Chapter 6: Target Markets: Segmentation and Evaluation

Question 1

consumer market

Answer 1

purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make profits

Question 2

business market

Answer 2

individuals, organizations, or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations

Question 3

undifferentiated targeting strategy

Answer 3

a strategy in which an organization designs a single marketing mix and directs ti at the entire market for a particular product

Question 4

homogeneous market

Answer 4

a market in which a large proportion of customers have similar needs for a product

Question 5

heterogeneous market

Answer 5

a market made up of individuals or organizations with diverse needs for products in a specific product class

Question 6

market segmentation

Answer 6

the process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs

Question 7

market segment

Answer 7

individuals, groups, or organizations sharing one or more similar characteristics that cause them to have similar product needs

Question 8

concentrated targeting strategy

Answer 8

a market segmentation strategy in which an organization targets a single market segment using one marketing mix

Question 9

differentiated targeting strategy

Answer 9

a strategy in which an organization targets two or more segments by developing a marketing mix for each segment

Question 10

segmentation variables

Answer 10

characteristics of individuals, groups, or organizations used to divide a market into segments

Question 11

market density

Answer 11

the number of potential customers within a unit of land area

Question 12

geodemographic segmentation

Answer 12

a method of market segmentation that clusters people in zipcode areas and smaller neighborhood units based on lifestyle and demographic information

Question 13

micromarketing

Answer 13

an approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets

Question 14

benefit segmentation

Answer 14

the division of a market according to benefits that consumers want from the product

Question 15

market potential

Answer 15

the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity

Question 16

company sales potential

Answer 16

the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product

Question 17

breakdown approach

Answer 17

measuring company sales potential based on a general economic forecast for a specific period and the market potential derived from it

Question 18

buildup approach

Answer 18

measuring company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered

Question 19

sales forecast

Answer 19

the amount of a product a company expects to sell during a specific period at a specified level of marketing activities

Question 20

executive judgement

Answer 20

a sales forecasting method based on the intuition of one or more executives

Question 21

customer forecasting survey

Answer 21

a survey of customers regarding the types and quantities of products they intend to buy during a specific period

Question 22

sales force forecasting

Answer 22

a survey of a firm’s sales force regarding anticipated sales in their territories for a specified period

Question 23

expert forecasting survey

Answer 23

sales forecasts prepared by experts outside the firm, such as economists, management, consultants, advertising executives, or college professors

Question 24

Delphi technique

Answer 24

a procedure in which experts create initial forecasts, submit them to the company for averaging, and then refine the forecasts

Question 25

time series analysis

Answer 25

a forecasting method that uses historical sales data to discover patterns in the firm’s sales over time and generally involves trend, cycle, season, and random factor analysis

Question 26

trend analysis

Answer 26

an analysis that focuses on aggregate sales data over a period of many years to determine general trends in annual sales

Question 27

cycle analysis

Answer 27

an analysis of sales figures for a three- to five-year period to ascertain whether sales fluctuate in a consistent, periodic manner

Question 28

seasonal analysis

Answer 28

an analysis of of daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales

Question 29

random factor analysis

Answer 29

an analysis attempting to attribute erratic sales variations to random, nonrecurrent events

Question 30

regression analysis

Answer 30

a method of predicting sales based on finding a relationship between past sales and one or more independent variables, such as population or income

Question 31

market test

Answer 31

marking a product available to buyers in one or more tests areas and measuring purchases and consumer responses to marketing efforts