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Chapter 5: Market Segmentation, Targeting, and Positioning

Every problem in the chapter beside the book’s answer, a chapter at a time as you scroll.

Chapter 5: Market Segmentation, Targeting, and Positioning

30 problems · 0 figures

Knowledge Check 5.1.1 §5.1 source ↗

In China, Starbucks offers tea-based drinks featuring regional ingredients. On what basis has Starbucks segmented its market?
  1. a.
    Demographic
  2. b.
    Behavioral
  3. c.
    Geographic
  4. d.
    Psychographic

Answer

C. Geographic
Starbucks researches the culture of the countries in which it operates so that beverages appeal to local tastes.

Knowledge Check 5.1.2 §5.1 source ↗

A travel agency offers adventure trips like hut-to-hut camping in the mountains as well as quieter vacations in all-inclusive resorts. On what basis has the travel agency segmented its market?
  1. a.
    Psychographic
  2. b.
    Demographic
  3. c.
    Behavioral
  4. d.
    Geographic

Answer

A. Psychographic
Psychographic segmentation divides consumers into different groups based on internal characteristics like personality, values, and beliefs.

Knowledge Check 5.1.3 §5.1 source ↗

Road Scholar is an American not-for-profit organization that provides educational travel programs geared primarily to older adults. On what basis has Road Scholar segmented the market?
  1. a.
    Geographic
  2. b.
    Psychographic
  3. c.
    Demographic
  4. d.
    Behavioral

Answer

C. Demographic
Demographic segmentation groups consumers by focusing on traits such as age, gender, income, etc.

Knowledge Check 5.1.4 §5.1 source ↗

Garnier offers a wide range of shampoos, including hydrating shampoo, smoothing shampoo, color-safe shampoo, volumizing shampoo, and more. On what basis has Garnier segmented the market?
  1. a.
    Geographic
  2. b.
    Psychographic
  3. c.
    Behavioral
  4. d.
    Demographic

Answer

C. Behavioral
Garnier has segmented the market based upon the benefits sought by the consumer.

Knowledge Check 5.1.5 §5.1 source ↗

Peloton’s main products are Internet-connected stationary bikes and treadmills that enable subscribers to remotely participate in live classes via streaming media. This enables subscribers to have a “spin class” experience without going to the gym. On what basis has Peloton segmented the market?
  1. a.
    Demographic
  2. b.
    Behavioral
  3. c.
    Geographic
  4. d.
    Psychographic

Answer

D. Psychographic
Just like our in-text example of Mirror, Peloton speaks to the personality of people who want to work out but can’t find the time to go to the gym.

Knowledge Check 5.2.1 §5.2 source ↗

Hoffman Enterprises, a manufacturer of electronic controls for appliances, has segmented its customers based upon the size of the company in terms of revenue and its geographic location. What method of segmenting B2B markets is Hoffman Enterprises using?
  1. a.
    Technographics
  2. b.
    Behavioral
  3. c.
    Firmographics
  4. d.
    Needs Based

Answer

C. Firmographics
Firmographics segments customers based on sets of characteristics such as industry, location, size, legal structure, and performance.

Knowledge Check 5.2.2 §5.2 source ↗

Matias is a marketing manager for a company whose product integrates with customer relationship management (CRM) systems such as Salesforce. In order to segment the market, he researches which companies currently use Salesforce as well as any other complementary or competing tools. On what basis is Matias segmenting the market?
  1. a.
    Technographics
  2. b.
    Value-based
  3. c.
    Behavioral
  4. d.
    Firmographics

Answer

A. Technographics
Technographic segmentation is based on the various hardware and software used by B2B customers.

Knowledge Check 5.2.3 §5.2 source ↗

Which form of B2B market segmentation differentiates customers according to their “transactional worth”?
  1. a.
    Behavioral
  2. b.
    Firmographics
  3. c.
    Value based
  4. d.
    Needs based

Answer

C. Value based
Value-based segmentation (sometimes called tiering or profitability segmentation) groups customers according to the potential value they may bring to a business.

Knowledge Check 5.2.4 §5.2 source ↗

Which form of B2B market segmentation groups customers based on sets of characteristics such as industry, location, size, legal structure, and performance?
  1. a.
    Technographics
  2. b.
    Psychographics
  3. c.
    Firmographics
  4. d.
    Demographics

Answer

C. Firmographics
Firmographics segments customers based on sets of characteristics such as industry, location, size, legal structure, and performance.

Knowledge Check 5.2.5 §5.2 source ↗

Which B2B market segmentation strategy clusters groups of customers on the basis of what features they normally look for in a product?
  1. a.
    Firmographics
  2. b.
    Behavioral
  3. c.
    Technographics
  4. d.
    Needs based

Answer

D. Needs based
Needs-based segmentation is based on the premise that a marketer should focus their limited resources on those customers that need the product and have the ability to purchase it.

