MARKET SEGMENTATION, TARGETING, AND POSITIONING
FOR COMPETITIVE ADVANTAGE
MULTIPLE CHOICE QUESTIONS
1. At one time, firms scattered their marketing efforts (a "shotgun" approach) to reach
consumers. Today, a firm is more likely to use:
a. a "bazooka" approach, where special effects are used to "explode" into the buyer's
consciousness.
b. a "knife" approach, where the firm tries to "cut" to the most important product
advantage.
c. a "rifle" approach, where the firm focuses on the buyers who have greater
interest in the values that the firm creates best.
d. a "pistol" approach, where the firm realizes that it has multiple chances to gain
consumer interest.
2. ________________ is the process of dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes.
a. Mass marketing
b. Market segmentation
c. Target marketing
d. Market positioning
3. __________________ is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter.
a. Mass marketing
b. Market segmentation
c. Market targeting
d. Market positioning
4. Setting the competitive positioning for the product and creating a detailed marketing mix is called:
a. mass marketing.
b. target marketing.
c. market segmentation.
d. marketing positioning.
5. During which step of the marketing segmentation, targeting, and positioning process
does the firm "develop a marketing mix for each segment?"
a. market segmentation
b. market targeting
c. market positioning
d. The firm does not go through the "development" during any of the above steps.
6. During one of the steps in the marketing segmentation, targeting, and positioning
process, the marketer develops measures of segment attractiveness. This procedure
belongs in the category of:
a. market segmentation.
b. market targeting.
c. market massing.
d. market positioning.
7. When companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently with products and services that match their unique needs, they are conducting a ___________________ process.
a. marketing aggregation
b. marketing positioning
c. marketing target
d. marketing segmentation
8. Market segmentation can be carried out at several different levels. Which of the
following WOULD NOT BE among these levels?
a. micromarketing
b. segment marketing
c. competition marketing
d. niche marketing
9. Another word for complete segmentation is:
a. macromarketing.
b. micromarketing.
c. niche marketing.
d. mass marketing.
10. For most of the 20th century, firms practiced which of the following forms of
marketing?
a. mass marketing
b. micromarketing
c. niche marketing
d. segment marketing
11. Which of the following marketers epitomized the mass marketing strategy?
a. Henry Ford
b. Bill Gates
c. F.W. Woolworth
d. Thomas A. Edison
12.Which of the following statements is closest to the traditional argument for mass marketing?
a. Find a need and fill it.
b. The largest potential market can lead to the lowest costs, which translates into either lower prices or higher margins.
c. The rifle approach rarely hits what it is aiming at.
d. The consumer is king. Long live the king.
13.Isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments is called _________________.
a. niche marketing
b. mass marketing
c. segment marketing
d. micromarketing
14.When General Motors designs specific models for different income and age groups, it is practicing which of the following marketing formats?
a. micromarketing
b. macromarketing
c. mass marketing
d. segment marketing
15.Segment marketing offers several benefits over mass marketing. All of the following would be among those benefits EXCEPT:
a. the company can market more efficiently and target its programs toward only those consumers that it can serve best.
b. the company can fine-tune its programs to meet the needs of carefully defined segments.
c. the company can reduce costs because of the ability to sell to customers one-on-one.
d. the company may face fewer competitors if fewer competitors are focusing on the company's chosen market segment.
16.A company is practicing ________________ if it focuses on subsegments with distinctive traits that may seek a special combination of benefits.
a. micromarketing
b. niche marketing
c. mass marketing
d. segment marketing
17.As an example of _______________, a company could build sport utility vehicles and direct marketing efforts towards the luxury SUV market (as does Lexus).
a. micromarketing
b. niche marketing
c. mass marketing
d. segment marketing
18. American Express offers not only its traditional green cards but also gold cards,
corporate cards, and even a black card, called the Centurian, with a $1,000 annual
fee aimed at a small group of "superpremium customers." Which of the following
marketing efforts is American Express following with their credit card policies?
a. macromarketing
b. segment marketing
c. niche marketing
d. self-marketing
19._________________ is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
a. Niche marketing
b. Micromarketing
c. Segment marketing
d. Mass marketing
20. Micromarketing includes:
a. segment marketing and niche marketing.
b. mass marketing and demographic marketing.
c. local marketing and individual marketing.
d. individual marketing and self-marketing.
