Download module #3 final exam pool items

Chapter 8—Segmenting and Targeting Markets
3. A market is people or organizations that have:
a. the ability, willingness, and power to buy
b. a medium of exchange and products they desire
c. needs and wants and an ability and willingness to buy
d. unmet needs or wants and products or services that satisfy those unmet needs or wants
e. communication, financial, and capital resources
ANS: C
A market is defined as having four imperative characteristics: people or organizations, needs and
wants, ability to buy, and willingness to buy.
PTS: 1
REF: 121
OBJ: 08-1
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Knowledge
4. A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause
them to have similar product needs.
a. market universe
b. market segment
c. aggregated market
d. segmentation base
e. population sample
ANS: B
This is the definition of a market segment.
PTS: 1
REF: 121
OBJ: 08-1
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Knowledge
7. _____ is the process of dividing a market into meaningful groups that are relatively similar and
identifiable.
a. Perceptual mapping
b. Positioning
c. Micromarketing
d. Market sampling
e. Market segmentation
ANS: E
This is the definition of market segmentation.
PTS: 1
REF: 122
OBJ: 08-1
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
8. The purpose of market segmentation is to:
a. reduce the market down to a size the firm can handle
b. divide the market into equal size and profit regions for sales territories
c. group a large number of markets together, enabling a company to serve them
simultaneously
d. develop a generalized definition of the market as a whole
e. enable the marketer to tailor marketing mixes to meet the needs of one or more specific
groups
ANS: E
The purpose of segmentation is to group similar consumers and to serve their needs with a specialized
marketing mix.
PTS: 1
REF: 122
OBJ: 08-1
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Comprehension
1
11. All of the following are criteria for successful market segmentation EXCEPT:
a. substantiality
b. identifiability and measurability
c. accountability
d. accessibility
e. responsiveness
ANS: C
The four criteria are substantiality, identifiability and measurability, accessibility, and responsiveness.
PTS: 1
REF: 122
KEY: CB&E Model Strategy
OBJ: 08-3
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
12. To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria
are:
a. segmentability, targetability, reliability and validity, and homogeneity
b. tangibility, inseparability, nonperishability, and uniqueness
c. substantiality, identifiability and measurability, accessibility, and responsiveness
d. reliability, flexibility, tangibility, and unbiased
e. complexity, compatability, relative advantage, trialability, and observability
ANS: C
Useful segments should be substantial, identifiable and measurable, accessible, and responsive to
different marketing mixes.
PTS: 1
REF: 122
KEY: CB&E Model Strategy
OBJ: 08-3
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
19. The requirement for a market segment to be responsive means:
a. over half of the consumers in the identified segment will be actively interested in the
product
b. all the segments identified by a marketer should respond to the marketing mix
c. all the segments identified by a marketer should not respond to the marketing mix
d. the segments identified by a marketer should not differ in the level of their responsiveness
to the marketing mix
e. the segment identified by a marketer should differ in how it responds to the marketing mix
when compared to another segment confronted with the same mix
ANS: E
The target segment should respond differently to the marketing mix compared to other segments.
PTS: 1
REF: 122-123
KEY: CB&E Model Customer
OBJ: 08-3
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
2
22. If a market segment is especially motivated by coupons in newspapers, which segmentation success
criterion is most influential in the success of this program?
a. Responsiveness
b. Identifiability and measurability
c. Substantiality
d. Accessibility
e. Functionality
ANS: A
Responsiveness is in force when a target segment responds differently (hopefully more positively) to
the marketing mix than other segments.
PTS: 1
REF: 122-123
KEY: CB&E Model Customer
OBJ: 08-3
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
23. A health club has a new fitness program for expectant mothers. After flyers were placed at the offices
of area obstetricians, classes filled up within two days. Which segmentation success criterion was most
influential in the success of this promotion?
a. Substantiality
b. Identifiability
c. Measurability
d. Causality
e. Responsiveness
ANS: E
Responsiveness is in force when a target segment responds differently (hopefully more positively) to
the marketing mix than other segments.
