c.
concentrated
d.
differentiated
e.
selective
140. Refer to Scenario 6.1. 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.
141. Refer to Scenario 6.1. In calculating the sales forecast for the next year, marketers at Lil’ Angels use
data from 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 be using 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
142. Refer to Scenario 6.1. What 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
Scenario 6.2
Use the following to answer the questions.
GE Transportation 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.
143. Refer to Scenario 6.2. 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
144. Refer to Scenario 6.2. 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
145. Refer to Scenario 6.2. 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.
146. Refer to Scenario 6.2. 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.
147. Refer to Scenario 6.2. 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
TRUE/FALSE
148. 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.
149. Individuals’ ability to buy depends on the amount of their buying power.
150. 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.
151. A person who has buying power also has the authority to buy.
152. 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.
153. There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy
and the concentrated targeting strategy.
154. A company sometimes defines a total market as its target market.
155. One condition for effective segmentation is that at least one segment must have substantial profit
potential.
156. A firm using a concentrated targeting strategy aims its marketing activities at one segment of a market.
157. The undifferentiated strategy can be effective for an organization that has a homogeneous market and
can develop and maintain a single marketing mix.
158. An undifferentiated targeting strategy does not target a single market with one marketing mix.
159. The concentrated targeting strategy is one in which an organization directs its marketing efforts toward
a single market segment through one marketing mix.
160. A differentiated targeting strategy is when the organization targets two or more markets by developing
a single marketing mix.
161. Only one variable can be used to segment a market.
162. Segmentation variables are characteristics of individuals, groups, or organizations in a total market.
163. A segmentation variable is used to group smaller markets into one larger market.
164. Demographic characteristics are commonly used to segment a market because they are closely related
to consumers’ product needs and purchasing behavior.
165. Family life cycle is a psychological dimension used for segmenting markets.
166. A firm operating in a one-state market would not regionalize its market.
167. The term market density refers to the number of potential customers per unit of land area, such as per
square mile.
168. One problem with using psychographic variables for segmentation purposes is that they are difficult to
measure accurately.
169. Motives can be used to segment markets.
170. Lifestyle is a product-related variable.
171. Lifestyle analysis focuses on people’s activities, interests, and opinions.
172. The ways in which customers use a particular product may be a basis for segmenting the market.
173. One way marketers can segment business markets is according to their geographic location.
174. A marketer may segment a market in terms of the benefits that customers expect to receive from a
particular product.
175. A market segment profile deals primarily with demographic characteristics.
176. A market segment profile describes the similarities among potential customers within a segment and
explains the differences among people across market segments.
177. A market segment profile may cover such aspects as demographic characteristics, geographic factors,
product benefits sought, lifestyles, brand preferences, and usage rates.
178. A market segment profile provides customers with an understanding of how a business can use its
capabilities.
179. Market segment profiles help determine the most desirable segment or segments in relation to the
firm’s strengths, weaknesses, objectives, and resources.
180. The information yielded by market segment profiles usually is not very useful later in the marketing
process.
181. The two general approaches to measuring company sales potential are the breakdown and the buildup
approach.
182. Company sales potential is the maximum percentage of market potential that an individual firm within
an industry can expect to obtain for a specific product.
183. Market potential is the amount of a product that an organization could sell during a specified time
period.
184. The size of the market potential places limits on the size of the company sales potential.
185. During the evaluation of relevant market segments, competitive assessment is used primarily to
determine the possibility of additional competitors entering particular segments.
186. The sum of firms’ marketing efforts equals industry marketing efforts.
187. When evaluating relevant market segments, cost estimates are important to determine if an
organization entering a particular segment can operate at costs equal to or below those of competitors.
188. It is likely that during the fifth step of the target market selection process, marketers will decide not to
enter and compete in any market segments.
189. When a firm’s management is making the final selection of specific target markets to enter, it should
consider whether the organization has the financial resources, managerial skills, expertise, and
facilities needed to effectively compete in the selected segments.
190. Consideration of the firm’s overall objectives usually does not influence the final selection of a target
market segment.
191. At times, after doing segmentation analysis, marketers in an organization decide not to enter any
segments.
192. A company sales forecast is the amount of a product that a firm actually expects to sell during a
specific time period.
193. Sales forecasts are always long-range in nature.
194. The executive judgment method of sales forecasting is very accurate in predicting future sales.
195. In developing a company sales forecast, the forecasting methods are limited to surveys and correlation
methods.
196. The types of surveys used to forecast sales are customer, executive, and competitor surveys.
197. Surveys are sometimes used to forecast sales.
198. In a customer survey, a marketer would question customers about the types and quantities of products
they intend to buy during a specific time period.
199. Customer surveys as a means of forecasting sales are not appropriate for a firm that has relatively few
customers.
200. One limitation of the sales force survey technique is that salespeople often believe that their sales goals
are determined by their sales estimates.
201. Trend analysis is a sales forecasting technique based on historical sales data.
202. A marketer can use regression analysis techniques to predict the sales of new products.
203. Through market tests, a forecaster gains data regarding consumers’ intended purchases.
204. A firm ordinarily uses the same sales forecasting method for determining short-range and long-range
sales forecasts.