Chapter 8: Identifying Market Segments and Targets
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. Instead of scattering their marketing effort (a “shotgun” approach), many companies
are now embracing target marketing where the focus is on those consumers that they
have the greatest chance of satisfying (a ________ approach) with their products and
services.
a. “rifle”
b. “focused”
c. “niche”
d. “macro”
e. “micro”
Answer: a Page: 240 Level of difficulty: Easy
2. In ________ marketing, the seller engages in the mass production, mass distribution,
and mass promotion of one product for all buyers.
a. group
b. mass
c. general
d. segmented
e. differentiated
Answer: b Page: 240 Level of difficulty: Medium
3. The argument for ________ marketing is that it creates the largest potential market,
which leads to the lowest costs, which in turn can lead to lower prices or higher
margins.
a. niche
b. micro
c. macro
d. differentiated
e. mass
Answer: e Page: 240 Level of difficulty: Medium
4. A ________ consists of a group of customers who share a similar set of needs and
wants.
a. market target
b. market group
c. market slice
d. market segment
e. market level
Answer: d Page: 240 Level of difficulty: Medium
5. A ________ consists of two parts: a naked solution and discretionary options.
a. differentiated market offering
b. flexible market offering
c. rigid market offering
d. vertical market offering
e. horizontal market offering
Answer: b Page: 241 Level of difficulty: Hard
6. If a marketing manager observes that his or her market shows no natural segments
and consumers seem to have roughly the same preferences, the marketing manager
will most likely be faced with a ________ preferences pattern.
a. homogeneous
b. heterogeneous
c. diffused
d. clustered
e. scattered
Answer: a Page: 241 Level of difficulty: Medium
7. Procter & Gamble has many soap brands. One reason for this is that soap users tend
to group together in terms of preferences such as bleaching action, softness, stain-
removal, et cetera. Which of the following preferences pattern would most likely
apply to P&G’s method of response to market needs?
a. Homogeneous preferences.
b. Diffused preferences.
c. Clustered preferences.
d. Psychological preferences.
e. Cultural preferences.
Answer: c Page: 242 Level of difficulty: Medium
8. Marketers usually identify niches by ________.
a. dividing a segment into subsegments
b. conducting VALS tests
c. allowing consumers to gravitate toward product brands
d. examining the demographics section of The Handbook of Marketing
e. producing products that can be used in a variety of ways
Answer: a Page: 242 Level of difficulty: Medium
9. A niche is characterized as being all of the following EXCEPT ________.
a. the customers in the niche have a distinct set of needs
b. the customers will pay a premium to the firm that satisfies their needs
c. the niche is not likely to attract other competitors
d. the customers generally have smaller amounts of income
e. the nicher gains certain economies through specialization
Answer: d Page: 242 Level of difficulty: Medium
10. Which of the following has greatly facilitated niche marketing?
a. The Internet
b. Globalization
c. Industrialization
d. Recession
e. Excessive demand
Answer: b Page: 243 Level of difficulty: Medium
11. When Nike attempts to get close to its customers at the local level by sponsoring local
school teams and providing shoes, equipment, and clothing to many of them, Nike is
using which of the following marketing formats?
a. Differentiated marketing
b. Consumer marketing
c. Instructional marketing
d. Partner marketing
e. Grassroots marketing
Answer: e Page: 244 Level of difficulty: Medium
12. According to thoughts expressed by Pine and Gilmore about a new economic era that
is rapidly approaching, if you charge for the time customers spend with you, then and
only then are you in the ________ business.
a. niche
b. grassroots
c. experience
d. service
e. goods
Answer: c Page: 245 Level of difficulty: Hard
13. Through customer experience management (CEM), brands can create five different
types of experiences: sense, feel, think, relate, and ________.
a. remembering
b. forgetting
c. simulation
d. act
e. bargain
Answer: d Page: 245 Level of difficulty: Medium
14. ________ combines operationally driven mass customization with customized
marketing in a way that empowers consumers to design the product service offering
of their choice.
a. Consumptionization
b. Viral marketing
c. Virtual marketing
d. Regionalization
e. Customerization
Answer: e Page: 246 Level of difficulty: Medium
15. Two broad groups of variables are used to segment consumer markets. One method
uses descriptive characteristics such as geography. The other method is to form
segments by looking at ________ considerations.
a. gender
b. income
c. cultural
d. interest
e. behavioral
Answer: e Page: 247 Level of difficulty: Medium
16. If a marketer decides that segmenting a market based on neighborhoods, the marketer
will have chosen the ________ method of segmentation.
a. demographic
b. psychographic
c. geographic
d. cultural
e. social class
Answer: c Page: 247 Level of difficulty: Easy
17. According to established methods of segmenting markets, all of the following would
an appropriate segment category if the family life cycle was the segmentation base
ACCEPT ________.
a. young, single
b. male, female
c. young, married
d. older, married, no children under 18
e. young, married, youngest child 6 or over
Answer: b Page: 248 Level of difficulty: Medium
18. A marketing manager is considering several options to market to market segments
identified as being either culture-oriented, sports-oriented, or outdoor-oriented. This
manager has selected the ________ format for segmenting markets.
a. personality
b. behavioral occasions
c. user status
d. psychographic lifestyle
e. readiness stage
Answer: d Page: 248 Level of difficulty: Medium
19. PRIZM (Potential Rating Index by Zip Markets) identifies clusters of consumers
based on a variety of characteristics such as education and affluence. Which of the
following clusters would match to a consumer group that is characterized as being in
their late forties and fifties, college-educated, upper-middle-class homeowners that
married late and are still raising children in comfortable suburban subdivisions and
are still pursuing kid-centered lifestyles.
