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Chapter 8: Identifying Market Segments and Targets

GENERAL CONCEPT M"#tip#e Ch$i%e

!ESTIONS

1. Instead of scattering their marketing effort (a shotgun approach), many companies are now embracing target marketing where the focus is on those consumers that they have the greatest chance of satisfying (a ________ approach) with their products and services. a. rif e b. focused c. niche d. macro e. micro !nswer" a #age" $%& 'eve of difficu ty" (asy $. In ________ marketing, the se er engages in the mass production, mass distribution, and mass promotion of one product for a buyers. a. group b. mass c. genera d. segmented e. differentiated !nswer" b #age" $%& 'eve of difficu ty" )edium *. +he argument for ________ marketing is that it creates the argest potentia market, which eads to the owest costs, which in turn can ead to ower prices or higher margins. a. niche b. micro c. macro d. differentiated e. mass !nswer" e #age" $%& 'eve of difficu ty" )edium

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%. ! ________ consists of a group of customers who share a simi ar set of needs and wants. a. market target b. market group c. market s ice d. market segment e. market eve !nswer" d #age" $%& 'eve of difficu ty" )edium ,. ! ________ consists of two parts" a naked solution and discretionary options. a. differentiated market offering b. f e.ib e market offering c. rigid market offering d. vertica market offering e. hori/onta market offering !nswer" b #age" $%1 'eve of difficu ty" 0ard 1. If a marketing manager observes that his or her market shows no natura segments and consumers seem to have rough y the same preferences, the marketing manager wi most ike y be faced with a ________ preferences pattern. a. homogeneous b. heterogeneous c. diffused d. c ustered e. scattered !nswer" a #age" $%1 'eve of difficu ty" )edium 2. #rocter 3 4amb e has many soap brands. 5ne reason for this is that soap users tend to group together in terms of preferences such as b eaching action, softness, stain6 remova , et cetera. 7hich of the fo owing preferences pattern wou d most ike y app y to #348s method of response to market needs9 a. 0omogeneous preferences. b. :iffused preferences. c. - ustered preferences. d. #sycho ogica preferences. e. -u tura preferences. !nswer" c #age" $%$ 'eve of difficu ty" )edium ;. )arketers usua y identify niches by ________. a. dividing a segment into subsegments b. conducting <!'= tests c. a owing consumers to gravitate toward product brands d. e.amining the demographics section of The Handbook of Marketing e. producing products that can be used in a variety of ways !nswer" a #age" $%$ 'eve of difficu ty" )edium

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-hapter ;" Identifying )arket =egments and +argets

>. ! niche is characteri/ed as being a of the fo owing (?-(#+ ________. a. the customers in the niche have a distinct set of needs b. the customers wi pay a premium to the firm that satisfies their needs c. the niche is not ike y to attract other competitors d. the customers genera y have sma er amounts of income e. the nicher gains certain economies through specia i/ation !nswer" d #age" $%$ 'eve of difficu ty" )edium 1&. 7hich of the fo owing has great y faci itated niche marketing9 a. +he Internet b. 4 oba i/ation c. Industria i/ation d. @ecession e. (.cessive demand !nswer" b #age" $%* 'eve of difficu ty" )edium 11. 7hen Aike attempts to get c ose to its customers at the oca eve by sponsoring oca schoo teams and providing shoes, eBuipment, and c othing to many of them, Aike is using which of the fo owing marketing formats9 a. :ifferentiated marketing b. -onsumer marketing c. Instructiona marketing d. #artner marketing e. 4rassroots marketing !nswer" e #age" $%% 'eve of difficu ty" )edium 1$. !ccording to thoughts e.pressed by #ine and 4i more about a new economic era that is rapid y approaching, if you charge for the time customers spend with you, then and on y then are you in the ________ business. a. niche b. grassroots c. e.perience d. service e. goods !nswer" c #age" $%, 'eve of difficu ty" 0ard 1*. +hrough customer e.perience management (-()), brands can create five different types of e.periences" sense, fee , think, re ate, and ________. a. remembering b. forgetting c. simu ation d. act e. bargain !nswer" d #age" $%, 'eve of difficu ty" )edium

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1%. ________ combines operationa y driven mass customi/ation with customi/ed marketing in a way that empowers consumers to design the product service offering of their choice. a. -onsumptioni/ation b. <ira marketing c. <irtua marketing d. @egiona i/ation e. -ustomeri/ation !nswer" e #age" $%1 'eve of difficu ty" )edium 1,. +wo broad groups of variab es are used to segment consumer markets. 5ne method uses descriptive characteristics such as geography. +he other method is to form segments by ooking at ________ considerations. a. gender b. income c. cu tura d. interest e. behaviora !nswer" e #age" $%2 'eve of difficu ty" )edium 11. If a marketer decides that segmenting a market based on neighborhoods, the marketer wi have chosen the ________ method of segmentation. a. demographic b. psychographic c. geographic d. cu tura e. socia c ass !nswer" c #age" $%2 'eve of difficu ty" (asy 12. !ccording to estab ished methods of segmenting markets, a of the fo owing wou d an appropriate segment category if the fami y ife cyc e was the segmentation base !--(#+ ________. a. young, sing e b. ma e, fema e c. young, married d. o der, married, no chi dren under 1; e. young, married, youngest chi d 1 or over !nswer" b #age" $%; 'eve of difficu ty" )edium

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-hapter ;" Identifying )arket =egments and +argets

