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Chapter 4 - Targeting TRUE/FALSE 1. The concept of targeting involves customer selection. ANS: NAT: TOP: KEY: MSC:

T DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? Bloom's: Comprehension MBA: Knowledge of General Business Functions

2. Targeting has to do with choosing which market segment we want to be our customers. ANS: NAT: TOP: KEY: MSC:

T DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? Blooms: Knowledge MBA: Knowledge of General Business Functions

3. We target for the same reason we segment - to try to be all things to all people. ANS: NAT: TOP: MSC:

F DIF: Easy REF: Page 43 BUSPROG Reflective Thinking LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? KEY: Bloom's: Analysis MBA: Knowledge of human behavior & society

4. Most markets are comprised of customers whose tastes are very similar. ANS: NAT: TOP: KEY: MSC:

F DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Customer What is Targeting and Why Do Marketers Do It? Blooms: Knowledge MBA: Knowledge of human behavior & society

5. There are two perspectives in assessing the attractiveness of each segment in terms of its potential for our targeting, and it is extremely important to consider only one of these. ANS: NAT: TOP: KEY: MSC:

F DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan How Do We Choose a Segment to Target? Bloom's: Comprehension MBA: Knowledge of General Business Functions

6. Targeting should not use a top-down vision of corporate strategy, but rather, only a bottomup data-informed approach on segment size and profitability. ANS: F

DIF:

Moderate

REF: Page 43

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

NAT: TOP: KEY: MSC:

BUSPROG Analytic LOC: DISC: Marketing Plan How Do We Choose a Segment to Target? Bloom's: Comprehension MBA: Managing Decision-Making Processes

7. Some customer segments are high maintenance and not worth serving. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Customer Profitability and Strategic Fit KEY: Bloom's: Analysis MBA: Knowledge of human behavior & society

8. A major concern of marketers is how profitable a specific segment will be. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

9. Potential profitability is a function of the current market size, its anticipated growth, current and anticipated levels of competition, and customer behavior and expectations. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

10. A firm’s ability to satisfy the needs of a segment impacts the decision as to whether or not to target a specific segment. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

11. Two important strategic criteria for targeting segments include the firm’s strengths and the attractiveness of the segment. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Comprehension MBA: Managing Strategy & Innovation

12. Company XYZ has examined several customer segments in order to determine which segments best align with the firm’s strengths and the attractiveness of the market opportunity. This analysis enables the firm to select which customer segment to target. ANS: T DIF: Moderate NAT: BUSPROG Analytic

REF: Page 43 LOC: DISC: Marketing Plan

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

TOP: Profitability and Strategic Fit KEY: Bloom's: Application MSC: MBA: Knowledge of General Business Functions 13. Company XYZ is working on a marketing strategy for a new oral hygiene product and just discovered that XYZ’s biggest competitor is launching a very similar product a month later. In conducting a SWOT analysis, the launch of the competitor’s product represents an opportunity. ANS: NAT: TOP: MSC:

F DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Application MBA: Managing Strategy & Innovation

14. Company XYZ is working on a marketing strategy for a new oral hygiene product and just discovered that XYZ’s biggest competitor is launching a similar, but better tasting, product with more dental health benefits. The competitor’s product should be considered a threat in Company XYZ’s SWOT analysis. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Application MBA: Managing Strategy & Innovation

15. Strengths & weaknesses are considerations that are external to the organization. ANS: NAT: TOP: MSC:

F DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Comprehension MBA: Knowledge of General Business Functions

16. Opportunities & threats are internal considerations about the organization. ANS: NAT: TOP: MSC:

F DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Comprehension MBA: Knowledge of General Business Functions

17. In conducting a SWOT analysis, marketers are likely to collect some market research data on customers, such as perceptual maps and information about product lines. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Research Profitability and Strategic Fit KEY: Bloom's: Analysis MBA: Knowledge of General Business Functions

18. In SWOT analysis, our opinions matter a lot more than the customer base. ANS: F DIF: Easy NAT: BUSPROG Reflective Thinking

REF: Page 44 LOC: DISC: Marketing Plan

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

TOP: Profitability and Strategic Fit KEY: Bloom's: Analysis MSC: MBA: Managing Decision-Making Processes 19. Opportunities and threats are usually driven by changes in one of the 5Cs. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

20. SWOTs are only useful for clarifying about half of all marketing questions. ANS: NAT: TOP: MSC:

F DIF: Easy REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Bloom's: Comprehension MBA: Knowledge of General Business Functions

21. E-books are taking off, but with varied platforms. Your company makes PCs, so you should probably develop a new e-reader. ANS: NAT: TOP: MSC:

F DIF: Challenging REF: Page 44 BUSPROG Analytic LOC: DISC: Strategy Profitability and Strategic Fit KEY: Bloom's: Analysis MBA: Managing Decision-Making Processes