a. The cosmopolitans
b. Beltway boomers
c. Young digerati
d. Winner’s circle
e. Blue bloods
Answer: b Page: 249 Level of difficulty: Hard
20. Jose and Erika have just divorced. This will obviously not only have an impact on
their personal lives but their consumptive lives as well. Which of the following
demographic segmentation subsegment formats might be used by marketers to reach
Jose or Erika?
a. Life stage
b. Benefits
c. Age segment
d. User segment
e. Occasion segment
Answer: a Page: 250 Level of difficulty: Medium
21. Men and women tend to have different attitudinal and behavioral orientations, based
partly on genetic makeup and partly on ________.
a. income
b. occupation
c. socialization
d. heredity
e. globalization
Answer: c Page: 250 Level of difficulty: Medium
22. Which of the following American Generations is characterized as being great
acquisitors and are value- and cause-driven despite indulgences and hedonism?
a. GI generation
b. Silent generation
c. Baby boomers
d. Generation X
e. Millennials
Answer: c Page: 252 Level of difficulty: Hard
23. ________ is the science of using psychology and demographics to better understand
consumers.
a. Psychographics
b. Segmentation
c. Clustering
d. Demographics
e. Social psychology
Answer: a Page: 252 Level of difficulty: Medium
24. To reach Generation Y, rock band Foo Fighters created a digital street team that sends
targeted e-mail messages to members who “get the latest news, exclusive audio/video
sneak previews, tons of chances to win great Foo Fighters prizes, and become part of
the Foo Fighters Family. Which of the following techniques for reaching Generation
Y are the Foo Fighters using?
a. Student ambassadors
b. Unconventional sports
c. Cool events
d. Computer games
e. Online buzz
Answer: e Page: 253 Level of difficulty: Medium
25. In 2003, 4.1 million Americans turned 21. An interesting fact is that the share of
college students who plan to move back home after graduation is ________.
a. 10 percent
b. 25 percent
c. 50 percent
d. 60 percent
e. 75 percent
Answer: d Page: 253 Level of difficulty: Hard
26. According to the VALS 8-part typology segmentation system, ________ are
successful, sophisticated, active, “take-charge” people with high self-esteem. Their
purchases often reflect cultivated tastes for relatively upscale, niche-oriented products
and services.
a. innovators
b. thinkers
c. achievers
d. experiencers
e. believers
Answer: a Page: 254 Level of difficulty: Hard
27. According to the VALS 8-part typology segmentation system, ________ are
considered to be elderly, passive people who are concerned about change. They are
loyal to their favorite brands.
a. believers
b. strivers
c. makers
d. survivors
e. experiencers
Answer: d Page: 254 Level of difficulty: Medium
28. A housewife requests a new treadmill for her birthday. With respect to consumer
decision roles, which role is the housewife currently playing?
a. Initiator
b. Influencer
c. Decider
d. Buyer
e. Gatekeeper
Answer: a Page: 255 Level of difficulty: Easy
29. With respect to occasion segmentation, Christmas, Valentine’s Day, and ________
account for just over half of gifters’ budgets.
a. Halloween
b. Father’s Day
c. Mother’s Day
d. Thanksgiving
e. Independence Day
Answer: c Page: 256 Level of difficulty: Medium
30. Mobil identified five different benefit segments for which products and services could
be designed. ________ (27 percent of the market) shops Mobil outlets for fast fuel,
fast service, and fast food.
a. Road warriors
b. Generation F
c. True blues
d. Home bodies
e. Price shoppers
Answer: b Page: 256 Level of difficulty: Hard
31. With respect to user status (a segmentation possibility), ________ tend to focus on
attracting potential users because they have the most to gain.
a. smaller firms
b. niche firms
c. followers
d. aggressive specialists
e. market-share leaders
Answer: e Page: 256 Level of difficulty: Hard
32. If a market is segmented according to light, medium, and heavy product users, the
marketer segmenting this market is using the ________ as the means to segment.
a. user status
b. usage rate
c. buyer-readiness stage
d. occasion
e. benefit
Answer: b Page: 256 Level of difficulty: Easy
33. If a buyer is loyal to two or three different brands of soap, this buyer’s loyalty status
can be described as being among the ________.
a. switchers
b. shifting loyals
c. split loyals
d. hard-core loyals
e. anti-loyals
Answer: c Page: 256 Level of difficulty: Easy
34. A company can learn a great deal by analyzing the degrees of brand loyalty. For
example, by studying the ________ the company can pinpoint which brands are most
competitive with its own.
a. hard-core loyals
b. split loyals
c. shifting loyals
d. switchers
e. anti-loyals
Answer: b Page: 257 Level of difficulty: Hard
35. All of the following have been designated as groups that might be found using
attitude as the primary segmentation variable EXCEPT ________.
a. synergistic
b. enthusiastic
c. positive
d. indifferent
e. hostile
Answer: a Page: 257 Level of difficulty: Medium
36. A snack chip manufacturer is concerned about consumers leaving its brand and going
to competitive alternatives. Which of the following groups (based on strength of
commitment) would be most likely to leave the company’s offering and go
somewhere else for snack products?
a. Convertible
b. Shallow
c. Average
d. Entrenched
e. Hard rocks
Answer: a Page: 258 Level of difficulty: Medium
37. If a consumer group is designated based on their “balance of disposition,” the
________ group can be described as one that is made up of nonusers who are as
attracted to a competing brand as they are to their current brands.