1;. ! marketing manager is considering severa options to market to market segments identified as being either cu ture6oriented, sports6oriented, or outdoor6oriented. +his manager has se ected the ________ format for segmenting markets. a. persona ity b. behaviora occasions c. user status d. psychographic ifesty e e. readiness stage !nswer" d #age" $%; 'eve of difficu ty" )edium 1>. #@IC) (#otentia @ating Inde. by Cip )arkets) identifies c usters of consumers based on a variety of characteristics such as education and aff uence. 7hich of the fo owing c usters wou d match to a consumer group that is characteri/ed as being in their ate forties and fifties, co ege6educated, upper6midd e6c ass homeowners that married ate and are sti raising chi dren in comfortab e suburban subdivisions and are sti pursuing kid6centered ifesty es. a. +he cosmopo itans b. De tway boomers c. Eoung digerati d. 7inner8s circ e e. D ue b oods !nswer" b #age" $%> 'eve of difficu ty" 0ard $&. Fose and (rika have Gust divorced. +his wi obvious y not on y have an impact on their persona ives but their consumptive ives as we . 7hich of the fo owing demographic segmentation subsegment formats might be used by marketers to reach Fose or (rika9 a. 'ife stage b. Denefits c. !ge segment d. Hser segment e. 5ccasion segment !nswer" a #age" $,& 'eve of difficu ty" )edium $1. )en and women tend to have different attitudina and behaviora orientations, based part y on genetic makeup and part y on ________. a. income b. occupation c. socia i/ation d. heredity e. g oba i/ation !nswer" c #age" $,& 'eve of difficu ty" )edium

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$$. 7hich of the fo owing !merican 4enerations is characteri/ed as being great acBuisitors and are va ue6 and cause6driven despite indu gences and hedonism9 a. 4I generation b. =i ent generation c. Daby boomers d. 4eneration ? e. )i ennia s !nswer" c #age" $,$ 'eve of difficu ty" 0ard
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a. #sychographics b. =egmentation c. - ustering d. :emographics e. =ocia psycho ogy !nswer" a #age" $,$

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$%. +o reach 4eneration E, rock band Ioo Iighters created a digita street team that sends targeted e6mai messages to members who get the atest news, e.c usive audioJvideo sneak previews, tons of chances to win great Ioo Iighters pri/es, and become part of the Ioo Iighters Iami y. 7hich of the fo owing techniBues for reaching 4eneration E are the Ioo Iighters using9 a. =tudent ambassadors b. Hnconventiona sports c. -oo events d. -omputer games e. 5n ine bu// !nswer" e #age" $,* 'eve of difficu ty" )edium $,. In $&&*, %.1 mi ion !mericans turned $1. !n interesting fact is that the share of co ege students who p an to move back home after graduation is ________. a. 1& percent b. $, percent c. ,& percent d. 1& percent e. 2, percent !nswer" d #age" $,* 'eve of difficu ty" 0ard

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$1. !ccording to the <!'= ;6part typo ogy segmentation system, ________ are successfu , sophisticated, active, take6charge peop e with high se f6esteem. +heir purchases often ref ect cu tivated tastes for re ative y upsca e, niche6oriented products and services. a. innovators b. thinkers c. achievers d. e.periencers e. be ievers !nswer" a #age" $,% 'eve of difficu ty" 0ard $2. !ccording to the <!'= ;6part typo ogy segmentation system, ________ are considered to be e der y, passive peop e who are concerned about change. +hey are oya to their favorite brands. a. be ievers b. strivers c. makers d. survivors e. e.periencers !nswer" d #age" $,% 'eve of difficu ty" )edium $;. ! housewife reBuests a new treadmi for her birthday. 7ith respect to consumer decision ro es, which ro e is the housewife current y p aying9 a. Initiator b. Inf uencer c. :ecider d. Duyer e. 4atekeeper !nswer" a #age" $,, 'eve of difficu ty" (asy $>. 7ith respect to occasion segmentation, -hristmas, <a entine8s :ay, and ________ account for Gust over ha f of gifters8 budgets. a. 0a oween b. Iather8s :ay c. )other8s :ay d. +hanksgiving e. Independence :ay !nswer" c #age" $,1 'eve of difficu ty" )edium

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*&. )obi identified five different benefit segments for which products and services cou d be designed. ________ ($2 percent of the market) shops )obi out ets for fast fue , fast service, and fast food. a. @oad warriors b. 4eneration I c. +rue b ues d. 0ome bodies e. #rice shoppers !nswer" b #age" $,1 'eve of difficu ty" 0ard *1. 7ith respect to user status (a segmentation possibi ity), ________ tend to focus on attracting potentia users because they have the most to gain. a. sma er firms b. niche firms c. fo owers d. aggressive specia ists e. market6share eaders !nswer" e #age" $,1 'eve of difficu ty" 0ard *$. If a market is segmented according to ight, medium, and heavy product users, the marketer segmenting this market is using the ________ as the means to segment. a. user status b. usage rate c. buyer6readiness stage d. occasion e. benefit !nswer" b #age" $,1 'eve of difficu ty" (asy **. If a buyer is oya to two or three different brands of soap, this buyer8s oya ty status can be described as being among the ________. a. switchers b. shifting oya s c. sp it oya s d. hard6core oya s e. anti6 oya s !nswer" c #age" $,1 'eve of difficu ty" (asy *%. ! company can earn a great dea by ana y/ing the degrees of brand oya ty. Ior e.amp e, by studying the ________ the company can pinpoint which brands are most competitive with its own. a. hard6core oya s b. sp it oya s c. shifting oya s d. switchers e. anti6 oya s !nswer" b #age" $,2 'eve of difficu ty" 0ard

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*,. ! of the fo owing have been designated as groups that might be found using attitude as the primary segmentation variab e (?-(#+ ________. a. synergistic b. enthusiastic c. positive d. indifferent e. hosti e !nswer" a #age" $,2 'eve of difficu ty" )edium *1. ! snack chip manufacturer is concerned about consumers eaving its brand and going to competitive a ternatives. 7hich of the fo owing groups (based on strength of commitment) wou d be most ike y to eave the company8s offering and go somewhere e se for snack products9 a. -onvertib e b. =ha ow c. !verage d. (ntrenched e. 0ard rocks !nswer" a #age" $,; 'eve of difficu ty" )edium *2. If a consumer group is designated based on their ba ance of disposition, the ________ group can be described as one that is made up of nonusers who are as attracted to a competing brand as they are to their current brands. a. strong y unavai ab e b. weak y unavai ab e c. ambiva ent d. avai ab e e. desirab e !nswer" c #age" $,; 'eve of difficu ty" )edium *;. If a marketer is seeking to segment a business market, which of the fo owing variab es is genera y fe t to be important enough by marketers to p ace it first among the ist of other variab es that can be used in segmentation process9 a. #ersona characteristics b. :emographic c. =ituationa factors d. 5perating variab es e. #urchasing approaches !nswer" b #age" $,; 'eve of difficu ty" 0ard

