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Indicate whether the statement is true or false.
1. Market segmentation helps decision makers to more accurately define marketing objectives and better allocate
resources.
a. True
b. False
2. According to family life cycle segmentation, young married or divorced couples with children have high liquid assets.
a. True
b. False
3. Segmentation descriptors identify the specific segmentation variables to use in segmenting a market.
a. True
b. False
4. Based on the target market(s), a marketer develops the product’s positioning, a process that influences nonpotential
customers’ overall perception of a brand.
a. True
b. False
5. A market is people or organizations with needs or wants and with the ability and the willingness to buy.
a. True
b. False
6. One disadvantage of the personal and targeted nature of customer relationship management (CRM) is that consumers
are spending more time making purchase decisions.
a. True
b. False
7. Ethnic segmentation involves segmenting potential customers into neighborhood lifestyle categories.
a. True
b. False
8. Women tend to accumulate money for the sake of accumulation and rarely associate it with security, independence, or
quality of life.
a. True
b. False
9. Even with the advantages of CRM as a targeting tool, marketers will continue to use mass marketing, especially to
create brand awareness or to remind consumers of a product.
a. True
b. False
10. When segmenting markets by age, Baby Boomers expect everything to be instantaneous because they have always
lived in a world with Internet.
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a. True
b. False
11. The final step in market segmentation is selecting segmentation descriptors.
a. True
b. False
12. There are many scientific procedures for selecting segmentation variables to use in identifying a market and there is
no need for having market knowledge for segmenting the market.
a. True
b. False
13. Wester Helix, a watch manufacturing company, is a brand mostly associated with men. Although they also
manufacture products for women, these products are less popular. To increase the sale of these products, Wester Helix
opens a sister company that caters solely to women. In this scenario, Wester Helix uses age segmentation.
a. True
b. False
14. Unilever is an example of multinational company with a multisegment targeting strategy that has many products in its
product line.
a. True
b. False
15. A company selling plain toilet paper is an example of a firm that uses an undifferentiated targeting strategy.
a. True
b. False
16. Segmenting by customer type allows business marketers to tailor their marketing mixes to the common needs of
particular types of organizations or industries.
a. True
b. False
17. It is possible to define every person and every organization in the world as a market segment because each is unique.
a. True
b. False
18. A concentrated strategy can be disastrous for a firm that is not successful in its narrowly defined target market.
a. True
b. False
19. Market segmentation helps marketers define customer needs and wants more precisely because market segments do
not differ in size and potential.
a. True
b. False
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20. A market segment is a subgroup of people or organizations having different characteristics that cause them to have
distinct product needs.
a. True
b. False
21. Single-variable segmentation has the advantage of being more precise than multiple-variable segmentation.
a. True
b. False
22. A dynamic segmentation approach adjusts to fit the changes that occur in customers’ lives.
a. True
b. False
23. Customers looking for luxury want products that exhibit careful craftsmanship, timeless design, prestige, and
exclusivity. This type of market is segmented by ethnicity.
a. True
b. False
24. When developing a product positioning strategy, marketers need to consider how consumers view the distinctions
between products and analyze whether those distinctions are real or perceived.
a. True
b. False
25. According to family life cycle segmentation, consumption patterns among people of the same age and gender differ
because they are in different stages of the family life cycle.
a. True
b. False
26. Cannibalization occurs when the sales of a firm’s existing product increase with the introduction of a new product.
a. True
b. False
27. Promotion is one of the components that forms a marketing mix.
a. True
b. False
28. Generation Y grew up as latchkey kids, meaning that they spent time alone at home while their (often divorced)
parents worked long into the night, and they were the best-educated generation.
a. True
b. False
29. One advantage of undifferentiated marketing is the potential for saving on production and marketing costs.
a. True
b. False
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Indicate the answer choice that best completes the statement or answers the question.
30. Zinta Co. has launched a new laptop computer with a bigger monitor and big lettered keyboard. The company uses
this model to target senior communities and provides discounts. The company targets thirteen cities in the United States
with high populations of seniors. This scenario exemplifies which type of market segmentation?
a. Geodemographic segmentation
b. Psychographic segmentation
c. Benefit segmentation
d. Usage-rate segmentation
31. This demographic group belonged to the Great Depression generation and had the ability to quietly persevere through
great hardships. They were taught to play by the rules and tend to be cautious and are the healthiest, most educated, and
wealthiest group of elders. Identify which demographic group is described.
a. The silent generation
b. The sandwich generation
c. Generation Z
d. Generation Y
32. Chipotle stated they were “in the market for Mexican food“ by competing on quality instead of price.
Chipotle is a company that prides itself on serving “food with integrity.” Which mass market targeting
strategy did it use when entering the market?
a. Undifferentiated targeting
b. Concentrated targeting
c. Multisegment targeting
d. Differentiated marketing
33. When selecting strategies for targeting markets, which of the following is a disadvantage of an undifferentiated
targeting strategy?
a. It results in market segments that are either too small or that shrink because of environmental changes.
b. It often results in sterile, unimaginative product offerings that have little appeal to anyone.
c. It results in cannibalization of products.
d. It increases the production and marketing costs of a firm.
34. Which of the following statements is true of markets?
a. They are composed of people or organizations.
b. They thrive only with government funds and subsidies.
c. They provide discounts for every consumer.
d. They influence consumers to buy products they do not need.
35. _____ involves dividing a market into groups such as newborns, infants, young children, tweens, Millennials,
Generation X, Baby Boomers, and seniors.
a. Ethnic segmentation
b. Family life cycle segmentation
c. Age segmentation
d. Psychographic segmentation
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36. Trower Inc. has launched a new smartphone in two different versions. Both variants of the smartphone have a similar
design but have different hardware specifications. The company uses this strategy to make this smartphone more
universally affordable. In this scenario, Trower Inc. is most likely using __________________________.
a. usage-rate segmentation
b. income segmentation
c. gender segmentation
d. age segmentation
37. A ____________segmentation has the advantage of being simpler and easier to use.
a. single–variable
b. double-variable
c. triple-variable
d. multiple-variable
38. _____ is market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
a. Benefit segmentation
b. Family life cycle segmentation
c. Usage-rate segmentation
d. Psychographic segmentation
39. Gamers’ Page is a magazine that primarily caters to people who are enthusiastic about sports and who enjoy gaming.
In this scenario, the editorial board of Gamers’ Page uses _____.
a. gender segmentation
b. geographic segmentation
c. psychographic segmentation
d. family life cycle segmentation
40. Advertisements of Dove soap show real women in its campaigns and commercials rather than celebrities. Which
product positioning has Dove chosen for marketing its soap?
a. Uses or applications by means of positioning
b. Price and quality
c. Attribute
d. Product class
41. The process of defining, dividing, and subdividing a large homogenous market into clear identifiable segments having
similar needs, wants, or demand characteristics is identified as _____________________________.
a. market segmentation
b. a consumer market
c. market criteria
d. market concentration
42. In the context of family life cycle segmentation, which of the following statements is true?
a. Young divorced couples without children have the lowest purchase rate.
b. Middle-aged married couples with or without children have high average purchase of durables.
c. Young married couples with children have high liquid assets.
d. Middle-aged divorced couples without dependent children are least satisfied with their financial position.
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43. Which of the following statements is true of lifestyle segmentation?
a. It divides people into groups based on their traits, attitudes, and habits.
b. It divides a market by the amount of product bought or consumed.
c. It divides people into market segments according to the benefits they seek from a product.
d. It divides people into groups based on socioeconomic characteristics such as income and education.
44. The purpose of market segmentation is to:
a. change consumer attitudes and beliefs toward a product.
b. divide a market into submarkets of equal size and equal number of customers.
c. eliminate the need for developing marketing objectives.
d. enable a marketer to tailor marketing mixes to meet the needs of one or more specific segments.
45. New technology that allows marketers to collect detailed information of customers offers marketers a more cost-
effective way to reach customers and:
a. choose which segment or segments to target.
b. enables businesses to personalize their messages.
c. review general activity on the website.
d. position the product.
46. _____ is a common base of demographic segmentation.
a. Product benefit
b. Usage rate
c. Geography
d. Income
47. _____ helps marketers develop marketing programs tailored to prospective buyers who live in small regions or who
have very specific lifestyle characteristics.
a. Benefit segmentation
b. Family life cycle segmentation
c. Ethnic segmentation
d. Geodemographic segmentation
48. Nalpas Inc., an apparel company, manufactures clothes for men, women, and children. It further divides its core
customers according to demographic variables such as income, ethnic background, and family life cycle. These
demographic variables are examples of _____.
a. product bases
b. segmentation bases
c. product categories
d. market segments
49. Unilever is a multinational corporation selling consumer goods under various categories such as foods, beverages,
cleaning agents, and personal care products. This is an example of:
a. product user.
b. product class.
c. product differentiation.
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d. repositioning.
50. Walmart is a successful example for retailing. The store emphasizes low pricing in its ads and promotes its message
that customers can get more for their money. Walmart likely uses _________________________.
a. income segmentation
b. age segmentation
c. gender segmentation
d. ethnic segmentation
51. Chipotle has become popular with a variety of people. It recently identified a primary customer segment in
Millennials. To win over this demographic group, traditional media is less authentic in the perception of Millennials,
therefore, Chipotle does not use traditional media, and its marketing and promotion focus on maintaining a large online
and social media presence. Here Chipotle is likely to use:
a. undifferentiated targeting.
b. concentrated targeting.
c. multisegment targeting.
d. differentiated marketing.
52. In the context of customer relationship management (CRM), _____ offers marketers a more cost-effective way to
reach customers and enables businesses to personalize their messages.
a. repositioning
b. undifferentiated targeting
c. cannibalization
d. new technology
53. The world’s best coffee beans come from Colombia. Therefore, the more Colombian beans in a blend of coffee, the
better the blend; and no company purchases more Colombian beans than Kreemo Coffee. Which positioning strategy is
the company demonstrating?
a. Product differentiation
b. Product user
c. Competitor
d. Product class
54. Which statement is true of gender segmentation in the United States?
a. Women are increasingly part of formerly all-male markets.
b. Women are not an experienced purchasing group, unlike men.
c. Men make 70 to 80 percent of purchases of consumer goods each year.
d. Men tend to be more deliberate than women and to take longer to make investment decisions.
55. According to family life cycle segmentation, middle-aged married couples with or without children:
a. are difficult to promote by advertisement.
b. are better off financially than young married couples with or without children.
c. buy medical care products that aid health, sleep, and digestion.
d. have the highest purchase rate.
56. _____ refers to segmenting markets by region of a country or the world, market size, market density, or climate.
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a. Geographic segmentation
b. Benefit segmentation
c. Demographic segmentation
d. Usage-rate segmentation
57. A cosmetic company manufactures products for skin and hair care for both men and women in the 20- to 50-year-old
age group. Which type of market segmentation approach does the company undertake?
a. Geographic segmentation
b. Psychographic segmentation
c. Benefit segmentation
d. Demographic segmentation
58. The step of choosing a basis or bases for segmenting a market requires creativity, market knowledge, and ________.
a. managerial insight
b. technical savvy
c. organizational skills
d. managerial directive
59. Based on age segmentation of a target market, which group is at peak earning power but seeks to spend only on
products that provide the best value for money?
a. Generation X
b. Generation Y
c. Generation Z
d. Baby Boomers
60. Tesla wanted to break into the electric vehicle (EV) marketplace with a luxury sports model. At that
time, economic value was more highly prized than form and function. Therefore, Tesla chose not to
compete with the other brands’ successful luxury hybrids and targeted the high–end market for electric
vehicles. Which base did Tesla use to position itself in the market?
a. Price and quality
b. Attribute
c. Competitor
d. Emotion
61. Demographics provide the skeleton for developing segmentation strategies, but ___________adds meat to the bones.
a. geographic segmentation
b. benefit-usage segmentation
c. psychographic segmentation
d. benefit segmentation
62. Which of the following is an advantage of a multisegment targeting strategy?
a. It significantly reduces the risk of product cannibalization.
b. It provides economies of scale in manufacturing and marketing.
c. It does not require firms to tailor marketing mixes to the preferences of market segments.
d. It decreases the costs involved in product design, marketing research, and management.
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63. Pine Groove, a cosmetic brand that primarily caters to women, wants to reach out to the less-traditional male market.
It conducts research and develops a new product especially for men. In this example, Pine Groove uses _____.
a. ethnicity segmentation
b. age segmentation
c. gender segmentation
d. psychographic segmentation
64. Kirksand Airlines is well known for providing excellent customer service to its flyers. The staff members inquire
about each flyer’s wants and needs, and listen carefully to their responses. If a flyer has any specific requests, the staff
members ensure that they are immediately attended to. In this scenario, Kirksand Airlines illustrates _______________,
which has been found successful in spurring on the growth of customer relationship management.
a. personalization
b. mass marketing
c. loyalty
d. technology
65. Companies that successfully implement customer relationship management (CRM) tend to:
a. Use an undifferentiated targeting strategy.
b. Customize the goods and services offered to their customers.
c. Assume that customers have similar needs that can be met with a general marketing mix.
d. Minimize the use of database technology.
