Consumer Behavior, 10e (Schiffman/Kanuk) Chapter 3 Market Segmentation and Strategic Targeting

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1 Consumer Behavior, 10e (Schiffman/Kanuk) Chapter 3 Market Segmentation and Strategic Targeting 1) The process of dividing a market into distinct subsets of consumers with common needs or characteristics is known as. A) target marketing B) market segmentation C) mass marketing D) the marketing concept E) market evaluation Diff: 2 Page Ref: 52 Objective: 3.1: Understand why market segmentation is essential 2) When Henry Ford introduced the Model T, the first affordable, mass-produced car, he stated that consumers "can have a car in any color they want, as long as it is black." Offering the same product to all consumers in this fashion is known as. A) mass marketing B) behavioral targeting C) benefit segmentation D) micro-targeting E) countersegmentation Answer: A Diff: 2 Page Ref: 52 Objective: 3.1: Understand why market segmentation is essential 3) The of a product or service is the value proposition, expressed through promotion, stating the product's or service's capability to deliver specific benefits corresponding to consumers' unfulfilled needs. A) segmentation B) target C) positioning D) psychographic inventory E) concentrated marketing strategy Answer: C Diff: 2 Page Ref: 52 Objective: 3.1: Understand why market segmentation is essential

2 4) Which of the following is most likely to successfully follow a mass-marketing strategy? A) a company that produces personal computers B) a company that runs a chain of discount grocery stores C) a company that manufactures custom stereo equipment D) a private university E) a company that produces agricultural products Answer: E Diff: 2 Page Ref: 54 AACSB: Reflective Thinking Objective: 3.1: Understand why market segmentation is essential 5) The primary advantage of mass marketing is. A) it costs less B) it leads to wider customer satisfaction C) it leads to the production of products that better meet the needs of individual segments of the market D) it reaches more people E) it more accurately describes the product being promoted Answer: A Diff: 3 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential 6) Most marketers prefer to target consumer segments that are relatively. A) small B) stable in terms of consumption patterns C) unpredictable D) inaccessible E) expensive to pursue Diff: 1 Page Ref: 55 Objective: 3.2: Understand the criteria for targeting selected segments effectively

3 7) Consumers' characteristics can be classed as either facts or cognitions. In this context, facts can be determined from direct questioning and categorized by a single objective measure. Examples of facts include. A) demographics, gender, and benefits wanted B) usage rate, level of involvement and psychographics C) personality traits, lifestyles, and family life cycle D) education, usage situation, and social class E) level of involvement, awareness of product alternatives, and benefits wanted Answer: D Diff: 3 Page Ref: 58, Figure 3.3 8) Consumers' characteristics can be classed as either facts or cognitions. In this context, cognitions are abstract, can be determined only through more complex questioning, and generally have no single, universal definitions. Examples of cognitions include. A) demographics, gender, and benefits wanted B) usage rate, level of involvement and psychographics C) personality traits, lifestyles, and family life cycle D) education, usage situation, and social class E) level of involvement, awareness of product alternatives, and benefits wanted Answer: E Diff: 3 Page Ref: 58, Figure 3.3 9) Consumers' characteristics can be classed as either consumer-rooted or consumption-specific. In this context, consumer-rooted features stem from the consumer's physical, social, and psychological characteristics. Examples of consumer-rooted features include. A) demographics, gender, and benefits wanted B) usage rate, level of involvement and psychographics C) personality traits, lifestyles, and family life cycle D) education, usage situation, and social class E) level of involvement, awareness of product alternatives, and benefits wanted Answer: C Diff: 3 Page Ref: 58, Figure 3.3

4 10) Consumers' characteristics can be classed as either consumer-rooted or consumptionspecific. In this context, consumption-specific features are attitudes and preferences toward specific products or buying situations. Examples of consumption-specific features include. A) demographics, gender, and benefits wanted B) usage rate, level of involvement and psychographics C) personality traits, lifestyles, and family life cycle D) education, usage situation, and social class E) level of involvement, awareness of product alternatives, and benefits wanted Diff: 3 Page Ref: 58, Figure ) In reference to consumer characteristics, can be determined from direct questioning and categorized by a simple objective measure, whereas are abstract and can be determined only through more complex questioning. A) consumption-specific features; consumer-rooted features B) facts; cognitions C) product-specific features; consumption-specific features D) cognitions; facts E) consumer-rooted features; consumption-specific features Diff: 2 Page Ref: 57 12) In reference to consumer characteristics, stem from consumer's physical, social, and psychological characteristics, whereas are a function of usage behaviors. A) consumption-specific features; consumer-rooted features B) facts; cognitions C) product-specific features; consumption-specific features D) cognitions; facts E) consumer-rooted features; consumption-specific features Answer: E Diff: 2 Page Ref: 58