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*>. ! marketer is interested in segmenting a business market based on techno ogy and customer capabi ities. 7hich of the fo owing maGor segmentation variab es wou d most ike y be used by the marketer to assist with the task9 a. :emographic b. #urchasing approaches c. =ituationa factors d. #ersona characteristics e. 5perating variab es !nswer" e #age" $,> 'eve of difficu ty" 0ard %&. ! marketer is interested in segmenting a business market on ________ if the marketer intends to eventua y segment the market based on oya ty and attitudes toward risk. a. situationa factors b. purchasing approaches c. persona characteristics d. operating variab es e. demographics !nswer" c #age" $,> 'eve of difficu ty" )edium %1. ! company can be said to have used ________ if the company distinguished customers buying on the basis of price, service, and Bua ity. a. macrosegmentation b. microsegmentation c. strategic segmentation d. g oba segmentation e. short6term segmentation !nswer" b #age" $1& 'eve of difficu ty" 0ard %$. Dusiness buyers seek different bund es based on their stage in the purchase decision process. ________ are customers who are starting their purchasing re ationship and they want easy6to6read manua s, hot ines, high eve s of training, and know edgeab e sa es reps. a. Iirst6time prospects b. =ophisticates c. 4 oba partners d. +rend6setters e. Aovices !nswer" e #age" $1& 'eve of difficu ty" 0ard

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-hapter ;" Identifying )arket =egments and +argets

%*. If your marketing department estab ished a priority in reaching so ution6oriented customers (e.g., those that want va ue through more benefits and advice), ________ wou d be the best means for connecting with these customers. a. transaction se ing b. consu tative se ing c. enterprise se ing d. dua se ing e. psycho ogica se ing !nswer" b #age" $11 'eve of difficu ty" )edium %%. :uring which step of the segmentation process wou d the marketer group customers into segments based on simi ar needs and benefits sought by the customer in so ving a particu ar consumption prob em9 a. =tep $Ksegment identification b. =tep *Ksegment attractiveness c. =tep 1Ksegment acid test d. =tep 1Kneeds6based segmentation e. =tep 2Kmarketing6mi. strategy !nswer" d #age" $11 'eve of difficu ty" )edium %,. If an organi/ation8s marketing department wished to create segment storyboards to test the attractiveness of each segment8s positioning strategy, this action wou d most ike y occur in the ________ step of the segmentation process. a. needs6based segmentation b. segment identification c. segment profitabi ity d. segment acid test e. marketing6mi. strategy !nswer" d #age" $11 'eve of difficu ty" 0ard %1. +o be usefu , market segments must rate favorab y on five key criteria. In the ________ criterion, effective programs can be formu ated for attracting and serving the segments. a. measurab e b. substantia c. accessib e d. differentiab e e. actionab e !nswer" e #age" $1$ 'eve of difficu ty" )edium

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%2. In eva uating different market segments, the firm must ook at two factors" the segment8s overa attractiveness and ________. a. company8s obGectives and resources b. the product to be so d c. the purchasing process d. competition8s strategies e. the g oba nature of the product !nswer" a #age" $1$ 'eve of difficu ty" )edium %;. <o kswagen concentrates on the sma 6car market and #orsche on the sports car market. +hese wou d be e.amp es of what is ca ed ________. a. sing e6segment concentration b. se ective specia i/ation c. product specia i/ation d. market specia i/ation e. fu market coverage !nswer" a #age" $1$ 'eve of difficu ty" (asy %>. ! of the fo owing are benefits of fo owing the ________ approach to target market se ection" a strong know edge of the segment8s needs, a strong market presence, operating economies through specia i/ing in production, distribution, and promotion. a. sing e6segment concentration b. se ective specia i/ation c. product specia i/ation d. market specia i/ation e. fu market coverage !nswer" a #age" $1$ 'eve of difficu ty" )edium ,&. 7hen a symphony orchestra targets peop e who have broad cu tura interests, rather than on y those who regu ar y attend concerts, the orchestra is targeting what are ca ed ________. a. market mavens b. strategic segments c. supersegments d. occasion segments e. psychodemographic segments !nswer" c #age" $1$ 'eve of difficu ty" 0ard ,1. 7hich of the fo owing best represents the chief advantage of pursuing a mu tisegment strategy9 a. It makes the company a most bu et proof to competitors8 actions. b. It diversifies the firm8s risk. c. It creates synergy between markets. d. It is a ow cost strategy. e. It treats a buyers the same and, therefore, owers promotion costs. !nswer" b #age" $1$ 'eve of difficu ty" )edium

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,$. +he chief disadvantage to a firm that decides to fo ow a product specia i/ation strategy in se ecting target markets is that ________. a. no synergy e.ists b. ogistics can become a nightmare c. the product may be supp anted by an entire y new techno ogy d. competitors can easi y copy any new product introductions e. e6commerce becomes difficu t for the company !nswer" c #age" $1* 'eve of difficu ty" 0ard ,*. 7ith ________ as a target market strategy, the firm concentrates on serving many needs of a particu ar customer group. a. sing e6segment concentration b. se ective specia i/ation c. product specia i/ation d. market specia i/ation e. fu market coverage !nswer" d #age" $1* 'eve of difficu ty" (asy ,%. +he two ways that arge firms can cover a who e market (e.g., fu market coverage strategy) are through ________ and differentiated marketing. a. undifferentiated b. ogistica c. psycho ogica d. niche e. macromarketing !nswer" a #age" $1* 'eve of difficu ty" (asy ,,. In ________ marketing, the firm operates in severa market segments and designs different products for each segment. a. segmented b. undifferentiated c. differentiated d. geodemographic e. niche !nswer" c #age" $1* 'eve of difficu ty" (asy ,1. +he best way to manage mu tip e segments is to appoint ________ with sufficient authority and responsibi ity for bui ding the segment8s business. a. a product champion b. segment managers c. promotion managers d. strategic managers e. mid6 eve managers !nswer" b #age" $1* 'eve of difficu ty" (asy

