Deck 6: Target Markets, Segmentation and Evaluation

Question 1

Demographic characteristics are commonly used to segment a market because they are closely related to consumers' product needs and purchasing behavior.

Answer 1

True

Question 2

The term market density refers to the number of potential customers per unit of land area, such as per square mile.

Answer 2

True

Question 3

A segmentation variable is used to group smaller markets into one larger market.

Answer 3

False

Question 4

Motives can be used to segment markets.

Question 5

A market is a group of people who, as individuals, have needs for products in a product class and have the ability, willingness, and authority to purchase such products.

Question 6

Lifestyle analysis focuses on people's activities, interests, and opinions.

Question 7

An undifferentiated targeting strategy does not target a single market with one marketing mix.

Question 8

The ways in which customers use a particular product may be a basis for segmenting the market.

Question 9

Lifestyle is a product-related variable.

Question 10

Family life cycle is a psychological dimension used for segmenting markets.

Question 11

One condition for effective segmentation is that at least one segment must have substantial profit potential.

Question 12

There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the concentrated targeting strategy.

Question 13

A company sometimes defines a total market as its target market.

Question 14

Segmentation variables are characteristics of individuals, groups, or organizations in a total market.

Question 15

The concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single market segment through one marketing mix.

Question 16

The four requirements of a market are that the individuals in the market must have a need for the product and the ability, willingness, and authority to buy it.

Question 17

Only one variable can be used to segment a market.

Question 18

Individuals' ability to buy depends on the strength of their buying power.

Question 19

A differentiated targeting strategy is when the organization targets two or more markets by developing a single marketing mix.

Question 20

One problem with using psychographic variables for segmentation purposes is that they are difficult to measure accurately.

Question 21

One way marketers can segment business markets is according to their geographic location.

Question 22

A company sales forecast is the amount of a product that a company expects to sell during a specific time period at a specified level of marketing activities.

Question 23

Sales forecasts are always long-range in nature.

Question 24

Consideration of the firm's overall objectives usually does not influence the final selection of a target market segment.

Question 25

The two general approaches to measuring company sales potential are the breakdown and the buildup approach.

Question 26

A market segment profile may cover such aspects as demographic characteristics, geographic factors, product benefits sought, lifestyles, brand preferences, and usage rates.

Question 27

Market segment profiles help determine the most desirable segment or segments in relation to the firm's strengths, weaknesses, objectives, and resources.

Question 28

The types of surveys used to forecast sales are customer, executive, and competitor surveys.

Question 29

The information yielded by market segment profiles usually is not very useful later in the marketing process.

Question 30

A market segment profile provides customers with an understanding of how a business can use its capabilities.

Question 31

It is likely that during the fifth step of the target market selection process, marketers will decide not to enter and compete in any market segments.

Question 32

Company sales potential is the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product.

Question 33

The size of the market potential places limits on the size of the company sales potential.

Question 34

In developing a company sales forecast, the forecasting methods are limited to surveys and correlation methods.

Question 35

The sum of firms' marketing efforts equals industry marketing efforts.

Question 36

A market segment profile describes the similarities among potential customers within a segment and explains the differences among people across market segments.

Question 37

When evaluating relevant market segments, cost estimates are important to determine if an organization entering a particular segment can operate at costs equal to or below those of competitors.

Question 38

The executive judgment method of sales forecasting is very accurate in predicting future sales.

Question 39

When a firm's management is making the final selection of specific target markets to enter, it should consider whether the organization has the financial resources, managerial skills, expertise, and facilities needed to effectively compete in the selected segments.

Question 40

Surveys are sometimes used to forecast sales.

Question 41

Trend analysis is a sales forecasting technique that focuses on aggregate sales data over a period of many years to determine general trends in annual sales.

Question 42

Mia is pet-sitting for a friend's dog while he is on vacation. Her friend has given Mia all sorts of information, including the veterinarian's name and phone number, pet emergency center location, and the dog's favorite bedtime snack. The first evening of the vacation, Mia realizes that her friend did not bring the dog's food over, and she has no idea what the dog eats. Her friend's cell phone is "out of range" at the moment, so Mia must go to the grocery store and shop for dog food, even though she has never bought it before now. In this case, even though Mia is not a dog owner, she is likely to be part of the market for dog food for all of the following reasons except _______.

A) She has the authority to purchase the dog food.
B) She possesses the buying power for purchasing dog food.
C) She has the need or desire for dog food.
D) Her ability to purchase the dog food is questionable.
E) She is willing to use her buying power.

Question 43

In a customer forecasting survey, a marketer would question customers about the types and quantities of products they intend to buy during a specific time period.

