Marketing Management 1st Edition Marshall Test Bank

Marketing Management 1st Edition
Marshall Test Bank

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Chapter 09 - Segmentation, Target Marketing, and Positioning
Chapter 09
Segmentation, Target Marketing, and Positioning
True / False Questions
1. Grand Theft Auto 4 broke the Guinness world record for the most violent game on the
market.
True False
2. Occupation segmentation is very closely related to income segmentation although the two
are not perfectly correlated.
True False
3. For many marketing managers, segmentation by benefit sought is the best place to start the
process of market segmentation.
True False
4. Firms generally only use one method of segmentation at a time.

True False
5. In general, B2B segmentation is more straightforward than B2C segmentation.

True False
6. When P & G purchased Gillette, it saw a market (men's toiletries market) that was large
and had a good growth rate. This combination made it hard not to buy the company even at a
price of $57 billion.
True False
7. If a firm chooses more than one segment to attack, it should approach them sequentially,
not all at the same time.
True False
9-1
8. Land's End likes customized (one-to-one) marketing because customers pay more, 25% of
customers are new to the company, and 33% purchase the custom made items more than
once.
True False
9. Generation Y, people born between 1978-1994, tend to be pragmatic, optimistic, good team
players, savvy and edgy in nature.
True False
10. The largest generation is the Millennial Generation. This group has been born after 1994
and is characterized by being heavily Hispanic, African American, and Asian.
True False
11. Family and household segmentation have become more complex than ever as a result of
non-traditional households and different standards of morality in the population.
True False
12. Family life cycle has declined in importance as a technique to segment the market as a
result of so many people living in untraditional families.
True False
13. The minority population with the youngest and the fastest growing population is the Asian
community.
True False
14. Ajax Engine Parts CEO says, "we sell to everyone" segmentation is only for the consumer
market. Do you believe the CEO's statement is true or false?
True False
9-2
15. Demographics are used as a segmentation variable in both the consumer and business
markets. The variables are different for the two markets but the concept is the same for both
markets.
True False
16. A company that use positioning often use a price-quality perceptual map in order to show
where it is positioned versus the competition. This helps it understand if it needs to either
change pricing strategy or quality standards.
True False
17. When a company decides its positioning strategy, it is impossible to over position it
against competition.
True False
18. A price leadership position (example: Wal-Mart) implies that a company that assumes this
position has superior operational elements in order to maintain the low price position.
True False
19. BMW is a good example of a company that employs symbols, atmosphere, and creative
media to compete with a positioning strategy of Image Leadership.
True False
20. When a company has frequent changes to its position and contradictory messages, it is
said that the company suffers from confused positioning.
True False
21. Under positioning occurs when consumers have a vague idea about the company and its
products, and do not perceive any real differentiation.
True False
9-3
Multiple Choice Questions
22. The sequential steps to successful segmentation are:

A. Positioning, targeting, and segmenting.
B. Research, fulfillment analysis, churn rate.
C. Segmenting, targeting and positioning.
D. Need identification, qualitative research, and positioning.
E. Consumer analysis, content analysis, and segmenting.
23. Segmenting means _________.

A. Identifying the market into meaningful smaller markets based upon common
characteristics.
B. Selecting the markets to attach in the market place.
C. Selecting a corporate position to communicate to potential customers.
D. Identifying and calculating the churn rate in different markets.
E. None of the above.
24. Target marketing is the process by which __________.

A. The market is divided up into cohesive groups.
B. The company evaluates segments and decides which ones have the most potential for
development.
C. The company decides on which words can be used to attack each segment.
D. Groups are evaluated on the basis of high or low churn to see which is the most profitable.
25. Positioning relies upon the communication of one or more sources of value to customers
in a way that the customer can easily make the connection between ________.
A. The cost of the product and the quality.
B. The way the 4 p's work with one another.
C. The customer's needs and wants and what the product has to offer.
D. The quid pro quo of product and advertising.
E. The salesperson and the customer at a personal level
9-4
26. Having a product whose value proposition is a well kept secret ________.
A. Is a good idea.
B. Is not a good thing in marketing.
C. Is a concept that uses subliminal messages.
D. Is a superior concept used in targeting.
E. Is a well accepted idea in market segmentation.
27. Differentiation is a concept that means _______.

A. People are different looking.
B. When marketers look at consumers they see a rainbow of looks.
C. Products need to appear to be different from one another to be successful in the market
place.
D. Communicating and delivering value in different ways to different customer groups.
E. All of the above together.
28. When Bernard, a marketer, says that a segment has sufficient size, he means _________.
A. The market has an expected return-on-viewing to be worth considering.
B. The market is too large to be worth considering.
C. The market has an expected return-on-investment that is positive.
D. The market has many customers in it.
E. The market has only one customer in it.
29. There are conditions necessary that a market has to have in order to be able to segment it
properly. The item below which is not necessary is _______.
A. Market has to be measurable.
B. Market has to be bigger than 10,000 people.
C. Market has to be responsive to communications.
D. Market has to be reachable via supply chain.
E. Market has to be reachable with communications.
9-5
30. When it is said that a market can be reached, it means that _______
A. The market can be reached by transportation.
B. The market can be reached by language.
C. The market can be reached by technology.
D. The market can be reached by communication.
E. All of the above.
31. There are popular approaches to segment the market geographically. Of the techniques
below the one that is not used is _________.
A. Region.
B. Density of population.
C. Size of population.
D. Sensitivity of population.
E. All of the above are used.
32. Some companies, insurance and credit card, would like to target students as a segment but
find them hard to capture. This is an example of a market lacking one of the criteria for
segmentation and is called _______.
A. Reachable-the ability to reach the segment in terms of communication.
B. Responsiveness-the feeling that the market will buy more if targeted.
C. Sufficient size-the size of the market is large enough to be worth considering.
D. Measurable-information can be obtained about the market.
33. The region, the density of the population, the size of the population are terms for
techniques to use in ________.
A. Positioning.
B. Differentiation.
C. Democratic segmentation.
D. Population parameter estimation.
E. Geographic segmentation.
9-6
34. The concept of being able to get either secondary and/or primary data on a market being
considered for segmentation means _______.
A. Differentiation.
B. Targeting.
C. The market is accessible to media.
D. The market is readily identifiable and can be measured.
E. The market is primed to be attacked by media.
35. An idea used in segmentation is geographic segmentation, this means ________.

A. People are different based upon where they live.
B. Geography determines ones likes and dislikes.
C. Consumer respond differently to marketing strategies and programs based on where they
live.
D. The East Coast, West Coast, and Midwest are the most important market segments based
upon size.
36. When JC Penney orders winter coats, it sends them to stores at different times of the year.
This is an example of _______.
A. Demographic segmentation.
B. Climate segmentation.
C. Geographic biases.
D. Lack of winter in the south.
E. Climate change.
37. Geographic segmentation is useful but ________

A. A necessary condition in all segmentation schemes.
B. Is an insufficient criteria in and of itself.
C. Creates negative stereotypes to different parts of the country.
D. Is dependent upon the talent of the marketer to discover the quirks of a given geographic
area.
9-7
38. Demographic segmentation is one of the most popular segmentation approaches because
_________.
A. It is readily measurable.
B. Because customer needs and wants tend to vary with some degree of regularity based on
demographic differences.
C. It uses the statistical characteristics of human populations such as age or income.
D. All of the above.
39. Age is a commonly used method of segmentation. Age alone, however, may be dangerous
_________.
A. Because lumping older or younger customers together in one group may not truly reflect
the market.
B. As McDonalds found out with Happy Meals.
C. Because Grand Theft Auto was a huge hit.
D. Because Egg McMuffins are not just for older people.
40. Demographic segmentation is best described as _______.

