Multiple Choice
1. What consumer value does Four Loko address that is in the American tradition of such
products as the Egg McMuffin and the breakfast bar?
a. portability
b
.
no waiting
c. convenience
d
.
surprise
e. colorful packaging
PTS: 1 OBJ: 6-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
2. Which of the following factors or influences provided a “gateway” to drinking and abusing
Four Loko?
a. sport hydrating drinks consumed in childhood
b
.
social class
c. income
d
.
college drinking subculture
e. All of the above
PTS: 1 OBJ: 6-5–7 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
3. It was the __________, that psychological factor in particular, which made Loko Four
seem healthy.
a. convenience
b perception
.
c. eye candy cans
d
.
hierarchical need of thirst
e. motivation
PTS: 1 OBJ: 6-8 TOP: AACSB Ethics
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
4. Four Loko is obviously a product that relies on peer pressure and self-image. Does this
product depend on nonaspirational groups in influencing its consumers? Choose the best
answer.
a. No, Four Loko is entirely dependent on its athletic, herbal lifestyle image.
b
.
Yes, drinking Four Loko separates its largely male athlete consumers from female
college students.
c. Yes, Four Loko uses legal wormwood extract and thus disassociates the product
from drug addicts.
d
.
Yes, Four Loko relies on groups perceived as unhealthy or social pariahs, such as
drunken beer drinkers and hard core alcoholics.
e. No, Four Loko relies more on the consumer achieving the ideal, athletic drinker
self-image.
PTS: 1 OBJ: 6-6 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
5. Phusion Products used __________ to make Four Loko attractive to young people mixing
and abusing such energy–alcoholic drink combinations such as Red Bull and Jägermeister.
a. perceptual mapping
b
.
positioning
c. product differentiation
d
.
cannibalization
e. niche marketing
PTS: 1 OBJ: 8-9 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
6. In the end, Phusion Products had to remove caffeine and other stimulants that masked Four
Loko’s inebriating effects. New variations of the product will be an alcoholic beverage.
This is an example of __________.
a. repositioning
b
.
cannibalization and repositioning
c. cannibalization
d
.
an FDA ruling
e. a change of product class
PTS: 1 OBJ: 8-9 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension
Critical Thinking Case
Mary Kay Inc. Taps into a Changing Demographic
Founded in 1963 by Mary Kay Ash and her son, Richard, Mary Kay Inc. is a company that has
long believed in the power of women. Dedicated to making life more beautiful for women, the
Beauty and Personal Care Products and Direct Selling
While the economic situation is such that consumers are scaling back on spending for high-end
nonessential items, many beauty and personal care products are considered necessities. At the
same time, beauty and personal care products do not have country boundaries—such products
Direct selling is a method of distributing products directly to the consumer via person-to-person
selling or party plan selling and away from permanent retail locations. According to the Direct
Mary Kay Inc.
Mary Kay Inc. develops and manufactures beauty and personal care products for both women
and men. The company spends millions of dollars and conducts more than 300,000 product tests
to ensure that Mary Kay Inc. products meet the highest standards of quality, safety, and
With women as its primary target market, Mary Kay Inc. has stayed abreast of changing buyer
behavior. For example, the company knows that the younger generation expects to touch and
While the company has been successful product-wise with the younger demographic, Mary Kay
Inc. has been particularly astute at tapping into this changing demographic with respect to its
Yet, the company recognizes that other direct-selling companies want to harness the power and
dynamic of this age group. These young leaders are known for wanting increased flexibility,
(Accessed February 9, 2011); Barbara Seale, “Younger every Day,” Direct Selling News, October
2010, 24–33.
Open-Ended Questions
1. The younger demographic is important to Mary Kay Inc. both as consumers of the
company’s products and as its sales force. Since the market is one and the same, can
the company utilize one marketing strategy targeting both consumers and sellers?
Why, or why not?
No, the company cannot use the same marketing strategy to attract both its independent
sales consultants and consumers. While both groups are in the same demographic and thus
For example, Mary Kay Inc. focuses upon the desire of younger demographic for
experimentation by offering a Virtual Makeover Tool on its website and videos on its
purposes.
2. What are particular characteristics about this younger demographic that Mary Kay
Inc. will have to tap into in order to capture and maintain the segment’s attention?
Digitally driven (technology)
Closed-Ended Questions
True/False
1. Mary Kay Inc. relies on consultants and direct selling, which is essentially one-to-one
marketing.
PTS: 1 OBJ: 8-8 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge
2. The marketing that exists between Mary Kay Inc. and its consultants is not B2B.
Mary Kay Inc., vis-à-vis its independent beauty consultants, is the producer and distributor
in this B2B role.
PTS: 1 OBJ: 7-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Level I Knowledge
3. Mary Kay’s seeking consultants who fit the segmentation of the target market is a form of
product user positioning.
PTS: 1 OBJ: 8-9 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge
4. Mary Kay Inc. is not vulnerable to losing a younger generation of consultants to direct
sellers like itself.
PTS: 1 OBJ: 7-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge
Multiple Choice
1. Which of the following segmentations is probably least important to Mary Kay?
a. ethnic
b
.
gender
c. age
d
.
family life cycle
e. None of the above
PTS: 1 OBJ: 8-8 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension
2. By designing its products to vary, to seem “new” in shade, scent, forms, even packaging,
Mary Kay Inc. is counteracting which aspect of a younger generation of users?
a. skepticism
b
.
disloyalty to brands
c. less income
d
.
the desire for an “experience”
e. All of the above
PTS: 1 OBJ: 8-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
3. Mary Kay Inc. recognizes geographic and ethnic segmentation. It also sees most women as
having similar preferences. These would probably lead to what strategy?
a. continue to create product lines specifically for each target market
b
.
produce makeup and the like in the most uniform way possible because women
tend not to recognize cultural differences when it comes to beauty care projects
c. treat customers in different countries as reference groups
d
.
pursue a geodemographic segments to target women in even smaller, more diverse
markets
e. produce products with the same formulations yet intensify marketing to individual
cultures and the like
PTS: 1 OBJ: 6-5 TOP: AACSB Diversity
KEY: CB&E Model International Perspective
MSC: BLOOMS Level IV Analysis
4. Unlike other companies, Mary Kay Inc. must compete with other direct-selling firms for
____________ from a business-to-business perspective.
a. beauty care product customers
b
.
the same demographic segments
c. a largely female demographic
d
.
its beauty consultants
e. None of the above
PTS: 1 OBJ: 7-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension
5. When Mary Kay Inc. identifies and focuses on the younger age of its largely female
clientele, their unlimited earning power, their preferences for certain product lines, and the
like, it is looking at __________.
a. segmentation descriptors
b
.
target market variables
c. evoked sets
d
.
consideration sets
e. optimizers
PTS: 1 OBJ: 8-6 TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer MSC: BLOOMS Level II Comprehension
6. From reading the Mary Kay Inc. case, which of the following would be the least important
in its approach to one-to-one marketing?
a. loyalty
b
.
technology
c. personalization
d
.
time-savings
e. None of the above
PTS: 1 OBJ: 8-8 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension