chapter 06 Target Markets: segmentation and Evaluation

All the following are true about business markets, except _______.

• 
  the purchase may be made to resell the item

• the purchase is made by household members who intend to consume the product

• they can also be known as organizational markets

• the purchase may be made to use in the production of another product

Do-yun has just joined a law firm as its purchasing agent for all supplies, equipment, and service contracts. In his previous position at another company, Do-yun could make decisions for any purchase up to $1 million; however, at the new law firm, he can only make decisions for purchases less than $500,000. Recently, Do-yun has been working with a sales representative from a computer software firm on a contract for a new program to process the firm’s billing statements. Do-yun signs the contract, even though it is for $950,000. In this case, Do-yun _______ part of the market for the software because _______.

• 
  is not; Do-yun does not have the authority to purchase

• 
  is; Do-yun has the need for the software

• is; Do-yun has very little buying power

• is not; Do-yun is willing to spend the firm’s money

Your marketing team is currently working through the target market selection process to identify which customers your firm will target with a new technology product being developed. You are currently in the process step where you must consider the target market characteristics, the product attributes, and the firm’s objectives and resources. Which of the five steps in the target market selection process are you currently working on?

• Step 3: Develop market segment profiles

• Step 2: Determine which segmentation variables to use

• 
  Step 4: Evaluate relevant market segments

• 
  Step 1: Identify the appropriate targeting strategy

French’s brand, makers of the famous, yellow-packaged mustard, view all mustard consumers as very similar and utilizes only one marketing mix. French’s brand uses a(n) _______ targeting strategy.

• undifferentiated

• differentiated

• product-use

• concentrated

Which of the following is an advantage of using a concentrated targeting strategy?

• Firms can reduce their expenditures on marketing research activities.

• Firms have high degrees of flexibility in reaching multiple market segments.

• 
  Firms can utilize their production capacity very efficiently.

• Firms can develop a special marketing mix for a single market segment.

The Cannon Mills Company markets towels and linens using the brand name Fieldcrest. Fieldcrest is sold at a variety of retail outlets, including Macy’s, Target, and Bed Bath & Beyond. The Cannon Mills Company offers a variety of models of Fieldcrest products to appeal to customers who are interested in owning the "best" products, those that are "good" and those that are in between. For example, at Macy’s, the Fieldcrest Luxury bath towels sell for $15, Bed Bath & Beyond sells the Fieldcrest Resort towels for $12 each, and Target sells the Fieldcrest Home towels for $8 each. Cannon Mills Company is most likely using a(n) _______ targeting strategy.

• concentrated

• differentiated

• undifferentiated

• 
  cluster

The Domino brand is a leading manufacturer of sugar and is part of the ASR Group, the world’s largest refiner of cane sugar. Sugar is a staple product that most people keep on hand in their pantry for everyday use as a sweetener or baking ingredient. Domino believes its market is _______, where individuals have similar needs for the product and, therefore, utilizes a(n) _______ targeting strategy because they can incorporate a single marketing mix and direct it at the entire market for their sugar products.

• 
  homogeneous, differentiated

• heterogeneous; undifferentiated

• heterogeneous, differentiated

• 
  

  homogeneous; undifferentiated

Crayola sells packages of crayons in 16- and 64-count packages as well as an 800-count “Classpack” geared towards schools and organizations. The company also sells colored pencils, markers, paints, and modeling clay. Crayola uses a(n) _______ targeting strategy.

• concentrated

• 
  undifferentiated

• 
  single

• differentiated

Billabong was founded in Australia by surfer and surfboard shaper Gordon Merchant in the 1970s. Today, the brand has a strong presence and is known as a lifestyle brand for board-sports, including skate, snow, and wake. Billabong has company-owned specialty stores located throughout the United States and plans to open additional outlets in the future. Billabong also markets its clothing and equipment through its website and catalog. Billabong would most likely use _______ variables as a segmentation base for its online and catalog sales but would benefit most from _______ segmentation to determine the locations for future company-owned stores.

• geographic; behavioristic

• geographic; demographic

• behavioristic; geographic

• 
  demographic; geographic

Verizon Wireless uses a segmentation strategy for its mobile phone and data packages based on market characteristics such as the number of devices, amount of download capacity, and volume of minutes or text messages. Based on these variables, Verizon Wireless is using _______ variables for segmentation.

• demographic

• 
  

  behavioristic

• psychographic

• 
  geographic