Solution Manual for Framework for Marketing Management
6th Edition by Kotler Keller ISBN 9780133871319
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A Framework for Marketing Management, 6e (Kotler)
Chapter 6 Identifying Market Segments and Targets
1) Which of the following statements about market segmentation is TRUE?
A) It involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
B) It is a process of evaluating each segment's attractiveness and selecting one or more to enter.
C) It is a process of creating an image or identity of the product in the minds of the target market.
D) It is a process of identifying and profiling distinct groups of buyers who differ in their needs and wants.
E) It is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results.
Answer: D
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
2) Establishing and communicating the distinctive benefit(s) of the company's market offering for each target segment is called ________.
A) market research
B) market positioning
C) marketing effectiveness
D) market segmentation
E) market dominance
Answer: B
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
3) The process of selecting one or more market segments to enter is called market ________.
A) targeting
B) dominance
C) positioning
D) segmentation
E) research
Answer: A
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
4) When Nike attempts to get close to its customers at the local level by sponsoring local school teams and providing shoes, equipment, and clothing to many of them, Nike is using which of the following marketing formats?
A) differentiated marketing
B) affiliate marketing
C) guerrilla marketing
D) affinity marketing
E) grassroots marketing
Answer: E
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
5) When the Modern Museum of Art separated its consumers by whether they were cultureoriented or outdoor-oriented for its new exhibit on art that used natural materials, they were using ________ segmentation.
A) psychographic lifestyle
B) personality
C) behavioral occasions
D) social class
E) demographic
Answer: A
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Application of knowledge
6) Pampers divides its market demographically on the basis of ________ into prenatal, new baby, baby, toddler, and preschooler.
A) life stage
B) gender
C) age
D) income
E) social class
Answer: C
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
7) The fact that Honda described its boxy Element as a "dorm room on wheels," but then attracted so many baby boomers that the average age of the Element turned out to be 42 illustrates what quality of baby boomers?
A) being willing to pay for price for valued offerings
B) being turned off by overt marketing practices
C) being pragmatic and prizing self-sufficiency
D) wanting to purchase online
E) wanting to turn back the hands of time
Answer: E
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Application of knowledge
8) Newlyweds in the United States buy more in the first six months than an established household does in five years. Newlyweds are an example of a(n) ________ segment.
A) life stage
B) age
C) behavior
D) user status
E) income
Answer: A
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
9) Which of the following statements about Gen Xers is TRUE?
A) Gen Xers are often willing to change brands.
B) Gen Xers are selective, confident, and impatient.
C) Gen Xers are socially conscious and concerned about the environment.
D) Gen Xers prize self-sufficiency and are pragmatic.
E) Technology is a barrier for Gen Xers.
Answer: D
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
10) ________ is the science of using psychology and demographics to better understand consumers.
A) Psychographics
B) Interactionism
C) Clustering
D) Demographic transition
E) Customerization
Answer: A
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
11) The dimensions in the VALS framework are consumer resources and ________.
A) marketer resources
B) product innovation
C) consumer maturity
D) impulsiveness
E) consumer motivation
Answer: E
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
12) Dennis requests his father to buy him a PlayStation® for his birthday. With respect to consumer decision roles, which role is Dennis currently playing?
A) initiator
B) influencer
C) decider
D) buyer
E) gatekeeper
Answer: A
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
13) Mothers-to-be are potential users who will turn into heavy users of infant products and services. By targeting mothers-to-be as future heavy users, producers of these products and services are segmenting consumers on the basis of ________.
A) attitude
B) buyer-readiness stage
C) loyalty status
D) user status
E) benefits
Answer: D
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
14) A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own.
A) hard-core loyals
B) split loyals
C) shifting loyals
D) switchers
E) antiloyals
Answer: B
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
15) If a marketer is seeking to segment a business market, which of the following variables is generally felt to be the most important?
A) personal characteristics
B) demographic variables
C) situational factors
D) operating variables
E) purchasing approaches
Answer: B
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
16) Urgency, specific application, and size of order are examples of ________ segmentation variables for business markets.
