Chapter 8—Segmenting and Targeting Markets
TRUE/FALSE
1. Fisher-Price developed a line of toys for infants in China. Babies make up the market for these
products.
2. Fisher-Price is identifying Asian markets that are interested in their line of talking toys. Fisher-Price is
engaged in the process of market segmentation.
3. Until the 1990s, few firms practiced market segmentation.
4. A market segment is deemed to have substantiality if it contains a large number of potential customers.
5. A segmentation plan must produce segments that are accessible—that is, the firm must be able to reach
members of targeted segments with customized marketing mixes.
6. Markets are always segmented by at least two variables.
7. U.S. paint manufacturers traditionally use different formulae for developing paint to be used in the
humid Southeast, the frigid Midwest, and the hot and dry Southwest. This is an example of how
demographic segmentation is used.
8. A market segmentation study done by the University of Thessaly in Greece classified recreational
skiers in terms of their gender, age, and income levels. The study used psychographic segmentation
variables.
9. Clearing Skies Press published a book by Robert Ruark entitled Keeping the Baby Alive Till Your Wife
Gets Home. It is an advice book for new fathers. The market for this book is based on demographics.
10. Generation Xers account for half of all spending in the United States.
11. In the United States, women tend to be the key household decision-makers for many products, such as
home furnishing purchases, vacations, and autos.
12. Research has shown that most Hispanic Americans are insulted when retailers attempt to serve them in
Spanish. Hispanic Americans overwhelmingly prefer to conduct business in English—even if they are
bilingual—in order to demonstrate that they are “true Americans.”
13. In market segmentation, individual psychographic variables can be combined with other variables to
provide more detailed descriptions of market segments.
14. Geodemographic segmentation combines geographic, demographic, and lifestyle segmentations.
15. The slogan used by Apple to promote the iPhone, “There’s an app for that,” indicates the company
relies heavily on benefit segmentation variables.
16. Clorox describes individuals who buy lots of cleaning products as heavy users. This is an example of
how companies use benefit segmentation.
17. The 80/20 principle implies that the majority of all demand is due to a minority of the customers.
18. The business market consists of four broad segments: producers, resellers, governments, and regions.
19. Company characteristics, such as geographic location, type of company, company size, and product
use, can be important segmentation variables.
20. While it is important to understand potential business customers’ buying processes, this is not a helpful
segmentation basis.
21. The first step in segmenting a market is to choose a basis or bases for segmenting the markets.
22. One reason marketers use market segmentation as a tool is that once completed, the process need not
be repeated.
23. Dakin Farms in Vermont uses mass marketing. Marketers would call the strategy an undifferentiated
targeting strategy.
24. Small firms often adopt a concentrated marketing strategy to compete effectively with larger firms.
25. Procter & Gamble markets several different brands of laundry detergent, such as Tide, ERA, Gain, and
Dreft, each targeting a different market segment. This is an example of concentrated targeting.
26. Increasing share of customer means getting more customers.
27. Marketers are rediscovering that the “one-size-fits-all” approach to marketing is still relevant.
28. A product’s position refers to where it is located on store shelves.
29. Product differentiation is a positioning strategy.
30. A product’s positioning could be based on product users.
31. Consumers’ perceptions regarding a product’s position cannot be changed.
1. A _____ is a group of people or organizations that has wants and needs that can be satisfied by
particular product categories, has the ability to purchase these products, and is willing to exchange
resources for the products.
a.
firm
b.
buyer
c.
market
d.
consumer
e.
target
2. The Belly Cast kit by Proud Body helps an expectant mom to make a cast of her pregnant body,
decorate it and keep it for a lifetime. The primary market segment for the Belly Cast kit is:
a.
all parents
b.
expectant moms
c.
recently married couples
d.
parents of toddlers
e.
collectors of unusual art
3. Ford Motor Company produces passenger cars, commercial trucks and specialty vehicles, performance
vehicles, and race cars. Ford uses a procedure called _____ to divide its large market.
a.
micromarketing
b.
positioning
c.
market segmentation
d.
cannibalization
e.
perceptual mapping
4. A market is people or organizations that have:
a.
the ability, willingness, and power to buy
b.
a medium of exchange and products they desire
c.
needs and wants and an ability and willingness to buy
d.
unmet needs or wants and products or services that satisfy those unmet needs or wants
e.
communication, financial, and capital resources
5. A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause
them to have relatively similar product needs.
a.
market universe
b.
market segment
c.
aggregated market
d.
segmentation base
e.
population sample
6. _____ is the process of dividing a market into meaningful groups that are relatively similar and
identifiable.
a.
