Deck 5: Market Segmentation and Segmentation Strategies

Question 1

Both consumers and businesses have market needs,and the factors influencing their needs are essentially the same.

Answer 1

False

Question 2

In order to implement a mass-personalization strategy,a business's database marketing system must be able to track individual customers and their buying history.

Answer 2

True

Question 3

The benefit of needs-based market segmentation is that it allows us to identify in advance the individual customers who would fall into each segment.

Answer 3

False

Question 4

Which of the following is a lifestyle influence that shapes customer needs?

A)income
B)age
C)education
D)occupation
E)interests

Question 5

Lifestyle forces that shape customer needs and market demand include how the product is used,when it is used,and how much it is used.

Question 6

Which of the following statements is true of customer needs?

A)Satisfying customer needs is the first step in successful market segmentation.
B)All potential customers have the same needs.
C)Solving customer problems requires knowing the identity of target customers.
D)A business with a strong market orientation rarely divides its served market into customer segments.
E)The factors influencing the needs of both consumers and businesses are the same.

Question 7

Common to most assessments of segment attractiveness are measurements of market demand,competitive intensity,and market access.

Question 8

In customer relationship management,every interaction with a customer or potential customer is known as a storyboard.

Question 9

The purpose of needs-based segmentation is to offer product benefits that satisfy the needs of target customers.

Question 10

The best way to identify groups of similar customers is to segment customers on the basis of demographics,lifestyles,and usage behaviors.

Question 11

Differences in values,attitudes,and interests are examples of ________ forces shaping consumer needs.

A)demographic
B)lifestyle
C)usage behavior
D)geographic
E)firmographic

Question 12

For a segment marketing mix strategy to be successful,the strategy needs to include only certain elements of the marketing mix.

Question 13

Which of the following is a demographic force that shapes consumer needs?

A)marital status
B)attitudes
C)interests
D)political views
E)quantity used

Question 14

A key benefit of market segmentation is identifying segments that should not be pursued.

Question 15

When pursuing a large-segment strategy,a business presents a generic value proposition built around the core customer need and the business's generic positioning strategy to the entire market.

Question 16

When a market is segmented and marketing resources are limited,a business could elect to pursue a large-segment strategy.

Question 17

In the context of market segmentation,interests,opinions,and leisure pursuits of consumers are related to ________ segmentation.

A)demographic
B)psychographic
C)usage behavior
D)firmographic
E)geographic

Question 18

The primary forces that shape the needs of consumers are demographic influences,lifestyle influences,and usage behaviors.

Question 19

The ultimate goal of a customer relationship management is to build one-on-one customized relationships between a business and individual customers.

Question 20

Business sophistication,growth orientation,innovativeness,technology,and decision making are all examples of firm demographic forces that can have a profound impact on consumer needs.

Question 21

A large-segment strategy differs from a mass-market strategy in that a large-segment strategy ________.

A)addresses one set of core customer needs
B)has no segment focus
C)is used when demographics are not distinctive
D)is used when differences in customer needs are small
E)allows customers to build their own products

Question 22

Number of employees,sales volume,number of locations,years in business,and financial situation are all examples of ________ forces shaping business market needs.

A)demographic
B)firm demographic
C)company culture
D)usage behavior
E)lifestyle

Question 23

Karen is interested in assessing a market segment's attractiveness by analyzing the market demand.Which of the following would be a variable should she assess?

A)number of companies
B)ease of entry
C)customer familiarity with her company
D)market size
E)access to channels that reach target customers

Question 24

________ are tools that marketing managers use to assess the merits of a proposed marketing communication and the strategy behind it.

A)Touch points
B)Value propositions
C)Storyboards
D)Strategy functions
E)Remote segments

Question 25

Which of the following forces that shape segment attractiveness include market size,growth rate,and growth potential?

A)competitive intensity
B)market access
C)market demand
D)profitability
E)feasibility

Question 26

Which of the following is a characteristic of cost-focused sustainers?

A)They have a high level of formal education at the leadership level.
B)They look for new ways to invest and grow their business.
C)They have a very high revenue per customer.
D)They are willing to buy value-added solutions.
E)They have a limited or no financial plan.

Question 27

Which of the following is a part of a company's culture?

A)number of employees
B)years in business
C)innovativeness
D)number of locations
E)sales volume

Question 28

A(n)________ includes all the key elements of the situation and the benefits the target customer is looking for in a given purchase.

A)acid test
B)value proposition
C)storyboard
D)Pareto chart
E)marketing mix strategy

Question 29

S.K Investment Group is a firm based in Chicago that provides financial services to its clients.The marketing department of the firm segments its market based on the amount invested,frequency of transactions,and type of investments purchased.The firm creates 5 meaningful categories for each of the 3 variables.Calculate the possible market segments for S.K Investment Group.

A)642
B)590
C)324
D)278
E)125

Question 30

Which of the following is used to determine a segment's marketing profitability?