A) situational factors
B) demographic
C) purchasing approaches
D) personal characteristics
E) operating variables
Answer: A
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
17) In segmenting its markets, an aluminum company first looked at which end-use market to serve: automobile, residential, or beverage containers. This is an example of ________.
A) macrosegmentation
B) microsegmentation
C) geographic segmentation
D) global segmentation
E) short-term segmentation
Answer: A
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
18) A marketer is interested in segmenting a business market on ________ if the marketer intends to segment the market based on industries and geographical areas to serve.
A) demographic variables
B) situational factors
C) operating variables
D) purchasing approaches
E) personal characteristics
Answer: A
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
19) A marketer is interested in segmenting a business market based on technology and customer capabilities. These criteria illustrate which of the following major segmentation variables?
A) demographic variables
B) purchasing approaches
C) situational factors
D) personal characteristics
E) operating variables
Answer: E
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
20) A marketer is interested in segmenting a business market on ________ if the marketer's variables are loyalty and attitudes toward risk.
A) situational factors
B) purchasing approaches
C) personal characteristics
D) operating variables
E) demographic variables
Answer: C
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
21) A ________ offering consists of two parts: a naked solution and discretionary options.
A) differentiated market
B) flexible market
C) rigid market
D) vertical market
E) horizontal market
Answer: B
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
22) When marketers present flexible market offerings to all members of a business segment, their offerings consist of two parts. Which part contains the product and service elements that all segment members value?
A) naked solution
B) discretionary solution
C) maximum solution
D) pseudo solution
E) virtual solution
Answer: A
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
23) A market segment consists of a group of consumers who share a similar set of needs and wants.
Answer: TRUE
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
24) Illustrations of personality segmentation would include culture-oriented, sports-centered, or outdoor-oriented subsegments.
Answer: FALSE
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
25) A local service company has decided to segment its market based on occupation; therefore, it has chosen a form of demographic segmentation for its approach.
Answer: TRUE
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking; Application of knowledge
26) Demographic variables are popular because they are often associated with consumer needs and wants and they are easy to measure.
Answer: TRUE
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
27) Marketers can assume that people who buy a given product want the same benefits from it.
Answer: FALSE
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
28) Hard-core loyals can show the firm which brands are most competitive with its own.
Answer: FALSE
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
29) Door-to-door workers in a political campaign use attitude to determine how much time to spend with each voter.
Answer: TRUE
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
30) Business segmentation based on purchasing approaches may divide the market by technology, user and nonuser status, and general purchasing policies.
Answer: FALSE
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
31) For segmenting a business market, situational factors include urgency, specific application, and size of order.
Answer: TRUE
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
32) With respect to business market offerings, if a marketer emphasizes a naked solution, he or she is emphasizing the product and service elements that all segment members value.
Answer: TRUE
Diff: 1
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
33) Suppose a marketer decides to segment a market based on social class, psychographic lifestyle, and readiness stage. For each type of segmentation, give at least three possible segmentation subcategories.
Answer: Answers will vary. For social class, subcategories include lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, and upper uppers. Possible psychographic lifestyles include culture-oriented, sports-oriented, and outdoor-oriented. Lastly, readiness stage includes unaware, aware, informed, interested, desirous, and intending to buy.
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
34) Describe the PRIZM method of segmenting consumer markets.
Answer: PRIZM, developed by Nielsen Claritas, stands for Potential Rating Index by Zip Markets. It is a method for geoclustering that classifies over half a million U.S. residential neighborhoods into 14 distinct groups and 66 distinct lifestyle segments called PRIZM Clusters. The groupings take into consideration 39 factors in five broad categories: education and affluence, family life cycle, urbanization, race and ethnicity, and mobility. The clusters have descriptive titles such as Blue Blood Estates, Winner's Circle, Hometown Retired, Shotguns and Pickups, and Back Country Folks. The inhabitants in a cluster tend to lead similar lives, drive similar cars, have similar jobs, and read similar magazines.
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
35) Briefly describe the characteristics of the Millennials.
Answer: Born between 1977 and 1994, Millennials, also called Gen Y and Echo Boomers, number 78 million. These consumers have been "wired" almost from birth–playing computer games, navigating the Web, downloading music, connecting with friends via instant messaging and mobile phones. They have a sense of entitlement and abundance from growing up during the economic boom. Yet they are highly socially conscious and concerned about environmental issues. They may be turned off by overt marketing practices.