Perceptual mapping
b.
Positioning
c.
Micromarketing
d.
Market sampling
e.
Market segmentation
7. The purpose of market segmentation is to:
a.
reduce the market down to a specific size that the firm can handle
b.
divide the market into equal size and profit regions for sales territories
c.
group a large number of markets together enabling a company to serve them
simultaneously
d.
develop a generalized definition of the market as a whole
e.
enable the marketer to tailor marketing mixes to meet the needs of one or more specific
groups
8. Home Cookin’ Catering would like to improve customer satisfaction and increase repeat business.
When you ask the owners to describe a typical customer, they say it is impossible and explain that with
corporate functions, family affairs, and fund-raisers, they do not have a typical customer. You suggest
it is time for market segmentation because:
a.
it will enable them to build an accurate description of customer needs by group and to
design a marketing mix to fit each segment
b.
the company needs to reduce the size of the market it serves
c.
the company needs to learn how to group these markets together into one market to serve
all of them adequately
d.
it will help develop a generalized definition of the market as a whole and reveal the
optimal marketing mix for this market
e.
this will position the company in the minds of its consumers as compared to its
competitors
9. A group of middle school students stop by a bicycle store. The store has just received a new shipment
of high-end racing bicycles. The bicycles range in price from $1,200 to $3,000. All of the students
want one of these new bikes, but none has the means to buy one. Is this group of consumers a potential
market for the expensive bikes?
a.
Yes, they are a potential market since they are all about the same age.
b.
No, they do not have the ability to purchase at this time.
c.
No, to qualify as a market, they must need the product.
d.
Yes, they are a market because this product could satisfy their consumer wants and
desires.
e.
Yes, they are a market because this group shares relatively similar product needs and
purchasing characteristics.
10. The process of market segmentation involves breaking down a heterogeneous market into
homogeneous and identifiable segments. If this process is carried to its extreme, then one could say
that:
a.
this is the reason segmentation cannot be used by small firms
b.
all individuals have the same needs in spite of cultural differences
c.
everyone belongs to the same segment
d.
segmentation controls the demand for products
e.
every individual in the world is a market segment
11. Market segmentation can assist marketers to do all of the following EXCEPT:
a.
develop more precise definitions of customer needs and wants
b.
identify which variable base should be used for segmenting
c.
more accurately define marketing objectives
d.
improve resource allocation
e.
evaluate performance
12. All of the following are criteria for successful market segmentation EXCEPT:
a.
substantiality
b.
identifiability and measurability
c.
accountability
d.
accessibility
e.
responsiveness
13. To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria
are:
a.
segmentable, targetable, reliable and valid, and homogeneous
b.
tangibility, inseparable, nonperishable, and unique
c.
substantiality, identifiability and measurability, accessibility, and responsiveness
d.
reliability, flexibility, tangibility, and unbiased
e.
complexity, compatability, relative advantage, trialability, and observability
14. A manufacturer of lenses used in microscopes, binoculars, and telescopes has segmented its market
into scientific equipment manufacturers, sporting equipment manufacturers, and retailers who sell
replacement lenses. In order for this segmentation scheme to be successful, all of the following criteria
must be met EXCEPT:
a.
substantiality
b.
accessibility
c.
identifiability and measurability
d.
complexity
e.
responsiveness
15. According to the criterion of _____ a selected segment must be large enough to warrant developing
and maintaining a special marketing mix. Serving the specific needs of this segment must be
commercially viable, even if the number of potential customers is small.
a.
causality
b.
accountability
c.
responsiveness
d.
accessibility
e.
substantiality
16. The marketing researcher for Bubastis Cat Treats has noticed an growing number of cat owners
purchasing organic treats for their pets. The researcher thinks there is a market for organic cat treats,
but she’s not sure if the segment is substantial. In this case, substantiality means the segment:
a.
has enough special stores, magazines, and other outlets that it will be possible to direct
advertisements at this group
b.
is large enough to permit a profitable market effort toward its members
c.
exhibits a response rate to marketing variables different from the rates of other segments
d.
is too large and needs to be reduced to a more easily identifiable and measurable size
e.
will be difficult to develop a product to match this group of buyers
17. The marketing manager of Gevalia gourmet coffees wants to target the gay male consumer because he
thinks this segment of consumers appreciates and consumes gourmet coffee. Even though gay
lifestyles are becoming more accepted socially, the manager is finding it difficult to determine the
market potential for this segment because many gay consumers are not willing to admit their lifestyle
publicly. Which criterion of a useful segment does this illustrate?
a.