PTS: 1
REF: 122-123
KEY: CB&E Model Customer
OBJ: 08-3
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
3
24. _____ are characteristics of individuals, groups, or organizations that marketers use to divide a total
market into segments.
a. Differentiation guides
b. Segmentation bases
c. Perceptual maps
d. Responsiveness quotients
e. Accessibility quotients
ANS: B
This is the definition of segmentation bases.
PTS: 1
REF: 123
KEY: CB&E Model Customer
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
27. _____ is the segmenting of markets based on the region of the country or the world, market size,
market density (number of people within a certain unit of land), or climate.
a. Community segmentation
b. Geographic segmentation
c. Geodemographic segmentation
d. PRIZM segmentation
e. Demonstrated regionalization
ANS: B
This is the definition of geographic segmentation.
PTS: 1
REF: 123
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
PTS: 1
REF: 123-124
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
31. Almost all cell phones sold in the United States are black or gray. Almost all cell phones sold in
Europe are colorful, and very few black phones are sold. A cell phone manufacturer knowing this
information could use _____ segmentation when selling its phones internationally.
a. geographic
b. economic
c. demographic
d. benefit
e. multipositioning
ANS: A
Geographic segmentation includes segmenting markets by region of the country or world.
PTS: 1
REF: 123-124
OBJ: 08-4
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy | CB&E Model International Perspective
MSC: BLOOMS Application
32. All of the following statements are reasons why consumer goods companies take a regional approach
to marketing rather than a national approach EXCEPT:
a. Many firms need to find new ways to generate sales because of sluggish and intensely
competitive markets.
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b. A regional approach gives marketing managers control over the competitive environment.
c. Computerized checkout stations with scanners enable retailers to assess accurately which
brands sell the best in each region.
d. Many packaged-goods manufacturers are introducing new regional brands intended to
appeal to local preferences.
e. A more regional approach allows consumer goods companies to react more quickly to
competition.
ANS: B
The competitive environment is one of the noncontrollable factors in a company’s environment.
PTS: 1
REF: 124
OBJ: 08-4
KEY: CB&E Model Distribution | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
33. Marketers use _____ to segment markets because this information is widely available, and factors such
as age or gender are often related to consumer purchasing and consumption behavior.
a. benefits
b. psychographics
c. demographics
d. usage rates
e. sociocultural attributes
ANS: C
Common bases of demographic segmentation are age, gender, income, ethnic background, and family
life cycle.
PTS: 1
REF: 124
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
5
34. Income, ethnic background, gender, and age are all examples of _____ segmentation bases.
a. geodemographic
b. organizational
c. demographic
d. socioeconomic
e. psychographic
ANS: C
These are demographic characteristics of consumers.
PTS: 1
REF: 124
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
44. In Miami, several radio stations broadcast in Spanish and play Latin music for the Hispanic people
living in South Florida. The radio stations are using _____ segmentation.
a. usage rate
b. ethnic
c. socioeconomic
d. geographic
e. gender
ANS: B
In this case, ethnicity would be the demographic variable.
PTS: 1
REF: 126
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
46. A series of stages determined by a combination of age, marital status, and the presence or absence of
children is known as the:
a. generation gap
b. family life cycle
c. maturation process
d. segmentation cycle
e. psychographic process
ANS: B
This describes the family life cycle.
PTS: 1
REF: 126-127
KEY: CB&E Model Customer
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
6
49. Which of the following businesses would be most likely to use family life cycle segmentation?
a. Those that produce and market computer software and hardware
b. The snack industry
c. Fast-food restaurants
d. Business-to-business marketers
e. Wedding planners, couples-only resorts, and day care centers
ANS: E
People in different stages of the family life cycle would be most likely getting married, going on a
couples-only trip, or needing the services of a day care center.
PTS: 1
REF: 126-127
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Evaluation
50. _____ segmentation is based on personality, motives, and lifestyles.
a. Psychographic
b. Demographic
c. Benefit
d. Family life cycle
e. Character
ANS: A
Personality, motives, and lifestyles are bases of psychographic segmentation.
PTS: 1
REF: 127
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
51. All of the following are bases for psychographic segmentation EXCEPT:
a. benefits
b. personality
c. motives
d. lifestyles
e. geodemographics
ANS: A
Benefit segmentation is a different segmentation strategy that groups customers on the basis of their
needs and wants.
