TEST BANK FOR M ADVERTISING 2ND EDITION

ARENS SCHAEFER WEIGOLD 0078028965

9780078028960

Download full test bank at:

https://testbankpack.com/p/test-bank-for-m-advertising-2nd-edition-arens-
schaefer-weigold-0078028965-9780078028960/

Download full solution manual at:

https://testbankpack.com/p/solution-manual-for-m-advertising-2nd-edition-
arens-schaefer-weigold-0078028965-9780078028960/

Chapter 04

Segmentation, Targeting, and the Marketing Mix

True / False Questions

1. One of the primary roles of advertising is to communicate product utility.

True False

2. Exchange is the traditional trading of values between two entities facilitated by marketing.

True False

4-1
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3. The process of market segmentation is a three-step process that begins with planning,
defining the product, and identifying the market.

True False

4. A target market can be classified into two types, namely, consumer markets and business
markets.

True False

5. Purchase occasion is a psychographic variable used to segment consumer markets.

True False

6. Advertising for a movie that describes the film as a "family-filled riot of fun" is relying on
benefit segmentation.

True False

7. Demographic segmentation would most likely be used to sell Fulla, a doll designed to embody
the image of a proper Muslim woman.

True False

8. To reach people who love to hunt, markets would most likely use psychographic
segmentation.

True False

9. Psychographics are useful in the marketing of all products because psychographic systems
are, such as VALS, are easy to use.

True False

10. Advertisers use NAICS codes to obtain lists of companies for direct mailings.

True False

4-2
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11. The first step in market aggregation is to determine the primary demand trend within the
targeted market.

True False

12. A challenge of market segmentation is estimating a firm's potential profits if it focuses on the
whole market or only to specific segments.

True False

13. Primary demand refers to consumer demand for a specific brand within a product category.

True False

14. A marketer of Kikkoman brand soy sauce would need to stimulate selective demand for its
new line of low-sodium sauces.

True False

15. Differences between products that are readily apparent are called position differences.

True False

16. When the manufacturer of Kikkoman brand soy sauce introduced Kikkoman brand low-
sodium soy sauce, it used private labeling by emphasizing the Kikkoman tradition and
quality.

True False

17. Brand equity is the totality of what consumers, distributors, dealers, and competitors feel and
think about a brand over an extended period of time.

True False

18. Consumers are mostly immune to psychological pricing.

True False

4-3
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
19. Network marketing is also called pyramid marketing.

True False

20. Distribution and promotion costs in selective distribution tend to increase as the number of
outlets is limited.

True False

21. Manufacturers' representatives, distributors, and retailers are considered resellers.

True False

22. Intensive distribution involves limiting the number of wholesalers who can sell a product in
order to gain a prestige image or maintain premium prices.

True False

23. Exclusive distribution is a strategy commonly used in the high fashion apparel industry.

True False

24. With an administered vertical marketing system, one company owns multiple levels of the
distribution or production channel.

True False

25. In the U.S., more than 40 percent of all retail sales are made through franchise outlets.

True False

Multiple Choice Questions

4-4
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
26. _____ is the product's ability to satisfy both functional needs and symbolic wants.

A. Market position
B. Product satisfaction
C. Product equity
D. Product utility
E. Market satisfaction

27. Market segmentation is a two-step strategic process, and the first step is to:

A. conduct advertising research that determines consumers' reactions to various ad

campaigns.
B. identify groups of people with certain shared characteristics within the broad product
market.
C. locate as many market niches as possible that will be profitable for the firm.
D. develop place, time, service, and possession utility.
E. determine which personal influences will have the appropriate effect on consumers.

28. Customers who might buy Muir Glen brand organic soups are people who like soup, want to
try something different, don't have time to cook, worry about putting chemicals in their
bodies, and are vegetarians. These various groups who may be in the market for Muir Glen
soups are all examples of:

A. innovators.
B. market segments.
C. market aggregations.
D. diffusers.
E. buying centers.

4-5
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
29. Gary Silva, senior vice president of sales, U.S. Auto Parts Group at Genuine Parts, says NAPA
doesn't have a cookie-cutter layout but builds stores based on market need, with each
designed independently. "It would be easier if all the stores had the exact same layout, but
it's not the right thing to do for independent owners because some areas have more
professional customers and others have more do-it-yourselfers," he explained. From this
information, you know that NAPA targets both _____ markets.

A. domestic and international

B. internal and external
C. demographic and psychographic
D. business and consumer
E. non-controllable and controllable

30. The ad for Pepperidge Farm products reads, "Filling your kitchen with delicious aromas is a
great way to ensure that your Thanksgiving holiday will be full of joyful anticipation." It would
seem that the manufacturer of these products is using:

A. demographic segmentation.
B. behavioristic segmentation.
C. temporal segmentation.
D. psychographic positioning.
E. lifestyle segmentation.

31. According to the research of Stephan and Tannenholz, _____ are the most brand loyal group
and require the least amount of promotion.

A. early adopters
B. innovators
C. sole users
D. early majority
E. laggards

4-6
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
32. Cell phone companies spend many advertising dollars appealing to people who are already
heavy users of cell phones to encourage them to buy plans that offer them additional
minutes. These cell phone companies are using:

A. purchase-occasion segmentation.
B. psychographic positioning.
C. demographic segmentation.
D. lifestyle segmentation.
E. volume segmentation.

33. Many people give fine chocolates as Christmas presents to friends and co-workers. The only
time of year you will see Ferrero Rocher chocolates advertised is during November and
December as the company tries to create awareness for its product in the minds of
consumers looking for that perfect utilitarian gift. This would be an example of:

A. purchase-occasion segmentation.
B. psychographic positioning.
C. demographic segmentation.
D. lifestyle segmentation.
E. volume segmentation.

34. The Visitors Bureau of Greenville, Mississippi, uses an ad with the following headline: "Join
some others who got inspired here" and then lists the famous authors that came from that
part of the state. The message in this headline indicates the city is using _____ to attract
tourists.

A. psychographic positioning
B. benefit segmentation
C. demographic segmentation
D. geodemographic segmentation
E. volume segmentation

4-7
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
35. Home builders are using _____ segmentation to target people over 55 with homes that have
wheelchair-friendly door widths, lever door handles, roll-out shelves, raised toilets, and direct
911 wiring.

A. demographic
B. psychographic
C. diffused
D. geographic
E. psychological

36. Harris Teeter Inc. is a chain of supermarkets in the Atlanta area. In one of its stores in a
predominantly Jewish neighborhood, the store has three rabbis on staff who make sure the
foods sold at the store are kosher. Every Harris Teeter store has distinct characteristics that
align it with the neighborhood in which it is located. The chain is using _____ segmentation.

A. geodemographic
B. psychographic
C. behavioristic
D. geographic
E. psychological

37. With _____, marketers group people by their values, attitudes, personality, and lifestyle.

A. demographics
B. psychographics
C. geodemographics
D. attitudinal positioning
E. lifestyle positioning

4-8
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
38. Over the past decade, brands that were once available only to the wealthy have created more
affordable product extensions, giving a far broader range of consumers a taste of the good
life. Jaguar, for instance, launched its X-type sedan, which starts at $30,000 and is meant for
the "almost rich" consumer who aspires to live in luxury. By marketing to people who desire a
luxurious lifestyle, Jaguar is using:

A. demographic segmentation.
B. psychographic segmentation.
C. geodemographic segmentation.
D. attitudinal positioning.
E. lifestyle positioning.

39. Hard apple cider is making a comeback. Cider consumption is expected to hit 15 million
cases annually this decade. Early adopters of cider are the same group that first gravitated to
the microbreweries. Apple cider's drinkers like the notion that it is basically a fruit drink. It
conjures up healthy associations and appeals to people who do not view themselves as
serious connoisseurs. What segmentation variable would you recommend Woodchuck Draft
Cider use to define its market?