Substantiality
b.
Identifiability and measurability
c.
Complexity
d.
Responsiveness
e.
Validity
18. Which criterion of useable market segments means the firm must be able to reach members of targeted
segments with customized marketing mixes?
a.
Substantiality
b.
Identifiability and measurability
c.
Accessibility
d.
Responsiveness
e.
Reliability
19. Many children on the autism spectrum like to chew on clothing, paper, or anything that they can find.
Kid Companions manufactures nontoxic, plastic chewable jewelry for kids to wear. The product is a
great way to keep kids from chewing on their clothes, while letting them work through their chewing
tendencies. However, the company is unsure how to reach parents and therapists with information
about their product. This illustrates a segmentation problem with:
a.
substantiality
b.
identifiability and measurability
c.
responsiveness
d.
accessibility
e.
accountability
20. The requirement for a market segment to be responsive means:
a.
over half of the consumers in the identified segment will be actively interested in the
product
b.
all the segments identified by a marketer should respond to the marketing mix
c.
all the segments identified by a marketer should not respond to the marketing mix
d.
the segments identified by a marketer should not differ in the level of their responsiveness
to the marketing mix
e.
the segment identified by a marketer should differ in how it responds to the marketing mix
when compared to another segment confronted with the same mix
21. Altria Group Inc.’s Phillip Morris failed at an attempt to target Americans looking for a potentially
safer cigarette. This market exhibits a lack of:
a.
substantiality
b.
identifiability and measurability
c.
responsiveness
d.
reliability
e.
accessibility
22. A research firm has conducted marketing research on the market for metal roofing for homes. The
research firm has determined there are thousands of homeowners who want the durability provided by
metal roofs. These homeowners are generally married and between 25 and 54 years of age. They tend
to live in suburban neighborhoods and most subscribe to lifestyle magazines. If you were interpreting
these results, you might suggest that the research firm:
a.
conduct additional research because it has no idea about the measurability of its segments
b.
examine the research report again to see if it can determine segment accessibility
c.
conduct a follow-up analysis to determine if the segments it might choose would respond
differently from other segments to its marketing strategy
d.
not segment the concrete siding market because the only market for siding is contractors
who build the homes
e.
segment the concrete siding market based on the information provided and concentrate its
efforts on suburban homeowners between 25 and 54 who read lifestyle magazines
23. If a market segment is especially motivated by coupons in newspapers, which segmentation success
criterion is most influential in the success of this program?
a.
Responsiveness
b.
Identifiability and measurability
c.
Substantiality
d.
Accessibility
e.
Functionality
24. A health club has a new fitness program for expectant mothers. After fliers were placed at the offices
of area obstetricians, classes filled up within two days. Which segmentation success criterion was most
influential in the success of this promotion?
a.
Substantiality
b.
Identifiability
c.
Measurability
d.
Causality
e.
Responsiveness
25. _____ are characteristics of individuals, groups, or organizations that marketers use to divide a total
market into segments.
a.
Differentiation guides
b.
Segmentation bases
c.
Perceptual maps
d.
Responsiveness quotients
e.
Accessibility quotients
26. Military Spouses is the only publication in the world that targets readers who are “married to the
military.” Its content reflects the unique set of challenges, hardships, and rewards to those whose
spouses are in the military. The marital status that has been used to distinguish the market for this
magazine is an example of a(n):
a.
market base
b.
selector base
c.
identifier
d.
segmentation base
e.
discriminator base
27. Scott owns Buffalo Mountain Coffee in Deer Park, Ohio. He understands the need to segment his
market, and available marketing research indicates there is much demand in the community for unique
coffee drinks. However, he has few resources and cannot engage in intensive consumer research to
precisely identify a segment. Which of the following strategies would you suggest he employ?
a.
Develop an undifferentiated strategy, because it is not a large community and he could
create a single marketing mix that would serve the entire community.
b.
Employ a macrosegmentation strategy because the data needed for such a strategy are both
easy to get and fit his needs exactly.
c.
Use a single-variable strategy because it offers an inexpensive alternative that would not
require much experience to employ.
d.