21. ______________ involves tailoring brands and promotions to the needs and wants of specific small groups such as cities, neighborhoods, and even specific stores.
a. Niche marketing
b. Local marketing
c. Detail marketing
d. Individual marketing
22.All of the following are considered to be drawbacks of local marketing EXCEPT:
a. it can drive up manufacturing and marketing costs by reducing economies of scale.
b. it can create logistical problems when the company tries to meet varied requirements.
c. it can attract unwanted competition.
d. it can dilute the brand's overall image.
23.________________ is tailoring products and marketing programs to the needs and preferences of individual customers.
a. Niche marketing
b. Local marketing
c. Self-marketing marketing
d. Individual marketing
24. Individual marketing is known by a variety of names. All of the following would
appropriately be called individual marketing EXCEPT:
a. mono-marketing.
b. one-to-one marketing.
c. customized marketing.
d. markets-of-one marketing.
25.______________ is the process through which firms interact one-to-one with
masses of customers to create customer-unique value by designing products and
services tailor-made to individual needs.
a. Mass marketing
b. Detail marketing
c. Mass globalization
d. Mass customization
26. The move toward individual marketing mirrors the trend in consumer _________.
a. backlash
b. self-marketing.
c. dialog marketing
d. niche marketing
27. All of the following are considered to be major variables for segmenting markets
EXCEPT:
a. geographic variables.
b. trait variables.
c. demographic variables.
d. psychographic variables.
28. If a marketer attempts segmentation of a market by dividing the market into different
units based on nations, regions, states, counties, cities, or even neighborhoods, then
the marketer is practicing ____________ segmentation.
a. demographic
b. geographic
c. political
d. cartographic
29. When Campbell Soup makes Cajun gumbo soup for Louisiana and Mississippi and nacho cheese soup for Texas and California, it is practicing _______________ segmentation.
a. geographic
b. demographic
c. psychographic
d. behavioral variable
30.All of the following would be ways to segment within the category of psychographic segmentation EXCEPT:
a. social class.
b. occupation.
c. lifestyle.
d. personality.
31.All of the following would be ways to segment within the category of behavioral variable segmentation EXCEPT:
a. occasions.
b. user status.
c. loyalty status.
d. lifestyle.
32._______________ factors are the most popular bases for segmenting customer groups.
a. Geographic
b. Demographic
c. Psychographic
d. Behavioral
33._________________ factors or variables are generally easier to measure than most of the other types of variables or factors.
a. Geographic
b. Demographic
c. Psychographic
d. Behavioral
34.Age is often a poor predictor of a person's life-cycle, health, work, or family status.
Therefore, when using age and life-cycle segmentation, the marketer must guard
against:
a. stereotyping.
b. gender bias.
c. racial bias.
d. intellectual bias.
35. Proctor & Gamble joined a growing list of marketers who use __________
segmentation when they developed Secret, a brand specially formulated for a
woman's chemistry.
a. geographic
b. income
c. benefit
d. gender
36. All of the following Web sites would be examples of sites wishing to make gender
segmentation appeals as their primary marketing segmentation strategy EXCEPT:
a. www.iVillage.com.
b. www.girlson.com.
c. www.playboy.com.
d. www.neimanmarcus.com.
37.___________________ is the process of dividing a market into different groups based on social class, lifestyle, or personality characteristics.
a. Gender segmentation
b. Behavioral segmentation
c. Psychological segmentation
d. Psychographic segmentation
38.Many marketers believe that ________________ are the best starting point for building market segments and programs.
a. behavioral variables
b. geographic variables
c. demographic variables
d. psychographic variables
39. "Coke in the morning" is an attempt to segment according to which of the following?
a. gender segmentation
b. psychographic segmentation
c. benefit segmentation
d. occasion segmentation
40. The orange juice manufacturers know that orange juice is most often consumed in the mornings. However, they would like to change this and make the drink acceptable for other time periods during the day. Which form of segmentation would they need to work with to establish a strategy reflective of their desires?
a. gender segmentation
b. benefit segmentation
c. occasion segmentation
d. age and life-cycle segmentation
41.When companies market products on the basis of what the product's attributes will do for a given segment of consumers, they are using a powerful form of behavioral segmentation known as:
a. occasion segmentation.
b. benefit segmentation.
c. user status segmentation.
d. usage rate segmentation.
