Question 1

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

Accepted Answer

This condition for effective segmentation is true, as segmenting a market into groups with little or no profit potential would not be a worthwhile pursuit for a company. At least one segment should have the potential for generating substantial profits to make segmentation efforts worthwhile.

Question 2

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

Accepted Answer

Segmentation variables are used to divide a total market into smaller groups based on characteristics such as demographic, geographic, psychographic, and behavioral variables.

Question 3

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.

Accepted Answer

This statement accurately describes the four requirements of a market. Without these four factors, there may be no demand for the product or the ability to sell it.

Question 4

The four categories of consumer markets are producer, reseller, government and institutional.

Accepted Answer

The four categories of consumer markets are actually consumer markets themselves: demographic, geographic, psychographic, and behavioral. Producer, reseller, government, and institutional are categories of business markets.

Question 5

Only one variable can be used to segment a market.

Accepted Answer

While one variable can be used to segment a market, it is most effective to use multiple variables for a more detailed and accurate segmentation. Using just one variable can result in oversimplification and a failure to identify important subgroups within the market.

Question 6

A consumer market consists of buyers intending to use the product with the main purpose of making a profit.

Accepted Answer

A consumer market consists of individual buyers who purchase products for their own personal use, not for the purpose of making a profit. A market where buyers intend to make a profit is a business or commercial market.

Question 7

The five-step process usually used for target market selection includes identifying the appropriate targeting strategy, determining which segmentation variables to use, developing market segment profiles, evaluating relevant market segments and deciding which targeting strategy to use.

Accepted Answer

The answer of The five-step process usually used for target...

Question 8

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

Accepted Answer

There are actually three basic targeting strategies: undifferentiated, concentrated, and differentiated targeting.

Question 9

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

Accepted Answer

Demographic characteristics such as age, gender, income, education, and family size can provide valuable insights into consumer preferences and buying habits, making them useful for market segmentation. For example, younger consumers may have different product needs and preferences than older ones, and families with children may have different buying patterns than households without kids. By segmenting a market based on demographic characteristics, companies can tailor their marketing efforts and product offerings to better meet the specific needs of different customer groups.

Question 10

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

Accepted Answer

This is true. A company may choose to target the entire market or a specific segment within it, depending on their goals and resources.

Question 11

A person with the ability, willingness and authority to buy products and who intends to consume them is a part of a consumer market.

Accepted Answer

This is a correct definition of a consumer market, and therefore the statement is true.

Question 12

A person who has buying power also has the authority to buy.

Accepted Answer

The answer of A person who has buying power also...

Question 13

A firm using a concentrated targeting strategy aims its marketing activities at one segment of a market.

Accepted Answer

A concentrated targeting strategy involves focusing marketing efforts on a single, specific segment of a market.

Question 14

Marketers select and evaluate relevant market segments by understanding the market needs.

Accepted Answer

Marketers use various methods to identify the needs and wants of their target market, and then evaluate and select the most relevant market segments to serve. By understanding the market needs, they can create a marketing mix that addresses the specific requirements and preferences of the target customers.

Question 15

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.

Accepted Answer

This is the definition of a market.

Question 16

The undifferentiated strategy can be effective for an organisation that has a homogeneous market and that can develop and maintain a single marketing mix.

Accepted Answer

The undifferentiated strategy, also known as mass marketing, focuses on developing and maintaining a single marketing mix for a homogeneous market. This strategy can be effective for organisations that have a uniform customer base and do not need to segment their market into different groups. By targeting everyone with the same message and product, the organisation can save on marketing costs and reach a larger audience. However, this strategy has the inherent risk of being too generic and not meeting the specific needs of individual customers, leading to lower customer satisfaction and loyalty.

Question 17

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

Accepted Answer

The statement accurately describes the concentrated targeting strategy.

Question 18

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

Accepted Answer

A segmentation variable is used to divide a large market into smaller, more defined segments or groups based on certain characteristics or factors.

Question 19

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

Accepted Answer

An undifferentiated targeting strategy targets the entire market with a single marketing mix, ignoring any segment differences.

Question 20

A differentiated targeting strategy is used when an organisation targets two or more markets by developing a single marketing mix.

Accepted Answer

A differentiated targeting strategy involves developing separate marketing mixes for each target market, not a single marketing mix.

Quiz 6: Segmentation, Target Markets and Positioning