A. Using characteristics of human populations to segment the market.
B. Using characteristics of geography to segment the market.
C. Using characteristics of lifestyle to segment the market.
D. Using characteristics of virtual communities to segment the market.
E. All of the above are demographic segmentation.
41. An advergame is a video game that _______.

A. Has an advertiser inserted into the game.
B. Has sponsors of the game on the cover of the game but not in the game itself.
C. Has been specifically designed to promote a brand.
D. Has been advertised on television with good results.
9-8
42. Sociologists look for defining events such as wars, major economic upheaval, and social
cultural revolution to create _________.
A. Social movements.
B. Marketing opportunities.
C. Generational Groups for segmentation purposes.
D. New product ideas.
43. Baby Boomers represent a huge segment of the population. There is some evidence that
they, in their own minds, do not think they age. This is an example of _______.
A. Lack of aging.
B. Age discrimination.
C. Ethical dilemmas in segmentation through the calling of Baby Boomers older.
D. Difference between chronological age and attitudinal age.
E. Aging diagnostics of different groups of people.
44. Among the generations used for segmentation, one stands out as the largest and most
affluent of all the generations. This generation is known as ______.
A. Millennial.
B. Generation X.
C. Generation Y.
D. Lost Generation.
E. Baby Boomer Generation.
45. Generation "X" is often referred to as the ________.

A. Spoiled generation.
B. Non-consumption generation.
C. Millennial generation.
D. Baby bust generation.
9-9
46. Serenity was born in 1970. Her parents met at the famous Woodstock festival. She is a
member of the ________ generation..
A. Baby boomer.
B. GI.
C. Silent.
D. Gen X.
E. Millennial.
47. Apple Cora Anderson was born in 2001. She is a member of the __________ generation.
A. Baby boomer.
B. GI.
C. Silent.
D. Gen X.
E. Millennial.
48. ___________ would not be a good product for using gender segmentation.
A. Underwear.
B. Perfume.
C. Toothpaste.
D. Cigars.
E. Rogaine.
49. The ____________ race and ethnicity market segment is not growing at a fast rate.
A. African-American.
B. Hispanic.
C. Asian-American.
D. Caucasian.
E. Catholic.
50. Family life cycle segmentation factors include all but ____________.
A. Income.
B. Age.
C. Marital status.
D. Number of children.
E. Cohabitation.
9-10
51. At one time, specific companies that catered to a particular market segmented by race.
Today ______.
A. The segments are indistinguishable.
B. The segments have declined in size.
C. The segments have become part of mainstream business.
D. The segments all buy the same products.
E. The segments lack sufficiency.
52. The Gillette Venus razor line is an example of a product that appeals to both men and
women but reveals ___________.
A. The same product can be used to attack different gender markets.
B. By slightly altering a product you can attack different gender markets.
C. There are different needs and wants for the same product category based on gender.
D. Women are always different than men.
53. The minority population of the United States has grown significantly in the past decade.
Minorities now represent _________.
A. 60 million people.
B. 101 million people.
C. 150 million people.
D. 200 million people.
54. Most Asians in the U.S. live in __________________.

A. New York state.
B. Texas.
C. California.
D. Washington state.
E. Washington, D.C.
9-11
55. Most Hispanics in the U.S. live in __________________.

A. New York state.
B. Texas.
C. California.
E. Washington, D.C.
56. The fastest growing minority group in the United States is ______.
A. Asians.
B. African Americans.
C. Hispanics.
D. American Indians.
57. Income segmentation is a commonly used segmentation technique. It has some problems,
however, that can be described as ___________.
A. It is difficult to collect quality marketing research on income due to people refusing to their
income.
B. It is too simple to use.
C. It is confusing because of the interaction with gender.
D. It is time consuming to study consumer's buying habits based upon their income.
58. There are many ways to segment the market using demographics. Select the answer below
that is the most truthful about demographic segmentation.
A. Income, education, and occupation are very closely correlated.
B. Income is all you need to know about someone.
C. Age is usually not a factor in segmentation.
D. The youth culture is the most important segmentation variable.
E. All of the above are true.
9-12
59. Occupational segmentation recognizes _________.

A. Jobs change people in terms of ideas.
B. What kind of job you have impacts your thinking.
C. Bureau of Census gives you good ideas on product segments.
D. There may be needs and wants demonstrated by consumers based on the job they have.
60. Offering credit cards to high school seniors is an example of ________ segmentation.
A. Income segmentation.
B. Occupation segmentation.
C. Education segmentation.
D. Life style segmentation.
61. Social Class as a segmentation tool takes into account _______.

A. Income.
B. Education.
C. Occupation.
D. None of the above.
E. A, B, and C.
62. Social class has declined as a method of segmentation as a result of ______.

A. Higher education rates in the US.
B. Readily available credit has flattened the classes.
C. The increase in minority consumers.
D. Stores appeal to everyone.
63. Every zip code in the United States falls into profiles provided by Claritas in its database
called _________.
A. GEO-FIX.
B. PRIZM.
C. AIO.
D. Nielsen ratings.
9-13
64. A marketing manager using PRIZM is interested in ____________ segmentation.

A. Geographic.
B. Psychographic.
C. Geodemographic.
D. Occasion.
E. Benefits Sought.
65. A marketing manager using VALS is interested in ____________ segmentation.

A. Geographic.
B. Psychographic.
C. Geodemographic.
D. Occasion.
E. Benefits Sought.
66. AIOs are one way to measure consumer variables using the psychographic segmentation
approach. AIO stands for _______.
A. Archives, intellect, and opinions.
B. Activities, interests, and opinions.
C. Archives, intellect, and orientation.
D. Activities, intellect, and orientation.
67. VALS is a form of segmentation based upon values, this allows marketers to _________.
A. Better communicate with consumers.
B. Match people with products.
C. Connect to consumers with either ideals, achievement, or self-expression.
E. A, B, and C.
68. The Benefit Sought method of segmentation focuses on ______.

A. The different benefits consumers seek.
B. The product features.
C. The service offering.
D. The positioning of the benefits.
E. The location of the store.
9-14
69. Usage patterns are another way to divide up the market. What causes you to take your
significant other out for that special dinner? Or, what makes you break down and rent a
tuxedo for a formal event? This form of usage is called using ________ as a reason to buy.
A. Time of year.
B. Graduation.
C. Occasions.
D. Experiences.
70. Ads with messages like "Orange juice—It's not just for breakfast anymore!" or "Soup can
be a delicious way to start a cold winter's day" are using _______ segmentation.
A. Benefits Sought.
B. Lifestyle.
C. Psychographic.
D. Usage.
E. Geographic.
71. Usage segmentation focuses on how much of the product different groups consume. It can
also be described as _______.
A. 80/20 rule.
B. Heavy users.
C. Light users.
D. Medium users.
72. Firms use ______.

A. One segmentation technique at a time.
B. Multiple segmentation techniques simultaneously.
C. One technique then sequentially another and then yet another.
D. Two major dominant forms.
E. None of the above
9-15
73. Michael Porter developed a model to determine the ______.

