Question 1

Abercrombie & Fitch opens a new store 20 km away from your house.You really like their clothes so you're happy to drive 20 km to shop there.Then another new Abercrombie & Fitch opens up right by your house so you don't have to drive as far to shop there.The A&F that was 20 km away has essentially lost a repeat customer-you-and likely others in your neighbourhood.What is the first A&F store likely experiencing?

Accepted Answer

The first A&F store is likely experiencing cannibalization, as the opening of a new store closer to the customer's house has resulted in a loss of demand for the farther away store. The new store is essentially taking sales away from the original store.

Question 2

A mass marketer,such as Walmart,targets the entire consumer market with a common marketing mix.What is Walmart's approach to segmenting?

Accepted Answer

Walmart's approach to segmenting is undifferentiated, as they target the entire consumer market with a common marketing mix. They do not differentiate their marketing mix to appeal to specific segments.

Question 3

Pharmaceutical firms have introduced new over-the-counter antacids that block the production of stomach acids while still marketing traditional antacids.Traditional antacids treat heartburn by neutralizing stomach acid.If sales of the new acid blockers reduce sales of the traditional antacids,what has occurred?

Accepted Answer

Cannibalization occurs when a new product reduces sales of an existing product within the same company. In this case, the introduction of the new acid blockers is likely to cannibalize sales of the traditional antacids as both products are used for the same purpose of treating heartburn.

Question 4

The difference between one-to-one marketing and customer relationship marketing can be compared to the difference between which of the following?

Accepted Answer

One-to-one marketing is like firing a rifle, where the marketing efforts are targeted to individual customers. Customer relationship marketing is like firing a shotgun, where the marketing efforts are aimed at a broader range of customers with the goal of building long-term relationships. Option A and B don't provide a clear comparison between the two concepts, and Option D is too extreme in describing the difference.

Question 5

Stouffer's offers gourmet entrees for one segment of the frozen dinner market,and Lean Cuisine for another segment that wants both good taste and low calories.When Stouffer's chose to serve two well-defined market segments and develop distinct marketing mixes for each,which of the following was it implementing?

Accepted Answer

Stouffer's is implementing multisegment targeting by developing distinct marketing mixes for two well-defined market segments.

Question 6

John Sichner,editor and publisher of Beverage Digest,a trade journal for beverage producers,wrote,"In this day and age,one product can't be the answer for all consumers." What was Sichner opposing the use of?

Accepted Answer

John Sichner's statement opposes undifferentiated targeting, which means targeting all consumers with the same product or marketing strategy. He is suggesting that in today's diverse market, one product cannot meet the needs and preferences of all consumers.

Question 7

Pharmaceutical firms market many brands of cold remedies with highly similar ingredients.The primary difference among the brands is their promotions that emphasize that various brands will treat different symptoms,such as runny noses,headaches,and fever.This is one way to practise which of the following?

Accepted Answer

Multisegment targeting involves marketing efforts directed at several distinct market segments, with a distinct marketing mix for each. In this case, pharmaceutical firms are targeting different segments of the cold remedy market (e.g., those primarily concerned with runny noses, headaches, or fever) with products that are essentially the same but marketed as being specialized for different symptoms.

Question 8

Tall Paul's Tall Mall designs and sells household furniture and furnishings to people who are over 6'6" tall-a rather small target market.Which targeting strategy does Tall Paul's Tall Mall use?

Accepted Answer

Tall Paul's Tall Mall is using a concentrated targeting strategy, which focuses on a narrow, specific segment of the market. In this case, the company is targeting people who are over 6'6" tall, which is a small and niche market. This strategy allows the company to tailor their products and marketing efforts to meet the specific needs and preferences of this target market, potentially leading to greater success and profitability.

Question 9

BigTime Productions Ltd.is an ambitious company with a tiny marketing budget.It has decided to spend its small-time budget on a niche market segment in the hopes of winning a big contract.Which strategy is BigTime practising?

Accepted Answer

BigTime Productions Ltd. is targeting a specific niche market segment, which is the definition of a concentrated strategy. This strategy focuses all company resources on a single, specific market segment in the hopes of dominating it. This is a common approach for small businesses with limited resources, like BigTime Productions, looking to achieve significant market penetration.

Question 10

With multisegment targeting,a company could benefit from all of the following EXCEPT which one?

Accepted Answer

Multisegment targeting involves targeting multiple segments of customers with different marketing strategies and products. This can lead to higher profits, economies of scale in manufacturing, and greater sales volume as each segment is effectively reached. However, it can also result in greater product design and management costs as the company must develop and maintain multiple products and marketing strategies to effectively target each segment. Therefore, D is the correct answer as it lists a potential drawback of multisegment targeting.

Question 11

Which strategy entails selecting one segment of a market to target,and focuses on understanding the needs,motives,and satisfactions of the members of that segment,as well as on developing a highly specialized marketing mix?

