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Chapter 5 Customers, Segmentation, and Target Marketing
MULTIPLE CHOICE
1. The consumer buying process begins when:
a.
marketing research discovers a new, untapped market segment.
b.
consumers recognize that they have unsatisfied needs.
c.
merchants offer goods and services for sale.
d.
a manufacturer develops a new product.
e.
consumers begin to seek information about an upcoming purchase.
2. From the viewpoint of the consumer buying process, what is the difference between a need and a
want?
a.
Needs are absolute necessities, whereas wants are discretionary.
b.
Needs are related to specific products, whereas wants occur only when the consumer has
the ability to purchase the product.
c.
Needs are based on discrepancies between actual and desired satisfaction, whereas wants
occur relative to specific products that can fulfill a need.
d.
Needs focus on specific elements of a product’s quality, whereas wants are related to the
“extras” that add value to the product.
e.
Needs and wants are essentially the same, except that consumers will pay more for
products they need.
3. With respect to the consumer buying process, __________ is perhaps the most important factor that
affects the time, effort, and expense dedicated to the search for information.
a.
the degree of risk
d.
the degree of competition
b.
the consumer’s expertise
e.
the extent of product differentiation
c.
the consumer’s brand loyalty
4. If a researcher were to ask consumers to quickly name the top 3 brands of computers they might
consider purchasing, the most common brands in the __________ would most likely be Dell, Apple,
and HP.
a.
brand set
d.
target group
b.
purchase set
e.
shopping list
c.
evoked set
5. After enrolling in the MBA program at Minor State University, Sheri began having second thoughts.
Although MSU seemed to be a good choice based on location, reputation, and price, Sheri was not
convinced she had made the right choice. Sheri is suffering from:
a.
too many opportunity costs.
d.
cognitive dissonance.
b.
dissatisfaction.
e.
poor product quality.
c.
choice insufficiency.
6. __________ is/are the primary reason why the consumer buying process varies across customers,
products, and situations.
a.
Individual influences
d.
Social influences
b.
Situational influences
e.
The complexity of the purchase
c.
The cost of the product
7. Each of the following statements describes a unique characteristic of the business buying process
EXCEPT:
a.
Business buyers have an easier time identifying their needs as compared to consumers.
b.
Business buyers must be keenly aware of both hard and soft costs.
c.
Groups of people, rather than individuals, often make purchase decisions.
d.
Business buyers are less likely to be dependent upon each other.
e.
Business buying is sometimes based on reciprocity where each firm buys products from
the other.
8. The basic assumption of __________ is that all customers in the market have similar needs and wants
that can be reasonably satisfied with a single marketing program.
a.
holistic marketing
d.
focused marketing
b.
mass marketing
e.
single segment marketing
c.
market concentration
9. The main advantage of __________ is specialization, as it allows the firm to focus its resources toward
understanding and serving a single segment.
a.
focused marketing
d.
multisegment marketing
b.
unidimensional marketing
e.
market concentration
c.
mass marketing
10. Firms that sell luxury products, custom-made products, and services often take the time to significantly
modify their products in an effort to precisely match the needs of individual customers. These firms
are pursuing what type of approach to market segmentation?
a.
individualized marketing
d.
focused marketing
b.
niche marketing
e.
one-to-one marketing
c.
pinpointed marketing
11. Advances in supply chain management now allow companies to customize products to meet the needs
of individual customers on a mass scale. This individualized approach to market segmentation is
called:
a.
individualization.
d.
customized marketing.
b.
one-to-one marketing.
e.
permission marketing.
c.
mass customization.
12. Which of the following IS NOT an example of mass customization?
a.
A college creates a custom degree program to match your unique needs.
b.
A customer orders a custom teddy bear from Build-A-BearWorkshop.com.
c.
Dell offers fully customized computers based on your needed configuration.
d.
A bank employee logs into the e-procurement system to browse a fully customized catalog
of office supplies.
e.
You order a customized vase of flowers from 1-800-Flowers.com.
13. Although a market segment can meet all criteria for viability, a firm may choose to not pursue the
segment. Which of the following is a reason why this might occur?
a.
A competitor has already targeted the segment.
b.
Targeting the segment could lead to antitrust concerns.
c.
The segment has no synergy with the firm’s mission.
d.
The segment is difficult to reach via communication and/or distribution.
e.
The segment’s members are not easily identifiable.