PTS: 1
REF: 127
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
7
57. _____ divides individuals into groups according to the way they spend their time, the importance of
items in their surroundings, their beliefs, and socioeconomic characteristics.
a. Life cycle segmentation
b. Temporal segmentation
c. Lifestyle segmentation
d. Microsegmentation
e. Macrosegmentation
ANS: C
This describes the essence of lifestyle segmentation.
PTS: 1
REF: 127
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
58. _____ is a method that clusters potential customers into neighborhood lifestyle categories and is a
combination of geographic, demographic, and lifestyle segmentations.
a. Geodemographic segmentation
b. Microsegmentation
c. Sociocultural clustering
d. Acculturation
e. Lifestyle segmentation
ANS: A
This is the definition of geodemographic segmentation.
PTS: 1
REF: 127
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
62. _____ is the process of grouping customers into market segments according to the benefits sought
from the product.
a. Benefit segmentation
b. Value-added segmentation
c. Lifestyle segmentation
d. Macrosegmentation
e. Psychographic segmentation
ANS: A
This is the definition of benefit segmentation.
PTS: 1
REF: 129
OBJ: 08-4
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
69. Which type of segmentation divides a market by the amount of product bought or consumed?
a. Benefit segmentation
b. Characteristic segmentation
c. Usage-rate segmentation
d. Demographic segmentation
e. Psychographic segmentation
ANS: C
This is the definition of usage-rate segmentation.
PTS: 1
REF: 129
OBJ: 08-4
8
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
70. Most airline frequent flyer programs reward the most frequent flyers with business class upgrades and
flight lounge privileges. Airlines are using these rewards as a means of implementing _____
segmentation.
a. lifestyle
b. motive
c. usage-rate
d. demographic
e. personality
ANS: C
Usage-rate segmentation divides a market by consumption so that firms can target their heavy users.
PTS: 1
REF: 129
KEY: CB&E Model Strategy
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
74. What does the 80/20 principle propose?
a. Roughly 80 percent of the profit comes from 20 percent of the sales.
b. Roughly 80 percent of a firm’s customers are repeat business.
c. Roughly 50 percent of a firm’s customers purchase 80 percent of the sales volume of the
product.
d. Roughly 20 percent of a firm’s customers purchase 80 percent of the sales volume of the
product.
e. Sales are equally divided among heavy, medium, and light users, but they all need slightly
different products.
ANS: D
The 80/20 principle proposes that a minority of a firm’s customers purchase a majority of the volume
of the product.
PTS: 1
REF: 129
KEY: CB&E Model Customer
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
9
75. The _____ proposes that a minority of a firm’s customers purchase a majority of the volume of the
product.
a. majority fallacy
b. equity fallacy
c. 80/20 principle
d. cannibalization rule
e. optimizer principle
ANS: C
This is the definition of the 80/20 principle.
PTS: 1
REF: 129
KEY: CB&E Model Customer
OBJ: 08-4
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
77. Business marketers focus on all of the following market segments EXCEPT:
a. institutions
b. producers
c. households
d. resellers
e. government
ANS: C
The business market consists of four broad segments: producers, resellers, government, and
institutions. Households are part of the consumer market.
PTS: 1
REF: 129
KEY: CB&E Model Strategy
OBJ: 08-5
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
80. Firms can be categorized by the type of purchasing strategy they use. _____ usually contact familiar
suppliers and place an order with the first that can meet product and delivery requirements.
a. Strugglers
b. Actualizers
c. Optimizers
d. Satisficers
e. Experiencers
ANS: D
This is the definition of satisficers.
PTS: 1
REF: 130
KEY: CB&E Model Customer
OBJ: 08-5
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
10
81. Hank operates a plumbing and electrical supply store. He has categorized its business customers by
their purchasing strategy. Hank has found it much easier to serve and satisfy the _____, who usually
recontact familiar suppliers and place an order immediately if product and delivery requirements are
acceptable.
a. adopters
b. adapters
c. optimizers
d. innovators
e. satisficers
ANS: E
Satisficers use a simple, quick purchasing strategy of looking for the first available adequate supplier.