5 13) Another term for psychographic characteristics is. A) age B) lifestyles C) benefits sought D) use-situation factors E) use-related factors Diff: 1 Page Ref: 58 14) Age, gender, and education are bases of which of the following types of segmentation? A) geographic segmentation B) sociocultural segmentation C) benefit segmentation D) demographic segmentation E) psychological segmentation Answer: D Diff: 1 Page Ref: 58 15) consist(s) of activities, interests, and opinions, which are mostly attitudes toward various issues, and cannot be classified according to standardized definitions. A) Demographics B) Social class C) Psychographics D) Personality traits E) Socio-cultural values Answer: C Diff: 2 Page Ref: 58 16) Trends in the markets, such as shifts in age, gender, and income distribution, are often detected through information. A) demographic B) sociocultural C) psychological D) physiological E) use-related Answer: A Diff: 3 Page Ref: 58 AACSB: Reflective Thinking 17) information is often the most accessible and cost-effective way to identify a target

6 market. A) Demographic B) Sociocultural C) Psychological D) Physiological E) Benefit Answer: A Diff: 2 Page Ref: 58 18) The largest age segment in the U.S. population is, 76 million consumers born between 1946 and A) Baby Boomers B) Generation X C) Generation Y D) Net Gen E) Echo Boomers Answer: A Diff: 2 Page Ref: 60 AACSB: Multicultural and Diversity 19) The fact that salsa outsells ketchup in the southwest, and that Jif peanut butter is preferred in the Midwest over Skippy, is an example of why segmentation is used. A) demographic B) geographic C) psychographic D) sociocultural E) use-related Diff: 2 Page Ref: 62 20) Traditionally, the has been the focus of most marketing efforts. A) mother B) family C) individual D) child E) teen Diff: 1 Page Ref: 61 21) The is a composite variable based explicitly on marital and family status but

7 implicitly reflects relative age, income, and employment status. A) psychographic profile B) family life cycle C) demographic profile D) psychological profile E) hybrid segment Diff: 2 Page Ref: 62 22) is felt by many marketers to be a strong indicator of the ability to pay for a product. A) Age B) Gender C) Occupation D) Education E) Income Answer: E Diff: 1 Page Ref: 62 23) As a base for market segmentation, is/are commonly computed as a weighted index of education, occupation, and income. A) social class B) family life cycle C) personality traits D) socio-cultural values E) psychographics Answer: A Diff: 1 Page Ref: 62 24) implies a hierarchy in which individuals in the same class generally have the same degree of status, whereas members of other classes have either higher or lower status. A) Usage rate B) Subculture C) Family life cycle D) Social class E) Religion Answer: D Diff: 1 Page Ref: 62 25) The most popular use of geography in strategic targeting is a hybrid

8 segmentation scheme based on the premise that people who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles, and consumption habits. A) countersegmentation B) geodemographics C) behavioral targeting D) social class E) psychographics Diff: 1 Page Ref: 62 26) Lifestyles, also known as, consist of activities, interests, and opinions. A) psychographics B) demographics C) geodemographics D) personality traits E) benefit segmentation Answer: A Diff: 2 Page Ref: 66 27) It is often stated that while determine consumers' need for products and the ability to buy them, and consumers' values explain buyers' purchase decisions and the choices they make within the buying options available to them. A) benefit segmentation; demographics B) demographics; psychographics C) psychographics; benefit segmentation D) psychographics; demographics E) benefit segmentation; psychographics Diff: 3 Page Ref: 66 AACSB: Reflective Thinking

