Chapter 4 – Understanding the Marketing Environment: Segmentation, Targeting, and
Positioning
TRUE/FALSE
1. STP marketing includes segmenting, targeting, and positioning.
2. Success from applying the STP framework is often short-lived.
3. If advertisers can’t reach a particular market segment with information, it’s probably not a very useful
segment.
4. Getting switchers to buy your brand ensures a new crop of loyal brand users.
5. Demographic segmentation is widely used in selecting target segments and includes basic descriptors
such as age, gender, race, and education.
6. Surprisingly, psychographic segmentation is refers not just to the inner mindset of consumers but also
to their lifestyles.
7. Advertising is not only used for consumer markets; businesses who market to other businesses use it
too.
8. Once a company matches what it can offer with what a target segment wants, the task of segmenting
has begun but is by not yet complete.
9. One reason to pursue niche marketing is that a company can often charge a premium price for its
product.
10. While a company may use a variety of themes in establishing a position, it should communicate only a
single theme within any one advertisement.
11. When formulating a positioning strategy, a multiple benefits to satisfy the target segment should be
considered.
12. State Farm’s “Like a good neighbor” ad campaign is an example of positioning consistency over the
long run.
13. One of the best ways to revive an ailing brand or fix a poor performance in a certain market is to
reposition the brand in the consumer’s mind – create a revised STP.
14. A brand’s value proposition is a statement of the benefits of the brand that provide value to its target
consumers and includes functional, emotional, and self-expressive benefits.
15. In an ad for Xootr adult motorized scooter the picture compares it to a child’s scooter and the tagline is
“Joy for toy.” This is an example of emotional, not functional benefit positioning.
MULTIPLE CHOICE
1. The act of representing one’s product so it will occupy a distinct place in the consumer’s mind is
known as ____.
a.
positioning
c.
segmentation
b.
targeting
d.
strategy
2. The STP approach is strongly recommended when markets are:
a.
homogenous with respect to consumer characteristics
b.
homogenous with respect to consumer needs
c.
diverse with respect to consumer needs
d.
not well understood by marketers
3. The purpose behind all efforts at market segmentation is to
a.
ensure that every product is unique.
b.
subdivide a large population into identical smaller segments
c.
find the largest market segment that will constitute 90 percent of your market share
d.
identify consumers that share common characteristics that will lead them as a group to
respond distinctively and positively to the right marketing program
4. The acronym STP stands for
a.
sales, targeting, and product.
c.
selling to parents.
b.
segmenting, targeting, and positioning.
d.
selling the product.
5. Choosing specific segments as the focal point for marketing efforts is
a.
differentiation.
c.
segmenting.
b.
positioning.
d.
targeting.
6. Aligning the marketing mix to yield distinctive approval for the target segment is
a.
differentiation.
c.
segmenting.
b.
positioning.
d.
targeting.
7. Folgers launched a new brand initiative called “Happy Mornings: the Revenge of the Yellow People.”
Using STP, they changed their brand positioning as part of a strategy that
a.
brings color to the brand reputation
b.
addresses a new target group in terms that are relevant to their lifestyles
c.
uses nostalgia for 1950’s monster movies to remind Boomers to drink their brand
d.
none of these statements explain what Folgers is doing with their new campaign
8. Segmenting consumers on the basis of product usage means describing consumers as
a.
nonusers vs. users
b.
loyalists vs. switchers
c.
light, medium and heavy users
d.
all of these are ways to categorize segments by usage
9. When segmenting markets based on consumers’ usage patterns, variety seekers as a segment are
characterized by
a.
the lowest level of opportunity for a firm to cultivate sales.
b.
buying what is on sale or choosing brands that offer discount coupons.
c.
a high level of repeat purchasing of the same brand.
d.
extra-enthusiastic purchasing behavior.
10. Descriptors such as age, gender, race, and marital status are widely used in
a.
demographic segmentation.
c.
soci-segmentation.
b.
psychographic segmentation.
d.
geo-segmentation.
11. One benefit of using demographic segmentation is that it
a.
incorporates the strengths of all the different segmentation methods.
b.
makes the process of selecting media vehicles easier.
c.
highlights the lifestyles of potential users.
d.
gives you insight into the motivations behind the use of the product.
