115. Guess Inc. will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans.
These 30 million pairs represent the company’s:
a. sales potential.
b. market potential.
c. sales forecast.
d. market sales.
e. selected market.
116. The amount of product a company expects to sell during a specific period at a specified level of marketing activity
is called the _____.
a. company sales potential
b. revenue estimate
c. company sales prediction
d. market potential
e. sales forecast
Chapter 5 – Target Markets: Segmentation and Evaluation
117. Relying on executive judgment for forecasting may be adequate when:
a. levels of marketing efforts put forth by competitors vary considerably.
b. recent events give the executive specific impressions of product demand.
c. product demand is erratic.
d. the executive conducts surveys.
e. the executive has considerable experience and product demand is relatively stable.
118. Intuition and expediency are primary characteristics of the sales forecasting method of _____.
a. surveys
b. executive judgment
c. cycle analysis
d. market tests
e. industry indicators
Chapter 5 – Target Markets: Segmentation and Evaluation
119. Company sales forecasts are least likely to be based on:
a. executive judgment.
b. customer surveys or sales force surveys.
c. time series analysis.
d. market tests.
e. single-variable segmentation.
120. When a business has a relatively small number of customers, a preferred method of forecasting is _____.
a. regression analysis
b. trend analysis
c. the Delphi technique
d. a market test
e. a customer forecasting survey
Chapter 5 – Target Markets: Segmentation and Evaluation
121. The most important reason that a firm might use a sales force forecasting survey to determine its sales forecast is:
a. salespeople are generally optimistic about the future and will provide excellent forecast targets.
b. most salespeople tend to have a pessimistic outlook, which is more likely to result in an achievable sales
forecast.
c. this tends to be the fastest way to determine a good sales forecast for the upcoming period.
d. the averaging and other statistical techniques applied to these forecasts result in extremely accurate
numbers.
e. the sales staff is closer to the actual customers on a regular basis than anyone else in the organization.
122. When a company has its sales forecasts prepared by management consultants, economists, or college professors, it
is using a(n) _____.
a. expert forecasting survey
b. Delphi technique
c. random factor analysis
d. external judgment survey
e. market test
Chapter 5 – Target Markets: Segmentation and Evaluation
123. Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to:
a. allow an opportunity to obtain diverse expert opinions.
b. allow experts to work separately to reach a consensus as to their forecasts.
c. reach an accurate sales forecast through the use of multiple sales forecasting techniques.
d. determine if the expert forecasting survey is superior to regression analysis.
e. assess the extent to which this year’s sales forecast is more accurate than that of previous years.
124. The forecasting techniques that assume past sales patterns will continue into the future are all variations of:
a. regression analysis.
b. random factor analysis.
c. seasonal analysis.
d. time series analysis.
e. past sales forecasting surveys.
Chapter 5 – Target Markets: Segmentation and Evaluation
125. A forecasting method that predicts sales based on relationships between past sales and one or more independent
variables is called _____.
a. regression analysis
b. customer forecasting surveys
c. the Delphi technique
d. random factor analysis
e. time series analysis
126. Brian works for a manufacturer of sports equipment and is currently developing a company sales forecast for golf
clubs. While reviewing data, he discovered a pattern in sales volume over the past ten years that peaked during two
months of each year. Thus, Brian likely used _____ to forecast sales.
a. the Delphi technique
b. executive judgment
c. time series analysis
d. market tests
e. regression analysis
Chapter 5 – Target Markets: Segmentation and Evaluation
127. Katy Ramirez is a marketer for a company that produces in-ground swimming pools. When forecasting company
sales, she finds a direct association between past sales and per capita income. Which sales forecasting technique is
being implemented by Katy?
a. The Delphi technique
b. Executive judgment
c. Time series analysis
d. Market tests
e. Regression analysis
128. The sales prediction technique based on the correlation between sales and other factors such as population density,
per capita income, or family size is:
a. executive judgment.
b. time series analysis.
c. regression analysis.
d. a market test.
e. an expert survey.
Chapter 5 – Target Markets: Segmentation and Evaluation
129. The Sara Lee Company is attempting to forecast sales for a new ice cream cake. To come up with an accurate
forecast, Sara Lee places the product in Atlanta supermarkets for a period of four months. In this instance, Sara
Lee is the forecasting method of _____.
a. time series analysis
b. market test
c. executive judgment
d. regression analysis
e. survey
130. The sales forecasting method that involves making a product available to buyers in one or more test areas and
measuring purchases and consumer responses to the product, distribution, promotion, and price is called _____.
a. a market test
b. regression analysis
c. trend analysis
d. a survey
e. the Delphi technique
Chapter 5 – Target Markets: Segmentation and Evaluation
131. The forecasting method that utilizes a firm’s historical sales data to find patterns in the firm’s sales volume over time
is:
a. the regression method.
b. customer forecasting.
c. a market test.
d. sales force forecasting.
e. time series analysis.
