Chapter 

07.        Customer-Driven Marketing Strategy: Segmentation, Targeting & Positioning
MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question.

1) When a company identifies the parts of the market it can serve best and most profitably, it is practicing
________.
A) concentrated marketing
B) mass marketing
C) market targeting
D) segmenting
E) differentiation
Answer: C
Diff: 2 Page Ref: 177
AACSB:
Skill: Concept
Objective: 7-1

2) What are the four steps, in order, to designing a customer-driven marketing strategy?
A) market segmentation, differentiation, positioning, and targeting
B) positioning, market segmentation, mass marketing, and targeting
C) market segmentation, targeting, differentiation, and positioning
D) market alignment, market segmentation, differentiation, and market positioning
E) market recognition, market preference, market targeting, and market insistence
Answer: C
Diff: 2 Page Ref: 177
AACSB:
Skill: Concept
Objective: 7-1

3) Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can
be reached more ________ with products and services that match their unique needs.
A) efficiently
B) effectively
C) intensely
D) indirectly
E) both A and B
Answer: E
Diff: 2 Page Ref: 178
AACSB:
Skill: Concept
Objective: 7-2

4) Even though several options are available at any one time, there ________ to segment a market.
A) is one single best way
B) is no single way
C) is a most effective way
D) are limited ways
E) are four ways
Answer: B
Diff: 2 Page Ref: 178
AACSB:
Skill: Concept
Objective: 7-2

1
5) Your firm has decided to localize its products and services to meet local market demands. A good approach to
use would be ________ segmentation.
A) geographic B) benefit C) end-use D) customer E) image
Answer: A
Diff: 1 Page Ref: 178
AACSB:
Skill: Concept
Objective: 7-2

6) Pendergraff Pet Supplies divides the pet market according to the ownersʹ race, occupation, income, and family
life cycle. What type of segmentation does Pendergraff use?
A) geographic
B) behavioral
C) lifestyle
D) demographic
E) psychographic
Answer: D
Diff: 1 Page Ref: 179
AACSB:
Skill: Concept
Objective: 7-2

7) Through talking to numerous competitors at a regional trade show, you learn that most of them use the most
popular base for segmenting markets. What is it?
A) demographic
B) gender
C) psychographic
D) behavioral
E) geographic
Answer: A
Diff: 2 Page Ref: 179
AACSB:
Skill: Concept
Objective: 7-2

8) Demographic variables are so frequently used in market segmentation because they ________.
A) create smaller segments than other methods do
B) create more easily reached segments than other methods do
C) do not involve stereotypes
D) are easy to measure in comparison to many other methods
E) involve fewer attributes to consider than other methods do
Answer: D
Diff: 2 Page Ref: 180
AACSB:
Skill: Concept
Objective: 7-2

2
 9) Marketers must be most careful to guard against which of the following when using age and life cycle
segmentation?
A) underestimating
B) stereotyping
C) traditional marketing
D) cultural bias
E) gender bias
Answer: B
Diff: 2 Page Ref: 181
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-2

10) When Positive Image, Inc., caters to clothing, cosmetics, and toiletries markets, it is most likely using which
type of segmentation?
A) age and life cycle
B) gender
C) behavior
D) psychographic
E) geographic
Answer: B
Diff: 2 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

11) Marketers of automobiles, financial services, and travel are most likely to use which of the following types of
segmentation?
A) gender
B) income
C) occasion
D) usage rate
E) benefits sought
Answer: B
Diff: 2 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

12) The division of buyers into groups based on their knowledge, attitudes, uses, or responses to a product is
________ segmentation.
A) behavioral
B) psychographic
C) age and life cycle
D) demographic
E) geographic
Answer: A
Diff: 1 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

3
13) Many marketers believe that ________ variables are the best starting point for building marketing segments.
A) behavioral B) family size C) gender D) age E) beneficial
Answer: A
Diff: 2 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

14) Which type of segmentation centers on the use of the word  when, such as when consumers get the idea to buy,

when they actually make their purchase, or when they use the purchased item?
A) behavioral
B) psychographic
C) occasion
D) impulse
E) emergency
Answer: C
Diff: 2 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

15) Markets can be segmented into groups of nonusers, ex-users, potential users, first-time users, and regular
users of a product. This method of segmentation is called ________.
A) user status
B) usage rates
C) benefit
D) behavior
E) loyalty status
Answer: A
Diff: 1 Page Ref: 182
AACSB:
Skill: Concept
Objective: 7-2

16) Consumers can show their allegiance to brands, stores, or companies. Marketers can use this information to
segment consumers by ________.
A) user status
B) loyalty status
C) store type
D) brand preference
E) usage rate
Answer: B
Diff: 1 Page Ref: 182
AACSB:
Skill: Concept
Objective: 7-2

4
17) By studying its less loyal buyers, a company can detect which brands are most ________ its own.
A) competitive with
B) used with
C) overlooked with
D) similar to
E) complementary to
Answer: A
Diff: 2 Page Ref: 184
AACSB:
Skill: Concept
Objective: 7-2

18) Many firms make an effort to identify smaller, better-defined target groups by using ________.
A) user rates
B) loyalty segmentation
C) multiple segmentation bases
D) positioning
E) mass marketing
Answer: C
Diff: 3 Page Ref: 184
AACSB:
Skill: Concept
Objective: 7-2

19) Consumer and business marketers use many of the same variables to segment markets. Business marketers use
all of the following EXCEPT ________.
A) operating characteristics
B) purchasing approaches
C) situational factors
D) personal characteristics
E) brand personalities
Answer: E
Diff: 3 Page Ref: 184
AACSB:
Skill: Concept
Objective: 7-2