a. strongly unavailable
b. weakly unavailable
c. ambivalent
d. available
e. desirable
Answer: c Page: 258 Level of difficulty: Medium
38. If a marketer is seeking to segment a business market, which of the following
variables is generally felt to be important enough by marketers to place it first among
the list of other variables that can be used in segmentation process?
a. Personal characteristics
b. Demographic
c. Situational factors
d. Operating variables
e. Purchasing approaches
Answer: b Page: 258 Level of difficulty: Hard
39. A marketer is interested in segmenting a business market based on technology and
customer capabilities. Which of the following major segmentation variables would
most likely be used by the marketer to assist with the task?
a. Demographic
b. Purchasing approaches
c. Situational factors
d. Personal characteristics
e. Operating variables
Answer: e Page: 259 Level of difficulty: Hard
40. A marketer is interested in segmenting a business market on ________ if the marketer
intends to eventually segment the market based on loyalty and attitudes toward risk.
a. situational factors
b. purchasing approaches
c. personal characteristics
d. operating variables
e. demographics
Answer: c Page: 259 Level of difficulty: Medium
41. A company can be said to have used ________ if the company distinguished
customers buying on the basis of price, service, and quality.
a. macrosegmentation
b. microsegmentation
c. strategic segmentation
d. global segmentation
e. short-term segmentation
Answer: b Page: 260 Level of difficulty: Hard
42. Business buyers seek different bundles based on their stage in the purchase decision
process. ________ are customers who are starting their purchasing relationship and
they want easy-to-read manuals, hot lines, high levels of training, and knowledgeable
sales reps.
a. First-time prospects
b. Sophisticates
c. Global partners
d. Trend-setters
e. Novices
Answer: e Page: 260 Level of difficulty: Hard
43. If your marketing department established a priority in reaching solution-oriented
customers (e.g., those that want value through more benefits and advice), ________
would be the best means for connecting with these customers.
a. transaction selling
b. consultative selling
c. enterprise selling
d. dual selling
e. psychological selling
Answer: b Page: 261 Level of difficulty: Medium
44. During which step of the segmentation process would the marketer group customers
into segments based on similar needs and benefits sought by the customer in solving a
particular consumption problem?
a. Step 2—segment identification
b. Step 3—segment attractiveness
c. Step 6—segment “acid test”
d. Step 1—needs-based segmentation
e. Step 7—marketing-mix strategy
Answer: d Page: 261 Level of difficulty: Medium
45. If an organization’s marketing department wished to create “segment storyboards” to
test the attractiveness of each segment’s positioning strategy, this action would most
likely occur in the ________ step of the segmentation process.
a. needs-based segmentation
b. segment identification
c. segment profitability
d. segment “acid test”
e. marketing-mix strategy
Answer: d Page: 261 Level of difficulty: Hard
46. To be useful, market segments must rate favorably on five key criteria. In the
________ criterion, effective programs can be formulated for attracting and serving
the segments.
a. measurable
b. substantial
c. accessible
d. differentiable
e. actionable
Answer: e Page: 262 Level of difficulty: Medium
47. In evaluating different market segments, the firm must look at two factors: the
segment’s overall attractiveness and ________.
a. company’s objectives and resources
b. the product to be sold
c. the purchasing process
d. competition’s strategies
e. the global nature of the product
Answer: a Page: 262 Level of difficulty: Medium
48. Volkswagen concentrates on the small-car market and Porsche on the sports car
market. These would be examples of what is called ________.
a. single-segment concentration
b. selective specialization
c. product specialization
d. market specialization
e. full market coverage
Answer: a Page: 262 Level of difficulty: Easy
49. All of the following are benefits of following the ________ approach to target market
selection: a strong knowledge of the segment’s needs, a strong market presence,
operating economies through specializing in production, distribution, and promotion.
a. single-segment concentration
b. selective specialization
c. product specialization
d. market specialization
e. full market coverage
Answer: a Page: 262 Level of difficulty: Medium
50. When a symphony orchestra targets people who have broad cultural interests, rather
than only those who regularly attend concerts, the orchestra is targeting what are
called ________.
a. market mavens
b. strategic segments
c. supersegments
d. occasion segments
e. psychodemographic segments
Answer: c Page: 262 Level of difficulty: Hard
51. Which of the following best represents the chief advantage of pursuing a
multisegment strategy?
a. It makes the company almost bullet proof to competitors’ actions.
b. It diversifies the firm’s risk.
c. It creates synergy between markets.
d. It is a low cost strategy.
e. It treats all buyers the same and, therefore, lowers promotion costs.
Answer: b Page: 262 Level of difficulty: Medium
52. The chief disadvantage to a firm that decides to follow a product specialization
strategy in selecting target markets is that ________.
a. no synergy exists
b. logistics can become a nightmare
c. the product may be supplanted by an entirely new technology
d. competitors can easily copy any new product introductions
e. e-commerce becomes difficult for the company
Answer: c Page: 263 Level of difficulty: Hard
53. With ________ as a target market strategy, the firm concentrates on serving many
needs of a particular customer group.
a. single-segment concentration
b. selective specialization
c. product specialization
d. market specialization
e. full market coverage
Answer: d Page: 263 Level of difficulty: Easy
54. The two ways that large firms can cover a whole market (e.g., full market coverage
strategy) are through ________ and differentiated marketing.
a. undifferentiated
b. logistical
c. psychological
d. niche
e. macromarketing
Answer: a Page: 263 Level of difficulty: Easy
55. In ________ marketing, the firm operates in several market segments and designs
different products for each segment.