9 28) Psychographic studies generally use to gauge respondents' level of agreement or disagreement with statements selected from a psychographic inventory. A) semantic differential scales B) Likert scales C) behavior intention scales D) rank order scales E) focus groups Diff: 3 Page Ref: 66 29) The most popular segmentation system combining lifestyle and values is. A) PALS B) VALS C) LAPS D) SALS E) CALS Diff: 3 Page Ref: 66 30) The VALS typology classifies the American adult population into eight distinctive subgroups based on their motivations and level of resources. The three primary motivations include. A) ideals, education, and achievement B) ideals, achievement, and self-expression C) knowledge, education, and self-expression D) independence, aptitude, and achievement E) aptitude, ideals, and self-expression Diff: 3 Page Ref: 67

10 31) In the VALS typology, are motivated by ideals and tend to have low resources. They are generally slow to change and technology averse, and tend to prefer familiar products and established brands. A) Innovators B) Believers C) Thinkers D) Strivers E) Experiencers Diff: 3 Page Ref: 68, Table ) In the VALS typology, achievers are motivated by achievement and tend to have high resources. They have goal-oriented lifestyles that center on family and career. This segment tends to prefer. A) familiar products and established brands B) value over luxury, and tend to buy basic products C) products that offer durability, functionality, and value D) products that reflect cultivated tastes for upscale niche products and services E) premium products that demonstrate success to their peers Answer: E Diff: 3 Page Ref: 68, Table ) In the VALS typology, thinkers are motivated by ideals and tend to have high resources. They tend to be well educated and actively seek out information in the decision-making process. This segment tends to prefer. A) familiar products and established brands B) value over luxury, and tend to buy basic products C) products that offer durability, functionality, and value D) products that reflect cultivated tastes for upscale niche products and services E) premium products that demonstrate success to their peers Answer: C Diff: 3 Page Ref: 68, Table 3.7

11 34) In the VALS typology, makers are motivated by self-expression and tend to have low resources. They choose hands-on constructive activities and spend leisure time with family and close friends. This segment tends to prefer. A) familiar products and established brands B) value over luxury, and tend to buy basic products C) products that offer durability, functionality, and value D) products that reflect cultivated tastes for upscale niche products and services E) premium products that demonstrate success to their peers Diff: 3 Page Ref: 68, Table ) In the VALS typology, innovators are successful, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. This segment tends to prefer. A) familiar products and established brands B) value over luxury, and tend to buy basic products C) products that offer durability, functionality, and value D) products that reflect cultivated tastes for upscale niche products and services E) premium products that demonstrate success to their peers Answer: D Diff: 3 Page Ref: 68, Table ) Teenagers around the world tend to want products that are trendy, entertaining, and image oriented, regardless of where those teens live. This is an example of. A) a usage rate segment B) a cross-cultural segment C) a benefit-based segment D) a cultural segment E) usage situation segmentation Diff: 2 Page Ref: 70 AACSB: Multicultural and Diversity

12 37) Segmenting on the basis of cultural heritage can be useful because members of the same culture tend to. A) share the same values, beliefs, and customs B) speak the same language C) live in the same areas D) have similar incomes E) be loyal to the same brands Answer: A Diff: 2 Page Ref: 69 AACSB: Multicultural and Diversity 38) Marketers of many products such as soup, laundry detergent, beer, and dog food have found that a relatively small group of heavy users accounts for a disproportionately large percentage of the total product usage. Targeting these heavy users specifically is an example of. A) benefit-based segmentation B) demographic segmentation C) cross-cultural segmentation D) usage rate segmentation E) usage situation segmentation Answer: D Diff: 2 Page Ref: 70 AACSB: Reflective Thinking 39) The theory behind geographic segmentation is that. A) people who have the same activities, interests, and objectives will purchase the same products B) people with the same cultural heritage will have similar needs and values C) people who live in the same area share some similar needs and wants that differ from those of people living in other areas D) people who speak the same language have very similar needs and values E) all people living in the same country will have very similar needs and can be best served by a single advertising campaign Answer: C Diff: 3 Page Ref: 62

13 40) Beyond flavor and the presence or absence of sugar, Nicorette offers a gum that will whiten your teeth while satisfying your nicotine craving and helping you quit smoking. This gum has been positioned on the basis of. A) demographic segmentation B) family life cycle segmentation C) psychographic segmentation D) mass marketing E) benefit segmentation Answer: E Diff: 2 Page Ref: 72 41) segmentation differentiates among heavy users, medium users, light users, and nonusers of a specific product, service or brand. A) Brand awareness B) Brand loyalty C) Usage rate D) Sociocultural E) Benefit Answer: C Diff: 1 Page Ref: 70 42) Research has shown that 25 to 35 percent of beer drinkers account for more than 70 percent of all beer consumed. This is an example of segmentation. A) benefit B) usage rate C) psychographic D) lifestyle E) usage-situation Diff: 2 Page Ref: 70