Use a multiple-variable segmentation strategy because it is easier to use than
single-variable segmentation.
e.
Conduct a VALS investigation of his buying market.
28. Consumers in Louisiana love hot sauce, and Tabasco and Crystal brands are particularly popular there.
Consumers in Michigan do not like hot food, so they purchase very little hot sauce. A national chain
of grocery stores would likely use _____ segmentation when stocking condiment merchandise.
a.
geographic
b.
economic
c.
demographic
d.
benefit
e.
geodemographic
29. _____ is the segmenting of markets based on the region of the country or the world, market size,
market density (number of people within a certain unit of land), or climate.
a.
Community segmentation
b.
Geographic segmentation
c.
Geodemographic segmentation
d.
PRIZM segmentation
e.
Demonstratable regionalization
30. A manufacturer of blankets knows heavy 100 percent wool blankets sell better in the New England
area where the winters are harsh and that lighter-weight blankets sell better in the Southeast market
where mild winters require fewer and lighter covers for the bed. Segmenting the market according to
climate is an example of _____ segmentation.
a.
psychographic
b.
lifestyle
c.
perceptual
d.
demographic
e.
geographic
31. The Coca-Cola Company has over 450 brands in over 195 countries. According to their web site, their
products range from Samurai, an energy drink available in Asia, to Vita, an African juice drink.
Coca-Cola uses _____ segmentation in this marketing strategy.
a.
geographic
b.
economic
c.
demographic
d.
usage-rate
e.
multi-positioning
32. Almost all cell phones sold in the United States are black or gray. Almost all cell phones sold in
Europe are colorful, and very few black phones are sold. A cell phone manufacturer knowing this
information could use _____ segmentation when selling its phones internationally.
a.
geographic
b.
economic
c.
demographic
d.
benefit
e.
multi-positioning
33. All of the following statements are reasons why consumer goods companies take a regional approach
to marketing rather than a national approach EXCEPT:
a.
Many firms need to find new ways to generate sales because of sluggish and intensely
competitive markets.
b.
A regional approach gives marketing managers control over the competitive environment.
c.
Computerized checkout stations with scanners enable retailers to assess accurately which
brands sell the best in each region.
d.
Many packaged goods manufacturers are introducing new regional brands intended to
appeal to local preferences.
e.
A more regional approach allows companies to react more quickly to competition.
34. Marketers use _____ to segment markets because this information is widely available, and factors such
as age or gender are often related to consumer purchasing and consumption behavior.
a.
benefits
b.
psychographics
c.
demographics
d.
usage rates
e.
sociocultural attributes
35. Income, ethnic background, gender, and age are all examples of _____ segmentation bases.
a.
geodemographic
b.
organizational
c.
demographic
d.
socioeconomic
e.
psychographic
36. Colgate manufactures a fruit-flavored SpongeBob Squarepants toothpaste for kids. The age-based
variable that distinguishes the market for this product is an example of a(n) _____ segmentation.
a.
geographic
b.
demographic
c.
psychographic
d.
benefits
e.
usage rate
37. Modern Maturity magazine is targeted toward adults age 50 and older. It has articles on health and
fitness as well as the arts and finance. What segmenting base is Modern Maturity using?
a.
demographic
b.
geographic
c.
nomological
d.
economic
e.
generational
38. Fisher-Price developed a rugged, waterproof camera for children. This product uses _____
segmentation.
a.
ethnicity
b.
income
c.
age
d.
gender
e.
occupation
39. While most marketing to Generation Y tries so hard to be hip that it borders on parody, Vans has kept
the decades-old brand real and vital for Gen Yers. Marketing programs the footwear manufacturer uses
to reach Gen Yers include the Vans Skate Parks, which operate in malls around the country; the wildly
successful Vans Warped Tour for alternative music; and the Vans Triple Crown, the brand’s answer to
the X Games. The segmentation plan used by Vans relies heavily on _____ segmentation.
a.
ethnicity
b.
income
c.
age
d.
gender
e.
occupation
40. Redbook magazine targets what it calls “Redbook jugglers,” defined as 25– to 44-year-old women who
must juggle family, husband, and job. According to a Redbook ad, “She’s the product of the ‘me
generation,’ the thirty-something woman who balances home, family, and career— more than any
generation before her, she refuses to put her pleasures aside. She’s old enough to know what she
wants. And young enough to get it.” This is an example of _____ segmentation.
a.
demographic and psychographic
b.
benefit desired and usage rate
c.
geodemographic and benefit desired
d.
demographic and usage rate
e.
benefit desired and demographic
41. Marketers who hope to sell to baby boomers need to avoid appeals to boomers’:
a.
age
b.
interests
c.
values
d.
lifestyles
e.
desire for attention
42. Which of the following statements about the tween market is TRUE?
a.