PTS: 1
REF: 130
KEY: CB&E Model Customer
OBJ: 08-5
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
84. What is the first step in segmenting a market?
a. Set the segmentation goals
b. Choose a basis or bases for segmenting the market
c. Select a market or product category for study
d. Profile and analyze segments
e. Select target markets
ANS: C
The steps in segmenting a market are (1) select a market or product category for study; (2) choose a
basis or bases for segmenting the market; (3) select segmentation descriptors; (4) profile and analyze
segments; (5) select target markets; and (6) design, implement, and maintain appropriate marketing
mixes.
PTS: 1
REF: 131
KEY: CB&E Model Strategy
OBJ: 08-6
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
11
85. All of the following are steps in the market segmenting process EXCEPT:
a. determining the objectives of the segmentation strategy
b. profiling and analyzing segments
c. designing, implementing, and maintaining appropriate marketing mixes
d. selecting a market or product category for study
e. choosing a basis or bases for segmenting the market
ANS: A
The steps in segmenting a market are (1) select a market or product category for study; (2) choose a
basis or bases for segmenting the market; (3) select segmentation descriptors; (4) profile and analyze
segments; (5) select target markets; and (6) design, implement, and maintain appropriate marketing
mixes.
PTS: 1
REF: 131
KEY: CB&E Model Strategy
OBJ: 08-6
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
86. June LaVista owns a health and fitness gym. After dividing her customers into four segments based on
income range, age, level of fitness, and other selected segmentation descriptors, she wrote out a
description of each segment’s size, expected growth, frequency of exercise, and overall profit
potential. Which step in segmenting a market is LaVista engaged in?
a. Profiling and analyzing her market segments
b. Positioning her products to her market segments
c. Targeting promotions to her market segments
d. Differentiating her market segments
e. Concentrating her marketing mix on the most profitable marketing segments
ANS: A
The profiling and analysis of the segments step in segmenting a market involves analyzing the
segments’ size, expected growth, purchase frequency, and so on.
PTS: 1
REF: 131
KEY: CB&E Model Strategy
OBJ: 08-6
TOP: AACSB Reflective Thinking
MSC: BLOOMS Application
87. After selecting a market for study and choosing bases for segmenting that market, the next step is to:
a. select segmentation descriptors
b. implement and maintain a marketing mix
c. design a marketing mix
d. profile and analyze segments
e. select target markets
ANS: A
The steps in segmenting a market are (1) select a market or product category for study; (2) choose a
basis or bases for segmenting the market; (3) select segmentation descriptors; (4) profile and analyze
segments; (5) select target markets; and (6) design, implement, and maintain appropriate marketing
mixes.
PTS: 1
REF: 131
KEY: CB&E Model Strategy
OBJ: 08-6
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
12
89. Market segmentation:
a. is a scientific technique for selecting ways to attract specific population samples
b. is rarely done by consumer products companies
c. only needs to be done once for each product
d. should be redone periodically
e. should be done every time a product enters a new stage of its life cycle
ANS: D
Markets are dynamic, so it is important that companies proactively monitor their segmentation over
time.
PTS: 1
REF: 131
KEY: CB&E Model Strategy
OBJ: 08-6
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
90. A(n) _____ is a group of people or organizations for which an organization designs, implements, and
maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying
exchanges.
a. heterogeneous segment
b. target market
c. responsive segment
d. aggregated market
e. undifferentiated target
ANS: B
This is the definition of a target market.
PTS: 1
REF: 131
KEY: CB&E Model Customer
OBJ: 08-7
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
93. Which target marketing strategy views the market as one big market with no individual segments and
thus uses a single marketing mix?
a. Undifferentiated
b. Concentrated
c. Niche
d. Uniform
e. Multisegmented
ANS: A
A firm using an undifferentiated targeting strategy essentially adopts a mass-market philosophy,
viewing the market as one big market with no individual segments.
PTS: 1
REF: 131-132
OBJ: 08-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
96. All of the following are advantages of using a concentrated targeting strategy EXCEPT:
a. concentration of resources
b. can better meet the needs of a narrowly defined segment
c. allows some small firms to better compete with larger firms
d. strong positioning
e. cannibalization
ANS: E
Cannibalization is a disadvantage of multisegment targeting. See Exhibit 8.2.