a. segmented
b. undifferentiated
c. differentiated
d. geodemographic
e. niche
Answer: c Page: 263 Level of difficulty: Easy
56. The best way to manage multiple segments is to appoint ________ with sufficient
authority and responsibility for building the segment’s business.
a. a product champion
b. segment managers
c. promotion managers
d. strategic managers
e. mid-level managers
Answer: b Page: 263 Level of difficulty: Easy
57. All of the following costs are likely to be higher if a marketer pursues a differentiated
marketing approach EXCEPT ________.
a. product modification costs
b. manufacturing costs
c. administrative costs
d. inventory costs
e. pricing costs
Answer: e Page: 264 Level of difficulty: Hard
58. ________ is the strategic coordination of economic, psychological, political, and
public relations skills, to gain the cooperation of a number of parties in order to enter
or operate in a given market.
a. Metamarketing
b. Macromarketing
c. Micromarketing
d. Megamarketing
e. Modular marketing
Answer: d Page: 265 Level of difficulty: Medium
59. One way to discover new market segments is to investigate the hierarchy of attributes
consumers examine in choosing a brand if they use phased decision strategies. This
process is called ________.
a. market partitioning
b. market positioning
c. market segmentation
d. strategic marketing
e. brand marketing
Answer: a Page: 266 Level of difficulty: Medium
60. Not all attempts to target children, minorities, or other special segments draw
criticism. Which of the following is the best illustration of a company (or industry)
that seems to be marketing to the above in a correct and ethical way?
a. McDonald’s marketing to inner-city youth.
b. R. J. Reynolds marketing of the Kool brand.
c. Colgate-Palmolive’s Colgate Junior toothpaste.
d. The cereal industry’s approaches to children.
e. G. Heileman Brewing’s approach to Colt 45 malt liquor.
Answer: c Page: 267 Level of difficulty: Medium
True/False
61. Markets are almost always homogeneous.
Answer: False Page: 239 Level of difficulty: Easy
62. To compete more effectively, many companies are now embracing target marketing.
Answer: True Page: 240 Level of difficulty: Easy
63. Effective target marketing requires that marketers use market segmentation,
market targeting, and market positioning to achieve success in the marketplace.
Answer: True Page: 240 Level of difficulty: Medium
64. Henry Ford epitomized the market segmentation strategy when he offered the Model-
T Ford.
Answer: False Page: 240 Level of difficulty: Hard
65. A market segment consists of a group of consumers who share a similar set of needs
and wants.
Answer: True Page: 240 Level of difficulty: Easy
66. With respect to market offerings, if a marketer emphasizes a naked solution, he or she
is emphasizing the product and service elements that all segment members value.
Answer: True Page: 241 Level of difficulty: Hard
67. A marketer glances at this month’s market-preference pattern diagram and notices
that all of the customers are grouped in the middle of the diagram; therefore,
customers are exhibiting clustered preferences.
Answer: False Page: 242 Level of difficulty: Hard
68. An attractive niche is characterized as having a distinct set of needs.
Answer: True Page: 242 Level of difficulty: Easy
69. Local marketing reflects a growing trend called macromarketing.
Answer: False Page: 244 Level of difficulty: Medium
70. Grassroots marketing done at the local level is associated with experiential marketing
where experiences are more important than products or services.
Answer: True Page: 244 Level of difficulty: Medium
71. If you charge for the time customers spend with you, then and only then are you in
the service business.
Answer: False Page: 245 Level of difficulty: Hard
72. When Nike and Gillette advertise and associate their products with the Boston
Marathon, the two companies are engaged in a form of experiential marketing called co-
branding.
Answer: True Page: 245 Level of difficulty: Medium
73. The ultimate level of segmentation leads to “segments of one,” “customized
marketing,” or “one-to-one marketing.”
Answer: True Page: 246 Level of difficulty: Easy
74. Two broad groups of variables are used to segment consumer markets: geographic
and demographic variables.
Answer: False Page: 247 Level of difficulty: Medium
75. Typical groupings (segments) that might be designated using the geographic method
of segmentation might be density, climate, or city/metro size.
Answer: True Page: 248 Level of difficulty: Hard
76. Illustrations of personality segmentation would include culture-oriented, sports-
centered, or outdoor-oriented subsegments.
Answer: False Page: 248 Level of difficulty: Medium
77. According to a new PRIZM cluster configuration, the Cosmopolitan tends to locate in
cities such as Las Vegas, Miami, or Albuquerque.
Answer: True Page: 249 Level of difficulty: Hard
78. A local service company has decided to segment its market based on occupation;
therefore, it has chosen a form of demographic segmentation for its approach.
Answer: True Page: 249 Level of difficulty: Medium
79. Life stage defines a person’s age.
Answer: False Page: 250 Level of difficulty: Medium
80. Men and women have different attitudinal and behavioral orientations caused mainly
by their genetic makeup.
Answer: False Page: 250 Level of difficulty: Hard
81. Research has shown that income is a highly accurate predictor of the “best”
customers for a given product.
Answer: False Page: 251 Level of difficulty: Medium
82. If you went to college in the late 1960s, you are most likely to be in a cohort shaped
by the Viet Nam War.
Answer: True Page: 251 Level of difficulty: Medium
83. The largest American generation of the twentieth century (78 million people) is
considered to be the GI Generation that fought in World War II.
Answer: False Page: 252 Level of difficulty: Medium
84. A sixty year-old man is coping with his advancing hair loss; therefore, he is dealing
with what is called physiographics.
Answer: True Page: 252 Level of difficulty: Hard
85. Psychographics is the science of using psychology and demographics to better
understand consumers.