14. __________ segmentation is the most powerful form of segmentation in consumer markets because it
uses actual product usage to make distinctions among market segments.
a.
Demographic
d.
Lifestyle
b.
Behavioral
e.
Geographic
c.
Psychographic
15. What is the key to using behavioral segmentation successfully in consumer markets?
a.
The firm must clearly link behavioral characteristics with risk profiles.
b.
The firm must clearly link behavioral characteristics to demographic characteristics.
c.
The firm must determine whether consumers see their behaviors as being distinct from
other behavioral segments.
d.
The firm must clearly link behavioral information with geography.
e.
The firm must clearly understand the basic needs and benefits sought by different
consumer groups.
16. What type of segmentation divides consumer markets into segments using individual factors such as
gender, age, income, and education?
a.
psychographic segmentation
d.
behavioral segmentation
b.
demographic segmentation
e.
lifestyle segmentation
c.
benefit segmentation
17. One of the most successful and well-known tools of __________ segmentation is VALS™ developed
by Strategic Business Insights.
a.
psychographic
d.
geoclustering
b.
geographic
e.
emotional
c.
demographic
18. Which of the following IS NOT a typical basis used to segment business markets?
a.
type of organization
d.
organizational culture
b.
organizational characteristics
e.
relationship intensity
c.
benefits sought
19. Firms engage in __________ when their intimate knowledge and expertise in one market allows them
to offer customized marketing programs that not only deliver needed products but also provide needed
solutions to customers’ problems.
a.
single segment targeting
d.
product specialization
b.
market specialization
e.
mass market targeting
c.
selective targeting
20. Only the largest firms can execute __________, which involves the development of multiple
marketing programs to serve all customer segments simultaneously.
a.
single segment targeting
d.
product specialization
b.
market specialization
e.
mass market targeting
c.
selective targeting
ESSAY
1. Identify and explain the five stages of the consumer buying process. Give examples of marketing
activities designed to influence each stage.
ANS:
2. Although the stages of the consumer buying process are typically discussed in a linear fashion,
consumers do not always follow the stages in sequence. Explain why this often occurs.
ANS:
The consumer buying process involves five stages of activities that consumers may go through in
buying goods and services. The process begins with the recognition of a need and then passes through
the stages of information search, evaluation of alternatives, purchase decision, and postpurchase
evaluation. The buying process depicts the possible range of activities that may occur in making
purchase decisions. Consumers, however, do not always follow these stages in sequence and may even
skip stages en route to making a purchase. Likewise, consumers who are loyal to a product or brand
will skip some stages and are most likely to simply purchase the same product they bought last time.
Consequently, marketers have a difficult time promoting brand switching because they must convince
these customers to break tradition and take a look at what their products have to offer.
3. Describe how the business buying process differs from the consumer buying process. Include an
explanation of the unique characteristics of business markets.
ANS:
Business markets differ from consumer markets in important ways. One of the most important
differences involves the consumption of the purchased products. Consumers buy products for their
personal use or consumption. In contrast, organizational buyers purchase products for use in their
operations. These uses can be direct, as in acquiring raw materials to produce finished goods; or
indirect, as in buying office supplies or leasing cars for salespeople. There are four types of business
markets: commercial markets, reseller markets, government markets, and institutional markets. These
markets differ from consumer markets in at least four major ways.
4. Identify and discuss the various traditional market segmentation strategies. Include in your answer a
discussion of the relative advantages and disadvantages of each strategy.
ANS:
Many segmentation approaches are traditional in the sense that firms have used them successfully for
decades. Many of today’s most successful firms use these tried-and-true approaches. Some
organizations actually use more than one type of segmentation, depending on the brand, product, or
market in question.
5. Explain the five different target marketing strategies and give examples of firms that use each one.
Also, discuss how firms might approach the targeting of noncustomers.
ANS:
Once the firm has completed segmenting a market, it must then evaluate each segment to determine its
attractiveness and whether it offers opportunities that match the firm’s capabilities and resources. Just
because a market segment meets all criteria for viability does not mean the firm should pursue it.
Attractive segments might be dropped for several reasons including a lack of resources, no synergy
with the firm’s mission, overwhelming competition in the segment, an impending technology shift, or
ethical and legal concerns over targeting a particular segment. Based on its analysis of each segment,
the firm’s current and anticipated situation, and a comprehensive SWOT analysis, a firm might
consider five basic strategies for target market selection.