20) As in consumer segmentation, many marketers believe that ________ and ________ segmentation provide the
best basis for segmenting business markets.
A) geographic; demographic
B) user status; user loyalty
C) benefits; buying behavior
D) age and life-cycle; psychographic
E) income; usage rate
Answer: C
Diff: 2 Page Ref: 184
AACSB:
Skill: Concept
Objective: 7-2

5
21) Lexus targets wealthy consumers with similar needs and buying behaviors, even though the consumers are
located in different countries. This is an example of ________ segmentation.
A) intermarket
B) loyalty
C) life-cycle
D) targeting
E) psychographic
Answer: A
Diff: 1 Page Ref: 193-194
AACSB:
Skill: Concept
Objective: 7-2

22) When the size, purchasing power, and profiles of a market segment can be determined, it possesses the
requirement of being ________.
A) measurable B) accessible C) substantial D) actionable E) observable
Answer: A
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-2

23) When a business market segment is large or profitable enough to serve, it is termed ________.
A) measurable
B) accessible
C) substantial
D) actionable
E) differentiable
Answer: C
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-2

24) When an effective program can be designed for attracting and serving a chosen segment, the segment is best
described as ________.
A) accessible
B) measurable
C) reachable
D) actionable
E) differentiable
Answer: D
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-2

6
25) You have discovered that the segments you are targeting are conceptually distinguishable and respond
differently to different marketing mix elements and programs. These segments are ________.
A) accessible
B) measurable
C) reachable
D) differentiable
E) observable
Answer: D
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-2

26) To evaluate the different market segments your company serves, you would look at all of these factors EXCEPT
which one?
A) segment size
B) segment growth
C) segment structural attractiveness
D) company values
E) company resources
Answer: D
Diff: 3 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-3

27) Rasheed has compiled a list of things that make segments more attractive. Which one of the following items
should NOT be on the list?
A) relative power of buyers
B) lack of powerful suppliers to control prices
C) few substitute products
D) competition with superior resources
E) financial resources
Answer: D
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-3

28) In general, a company should enter segments only in which it can ________ and ________.
A) offer lower prices; ship faster
B) offer superior value; gain advantages over competitors
C) offer superior value; ship faster
D) gain advantages over competitors; differentiate its products
E) identify behaviors; understanding spending power
Answer: B
Diff: 3 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

7
29) Mass marketers, such as Carrefour, often ignore market segment differences and target the whole market with
one offer. What is their approach to segmenting?
A) undifferentiated marketing
B) differentiated marketing
C) target marketing
D) concentrated marketing
E) micromarketing
Answer: A
Diff: 1 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

30) When East Port Shipping uses segmented marketing, it targets several segments and designs separate offers for
each one. This approach is called ________ marketing.
A) undifferentiated
B) differentiated
C) target
D) individual
E) niche
Answer: B
Diff: 2 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

31) Developing a strong position within several segments creates more total sales than ________ marketing across
all segments.
A) undifferentiated
B) differentiated
C) niche
D) target
E) individual
Answer: A
Diff: 3 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

32) ByWay Ventures chose a differentiated marketing strategy. The company had to weigh ________ against
________ when selecting this strategy.
A) extra research; costs
B) sales analysis; sales
C) increased sales; increased costs
D) geographic segmentation; demographic segmentation
E) attitudes; perceptions
Answer: C
Diff: 2 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

8
33) Procter & Gamble sells six brands of laundry detergent in the United States, each designed for one of six
laundry segments  which Procter & Gamble has identified. Together, these six brands take 62% of market share.
Which of the following is a disadvantage of Procter & Gambleʹs differentiated marketing strategy?
A) lost sales that would have been made with an undifferentiated marketing strategy across all segments
B) lost customer loyalty due to lack of brand loyalty
C) increased costs for separate marketing plans for each brand
D) other suppliers controlling pricing
E) lack of resources to succeed in an attractive segment
Answer: C
Diff: 2 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

34) Successful niche marketing relies on a firmʹs ________ and its ________.
A) marketing strategy; services
B) individual relationships with customers; positioning
C) superior products; value network partners
D) greater knowledge of customersʹ needs; special reputation
E) competitive advantage in comparison to mass-market companies; affordable pricing
Answer: D
Diff: 2 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

35) Using concentrated marketing, the marketer goes after a ________ share of ________.
A) small; a small market
B) small; a large market
C) large; one or a few niches
D) large; the mass market
E) moderate; local
Answer: C
Diff: 2 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

36) Today, the low cost of setting up shop ________ makes it even more profitable to serve very small niches.
A) in malls in major cities
B) in mail-order catalogs
C) on the Internet
D) near major competitors
E) far from competitors
Answer: C
Diff: 1 Page Ref: 188
AACSB: Use of IT
Skill: Concept
Objective: 7-3

9
37) Which of the segmenting strategies carries higher-than-average risks in consumer markets?
A) concentrated
B) mass
C) differentiated
D) undifferentiated
E) multiple-segment
Answer: A
Diff: 3 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

38) As You Like It, Inc., customizes its offers to each individual consumer. This practice of tailoring products and
marketing programs to suit the tastes of specific individuals and locations is referred to as ________ marketing.
A) niche
B) mass
C) differentiated
D) undifferentiated
E) micro
Answer: E
Diff: 2 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

39) ________ marketing tailors brands and promotions to the needs and wants of specific cities, neighborhoods,
and even stores.
A) Undifferentiated
B) Differentiated
C) Niche
D) Local
E) Individual
Answer: D
Diff: 1 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

40) ________ marketing is the narrowest marketing strategy.
A) Segmented
B) Local
C) Differentiated
D) Mass
E) Undifferentiated
Answer: B
Diff: 3 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-2