Answer: True Page: 252 Level of difficulty: Easy
86. Generation X is considered to be a hot market because of their size, consumer savvy,
and their ability to be “wired-in” to contemporary trends.
Answer: False Page: 253 Level of difficulty: Medium
87. Forty-seven percent of 21-year-olds own a mobile phone.
Answer: True Page: 253 Level of difficulty: Medium
88. In the VALS segmentation system, Thinkers are characterized as being successful,
sophisticated, active, “take-charge” people with high self-esteem.
Answer: False Page: 254 Level of difficulty: Hard
89. According to the VALS segmentation system, the Strivers are at bottom of the
typology with the lowest resources and lowest with respect to innovation.
Answer: False Page: 254 Level of difficulty: Medium
90. When Mobil Oil Company researched its market based on benefit expectations, it
found that the largest segment (Price Shoppers) with a 27 percent share wanted fast
fuel, branded products, and convenience.
Answer: False Page: 256 Level of difficulty: Hard
91. An organization that could benefit from using User Status as a means for segmenting
its market would be a local blood bank.
Answer: True Page: 256 Level of difficulty: Medium
92. Marketers would rather attract one heavy user than several light users.
Answer: True Page: 256 Level of difficulty: Easy
93. With respect to loyalty status, if a consumer is loyal to two or three brands, he or she
is called shifting loyal.
Answer: False Pages: 256–257 Level of difficulty: Medium
94. The most important variable in segmenting a business market is demographics.
Answer: True Page: 258 Level of difficulty: Medium
95. Typical categories that would appear under the heading of situational factor
segmentation variables in the business marketplace would be urgency, specific
application, and size of order.
Answer: True Page: 259 Level of difficulty: Hard
96. The last step in the seven-step marketing segmentation process would be to develop a
marketing-mix strategy reflective of segment positioning strategies.
Answer: True Page: 261 Level of difficulty: Medium
97. To be useful, market segments must have as one of their characteristics the ability to
be measured.
Answer: True Page: 262 Level of difficulty: Medium
98. As a pattern found in target market selection, market specialization means that the
company offers one product to as many markets as possible.
Answer: False Page: 262 Level of difficulty: Medium
99. If a marketer is blocked from entering a market, the strategy of megamarketing can be
used to assist in breaking into that market.
Answer: True Page: 265 Level of difficulty: Medium
100. Market partitioning is process of focusing on a desired position in the marketplace
and then accumulating the resources to protect and defend that position.
Answer: False Page: 266 Level of difficulty: Medium
Essay
101. Market segments can be defined in many different ways. One way to carve up a
market is to identify preference segments. List and briefly characterize three
preference segments cited in the text.
Suggested Answer: The three preference segments cited in the text are: (1)
homogeneous preferences—a market where all consumers basically have the
same preferences; (2) diffused preferences—a market where preferences are
scattered indicating consumers vary greatly in their preferences; and, (3) clustered
preferences—where distinct natural market clusters develop.
Pages: 241–242 Level of difficulty: Medium
102. Columbia University’s Bernd Schmitt believes that marketers can provide
experiences for customers through a set of experience providers. List and briefly
discuss the seven experience providers recommended by Schmitt.
Suggested Answer: The seven experience providers are: (1) communications, (2)
visual/verbal identity, (3) product presence, (4) co-branding, (5) environments, (6)
Web sites and electronic media, and (7) people. For descriptions see Marketing
Insight (Experiential Marketing).
Page: 245 Level of difficulty: Hard
103. A new trend in marketing is toward customerization. Describe what
customerization is and how marketers are using it.
Suggested Answer: Customerization combines operationally driven mass
customization with customized marketing in a way that empowers consumers to
design the product or service offering of their choice. A company is customerized
when it is able to respond to individual customers by customizing its products,
services, and messages on a one-to-one basis.
Page: 246 Level of difficulty: Medium
104. There are several major segmentation variables that might be used by a marketer
to address a consumer market. If the marketer were to use social class,
psychographic lifestyle, and readiness stage to segment its market, identify
possible segmentation subcategories under each of the three. For example, if we
were to segment based on usage rate, subcategories would be light user, medium
user, and heavy user.
Suggested Answer: First, social class would yield the subcategories of lower
lowers, upper lowers, working class, middle class, upper middles, lower uppers,
and upper uppers. Second, psychographic lifestyles would yield culture-oriented,
sports-oriented, and outdoor-oriented. Lastly, readiness stage would yield
unaware, aware, informed, interested, desirous, and intending to buy. Other sub-
categories might be possible. The list above comes from Table 8.1. If you wish to
deviate from this table, be sure set ground rules for the students.
Page: 248 Level of difficulty: Hard
105. Briefly profile the American generations labeled as Baby boomers, Generation X,
Generation Y, and Millennials.
Suggested Answer: According to information presented in the text, (1) Baby
boomers (78 million people) were born 1946–1964 and are depicted as great
acquisitors, they are value- and cause-driven despite indulgences and hedonism;
(2) Generation X (57 million people) were born 1966–1977 and are depicted as
cynical and media-savvy, they are more alienated and individualistic; (3)
Generation Y (60 million people) were born 1977–1994 and are depicted as edgy,
focused on urban style, they are more idealistic than Generation X; and, (4)
Millennials (42 million people) were born 1994–2002 and are depicted as
multicultural, they will be tech-savvy, educated, grow up in an affluent society,
and have big spending power.