14 43) Whether or not consumers need to be informed about a product relates to consumers'. A) awareness status B) usage situation C) attitude D) usage rate E) learning-involvement Answer: A Diff: 1 Page Ref: 71 44) The greeting card industry capitalizes on occasions to sell products; this is a perfect example of segmentation. A) lifestyle B) benefit C) usage situation D) demographic E) geographic Answer: C Diff: 3 Page Ref: 71 45) Campbell's Soup has divided the domestic market into more than 20 regions, each with its own sales managers that develop specific advertising and promotional campaigns geared to local market needs and conditions. This is an example of. A) microtargeting B) mass marketing C) ideal targeting D) counter segmentation E) hyper-segmentation Answer: A Diff: 3 Page Ref: 80 Objective: 3.4: Understand how segmentation and strategic targeting are carried out

15 46) represent unfilled consumer needs and can be used to develop a positioning approach. A) Usage rates B) Usage situations C) Psychographics D) Sought benefits E) Social class Answer: D Diff: 2 Page Ref: 72 47) Advertising for Hefty One Zip Bags emphasize "peace of mind." Eclipse gum stresses "fresh breath." They are two companies trying to attract customers on the basis of segmentation. A) use-related B) benefit C) lifestyle D) sociocultural E) demographic Diff: 2 Page Ref: 72 AACSB: Reflective Thinking 48) The market for toothpaste is a classic case of successful segmentation. If consumers are socially active, they want a toothpaste that can deliver white teeth and fresh breath; if they smoke, they want one that fights stains; if they want to prevent disease, they want one that will fight germs. A) use-related B) lifestyle C) sociocultural D) family life cycle E) benefit Answer: E Diff: 2 Page Ref: 72

16 49) The behavioral component of brand loyalty involves. A) the frequency and consistency of buying a given brand B) consumers' feelings of commitment to the brand C) the benefits offered to consumers as a result of repeated purchase of a given brand D) the trust consumers place on a given brand E) how consumers evaluate the functional features of a product or brand Answer: A Diff: 3 Page Ref: 74 50) The attitudinal component of brand loyalty involves. A) the frequency and consistency of buying a given brand B) consumers' feelings of commitment to the brand C) the benefits offered to consumers as a result of repeated purchase of a given brand D) the trust consumers place on a given brand E) how consumers evaluate the functional features of a product or brand Diff: 3 Page Ref: 74 51) The most common application of brand loyalty segmentation is, where marketers offer rewards to buyers who purchase their offerings consistently. A) VALS typology B) microtargeting C) the psychographic inventory D) the frequency award program E) mass marketing Answer: D Diff: 1 Page Ref: 74 52) Some marketers target consumers who show no brand loyalty in the belief that they represent greater market potential than consumers who are brand loyal. When shopping and evaluating prices and discounts, switchers are more likely to respond to than other segments. A) marketing messages B) televised marketing messages C) coupons and price cuts D) word-of-mouth and buzz marketing E) point-of-sale displays Answer: C Diff: 2 Page Ref: 80 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 53) Some marketers target consumers who show no brand loyalty in the belief that they represent

17 greater market potential than consumers who are brand loyal. Consumer innovators, often a prime target for new products,. A) tend not to be brand loyal B) tend to be resistant to change C) tend to have very limited resources D) tend to be highly brand loyal E) tend to be risk averse Answer: A Diff: 2 Page Ref: 80 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 54) Home Depot uses its individual customer purchase history to design customized ads. This is an example of. A) psychographic segmentation B) geodeomgraphic segmentation C) countersegmentation D) mass marketing E) behavioral targeting Answer: E Diff: 2 Page Ref: 79 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 55) The practice of transmitting individualized messages using , mobile devices, and even door-to-door presentations to deliver personalized messages to individuals is known as. A) broadcasting B) mass marketing C) narrowcasting D) countersegmentation E) functional marketing Answer: C Diff: 2 Page Ref: 80 Objective: 3.4: Understand how segmentation and strategic targeting are carried out