A. Segment approaches to complex markets.
B. Life of a product once it is introduced.
C. Size of the market needed to be successful.
D. The six competitive forces that firms must consider.
74. When P & G bought Gillette it thought that there was a strategic fit between the
companies. This was a good fit because they had _______________.
A. The same ad agency.
B. Sophisticated supply chain systems including international markets.
C. Similar price structures.
D. Great brand awareness.
75. Primary markets differ from secondary and tertiary markets by _______.
A. The expected level of ROI derived from the market.
B. The difficulty of attacking the market.
C. The consumers ability to buy multiple units.
D. The advertising effort needed for the market.
76. When a company is confused about market segments, it sometimes pick a one-market
strategy. This segmentation approach is called ________.
A. Mass approach.
B. Undifferentiated target marketing.
C. Differentiated strategy.
D. Low cost approach.
E. Efficiency marketing.
9-16
77. Differentiated target marketing means ______.

A. Different prices to different markets.
B. The same value offering to every market segment.
C. Different value offerings for different target markets.
D. Using push and pull strategy to differentiate markets.
78. Concentrated target marketing is often used by ________.

A. Large companies to dominate a market.
B. Start-up firms to enter a market as a focus player.
C. All firms.
D. Virtual firms that use internet marketing.
E. Michael Porter in a consulting capacity.
79. Firms that develop such close relationships with customers that they seem to deliver
customized goods and services, are engaged in ____________ marketing.
A. Concentrated target marketing.
B. One-to-one marketing.
C. Differentiated marketing.
D. Undifferentiated marketing.
E. Shotgun marketing.
80. Positioning strategy allows consumers to ______.

A. Buy things they do not like.
B. Understand a company's ability to fulfill their needs and wants.
C. Compare competitors on a list of tangible evidence.
D. Think like the company thinks.
81. Positioning strategy is a process that often starts with ______.

A. Focus groups.
B. Surveys of customers.
C. Perceptual maps.
D. Panel research data.
9-17
82. Companies often try to draw the attributes necessary to position a firm. The process of
drawing two attributes at a time to visualize the market is called ________.
A. Virtual mapping.
B. Perception training.
C. Monolithic mapping.
D. Perceptual mapping.
83. When positioning a firm against competition, segmenting companies often use
__________.
A. Two dimensional maps of the consumer's mind.
B. Generic price-quality perceptual maps.
C. Three dimensional mind maps.
D. Two consumer variables taken together.
84. Firms considering their positioning statements frequently use perceptual maps. The
simplest of these maps rank the firm on ____________ dimensions.
A. One.
B. Two.
C. Three.
D. Four.
E. Five.
85. Perceptual maps aid in _________ a product.

A. Repositioning.
B. Underpostioning.
C. Over positioning.
D. Confused positioning.
E. Doubtful positioning.
9-18
86. While many companies use a two dimensional map for positioning illustrations, there is a
more sophisticated mapping technique called ______.
A. Multi-level marketing.
B. Virtual mapping.
C. Multidimensional scaling.
D. Scaling by design.
E. Map crushing.
87. Differentiation strategy implies that a company is able to compete on a basis that is
________.
A. The same as competition.
B. Unique and where customers are willing to pay a premium.
C. A leadership price position.
D. Driven by customer contact.
E. Derived product demand.
88. A personnel leadership position implies that a company ________.

A. Has employees who are more talented than the competition.
B. Has the lowest cost employees.
C. Has the highest cost benefit package.
D. Has the intent to hire employees already trained.
E. Has systems to monitor employee benefits.
89. When a company tries to make the product or service significantly easier to obtain than
the competition, it is employing ______.
A. Service leadership.
B. Image leadership.
C. Competitive intelligence.
E. Convenience leadership.
9-19
90. When consumers have too narrow an understanding of the company, brand, or product, it
is called ________.
A. Underachieving.
B. Overpositioning.
C. Underpositioning.
D. Perplexing positioning.
E. Lack of positioning.
91. When a company has doubtful positioning consumers view the claims made by the
company as ________.
A. Being exaggerated.
B. Lacking efficiency.
C. Lacking credibility.
D. Exceeding performance.
E. Lacking performance.
Short Answer Questions
92. Define market segmentation.
93. Define target marketing. Which segments should the firm select?
9-20
94. How does a firm connect its value proposition to the target market?
95. What are the four basic principles of segmentation?
96. What is a heterogeneous market? What is a homogeneous market? Give an example of

each.
97. Explain the concept of differentiation.
9-21
98. Jane is evaluating Central America as a possible new market for the OTC (over-the-
counter) pharmaceutical line she manages. What are some of the barriers the company may
face in reaching segments there?
99. How would you use geographic segmentation in the bathing suit market?
100. How does age segmentation limit marketers? For example, you are a college student yet
undoubtedly you have many friends from high school who did not go to college. How are
their lifestyles different from yours? What do they do in their leisure time that is different than
what you and your college friends do? What other methods of segmentation other than age
would be better to reach them?
101. Marcus is a high school teacher who was born in 1980. What generation does he belong
to and what are its characteristics?
9-22
102. Karen is a marine biologist who was born in 1970. What generation does she belong to
and what are its characteristics?
103. Ron's grandfather was born in 1934. What generation does he belong to and what are its
characteristics?
104. Of people born after 1965, which generation or generations do marketers favor and
why?
105. What is the size of the minority population in the U.S. and which is the largest minority
group?
9-23
106. What is geodemographic segmentation and what are PRIZM clusters?
107. Why is the Benefits Sought method of segmentation a good place to start the
segmentation process?
108. In the B2B market, how do you segment by operating variables?
109. Should every company develop and serve a tertiary target market?
9-24
110. What research technique is often used by a firm in starting to determine its positioning
strategy?
111. Define perceptual maps.
Essay Questions
112. When the social networking site Facebook started, its primary members were in the
young adult market of 18 to 24 year olds. Now the 35 and over age group has the largest
membership. What kind of value does Facebook offer to different segments?
113. Hybrid cars attract different customer segments. Identify two segments and explain what
message you would send to each.
9-25
114. Wal-Mart operates stores, supercenters, and neighborhood markets. How do you think
the company views its market segments? What benefits do you think that each segment is
seeking?
115. How can Spuds and Suds, a Dallas, Texas sports bar, determine if there is a market
segment of sufficient size to justify its purchase of the National Hockey League Center Ice
package?
116. Audrey is studying generational segmentation. What are the most important things she
needs to know about baby boomers?
117. Many people of the GI Generation and the Silent Generation now live in or are
considering retirement communities, nursing homes or assisted living facilities. What do
marketing managers need to understand about these groups?
9-26
118. How does Gillette use gender segmentation?
119. Rita spent four years at HSN (formerly Home Shopping Network) as a category manager
in healthcare products aimed at the B2C market. Target headquarters in Minneapolis recruited
her to manage the stationery division. She contracts with suppliers worldwide to supply the
chain with notebooks, notepads, art supplies, computer paper, etc. In analyzing the target
markets, should Rita use an undifferentiated or differentiated target marketing strategy?
Which of Michael Porter's competitive strategies does Target use?
120. Identify and describe the most often used sources of differentiation?
121. Identify and describe the four types of positioning errors.
9-27
Chapter 09 Segmentation, Target Marketing, and Positioning Answer Key
True / False Questions
1. (p. 244) Grand Theft Auto 4 broke the Guinness world record for the most violent game on the
market.
FALSE
AASCB Standard: communication

Bloom's Taxonomy: knowledge
Difficulty: easy
Learning Objective: Identify the various approaches to market segmentation
2. (p. 249) Occupation segmentation is very closely related to income segmentation although the
two are not perfectly correlated.
TRUE

Difficulty: easy
3. (p. 254) For many marketing managers, segmentation by benefit sought is the best place to
start the process of market segmentation.
TRUE

Difficulty: easy
9-28
4. (p. 255) Firms generally only use one method of segmentation at a time.
FALSE