PTS: 1
REF: 132
KEY: CB&E Model Strategy
OBJ: 08-7
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
13
97. A(n) _____ strategy entails selecting one segment of a market to target and focuses on understanding
the needs, motives, and satisfactions of the members of that segment, as well as on developing a highly
specialized marketing mix.
a. universal product
b. undifferentiated targeting
c. concentrated targeting
d. market development
e. product development
ANS: C
Concentrated targeting strategy selects one segment of a market for targeting marketing efforts.
PTS: 1
REF: 133
OBJ: 08-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
99. When a firm uses a concentrated targeting strategy, it can:
a. view the total market as receptive to its product
b. offer a highly specialized marketing mix
c. reach customers in two or more segments that might otherwise be missed
d. avoid the danger of putting all resources in one micromarket
e. concentrate on one generalized product to fit the mass market, maximizing sales volume
ANS: B
Concentrated targeting focuses on one target market and develops a highly specialized mix.
PTS: 1
REF: 133
OBJ: 08-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Comprehension
107. _____ is one of the potential disadvantages associated with a multisegment strategy.
a. Inadequate demand
b. Demarketing
c. Lower profits
d. Cannibalization
e. Loss of synergy
ANS: D
Cannibalization is a situation that occurs when sales of a new product cut into sales of a firm’s existing
products.
PTS: 1
REF: 134
OBJ: 08-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Comprehension
111. An individualized marketing method that utilizes customer information to build long-term,
personalized, and profitable relationships with each customer is referred to as:
a. 80/20 marketing
b. interpersonal marketing
c. zoned marketing
d. one-to-one marketing
e. individual marketing
ANS: D
This is the definition of one-to-one marketing.
PTS: 1
REF: 134
OBJ: 08-8
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Knowledge
14
114. Increasing share of customer means:
a. selling more products to each customer
b. increasing the number of customers
c. winning market share from competitors
d. the sales due to a customer relative to the costs of attaining and retaining that customer
e. individual customer revenue minus costs to satisfy that customer
ANS: A
Share of customer represents how much a customer spends with a business, so increasing customer
share attempts to sell more products to each customer rather than attempting to gain more customers
overall.
PTS: 1
REF: 134
OBJ: 08-8
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Comprehension
115. The basic goal of one-to-one marketing is to:
a. increase the market for the product category to new and current customers
b. eliminate the use of mass media for promotion and locate a direct communications channel
c. increase operating costs and locate new customers
d. reduce the number of company employees and increase overall sales
e. reduce costs through customer retention and increase revenue through customer loyalty
ANS: E
Loyal customers are less costly to maintain than acquiring new customers.
PTS: 1
REF: 134
OBJ: 08-8
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Comprehension
116. All of the following have been identified as trends that will lead to the continuing growth of one-toone marketing EXCEPT:
a. the growing number of customers who do not have time to spend shopping
b. the fact that consumers do not want to be treated like the masses
c. technology that allows the collection of detailed information on customers
d. consumers are loyal to companies and brands that have earned their loyalty and reinforce
it at every purchase occasion
e. mass marketing is no longer appropriate, especially for consumer packaged-goods
products
ANS: E
All of these are trends impacting the growth of one-to-one marketing except the inappropriateness of
mass marketing for consumer packaged-goods products.
PTS: 1
REF: 135
KEY: CB&E Model Strategy
OBJ: 08-8
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
118. Product positioning is the process of:
a. finding the correct location for retail outlets to sell a product category
b. finding the right channel of distribution for a product
c. creating the desired image of the firm’s product
d. competing with competitors’ products in the retailers’ stores for the best position on the
shelf
e. pricing the product to be at a competitive level with other brands on the market
ANS: C
Positioning is developing a specific marketing mix to influence potential customers’ overall perception
of a brand, product line, or organization in general.
15
PTS: 1
REF: 135
KEY: CB&E Model Strategy
OBJ: 08-9
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
119. _____ is the development of a specific marketing mix to influence potential customers’ overall
perception of a brand, product line, or organization in general and is related to the place a product
occupies in consumers’ minds relative to competing offerings.
a. Market differentiation
b. Diversification
c. Combination marketing
d. Positioning
e. Market aggregation
ANS: D
This is the definition of positioning.