18 56) Differentiated marketing is a highly appropriate segmentation strategy for. A) innovative companies in new industries with few competitors B) established companies developing new technologies in their industries C) financially strong companies that are undisputed market leaders in their industries D) new companies that are trying to break into the market for an existing product category for which there is already a strong market leader E) financially strong companies that are well established in a product category and competitive with other firms that are also strong in the category Answer: E Diff: 3 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 57) When segments evolve in such a way that they no longer warrant individually designed marketing programs, research aimed at discovering a more generic need or consumer characteristic applicable to the members of two or more segments can be undertaken to facilitate. A) mass marketing B) target marketing C) countersegmentation D) market segmentation E) microsegmentation Answer: C Diff: 3 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 58) A college that decreases the number of courses it offers as a result of under-enrollment in indepth courses by combining those in-depth courses into one single course is engaging in. A) mass marketing B) target marketing C) countersegmentation D) market segmentation E) microsegmentation Answer: C Diff: 3 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out

19 MUSEUM MINI CASE: Central City Art Museum is looking to increase museum revenues by trying to draw more people to the museum. Research has shown that the most frequent users of the museum are over 55 years old, have college degrees, and have a household income of over $100,000. Less frequent users of the museum have the same education and income profile as frequent users, but tend to be younger, between 35 and 55. Surveys suggest that these younger adults would use the museum more frequently, but have do not have enough time due to the demands of their children and families. In order to increase museum entrance revenues, the administrative team wants to attract people who are likely to become heavy users of the museum when they get older, and try to bring them into the heavy user category at an earlier age. In an effort to encourage heavy museum use, the museum has begun a membership program that offers discounts on museum entrance and gift shop purchases and special exhibit preview events for members. The museum has also begun to offer free children's art and museum appreciation classes on weekend afternoons that will allow younger adults to drop their children off once a week and then enjoy the museum's exhibits and café. In order to promote its new children's programming, the museum acquired an address list of local households with children, including the ages of those children, and intends to send tailored messages specifically highlighting programming that is age-appropriate for each household's children. 59) In the MUSEUM MINI CASE, dividing museum attendees into frequent users, less frequent users, and non-users is known as. A) geographic segmentation B) benefit segmentation C) rate of usage segmentation D) sociocultural segmentation E) psychographic segmentation Answer: C Diff: 2 Page Ref: 70 60) In the MUSEUM MINI CASE, providing museum members with special perks associated with heavy museum use is an example of a(n). A) micromarketing program B) relationship program C) awareness drive D) countersegmentation strategy E) segmentation study Diff: 2 Page Ref: 74

20 61) In the MUSEUM MINI CASE, the museum's approach to promoting its new children's programming is best described as. A) countersegmentation B) mass marketing C) narrowcasting D) concentrated marketing E) demographic segmentation Answer: E Diff: 3 Page Ref: 58 62) In the MUSEUM MINI CASE, the most important differentiating factor between frequent and less frequent users is. A) income B) age C) gender D) education E) stage of family life cycle Answer: E Diff: 3 Page Ref: 62 AACSB: Reflective Thinking 63) In the MUSEUM MINI CASE, segmenting families based on the age of their children constitutes a segmentation basis. A) consumer-rooted, fact-based B) consumer-rooted, cognition-based C) consumption-specific, fact-based D) consumption-specific, cognition based E) consumption-specific, consumer-rooted Answer: A Diff: 3 Page Ref: 58