Knowledge Check 5.3.1 §5.3 source ↗

The Hofstede cultural dimension that assesses the degree to which a society avoids risk or ambiguity is known as ________.
  1. a.
    masculinity/femininity
  2. b.
    uncertainty avoidance
  3. c.
    power distance index
  4. d.
    individualism versus collectivism

Answer

B. uncertainty avoidance
Societies with a high degree of uncertainty avoidance compensate for this uncertainty by establishing rules, policies, and procedures, whereas societies with low uncertainty avoidance more readily accept change.

Knowledge Check 5.3.2 §5.3 source ↗

Jamal’s company is looking to expand into a market in West Africa, but Jamal wants to ensure that there are roads, bridges, nearby airports, and shipping terminals from which to distribute the product. Jamal is examining the country’s ________.
  1. a.
    infrastructure
  2. b.
    governmental stability
  3. c.
    inflation and unemployment rates
  4. d.
    culture

Answer

A. infrastructure
Infrastructure is the basic physical systems of a nation, such as roads, sewage treatment, communication, water treatment, etc.

Knowledge Check 5.3.3 §5.3 source ↗

Alexis is making a sales presentation in Japan, and she realizes suddenly realizes that she is the only woman in the meeting. This suggests that Japan has a high ________.
  1. a.
    degree of uncertainty avoidance
  2. b.
    individualism ranking
  3. c.
    power distance index
  4. d.
    masculinity ranking

Answer

D. masculinity ranking
In countries with a high masculinity ranking, men are intended to lead; women are supposed to follow.

Knowledge Check 5.3.4 §5.3 source ↗

Jose’s firm is looking to market its products in Venezuela, but the marketing department is concerned about the current inflation rate in the country. This would be considered a(n) ________ factor.
  1. a.
    geographic
  2. b.
    political
  3. c.
    economic
  4. d.
    cultural

Answer

C. economic
Economic factors consider things like inflation, per capita income, unemployment, etc.

Knowledge Check 5.3.5 §5.3 source ↗

Which Hofstede cultural dimension assesses the degree to which gender-specific roles are valued in a society?
  1. a.
    Power distance index
  2. b.
    Masculinity/femininity
  3. c.
    Uncertainty avoidance
  4. d.
    Individualism versus collectivism

Answer

B. Masculinity/femininity
Masculinity/femininity assesses “masculine” values (such as achievement, ambition, and acquisition) versus “feminine” values like quality of life and service to others.

Knowledge Check 5.4.1 §5.4 source ↗

Mateus is a marketer for a consumer products company. His company is considering marketing a new breakfast drink, but Mateus wants to make certain that there is a sufficient number of consumers in his target audience to make the new product development process worthwhile. Which essential factor of market segmentation is he analyzing?
  1. a.
    Accessible
  2. b.
    Differentiable
  3. c.
    Actionable
  4. d.
    Measurable

Answer

D. Measurable
A market segment should be measurable—that is, you should be able to accurately determine the size of the market segment in terms of sales value or number of customers so you can decide whether, how, and to what extent you should focus your efforts on that segment.

Knowledge Check 5.4.2 §5.4 source ↗

Wall Enterprises is considering developing a new product for a market segment that has been identified by marketing research. However, based on the research, it appears that the market segment may be smaller than originally anticipated. Which essential factor of market segmentation does this reflect?
  1. a.
    Accessible
  2. b.
    Differentiable
  3. c.
    Substantial
  4. d.
    Actionable

Answer

C. Substantial
A market segment should be substantial because it’s inefficient to waste resources to market the product or service to a segment too small to justify a company’s time.

Knowledge Check 5.4.3 §5.4 source ↗

Alma is analyzing the market segment she has identified for a new service to determine whether her firm can reach the consumers in that market within the constraints of her budget, given the resources of the firm. Which essential factor of market segmentation does this reflect?
  1. a.
    Accessible
  2. b.
    Actionable
  3. c.
    Substantial
  4. d.
    Measurable

Answer

A. Accessible
Accessibility refers to the ability to reach customers in the chosen segment at an affordable cost, given the strengths and abilities of your marketing department.

Knowledge Check 5.4.4 §5.4 source ↗

Idris has been researching a potential market segment for his company’s new product. He is concerned that, although the product holds considerable promise, the advertising campaign would be beyond the company’s budget. Which essential factor of market segmentation appears to be lacking in Idris’s analysis?
  1. a.
    Differentiable
  2. b.
    Substantial
  3. c.
    Measurable
  4. d.
    Accessible

Answer

D. Accessible
Accessibility refers to the ability to reach customers in the chosen segment at an affordable cost, given the strengths and abilities of your marketing department.

Knowledge Check 5.4.5 §5.4 source ↗

Which essential factor in selecting a target market refers to the ability to accurately determine the size of the market in terms of either sales volume or number of customers?
  1. a.
    Actionable
  2. b.
    Differentiable
  3. c.
    Measurable
  4. d.
    Substantial

Answer

C. Measurable
A measurable market segment means that you can accurately determine the size of the segment in terms of either sales volume or number of customers.

Knowledge Check 5.5.1 §5.5 source ↗

M&M’s addresses people of all ages and appeals to everyone looking for sweets (that melt in your mouth, not in your hand). What target marketing strategy does M&M’s use?
  1. a.
    Differentiated marketing
  2. b.
    Concentrated marketing
  3. c.
    Undifferentiated marketing
  4. d.
    Micromarketing

Answer

C. Undifferentiated marketing
Undifferentiated marketing treats all buyers or potential buyers as a homogenous group and creates one message for an entire audience.