A. Usage rate
B. Geographic
C. Demographic
D. Psychographic
E. Purchase occasion

40. The Values and Lifestyles (VALS) typology uses a two-dimensional structure based on:

A. geographic variables and consumer perceptions.

B. consumer behavior and product characteristics.
C. primary motivation and resources.
D. self-orientation and product differentiation.
E. target marketing strategy and product positioning strategy.

4-9
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
41. _____ is the pattern of attitudes and activities that help people modify their social and self-
image.

A. Primary motivation
B. Attribution theory
C. Reciprocal activation
D. Perceptual motivation
E. Motivational mapping

42. In the health care industries, strategies that target women are becoming increasingly
prevalent because capturing the female patient means influencing the vast majority of health
care decisions made for families. Plus, women use health services more frequently than men.
If you are a health care provider, you would want to use _____ segmentation.

A. demographic
B. psychographic
C. diffused
D. geographic
E. psychological

43. Which of the following marketing activities most likely takes place in the business market?

A. The sale of a Black & Decker hammer to a do-it-yourselfer

B. The rental of an apartment by a college student
C. The purchase of babysitting services for a small child
D. The purchase of a case of Campbell's brand soups by a supermarket
E. The payment of a fee to a divorce lawyer

4-10
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
44. A pizza restaurant buys fountain Coca-Cola, which it sells to its customers. The pizza
restaurant is an example of a(n):

A. consumer market.
B. VALS market.
C. reseller.
D. wholesaler.
E. business-to-business market.

45. When compared to consumer markets, business markets:

A. contain many more buyers.

B. have more systematic purchasing procedures.
C. can be segmented using psychological variables.
D. have more dispersed markets.
E. cannot be segmented by end users.

46. Which of the following is one of the bases for making purchase decisions in the business
market and should be emphasized in promotional appeals?

A. Product demonstrations
B. Brand equity
C. Wholesaler
D. Retailer
E. Market concentration

47. The North American Industry Classification System (NAICS) codes:

A. will soon be replaced by the strategic industrial classification (SIC).

B. is published by the North American Treaty Alliance.
C. organizes all industries in the economy into 20 broad sectors.
D. have little relevance for marketers that use direct mail.
E. are top secret which cannot be shared with outsiders.

4-11
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
48. What is the next step for a marketer once market segmentation has been done?

A. Target marketing process

B. Budgeting process
C. Mission statement
D. SWOT analysis
E. Competitive assessment

49. Which of the following statements about the target marketing process is true?

A. The target marketing process will determine the content, look, and feel of a company's
advertising.
B. The first step in the target marketing process is to develop primary demand in a target
market.
C. To perform the target marketing process correctly, an advertiser must select a single
target market.
D. From the view of a marketer, the target marketing process begins with setting the
advertising budget.
E. The first step in target marketing is to assess the viability of the markets identified by the
market segmentation process.

50. Which of the following is most likely a potential target market for a manufacturer who is
licensed by World Wrestling Entertainment (WWE) to make Halloween costumes based on
characters seen in WWE matches?

A. Older men and women who enjoy watching Olympic wrestling

B. Pre-teen males who wish to emulate one of the WWE wrestlers
C. People who believe the WWE promotes violence
D. Children of parents who are sports enthusiasts
E. Anyone who has attended a WWE match

4-12
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
51. The _____ for Huggies disposable washcloths is most likely first-time parents with a
significant amount of discretionary income who value their time more highly than they value
their environment.

A. product utility
B. customer group
C. target market
D. market aggregate
E. marketing mix

52. The _____ refers to the bundle of values built into a product aimed at satisfying various
functional, social, psychological, economic, and other consumer needs and wants.

A. total product concept

B. marketing mix
C. targeted product
D. product attribution
E. product utility

53. To appeal to a new target market, the maker of Hill's coffee has changed the product's
package design, reformulated the coffee, begun advertising price discounts in women's
magazines, and started distributing the product through gourmet coffee shops. What has
been changed?

A. Perceptual value
B. Marketing mix
C. Niche market
D. Product line
E. Product utility

4-13
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
54. The _____ element of the marketing mix includes the way the product is designed and
classified, positioned, branded, and packaged.

A. utility
B. communication
C. distribution
D. product
E. customer

55. Before starting Pedigree Pajamas, the owner of the company realized that he was treating his
dog as if it were a child and that a lot of his friends did the same thing. So in what he
perceived as a dog-friendly environment, he launched a line of doggie pajamas—available
from size 6 for Chihuahuas to size 30 for Great Danes. The ads for Pedigree Pajamas had to
convince people that dogs slept better in pajamas. A product that has to create primary
demand is more than likely in the _____ stage of the product life cycle.

A. pioneering
B. introductory
C. maturity
D. growth
E. revitalization

56. Consumer demand for a whole product category such as DVD players, pickles, or laptop
computers is called _____ demand.

A. primary
B. selective
C. positioned
D. category
E. introductory

4-14
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
57. The sale of traditional brands of chocolate candy bars is declining. The manufacturers of
candy have noticed that the demand for energy-boosters is up. As a result, they have
introduced a new type of candy bar called "buzz bars." The new candy bars have 60
milligrams of caffeine, with taurine and B vitamins. The candy industry had to create _____ for
buzz bars.

A. primary demand
B. par value
C. secondary demand
D. utilitarian worth
E. market value

58. When pharmaceutical companies began advertising directly to consumers, it was an example
of ____. The pharmaceutical companies realized that consumer demand influences which
medications a physician will prescribe.

A. indirect consumer marketing

B. promotion equity
C. scrambled promotion
D. a push strategy
E. a pull strategy

59. Drawing on almost 50 years of experience, Cotton Council International (CCI), the export
promotion arm of the National Cotton Council is devoted to expanding U.S. cotton exports by
capitalizing on consumer preference for cotton fiber and its products. CCI spends promotional
dollars advertising the benefits of 100 percent cotton clothing. CCI uses:

A. indirect consumer marketing.

B. promotion equity.
C. scrambled promotion.
D. a push strategy.
E. a pull strategy.

4-15
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
60. Seagram's of North America provides its resellers with elaborate point-of-purchase displays
to encourage resellers to stock and promote the distillery's products. In this example,
Seagram's is using a:

A. penetration strategy.
B. diversification strategy.
C. divestiture strategy.
D. push strategy.
E. pull strategy.

61. The _____ stage of the product life cycle is characterized by rapid market expansion, more
and more customers, a decrease in total advertising expenditures as a percentage of total
sales.

A. pioneering
B. introductory
C. maturity
D. growth
E. revitalization

62. In the _____ stage of the product life cycle, the marketplace becomes saturated with
competing products and the number of new customers dwindles and industry sales reach a
plateau.

A. saturation
B. introductory
C. maturity
D. growth
E. revitalization

4-16
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
63. There are many different brands of candy on the shelves of most supermarkets. The
manufacturer of Dale Jr.'s Big Mo candy bars, aimed at NASCAR fans, hopes to create _____
so that customers will perceive why it is a better brand of candy than all the rest in the
market.

A. secondary demand
B. selective demand
C. primary demand
D. pioneering demand
E. utility of demand

64. With the common usage of laptops and tablets, large, bulky desktop computers have entered
the _____ stage of the product life cycle and are being phased out by many computer firms.

A. utility
B. laggard
C. late adopter
D. decline
E. growth

65. The basic goal of a positioning strategy is to:

A. own a word that establishes the product in the prospect's mind.

B. create a long-term market for a product category.
C. correlate the total product concept with the product's position in the PLC.
D. minimize product differentiation.
E. create and maintain primary demand for a product.