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
36) Identify the four market segment groups based on brand loyalty status, and list what a company can learn from analyzing the degrees of brand loyalty.
Answer: Marketers usually envision four groups based on brand loyalty status:
1. hard-core loyals
2. split loyals
3. shifting loyals
4. switchers
Hard-core loyals can help identify the products' strengths. Split loyals can show the firm which brands are most competitive with its own. By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses and attempt to correct them.
Diff: 3
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
37) Local marketing reflects a growing trend called grassroots marketing What are the characteristics of grassroots marketing?
Answer: In grassroots marketing, marketing activities concentrate on getting as close and personally relevant to individual customers as possible.
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
38) Not everyone is in favor of local marketing. Identify two arguments made against local marketing.
Answer: Those against local marketing argue that it drives up manufacturing and marketing costs by reducing economies of scale and magnifying logistical problems. A brand's overall image might be diluted if the product and message are different in different localities.
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Analytical thinking
39) Identify ways in which shopping behaviors differ between men and women.
Answer: When shopping, men often need to be invited to touch a product, whereas women are likely to pick it up without prompting. Men like to read product information, whereas women may relate to a product on a more personal level. These differences are based partly on genetic makeup and partly on socialization. As men and women expand their roles, gender differences are shrinking in some areas.
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
40) List the four groups of consumers based on loyalty status.
Answer: The four groups of consumers based on loyalty status are:
1. hard-core loyals
2. split loyals
3. shifting loyals
4. switchers
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
41) What are some examples of situational factors that can be used to segment business markets?
Answer: Urgency, specific application, and size of order are examples of situational factors used for business market segmentation.
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
AACSB: Reflective thinking
42) A flexible market offering consists of two parts. Identify and describe these two parts.
Answer: A flexible market offering consists of two parts: a naked solution containing the product and service elements that all segment members value, and discretionary options that some segment members value.
Diff: 2
LO: 6.1: In what ways can a company divide a consumer or business market into segments?
43) Which of the following statements is TRUE about the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment?
A) A segment is unattractive if the company's suppliers are unable to raise prices or reduce quantity supplied.
B) A segment is unattractive if buyers possess strong or growing bargaining power.
C) A segment is attractive when there are actual or potential substitutes for the product.
D) A segment is attractive if it already contains numerous, strong, or aggressive competitors.
E) The most attractive segment is one in which entry barriers are low and exit barriers are high.
Answer: B
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
44) During which step of the needs-based segmentation process would the marketer group customers into segments based on similar needs and benefits sought by the customer in solving a particular consumption problem?
A) Step 2–segment identification
B) Step 3–segment attractiveness
C) Step 6–segment "acid test"
D) Step 1–needs-based segmentation
E) Step 7–marketing-mix strategy
Answer: D
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
45) If an organization's marketing department wants to create "segment storyboards" to test the attractiveness of each segment's positioning strategy, it would most likely occur in the ________ step of the segmentation process.
A) needs-based segmentation
B) segment identification
C) segment profitability
D) segment "acid test"
E) marketing-mix strategy
Answer: D
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Analytical thinking
46) In the ________ step of the market segmentation process, the marketer evaluates the segment using criteria such as market growth and market access.
A) need-based segmentation
B) segment identification
C) segment attractiveness
D) segment profitability
E) segment "acid test"
Answer: C
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
47) In the ________ step of the market segmentation process, the marketer determines which demographics, lifestyles, and usage behaviors make each needs-based segment distinct and identifiable.
A) segment "acid test"
B) segment attractiveness
C) segment profitability
D) need-based segmentation
E) segment identification
Answer: E
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
48) To be useful, a market segment should be ________, which means the largest possible homogeneous group worth going after with a tailored marketing program.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable
Answer: B
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Analytical thinking
49) The characteristic of useful market segments that relates to whether the segments can be effectively reached and served is whether the segment is ________.
A) measurable
B) substantial
C) differentiable
D) accessible
E) actionable
Answer: D
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Analytical thinking
50) If your assignment was to create a value proposition and product-price positioning strategy for each segment, based on the segment's unique customer needs and characteristics, you would be in which of the following steps of the segmentation process?