Knowledge Check 5.5.2 §5.5 source ↗

A ________ is a semi-fictional representation of your ideal customer that helps you understand and relate to the audience to which you want to market your product and/or services.
  1. a.
    buyer persona
  2. b.
    target market
  3. c.
    niche market
  4. d.
    brand affinity

Answer

A. buyer persona
A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.

Knowledge Check 5.5.3 §5.5 source ↗

Lefty’s is a retail shop that makes specific products like left-handed scissors and left-handed notebooks for the population of left-handed people. What target marketing strategy does Lefty’s use?
  1. a.
    Undifferentiated marketing
  2. b.
    Differentiated marketing
  3. c.
    Concentrated marketing
  4. d.
    Micromarketing

Answer

C. Concentrated marketing
Concentrated marketing (or niche marketing) is a subset of a market on which a particular product or service is focused. In Lefty’s case, it is focusing on left-handed people.

Knowledge Check 5.5.4 §5.5 source ↗

A running shoe company specializes in designing sustainable sneakers from recycled and renewable materials for athletes who care about the environment, as well as performance models of running shoes with less cushioning for runners who are concerned with speed. What target marketing strategy does the running company use?
  1. a.
    Concentrated marketing
  2. b.
    Undifferentiated marketing
  3. c.
    Differentiated marketing
  4. d.
    Micromarketing

Answer

C. Differentiated marketing
A differentiated marketing strategy focuses on the differences between segments and designs a specific marketing mix for each segment.

Knowledge Check 5.5.5 §5.5 source ↗

55places.com is a website for active adult “retirement” communities in the United States. It features unbiased information, current home sale listings, floor plans, photos, and third-party reviews. All the communities listed on the website are for residents who are age 55+. What target marketing strategy does the company use?
  1. a.
    Undifferentiated marketing
  2. b.
    Differentiated marketing
  3. c.
    Micromarketing
  4. d.
    Concentrated marketing

Answer

D. Concentrated marketing
A niche market (or concentrated marketing) channels all marketing actions toward one well-defined segment of the market. In this case, the subset is people over the age of 55 who are in the market for an active adult lifestyle.

Knowledge Check 5.6.1 §5.6 source ↗

Which of the following BEST describes a positioning statement?
  1. a.
    It is a brief description of your offering, how it meets the needs of a consumer, and why it is superior to your competitor’s offerings.
  2. b.
    It sets forth the group(s) of people with shared characteristics that you’ve identified as potential customers for your products.
  3. c.
    It defines where your offering fits in the marketplace and why it is better than competitors’ offerings.
  4. d.
    It is a visual tool designed to demonstrate the perception of your offerings by the average target market consumer vis-à-vis your competitors’ offerings.

Answer

C. It defines where your offering fits in the marketplace and why it is better than competitors’ offerings.
A positioning statement defines where your offering fits in the marketplace and why it is better than competitors’ offerings.

Knowledge Check 5.6.2 §5.6 source ↗

The STP process is an acronym for ________.
  1. a.
    segmentation, targeting, and positioning
  2. b.
    screening, targeting, and promotion
  3. c.
    sampling, test marketing, and publicity
  4. d.
    segmentation, training, and promotion

Answer

A. segmentation, targeting, and positioning
The STP process is an acronym for segmentation, targeting, and positioning.

Knowledge Check 5.6.3 §5.6 source ↗

Build-A-Bear put a twist on buying cuddly toys by providing consumers with the ability to modify and personalize their toys. What type of positioning strategy did Build-A-Bear use?
  1. a.
    Undifferentiated positioning
  2. b.
    Differentiated positioning
  3. c.
    Head-to-head positioning
  4. d.
    Niche positioning

Answer

B. Differentiated positioning
Differentiated positioning is based on the differentiating characteristics or qualities that make your product/service/brand better than those of your competitors.

Knowledge Check 5.6.4 §5.6 source ↗

When Artesha is on the road for her job and wants some fast food for lunch, she is looking for speed of service, value, and cleanliness of the restaurant. The factors would be referred to as ________.
  1. a.
    her buyer persona
  2. b.
    a perceptual map
  3. c.
    her determinant attributes
  4. d.
    a positioning statement

Answer

C. her determinant attributes
Determinant attributes are those attributes or factors that a customer uses in making their purchase decision.

Knowledge Check 5.6.5 §5.6 source ↗

A visual technique designed to show how the average target market consumer perceives the positioning of competing products in the market place is known as ________.
  1. a.
    a positioning statement
  2. b.
    head-to-head positioning
  3. c.
    differentiation positioning
  4. d.
    a perceptual map

Answer

D. a perceptual map
A perceptual map is a visual diagram that shows how the average target market consumer perceives your product versus those of your competitors.

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Problems and answers are adapted from Principles of Marketing by Maria Gomez Albrecht, Mark Green and Linda Hoffman, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/principles-marketing/pages/1-unit-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.