PTS: 1
REF: 135
KEY: CB&E Model Strategy
OBJ: 08-9
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
121. The place a product, brand, or group of products occupies in consumers’ minds relative to competing
offerings is referred to as a product’s:
a. status
b. equity
c. frame
d. role
e. position
ANS: E
This is the definition of a product’s position.
PTS: 1
REF: 135
OBJ: 08-9
TOP: AACSB Reflective Thinking
KEY: CB&E Model Product
MSC: BLOOMS Knowledge
124. Products such as bleaches, aspirin, unleaded regular gasoline, and some soaps are distinguished by
differences such as brand names, packaging, color, smell, or “secret” additives. With these products,
marketers attempt to convince customers that their product is significantly different from the others
and should therefore be demanded over competing brands. These marketers are using:
a. cannibalization
b. perceptual mapping
c. psychographic targeting
d. integrated marketing
e. product differentiation
ANS: E
Product differentiation is a positioning strategy that some firms use to distinguish their products from
those of competitors.
PTS: 1
REF: 135
OBJ: 08-9
TOP: AACSB Reflective Thinking
KEY: CB&E Model Product
MSC: BLOOMS Application
127. Which of the following is a means of displaying or graphing, in two or more dimensions, the location
of products, brands, or groups of products in customers’ minds?
a. Perceptual mapping
b. Product positioning
c. Market segmentation
d. Product tracing
e. Laddering
ANS: A
This is the definition of perceptual mapping.
16
PTS: 1
REF: 136
KEY: CB&E Model Product
OBJ: 08-9
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
129. All of the following are typical bases for positioning EXCEPT:
a. attribute
b. price and quality
c. distribution
d. emotion
e. product user
ANS: C
Typical bases for positioning include attribute, price and quality, use or application, product user,
product class, competitor, and emotion.
PTS: 1
REF: 136-137
KEY: CB&E Model Strategy
OBJ: 08-9
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
133. Changing consumers’ perceptions of a brand in relation to competing brands is known as:
a. positioning
b. repositioning
c. reintermediation
d. demarketing
e. reengineering
ANS: B
This is the definition of repositioning.
PTS: 1
REF: 137
KEY: CB&E Model Strategy
OBJ: 08-9
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
17
Chapter 21—Customer Relationship Management (CRM)
1. _____ is a company-wide business strategy designed to optimize profitability, revenue, and customer
satisfaction by focusing on highly defined and precise customer groups.
a. Organizational optimization
b. Consumer relationship marketing (CRM)
c. Total quality management (TQM)
d. Customer relationship management (CRM)
e. Market aggregation
ANS: D
This is the definition of customer relationship management (CRM).
PTS: 1
REF: 337
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
6. Customer relationship management is accomplished by all of the following EXCEPT:
a. offering the lowest prices of all major competitors
b. organizing the company around customer segments
c. establishing and tracking customer interactions with the company
d. fostering customer-satisfying behaviors
e. linking all processes of the company from its customers through its suppliers
ANS: A
CRM is a company-wide business strategy designed to optimize profitability, revenue, and customer
satisfaction by focusing on highly defined and precise customer segments, but it does not mean that
offering the lowest prices is necessary.
PTS: 1
REF: 337
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
7. The difference between traditional marketing and customer relationship marketing can be compared to
the difference between:
a. night and day
b. boning a fish and dressing a chicken
c. mice and elephants
d. shooting a rifle and a shotgun
e. circles and squares
ANS: D
If you have good aim, a rifle is the more effective weapon to use (i.e., CRM).
PTS: 1
REF: 337
KEY: CB&E Model Strategy
OBJ: 21-1
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
18
8. At its most fundamental level, a CRM approach is no more than:
a. the relationship cultivated by a salesperson with a customer
b. a mass marketing approach
c. a transactional selling approach
d. a customer satisfaction program
e. a differentiation strategy
ANS: A
Fundamentally, a CRM approach is no more than the relationship cultivated by a salesperson with the
customer.
PTS: 1
REF: 338
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
9. To initiate the CRM cycle, a company must first:
a. establish marketing objectives
b. captures relevant customer data on interactions
c. identify customer relationships with the organization
d. understand the interactions the company has with current customers
e. Decides on a segmentation strategy
ANS: C
To initiate the CRM cycle, a company must first identify customer relationships with the organization.