A) needs-based segmentation
B) segment identification
C) segment attractiveness
D) segment positioning
E) segment "acid-test"
Answer: D
Diff: 3
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Analytical thinking
51) For a segment to meet the ________ criterion of usefulness, the marketer must be able to formulate effective programs for attracting and serving the segments.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable
Answer: E
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Analytical thinking
52) If married and unmarried women respond similarly to a sale on perfume, these hypothetical segments fail the ________ criterion for useful market segments.
A) measurable
B) substantial
C) accessible
D) differentiable
E) actionable
Answer: D
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking; Application of knowledge
53) The most attractive segment is one in which entry barriers are low and exit barriers are high.
Answer: FALSE
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
54) A segment is attractive when there are actual or potential substitutes for the product.
Answer: FALSE
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
55) A segment is unattractive if the company's suppliers are able to raise prices or reduce quantity supplied.
Answer: TRUE
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
56) The last step in the seven-step marketing segmentation process would be to develop a marketing-mix strategy reflective of segment positioning strategies.
Answer: TRUE
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
57) To be useful, market segments must be measurable.
Answer: TRUE
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
58) Briefly describe the steps in the segmentation process.
Answer: The seven steps in the segmentation process include:
1. Needs-Based Segmentation Group customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem.
2. Segment Identification For each needs-based segment, determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable (actionable).
3. Segment Attractiveness Using predetermined segment attractiveness criteria (such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment.
4. Segment Profitability Determine segment profitability.
5. Segment Positioning For each segment, create a "value proposition" and product-price positioning strategy based on that segment's unique customer needs and characteristics.
6. Segment "Acid Test" Create "segment storyboard" to test the attractiveness of each segment's positioning strategy.
7. Marketing-Mix Strategy Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, and place.
Diff: 3
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
59) To be useful, market segments must rate favorably on five key criteria. What are those criteria?
Answer: To be useful, market segments must be:
1. measurable
2. substantial
3. accessible
4. differentiable
5. actionable
Diff: 2
LO: 6.2: How should a company choose the most attractive target markets?
AACSB: Reflective thinking
60) List the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment.
Answer: The five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment are industry competitors, potential entrants, substitutes, buyers, and suppliers.
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
61) List the threats posed by the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment.
Answer: The threats posed by the five forces are:
1. threat of intense segment rivalry
2. threat of new entrants
3. threat of substitute products
4. threat of buyers' growing bargaining power
5. threat of suppliers' growing bargaining power
Diff: 1
LO: 6.2: How should a company choose the most attractive target markets?
62) All attempts to target marketing to children, minorities, or other special segments are discriminatory and unethical.
Answer: FALSE
Diff: 2
LO: 6.3: How should a company choose the most attractive target markets?
AACSB: Ethical understanding and reasoning
63) In evaluating different market segments, the firm must look at two factors: the segment's overall attractiveness and the ________.
A) company's objectives and resources
B) effectiveness of the suppliers
C) flexibility of legal rules governing the business
D) socio-economic infrastructure
E) global nature of the product
Answer: A
Diff: 1
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking
64) In ________ marketing, the firm ignores segment differences and goes after the whole market with one offer
A) niche
B) mass
C) guerrilla
D) segmented
E) differentiated
Answer: B
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking
65) In ________ marketing, the firm operates in several market segments and designs different products for each segment.
A) individual
B) undifferentiated
C) differentiated
D) concentrated
E) niche
Answer: C
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking
66) General Motors, a leading American multinational automaker, sells cars for every purpose, budget, and personality. This is an example of ________ marketing.
A) undifferentiated
B) differentiated
C) concentrated
D) niche
E) micro
Answer: B
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking; Application of knowledge
67) Marketers usually identify niches by ________.
A) dividing a segment into subsegments
B) conducting VALS tests
C) allowing consumers to gravitate toward product brands
D) examining the demographics section of the handbook of marketing
E) producing products that can be used in a variety of ways
Answer: A
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
68) Volkswagen concentrates on the small-car market and Porsche on the sports car market. These would be examples of what is called ________.