Difficulty: easy
5. (p. 256) In general, B2B segmentation is more straightforward than B2C segmentation.
TRUE

Difficulty: easy
6. (p. 257) When P & G purchased Gillette, it saw a market (men's toiletries market) that was
large and had a good growth rate. This combination made it hard not to buy the company even
at a price of $57 billion.
TRUE

Difficulty: easy
Learning Objective: Describe the steps in target marketing
7. (p. 258) If a firm chooses more than one segment to attack, it should approach them
sequentially, not all at the same time.
FALSE

Bloom's Taxonomy: comprehension
Difficulty: moderate
9-29
8. (p. 260) Land's End likes customized (one-to-one) marketing because customers pay more,
25% of customers are new to the company, and 33% purchase the custom made items more
than once.
TRUE

9. (p. 246) Generation Y, people born between 1978-1994, tend to be pragmatic, optimistic, good
team players, savvy and edgy in nature.
TRUE

10. (p. 246) The largest generation is the Millennial Generation. This group has been born after
1994 and is characterized by being heavily Hispanic, African American, and Asian.
FALSE

11. (p. 247) Family and household segmentation have become more complex than ever as a
result of non-traditional households and different standards of morality in the population.
TRUE

9-30
12. (p. 247) Family life cycle has declined in importance as a technique to segment the market as
a result of so many people living in untraditional families.
TRUE

13. (p. 248) The minority population with the youngest and the fastest growing population is the
Asian community.
FALSE

14. (p. 256-257) Ajax Engine Parts CEO says, "we sell to everyone" segmentation is only for the
consumer market. Do you believe the CEO's statement is true or false?
FALSE

Bloom's Taxonomy: analysis
15. (p. 256-257) Demographics are used as a segmentation variable in both the consumer and
business markets. The variables are different for the two markets but the concept is the same
for both markets.
TRUE

9-31
16. (p. 261-262) A company that use positioning often use a price-quality perceptual map in order
to show where it is positioned versus the competition. This helps it understand if it needs to
either change pricing strategy or quality standards.
TRUE

Learning Objective: Use and interpret perceptual maps
17. (p. 263) When a company decides its positioning strategy, it is impossible to over position it
against competition.
FALSE
AASCB Standard: analytic

Difficulty: easy
Learning Objective: Avoid potential positioning errors
18. (p. 263) A price leadership position (example: Wal-Mart) implies that a company that
assumes this position has superior operational elements in order to maintain the low price
position.
TRUE

19. (p. 263) BMW is a good example of a company that employs symbols, atmosphere, and
creative media to compete with a positioning strategy of Image Leadership.
TRUE

Bloom's Taxonomy: application
Difficulty: easy
9-32
20. (p. 263) When a company has frequent changes to its position and contradictory messages, it
is said that the company suffers from confused positioning.
TRUE

Difficulty: easy
21. (p. 263) Under positioning occurs when consumers have a vague idea about the company and
its products, and do not perceive any real differentiation.
TRUE

Difficulty: easy
Multiple Choice Questions
22. (p. 238) The sequential steps to successful segmentation are:

A. Positioning, targeting, and segmenting.
B. Research, fulfillment analysis, churn rate.
C. Segmenting, targeting and positioning.
D. Need identification, qualitative research, and positioning.
E. Consumer analysis, content analysis, and segmenting.

Difficulty: easy
Learning Objective: Explain the criteria for effective segmentation
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23. (p. 238) Segmenting means _________.

A. Identifying the market into meaningful smaller markets based upon common
characteristics.
B. Selecting the markets to attach in the market place.
C. Selecting a corporate position to communicate to potential customers.
D. Identifying and calculating the churn rate in different markets.

Difficulty: easy
24. (p. 238) Target marketing is the process by which __________.

A. The market is divided up into cohesive groups.
B. The company evaluates segments and decides which ones have the most potential for
development.
C. The company decides on which words can be used to attack each segment.
D. Groups are evaluated on the basis of high or low churn to see which is the most profitable.

Difficulty: easy
Scrambling: Locked
25. (p. 238) Positioning relies upon the communication of one or more sources of value to
customers in a way that the customer can easily make the connection between ________.
A. The cost of the product and the quality.
B. The way the 4 p's work with one another.
C. The customer's needs and wants and what the product has to offer.
D. The quid pro quo of product and advertising.
E. The salesperson and the customer at a personal level

Difficulty: easy
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26. (p. 238-239) Having a product whose value proposition is a well kept secret ________.
A. Is a good idea.
B. Is not a good thing in marketing.
C. Is a concept that uses subliminal messages.
D. Is a superior concept used in targeting.
E. Is a well accepted idea in market segmentation.

Difficulty: easy
27. (p. 239) Differentiation is a concept that means _______.

A. People are different looking.
B. When marketers look at consumers they see a rainbow of looks.
C. Products need to appear to be different from one another to be successful in the market
place.
D. Communicating and delivering value in different ways to different customer groups.
E. All of the above together.

Difficulty: easy
28. (p. 239) When Bernard, a marketer, says that a segment has sufficient size, he means
_________.
A. The market has an expected return-on-viewing to be worth considering.
B. The market is too large to be worth considering.
C. The market has an expected return-on-investment that is positive.
D. The market has many customers in it.
E. The market has only one customer in it.

Difficulty: easy
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29. (p. 239) There are conditions necessary that a market has to have in order to be able to
segment it properly. The item below which is not necessary is _______.
A. Market has to be measurable.
B. Market has to be bigger than 10,000 people.
C. Market has to be responsive to communications.
D. Market has to be reachable via supply chain.
E. Market has to be reachable with communications.

30. (p. 239) When it is said that a market can be reached, it means that _______
A. The market can be reached by transportation.
B. The market can be reached by language.
C. The market can be reached by technology.
D. The market can be reached by communication.

Difficulty: easy
31. (p. 240) There are popular approaches to segment the market geographically. Of the
techniques below the one that is not used is _________.
A. Region.
B. Density of population.
C. Size of population.
D. Sensitivity of population.
E. All of the above are used.

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32. (p. 240) Some companies, insurance and credit card, would like to target students as a
segment but find them hard to capture. This is an example of a market lacking one of the
criteria for segmentation and is called _______.
A. Reachable-the ability to reach the segment in terms of communication.
B. Responsiveness-the feeling that the market will buy more if targeted.
C. Sufficient size-the size of the market is large enough to be worth considering.
D. Measurable-information can be obtained about the market.

33. (p. 240) The region, the density of the population, the size of the population are terms for
techniques to use in ________.
A. Positioning.
B. Differentiation.
C. Democratic segmentation.
D. Population parameter estimation.
E. Geographic segmentation.

Difficulty: easy
34. (p. 240) The concept of being able to get either secondary and/or primary data on a market
being considered for segmentation means _______.
A. Differentiation.
B. Targeting.
C. The market is accessible to media.
D. The market is readily identifiable and can be measured.
E. The market is primed to be attacked by media.

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35. (p. 240) An idea used in segmentation is geographic segmentation, this means ________.
A. People are different based upon where they live.
B. Geography determines ones likes and dislikes.
C. Consumer respond differently to marketing strategies and programs based on where they
live.
D. The East Coast, West Coast, and Midwest are the most important market segments based
upon size.

Difficulty: easy
36. (p. 241) When JC Penney orders winter coats, it sends them to stores at different times of the
year. This is an example of _______.
A. Demographic segmentation.
B. Climate segmentation.
C. Geographic biases.
D. Lack of winter in the south.
E. Climate change.

