1. How do business markets differ from consumer markets?
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?
4. Compare and contrast the concentrated and differentiated targeting strategies of market segmentation.
5. Identify the four major categories of segmentation of variables for consumer products, and give three examples of each.
6. Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?
7. Describe the variables used to segment business markets, and provide two examples of each.
8. Describe the three areas marketers should examine when they evaluate relevant market segments.
9. Why is it important for marketers to estimate sales potential for the entire industry as well as for the individual
company?
10. Discuss the differences between the breakdown and buildup approaches to measuring company sales potential. What
are the similarities between these two approaches?
11. Why is it important for marketers to assess competitors before entering a market segment?
12. Discuss the difference between sales forecasts and company sales potential. Why is it important for a marketer to be
able to forecast sales?
13. Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.
14. Why would a firm survey its sales force to forecast company sales? Why would a firm choose an expert forecasting
survey instead?
15. Any group of people who, as individuals or as organizations, have needs for products in a product class and who have
the ability, willingness, and authority to buy such products is a(n)
a.
business market.
b.
market.
c.
undifferentiated market
d.
segmented market
e.
market variable
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: What Are Markets?
Bloom’s: Knowledge
16. 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.
they do not buy products for the main purpose of making a profit
c.
they are sometimes referred to as B2C markets
d.
their purchasing decisions are always made by only one individual
e.
they may buy the product, but not use it themselves
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Knowledge
17. Which of these statements is not true about business markets?
a.
b.
c.
d.
e.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Developing Sales Forecasts
Bloom’s: Knowledge
18. 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
Moderate
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Comprehension
19. Mia is pet-sitting for a friend’s dog while he is on vacation. Her friend has given Mia all sorts of information,
including the veterinarian’s name and phone number, pet emergency center location, and the dog’s favorite bedtime
snack. The first evening of the vacation, Mia realizes that her friend did not bring the dog’s food over, and she has no idea
what the dog eats. Her friend’s cell phone is “out of range” at the moment, so Mia must go to the grocery 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.
Challenging
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Application
20. The ability to purchase a product is a function of
a.
buying power.
b.
desire.
c.
willingness.
d.
authority.
e.
needs.
a
Moderate
A-Head: What Are Markets?
Bloom’s: Comprehension
21. 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 a sales
representative from a computer software firm about a contract for new program to process the firm’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; he is willing to spend the firm’s money.
d.
is; he has the desire for the software.
e.
is not; he does not have the authority to purchase.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Application
22. 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.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Comprehension
23. 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.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: What Are Markets?
Bloom’s: Knowledge
e.
lack the money to purchase this type of product.
24. 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 $5,000 to the school
in order to hold the child’s “application” until they reach the age of 5 years. Emma’s parents put her on the waiting list at
the age of 1 year and paid the deposit; however, when Emma became five years old, she did not want to attend the school
even though 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 willingness.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Application
25. 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.
MARK.PRID.16.06.02 – LO: 06–02
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Target Market Selection Process
Bloom’s: Knowledge
26. To find a target market, a firm can use one of these targeting strategies.
MARK.PRID.16.06.01 – LO: 06–01
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: What Are Markets?
Bloom’s: Comprehension
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.
27. The Pillsbury company defines all individual consumers who are purchasers of flour as its target market. It also
defines all businesses who purchase flour as its target market. What targeting strategy would be most appropriate in this
case?
a.
Concentrated
b.
Undifferentiated
c.
Wide appeal
d.
Differentiated
e.
Clustered
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
28. 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) ____ strategy.
a.
concentrated targeting
b.
differentiated
c.
heterogeneous market
d.
undifferentiated
e.
single mix
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
e
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
29. 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.
When a market is made up of individuals or organizations with diverse need for products in a specific product
class.
30. 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
a
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
31. 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.
Challenging
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
c
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Comprehension
32. 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. What type of targeting strategy is the ProMark Company using?
a.
Extensive
b.
Concentrated
c.
Undifferentiated
d.
Intensive
e.
Differentiated
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
33. 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
a
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
34. If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be
using the ____ strategy.
a.
directed
b.
undifferentiated
c.
segmented
d.
differentiated
e.
product-use
Easy
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Comprehension
35. Smart Balance produces a line of milk products that are lactose-free. The milk comes in pint, quart, and half-gallon
cartons, as well as 16-ounce glass bottles. Smart Balance sells its pint cartons to school systems, its quart and half-gallon
cartons to grocery stores, and its glass bottles to vending machine operators. Smart Balance appears to use a(n) _____
strategy in marketing its product to a target market that is likely to be _______.
a.
undifferentiated; homogeneous
b.
undifferentiated; heterogeneous
c.
differentiated; homogenous
d.
differentiated; heterogeneous
e.
concentrated; heterogeneous
c
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
36. The undifferentiated targeting strategy for finding a target market will likely not be successful if
a.
product positioning is needed.
b.
the firm defines the total market as its target market.
c.
people within the market have heterogeneous needs.
d.
people within the market have homogeneous needs.
e.
the firm is capable of developing a single marketing mix that satisfies all people’s needs.
c
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Comprehension
37. Most markets for products are made up of individuals or groups with diverse needs for products and are called ____
markets.
a.
undifferentiated
b.
concentrated
c.
homogenous
d.
differentiated
e.
heterogeneous
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
38. Walmart sells numerous products, including packaged food, produce, automotive maintenance services, eyeglasses,
clothing, and toys. Walmart advertises itself as a store where “we save people money so they can live better,” focusing on
its low prices as the customer’s most important need. Walmart’s advertising appears to use a(n) _____ strategy to a
market that is _____.
a.
undifferentiated; homogeneous.
b.
undifferentiated; heterogeneous.
c.
differentiated; homogeneous.
d.
homogeneous; differentiated.
e.
heterogeneous; undifferentiated.
