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Marketing: An Introduction, 13e (Armstrong)
Chapter 6 Customer-Driven Marketing Strategy: Creating Value for Target Customers

1) ________ is the process of dividing a market into distinct groups of buyers who have different
needs, characteristics, or behavior.
A) Differentiation
B) Mass marketing
C) Market targeting
D) Market segmentation
E) Positioning
Answer: D
Diff: 1
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.

2) Harry's caters to the clothing needs of men, manufacturing two different lines of fashion based
on the purchasing power of its customers. One product line caters to the needs of affluent,
middle-aged men, and the other line targets younger, up-and-coming professionals. Harry's most
likely segments the consumer market based on ________ variables.
A) geographic
B) psychographic
C) universal
D) demographic
E) behavioral
Answer: D
Diff: 3
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.
AACSB: Analytical thinking

3) ________ consists of arranging for a market offering to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of target consumers.
A) Differentiation
B) Positioning
C) Market targeting
D) Market segmentation
E) Mass marketing
Answer: B
Diff: 1
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.

1
Copyright © 2017 Pearson Education, Inc.
4) Which of the following is the right order of the steps that companies generally follow in
designing a customer-driven marketing strategy?
A) market segmentation, differentiation, positioning, and market targeting
B) positioning, market segmentation, mass marketing, and market targeting
C) market segmentation, market targeting, differentiation, and positioning
D) market alignment, market segmentation, differentiation, and market positioning
E) market recognition, market preference, market targeting, and market insistence
Answer: C
Diff: 1
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.

5) Companies today are moving away from target marketing and toward mass marketing.
Answer: FALSE
Diff: 1
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.

6) While designing a customer-driven marketing strategy, marketers are likely to divide the
market into smaller segments.
Answer: TRUE
Diff: 1
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.

7) Explain the four major steps in designing a customer-driven marketing strategy.

Answer: The four major steps in designing a customer-driven marketing strategy are market
segmentation, market targeting, differentiation, and market positioning.

Market segmentation: Dividing a market into smaller groups of buyers with distinct needs,
characteristics, or behaviors, that might require separate marketing strategies or mixes. The
company identifies different ways to segment the market and develops profiles of the resulting
market segments. Market targeting: Evaluating each market segment's attractiveness and
selecting one or more of the market segments to enter. Differentiation: Actually differentiating
the firm's market offering to create a superior customer value. Market positioning: Arranging for
a market offering to occupy a clear, distinctive, and desirable place relative to competing
products in the minds of consumers.
Diff: 2
LO: 6-1: Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.
AACSB: Analytical thinking

2
Copyright © 2017 Pearson Education, Inc.
8) Lilly's, a furniture retailer, sells low-end furniture and accent pieces that are targeted toward
lower-income consumer groups. Lilly's most likely segments the consumer market based on
________ variables.
A) demographic
B) psychographic
C) universal
D) geographic
E) behavioral
Answer: A
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

9) Gulf Coast, a wholesale shrimp distributor, groups its customers by regions in the United
States, such as Midwest, Northeast, and Southwest. For each region, Gulf Coast tailors a
different set of advertisements and promotions. The supplier is segmenting its market according
to ________.
A) behavioral factors
B) personality characteristics
C) geographic location
D) benefits sought
E) demographics
Answer: C
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

10) Pediacertain Pet Supplies, a pet-food company, divides the pet market according to the pet
owners' gender, occupation, income, and family life cycle. In this case, which of the following
variables has the company used for market segmentation?
A) geographic
B) psychographic
C) benefit
D) demographic
E) occasion
Answer: D
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

3
Copyright © 2017 Pearson Education, Inc.
11) One reason demographic variables are the most popular bases for segmenting customer
groups is because they ________.
A) create smaller segments
B) create more easily accessible segments
C) do not involve stereotypes
D) are easier to measure than other variables
E) involve fewer attributes to consider
Answer: D
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

12) Delta, an American video game manufacturer, targets teens between the ages of 13 and 18,
providing free game trials and applications. The firm's marketing approach exemplifies
________ segmentation.
A) age and life-cycle
B) geographic
C) occasion
D) gender
E) income
Answer: A
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

