Exam 5: Target Markets: Segmentation and Evaluation

What is the primary disadvantage of using a market test as a forecasting tool?

A market comprised of individuals or organizations with diverse product needs is called a(n) market.

In developing a company sales forecast, the forecasting methods are limited to surveys and correlation methods.

Only one variable can be used to segment a market.

A market segment profile may cover such aspects as demographic characteristics, geographic factors, product benefits sought, lifestyles, brand preferences, and usage rates.

Guess Inc. will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's:

Generally speaking, individuals who are unemployed would not be considered a target market for lawn care services because:

In a customer survey, a marketer would question customers about the types and quantities of products they intend to buy during a specific time period.

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 a 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 .

What are the three major issues that need to be considered in the process of evaluating market segments?

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.

Many marketers are concerned about the number of potential customers within a certain area of land because of the different requirements to serve dissimilar areas. This segmentation variable is known as .

The size of the market potential places limits on the size of the company sales potential.

Justin Franklin's company is interested in locating areas where the average income is high, the average age range is 25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company would most likely find possible markets through:

Demographic variables such as income and occupation, as well as how people spend their time and the importance of things in their surroundings, are all factors considered in segmentation.

Which of the following forecasting methods is least dependent on historical sales data?

When a business has a relatively small number of customers, a preferred method of forecasting is .

The psychographic variable that includes numerous characteristics related to people's activities, interests, and opinion is:

The sales prediction technique based on the correlation between sales and other factors such as population density, per capita income, or family size is:

Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?