
b. grouping people according to similar needs
c. splitting people randomly within a market
d. dividing people into the smallest groups possible
e. identifying potential new buyers who are not yet familiar with a new product
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segmentation first stresses the importance of grouping people or organizations
in a market according to the similarity of their needs and the benefits they are looking for in
making a purchase. Second, such needs and benefits must be related to specific marketing
actions the organization can take.
9-16 MARKET SEGMENTS
KNOWLEDGE
Market segments refer to

a. the relatively heterogeneous groups of prospective buyers that result from the market
segmentation process.
b. the relatively homogenous groups of prospective buyers that result from the market
segmentation process.
c. the smallest number of buyers that have similar needs but do not react similarly in a buying
situation.
d. all buyers of a product or service who have previously purchased a particular firms products
or services and who intend to repeat that purchase sometime in the future.
e. all potential buyers of a product or service who intend to purchase a firms products or
services but who have not yet done so.
Answer: b
Page(s): 220
LO: 1
Rationale: Key term definitionmarket segment.
AACSB: Analytic
QD: Easy
KNOWLEDGE
The relatively homogenous group of prospective buyers that results from the market
segmentation process is referred to as a(n) __________.
-7-
a.
b.
c.
d.
e.
market segment
target market
customer base
ultimate consumer
preferred customer
Answer: a
Page(s): 220
LO: 1
Rationale: Key term definitionmarket segment.
AACSB: Analytic
QD: Easy
COMPREHENSION
The phrase relatively homogeneous collections of prospective buyers is most descriptive of

a. demographic clusters.
b. organizational buyers.
c. ultimate consumers.
d. market segments.
e. qualified prospects.
Answer: d
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segments are the relatively homogeneous groups of prospective buyers that
result from the market segmentation process.
COMPREHENSION
In marketing, each __________ consists of people who are relatively similar to each other in
terms of their consumption behavior.
a. market segment
b. demographic cluster
c. organizational buyer group
d. ultimate consumer group
e. qualified prospect group
Answer: a
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segments are the relatively homogeneous groups of prospective buyers that
result from the market segmentation process.
9-20 PRODUCT DIFFERENTIATION
KNOWLEDGE
A marketing strategy that involves a firm using different marketing mix activities to help
consumers perceive the product as being different and better than competing products is referred
to as __________.
a. product repositioning
b. points of difference
c. market differentiation
d. product positioning
e. product differentiation
Answer: e
Page(s): 220
LO: 1
AACSB: Analytic
Rationale: Key term definitionproduct differentiation.
-8-
QD: Easy
KNOWLEDGE
Product differentiation refers to

a. a good, service, or idea consisting of a bundle of tangible and intangible attributes that
satisfies consumers needs.
b. the unique combination of product benefits received by targeted buyers.
c. those characteristics of a product that make it superior to competitive substitutes.
d. the legal requirement that requires a specified degree of distinction between products to
ensure an organizations intellectual property rights.
e. a marketing strategy that involves a firm using different marketing mix activities to help
consumers perceive the product as being different and better than competing products.
Answer: e
Page(s): 220
LO: 1
AACSB: Analytic
QD: Easy
COMPREHENSION
Which strategy involves a firms using different marketing mix activities to help consumers
perceive the product as being different and better than competing products?
a. points of difference
b. market differentiation
c. product differentiation
d. market penetration
e. product positioning
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
APPLICATION
When Procter & Gamble introduced Crest toothpaste, the first fluoride toothpaste, it was intended
for use by children and was therefore given a child-appealing bubblegum flavor. Sometime later,
the same basic formula was given a fresh, minty flavor to appeal to adults. What marketing
strategy did P&G use in this example?
a. product segmentation
b. market expansion
d. usage segmentation
e. psychographic segmentation
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Product differentiation involves a firms using different marketing mix activities, such
as product features and advertising, to help consumers perceive the product as being different and
better than competing products. In the case of Crest, the change of flavor (a product feature)
helped consumers to perceive the product as different and better than competing products.
APPLICATION
Alka-Seltzer was made originally as a hangover remedy that cured the headache and settled the
stomach. Today you can buy Original Alka-Seltzer, Extra Strength Alka-Seltzer, Alka-Seltzer
-9-
Morning Relief (for morning headaches and fatigue), and Alka-Seltzer Heartburn Relief. Each
Alka-Seltzer product has a different formulation to relieve a specific malady for a specific
targeted market segment. The maker of Alka-Seltzer is using
a. product segmentation.
b. market sectioning.
c. product differentiation.
d. product segmentation.
e. product base development.
Answer: c
Page(s): 220
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Product differentiation involves a firms using different marketing mix activities, such
as product features and advertising, to help consumers perceive the product as being different and
better than competing products. Bayer, the maker of Alka-Seltzer, is selling four versions with
different product features to appeal to different market segments.
9-25 SEGMENTATION: LINKING NEEDS TO ACTIONS
COMPREHENSION
The process of segmenting a market and selecting specific segments as targets is the link between
__________ and the organizations marketing program.
a. self-regulatory industry standards
b. government regulations
c. top-level management
d. buyers needs
e. controllable environmental factors
Answer: d
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The process of segmenting and targeting markets links buyer or market needs to an
organizations marketing program. See Figure 9-1 in the textbook.
9-26 SEGMENTATION: LINKING NEEDS TO ACTIONS
COMPREHENSION
The process of segmenting a market and selecting specific segments as targets is the link between
the various buyers needs and
a. industry standards.
b. government regulations.
c. top-level management.
d. controllable environmental factors.
e. the organizations marketing program.
Answer: e
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Figure 9-1 in the textbook illustrates how the process of segmenting and targeting
markets links market needs to an organizations marketing program.
9-27 ZAPPOS SEGMENTATION STRATEGY
COMPREHENSION
Zappos original target market customers consisted of people who wanted all of the following
EXCEPT:
a. to receive quick delivery of their merchandise.
b. to buy sustainable shoes, accessories, and clothing.
c. to shop online in the convenience of their own homes.
- 10 -
d. to allow for free returns of goods if dissatisfied.

e. to have a wide selection of shoes.
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The Zappos.com target customer segment originally consisted of people who wanted
to (1) have a wide selection of shoes, (2) shop online in the convenience of their own homes, and
(3) receive quick delivery and free returns.
Figure 9-1
9-28 MARKET SEGMENTATION PROCESS
COMPREHENSION
In Figure 9-1 above, A represents which stage of the market segmentation process?
a. link needs to actions
b. identify market needs
c. establish a marketing protocol
d. execute marketing program actions
e. segment and select the target markets
Answer: b
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segmentation links market needs to an organizations marketing program
specific marketing mix actions to satisfy those needs. The stages in the market segmentation
process are: (A) identify market needs; (B) link needs to actions; and (C) execute
marketing program actions.
COMPREHENSION
In Figure 9-1 above, B represents which stage of the market segmentation process?
- 11 -
Answer: a
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
In Figure 9-1 above, C represents which stage of the market segmentation process?
Answer: d
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
APPLICATION
Small athletic shoe manufacturers such as Vans have targeted niche markets and make shoes
designed to satisfy the needs of different specific groups of customers. This strategy is an
example of
a. market segmentation.
b. mass customization.
c. customized manufacturing.
d. single chain marketing.
e. market specific selection.
Answer: a
Page(s): 220
LO: 1
AACSB: Analytic
QD: Hard
specific marketing mix actions that satisfy customers needs.
APPLICATION
Reebok makes shoes with DMX Shear and Foam cushioning. The Premier Control shoe is made
for runners whose feet tend to turn out. The Premier Road is made with extra cushioning for
pavement runners. This strategy is an example of
a. mass customization.
b. customized manufacturing.
c. market segmentation.
d. single chain marketing.
e. market specific selection.
Answer: c
Page(s): 220
LO: 1
- 12 -
AACSB: Analytic
QD: Hard

specific marketing mix actions to satisfy those needs. Reebok targets the specific needs of
particular segments of runners with its different types of shoes.
9-33 MARKET-PRODUCT GRID
KNOWLEDGE
A framework to relate the market segments of potential buyers to products offered or potential
marketing actions by an organization is referred to as a __________.
a. payoff table
b. cross-tabulation
c. market-product grid
d. growth-share matrix
e. product differentiation table
Answer: c
Page(s): 221
LO: 1
AACSB: Analytic
Rationale: Key term definitionmarket-product grid.
QD: Easy
KNOWLEDGE
A market-product grid refers to

a. a visual representation of all products offered within a specific product class.
b. a framework used to compare the relative market share of one firms product offerings to
those of its competitors.
c. a technique that seeks opportunities by finding the optimum balance between marketing
efficiencies versus R&Dmanufacturing efficiencies.
d. a framework used to relate the market segments of potential buyers to products offered or
potential marketing actions by an organization.
e. a technique that helps a firm search for growth opportunities from among current and new
markets as well as current and new products.
Answer: d
Page(s): 221
LO: 1
AACSB: Analytic
Rationale: Key term definitionmarket-product grid.
QD: Easy
APPLICATION
A market-product grid relates the market segments to the products offered or potential marketing
actions. With respect to pillows, what would be the most effective way to segment the pillow
market? One should segment this market by
a. the age of the sleeper: less than 18 years of age, 18 to 44 years of age, or 45 years and older.
b. the sleepers annual income: less than $25,000, $25,000 to $49,999, or $50,000 and over.
c. the sleepers gender: male or female.
d. whether the sleeper has sleeping problems: yes or no.
e. how the sleeper sleeps: side, back,or stomach.
Answer: e
Page(s): 221
LO: 1
AACSB: Analytic
QD: Hard
Rationale: A market-product grid is a framework to relate the market segments of potential
buyers to products offered or potential marketing actions. The market-product grid for pillows
shows the different market segments for bed pillowsthe side, back, and stomach sleepersin
the horizontal rows. The product offeringsthe pillowsappear in the vertical columns and are
based on three different pillow firmnesses. See Figure 9-2 in the textbook.
- 13 -
APPLICATION
An analysis of the pillow market using a market-product grid suggests that the most important
segment to target is
a. side sleepers.
b. sleepers with sleep disorders, such as sleep apnea.
c. sleepers with annual incomes of $50,000 and over.
d. back sleepers.
e. stomach sleepers.
Answer: a
Page(s): 221
LO: 1
AACSB: Analytic
QD: Hard
buyers to products offered or potential marketing actions. The market-product grid for pillows
shows the different market segments for bed pillowsthe side, back, and stomach sleepersin
the horizontal rows. The product offeringsthe pillowsappear in the vertical columns and are
based on three different pillow firmnesses. Market research reveals the size of each sleeper
segment, as shown by both the percentages and circles in Figure 9-2. This tells pillow
manufacturers that the relative importance of each of the three market segments when they
schedule production. It also emphasizes the importance of the firm pillow product targeted at the
side sleeper market segment. As Figure 9-2 shows, this segment is almost three times larger (73
percent) than the combined sizes of the other two. Therefore, meeting the needs of this side
sleeperfirm pillow market-product segment is especially important to a pillow manufacturer.
See Figure 9-2 in the textbook.
COMPREHENSION
A basic test of the usefulness of the market segmentation process is whether it leads to tangible
marketing actions that can
a. increase sales and profitability.
b. stand up to legal scrutiny.
c. be socially responsible.
d. create sustainable demand.
e. create innovation.
Answer: a
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A basic test of the usefulness of the segmentation process is whether it leads to
tangible marketing actions that can increase sales and profitability.
COMPREHENSION
A business firm goes to the trouble and expense of segmenting its markets when
a. it changes its advertising campaign.
b. competitors enter the marketplace.
c. the environment becomes uncertain.
d. it expects that this will increase its sales, profit, and return on investment.
e. there is a recessionary economic environment.
Answer: d
Page(s): 221
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A business firm goes to the trouble and expense of segmenting its markets when it
expects that this will increase its sales, profit, and return on investment.
- 14 -
COMPREHENSION
A business firm segments its markets when this strategy increases its sales revenue, profit, and
ROI. When expenses are greater than the potential increased sales from segmentation, the firm
should
a. not consider market segmentation at this time.
b. combine departments within the company to make the process more streamlined.
c. reduce production costs or increase prices to facilitate the segmentation process.
d. seek alternate channels of distribution, including Internet sales.
e. discontinue manufacturing any products that are not in the mature stage of their product life
cycle.
Answer: a
Page(s): 221-222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A business firm goes to the trouble and expense of segmenting its markets when it
expects that this will increase its sales, profit, and return on investment. When expenses are
greater than the potentially increased sales from segmentation, a firm should not attempt to
segment its market.
COMPREHENSION
The purpose of market segmentation is to respond more effectively to the wants of groups of
potential buyers in order to
a. maintain market share.
b. increase sales and profits.
c. assume social responsibility.
d. use the firms resources most efficiently.
e. provide the best quality products on the market.
Answer: b
Page(s): 221-222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A business firm segments its markets so it can respond more effectively to the wants
of groups of potential buyers and thus increase sales and profits.
9-41 MARKET SEGMENTATION STRATEGIES
COMPREHENSION
All of the following are market segmentation strategies EXCEPT:

a. build-to-order
b. multiple products, multiple market segments
c. one product, multiple market segments
d. multiple products, one segment
e. mass customization
Answer: d
Page(s): 222-223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The segmentation strategies are (1) one product and multiple market segments, (2)
multiple products and multiple market segments, and (3) segments of one, or mass customization,
which is the next step beyond build-to-order (BTO)manufacturing a product only when there is
an order from a customer. Multiple products, one segment would be a product differentiation
strategy.
9-42 ONE PRODUCT, MULTIPLE MARKET SEGMENTS
- 15 -
COMPREHENSION
One marketing action that can be taken to sell a single product or service to multiple market
segments is to
a. develop and produce another version of the product.
b. manufacture products that appeal to different markets.
c. develop separate promotional campaigns.
d. purchase another firm that has additional products that would appeal to multiple markets.
e. issue stock to fund additional research and development for new products.
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: When an organization produces only a single product or service and attempts to sell it
to two or more market segments, it avoids the extra costs of developing and producing additional
versions of the product, which often entail extremely high research, engineering, and
manufacturing expenses. In this case, the incremental costs of taking the product into new market
segments are typically those of a separate promotional campaign or a new channel of distribution.
COMPREHENSION
When a firm produces only a single product or service and attempts to sell it to two or more
market segments, it avoids __________, which often results in extremely high research,
engineering, and manufacturing expenses.
a. the extra cost of developing and producing additional versions of the product
b. creating a customer service gap
c. indirect distribution and logistics problems
d. restructuring the firms strategic planning
e. amortization costs of product enhancements
Answer: a
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The incremental costs of taking a product into new market segments are rarely as
large as those for developing an entirely new product.
COMPREHENSION
When compared to a multiple products, multiple market segments strategy, a one product,
multiple market segment strategy
a. is a much more effective means of meeting consumers individual needs.
b. creates greater cost savings in manufacturing costs.
c. is a more effective way of meeting organizational objectives.
d. has significantly higher distribution costs.
e. is more profitable since a firm can charge the new segment higher prices without changing
the product.
Answer: b
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: When a firm produces only a single product or service and attempts to sell it to two or
more market segments, it avoids the extra cost of developing and producing additional versions of
the product, which often entails higher research, engineering, and manufacturing expenses.
COMPREHENSION
The greatest benefit to consumers when a firm chooses a one product, multiple market segment
strategy is __________.
- 16 -
a.
b.
c.
d.
e.
improved service
increased number of choices
higher product quality and consumer value
lower retail prices because of lower marketing costs
lower retail prices because of lower production costs
Answer: e
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Producing a single product and selling it to multiple market segments gives important
production economies of scale and reduced costs that may be passed on to consumers as lower
prices. In this case, the incremental costs of taking the product into new market segments are
typically those of a separate promotional campaign or a new channel of distribution. Moreover,
producing separate covers for magazines is expensive but relatively minor when compared to the
costs of producing multiple versions of the magazine for multiple geographic markets.
Sporting News Baseball Yearbook Covers