13) ________ segmentation factors divide buyers into different groups based on social class,
lifestyle, or personality characteristics.
A) Geographic
B) Demographic
C) Psychographic
D) Behavioral
E) User status
Answer: C
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

14) P&G was among the first to use ________ segmentation when it introduced Secret, a
deodorant brand specially formulated for women's chemistry.
A) age and life-cycle
B) gender
C) behavior
D) psychographic
E) geographic
Answer: B
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

4
Copyright © 2017 Pearson Education, Inc.
15) Which type of market segmentation is generally used by marketers who sell luxury products
targeted to the affluent segments of a population?
A) usage rate
B) occasion
C) income
D) benefits sought
E) gender
Answer: C
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

16) Bass Pro Shops recognizes that outdoors enthusiasts are a diverse group. Likely segments
include hunters, campers, and boaters. What is this segmentation method called?
A) user status
B) usage rate
C) benefit
D) behavioral
E) psychographic
Answer: E
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

17) Dividing buyers into groups based on their knowledge, attitudes, uses, or responses to a
product is called ________ segmentation.
A) behavioral
B) psychographic
C) age and life-cycle
D) user status
E) geographic
Answer: A
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

18) Bakeries and coffee bistros that offer pumpkin-flavored items only during the autumn season
target their consumers primarily through ________ segmentation.
A) psychographic
B) demographic
C) income
D) occasion
E) age and life-cycle
Answer: D
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

5
Copyright © 2017 Pearson Education, Inc.
19) The marketing manager at Frizzles' Eateries targets customers who are working to lose
weight but who still want to dine out. The restaurant chain offers a wide variety of low-fat, low-
calorie meals that appeal to dieters. Frizzles' approach is best referred to as ________
segmentation.
A) age and life-cycle
B) user status
C) benefit
D) demographic
E) geographic
Answer: C
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

20) 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 ________.
A) user status segmentation
B) usage rate segmentation
C) benefit segmentation
D) behavioral segmentation
E) loyalty status segmentation
Answer: A
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

21) Shampoo marketers segment buyers as light, medium, or heavy product users. This is an
example of ________ segmentation.
A) user status
B) usage rate
C) benefits sought
D) occasion
E) psychographic
Answer: B
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

6
Copyright © 2017 Pearson Education, Inc.
22) Gold Class Electricals, a consumer-electronics firm, targets market segments based on
factors such as country, age, social class, usage rate, and benefits sought. The company divides
its markets based on ________.
A) demographic variables
B) geographic regions
C) multiple segmentation bases
D) behavioral variables
E) psychographic segmentation bases
Answer: C
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

23) Danko International is a multinational company that targets the BRIC countries (Brazil,
Russia, India, and China) because they're fast-growing developing economies and use ________
to segment its world markets.
A) political factors
B) legal factors
C) personality factors
D) economic factors
E) cultural factors
Answer: D
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

24) Producers of popular beverages often partner with global music channels to target consumers
through a variety of promotional events and advertisements. This approach to marketing is
referred to as ________ segmentation.
A) intermarket
B) income
C) age and life-cycle
D) occasions
E) gender
Answer: A
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

7
Copyright © 2017 Pearson Education, Inc.
25) Market segments that can be effectively reached and served are said to be ________.
A) measurable
B) accessible
C) substantial
D) actionable
E) profitable
Answer: B
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

26) When the size, purchasing power, and profiles of a market segment can be determined, the
market segment is said to be ________.
A) measurable
B) accessible
C) substantial
D) actionable
E) observable
Answer: A
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

27) When a market segment is large or profitable enough to serve, it is termed ________.
A) measurable
B) accessible
C) substantial
D) actionable
E) differentiable
Answer: C
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

28) When an effective program can be designed for attracting and serving a chosen segment, the
segment is best described as ________.
A) accessible
B) measurable
C) reachable
D) actionable
E) differentiable
Answer: D
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

8
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29) If men and women respond dissimilarly to the marketing efforts for a root beer-flavored malt
beverage, they are considered ________ market segments.
A) accessible
B) measurable
C) reachable
D) differentiable
E) observable
Answer: D
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