10
41) Which of the following is NOT a drawback of local marketing?
A) It can drive up manufacturing costs.
B) It can drive up marketing costs by reducing economies of scale.
C) It can create logistics problems.
D) A brandʹs overall image might be diluted through too much variation.
E) Supporting technologies are expensive.
Answer: E
Diff: 3 Page Ref: 190
AACSB:
Skill: Concept
Objective: 7-3

42) Under what circumstances can local marketing be quite effective?
A) when pronounced regional differences in demographics are present
B) when pronounced local differences in lifestyles are present
C) when pronounced regional and local differences in demographics and lifestyles are present
D) when regional and local differences in demographics and lifestyles are similar
E) all of the above
Answer: C
Diff: 3 Page Ref: 190
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 7-3

43) When H&M customizes its merchandise store by store to meet shopper needs, it is practicing ________.
A) niche marketing
B) psychographic marketing
C) local marketing
D) social segmentation
E) individual marketing
Answer: C
Diff: 2 Page Ref: 190
AACSB:
Skill: Concept
Objective: 7-3

44) When a company interacts one-on-one with large numbers of customers to create customer-unique value by
designing products and services tailor-made to individual needs, it is following ________.
A) one-to-one marketing
B) mass marketing
C) mass customization
D) differentiated marketing
E) localization
Answer: C
Diff: 2 Page Ref: 190
AACSB:
Skill: Concept
Objective: 7-3

11
45) The move toward individual marketing mirrors the trend in consumer ________.
A) self-imaging
B) customizing
C) self-marketing
D) tastes
E) self-conceptualization
Answer: C
Diff: 3 Page Ref: 191
AACSB:
Skill: Concept
Objective: 7-3

46) When competitors use differentiated or concentrated marketing, ________ marketing can be disastrous.
A) differentiated
B) undifferentiated
C) concentrated
D) customized
E) localized
Answer: B
Diff: 2 Page Ref: 191
AACSB:
Skill: Concept
Objective: 7-3

47) Target marketing sometimes generates controversy and concern. Issues usually involve the targeting of
________ consumers with ________ products.
A) elderly; expensive
B) young; appealing
C) vulnerable; marketing
D) vulnerable or disadvantaged; controversial or potentially harmful
E) unexpected; deceptive
Answer: D
Diff: 2 Page Ref: 191
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-3

48) It is considered socially irresponsible when the marketing of adult products spills over into the ________
segment.
A) elderly B) child C) animal D) minority E) senior
Answer: B
Diff: 1 Page Ref: 192
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-3

12
49) Companies need to consider many factors when choosing a market -targeting strategy. Which strategy is best
depends on company ________.
A) customers
B) products
C) resources
D) marketing budget
E) opinion
Answer: C
Diff: 3 Page Ref: 191
AACSB:
Skill: Concept
Objective: 7-3

50) Most attempts to target children and minority groups provide ________ to target customers.
A) benefits
B) education
C) disadvantages
D) harm
E) expenses
Answer: A
Diff: 2 Page Ref: 192
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-3

51) In target marketing, the issue is not really who is targeted, but rather ________ and for ________.
A) why; what
B) how; what
C) why; how long
D) where; how long
E) how; where
Answer: B
Diff: 2 Page Ref: 192
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-3

52) Which group determines a productʹs position relative to competing products?
A) manufacturers
B) wholesalers
C) retailers
D) consumers
E) suppliers
Answer: D
Diff: 1 Page Ref: 192
AACSB:
Skill: Concept
Objective: 7-4

13
53) A productʹs position is based on important attributes as perceived by ________.
A) suppliers
B) competitors
C) market conditions
D) consumers
E) managers
Answer: D
Diff: 2 Page Ref: 192
AACSB:
Skill: Concept
Objective: 7-4

54) Consumers position products and services ________.
A) after marketers put marketing mixes in place
B) generally after consulting friends who use them
C) with or without the help of marketers
D) only reluctantly
E) based on nearby competitorsʹ positions
Answer: C
Diff: 1 Page Ref: 192
AACSB:
Skill: Concept
Objective: 7-4

55) Which of the listed choices is NOT a positioning task?
A) identifying a set of possible competitive advantages upon which to build a position
B) surveying frequent users of the product
C) selecting an overall positioning strategy
D) effectively communicating and delivering the chosen position to the market
E) selecting the right competitive advantages
Answer: B
Diff: 2 Page Ref: 193-197
AACSB: Communication
Skill: Concept
Objective: 7-4

56) A company or store gains a(n) ________ by differentiating its products and delivering more value.
A) competitive advantage
B) positioning advantage
C) cost advantage
D) efficiency advantage
E) synergy
Answer: A
Diff: 1 Page Ref: 193
AACSB:
Skill: Concept
Objective: 7-4

14
57) A company or market offer can be differentiated along the lines of product, image, services, channels, or
________.
A) prices
B) nonprice factors
C) people
D) customer service
E) location
Answer: C
Diff: 2 Page Ref: 194
AACSB:
Skill: Concept
Objective: 7-4

58) Which type of differentiation is used to gain competitive advantage through the way a firm designs its
distribution coverage, expertise, and performance?
A) services B) channel C) people D) product E) price
Answer: B
Diff: 2 Page Ref: 194
AACSB:
Skill: Concept
Objective: 7-4

59) When firms use symbols, colors, or characters to convey their personalities, they are using ________
differentiation.
A) image B) people C) company D) reputation E) subliminal
Answer: A
Diff: 1 Page Ref: 194
AACSB: Communication
Skill: Concept
Objective: 7-4

60) What does USP stand for?
A) unique selling product
B) unique services practice
C) unique sales pitch
D) unique selling proposition
E) unique strategic practice
Answer: D
Diff: 3 Page Ref: 194
AACSB: Communication
Skill: Concept
Objective: 7-4