COMPREHENSION
The Sporting News Baseball Yearbook uses 16 different covers featuring a baseball star from each
of its regions in the United States. Four covers are shown above. This is an example of a(n)
a. sporting interestbased segmentation.
b. segmenting organizational markets.
c. one product and multiple market segments.
d. multiple products and multiple market segments.
e. segments of one or mass customization.
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The 16 different covers enable the magazine with exactly the same stories to reach 16
different regional segments, the definition of a one product, multiple market segments strategy.
COMPREHENSION
Street & Smith publishes its Sporting News Baseball Yearbook with exactly the same stories but
with 16 different covers to appeal to baseball fans in 16 different regions of the U.S. What is its
market segmentation strategy?
a. psychographic segmentation
b. retail outlet segmentation
c. demographic segmentation
d. behavioral segmentation
e. geographic segmentation
- 17 -
Answer: e
Page(s): 222, 225
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The magazine has 16 different covers to appeal to sports fans in 16 different
geographic regions, clearly using the geographic variable as the basis for market segmentation.
COMPREHENSION
Which marketing strategy does a firm use to sell a single product or service to multiple market
segments?
a. developing and producing another version of the product
b. manufacturing different products that appeal to different markets
c. developing separate promotional campaigns for each market
d. acquiring another firm that has additional products that would appeal to multiple markets
e. issuing stock to fund additional research and development for new products
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: When an organization produces only a single product or service and attempts to sell it
to two or more market segments, it avoids the extra costs of developing and producing additional
versions of the product, which often entail extremely high research, engineering, and
manufacturing expenses. In this case, the incremental costs of taking the product into new market
segments are typically those of a separate promotional campaign or a new channel of distribution,
each designed to reach a different segment.
APPLICATION
Time magazine publishes over 100 different U.S. editions with common editorial content.
However, each edition is targeted at unique geographic segments with its own set of
advertisements. Time is using which of the following segmentation strategies?
a. one product with multiple market segments
b. multiple products with multiple market segments
c. one product with multiple channels of distribution
d. one product with changes based on customer behavior
e. multiple products with one segment
Answer: a
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Time is selling one edition of the magazine (product) to multiple geographic
segments. The only difference in each magazine is that the advertisements in the magazine are
different and are targeted to the appropriate geographic segment.
APPLICATION
In the United States, the Harry Potter series of books were often at the top of The New York
Times fiction bestseller list. These books have been marketed to preteen, teen, and adult readers
around the world. Scholastic Press, the publisher of the Harry Potter books in the U.S., is using
which of the following segmentation strategies?
a. multiple products with one segment
b. one product with one channel of distribution
c. one product with multiple market segments
d. one product with changes based on customer behavior
e. multiple products with multiple segments
- 18 -
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Scholastic is selling one book series (product) to multiple market segmentspreteen,
teen, and adult readers.
9-51 MULTIPLE PRODUCTS, MULTIPLE MARKET SEGMENTS
COMPREHENSION
Which of the following is a disadvantage of employing a multiple products, multiple market

segments strategy if NOT implemented well?
a. higher sales but lower profits
b. reduced quality and higher prices
c. meeting customer needs but at the expense of higher prices
d. lower prices but with higher production costs
e. higher quality but lower prices
Answer: b
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Producing multiple products for multiple segments is clearly more expensive than
producing only a single product. But this strategy is very effective if it meets customers needs
better, doesnt reduce quality or increase price, and adds to sales revenues and profits. The
proliferation of different products sold to multiple segments can reduce quality and raise prices if
this strategy is not well implemented.
APPLICATION
Which of the following is an example of a multiple products and multiple market segments
strategy?
a. College Football magazine selects different covers for essentially the same magazine in order
to appeal to different geographic markets in the U.S.
b. A new movie used several different movie trailers. One set of previews showed the action
scenes in order to attract one audience and the other set showed romantic scenes to attract
another audience.
c. Ford manufactures SUVs for those who wish to carry lots of people and pickup trucks for
those who wish to carry lots of cargo.
d. Arm and Hammer Baking Soda can be used for baking and to remove odors from
refrigerators and litter boxes.
e. Johnsons Baby Oil is advertised as a skin softener for babies and as a makeup remover for
women.
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
Rationale: A multiple products and multiple markets strategy has a number of distinct products,
each targeted to different types of users. Fords SUVs and pickups are two types of vehicles
targeted at two different groups of consumersthose who wish to carry people and those who
wish to carry cargo.
APPLICATION
Which of the following is an example of a multiple products and multiple markets strategy?
another audience.
- 19 -
c. Betty Crocker carries one line of cake mixes for people with conventional ovens and another
line of cake mixes for people with microwave ovens.
d. Arm and Hammer Baking Soda can be used for baking and to remove odors from
women.
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
Rationale: A multiple products and multiple markets strategy has a number of distinct products,
each targeted to a different type of user. Betty Crockers two types of cake mixes are marketed to
two different groups of consumersthose with conventional ovens and those with microwave
ovens.
APPLICATION
Kelloggs different cereals are each targeted at a different type of user. This is an example of
multiple products aimed at multiple markets. Manufacturing these different cereals is clearly
more expensive than producing one but seems worthwhile if it adds to the manufacturers sales
revenues and profits, doesnt reduce quality or increase price, and
a. conforms to all FDA guidelines.
b. uses the same promotion and packaging for all segments.
c. decreases the cost of the physical plant.
d. stabilizes the sales revenues and profits.
e. better serves customers needs.
Answer: e
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Manufacturing multiple products for multiple market segments is worthwhile if it
serves customers needs better, doesnt reduce quality or increase price, and adds to the
manufacturers sales revenues and profits.
APPLICATION
Kelloggs different types of cereals are each targeted at a different type of user. This is an
example of multiple products aimed at multiple markets. Manufacturing these different cereals is
clearly more expensive than producing one, but seems worthwhile if it adds to the manufacturers
sales revenues and profits, serves customers needs better, and
b. creates economy of scale.
c. doesnt reduce quality or increase price.
d. decreases the cost of the physical plant.
e. stabilizes the sales revenues and profits.
Answer: c
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
APPLICATION
Kelloggs different types of cereals are each targeted at a different type of user. This is an
example of multiple products aimed at multiple markets. Manufacturing these different cereals is
- 20 -
clearly more expensive than producing one, but seems worthwhile if it serves customers needs
better, doesnt reduce quality or increase price, and
b. adds to the manufacturers sales revenues and profits.
c. creates economy of scale.
d. decreases the cost of the physical plant.
e. stabilizes the sales revenues and profits.
Answer: b
Page(s): 222
LO: 1
AACSB: Analytic
QD: Hard
9-57 MASS CUSTOMIZATION
KNOWLEDGE
Tailoring goods or services to the tastes of individual customers on a high-volume scale is

referred to as
a. family branding.
c. Tiffany/Walmart marketing.
d. economies of scale marketing.
e. build-to-order.
Answer: b
Page(s): 223
LO: 1
AACSB: Analytic
QD: Easy
Rationale: Text term definitionmass customization. Build-to-order (BTO) is incorrect because
it involves manufacturing a product only when there is an order from a customer; mass
customization is the next step beyond build-to-order.
APPLICATION
Custom Foot runs six retail locations. At first glance, none looks any different from your basic
old-fashioned shoe store, but the only boots on hand are display models. Theres no inventory for
sale and customers go home empty-handedat least initially. Customers browse the store,
mixing and matching design components such as style, color, and leather type. About 100 display
boots provide style guidelines. Once you choose a boot style, you select materials, colors, and
textures. Custom Foot guarantees your boots will be ready within three weeks. This is an
example of
b. specialty customization.
c. virtual merchandising.
d. one product and multiple market segments.
e. multiple products and multiple market segments.
Answer: a
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Mass customization is tailoring goods or services to the tastes of individual customers
on a high-volume scalethe situation here with Custom Foot.
APPLICATION
- 21 -
ChoiceShirts is an online company that makes made-to-order T-shirts. Its online customers can
order their shirts using any downloaded photo inserted into 600 templates or even design a shirt
from scratch. This is an example of
a. family branding.
c. multiple products and multiple market segments.
d. one product and multiple market segments.
e. specialty customization.
Answer: b
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Mass customization is tailoring goods or services to the tastes of individual customers
at high volumes. Alternatives of one product and multiple market segments and multiple
products and multiple market segments are incorrect because ChoiceShirts only markets to one
segment: online consumers who buy photo-supplied designer T-shirts. This issue here is mass
customization.
APPLICATION
MyTwinn makes dolls that look like young girls. For $119, the firm will make a doll that looks
just like a photograph. So, if you send in the money and a photo of your young niece, she could
have a doll that is her twin! This is an example of
a. family branding.
b. Tiffany marketing.
c. multiple products and multiple market segments.
d. mass customization.
Answer: d
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Todays flexible manufacturing and marketing processes have made mass
customization possible, tailoring goods or services to the tastes of individuals on a high-volume
scale.
APPLICATION
Lands End will custom fit a Marinac jacket and make it with additional features such as thumb
loops, underarm ventilation slits, and a key clip when you order from LandsEnd.com. This is an
example of
a. family branding.
c. Tiffany/Walmart marketing.
d. market melding.
Answer: b
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
scale.
APPLICATION
- 22 -
To implement a __________ strategy, nikeid.com allows customers to visit its website and design
a sneaker to their own personal specifications.
a. product sampling
b. product clustering
c. mass customization
e. psychographic segmentation
Answer: c
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Todays Internet ordering and flexible manufacturing and marketing processes have
made mass customization possible, tailoring goods or services to the tastes of individuals on a
high-volume scale.
APPLICATION
Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself on the
tin. This is an example of
b. multiple marketing.
c. target marketing.
d. product clustering.
e. repositioning.
Answer: a
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
scale.
APPLICATION
Name Maker is an online company that sells high-end gift wrapping that can have custom slogans
or names printed on it, such as the name of a person celebrating a birthday or a couple who is
getting married. This made-to-order gift wrapping is priced from $24.95 to $32.95 per 12-foot
roll. This is an example of
a. family branding.
c. synergistic marketing.
d. Tiffany/Walmart marketing.
Answer: b
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
scale.
9-65 MASS CUSTOMIZATION: BUILD-TO-ORDER
KNOWLEDGE
Manufacturing a product only when there is an order from a customer is referred to as

a. order customization.
b. a one product one market segment strategy.
- 23 -
c. synergistic marketing.
d. build-to-order.
Answer: d
Page(s): 223
LO: 1
Rationale: Text term definitionbuild-to-order.
AACSB: Analytic
9-66 MASS CUSTOMIZATION: BUILD-TO-ORDER
QD: Easy
APPLICATION
Model E is a new type of car manufacturer that relies on the Internet to build new car designs
from prototypes to marketable vehicles much faster than ever before. Think of Model E as the
Dell of the auto industry. We design just a few products that consumers truly want, leveraging
best-in-class components and micro-factory approaches for rapid design, launch, and direct
delivery, said William Santana Li, president and CEO of Model E. Model E manufactures a car
only when there is an order from a customer. Model E relies on
a. order customization.
b. a one product one market segment strategy.
c. build-to-order.
d. mass customization.
Answer: c
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: The comparison of the Model E to Dell is the phrase that should remove any doubt
from students minds about what kind of business this is. It is very similar to mass customization,
but because of production issues, a customer does not have the ability to specify an unlimited
number of features.
9-67 ORGANIZATIONAL SYNERGY
KNOWLEDGE
Organizational synergy is the increased customer value achieved through

a. performing organizational functions more efficiently.
b. more discounts or larger rebates at the point of sale.
c. involvement of the ultimate consumer in product design.
d. an increase in the knowledge of competitors.
e. shared ownership of the organization through publicly traded stock.
Answer: a
Page(s): 223
LO: 1
AACSB: Analytic
Rationale: Text term definitionorganizational synergy.
QD: Easy
KNOWLEDGE
The increased customer value achieved through performing organizational functions like
marketing or manufacturing more efficiently is referred to as __________.
a. aggregation
b. organizational synergy
c. segmentation
d. amalgamation
e. valuation
Answer: b
Page(s): 223
LO: 1
- 24 -
AACSB: Analytic
QD: Easy
Rationale: Text term definitionorganizational synergy.

COMPREHENSION
The ultimate criterion for an organizations marketing success is that __________ as a result of
increased synergies.
a. costs decrease
b. market share increases
c. product deficiencies decrease
d. customers should be better off
e. production benefits from economies of efficiency
Answer: d
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: The organizational synergy increases customer value through more products,
improved quality on existing products, lower prices, improved distribution, and so on. So, the
ultimate criterion for an organizations marketing success is that customers should be better off as
a result of the increased synergies.
9-70 CANNIBALIZATION
KNOWLEDGE
When a new product or a new chain steals customers and sales from older existing ones, it is
referred to as
a. cannibalization.
b. amortization.
c. product appropriation.
d. product pilfering.
e. marketing Darwinism.
Answer: a
Page(s): 223
LO: 1
Rationale: Text term definitioncannibalization.
AACSB: Analytic
QD: Easy
COMPREHENSION
When Ann Taylor, a well-known retailer of sophisticated womens clothing, started losing sales to
its own LOFT outlets that feature moderately priced casual clothes, Ann Taylor was dealing with
the marketing phenomenon of __________.
a. amortization
b. product appropriation
c. profit pilferage
d. marketing Darwinism
e. cannibalization
Answer: e
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: When a companys new product or a new chain steals customers and sales from older
existing ones, it is referred to as cannibalization.
COMPREHENSION
A key question to ask before using the product differentiation and market segmentation strategies
is
- 25 -
a.
b.
c.
d.
e.
Will our new products steal customers or sales from our older ones?
Will the products compete head-to-head with those of a competitor?
Can this action successfully draw customers away from competitors?
Are there enough similarities within the market segment to warrant such high costs?
Will this action eliminate the need for individualized advertising and promotion?
Answer: a
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: When the increased customer value involves adding new products or a new chain of
stores, the product differentiation-market segmentation trade-off raises a critical issue: Are the
new products or new chain simply stealing customers and sales from the companys older
existing ones? This is known as cannibalization.
APPLICATION
Cannibalization would most likely occur if

a. Dell adds high-end speaker systems to its line.
b. General Mills launches Chocolate Cheerios.
c. General Motors markets a sport coupe similar to the BMW Z4.
d. Pillsbury adds boxed sugar to its product line.
e. Procter & Gamble adds a new line of baby clothing to its product mix.
Answer: b
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: Consumers who buy Chocolate Cheerios may have chosen not to buy MultiGrain
Cheerios or Honey Nut Cheerios. Thus, Chocolate Cheerios could cannibalize sales from the
other Cheerios products in the General Mills line.
9-74 TIFFANY/WALMART STRATEGY
KNOWLEDGE
Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which is to offer

a. a low-priced product to a high-income or high net worth segment.
b. a high-priced product to a low-income or low net worth segment.
c. different variations of the same basic offering to high-end and low-end segments.
d. a high-priced and a low-priced offering to a single market segment.
e. different offerings to high-end and low-end segments.
Answer: c
Page(s): 223
LO: 1
AACSB: Analytic
QD: Easy
Rationale: A firm uses a Tiffany/Walmart strategy when it offers different variations of the same
basic offering to high-end and low-end segments.
COMPREHENSION
Which of the following is an example of a Tiffany/Walmart strategy?

