Creating Value for Target Customers

Chapter 7: Customer-Driven Marketing Strategy: Creating Value for Target Customers

Chapter 7

Customer-Driven Marketing Strategy:

Creating Value for Target Customers

GENERAL CONTENT: Multiple-Choice Questions

1. Why did Dunkin’ Donuts pay dozens of their faithful customers in Phoenix, Chicago, and Charlotte, $100 a week to buy coffee at Starbucks?
2. They wanted them to see how bad Starbucks’ coffee was.
3. They wanted to see what they would say about Starbucks.
4. They wanted them to test the competition.
5. Retailers requested it.
6. It created healthy competition.

(Answer: b; p. 182; Moderate)

1. Dunkin’ Donuts franchises have recently teamed up, under one roof, with Baskin-Robbins ice cream. By ______the market and having several different products, Dunkin’ Donuts now has an attractive offering for consumers in two product categories.
2. dividing
3. researching
4. segmenting
5. understanding
6. reaching

(Answer: c; p. 182; Easy; LO1)

1. Dunkin’ Donuts has identified the parts of the market it can serve best and most profitably. It is practicing ______.
2. concentrated marketing
3. mass marketing
4. targeted marketing
5. segmentation
6. undifferentiated

(Answer: d; p. 184; Moderate; LO1)

1. With only limited exception in certain commodities, mass marketing today is limited because the world’s mass markets have slowly splintered into a profusion of ______.
2. unidentifiable markets
3. confused markets
4. small segments
5. international markets
6. disarray

(Answer: c; p. 184; Easy; LO1)

1. Jim Cosentino and his staff are designing a customer-driven marketing strategy. The first step in this process is market segmentation. Identify the remaining three steps (in order) to develop this strategy.
2. market positioning, market differentiation, target marketing
3. market positioning, market targeting, market segmentation
4. market targeting, market differentiation, market positioning
5. market alignment, market segmentation, market positioning
6. market recognition, market preference, market insistence

(Answer: c; p. 185; Challenging; LO1)

1. Even though several options are available at any one time, there is ______to segment a market.
2. one single best way
3. no single way
4. the most effective way
5. the least-cost way
6. a most popular way

(Answer: b; p. 185; Moderate; LO1)

7.The oldest form of segmentation localizes products and services to meet local market demands. This approach is referred to as ______segmentation.

1. geographic
2. benefit
3. end-use
4. customer
5. image

(Answer: a; p. 185; Easy; LO2)

1. One common segmentation approach divides the market according to the owners’ race, occupation, income, and family life cycle. This segmentation approach uses ______.
2. VALS
3. benefits
4. end-uses
5. demographics
6. psychographics

(Answer: d; p. 187; Moderate; LO2)

1. Through talking to numerous competitors at a regional trade show, you learn that most of them use the most popular base for segmenting markets. What is it?
2. demographic
3. gender
4. psychographic
5. behavioral
6. geographic

(Answer: a; p. 187; Easy; LO2)

1. When Burger King targets different groups—from children and teens to adults and seniors—with different ads and media, it is practicing ______segmentation.
2. demographic
3. age and life cycle
4. psychographic
5. behavioral
6. end-use

(Answer: b; p. 187; Moderate; LO2) {AACSB: Diversity}

1. Marketers must be careful to guard against ______when using age and life cycle segmentation.
2. underestimating
3. stereotyping
4. traditional marketing
5. cultural bias
6. discrimination

(Answer: b; p. 187; Moderate; LO2) {AACSB: Diversity}

1. This common and popular form of segmentation has long been used in clothing, cosmetics, toiletries, and magazines.
2. age and life cycle
3. gender
4. behavior
5. psychographic
6. geographic

(Answer: b; p. 187; Easy; LO2) {AACSB: Diversity}

1. Income segmentation is used to target the ______.
2. affluent
3. middle class
4. lower income class
5. all of the above
6. none of the above

(Answer: d; p. 188; Moderate; LO2)

1. Sumeer Dutta divides buyers into groups based on their social class, lifestyle, or personality characteristics. Sumeer is obviously using ______segmentation.
2. behavioral
3. psychographic
4. age and life cycle
5. demographic
6. geographic