22. Your company is great at producing a certain product, but the market doesn’t look so great right now. This scenario is consistent with the lower-left quadrant in a SWOT analysis. ANS: NAT: TOP: MSC:

F DIF: Challenging REF: Page 44 BUSPROG Analytic LOC: DISC: Strategy Profitability and Strategic Fit KEY: Bloom's: Application MBA: Managing Decision-Making Processes

23. A perceptual map shows perceived strengths of a firm (compared to its competitors) from the customers’ perspective. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Competitive Comparisons KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

24. Usually, the best way for a company to assess its corporate strengths is in terms of absolute measures. ANS: NAT: TOP: MSC:

F DIF: Moderate BUSPROG Analytic Competitive Comparisons MBA: Operations Skills

REF: Page 44 LOC: DISC: Marketing Plan KEY: Bloom's: Analysis

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

25. Companies typically assess their corporate strengths relative to their competitors. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 44 BUSPROG Analytic LOC: DISC: Marketing Plan Competitive Comparisons KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

26. The choice of a target segment involves information about both the size of the market and the fit with corporate goals. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 47 BUSPROG Analytic LOC: DISC: Marketing Plan Competitive Comparisons KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

27. It is impossible to estimate the size of a market segment. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 47 BUSPROG Analytic LOC: DISC: Marketing Plan Competitive Comparisons KEY: Bloom's: Comprehension MBA: Knowledge of General Business Functions

28. A lot of estimates go into the final calculation to determine market size, and each component needs to be as precise as possible, otherwise the errors in the estimation get compounded. ANS: NAT: TOP: MSC:

T DIF: Moderate BUSPROG Analytic Sizing Markets MBA: Operations Skills

REF: Page 47 LOC: DISC: Marketing Plan KEY: Bloom's: Comprehension

29. Company XYZ is interested in determining how much revenue and profit potential exist for a new product it is considering manufacturing. The company will need to size the market. ANS: NAT: TOP: MSC:

T DIF: Easy BUSPROG Analytic Sizing Markets MBA: Operations Skills

REF: Page 47 LOC: DISC: Strategy KEY: Bloom's: Application

30. The more precisely defined the target market is, the easier the numbers are to estimate. ANS: NAT: TOP: MSC:

T DIF: Moderate REF: Page 47 BUSPROG Analytic LOC: DISC: Marketing Plan Sizing Markets KEY: Bloom's: Analysis MBA: Knowledge of General Business Functions

31. For B2B marketers, market sizing is typically more difficult than in B2C markets. ANS: F DIF: Moderate NAT: BUSPROG Reflective Thinking

REF: Page 49 LOC: DISC: Marketing Plan

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

TOP: Concept in Action: How Many RVs Can I Sell? KEY: Blooms: Knowledge MSC: MBA: Knowledge of General Business Functions 32. The census.gov website cross-classifies businesses by sector and size. ANS: NAT: TOP: KEY: MSC:

T DIF: Moderate REF: Page 49 BUSPROG Technology LOC: DISC: Online/Computer Concept in Action: How Many RVs Can I Sell? Blooms: Knowledge MBA: Knowledge of Media Communications & Delivery

33. Regardless of whether a marketer is working B2B or B2C, the logic in market sizing estimation is always the same - start with the price of the product and multiply it by the size of the target market. ANS: NAT: TOP: KEY:

F DIF: Moderate REF: Page 49 BUSPROG Analytic LOC: DISC: Strategy Concept in Action: How Many RVs Can I Sell? Bloom's: Comprehension MSC: MBA: Operations Skills

34. Poor demographic data exists for consumers and businesses in the U.S. and international markets. ANS: NAT: TOP: KEY: MSC:

F DIF: Easy REF: Page 50 BUSPROG Analytic LOC: DISC: Research Concept in Action: How Many RVs Can I Sell? Blooms: Knowledge MBA: Knowledge of human behavior & society

35. Determining which segments to target depends on an interplay of two factors: quantitative issues such as size of segment, profitability, and growth, and strategic issues, primarily the fit of the segment needing to incorporate philosophy and intended positioning. ANS: NAT: TOP: KEY:

T DIF: Moderate REF: Page 50 BUSPROG Analytic LOC: DISC: Marketing Plan Concept in Action: How Many RVs Can I Sell? Bloom's: Comprehension MSC: MBA: Managing Strategy & Innovation

36. The Murphy Company is determining which segment(s) to target for its new professional resume writing service. In making this determination, the company should consider quantitative factors such as the size of the segment, profitability, and growth. ANS: NAT: TOP: KEY: MSC:

T DIF: Easy REF: Page 50 BUSPROG Analytic LOC: DISC: Marketing Plan Concept in Action: How Many RVs Can I Sell? Bloom's: Application MBA: Managing Decision-Making Processes