another audience.
c. Arm and Hammer Baking Soda can be used for baking and to remove odors from
d. Gaps Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores sell a
slightly different version for $22.
- 26 -
women.
Answer: d
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: A Tiffany/Walmart strategy is a two-tier marketing strategy. Many firms are now
offering different variations of the same basic product or service to high-end and low-end
segments sold at different retailersthe situation with Gap and Old Navy.
COMPREHENSION
The Walt Disney Company carefully markets two distinct Winnie-the-Poohssuch as the original
line-drawn figures on fine china sold at Nordstrom and a cartoon-like Pooh on polyester bed
sheets sold at Walmart. This is an example of
b. one product and multiple market segments.
c. price discrimination.
d. a Tiffany/Walmart strategy.
e. psychographic market segmentation.
Answer: d
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
Rationale: This is an example of the two-tiered strategy referred to as a Tiffany/Walmart
strategy. Many firms are now offering different products or services to high-end or low-end
segments sold at different retailers.
COMPREHENSION
You can go to your nearest Hallmark card store and buy a birthday greeting card for a friend and
pay $4.50. Or, you can buy a Hallmark card from its new $0.99 line of greeting cards that is not
quite as nice in terms of quality materials, but just as sentimental, that are sold at Barnes and
Noble bookstores. This is an example of
b. organizational synergy.
c. one product and multiple market segments.
d. price discrimination.
e. a Tiffany/Walmart strategy.
Answer: e
Page(s): 223
LO: 1
AACSB: Analytic
QD: Hard
Rationale: This is an example of the two-tiered strategy referred to as a Tiffany/Walmart
strategy. Many firms are now offering different products or services to high-end or low-end
segments sold at different retailers.
9-78 STEPS IN SEGMENTING AND TARGETING MARKETS
COMPREHENSION
The purpose of the five key steps in segmenting and targeting markets that link customer needs to
marketing actions is to
a. identify competitors that provide similar products that satisfy a firms customers needs.
b. provide guidance to reposition products.
c. generate new products ideas for firms that are not growing in market share.
d. link market needs of customers to the organizations marketing program.
e. correspond directly to each of the five environmental forces.
Answer: d
Page(s): 224-225
LO: 2
- 27 -
AACSB: Analytic
QD: Medium
Rationale: Figure 9-3 in the textbook shows the five key steps in segmenting and targeting
markets that link customers needs to the organizations marketing program.
COMPREHENSION
The first step in segmenting and targeting markets that link customer needs to marketing actions
is to
a. group potential buyers into segments.
b. group products to be sold into categories.
c. develop a market-product grid and estimate size of the overall market.
d. select target markets.
e. take marketing actions to reach target markets.
Answer: a
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
Rationale: The steps in segmenting and targeting markets that link customer needs to marketing
actions are: (1) group potential buyers into segments; (2) group products to be sold into
categories; (3) develop a market-product grid and estimate size of markets; (4) select target
markets; and (5) take marketing actions to reach target markets. See Figure 9-3 in the textbook.
COMPREHENSION
The second step in segmenting and targeting markets that link customer needs to marketing
actions is to
a. group potential buyers into segments.
b. develop a market-product grid and estimate size of the overall market.
c. select target markets.
d. take marketing actions to reach target markets.
e. group products to be sold into categories.
Answer: e
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
COMPREHENSION
The third step in segmenting and targeting markets that link customer needs to marketing actions
is to __________.
a. group potential buyers into segments
b. group products to be sold into categories
c. select target markets
d. develop a market-product grid and estimate size of markets
e. take marketing actions to reach target markets
Answer: d
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
- 28 -
COMPREHENSION
The fourth step in segmenting and targeting markets that link customer needs to marketing
actions is to __________.
a. group potential buyers into segments
b. select target markets
c. group products to be sold into categories
d. develop a market-product grid and estimate size of the overall market
e. take marketing actions to reach target markets
Answer: b
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
COMPREHENSION
The fifth step in segmenting and targeting markets that link customer needs to marketing actions
is to __________.
a. take marketing actions to reach target markets
b. group potential buyers into segments
c. select target markets
d. group products to be sold into categories
e. develop a market-product grid and estimate size of the overall market
Answer: a
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
COMPREHENSION
There are five steps involved in segmenting and targeting markets. What should a marketer do
after he or she has grouped products to be sold into categories?
a. create product groupings
b. develop a market-product grid and estimate size of markets
c. identify market needs
d. take marketing actions to reach target markets
e. form prospective buyers into market segments
Answer: b
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
9-85 CRITERIA FOR FORMING SEGMENTS
- 29 -
COMPREHENSION
A marketing manager must be able to put a market segmentation plan into effect. This means
being able to recognize the characteristics of potential buyers and __________ without
encountering excessive costs.
a. eliminating potential non-buyers
b. identifying segmentation variables
c. assigning them to a segment
d. redirecting their purchase behaviors
e. ignoring any and all similarities
Answer: c
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: The five criteria to be used in forming segments include: (1) potential for increased
profit; (2) similarity of needs of potential buyers within a segment; (3) difference of needs of
buyers among segments; (4) potential of a marketing action to reach a segment; and (5) simplicity
and cost of assigning potential buyers to segments.
COMPREHENSION
All of the following are criteria used for forming market segments EXCEPT:
a. difference of needs of buyers among segments.
b. potential for increased profit.
c. cost of reaching the segment.
d. potential of a marketing action to reach a segment.
e. simplicity and cost of assigning potential buyers to segments.
Answer: c
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
and cost of assigning potential buyers to segments. The cost of reaching the segment is a
criterion for selecting a target segment.
COMPREHENSION
Which of the following is a criterion used in forming market segments?

a. your competitors have similar segments
b. differences between potential suppliers or distributors
c. differences of needs of buyers within segments
d. no marketing action to reach a segment
e. simplicity and cost of assigning potential buyers to segments
Answer: e
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
and cost of assigning potential buyers to segments.
The best segmentation approach is the one that
a. makes it easiest to reach the segment.
- 30 -
COMPREHENSION
b.
c.
d.
e.
maximizes the opportunity for future profit and ROI.

recognizes different needs of buyers among different segments.
recognizes similarities of needs of potential buyers within a segment.
is simplest and least costly in assigning potential buyers to segments.
Answer: b
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: The best segmentation approach is the one that maximizes the opportunity for future
profit and ROI. If this potential is maximized without segmentation, dont segment.
COMPREHENSION
Which of the following is NOT a reason to segment a market?

a. The ability to assign buyers to a segment is simple and cost-effective.
b. All the buyers in the entire market have similar wants and needs.
c. It would cause an increase in market share or profit.
d. There is a potential marketing action to reach it.
e. There are different wants and needs of buyers in the entire market.
Answer: b
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: You would not break a market into segments if all the buyers within it have similar
wants and needs. The other alternatives are all reasons to form a segment.
COMPREHENSION
Which of the following in NOT a criterion to use in forming market segments?

a. The ability to assign buyers to a segment is cost-effective and simple.
b. The result of segmenting will cause an increase in market share or profit.
c. There are significant similarities among buyers in the market segment.
d. There is a potential marketing action to reach the segment.
e. Buyers throughout the entire market have very similar wants and needs.
Answer: e
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: You should not undertake market segmentation if buyers throughout the entire market
have very similar wants and needs. The other alternatives are all criteria to form a segment.
COMPREHENSION
Selling a product to a different market segment usually requires a different marketing action that
in turn means greater costs. If increased revenues dont offset extra costs of this action, a
marketer should __________.
a. increase the advertising budget
b. prune the product offerings
c. family brand their products
d. combine segments
e. group products into categories
Answer: d
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: If the needs of the various segments arent very different, combine them into fewer
segments. A different segment usually requires a different marketing action that, in turn, means
- 31 -
greater costs. If increased sales dont offset extra costs, combine segments to reduce the number
and total costs of marketing actions.
COMPREHENSION
Criteria for forming segments involve both similarities and differences. The similarities must be
____________ a segment, and the differences must be __________ segments.
a. between; among
b. throughout; absent in
c. within; among
d. absent in; throughout
e. among; across
Answer: c
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: Two criteria used in forming segments answer this question: similarity of needs of
potential buyers within a segment and difference of needs of buyers among segments.
COMPREHENSION
Criteria for forming segments involve both similarities and differences. Which of the following
statements is most accurate?
a. Within a segment, the needs of potential buyers should be different; among segments, the
needs of buyers should be similar.
b. Within a segment, the needs of potential buyers should be similar; among segments, the needs
of buyers should be different.
c. The needs of buyers should be different, both between segments and within segments.
d. The needs of buyers should be the same, both between segments and within segments.
e. If there are any differences at all, you should segment your market.
Answer: b
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
Rationale: Two criteria used in forming segments answer this question: similarity of needs of
potential buyers within a segment and difference of needs of buyers among segments.
APPLICATION
Grouping potential buyers into meaningful segments involves meeting some specific criteria that
answer the question
a. Is this product useful on a global scale?
b. Would segmentation be worth doing and is it possible?
c. Is it possible to reposition this product?
d. Is there too much competition for this product?
e. Is the market loyal to the product?
Answer: b
Page(s): 224
LO: 2
AACSB: Analytic
QD: Hard
Rationale: Its not always a good idea to segment a market. Grouping potential buyers into
meaningful segments involves answering the question, Would segmentation be worth doing, and
is it possible?
- 32 -
APPLICATION
Between 2 and 3 percent of the population have some degree of allergic reaction, usually mild, to
preservatives used in salad bars. Restaurants might consider people with these allergies as a
separate segment. To implement this segmentation strategy, restaurants would have to have a
regular salad bar and a special salad bar for the allergies segment. This multiple product and
multiple market segment strategy would have the greatest difficulty meeting which of the
following criteria used to form market segments?
a. different needs of buyers among different segments
b. similarity of needs of potential buyers within a segment
c. simplicity and cost of assigning potential buyers to segments
d. potential for increased profit and ROI
e. potential of a marketing action to reach a segment
Answer: d
Page(s): 224
LO: 2
AACSB: Analytic
QD: Hard
Rationale: The allergies market segment would probably not provide sufficient profit and ROI
given its small estimated size, the limited benefit to consumers in the segment, and the high cost
of running a duplicate salad bar. Bottom line: The cost probably exceeds the profits gained.
9-96 CONSUMER SEGMENTATION VARIABLES
COMPREHENSION
Four general categories used to segment consumer markets are geographic segmentation,
demographic segmentation, __________, and behavioral segmentation.
a. supplier segmentation
b. demand segmentation
c. regional segmentation
d. psychographic segmentation
e. product segmentation
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Figure 9-4 shows four general bases of segmentation for consumer markets and the
typical variables that can be used to segment U.S. consumer markets. These four segmentation
bases are: (1) geographic segmentation; (2) demographic segmentation; (3) psychographic
segmentation; and (4) behavioral segmentation.
9-97 GEOGRAPHIC SEGMENTATION
KNOWLEDGE
Segmentation based on where prospective customers live or work is referred to as

a. zip code segmentation.
b. geographic segmentation.
c. regional segmentation.
d. MSA segmentation.
e. NAICS code segmentation.
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
Rationale: Text term definitiongeographic segmentation.
QD: Easy
COMPREHENSION
All of the following are geographic segmentation variables EXCEPT:

a. density
b. city size
- 33 -
c. region
d. VALS
e. statistical area
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Geographic segmentation is based on based on where prospective customers live or
work. Geographic segmentation variables include region, city size, statistical area, mediatelevision, and density. VALS is a psychographic segmentation variable. See Figure 9-4 in the
textbook.
APPLICATION
Campbells found that its canned nacho cheese sauce, which could be heated and poured directly
onto nacho chips, was too hot for Americans in the East and not hot enough for those in the West
and Southwest. Today, Campbells plants in Texas and California produce a hotter nacho cheese
sauce than what is produced in the other plants. Campbells is using __________ segmentation.
a. demographic
b. behavioral
c. economic
d. geographic
e. psychographic
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Campbells is marketing a different sauce to different markets depending on where
they are located. This is geographic segmentation.
APPLICATION
Which of the following statements best illustrates geographic segmentation?

a. GE built a downsized microwave oven to hang under kitchen cabinets.
b. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.
c. In China, KFC sells a spicier chicken the farther away its restaurants are from the coastal
areas.
d. A fast food hamburger restaurant is only open for breakfast on weekdays and Saturdays but
not Sundays.
e. A gourmet grocer advertises its services on a small-audience classical music station even
though there is a much larger-audience rock station in the area.
Answer: c
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: KFC has discovered that to be a successful global marketer, it must be willing to
adapt to the taste preferences of different geographic regions.
APPLICATION
Universal Concerts wants to bring a series of country music concerts to Canada next year. In
general, Western Canadians much prefer country music while Eastern Canadians prefer rock.
Thus, a country music event in eastern Canada is very likely to have lots of empty seats even
though it is more populous than the western part of the country. If it can book only one venue,
Universal Concerts should segment its Canadian market according to __________ if it hopes to
have a sold out concert.
a. geographic characteristics
- 34 -
b.
c.
d.
e.
demographic characteristics
music format characteristics
behavioral characteristics
psychographic characteristics
Answer: a
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Western Canadians prefer country music much more than do Eastern Canadians. If
the concerts can be held in only one location, Universal Concerts should use geographic
characteristics in deciding where to hold a successful country music concert.
9-102 DEMOGRAPHIC SEGMENTATION
KNOWLEDGE
Segmentation that is based on some objective physical (gender, ethnicity), measurable (age,
income), or other classification attribute (occupation) of prospective customers is referred to as
a. personality segmentation.
b. demographic segmentation.
c. usage segmentation.
d. needs segmentation.
e. behavioral segmentation.
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
Rationale: Text term definitiondemographic segmentation.
QD: Easy
COMPREHENSION
Which of the following is a consumer demographic segmentation variable?

a. personality
b. gender
c. usage rate
d. needs
e. metropolitan statistical area
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Demographic segmentation is based on some objective physical (gender, race),
measurable (age, income), or other classification attribute (birth era, occupation) of prospective
customers. See Figure 9-4 in the textbook.
APPLICATION
More than half of all U.S. households are composed of only one or two persons, so Aunt Jemima
packages meals with only one servingsuch as its Ham & Egg Scramble and Oatmeal Pancakes.
Aunt Jemima is using __________ as the basis to segment its market.
a. usage rates
b. usage patterns
c. behavior characteristics
d. demographic characteristics
e. psychographic characteristics
Answer: d
Page(s): 225-226
LO: 3
- 35 -
AACSB: Analytic
QD: Hard
Rationale: The number of people in a household is a demographic characteristic that Aunt

Jemima uses to segment the market. See Figure 9-4 in the textbook.
APPLICATION
Procter & Gamble (P&G) decided to skip a generation of consumers when it began to market Old
Spice deodorant. The target market consists of men aged 18 to 34 years old (Generation Y) who
dont remember the Old Spice brand sold to their grandfathers (pre baby boomer) many years
ago. P&G is using which type of segmentation variable?
a. behavioral
b. demographic
c. lifestyle
d. geographic
e. psychographic
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Birth era (derived in part from age) is a demographic segmentation variable. See
Figure 9-4 in the textbook.
APPLICATION
When a telemarketer calls to sell a consumer life insurance, the last questions asked is what
category does the persons household income fall into (less than $50,000; $50,000 to $99,999;
and $100,000 and over). When the telemarketer asks about household income, this indicates the
use of which type of consumer segmentation variable?
a. usage
b. behavior
c. demographic
d. buying situation
e. psychographic
Answer: c
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Household income is a demographic variable. See Figure 9-4 in the textbook.
APPLICATION
The State of Alabama Board of Tourism ran a series of ads showing traditional families enjoying
various attractions in the state. Since the apparent target of these ads is the traditional family, it
appears that the State of Alabama Board of Tourism has segmented the market using __________
variables.
a. regional
b. demographic
c. socioeconomic
d. geographic
e. psychographic
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Marital status, life stage, and household/family size are demographic variables. See
- 36 -
APPLICATION
Which of the following statements demonstrate the formation of a segment based on household
size?
a. Campbells makes a spicier nacho cheese sauce for its distributors in Texas than it does in
Maine.
b. GE built a downsized microwave oven to hang under kitchen cabinets.
c. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.
d. A fast food hamburger restaurant is only open for breakfast on weekdays and Saturdays but
not Sundays.
e. A gourmet grocer advertises its services on a small-audience classical music station even
though there is a much larger-audience rock station in the area.
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Household size is a demographic customer characteristic. Because smaller
households need to cook less food, GE downsized its microwave oven and restyled it to hang
under cabinets. See Figure 9-4 in the textbook.
APPLICATION
At a Hallmark store you can find several different product lines of greeting cards, likely including
Fresh Ink, Natures Sketchbook, Shoebox, Maxine, Mahogany, and Tree of Life cardsall made
by Hallmark for sale in its stores and intended to appeal to different target markets. The
Mahogany line is designed to appeal to African-Americans. This is an example of __________
segmentation.
a. regional
b. demographic
c. lifestyle
d. geographic
e. psychographic
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Race/ethnicity is a demographic segmentation variable. See Figure 9-4 in the
textbook.
COMPREHENSION
Which of the following statements regarding segmentation bases is most accurate?