Difficulty: easy
37. (p. 242) Geographic segmentation is useful but ________

A. A necessary condition in all segmentation schemes.
B. Is an insufficient criteria in and of itself.
C. Creates negative stereotypes to different parts of the country.
D. Is dependent upon the talent of the marketer to discover the quirks of a given geographic
area.

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38. (p. 243) Demographic segmentation is one of the most popular segmentation approaches
because _________.
A. It is readily measurable.
B. Because customer needs and wants tend to vary with some degree of regularity based on
demographic differences.
C. It uses the statistical characteristics of human populations such as age or income.

39. (p. 243) Age is a commonly used method of segmentation. Age alone, however, may be
dangerous _________.
A. Because lumping older or younger customers together in one group may not truly reflect
the market.
B. As McDonalds found out with Happy Meals.
C. Because Grand Theft Auto was a huge hit.
D. Because Egg McMuffins are not just for older people.

Difficulty: easy
40. (p. 243) Demographic segmentation is best described as _______.

A. Using characteristics of human populations to segment the market.
B. Using characteristics of geography to segment the market.
C. Using characteristics of lifestyle to segment the market.
D. Using characteristics of virtual communities to segment the market.
E. All of the above are demographic segmentation.

Difficulty: easy
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41. (p. 244) An advergame is a video game that _______.

A. Has an advertiser inserted into the game.
B. Has sponsors of the game on the cover of the game but not in the game itself.
C. Has been specifically designed to promote a brand.
D. Has been advertised on television with good results.

Difficulty: easy
42. (p. 245) Sociologists look for defining events such as wars, major economic upheaval, and
social cultural revolution to create _________.
A. Social movements.
B. Marketing opportunities.
C. Generational Groups for segmentation purposes.
D. New product ideas.

43. (p. 245) Baby Boomers represent a huge segment of the population. There is some evidence
that they, in their own minds, do not think they age. This is an example of _______.
A. Lack of aging.
B. Age discrimination.
C. Ethical dilemmas in segmentation through the calling of Baby Boomers older.
D. Difference between chronological age and attitudinal age.
E. Aging diagnostics of different groups of people.

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44. (p. 245-246) Among the generations used for segmentation, one stands out as the largest and
most affluent of all the generations. This generation is known as ______.
A. Millennial.
B. Generation X.
C. Generation Y.
D. Lost Generation.
E. Baby Boomer Generation.

Difficulty: easy
45. (p. 246) Generation "X" is often referred to as the ________.

A. Spoiled generation.
B. Non-consumption generation.
C. Millennial generation.
D. Baby bust generation.

Difficulty: easy
46. (p. 246) Serenity was born in 1970. Her parents met at the famous Woodstock festival. She is
a member of the ________ generation..
A. Baby boomer.
B. GI.
C. Silent.
D. Gen X.
E. Millennial.

Difficulty: easy
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47. (p. 246) Apple Cora Anderson was born in 2001. She is a member of the __________
generation.
A. Baby boomer.
B. GI.
C. Silent.
D. Gen X.
E. Millennial.

Difficulty: easy
48. (p. 246) ___________ would not be a good product for using gender segmentation.
A. Underwear.
B. Perfume.
C. Toothpaste.
D. Cigars.
E. Rogaine.

Difficulty: easy
49. (p. 247) The ____________ race and ethnicity market segment is not growing at a fast rate.
A. African-American.
B. Hispanic.
C. Asian-American.
D. Caucasian.
E. Catholic.

Difficulty: easy
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50. (p. 247) Family life cycle segmentation factors include all but ____________.
A. Income.
B. Age.
C. Marital status.
D. Number of children.
E. Cohabitation.

Difficulty: easy
51. (p. 247) At one time, specific companies that catered to a particular market segmented by
race. Today ______.
A. The segments are indistinguishable.
B. The segments have declined in size.
C. The segments have become part of mainstream business.
D. The segments all buy the same products.
E. The segments lack sufficiency.

Difficulty: easy
52. (p. 247) The Gillette Venus razor line is an example of a product that appeals to both men
and women but reveals ___________.
A. The same product can be used to attack different gender markets.
B. By slightly altering a product you can attack different gender markets.
C. There are different needs and wants for the same product category based on gender.
D. Women are always different than men.

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53. (p. 248) The minority population of the United States has grown significantly in the past
decade. Minorities now represent _________.
A. 60 million people.
B. 101 million people.
C. 150 million people.
D. 200 million people.

Difficulty: easy
54. (p. 248) Most Asians in the U.S. live in __________________.

A. New York state.
B. Texas.
C. California.
E. Washington, D.C.

Difficulty: easy
55. (p. 248) Most Hispanics in the U.S. live in __________________.

A. New York state.
B. Texas.
C. California.
E. Washington, D.C.

Difficulty: easy
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56. (p. 248) The fastest growing minority group in the United States is ______.
A. Asians.
B. African Americans.
C. Hispanics.
D. American Indians.

Difficulty: easy
57. (p. 249) Income segmentation is a commonly used segmentation technique. It has some
problems, however, that can be described as ___________.
A. It is difficult to collect quality marketing research on income due to people refusing to their
income.
B. It is too simple to use.
C. It is confusing because of the interaction with gender.
D. It is time consuming to study consumer's buying habits based upon their income.

58. (p. 249) There are many ways to segment the market using demographics. Select the answer
below that is the most truthful about demographic segmentation.
A. Income, education, and occupation are very closely correlated.
B. Income is all you need to know about someone.
C. Age is usually not a factor in segmentation.
D. The youth culture is the most important segmentation variable.
E. All of the above are true.

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59. (p. 249) Occupational segmentation recognizes _________.

A. Jobs change people in terms of ideas.
B. What kind of job you have impacts your thinking.
C. Bureau of Census gives you good ideas on product segments.
D. There may be needs and wants demonstrated by consumers based on the job they have.

60. (p. 250) Offering credit cards to high school seniors is an example of ________
segmentation.
A. Income segmentation.
B. Occupation segmentation.
C. Education segmentation.
D. Life style segmentation.

61. (p. 250) Social Class as a segmentation tool takes into account _______.
A. Income.
B. Education.
C. Occupation.
D. None of the above.
E. A, B, and C.

Difficulty: easy
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62. (p. 250) Social class has declined as a method of segmentation as a result of ______.
A. Higher education rates in the US.
B. Readily available credit has flattened the classes.
C. The increase in minority consumers.
D. Stores appeal to everyone.

63. (p. 251) Every zip code in the United States falls into profiles provided by Claritas in its
database called _________.
A. GEO-FIX.
B. PRIZM.
C. AIO.
D. Nielsen ratings.

Difficulty: easy
64. (p. 251) A marketing manager using PRIZM is interested in ____________ segmentation.
A. Geographic.
B. Psychographic.
C. Geodemographic.
D. Occasion.
E. Benefits Sought.

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65. (p. 252) A marketing manager using VALS is interested in ____________ segmentation.
A. Geographic.
B. Psychographic.
C. Geodemographic.
D. Occasion.
E. Benefits Sought.

Difficulty: easy
66. (p. 252) AIOs are one way to measure consumer variables using the psychographic
segmentation approach. AIO stands for _______.
A. Archives, intellect, and opinions.
B. Activities, interests, and opinions.
C. Archives, intellect, and orientation.
D. Activities, intellect, and orientation.

67. (p. 252) VALS is a form of segmentation based upon values, this allows marketers to
_________.
A. Better communicate with consumers.
B. Match people with products.
C. Connect to consumers with either ideals, achievement, or self-expression.
E. A, B, and C.

