Study 1 – Flashcards
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Which of the following is not a characteristic of a consumer market?
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their purchasing decisions are always made by only one individual
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Which of these statements is not true about business markets?
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the purchase is always made by more than one individual
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Which of the following is not a requirement or characteristic of a market?
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A large number of people or organizations
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In order to be considered a market, people do not have to have
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discretionary income to purchase the product.
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Consumers that do not own dogs are not likely to be in the market for dog food because
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they do not have the need or desire for dog food.
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The ability to purchase a product is a function of
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buying power.
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Adolescents are not considered part of the market for casinos because they
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have very little buying power.
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Generally speaking, individuals who are unemployed would not be considered a target market for Mercedes or other luxury European import sedans because
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they would not have the ability to purchase such products.
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Miller Brewing does not consider teenagers to be a part of the beer market because they lack the ___________ to buy beer.
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authority
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When marketing research shows that a group of people does not desire a particular product, the people in that group
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are not a market for the product.
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The first step in the target market selection process is
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identifying an appropriate targeting strategy
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To find a target market, a firm can use the
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undifferentiated strategy, the concentrated strategy, and the differentiated strategy.
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Pillsbury defines all purchasers of flour as its target market. What targeting strategy would be most appropriate in this case?
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Undifferentiated
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When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is using a(n) _________ strategy.
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undifferentiated
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Why would a company use the undifferentiated strategy?
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The needs of individual consumers in the target market for a specific product are similar, so the organization can satisfy most customers with a single marketing mix.
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When the needs of individual consumers in a target market for a specific product are similar and the organization can satisfy most customers with a single marketing mix, the best approach to use may be the ___________ strategy.
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undifferentiated
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Which of the following statements about the undifferentiated targeting strategy is false?
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The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the target market
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The ProMark Company manufactures and sells only one type of ballpoint pen at just one price. All its advertising is the same and is directed at the mass market. What type of targeting strategy is the ProMark Company using?
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Undifferentiated
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Marketers for C & H Sugar believe that consumers have similar needs for the product. C & H will most likely use a(n) ___________ approach in defining a target market
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undifferentiated
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If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be using the ___________ strategy
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undifferentiated
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A market in which a large proportion of customers have similar needs for a product is called a(n) _____ market.
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homogenous
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The undifferentiated targeting strategy for finding a target market will likely not be successful if
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people within the market have heterogeneous needs.
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Most markets for products are made up of individuals or groups with diverse needs for products and are called ________ markets.
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heterogeneous
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Toyota has learned that some people want sports cars, while others want vans, trucks, sedans, and economy cars. In this instance, Toyota has found its markets to be
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heterogeneous
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Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs are classified as
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market segments.
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Mattel views the toy market as composed of four age groupings, each with different needs and desires. Each of these groups are known as
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a market segment.
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The purpose of market segmentation is to
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divide a total market to enable a marketer to develop a more precise marketing mix.
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The process of dividing a total market into market groups because people within each group have relatively similar product needs is called
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segmentation
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Several conditions must exist for market segmentation to be successful. These conditions include all of the following except
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customers' needs for the product must be homogeneous.
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A business advantage of the concentrated targeting strategy for any company is that it
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allows a firm to develop a special marketing mix for a single market segment.
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A targeting strategy in which an organization targets a single market segment using one marketing mix is called a(n) _____ strategy.
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concentrated
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When markets are comprised of people with differing product needs, the marketing manager should use a(n) ___________ strategy
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concentrated or differentiated targeting
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A disadvantage of the concentrated targeting strategy is that
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the firm's financial condition is tied to a single and specialized marketing mix. large sales volumes cannot be generated
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If Jaguar focused all its marketing efforts for the new Jaguar XKR on professionals earning more than $250,000, it would be using a(n) ___________ strategy.