Page: 252 Level of difficulty: Medium
106. Marketing to Generation Y is a challenge because of their size and characteristics.
Because they are often turned off by overt branding practices and a “hard sell,”
marketers have tried many different approaches to reach and persuade Gen Y. The
text mentions seven methods for accomplishing this task. List and briefly discuss
four of those methods.
Suggested Answer: The seven methods are: (1) online buzz, (2) student
ambassadors, (3) unconventional sports, (4) cool events, (5) computer games, (6)
videos, and (7) street teams. See Marketing Insight (Marketing to Generation Y)
for additional details and discussion. Students may select any of the above four
for discussion and characterization.
Page: 253 Level of difficulty: Hard
107. The VALS segmentation system has evolved into an 8-part typology. List and
briefly describe any four categories of that 8-part typology.
Suggested Answer: The eight parts of the VALS segmentation system include
the following: (1) innovators, (2) thinkers, (3) achievers, (4) experiencers, (5)
believers, (6) strivers, (7) makers, and (8) survivors. Students may choose any of
the above four of the above eight for their discussion unless otherwise directed.
See the chapter section for characterization and discussion of each of the eight
categories.
Page: 254 Level of difficulty: Hard
108. If a marketer were to segment a business market on the basis of demographics,
what three subcategory segmentation variables would probably be used to assist
with this form of segmentation? What questions would be asked in each of the
three categories to advance the segmentation effort?
Suggested Answer: The three subcategories (and associated questions) would be:
(1) industry—which industries should we serve?, (2) company size—what size
companies should we serve?, and (3) location—what geographical areas should
we serve?
Page: 259 Level of difficulty: Medium
109. To be useful, market segments must rate favorably on five key criteria. What are
those criteria?
Suggested Answer: The five criteria are: (1) measurable, (2) substantial, (3)
accessible, (4) differentiable, and (5) actionable. For additional information, see
the chapter section.
Page: 262 Level of difficulty: Medium
110. The text describes five possible patterns for target market selection. Describe the
pattern called selective specialization.
Suggested Answer: In selective specialization, a firm selects a number of
segments, each objectively attractive and appropriate. There may be little of no
synergy among the segments, but each promises to be a moneymaker. This multi-
segment strategy has the advantage of diversifying the firm’s risk.
Page: 262 Level of difficulty: Medium
APPLICATION QUESTIONS
Multiple Choice
111. According one expert from J. Walter Thompson’s Mature Marketing Group,
“everyone over 45 is lumped into a category called old.” However, the expert
points out that this strategy is faulty. Seniors, particularly boomers-turned-seniors,
often make buying decisions based on ________.
a.price, not quality
b. lifestyle, not age
c.age perception
d. what their children buy
e.dreams, not realities
Answer: b Page: 239 Level of difficulty: Medium
112. When Coca-Cola sold only one kind of Coke in a 6.5-ounce bottle, it was
practicing what is called ________.
a. primary marketing
b. micromarketing
c. macromarketing
d. segmented marketing
e. mass marketing
Answer: e Page: 240 Level of difficulty: Medium
113. The marketer ________ the segments; the marketer’s task is to identify the
segments and decide which one(s) to target.
a. plans
b. creates
c. does not create
d. rarely controls
e. controls
Answer: c Page: 240 Level of difficulty: Hard
114. Anderson and Narus have urged marketers to present flexible market offerings to
all members of a segment. A flexible market offering consists of two parts. Which
of those parts contains the product and service elements that all segment
members’ value?
a. Naked solution
b. Discretionary solution
c. Maximum solution
d. Pseudo solution
e. Virtual solution
Answer: a Page: 241 Level of difficulty: Medium
115. Enterprise Rent-A-Car has challenged Hertz’s supremacy in the rental car market
by tailoring its marketing program to a relatively neglected target market. Which
of the following would be the most accurate description of that market?
a.The singles market.
b. The soccer mom market.
c.The business traveler market.
d. The low-budget, insurance-replacement market.
e.The vacationer market.
Answer: d Page: 242 Level of difficulty: Hard
116. The recipe for Internet niching success is to ________.
a. find a need and fill it
b. choose a hard-to-find product that customers do not need to see and touch
c. choose a low-budget product that is heavily demanded by Gen Y
d. choose an exclusive product sold primarily to seniors
e. find a product that has some attraction to a health-conscious market
Answer: b Pages: 243–244 Level of difficulty: Medium
117. One marketing commentator said, “The idea is not to sell something, but to
demonstrate how a brand can enrich a customer’s life.” Which of the following
forms of marketing was the commentator describing?
a. Experiential marketing
b. Niche marketing
c. Benefit marketing
d. Viral marketing
e. Virtual marketing
Answer: a Page: 244 Level of difficulty: Hard
118. If you were a marketing manager that was considering implementing the concept
of customer experience management (CEM), you would follow all of the
following steps EXCEPT ________.
a. analyzing the experiential world of the customer
b. building the experiential platform
c. designing the segmentation portfolio
d. structuring the customer interface
e. engaging in continuous innovation
Answer: c Page: 245 Level of difficulty: Hard
119. Home furnishing retailer Bed Bath & Beyond’s ability to cater to local tastes has
fueled its phenomenal growth. Bed Bath & Beyond’s managers pick ________ of
their own merchandise, and this local focus has helped the chain evolve from one
that began selling little more than bed linens to the “beyond” part—products
ranging from picture frames and pot holders to imported olive oil and designer
door mats.
a. 40 percent
b. 50 percent
c. 25 percent
d. 70 percent
e. 90 percent
Answer: d Page: 248 Level of difficulty: Hard
120. If a marketing researcher saw such names (categories) Blue Blood Estates,
Winner’s Circle, Hometown Retired, or Shotguns and Pickups when doing
segmentation research, the marketing researcher would most likely be dealing
with ________ clusters.
a.PRIZM
b. geodemographic
c.psychographic
d. demographic
e.VALS
Answer: a Page: 249 Level of difficulty: Medium
121. The Scion by Toyota has a hip look and feel—and an industrial strength stereo—
and is sold in chrome and black showrooms tucked inside Toyota dealerships.
