Exam 6: Target Markets, Segmentation and Evaluation

Jonathan works as a manager in the marketing department of a pharmaceutical firm. The time has come to develop sales forecasts for the next year. This year the company wants to increase the reliability of the sales forecast. Jonathan was asked to participate in this process because of his extensive market knowledge. He joins a group of other experts in the area. Individuals in Jonathan's group all submit their own forecasts. These forecasts are then averaged, and the results are given back to the group so they can refine them. The intent is to reach a consensus by working separately on these forecasts. What type of forecasting technique is this?

In the breakdown approach, the marketing manager measures company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered.

A company sales forecast is the amount of a product that a company expects to sell during a specific time period at a specified level of marketing activities.

The process of dividing a total market into market groups because people within each group have relatively similar product needs is called

Only one variable can be used to segment a market.

The purpose of market segmentation is to

The Cup is a small shop in a small Pennsylvania town with a very loyal following. It has become well known in the town as well as in many of the towns surrounding it. Consumers seem to love the homey, local feel of The Cup. As a result, The Cup would like to open a new store in one of the towns close by. It has identified a region it thinks could be profitable. It has many loyal customers who live in that town. However, the town is also home to a Starbucks store. The town is growing, and The Cup has heard rumors that a Dunkin' Donuts may open. The owner is currently evaluating the relevant market segments in the area (Step 4). He has the following questions he wants to answer: 1. Do we have enough of a loyal following as a local shop that we can attract customers away from Starbucks? 2) With the town growing as fast as it is, will other coffee shops decide to locate there? The owner is conducting a _____________ to evaluate relevant market segments.

Family life cycle is most typically based on

When selecting the specific target market, the firm must consider the possibility that the requirements of some market segments are at odds with the firm's overall objectives.

Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.

The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the

Coca-Cola would be able to use a customer forecasting survey to forecast future sales effectively.

Discuss the differences between the breakdown and buildup approaches to measuring company sales potential. What are the similarities between these two approaches?

The undifferentiated targeting strategy for finding a target market will likely not be successful if

If your firm uses a ______________ targeting strategy, you can expect to need __________ production processes to support the strategy.

Dana wants to open up a clothing store. The target market she selects will largely determine the type of product she sells. She has performed research and come up with three market segments that she thinks could be profitable: formal wear for special events, stylish but high-end clothes for consumers who use clothing as a status symbol, and casual clothing for those whose main concern is comfort. Dana has used sales estimates, competitive assessments, and cost estimates to determine the potential profitability of each segment. What is Dana's next step in the process?

If Campbell were to offer single serving "Soup for One" packages to household markets, it would be using segmentation based on

When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is using a(n) ____ strategy.

The marketer uses segmentation variables to divide a market into segments. All of the following statements are true about segmentation variables except:

Scenario 6.1 Use the following to answer the questions. Angels Kids Spa offers various treatments designed to appeal to the younger customer. Treatment options include manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party package. Currently, Angels offers its services only to girls under the age of 14. Originally begun in Delaware, Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to 17. The company realizes that some changes may be needed. For example, management wants to find out if the older girls will be interested in their birthday party and tea party services. Refer to Scenario 6.1. What method should Angels use to forecast sales in new regions?