PTS: 1
REF: 338
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
10. Which of the following statements about the CRM cycle is true?
a. The letters CRM are an acronym for consumer relationship marketing.
b. The CRM cycle does not affect employees outside the marketing and management
functional areas.
c. The CRM cycle is continuous and circular with no predefined start or end point.
d. The CRM cycle takes a simplistic perspective on customers.
e. All of these statements about the CRM cycle are true.
ANS: C
CRM is often described as a closed-loop system that builds relationships with customers––one that is
continuous and circular with no predetermined starting or end points.
PTS: 1
REF: 338
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
19
TOP: AACSB Reflective Thinking
MSC: BLOOMS Analysis
12. As the second step in the CRM cycle a company must:
a. establish marketing objectives
b. capture relevant customer data on interactions
c. identify customer relationships with the organization
d. understand the interactions the company has with current customers
e. decide on a segmentation strategy
ANS: D
To initiate the CRM cycle, a company must first identify customer relationships with the organization.
Next, the company must understand the interactions with current customers.
PTS: 1
REF: 338
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
13. Which of the following statements about a CRM system is true?
a. A critical component of a CRM system is the use of the appropriate technology to store
and integrate customer data.
b. A CRM system operates on the theory that all customers are equally important.
c. Due to privacy laws, a CRM system only disseminates customer information to those who
are actually in day-to-day contact with customers.
d. A company using a CRM system must view its customers as bits of data.
e. All of these statements about a CRM system are true.
ANS: A
Information technology is used not only to enhance the collection of customer data, but also to store
and integrate customer data throughout the company and, ultimately, to “get to know” customers on a
personal basis. See Exhibit 21.1.
PTS: 1
REF: 338
OBJ: 21-1
KEY: CB&E Model Customer | CB&E Model Strategy
TOP: AACSB Technology
MSC: BLOOMS Analysis
14. A company that has a(n) _____ customizes its product and service offerings based on data generated
through interactions between the customer and the company.
a. ethnocentric perspective
b. supply-based focus
c. sales orientation
d. supply-based focus
e. customer-centric focus
ANS: E
A customer-centric focus is an internal management philosophy similar to the marketing concept.
PTS: 1
REF: 339
KEY: CB&E Model Customer
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
20
16. Customer-centric is an internal management philosophy similar to:
a. utilitarianism
b. Herzberg’s theory of motivation
c. the equity theory
d. the marketing concept
e. consumerism
ANS: D
Under this philosophy, the company customizes its product and service offering based on data
generated through interactions between the customer and the company.
PTS: 1
REF: 339
KEY: CB&E Model Strategy
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension
18. In a CRM environment, _____ is defined as an informal process of collecting customer data through
customer comments and feedback on product or service performance.
a. leveraging
b. knowledge management
c. interaction
d. data mining
e. learning
ANS: E
This is the definition of learning (in a CRM environment).
PTS: 1
REF: 340
KEY: CB&E Model Customer
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
19. _____ refers to the latitude organizations give their representatives to negotiate mutually satisfying
commitments with customers.
a. Consumer learning
b. Customerization
c. Empowerment
d. Autonomy
e. Interaction
ANS: C
Empowerment is the delegation of authority to solve customers’ problems quickly––usually by the
first person the customer notifies regarding the problem.
PTS: 1
REF: 340
KEY: CB&E Model Customer
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
21
21. _____ is the process by which learned information from customers is centralized and shared in order to
enhance the relationship between customers and the organization.
a. Knowledge management
b. Learning
c. Database marketing
d. Interactive marketing
e. Information marketing
ANS: A
This is the definition of knowledge management.
PTS: 1
REF: 340
KEY: CB&E Model Customer
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
23. A(n) _____ is the point at which a customer and a company representative exchange information and
develop learning relationships.
a. social contact
b. interaction
c. empowering moment
d. equilibrium point
e. transactional dyad
ANS: B
An interaction is a touch point at which a customer and a company representative exchange
information and develop learning relationships, but with CRM, it is the customer, not the organization,
that defines the terms of the interaction.
PTS: 1
REF: 340
KEY: CB&E Model Customer
OBJ: 21-2
TOP: AACSB Reflective Thinking
MSC: BLOOMS Knowledge
22