30) Target and Kohl's have opened smaller-format stores designed to fit the needs of densely
packed urban neighborhoods. This is an example of geographic segmentation.
Answer: TRUE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

31) Marketers must be careful to guard against stereotypes when using age and life-cycle
segmentation.
Answer: TRUE
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Ethical understanding and reasoning

32) Demographic factors are the most popular bases for segmenting customer groups.
Answer: TRUE
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

33) Demographic variables are generally more difficult to measure than most other types of
variables.
Answer: FALSE
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

34) Not all companies that use income segmentation target the affluent.
Answer: TRUE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

35) Cupcake Gourmet, a high-end bakery in Manhattan, segments its customers according to
those who frequent their store regularly, those who visit infrequently, and those who have never
visited. This is an example of usage-rate segmentation.
Answer: FALSE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
9
Copyright © 2017 Pearson Education, Inc.
36) Marketers typically limit their market segmentation analysis to a single variable in order to
simplify the process.
Answer: FALSE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

37) Multivariable segmentation systems merge and analyze geographic, demographic, lifestyle,
and behavioral data to help companies segment their markets.
Answer: TRUE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

38) Business and consumer marketers use many of the same variables to segment their markets.
Answer: TRUE
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

39) Light users are often a small percentage of a company's market but account for a high
percentage of total consumption.
Answer: FALSE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

40) New communications technologies like satellite TV and social media are likely to eliminate
the need for markets to be geographically segmented as clusters of countries.
Answer: TRUE
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Information technology

41) For market segments to be beneficial for companies, they must be measurable.
Answer: TRUE
Diff: 1
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

10
Copyright © 2017 Pearson Education, Inc.
42) Explain the four major segmentation variables for consumer markets.
Answer: For consumer marketing, the major segmentation variables are geographic,
demographic, psychographic, and behavioral. Geographic segmentation divides the market into
different geographic units, such as nations, regions, states, countries, cities, or neighborhoods.
Many companies are localizing their products, advertising, promotion, and sales efforts to fit the
needs of individual regions, cities, and neighborhoods. Demographic segmentation divides the
market into groups based on variables such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation. These are the most popular factors because they
are easy to measure, and consumer needs, wants, and usage rates often vary closely with
demographic variables. Psychographic segmentation, on the other hand, divides buyers into
different groups based on social class, lifestyle, or personality characteristics. People in the same
demographic group can have very different psychographic characteristics. Behavioral
segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses
to a product. Many marketers believe that behavioral variables are the best starting point for
building market segments.
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

43) Describe age and life-cycle segmentation with examples. What are the precautions that
marketers should take when using age and life-cycle segmentation?
Answer: Consumer needs and wants change with age. Some companies use age and life-cycle
segmentation, offering different products or using different marketing approaches for different
age and life-cycle groups. For example, Kraft's Oscar Mayer brand markets Lunchables,
convenient prepackaged lunches for children. To extend the substantial success of Lunchables,
however, Oscar Mayer later introduced Lunchables Uploaded, a version designed to meet the
tastes and sensibilities of teenagers. Most recently, the brand launched an adult version, but with
the more adult-friendly name P3 (Portable Protein Pack). Other companies focus on the specific
age of life-stage groups. For example, whereas most tablet makers have been busy marketing
their devices to grown-ups, Amazon has spotted a tinier tablet market. Feedback from parents
suggested that they were handing their entertainment-packed Kindle Fire tablet over to their
young children for entertainment, education, and babysitting purposes. To tap this young-family
market, Amazon introduced FreeTime Unlimited, a multimedia subscription service targeted
toward 3- to 8-year-olds. Marketers must be careful to guard against stereotypes when using age
and life-cycle segmentation. For example, although consumers in all age segments love Disney
cruises, most Disney Cruise Lines destinations and shipboard activities are designed with parents
and their children in mind. Marketers must be careful to guard against stereotypes when using
age and life-cycle segmentation. Although some 80-year-olds fit the doddering stereotypes,
others ski and play tennis. Similarly, whereas some 40-year-old couples are sending their
children off to college, others are just beginning new families. Thus, age is often a poor predictor
of a person's life cycle, health, work or family status, needs, and buying power. Companies
marketing to mature consumers usually employ positive images and appeals.
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

11
Copyright © 2017 Pearson Education, Inc.
44) Explain with examples how marketers segment markets based on occasions, benefits sought,
and user status.
Answer: Occasions: Buyers can be grouped according to occasions when they get the idea to
buy, actually make their purchase, or use the purchased item. Occasion segmentation can help
firms build up product usage. For example, most consumers drink orange juice in the morning,
but orange growers have promoted drinking orange juice as a cool, healthful refresher at other
times of the day.