4-17
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
66. If you look at an organically-grown tomato and one that has been chemically-enhanced, you
can easily see the difference—one is perfectly formed and uniformly red and the other is not.
In terms of product differentiation, this is an example of a:

A. hidden difference.
B. differentiation cue.
C. perceptible difference.
D. sensory cue.
E. perceptual filter.

67. Unlike the McCormick's brand of spices, the Penzeys brand of spices provides cooks with a
helpful monthly magazine that shows them how to make the most effective use of spices in
their recipes. This is most likely an example of a:

A. perceptible difference.
B. differentiation cue.
C. imperceptible difference.
D. sensory cue.
E. perceptual filter.

68. The differences between Golden Harvest brand canning jars and Mason brand canning jars is
not readily visible. Both are made of heavy glass that will not break easily. Through its
advertising, Golden Harvest advertises that its jars are made with a glass that is 100 percent
free of all impurities. In this way, Golden Harvest is using _____ to differentiate its product
from those of the Mason brand.

A. hidden differences
B. differentiation cues
C. imperceptible differences
D. sensory cues
E. perceptual filters

4-18
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
69. Maidenform is a global intimate apparel company that designs, sources, and markets
products such as bras, panties, and "shape wear" under the Maidenform, Flexees, Lilyette,
and Control It brand names. Which branding strategy does Maidenform use?

A. Individual branding
B. Regional branding
C. Psychological branding
D. Private labeling
E. Family branding

70. A promotion was launched to position French's as a fun line of condiments for a variety of
everyday usage occasions. Its promotions showed vignettes of families, children, and older
Americans enjoying foods flavored with French's Deli Style, Dijon Style, and Honey Mustard
flavors as well as its Classic Yellow mustard. The fact that all of these mustards have the
French's brand is an example of:

A. individual branding.
B. regional branding.
C. psychological branding.
D. private labeling.
E. family branding.

71. Another name for manufacturer's brands is:

A. private brands.
B. umbrella brands.
C. national brands.
D. family brands.
E. individual brands.

4-19
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
72. Joe Boxer products can only be found at Kmart and Sears. Joe Boxer is best described as
a(n):

A. aggregated brand.
B. private label.
C. manufacturer's brand.
D. indirect consumer promotion.
E. demographic brand.

73. The most recent trend in new candy bars is candy bars loaded with caffeine. In March 2008,
Hershey Company, a large candy manufacturer, introduced a brand of high-caffeinated candy
under the Starbucks brand name. What type of banding strategy is Hershey's using with this
new product?

A. Licensed branding
B. National positioning
C. Family branding
D. Private branding
E. Intensive branding

74. _____ is the totality of what consumers, distributors, dealers, and competitors feel and think
about a brand over an extended period of time.

A. Brand acceptance
B. Market value
C. Brand commitment
D. Brand equity
E. Product loyalty

4-20
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
75. Maidenform Brands is a global intimate apparel company that designs, sources, and markets
intimate apparel products under the Maidenform, Flexees, and Lilyette brand names.
Maidenform is able to use a multiple brand strategy that provides access to the faster-
growing mass market channel without diluting the strong positive opinions and feelings that
its consumers, distributors, dealers, and competitors have for the Maidenform, Flexees, and
Lilyette brands. In other words, Maidenform and its major brands have strong:

A. market share.
B. market value.
C. brand commitment.
D. brand equity.
E. market utility.

76. When Hannah buys almond soap from a vendor at an arts and crafts show and the vendor
that sells the soap is actually the person who made the soap from scratch, it is an example
of:

A. selective distribution.
B. indirect distribution.
C. direct distribution.
D. unbranded distribution.
E. differentiated distribution.

77. Bose manufactures and markets home theater systems, surround sound stereos, and audio
accessories. The company prices its products higher than most other brands on the market to
make its products seem more valuable and of a higher quality. In other words, Bose uses:

A. exclusive distribution.
B. psychographic pricing.
C. psychological pricing.
D. intensive distribution.
E. price branding.

4-21
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
78. A(n) _____ comprises all the firms and individuals that take responsibility for the product as it
moves from the producer to the consumer.

A. distribution channel
B. communication channel
C. intermediating continuum
D. marketing channel
E. connectivity channel

79. Which product would most likely involve intensive distribution?

A. Waterford crystal
B. Harry Potter books
C. Wrigley's chewing gum
D. Whirlpool refrigerators
E. Pepperidge Farm turnovers

80. While you cannot find televisions at every retail outlet, you can find them at discount stores,
electronic stores, appliance stores, and department stores. What kind of distribution is used
for televisions?

A. Exclusive
B. Pioneering
C. Selective
D. Intensive
E. Direct

Short Answer Questions

4-22
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
81. What is the utility of a product?

82. There is an ad for the Braun Oral-B Plaque Remover (an electric toothbrush) in an issue of
Self magazine. The full-page ad encourages readers to try out the system and experience the
feeling of truly clean teeth. To which type of market is the advertisement targeted? Briefly
explain your answer.

83. List the four variables used in behavioristic segmentation.

4-23
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
84. What are business markets?

85. What is the purpose of North American Industry Classification System (NAICS) codes?

86. What is the second step in the market segmentation process? Discuss briefly.

4-24
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
87. What is a vertical marketing system?

88. What is the product element?

89. What is the basic goal of any positioning strategy?

4-25
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
90. List the most important factors for advertising success.

Essay Questions

91. What are the two steps that make up the market segmentation process?

92. Explain how the concept of shared characteristics relates to the marketing segmentation
process.

4-26
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
93. Explain the target marketing process.

94. What are the stages in a product life cycle? Discuss each stage in brief.

95. Discuss the push and the pull strategy with respect to the product life cycle.

4-27
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
96. Distinguish between primary demand and selective demand.

97. Distinguish between an individual brand, a family brand, a national brand, and private labels.

98. Discuss the importance of product differentiation with respect to perceptible differences,
hidden differences, and induced differences.

4-28
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
99. Once a company decides to use indirect rather than direct distribution, it must choose one of
the three strategies of distribution. Discuss what each choice means in terms of product
availability to final consumers.

100.What is marketing communications? What are the tools used in marketing communications?

4-29
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
 Chapter 04 Segmentation, Targeting, and the Marketing Mix Answer
Key

True / False Questions

1. One of the primary roles of advertising is to communicate product utility.

TRUE

Utility is the product's ability to satisfy both functional needs and symbolic (or
psychological) wants. One of the primary roles of advertising is to communicate this utility.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-01 Explain the role of advertising in facilitating satisfying exchanges.
Topic: The Larger Marketing Context of Advertising

2. Exchange is the traditional trading of values between two entities facilitated by marketing.

TRUE

An exchange refers to any transaction in which a person or organization trades something

of value with someone else. Marketing facilitates these exchanges, thus increasing our
potential for satisfaction.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-01 Explain the role of advertising in facilitating satisfying exchanges.
Topic: The Larger Marketing Context of Advertising

4-30
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3. The process of market segmentation is a three-step process that begins with planning,
defining the product, and identifying the market.

FALSE

The process of market segmentation involves two steps: identifying groups of people (or
organizations) with certain shared needs and characteristics and aggregating (combining)
these groups into larger market segments according to their interest in the product's
utility.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4. A target market can be classified into two types, namely, consumer markets and business
markets.

TRUE

There are two main types of target markets, consumers and businesses.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-01 Explain the role of advertising in facilitating satisfying exchanges.
Topic: The Market Segmentation Process

4-31
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
5. Purchase occasion is a psychographic variable used to segment consumer markets.