12. Segmentation used in selecting target markets that includes basic descriptors such as age, gender, and
income is known as ____ segmentation.
a.
psychographic
c.
geographic
b.
behavioral
d.
demographic
13. A market niche is
a.
a competitive position that has little profitability for a firm.
b.
a relatively small group of consumers who have a unique set of needs and who typically
are willing to pay a premium price to a firm that specializes in meeting those needs.
c.
a market segment that a firm stole from a key competitor.
d.
a market strategy that positions the firm’s brand as close to the market leader as possible.
14. As marketing manager for a large company that publishes magazines, you have been put in charge of
positioning a new magazine for “woopies,” or well-off older people. You research the market and
make a recommendation to segment on the basis of some VALS information that you collected. You
are about to use
a.
usage pattern segmentation.
c.
geodemographic segmentation.
b.
demographic segmentation.
d.
psychographic segmentation.
15. “Careful cooks,” “down–home stokers,” and “functional feeders” are all examples of
a.
geopsychographic segmentation
c.
psychousage segmentation
b.
lifestyle segmentation
d.
benefit segmentation
16. ____ are those whose brand preferences are still under development and are likely to offer future
potential success for the brand.
a.
emergent consumers
c.
heavy users
b.
brand loyal users
d.
variety seekers
17. A package delivery company decides it wants to get into the flower delivery business. However, it
knows that FTD has a huge share of the market and can offer service worldwide. It decides to look for
a market niche. Which of the following is not an advantage of this strategy?
a.
The company may be able to charge more for its product.
b.
It may not be profitable for FTD to compete in the niche.
c.
The company’s market may be larger than FTD’s market.
d.
The company can still attempt to serve other segments.
18. When Mobil positioned itself as the “Friendly Serve” station, it had a number of good reasons for the
selection of its target market. Which one of the following is not one of them?
a.
The segment spent the largest amount of money at service stations.
b.
Mobil had the resources to provide the service that it promised.
c.
The segment was growing.
d.
The segment had the greatest number of people in it.
19. Effective positioning is based on:
a.
meaningful commitment of organizational resources
b.
focus on providing substantive value for the intended target
c.
simple and internally consistent over time
d.
all of these statements are part of a sound basis for positioning
20. When a company undergoes a repositioning, it depends on its advertising effort to
a.
make sure the position has substance.
b.
make sure consumers understand the theme behind its repositioning.
c.
reduce the size of the competitive field.
d.
select a target market.
21. The three fundamental positioning themes are
a.
demographic, psychographic, user.
c.
heavy user, light user, emergent user.
b.
benefit, functional, emotional.
d.
benefit, user, competitive.
22. The American Pork Producers association is running a campaign with the position “Pork. The other
white meat.” This is an example of
a.
lifestyle segmentation.
c.
benefit positioning.
b.
competitive positioning.
d.
demographic segmentation.
23. Benefit positioning often refers to the functional benefits the brand offers. What else can it refer to?
a.
there are no other kind of benefits
b.
powerful emotional benefits that differentiate the brand in situations where all the
competitors offer comparable functional benefits
c.
the perceived utilities set with which consumers interpret the brand’s messages
d.
insignificant benefits such as peace of mind or prestige benefits
24. Self expressive benefits can be the basis for effective positioning. With this approach the purpose is
a.
to create distinctive images or personality traits for the brand and then invite the consumer
into the brand’s community
b.
on benefit, user and competitive positioning, rather than emotional differentiation.
c.
on making a product that doesn’t compete directly with the competition.
d.
on identifying groups of customers that can be served in a specifically utilitarian way.
25. A value proposition fosters the most effective IMC strategies because it
a.
conveys knowledge of the target segment in an explicit statement of functional, emotional
and self-expressive benefits that client and agency can refer to
b.
articulates a distinctive personality for a brand
c.
links a brand with status or prestige
d.
identifies a brand with a social cause such as literacy
OBJ: 4-5
Scenario 4-1
Headquartered in Boston, The Gillette Company is the world leader in male grooming, a category that
includes blades, razors and shaving preparations. The Gillette Company announced the upcoming
launch of two new high-performance women’s razors, broadening the portfolio of the top-selling
Venus brand, the world’s most successful franchise in female shaving. The two new razors are Venus
Vibrance™, the first power wet shaving system for women, and Venus Disposable, a premium–
performing disposable razor. Both razors incorporate technological and design enhancements to better
address the specific shaving needs of women.
