92. Alli segments its diet pills based on those who have morning cravings, those who tend to overeat near
the end of the day, those who need all day long appetite suppression, and those who want appetite
control and more energy. This is an example of market segmentation based on variables of
a.
demographics.
b.
lifestyles.
c.
psychographics.
d.
behavior.
e.
personality characteristics.
93. Crest toothpaste is available in several different versions, such as Crest Whitening, Crest Tartar
Control, Crest Whitening with mouthwash, and Crest Total Effects. Given these different variations of
the product, it appears that the marketers of Crest are segmenting the market by using ____
segmentation.
a.
behavioristic
b.
product usage
c.
benefit
d.
end-purpose
e.
advantage
94. Variables such as geographic location, type of organization, customer size, and type of product usage
are used to segment ____ markets.
a.
consumer
b.
business
c.
government
d.
international
e.
most target
95. Dell segments its business markets into small business, corporate, government agencies, K-12 schools,
and higher education institutions. The primary segmentation variable used in this example is
a.
geographic location.
b.
type of organization.
c.
secondary product use.
d.
customer size.
e.
market potential.
96. Which of the following variables would most likely be used to segment a business market?
a.
An attitude of the company’s CEO
b.
The geographic location of the company
c.
The lifestyle of the company’s buying agent
d.
Net income generated by the company
e.
Common opinions of the company’s employees
97. Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing,
International Paper segments its market based on
a.
customer size.
b.
psychographics.
c.
demographics.
d.
use of product.
e.
geographic location.
98. Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have different
needs for the steel and thus Bethlehem has to prepare the raw steel differently depending on how
customers will use it in their production processes. The primary business segmentation variable in this
example is
a.
geographic location.
b.
customer size.
c.
product use.
d.
customer importance.
e.
organization classification.
99. After an organization has determined which of the many segmentation variables it will use, the next
step in the target market selection process is
a.
evaluating each of the relevant market segments.
b.
selecting the specific target markets.
c.
reviewing the appropriate marketing strategy.
d.
analyzing the interaction between segmentation variables.
e.
developing market segment profiles.
100. ____ describe the similarities among potential customers within a market segment and explain the
differences among people in different market segments.
a.
Market segmentation variables
b.
Market segment profiles
c.
Segmentation grids
d.
Market differentiation indexes
e.
Market concentrations
101. Yvonne and Garret are looking at information about how their organization’s products could fit
potential customers’ needs. This information deals with demographic characteristics, product benefits
sought, lifestyles, geographic factors, brand preferences, and usage rates. They are most likely looking
at
a.
the sales force survey results.
b.
the results of sales forecasting.
c.
a market trend analysis.
d.
a market segmentation discrimination analysis.
e.
a market segment profile.
102. The total volume of a product, for all firms in an industry, that would be purchased by specific
customer groups within a specified time period at a given level of industry-wide marketing activity, is
the
a.
competitor sales potential.
b.
sales objective.
c.
forecasted sales.
d.
company sales potential.
e.
market potential.
103. The maximum percentage of market potential that an individual firm can expect to obtain for a specific
product is the
a.
sales forecast.
b.
market potential.
c.
company sales potential.
d.
company sales objective.
e.
market share goal.
104. General Electric calculates that the total number of light bulbs sold to consumers in the next year by all
light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure
represents the industry’s
a.
sales potential.
b.
market potential.
c.
target growth rate.
d.
sales forecast.
e.
sales objective.
105. If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the United
States, this percentage would represent the ice cream marketer’s
a.
target growth rate.
b.
sales forecast.
c.
sales objective.
d.
company sales potential.
e.
market potential.
106. Using the breakdown approach to sales potential, estimates are made
a.
by referring to specific geographic factors.
b.
by establishing levels of marketing effort that will be required to achieve specific levels of
sales.
c.
without reference to industry marketing efforts.
d.
without reference to general economic conditions.
e.
by starting with general economic conditions.
107. The manager at a local recreational vehicle store, Off-Road Rage, believes the next two years will be
difficult because of an economic recession. Using this forecast, he determines the effect on the
industry’s market potential and then estimates how his company’s potential sales will look based on
this outlook. This manager is using a ____ approach to estimating sales potential.
a.
breakdown
b.
recessionary
c.
buildup
d.
pyramid
e.
dimensional
108. Alex Wren of Owens Corning Fiberglass talks to Terry Jones, a homebuilder, to find out how much
fiberglass insulation he intends to use in building homes during the next year. Albert then multiplies
that number by the total number of builders in the territory. He is using a ____ approach to measure
sales potential.
a.
multivariable
b.
use of product
c.
breakdown
d.
regression
e.
buildup
109. The buildup approach measure of sales potential
a.
starts with broad estimates of general economic activity.
b.
ends with an estimate of a single firm’s sales of a specific product.
c.
starts with forecasts about demand for a specific product within a relatively small area.
d.
does not use sales estimates.
e.
is seldom employed by industrial firms.