FALSE

Purchase occasion is a behavioristic segmentation variable.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

6. Advertising for a movie that describes the film as a "family-filled riot of fun" is relying on
benefit segmentation.

TRUE

Marketers may segment consumers based on the benefits being sought, such as enjoying
a movie.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-32
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
7. Demographic segmentation would most likely be used to sell Fulla, a doll designed to
embody the image of a proper Muslim woman.

TRUE

Demographic segmentation is a way to define groups by their statistical characteristics:

sex, age, ethnicity, education, occupation, income, and other quantifiable factors.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

8. To reach people who love to hunt, markets would most likely use psychographic
segmentation.

TRUE

For certain products, appeals to emotions and cultural values may be persuasive. So some
advertisers use psychographic segmentation to define consumer markets. With
psychographics, marketers group people by their values, attitudes, personality, and
lifestyle. Psychographics enables marketers to view people as individuals with feelings
and inclinations.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-33
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
9. Psychographics are useful in the marketing of all products because psychographic
systems are, such as VALS, are easy to use.

FALSE

VALS is criticized for being too complicated to use. For some products, psychographics
may offer little real value—especially since it oversimplifies consumer personalities and
purchase behavior.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

10. Advertisers use NAICS codes to obtain lists of companies for direct mailings.

TRUE

The NAICS codes help companies segment markets and do research, and advertisers can
even obtain lists of companies in particular NAICS divisions for direct mailings.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-34
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11. The first step in market aggregation is to determine the primary demand trend within the
targeted market.

TRUE

When aggregating markets, the firm must know the primary demand trend, which is the
projection of future consumer demand for a product category based on past demand and
other market influences.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

12. A challenge of market segmentation is estimating a firm's potential profits if it focuses on

the whole market or only to specific segments.

TRUE

Part of the challenge of market segmentation is estimating the profits the company might
realize if it (1) aims at the whole market or (2) caters only to specific segments.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-35
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
13. Primary demand refers to consumer demand for a specific brand within a product
category.

FALSE

Primary demand is consumer demand for the whole product category, not just the
company's own brand.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

14. A marketer of Kikkoman brand soy sauce would need to stimulate selective demand for its
new line of low-sodium sauces.

TRUE

Selective demand is stimulated to convince consumers to buy a particular brand.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-36
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
15. Differences between products that are readily apparent are called position differences.

FALSE

Differences between products that are visibly or readily apparent to the consumer are
called perceptible differences.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

16. When the manufacturer of Kikkoman brand soy sauce introduced Kikkoman brand low-
sodium soy sauce, it used private labeling by emphasizing the Kikkoman tradition and
quality.

FALSE

Kikkoman used national branding by using the Kikkoman name. Private labels are usually
sold at lower prices in familiar stores, such as Great Value products at Walmart.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-37
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
17. Brand equity is the totality of what consumers, distributors, dealers, and competitors feel
and think about a brand over an extended period of time.

TRUE

Brand equity is the totality of what consumers, distributors, dealers—even competitors—

feel and think about the brand over an extended period of time. In short, it's the value of
the brand's assets.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

18. Consumers are mostly immune to psychological pricing.

FALSE

Psychological pricing involves using price as a means of influencing a consumer's behavior

or perceptions; for example, using high prices to reinforce a quality image, or selling at
$2.99 instead of $3.00 to make a product appear less expensive. Marketers believe that
consumers are often less concerned with a product's actual price than with its perceived
price relative to competitors. Many premium-priced brands, such as L'Oréal, are touted for
the very fact that they cost more.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Price Element

4-38
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
19. Network marketing is also called pyramid marketing.

FALSE

One of the fastest-growing methods of direct distribution today is network marketing (also
called multilevel marketing), in which individuals act as independent distributors for a
manufacturer or private-label marketer.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

20. Distribution and promotion costs in selective distribution tend to increase as the number
of outlets is limited.

FALSE

By limiting the number of outlets through selective distribution, manufacturers can cut
their distribution and promotion costs.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-39
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
21. Manufacturers' representatives, distributors, and retailers are considered resellers.

TRUE

Resellers include both wholesalers and retailers, as well as manufacturers'

representatives, brokers, jobbers, and distributors.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

22. Intensive distribution involves limiting the number of wholesalers who can sell a product in
order to gain a prestige image or maintain premium prices.

FALSE

An intensive distribution strategy is based on making the product available to consumers

at every possible location so that the consumers can buy with a minimum of effort.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-40
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
23. Exclusive distribution is a strategy commonly used in the high fashion apparel industry.

TRUE

Some manufacturers grant exclusive distribution rights to a wholesaler or retailer in one

geographic region. This is a common method used in high fashion, major appliances, and
furniture lines.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

24. With an administered vertical marketing system, one company owns multiple levels of the
distribution or production channel.

FALSE

In a corporate vertical marketing system (VMS), one company owns multiple levels of the
distribution or production channel. An administered VMS is one in which one member of
the production and distribution chain is dominant and calls the shots.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-41
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
25. In the U.S., more than 40 percent of all retail sales are made through franchise outlets.

TRUE

It's estimated that over 40 percent of all retail sales in the United States are made through
franchise outlets. There are over 1,500 franchise companies operating more than 320,000
retail units in the United States today.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

Multiple Choice Questions

26. _____ is the product's ability to satisfy both functional needs and symbolic wants.

A. Market position
B. Product satisfaction
C. Product equity
D. Product utility
E. Market satisfaction

Utility is the product's ability to satisfy both functional needs and symbolic (or
psychological) wants.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-01 Explain the role of advertising in facilitating satisfying exchanges.
Topic: The Larger Marketing Context of Advertising

4-42
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
27. Market segmentation is a two-step strategic process, and the first step is to:

A. conduct advertising research that determines consumers' reactions to various ad

campaigns.
B. identify groups of people with certain shared characteristics within the broad product
market.
C. locate as many market niches as possible that will be profitable for the firm.
D. develop place, time, service, and possession utility.
E. determine which personal influences will have the appropriate effect on consumers.

The process of market segmentation involves two steps: identifying groups of people (or
organizations) with certain shared needs and characteristics and aggregating (combining)
these groups into larger market segments according to their interest in the product's
utility.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-43
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
28. Customers who might buy Muir Glen brand organic soups are people who like soup, want
to try something different, don't have time to cook, worry about putting chemicals in their
bodies, and are vegetarians. These various groups who may be in the market for Muir Glen
soups are all examples of:

A. innovators.
B. market segments.
C. market aggregations.
D. diffusers.
E. buying centers.

Market segments are segments of the market for which a manufacturer can create a
marketing appeal. Markets often consist of many segments. A company may differentiate
its products and marketing strategy for every segment, or concentrate its marketing
activities on only one or a few segments.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-44
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
29. Gary Silva, senior vice president of sales, U.S. Auto Parts Group at Genuine Parts, says
NAPA doesn't have a cookie-cutter layout but builds stores based on market need, with
each designed independently. "It would be easier if all the stores had the exact same
layout, but it's not the right thing to do for independent owners because some areas have
more professional customers and others have more do-it-yourselfers," he explained. From
this information, you know that NAPA targets both _____ markets.

A. domestic and international

B. internal and external
C. demographic and psychographic
D. business and consumer
E. non-controllable and controllable

The two primary types of target markets are business and consumer markets.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-45
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
30. The ad for Pepperidge Farm products reads, "Filling your kitchen with delicious aromas is
a great way to ensure that your Thanksgiving holiday will be full of joyful anticipation." It
would seem that the manufacturer of these products is using:

A. demographic segmentation.
B. behavioristic segmentation.
C. temporal segmentation.
D. psychographic positioning.
E. lifestyle segmentation.