42.If people that take cruise ship vacations do so because of "gambling," "fun," or "for adventure or educational purposes," then it is possible to segment this market based on what might be called:
a. psychographic segmentation.
b. benefit segmentation.
c. demographic segmentation.
d. gender segmentation.
43. A marketing firm classifies customers as nonusers, ex-users, potential users, first-
time users, and regular users. Which of the following classifications is the firm most
likely using to segment its market and devise strategies for selling its products and
services?
a. user status
b. user rate
c. loyalty status
d. benefit status
44. One of the most promising developments in multivariable segmentation is called _________________, where a host of demographic and socioeconomic factors are used.
a. terragraphic segmentation
b. fermagraphic segmentation
c. geothermal segmentation
d. geodemographic segmentation
45.All of the following are major variables that can be used to segment business markets
EXCEPT:
a. operating characteristics.
b. psychographics.
c. demographics.
d. situational factors.
46.____________________ is forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.
a. External segmentation
b. International segmentation
c. Intermarket segmentation
d. Enriched segmentation
47.When Mercedes-Benz targets the world's well-to-do, regardless of their country, they are most likely following a segmentation strategy called:
a. external segmentation.
b. international segmentation.
c. enriched segmentation.
d. intermarket segmentation.
48.Clearly, there are many ways to segment markets. However, not all segmentations are effective or successful. To be useful, market segments must have all the following characteristics EXCEPT being:
a. measurable.
b. plausible.
c. accessible.
d. actionable.
49.It is a fact that there are 32.5 million left-handed people in the United States. However, most marketers do not attempt to appeal to or design products for this group because there is little in the way of census data about this group. Therefore, this group fails in one of the requirements for effective segmentation. Which of the following is most likely to apply in this case?
a. actionable
b. substantial
c. differentiable
d. measurable
50.Knowing the size, purchasing power, and profiles of a market segment are all part of which of the following characteristics?
a. substantiality
b. measurability
c. actionability
d. accessibility
51.The ability to reach and serve a market segment defines the characteristic of:
a. measurability.
b. actionability.
c. accessibility.
d. substantiality.
52.Married and unmarried women may use the same perfume, and might respond in a similar way to promotional sales of this fragrance. It might, therefore, be difficult to consider that marital status designates separate segments in this case. Which of the following requirements of effective segmentation would probably rule out segmentation based on marital status in this case?
a. actionable
b. substantial
c. differentiable
d. measurable
53. Stephanie Cross has a small clothing store, and has identified seven separate
categories of clothing buyers that form the general market for clothing stores in her
city. Her problem is that because of a limited advertising budget, she cannot
effectively reach these various segments (especially since several of the segments are
distant from her store). Which of the following requirements of effective
segmentation would probably rule out segmentation based on Stephanie's current
segmentation classification scheme?
a. actionable
b. substantial.
c. differentiable
d. measurable
54. In market targeting, a firm looks at all of the following factors EXCEPT:
a. segment size and growth.
b. segment structural attractiveness.
c. company objectives and resources.
d. segment public relations value.
55.All of the following factors can affect the attractiveness of a market segment
EXCEPT:
a. the presence of many strong and aggressive competitors.
b. the likelihood of government monitoring.
c. actual or potential substitute products.
d. the power of buyers in the segment.
56. A(n) __________________ is a set of buyers sharing common needs or
characteristics that the company decides to serve.
a. undifferentiated market
b. market segment
c. target market
d. differentiated market
57. A market-coverage strategy in which a firm decides to ignore market segment
differences and go after the whole market with one offer is called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
58. Deciding to target several market segments and design separate offers for each is
called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
59. A growing number of firms have adopted differentiated marketing. However, one
drawback to this approach is that it:
a. is hard for managers to understand.
b. increases the costs of doing business.
c. alerts competitors as to your strategy.
d. is a poor strategy internationally.