21 CRUISE MINI CASE: Sunshine Cruise Lines is a cruise operator that offers three- to seven-day cruises along five Caribbean routes. It has developed a reputation as a party cruise operator and the majority of its revenue comes from vacationing college students. This type of customer demand is highly cyclical, and Sunshine finds that repeat purchase is high while its consumers are in college, but practically disappears after graduation. In an effort to encourage its customers to continue taking Sunshine Cruises after they have graduated, the cruise operator has begun offering Adventure Cruises, with port stops on islands known for eco-tourism and biodiversity, both on land and off shore, appealing to young professionals who like to hike and scuba dive or snorkel. In contrast to its party cruises, Sunshine focuses its marketing message for Adventure Cruises on activities at port stops and the convenience of being able to explore several Caribbean destinations from the comfort of a single ship. Adventure Cruises are roughly 15% more expensive than party cruises, priced to discourage a raucous college-age party crowd, and do not allow children under 18. The first season of Adventure Cruises was a great success and, much to Sunshine's surprise, attracted not only the intended young professional crowd, but also many empty nester couples that were looking for a reasonably priced, active vacation. 64) In the CRUISE MINI CASE, Sunshine specifically markets its party cruises to college students in January and February in anticipation of spring break. This is an example of. A) usage situation segmentation B) demographic segmentation C) rate of usage segmentation D) sociocultural segmentation E) benefit segmentation Answer: A Diff: 3 Page Ref: 71 65) In the CRUISE MINI CASE, of the eight VALS segments, Sunshine is most likely targeting with its new adventure Cruises. A) Makers B) Survivors C) Experiencers D) Strivers E) Believers Answer: C Diff: 3 Page Ref: 68, Table 3.7 AACSB: Reflective Thinking

22 66) In the CRUISE MINI CASE, Sunshine has developed a new cruise offering and is targeting a single, specific segment with a single marketing message. This is an example of. A) countersegmentation B) mass marketing C) microtargeting D) differentiated marketing E) concentrated marketing Answer: E Diff: 2 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 67) In the CRUISE MINI CASE, Sunshine markets Adventure Cruises as a way to see multiple islands from the comfort of a single ship, alleviating the hassle of flying between islands and staying in a different hotel every couple of nights. Targeting consumers who view this convenience as appealing is an example of. A) countersegmentation B) cultural segmentation C) usage rate segmentation D) demographic segmentation E) benefit segmentation Answer: E Diff: 2 Page Ref: 72 AACSB: Reflective Thinking 68) In the CRUISE MINI CASE, Sunshine is surprised to see that many of its Adventure Cruise guests are retired empty nesters with disposable income and an interest in travel. These consumers are most likely members of. A) the echo boomer generation B) the Net generation C) Generation Y D) Generation X E) the baby boomer generation Answer: E Diff: 2 Page Ref: 61 AACSB: Multicultural and Diversity

23 RENTAL CAR MINI CASE: Rosetta Car Rental operates car rental lots at airports nationwide. It specifically targets vacationers and advertises in travel magazines and through travel web sites with a campaign that emphasizes its quality customer service and well-maintained cars. Rosetta stocks its lots based on a number of factors, including climate and the type of activities it expects its renters to undertake. For example, Rosetta stocks more convertible cars in its warm California lots than in New York. Its Colorado lots stock a large number of station wagons, vans, and SUVs to accommodate skiers and snow-boarders and all their gear. 69) In the RENTAL CAR MINI CASE, Rosetta exercises when it stocks more convertible cars in California than in New York. A) demographic segmentation B) geographic segmentation C) sociocultural segmentation D) psychographic segmentation E) usage-situation segmentation Diff: 1 Page Ref: 62 70) In the RENTAL CAR MINI CASE, Rosetta exercises when it stocks large numbers of bigger cars in Colorado. A) demographic segmentation B) countersegmentation C) sociocultural segmentation D) psychological segmentation E) usage-situation segmentation Answer: E Diff: 2 Page Ref: 71 71) In the RENTAL CAR MINI CASE, Rosetta focuses on vacation travelers, as opposed to business travelers. Dividing the market in this way is known as. A) psychographic segmentation B) geographic segmentation C) demographic segmentation D) sociocultural segmentation E) psychological segmentation Answer: A Diff: 3 Page Ref: 58

24 72) In the RENTAL CAR MINI CASE, by focusing on a single segment (vacationers) of the market, Rosetta is using a(n). A) differentiated marketing strategy B) undifferentiated marketing strategy C) concentrated marketing strategy D) mass marketing strategy E) countersegmentation strategy Answer: C Diff: 3 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 73) In the RENTAL CAR MINI CASE, segmenting consumers on the basis of their purpose for travel is an example of a segmentation basis. A) cognition-based, consumption-specific B) cognition-based, consumer-rooted C) fact-based, consumption-specific D) fact-based, consumer-rooted E) consumption-based, consumer-rooted Answer: C Diff: 3 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 74) A company that employs a mass marketing strategy typically offers a variety of specialized products. Answer: FALSE Diff: 2 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential 75) One advantage of segmented marketing is that it costs less in terms of advertising campaign costs and production costs of a standardized product. Answer: FALSE Diff: 1 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential 76) When trying to sell the same product to every prospective customer with a single advertising campaign, the marketer must portray its product as a means for satisfying a common or generic need and, therefore, often ends up appealing to nearly no one. Diff: 1 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential 77) Marriott operates 13 lodging brands, such as Fairfield Inn, Residence Inn, and Marriott