Behavioral segments are determined by many variables, but the most important are user
status, usage rate, purchase occasion, and benefits sought. This is more correctly an
example of benefit segmentation under behavioral segment.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-46
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
31. According to the research of Stephan and Tannenholz, _____ are the most brand loyal
group and require the least amount of promotion.

A. early adopters
B. innovators
C. sole users
D. early majority
E. laggards

Researchers Stephan and Tannenholz have identified six categories of consumers based
on user status. Sole users are the most brand loyal and require the least amount of
advertising and promotion.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-47
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
32. Cell phone companies spend many advertising dollars appealing to people who are already
heavy users of cell phones to encourage them to buy plans that offer them additional
minutes. These cell phone companies are using:

A. purchase-occasion segmentation.
B. psychographic positioning.
C. demographic segmentation.
D. lifestyle segmentation.
E. volume segmentation.

It's usually easier to get a heavy user to increase usage than a light user. In volume
segmentation, marketers measure people's usage rates to define consumers as light,
medium, or heavy users of products.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: The Market Segmentation Process

4-48
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
33. Many people give fine chocolates as Christmas presents to friends and co-workers. The
only time of year you will see Ferrero Rocher chocolates advertised is during November
and December as the company tries to create awareness for its product in the minds of
consumers looking for that perfect utilitarian gift. This would be an example of:

A. purchase-occasion segmentation.
B. psychographic positioning.
C. demographic segmentation.
D. lifestyle segmentation.
E. volume segmentation.

Buyers can also be distinguished by when they buy or use a product or service—the
purchase occasion. Air travelers, for example, may fly for business or vacation so one
airline might promote business travel while another promotes tourism.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-49
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
34. The Visitors Bureau of Greenville, Mississippi, uses an ad with the following headline:
"Join some others who got inspired here" and then lists the famous authors that came
from that part of the state. The message in this headline indicates the city is using _____
to attract tourists.

A. psychographic positioning
B. benefit segmentation
C. demographic segmentation
D. geodemographic segmentation
E. volume segmentation

The ad is using benefit segmentation to highlight the benefits of the city. Consumers seek
various benefits in the products they buy—high quality, low price, status, sex appeal, good
taste, and so on.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-50
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
35. Home builders are using _____ segmentation to target people over 55 with homes that
have wheelchair-friendly door widths, lever door handles, roll-out shelves, raised toilets,
and direct 911 wiring.

A. demographic
B. psychographic
C. diffused
D. geographic
E. psychological

Demographic segmentation is a way to define groups by their statistical characteristics:

sex, age, ethnicity, education, occupation, income, and other quantifiable factors. Age is a
demographic variable. It is quantifiable.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-51
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
36. Harris Teeter Inc. is a chain of supermarkets in the Atlanta area. In one of its stores in a
predominantly Jewish neighborhood, the store has three rabbis on staff who make sure
the foods sold at the store are kosher. Every Harris Teeter store has distinct
characteristics that align it with the neighborhood in which it is located. The chain is using
_____ segmentation.

A. geodemographic
B. psychographic
C. behavioristic
D. geographic
E. psychological

Demographics are often combined with geographic segmentation to select target markets
for advertising. This is called geodemographic segmentation. Harris Teeter has defined its
market in terms of its market's ethnicity and the neighborhoods in which they are located.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-52
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
37. With _____, marketers group people by their values, attitudes, personality, and lifestyle.

A. demographics
B. psychographics
C. geodemographics
D. attitudinal positioning
E. lifestyle positioning

For certain products, appeals to emotions and cultural values may be persuasive. So some
advertisers use psychographic segmentation to define consumer markets. With
psychographics, marketers group people by their values, attitudes, personality, and
lifestyle.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-53
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
38. Over the past decade, brands that were once available only to the wealthy have created
more affordable product extensions, giving a far broader range of consumers a taste of the
good life. Jaguar, for instance, launched its X-type sedan, which starts at $30,000 and is
meant for the "almost rich" consumer who aspires to live in luxury. By marketing to people
who desire a luxurious lifestyle, Jaguar is using:

A. demographic segmentation.
B. psychographic segmentation.
C. geodemographic segmentation.
D. attitudinal positioning.
E. lifestyle positioning.

For certain products, appeals to emotions and cultural values may be persuasive. So some
advertisers use psychographic segmentation to define consumer markets. With
psychographics, marketers group people by their values, attitudes, personality, and
lifestyle.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-54
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
39. Hard apple cider is making a comeback. Cider consumption is expected to hit 15 million
cases annually this decade. Early adopters of cider are the same group that first gravitated
to the microbreweries. Apple cider's drinkers like the notion that it is basically a fruit drink.
It conjures up healthy associations and appeals to people who do not view themselves as
serious connoisseurs. What segmentation variable would you recommend Woodchuck
Draft Cider use to define its market?

A. Usage rate
B. Geographic
C. Demographic
D. Psychographic
E. Purchase occasion

Psychographics group people according to their lifestyle. In this example, the marketer is
trying to group people who like something new and who like the idea that this drink is
healthy.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-55
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
40. The Values and Lifestyles (VALS) typology uses a two-dimensional structure based on:

A. geographic variables and consumer perceptions.

B. consumer behavior and product characteristics.
C. primary motivation and resources.
D. self-orientation and product differentiation.
E. target marketing strategy and product positioning strategy.

Perhaps the best-known psychographic classification system is VALSTM, a product of

Strategic Business Insights (SBI), a spinout of SRI International. VALS assigns consumers
to one of eight groups based on two dimensions: primary motivation and resources.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-56
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
41. _____ is the pattern of attitudes and activities that help people modify their social and
self-image.

A. Primary motivation
B. Attribution theory
C. Reciprocal activation
D. Perceptual motivation
E. Motivational mapping

Primary motivation refers to the pattern of attitudes and activities that help people
reinforce, sustain, or modify their social and self-image. An understanding of the primary
motivation of individuals helps advertisers promote and sell goods and services.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-57
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
42. In the health care industries, strategies that target women are becoming increasingly
prevalent because capturing the female patient means influencing the vast majority of
health care decisions made for families. Plus, women use health services more frequently
than men. If you are a health care provider, you would want to use _____ segmentation.

A. demographic
B. psychographic
C. diffused
D. geographic
E. psychological

Demographic segmentation is a way to define groups by their statistical characteristics:

sex, age, ethnicity, education, occupation, income, and other quantifiable factors. Gender
is a demographic variable. It is quantifiable.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-58
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
43. Which of the following marketing activities most likely takes place in the business
market?

A. The sale of a Black & Decker hammer to a do-it-yourselfer

B. The rental of an apartment by a college student
C. The purchase of babysitting services for a small child
D. The purchase of a case of Campbell's brand soups by a supermarket
E. The payment of a fee to a divorce lawyer

Business markets (or industrial markets) include manufacturers, government agencies,

wholesalers, retailers, banks, and institutions that buy goods and services to help them
operate. Many business marketers sell to resellers, such as retailers that resell to
consumers. The supermarket would be a reseller.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-59
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
44. A pizza restaurant buys fountain Coca-Cola, which it sells to its customers. The pizza
restaurant is an example of a(n):

A. consumer market.
B. VALS market.
C. reseller.
D. wholesaler.
E. business-to-business market.

Many business marketers sell to resellers, such as retailers that resell to consumers. The
pizza restaurant is an example of reseller and they sell Coca-Cola to the customers.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-60
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
45. When compared to consumer markets, business markets:

A. contain many more buyers.

B. have more systematic purchasing procedures.
C. can be segmented using psychological variables.
D. have more dispersed markets.
E. cannot be segmented by end users.

