Chap 9

Question 1

What is a market?

Answer 1

a group of people with sufficient purchasing power, authority, and willingness to buy

Question 2

What is a target market?

Answer 2

group of people a firm believes is most likely to buy its goods and services

Question 3

Define consumer products.

Answer 3

Products bought by ultimate consumers for personal use

Question 4

Define business products.

Answer 4

Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale.

Question 5

What is market segmentation?

Answer 5

division of the total market into smaller, relatively homogenous groups

Question 6

Criteria for effective segmentation:

Answer 6

• market segment must present measurable purchasing power and size
• marketers must find a way to effectively promote and serve the market segment
• segment must be sufficiently large to offer good profit potential
• firm must aim for segments that match its marketing capabilities

Question 7

Types of Segmenting consumer markets:

Answer 7

Geographic
Demographic
Psychographic
Product-related

Question 8

Governmental urban classifications (based on # of people):

Answer 8

• Core based statistical area (CBSA)
• Metropolitan statistical area (MSA)
• Consolidated metropolitan statistical area (CMSA)
• Primary metropolitan statistical area (PMSA)

Question 9

What to marketers focus on from which they draw 40-80% of sales?

Answer 9

core regions

Question 10

Factors of Demographic Segmentation

Answer 10

.Gender and Age
 (gender and age lines blurring in recent years)
.Income and Occupation
.Education
.Sexual orientation
.Household size
.Stage in the family life cycle

Question 11

What is generation x?

Answer 11

• Born between 1968-1979
• Family-oriented, well educated and optimistic
• TV important marketing tool
• Prefer goods and services that support certain causes

Question 12

What is the Cohort Effect?

Answer 12

The tendency of members of a generation to be influenced and bound together by significant events in their formative year.

• Veterans
• current cohort (late 70s- early 90s)
• Echo Boomers (children of baby boomers)

Question 13

Largest ethnic/minority groups in the US

Answer 13

Hispanics/African American

Question 14

Fastest growing segment of US pop.

Answer 14

Asian Americans

- fastest growing income

Question 15

What is the Family Lifecycle?

Answer 15

process of family formation and dissolution

- empty nesters are a marketing target

Question 16

What are “boomerangs”?

Answer 16

grown children who have returned home to live with their parents

Question 17

What is Engel’s Laws?

Answer 17

As a household income increases:

• small % of expenditures goes for food
• % spend on housing, household operations, and clothing remains constant
• % spend on rec and educ items increases

Question 18

AIO Statements

Answer 18

Items on lifestyle surveys that describe various Activities, Interests and respondents’ Opinions

Question 19

VALs framework is based on what two components

Answer 19

?

Question 20

Roper ASW identifies what 6 psychographic consumer segments?

Answer 20

Strivers
Devouts
Altruists - emphasize social issues and social well-being
Intimates - value family and personal relationships
Fun seekers
Creatives

Question 21

What is Product-related segmentation?

Answer 21

a division of a population into homogeneous (of the same or similar nature) groups based on their relationships to a product

Question 22

Process of Market Segmentation (4 criteria)

Answer 22

1. Develop a relevant profile for each segment.
2. Forecast market potential
3. Forecast probable market share
4. Select specific market segments

Question 23

Undifferentiated marketing

Answer 23

focuses on producing single product and marketing it to all customers; mass marketing

Question 24

Differentiated marketing

Answer 24

focuses on producing several products and pricing, promoting and distributing them with different marketing mixes designed to satisfy smaller segments

Question 25

Micromarketing

Answer 25

targeting potential customers at very narrow basic levels

Question 26

Basic determinants of marketing strategy

Answer 26

Company resources
Product homogeneity
Stage in the product lifestyle
Competitors’ strategies

Question 27

What is positioning?

Answer 27

placing a product at a certain point or location within a market in the minds of prospective buyers

Question 28

Japanese automaker, Subaru generates more than half its sales in four states. What is the area called?

Answer 28

core region

Question 29

Most common method of market segmentation is

Answer 29

demographic segmentation (socioeconomic seg)

Question 30

Which of the following is true of differentiated marketing?

Answer 30

differentiated marketing helps a company to diversify and reach new customers