a. The identification of demographic variables is more objective than the identification of
psychographic variables, which is more subjective.
b. The identification of psychographic variables is more objective than the identification of
demographic variables, which is more subjective.
c. Marketers should use segmentation bases in this order to reduce potential costs: behavioral,
demographic, psychographic, and geographic.
d. Behavioral segmentation is based primarily on personality.
e. Psychographic segmentation is based primarily on product features.
Answer: a
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Demographic segmentation is based on some objective physical (gender, race),
measurable (age, income) or other classification attribute (birth era, occupation) of prospective
customers. Psychographic segmentation is based on some subjective mental or emotional
- 37 -
attributes (personality, aspirations, lifestyle) or needs of prospective customers. See Figure 9-4 in
the textbook.
9-111 PSYCHOGRAPHIC SEGMENTATION
KNOWLEDGE
Segmentation based on some subjective mental or emotional attributes, aspirations, or needs of

prospective customers is referred to as
a. behavioral segmentation.
b. affective segmentation.
c. socioeconomic segmentation.
d. psychographic segmentation.
e. psychosocial segmentation.
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
Rationale: Text term definitionpsychographic segmentation.
QD: Easy
COMPREHENSION
All of the following are psychographic segmentation variables EXCEPT:

a. lifestyle
b. needs
c. birth era
d. VALS
e. personality
Answer: c
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Psychographic segmentation is based on some subjective mental or emotional
attributes (personality), aspirations (lifestyle), or needs of prospective customers. Birth era is a
demographic segmentation variable See Figure 9-4 in the textbook.
APPLICATION
Magazines like Fitness, Field & Stream, Golf Digest, and Health all use a __________
segmentation strategy.
a. psychographic
b. behavioral
c. situational
d. socioeconomic
e. geographic
Answer: a
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Lifestyle is a psychographic variable. These magazines are designed to appeal to
people who enjoy certain lifestyles. See Figure 9-4 in the textbook.
9-114 MARKETING MATTERS: NIELSEN PRIZM
COMPREHENSION
The Nielsen PRIZM (part of Nielsen Claritas) lifestyle segmentation is based on the belief that
birds of a feather flock together. This type of consumer segmentation is referred to as
a. psychographic segmentation.
- 38 -
b.
c.
d.
e.
behavioral segmentation.
situational segmentation.
socioeconomic segmentation.
geographic segmentation.
Answer: a
Page(s): 226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Psychographic segmentation is based on some subjective mental or emotional
attributes (personality), aspirations (lifestyle), or needs of prospective customers. Nielsen
PRIZM uses the lifestyle segmentation variable, a type of psychographic segmentation. See the
Marketing Matters box on p. 226. See also Figure 9-4 in the textbook.
9-115 MARKETING MATTERS: NIELSEN PRIZM
COMPREHENSION
Nielsen PRIZM (part of Nielsen Claritas) segmentation classifies every household into one of 66
demographically and __________ distinct neighborhood segments to identify lifestyles and
purchase behavior within a defined geographic market area, such as zip code.
a. psychographically
b. behaviorally
c. situationally
d. socioeconomically
e. ethnographically
Answer: b
Page(s): 226
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Nielsen PRIZM uses lifestyle segmentation, and classifies every household into one
of 66 demographically and behaviorally distinct neighborhood segments to identify lifestyles and
purchase behavior within a defined geographic market, such as zip code. See the Marketing
Matters box on page 226. See also Figure 9-4 in the textbook.
9-116 BEHAVIORAL SEGMENTATION
KNOWLEDGE
Segmentation based on some observable actions or attitudes by prospective customers, such as

what benefits they seek, as well as where, how frequently, and why they buy, is referred to as
a. demographic segmentation.
b. psychographic segmentation.
c. geographic segmentation.
d. behavioral segmentation.
e. socioeconomic segmentation.
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
Rationale: Text term definitionbehavioral segmentation.
QD: Easy
COMPREHENSION
Segmentation based on what product features are important to different customers is known as
a. demographic segmentation.
b. psychographic segmentation.
c. geographic segmentation.
e. socioeconomic segmentation.
Answer: d
Page(s): 225-226
LO: 3
- 39 -
AACSB: Analytic
QD: Medium
Rationale: Understanding what features are important to different customers (behavioral

segmentation) is a useful way to segment markets because it can lead directly to specific
marketing actions, such as a new product, an ad campaign, or a distribution system. See Figure
9-4 in the textbook.
COMPREHENSION
All of the following are behavioral segmentation variables EXCEPT:

a. needs
b. usage rate
c. product features
d. intentions
e. user status
Answer: a
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Behavioral segmentation is based on some observable actions or attitudes by
prospective customerssuch as where they buy, what benefits they seek, how frequently they
buy, and why they buy. Needs is a psychographic segmentation variable. See Figure 9-4 in the
textbook.
COMPREHENSION
Behavioral segmentation encompasses

a. lifestyles and demographics.
b. retailer and wholesaler behaviors.
c. geographic and demographic criteria.
d. product features and user status.
e. demand and supply.
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Behavioral segmentation is based on observable actions or attitudes of prospective
customers, such as where they buy, what benefits they seek, how frequently they buy, and why
they buy. Examples of behavioral segmentation variables include product features and user
status. See Figure 9-4 in the textbook.
APPLICATION
A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over
40 weeks per year. Its market is likely segmented by
a. usage.
b. benefits offered.
c. demographics.
d. geography.
e. lifestyle.
Answer: a
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Rate of use and user status are both behavioral segmentation variables. In this case,
over 40 weeks per year is a measure of usage rate.
APPLICATION
- 40 -
College dorm residents frequently want to keep and prepare their own food and snacks to save
money or have a late night snack. However, their dorm rooms are often woefully short of space.
MicroFridge understands this and markets a combination microwave, refrigerator, and freezer
targeted to these students. MicroFridge is using which basis of segmentation?
a. demographic segmentation
b. psychographic segmentation
c. geographic segmentation
d. behavioral segmentation
e. socioeconomic segmentation
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
marketing actions, such as a new product, an ad campaign, or a distribution system.
APPLICATION
Samsung sells its target markets many different types of TVs. The larger TVs can be outfitted
with surround sound at a higher price than the smaller ones. Samsung is using which type of
segmentation variable in this example?
a. demographic segmentation
b. psychographic segmentation
c. behavioral segmentation
d. geographic segmentation
e. socioeconomic segmentation
Answer: c
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
marketing actions. Samsung uses behavioral segmentation to guide the types of TVs it sells since
different consumers seek different benefits in a TV.
APPLICATION
Many families today hold potluck meals during holidays or special events. Participants bring
casseroles, vegetables, breads, and desserts to share. It is easy to forget to take the bowl that you
brought to the dinner home with you. Reynolds responded to this problem by creating PotLux
cookware, attractive and inexpensive disposable dishes for transporting food. Reynolds has
recognized how to use _________ variables to segment its market.
a. psychographic
b. behavioral
c. demographic
d. social
e. geographic
Answer: b
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Reynolds uses behavioral segmentation based on the benefits prospective customers
seekcookware that is disposable and can be left behind.
APPLICATION
- 41 -
Many companies have cut travel budgets so that very few business people are authorized to fly
first class. Despite the shrinking pool of business-class travelers, British Airways has grown
market share for its transatlantic business class by offering greater comfort. Promotions to
frequent fliers stress that passengers can sleep in fully reclining seats and arrive refreshed to carry
out a full days schedule. The segmentation strategy of British Airways is an example of
a. life stage segmentation.
b. lifestyle segmentation.
c. social class segmentation.
e. psychographic segmentation.
Answer: d
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: British Airways is using behavioral segmentation (benefits the prospective customers
seek) to sell airline tickets to frequent fliers who value comfort and wish to sleep on a
transatlantic flight.
APPLICATION
Post Grape-Nuts cereal has been marketed since the early 20 th century. Its market share has been
steadily declining as consumers began associating it with something their grandfathers ate. Post
recently launched a campaign to increase consumption of the cereal by inviting consumers to
sprinkle the crunchy cereal on yogurt, salad, or soup as a delicious addition. Post wanted to
convince people either who had never tried the cereal or who were familiar with the product to
use it in a variety of different ways. In this example, Post is using which segmentation variable?
a. needs
b. lifestyle
c. behavioral
d. psychographic
e. demographic
Answer: c
Page(s): 225-226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: To boost sales, Post used user status (nonuser; regular user) as the segmentation
variable for the behavioral basis of segmentation. It also used a market modification strategy to
find new customers for Post Grape-Nuts cereal and increase its use among existing customers by
creating new use situations as a topping on yogurt, salad, or soup.
9-126 USAGE RATE
KNOWLEDGE
The quantity consumed or patronage (store visits) during a specific period is referred to as
a. usage rate.
b. purchase metric.
c. consumption index.
d. consumption rate.
e. demand amount.
Answer: a
Page(s): 226
LO: 3
Rationale: Key term definitionusage rate.
9-127 USAGE RATE
AACSB: Analytic
QD: Easy
KNOWLEDGE
- 42 -
Usage rate refers to

a. the percentage of total possible users divided by the total number of consumers who actually
use a product or service.
b. the average number of times a customer uses a product or service.
c. quantity consumed or patronage (store visits) during a specific period.
d. the maximum number of times a customer uses a product or service.
e. the profits a firm earns from customers who consume a particular product or service.
Answer: c
Page(s): 226
LO: 3
Rationale: Key term definitionusage rate.
9-128 USAGE RATE
AACSB: Analytic
QD: Easy
APPLICATION
Alamo, a car rental firm, targets 50 percent of its advertising to salespeople who rent a car over
40 weeks per year. Alamo likely segments its market by
a. usage rate.
b. benefits offered.
c. demographics.
d. geography.
e. lifestyle.
Answer: a
Page(s): 226
LO: 3
AACSB: Analytic
QD: Hard
Rationale: In this case, rate of use is defined as over 40 weeks per year. Therefore, Alamo
uses behavioral segmentation as the basis and usage rate as the variable.
9-129 FREQUENCY MARKETING
COMPREHENSION
Airlines have developed frequent-flier programs to encourage passengers to use the same airline
repeatedly. This technique is based on
a. geographic segmentation.
b. behavioral segmentation.
c. psychographic segmentation.
d. demographic segmentation.
e. buying condition segmentation.
Answer: b
Page(s): 226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Airlines have developed frequent-flier programs to encourage passengers to use the
same airline repeatedly to create loyal customers. This technique, sometimes called frequency
marketing, is a strategy that focuses on usage rate, a type of behavioral segmentation.
COMPREHENSION
Frequency marketing is a strategy that focuses on usage rate. In market segmentation studies,
a. usage should be the last factor that is considered as a criterion for segmentation, since the
entire point of segmentation is to attract consumers who are not yet using your product.
b. some measure of usage by, or sales obtained from, various segments is central to the analysis.
c. usage rate should always be considered in tandem with geographic segmentation factors to
understand the why consumers behave as they do.
d. usage rate has far more value in consumer market segmentation than in organizational market
segmentation.
- 43 -
e. usage rate has far more value in organizational market segmentation than in consumer market
segmentation.
Answer: b
Page(s): 226
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Frequency marketing is a strategy that focuses on usage rate. One key conclusion
emerges about usage: in market segmentation studies, some measure of usage by, or sales
obtained from, various segments is central to the analysis. Usage rate is equally important in
segmenting organizational markets and consumer markets.
COMPREHENSION
Frequency marketing is a market segmentation strategy that focuses on

a. trial.
b. the average number of times a person in the target audience is exposed to an advertisement.
c. usage rate.
d. consumption incidence.
e. turnover.
Answer: c
Page(s): 226
LO: 3
AACSB: Analytic
QD: Medium
marketing, is a strategy that focuses on usage rate.
COMPREHENSION
Airline programs that encourage passengers to repeatedly use the same airline focus on usage rate
and employ a __________ strategy.
a. rate of recurrence
b. product utilization
c. incidence
d. frequency marketing
e. consumption index
Answer: d
Page(s): 226
LO: 3
AACSB: Analytic
QD: Medium
marketing, is a strategy that focuses on usage rate.
9-133 SEGMENTATION BASES USED
APPLICATION
A recent study by the Aberdeen Group analyzed which segmentation bases were used by the top
20 percent of 220 organizations surveyed. Which segmentation base did these organizations use
most?
a. behavioral
b. psychographic
c. geographic
d. demographic
e. product
Answer: c
Page(s): 226-227
LO: 3
- 44 -
AACSB: Analytic
QD: Hard
Rationale: A recent study by the Aberdeen Group analyzed which segmentation bases were used
by the top 20 percent of 220 organizations surveyed. From highest to lowest, the segmentation
bases were: geographic (88 percent), behavioral (65 percent), demographic (53 percent), and
psychographic (43 percent).
Figure 9-5
9-134 FAST-FOOD RESTAURANT PATRONAGE
COMPREHENSION
According to Figure 9-5 above, people who most likely will never use a firms product or service
are referred to as
a. nonqualified prospects.
b. dead leads.
c. potential prospects.
d. nonprospects.
e. laggards.
Answer: d
Page(s): 227
LO: 3
AACSB: Analytic
Rationale: Text term definitionnonprospects. See Figure 9-5 in the textbook.
QD: Medium
COMPREHENSION
According to Figure 9-5 above, people who currently do not use a firms product or service but
who might become users in the future are referred to as
a. leads.
b. prospects.
c. potential users.
d. ultimate consumers.
e. undefined prospects.
Answer: b
Page(s): 227
LO: 3
AACSB: Analytic
Rationale: Text term definitionprospects. See Figure 9-5 in the textbook.
- 45 -
QD: Medium
APPLICATION
According to Figure 9-5 above, people who ate at fast-food restaurants about twice a week would
most likely be considered a
a. light user.
b. medium user.
c. heavy user.
d. uncommitted user.
e. potential prospect.
Answer: b
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: According to Figure 9-5 above, people who ate at fast-food restaurants about twice a
week would eat there about 8 times per month. This behavior falls into the medium users
segment, which consists of patrons who eat at fast-food restaurants 6 to 13 times per month. See
APPLICATION
According to Figure 9-5 above, what percentage of nonusers could still be considered potential
customers?
a. 1.5 percent
b. 8.9 percent
c. 14.1 percent
d. 15.6 percent
e. 45.4 percent
Answer: a
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: There are 3,470,000 nonusers, called prospects, who might become fast-food
restaurant patrons. These prospects represent 1.5 percent of those sampled who might become
customers. See Figure 9-5 in the textbook.
APPLICATION
According Figure 9-5 above, heavy users are the most important segment to a fast-food restaurant
because
a. there are fewer numbers of them than any other segment.
b. they represent the largest percentage of nonprospects.
c. the usage index per person is highest for that segment.
d. from a cost basis, they are the most easily identified user segment.
e. they have the smallest consumption percentage.
Answer: c
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: The Usage Index per Person column in Figure 9-5 emphasizes the importance of the
heavy-user group even more. Giving the light users an index of 100, the heavy users have an
index of 640, which means that for every $1.00 spent by a light user in a fast-food restaurant, a
heavy user spends $6.40 or about 6 times what a light user spends. This is the reason for the
emphasis in almost all marketing strategies on effective ways to reach these heavy users. See
9-139 80/20 RULE
KNOWLEDGE
- 46 -
The 80/20 rule suggests that

