Deck 2: Consumer Segmentation and Positioning

Question 1

The four elements of the marketing mix are product, price, position, and place.

Answer 1

False

Question 2

The four main factors influencing market segmentation strategy are customer preference heterogeneity, the sales-cost trade-off, the majority fallacy, and psychographics.

Answer 2

False

Question 3

Targeting is the process of communicating with our market segments through the use of marketing mix variables in such a way as to help consumers differentiate our product from our competition.

Answer 3

False

Question 4

Because it is logical to assume that size of a potential market segment is positively correlated to profit, pursuing the largest market segment makes sound business sense.

Question 5

Mass customization is the targeting of large segments, or traditionally mass markets, with highly customized products.

Question 6

Market aggregation is the process of dividing the large and diverse market into subsets of consumers who share common needs, characteristics, or behaviors.

Question 7

Henry Ford, founder of the Ford Motor Co., is generally considered the first mass marketer.

Question 8

Market segmentation allows a company to efficiently focus resources and efforts by avoiding those parts of the market it cannot satisfy well, thereby avoiding unwieldy competition.

Question 9

Dividing groups of products into subgroups of products is the best way to segment a market.

Question 10

Market aggregation strategies ignore differences among different groups of consumers.

Question 11

A market segment must have more than one person.

Question 12

One key assumption that underlies market segmentation is consumer preference homogeneity.

Question 13

A target market is simply the segment(s) toward which a firm's marketing efforts are directed.

Question 14

Market segmentation benefits consumers and has increased society's standard of living.

Question 15

Jungle Jim's International Market, featured in your readings, uses a market aggregation strategy.

Question 16

If all humans were the same in their preferences and behaviors, market segmentation would not be needed.

Question 17

Market aggregation is the opposite of market segmentation.

Question 18

The opposite of micromarketing is mass customization.

Question 19

One unfortunate consequence of market segmentation is that consumers spend more time in search, evaluation, and purchase activities.

Question 20

The ultimate goal of market segmentation is better serving the consumer while improving profitability.

Question 21

Delta Airlines now offers a preferred seating section on many flights (usually the front part of the coach section of the airplane) to appeal to and reward members of its frequent flyer club. This is an application of product usage segmentation.

Question 22

In the price segmentation model presented in your readings, the "convenience segment" is less concerned with price and wants to have a high level of value and/or product differentiation.

Question 23

People that live near one another often become more alike over time.

Question 24

Home Depot, a home-improvement retail chain, sells scorpion traps in its stores in New Mexico, Texas, Arizona, and California. This is an example of geographic segmentation.

Question 25

Cannibalization is the phenomenon that as market segmentation increases, sales increase; but as market segmentation increases, costs also increase.

Question 26

Most pioneer brands position themselves as "standards of comparison."

Question 27

Geographic bases for segmenting consumer markets are based on a consumer's physical location.

Question 28

Within the VALS System, Strivers have the fewest resources, often feel powerless, and are primarily concerned with safety and security.

Question 29

Procter and Gamble offers a $1.00 coupon when consumers purchase three bottles of Pantene brand shampoo. This strategy represents segments based on geo-demographics.

Question 30

In the United States, as well as world-wide, people no longer want to live in cities and are moving away from urban areas.

Question 31

Retail operations, such as Pottery Barn Outlet Store, Williams-Sonoma Outlet Store, Designer's Store Warehouse, and Overstock.com, that aim at appealing to the
"value segment" are segmenting the market based on price.

Question 32

Demographic based segmentation is the most popular segmentation base.

Question 33

The VALS System is a segmentation tool that uses behavioral-based segmentation.

Question 34

The majority fallacy suggests that consumers' tastes are normally distributed.

Question 35

An underlying assumption when using geographic-based segmentation is that consumers located in geographic proximity share similar product and service needs and preferences.

Question 36

Market size is a key factor that is overlooked when a manager commits the majority fallacy.

Question 37

PRIZM is a segmentation tool that uses psychographics.

Question 38

Demographic bases for segmenting consumer markets include customers' vital population statistics, such as age, gender, income, and education.

Question 39

Geo-demographic segmentation is sometimes called zip-code marketing.

Question 40

Demographic segmentation involves segmenting on the basis of cultural differences among consumers living in different cities, states, regions, or countries.

Question 41

_____ is when products offered by the same firm are so similar they compete among themselves.

A) The majority fallacy
B) Cannibalization
C) The sales-cost trade-off
D) Mass customization
E) Market aggregation

Question 42

_____ occurs when an organization chooses to aggregate the market and offer the same product or service and marketing mix to all consumers.

A) Niche marketing
B) Mass marketing
C) Market consolidation
D) Micromarketing
E) Mass customization

Question 43

According to your readings, 7Up Soda has successfully competed in the soft drink product category by pursuing a "turn a disadvantage into an advantage" positioning strategy.

Question 44

The slogan, "Subway is fresh!" is an example of positioning by core benefit.

Question 45

What factor is not a relevant influence when choosing between aggregation versus segmentation strategies?