A) single-segment concentration
B) selective specialization
C) product specialization
D) market specialization
E) full market coverage
Answer: A
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking; Application of knowledge
69) All of the following are benefits of following the ________ approach to target market selection: a strong knowledge of the segment's needs, a strong market presence, operating economies through specializing in production, distribution, and promotion.
A) single-segment concentration
B) selective specialization
C) product specialization
D) market specialization
E) full market coverage
Answer: A
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking
70) Which of the following best represents the chief advantage of pursuing a strategy of multiple segment specialization?
A) It makes the company almost bulletproof to competitors' actions.
B) It diversifies the firm's risk.
C) It creates synergy between markets.
D) It is a low-cost strategy.
E) It treats all buyers the same and, therefore, lowers promotion costs.
Answer: B
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking
71) An undifferentiated marketing approach to full market coverage designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers.
Answer: TRUE
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking
72) An attractive niche consists of customers having a distinct set of needs.
Answer: TRUE
Diff: 1
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking
73) The ultimate level of segmentation leads to "segments of one," "customized marketing," or "one-to-one marketing."
Answer: TRUE
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking
74) The niche marketing strategy used by Tom's of Maine, which used concentrated marketing, is in line with an individual marketing strategy.
Answer: FALSE
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Application of knowledge
75) Briefly describe single-segment concentration with an example.
Answer: Examples may vary. With single-segment concentration, the firm markets to only one particular segment. Porsche concentrates on the sports car market and Volkswagen on the smallcar market its foray into the large-car market with the Phaeton was a failure in the United States. Through concentrated marketing, the firm gains deep knowledge of the segment's needs and achieves a strong market presence. It also enjoys operating economies by specializing its production, distribution, and promotion. If it captures segment leadership, the firm can earn a high return on its investment.
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking; Application of knowledge
76) Briefly describe product specialization and market specialization.
Answer: With product specialization, the firm sells a certain product to several different market segments. A microscope manufacturer, for instance, sells to university, government, and commercial laboratories, making different instruments for each and building a strong reputation in the specific product area. The downside risk is that the product may be supplanted by an entirely new technology. With market specialization, the firm concentrates on serving many needs of a particular customer group, such as by selling an assortment of products only to university laboratories. The firm gains a strong reputation among this customer group and becomes a channel for additional products its members can use. The downside risk is that the customer group may suffer budget cuts or shrink in size.
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking
77) List the three premises on which Anderson's long tail theory is based, and summarize the research testing his idea.
Answer: Anderson's long tail theory is based on three premises:
1. Lower costs of distribution make it economically easier to sell products without precise predictions of demand.
2. The more products available for sale, the greater the likelihood of tapping into latent demand for niche tastes unreachable through traditional retail channels.
3. If enough niche tastes are aggregated, a big new market can result. Some research supports this idea, but other research finds very low share products may be so obscure that they disappear before they can be purchased often enough to justify their existence. For companies selling physical products, the costs of inventory, stocking, and handling can outweigh the financial benefits of selling them.
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
78) Give an example of how a company might target products to children in an ethical way.
Answer: The public is concerned when marketers take unfair advantage of vulnerable groups, such as children. However, not all attempts to target children draw criticism. Socially responsible marketing calls for targeting that serves not only the company's interests, but also the interests of those targeted. For example, Colgate Junior toothpaste has special features designed to get children to brush longer and more often.
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Ethical understanding and reasoning
79) Explain the concept of mass marketing.
Answer: In mass marketing, the firm ignores segment differences and goes after the whole market with one offer. It designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers via mass distribution and mass communications.
Diff: 2
LO: 6.3: What are the different levels of market segmentation?
AACSB: Analytical thinking
80) Assume that you have decided to use a niche strategy to advance your marketing goals. Characterize an attractive niche.
Answer: An attractive niche is distinguished as follows:
∙ the customers in the niche have a distinct set of needs they will pay a premium to the firm that best satisfies their needs
∙ the niche is not likely to attract other competitors the niche gains certain economies through specialization
∙ the niche is fairly small but has size, profit, and growth potential
Diff: 3
LO: 6.3: What are the different levels of market segmentation?
AACSB: Reflective thinking