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68. (p. 254) The Benefit Sought method of segmentation focuses on ______.
A. The different benefits consumers seek.
B. The product features.
C. The service offering.
D. The positioning of the benefits.
E. The location of the store.

69. (p. 255) Usage patterns are another way to divide up the market. What causes you to take
your significant other out for that special dinner? Or, what makes you break down and rent a
tuxedo for a formal event? This form of usage is called using ________ as a reason to buy.
A. Time of year.
B. Graduation.
C. Occasions.
D. Experiences.

70. (p. 255) Ads with messages like "Orange juice—It's not just for breakfast anymore!" or
"Soup can be a delicious way to start a cold winter's day" are using _______ segmentation.
A. Benefits Sought.
B. Lifestyle.
C. Psychographic.
D. Usage.
E. Geographic.

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71. (p. 255) Usage segmentation focuses on how much of the product different groups consume.
It can also be described as _______.
A. 80/20 rule.
B. Heavy users.
C. Light users.
D. Medium users.

Difficulty: easy
72. (p. 255) Firms use ______.

A. One segmentation technique at a time.
B. Multiple segmentation techniques simultaneously.
C. One technique then sequentially another and then yet another.
D. Two major dominant forms.
E. None of the above

Difficulty: easy
73. (p. 257) Michael Porter developed a model to determine the ______.
A. Segment approaches to complex markets.
B. Life of a product once it is introduced.
C. Size of the market needed to be successful.
D. The six competitive forces that firms must consider.

Difficulty: easy
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74. (p. 258) When P & G bought Gillette it thought that there was a strategic fit between the
companies. This was a good fit because they had _______________.
A. The same ad agency.
B. Sophisticated supply chain systems including international markets.
C. Similar price structures.
D. Great brand awareness.

Difficulty: easy
75. (p. 258) Primary markets differ from secondary and tertiary markets by _______.
A. The expected level of ROI derived from the market.
B. The difficulty of attacking the market.
C. The consumers ability to buy multiple units.
D. The advertising effort needed for the market.

Difficulty: easy
76. (p. 259) When a company is confused about market segments, it sometimes pick a one-
market strategy. This segmentation approach is called ________.
A. Mass approach.
B. Undifferentiated target marketing.
C. Differentiated strategy.
D. Low cost approach.
E. Efficiency marketing.

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77. (p. 259) Differentiated target marketing means ______.

A. Different prices to different markets.
B. The same value offering to every market segment.
C. Different value offerings for different target markets.
D. Using push and pull strategy to differentiate markets.

78. (p. 260) Concentrated target marketing is often used by ________.

A. Large companies to dominate a market.
B. Start-up firms to enter a market as a focus player.
C. All firms.
D. Virtual firms that use internet marketing.
E. Michael Porter in a consulting capacity.

79. (p. 260) Firms that develop such close relationships with customers that they seem to deliver
customized goods and services, are engaged in ____________ marketing.
A. Concentrated target marketing.
B. One-to-one marketing.
C. Differentiated marketing.
D. Undifferentiated marketing.
E. Shotgun marketing.

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80. (p. 260) Positioning strategy allows consumers to ______.

A. Buy things they do not like.
B. Understand a company's ability to fulfill their needs and wants.
C. Compare competitors on a list of tangible evidence.
D. Think like the company thinks.

Learning Objective: Define positioning and link it to the use of the marketing mix
81. (p. 261) Positioning strategy is a process that often starts with ______.
A. Focus groups.
B. Surveys of customers.
C. Perceptual maps.
D. Panel research data.

82. (p. 261-262) Companies often try to draw the attributes necessary to position a firm. The
process of drawing two attributes at a time to visualize the market is called ________.
A. Virtual mapping.
B. Perception training.
C. Monolithic mapping.

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83. (p. 261-262) When positioning a firm against competition, segmenting companies often use
__________.
A. Two dimensional maps of the consumer's mind.
B. Generic price-quality perceptual maps.
C. Three dimensional mind maps.
D. Two consumer variables taken together.

84. (p. 262) Firms considering their positioning statements frequently use perceptual maps. The
simplest of these maps rank the firm on ____________ dimensions.
A. One.
B. Two.
C. Three.
D. Four.
E. Five.

85. (p. 262) Perceptual maps aid in _________ a product.

A. Repositioning.
B. Underpostioning.
C. Over positioning.
D. Confused positioning.
E. Doubtful positioning.

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86. (p. 262) While many companies use a two dimensional map for positioning illustrations,
there is a more sophisticated mapping technique called ______.
A. Multi-level marketing.
B. Virtual mapping.
C. Multidimensional scaling.
D. Scaling by design.
E. Map crushing.

87. (p. 262) Differentiation strategy implies that a company is able to compete on a basis that is
________.
A. The same as competition.
B. Unique and where customers are willing to pay a premium.
C. A leadership price position.
D. Driven by customer contact.
E. Derived product demand.

Difficulty: difficult
Learning Objective: Identify sources of differentiation
88. (p. 263) A personnel leadership position implies that a company ________.
A. Has employees who are more talented than the competition.
B. Has the lowest cost employees.
C. Has the highest cost benefit package.
D. Has the intent to hire employees already trained.
E. Has systems to monitor employee benefits.

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89. (p. 263) When a company tries to make the product or service significantly easier to obtain
than the competition, it is employing ______.
A. Service leadership.
B. Image leadership.
C. Competitive intelligence.
E. Convenience leadership.

90. (p. 263) When consumers have too narrow an understanding of the company, brand, or
product, it is called ________.
A. Underachieving.
B. Overpositioning.
C. Underpositioning.
D. Perplexing positioning.
E. Lack of positioning.

91. (p. 264) When a company has doubtful positioning consumers view the claims made by the
company as ________.
A. Being exaggerated.
B. Lacking efficiency.
C. Lacking credibility.
D. Exceeding performance.
E. Lacking performance.

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Short Answer Questions
92. (p. 238) Define market segmentation.
Segmentation is the process by which a company divides a market into meaningful smaller
markets or submarkets based on common characteristics.

Difficulty: easy
93. (p. 238) Define target marketing. Which segments should the firm select?
Once a segmentation approach is developed, marketing managers engage in target

marketing, which involves evaluating the segments and deciding which shows the most
promise for development. In most ways, selecting target markets (also called market targets)
is truly an investment decision. That is, a company must decide where to best invest its limited
resources in developing markets for future growth. Everything else being equal, it should
invest in the target markets that promise the best overall return on that investment over the
long run.

Difficulty: easy
94. (p. 238) How does a firm connect its value proposition to the target market?
Finally, the way the firm ultimately connects its value proposition to a target market is
through its positioning. Positioning relies on the communication of one or more sources of
value to customers in a way that the customer can easily make the connection between his or
her needs and wants and what the product has to offer. Positioning strategies are executed
through the development of unique combinations of the marketing mix variables, introduced
in Chapter 1 as the 4Ps: product (or more broadly—the offering), price, place
(distribution/supply chain), and promotion.

Difficulty: easy
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95. (p. 239) What are the four basic principles of segmentation?
· Not all customers are alike.

· Subgroups of customers can be identified on some basis of similarity.
· The subgroups will be smaller and more homogeneous than the overall market.
· Needs and wants of a subgroup are more efficiently and effectively addressed than would be
possible within the heterogeneous full market.
AASCB Standard: Communication

Learning Objective: Explain criteria for segmentation
96. (p. 239) What is a heterogeneous market? What is a homogeneous market? Give an example
of each.
A heterogeneous market is one made of dissimilar customers that may be grouped into
smaller homogeneous groups that are similar. An example of a heterogeneous market is the
automobile market. It is a broad market with many different customers seeking different
features and benefits. Homogeneous groups within the automobile market include light truck
owners, heavy truck owners, sports car drivers, luxury SUV drivers, green consumers seeking
hybrids, drivers seeking basic transportation in the compact or subcompact markets, etc.