Business markets have special characteristics. They employ professional buyers and use
systematic purchasing procedures. They may be concentrated geographically. And in any
single market there may be only a small number of buyers.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-61
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
46. Which of the following is one of the bases for making purchase decisions in the business
market and should be emphasized in promotional appeals?

A. Product demonstrations
B. Brand equity
C. Wholesaler
D. Retailer
E. Market concentration

Purchase decisions often depend on factors besides price or quality, among them product
demonstrations, delivery time, terms of sale, and dependability. Marketers often
emphasize these issues in advertising and promotional appeals.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-62
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
47. The North American Industry Classification System (NAICS) codes:

A. will soon be replaced by the strategic industrial classification (SIC).

B. is published by the North American Treaty Alliance.
C. organizes all industries in the economy into 20 broad sectors.
D. have little relevance for marketers that use direct mail.
E. are top secret which cannot be shared with outsiders.

NAICS organizes industries into 20 broad sectors such as mining, manufacturing,

wholesale trade, and information.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

48. What is the next step for a marketer once market segmentation has been done?

A. Target marketing process

B. Budgeting process
C. Mission statement
D. SWOT analysis
E. Competitive assessment

Once the market segmentation process is complete, a company can proceed to the target
marketing process.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-63
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
49. Which of the following statements about the target marketing process is true?

A. The target marketing process will determine the content, look, and feel of a company's
advertising.
B. The first step in the target marketing process is to develop primary demand in a target
market.
C. To perform the target marketing process correctly, an advertiser must select a single
target market.
D. From the view of a marketer, the target marketing process begins with setting the
advertising budget.
E. The first step in target marketing is to assess the viability of the markets identified by
the market segmentation process.

An advertiser can determine more than one target market. The first step in target
marketing is to assess which of the newly created segments offer the greatest profit
potential and which can be most successfully penetrated.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-64
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
50. Which of the following is most likely a potential target market for a manufacturer who is
licensed by World Wrestling Entertainment (WWE) to make Halloween costumes based on
characters seen in WWE matches?

A. Older men and women who enjoy watching Olympic wrestling

B. Pre-teen males who wish to emulate one of the WWE wrestlers
C. People who believe the WWE promotes violence
D. Children of parents who are sports enthusiasts
E. Anyone who has attended a WWE match

People who enjoy Olympic wrestling have a different idea about wrestling than the WWE
has. Sports enthusiasts do not necessarily view the WWE as a sport. People who believe it
promotes violence would be the least likely target market. A parent taking a son or
daughter to a match is not as good a target as the child who pretends to be a WWE
wrestler.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-65
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
51. The _____ for Huggies disposable washcloths is most likely first-time parents with a
significant amount of discretionary income who value their time more highly than they
value their environment.

A. product utility
B. customer group
C. target market
D. market aggregate
E. marketing mix

The target market is the group of segments the company wishes to appeal to.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-66
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
52. The _____ refers to the bundle of values built into a product aimed at satisfying various
functional, social, psychological, economic, and other consumer needs and wants.

A. total product concept

B. marketing mix
C. targeted product
D. product attribution
E. product utility

Marketers and advertisers generally try to shape their basic product into a total product
concept: the consumer's perception of a product or service as a bundle of utilitarian and
symbolic values that satisfy functional, social, psychological, and other wants and needs.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-67
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
53. To appeal to a new target market, the maker of Hill's coffee has changed the product's
package design, reformulated the coffee, begun advertising price discounts in women's
magazines, and started distributing the product through gourmet coffee shops. What has
been changed?

A. Perceptual value
B. Marketing mix
C. Niche market
D. Product line
E. Product utility

The company changed its product, its price, its distribution and its communication, which
constitute the marketing mix.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

4-68
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
54. The _____ element of the marketing mix includes the way the product is designed and
classified, positioned, branded, and packaged.

A. utility
B. communication
C. distribution
D. product
E. customer

Product element: The most important element of the marketing mix: the good or service
being offered and the values associated with it—including the way the product is designed
and classified, positioned, branded, and packaged.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-69
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
55. Before starting Pedigree Pajamas, the owner of the company realized that he was treating
his dog as if it were a child and that a lot of his friends did the same thing. So in what he
perceived as a dog-friendly environment, he launched a line of doggie pajamas—available
from size 6 for Chihuahuas to size 30 for Great Danes. The ads for Pedigree Pajamas had
to convince people that dogs slept better in pajamas. A product that has to create primary
demand is more than likely in the _____ stage of the product life cycle.

A. pioneering
B. introductory
C. maturity
D. growth
E. revitalization

In the introductory phase, a company would incur significant cost just convincing people
that pajamas for dogs was a good idea and to gain a large market share before the
product enters the growth stage.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-70
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
56. Consumer demand for a whole product category such as DVD players, pickles, or laptop
computers is called _____ demand.

A. primary
B. selective
C. positioned
D. category
E. introductory

Primary demand refers to consumer demand for a whole product category.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-71
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
57. The sale of traditional brands of chocolate candy bars is declining. The manufacturers of
candy have noticed that the demand for energy-boosters is up. As a result, they have
introduced a new type of candy bar called "buzz bars." The new candy bars have 60
milligrams of caffeine, with taurine and B vitamins. The candy industry had to create _____
for buzz bars.

A. primary demand
B. par value
C. secondary demand
D. utilitarian worth
E. market value

Primary demand refers to creating consumer demand for the whole product category—not
just a particular brand.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-72
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
58. When pharmaceutical companies began advertising directly to consumers, it was an
example of ____. The pharmaceutical companies realized that consumer demand
influences which medications a physician will prescribe.

A. indirect consumer marketing

B. promotion equity
C. scrambled promotion
D. a push strategy
E. a pull strategy

A pull strategy refers to marketing, advertising, and sales promotion activities aimed at
inducing trial purchase and repurchase by consumers. A pull strategy creates consumer
demand to pull the product through the channel of distribution.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-73
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
59. Drawing on almost 50 years of experience, Cotton Council International (CCI), the export
promotion arm of the National Cotton Council is devoted to expanding U.S. cotton exports
by capitalizing on consumer preference for cotton fiber and its products. CCI spends
promotional dollars advertising the benefits of 100 percent cotton clothing. CCI uses:

A. indirect consumer marketing.

B. promotion equity.
C. scrambled promotion.
D. a push strategy.
E. a pull strategy.

A pull strategy creates consumer demand to pull the product through the channel of
distribution.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-74
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
60. Seagram's of North America provides its resellers with elaborate point-of-purchase
displays to encourage resellers to stock and promote the distillery's products. In this
example, Seagram's is using a:

A. penetration strategy.
B. diversification strategy.
C. divestiture strategy.
D. push strategy.
E. pull strategy.

A push strategy refers to marketing, advertising, and sales promotion activities aimed at
getting products into the dealer pipeline and accelerating sales by offering inducements to
dealers, retailers, and salespeople. Push strategies target retailers and distributors.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-75
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
61. The _____ stage of the product life cycle is characterized by rapid market expansion, more
and more customers, a decrease in total advertising expenditures as a percentage of total
sales.

A. pioneering
B. introductory
C. maturity
D. growth
E. revitalization

When sales volume begins to rise rapidly, the product enters the growth stage. This period
is characterized by rapid market expansion as more and more customers, stimulated by
mass advertising and word-of-mouth, make their first, second, and third purchases. As a
percentage of total sales, advertising expenditures should decrease, and individual firms
will realize their first substantial profits.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-76
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
62. In the _____ stage of the product life cycle, the marketplace becomes saturated with
competing products and the number of new customers dwindles and industry sales reach
a plateau.

