1. How do business markets differ from consumer markets?
Chapter 5 – Target Markets: Segmentation and Evaluation
2. What are the conditions under which an undifferentiated targeting strategy is effective? Why are these conditions
essential?
3. What are the major steps of the target market selection process?
Chapter 5 – Target Markets: Segmentation and Evaluation
4. Compare and contrast the concentrated and differentiated targeting strategies of market segmentation.
Chapter 5 – Target Markets: Segmentation and Evaluation
5. Would a person’s political views be an effective variable in the process of market segmentation? Why or why not?
Chapter 5 – Target Markets: Segmentation and Evaluation
6. Identify the four major categories of segmentation of variables for consumer products, and give one example for
each of these variables.
Chapter 5 – Target Markets: Segmentation and Evaluation
7. Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?
Chapter 5 – Target Markets: Segmentation and Evaluation
8. What are the variables involved in the process of segmenting business markets?
Chapter 5 – Target Markets: Segmentation and Evaluation
9. What are the three major issues that need to be considered in the process of evaluating market segments?
10. Define market potential. Explain the various factors that affect the same.
Chapter 5 – Target Markets: Segmentation and Evaluation
11. Distinguish between the breakdown and buildup approaches to assess company sales potential.
12. Why is it important for marketers to assess competitors before entering a market segment?
Chapter 5 – Target Markets: Segmentation and Evaluation
13. Discuss the difference between sales forecasts and company sales potential. Why is it important for a marketer to
be able to forecast sales?
14. Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.
Chapter 5 – Target Markets: Segmentation and Evaluation
15. Why would a firm survey its sales force to forecast company sales? Why would it choose an expert forecasting
survey?
16. A group of individuals and/or organizations that have desire or needs for products in a product class and have the
ability, willingness, and authority to purchase those products is a:
a. business market.
b. market.
c. undifferentiated market
d. segmented market
e. market variable
Chapter 5 – Target Markets: Segmentation and Evaluation
17. Which of the following is not a characteristic of a consumer market?
a. It consists of purchasers who intend to consume or benefit from the purchased products.
b. Purchasers do not buy products for the main purpose of making a profit.
c. It is sometimes referred to as B2C markets.
d. The purchasing decisions of a consumer market are always made by only one individual.
e. Purchasers may buy the product but not use it themselves.
18. Which of these statements is not true about business markets?
a. The purchase may be made to resell the item.
b. The purchase is always made by more than one individual.
c. The purchase may be made to use in general daily operations.
d. The purchase may be made to use in production of another product.
e. These markets can also be referred to as organizational markets.
Chapter 5 – Target Markets: Segmentation and Evaluation
19. Which of the following is not a requirement or characteristic of a market?
a. The ability to purchase a product
b. A large number of people or organizations
c. The authority to buy a product
d. The willingness to use buying power
e. The need for a specific product in a specific product category
20. In order to be considered a market, people do not require:
a. a need or desire for a particular product.
b. the ability to purchase the product.
c. an organization of their own to purchase the product.
d. the willingness to use their buying power.
e. the authority to buy the specific products.
Chapter 5 – Target Markets: Segmentation and Evaluation
21. Miaispetsittingforafriend’sdogwhileheisonvacation.HerfriendhasgivenMiaallsortsofinformation,
includingtheveterinarian’snameandphonenumber,petemergencycenterlocation,andthedog’sfavoritebedtime
snack.Thefirsteveningofthevacation,Miarealizesthatherfrienddidnotbringthedog’sfoodover,andshehas
noideawhatthedogeats.Herfriend’scellphoneis“outofrange”atthemoment,soMiamustgotothegrocery
store and shop for dog food, even though she has never bought it before now. In this case, even though Mia is not a
dog owner, she is likely to be part of the market for dog food for all of the following reasons except _____.
a. she has the authority to purchase the dog food.
b. she possesses the buying power for purchasing dog food.
c. she has the need or desire for dog food.
d. her ability to purchase the dog food is questionable.
e. she is willing to use her buying power.
22. Jack has just joined a law firm as its purchasing agent for all supplies, equipment, and service contracts. In his
previous position at another company, Jack could make decisions for any purchase up to $1 million; however, at the
new law firm, he can only make decisions for purchases less than $500,000. Recently, Jack has been working with
asalesrepresentativefromacomputersoftwarefirmaboutacontractforanewprogramtoprocessthefirm’s
billing statements. Jack signs the contract, even though it is for $950,000. In this case, Jack _____ part of the
market for the software because _____.
a. is; he has very little buying power.
b. is; has the need for the software.
c. is not; heiswillingtospendthefirm’smoney.
d. is; he has the desire for the software.
e. is not; he does not have the authority to purchase.