a. 80 percent of a firms inventory should be readily available and 20 percent should be reserved
for emergency demand.
b. 80 percent of a firms first-time users will become brand loyal and 20 percent will use the
product only once and then abandon it.
c. 80 percent of a firms sales are obtained from 20 percent of its customers.
d. 80 percent of a firms marketing program expenses are tax deductible and 20 percent are not.
e. 80 percent of a firms products will be sold to ultimate consumers and 20 percent to
organizational buyers.
Answer: c
Page(s): 227-228
LO: 3
Rationale: Key term definition80/20 rule.
9-140 80/20 RULE
AACSB: Analytic
QD: Easy
COMPREHENSION
The 80/20 rule is most closely related to which consumer segmentation variable?
a. geographic
b. psychographic
c. benefits sought
d. geographic
e. usage rate
Answer: e
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Medium
Rationale: The 80/20 rule is a concept that suggests 80 percent of a firms sales are obtained
from 20 percent of its customers and relates to usage rates.
9-141 80/20 RULE
APPLICATION
Todd Harris and Associates, a New York sales promotion agency, discovered from an analysis of
its files that one-quarter (or 25 percent) of its clients generated more than three-quarters (or 75
percent) of its fees and commissions. This is an example of what classic concept?
a. the 10/90 gap
b. the 80/20 rule
c. the 20/80 rule
d. the 75/25 rule
e. Parkinsons Law
Answer: b
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: The 80/20 rule is a concept that suggests 80 percent of a firms sales are obtained
from 20 percent of its customers. The percentages in the 80/20 rule are not really fixed at exactly
80 percent and 20 percent but suggest that a small fraction of customers provides a large fraction
of a firms sales. The 10/90 gap alternative refers to the statistical finding of the Global Forum
for Health Research that only 10 percent of worldwide expenditure on health research and
development is devoted to the problems that primarily affect the poorest 90 percent of the worlds
population. Parkinsons Law states: Work expands so as to fill the time available for its
completion.
- 47 -
Figure 9-6
COMPREHENSION
As an owner of a Wendys fast food restaurant, the information in Figure 9-6 above suggests that
Wendys prospects are __________ of the total compared to __________ for McDonalds.
a. 48.8 percent, 57.6 percent
b. 16.7 percent, 45.6 percent
c. 57.6 percent, 48.8 percent
d. 16.7 percent, 22.2 percent
e. 57.6 percent, 26.2 percent
Answer: e
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Figure 9-6 shows that 57.6 percent of respondents are Wendys prospects, while 26.2
percent are McDonalds prospects. See Figure 9-6 in the textbook.
APPLICATION
As an owner of a Wendys fast-food restaurant, the information in Figure 9-6 above suggests
a. you have an advantage over both McDonalds and Burger King as being the most preferred
second choice restaurant.
b. most of the respondents think of Wendys as their primary fast food restaurant.
c. McDonalds has fewer exclusively loyal customers than does Wendys.
d. Burger King is closing in on your market share.
e. a need to devise a marketing program to win customers from McDonalds and Burger King.
Answer: e
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: The Wendys bar in Figure 9-6 shows that your primary user segments are somewhat
behind Burger King and far behind McDonalds, so a natural strategy is to look at these two
competitors and devise a marketing program to win customers from them. See Figure 9-6 in the
textbook.
- 48 -
APPLICATION
As an owner of a Wendys fast-food restaurant, the information in Figure 9-6 above suggests
a. new menu items or promotional strategies may succeed in converting the prospects into users.
b. most of the respondents think of Wendys as their primary fast food restaurant.
c. McDonalds has fewer exclusively loyal customers than does Wendys.
d. Burger King is closing in on your market share.
e. a need to devise a marketing program to change the minds of nonprospects.
Answer: a
Page(s): 227-228
LO: 3
AACSB: Analytic
QD: Hard
Rationale: The nonusers part of the Wendys bar in text Figure 9-6 also provides ideas. It shows
that 14.1 percent of adult Americans dont go to fast-food restaurants in a typical month and are
really nonprospectsunlikely to ever patronize your restaurant. But the 57.6 percent of the
Wendys bar shown as prospects may be worth some in-depth thought. These adults use the
product category (fast food) but do not yet go to Wendys. New menu items or promotional
strategies may succeed in converting these prospects into users that patronize Wendys. See
APPLICATION
As an owner of a Wendys fast-food restaurant located near a large urban university, you need to
analyze your customers and determine which segmentation base and its associated variable(s) you
will use to segment your target market. Which segmentation base and associated variable (s)
should you use?
a. psychographic: VALS and personality
b. demographic: gender and age
c. behavioral: students and nonstudents
d. geographic: city and zip code
e. transportation mode: car, bus, bike, tram/subway/light rail, and none (walking)
Answer: c
Page(s): 224, 228-229 LO: 3
AACSB: Analytic
QD: Hard
Rationale: Because the restaurant is located near a large urban university, the most logical
starting point for segmentation is really behavioral. Why? The reasons are (1) it is relatively
simple and cost effective to assign potential customers to a segment and (2) reaching a particular
segment should be relatively easy and effective. Given these, the logical segmentation variables
for prospective customers would be students (broken down into these subsegments: students
living on campus in dorms, student living off campus in apartments, day commuter students, and
night commuter students) and nonstudents (broken down into these subsegments: faculty and
staff, people who live in the area, and people who only work in the area).
9-146 ORGANIZATIONAL MARKET SEGMENTATION
COMPREHENSION
Which of the following is a basis used to segment U.S. organizational markets?

a. geographic
b. psychographic
c. income
d. needs
e. education
Answer: a
Page(s): 229
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Figure 9-7 in the textbook shows the segmentation bases for U.S. organizational
markets, which include geographic, demographic, and behavioral.
- 49 -
COMPREHENSION
Variables such as location, the North American Industry Classification System (NAICS) code,
and type of buy are all examples of ways to
a. differentiate products.
b. forecast sales to a consumer market.
c. segment an organizational market.
d. segment a consumer market.
e. promote NAFTA.
Answer: c
Page(s): 229
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Variables for segmenting organizational markets include geographic (location),
demographic (NAICS code), and behavioral (type of buy) segmentation bases. See Figure 9-7 in
the textbook.
COMPREHENSION
Which of the following statements about market segmentation for organizational markets is most
accurate?
a. Criteria for segmenting markets are the same whether the market is composed of consumers
or organizations.
b. Both consumer markets and organizational markets use demographic, geographic, and
behavioral bases to segment markets.
c. Psychographic criteria are just as important in segmenting organizational markets as they are
in segmenting consumer markets.
d. Organizational markets use exactly the same selection criteria as consumer markets.
e. The greatest difference in market segmentation strategies between consumer and
organizational markets is the number of employees employed in the segmentation process.
Answer: b
Page(s): 229
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Figure 9-7 in the textbook shows the variables for segmenting organizational markets
and include geographic, demographic, and behavioral bases.
APPLICATION
Evergreen Air Center in Marana, Arizona, is the worlds biggest parking lot for unwanted
commercial aircraft. Airlines pay from $750 to $5,000 a month for its storage service. The
warm, dry air where the operation is located serves as a cheap and effective airplane preservative.
Which organizational segmentation variable might Evergreen use to segment the market?
a. NAICS sector, such as manufacturers, or retailers, or lawyers
b. number of locations
c. who buys, such as individual buyer or buying groups
d. metropolitan statistical area
e. number of employees
Answer: a
Page(s): 229
LO: 3
AACSB: Analytic
QD: Hard
Rationale: The NAICS sector variable in the demographics segmentation base would reveal
other companies that fly commercial aircraft in industries that already use Evergreens services
and which might be potential customers. See Figure 9-7 in the textbook.
- 50 -
APPLICATION
The William Morris Agency represents country singer Trace Adkins in negotiations with various
venues in which he could perform. Imagine that the agency decided the singer would not perform
at venues located in small town communities that have less than 100,000 people. Thus, venues
segmentation is a form of __________ segmentation.
a. entertainment
b. psychographic
c. geographic
d. usage rate
e. buying condition
Answer: c
Page(s): 229
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Population density is a geographic variable that includes whether the area is urban,
suburban, small town, or rural. See Figure 9-7 in the textbook.
APPLICATION
Australia-based Renewable Energy Ltd. sells a $10 million device that converts manure into
energy. One of these devices is capable of generating energy equal to $2 million of natural gas
per year. The company believes its target market consists of businesses that use a lot of energy
like its first customer, a fertilizer manufacturer that was located in a rural area. If the firm decides
to expand to the U.S., it most likely will use which of the following strategies to segment its
market?
a. behavioral and geographic
b. number of employees and behavioral
c. purchase location and purchase type
d. NAICS code and geographic
e. behavioral and NAICS code
Answer: d
Page(s): 229
LO: 3
AACSB: Analytic
QD: Hard
Rationale: Renewable Energy would first use the NAICS code to locate other fertilizer
manufacturers and then use geographic segmentation to find prospects located in rural areas in
the U.S. where there is a ready supply of manure. Renewable Energy probably presumes that the
fertilizer manufacturers have chosen their locations based on their own segmentation process
(demographic: NAICS code, geography: density, etc.) to identify those areas in the U.S. where
there are large concentrations of farms that produce manure (cattle, chickens, pigs, etc.). See
9-152 PRODUCT GROUPINGS
COMPREHENSION
If Wendys customers are buying an eating experience, which of the following rationales would
make the most sense if you were to group the products Wendys sells?
a. grouping by product type such as types of drinks
b. grouping by price
c. grouping by meal occasion
d. grouping by usage rate
e. grouping by individual item (hamburgers, fries, etc.)
Answer: c
Page(s): 230-231
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Finding a means of grouping the products a firm sells into meaningful categories is as
important as forming customers into segments. If the firm has only one product or service, this
- 51 -
isnt a problem. But when it has dozens or hundreds, these must be grouped in a way that buyers
can relate to them. Wendys customers really buy an eating experience, a meal occasion that
satisfies a need at a particular time of day. So, the product grouping that makes the most
marketing sense is by meal or time of day.
COMPREHENSION
All of the following would be a logical way to group the products Wendys sells at its restaurants
EXCEPT:
a. dinner
b. burgers
c. breakfast
d. between-meal snacks
e. lunch
Answer: b
Page(s): 230-231
LO: 3
AACSB: Analytic
QD: Medium
can relate to them. Wendys customers really buy an eating experience, a meal occasion that
satisfies a need at a particular time of day. So, the product grouping that makes the most
marketing sense is by meal or time of day, which include breakfast, lunch, between-meal snacks,
dinner, and after-dinner snacks. Burgers can be one component of a meal at fast-food restaurants.
APPLICATION
Safeway displays the thousands of items it sells in aisles containing related items or product
groupings. Examples would be the pet food aisle or the soft drink aisle. Why would Safeway
display product groupings in this manner?
a. The groupings increase the number of market-product combinations on the market-product
grid, which makes it a more manageable framework for subsequent analysis.
b. This form of product groupings makes it easier for customers to get in and out of the store
more quickly, creating time utility.
c. The products are grouped so people can relate to them in a more meaningful way when they
shop.
d. Product groupings can be generated quantitatively to show which adhere to the 80/20 rule.
e. Individual suppliers get preferential treatment based upon the number of different UPCs they
provide in a given store.
Answer: c
Page(s): 230-231
LO: 3
AACSB: Analytic
QD: Hard
can relate to them.
APPLICATION
Hallmark placed its scrapbook supplies, photo albums, and related supplies into one product
group because
a. it was easier to forecast future sales since there were fewer market-product combinations.
b. customers could buy in quantity and take advantage of quantity discounts.
- 52 -
c. their suppliers provided free displays and shelving to highlight Hallmarks products.
d. it helped buyers relate to the products and make decisions in a more meaningful way.
e. it allowed customers to compare price and quality with competitors who displayed their
products in a similar manner.
Answer: d
Page(s): 230-231
LO: 3
AACSB: Analytic
QD: Hard
can relate to them.
KNOWLEDGE
A market-product grid is a framework to relate

a. total estimated expenses for each product sold to each market segment.
b. total anticipated revenue for each product-market segment combination.
c. total anticipated profit for each product sold to each market segment.
d. the market segments of potential buyers to relative market share compared to the closest
competitor.
e. the market segments of potential buyers to products offered or potential marketing actions by
an organization.
Answer: e
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Easy
buyers to products offered or potential marketing actions by an organization.
KNOWLEDGE
A market-product grid is a framework to relate the __________ to products offered or potential

marketing actions by an organization.
a. market segments of potential buyers
b. marketing objectives of potential products
c. total anticipated revenue
d. total anticipated profit
e. market share of the closest competitor
Answer: a
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Easy
KNOWLEDGE
A market-product grid is a framework to relate the market segments of potential buyers to

a. estimated expenses for products sold.
b. products offered or potential marketing actions by an organization.
c. total anticipated revenue.
d. total anticipated profit.
e. market share of the closest competitor.
Answer: b
Page(s): 231-232
LO: 4
- 53 -
AACSB: Analytic
QD: Easy

COMPREHENSION
Each cell of the market-product grid shows the __________.