61) A brand difference is worth establishing and promoting to the extent that it satisfies all of the criteria below
EXCEPT which one?
A) important B) distinctive C) divisible D) affordable E) noticeable
Answer: C
Diff: 3 Page Ref: 195
AACSB:
Skill: Concept
Objective: 7-4

15
62) You have just created the ʺperfectʺ ad. It communicates the full mix of benefits upon which the brand is
differentiated and positioned. This full positioning of the brand is called ________.
A) its value proposition
B) target marketing
C) capturing the consumersʹ attention
D) value profiling
E) differentiated marketing
Answer: A
Diff: 2 Page Ref: 195
AACSB: Communication
Skill: Concept
Objective: 7-4

63) The answer to the customerʹs question ʺWhy should I buy your brand?ʺ is found in the ________.
A) quality image
B) customer services
C) value proposition
D) differentiation
E) pricing and promotion structure
Answer: C
Diff: 2 Page Ref: 195
AACSB:
Skill: Concept
Objective: 7-4

64) What competitive positioning can attack a more-for-more strategy by introducing a brand offering with
comparable quality at a lower price?
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) all-or-nothing
Answer: A
Diff: 3 Page Ref: 196
AACSB:
Skill: Concept
Objective: 7-4

65) Which positioning strategy offers consumers a ʺgood dealʺ by offering equivalent -quality products or services

at a lower price?
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) all-or-nothing
Answer: C
Diff: 2 Page Ref: 196
AACSB:
Skill: Concept
Objective: 7-4

16
66) ʺLess-for-much-lessʺ positioning involves meeting consumersʹ ________.
A) quality performance requirements at a lower price
B) lower quality requirements in exchange for a lower price
C) lower quality requirements at the lowest possible price
D) high quality requirements at a discounted rate
E) high quality requirements at the lowest possible price
Answer: B
Diff: 1 Page Ref: 196
AACSB:
Skill: Concept
Objective: 7-4

67) Few people can afford the best in everything they buy. At times everyone needs a product with less quality or
performance with a correspondingly lower price. In this case a consumer would purchase a product positioned
with a ________ strategy.
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) all-or-nothing
Answer: D
Diff: 2 Page Ref: 196
AACSB:
Skill: Concept
Objective: 7-4

68) Which difficult-to-sustain positioning strategy attempts to deliver the ʺbest-of-bothʺ?
A) more-for-the-same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) more-for-more
Answer: B
Diff: 2 Page Ref: 197
AACSB:
Skill: Concept
Objective: 7-4

69) Which type of statement first states the productʹs membership in a category and then shows its
point-of-difference from other members of the category?
A) mission statement
B) vision statement
C) differentiation statement
D) positioning statement
E) statement of intent
Answer: D
Diff: 2 Page Ref: 197
AACSB:
Skill: Concept
Objective: 7-4

17
70) What is the following an example of? ʺTo busy, mobile professionals who need to always be in the loop,
BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to
data, people, and resources while on the go.ʺ
A) positioning statement
B) service differentiation
C) concentrated segmentation
D) competitive advantage
E) responsible target marketing
Answer: A
Diff: 2 Page Ref: 197
AACSB:
Skill: Concept
Objective: 7-4

71) When marketers at Procter & Gamble selected the Millennials, a demographic that includes college students, as
an untapped group of potential customers for their Febreze line of products, they were executing which step in
the process of designing a customer-driven marketing strategy?
A) market segmenting
B) mass marketing
C) differentiation
D) targeting
E) positioning
Answer: D
Diff: 4 Page Ref: 186
AACSB: Reflective Thinking
Skill: Application
Objective: 7-1

72) When Pacific Fisheries groups its customers as countries by regions such as Asia, Australia, or New Zealand, it
is using which segmenting base?
A) economic factors
B) political and legal factors
C) geographic location
D) benefits sought
E) demographics
Answer: C
Diff: 1 Page Ref: 178
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

18
73) When Burger King targets children, teens,  adults, and seniors with different ads and media, it is practicing
________ segmentation.
A) demographic
B) age and life cycle
C) psychographic
D) behavioral
E) generational
Answer: B
Diff: 1 Page Ref: 180
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

74) Which of the following statements illustrates why stereotypes should be avoided when using age and life cycle
segmentation?
A) Old women love to shop; young women love it more!
B) Most 10-year-old boys are mischievous.
C) Some 70 year olds use wheelchairs; others play tennis.
D) The majority of 20 year olds have to work; the same holds true for 30 and 40 year olds.
E) both C and D
Answer: C
Diff: 2 Page Ref: 181
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

75) Segmenting voters as either blue collars or white collars is an example of ________.
A) psychographic segmentation
B) intermarket segmentation
C) occasion segmentation
D) demographic segmentation
E) A and B
Answer: A
Diff: 3 Page Ref: 181
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

76) Birrel wanted to increase sales,  hence they targeted males in the campaign ʺman up and drink birrelʺ. This
approach is ________ segmentation.
A) user status
B) usage rate
C) benefit
D) behavioral
E) demographic
Answer: E
Diff: 2 Page Ref: 181
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

19
77) Shampoo marketers characterize buyers as light, medium, or heavy product users. This is ________
segmentation.
A) benefit
B) user status
C) usage rate
D) psychographic
E) occasions
Answer: C
Diff: 1 Page Ref: 182
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

78) MTV targets the worldʹs teenagers, who have similar needs and buying behavior even though they are located
in different countries. This is called ________ segmentation.
A) political and legal
B) cross-cultural
C) cultural
D) intermarket
E) individual
Answer: D
Diff: 2 Page Ref: 186
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