60. The practice of going after a large share of a smaller market or subsets of a few
markets is called:
a. undifferentiated marketing.
b. differentiated marketing.
c. concentrated marketing.
d. turbo marketing.
61. All of the following would be among the chief factors to consider when choosing a
market-coverage strategy EXCEPT:
a. organizational culture.
b. product variability.
c. product's life-cycle.
d. market variability.
62. The way the product is defined by consumers on important attributes is called
________________.
a. market segmentation
b. image psychology
c. product position
d. market targeting
63. The positioning task consists of three steps. Which of the following does not belong?
a. Identifying a set of possible competitive advantages upon which to build a position.
b. Choosing the right competitive advantages.
c. Comparing the position with ethical and legal guidelines established by the trade.
d. Selecting an overall positioning strategy.
64. The key to winning and keeping customers is to understand their needs and buying
processes better than competitors do and:
a. advertise constantly to let customers know about changes in products and
services.
b. hire the best sales people.
c. have an updated Web presence.
d. to deliver more value.
65. Product differentiation can be along all of the following lines EXCEPT:
a. consistency.
b. durability.
c. reliability.
d. competitive parity.
66. Gaining competitive advantage through speedy or careful delivery is an example of
which type of differentiation?
a. product
b. services
c. personnel
d. image
67. The strategy of choosing one attribute to excel at to create competitive advantage is
known as (the):
a. unique selling proposition.
b. underpositioning.
c. overpositioning.
d. confused positioning.
68. In general, a company needs to avoid three major positioning errors. Which of the
following is NOT one of those errors?
a. underpositioning
b. repositioning
c. overpositioning
d. confused positioning
69. In determining which differences to promote, focusing on a difference that delivers a
highly valued benefit to target buyers would mean selecting the difference that is
most:
a. important.
b. distinctive.
c. superior.
d. communicable.
70. Choosing a product difference that competitors cannot easily copy would be which
kind of differentiation criterion?
a. important
b. distinctive
c. superior
d. preemptive
71. A brand's _____________ is the full positioning of the brand-the full mix of
benefits upon which it is positioned.
a. distinctive proposition
b. preemptive proposition
c. value proposition
d. superior proposition
72. The text describes a series of value propositions. Of these propositions, Southwest
Airlines has chosen to adopt the:
a. more for less proposition.
b. less for much less proposition.
c. same for less proposition.
d. more for more proposition.
TRUE/FALSE QUESTIONS
73. Companies today realize that they can appeal to all buyers in the marketplace by
using concentrated marketing.
74. Because of profit pressures and the threat of the Internet, most companies have now
moved away from market segmentation and targeting and toward mass marketing.
75. With respect to markets, the "shotgun" approach in marketing efforts seems to be
better than the "rifle" approach.
76. Market segmentation is the process of taking a market and dividing the buyers into
distinct groups for which marketing mixes can be constructed.
77. Today, most companies are rushing toward mass marketing because of the changing
nature of the marketplace.
78. A good illustration of the niche marketing approach was when Henry Ford said
(with respect to cars) "they can have any color they want as long as it's black."
79. Micromarketing is focusing on subsegments or niches with distinctive traits that may
seek a special combination of benefits.
80. If a marketer were to tailor products and marketing programs to the needs and wants
of specific individuals and local customer groups, the marketer would be practicing
micromarketing.
81. One of the drawbacks for adopting a policy of local marketing is that it can drive up
manufacturing and marketing costs by reducing economies of scale.
82. Because buyers have unique needs and wants, each buyer is potentially a separate
market.
83. Customized marketing is often called individual marketing.
84. An example of a firm that practices individual marketing is Mattel, with its My
Design page of its Barbie Web site.
85. The move toward individual marketing mirrors the trend in consumer concentration
strategy.
86. The most popular base for segmenting markets and customer groups is geographic
segmentation.