According to Toyota, to which of the following audiences is the Scion positioned?
a.Wealthy baby boomers.
b. African American Generation X members.
c.Hispanic American millennials.
d. Generation Y.
e.The silent majority.
Answer: d Page: 250 Level of difficulty: Medium
122. Increasingly, companies are finding that their markets are ________ as middle-
market Americans migrate toward more premium products.
a. “triangle-shaped”
b. “inverted”
c. “hourglass-shaped”
d. “circular”
e. “linear”
Answer: c Page: 251 Level of difficulty: Hard
123. Which of the following statements accurately describes what demographers are
calling the “boom-boom effect”?
a. Consumers are demanding more “bang for their buck.”
b. Baby boomers still rule the marketplace.
c. Generation X and their taste for violence will dominate the market in the
future.
d. Products that appeal to 20-somethings also appeal to baby boomers.
e. Companies must have success quickly or go bust.
Answer: d Page: 252 Level of difficulty: Medium
124. If a marketing manager employs such marketing techniques as online buzz,
student ambassadors, cool events, and street teams to reach target markets, the
manager is most likely appealing to the ________ market.
a.pre-school
b. Generation X
c.Generation Y
d. Generation Z
e.latent baby boomers
Answer: c Page: 253 Level of difficulty: Easy
125. A hardware store has decided to use the VALS segmentation system to target
consumers. The store is particularly interested in reaching people who are
characterized by the VALS system as being practical, down-to-earth, and self-
sufficient who like to work with their hands. Which of the following VALS
categories most likely matches to the hardware store’s segment of interest?
a. Believers
b. Strivers
c. Survivors
d. Experiencers
e. Makers
Answer: e Page: 254 Level of difficulty: Hard
126. Users of a brand can be segmented into several groups based on the strength of
commitment to the brand. If a brand manager is seeking to identify those users who
are most likely to defect to another brand, he or she should look for users that are
labeled as being ________.
a. convertible
b. shallow
c. average
d. entrenched
e. latent
Answer: a Page: 258 Level of difficulty: Medium
127. A purchasing manager has decided to take a “purchasing approach” to segmenting
a proposed business market. All of the following would be potential means (sub-
segments) for segmenting under the “purchasing approach” EXCEPT ________.
a.purchasing-function organization
b. power structure
c.specific application
d. nature of existing relationships
e.purchasing criteria
Answer: c Page: 259 Level of difficulty: Hard
128. If your assignment was (for each segment) to create a “value proposition” and
product-price positioning strategy based on the segment’s unique customer needs
and characteristics, you would be in which of the following steps of the
segmentation process?
a. Needs-based segmentation
b. Segment identification
c. Segment attractiveness
d. Segment positioning
e. Segment “acid-test”
Answer: d Page: 261 Level of difficulty: Medium
129. As a brand manager you have decided to use the full market coverage approach in
marketing to your customers. Within the full market coverage approach, you have
selected a(n) ________ strategy whereby your firm will operate in several market
segments and design different products for each segment.
a. undifferentiated
b. differentiated
c. concentrated
d. introverted
e. parallel
Answer: b Page: 263 Level of difficulty: Medium
130. In the past, most car buyers first decided on the manufacturer and then on one of
its car divisions. This type of buying strategy has been labeled as a ________.
a. brand-dominant hierarchy
b. nation-dominant hierarchy
c. promotional hierarchy
d. geographic hierarchy
e. service-value hierarchy
Answer: a Page: 266 Level of difficulty: Medium
Short Answer
131. A starting point for discussing segmentation is mass marketing. Explain this
concept.
Suggested Answer: In mass marketing, the seller engages in the mass production,
mass distribution, and mass promotion of one product for all buyers.
Page: 240 Level of difficulty: Easy
132. Most companies today are turning to micromarketing at one of four levels. What
are those levels?
Suggested Answer: The levels are: (1) segments, (2) niches, (3) local areas, and
(4) individuals.
Page: 240 Level of difficulty: Medium
133. Assume that you have decided to use a niche strategy to advance your marketing
goals. Characterize an attractive niche.
Suggested Answer: An attractive niche is distinguished as follows: (1) the
customers in the niche have a distinct set of needs; (2) they will pay a premium to
the firm that best satisfies their needs; (3) the niche is not likely to attract other
competitors; (4) the nicher gains certain economies through specialization; and (5)
the niche has size, profit, and growth potential.
Page: 242 Level of difficulty: Hard
134. Local marketing reflects a growing trend called grassroots marketing.
Characterize grassroots marketing.
Suggested Answer: In grassroots marketing, marketing activities concentrate on
getting as close and personally relevant to individual customers as possible.
Page: 244 Level of difficulty: Easy
135. According to one marketing expert, “The idea is not to sell something, but to
demonstrate how a brand can enrich a customer’s life.” What form of marketing is
this expert referring to?
Suggested Answer: The expert is referring to what is called experiential
marketing.
Page: 244 Level of difficulty: Medium
136. Pine and Gilmore have argued that we are on the brink of what might be called
the “Experience Economy.” What are the four varieties of experiences that Pine
and Gilmore assert will be salable in the future?