79) The markets you have chosen to serve in four GCC countries can be effectively reached and served. You would
tell the marketing manager that these segments are ________.
A) measurable B) accessible C) substantial D) actionable E) profitable
Answer: B
Diff: 2 Page Ref: 186
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

80) Procter & Gamble mass produces an all-purpose floor cleaner, mass distributes it and mass promotes it. This
firm uses ________ marketing.
A) segmented
B) undifferentiated
C) traditional
D) differentiated
E) none of the above
Answer: B
Diff: 1 Page Ref: 187
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

20
81) A marketer focuses on several commonalities among all consumers. This marketer appears to be engaging in
________.
A) differentiated marketing
B) undifferentiated marketing
C) segmented marketing
D) concentrated marketing
E) mass customization
Answer: B
Diff: 2 Page Ref: 187
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

82) Which of the following is the most logical reason for Procter & Gamble offering products that compete with one
another on the same supermarket shelves?
A) Different people want a greater selection.
B) Procter & Gamble has little competition.
C) Different people want different mixes of benefits from the products they buy.
D) Retailers request it.
E) It creates healthy competition.
Answer: C
Diff: 3 Page Ref: 187
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

83) Sanguine Services practices a marketing strategy where its limited resources are used to go after a large share
of two small niches. Sanguine practices a(n) ________ strategy.
A) undifferentiated
B) differentiated
C) mass
D) concentrated
E) geographically dispersed
Answer: D
Diff: 2 Page Ref: 188
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

21
84) Aly and Hassan own two retail stores, one in Dubai and one in Sharjah. Though the cities are only a few
kilometres apart, the consumers at both stores are very different demographically. Aly and Hassan alter the
product offerings between both locations in an effort to cater to both demographic groups. This is an example
of ________.
A) local marketing
B) psychographic segmentation
C) micromarketing
D) demographic segmentation
E) A and C
Answer: E
Diff: 2 Page Ref: 188
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

85) Bee Promotions tailors its advertising and promotional services to the needs and preferences of individual
customers. Which of the following terms does NOT apply to this type of marketing?
A) one-to-one
B) customized
C) markets-of-one
D) concentrated
E) mass customization
Answer: D
Diff: 3 Page Ref: 188
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

86) The Jalil Group hires better employees than the competition by conducting lengthy searches and interviews.
Management also trains employees much better than competitors do. The Jalil Group has gained a strong
competitive advantage through ________ differentiation.
A) image B) people C) services D) product E) channel
Answer: B
Diff: 2 Page Ref: 194
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

87) Ford Motor Company emphasizes ʺQuality First  Ford Toughʺ in its truck products. In doing so, the company

has developed a differentiation strategy based on ________.
A) people B) image C) products D) services E) positioning
Answer: B
Diff: 2 Page Ref: 194
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

22
88) Used Auto specializes in lower quality vehicles, with a few dents, priced a great deal lower than other used
cars. Used Auto has chosen to position their products with a ________ strategy.
A) more-for-the same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) A or C
Answer: D
Diff: 2 Page Ref: 196
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

89) Neiman Marcus claims superior quality, performance, and style. The owners provide the most upscale
products and services and charge a higher price to cover the higher costs. What type of positioning does
Neiman Marcus use?
A) more-for-the-same
B) more-for-more
C) repositioning
D) the-same-for-less
E) more-for-less
Answer: B
Diff: 1 Page Ref: 196
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

90) When it first opened for business, Home Depot claimed to offer better products at lower prices. This value
proposition is called ________.
A) more-for-the-same
B) more-for-less
C) more-for-more
D) same-for-less
E) same-for-more
Answer: B
Diff: 2 Page Ref: 196
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

91) Superior Auto Sales, a chain of high-end used car dealerships, wants to sum up its company positioning and
brand positioning in a formal way. Superiorʹs management would use a ________ statement.
A) mission B) vision C) competitive D) positioning E) company
Answer: D
Diff: 2 Page Ref: 197
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

23
Refer to the scenario below to answer the following questions.

Khaled Khan began making wooden writing utensils as a hobby until Elham Nasr recognized Khaledʹs talent. Elham
immediately ordered 250 pens and pencils of various styles to be displayed in his shopʹs showcase. Within three months,
the writing utensils were a hit! Khaled had never thought of marketing his talent but Elhamʹs enthusiasm and the recent
sales were enough to change his mind.
With limited resources, Khaled contacted three additional specialty shops within 100 miles. He explained his
manufacturing processes and engraving options to each. All three shopsʹ owners placed a trial order. Within two months,
just prior to the holiday season, each shop owner placed an additional order. Khaled was ecstatic!
ʺI figured business would slow down after that,ʺ Khaled stated, ʺbut in February I was contacted by Elmore Distributors.
At that point, I had to make a huge decision about how far I wanted to go with this business.ʺ
Elmore Distributors provided products for school fundraisers in a seven -state area. Herb was offered a two-year
contract and immediate inclusion in Elmoreʹs promotional flyer. Khaled accepted the offer and, along with it, the
responsibility to produce thousands of wooden pens and pencils.
ʺI had to get a grip on the magnitude of this project!ʺ Khaled added. ʺI couldnʹt grow out of control. I was already
working to capacity.ʺ
Khaled decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis
with one customer, Khaled continued nurturing his four previously established accounts without targeting any additional
customers.
ʺAt this point, I had set up an assembly line in a rented building,ʺ Khaled explained. ʺI had to hire three full -time
employees to work the line while I managed the customer orders and purchased materials.ʺ Khaled paused. ʺBut I canʹt take
the Elmore project for granted. It might not always be there. Iʹll have to have a good alternate plan if that day comes.ʺ

92) In the scenario, how does Khaled segment his market?
A) loyalty status
B) usage rate
C) income
D) geographically
E) demographically
Answer: B
Diff: 2 Page Ref: 182
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

93) In marketing his writing utensils to his four specialty-shop customers, Khaled is using ________ marketing.
A) mass
B) undifferentiated
C) niche
D) mass customization
E) individual
Answer: C
Diff: 2 Page Ref: 188
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

24
 94) If Khaled produced a variety of styles of pens and pencils with various wood types and engravings that he
tailored specifically to each individualʹs order, he would be practicing ________.
A) concentrated marketing
B) local marketing
C) undifferentiated marketing
D) mass customization
E) micromarketing
Answer: D
Diff: 2 Page Ref: 190
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

TRUE/FALSE.  Write ʹTʹ if the statement is true and ʹFʹ if the statement is false.