87. Demographic variables are easier to measure than most other types of variables with
respect to segmentation.
88. Income segmentation is used not only with the affluent, but also with the consumers
with lower spending power.
89. Psychographic segmentation occurs when a market is divided into different groups
based on social class, lifestyle, or personality characteristics.
90. One of the forms of behavioral segmentation would be lifestyle segmentation.
91. If a marketer were to link U.S. Census data with lifestyle patterns to better segment
markets, this would be an example of geodemographic segmentation.
92. A common way to segment a business market would be to segment based on
operating characteristics and situational factors.
93. Segmenting international markets on the basis of geographic, economic, political,
cultural, and other factors is called international psychographics.
94. To be useful, a market segment must be substantial.
95. To be useful, a market segment must be conspicuous.
96. A market segment is a set of buyers sharing common needs or characteristics that the
company decides to serve.
97.Concentrated marketing is a market-coverage strategy in which a firm decides to
ignore market segment differences and go after the whole market with one offer.
98. If a firm decides to go after a large share of one or a few segments or niches, then
the firm will probably be following a concentrated marketing strategy.
99. In market targeting, the issue is not how and for what, but who is targeted.
100. A product's position is the way the product is defined by consumers on important
attributes.
101. One of the major positioning errors that a company needs to avoid is that of
confused positioning.
102. A difference is worth establishing to the extent that it satisfies the criterion of
cultural imperative.
103. According to the nine cell matrix that describes possible value propositions, the
cell that produces a higher price for reduced benefits should be pursued by the
marketer.
104. According to the value proposition presented by Southwest Airlines, the customer
gets "less for much less."
ESSAY QUESTIONS
105. Proctor & Gamble makes eight brands of laundry detergent (Tide, Cheer, Bold, Gain, Era, Dreft, Febreze, and Ivory Snow). Each of these brands is directed toward a different segment of the vast laundry detergent market. Comment on Proctor & Gamble's strategy for this market. Describe the company's attitude toward intracompany brand competition and competition from other competitors. Finally, give examples of how the various laundry detergent brands are directed toward specific market segments by Proctor & Gamble.
106. Define market segmentation, market targeting, and market positioning. Demonstrate through the steps of a model how these concepts fit together to aid the decision maker in his or her attempt to use market segmentation in the marketing process.
107. Identify the differences between the mass marketing, segment marketing, niche marketing, and micromarketing strategies.
108. List and briefly discuss the major bases for segmenting consumer markets. Demonstrate how these major bases would compare to the bases used in segmenting business markets (what are the differences and similarities?).
109. Consumer and business markets use many of the same variables to segment their markets. However, there are also differences. Using the approach suggested in the text, list and briefly describe the additional variables that would be important to the business marketer who wished to segment markets.
110. Define and give a specific example of intermarket segmentation.
111. As demonstrated in the text, there are several ways to segment a market. However, not all of these ways are always effective. To be useful and effective, market segments should have five different characteristics. List these and briefly explain each.
112. A firm can adopt one of three market-coverage strategies when attempting to market its goods and services. List and describe each of these possible market-coverage strategies and provide and example of each.
113. What factors might a company need to consider when choosing a market-coverage strategy? Explain and justify your choices.
114. In general, a company needs to avoid three major positioning errors. What are these errors? Present a brief description and illustration of each.
115. Companies are often faced with the problem of deciding which differences of a product or service to promote. This is especially relevant to product positioning. According to the text, a difference is worth promoting if it satisfies seven criteria. What are those criteria? Briefly explain each.
APPLICATION QUESTION
116. New Balance athletic shoe company has a difficult problem-how to compete in the highly competitive athletic shoe market against such industry giants as Nike and Reebok. The company does have certain advantages (it makes a quality product, has a good reputation with distributors, and is the only athletic shoe that offers width sizes as well as length sizes) that it hopes will help meet the challenges of the industry giants. Your job as a strategic planning consultant is to formulate a market-coverage strategy for New Balance. You have three options-undifferentiated marketing, differentiated marketing, and concentrated marketing. Choose one of these methods and support your choice with a logical explanation.