(Answer: b; p. 188; Easy; LO2)

1. This type of segmentation centers on the use of the word when, such as when consumers get the idea to buy, when they actually make their purchase, or when they use the purchased item. What do marketers call this?
2. behavioral
3. psychographic
4. occasion
5. impulse
6. emergency

(Answer: c; p. 189; Easy; LO2)

1. Markets can be segmented into light, medium, and heavy users of a product. This method of segmentation is called ______.
2. user status
3. usage rate
4. benefit
5. behavior
6. product frequency

(Answer: b; p. 190; Easy; LO2)

1. Markets can be segmented into groups of nonusers, ex-users, potential users, first-time users, and regular users of a product. This method of segmentation is called ______.
2. user status
3. usage rate
4. benefit
5. behavior
6. product frequency

(Answer: a; p. 190; Easy; LO2)

1. By studying its less loyal buyers, a company can detect which brands are most ______with its own.
2. competitive
3. used
4. often overlooked
5. similar
6. complementary

(Answer: a; p. 191; Easy; LO2)

1. Business marketers use several variables that are not used to segment consumer markets including all of the following EXCEPT ______.
2. operating characteristics
3. purchasing deadlines
4. situational factors
5. personal characteristics
6. purchasing approaches

(Answer: b; p. 192; Challenging; LO2)

1. Almost every company serves ______business markets.
2. no
3. many
4. international
5. local
6. some

(Answer: e; p. 192; Moderate; LO2)

1. Within a given target industry and customer size there are several different bases, but many marketers believe that ______and benefits provide the best basis for segmentation.
2. demographics
3. psychographics
4. VALS
5. buying behavior
6. concentration of buyers

(Answer: d; p. 193; Challenging; LO2)

1. International Drilling Company segments its foreign markets by their overall level of common language, religions, and values. This firm segments on what basis?
2. political factors
3. legal factors
4. benefits sought
5. cultural factors
6. natural factors

(Answer: d; p. 193; Moderate; LO2) {AACSB: Global}

1. When the size, purchasing power, and profiles of business market segments can be determined, they are said to possess the requirement of being ______.
2. measurable
3. accessible
4. substantial
5. actionable
6. observable

(Answer: a; p. 194; Moderate; LO3)

1. When a business market segment is large or profitable enough to serve, it is termed ______.

1. measurable
2. accessible
3. substantial
4. actionable
5. observable

(Answer: c; p. 194; Easy; LO3)

1. You have discovered that the segments you are targeting are conceptually distinguishable and respond differently to different marketing mix elements and programs. This segmenting requirement is called ______.
2. accessible
3. measurable
4. reachable
5. differentiable
6. observable

(Answer: d; p. 194; Moderate; LO3)

1. It is now time to evaluate the different market segments your company is serving. You would look at all of these factors EXCEPT which one?
2. segment size
3. segment growth
4. structural attractiveness
5. company values and mission
6. none of the above

(Answer: d; p. 195; Challenging; LO3)

1. Barney Hopkins has compiled a list of things that make segments attractive. Which of the following is an error?
2. relative power of buyers
3. lack of powerful suppliers to control the channel
4. few substitute products
5. competition with superior resources
6. financial resources

(Answer: d; p. 195; Challenging; LO3)

1. In general, a company should enter only segments in which it can ______and ______.
2. offer lower prices; ship faster
3. offer superior value; gain advantages over competitors
4. offer superior value; ship faster
5. gain advantages over competitors; get co-op advertising
6. identify behaviors; understanding spending power

(Answer: b; p. 195; Moderate; LO3)

1. A ______consists of a set of buyers who share common needs or characteristics that the company decides to serve.
2. market segment
3. target market
4. well-defined market
5. lucrative market
6. ultimatum

(Answer: b; p. 195; Easy; LO1)

1. Mass marketers, such as Target and Venture Stores, ignore market segment differences and target the whole market with one offer. What is their approach to segmenting?
2. undifferentiated marketing
3. differentiated marketing
4. target marketing
5. blanket marketing
6. intelligent marketing

(Answer: a; p. 195; Easy; LO4)