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,2. ! of the fo owing costs are ike y to be higher if a marketer pursues a differentiated marketing approach (?-(#+ ________. a. product modification costs b. manufacturing costs c. administrative costs d. inventory costs e. pricing costs !nswer" e #age" $1% 'eve of difficu ty" 0ard ,;. ________ is the strategic coordination of economic, psycho ogica , po itica , and pub ic re ations ski s, to gain the cooperation of a number of parties in order to enter or operate in a given market. a. )etamarketing b. )acromarketing c. )icromarketing d. )egamarketing e. )odu ar marketing !nswer" d #age" $1, 'eve of difficu ty" )edium ,>. 5ne way to discover new market segments is to investigate the hierarchy of attributes consumers e.amine in choosing a brand if they use phased decision strategies. +his process is ca ed ________. a. market partitioning b. market positioning c. market segmentation d. strategic marketing e. brand marketing !nswer" a #age" $11 'eve of difficu ty" )edium 1&. Aot a attempts to target chi dren, minorities, or other specia segments draw criticism. 7hich of the fo owing is the best i ustration of a company (or industry) that seems to be marketing to the above in a correct and ethica way9 a. )c:ona d8s marketing to inner6city youth. b. @. F. @eyno ds marketing of the Loo brand. c. -o gate6#a mo ive8s -o gate Funior toothpaste. d. +he cerea industry8s approaches to chi dren. e. 4. 0ei eman Drewing8s approach to -o t %, ma t iBuor. !nswer" c #age" $12 'eve of difficu ty" )edium

Tr"e&'a#se
11. )arkets are a most a ways homogeneous. !nswer" Ia se #age" $*> 'eve of difficu ty" (asy

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-hapter ;" Identifying )arket =egments and +argets

1$. +o compete more effective y, many companies are now embracing target marketing. !nswer" +rue #age" $%& 'eve of difficu ty" (asy 1*. (ffective target marketing reBuires that marketers use market segmentation, market targeting, and market positioning to achieve success in the marketp ace. !nswer" +rue #age" $%& 'eve of difficu ty" )edium 1%. 0enry Iord epitomi/ed the market segmentation strategy when he offered the )ode 6 + Iord. !nswer" Ia se #age" $%& 'eve of difficu ty" 0ard 1,. ! market segment consists of a group of consumers who share a simi ar set of needs and wants. !nswer" +rue #age" $%& 'eve of difficu ty" (asy 11. 7ith respect to market offerings, if a marketer emphasi/es a naked solution, he or she is emphasi/ing the product and service e ements that a segment members va ue. !nswer" +rue #age" $%1 'eve of difficu ty" 0ard 12. ! marketer g ances at this month8s market6preference pattern diagram and notices that a of the customers are grouped in the midd e of the diagramM therefore, customers are e.hibiting clustered preferences. !nswer" Ia se #age" $%$ 'eve of difficu ty" 0ard 1;. !n attractive niche is characteri/ed as having a distinct set of needs. !nswer" +rue #age" $%$ 'eve of difficu ty" (asy 1>. 'oca marketing ref ects a growing trend ca ed macromarketing. !nswer" Ia se #age" $%% 'eve of difficu ty" )edium 2&. 4rassroots marketing done at the oca eve is associated with e.perientia marketing where e.periences are more important than products or services. !nswer" +rue #age" $%% 'eve of difficu ty" )edium 21. If you charge for the time customers spend with you, then and on y then are you in the service business. !nswer" Ia se #age" $%, 'eve of difficu ty" 0ard 2$. 7hen Aike and 4i ette advertise and associate their products with the Doston )arathon, the two companies are engaged in a form of e.perientia marketing ca ed cobranding. !nswer" +rue #age" $%, 'eve of difficu ty" )edium 2*. +he u timate eve of segmentation eads to segments of one, customi/ed marketing, or one6to6one marketing. !nswer" +rue #age" $%1 'eve of difficu ty" (asy

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2%. +wo broad groups of variab es are used to segment consumer markets" geographic and demographic variab es. !nswer" Ia se #age" $%2 'eve of difficu ty" )edium 2,. +ypica groupings (segments) that might be designated using the geographic method of segmentation might be density, c imate, or cityJmetro si/e. !nswer" +rue #age" $%; 'eve of difficu ty" 0ard 21. I ustrations of persona ity segmentation wou d inc ude cu ture6oriented, sports6 centered, or outdoor6oriented subsegments. !nswer" Ia se #age" $%; 'eve of difficu ty" )edium 22. !ccording to a new #@IC) c uster configuration, the Cosmopolitan tends to ocate in cities such as 'as <egas, )iami, or ! buBuerBue. !nswer" +rue #age" $%> 'eve of difficu ty" 0ard 2;. ! oca service company has decided to segment its market based on occupationM therefore, it has chosen a form of demographic segmentation for its approach. !nswer" +rue #age" $%> 'eve of difficu ty" )edium 2>. Life stage defines a person8s age. !nswer" Ia se #age" $,& 'eve of difficu ty" )edium

;&. )en and women have different attitudina and behaviora orientations caused main y by their genetic makeup. !nswer" Ia se #age" $,& 'eve of difficu ty" 0ard ;1. @esearch has shown that income is a high y accurate predictor of the best customers for a given product. !nswer" Ia se #age" $,1 'eve of difficu ty" )edium ;$. If you went to co ege in the ate 1>1&s, you are most ike y to be in a cohort shaped by the <iet Aam 7ar. !nswer" +rue #age" $,1 'eve of difficu ty" )edium ;*. +he argest !merican generation of the twentieth century (2; mi ion peop e) is considered to be the 4I 4eneration that fought in 7or d 7ar II. !nswer" Ia se #age" $,$ 'eve of difficu ty" )edium ;%. ! si.ty year6o d man is coping with his advancing hair ossM therefore, he is dea ing with what is ca ed physiographics. !nswer" +rue #age" $,$ 'eve of difficu ty" 0ard