Difficulty: easy
97. (p. 239) Explain the concept of differentiation.
Differentiation means communicating and delivering value in different ways to different

customer groups.

Difficulty: easy
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98. (p. 240) Jane is evaluating Central America as a possible new market for the OTC (over-the-
counter) pharmaceutical line she manages. What are some of the barriers the company may
face in reaching segments there?
Barriers to reaching a segment might include language, physical distance, or as in the case of
some developing markets, transportation, technology, and infrastructure challenges. Firms
have to be able to sustain their management of a target segment over time—if this activity
becomes problematic it can be a drain on resources and result in poor ROI.

99. (p. 241) How would you use geographic segmentation in the bathing suit market?
Stores in warm climates would stock bathing suits all year long. Stores in climates with four
seasons would stock the suits just prior to warm weather arriving. For example, Texas, North
Carolina, and Virginia would stock suits earlier than Maine or Wisconsin.

100. (p. 243 –255) How does age segmentation limit marketers? For example, you are a college
student yet undoubtedly you have many friends from high school who did not go to college.
How are their lifestyles different from yours? What do they do in their leisure time that is
different than what you and your college friends do? What other methods of segmentation
other than age would be better to reach them?
Answers will vary but may include friends who are parents, in the military, work at a full time
job, etc. Better methods of segmentation may include family and household segmentation,
income, education, social class or psychographic.

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101. (p. 246) Marcus is a high school teacher who was born in 1980. What generation does he
belong to and what are its characteristics?
Generation Y (60 million born 1978–1994)

● Pragmatic
● Optimistic
● Team players
● Savvy consumers
● Edgy
● Focused on urban style
● More idealistic than Gen X
● Technology comes naturally

102. (p. 246) Karen is a marine biologist who was born in 1970. What generation does she
belong to and what are its characteristics?
Generation X (57 million born 1965–1977)

● Lack of trust in society
● Cynical and media-savvy
● Entrepreneurial
● Accept diversity
● Environmentally conscious
● Work to live, not live to work

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103. (p. 246) Ron's grandfather was born in 1934. What generation does he belong to and what
are its characteristics?
Silent (35 million born 1925–1945)

● Strength in human relation skills
● Respectful of others' opinions
● Trusting conformists
● Health, stability, and wisdom
● Civic life and extended families

104. (p. 246) Of people born after 1965, which generation or generations do marketers favor and
why?
Because Gen X is such a small segment of the consumer market, many marketers have their
eye squarely on the Gen Y and Millennial cohorts as the next great consumer frontier. Both of
these groups are highly technology-savvy and don't balk at using any and every sort of
communication medium to enhance their lives.

105. (p. 248) What is the size of the minority population in the U.S. and which is the largest
minority group?
100.7 million people are in minority groups or about 1/3 of the total population. Hispanics
make up the largest group.

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106. (p. 251) What is geodemographic segmentation and what are PRIZM clusters?
A hybrid form of segmentation that considers both geographic and demographic factors is
called geodemographic segmentation. Typically, marketers turn to firms that specialize in
collecting such data on an ongoing basis to purchase data relevant to their geographic area of
focus. One source is Nielsen's Claritas, which continually updates a large database called
PRIZM-NE that is zip-code driven. PRIZM profiles every zip code in the United States by
both demographic and lifestyle (psychographic) variables. Over time, PRIZM has discovered
62 "neighborhood types" into which all zip codes fall.

107. (p. 254) Why is the Benefits Sought method of segmentation a good place to start the
segmentation process?
For many marketing managers, segmentation by benefits sought is the best place to start the
process of market segmentation. You might begin by identifying groups interested in the
specific bundle of benefits afforded by your offering and then move toward utilizing the other
segmentation variables to further hone the profile of the core group that is attracted to your
product's benefits.

108. (p. 257) In the B2B market, how do you segment by operating variables?
Look at technology, user status, or customer capabilities

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109. (p. 258) Should every company develop and serve a tertiary target market?
No. The tertiary market is one that may be attractive for the future but is not so attractive now.

110. (p. 261) What research technique is often used by a firm in starting to determine its
positioning strategy?
Focus groups

Difficulty: easy
111. (p. 261-262) Define perceptual maps.
The data generated from the above analysis can be used to develop a useful visual tool for
positioning called a perceptual map, which displays paired attributes in order to compare
consumer perceptions of each competitor's delivery against those attributes. Today this is
usually accomplished by computer statistical software applications that plot each competitor's
relative positioning on the attributes.

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Essay Questions
112. (p. 245) When the social networking site Facebook started, its primary members were in the
young adult market of 18 to 24 year olds. Now the 35 and over age group has the largest
membership. What kind of value does Facebook offer to different segments?
Facebook offers value by linking people through common interests. For the younger segment,
the links are based on which University they attend, which town they live in, which high
school they went to. It allows them to stay in touch with their "old" friends, while also
forming new friends in their new social settings. Additionally, Facebook is customizable, so
music, politics, movies, etc. can all link one person to another. To the younger segment,
Facebook is an interactive statement of who they are.
For the older segment, Facebook not only links based on town, but also on family groups,
business groups and other professional groups. In Facebook, you are allowed to create
segments to fit your particular means. The older segment tends to gain value from Facebook
by using it to keep in touch with family and business associates.

113. (p. 240-256) Hybrid cars attract different customer segments. Identify two segments and
explain what message you would send to each.
The first segment is the green consumer who is most interested in the impact of emissions on
the environment. The message should focus on low emissions, impact on the environment,
saving the earth.
The second segment is concerned with the source and price of fuel. Many people don't like
the idea of buying fuel from foreign sources or the fluctuating price of fuel. The message
should be focused on ‘Buy American'.
Another segment would be the price conscious consumer. Emphasize the cost-saving on fuel
over the lifetime of the car.

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114. (p. 251) Wal-Mart operates stores, supercenters, and neighborhood markets. How do you
think the company views its market segments? What benefits do you think that each segment
is seeking?
Supercenter customers are seeking product selection and price. They are looking for a one-
stop solution to their shopping needs, including groceries. Wal-Mart store customers are
certainly seeking price but may appreciate the smaller size of the stores. Market shoppers are
looking for convenience and price in the grocery market.

Bloom's Taxonomy: analysis
Learning Objective: Understand the continuum of approaches to target marketing strategy
115. (p. 245) How can Spuds and Suds, a Dallas, Texas sports bar, determine if there is a market
segment of sufficient size to justify its purchase of the National Hockey League Center Ice
package?
The bar's business drops off after football season ends with the Super Bowl. The subscription
is expensive but the owner will purchase it if he thinks he can draw hockey fans, especially
from February to the end of hockey season in June.

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116. (p. 245) Audrey is studying generational segmentation. What are the most important things
she needs to know about baby boomers?
The generational group that has traditionally been the apple of the marketing manager's eye is
the baby boomers. This is because there are so many of them and because they personify
conspicuous consumption—acquiring products for the pure enjoyment of the purchase. An
interesting aspect of boomers is that the oldest among the group have just entered their early
60sin age, and the majority of them will soon be facing decisions about retirement and
beyond. Much of the research on baby boomers indicates that—at least in their minds—they
don't age. Recall that a marketer must be cognizant of the difference between chronological
age and attitudinal age. It is anticipated that this forever-young generation will enter the
segment we would traditionally label as "older consumer" without an old outlook on life and
the future. This has profound implications for marketers in that it turns on end the
stereotypical approaches to what products are marketed to them and how they are marketed.
Many boomers will become more active, spend more money, and want to experience more
new things after retirement than they ever did while they were employed—that is, if you can
get them to retire. Many smart marketers who happen to be of Generation X or Y would do
well to rethink the potential impact of successful strategies aimed at these ageless boomers.