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concentrated
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Tiffany's markets its exclusive jewelry and gifts to high-income individuals interested in high- quality products and a well-known brand name. It uses the same marketing mix to reach this market. Tiffany's uses a(n) ______ strategy.
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concentrated targeting
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Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories using a single marketing mix and is therefore most likely using a(n) _____ targeting strategy
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concentrated
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The primary advantage of a concentrated targeting strategy is
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it allows a firm to specialize to meet specific customer needs.
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Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to families. Procter & Gamble is using a(n) ___________ targeting strategy for laundry detergents
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differentiated
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Volkswagen markets its Routan to large families, its R32 race car to men, and its Jetta to young singles. What targeting approach is Volkswagen using?
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Differentiated
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A targeting strategy in which an organization directs its marketing efforts at several segments is called a(n) ___________ targeting strategy.
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differentiated
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If a company markets its products to several different countries, it is using a(n) ___________ targeting strategy to segment the total market.
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differentiated
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After a firm has identified an appropriate targeting strategy, the next step in the target market selection process is
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determining which segmentation variables to use.
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Characteristics of individuals, groups, or organizations that are used for dividing a total market into smaller homogeneous groups are called ___________ variables.
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segmentation
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Age, rate of product use, location, and gender are all examples of common
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segmentation variables.
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Segmentation variables are usually grouped into four categories:
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demographic, geographic, psychographic, and behavioristic
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Which of the following is not one of the major categories of consumer market segmentation variables?
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Situational variables
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Occupation, family size, and family life cycle are all ______ variables for segmenting consumer markets.
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demographic
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McDonald's uses a segmentation strategy for its sandwiches based on market characteristics such as age, gender, or income. Which of the following segmentation variables is McDonald's using?
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Demographic
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With its Venus razor, Gillette was the first marketer to offer a triple blade razor specifically designed for women. This is an example of market segmentation using ___________ variables.
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demographic
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Kelly's Kids is a home-based business that sells high-quality children's clothing at premium prices using in-home parties. These in-home parties typically cater to families with small children and middle- to upper-middle-class income. Kelly's Kids is using _____ variables to segment its market.
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demographic
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Cosmopolitan magazine, Secret deodorant, and Eve cigarettes are all products whose marketers have used segmentation based on
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gender.
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A marketer that targets customers based on marital status and the presence and age of children is using
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family life cycle.
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Which of the following products is most likely to have its market segment based on age?
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Legos
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If Campbell were to offer single serving "Soup for One" packages to small household markets, it would be using segmentation based on
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family life cycle.
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Which of the following products is least likely to be segmented according to stages in the family life cycle?
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Diet Coke
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Family life cycle is most typically based on
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marital status and age of children.
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Population density and city size are _______ variables used for market segmentation.
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geographic
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Zerex markets its radiator liquid as a coolant in the South and an antifreeze in the North. Which of the following segmentation variables is Zerex using?
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Geographic
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Many marketers are concerned about the number of potential customers within a certain area of land because of the different requirements to serve dissimilar areas. What is this segmentation variable called?
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Market density
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Subaru is producing a new crossover van with all-wheel drive. Which of the following would be a likely variable for segmenting the market for this new model?
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Geographic location
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Systems such as PRIZM and Acorn provide companies with lifestyle and demographic information about neighborhoods throughout the United States. This information is used to aid
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geodemographic segmentation.
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Justin Franklin's company is interested in locating areas where the average income is high, the average age range is 25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company would most likely find possible markets through
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geodemographic segmentation.
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Micromarketing is
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a market segmentation approach in which firms focus precise marketing efforts on very small geographic markets.
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Retail-site location analyses, unique product offerings, and special advertising campaigns are all examples of the use of
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micromarketing.
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Which of the following is the biggest drawback to using psychographic variables?
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They are difficult to measure
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The three most commonly used psychographic segmentation variables are
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personality, motives, and lifestyles
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When research indicated that Bluetooth's products were not reaching the correct target market, marketers of Bluetooth decided to change from demographic segmentation to psychographic segmentation. Which group of new segmentation variables will Bluetooth now be using?