Benefits sought: A powerful form of segmentation is grouping buyers according to the different
benefits that they seek from a product. Benefit segmentation requires finding the major benefits
people look for in a product class, the kinds of people who look for each benefit, and the major
brands that deliver each benefit. For example, people buying bikes are looking for any of
numerous benefits, from competitive racing and sports performance to recreation, fitness,
touring, transportation, and just plain fun. To meet varying benefit preferences, Schwinn makes
affordable, quality bikes in seven major benefit groups: cruisers, hybrid, bike path, mountain,
road, urban, and kids.

User status: Markets can be segmented into nonusers, ex-users, potential users, first-time users,
and regular users of a product. Marketers want to reinforce and retain regular users, attract
targeted nonusers, and reinvigorate relationships with ex-users. Included in the potential user
group are consumers facing life-stage changes — such as new parents and newlyweds — who
can be turned into heavy users. For example, to get new parents off to the right start, P&G makes
certain its Pampers Swaddlers are the diaper provided for newborns at most U.S. hospitals.
Diff: 3
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

45) Describe how marketers use multiple-segmenting bases to their advantage.

Answer: Marketers rarely limit their segmentation analysis to only one or a few variables.
Instead, they use multiple segmentation bases in an effort to identify smaller, better-defined
target groups of consumers. Such segmentation provides a powerful tool for marketers of all
kinds. It can help companies identify and better understand key customer segments, reach them
more efficiently, and tailor market offerings and messages to their specific needs.
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Analytical thinking

46) How do businesses segment their markets?

Answer: Consumer and business marketers use many of the same variables to segment their
markets. Like consumer groups, business buyers can be segmented using geographic,
demographic, benefits sought, user status, usage rate, and loyalty status segmentation. Business
buyers are also segmented by the variables of operating characteristics, purchasing approaches,
situational factors, and personal characteristics.
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

12
Copyright © 2017 Pearson Education, Inc.
47) Why do international markets need to be segmented?
Answer: Few companies have either the resources or the will to operate in all, or even most, of
the countries that dot the globe. Different countries, even those that are close together, can vary
greatly in their economic, cultural, technological, and political makeup. International firms need
to group their world markets into segments with distinctive buying needs and behaviors.
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.
AACSB: Reflective thinking

48) Briefly describe the characteristics of effective market segments.

Answer: To be useful, market segments must be:
Measurable: The size, purchasing power, and profiles of the segments can be measured.
Accessible: The market segments can be effectively reached and served.
Substantial: The market segments are large or profitable enough to serve. It should be the largest
possible homogeneous group worth pursuing with a tailored marketing program.
Differentiable: The segments are conceptually distinguishable and respond differently to
different marketing mix elements and programs.
Actionable: Effective programs can be designed for attracting and serving consumers who make
up the segment.
Diff: 2
LO: 6-2: List and discuss the major bases for segmenting consumer and business markets.

49) A market segment is less attractive when ________.