A. saturation
B. introductory
C. maturity
D. growth
E. revitalization

In the maturity stage, the marketplace becomes saturated with competing products and
the number of new customers dwindles, so industry sales reach a plateau.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-77
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
63. There are many different brands of candy on the shelves of most supermarkets. The
manufacturer of Dale Jr.'s Big Mo candy bars, aimed at NASCAR fans, hopes to create
_____ so that customers will perceive why it is a better brand of candy than all the rest in
the market.

A. secondary demand
B. selective demand
C. primary demand
D. pioneering demand
E. utility of demand

Selective demand refers to consumer demand for the particular advantages of one brand
over another. Marketers emphasize selective demand in the maturity stage. They want
consumers to buy particular brands.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-78
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
64. With the common usage of laptops and tablets, large, bulky desktop computers have
entered the _____ stage of the product life cycle and are being phased out by many
computer firms.

A. utility
B. laggard
C. late adopter
D. decline
E. growth

The decline stage in the product life cycle is when sales begin to decline due to
obsolescence, new technology, or changing consumer tastes.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-79
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
65. The basic goal of a positioning strategy is to:

A. own a word that establishes the product in the prospect's mind.

B. create a long-term market for a product category.
C. correlate the total product concept with the product's position in the PLC.
D. minimize product differentiation.
E. create and maintain primary demand for a product.

The basic goal of positioning strategy is to own a word that establishes the product in the
prospect's mind.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-80
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
66. If you look at an organically-grown tomato and one that has been chemically-enhanced,
you can easily see the difference—one is perfectly formed and uniformly red and the other
is not. In terms of product differentiation, this is an example of a:

A. hidden difference.
B. differentiation cue.
C. perceptible difference.
D. sensory cue.
E. perceptual filter.

Differences between products that are readily apparent to the consumer are called
perceptible differences. The differences between the two tomatoes are readily apparent
from simply looking at them.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-81
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
67. Unlike the McCormick's brand of spices, the Penzeys brand of spices provides cooks with
a helpful monthly magazine that shows them how to make the most effective use of spices
in their recipes. This is most likely an example of a:

A. perceptible difference.
B. differentiation cue.
C. imperceptible difference.
D. sensory cue.
E. perceptual filter.

Differences between products that are readily apparent to the consumer are called
perceptible differences. The Penzeys monthly magazine makes the difference between its
spices and McCormick's brands readily apparent.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-82
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
68. The differences between Golden Harvest brand canning jars and Mason brand canning
jars is not readily visible. Both are made of heavy glass that will not break easily. Through
its advertising, Golden Harvest advertises that its jars are made with a glass that is 100
percent free of all impurities. In this way, Golden Harvest is using _____ to differentiate its
product from those of the Mason brand.

A. hidden differences
B. differentiation cues
C. imperceptible differences
D. sensory cues
E. perceptual filters

Hidden differences are imperceptible but existing differences that may affect the
desirability of a product. The difference in the brand of canning jars is not readily visible to
the naked eye.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-83
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
69. Maidenform is a global intimate apparel company that designs, sources, and markets
products such as bras, panties, and "shape wear" under the Maidenform, Flexees, Lilyette,
and Control It brand names. Which branding strategy does Maidenform use?

A. Individual branding
B. Regional branding
C. Psychological branding
D. Private labeling
E. Family branding

Individual branding involves assigning a unique name to each product a manufacturer

produces. Maidenform has established an individual brand for each product line it
manufactures.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-84
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
70. A promotion was launched to position French's as a fun line of condiments for a variety of
everyday usage occasions. Its promotions showed vignettes of families, children, and older
Americans enjoying foods flavored with French's Deli Style, Dijon Style, and Honey
Mustard flavors as well as its Classic Yellow mustard. The fact that all of these mustards
have the French's brand is an example of:

A. individual branding.
B. regional branding.
C. psychological branding.
D. private labeling.
E. family branding.

Family branding occurs when a manufacturer markets different products under the same
umbrella name.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-85
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
71. Another name for manufacturer's brands is:

A. private brands.
B. umbrella brands.
C. national brands.
D. family brands.
E. individual brands.

As it is very expensive for manufacturers to market national brands (also called

manufacturer's brands), some companies use a private-labeling strategy.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-86
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
72. Joe Boxer products can only be found at Kmart and Sears. Joe Boxer is best described as
a(n):

A. aggregated brand.
B. private label.
C. manufacturer's brand.
D. indirect consumer promotion.
E. demographic brand.

Private labels are typically sold at lower prices in large retail chains. The retailer is
responsibility for the brand's image.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-87
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
73. The most recent trend in new candy bars is candy bars loaded with caffeine. In March
2008, Hershey Company, a large candy manufacturer, introduced a brand of high-
caffeinated candy under the Starbucks brand name. What type of banding strategy is
Hershey's using with this new product?

A. Licensed branding
B. National positioning
C. Family branding
D. Private branding
E. Intensive branding

Licensed brands are brand names that other companies can buy the right to use.
Hershey's has paid a substantial fee to Starbucks for the right to use its company's brand.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-88
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
74. _____ is the totality of what consumers, distributors, dealers, and competitors feel and
think about a brand over an extended period of time.

A. Brand acceptance
B. Market value
C. Brand commitment
D. Brand equity
E. Product loyalty

Brand equity refers to the totality of what consumers, distributors, dealers, and
competitors feel and think about a brand over an extended period of time; in short, it is the
value of the brand's capital.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-89
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
75. Maidenform Brands is a global intimate apparel company that designs, sources, and
markets intimate apparel products under the Maidenform, Flexees, and Lilyette brand
names. Maidenform is able to use a multiple brand strategy that provides access to the
faster-growing mass market channel without diluting the strong positive opinions and
feelings that its consumers, distributors, dealers, and competitors have for the
Maidenform, Flexees, and Lilyette brands. In other words, Maidenform and its major
brands have strong:

A. market share.
B. market value.
C. brand commitment.
D. brand equity.
E. market utility.

Brand equity is the totality of what consumers, distributors, dealers and competitors feel
and think about a brand over an extended period of time.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-90
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
76. When Hannah buys almond soap from a vendor at an arts and crafts show and the vendor
that sells the soap is actually the person who made the soap from scratch, it is an example
of:

A. selective distribution.
B. indirect distribution.
C. direct distribution.
D. unbranded distribution.
E. differentiated distribution.

When manufacturers sell directly to end users or consumers, it is called direct distribution.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-91
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
77. Bose manufactures and markets home theater systems, surround sound stereos, and
audio accessories. The company prices its products higher than most other brands on the
market to make its products seem more valuable and of a higher quality. In other words,
Bose uses:

A. exclusive distribution.
B. psychographic pricing.
C. psychological pricing.
D. intensive distribution.
E. price branding.

Setting a high price to make a product seem more valuable is an example of psychological
pricing. Image advertising may be used to justify the higher price.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Price Element

4-92
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
78. A(n) _____ comprises all the firms and individuals that take responsibility for the product
as it moves from the producer to the consumer.

A. distribution channel
B. communication channel
C. intermediating continuum
D. marketing channel
E. connectivity channel

A distribution channel refers to the network of all the firms and individuals that take title,
or assist in taking title, to the product as it moves from the producer to the consumer.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-93
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
79. Which product would most likely involve intensive distribution?

A. Waterford crystal
B. Harry Potter books
C. Wrigley's chewing gum
D. Whirlpool refrigerators
E. Pepperidge Farm turnovers

Intensive distribution is a distribution strategy based on making the product available to

consumers at every possible location so that the consumers can buy with a minimum of
effort. Consumers buy products sold through intensive distribution with minimal effort.

AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-94
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
80. While you cannot find televisions at every retail outlet, you can find them at discount
stores, electronic stores, appliance stores, and department stores. What kind of
distribution is used for televisions?