Question 44

When selecting the specific target market, the firm must consider the possibility that the requirements of some market segments are at odds with the firm's overall objectives.

Question 45

Sellers of farm produce would be likely to use an undifferentiated targeting strategy.

Question 46

Which of the following is not a characteristic of a consumer market?

A) It consists of purchasers who intend to consume or benefit from the purchased products
B) They do not buy products for the main purpose of making a profit
C) They are sometimes referred to as B2C markets
D) Their purchasing decisions are always made by only one individual
E) They may buy the product, but not use it themselves

Question 47

Market segment profiles help a marketer determine which segments are most attractive relative to a firm's strengths, weaknesses, objectives, and resources.

Question 48

A marketer can use regression analysis techniques to predict the sales of new products.

Question 49

Any group of people who, as individuals or as organizations, have needs for products in a product class and who have the ability, willingness, and authority to buy such products is a(n)

A) business market.
B) market.
C) undifferentiated market
D) segmented market
E) market variable

Question 50

Coca-Cola would be able to use a customer forecasting survey to forecast future sales effectively.

Question 51

Which of these statements is not true about business markets?

A) The purchase may be made to resell the item
B) The purchase is always made by more than one individual
C) The purchase may be made to use in general daily operations
D) The purchase may be made to use in production of another product
E) They can also be referred to as organizational markets

Question 52

The first step of the target market selection process is identifying the appropriate targeting strategy; the last step is evaluating relevant market segments.

Question 53

A firm ordinarily uses the same sales forecasting method for determining short-range and long-range sales forecasts.

Question 54

Lily is an award-winning fiction writer. She works out of her apartment. She recently purchased a new desk in which to store her manuscripts and for use when typing up stories for publication. Lily is part of the business market for the desk manufacturer.

Question 55

The ability to purchase a product is a function of

A) buying power.
B) desire.
C) willingness.
D) authority.
E) needs.

Question 56

In the breakdown approach, the marketing manager measures company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered.

Question 57

Through market tests, a forecaster gains data regarding consumers' intended purchases.

Question 58

Which of the following is not a requirement or characteristic of a market?

A) The ability to purchase a product
B) A large number of people or organizations
C) The authority to buy a product
D) The willingness to use buying power
E) The need for a specific product in a specific product category

Question 59

A competitive assessment may reveal that a market segment that initially seemed attractive may not be worth pursuing.

Question 60

Psychographic variables are aggregate population characteristics such as the distribution of age and gender, fertility rates, migration patterns, and mortality rates.

Question 61

Prodigy Placement is a private elementary school located in the center of Manhattan. Students at the school are considered in the top 1% of their age group in terms of IQ scores and aptitude. Parents who want to send their children to the school must get on a waiting list as soon as the child is 12 months old and must make a deposit of $5,000 to the school in order to hold the child's "application" until they reach the age of 5 years. Emma's parents put her on the waiting list at the age of 1 year and paid the deposit; however, when Emma became 5 years old, she did not want to attend the school even though she tested above the requirement. Her parents made the decision to enroll her for the upcoming school year. In this case, Emma ___ part of the market for Prodigy Placement, and her parents ____ part of the market because ____.

A) was; were; Emma needed to attend school
B) was; were; Emma had the authority to attend the school
C) was; were; they had the authority
D) was not; were; Emma needed to attend school
E) was not; were; Emma lacked willingness

Question 62

Why would a company use the undifferentiated strategy?

A) The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy them.
B) The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market.
C) The needs of individual consumers in the target market for a specific product are similar, so the organization can satisfy most customers with a single marketing mix.
D) The undifferentiated strategy is expensive to implement but tends to produce the most sales.
E) When a market is made up of individuals or organizations with diverse need for products in a specific product class, you would use an undifferentiated strategy.

Question 63

The purpose of market segmentation is to

A) differentiate products.
B) divide a total market to enable a marketer to develop a more precise marketing mix.
C) reduce the overall cost of marketing activities.
D) identify a single marketing mix that will be satisfactory for the general market.
E) meet the needs of homogeneous markets.

Question 64

Which of the following statements about the undifferentiated targeting strategy is false?

A) The undifferentiated targeting strategy should be used when the needs of individual customers are similar.
B) The undifferentiated targeting strategy uses one promotional program aimed at everyone in the target market.
C) The undifferentiated targeting strategy is good for use with staple items, such as sugar and salt.
D) The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the target market.
E) The opposite of the undifferentiated targeting strategy is the differentiated targeting strategy.