1. Mary Anne’s Chocolates targets several different market segments while designing separate offers for each one. This approach is called ______marketing.
2. undifferentiated
3. differentiated
4. multi-segmented
5. mass
6. multiple-attractions

(Answer: b; p. 196; Moderate; LO4)

1. Developing a stronger position within several segments creates more total sales than ______marketing across all segments.
2. undifferentiated
3. differentiated
4. mass
5. target
6. multiple-segment

(Answer: a; p. 196; Challenging; LO4)

1. Companies who use a differentiated marketing strategy may have higher profits. But the company must weigh ______against ______when selecting this strategy.
2. extra research; costs
3. sales analysis; sales
4. increased sales; increased costs
5. benefits; costs
6. attitudes; perceptions

(Answer: c; p. 197; Moderate; LO4)

1. Sanguine Services practices a marketing strategy where its limited resources are used to go after a large share of two small niches. Sanguine practices which one of these strategies?
2. undifferentiated
3. differentiated
4. mass
5. concentrated
6. geographically dispersed

(Answer: d; p. 197; Challenging; LO4)

1. Many smaller companies pursue concentrated marketing because it offers the opportunity to compete by focusing their limited resources on serving niches that may be ______or ______larger companies.
2. unimportant to; unwanted by
3. unimportant to; overlooked by
4. too small; undesirable to
5. unknown by; unwanted by
6. none of the above

(Answer: b; p. 197; Moderate; LO4)

1. Today, the low cost of setting up shop ______makes it even more profitable to serve seemingly miniscule niches.
2. in malls in major cities
3. in mail-order catalogs
4. on the Internet
5. near major competitors
6. far from competitors

(Answer: c; p. 197 Easy; LO4) {AACSB: Technology}

1. Although there are many segmenting strategies, one in particular carries higher-than-average risks in consumer markets. This strategy is ______marketing.
2. concentrated
3. niche
4. differentiated
5. undifferentiated
6. multiple-segment

(Answer: a; p. 197; Moderate; LO4)

1. On the Internet it is possible to purchase denim jeans manufactured to perfectly fit you. This practice is known as ______.
2. niche marketing
3. micromarketing
4. differentiated marketing
5. mass marketing
6. none of the above

(Answer: b; p. 198; Moderate; LO4) {AACSB: Technology}

1. A segmenting approach that has been around for a long time that can be very effective—______— tailors brands and promotions to the needs and wants of specific cities, neighborhoods, and even specific stores.
2. micromarketing
3. differentiated marketing
4. niche marketing
5. local marketing
6. A or D

(Answer: d; p. 198; Easy; LO4)

1. In the extreme, micromarketing becomes ______—tailoring products and marketing programs to the needs and preferences of individual customers.
2. individual marketing
3. mass marketing
4. mass customizing
5. differentiated marketing
6. A and C

(Answer: e; p. 200; Challenging; LO4)

1. All of the following are drawbacks of local marketing EXCEPT ______.
2. it can drive up manufacturing costs
3. it can drive up marketing costs by reducing economies of scale
4. it can create logistics problems
5. that a brand’s overall image might be diluted with too frequent use
6. C and D

(Answer: d; p. 199; Challenging; LO4)

1. Under what circumstances can local marketing be quite effective?
2. when pronounced regional differences in demographics and lifestyles are present
3. when pronounced local differences in demographics and lifestyles are present
4. when pronounced regional and local differences in demographics and lifestyles are present
5. when regional and local differences in demographics and lifestyles are similar
6. any of the above

(Answer: c; p. 200; Challenging; LO4)

1. Other names for individual marketing include all of the following EXCEPT ______.
2. one-to-one marketing
3. self-marketing
4. mass customization
5. markets-of-one marketing
6. none of the above, they are all interchangeable

(Answer: b; p. 200; Moderate; LO4)

1. The move toward individual marketing mirrors the trend in consumer ______.
2. niche marketing
3. company reflections
4. self-marketing
5. individual marketing
6. direct marketing

(Answer: c; p. 201; Challenging; LO4)