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Personality characteristics, motives, and lifestyles
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When using personality characteristics as a market segmentation variable, marketers generally
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use a positively viewed characteristic they assume much of their target market has or would like to have
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The psychographic variable that includes numerous characteristics related to people's activities, interests, and opinion is
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lifestyle.
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If a company segments its market on the basis of their reasons for purchasing a particular product, the primary segmentation variable in use is
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motives.
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Demographic variables such as income and occupation, as well as how people spend their time and the importance of things in their surroundings, are all factors considered in ______ segmentation.
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lifestyle
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A widely used system for classifying individuals on the basis of lifestyle is
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VALS.
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Which of the following is an example of a behavioristic segmentation variable?
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Usage rate
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Budweiser may choose to segment its market based on heavy, moderate, and light drinkers of its alcoholic beverages. This is an example of market segmentation based on
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behavioristic variables
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End use, price sensitivity, and brand loyalty are all _____ variables that can be used in market segmentation.
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behavioristic
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Alli segments its diet pills based on those who have morning cravings, those who tend to overeat near the end of the day, those who need all day long appetite suppression, and those who want appetite control and more energy. This is an example of market segmentation based on variables of
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behavior.
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The division of a market according to what benefits consumers want from the product is called ______ segmentation.
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benefit
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Variables such as geographic location, type of organization, customer size, and type of product usage are used to segment ___________ markets.
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business
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Dell segments its business markets into small business, corporate, government agencies, K- 12 schools, and higher education institutions. The primary segmentation variable used in this example is
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type of organization.
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Which of the following variables would most likely be used to segment a business market?
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The geographic location of the company
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Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International Paper segments its market based on
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use of product.
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Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have different needs for the steel and thus Bethlehem has to prepare the raw steel differently depending on how customers will use it in their production processes. The primary business segmentation variable in this example is
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product use
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After an organization has determined which of the many segmentation variables it will use, the next step in the target market selection process is
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developing market segment profiles.
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__________ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments.
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Market segment profiles
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Yvonne and Garret are looking at information about how their organization's products could fit potential customers' needs. This information deals with demographic characteristics, product benefits sought, lifestyles, geographic factors, brand preferences, and usage rates. They are most likely looking at
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a market segment profile.
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The total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within a specified time period at a given level of industry-wide marketing activity, is the
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market potential.
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The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the
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company sales potential.
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General Electric calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's
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market potential.
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If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United States, this percentage would represent the ice cream marketer's
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company sales potential
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Using the breakdown approach to sales potential, estimates are made
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by starting with general economic conditions.
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The manager at a local recreational vehicle store, Off-Road Rage, believes the next two years will be difficult because of an economic recession. Using this forecast, he determines the effect on the industry's market potential and then estimates how his company's potential sales will look based on this outlook. This manager is using a _________ approach to estimating sales potential.
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breakdown
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Alex Wren of Owens Corning Fiberglass talks to Terry Jones, a home builder, to find out how much fiberglass insulation he intends to use in building homes during the next year. Albert then multiplies that number by the total number of builders in the territory. He is using a ___________ approach to measure sales potential.
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buildup
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The buildup approach measure of sales potential
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starts with forecasts about demand for a specific product within a relatively small area.
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When evaluating market segments, assessment of competitors is important because
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sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that together have a large share of that segment.
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Estimating the cost of entering a market and focusing on a specific target segment is important because
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the organization's marketers need to know if they can reach the segment at costs equal to or below competitors' costs.
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The final step in the target market selection process is
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selecting specific target markets.
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Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments, they have completed competitive assessments and cost estimates. The next major step they must take is to
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select specific target markets.
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When a marketer is engaged in the target market selection process and has assessed relevant market segments by considering such factors as sales estimates, competition, and estimated costs, the marketer is ready for the next step, which is to
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select specific target markets.