A)customer retention index
B)net profit (after taxes)
C)gross profit
D)net marketing contribution
E)gross revenue

Question 31

Which of the following steps in the segmentation process involves determining the demographics,lifestyles,and usage behaviors that make one segment meaningfully different from another?

A)segment strategy "acid test"
B)segment positioning
C)segment attractiveness
D)segment profitability
E)segment identification

Question 32

Dynamo Inc. ,a motor company,started by selling sturdy,affordable,low-maintenance motorcycles in the U.S.Initially the firm pursued a single-segment focus,and targeted the middle-income group.When the company reached the point of full market penetration of the middle-income group,it marketed to a closely related attractive segment by introducing a line of luxury motorcycles for the high-income group of consumers.Which of the following type of market segmentation strategy does Dynamo Inc.use when it targets the high-income group of consumers?

A)multi-segment strategy
B)adjacent-segment strategy
C)mass-customization strategy
D)niche-segment strategy
E)mass-market strategy

Question 33

A(n)________ strategy presents a generic value proposition built around the core customer need and the business's generic positioning strategy.

A)mass-market
B)large-segment
C)adjacent-segment
D)multi-segment
E)niche-segment

Question 34

Which of the following market segments is most likely to be considered attractive by a firm?

A)a market segment with many substitute products
B)a market segment with limited product differentiation
C)a market segment with low barriers to competitor entry
D)a market segment with high price competition
E)a market segment with cost-effective access to customers

Question 35

A business could elect to pursue a large-segment strategy when ________.

A)it wants to provide customized products
B)a market is segmented and marketing resources are limited
C)demographics are not distinctive
D)differences in customer needs are small
E)it wants to carve out a niche within a segment using a highly refined marketing effort directed at an overlooked group of customers

Question 36

Which of the following is true of needs-based market segments?

A)Relevant demographics that cause differences in needs include investments,size of investment portfolio,and portfolio diversification.
B)To make the segments actionable,the observable demographics and behaviors have to be determined.
C)The main advantage is that individual customers who fall into each segment can be identified.
D)The main disadvantage is that the segments are not directly based on specific customer needs.
E)The usage behaviors that cause differences in needs include income and assets.

Question 37

Growth-oriented entrepreneurs differ from cost-focused sustainers in that growth-oriented entrepreneurs ________.

A)are more interested in maintaining the status quo at the lowest cost
B)have a lower level of formal education at the leadership level
C)are less likely to have a working financial plan
D)are confused by value-added solutions
E)are more sophisticated in their operations

Question 38

When differences in customer needs are small or demographics are not distinctive,a business may elect to use a ________ strategy.

A)small-segment
B)vertical integration
C)horizontal integration
D)mass-market
E)niche-segment

Question 39

McEwan and Co. ,a commercial real estate brokerage firm,creates four storyboards,each of which delineates a different value proposition and segment positioning strategy.The firm recruits a group of executives from different industries,and assigns them to one of the four segments.The executives are asked to critique each segment's storyboard and select the one that most appeals to them.The firm aims to assess its understanding of segment needs and its ability to translate that understanding into a value proposition.In this example,which of the following methods is McEwan and Co.using?

A)the emphatic method
B)segment attractiveness test
C)marketing mix strategy test
D)mass-market strategy test
E)segment strategy "acid test"

Question 40

Kate owns a women's fashion apparel manufacturing firm.She has determined that the customers for her business' products can be segmented into three distinct segments differing in primary needs,demographics,lifestyle,and purchase behaviors.She now wants to develop a value proposition that delivers value to target customers in each segment.Which stage of the needs-based market segmentation process does this represent?

A)segment identification
B)segment attractiveness
C)segment profitability
D)segment positioning
E)segment marketing mix strategy

Question 41

Vermont Home Builders conducted a study of the customers in the housing sector,which revealed that there are seven kinds of buyers,each a little different and each differently profitable.Vermont Home Builders decided to focus their attention on the three most profitable segments.In this example,Vermont Home Builders uses which of the following market segmentation strategies?

A)mass-market strategy
B)niche-segment strategy
C)adjacent-segment strategy
D)multi-segment strategy
E)subsegment strategy

Question 42

The rapid growth of database marketing technologies has lured many businesses down a side road where technology is seen as the solution instead of a tool for building a solution.Without a solid commitment to serving individual customer needs,these businesses can fall into a ________.

A)reverse marketing trap
B)technology trap
C)customization trap
D)downward spiral
E)price trap

Question 43

David has determined that there are meaningful differences in customer needs within the health supplements market segment in the U.S. ,that are not being met by the current segmentation strategy used by the businesses in the sector.What market segmentation strategy would be appropriate for David to use to capitalize on this opportunity?

A)mass-market strategy
B)market penetration strategy
C)subsegment strategy
D)large-market strategy
E)undifferentiated strategy

Question 44

Name and describe the seven key steps in a needs-based market segmentation process.