(http://www.gillette.com/women/product_news/gillette_introduces_two_new_razors.htm)
26. (Scenario 4-1) This effort by Gillette to capture the female market
a.
fits all the criteria of an STP effort.
b.
may or may not be an STP effort. To determine this, it is necessary to know whether Ford
has created sub-segments of these segments.
c.
May or may not be an STP effort. To determine this, it is necessary to know if all possible
segments are being targeted.
d.
cannot be considered an STP effort because Ford is targeting multiple segments.
27. (Scenario 4-1) According to the information provided here, Gillette has identified market segments
along ____ lines.
a.
benefit
c.
geographic
b.
usage pattern
d.
demographic
28. (Scenario 4-1) The position for any one segment should
a.
also hold an appeal for those outside the segment.
b.
be easily communicated to consumers.
c.
change occasionally to break through advertising clutter.
d.
be the same position selected for any other segments.
29. (Scenario 4-1) The philosophy behind Gillette’s efforts is based on
a.
benefit positioning.
c.
user positioning.
b.
market niche positioning.
d.
competitive positioning.
Scenario 4-2
Stronger income growth among upscale shoppers is fueling sales at the high end, while slow job
growth and higher energy costs are prompting more moderate-income consumers to search of bigger
bargains. No retail sector is more squeezed from both sides than the department-store chains, most of
which continue to lose sales to other retailers. That has opened the door for financier Edward S.
Lampert, 42, whose plans to merge Kmart Holdings and Sears could result in Sears vacating 200 to
300 of its 871 mall-based stores Overriding all this jostling is the biggest question in retail: whether the
planned merger of Kmart and Sears will work. The deal would accelerate Sears’ strategy to move off
the mall by taking some Kmart sites. The retailers believe, too, that they would benefit from cross–
selling some of their proprietary brands, like Kenmore appliances. (Robert Berner, “Retail’s Unhappy
Middle Ground,” Business Week Online, December 24, 2004.)
30. (Scenario 4-2) Sears promotes its Kenmore line with the phrase “The innovative side of Sears.” This
phrase should be a clear reflection of its
a.
target segment.
c.
market niche.
b.
AIO and VALS.
d.
positioning strategy.
31. (Scenario 4-2) Kenmore previously appealed to penny-conscious consumers who were in a position to
buy major appliances for the first time. When studying usage patterns, the members of this group are
referred to as
a.
emergent consumers.
c.
nonusers.
b.
novices.
d.
neophytes.
32. (Scenario 4-2) In designing the new line of Kenmore appliances, the new models are to appeal to a
more upscale user. If Sears chose to advertise an emotional benefit for the product,the most likely
reason would be that
a.
appliances are a mature product category, and thus it would be hard to differentiate the
product based on functionality.
b.
consumers don’t usually consider functional benefits when choosing appliances.
c.
the competition is also using emotional benefits.
d.
consumers more readily accept emotional benefits.
33. (Scenario 4-2) One of Sears’s goals in the redesign of the Kenmore line is that it wants to change the
way consumers think about appliances. This statement suggests that Sears is following a(n) ____
strategy.
a.
STP
c.
supplemental
b.
benefits sought
d.
product differentiation
Scenario 4-3
El Sol sunglasses were designed by an avant-garde artist. She said there were no sunglasses out there
that she would wear, so she had to design her own. Her sunglasses were worn by a whacked-out bad
guy in a blockbuster movie and, because of this, have acquired a cult following among young teens.
Print advertisements are visually sparse—nothing more than a still shot from the movie and a logo for
the brand.
Eyewake sunglasses were designed by an optician after he realized that conventional sunglasses
allowed in certain types of light that promoted eye fatigue. He made 1,000 of his sunglasses and gave
100 of them away to friends and acquaintances. After trying them out for awhile, several of them told
him that they really liked them when they had to drive for extended lengths of time. He placed an ad in
the back of a tourism magazine, extolling the safety benefit of driving with eyes that weren’t fatigued.