25 Resorts. This is an example of Marriott adopting a mass marketing strategy. Answer: FALSE Diff: 2 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential 78) Catering to the distinct needs of consumers by offering them clearly differentiated products is significantly more profitable than mass marketing because it is significantly less expensive. Answer: FALSE Diff: 3 Page Ref: 54 AACSB: Reflective Thinking Objective: 3.1: Understand why market segmentation is essential 79) Marketers use segmentation research to identify the most appropriate media in which to place advertisements. Diff: 2 Page Ref: 55 Objective: 3.1: Understand why market segmentation is essential 80) Most marketers prefer to target consumer segments that are relatively stable in terms of demographic and psychological factors and needs that are likely to grow larger over time. Diff: 1 Page Ref: 55 Objective: 3.2: Understand the criteria for targeting selected segments effectively 81) Every segment that can be identified is inherently viable and profitable as a basis for targeted marketing. Answer: FALSE Diff: 2 Page Ref: 55 AACSB: Reflective Thinking Objective: 3.2: Understand the criteria for targeting selected segments effectively 82) Personality and sociocultural values are consumer-rooted, fact-based forms of segmentation. Diff: 3 Page Ref: 58, Figure 3.3

26 83) Geographic characteristics serve as the core of almost all segmentations. Answer: FALSE Diff: 2 Page Ref: 58 84) Demographic variables can reveal ongoing trends that signal business opportunities, such as shifts in age, gender, and income distribution. Diff: 2 Page Ref: 58 85) Marketplace decision difficulty - an attribute depicting one's hardship in making buying decisions - is more typical of older, less-educated consumers. Diff: 2 Page Ref: 60 86) Consumers in different social classes tend to vary in terms of values, product preferences, and buying habits. Diff: 2 Page Ref: 62 87) Climate is a basis of geographic segmentation. Diff: 1 Page Ref: 62 88) Education, occupation, and income tend to be closely correlated. Diff: 1 Page Ref: 62 89) The traditional family life cycle will go through the following stages: bachelorhood, honeymooners, parenthood, post-parenthood and dissolution. Diff: 3 Page Ref: 62 AACSB: Multicultural and Diversity 90) Psychographic research is commonly referred to as lifestyle analysis.

27 Diff: 1 Page Ref: 66 91) A recent study found that individuals who purchase their magazines at newsstands are more active consumers and are more receptive to advertising than consumers who subscribe to the same magazines. Advertisers that segment consumers based on where they purchase their magazines are practicing usage situation segmentation. Diff: 3 Page Ref: 71 92) Culturally distinct segments are rarely prospects for the same product and can only be targeted efficiently with unique promotional appeals for unique products. Answer: FALSE Diff: 2 Page Ref: 69 AACSB: Multicultural and Diversity 93) Often marketers target consumers who are known to be brand switchers, in belief that such people represent greater market potential than consumers who are loyal to competing brands. Diff: 3 Page Ref: 75 94) Consumer innovators tend to be brand loyal. Answer: FALSE Diff: 3 Page Ref: 75 95) Frequency award programs attempt to reward customers who are brand loyal. Diff: 1 Page Ref: 74