A) there are few aggressive competitors in the segment
B) it is difficult for new entrants to enter the segment
C) it contains powerful suppliers who can control prices
D) substitute products are unavailable in the segment
E) buyers in the market segment have weak bargaining powers
Answer: C
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

50) Which of the following is an approach where firms target a whole market based on common
consumer needs?
A) demographic segmentation
B) undifferentiated marketing
C) micromarketing
D) concentrated marketing
E) geographic segmentation
Answer: B
Diff: 1
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

13
Copyright © 2017 Pearson Education, Inc.
51) Marketing the same product to a huge customer base without any customization is referred to
as ________.
A) mass marketing
B) differentiated marketing
C) niche marketing
D) local marketing
E) individual marketing
Answer: A
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

52) Port Orleans Shipping markets different services to the tourism, defense, and trade segments.
The firm designs separate offers for each segment based on their needs. This approach is called
________ marketing.
A) concentrated
B) differentiated
C) individual
D) mass
E) local
Answer: B
Diff: 3
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

53) Although not recommended, some marketers decide to ignore market segmentation and
target the whole market with one offer. This is known as ________ marketing.
A) undifferentiated
B) differentiated
C) niche
D) local
E) individual
Answer: A
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

14
Copyright © 2017 Pearson Education, Inc.
54) The marketing manager of Refresh Inc., a leading producer of soft drinks, is considering a
differentiated marketing strategy. An important consideration is weighing increased sales against
________ before selecting this strategy.
A) decreased production
B) increased demand
C) increased costs
D) decreased prices
E) increased profits
Answer: C
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

55) Compared with undifferentiated marketing, differentiated marketing is more likely to lead to
________.
A) reduced sales in each market segment
B) weaker product position in each market segment
C) higher costs of doing business
D) redundancy in product design across market segments
E) smaller market share in the industry
Answer: C
Diff: 3
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

56) A successful niche marketing strategy relies on a firm's ________.

A) availability of services
B) product positioning
C) superior products
D) knowledge of customer needs
E) affordable pricing
Answer: D
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

15
Copyright © 2017 Pearson Education, Inc.
57) Unlike other car rental agencies that are based in airports to serve travelers, Rental Wheelz
has a network of neighborhood offices. The firm strives to serve people who need car rentals for
reasons other than vacation, such as when their own cars are being repaired. Rental Wheelz
caters to a small share of the large car rental market. From this description, it can be concluded
that Rental Wheelz most likely practices ________.
A) undifferentiated marketing
B) multi-segmented marketing
C) individual marketing
D) local marketing
E) concentrated marketing
Answer: E
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

58) The practice of tailoring products and marketing programs to suit the tastes of specific
individuals and locations is referred to as ________.
A) niche marketing
B) micromarketing
C) segmented marketing
D) global marketing
E) undifferentiated marketing
Answer: B
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

59) ________ marketing tailors brands and promotions to the needs and wants of specific cities,
neighborhoods, and even stores.
A) Differentiated
B) Mass
C) Niche
D) Local
E) Individual
Answer: D
Diff: 1
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

16
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60) Which of the following is true about local marketing?
A) It does not cater to individual stores.
B) It does not support evolving technologies.
C) It increases manufacturing costs.
D) It increases economies of scale.
E) It reduces logistical issues.
Answer: C
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

61) At the extreme, micromarketing becomes ________ insofar as products and marketing
programs are tailored to the needs and preferences of customers.
A) differentiated marketing
B) multi-segmented marketing
C) local marketing
D) mass marketing
E) individual marketing
Answer: E
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

62) When a company interacts one-on-one with large numbers of customers to create customer-
unique value by designing products and services tailor-made to individual needs, it is engaging
in ________.
A) concentrated marketing
B) mass marketing
C) mass customization
D) differentiated marketing
E) local marketing
Answer: C
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

63) Smaller companies may lack the skills and resources needed to serve larger segments.
Answer: TRUE
Diff: 1
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

17
Copyright © 2017 Pearson Education, Inc.
64) A segment is more attractive if it is easy for new competitors to enter the market.
Answer: FALSE
Diff: 1
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

65) A market segment with powerful suppliers controlling the prices is more attractive than a
segment with less powerful suppliers.
Answer: FALSE
Diff: 1
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

66) Even if a segment has the right size and growth and is structurally attractive, a company must
consider its own objectives and resources before targeting that segment.
Answer: TRUE
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

67) Using a differentiated marketing strategy, a company is likely to design a product and a
marketing program that will appeal to the largest number of buyers.
Answer: FALSE
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

68) The low cost of setting up shop on the Internet makes it even more profitable to serve
seemingly small niches.
Answer: TRUE
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Information technology

69) Niche marketing offers smaller companies an opportunity to compete by focusing their
limited resources on serving niches that may be unimportant to or overlooked by larger
companies.
Answer: TRUE
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

18
Copyright © 2017 Pearson Education, Inc.
70) The full positioning of a brand is called the unique selling proposition.
Answer: FALSE
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.