a. relative market share
b. estimated market size
c. investment required to reach the market
d. market growth rate
e. estimated profit
Answer: b
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Developing a market-product grid means identifying and labeling the markets (or
horizontal rows) and product groupings (vertical columns). Each cell in the grid can show the
estimated market size of a given product sold to a specific market segment. See Figure 9-9 in the
textbook.
COMPREHENSION
After establishing the market segments and product groupings on a market-product grid, the next
step is to
a. fill in the appropriate cells with precise statistical data from primary and/or secondary
sources.
b. make intelligent guesstimates of the market size for each cell using a simple scale from
zero to three (0 = no market; 1 = a small market; 2 = a medium market; and 3 = a
large market).
c. total the vertical columns to identify the greatest marketing synergies and efficiencies.
d. total the horizontal rows to identify greatest operations/production synergies and efficiencies.
e. identify a marketing action for every product-market combination in the grid.
Answer: b
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: The next step is to estimate the market size of each cell. The market size estimates in
Figure 9-9 vary from a large market (3) to no market at all (0) for each cell in the marketproduct grid.
COMPREHENSION
One advantage of a market-product grid is that it can be used to

a. make cost-cutting decisions under conditions of uncertainty.
b. screen many new product ideas in order to select the one with the best long-run market
potential.
c. determine which target market segments to select and which product groupings to offer.
d. select representative samples of consumers for marketing research studies.
e. relate the product life cycle to consumer demand.
Answer: c
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: A market-product grid is a framework to relate the segments of a market to the
products offered. It is helpful in determining which target market segments to select and which
product groupings to offer.
- 54 -
COMPREHENSION
Determining the size of specific markets using a market-product grid is helpful in determining
which target market segments to select and
a. how to implement the 80-20 rule.
b. which products to group into meaningful categories.
c. how to implement a harvesting strategy.
d. which product groupings to offer.
e. which products to reposition.
Answer: d
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Even guesstimates of the size of specific market-product combinations using a
market-product grid are helpful in determining which target market segments to select and which
product groupings to offer.
Figure 9-9
9-163 WENDYS MARKET-PRODUCT GRID
COMPREHENSION
Figure 9-9 above shows the market-product grid for a Wendys restaurant next to a large urban
university campus. The best way to describe how the student market is segmented is
a. whether the student is a faculty or staff member.
b. whether the student lives near the campus or far away.
c. whether the student has the disposable income to eat at Wendys.
d. combining the factors of where the student lives and when (s)he is on campus.
e. the meals eaten at the Wendys restaurant.
Answer: d
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: The method of segmenting the student market combines where they live if they are
not commuters (dormitory or apartment) and when they are on campus if they are commuters
(day or night). See Figure 9-9 in the textbook.
- 55 -
COMPREHENSION
university campus. Assume a large market (shown by a 3) is three times the size of a small
market (shown by a 1). Similarly, assume a medium market (shown by a 2) is twice the size
of a small market. The meal occasion (product grouping) that comprises the largest market is
a. breakfast.
b. lunch.
c. between-meal snack.
d. dinner.
e. after-dinner snack.
Answer: b
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Totaling the meal columns vertically shows the lunch meal occasion to have the
most units of sales (14) of the five product grouping columns. See Figure 9-9 in the textbook.
COMPREHENSION
university campus. Assume a large market (shown by a 3) is three times the size of a small
market (shown by a 1). Similarly, assume a medium market (shown by a 2) is twice the size
of a small market. The largest potential market segment consists of
a. students that live in a dormitory.
b. students that live in an apartment.
c. students that are day commuters.
d. students that are night commuters.
e. faculty or staff members.
Answer: b
Page(s): 231-232
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Totaling the market segment rows horizontally shows that students that live in an
apartment is the largest segment with 9 units of sales of the student market segments. See
APPLICATION
university campus. Marketing synergies and efficiencies run __________ because a single kind
of marketing action can reach customers that buy different product groupings.
a. horizontally across the rows
b. vertically down the column
c. between full meals and snacks
d. diagonally from top-left to bottom-right of a market-product grid
e. both horizontally and vertically depending upon the marketing action developed
Answer: a
Page(s): 231, 236
LO: 4
AACSB: Analytic
QD: Hard
Rationale: Marketing synergies and efficiencies run horizontally across the rows because a single
kind of marketing action can reach customers that buy different productsin this case, meals.
For example, a flyer placed under the doors of dormitory residents could promote the Wendys
restaurant and several of its meals. See Figure 9-9 in the textbook.
- 56 -
APPLICATION
university campus. The strategy most likely to exploit marketing synergies and efficiencies
would be to target
a. lunch customers.
b. between-meal snack customers.
c. dinner customers.
d. after-dinner snack customers.
e. dormitory customers.
Answer: e
Page(s): 231, 236
LO: 4
AACSB: Analytic
QD: Hard
kind of marketing action can reach a target market segment that buys different productsin
this case, meals. The other alternatives run vertically down the columns and correspond to
operations/production synergies and efficiencies. See Figure 9-9 in the textbook.
APPLICATION
university campus. Marketing synergies and efficiencies run horizontally because
a. the first potential growth opportunity would be the breakfast market.
b. there are multiple markets and actions that can be simultaneously addressed.
c. a single kind of marketing action can reach customers that buy different product groupings.
d. the product offerings are virtually the same and the marketing action can be as simple as
offering current customers coupons.
e. the columns correspond to sales synergies and efficiencies.
Answer: c
Page(s): 231, 236
LO: 4
AACSB: Analytic
QD: Hard
kind of marketing action can reach customers that buy different productsin this case, meals.
For example, a flyer placed under the doors of dormitory residents could promote the Wendys
restaurant and several of its meals. See Figure 9-9 in the textbook.
APPLICATION
university campus. Operations and production synergies and efficiencies run __________.
a. horizontally across the rows
b. vertically from top to bottom
c. between full meals and snacks
d. diagonally from top-left to bottom-right of a market-product grid
e. both horizontally and vertically depending upon the marketing action
Answer: b
Page(s): 231, 236
LO: 4
AACSB: Analytic
QD: Hard
Rationale: Operations/production synergies and efficiencies run vertically because there is only
one product grouping to be produced and marketed. See Figure 9-9 in the textbook.
9-170 CRITERIA FOR SELECTING SEGMENTS
COMPREHENSION
All of the following are criterion used for selecting target market segments EXCEPT:
- 57 -
a.
b.
c.
d.
e.
compatibility with the organizations objectives and resources.

market size.
simplicity and cost of assigning potential buyers to segments.
competitive position.
cost of reaching the segment.
Answer: c
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
Rationale: The five criteria used for selecting a target segment include: (1) market size; (2)
expected growth; (3) competitive position; (4) cost of reaching the segment; and (5) compatibility
with the organizations objectives and resources. Simplicity and cost of assigning potential
buyers is a criterion used in forming market segments.
COMPREHENSION
Which of the following is a criterion used for selecting a target segment?

a. potential for increased profit
c. difference of needs of buyers among segments
d. competitive position
Answer: d
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
with the organizations objectives and resources.
COMPREHENSION
Five general criteria are often used to select target segments. They include: (1) the size of the
market; (2) expected growth of the market; (3) competitive position of the firm with respect to the
market; (4) cost of reaching the segment; and __________.
a. compatibility with the organizations objectives and resources
b. potential of a marketing action to reach a segment
c. similarity of needs of potential buyers within a segment
d. difference of needs of buyers among segments
e. potential for increased profit
Answer: a
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
c. cost of reaching the segment
d. difference of needs of buyers among segments
- 58 -
COMPREHENSION
Answer: c
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
COMPREHENSION

c. difference of needs of buyers among segments
d. potential of a marketing action to reach a segment
e. compatibility with the organizations objectives and resources
Answer: e
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
COMPREHENSION
Which of the following is a criterion used for selecting a target market?

a. similarity of needs of potential buyers within a segment
b. difference of needs of sellers between segments
c. feasibility of a marketing action to reach a segment
d. competitive position
Answer: d
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
COMPREHENSION
Which of the following is a criterion used for selecting a target market?

a. similarity of needs of potential buyers within a segment
b. difference of needs of buyers between segments
c. expected growth of a segment
d. feasibility of a marketing action to reach a segment
Answer: c
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Expected growth is a criterion for selecting a target market. Although the size of
market in the segment may be small now, perhaps it is growing significantly or is expected to
grow in the future.
- 59 -
COMPREHENSION
It is not recommended that a firm select a target segment that

a. is incompatible with its companys goals or objectives.
b. requires more than one marketing action.
c. has few competitors that target this same segment.
d. would require entry in a global marketplace.
e. has a growth potential that would require increasing the current workforce.
Answer: a
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Medium
APPLICATION
Best Foods Company is considering expanding beyond the regional market segments now served
by its Hellmanns mayonnaise. One criterion management wants to use to evaluate potential new
geographic market segments is whether new equipment must be bought to serve each new
segment. This is an example of which criterion used to select target market segments?
a. Best Foods competitive position in the segment
b. Best Foods created product groupings
c. expected growth of the market segment
d. size of the market segment
e. cost of reaching the segment
Answer: e
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Hard
Rationale: New equipment to reach a new market segment can be too costly to justify the
strategy.
APPLICATION
A rehabilitation center wants to target women in their 20s who have received some permanent
disability as the result of a skiing accident. In terms of the criteria used for selecting a target
segment, this market would
a. have no expected growth.
b. not be compatible with the companys current resources.
c. not be worth doing since its market size is very small.
d. not be readily accessible to the firms marketing programs.
e. be relatively difficult to access.
Answer: c
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Hard
Rationale: This market could grow, albeit slowly, as women continue skiing, some of whom will
likely need the rehabilitation services that the company provides. However, this segment is
probably too small for the rehabilitation center to develop a marketing program to reach it.
APPLICATION
During its market segmentation process for the Nike Air Jordan XVII, Nike decided to
concentrate on affluent teens rather than members of high school basketball teams. This is an
example of
a. selecting target market segments to reach.
- 60 -
b.
c.
d.
e.
forming products to be sold into groups.

developing a market-product grid and estimating size of markets.
taking marketing actions to reach target markets.
forming prospective buyers into segments.
Answer: a
Page(s): 232-233
LO: 4
AACSB: Analytic
QD: Hard
Rationale: A decision to concentrate on affluent teenagers is the selection of a target market
segment.
9-181 MARKETING ACTIONS
APPLICATION
Doris Lewis owns Lewis Edibles, Inc., a company that makes Tongue Tinglin B.B.Q. Sauce. She
wants to target local people who like the special blend of flavors found only in North Carolina
barbecue sauce. In developing a marketing strategy to sell the sauce, Lewis decided to join
Goodness Grows in North Carolina, a specialty food association that advertises local products
and distributes them to local supermarkets and gourmet shops. Lewis has just
a. formed a market segment using critical product features.
b. formed products to be sold into groups.
c. developed a market-product grid and estimating size of markets.
d. taken marketing actions to reach a target market segment.
e. formed prospective buyers into segments.
Answer: d
Page(s): 233-235
LO: 4
AACSB: Analytic
QD: Hard
Rationale: Alternative d is the final step in the market segmentation process, which is take
marketing actions to reach target markets. This can be accomplished by joining the food
association that will assist her in two aspects of the marketing programadvertising and
distribution.
9-182 WENDYS MARKETING ACTIONS
COMPREHENSION
When developing a new breakfast menu, Wendys had to consider not only the offerings of
Burger King and McDonalds but also the
a. monthly breakfast specials from IHOP and Perkins.
b. dormitory breakfast meal plans at surrounding colleges and universities.
c. quick-serve breakfast items from gas stations and convenience stores.
d. local farmers market that serves a hot breakfast buffet.
e. breakfast cereals sold at local grocery stores.
Answer: c
Page(s): 233
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Wendys evaluates possible new menu items continuously to compete with a complex
array of convenience stores and gas stations that sell breakfast items similar to those Wendys
may offer. The breakfast strategies developed by firms indicated in the other alternatives do not
directly compete with Wendys like McDonalds and Burger King does by offering primarily
quick-serve breakfast sandwiches, hash browns, coffee, etc.the fare that typically characterizes
fast-food restaurants.
- 61 -
Figure 9-10
APPLICATION
university campus after youve chosen the market segments to target and the product groupings to
offer based on the market size estimates. The next step is to develop a simple marketing action to
reach a target market. Assume students who live in dormitories or apartments on or near the
campus cannot use student parking lots. Placing flyers under windshield wipers of cars parked in
student parking lots on weekdays between 7:00 AM and 4:00 PM that offer a $2 off coupon on
any meal during the fall quarter would be especially targeted at potential
a. faculty customers.
b. staff customers.
c. day commuter customers.
d. night commuter customers.
e. nonstudent customers.
Answer: c
Page(s): 233-234
LO: 4
AACSB: Analytic
QD: Hard
Rationale: Market segments comprise the horizontal rows in Figure 9-10. Cars parked in student
parking lots between 7:00 AM and 4:00 PM generally belong to day commuter students.
APPLICATION
university campus after youve chosen the market segments to target and the product groupings to
offer based on the market size estimates. The next step is to develop a simple marketing action to
reach a target market. Sending out coupons for 10 percent off all purchases between 2:00 PM
and 4:30 PM during the winter quarter would target potential
a. dormitory customers.
b. night commuter customers.
c. between-meal snack customers.
d. after-dinner snack customers.
e. apartment customers.
- 62 -
Answer: c
Page(s): 233-234
LO: 4
AACSB: Analytic
QD: Hard
Rationale: The target here is potential between-meal snack customers, who might be reached by
this coupon that is intended to increase sales during the 2:00 PM to 4:30 PM time period. This is
a product grouping or meal in the market-product grid, a vertical column in Figure 9-10.
9-185 MARKETING MATTERS: APPLE
COMPREHENSION
In the early 1980s, Apple, Inc. was often called Camp Runamok because
a. every employee was encouraged to do his or her own thing.
b. it was concentrating on laptops while everyone else was concentrating on personal
computers.
c. all the employees were so young, they occasionally played more than they worked.
d. there were no coherent product lines targeted at identifiable market segments.
e. its personal computers were running amok with viruses, spyware, and other problems.
Answer: d
Page(s): 235
LO: 4
AACSB: Analytic
QD: Medium
Rationale: There were no coherent product lines targeted to identifiable market segments.
Apples lack of a segmentation strategy in the early 1980s and its current segmentation strategy
are compared in the Marketing Matters box on page 235.
Apple Market-Product Grid

APPLICATION
In the Apple market-product grid shown above for its computer line, the iMac is popular among
all the segments Apple can target. This allows Apple to enjoy __________.
a. segmentation synergies
b. marketing synergies
c. product synergies
d. 80/20 rule
e. usage rates
Answer: c
Page(s): 235-236
LO: 4
- 63 -
AACSB: Analytic
QD: Hard
Rationale: If Apple wanted to simplify its product line, reduce R&D and production expenses,
and manufacture only one computer it might do well to focus on the iMac because every segment
purchases it.
APPLICATION
In the Apple market-product grid shown above for its computer line, the individuals consumer
segment seems willing to purchase each item in Apples product line. This allows Apple to enjoy
__________.
a. segmentation synergies
b. marketing synergies
c. product synergies
d. 80/20 rule
e. usage rates
Answer: b
Page(s): 235-236
LO: 4
AACSB: Analytic
QD: Hard
Rationale: Running horizontally across the grid, each row represents an opportunity for
efficiency in terms of a market segment. Were Apple to focus on just one group of consumers,
such as the individual consumer segment, its marketing efforts could be streamlined. Apple could
probably create a single ad to reach the individual consumer target segment.
APPLICATION
According to the Apple market-product grid above, Apple would most likely get the LEAST
product synergies from the
a. Mac Pro and MacBook Pro.
b. Mac Pro and iMac.
c. Mac Pro and MacBook Air.
d. Mac Pro and Mac Mini.
e. iMac and Mac Mini.
Answer: d
Page(s): 235-236
LO: 4
AACSB: Analytic
QD: Hard
Rationale: The Mac Pro and Mac Mini products are designed to serve the needs of only three
market segments, whereas the other products are designed to serve five or more segments.
APPLICATION
According to the Apple market-product grid above, Apple would most likely get the LEAST
market synergies from
a. college staff.
b. individuals and small home office users.
c. medium/large businesses and college faculty.
d. students, teachers, and college faculty.
e. creative professionals.
Answer: a
Page(s): 235-236
LO: 4
AACSB: Analytic
QD: Hard
Rationale: The college staff segment primarily uses only two products (albeit different ones),
whereas the other segments could use three or more of these products (albeit different ones).
9-190 MARKET-PRODUCT SYNERGIES
COMPREHENSION
- 64 -
Two key types of synergies are __________.