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;,. #sychographics is the science of using psycho ogy and demographics to better understand consumers. !nswer" +rue #age" $,$ 'eve of difficu ty" (asy ;1. Generation X is considered to be a hot market because of their si/e, consumer savvy, and their abi ity to be wired6in to contemporary trends. !nswer" Ia se #age" $,* 'eve of difficu ty" )edium ;2. Iorty6seven percent of $16year6o ds own a mobi e phone. !nswer" +rue #age" $,* 'eve of difficu ty" )edium ;;. In the <!'= segmentation system, Thinkers are characteri/ed as being successfu , sophisticated, active, take6charge peop e with high se f6esteem. !nswer" Ia se #age" $,% 'eve of difficu ty" 0ard ;>. !ccording to the <!'= segmentation system, the Strivers are at bottom of the typo ogy with the owest resources and owest with respect to innovation. !nswer" Ia se #age" $,% 'eve of difficu ty" )edium >&. 7hen )obi 5i -ompany researched its market based on benefit e.pectations, it found that the argest segment !rice Shoppers" with a $2 percent share wanted fast fue , branded products, and convenience. !nswer" Ia se #age" $,1 'eve of difficu ty" 0ard >1. !n organi/ation that cou d benefit from using Hser =tatus as a means for segmenting its market wou d be a oca b ood bank. !nswer" +rue #age" $,1 'eve of difficu ty" )edium >$. )arketers wou d rather attract one heavy user than severa ight users. !nswer" +rue #age" $,1 'eve of difficu ty" (asy >*. 7ith respect to oya ty status, if a consumer is oya to two or three brands, he or she is ca ed shifting loyal. !nswer" Ia se #ages" $,1N$,2 'eve of difficu ty" )edium >%. +he most important variab e in segmenting a business market is demographics. !nswer" +rue #age" $,; 'eve of difficu ty" )edium >,. +ypica categories that wou d appear under the heading of situationa factor segmentation variab es in the business marketp ace wou d be urgency, specific app ication, and si/e of order. !nswer" +rue #age" $,> 'eve of difficu ty" 0ard >1. +he ast step in the seven6step marketing segmentation process wou d be to deve op a marketing-mi# strategy ref ective of segment positioning strategies. !nswer" +rue #age" $11 'eve of difficu ty" )edium

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>2. +o be usefu , market segments must have as one of their characteristics the abi ity to be measured. !nswer" +rue #age" $1$ 'eve of difficu ty" )edium >;. !s a pattern found in target market se ection, market speciali$ation means that the company offers one product to as many markets as possib e. !nswer" Ia se #age" $1$ 'eve of difficu ty" )edium >>. If a marketer is b ocked from entering a market, the strategy of megamarketing can be used to assist in breaking into that market. !nswer" +rue #age" $1, 'eve of difficu ty" )edium 1&&. Market partitioning is process of focusing on a desired position in the marketp ace and then accumu ating the resources to protect and defend that position. !nswer" Ia se #age" $11 'eve of difficu ty" )edium

Essay
1&1. )arket segments can be defined in many different ways. 5ne way to carve up a market is to identify preference segments. 'ist and brief y characteri/e three preference segments cited in the te.t. S"ggested Ans(er: +he three preference segments cited in the te.t are" (1) homogeneous preferencesKa market where a consumers basica y have the same preferencesM ($) diffused preferencesKa market where preferences are scattered indicating consumers vary great y in their preferencesM and, (*) c ustered preferencesKwhere distinct natura market c usters deve op. #ages" $%1N$%$ 'eve of difficu ty" )edium 1&$. -o umbia Hniversity8s Dernd =chmitt be ieves that marketers can provide e.periences for customers through a set of e.perience providers. 'ist and brief y discuss the seven e.perience providers recommended by =chmitt. S"ggested Ans(er: +he seven e.perience providers are" (1) communications, ($) visua Jverba identity, (*) product presence, (%) co6branding, (,) environments, (1) 7eb sites and e ectronic media, and (2) peop e. Ior descriptions see )arketing Insight ((.perientia )arketing). #age" $%, 1&*. 'eve of difficu ty" 0ard

! new trend in marketing is toward customeri/ation. :escribe what customeri/ation is and how marketers are using it. S"ggested Ans(er: Customeri$ation combines operationa y driven mass customi/ation with customi/ed marketing in a way that empowers consumers to

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design the product or service offering of their choice. ! company is customeri/ed when it is ab e to respond to individua customers by customi/ing its products, services, and messages on a one6to6one basis. #age" $%1 'eve of difficu ty" )edium 1&%. +here are severa maGor segmentation variab es that might be used by a marketer to address a consumer market. If the marketer were to use socia c ass, psychographic ifesty e, and readiness stage to segment its market, identify possib e segmentation subcategories under each of the three. Ior e.amp e, if we were to segment based on usage rate, subcategories wou d be ight user, medium user, and heavy user. S"ggested Ans(er: Iirst, socia c ass wou d yie d the subcategories of ower owers, upper owers, working c ass, midd e c ass, upper midd es, ower uppers, and upper uppers. =econd, psychographic ifesty es wou d yie d cu ture6oriented, sports6oriented, and outdoor6oriented. 'ast y, readiness stage wou d yie d unaware, aware, informed, interested, desirous, and intending to buy. 5ther sub6 categories might be possib e. +he ist above comes from +ab e ;.1. If you wish to deviate from this tab e, be sure set ground ru es for the students. #age" $%; 'eve of difficu ty" 0ard 1&,. Drief y profi e the !merican generations abe ed as Daby boomers, 4eneration ?, 4eneration E, and )i ennia s. S"ggested Ans(er: !ccording to information presented in the te.t, (1) Daby boomers (2; mi ion peop e) were born 1>%1N1>1% and are depicted as great acBuisitors, they are va ue6 and cause6driven despite indu gences and hedonismM ($) 4eneration ? (,2 mi ion peop e) were born 1>11N1>22 and are depicted as cynica and media6savvy, they are more a ienated and individua isticM (*) 4eneration E (1& mi ion peop e) were born 1>22N1>>% and are depicted as edgy, focused on urban sty e, they are more idea istic than 4eneration ?M and, (%) )i ennia s (%$ mi ion peop e) were born 1>>%N$&&$ and are depicted as mu ticu tura , they wi be tech6savvy, educated, grow up in an aff uent society, and have big spending power. #age" $,$ 'eve of difficu ty" )edium 1&1. )arketing to 4eneration E is a cha enge because of their si/e and characteristics. Decause they are often turned off by overt branding practices and a hard se , marketers have tried many different approaches to reach and persuade 4en E. +he te.t mentions seven methods for accomp ishing this task. 'ist and brief y discuss four of those methods. S"ggested Ans(er: +he seven methods are" (1) on ine bu//, ($) student ambassadors, (*) unconventiona sports, (%) coo events, (,) computer games, (1) videos, and (2) street teams. =ee )arketing Insight ()arketing to 4eneration E)