A) The intuition trap
B) Customer preference heterogeneity
C) Sales-cost trade-off
D) Majority fallacy
E) All of the above are relevant influences.

Question 46

What key factor is overlooked when a manager commits the majority fallacy?

A) Competition
B) Market size
C) Geography
D) Advertising
E) Customer attitudes

Question 47

Perceptual maps show how a company's products and competitors' products are clustered by market share.

Question 48

Premium pricing, which is sometimes called prestige pricing, is pricing a brand at the top end of a product category's price range.

Question 49

_____ is the segment(s) toward which a firm's marketing efforts are directed.

A) Micromarket
B) Niche market
C) Target market
D) Marketing Mix
E) None of the above is correct.

Question 50

One strategy for positioning a follower brand is to separate the brand from the market leader by creating what appears to the customer as a new product category.

Question 51

What marketing practice benefits the consumer and the marketer alike by encouraging the efficient use of marketing resources and information, thus improving society's standard of living?

A) Segmentation
B) Word-of-mouth marketing
C) Branding
D) Advertising
E) Positioning

Question 52

What phenomenon recognizes that as market segmentation increases, sales increase; but as market segmentation increases, costs also increase?

A) Cannibalization
B) Sales-cost trade-off
C) Customer preference heterogeneity
D) Majority fallacy
E) Expenses to sales ratio

Question 53

_____ is the tendency for a company to focus exclusively on large, average market segments and neglect small, less typical segments.

A) Repositioning
B) False thinking
C) Market neglect
D) Majority fallacy
E) Market aggregation

Question 54

_____ is the process of dividing the large and diverse market into subsets of consumer who share common needs, characteristics, or behaviors.

A) Market segmentation
B) Market aggregation
C) Branding
D) Advertising
E) Positioning

Question 55

Procter and Gamble offers over 10 different diaper products. Unfortunately, many of these products are similar and compete with each other. What is this consequence of segmentation?

A) The majority fallacy
B) Cannibalization
C) The sales-cost trade-off
D) Mass customization
E) None of the above is correct.

Question 56

Consumers tend to use price as a gauge of quality. This phenomenon is called the price-quality heuristic.

Question 57

The slogan, "Close-Up Toothpaste - Kissably Fresh Breath!" is an example of positioning by product user.

Question 58

The four elements of the marketing mix are:

A) product, price, place, and position
B) price, position, place, and promotion
C) place, product, price, and promotion
D) promotion, place, prestige, and product
E) position, price, product, and promotion

Question 59

The fact that some people prefer mint flavored-toothpaste, while others prefer cinnamon-flavored is known as:

A) psychographics
B) stereotyping
C) cannibalization
D) the majority fallacy
E) customer preference heterogeneity

Question 60

Premium pricing, which is sometimes called prestige pricing, is pricing a brand at the top end of a product category's price range.

Question 61

Penturbia refers to:

A) remote suburbs
B) large towns/cities that have decreased in population by 10% in one year
C) remote suburbs that have decreased in population by 10% in one year
D) clusters of suburbs encircling cities
E) None of the above is correct.

Question 62

_____ is the measurement of lifestyle, typically defined in terms of activities, interests, and opinions.

A) Demographics
B) Ethnographics
C) Psychographics
D) Polygraphics
E) Geo-demographics

Question 63

Abby is an education major in college. Abby eventually wants to settle down, get married, and have children, although she wants to work with children as a school teacher. Ideally, she would like to move back to her small-town home, where the rest of her family lives. She often goes home on the weekends because her strong Christian religion doesn't condone drinking and "partying." According to the VALS System segmentation model, to what segmentation group does Cindy most likely belong?

A) Makers
B) Survivors
C) Believers
D) Experiencers
E) Striver

Question 64

Volvo manufactures a station wagon to meet all of the government's strictest safety ratings, and Volvo emphasizes this in its advertising, claiming to be, "the safest car on the road." From this information, it appears that Volvo may be engaging in what type of segmentation strategy?

A) Geographic
B) Price
C) Psychographic
D) Demographic
E) Benefits sought

Question 65

"Movers and Shakers," "City Roots," and "Domestic Duos" are:

A) psychographic profiles of urban consumers
B) groups in the PRIZM system
C) segments in the VALS system
D) types of positioning strategies
E) None of the above are correct.

Question 66

Which of the following statements demonstrates the formation of a segment based on benefits sought?

A) Campbell's Soup makes a spicier chili for its market in Texas than it does in Maine.
B) GE built a downsized microwave oven to hang under kitchen cabinets.
C) Kings Island Park offers a special discount to senior citizens.
D) Procter and Gamble offers a $1.00 coupon when consumers purchase three bottles of Pert Shampoo.
E) Cengage Publishing Company publishes a magazine called "Underground" specifically for audiences who enjoy punk and alternative forms of rock music.

Question 67

Air Walk is a brand of athletic shoes that is marketed to appeal to individuals who engage in skateboarding. This is an example of what kind of segmentation strategy?