Suggested Answer: The four varieties may be described as being: (1)
entertainment, (2) education, (3) esthetic, and (4) escapist.
Page: 245 Level of difficulty: Hard
137. When a marketer attempts to segment a consumer market, two broad groups of
variables may be used. What are those two broad groups of variables? Give an
example of each broad group.
Suggested Answer: The first broad group is labeled descriptive characteristics
such as geographic, demographic, and psychographic variables. The second broad
group is labeled behavioral considerations such as consumer responses to
benefits, use occasions, or brands.
Page: 247 Level of difficulty: Medium
138. PRIZM was developed by Claritas, Inc. Explain what PRIZM is intended to do.
Suggested Answer: PRIZM stands for Potential Rating Index by Zip Markets. It
is a method for geoclustering that classifies over half a million U.S. residential
neighborhoods into 15 distinct groups and 66 distinct lifestyle segments called
PRIZM Clusters. For more information, see the chapter section.
Page: 249 Level of difficulty: Hard
139. Silverstein and Fiske say that Panera bakery cafes are a good illustration of luxury
good-oriented establishments that deliver three benefits that are common to new
luxury good organizations. What are the three benefits listed by Silverstein and
Fiske?
Suggested Answer: The benefits are: (1) technical benefits, (2) functional
benefits, and (3) emotional benefits.
Page: 251 Level of difficulty: Medium
140. Meredith, Schewe, and Karlovich developed a framework called The Lifestage
Analytic Matrix. What does this matrix do and what are the variables that might
be contained in such a matrix?
Suggested Answer: The matrix combines information on cohorts, life stages,
physiographics, emotional effects, and socioeconomics in analyzing a segment or
individual.
Page: 252 Level of difficulty: Hard
141. Characterize psychographic segmentation.
Suggested Answer: In psychographic segmentation, buyers are divided into
different groups on the basis of psychological/personality traits, lifestyle, or
values.
Page: 252 Level of difficulty: Medium
142. According to the VALS Segmentation System, what four groups belong in the
category that displays lower resources?
Suggested Answer: The four groups are: (1) believers, (2) strivers, (3) makers,
and (4) survivors.
Page: 254 Level of difficulty: Medium
143. People play five roles in a buying decision. What are those roles?
Suggested Answer: The roles are: (1) initiator, (2) influencer, (3) decider, (4)
buyer, and (5) user.
Page: 255 Level of difficulty: Medium
144. Buyers can be classified according to the benefits they seek. Even car drivers who
what to stop for gas may seek different benefits. Through its research, Mobil
identified five different benefit segments. What are those segments and what
benefits are associated with each segment?
Suggested Answer: The different benefit segments are: (a) Road Warriors—
premium products and quality service, (b) Generation F—fast fuel, fast service,
and fast food, (c) True Blues—branded products and reliable service, (d) Home
Bodies—convenience, and (e) Price Shoppers—low price.
Page: 256 Level of difficulty: Hard
145. Consumer attitude(s) is(are) an interesting way to segment a market. Research
has shown that five attitude groups can be found in the market. What are those
five attitude groups?
Suggested Answer: The five attitude groups are: (1) enthusiastic, (2) positive, (3)
indifferent, (4) negative, and (5) hostile. For more information, see the chapter
section.
Page: 257 Level of difficulty: Medium
146. A Conversion Model is proposed in the text. What is the purpose of a conversion
model in assessing behavioral segmentation?
Suggested Answer: The Conversion Model has been developed to measure the
strength of the psychological commitment between brands and consumers and
their openness to change. To determine the ease with which a consumer can be
converted to another choice, the model assesses commitment based on such
factors as consumer attitudes toward and satisfaction with current brand choices
in a category and the importance of the decision to select a brand in the category.
For information on the various segments, see chapter material.
Pages: 257–258 Level of difficulty: Medium
147. Assuming you were a marketing manager that was interested in segmenting
business buyers’ benefit bundles based on their stage in the purchase decision
process, what three categories would be appropriate?
Suggested Answer: Categories would include: (1) first-time prospects, (2)
novices, and (3) sophisticates. For descriptions of each category, see chapter
materials.
Page: 260 Level of difficulty: Hard
148. One proposed segmentation scheme classifies business buyers into three groups,
each warranting a different type of selling. The groups are (1) price-oriented
customers, (2) solution-oriented customers, and (3) strategic-value customers.
What types of selling (specific selling type name) would be associated with these
three groups?
Suggested Answer: The selling types would be: (1) price-oriented customers
match to transactional selling, (2) solution-oriented customers match to
consultative selling, and (3) strategic-value customers match to enterprise selling.
Page: 261 Level of difficulty: Medium
149. Differentiated marketing typically creates more total sales than undifferentiated
marketing. However, it also increases the costs of doing business. Assume that
you are a marketing manager that is considering using differentiated marketing.
What five costs that you encounter on a rather regular basis would most likely be
higher because of your decision to pursue differentiated marketing?
Suggested Answer: The categories of costs that would most likely be higher
include: (1) product modification costs, (2) manufacturing costs, (3)
administrative costs, (4) inventory costs, and (5) promotion costs. For additional
information, see chapter section.
Page: 264 Level of difficulty: Hard
150. As a marketing manager, you have decided to update your segmentation scheme.
In the process of doing this, you have decided to use a process called market
partitioning. Explain what market portioning is.
Suggested Answer: One way to discover new segments is to investigate the
hierarchy of attributes consumers examine in choosing a brand if they use phased
decision strategies. This is called market partitioning. See chapter section for
additional information and examples of the process.
Page: 266 Level of difficulty: Medium