110. When evaluating market segments, assessment of competitors is important because
a.
it is difficult to segment a market when it has multiple competitors.
b.
an absence of competitors usually creates difficulties in accurately measuring segment
sales potential.
c.
sales estimates may cause a segment to appear to be lucrative, but there may be several
competitors that together have a large share of that segment.
d.
a competitive analysis may lead to confusion as to who are the key competitors.
e.
competition is generally not a major problem as long as a marketer is aware of it.
111. Estimating the cost of entering a market and focusing on a specific target segment is important because
a.
cost estimates are crucial to estimating sales potential accurately.
b.
higher costs will keep other potential competitors from entering that particular segment.
c.
customers are more likely to be attracted to marketers that invest heavily in the target
segment.
d.
the organization’s marketers need to know if they can reach the segment at costs equal to
or below competitors’ costs.
e.
higher cost generally ensures long-term success.
112. The final step in the target market selection process is
a.
implementing the appropriate marketing mix for the target market.
b.
evaluating relative market segments.
c.
eliminating market segments that are cost prohibitive.
d.
selecting specific target markets.
e.
revising the final segmentation variables based on target selection.
113. Frito-Lay Snack Foods is currently conducting market segmentation studies. For several segments,
they have completed competitive assessments and cost estimates. The next major step they must take
is to
a.
determine which segmentation variables to use.
b.
develop market segment profiles.
c.
identify the appropriate targeting strategy.
d.
select specific target markets.
e.
develop sales forecasts.
114. Meghan would like to open a house cleaning business and is considering several market segments.
She has identified four segments for consideration; young, urban singles, young married professionals,
senior citizens, and college students. She has just completed an analysis of these four segments by
assessing such factors as sales estimates, competition, and estimated costs. Meghan is now ready for
the next step in the target market selection process, which is to
a.
identify the appropriate targeting strategy.
b.
determine which segmentation variables to use.
c.
develop market segment profiles.
d.
evaluate relevant market segments.
e.
select specific target markets.
115. When selecting specific target markets, a firm should
a.
revert to an undifferentiated approach if the market is deemed heterogeneous.
b.
choose the segments most in line with the firm’s objectives and long-term growth.
c.
choose all segments that are determined to be profitable for the organization.
d.
choose the minimum number of segments necessary to achieve company sales potential.
e.
pick the segments with the best sales forecasts for the upcoming period of time.
116. Evaluating and making product positioning decisions is important for
a.
new products only.
b.
existing products only.
c.
new and existing products.
d.
product deletions only.
e.
new products and product deletions.
117. PedigreeTM is a leading brand of dog food in the United States. Suppose the maker of PedigreeTM
decided to extend its line of products by offering a different version made with more natural
ingredients. PedigreeTM must be sure that its marketing communications distinctly position this
product (i.e., separate it from the other products in the line) or the result could be
a.
poor product positioning.
b.
product deletion.
c.
product repositioning.
d.
cannibalization.
e.
new-product failure.
118. Guess? 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.
119. 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.
120. 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.
121. Intuition and expediency are primary characteristics of which of the following sales forecasting
methods?
a.
Surveys
b.
Executive judgment
c.
Cycle analysis
d.
Market tests
e.
Industry indicators
122. 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.
123. 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.
124. 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.
125. 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.
126. 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.
127. 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.
128. A forecasting method that predicts sales based on relationships between past sales and other variables
is called
a.
regression analysis.
b.
customer forecasting surveys.
c.
the Delphi technique.
d.
random factor analysis.
e.
time series analysis.
129. 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. Brian likely used which sales forecasting
technique?
a.
the Delphi technique
b.
Executive judgment
c.
Time series analysis
d.
Market tests
e.
Regression analysis
130. 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 Katy using?
a.
The Delphi technique
b.
Executive judgment
c.
Time series analysis
d.
Market tests
e.
Regression analysis
131. 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.
132. 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 using which forecasting method?
a.
Time series analysis
b.
Market test
c.
Executive judgment
d.
Regression analysis
e.
Survey
133. The sales forecasting method that consists of making a product available to buyers in one or more
locations and measuring purchase response is
a.
a market test.
b.
regression analysis.
c.
trend analysis.
d.
a survey.
e.
the Delphi technique.
134. 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.
135. 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 combination 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
136. 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
137. 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.
A market test
138. What is the main problem with using a market test as a forecasting tool?
a.
Difficult to interpret
b.
Expensive
c.
Inaccurate
d.
Unacceptable to consumers
e.
Overused
Scenario 6.1
Use the following to answer the questions.
Lil’ Angels Kids Spa offers various treatments designed to appeal to the younger customer. 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, management wants to find out if the older girls will be
interested in their birthday party and tea party services.
139. Refer to Scenario 6.1. Lil’ Angels Kids Spa is currently using a(n)____ targeting strategy.
a.
undifferentiated
b.
exclusive