Question 65

The process of dividing a total market into market groups because people within each group have relatively similar product needs is called

A) segmentation.
B) diversification.
C) target marketing.
D) concentration.
E) customization.

Question 66

Several conditions must exist for market segmentation to be successful. These conditions include all of the following except

A) the total market should be divided so that segments can be compared on sales potential, costs, and profits.
B) customers' needs for the product must be homogeneous.
C) the company must be able to reach the chosen segment with a particular marketing mix.
D) segments must be identifiable and divisible.
E) at least one segment must have enough profit potential to justify developing and maintaining a special marketing mix for that segment.

Question 67

Walmart sells numerous products, including packaged food, produce, automotive maintenance services, eyeglasses, clothing, and toys. Walmart advertises itself as a store where "we save people money so they can live better," focusing on its low prices as the customer's most important need. Walmart's advertising appears to use a(n) _____ strategy to a market that is _____.

A) undifferentiated; homogeneous.
B) undifferentiated; heterogeneous.
C) differentiated; homogeneous.
D) homogeneous; differentiated.
E) heterogeneous; undifferentiated.

Question 68

To find a target market, a firm can use one of these targeting strategies

A) Total market strategy and the undifferentiated strategy
B) Product differentiation strategy and the customer differentiation strategy
C) Demographic strategy and the psychographic strategy
D) Socioeconomic strategy and the psychological strategy
E) Undifferentiated strategy, the concentrated strategy, and the differentiated strategy

Question 69

The undifferentiated targeting strategy for finding a target market will likely not be successful if

A) product positioning is needed.
B) the firm defines the total market as its target market.
C) people within the market have heterogeneous needs.
D) people within the market have homogeneous needs.
E) the firm is capable of developing a single marketing mix that satisfies all people's needs.

Question 70

Generally speaking, individuals who are unemployed would not be considered a target market for lawn care services because

A) they would not desire such products.
B) they would not be willing to purchase such products.
C) they would not have the ability to purchase such products.
D) such markets are narrowly defined geographically.
E) they would not be authorized to purchase such products.

Question 71

If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be using the ____ strategy.

A) directed
B) undifferentiated
C) segmented
D) differentiated
E) product-use

Question 72

The producers of C & H Sugar Company sell cane sugar in five-pound bags, one-pound bags, and one-pound boxes. When developing its advertising strategy, C & H will most likely use a(n) ____ approach in defining a target market.

A) undifferentiated
B) differentiated
C) product strategy
D) cost-benefit
E) demographic

Question 73

Mattel views the toy market as composed of four age groupings, each with different needs and desires. Mattel is using a(n) ____ targeting strategy for its groups, which are known as _____.

A) undifferentiated market; market segments
B) undifferentiated market; heterogeneous
C) differentiated; market segments
D) differentiated; the marketing mix
E) concentrated market; heterogeneous

Question 74

Smart Balance produces a line of milk products that are lactose-free. The milk comes in pint, quart, and half-gallon cartons, as well as 16-ounce glass bottles. Smart Balance sells its pint cartons to school systems, its quart and half-gallon cartons to grocery stores, and its glass bottles to vending machine operators. Smart Balance appears to use a(n) _____ strategy in marketing its product to a target market that is likely to be _______.

A) undifferentiated; homogeneous
B) undifferentiated; heterogeneous
C) differentiated; homogenous
D) differentiated; heterogeneous
E) concentrated; heterogeneous

Question 75

The first step in the target market selection process is

A) determining which segmentation variables to use.
B) selecting specific target markets.
C) identifying an appropriate targeting strategy.
D) evaluating relevant market segments.
E) developing market segment profiles.

Question 76

Eighteen-year-old students do not form a market for alcoholic beverages because they

A) lack sufficient buying power to form a market.
B) lack the authority to purchase this type of product.
C) do not want to purchase this type of product.
D) do not have sufficient experience with this type of product.
E) lack the money to purchase this type of product.

Question 77

When the needs of individual consumers in a target market for a specific product are similar and the organization can satisfy most customers with a single marketing mix, the best approach to use may be the ____ strategy.

A) undifferentiated
B) differentiated
C) segmented
D) concentrated
E) heterogeneous

Question 78

Most markets for products are made up of individuals or groups with diverse needs for products and are called ____ markets.

A) undifferentiated
B) concentrated
C) homogenous
D) differentiated
E) heterogeneous

Question 79

When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is using a(n) ____ strategy.

A) concentrated targeting
B) differentiated
C) heterogeneous market
D) undifferentiated
E) single mix

Question 80

Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs are classified as

A) market segments.
B) heterogeneous markets.
C) concentrated markets.
D) demographic segments.
E) strategic segments.