66. A firm which produces replicas of famous paintings of reputed and great artists has as its target customers: socialites,
celebrities, and the hospitality industry. What type of market segmentation is used in this case?
a. Geographic segmentation
b. Psychographic segmentation
c. Benefit segmentation
d. Demographic segmentation
67. Titan Company manufactures watches for all age groups, gender, and income and also for all important family
occasions. This company exemplifies ________________________.
a. income segmentation
b. ethnic segmentation
c. gender segmentation
d. family life cycle segmentation
68. Julie works as a public relations executive in a firm and is definitive in her choice of office clothes and accessories.
She prefers to wear only certain brands. Hence, she is always seen in clothes from Banana Republic and carries only
Coach handbags to office. Which psychographic variable is Julie exhibiting?
a. Motives
b. Personality
c. Geodemographics
d. Attributes
69. Which positioning base for a product or service focuses on a personality or type of consumer?
a. Product class
b. Attribute
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c. Product user
d. Emotion
70. As a commitment to diversity and inclusion, Bank of America partnered with the American Ad Council on a campaign
known as “Love Has No Labels.” The campaign was a roaring success as it touched upon which positioning base of its
audience?
a. Responsiveness
b. Personality
c. Emotion
d. Attribute
71. What is the similarity between a stock market and a labor market?
a. Both use a barter system to facilitate the exchange of products.
b. Both are composed of people who are unwilling to spend large sums of money for products or services.
c. Both are composed of people with specific wants that can be satisfied by particular product categories.
d. Both deal in selling high-end, consumer durable products.
72. Apple saw a huge drop in the sales of its iPhone 6s when they launched the iPhone 7. This situation
exemplifies _________________, that is, when a new product cuts into the sales of existing products within
the same company.
a. cannibalization
b. positioning
c. repositioning
d. competition
73. Why do marketers segment their markets and what are the basic criteria for doing so successfully?
a. Segments must be composed of people with different product needs.
b. Segments must be composed of people with different characteristics.
c. Segments must be large enough to warrant developing and maintaining a special marketing mix.
d. Segments must be divided according to the North American Industry Classification System.
74. A firm using a(n) _____ essentially adopts a mass-market philosophy, viewing the market as one big market with no
individual segments.
a. undifferentiated targeting strategy
b. niche targeting strategy
c. individual targeting strategy
d. concentrated targeting strategy
75. Direct and personal marketing efforts will continue to grow to meet the needs of consumers who no longer have the
time to spend shopping and making purchase decisions. Which tool helps marketers meet this demand of consumers?
a. Positioning
b. Perceptual mapping
c. Personalization
d. CRM
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76. Wesley Electronics Inc. manufactures electronic gadgets. Its marketing team spent a great deal of money on
advertising to create awareness about the company’s products among potential customers and employs a variety of
methods, such as print, broadcast, and online advertising. According to the steps involved in segmenting a market, Wesley
Electronics most likely is:
a. selecting a market or product category for study.
b. designing and implementing its marketing mix.
c. profiling and analyzing market segments.
d. selecting segmentation descriptors for a market.
77. The combination of demographics, lifestyles, and geographic categories leads to ______________.
a. geodemographic segmentation
b. benefit segmentation
c. usage-rate segmentation
d. psychographic segmentation
78. Rolls Royce cars target only the premium car market segment. This is a classic example of:
a. multisegment targeting.
b. undifferentiated targeting.
c. differentiated targeting.
d. concentrated targeting.
79. With regard to age segmentation, the tween and teenage cohort following the Millennials is sometimes called _____.
a. Generation X
b. the Baby Boomer generation
c. Generation Z
d. the Silent Generation
80. Laelle is a confectionery company that manufactures candies. It does not use specific strategies to target children
when marketing its products. Instead it uses the same strategies to promote its candies among all consumers in the market.
In this scenario, Laelle uses a(n) _____.
a. multisegment targeting strategy
b. individual targeting strategy
c. undifferentiated targeting strategy
d. concentrated targeting strategy
81. Tennot Inc. sells used cars. It focuses solely on low-income customers who prefer to buy a used car rather than a new
one. Therefore, it develops one marketing mix that targets a low-income demographic group. In this scenario, Tennot Inc.
most likely uses a(n) _____.
a. undifferentiated targeting strategy
b. multisegment targeting strategy
c. concentrated targeting strategy
d. universal targeting strategy
82. Which of the following occurs when sales of a new product cut into sales of a firm’s existing products?
a. Cannibalization
b. Product churning
c. Backward invention