Chapter 7 Customer-Driven Marketing Strategy: Creating Value for Target Customers

1) ____ consists of evaluating each market segment’s attractiveness and selecting one or more
segments to enter.

1. A) Positioning
2. B) Mass customization
3. C) Market targeting
4. D) Market segmentation
5. E) Differentiation

2) ____ involves dividing a market into smaller segments of buyers with distinct needs,
characteristics, or behaviors that might require separate marketing strategies or mixes.

1. A) Mass customization
2. B) Market targeting
3. C) Market segmentation
4. D) Differentiation 5.
E) Positioning

Answer: C

3) ____ involves actually distinguishing the firm’s market offering to create superior customer
value.

1. A) Mass customization
2. B) Differentiation
3. C) Market segmentation
4. D) Diversifying
5. E) Targeting

Answer: B

4) When marketers at Fair & Leigh Inc. selected the Millennials, a demographic group that
includes many college students, as an untapped group of potential customers for their new line
of products, they were engaging in ____.

1. A) occasion segmenting
2. B) local marketing
3. C) market diversification
4. D) market targeting
5. E) product positioning

Answer: D

5) ____ consists of arranging for a market offering to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers.

1. A) Mass customization
2. B) Positioning
3. C) Segmentation
4. D) Differentiation
5. E) Targeting

Answer: B

True /False

6) Mass marketing involves identifying market segments, selecting one or more of them, and
developing products and marketing programs tailored to each.

Answer: FALSE

7) The customer-driven marketing strategy involves four steps: market segmentation, market
targeting, positioning, and differentiation.

Answer: TRUE

13) Delta Motorworks markets its cars based on the age, gender, and income of its customers.
Which of the following types of market segmentation is evident here?

1. A) geographic segmentation
2. B) benefit segmentation
3. C) occasion segmentation
4. D) demographic segmentation
5. E) psychographic segmentation

Answer: D

15) ____ segmentation has long been used in clothing, cosmetics, toiletries, and magazines. 1.
A) Behavioral 2.
B) Gender
3. C) Benefit
4. D) Occasion
5. E) Geographic Answer: B

16) Gilron Holidays runs a premium membership club that caters to customers whose annual
salary exceeds $100,000. Members of this club are offered seasonal discounts on select luxury
hotels in select cities worldwide. Gilron Holidays most likely follows a(n) ____ segmentation
approach.
1. A) gender
2. B) income
3. C) occasion
4. D) benefit
5. E) geographic

Answer: B

17) ____ segmentation divides buyers into different segments based on social class, lifestyle,
or personality characteristics.
1. A) Benefit
2. B) Occasion
3. C) Geographic
4. D) Demographic
5. E) Psychographic

Answer: E Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting
consumer and business markets. Difficulty: Easy

18) Marketers who use ____ often segment their markets by consumer lifestyles and base their
marketing strategies on lifestyle appeals.
1. A) demographic segmentation
2. B) geographic segmentation
3. C) benefit segmentation
4. D) psychographic segmentation
5. E) occasion segmentation

Answer: D

22) ____ requires finding the major advantages people look for in a product class, the kinds of
people who look for each positive aspect of a product, and the major brands that deliver it.

1. A) Gender segmentation
2. B) Psychographic segmentation
3. C) Benefit segmentation
4. D) Geographic segmentation
5. E) Age and life-cycle segmentation

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss
the major bases for segmenting consumer and business markets. Difficulty: Easy

23) Calypso Motors recently rolled out its Proteus hatchback. Proteus combines the
attractiveness of a luxury car with the excellent agility of a sports car. Calypso Motors is
confident that Proteus will appeal to both sports car enthusiasts as well as the luxury segment.
Which of the following types of market segmentation is evident here?
1. A) gender segmentation
2. B) income segmentation
3. C) benefit segmentation
4. D) geographic segmentation
5. E) age and life-cycle segmentation

Answer: C AACSB: Application of knowledge

24) Which of the following refers to a behavioral segmentation variable that involves
segmenting markets into nonusers, ex-users, potential users, first-time users, and regular users
of a product?
1. A) user status
2. B) usage rates
3. C) gender status
4. D) income status
5. E) loyalty status

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and
discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

25) In the context of behavioral segmentation, who among the following is a potential user?
1. A) Anita, who recently had a baby
2. B) Peter, who recently changed his job
3. C) Mary, who enrolled as a graduate student in a university last year
4. D) Gina, who opened a dental clinic in Orange County
5. E) Raj, who is planning a trip to Hawaii with friends Answer: A AACSB: Analytical
thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting
consumer and business markets. Difficulty: Moderate

5. E) benefit-seeking attitudes Answer: B Skill: Concept Objective: LO 7.2: List and

discuss the major bases for segmenting consumer and business markets. Difficulty:
Easy