132. DeShon has just become the new marketing analyst for a company that produces vinyl siding for homes. In an
effort to forecast his firm’s sales for the coming year, he needs to find where the greatest opportunities are for
selling his product. DeShon looks at the sales for the last five years and calculates a growth trend. He then collects
data from a combination of other factors, such as population density, family size, home ownership, and per capita
income. Finally, DeShon looks at the correlation between the sales trend data and the various combinations of
demographic data. DeShon is employing the _____ forecasting method for the sales growth trend and the _____
method for the correlation.
a. time series analysis; regression analysis
b. executive judgment; regression analysis
c. market tests; regression analysis
d. regression analysis; time series analysis
e. market tests; time series analysis
Chapter 5 – Target Markets: Segmentation and Evaluation
133. Which of the following sales forecasting techniques would generally be most suitable for estimating sales of a new
product?
a. Executive judgment
b. Customer surveys
c. Time series analysis
d. Market tests
e. Regression methods
134. Which of the following forecasting methods is least dependent on historical sales data?
a. Regression analysis
b. Trend analysis
c. Time series analysis
d. Cycle analysis
e. Market tests
Chapter 5 – Target Markets: Segmentation and Evaluation
135. What is the primary disadvantage of using a market test as a forecasting tool?
a. It is difficult to interpret.
b. It is expensive.
c. It is inaccurate.
d. It is unacceptable to consumers.
e. It is overused.
Scenario 5.1
Use the following to answer the questions.
Lil’ Angels Kids Spa offers various treatments designed to appeal to the younger customers. Treatment options
include manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party
package. Currently, Lil’ Angels offers its services only to girls under the age of 14. Originally begun in Delaware,
Lil’ Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings
to girls aged 14 to 17. The company realizes that some changes may be needed. For example, the management
wants to find out if the older girls will be interested in their birthday party and tea party services.
136. Refer to Scenario 5.1. Lil’ Angels Kids Spa is currently using a(n)_____ targeting strategy.
a. undifferentiated
b. exclusive
c. concentrated
d. differentiated
e. selective
Chapter 5 – Target Markets: Segmentation and Evaluation
137. Refer to Scenario 5.1. Which of the following best describes Lil’ Angels’ current approach to the market?
a. It is segmenting the market according to demographic variables.
b. It is segmenting the market according to product-related variables.
c. It has chosen a segment that is not identifiable and divisible.
d. Its market is impossible to reach because of legal constraints.
e. It is not segmenting the market but is attempting to reach everyone with the product.
138. Refer to Scenario 5.1. Which method should Lil’ Angels use to forecast sales in new regions?
a. Sales force survey
b. Time series analysis
c. Correlation method
d. Market test
e. Regression analysis
Chapter 5 – Target Markets: Segmentation and Evaluation
139. RefertoScenario5.1.Incalculatingthesalesforecastforthenextyear,marketersatLil’Angelsusedatafrom
the past five years in order to identify any trends that surface. Additionally, marketers want to find out what family
variables relate to those sales. Which of the following variables should the marketers use in relating to sales? What
type of forecast method will they implement to relate the variables to sales trends?
a. behavioristic; time series analysis
b. psychographic; time series analysis
c. demographic; regression analysis
d. income; regression analysis
e. family life cycle; market tests
Chapter 5 – Target Markets: Segmentation and Evaluation
Scenario 5.2
Use the following to answer the questions.
GE Transportation Corp produces locomotive engines for sale in countries around the world. After looking at the
total market for locomotive engines, the company found that various rail lines wanted different types of engines.
Major rail lines in the U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and
Germany were interested in a cleaner, greener locomotive engine. Rail lines operated by several Eastern European
countries wanted locomotive engines for running short distances between cities in their own country. GE
Transportation is currently manufacturing its GE 4400 for heavy freight, its Hybrid Eco-Engine, and its Dash 9,
suited for shortline transport.
140. Refer to Scenario 5.2. GE Transportation is most likely using a (an) _____ targeting strategy, segmenting by
_____ variables.
a. undifferentiated; benefit expectations
b. differentiated; benefit expectations
c. differentiated; volume usage
d. concentrated; volume usage
e. concentrated; geographic location
Chapter 5 – Target Markets: Segmentation and Evaluation
141. Refer to Scenario 5.2. Currently, GE uses several sales forecasting methods. One method is to sell the different
locomotive engines to buyers in different countries, and then measuring the purchasing response in each. In this
case, GE Transportation is using the _____ method to forecast future sales.
a. Delphi
b. market test
c. regression analysis
d. volume usage
e. trend analysis
142. Refer to Scenario 5.2. Suppose that GE Transportation decided to produce only locomotive engines for rail lines in
the United States. The segmentation variable then would be:
a. geographic location.
b. type of organization.
c. market density.
d. product use.
e. customer size.
Chapter 5 – Target Markets: Segmentation and Evaluation
143. Refer to Scenario 5.2. Researchers at GE Transportation estimate that 1,000 rail lines throughout the world will
purchase some kind of locomotive engine next year. That number represents the:
a. company sales potential.
b. breakdown approach.
c. market potential.
d. buildup approach.
e. company sales forecast.
144. Refer to Scenario 5.2. If a GE Transportation researcher analyzes monthly sales data for a four-year time frame,
looking for periodic fluctuations, the researcher is doing a _____ analysis.
a. trend
b. seasonal
c. cycle
d. random factor
e. regression
Chapter 5 – Target Markets: Segmentation and Evaluation
145. 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.
a. True
b. False
146. Individuals’ ability to buy depends on the amount of their buying power.
a. True
b. False
147. 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.
a. True
b. False
Chapter 5 – Target Markets: Segmentation and Evaluation
148. A person who has buying power also has the authority to buy.
a. True
b. False
149. 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.
a. True
b. False
150. There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the
concentrated targeting strategy.
a. True
b. False
Chapter 5 – Target Markets: Segmentation and Evaluation