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for additiona detai s and discussion. =tudents may se ect any of the above four for discussion and characteri/ation. #age" $,* 'eve of difficu ty" 0ard 1&2. +he <!'= segmentation system has evo ved into an ;6part typo ogy. 'ist and brief y describe any four categories of that ;6part typo ogy. S"ggested Ans(er: +he eight parts of the <!'= segmentation system inc ude the fo owing" (1) innovators, ($) thinkers, (*) achievers, (%) e.periencers, (,) be ievers, (1) strivers, (2) makers, and (;) survivors. =tudents may choose any of the above four of the above eight for their discussion un ess otherwise directed. =ee the chapter section for characteri/ation and discussion of each of the eight categories. #age" $,% 'eve of difficu ty" 0ard 1&;. If a marketer were to segment a business market on the basis of demographics, what three subcategory segmentation variab es wou d probab y be used to assist with this form of segmentation9 7hat Buestions wou d be asked in each of the three categories to advance the segmentation effort9 S"ggested Ans(er: +he three subcategories (and associated Buestions) wou d be" (1) industryKwhich industries shou d we serve9, ($) company si/eKwhat si/e companies shou d we serve9, and (*) ocationKwhat geographica areas shou d we serve9 #age" $,> 'eve of difficu ty" )edium 1&>. +o be usefu , market segments must rate favorab y on five key criteria. 7hat are those criteria9 S"ggested Ans(er: +he five criteria are" (1) measurab e, ($) substantia , (*) accessib e, (%) differentiab e, and (,) actionab e. Ior additiona information, see the chapter section. #age" $1$ 'eve of difficu ty" )edium 11&. +he te.t describes five possib e patterns for target market se ection. :escribe the pattern ca ed selective speciali$ation. S"ggested Ans(er: In selective speciali$ation% a firm se ects a number of segments, each obGective y attractive and appropriate. +here may be itt e of no synergy among the segments, but each promises to be a moneymaker. +his mu ti6 segment strategy has the advantage of diversifying the firm8s risk. #age" $1$ 'eve of difficu ty" )edium

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APPLICATION M"#tip#e Ch$i%e


111.

!ESTIONS

!ccording one e.pert from F. 7a ter +hompson8s )ature )arketing 4roup, everyone over %, is umped into a category ca ed o d. 0owever, the e.pert points out that this strategy is fau ty. =eniors, particu ar y boomers6turned6seniors, often make buying decisions based on ________. a.price, not Bua ity b. ifesty e, not age c.age perception d. what their chi dren buy e.dreams, not rea ities !nswer" b #age" $*> 'eve of difficu ty" )edium 11$. 7hen -oca6-o a so d on y one kind of -oke in a 1.,6ounce bott e, it was practicing what is ca ed ________. a. primary marketing b. micromarketing c. macromarketing d. segmented marketing e. mass marketing !nswer" e #age" $%& 'eve of difficu ty" )edium 11*. +he marketer ________ the segmentsM the marketer8s task is to identify the segments and decide which one(s) to target. a. p ans b. creates c. does not create d. rare y contro s e. contro s !nswer" c #age" $%& 'eve of difficu ty" 0ard 11%. !nderson and Aarus have urged marketers to present f e.ib e market offerings to a members of a segment. ! f e.ib e market offering consists of two parts. 7hich of those parts contains the product and service e ements that a segment members8 va ue9 a. Aaked so ution b. :iscretionary so ution c. )a.imum so ution d. #seudo so ution e. <irtua so ution !nswer" a #age" $%1 'eve of difficu ty" )edium

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11,.

(nterprise @ent6!6-ar has cha enged 0ert/8s supremacy in the renta car market by tai oring its marketing program to a re ative y neg ected target market. 7hich of the fo owing wou d be the most accurate description of that market9 a.+he sing es market. b. +he soccer mom market. c.+he business trave er market. d. +he ow6budget, insurance6rep acement market. e.+he vacationer market. !nswer" d #age" $%$ 'eve of difficu ty" 0ard 111. +he recipe for Internet niching success is to ________. a. find a need and fi it b. choose a hard6to6find product that customers do not need to see and touch c. choose a ow6budget product that is heavi y demanded by 4en E d. choose an e.c usive product so d primari y to seniors e. find a product that has some attraction to a hea th6conscious market !nswer" b #ages" $%*N$%% 'eve of difficu ty" )edium 112. 5ne marketing commentator said, +he idea is not to se something, but to demonstrate how a brand can enrich a customer8s ife. 7hich of the fo owing forms of marketing was the commentator describing9 a. (.perientia marketing b. Aiche marketing c. Denefit marketing d. <ira marketing e. <irtua marketing !nswer" a #age" $%% 'eve of difficu ty" 0ard 11;. If you were a marketing manager that was considering imp ementing the concept of customer e.perience management (-()), you wou d fo ow a of the fo owing steps (?-(#+ ________. a. ana y/ing the e.perientia wor d of the customer b. bui ding the e.perientia p atform c. designing the segmentation portfo io d. structuring the customer interface e. engaging in continuous innovation !nswer" c #age" $%, 'eve of difficu ty" 0ard

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11>.