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

37. Goods are usually associated with more variable costs than services. ANS: NAT: TOP: MSC:

F DIF: Moderate REF: Page 49 BUSPROG Analytic LOC: DISC: Marketing Plan Concept in Action: How Many RVs Can I Sell? KEY: Bloom's: Analysis MBA: Knowledge of General Business Functions

38. Census.gov is a good place to get data about the size of age cohorts. ANS: NAT: TOP: KEY: MSC:

T DIF: Easy REF: Page 49 BUSPROG Technology LOC: DISC: Online/Computer Concept in Action: How Many RVs Can I Sell? Blooms: Knowledge MBA: Knowledge of Media Communications & Delivery

39. Market sizing is very complicated as there are few secondary data sources to help estimate probabilities and customer survey data on attitudes and preferences is difficult to obtain. ANS: NAT: TOP: MSC:

F DIF: Easy BUSPROG Analytic Managerial Recap MBA: Operations Skills

REF: Page 50 LOC: DISC: Marketing Plan KEY: Bloom's: Comprehension

40. Targeting is important but not difficult. ANS: NAT: TOP: MSC:

T DIF: Easy REF: Page 50 BUSPROG Reflective Thinking LOC: DISC: Marketing Plan Managerial Recap KEY: Bloom's: Comprehension MBA: Knowledge of General Business Functions

MULTIPLE CHOICE 1. The idea of targeting is merely one of __________.

a. b. c. d.

surveying assessing analysis selection

ANS: NAT: TOP: KEY: MSC:

D DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? Blooms: Knowledge MBA: Knowledge of General Business Functions

2. Which of the following questions characterizes targeting?

a. b. c. d.

How can we identify segments? Why should we segment? Which segments do we want to be our customers? Which segment is the biggest?

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

ANS: NAT: TOP: KEY: MSC:

C DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? Blooms: Knowledge MBA: Knowledge of General Business Functions

3. Company ABC operates a nail salon that specializes in artificial nails. It has two primary ______, women who get their nails done infrequently (i.e., once or twice per year), and women who continuously wear fake nails.

a. b. c. d.

segments positionings levels of awareness market sizes

ANS: NAT: TOP: KEY: MSC:

A DIF: Easy REF: Page 43 BUSPROG Analytic LOC: DISC: Customer What is Targeting and Why Do Marketers Do It? Bloom's: Application MBA: Knowledge of General Business Functions

4. Marketers try to serve the segments whose needs match their _______, and in doing so hope to make very happy and loyal customers who will be very profitable.

a. b. c. d.

abilities to deliver opportunities financial resources targets

ANS: NAT: TOP: KEY: MSC:

A DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? Bloom's: Comprehension MBA: Managing Decision-Making Processes

5. Marketers target certain segments because it’s _______ to try to be all things to all people.

a. b. c. d.

easier strategic not advisable advisable

ANS: NAT: TOP: MSC:

C DIF: Easy REF: Page 43 BUSPROG Reflective Thinking LOC: DISC: Marketing Plan What is Targeting and Why Do Marketers Do It? KEY: Bloom's: Analysis MBA: Knowledge of human behavior & society

6. Regarding targeting, we iterate between our ________ vision of corporate strategy, and a ________ data-informed approach on segment size and profitability.

a. b. c. d.

top-down, bottom-up bottom-up, top-down horizontal, vertical vertical, horizontal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

ANS: NAT: TOP: KEY: MSC:

A DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan How Do We Choose a Segment to Target? Bloom's: Comprehension MBA: Knowledge of General Business Functions

7. What are two perspectives in assessing each segment's attractiveness in terms of its potential for targeting?

a. b. c. d.

profitability and marketability profitability and strategic fit marketability and strategic fit marketability and positioning

ANS: NAT: TOP: MSC:

B DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Managing Decision-Making Processes

8. Potential profitability is a function of all of the following EXCEPT:

a. b. c. d.

current market price anticipated growth current market size current and anticipated levels of competition

ANS: NAT: TOP: MSC:

A DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Marketing Plan Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

9. Potential strategic fit is a function of all of the following EXCEPT:

a. b. c. d.

firm’s strengths firm’s resources brand personalities product prices

ANS: NAT: TOP: MSC:

D DIF: Moderate REF: Page 43 BUSPROG Analytic LOC: DISC: Strategy Profitability and Strategic Fit KEY: Blooms: Knowledge MBA: Knowledge of General Business Functions

10. If a market looks attractive, but a firm is not particularly skilled in the market, a key question is whether the firm can develop sufficient ______.

a. b. c. d.

opportunities segments capabilities products

ANS: C DIF: Moderate NAT: BUSPROG Analytic TOP: Profitability and Strategic Fit

REF: Page 43 LOC: DISC: Marketing Plan KEY: Bloom's: Comprehension

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

MSC: MBA: Managing Decision-Making Processes 11. If a market doesn’t look so great, but a firm is awesome at creating products for it, the key question is whether the firm can _____.

a. b. c. d.

conduct market research develop a market strategically segment the market develop eve...