95) Today, most companies have moved away from mass marketing and are being choosier about the customers
with whom they wish to build relationships.
Answer: True False
Diff: 2 Page Ref: 177
AACSB:
Skill: Concept
Objective: 7-1

96) Your company wants to move away from mass marketing and engage in customer -driven marketing. The four

steps to take, in order, are market segmentation, marketing positioning, differentiation, and targeting.
Answer: True False
Diff: 2 Page Ref: 177
AACSB:
Skill: Concept
Objective: 7-1

97) Cairo Gifts divides its markets into units of nations, regions, and cities. Cairo Gifts uses geographic
segmentation.
Answer: True False
Diff: 1 Page Ref: 178
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

98) Demographic segmentation uses different marketing approaches for different time periods of peopleʹs lives and
different family situations.
Answer: True False
Diff: 2 Page Ref: 180
AACSB:
Skill: Concept
Objective: 7-2

25
 99) Shopping for the Rich and Famous is a buying service that helps wealthy clients find the best buys in exclusive
clothing, high-end cars, travel, and financial services. This firm most likely uses income segmentation.
Answer: True False
Diff: 2 Page Ref: 181
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

100) Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines.
Answer: True False
Diff: 2 Page Ref: 181
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 7-2

101) Your assignment at work is to divide buyers into different groups based on social class, lifestyle, and
personality characteristics. After a planning session with the marketing and sales staff, you issue a memo to
upper management recommending psychographic segmentation. You are right on target.
Answer: True False
Diff: 2 Page Ref: 181
AACSB:
Skill: Concept
Objective: 7-2

102) LaGrange Florists segments markets into groups of nonusers, ex-users, potential users, first-time users, and
regular users of its flowers and services. This firm uses usage rate as its segmentation approach.
Answer: True False
Diff: 2 Page Ref: 182
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

103) Research about and planning for loyalty status as a segmentation approach is generally not useful or practical
for most firms.
Answer: True False
Diff: 2 Page Ref: 182
AACSB:
Skill: Concept
Objective: 7-2

104) For simplicityʹs sake, most marketers generally limit their segmentation analysis to one or a few variables.
Answer: True False
Diff: 2 Page Ref: 178
AACSB:
Skill: Concept
Objective: 7-2

26
105) Clusters of marketable groups of customers with similar likes, dislikes, lifestyles, and purchase behaviors can
be identified by multivariable segmentation systems that merge and analyze geographic, demographic,
lifestyle, and behavioral data.
Answer: True False
Diff: 2 Page Ref: 178-179
AACSB: Use of IT
Skill: Concept
Objective: 7-2

106) There are many exceptions to the geographic segmentation assumption, that consumers in nations close to one
another will have many common behaviors and traits.
Answer: True False
Diff: 2 Page Ref: 185
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 7-2

107) Because there is such variation among the economies of countries around the world, it is not practical to
segment international markets on the basis of economic factors.
Answer: True False
Diff: 2 Page Ref: 185
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 7-2

108) In evaluating different market segments, a firm should look at three factors: segment size and growth, segment
structural attractiveness, and company objectives and resources.
Answer: True False
Diff: 2 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-3

109) At a recent marketing seminar, the featured speaker stated that a target market consists of a set of buyers who
share common needs or characteristics that the company decides to serve. This is a correct definition.
Answer: True False
Diff: 1 Page Ref: 186
AACSB:
Skill: Concept
Objective: 7-3

110) Developing a stronger position within several segments creates more total sales than undifferentiated
marketing across all segments.
Answer: True False
Diff: 2 Page Ref: 187
AACSB:
Skill: Concept
Objective: 7-3

27
111) Niche marketing offers smaller companies an opportunity to compete by focusing their limited resources on
serving niches that may be unimportant to or overlooked by larger companies.
Answer: True False
Diff: 1 Page Ref: 188
AACSB:
Skill: Concept
Objective: 7-3

112) Because Cruise Ships International currently has limited financial and personnel resources, it should avoid
concentrated or niche marketing until resources are again substantial.
Answer: True False
Diff: 2 Page Ref: 188
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

113) Though the use of mass marketing has been widespread in the past 100 years, for centuries consumers were
served as individuals as businesses practiced individual marketing.
Answer: True False
Diff: 3 Page Ref: 190
AACSB:
Skill: Concept
Objective: 7-3

114) Mass marketing is becoming a marketing principle for the 21 st century.