a. supplier and distributor synergies
b. market and product synergies
c. industry-dominated and consumer-dominated
d. product and production synergies
e. consumer and market synergies
Answer: b
Page(s): 236
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Recognizing opportunities for key synergies or efficiencies are vital to success in
selecting target market segments and making marketing program decisions. Two key synergies
are marketing and productin the form of research and development (R&D) and
production/manufacturing/operations.
COMPREHENSION
Marketing synergies often come at the expense of product synergies because

a. product synergies are more effective for penetrating a market rather than creating one.
b. multiple market segments usually require multiple products.
c. it is easier to change a product than to completely develop a new marketing plan.
d. a single customer segment will likely require a variety of products.
e. no company can afford to do both at the same time.
Answer: d
Page(s): 236
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Marketing synergies often come at the expense of product synergies because a single
customer segment will likely require a variety of products, each of which will have to be designed
and manufactured.
COMPREHENSION
_________ often come at the expense of _________ because a single customer segment will
likely require a variety of products, each of which will have to designed and manufactured.
a. product synergies; marketing synergies
b. marketing synergies; product synergies
c. supplier synergies; consumer synergies
d. distributor synergies; supplier synergies
e. marketing synergies; finance synergies
Answer: b
Page(s): 236
LO: 4
AACSB: Analytic
QD: Medium
Rationale: Marketing synergies often come at the expense of product synergies because a single
customer segment will likely require a variety of products, each of which will have to be designed
and manufactured.
9-193 PRODUCT POSITIONING
KNOWLEDGE
The place a product occupies in consumers minds on important attributes relative to competitive
products is referred to as
a. product repositioning.
b. relative positioning.
c. competitive positioning.
- 65 -
d. product positioning.
e. selective perception.
Answer: d
Page(s): 236-238
LO: 5
AACSB: Analytic
Rationale: Key term definitionproduct positioning.
9-194 PRODUCT POSITIONING
QD: Easy
KNOWLEDGE
Product positioning refers to

a. an outdated concept that assigns product value by association with social class.
b. the place a product offering occupies in consumers minds on important attributes.
c. the competitive advantage of one product over another.
d. changing the place a product occupies in a consumers mind relative to competitive products.
e. using a market-product grid to place products in their appropriate places on that grid to
identify potential untapped markets.
Answer: b
Page(s): 236-238
LO: 5
AACSB: Analytic
Rationale: Key term definitionproduct positioning.
9-195 PRODUCT REPOSITIONING
QD: Easy
KNOWLEDGE
Changing the place an offering occupies in consumers minds relative to competitive products is
referred to as
a. product placement.
b. perceptual mapping.
c. product positioning.
d. product repositioning.
e. product differentiation.
Answer: d
Page(s): 236-238
LO: 5
AACSB: Analytic
Rationale: Key term definitionproduct repositioning.
QD: Easy
KNOWLEDGE
Product repositioning refers to

a. the place a product offering occupies in consumers minds on important attributes.
b. using a market-product grid to place products in their appropriate places on that grid to
identify potential untapped markets.
c. changing the place an offering occupies in consumers minds relative to competitive products.
d. the practice of selling off a firms least successful product line and redirecting that revenue
into a totally new product.
e. the competitive advantage of one product over another.
Answer: c
Page(s): 236-238
LO: 5
AACSB: Analytic
Rationale: Key term definitionproduct repositioning.
QD: Easy
APPLICATION
- 66 -
Recently, U.S. dairies, struggling to increase milk sales, tried to change the way adults thought
about milk. The dairies wanted to __________ chocolate milk in the minds of adult consumers.
a. segment
b. differentiate
c. reposition
d. explain
e. promote
Answer: c
Page(s): 236-238
LO: 5
AACSB: Analytic
QD: Hard
Rationale: Changing the place an offering occupies in consumers minds is called repositioning.
The dairy industry tried to reposition chocolate milk in the minds of adult consumers.
APPLICATION
Motts used an advertising campaign to change the way consumers thought about its applesauce
from a dinnertime side dish to a replacement for cooking oil in baking. The advertising message
was that using applesauce in baking cuts calories and also makes the resulting baked good
healthier. Motts used a __________ strategy.
a. perceptual mapping
b. product positioning
d. product repositioning
e. psychographics
Answer: d
Page(s): 236-238
LO: 5
AACSB: Analytic
QD: Hard
Rationale: Product repositioning changes the place a product occupies in consumers minds. In
this case, Motts attempted to reposition its applesauce from a dinnertime side dish to a healthy
baking ingredient.
9-199 HEAD-TO-HEAD POSITIONING
KNOWLEDGE
Positioning that involves competing directly with competitors on similar product attributes in the
same target market is referred to as __________.
a. competitive repositioning
b. position downsizing
c. differentiation positioning
d. head-to-head positioning
e. product distinction positioning
Answer: d
Page(s): 236-237
LO: 5
AACSB: Analytic
Rationale: Text term definitionhead-to-head positioning.
QD: Easy
APPLICATION
In the sneaker business, Heelys initially was practicing __________ positioning with sneakers
that were similar in consumers minds, so it introduced a line of Heelys sneakers that came with
an imbedded, detachable wheel in the shoes heel.
a. head-to-head
b. parallel market
c. lateral
- 67 -
d. repositioning
e. differentiation
Answer: a
Page(s): 236-237
LO: 5
AACSB: Analytic
QD: Hard
Rationale: Head-to-head positioning involves competing directly with competitors on similar
product attributes in the same target market. Initially, Heelys used this strategy to compete in the
kids sneaker market with firms like Nike, Vans, Skechers, etc., but then it made product
modifications (the wheel in the heel) to differentiate its shoes from those of its competitors.
KNOWLEDGE
One approach to positioning a new product in a market is __________ positioning, which

involves competing directly with competitors on similar product attributes in the same target
market.
a. perceptual
b. psychological
c. differentiation
d. head-to-head
e. market
Answer: d
Page(s): 236-237
LO: 5
AACSB: Analytic
Rationale: Text term definitionhead-to-head positioning.
QD: Easy
COMPREHENSION
Head-to-head positioning requires a product to

a. compete with competitors using completely different attributes.
b. compete with competitors on similar product attributes in the same market.
c. compete with competitors on similar product attributes but in a different market.
d. seek out its own market niche.
e. compete against other products from the same company.
Answer: b
Page(s): 236
LO: 5
AACSB: Analytic
QD: Medium
Rationale: Head-to-head positioning involves competing directly with competitors on similar
product attributes in the same target market.
APPLICATION
In the sneaker market, Reebok and Nike practice __________ positioning since both
manufacturers compete in the same target market with similar product attributes.
a. psychological
b. perceptual
c. differentiation
d. head-to-head
e. market
Answer: d
Page(s): 236
LO: 5
AACSB: Analytic
QD: Hard
Rationale: Differentiation positioning involves seeking a smaller market niche that is less
competitive in which to locate a brand. In the sneaker market, Nike and Reebok practice head-to-
- 68 -
head positioning, which involves competing directly with competitors on similar product
attributes in the same target market.
9-204 DIFFERENTIATION POSITIONING
KNOWLEDGE
A positioning approach that involves seeking a less competitive, smaller market niche in which to
locate a brand is referred to as __________.
a. competitive repositioning
b. head-to-head positioning
c. differentiation positioning
d. downsize positioning
e. product repositioning
Answer: c
Page(s): 237
LO: 5
AACSB: Analytic
Rationale: Text term definitiondifferentiation positioning.
QD: Easy
COMPREHENSION
Differentiation positioning requires a product to

a. emphasize unique product attributes to compete directly with competitors.
b. compete directly with competitors on similar product attributes in the same target market.
c. compete with competitors on similar product attributes but in a different market.
d. seek a less-competitive, smaller market niche in which to locate a brand.
e. develop marketing actions to move a product or brand to an ideal position.
Answer: d
Page(s): 237
LO: 5
AACSB: Analytic
QD: Medium
Rationale: Differentiation positioning involves seeking a less competitive, smaller market niche
in which to locate a brand.
COMPREHENSION
To minimize the cannibalization of a brands sales within its product line, firms often use
a. head-to-head positioning.
b. lateral positioning.
c. differentiation positioning.
d. market repositioning.
e. the 80/20 rule.
Answer: c
Page(s): 236-237
LO: 5
AACSB: Analytic
QD: Medium
Rationale: Companies use a differentiation positioning strategy among brands within their own
product line to minimize cannibalization of a brands sales or market share.
APPLICATION
Some Timex wristwatches can be purchased for less than $30 while some Rolex wristwatches
carry a price tag of several thousand dollars. In general, consumers view Timex watches as being
dependable, relatively accurate, and inexpensive. The Rolex brand tends to be perceived as an
expensive status symbol. Timex watches can be purchased in drug stores, discount stores, and
department stores in all sizes of communities. Rolex watches are distributed more selectively,
- 69 -
and are often available only in fine jewelry stores or specialty shops in major cities. By using
distinctly different pricing and distribution strategies, the marketers of Rolex watches
a. compete for the same segment through different channels of distribution.
b. develop similar products as Timex but under different names.
c. use a differentiation positioning strategy.
d. compete for the same customers through similar retail outlets.
e. create cognitive dissonance in consumers who purchased Timex wristwatches.
Answer: c
Page(s): 236-237
LO: 5
AACSB: Analytic
QD: Hard
Rationale: In todays marketplace, competition is extreme. For most products, many comparable
alternatives are available to the consumer. In this example, both the Timex and the Rolex
wristwatches will satisfy consumers basic need to know the time of day. However, in order to
compete in the wristwatch market, each marketer has attempted to create a distinct product
position in the minds of consumers. The image of the Timex (dependable, relatively accurate,
and inexpensive) is very different from that of Rolex (an expensive status symbol).
9-208 PERCEPTUAL MAP
COMPREHENSION
A means of displaying or graphing in two dimensions the location of products or brands in the
minds of consumers to enable a manager to see how consumers perceive competing products or
brands, as well as its own product or brand, is referred to as a
a. perception matrix.
b. growth-share matrix.
c. market-product grid.
d. perceptual map.
e. product differentiation chart.
Answer: d
Page(s): 237-238
LO: 5
Rationale: Key term definitionperceptual map.
AACSB: Analytic
QD: Medium
KNOWLEDGE
A perceptual map refers to

a. a framework used to compare one firms product offerings with another firms offerings in
relationship to their relative market share.
b. a framework used to demonstrate the growth or decline of specific market segments within an
industry.
c. a means of displaying or graphing in two dimensions the location of products or brands in the
minds of consumers to enable a manager to see how consumers perceive competing products
or brands, as well as its own product or brand.
d. a framework to relate the market segments of potential buyers to the products offered or
potential marketing actions by an organization.
e. the place a product occupies in a single consumers mind on unimportant attributes relative to
competitive products.
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Easy
COMPREHENSION
- 70 -
A graph displaying consumers perceptions of product attributes in two dimensions is referred to

as a
a. perception matrix.
b. growth-share matrix.
c. perceptual map.
d. market-product grid.
e. product differentiation chart.
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
COMPREHENSION
Marketers use perceptual maps as a means to display or graph in two dimensions the location of
products or brands
a. against large market segments in a market-product grid.
b. against small market segments in a market-product grid.
c. in the minds of consumers.
d. in the mind of a single consumer.
e. against the revenues generated by other products or brands within the company.
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
Rationale: A perceptual map is a means of displaying or graphing in two dimensions the location
of products or brands in the minds of consumers to enable a manager to see how consumers
perceive competing products or brands, as well as its own product or brand.
COMPREHENSION
A perceptual map can be used to identify a firms product in terms of how closely it fits the
ideal perceptions of __________ and where it fits in relationship to competitors products.
a. stakeholders
b. competitors
c. consumers
d. the CEO of the firm
e. independent rating organizations such as Consumer Reports
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
Rationale: A key to positioning a product or brand effectively is the perceptions of customers.
COMPREHENSION
The axes on a perceptual map are

a. two product attributes, each listed in terms of their opposites.
b. market share and market growth rate.
c. sales and profitability.
d. customer perceptions of the firms product versus the average of all brands in the industry.
e. customer perceptions of the firms product versus the brand of the firms principal competitor.
Answer: a
Page(s): 237-238
LO: 5
- 71 -
AACSB: Analytic
QD: Medium
Rationale: A perceptual map is a means of displaying or graphing in two dimensions, the

location of products or brands in the minds of consumers to enable a manager to see how
consumers perceive competing products or brands as well as its own product or brand. An
attribute such as nutrition could be listed as high at one end and low at the opposite end.
COMPREHENSION
Which of the following data are collected from consumers to develop a perceptual map for a
particular product?
a. a listing of all prospective brands and products
b. the important attributes for a product or brand class
c. managerial judgments about how consumers perceive products
d. rank order of the ratings of an existing brands preference relative to its competitors
e. detailed explanations of why consumers make the choices they do
Answer: b
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
Rationale: To develop a perceptual map, three types of data are needed: identification of
important attributes for a product or brand class; judgments of consumers about existing products
or brands with respect to these attributes; and identification of where the companys product or
brand is on these attributes in the minds of potential customers.
COMPREHENSION
A key to effectively positioning a product or brand is discovering its perception in the minds of
potential customers. To do this, companies take four steps: (1) __________; (2) discover how
target customers rate competing products or brands with respect to these attributes; (3) discover
where the companys product or brand is on these attributes in the minds of potential customers;
and (4) reposition the companys product or brand in the minds of potential customers.
a. decide whether to keep or delete the market segment that your product offering targets
b. identify the competitors brands that make up the consideration set
c. identify the important attributes for the product or brand class
d. create a marketing plan based on customers perceptions
e. identify market niches that were not previously selected during the market segmentation
process
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
Rationale: A key to positioning a product or brand effectively is discovering the perceptions of
its potential customers. In determining its positioning in the minds of customers, companies take
four steps: (1) identify the important attributes for the product or brand class; (2) discover how
COMPREHENSION
A key to positioning a product or brand effectively is discovering the perceptions of its potential
customers. In determining its positioning in the minds of customers, companies take four steps:
(1) identify the important attributes for the product or brand class; (2)__________; (3) discover
- 72 -

c. discover how target customers rate competing products or brands with respect to these
attributes
d. create a marketing plan based on customers perceptions
e. identify market niches that were not previously selected during the market segmentation
process
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
COMPREHENSION
A key to positioning a product or brand effectively is discovering the perceptions of its potential
customers. In determining its positioning in the minds of customers, companies take four steps:
(1) identify the important attributes for the product or brand class; (2) discover how target
customers rate competing products or brands with respect to these attributes; (3) ___________;
c. create a marketing plan based on customers perceptions
d. identify market niches that were not previously selected during the market segmentation
process
e. discover where the companys product or brand is on these attributes in the minds of potential
customers
Answer: e
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
- 73 -
Figure 9-11
COMPREHENSION
Figure 9-11 above is a depiction of a _________ for beverages in the minds of adults.
a. hierarchy of needs
b. perceptual map
c. marketing matrix
d. growth-share matrix
e. perception matrix
Answer: b
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Medium
Rationale: A perceptual map is a means of displaying or graphing in two dimensions the location
of products or brands in the minds of consumers to enable a manager to see how consumers
perceive competing products or brands, as well as its own product or brand.
APPLICATION
The perceptual map in Figure 9-11 above shows how various drinks are seen in the minds of adult
consumers. Suppose a coffee producer wants to increase sales. As the account executive for the
coffee producers advertising agency, you want to create comparative ads showing that coffee
presently is healthier (has higher nutrition) than which beverage?
a. skinny lattes.
b. fruit-flavored drinks.
c. sugared soft drinks.
d. sports drinks.
e. milk shakes.
Answer: c
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Hard
Rationale: For the planned ads, the coffee producer should position its coffee against drinks in
Figure 9-11 that are lower than coffee on the vertical nutrition axis. Such drinks are seen as less
nutritious. The only such drink in the figure that meets this criterion is sugared soft drinks.
- 74 -
APPLICATION
The perceptual map in Figure 9-11 above shows how various drinks are seen in the minds of adult
consumers. Suppose this map describes accurately how adults see the drinks shown. As one of
these adults, you are a heavy consumer of mineral water. Moreover, you are very concerned
about nutrition and tend not to consume childrens drinks. From this perceptual map, you
conclude that mineral water is
a. more nutritious than tea.
b. a more adult-oriented beverage than sports drinks.
c. more nutritious and a more adult-oriented beverage than milk shakes.
d. a more adult-oriented beverage than nutritionally designed diet drinks.
e. less nutritious and a more adult-oriented beverage than fruit-flavored drinks.
Answer: b
Page(s): 237-238
LO: 5
AACSB: Analytic
QD: Hard
Rationale: According to Figure 9-11, tea ranks higher than mineral water on the vertical attribute
nutrition, so more nutritious than tea is incorrect. Also, mineral water ranks as a more adultoriented beverage on the horizontal axis than sports drinks, so that is the correct answer. Milk
shakes is incorrect because mineral water is less nutritious than milk shakes. Moreover, mineral
water ranks higher than fruit-flavored drinks on the vertical attribute nutrition, so that
alternative is incorrect. Mineral water is a less adult-oriented beverage than nutritionally
designed diet drinks, since it is left of the diet drinks on the horizontal axis. Mineral water is a
more adult-oriented beverage than fruit-flavored drinks, but it is more nutritious.
9-221 VIDEO CASE 9: PRINCE SPORTS
COMPREHENSION
By dividing its tennis racquet market into three categories, which it labels Performance,
Recreational, and Junior tennis players, Prince Sports is using a marketing strategy called
a. product differentiation.
b. product innovation.
c. market delineation.
d. market segmentation.
e. product groupings.
Answer: d
Page(s): 239-241
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Market segmentation involves aggregating prospective buyers into groups that (1)
have common needs and (2) will respond similarly to a marketing action. Market segments are
the relatively homogeneous groups of prospective buyers that result from the market
segmentation processwhich helps Prince Sports develop products with the features and at the
prices that serve the different needs and skills of the three categories or segments tennis players.
COMPREHENSION
The O3 technology refers to an innovative tennis racquet Prince Sports developed that
simultaneously delivers faster racquet speed and a bigger sweet spot in the middle of the frame.
Prince Sports has implemented a __________ strategy with its O3 innovative tennis racquet
technology.
a. competitive segmentation
b. head-to-head
e. market segmentation
- 75 -
Answer: c
Page(s): 239-241
LO: 1
AACSB: Analytic
QD: Medium
Rationale: Product differentiation involves a firm using different marketing mix activities, such
as product features, to help consumers perceive the product as being different and better than
competing products. By developing the O3 technology for the Performance segment, Prince
Sports is focusing on a product feature that provides great feel, control, and spin, which both
professional and amateur tennis players are willing to pay for.
COMPREHENSION
The segmentation strategy used by Prince Sports today is

a. geographic.
b. behavioral.
c. psychographic.
d. socioeconomic.
e. resource-based.
Answer: b
Page(s): 239-241
LO: 3
AACSB: Analytic
QD: Medium
Rationale: Behavioral segmentation is based on some observable actions of prospective
customers, such as the benefits they seek, which usually relates to the product features they want
developed as part of the marketing program. Potential buyers within a segment should be
similar in terms of their needs and the resulting marketing action, such as product features.
Prince Sports segments on a behavioral basistrying to put features into its racquets that appeal
to different levels of players.
- 76 -

SHORT ESSAY QUESTIONS
COMPREHENSION
What is market segmentation and why is it important?