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117. (p. 246) Many people of the GI Generation and the Silent Generation now live in or are
considering retirement communities, nursing homes or assisted living facilities. What do
marketing managers need to understand about these groups?
GI (16 million born 1901–1924)

● Financial security and conservative spending shaped by hard times and the economic
depression of the 1930s)
● No such thing as problems—only challenges and opportunities
● Civic minded
● Duty to family, community, and country
● Unified and team oriented
Silent (35 million born 1925–1945)
● Strength in human relation skills
● Respectful of others' opinions
● Trusting conformists
● Health, stability, and wisdom
● Civic life and extended families

118. (p. 247) How does Gillette use gender segmentation?
Gillette learned some years ago that generally, women don't like to use a man's razor, which
they had to do for decades because no thought was given to differences in gender usage
preference. Research in the 1980s revealed that most women viewed men's razors as too
bulky, with too many bells and whistles, and not feminine in color or design. Suddenly,
Gillette found an underserved new submarket for segmenting its razor line: the female shaver!
The result was a completely new brand and product line called Gillette Venus, whose tagline
is "Reveal the Goddess in You." Venus comes in six models: Original Venus; Venus
Embrace, which "embraces a whole new level of smoothness"; Venus Breeze, the only razor
with built-in shave gel bars; Venus Vibrance, which gently exfoliates to reveal more radiant
skin; Venus Divine, which contains "Intensive Moisture Strips" enriched with oils; and Venus
Disposable, for the "Goddess on the Go."

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119. (p. 259) Rita spent four years at HSN (formerly Home Shopping Network) as a category
manager in healthcare products aimed at the B2C market. Target headquarters in Minneapolis
recruited her to manage the stationery division. She contracts with suppliers worldwide to
supply the chain with notebooks, notepads, art supplies, computer paper, etc. In analyzing the
target markets, should Rita use an undifferentiated or differentiated target marketing strategy?
Which of Michael Porter's competitive strategies does Target use?
The broadest possible approach is undifferentiated target marketing —which is essentially

a one-market strategy, sometimes referred to as an unsegmented mass market. Firms whose
market approach is grounded in Porter's competitive strategy of low cost may use a relatively
undifferentiated target marketing strategy based primarily on the resulting price advantage. 54
Southwest Airlines and Wal-Mart are two firms that have built their businesses on their
inherent internal cost advantages, passing along a price advantage to the mass market. But
most firms don't have the kind of cost efficiencies it takes to operate such a target marketing
approach and instead have to rely on developing sources of differentiation other than price.

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120. (p. 263) Identify and describe the most often used sources of differentiation?
Price leadership: Efficiencies in cost of labor, materials, supply chain, or other operational
elements enabling the price leader to charge less.
Example: Wal-Mart.
Innovative leadership: constantly developing the "next new thing." Example: Apple.
Service leadership: having an unusual and notable commitment to providing service to
customers.
Example: Ritz-Carlton, BMW.
Product leadership: performance, features, durability, reliability, style, and so on. Example:
BMW.
Personnel leadership: hiring employees who are competent, reliable, courteous, credible,
responsive, and able to communicate clearly. Example:
Southwest Airlines.
Convenience leadership: making the product or service significantly easier to obtain.
Example:
Amazon.com.
Image leadership: symbols, atmosphere, and creative media. Example: BMW.
It is important to note that firms and brands often rely on multiple sources of differentiation
simultaneously.
Note above that BMW stakes a claim to differentiation by leadership in product, service, and
image—a great position to be in.

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121. (p. 263-264) Identify and describe the four types of positioning errors.
Underpositioning: when consumers have only a vague idea about the company and its
products, and do not perceive any real differentiation. Until recently, both Audi and
Volkswagen suffered from underpositioning as many consumers struggled to identify salient
points of differentiation between those brands and their competitors. However, both brands
have beefed up their marketing communication to better clarify exactly what each stands for
in the marketplace.
● Overpositioning: when consumers have too narrow an understanding of the company,
product, or brand. Dell became so entrenched as a brand of PCs that it has been a bit of a
struggle to extend the brand into other lucrative product lines. Neither HP nor Apple suffers
from overpositioning; both have engaged in great positioning strategies over the long run.
● Confused positioning: when frequent changes and contradictory messages confuse
consumers regarding the positioning of the brand. McDonald's found itself the victim of
confused positioning as it moved out of the 1990s.
It had tried (and failed) at so many diverse new product launches in the restaurants that many
customers lost track of what the core of the brand was.
Since then, under new top leadership, McDonald's has embraced its core differentiators of
consistency of products and dependability of service, while growing new products at a much
more conservative rate.
Doubtful positioning: when the claims made for the product or brand are not regarded as
credible by consumers. Sadly, firms that engage in unethical business practices often do not
realize the magnitude of damage being done to their brand. Also, you will learn in the
chapters on products and branding that trial is only the initial goal of marketing
communication. After initial trial, firms need to ensure that the offering consistently meets or
exceeds customer expectations so that repurchase—and loyalty—will occur, which is a
process of customer expectations management. When FedEx promises 8 a.m. next-day
delivery, it has to be sure its systems can actually produce such a level of performance all the
time.

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True / False Questions

4. Firms generally only use one method of segmentation at a time.

5. In general, B2B segmentation is more straightforward than B2C segmentation.

Multiple Choice Questions

22. The sequential steps to successful segmentation are:

23. Segmenting means _________.

24. Target marketing is the process by which __________.

27. Differentiation is a concept that means _______.

35. An idea used in segmentation is geographic segmentation, this means ________.

37. Geographic segmentation is useful but ________

40. Demographic segmentation is best described as _______.

41. An advergame is a video game that _______.

45. Generation "X" is often referred to as the ________.

54. Most Asians in the U.S. live in __________________.

55. Most Hispanics in the U.S. live in __________________.

59. Occupational segmentation recognizes _________.

61. Social Class as a segmentation tool takes into account _______.

62. Social class has declined as a method of segmentation as a result of ______.

64. A marketing manager using PRIZM is interested in ____________ segmentation.

65. A marketing manager using VALS is interested in ____________ segmentation.

68. The Benefit Sought method of segmentation focuses on ______.

72. Firms use ______.

73. Michael Porter developed a model to determine the ______.

77. Differentiated target marketing means ______.

78. Concentrated target marketing is often used by ________.

80. Positioning strategy allows consumers to ______.

81. Positioning strategy is a process that often starts with ______.

85. Perceptual maps aid in _________ a product.

88. A personnel leadership position implies that a company ________.

Short Answer Questions

92. Define market segmentation.

95. What are the four basic principles of segmentation?

96. What is a heterogeneous market? What is a homogeneous market? Give an example of

97. Explain the concept of differentiation.

106. What is geodemographic segmentation and what are PRIZM clusters?

108. In the B2B market, how do you segment by operating variables?

111. Define perceptual maps.

118. How does Gillette use gender segmentation?

121. Identify and describe the four types of positioning errors.

Chapter 09 Segmentation, Target Marketing, and Positioning Answer Key

True / False Questions

AASCB Standard: communication

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AASCB Standard: analytic

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