Answer: True False
Diff: 2 Page Ref: 190
AACSB:
Skill: Concept
Objective: 7-3

115) When a company chooses a target marketing strategy, its choices are influenced by factors related to company
resources, the degree of product variability, and the productʹs life-cycle stage.
Answer: True False
Diff: 3 Page Ref: 177
AACSB:
Skill: Concept
Objective: 7-3

116) A productʹs position is the way the product is defined by the retailers who sell it to target markets. It is how it
is defined on important attributesthe place the product occupies in the retailersʹ minds relative to competing
products.
Answer: True False
Diff: 1 Page Ref: 192
AACSB: Communication
Skill: Concept
Objective: 7-4

28
 117) Consumers position products in their minds in order to simplify the buying process.
Answer: True False
Diff: 3 Page Ref: 192
AACSB:
Skill: Concept
Objective: 7-4

118) A market rarely exists for products that offer less and therefore cost less.
Answer: True False
Diff: 3 Page Ref: 196
AACSB:
Skill: Concept
Objective: 7-4

119) When Kia offers a new car model with the same features as a comparable Toyota or Ford and provides a longer
warranty, Kia is following a more-for-less strategy.
Answer: True False
Diff: 2 Page Ref: 197
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4

SHORT ANSWER.  Write the word or phrase that best completes each statement or answers the question.

120) Why do marketers segment the market?
Answer: Marketers divide heterogeneous markets into smaller groups that can be reached more efficiently with
products and services that match their unique tastes; firms focus on buyers it can serve best and most
profitably.
Diff: 1 Page Ref: 178
AACSB: Analytic Skills
Skill: Application
Objective: 7-1

121) When might be the best time for a marketer to use geographic segmentation?
Answer: Geographic segmentation may be especially profitable when consumers in different regions, states,
counties, etc., have different buying behaviors and product or service preferences.
Diff: 1 Page Ref: 179
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

122) Why might demographic segmentation be the most common type of segmentation?
Answer: Demographic segmentation is often based on observable features, making demographic segmentation
easier than other types.
Diff: 2 Page Ref: 180
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

29
123) Why must marketers guard against stereotypes when using age and life cycle segmentation?
Answer: Not all consumers in the same age and life cycle categories share the same abilities and interests; some
40-year-olds may have more in common with typical 20 -year-olds, for example, than with other
40-year-olds.
Diff: 2 Page Ref: 181
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

124) If Tang promotes a year-round campaign that ʺTang isnʹt just a summertime drink,ʺ what type of segmentation
is being used?
Answer: Occasion segmentation is being used in this scenario.
Diff: 3 Page Ref: 181
AACSB: Reflective Thinking
Skill: Application
Objective: 7-2

125) How can a company learn about its marketing weaknesses?
Answer: The company can learn about its marketing weaknesses by looking at customers who are shifting away
from its brand.
Diff: 2 Page Ref: 184
AACSB:
Skill: Application
Objective: 7-2

126) How can a company  analyze loyalty patterns in its market?
Answer: A company can learn about loyalty patterns by studying its own loyal customers.
Diff: 3 Page Ref: 184
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

127) List three variables not applicable to the consumer market that may be used to segment business markets.
Answer: Operating characteristics, purchasing approaches, situational factors, and personal characteristics can all
be used to segment business markets but not consumer markets.
Diff: 2 Page Ref: 184
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

128) What factors may impact segment attractiveness?
Answer: The number of competitors, substitute products, power of buyers, and powerful suppliers may impact
segment attractiveness.
Diff: 2 Page Ref: 186
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

30
129) What is one major assumption made by marketers who choose to use an undifferentiated marketing strategy?
Answer: Such marketers assume that all consumers share something in common, regardless of how different the
consumers may be.
Diff: 2 Page Ref: 187
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

130) XYZ Computers, Inc., a business with limited resources, is a market nicher. How might XYZ benefit from this?
Answer: XYZ Computers will have an opportunity to compete by focusing its limited resources on serving niches
that may be unimportant to or overlooked by larger competitors.
Diff: 2 Page Ref: 188
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

131) BMW allows customers to design their own vehicle from a set of options on BMWʹs website. What is this
called?
Answer: This is called mass customization.
Diff: 2 Page Ref: 190
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3

132) Explain how market variability impacts the choice of a target-marketing strategy.
Answer: If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts,
undifferentiated marketing may be appropriate, for example.
Diff: 3 Page Ref: 191
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

133) Why might a marketer of laundry detergent be interested in viewing a positioning map?
Answer: Positioning maps show consumer perceptions of their brands versus competing products on important
buying dimensions. Laundry detergent, for example, may be placed on a perceptual map based on price
and cleaning power; this allows a marketer to view how consumers perceive their product with respect
to othersʹ products along those dimensions.
Diff: 3 Page Ref: 193
AACSB: Analytic Skills
Skill: Application
Objective: 7-4

134) In what ways might a marketer be able to gain competitive advantage through channel differentiation?
Answer: Firms that practice channel differentiation gain competitive advantage through the way they design
their channelʹs coverage, expertise, and performance. Such factors as the level of customer service, speed
of delivery, packaging, transportation type, etc., may play a role in channel differentiation.
Diff: 2 Page Ref: 194
AACSB: Analytic Skills
Skill: Application
Objective: 7-4

31
ESSAY.  Write your answer in the space provided or on a separate sheet of paper.

135) Explain the four major steps in designing a customer-driven marketing strategy.
Answer: The first step is market segmentation: dividing a market into smaller groups of buyers with distinct
needs, characteristics, or behaviors, who might require separate products or marketing mixes. The
company identifies different ways to segment the market and develops profiles of the resulting market
segments. The second step is market targeting: evaluating each market segmentʹs attractiveness and
selecting one or more of the market segments to enter. The third step is differentiation: actually
differentiating the firmʹs market offering to create superior customer value. Finally, the last step is
market positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of consumers.
Diff: 2 Page Ref: 177
AACSB: Analytic Skills
Skill: Application
Objective: 7-1