0ome furnishing retai er Ded Dath 3 Deyond8s abi ity to cater to oca tastes has fue ed its phenomena growth. Ded Dath 3 Deyond8s managers pick ________ of their own merchandise, and this oca focus has he ped the chain evo ve from one that began se ing itt e more than bed inens to the beyond partKproducts ranging from picture frames and pot ho ders to imported o ive oi and designer door mats. a. %& percent b. ,& percent c. $, percent d. 2& percent e. >& percent !nswer" d #age" $%; 'eve of difficu ty" 0ard 1$&. If a marketing researcher saw such names (categories) &lue &lood 'states% (inner)s Circle% Hometo*n +etired% or Shotguns and !ickups when doing segmentation research, the marketing researcher wou d most ike y be dea ing with ________ c usters. a.#@IC) b. geodemographic c.psychographic d. demographic e.<!'= !nswer" a #age" $%> 'eve of difficu ty" )edium 1$1. +he =cion by +oyota has a hip ook and fee Kand an industria strength stereoK and is so d in chrome and b ack showrooms tucked inside +oyota dea erships. !ccording to +oyota, to which of the fo owing audiences is the =cion positioned9 a.7ea thy baby boomers. b. !frican !merican 4eneration ? members. c.0ispanic !merican mi ennia s. d. 4eneration E. e.+he si ent maGority. !nswer" d #age" $,& 'eve of difficu ty" )edium 1$$. Increasing y, companies are finding that their markets are ________ as midd e6 market !mericans migrate toward more premium products. a. triang e6shaped b. inverted c. hourg ass6shaped d. circu ar e. inear !nswer" c #age" $,1 'eve of difficu ty" 0ard

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1$*.

7hich of the fo owing statements accurate y describes what demographers are ca ing the boom6boom effect9 a. -onsumers are demanding more bang for their buck. b. Daby boomers sti ru e the marketp ace. c. 4eneration ? and their taste for vio ence wi dominate the market in the future. d. #roducts that appea to $&6somethings a so appea to baby boomers. e. -ompanies must have success Buick y or go bust. !nswer" d #age" $,$ 'eve of difficu ty" )edium 1$%. If a marketing manager emp oys such marketing techniBues as on ine bu//, student ambassadors, coo events, and street teams to reach target markets, the manager is most ike y appea ing to the ________ market. a.pre6schoo b. 4eneration ? c.4eneration E d. 4eneration C e. atent baby boomers !nswer" c #age" $,* 'eve of difficu ty" (asy 1$,. ! hardware store has decided to use the <!'= segmentation system to target consumers. +he store is particu ar y interested in reaching peop e who are characteri/ed by the <!'= system as being practica , down6to6earth, and se f6 sufficient who ike to work with their hands. 7hich of the fo owing <!'= categories most ike y matches to the hardware store8s segment of interest9 a. De ievers b. =trivers c. =urvivors d. (.periencers e. )akers !nswer" e #age" $,% 'eve of difficu ty" 0ard 1$1. Hsers of a brand can be segmented into severa groups based on the strength of commitment to the brand. If a brand manager is seeking to identify those users who are most ike y to defect to another brand, he or she shou d ook for users that are abe ed as being ________. a. convertib e b. sha ow c. average d. entrenched e. atent !nswer" a #age" $,; 'eve of difficu ty" )edium

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1$2.

! purchasing manager has decided to take a purchasing approach to segmenting a proposed business market. ! of the fo owing wou d be potentia means (sub6 segments) for segmenting under the purchasing approach (?-(#+ ________. a.purchasing6function organi/ation b. power structure c.specific app ication d. nature of e.isting re ationships e.purchasing criteria !nswer" c #age" $,> 'eve of difficu ty" 0ard 1$;. If your assignment was (for each segment) to create a va ue proposition and product6price positioning strategy based on the segment8s uniBue customer needs and characteristics, you wou d be in which of the fo owing steps of the segmentation process9 a. Aeeds6based segmentation b. =egment identification c. =egment attractiveness d. =egment positioning e. =egment acid6test !nswer" d #age" $11 'eve of difficu ty" )edium 1$>. !s a brand manager you have decided to use the full market coverage approach in marketing to your customers. 7ithin the fu market coverage approach, you have se ected a(n) ________ strategy whereby your firm wi operate in severa market segments and design different products for each segment. a. undifferentiated b. differentiated c. concentrated d. introverted e. para e !nswer" b #age" $1* 'eve of difficu ty" )edium 1*&. In the past, most car buyers first decided on the manufacturer and then on one of its car divisions. +his type of buying strategy has been abe ed as a ________. a. brand6dominant hierarchy b. nation6dominant hierarchy c. promotiona hierarchy d. geographic hierarchy e. service6va ue hierarchy !nswer" a #age" $11 'eve of difficu ty" )edium

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Sh$rt Ans(er
1*1. ! starting point for discussing segmentation is mass marketing. (.p ain this concept. S"ggested Ans(er: In mass marketing, the se er engages in the mass production, mass distribution, and mass promotion of one product for a buyers. #age" $%& 'eve of difficu ty" (asy 1*$. )ost companies today are turning to micromarketing at one of four eve s. 7hat are those eve s9 S"ggested Ans(er: +he eve s are" (1) segments, ($) niches, (*) oca areas, and (%) individua s. #age" $%& 'eve of difficu ty" )edium 1**. !ssume that you have decided to use a niche strategy to advance your marketing goa s. -haracteri/e an attractive niche. S"ggested Ans(er: !n attractive niche is distinguished as fo ows" (1) the customers in the niche have a distinct set of needsM ($) they wi pay a premium to the firm that best satisfies their needsM (*) the niche is not ike y to attract other competitorsM (%) the nicher gains certain economies through specia i/ationM and (,) the niche has si/e, profit, and growth potentia . #age" $%$ 'eve of difficu ty" 0ard 1*%. 'oca marketing ref ects a growing trend ca ed grassroots marketing, -haracteri/e grassroots marketing. S"ggested Ans(er: In grassroots marketing, marketing activities concentrate on getting as c ose and persona y re evant to individua customers as possib e. #age" $%% 'eve of difficu ty" (asy 1*,. !ccording to one marketing e.pert, +he idea is not to se something, but to demonstrate how a brand can enrich a customer8s ife. 7hat form of marketing is this e.pert referring to9 S"ggested Ans(er: +he e.pert is referring to what is ca ed e#periential marketing, #age" $%% 'eve of difficu ty" )edium 1*1. #ine and 4i more have argued that we are on the brink of what might be ca ed the (.perience (conomy. 7hat are the four varieties of e.periences that #ine and 4i more assert wi be sa ab e in the future9