29) Which of the following is true about behavioral segmentation on the basis of the loyalty
variable?
1. A) Consumers tend to pay more for products that are targeted at their respective age group
or generation.
2. B) By looking at customers who are shifting away from its brand, a company can learn
about its marketing weaknesses and take actions to correct them.
3. C) Highly loyal customers of a brand are less likely to engage in word-of-mouth publicity
than those who are not.
4. D) Completely loyal customers of a brand are typically loyal to two or three brands of a
given product.
5. E) Only consumers who seek premium or luxury services are subjected to behavioral
segmentation based on the loyalty variable. Answer: B AACSB: Analytical thinking Skill:
Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and
business markets. Difficulty: Moderate

30) Which of the following is true about multivariable segmentation systems?

1. A) Marketers using multiple segmentation bases tend to ignore smaller markets.
2. B) Marketers often use multiple segmentation bases to control inflation.
3. C) Multiple segmentation rarely involves the use of demographic data.
4. D) Multiple segmentation is ineffective in large markets.
5. E) Multiple segmentation bases help identify smaller, better-defined target groups. Answer:
E AACSB: Application of knowledge Skill: Concept

Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business
markets. Difficulty: Moderate

31) Which of the following is NOT a common variable used by both consumer and business
marketers while segmenting markets?
1. A) operating characteristics
2. B) loyalty status
3. C) usage rate
4. D) geographic location
5. E) benefits sought Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO
7.2: List and discuss the major bases for segmenting consumer and business markets.
Difficulty: Easy

32) ____ segmentation assumes that nations close to one another will have many common
traits and behaviors.
1. A) Geographic
2. B) Occasion
3. C) Psychographic
4. D) Benefit
5. E) Demographic Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major
bases for segmenting consumer and business markets. Difficulty: Moderate

36) Which of the following refers to a cultural factor in the context of segmenting
international markets?
1. A) receptivity of foreign firms
2. B) economic development of the country
3. C) population income levels
4. D) stability of the government
5. E) values and attitudes Answer: E AACSB: Diverse and multicultural work environments
Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer
and business markets. Difficulty: Moderate

37) Using ____ segmentation, marketers form segments of consumers who have similar needs
and buying behaviors even though they are located in different countries.
1. A) psychographic
2. B) demographic
3. C) occasion
4. D) benefit
5. E) intermarket Answer: E AACSB: Diverse and multicultural work environments Skill:
Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and
business markets. Difficulty: Easy

38) Orion Inc. markets luxury watches. It targets the wealthy global elite segment, regardless
of their geographic location. Orion most likely uses ____ segmentation.
1. A) income
2. B) age-group
3. C) occasion
4. D) benefit
5. E) cross-market Answer: E AACSB: Analytical thinking Skill: Application Objective: LO
7.2: List and discuss the major bases for segmenting consumer and business markets.
Difficulty: Moderate

39) Teen Mania Inc., a company marketing adventure sports merchandise for teenagers,
targets the world’s teenagers, who have similar needs and buying behavior even though they
are located in different countries. Which of the following market segmentation is evident
here? 1. A) income segmentation 2. B) psychographic segmentation 3. C) gender
segmentation 4. D) intermarket segmentation 5. E) occasion segmentation Answer: D
AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major
bases for segmenting consumer and business markets. Difficulty: Moderate

40) An American cola-manufacturing company that primarily targets rebellious and

adventurous people most likely uses ____ segmentation. 1. A) occasion 2. B) geographic

AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major
bases for segmenting consumer and business markets. Difficulty: Moderate

43) When the size, purchasing power, and profile of a market segment can be calculated, the
market is ____. 1. A) measurable 2. B) profitable 3. C) substantial 4. D) actionable 5. E)
competitive Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major bases for
segmenting consumer and business markets. Difficulty: Easy

44) A market segment that is large enough or profitable enough to serve is ____. 1. A)
measurable 2. B) accessible 3. C) substantial 4. D) profitable 5. E) differentiable Answer: C
Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer
and business markets. Difficulty: Easy

45) When an effective program can be designed for attracting and serving a particular
segment, the segment is best described as ____.

1. A) accessible
2. B) measurable
3. C) competitive
4. D) actionable
5. E) differentiable Answer: D Skill: Concept Objective: LO 7.2: List and discuss the
major bases for segmenting consumer and business markets. Difficulty: Easy 46)
Bailey’s Burgers promotes the Bailey’s Jumbo Burger as a fun snack for teens and
young adults. In this instance, Bailey’s Burgers is practicing ____ segmentation.
6. A) benefit
7. B) age and life-cycle
8. C) psychographic
9. D) geographic
10. E) gender Answer: B AACSB: Analytical thinking Skill: Application Objective: LO
7.2: List and discuss the major bases for segmenting consumer and business markets.
Difficulty: Moderate