136) Explain the four major segmenting variables for consumer markets.
Answer: Geographic segmentation divides the market into different geographic units, such as nations, regions,
states, countries, cities, or neighborhoods. Many companies are localizing their products, advertising,
promotion, and sales efforts, or are seeking to cultivate as-yet untapped geographic territory.
Demographic segmentation divides the market into groups based on variables such as age, gender,
family size, family life-cycle, income, occupation, education, religion, race, generation, and nationality.
These are the most popular factors because they are easy to measure, and consumer needs, wants, and
usage rates often vary closely with demographic variables. Psychographic segmentation, on the other
hand, divides buyers into different groups based on social class, lifestyle, or personality characteristics.
People in the same demographic group can have very different psychographic makeup. Behavioral
segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a
product. Many marketers believe that behavior variables are the best starting point for building market
segments.
Diff: 2 Page Ref: 178
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

137) Describe how marketers use multiple-segmenting bases to their advantage.
Answer: Marketers rarely limit their segmenting analysis to only one or a few variables. Instead, they use
multiple segmentation bases in an effort to identify smaller, better-defined target groups of consumers
who share likes, dislikes, lifestyles, and purchase behaviors. Companies often begin by segmenting their
markets using a single base, and then expand using other bases.
Diff: 2 Page Ref: 184
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

32
138) Why do businesses segment their markets?
Answer: By going after segments instead of the whole market, companies have a much better chance of delivering
value to customers and of receiving maximum rewards for close attention to customer needs. Like
consumer groups, business buyers can be segmented using geographic, demographic, benefits sought,
user status, usage rate, and loyalty status segmentations. Business buyers are also segmented by the
variables of operating characteristics, purchasing approaches, situational factors, and personal
characteristics.
Diff: 2 Page Ref: 184
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

139) Why do international markets need to be segmented?
Answer: Few companies have either the resources or the will to operate in all, or even most, of the countries that
dot the globe. Different countries, even those that are close together, can vary greatly in their economic,
cultural, technological, and political makeup. International firms need to group their world markets into
segments with distinctive buying needs and behaviors.
Diff: 1 Page Ref: 184-185
AACSB: Multicultural and Diversity
Skill: Application
Objective: 7-2

140) Imagine that you are presenting a workshop on the Requirements for Effective Segmentation. Briefly describe
the five items that will help your audience understand your topic.
Answer: The size, purchasing power, and profiles of the segments must be measurable. The major problem may
be that the segment will be hard to identify and measure. The market segments must be accessible; that
is they can be effectively reached and served. The segment must be substantial or large/profitable
enough to serve. It should be the largest possible homogeneous group worth pursuing with a tailored
marketing program. To be differentiable, the segments need to be conceptually distinguishable and
respond differently to different marketing mix elements and programs. Finally, the segment must be
actionable, meaning that effective programs can be designed for attracting and serving consumers who
make up the segment.
Diff: 3 Page Ref: 185-186
AACSB: Analytic Skills
Skill: Application
Objective: 7-2

33
141) Explain how companies identify attractive market segments and choose a target marketing strategy.
Answer: To target the best market segments, the company first evaluates each segmentʹs size and growth
characteristics, structural attractiveness, and compatibility with company objectives and resources. It
then chooses one of four marketing strategies – ranging from very broad to very narrow targeting. The
seller can ignore segment differences and target broadly using undifferentiated marketing. This involves
mass-producing, mass-distributing, and mass-promoting nearly the same product in approximately the
same way to all consumers. Or the seller can adopt differentiated marketing   developing different
market offers for several segments. Concentrated marketing involves focusing on only one or a few
market segments. Finally, micromarketing is the practice of tailoring products and marketing programs
to suit the tastes of specific individuals and locations. Micromarketing includes local marketing and
individual marketing. Which targeting strategy is best depends on company resources, product
variability, product life cycle stage, market variability, and competitive marketing strategies.
Diff: 3 Page Ref: 198
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

142) Compare and contrast four major segmenting strategies.
Answer: An undifferentiated marketing strategy ignores market segment differences and targets the whole
market with one offer. This mass-marketing strategy focuses on what is common in the needs of
consumers rather than on what is different. In contrast, a differentiated strategy targets several market
segments and designs separate offers for each. Companies hope for higher sales and a stronger position
within each market segment. Concentrated or niche marketing goes after a large share of one or a few
segments or niches instead of going after a share of a large market. These niches may be overlooked by
or be unimportant to other companies. Niching offers smaller companies an opportunity to compete by
focusing their limited resources more effectively. Using micromarketing, a company can tailor products
and marketing programs to suit the tastes of specific individuals and locations. It includes local and
individual marketing.
Diff: 2 Page Ref: 178-186
AACSB: Analytic Skills
Skill: Application
Objective: 7-3

143) In what ways might a marketer engage in socially responsible target marketing?
Answer: Socially responsible marketers work to avoid purposefully targeting vulnerable or disadvantaged
consumers with controversial or potentially harmful products. In addition, marketers may reconsider the
marketing of adult products that may spill over into the child segment  either intentionally or
unintentionally. The growth of the Internet has also presented potential problems   namely that makers
of questionable products or deceptive advertisers may more readily victimize the most vulnerable
audiences. Marketers can avoid becoming involved in these harmful situations as they attempt to reach
vast numbers of consumers by using precise, refined targeting strategies.
Diff: 1 Page Ref: 191-192
AACSB: Ethical Reasoning
Skill: Application
Objective: 7-3

34
144) Explain the concept of positioning for competitive advantage.
Answer: A productʹs position is the way the product is defined by consumers on important attributes  the place
the product occupies in consumersʹ minds relative to competing products. Positioning involves
implanting the brandʹs unique benefits and differentiation in customersʹ minds. To carry out effective
positioning, a company must identify a set of possible competitive advantages upon which to build a
problem, choose the right competitive advantages, and select an overall positioning strategy. The
company must then effectively communicate and deliver the chosen position to the market.
Diff: 3 Page Ref: 193
AACSB: Analytic Skills
Skill: Application
Objective: 7-4

35