Test #3

Question 1

Segmentation that divides markets using demographics, psychology, and personality traits

Answer 1

Psychographic Segmentation:

Question 2

categorizes consumers according to how they behave with or act toward products.

Answer 2

Behavioral Segmentation

Question 3

Segmentation that divides markets by characteristics such as age, gender, income, education, and family size.

Answer 3

Demographic Segmentation

Question 4

Segmentation that divides markets into groups such as nations, regions, states, and neighborhoods.

Answer 4

Geographic Segmentation

Question 5

A targeting strategy that simultaneously pursues several different market segments, usually with a different strategy for each.

Answer 5

Differentiated Targeting

Question 5

A targeting strategy that approaches the marketplace as one large segment.

Answer 5

Undifferentiated Targeting

Question 6

A targeting strategy that involves pursuing a large share of a small market segment.

Answer 6

Niche Marketing

Question 7

A subset of the marketing mix that includes four main elements of marketing communication: advertising, sales promotion, personal selling, and public relations.

Answer 7

Promotional Mix

Question 8

A type of advertising that attempts to develop initial demand for a product.

Answer 8

Informative Advertising

Question 9

A type of advertising that seeks to keep the product before the public in an effort to reinforce previous promotional activity.

Answer 9

Reminder Advertising

Question 10

A type of advertising that attempts to increase demand for an existing product.

Answer 10

Persuasive Advertising

Question 11

An advertising technique in which a company promotes its products through appearances in movies or on television shows or other media.

Answer 11

Product Placement

Question 12

A promotion-mix budgeting strategy in which firms set their promotion budget based on what they believe they can afford.

Answer 12

Affordable Method

Question 13

A promotion-mix budgeting strategy in which firms allocate a specific percentage of a period’s sales to the promotion budget for that period.

Answer 13

Percentage of Sales Method

Question 13

A promotion-mix budgeting strategy in which a firm defines specific objectives, determines the tasks required to achieve those objectives, and then estimates how much each task will cost.

Answer 13

Objective and Task Method

Question 14

A pricing tactic that involves constantly updating prices to reflect changes in supply, demand, or market conditions.

Answer 14

Dynamic Pricing

Question 15

A pricing method in which a certain amount is added to the cost of the product, to set the final price; also called cost-plus pricing.

Answer 15

Markup Pricing

Question 16

A pricing tactic that involves selling a product at a price that causes the firm a financial loss.

Answer 16

Loss Leader Pricing

Question 16

A pricing tactic in which two or more products are packaged together and sold at a single price

Answer 16

Price Bundling

Question 17

The practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market, and then raising prices to normal levels.

Answer 17

Predatory Pricing

Question 17

A pricing objective that involves setting a relatively high price for a period after the product launches.

Answer 17

Profit Maximization

Question 18

A pricing tactic that involves pricing a product higher than competitors to signal that it is of higher quality.

Answer 18

Prestige Pricing

Question 19

When two or more companies collude to set a product’s price.

Answer 19

Price Fixing

Question 20

The practice of charging different customers different prices for the same product.

Answer 20

Price Discrimination

Question 21

The prices that consumers consider reasonable and fair for a product.

Answer 21

Reference Pricing

Question 22

The point at which the costs of producing a product equal the revenue made from selling the product.

Answer 22

Break Even Pricing

Question 23

Products developed by a retailer and sold only by that specific retailer. Also referred to as store brands.

Answer 23

Private Label Branding

Question 24

A strategy in which two or more companies issue a single product in an effort to capitalize on the equity of each company’s brand.

Answer 24

Co-Branding

Question 25

A reduction in sales volume or market share of a company’s existing product due to the introduction of a new product made by the same company.

Answer 25

Cannibalization

Question 26

The value the firm derives from consumers’ positive perception of its products.

Answer 26

Brand Equity

Question 27

The process of broadening the use of an organization’s current brand to include new products.

Answer 27

Brand Extension