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S"ggested Ans(er: +he four varieties may be described as being" (1) entertainment, ($) education, (*) esthetic, and (%) escapist. #age" $%, 'eve of difficu ty" 0ard 1*2. 7hen a marketer attempts to segment a consumer market, two broad groups of variab es may be used. 7hat are those two broad groups of variab es9 4ive an e.amp e of each broad group. S"ggested Ans(er: +he first broad group is abe ed descriptive characteristics such as geographic, demographic, and psychographic variab es. +he second broad group is abe ed behavioral considerations such as consumer responses to benefits, use occasions, or brands. #age" $%2 'eve of difficu ty" )edium 1*;. #@IC) was deve oped by - aritas, Inc. (.p ain what #@IC) is intended to do. S"ggested Ans(er: #@IC) stands for #otentia @ating Inde. by Cip )arkets. It is a method for geoc ustering that c assifies over ha f a mi ion H.=. residentia neighborhoods into 1, distinct groups and 11 distinct ifesty e segments ca ed #@IC) - usters. Ior more information, see the chapter section. #age" $%> 'eve of difficu ty" 0ard 1*>. =i verstein and Iiske say that #anera bakery cafes are a good i ustration of u.ury good6oriented estab ishments that de iver three benefits that are common to new u.ury good organi/ations. 7hat are the three benefits isted by =i verstein and Iiske9 S"ggested Ans(er: +he benefits are" (1) technica benefits, ($) functiona benefits, and (*) emotiona benefits. #age" $,1 'eve of difficu ty" )edium 1%&. )eredith, =chewe, and Lar ovich deve oped a framework ca ed +he 'ifestage !na ytic )atri.. 7hat does this matri. do and what are the variab es that might be contained in such a matri.9 S"ggested Ans(er: +he matri. combines information on cohorts, ife stages, physiographics, emotiona effects, and socioeconomics in ana y/ing a segment or individua . #age" $,$ 'eve of difficu ty" 0ard 1%1. -haracteri/e psychographic segmentation. S"ggested Ans(er: In psychographic segmentation, buyers are divided into different groups on the basis of psycho ogica Jpersona ity traits, ifesty e, or va ues. #age" $,$ 'eve of difficu ty" )edium

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1%$.

!ccording to the <!'= =egmentation =ystem, what four groups be ong in the category that disp ays ower resources9 S"ggested Ans(er: +he four groups are" (1) be ievers, ($) strivers, (*) makers, and (%) survivors. #age" $,% 'eve of difficu ty" )edium

1%*.

#eop e p ay five ro es in a buying decision. 7hat are those ro es9 S"ggested Ans(er: +he ro es are" (1) initiator, ($) inf uencer, (*) decider, (%) buyer, and (,) user. #age" $,, 'eve of difficu ty" )edium

1%%.

Duyers can be c assified according to the benefits they seek. (ven car drivers who what to stop for gas may seek different benefits. +hrough its research, )obi identified five different benefit segments. 7hat are those segments and what benefits are associated with each segment9 S"ggested Ans(er: +he different benefit segments are" (a) @oad 7arriorsK premium products and Bua ity service, (b) 4eneration IKfast fue , fast service, and fast food, (c) +rue D uesKbranded products and re iab e service, (d) 0ome DodiesKconvenience, and (e) #rice =hoppersK ow price. #age" $,1 'eve of difficu ty" 0ard

1%,.

-onsumer attitude(s) is(are) an interesting way to segment a market. @esearch has shown that five attitude groups can be found in the market. 7hat are those five attitude groups9 S"ggested Ans(er: +he five attitude groups are" (1) enthusiastic, ($) positive, (*) indifferent, (%) negative, and (,) hosti e. Ior more information, see the chapter section. #age" $,2 'eve of difficu ty" )edium

1%1.

! -onversion )ode is proposed in the te.t. 7hat is the purpose of a conversion mode in assessing behaviora segmentation9 S"ggested Ans(er: +he -onversion )ode has been deve oped to measure the strength of the psycho ogica commitment between brands and consumers and their openness to change. +o determine the ease with which a consumer can be converted to another choice, the mode assesses commitment based on such factors as consumer attitudes toward and satisfaction with current brand choices in a category and the importance of the decision to se ect a brand in the category. Ior information on the various segments, see chapter materia . #ages" $,2N$,; 'eve of difficu ty" )edium

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1%2.

!ssuming you were a marketing manager that was interested in segmenting business buyers8 benefit bund es based on their stage in the purchase decision process, what three categories wou d be appropriate9 S"ggested Ans(er: -ategories wou d inc ude" (1) first6time prospects, ($) novices, and (*) sophisticates. Ior descriptions of each category, see chapter materia s. #age" $1& 'eve of difficu ty" 0ard

1%;.

5ne proposed segmentation scheme c assifies business buyers into three groups, each warranting a different type of se ing. +he groups are (1) price6oriented customers, ($) so ution6oriented customers, and (*) strategic6va ue customers. 7hat types of se ing (specific se ing type name) wou d be associated with these three groups9 S"ggested Ans(er: +he se ing types wou d be" (1) price6oriented customers match to transactional selling, ($) so ution6oriented customers match to consultative selling, and (*) strategic6va ue customers match to enterprise selling. #age" $11 'eve of difficu ty" )edium

1%>.

:ifferentiated marketing typica y creates more tota sa es than undifferentiated marketing. 0owever, it a so increases the costs of doing business. !ssume that you are a marketing manager that is considering using differentiated marketing. 7hat five costs that you encounter on a rather regu ar basis wou d most ike y be higher because of your decision to pursue differentiated marketing9 S"ggested Ans(er: +he categories of costs that wou d most ike y be higher inc ude" (1) product modification costs, ($) manufacturing costs, (*) administrative costs, (%) inventory costs, and (,) promotion costs. Ior additiona information, see chapter section. #age" $1% 'eve of difficu ty" 0ard

1,&.

!s a marketing manager, you have decided to update your segmentation scheme. In the process of doing this, you have decided to use a process ca ed market partitioning. (.p ain what market portioning is. S"ggested Ans(er: 5ne way to discover new segments is to investigate the hierarchy of attributes consumers e.amine in choosing a brand if they use phased decision strategies. +his is ca ed market partitioning. =ee chapter section for additiona information and e.amp es of the process. #age" $11 'eve of difficu ty" )edium

$**