Question 1

When a business has a relatively small number of customers, a preferred method of forecasting is

Accepted Answer

A customer forecasting survey is particularly effective for businesses with a small customer base, as it allows for direct feedback and predictions from the customers themselves, making the forecasting more accurate and tailored to the specific clientele.

Question 2

Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International Paper segments its market based on

Accepted Answer

International Paper segments its market based on the use of the product, specifically marketing newsprint to newspaper publishers and glass manufacturers that use it in packing. This indicates that the company is using a usage-based segmentation strategy.

Question 3

Intuition and expediency are primary characteristics of which of the following sales forecasting methods?

Accepted Answer

Executive judgment relies on the intuition and experience of top-level managers or executives to forecast sales. They use their knowledge and expertise to make informed predictions about future sales trends.

Question 4

When evaluating market segments, assessment of competitors is important because

Accepted Answer

Sales estimates may make a segment seem attractive, but competition may make it less lucrative. Understanding the level of competition in a market segment is essential for accurate assessment of sales potential and determining if a segment is worth pursuing.

Question 5

The buildup approach measure of sales potential

Accepted Answer

The buildup approach measure of sales potential starts with forecasts about demand for a specific product within a relatively small area. It considers factors like population demographics, consumer behavior, competition, and market trends to estimate the sales potential for a particular product in a particular area.

Question 6

Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have different needs for the steel and thus Bethlehem has to prepare the raw steel differently depending on how customers will use it in their production processes. The primary business segmentation variable in this example is

Accepted Answer

The primary business segmentation variable in this example is the product use, as the preparation of raw steel depends on how customers will use it in their production processes. Other variables like geographic location, customer size, customer importance, and organization classification may also be relevant but are not the primary segmentation variable in this context.

Question 7

The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the

Accepted Answer

Company sales potential refers to the maximum share or percentage of market potential that an individual firm can expect to capture or obtain for a specific product. This considers the company's resources, competition, and market conditions.

Question 8

The total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within a specified time period at a given level of industry-wide marketing activity, is the

Accepted Answer

The description given in the question is that of market potential, which refers to the total volume of a product or service that could be sold by all firms in a particular industry to a specific customer segment within a specified period of time, assuming a certain level of marketing efforts. Thus, the best choice is E, market potential. Choices A, B, C, and D are all related to specific sales goals, forecasts, or estimations for a particular company or its competitors, whereas market potential pertains to the entire industry rather than a single firm.

Question 9

If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United States, this percentage would represent the ice cream marketer's

Accepted Answer

The percentage represents the company's sales potential, which is the maximum share of the market that a firm can expect to capture for a specific product.

Question 10

The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the

Accepted Answer

The description given in the question best fits the definition of a sales forecast, which is an estimate of the amount of product a company expects to sell during a specific period at a specified level of marketing activity. The other choices, such as company sales potential, revenue estimate, company sales prediction, and market potential, may be related to sales forecasting but do not specifically refer to the estimation of expected sales at a certain level of marketing activity.

Question 11

Estimating the cost of entering a market and focusing on a specific target segment is important because

Accepted Answer

Estimating the cost of entering a market and focusing on a specific target segment is important because the organization's marketers need to know if they can reach the segment at costs equal to or below competitors' costs. This knowledge will help in making informed decisions about pricing, promotion, and other marketing strategies to successfully enter and compete in that market segment.

Question 12

Alex Wren of Owens Corning Fiberglass talks to Terry Jones, a homebuilder, to find out how much fiberglass insulation he intends to use in building homes during the next year. Albert then multiplies that number by the total number of builders in the territory. He is using a ____ approach to measure sales potential.

Accepted Answer

Alex Wren is using a buildup approach to measure sales potential, by multiplying the amount of insulation intended for use by one homebuilder by the number of builders in the territory. This is a common method used in sales forecasting.

Question 13

The final step in the target market selection process is

Accepted Answer

Selecting specific target markets is the final step in the target market selection process.

Question 14

General Electric calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's

Accepted Answer

Market potential is the total sales volume that all companies in a particular industry could achieve if every customer in the market purchased a product or service from them. Therefore, the given figure of 1 billion represents the industry's market potential.

Question 15

After an organization has determined which of the many segmentation variables it will use, the next step in the target market selection process is

Accepted Answer

After selecting segmentation variables, the next step is to develop market segment profiles to understand the characteristics and needs of each segment.

Question 16

When selecting specific target markets, a firm should

Accepted Answer

It is important for a firm to choose the segments that align with their objectives and long-term growth to ensure that they are targeting the right audience for their product or service. Choosing profitable segments is also important, but they should align with the overall objectives of the firm. Choosing the minimum number of segments necessary to achieve company sales potential may limit potential growth opportunities, and picking segments based solely on sales forecasts may not necessarily align with long-term objectives. So, option B is the most appropriate.

Question 17

The manager at a local recreational vehicle store, Off-Road Rage, believes the next two years will be difficult because of an economic recession. Using this forecast, he determines the effect on the industry's market potential and then estimates how his company's potential sales will look based on this outlook. This manager is using a ____ approach to estimating sales potential.

Accepted Answer

The manager is using a breakdown approach, which involves starting with the overall market potential and then estimating the company's potential sales based on that.

Question 18

Relying on executive judgment for forecasting may be adequate when

Accepted Answer

When the executive has considerable experience and product demand is relatively stable, relying on executive judgment for forecasting may be adequate as the executive can make knowledgeable assumptions based on past experiences and patterns. In other scenarios such as when competitor efforts vary or when demand is erratic, relying solely on executive judgment may not be sufficient and additional data and analysis may be necessary.

Question 19

____ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments.

Accepted Answer

Market segment profiles describe the similarities among potential customers within a market segment, such as demographic, geographic, psychographic, and behavioral characteristics. On the other hand, market differentiation indexes or concentration measures describe the differences between various market segments based on measures like market size, growth rate, and purchasing power. Segmentation grids are visual tools used to analyze and compare different market segments based on two or more criteria. Market segmentation variables are the criteria used to divide a market into distinct groups.

Question 20

Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments, they have completed competitive assessments and cost estimates. The next major step they must take is to

Accepted Answer

After completing competitive assessments and cost estimates for several segments, the next major step for Frito-Lay Snack Foods would be to select specific target markets. This involves evaluating the attractiveness of each segment and then deciding which ones to target based on factors such as market size, growth potential, and competitive environment. Once target markets have been selected, the company can then develop marketing strategies and sales forecasts for each one.

Quiz 6: Target Markets, Segmentation and Evaluation