Marketing Unit 4 Test

Question 1

What is a Market?

Answer 1

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

Question 2

What is a Target Market?

Answer 2

A group of people to whom a firm decided to direct its marketing effort and its goods and services

Question 3

What are the two types of markets?

Answer 3

Consumer products (B to C): Products bought by ultimate customers for personal use
Business products (B to B): Goods and services purchased for use either directly or indirectly in the production of other goods and services

Question 4

What is marketing segmentation?

Answer 4

Division of the total market into smaller, relatively homogeneous groups.

Question 5

What is the first piece of criteria for marketing segmentation

Answer 5

1. Measurable size and power

Question 6

What are the four common bases for segmenting consumer markets?

Answer 6

Geographic, demographic, behavioral, and psychographic

Question 7

What is geographic segmentation?

Answer 7

Division of an overall market into homogeneous groups based on their locations

Question 8

What do marketers look for in geographic segmentation?

Answer 8

Marketers look at total population, economic variables, geographic indicators (job growth), and migration patterns. They also pay close attention to areas with quickly growing population (using GIS)

Question 9

How do marketers use geographic segmentation?

Answer 9

To find core regions- where they draw 40-80% of their sales and residence within urban vs. suburban

Question 10

What is a GIS?

Answer 10

Geographic information systems-assemble, store, manipulate, and display data by location. Allows firms to overlay data about customers over a map and make a decision about location, delivery, and other issues

Question 11

What is demographic segmentation? (socioeconomic segmentation)

Answer 11

Division of an overall market into homogeneous groups based on variables like gender, age, income, occupation, education, sexual orientation, household size, and stage in the family life cycle

Question 12

What two types of demographic segmentation have been changing?

Answer 12

Gender and age

Question 13

What is the cohort effect

Answer 13

Tendency of members too be influenced and bound together by significant events in their formative year (age 17–22)

Question 14

What is the primary demographic concern of marketers

Answer 14

Life-cycle

Question 15

Who are empty nesters and do they have a higher or lower disposable income?

Answer 15

Adults who don’t live with their children (higher disposable incomes and spend more on luxury items)

Question 16

What are boomerangs

Answer 16

Children who have returned home to live with their parents

Question 17

In what ways do household types vary?

Answer 17

Lifestage and presence or absence of children. Lately growing number of same-sex couples who share households

Question 18

As household income increases (smaller percentage goes to food, percentage spent on housing, household operations, and clothing remains constant, and percentage spent on recreation and education increases)

Answer 18

What is Engels law?

Question 19

What does Engels Law do

Answer 19

Helps marketers target customers at all income needs

Question 20

What is Psychographic segmentation (complimentary to geographic and demographic)

Answer 20

Division of a population of groups that have similar attitudes,values, and lifestyles (common research method is large scale surveys)

Question 21

What are the six psychographic consumer segments?

Answer 21

Strivers, devouts, altruists, intimates, fun-seekers, and creatives

Question 22

How do marketers use psychographic segmentation?

Answer 22

They use it to quantify aspects of consumers personalities and lifestyles to create goods and services for a target market and to identify which Psychographic segments are most prevalent

Question 23

What is behavioral segmentation?

Answer 23

The division of a population into homogeneous groups based on their relationship to the product

Question 24

What three ways do marketers segment behavior?

Answer 24

Segmenting by benefits sought, usage rates, and brand loyalty

Question 25

How do marketers segment by benefits sought (behavioral segmentation)

Answer 25

They focus on the benefits people expect from using a product (Example- Starbucks customers want more than coffee- they want a pleasant experience)

Question 26

Ho do marketers use segmenting by usage rates (behavioral segmentation)

Answer 26

80/20 principle (Praedo’s law)- large percentage of revenue comes from a small, loyal percentage of customers

Question 27

What is a way of segmenting by brand loyalty (behavioral)

Answer 27

Grouping customers according to the strength of their product loyalty (customers develop loyalty for a variety of reasons)

Question 28

Why do marketers use multiple segmentation bases?

Answer 28

Flexibility helps marketers increase accuracy and the goal is getting to know potential customers better and satisfying their needs with appropriate goods and services

Question 29

What is positioning?

Answer 29

Placing a product at a certain point or location within the minds of prospective buyers

Question 30

What are possible approaches to positioning?

Answer 30

attributes; price/quantity; competitors; application; product user; and product class

Question 31

What does positioning do?

Answer 31

Distinguishes firms offerings from competitors

Question 32

What are strivers?

Answer 32

Value professional and material goals

Question 33

What are devouts?

Answer 33

People who value duty and tradition

Question 34

What are altruists?

Answer 34

emphasize social issues and societal well-being

Question 35

What are intimates?

Answer 35

People who value family and personal relationships

Question 36

What are fun-seekers?

Answer 36

People who focus on personal enjoyment and pleasurable experiences

Question 37

What are creatives?

Answer 37

People who seek education, technology, and knowledge

Question 38

Do for-profit or not-for-proft organizations use market segmentation?

Answer 38

Both for profit and not-for-profit organizations use market segmentation

Question 39

What is the second criteria for marketing segmentation?

Answer 39

Marketers must effectively find a way to promote and serve the target market

Question 40

What is the third criteria for marketing segmentation?

Answer 40

Segment must be sufficiently large to offer good profit potential

Question 41

What is the fourth criteria for marketing segmentation?

Answer 41

Firm must aim for segments that match its marketing capabilities (smaller organizations usually stick with a target market)