Accepted Answer

Concentrated targeting entails selecting one segment of a market to target, understanding their needs and developing a specialized marketing mix. Universal product involves offering the same product to everyone, market development involves expanding into new markets, and product development involves creating and modifying products based on customer needs.

Question 12

Your firm is producing a car battery that is safe to discard in normal household trash.All other batteries on the market contain chemicals that are harmful and that can pollute underground water supplies and should be discarded with caution.Which of the following marketing segmentation options might you choose?

Accepted Answer

The answer of Your firm is producing a car battery...

Question 13

You are the president of a new,capital-rich firm and you must decide on your firm's targeting approach.Three large subgroups exist in your market that have never had their unique needs served.If you don't act now,others will seize the opportunity.What should you use?

Accepted Answer

Since there are three distinct subgroups in the market with unique needs, a multisegment targeting strategy would be the best approach. This will allow the firm to tailor their marketing mix to each subgroup and capture a larger portion of the market. A concentrated or niche targeting strategy would only focus on one subgroup, potentially leaving the other two untapped. A single product with a concentrated strategy would also limit the potential market share of the firm. An undifferentiated strategy would not address the unique needs of each subgroup, resulting in a lack of market penetration.

Question 14

Which of the following old sayings do companies that adopt a concentrated marketing strategy violate?

Accepted Answer

Companies that adopt a concentrated marketing strategy violate the old saying "Don't put all of your eggs in one basket." This is because they focus their resources and efforts on a single market segment, product, or geographic location, which can be risky if something goes wrong in that specific area. Diversification is often recommended to spread out potential losses and minimize risks.

Question 15

Mirage Resorts in Las Vegas has a system that allows hotel clerk's instantaneous access to a client's gambling history to determine what sort of room or complimentary services will provide the guests with the highest level of service.What is the resort practising?

Accepted Answer

The resort is practising one-to-one marketing, which is personalized marketing that tailors specific products and services to individual customers by identifying their unique needs and preferences. This is evident in the hotel clerk's access to a client's gambling history to determine what sort of room or complimentary services will provide the guests with the highest level of service.

Question 16

What is one of the potential disadvantages associated with a multisegment strategy?

Accepted Answer

Multisegment strategy can sometimes result in cannibalization, where one product or segment reduces the sales of another product or segment within the same company. This can lead to lower profits and confusion among customers about the company's brand identity.

Question 17

A mobile home manufacturer has decided to add concession food trailers to its product line.If all the current competitors in that market use a Differentiated product market strategy,which strategy would make the LEAST sense for the manufacturer to implement?

Accepted Answer

Undifferentiated targeting strategy would not make sense for the manufacturer since all current competitors are using a Differentiated product market strategy. Undifferentiated targeting strategy means creating a single product and marketing it to the entire market without any customization or differentiation, which is not effectively competing against a differentiated market. The manufacturer would not be able to compete with its competitors if it did not differentiate its product. Therefore, multisegment targeting strategy, concentrated targeting strategy, or product differentiation strategy would all make more sense for the manufacturer to implement.

Question 18

Hampton Rojas produces and markets Orangeville peach preserves.He views the world as one big market with no individual segments and tries to reach it with only one marketing mix.His essentially mass-market philosophy indicates that he probably uses which strategy?

Accepted Answer

The fact that Hampton Rojas views the world as one big market with no individual segments and tries to reach it with only one marketing mix suggests he is using an undifferentiated targeting strategy, also known as mass marketing. This strategy involves ignoring individual market segments and attempting to appeal to as many people as possible with a single marketing mix.

Question 19

When Procter & Gamble (P&G)introduced Liquid Tide to a new segment,consumers in the traditional powdered detergent segment switched to the liquid product.Rather than real sales growth,P&G simply experienced the shifting of existing customers to a new product.This exemplifies a drawback of multisegment targeting strategy.What is it?

Accepted Answer

This situation exemplifies cannibalization, which occurs when a new product introduced to a company's product line captures sales from existing products, rather than generating new sales. In this case, Liquid Tide took sales away from traditional powdered detergent, rather than bringing in new customers or increasing overall sales. This is a drawback of multisegment targeting strategy because it can lead to cannibalization and ultimately hurt the company's overall revenue.

Question 20

What happens when a firm uses a concentrated targeting strategy?

Accepted Answer

A concentrated targeting strategy allows a firm to focus on a specific market segment with a highly specialized marketing mix. This enables the firm to cater to the unique needs and preferences of that segment, potentially leading to higher customer loyalty and profitability. Option A describes a mass marketing strategy, not a concentrated targeting strategy. Option C describes a differentiated targeting strategy, not a concentrated targeting strategy. Option D presents an incorrect statement because a concentrated targeting strategy actually does put all resources in one micromarket.

Quiz 6: Segmenting and Targeting Markets