Tweens represent half of all spending in the United States.
b.
Tweens are technologically savvy and are very social consumers.
c.
Tweens typically have very little influence over major family purchase decisions.
d.
Tweens spend a considerable amount of money on health-related purchases.
e.
All of the above are true.
43. Abbeville Press published a book by Armin Brott and Jennifer Ash entitled The Expectant Father:
Facts, Tips, and Advice for Dads-to–Be. It is an advice book for men whose partners are expecting a
baby. What demographic variables have been used to define the market for this book?
a.
Benefit desired and lifestyle
b.
Gender and family life-cycle stage
c.
Age, gender, and personality
d.
Benefit desired and gender
e.
Usage-rate and lifestyle
44. Deal$ stores sell a wide variety of low-priced merchandise: party supplies, cleaning products, toys,
food, housewares, and health and beauty products for both men and women. Many items in the store
are priced no higher than one dollar. Which type of demographic segmentation is Deal$ using?
a.
Ethnic
b.
Usage rate
c.
Income
d.
Gender
e.
Age
45. H&M plans to open a new store in Saudi Arabia. It will be staffed completely by women. Saudi Arabia
has strict laws about women interacting with men other than their husbands so only women will be
permitted to shop there. Which type of demographic segmentation is H&M using?
a.
Lifestyle
b.
Usage rate
c.
Benefit
d.
Age
e.
Gender
46. Johnson Publishing Company, the world’s largest African American-owned publishing company and
home of Ebony magazine, has forged an alliance with Dan River, Inc., to create luxury bed and bath
products for the newly developed Ebony Home brand. This brand will use the strong relationship the
publisher has with the African American market to sell the brand. What form of demographic
segmentation will be used to market the Ebony Home brand?
a.
Geographic
b.
Income
c.
Ethnic
d.
Benefit
e.
Lifestyle
47. In Miami, several radio stations broadcast in Spanish and play Latin music for the Hispanic people
living in South Florida. The radio stations are using _____ segmentation.
a.
usage rate
b.
ethnic
c.
socioeconomic
d.
geographic
e.
gender
48. Which of the following statements about the Hispanic-American market is TRUE?
a.
Hispanic-Americans spend less on packaged goods than any other demographic segment.
b.
Hispanic Americans rarely purchase products and services advertised on television.
c.
By 2013, Hispanic-Americans will constitute the second-largest ethnic market in the U.S.
d.
The Hispanic segment is less likely to carry credit card debt than the general U.S.
population.
e.
Hispanic-Americans make more online purchases than any other ethnic group in the U.S.
49. _____ have higher-than-average household incomes and education levels than the general U.S.
population.
a.
African-Americans
b.
Native Americans
c.
Hispanic-Americans
d.
Caucasians
e.
Asian-Americans
50. Modern Bride is a publication that contains articles and lots of ads for the bride–to–be. Many young
women consult this magazine as they plan their special day. The segmentation base used to define the
publication’s target market is based on _____ variables.
a.
geodemographic
b.
geographic
c.
family life-cycle
d.
lifestyle
e.
psychographic
51. A series of stages determined by a combination of age, marital status, and the presence or absence of
children is known as the:
a.
generation gap
b.
family life cycle
c.
maturation process
d.
segmentation cycle
e.
psychographic process
52. Jane graduated from high school in 1978, is married, and has two teenaged children. Most of Jane’s
friends from high school have children who have already graduated from college, gotten married, and
some with grandchildren. Jane and her former classmates are at difference stages of the:
a.
internalization phase
b.
segmentation process
c.
family life cycle
d.
psychographic cycle
e.
maturation process
53. Evenflo makes baby-gates to keep toddlers away from stairs. What demographic segmentation variable
will Evenflo use to identify its target market?
a.
gender
b.
benefit
c.
usage rate
d.
family life cycle
e.
ethnic
54. Which of the following businesses would be most likely to use family life-cycle segmentation?
a.
Businesses that produce and market computer software and hardware
b.
The snack industry
c.
Fast-food restaurants
d.
Business-to-business marketers
e.
Wedding planners, couples-only resorts, and day-care centers