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When selecting specific target markets, a firm should
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choose the segments most in line with the firm's objectives and long-term growth.
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Soft Shave is a shaving cream aimed primarily at women. The activities and decisions involved in developing and maintaining Soft Shave's product concept in buyers' minds are called
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product positioning.
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Product positioning refers to
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the decisions and activities intended to create and maintain a certain concept of the firm's product in customers' minds.
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All of the following statements about product positioning are true except
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product positioning is the customer's absolute perception of a product's attributes.
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Pepsi wants to know where its Sierra Mist soft drink fits in with other drinks in the mind of the consumer. Marketers question a sample of consumers about Sierra Mist and other drinks on two different dimensions. They will most likely put this information into a _____ to show Sierra Mist's position.
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perceptual map
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If PepsiCo and Coca-Cola use celebrities to challenge the taste of the other firm's cola, this is referred to as ___________ positioning.
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head-to-head
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Positioning a product to avoid competition may be best when the
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product's performance characteristics are not significantly different from those of competing brands.
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When a company is introducing a new brand in a market where it already has one or more brands, which type of product positioning is most likely to be used?
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Positioning to avoid competition
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If a company extends a line of products by introducing a new product to the market, and the firm does not distinctly position this product (i.e., separately from the other products in the line), the result could be
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cannibalization.
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In the context of marketing, cannibalization means
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sales of a new product hurts sales of the company's existing products.
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Guess? will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's
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sales forecast.
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The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the
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sales forecast.
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All of the following are categories of common forecasting techniques for business except
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customer determined
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Relying on executive judgment for forecasting may be adequate when
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the executive has considerable experience and product demand is relatively stable.
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Intuition and expediency are primary characteristics of which of the following sales forecasting methods?
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Executive judgment
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Company sales forecasts are least likely to be based on
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single-variable segmentation.
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When a business has a relatively small number of customers, a preferred method of forecasting is
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a customer forecasting survey.
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The most important reason that a firm might use a sales force forecasting survey to determine its sales forecast is
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the sales staff is closer to the actual customers on a regular basis than anyone else in the organization.
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When a company has its sales forecasts prepared by management consultants, economists, or college professors, it is using a(n)
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expert forecasting survey.
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Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to
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allow experts to work separately to reach a consensus as to their forecasts.
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The forecasting techniques that assume past sales patterns will continue into the future are all variations of
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time series analysis.
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A forecasting method that predicts sales based on relationships between past sales and other variables is called
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regression analysis.
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While developing a company sales forecast at Safeway, Barb Herrington discovered a pattern in sales volume over the past five years. She likely used which sales forecasting technique?
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Time series analysis
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Katy Ramirez is a marketer for a golf equipment manufacturer. When forecasting company sales, she finds a direct association between past sales and per capita income. Which sales forecasting technique is Katy using?
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Regression analysis
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The sales prediction technique based on the correlation between sales and other factors such as population density, per capita income, or family size is
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regression analysis.
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The Sara Lee Company is attempting to forecast sales for a new ice cream cake. To come up with an accurate forecast, Sara Lee places the product in Atlanta supermarkets for a period of four months. In this instance, Sara Lee is using which forecasting method?
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Market test
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The sales forecasting method that consists of making a product available to buyers in one or more locations and measuring purchase response is
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a market test
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The forecasting method that utilizes a firm's historical sales data to find patterns in the firm's sales volume over time is
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time series analysis.
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In an effort to forecast his firm's sales for the coming year, Henry Thompson takes sales for the last three years and calculates a growth trend. Henry is employing which forecasting method?
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Time series analysis
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Which of the following sales forecasting techniques would generally be most suitable for estimating sales of a new product?
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Market tests
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Which of the following forecasting methods is least dependent on historical sales data?
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A market test
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What is the main problem with using a market test as a forecasting tool?
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Expensive