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
39. Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product
needs are classified as
a.
market segments.
b.
heterogeneous markets.
c.
concentrated markets.
d.
demographic segments.
e.
strategic segments.
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
40. Mattel views the toy market as composed of four age groupings, each with different needs and desires. Mattel is using
a(n) ____ targeting strategy for its groups, which are known as _____.
a.
undifferentiated market; market segments
b.
undifferentiated market; heterogeneous.
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
c.
differentiated; market segments.
d.
differentiated; the marketing mix.
e.
concentrated market; heterogeneous.
41. The purpose of market segmentation is to
a.
differentiate products.
b.
divide a total market to enable a marketer to develop a more precise marketing mix.
c.
reduce the overall cost of marketing activities.
d.
identify a single marketing mix that will be satisfactory for the general market.
e.
meet the needs of homogeneous markets.
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
42. The process of dividing a total market into market groups because people within each group have relatively similar
product needs is called
a.
segmentation.
b.
diversification.
c.
target marketing.
d.
concentration.
e.
customization.
a
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
43. Several conditions must exist for market segmentation to be successful. These conditions include all of the following
except
a.
the total market should be divided so that segments can be compared on sales potential, costs, and profits.
c
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
b.
customers’ needs for the product must be homogeneous.
c.
the company must be able to reach the chosen segment with a particular marketing mix.
d.
segments must be identifiable and divisible.
e.
at least one segment must have enough profit potential to justify developing and maintaining a special
marketing mix for that segment.
44. A business advantage of the concentrated targeting strategy for any company is that it
a.
requires less market research and information.
b.
requires less intensive analysis of customers’ characteristics and needs.
c.
allows a firm to utilize all of its production capacity.
d.
maintains the firm’s flexibility in moving into other market segments.
e.
allows a firm to develop a special marketing mix for a single market segment.
e
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Comprehension
45. A targeting strategy in which an organization targets a single market segment using one marketing mix is called a(n)
____ strategy.
a.
selective
b.
focused
c.
differentiated
d.
concentrated
e.
undifferentiated
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
Bloom’s: Knowledge
46. When markets are comprised of people with differing product needs, the marketing manager should use a(n) ____
Challenging
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
strategy.
a.
concentrated or differentiated targeting
b.
market-intensive
c.
integrated
d.
product-oriented
e.
undifferentiated
47. A disadvantage of the concentrated targeting strategy is that
a.
the firm’s financial condition is tied to a single and specialized marketing mix.
b.
large sales volumes cannot be generated.
c.
production costs may be higher than with other strategies.
d.
marketing personnel may become dissatisfied with the limited opportunities provided by this approach.
e.
marketing costs are often higher than for other strategies.
a
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
48. If Georgia-Pacific, a producer of home siding, decking, and other wood products, focused its marketing efforts to
home construction companies only, it would be using a(n) ____ strategy. If it sold the same products to both construction
companies and DIY retailers such as Home Depot, it would be using a(n) ____ strategy.
a.
undifferentiated; undifferentiated
b.
undifferentiated; differentiated
c.
differentiated; multisegmented
d.
concentrated; differentiated
e.
concentrated; concentrated
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge
49. Tiffany’s markets its exclusive jewelry and gifts to high-income individuals interested in high-quality products and a
well-known brand name. It uses the same marketing mix to reach this market. Tiffany’s uses a(n) ____ strategy.
a.
undifferentiated
b.
differentiated targeting
c.
exclusive targeting
d.
heterogeneous
e.
concentrated targeting
50. Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories through sales representatives
who are also interior designers. It also has another, slightly less expensive line that it sells through stores such as
Nordstrom’s and Saks Fifth Avenue. Interior Designs Inc. is most likely using a(n) ____ targeting strategy.
a.
differentiated
b.
undifferentiated
c.
concentrated
d.
homogeneous
e.
heterogeneous
a
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
51. The primary advantage of a concentrated targeting strategy is
a.
it meets the needs of a wide range of consumers.
b.
it allows a firm to specialize to meet specific customer needs.
c.
it is more flexible than any other approach.
d.
it is the least risky targeting approach.
e.
its customers are the most willing to repurchase the same brands.
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Strategy
e
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
52. Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to families. Procter &
Gamble is using a(n) ____ targeting strategy for laundry detergents.
a.
multiuse
b.
differentiated
c.
stratified
d.
undifferentiated
e.
concentrated
Easy
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
53. Volkswagen markets its Routan to large families, its R32 racecar to men, and its Jetta to young singles. What targeting
approach is Volkswagen using?
a.
Concentrated
b.
Strategic
c.
Differentiated
d.
Undifferentiated
e.
Multisegmented
c
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
United States – AK – DISC: Marketing Plan
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Application
54. Which of the following products is most likely to be marketed, using an undifferentiated approach?
a.
bicycle
b.
computer
c.
notebook
d.
seasoning salt
e.
oscillating fan
Moderate
MARK.PRID.16.06.03 – LO: 06–03
United States – BUSPROG: Analytic
A-Head: Step 1: Identify The Appropriate Targeting Strategy
Bloom’s: Knowledge