Question 45

Niche-segment strategies differ from mass-market strategy in that niche-market strategies ________.

A)address one set of core customer needs of a large market segment
B)have no segment focus
C)are used when demographics are not distinctive
D)are used when the company markets to a closely related attractive segment first
E)involve highly refined marketing effort directed at an overlooked,small group of customers

Question 46

MyStyle Clothes Inc.is a women's fashion apparel firm that allows its customers to personalize their clothes.MyStyle Clothes Inc.has a web site where customers can choose from a range of fabrics,colors,buttons,fits,and designs to create clothes.Customers can place orders with their measurements,and the clothes are manufactured according to the customer's specifications and sent to her by courier.In this example,MyStyle Clothes Inc.uses which of the following strategies?

A)mass-personalization
B)mass-customization
C)customer relationship management
D)sub-segment
E)multi-segment

Question 47

Which of the following would be considered an indirect customer touch point?

A)in-store interactions
B)news articles
C)return counters
D)voice mail systems
E)service calls

Question 48

Which of the following customer relationship marketing strategies allows customers to become their own individual market segments?

A)mass-personalization
B)core-segment strategy
C)decentralization
D)mass-customization
E)database marketing

Question 49

In the context of customer relationship management,every interaction with a customer or a potential customer is a(n)________.

A)value proposition
B)irrelevant cost
C)service contact
D)touch point
E)sales contact

Question 50

MINI-CASE
FunTime Inc. ,is an American toy manufacturing firm,with its headquarters in New York.The firm specializes in manufacturing educational toys for children.The table given below shows the educational toys market segment performance for FunTime Inc.

Mini-Case Question.What is the net marketing contribution of FunTime Inc?

A)$70 million
B)$120 million
C)$18 million
D)$75 million
E)$190 million

Question 51

MINI-CASE
FunTime Inc. ,is an American toy manufacturing firm,with its headquarters in New York.The firm specializes in manufacturing educational toys for children.The table given below shows the educational toys market segment performance for FunTime Inc.

Mini-Case Question.What is the marketing ROS for FunTime Inc.?

A)27.5%
B)50%
C)10%
D)15%
E)52%

Question 52

The first level of customer relationship marketing is a ________ strategy that recognizes individual customers by name and buying behavior.

A)mass-personalization
B)decentralization
C)mass-market
D)core-segment
E)sub-segment

Question 53

MINI-CASE
FunTime Inc. ,is an American toy manufacturing firm,with its headquarters in New York.The firm specializes in manufacturing educational toys for children.The table given below shows the educational toys market segment performance for FunTime Inc.

Mini-Case Question.What is the marketing ROI for FunTime Inc.?

A)60%
B)40%
C)25%
D)200%
E)65%

Question 54

Compare and contrast the three types of customer relationship marketing strategies.

Question 55

Which of the following is true about database marketing?

A)It is at the core of customer relationship marketing.
B)It assumes that all customers have the same needs.
C)It avoids building a more personal relationship between the business and the customer.
D)It treats all customers as the same,instead of assuming that each customer is unique.
E)It prioritizes creating efficiency through technological advances over building customer relationships.

Question 56

Which of the following segmentation strategies involves using a highly refined marketing effort directed at an overlooked,small group of target customers?

A)a mass-market strategy
B)an adjacent-segment strategy
C)a multi-segment strategy
D)a large-segment strategy
E)a niche-segment strategy

Question 57

HomeVenture Inc.manufactures and sells a line of furniture under the brand name Elegant Lines.The firm has a 3 percent share of the U.S.furniture market,and competes with industry giants who have large economies of scale and marketing resources.However,Elegant Lines holds 65 percent of the overlooked "customized art furniture" segment,specializing in very expensive custom-designed,furniture.Each of the Elegant Lines furniture pieces is a unique piece of art.What type of market segmentation strategy is HomeVenture Inc.pursuing?

A)a mass-segment strategy
B)a niche-segment strategy
C)a large-segment strategy
D)a market-development strategy
E)a mass-market strategy

Question 58

Mass-customization differs from mass-personalization in that mass-customization ________.

A)is a customer relationship marketing strategy
B)assumes that all customers have the same needs
C)allows each customer to build a custom product to meet that customer's specific needs
D)involves pursuing a large-segment strategy
E)recognizes individual customers by name,needs,and buying behavior.

Question 59

Which of the following is a customer relationship marketing strategy?

A)mass-market strategy
B)mass-customization strategy
C)core-segment strategy
D)sub-segment strategy
E)decentralization strategy

Question 60

Which of the following is true about customer relationship marketing?

A)It is more focused on what happens before a customer is acquired.
B)It aims to develop a short-term customer relationship to lower the cost of marketing.
C)It has the same meaning as customer relationship management.
D)It is a high-level program for developing ongoing individualized relationships with certain customers when both company and customer value are very high.
E)It is a range of one-on-one relationship marketing programs based on the level of company and customer value.