1. All of the following are factors that should be considered when choosing a target marketing strategy EXCEPT ______.
2. company resources
3. degree of product variability
4. product life cycle
5. market stability
6. market variability

(Answer: d; p. 201; Moderate; LO4)

1. When competitor’s use differentiated or concentrated marketing, ______marketing can be suicidal.
2. differentiated
3. undifferentiated
4. concentrated
5. customized
6. localized

(Answer: b; p. 201; Easy; LO4)

1. When competitors use undifferentiated marketing, a firm can gain an advantage by using differentiated or ______marketing.
2. undifferentiated
3. customized
4. concentrated
5. individual
6. mass

(Answer: c; p. 201; Moderate; LO4)

1. Socially responsible target marketing is often concerned with the issues of targeting ______consumers with ______products.
2. elderly; expensive
3. young; appealing
4. vulnerable; potentially harmful
5. vulnerable or disadvantaged; controversial or potentially harmful
6. unexpected; business

(Answer: d; p. 202; Challenging; LO1) {AACSB: Ethics}

1. It is considered socially irresponsible when the marketing of adult products spills over into the ______segment.
2. elderly
3. child
4. animal
5. minority
6. senior

(Answer: b; p. 202; Easy; LO1) {AACSB: Ethics}

1. Manufacturers and retailers of such products as cigarettes and beer have generated much controversy in recent years by their attempts to target ______.
2. teens
3. the poor
4. inner-city minorities
5. the poor in foreign markets
6. the Amish

(Answer: c; p. 202; Moderate; LO1) {AACSB: Ethics}

1. It is often difficult to be totally critical of products that target children and minorities because most of these products provide ______to target customers.
2. benefits
3. education
4. experience
5. major sales
6. expenses

(Answer: a; p. 202; Easy; LO1) {AACSB: Ethics}

1. In target marketing, the issue is not really who is targeted, but rather ______and for ______.
2. why; what
3. how; what
4. why; how long
5. where; what
6. none of the above

(Answer: b; p. 202; Moderate; LO1)

1. A product’s position is the way the product is defined by ______.
2. manufacturers
3. wholesalers
4. retailers
5. consumers
6. none of the above

(Answer: d; p. 203; Easy; LO4)

1. The marketing task necessary to make positioning effective, requires that the brand’s unique benefits and ______must be implanted in customers’ minds.
2. uniqueness
3. differentiation
4. equity
5. price
6. image

(Answer: b; p. 203; Moderate; LO4)

1. It is safe to say that consumers position products and services ______.
2. after marketers put marketing mixes in place
3. generally after consulting friends who use them
4. with or without the help of marketers
5. rather reluctantly
6. based on nearby competitors’ positions

(Answer: c; p. 203; Challenging; LO4)

1. All of the following are tasks involved in the process of positioning products EXCEPT ______.
2. identifying a set of possible competitive advantages upon which to build a position
3. surveying frequent users of the product
4. selecting an overall positioning strategy
5. effectively communicating and delivering the chosen position to the market
6. assessing competitors’ positions in the immediate market

(Answer: b; p. 204; Moderate; LO4)

1. A company or store gains a(n) ______by understanding customer needs better than competitors do and delivering more value.
2. competitive advantage
3. positioning advantage
4. cost advantage
5. efficiency advantage
6. synergy

(Answer: a; p. 204; Easy; LO4)

1. A company or market offer can be differentiated along the lines of product, image, services, channels, or ______.
2. prices
3. nonprice factors
4. people
5. customer service
6. none of the above

(Answer: c; p. 204; Moderate; LO4)

1. A company difference is worth establishing to the extent that it satisfies all of the following criteria EXCEPT ______.
2. importance
3. communicability
4. affordability
5. compatibility
6. profitability

(Answer: d; p. 207; Challenging; LO4)

1. ______is the advantage gained through the way a firm designs their distribution coverage, expertise, and delivery performance.
2. Services differentiation
3. Channel differentiation
4. People differentiation
5. Product differentiation
6. Price differentiation

(Answer: b; p. 206; Easy; LO1)

1. When firms use symbols, colors, or characters to convey their personalities, they are using this type of differentiation.
2. image
3. people
4. company
5. reputation
6. subliminal