71) Describe the process by which companies identify attractive market segments and choose a
target marketing strategy.
Answer: To target the best market segments, a company first evaluates each segment's size and
growth characteristics, structural attractiveness, and compatibility with company objectives and
resources. It then chooses one of four marketing strategies — ranging from very broad to very
narrow targeting. The seller can ignore segment differences and target broadly using
undifferentiated marketing. This involves mass producing, mass distributing, and mass
promoting about the same product in about the same way to all consumers. The seller can also
adopt differentiated marketing — developing different market offers for several segments.
Concentrated marketing involves focusing on only one or a few market segments. Finally,
micromarketing is the practice of tailoring products and marketing programs to suit the tastes of
specific individuals and locations. Micromarketing includes local marketing and individual
marketing. Which targeting strategy is best depends on company resources, product variability,
product life-cycle stage, market variability, and competitive marketing strategies.
Diff: 3
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

72) Compare and contrast the four major strategies that are generally used to target market
segments.
Answer: Market targeting can be carried out at several different levels. Companies can target
very broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in
between (differentiated or concentrated marketing). An undifferentiated marketing strategy
ignores market segment differences and targets the whole market with one offer. This mass-
marketing strategy focuses on what is common in the needs of consumers rather than on what is
different. In contrast, a differentiated strategy targets several market segments and designs
separate offers for each. Companies hope for higher sales and a stronger position within each
market segment. Concentrated or niche marketing goes after a large share of one or a few
segments or niches instead of going after a large share of a large market. These niches may be
overlooked or unimportant. Niching offers smaller companies an opportunity to compete by
focusing their limited resources more effectively. Finally, using micromarketing, a company can
tailor products and marketing programs to suit the tastes of specific individuals and locations. It
includes local and individual marketing.
Diff: 3
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

19
Copyright © 2017 Pearson Education, Inc.
73) Compare and contrast local and individual marketing.
Answer: Local marketing involves tailoring brands and promotions to the needs and wants of
local customer groups — cities, neighborhoods, and even specific stores. Advances in
communications technology have given rise to new high-tech versions of location-based
marketing. Local marketing has some drawbacks, however. It can drive up manufacturing and
marketing costs by reducing the economies of scale. It can also create logistics problems as
companies try to meet the varied requirements of different regional and local markets. Still, local
marketing helps a company to market more effectively in the face of pronounced regional and
local differences in demographics and lifestyles. In contrast, individual marketing involves
tailoring products and marketing programs to the needs and preferences of individual customers.
Individual marketing has also been labeled one-to-one marketing, mass customization, and
markets-of-one marketing. Today, new technologies are permitting many companies to return to
customized marketing. More detailed databases, robotic production and flexible manufacturing,
and interactive communication media such as cell phones and the Internet have combined to
foster mass customization. Mass customization is the process by which firms interact one-to-one
with masses of customers to design products and services tailor-made to individual needs.
Diff: 3
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Analytical thinking

74) Describe a few ways in which a marketer can engage in socially responsible target
marketing.
Answer: In order to engage in socially responsible target marketing, marketers must avoid
purposefully targeting vulnerable or disadvantaged consumers with controversial or potentially
harmful products. In addition, marketers should reconsider the marketing of adult products that
may spill over into the child segment either intentionally or unintentionally; primary examples
include beer, cigarettes, and fast food.
Diff: 2
LO: 6-3: Explain how companies identify attractive market segments and choose a market-
targeting strategy.
AACSB: Ethical understanding and reasoning

75) Which of the following is true of product positioning?