A) Benefits sought
B) Price
C) Psychographic
D) Demographic
E) Geo-demographic

Question 68

An exurb refers to:

A) remote suburbs
B) large towns/cities that have decreased in population by 10% in one year
C) small towns that have decreased in population by 10% in one year
D) clusters of small towns encircling cities
E) None of the above is correct.

Question 69

The first brand to enter a new market often enjoys a long-term consumer preference advantage over follower brands. This phenomenon is known as what?

A) Diversification effect
B) Repositioning
C) Majority fallacy
D) Cannibalization
E) Pioneering advantage

Question 70

According to marketing experts, positioning is not something you do to a product, it's something you do:

A) to your competitors
B) in the mind of the potential customer
C) to your organization and products
D) to your competitor's product
E) All of the above are correct.

Question 71

_____ is segmentation based on consumer preference for specific product attributes or benefits, usage occasion, user status, rate of product usage, or loyalty.

A) Demographic-based segmentation
B) Ethnographic-based segmentation
C) Psychographic-based segmentation
D) Geo-demographic based segmentation
E) None of the above is correct.

Question 72

Cindy, Bob, and Tina are all college students. Cindy is a music major. While she enjoys composing and playing her own music, she doesn't have strong ambitions toward having a career. Ideally, she would like to find a nice guy (but not a business major), get married, move out to the country so she can have a garden and maybe even a horse, and teach piano lessons out of her home.
Bob is currently a finance major, after recently changing from management. (He has also been a political science major and an engineering major - they all seem cool, but none of the majors seem to be able to hold his interest.) Besides changing majors, Bob loves to play club sports, really enjoys going to bars and socializing with his fraternity brothers, and considers himself to be fairly "hip" and "cool."
Tina is an education major. Like Cindy, she eventually wants to settle down, get married, and have children, although she wants to work with children as a school teacher. Ideally, she would like to move back to her small-town home, where the rest of her family lives. She often goes home on the weekends because her strong Christian religion doesn't condone drinking and "partying."
Based on the descriptions provided above and according to the VALS System, which student most likely belongs to the "makers" segment?

A) Cindy
B) Bob
C) Tina
D) None of them belong to the makers segment.
E) All of them belong to the makers segment.

Question 73

Which of the following statements demonstrates the formation of a segment based on demographics?

A) A local restaurant is open for breakfast and lunch, and then closes at 3:00 PM.
B) GE has developed a microwave that can run on batteries.
C) "University Park" is a new set of student apartments rented exclusively to graduate students.
D) Procter & Gamble offers a $1.00 coupon when consumers purchase three bottles of Pert Shampoo.
E) Cengage Publishing Company publishes a magazine called "Taste of Living" specifically for audiences who enjoy cooking and trying new recipes.

Question 74

According to the price segmentation model in your readings, which segment represents a combination of low "perceived pain" and high "perceived value" and is a highly desirable segment to marketers?

A) The price segment
B) The loyal segment
C) The value segment
D) The convenience segment
E) The brand segment

Question 75

Which of the following is not a demographic characteristic?

A) Population age distributions
B) American family composition
C) Changing likes and dislikes of Americans
D) Average income of single Americans
E) All of the above are demographic characteristics.

Question 76

For years, Secret brand deodorant has run the slogan, "Strong enough for a man but made for a woman." This is an example of what type of positioning?

A) Positioning by doing the opposite
B) Positioning by turning a disadvantage into an advantage
C) Positioning as a leader
D) Positioning with respect to use or application
E) None of the above is correct.

Question 77

The PRIZM segmentation model discussed in your readings is based in what market segmentation strategy?

A) Demographic segmentation
B) Geo-demographic segmentation
C) Psychographic segmentation
D) Behavioral-based segmentation
E) Price segmentation

Question 78

Which of the following about positioning is false?

A) When product benefits are difficult to communicate, positioning on price may be a good choice.
B) Characters like the "Betty Crocker" help companies position by user.
C) All marketing activities influence positioning and vice versa.
D) Positioning on price is usually only used for luxury items.
E) One advantage of using price to position is that consumers often use price to gauge quality.

Question 79

The price segmentation model divides customers into four broad categories based on the customer's "perceived pain" of paying a high price and the "perceived value" of product differentiation. A customer who is in a "Value Segment" is best characterized by which of the following?

A) This customer wants the lowest price and will not make trade-offs for value-added product benefits. Getting the lowest price is the priority.
B) This customer wants both the lowest price possible and the largest combination of value-added product benefits. This person "wants it all" and will search for the best combination.
C) This customer is less concerned with price and wants to have a high level of product differentiation.
D) This customer is not overly concerned with price or value-added product benefits, but is mainly concerned with minimizing product search and evaluation.
E) This customer is highly brand loyal, perceiving value in his/her favorite brand, and will pay any price for that favored brand.

Question 80

Which of the following related to positioning is true?

A) The first brand to enter and define a market is known as a pioneering brand.
B) According to Reis and Trout, positioning is something you do to your product and your competitors' products.
C) "Tylenol - The first word in relief" is an example of positioning by usage occasion.
D) Perceptual maps show how our products and our competitors' product are clustered by market share.
E) All of the above are true.