Chapter 5 – Target Markets: Segmentation and Evaluation
23. Generally speaking, individuals who are unemployed would not be considered a target market for lawn care
services because:
a. they would not desire such products.
b. they would not be willing to purchase such products.
c. they would not have the ability to purchase such products.
d. such markets are narrowly defined geographically.
e. they would not be authorized to purchase such products.
24. Eighteen-year-old students do not form a market for alcoholic beverages because they:
a. lack sufficient buying power to form a market.
b. lack the authority to purchase this type of product.
c. do not want to purchase this type of product.
d. do not have sufficient experience with this type of product.
e. lack the money to purchase this type of product.
25. Prodigy Placement is a private elementary school located in the center of Manhattan. Students at the school are
considered in the top 1% of their age group in terms of IQ scores and aptitude. Parents who want to send their
children to the school must get on a waiting list as soon as the child is 12 months old and must make a deposit of
$5,000totheschoolinordertoholdthechild’s“application”untiltheyreachtheageof5years.Emma’sparents
put her on the waiting list at the age of 1 year and paid the deposit; however, when Emma turned five, she did not
want to attend the school although she tested above the requirement. Her parents made the decision to enroll her
for the upcoming school year. In this case, Emma _____ part of the market for Prodigy Placement, and her
parents _____ part of the market:
a. was; were; because Emma needed to attend school.
b. was; were; because Emma had the authority to attend the school.
c. was; were; because they had the authority.
d. was not; were; because Emma lacked the desire.
e. was not; were; because Emma lacked the authority.
26. The first step in the target market selection process is:
a. determining which segmentation variables to use.
b. selecting specific target markets.
c. identifying an appropriate targeting strategy.
d. evaluating relevant market segments.
e. developing market segment profiles.
Chapter 5 – Target Markets: Segmentation and Evaluation
27. To find a target market, a firm can use the:
a. total market strategy and the undifferentiated strategy.
b. product differentiation strategy and the customer differentiation strategy.
c. demographic strategy and the psychographic strategy.
d. socioeconomic strategy and the psychological strategy.
e. undifferentiated strategy, the concentrated strategy, and the differentiated strategy.
28. The Pillsbury Company defines all individual consumers who are purchasers of flour as its target market. It also
defines all businesses that purchase flour as its target market. Which targeting strategy would be most appropriate
in this case?
a. Concentrated
b. Undifferentiated
c. Wide appeal
d. Differentiated
e. Clustered
Chapter 5 – Target Markets: Segmentation and Evaluation
29. When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company
is using a(n) _____ targeting strategy.
a. concentrated targeting
b. differentiated
c. heterogeneous market
d. undifferentiated
e. single mix
30. Why would a company use the undifferentiated strategy?
a. The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy
them.
b. The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market.
c. The needs of individual consumers in the target market for a specific product are similar, so the organization
can satisfy most customers with a single marketing mix.
d. The undifferentiated strategy is expensive to implement but tends to produce the most sales.
e. The undifferentiated strategy requires less time and fewer resources.
Chapter 5 – Target Markets: Segmentation and Evaluation
31. When the needs of individual consumers in a target market for a specific product are similar and the organization
can satisfy most customers with a single marketing mix, the best approach to use may be the _____ strategy.
a. undifferentiated
b. differentiated
c. segmented
d. concentrated
e. heterogeneous
32. Which of the following statements about the undifferentiated targeting strategy is false?
a. The undifferentiated targeting strategy should be used when the needs of individual customers are similar.
b. The undifferentiated targeting strategy uses one promotional program aimed at everyone in the target
market.
c. The undifferentiated targeting strategy is good for use with staple items, such as sugar and salt.
d. The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the
target market.
e. The opposite of the undifferentiated targeting strategy is the differentiated targeting strategy.
Chapter 5 – Target Markets: Segmentation and Evaluation
33. The ProMark Company manufactures a pencil that is about five inches long and has no eraser. It sells the product
primarily to golf courses and universities. Which of the following targeting strategies has been implemented by this
company?
a. Extensive targeting strategy
b. Concentrated targeting strategy
c. Undifferentiated targeting strategy
d. Intensive targeting strategy
e. Differentiated targeting strategy
34. The producers of C & H Cane Sugar sell the product in five-pound bags, one-pound bags, and one-pound boxes.
When developing its advertising strategy, C & H will most likely use a(n) _____ approach in defining a target
market.
a. undifferentiated
b. differentiated
c. product strategy
d. cost-benefit
e. demographic
Chapter 5 – Target Markets: Segmentation and Evaluation