A) A product's position is defined by the number of competitors in a market.
B) Product positioning has little influence on the design of marketing mixes.
C) Consumers generally reevaluate products every time they make a buying decision.
D) To simplify the buying process, consumers are likely to position products in their minds.
E) Consumers cannot position products with or without the help of marketers.
Answer: D
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

20
Copyright © 2017 Pearson Education, Inc.
76) Bose promises "better sound through research." This is an example of ________.
A) people differentiation
B) channel differentiation
C) price differentiation
D) services differentiation
E) product differentiation
Answer: E
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

77) Companies are likely to gain ________ through speedy, convenient, or careful delivery of
products.
A) price differentiation
B) product differentiation
C) channel differentiation
D) services differentiation
E) people differentiation
Answer: D
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

78) Which of the following types of differentiation is used to gain competitive advantage through
the way a firm designs its distribution coverage, expertise, and performance?
A) services differentiation
B) channel differentiation
C) people differentiation
D) product differentiation
E) price differentiation
Answer: B
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

21
Copyright © 2017 Pearson Education, Inc.
79) Argonaut Food Stores, a retail giant, hires better-skilled employees than its competitors by
employing strategic recruitment practices. It also conducts highly specialized training programs
for its employees. In this case, Argonaut has focused on gaining a strong competitive advantage
through ________ differentiation.
A) image
B) people
C) services
D) product
E) channel
Answer: B
Diff: 3
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

80) The distinctive yellow and blue "hands held high" logo of a local daycare distinguishes it
from other establishments. The logo is prominently displayed on its building, t-shirts worn by the
children, and at fundraising events. The daycare has differentiated itself through ________.
A) image
B) people
C) services
D) channels
E) positioning
Answer: A
Diff: 3
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

81) When firms use symbols, colors, or characters to convey their personalities, they are using
________ differentiation.
A) image
B) people
C) usage-rate
D) user-status
E) channel
Answer: A
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

22
Copyright © 2017 Pearson Education, Inc.
82) Which of the following is true of perceptual positioning maps?
A) They are used by marketers to divide a market into smaller groups with distinct
characteristics.
B) They are used by marketers to identify supplier and retailer perceptions of a product.
C) They are used to analyze consumer perceptions of a brand relative to competing products.
D) They are used to divide buyers into groups based on their perceived income and age.
E) They are used to plot the geographic segments that a company needs to target.
Answer: C
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

83) Eastline, a manufacturer of outdoor patio furniture, positions its products as superior in
weatherproofing and durability. This is an example of ________ differentiation.
A) product
B) services
C) image
D) people
E) channels
Answer: A
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

84) A brand difference is said to be preemptive if ________.

A) competitors cannot easily copy the difference
B) buyers can afford to pay for the difference
C) the difference can be introduced profitably
D) the difference is communicable
E) the difference is beneficial to customers
Answer: A
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

23
Copyright © 2017 Pearson Education, Inc.
85) Rad, a manufacturer of luxury watches, charges a higher price for its products than its
competitors. Despite the high prices, the brand is popular among customers for its quality and
service in comparison to cheaper alternatives available in the market. In this case, Rad offers a(n)
________ value proposition.
A) more-for-more
B) more-for-the-same
C) more-for-less
D) all-or-nothing
E) same-for-less
Answer: A
Diff: 3
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

86) Using a ________ positioning strategy, companies can attack the more-for-more strategy of
another firm by offering a brand of comparable quality at a lower price.
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) less-for-more
Answer: A
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

87) Which positioning strategy offers value for consumers by providing the same brands as
competitors at a lower price?
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) more-for-more
Answer: C
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

24
Copyright © 2017 Pearson Education, Inc.
88) The full positioning of a brand is referred to as the ________.
A) differentiated strategy
B) concentrated strategy
C) unique selling proposition
D) value proposition
E) undifferentiated strategy
Answer: B
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

89) Stores offering low-quality alternatives to luxury products at low prices most likely follow a
________ positioning strategy.
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) more-for-more
Answer: D
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

90) Which of the following strategies is most likely to be followed by firms that position
themselves as caterers of the best products at economical prices?
A) more-for-the-same
B) more-for-less
C) same-for-less
D) more-for-more
E) less-for-much-less
Answer: B
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