A. Exclusive
B. Pioneering
C. Selective
D. Intensive
E. Direct

Selective distribution is a strategy of limiting the distribution of a product to select outlets

in order to reduce distribution and promotion costs. Selective distribution limits the
number of outlets through which a product can be purchased.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

Short Answer Questions

4-95
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
81. What is the utility of a product?

Utility refers to a product's ability to satisfy both functional needs and symbolic or
psychological wants. A product's problem-solving potential may include form, task,
possession, time, or place utility.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-01 Explain the role of advertising in facilitating satisfying exchanges.
Topic: The Larger Marketing Context of Advertising

82. There is an ad for the Braun Oral-B Plaque Remover (an electric toothbrush) in an issue of
Self magazine. The full-page ad encourages readers to try out the system and experience
the feeling of truly clean teeth. To which type of market is the advertisement targeted?
Briefly explain your answer.

The advertisement is targeted towards the consumer market. The product is targeted
towards readers who are seeking cleaner teeth and better oral hygiene.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-96
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
83. List the four variables used in behavioristic segmentation.

Behavioral segments are determined by many variables, but the most important are (1)
purchase occasion, (2) benefit sought, (3) user status, and (4) usage rate.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

84. What are business markets?

Organizations that buy natural resources, component products, and services that they
resell, use to conduct their business, or use to manufacture another product. They include
manufacturers, government agencies, wholesalers, retailers, banks, and institutions that
buy goods and services to help them operate.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-97
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
85. What is the purpose of North American Industry Classification System (NAICS) codes?

NAICS codes are used by the U.S. Department of Commerce to classify all businesses.
The NAICS codes help companies' segment markets and do research, and advertisers can
even obtain lists of companies in particular NAICS divisions for direct mailings.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

86. What is the second step in the market segmentation process? Discuss briefly.

Once marketers identify and locate broad markets with shared characteristics
(behavioristic, geographic, demographic, or psychographic), they can proceed to the
second step in the market segmentation process. This involves (1) selecting groups that
have a mutual interest in the product's utility and (2) reorganizing and aggregating
(combining) them into larger market segments based on their potential for sales and
profit.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-98
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
87. What is a vertical marketing system?

A vertical marketing system (VMS) is a system in which the main members of a

distribution channel—producer, wholesaler, and retailer—work together as a cooperative
group to meet consumer needs.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

88. What is the product element?

Product element is the most important element of the marketing mix: the good or service
being offered and the values associated with it—including the way the product is designed
and classified, positioned, branded, and packaged.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-99
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
89. What is the basic goal of any positioning strategy?

The basic goal of a positioning strategy is to own a word that establishes the product in
the prospect's mind.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

90. List the most important factors for advertising success.

The following factors are particularly important for advertising success:

• Strong primary demand trend.

• Chance for significant product differentiation.
• Hidden qualities highly important to consumers.
• Opportunity to use strong emotional appeals.
• Substantial sums available to support advertising.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Promotion (Communication) Element

Essay Questions

4-100
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
91. What are the two steps that make up the market segmentation process?

Market segmentation is a two-step process. In the first step, groups of people or

organizations with certain shared characteristics are identified. In the second step, these
groups are aggregated according to their mutual interest in the product's utility. The
second step gives the marketer a selection of markets large enough to be profitable to
target.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

92. Explain how the concept of shared characteristics relates to the marketing segmentation
process.

The concept of shared characteristics is critical to market segmentation. Marketing and

advertising people know that, based on their needs, wants and mental files, consumers
leave "footprints in the sand"—the telltale signs of where they live and work, what they
buy and how they spend their leisure time. By following these footprints, marketers can
locate and define groups of consumers with similar needs and wants, create messages for
them and know how and where to send their messages. The goal is to find that particular
niche where the marketer's product fits.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-02 Illustrate the various methods advertisers use to segment and aggregate consumer and
business markets.
Topic: The Market Segmentation Process

4-101
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
93. Explain the target marketing process.

The first step in target marketing is to assess which of the newly created segments offers
the greatest profit potential and which can be most successfully penetrated. The company
designates one or more segments as a target market—those consumers the company
wishes to appeal to, design products for, and tailor its marketing activities toward. It may
designate another set of segments as a secondary target market and aim some of its
resources at it.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-03 Discuss how defining a target market enhances a product's marketing strategy.
Topic: The Target Marketing Process

94. What are the stages in a product life cycle? Discuss each stage in brief.

There are four major stages in the product life cycle: introduction, growth, maturity, and
decline. Introductory phase: The initial phase of the product life cycle (also called the
pioneering phase) when a new product is introduced, costs are highest, and profits are
lowest. Growth stage: The period in a product life cycle that is marked by market
expansion as more and more customers make their first purchases while others are
already making their second and third purchases. Maturity stage: That point in the product
life cycle when the market has become saturated with products, the number of new
customers has dwindled, and competition is most intense. Decline stage: The stage in the
product life cycle when sales begin to decline due to obsolescence, new technology, or
changing consumer tastes.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-102
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
95. Discuss the push and the pull strategy with respect to the product life cycle.

Pull strategy refers to the marketing, advertising, and sales promotion activities aimed at
inducing trial purchase and repurchase by consumers. Push strategy involves marketing,
advertising, and sales promotion activities aimed at getting products into the dealer
pipeline and accelerating sales by offering inducements to dealers, retailers, and
salespeople.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

96. Distinguish between primary demand and selective demand.

Primary demand refers to demand for all brands in a product category. Selective demand
is demand for a particular brand. A company has to stimulate primary demand when it
introduces a major new product category. A company tries to create selective demand for
its products when it uses its promotional efforts to impress customers with the subtle
advantages of one brand over another.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-103
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
97. Distinguish between an individual brand, a family brand, a national brand, and private
labels.

Individual brand involves assigning a unique name to each product a manufacturer

produces. Family brand is the marketing of various products under the same umbrella
name. National brands refer to product brands that are marketed in several regions of the
country. Private labels are personalized brands applied by distributors or dealers to
products supplied by manufacturers. Private brands are typically sold at lower prices in
large retail chain stores.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

4-104
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
98. Discuss the importance of product differentiation with respect to perceptible differences,
hidden differences, and induced differences.

Product differentiation creates a product difference that appeals to the preferences of a

distinct market segment. In advertising, nothing is more important than being able to tell
prospects truthfully that your product is different. Unfortunately, in response to increased
competitive pressures, burgeoning innovation and technology, and various constraints on
distribution, new-product development cycles have shortened dramatically. Differences
between products that are readily apparent to the consumer are called perceptible
differences. Hidden differences are not so readily apparent. Induced differences are
distinguishing characteristics of products affected through unique branding, packaging,
distribution, merchandising, and advertising.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Product Element

99. Once a company decides to use indirect rather than direct distribution, it must choose one
of the three strategies of distribution. Discuss what each choice means in terms of
product availability to final consumers.

With intensive distribution, products are available to purchasers at every possible location.
With selective distribution, the number of outlets that carries a product is limited.
Exclusive distribution occurs when a manufacturer grants to one wholesaler or retailer the
exclusive right to sell a product in a specific geographic region.

AACSB: Analytic
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Distribution (Place) Element

4-105
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
100. What is marketing communications? What are the tools used in marketing
communications?

Marketing communications (often called marcom) refers to all the planned messages that
companies and organizations create and disseminate to support their marketing objectives
and strategies. In addition to advertising, major marketing communication tools include
personal selling, sales promotion, direct marketing, and public relations activities.

AACSB: Communication
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-04 Describe the elements of the marketing mix and the role advertising plays in each element of
the mix.
Topic: Advertising and the Promotion (Communication) Element

4-106
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.