Answer:
Market segmentation involves aggregating prospective buyers into groups that have common
needs and will respond similarly to a marketing action. Segmentation links needs to marketing
actions. It stresses the importance of aggregatingor groupingpeople or organizations in a
market according to the similarity of their needs and the benefits they are looking for in making a
purchase. The needs and benefits to be satisfied must be related to specific, tangible marketing
actions in terms of the marketing mix variables (product, price, promotion, and distribution),
which the firm can control to satisfy the needs of these segments.
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
What is product differentiation? How does it relate to market segmentation? How does it
potentially improve a firms revenues?
Answer:
Product differentiation is a strategy that has come to have two different but related meanings. In
its broadest sense, it involves a firm using different marketing mix activities, such as product
features and advertising, to help consumers perceive the product as being different and better than
competing products. Differences may involve nonphysical features as well, such as image or
price. Thus, product differentiation relates to market segmentation, where perhaps the same or
similar target markets are more likely to buy the product differentiated as having greater
reliability or lower price. In a narrower sense, product differentiation involves a firm selling two
or more products with different features targeted to different market segments, because clearly
defined and different target markets have different needs that can be satisfied with different
products of the same general type, as the text points out in connection with Zappos. As long as a
new product does not take a significant amount of sales away from an existing product, it can
contribute to increased revenues for the firm.
Page(s): 220
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
Why would an organization produce a single product or service and then attempt to sell it to two
or more market segments?
Answer:
An organization would produce a single product or service and then attempt to sell it to two or
more market segments to avoid the added cost of developing additional versions of the product,
which often entails high research and development, engineering, and manufacturing expenses. In
- 77 -
this case, the incremental costs of taking the product into new market segments are typically
those of a separate promotional campaign or a new channel of distribution. Although these
expenses can be high, they are rarely as large as those for developing an entirely new product.
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
Why would an organization produce multiple products or services and then attempt to sell them
to two or more market segments?
Answer:
Organizations may target different products or services to multiple market segments. Producing
these different products or services is clearly more expensive than producing only one product or
service but is effective if it meets customers needs better, doesnt reduce quality or increase
price, and most importantly, adds to the organizations sales revenues and profits.
Page(s): 222
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
Explain the difference between mass customization and build-to-order.

Answer:
Mass customization involves tailoring goods or services to the tastes of individual customers on a
high-volume scale. Build-to-order (BTO), upon which mass customization is based, involves
manufacturing a product only when there is an order from a customer. In a BTO system,
customers do not have an unlimited number of product features they can choose from.
Page(s): 223
LO: 1
AACSB: Analytic
QD: Medium
COMPREHENSION
There are five key steps in segmenting and targeting markets, which link market needs of
customers to the organizations marketing program. List these five key steps.
Answer:
The five key steps in segmenting and targeting markets are: (1) group potential buyers into
segments; (2) group products to be sold into categories; (3) develop a market-product grid and
estimate size of markets; (4) select target markets; and (5) take marketing actions to reach target
markets. See Figure 9-3 in the textbook.
Page(s): 224-225
LO: 2
AACSB: Analytic
QD: Medium
COMPREHENSION
A marketing manager should develop segments for a market that meet five principal criteria. List
these important factors in forming market segments.
Answer:
- 78 -
The five criteria are: (1) simplicity and cost-effectiveness of assigning potential buyers to
segments; (2) potential for increased profit and ROI; (3) similarity of needs of potential buyers
within a segment; (4) difference of needs of buyers among segments; and (5) potential of a
marketing action to reach a segment.
Page(s): 224
LO: 2
AACSB: Analytic
QD: Medium
APPLICATION
A nonprofit food bank was handing out food to anyone who requested it on a weekly basis. It
now wants to give free food only to people who go hungry on a daily basis. This will be the
market segment it targets. How will the evaluation of its market segmentation strategy differ
from that used for a retail store?
Answer:
There is one key difference between for-profit and not-for-profit organizations, and that is the
criterion related to the potential for increased profit and ROI. For nonprofits, this criterion is
replaced by the potential for serving clients needs more effectively while achieving the
organizations goals.
Page(s): 224
LO: 2
AACSB: Analytic
9-232 CONSUMER SEGMENTATION VARIABLES
QD: Hard
COMPREHENSION
What are the four general bases that are used to segment consumer markets?
Answer:
The four general bases of segmentation are: (1) geographic segmentation, which is based on
where prospective customers live or work (region, city size); (2) demographic segmentation,
which is based on some objective physical (gender, race), measurable (age, income), or other
classification attribute (birth era, occupation) of prospective customers; (3) psychographic
segmentation, which is based on some subjective mental or emotional attributes (personality),
aspirations (lifestyle), or needs of prospective customers; and (4) behavioral segmentation, which
is based on some observable actions or attitudes by prospective customerssuch as where they
buy, what benefits they seek, how frequently they buy, and why they buy.
Page(s): 225-227
LO: 3
AACSB: Analytic
9-233 CONSUMER MARKET SEGMENTATION
QD: Medium
APPLICATION
Assume you are manager of The Outback Steak House, a franchised restaurant that has opened at
new location in St. Louis. Describe which segmentation base(s) and its (their) respective
segmentation variable(s) you would use to segment the U.S. market and explaining why each the
appropriate market segmentation strategy.
Answer:
Students should choose from the segmentation base(s) and its (their) respective segmentation
variable(s) listed in Figure 9-4. The most likely basis of segmentation would be geographic. The
likely segmentation variables, from the simplest to use to the more complex, would be: (1) region
(Midwest, where St. Louis is located); MSA (or a metropolitan statistical area that has at least one
urbanized area of 50,000 or more people and adjacent territory with a high degree of social and
- 79 -
economic integration)since larger cities and their associated suburbs meet this criterion and
usually have a sufficient number of people that are willing and able to pay for food served at this
restaurant; (3) density such as urban and suburban locations but not small town or rural, which
are excluded from a defined MSA; and (4) the set of zip codes or census tracts where potential
consumers reside who (a) live within a 10-mile drive-time radius of the proposed restaurant
location and (b) have the necessary income (a demographic segmentation variable) of at least
$35,000 to afford the $10 to $25 per person cost of a meal at Outback. Although a psychographic
basis of segmentation could be chosen, it would be too difficult and costly to select a
psychographic variable (like personalityextroverted, gregarious) to identify and assign
consumers into distinct segments and then develop marketing actions to reach themtwo criteria
necessary to segment markets. With respect to behavioral segmentation, usage status may be
feasible if an effective customer loyalty/frequency marketing program can be easily developed to
identify and classify the heavy users that would patronize Outback, say, more than once a
month, since repeat business is the key to success in the sit-down restaurant industry.
Page(s): 225-227
LO: 3
AACSB: Analytic
9-234 80/20 RULE
QD: Hard
COMPREHENSION
Explain what is meant by the concept of the 80/20 rule.

Answer:
Usage rate is sometimes referred to in terms of the 80/20 rule, a concept that suggests 80 percent
of a firms sales are obtained from 20 percent of its customers. The percentages in the 80/20 rule
are not really fixed at exactly 80 percent and 20 percent, but suggest that a small fraction of
customers provide a large fraction of a firms sales.
Page(s): 227
LO: 3
AACSB: Analytic
QD: Medium
COMPREHENSION
What are the segmentation bases for U.S. organizational (business) markets?
Answer:
Organizational (business) markets can be segmented by geographic, demographic, or behavioral
bases. A psychographic basis is not used for organizational market segmentation.
Page(s): 229
LO: 3
AACSB: Analytic
QD: Medium
COMPREHENSION
Explain what a market-product grid is and how it is used.

Answer:
A market-product grid is a framework to relate the market segments of potential buyers to
products offered or potential marketing actions by an organization. Developing a market-product
grid means identifying and labeling the markets (or horizontal rows) and product groupings (or
vertical columns). In a complete market-product grid analysis, each cell in the grid can show the
estimated market size of a given product sold to a specific market segment.
Page(s): 221, 231-232 LO: 4
AACSB: Analytic
- 80 -
QD: Medium
9-237 SELECTING TARGET MARKETS
COMPREHENSION
What are the criteria used to select target markets?

Answer:
There are two different kinds of criteria in the market segmentation process: those used to (1)
divide the market into segments and (2) actually pick the target segments. Five criteria can be
used to select the target segments. They are: (1) market size; (2) expected growth; (3)
competitive position; (4) cost of reaching the segment; and (5) compatibility with the
organizations objectives and resources.
Page(s): 232-233
LO: 4
AACSB: Analytic
9-238 MARKETING-PRODUCT SYNERGIES
QD: Medium
COMPREHENSION
Explain the difference between marketing synergies and product synergies.

Answer:
Synergy analysis seeks opportunities by finding the optimum balance between marketing
efficiencies versus product efficiencies and is vital to a marketers success in selecting target
market segments and making marketing program action decisions. Marketing synergies run
horizontally across a market-product grid and represent an opportunity for efficiency in terms of a
market segment. Marketing efforts can be streamlined with a focus on fewer segments. Product
synergies run vertically down the market-product grid and each column represents an opportunity
for efficiency in research and development and production. To simplify product lines and reduce
R&D and production expenses, a firm might only wish to manufacture one or a few products and
could determine which to make based on the number of segments with an interest in that product.
Page(s): 236
LO: 4
AACSB: Analytic
9-239 APPROACHES TO PRODUCT POSITIONING
QD: Medium
COMPREHENSION
What are two approaches to product positioning? Give an example of each approach.
Answer:
There are two major approaches to positioning a product. Head-to-head positioning involves
competing directly with competitors on similar product attributes in the same target market. For
example, Dollar Rental Cars compete head-to-head or directly with Avis and Hertz.
Differentiation positioning involves seeking a smaller market niche that is less competitive in
which to locate a brand. Companies also follow a differentiation positioning strategy among
brands within their own product line to minimize the cannibalization of a brands sales or market
share. For example, McDonalds tried to appeal to the health-conscious segment when it
introduced the low-fat McLean Deluxe hamburger a few years ago to avoid competing directly
with Wendys and Burger Kings (and its own) higher fat-content offerings.
Page(s): 236-237
LO: 5
AACSB: Analytic
9-240 DATA NEEDED FOR PERCEPTUAL MAP
- 81 -
QD: Medium
COMPREHENSION
What are the three types of data needed from consumers to develop a perceptual map?
Answer:
In determining a brands position and the preferences of consumers, companies obtain three types
of data from consumers. They are: (1) important attributes for a product class; (2) judgments of
target customers about existing products or brands with respect to these attributes; and (3) where
the companys product or brand is on these attributes in the minds of potential consumers.
Page(s): 237
LO: 5
AACSB: Analytic
- 82 -
QD: Medium

CH09TB

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

CH09TB

Transféré par

Droits d'auteur :

Formats disponibles

CHAPTER 9: MASTER TEST BANK

MARKET SEGMENTATION, TARGETING, AND POSITIONING

Blooms Level of Learning (LL)

8, 9, 16, 17, 20, 21,

10, 11, 12, 13, 14, 15, 18, 19, 22,

23, 24, 31, 32, 35, 36, 49, 50,

97, 102, 111, 116,

78, 79, 80, 81, 82, 83, 84, 85, 86,

94, 95, 99, 100, 101, 104,

193, 194, 195, 196,

202, 205, 206, 208, 210, 211,

197, 198, 200, 203, 207, 219,

221, 222, 223

CHAPTER 9: MASTER TEST BANK

LO1 Explain what market

8, 9, 16, 17, 20, 21, 33,

1, 2, 3, 4, 5, 6, 7, 10, 11, 12,

23, 24, 31, 32, 35,

78, 79, 80, 81, 82, 83, 84,

97, 102, 111, 116, 126,

96, 98, 103, 110, 112, 114,

99, 100, 101, 104,

156, 157, 158

159, 160, 161, 162, 163,

166, 167, 168, 169,

193, 194, 195, 196,

202, 205, 206, 208, 210,

197, 198, 200, 203,

LO2 Identify the five steps

LO4 Develop a marketproduct grid to

CHAPTER 9: MASTER TEST BANK

The company name Zappos was chosen because it

The primary focus of Zappos market segmentation strategy is to sell

Tony Hsieh, CEO of Zappos, offers $2,000 to anyone who

Building open and honest relationships with communication is an example of Zappos

Which of the following statements about Zappos is most accurate?

The Zappos segmentation strategy is based on

Market segmentation refers to

Which of the following statements regarding market segmentation is most accurate?

9-14 MARKET SEGMENTATION

To be identified as a market segment, its members must

Market segments refer to

9-18 MARKET SEGMENTS

The phrase relatively homogeneous collections of prospective buyers is most descriptive of

9-21 PRODUCT DIFFERENTIATION

Product differentiation refers to

d. to allow for free returns of goods if dissatisfied.

Rationale: Market segmentation links market needs to an organizations marketing program

A market-product grid refers to

9-36 MARKET-PRODUCT GRID

9-39 MARKET SEGMENTATION

All of the following are market segmentation strategies EXCEPT:

Sporting News Baseball Yearbook Covers

Which of the following is a disadvantage of employing a multiple products, multiple market

Tailoring goods or services to the tastes of individual customers on a high-volume scale is

Manufacturing a product only when there is an order from a customer is referred to as

9-66 MASS CUSTOMIZATION: BUILD-TO-ORDER

Organizational synergy is the increased customer value achieved through

Rationale: Text term definitionorganizational synergy.

Cannibalization would most likely occur if

Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which is to offer

Which of the following is an example of a Tiffany/Walmart strategy?