91) Household Storez, a local retail store, claims to offer better products at lower prices than
other retail stores. In this case, the firm's positioning reflects a ________ value proposition.
A) more-for-the same
B) more-for-less
C) same-for-less
D) more-for-more
E) same-for-more
Answer: B
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking
25
Copyright © 2017 Pearson Education, Inc.
92) Which of the following includes the target segment of a product, the category to which the
product belongs, and the product's point of difference from other members in the category?
A) mission statement
B) vision statement
C) profit statement
D) positioning statement
E) inventory statement
Answer: D
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

93) Zeal is a popular automobile brand, and its positioning statement is: "For upscale American
families who require large vehicles, Zeal is the automobile of choice." Which of the following
mandatory elements is missing from the positioning statement?
A) point of difference
B) target audience
C) brand name
D) product category
E) need
Answer: A
Diff: 3
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

94) Company and brand positioning should be summed up in a ________.

A) mission statement
B) vision statement
C) profit statement
D) positioning statement
E) corporate statement
Answer: D
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

95) A company or brand image should convey a product's distinctive benefits and positioning.
Answer: TRUE
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

26
Copyright © 2017 Pearson Education, Inc.
96) A more-for-more market offering not only offers higher quality but also gives prestige to a
buyer.
Answer: TRUE
Diff: 1
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

97) Cian, an automobile manufacturer, offers a new car model with features comparable to that
of another popular brand. However, the Cian model is priced lower than its competitor and
includes a longer warranty. Cian is most likely following a more-for-the-same strategy.
Answer: FALSE
Diff: 3
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

98) Explain the concept of positioning for competitive advantage.

Answer: A product's position is the way the product is defined by consumers on important
attributes — the place the product occupies in consumers' minds relative to competing products.
Positioning involves implanting the brand's unique benefits and differentiation in customers'
minds. To carry out effective positioning, a company must identify a set of possible competitive
advantages upon which to build a position, choose the right competitive advantages, and select
an overall positioning strategy. The company must then effectively communicate and deliver the
chosen position to the market.
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

99) Brand differences are worth promoting if they satisfy certain criteria. What are these criteria?
Answer: A brand difference is worth establishing to the extent that it satisfies the following
criteria:
(a) Important: The difference delivers a highly valued benefit to target buyers.
(b) Distinctive: Competitors do not offer the difference, or the company can offer it in a more
distinctive way.
(c) Superior: The difference is superior to other ways that customers might obtain the same
benefit.
(d) Communicable: The difference is communicable and visible to buyers.
(e) Preemptive: Competitors cannot easily copy the difference.
(f) Affordable: Buyers can afford to pay for the difference.
(g) Profitable: The company can introduce the difference profitably.
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.

27
Copyright © 2017 Pearson Education, Inc.
100) Describe the different types of value propositions on which a company might position its
products.
Answer: Companies can generally choose one of five types of value propositions for their
customers:
(a) More for more: More-for-more positioning involves providing the most upscale product or
service and charging a higher price to cover the higher costs. A more-for-more market offering
not only offers higher quality, it also gives prestige to the buyer. It symbolizes status and a loftier
lifestyle.
(b) More for the same: Companies can attack a competitor's more-for-more positioning by
introducing a brand offering comparable quality at a lower price.
(c) The same for less: Offering the same for less can be a powerful value proposition. Many
companies that offer this proposition don't claim to offer different or better products. Instead,
they offer many of the same brands as their competitors but at deep discounts based on superior
purchasing power and lower-cost operations. Other companies develop imitative but lower-
priced brands in an effort to lure customers away from the market leader.
(d) Less for much less: A market almost always exists for products that offer less and therefore
cost less. Few people need, want, or can afford "the very best" in everything they buy. In many
cases, consumers will gladly settle for less than optimal performance or give up some of the bells
and whistles in exchange for a lower price. Less-for-much-less positioning involves meeting
consumers' lower performance or quality requirements at a much lower price.
(e) More for less: The winning value proposition would be to offer more for less. Many
companies claim to do this. And, in the short run, some companies can actually achieve such
lofty positions.
Diff: 2
LO: 6-4: Discuss how companies differentiate and position their products for maximum
competitive advantage.
AACSB: Analytical thinking

28
Copyright © 2017 Pearson Education, Inc.
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