He promptly sold all of his remaining glasses.
Kushyspecs sunglasses were developed after research revealed that there was a small group of people
who didn’t like wearing sunglasses because most sunglasses left pinch marks on their noses. The
company that performed the research developed sunglasses with a soft, cushiony nose piece.
Advertisements for Kushyspecs feature the headline “The mark of a good pair of sunglasses is no mark
at all.”
34. (Scenario 4-3) Which of these brands of sunglasses was positioned through a product differentiation
strategy?
a.
El Sol
c.
El Sol and Kushyspecs
b.
El Sol and Eyewake
d.
Eyewake, and Kushyspecs
35. (Scenario 4-3) Which of these brands of sunglasses has a target audience selected on the basis of usage
patterns and commitment levels?
a.
El Sol
c.
Kushyspecs
b.
Eyewake
d.
None of the brands
36. (Scenario 4-3) Which of these brands of sunglasses uses benefit positioning in its advertisements?
a.
El Sol and Eyewake
c.
Kushyspecs
b.
Eyewake
d.
El Sol, Eyewake, and Kushyspecs
37. (Scenario 4-3) Which of these brands of sunglasses uses competitive positioning in its advertising?
a.
El Sol
c.
Kushyspecs
b.
Eyewake
d.
None of the brands
38. (Scenario 4-3) Which of these brands of sunglasses relies on emotional differentiation?
a.
El Sol
c.
Kushyspecs
b.
Eyewake
d.
El Sol and Eyewake
Scenario 4-4
Keds is trying to turn around a long-term slide in its shoe business. For years, it had depended on its
image as the women’s no-frills summer shoe to keep sales moving. However, as of late, competition
from Sam & Libby and Easy Spirit brands have been nipping at the heels of Keds. As part of its effort
to revitalize the brand, Keds’ advertising agency has developed a campaign that focuses on the warm,
close relationships between mothers and daughters. According to Brandweek magazine, “The new ads
really go for the heart.” Copy on the first ad includes, “She was my first, I could never tell her how to
dress,” with the daughter saying, “She made me feel pretty even when I had braces.”
39. (Scenario 4-4) Why should Keds not define its target segment simply as “women” instead of “mothers
and daughters?”
a.
It is poorly defined and gives no indication about their orientations as consumers.
b.
It is not a niche.
c.
Typically, media cannot be selected on demographic criteria.
d.
Other companies are established in this segment.
40. (Scenario 4-4) Which segmentation technique would provide the most insight for Keds’s advertising
agency in the creation of its advertisements?
a.
Demographic
c.
Geographic
b.
Usage pattern
d.
Lifestyle
41. (Scenario 4-4) For Keds’s positioning to have the best chance at success, it
a.
should be targeted at the segment that spends the most on its product.
b.
must be internally and externally consistent.
c.
must communicate a promise the company can truly deliver on
d.
cannot suggest too many different compelling benefits to the user.
42. (Scenario 4-4) The theme of the advertisements that Keds is running uses
a.
competitive positioning.
c.
benefit positioning.
b.
niche positioning.
d.
user positioning.
OBJ: 4-4
Scenario 4-5
Jay and Carrie Garrett operate a small retail store in a college town that sells only house plants and
accessories called The Plantatarium. Their initial feeling when they went into business was that
virtually everyone was a potential customer for house plants. Subsequent market research conducted
for them painted a different picture. This research identified three particularly strong market segments.
The first was college students ages 18-24. The next segment was retired seniors ages 65-80. The third
segment was professional offices for doctors, accountants, and lawyers. The college students liked
houseplants because they dressed up their living spaces. The senior liked them because they became
the focus of a hobby. The professionals did not buy them for any other reason than décor.
43. (Scenario 4-5) The Plantatarium promotes itself in different media using the phrase “An out of this
world selection of unique plants.” This phrase is a reflection of the firm’s ____.
a.
target market
c.
VALS profile
b.
positioning strategy
d.
demographics
44. (Scenario 4-5) The owners of this business have decided to carry a great deal of plants that flower
throughout the year because most consumers have said they like them for the cheerful feeling they
give. This suggests that The Plantatarium is following a ____ strategy.
a.