28 96) Compared with other hybrid segmentations, microtargeting stands out because the very large number and diverse origins of the sources used to classify people. Diff: 2 Page Ref: 80 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 97) Differentiated marketing is a highly appropriate segmentation strategy for financially strong companies that are well established in a product category and competitive with other firms that are also strong in that category. Diff: 2 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 98) In counter segmentation strategy, a company seeks to discover a more generic consumer need that would apply to the members of two or more segments and recombine those segments into a larger single segment that can be targeted with an individually tailored product or promotional campaign. Diff: 2 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out 99) Describe the advantages and disadvantages of a mass marketing strategy. For what types of companies does this strategy work best? Answer: Mass marketing is a strategy whereby a company offers one standardized product and develops only one marketing strategy and advertising campaign to sell that product to the entire population. The advantage of mass marketing is that it carries a lower cost for the company. Unfortunately, when trying to sell the same product to every prospective customer with a single advertising campaign, the marketer must portray its product as a means for satisfying a common or generic need and, therefore, often ends up appealing to no one. Nevertheless, this strategy tends to work well for producers of generic manufactured goods, like rubber bands, and for producers of agricultural products like potatoes. Diff: 2 Page Ref: 54 Objective: 3.1: Understand why market segmentation is essential

29 100) Describe and give examples of consumer-rooted versus consumption-specific bases for segmentation. Answer: Consumer-rooted features stem from the consumer's physical, social, and psychological characteristics, such as demographics, personality traits, and sociocultural values and beliefs. Consumption-specific features stem from product-specific usage-behaviors or attitudes and preferences toward specific products or buying situations, such as benefits wanted, level of involvement, and usage occasion. Diff: 2 Page Ref: ) Explain how segmentation and targeting can work to the advantage of small players in industries dominated by large companies. Answer: Segmentation and targeting enable small producers to avoid head-on competition in the marketplace by differentiating their offerings on the basis of such features as price, styling, packaging, promotional appeal, method of distribution, and level of service. This is particularly important for small players in industries dominated by large companies because small players are unlikely to have the resources to challenge large market leaders, but may be able to survive in the market if they are able to develop a market proposition that large incumbents find to be nonthreatening or target segments that large incumbents may find to be too small to service profitably. Diff: 2 Page Ref: 54 AACSB: Reflective Thinking Objective: 3.1: Understand why market segmentation is essential 102) What personality traits do consumer innovators tend to display, and how can marketers leverage those traits to help launch new products? Answer: Consumers who are open-minded and generally perceive less risk than others in trying new things are likely to be consumer innovators. If personality tests also discover that innovators tend to score high on exhibition - a trait where a person wants to be the center of a group - the promotion directed at this group should encourage the innovators to initiate positive word of mouth and tell others about the new product. Diff: 2 Page Ref: 64 AACSB: Reflective Thinking

30 103) Why is family life cycle an important basis for segmentation? ecause many families pass through similar phases in their formation, growth and financial dissolution, at each phase the family unit needs differ. Young singles going through the bachelorhood stage will need basic furniture for their apartments, and a small, inexpensive vehicle to start them off. Once singles get married and move into the honeymooners stage, their focus becomes buying a new home and furnishing it, then when they become parents, the majority of their disposable income will be spent on their children's needs. Diff: 2 Page Ref: ) Describe the two components of brand loyalty. rand loyalty consists of two components: (1) behavior - the frequency and consistency of buying a given brand; and (2) attitude - the consumer's feeling of commitment to the brand. Diff: 1 Page Ref: ) Identify and discuss the five strategic brand benefits that facilitate benefit segmentation. Answer: a. Functional benefits (quality) b. Value for money c. Social benefit d. Positive emotional benefits e. Negative emotional benefits Diff: 3 Page Ref: ) Describe the VALS typology. How does it segment the population? Answer: The VALS typology classifies the population into 8 distinctive segments based on consumer responses to attitudinal and demographic questions. The system identifies three primary motivations: the ideals motivated, the achievement motivated, and the self-expression motivated. Each of these three major self-motivations represents distinct attitudes, lifestyles, and decision-making styles. Diff: 3 Page Ref: 66

31 107) Identify and discuss the four criteria that make market segments effective targets. Answer: To be an effective target, a market segment should be: a. identifiable. b. sufficient, in terms of size. c. stable or growing. d. accessible in terms of both media and cost. Diff: 2 Page Ref: 55 Objective: 3.2: Understand the criteria for targeting selected segments effectively 108) What is countersegmentation? Answer: Counter segmentation occurs when companies find that some segments have contracted over time to the point that they do not warrant an individually designed marketing program. In this case a company will seek to discover a more generic need that would apply to two or more segments and recombine those segments into a larger segment that would be targeted with one promotional campaign. Diff: 2 Page Ref: 82 Objective: 3.4: Understand how segmentation and strategic targeting are carried out