(Answer: a; p. 206; Easy; LO1)

1. The idea that companies should aggressively promote only one benefit to the target market is referred to as a ______.
2. unique selling product
3. unique services practice
4. unique sales pitch
5. unique selling proposition
6. universally strategic practice

(Answer: d; p. 207; Challenging; LO1)

1. Regarding promoting, a difference is worth establishing to the extent that it satisfies all of the criteria EXCEPT which one?
2. important
3. distinctive
4. divisible
5. affordable
6. profitable

(Answer: c; p. 207; Moderate; LO1)

1. Occasionally a company will possess a market advantage because their competitors cannot easily copy a particular product attribute. They then have a ______difference.
2. distinctive
3. profitable
4. preemptive
5. superior
6. irreconcilable

(Answer: c; p. 207; Moderate; LO1)

1. You have just created the “perfect” ad. It communicates a solid answer to the question, “Why should I buy your brand?” This full positioning is called ______.
2. value proposition
3. AIDA
4. capturing the consumers’ attention
5. value profiling
6. VALS

(Answer: a; p. 208; Moderate; LO4)

1. The full mix of benefits upon which a brand is differentiated and positioned is the brand’s ______.
2. quality image
3. customer services
4. value proposition
5. encyclopedia
6. pricing and promotion structure

(Answer: c; p. 208; Moderate; LO4)

1. This positioning strategy is very competitive. It can attack a more-for-more strategy by introducing a brand offering comparable quality but at a lower price.
2. more-for-the-same strategy
3. more-for-less strategy
4. same-for-less strategy
5. less-for-much-less strategy
6. all-or-nothing strategy

(Answer: a; p. 208; Moderate; LO4)

1. Which positioning strategy offers consumers a “good deal” by offering equivalent-quality products or services at a lower price?
2. more-for-the-same strategy
3. more-for-less strategy
4. same-for-less strategy
5. less-for-much-less strategy
6. all-or-nothing strategy

(Answer: c; p. 209; Easy; LO4)

1. Companies that offer this positioning strategy find it difficult to deliver on their promise and lose out to more focused competitors.
2. more-for-the-same strategy
3. more-for-less strategy
4. same-for-less strategy
5. more-for-more strategy
6. none of the above

(Answer: b; p. 209; Moderate; LO4)

1. This statement first states the product’s membership in a category and then shows its point-of-difference from other members of the category.
2. mission statement
3. vision statement
4. position statement
5. positioning statement
6. statement of intent

(Answer: d; p. 210; Moderate; LO4)

1. In its efforts to deliver and communicate its chosen position a company will follow all of the following steps EXCEPT ______.
2. the company’s marketing mix efforts must support the positioning strategy
3. positioning the company calls for concrete action, not just talk
4. designing the marketing mix involves working out the strategic details of the positioning strategy
5. its service personnel, retailers, and advertising messages must match correctly
6. B and C

(Answer: d; p. 210; Challenging; LO4) {AACSB: Communication}

1. Symbols can provide strong company or brand recognition and image differentiation. All of the following are examples of such symbols except ______.
2. McDonald’s golden arches
3. Tiger Woods golfing products
4. the Prudential rock
5. the Nike swoosh
6. Google’s colorful logo

(Answer: b; p. 206; Moderate; LO4) {AACSB: Communication}

73.Among the following the narrowest marketing strategy is ______.

a.segmented strategy

b.local marketing

c.differentiated marketing

d.mass marketing

e.A and C

(Answer: b; p. 198; Moderate; LO1)

74.With concentrated marketing, the marketer goes after a ______share of ______.

a.small; a small market

b.small; a large market

c.large; one or a few niches

d.large; the mass market

e.none of the above

(Answer: c; p. 197; Challenging; LO4)

1. A product’s position is based on important attributes as perceived by ______.

1. suppliers
2. competitors
3. market conditions
4. consumers
5. B or D

(Answer: d; p. 203; Moderate; LO4)

True/False

1. Today, most companies have moved back toward mass marketing and are being less choosy about the customers with whom they wish to build relationships.

(Answer: False; p. 184; Moderate; LO1)