STP
c.
psychographic segmentation
b.
benefit segmentation
d.
positioning
45. (Scenario 4-5) A few customers told the owners of the Plantatarium that they would like to see them
carry a few varieties of cactus. The Garretts decided to devote a small corner of their store exclusively
to cacti. These customers constitute an example of a ____.
a.
demographic segmentation
c.
market niche
b.
psychographic segmentation
d.
positioning
46. (Scenario 4-5) In order to capture the ____ in the market, the Plantatarium offers a punch card that
rewards buyers with a $10.00 discount each time they have purchased over $150.00 of plants from the
store.
a.
emergent consumers
c.
variety seekers
b.
heavy users
d.
market niches
Scenario 4-6
Madison State University has a reputation for having a powerful intercollegiate coed bowling team.
Seating in the campus bowling alley only allows for 400 fans to attend any of their matches. Long
lines for seats have formed in the past with many fans leaving disappointed because they could not get
a ticket. As a result, the school’s administrators decided to institute a “priority seating” plan where fans
would be given access to advance tickets based on the following schedule:
• “Lanemaster Club” – $10,000 annual donation to the bowling program – guaranteed free box seats
to any match (100 seats total)
• “Strike Club” – $1,000 annual donation to the bowling program – guaranteed free bleacher seats
to any match (100 seats total)
• “Kingpin Club” – participants in local recreation bowling leagues – guaranteed bleacher seats for
$10.00 to any match (100 seats total)
• “Pinhead Club” – students who have maintained a 3.9 GPA or better – guaranteed bleacher seats for
$1.00 to any match (100 seats total)
47. (Scenario 4-6) In marketing material that is used by the team to attract fans, the slogan “Two hours of
down-home, wholesome fun” is used to attract ticket-buyers. This philosophy is an example of ____
segmentation.
a.
benefit
c.
geodemographic
b.
demographic
d.
niche
48. (Scenario 4-6) Each summer, the MSU Athletic Director chooses certain high income neighborhoods
to walk through and knock on doors to encourage those people to join the Lanemaster Club. This is an
example of a ____ segmentation strategy.
a.
psychographic
c.
demographic
b.
geodemographic
d.
geographic
49. (Scenario 4-6) There is a group of 30 students that have earned 3.9 GPA or better that have attended
every match for nearly four years. These students would best be described as ____.
a.
nonusers
c.
switchers
b.
emergent consumers
d.
heavy users
50. (Scenario 4-6) With the “priority seating” plan, the bowling team is attempting to encourage bowling
aficionados to come watch the team in action. This is an example of ____ segmentation.
a.
lifestyle
c.
usage
b.
geographic
d.
demographic
ESSAY
1. Using a product that you have used in the past week as an example, explain the difference between
segmenting and targeting in the STP approach to marketing.
2. Imus Brothers Coffee, distributed by Fred and his radio disc jockey brother Don Imus’ mail order
company, makes ground coffee and has targeted heavy users in the past. However, it is considering
switching to college students. It is considering switching target segments even though this group is
comprised largely of people who have just started to drink coffee and don’t consume anywhere near as
much as the heavy users. What are the disadvantages of the heavy-user strategy? What is the term used
to describe the college students the company is considering targeting? What are the advantages of
targeting this college student segment?
3. Describe the principle known as niche marketing. What are the competitive advantages of marketing to
a niche?
4. For Kraft, the South Beach deal seems an admission that the diet – – linked with celebrity dieters such
as Bill Clinton, Bette Midler and Nicole Kidman — may be a bigger consumer draw currently than the
Kraft name. The South Beach Diet book, by cardiologist Arthur Agatston, has sold more than 8 million
copies. Among Kraft products that will carry the South Beach diet seal of approval is Jello. (Bruce
Horvitz, “Kraft gets South Beach diet’s seal of approval; New labels part of deal to keep waist
watchers buying,” USAToday.com, September 27, 2004.)
To maximize Jell-O’s chances for success, describe the general characteristics its new position should
possess.
5. Define and explain the importance of the value proposition in brand promotion.