Chapter 4—Segmenting the Business Market and Estimating Segment Demand
MULTIPLE CHOICE
1. Concerning segmentation criteria, _____ refers to the degree to which information on the particular
buyer characteristic exists or can be obtained.
a. measurability
b. accessibility
c. substantiality
d. responsiveness
e. enforceability
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
2. Which of the following statements concerning business market segmentation is(are) true?
a. The decision to enter a particular market segment carries with it significant long-term
resource commitments for the industrial firm.
b. In evaluating alternative bases for segmentation, the marketer is attempting to identify
good predictors of differences in buyer behavior.
c. Segmentation decisions can be reversed more easily in the business market than in the
consumer market.
d. all of the above
e. (a) and (b) only
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
3. Market segmentation is:
a. more useful to consumer goods marketers than to business marketers.
b. of little value to business marketers that concentrate on the governmental and institutional
sectors of the organizational market.
c. difficult to apply in the business market because groups, not individuals, make many
purchasing decisions.
d. a useful tool for both business and consumer goods marketers.
e. inappropriate for low market share firms.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
4. Which of the following statements concerning business market segmentation is(are) false?
a. In selecting a market segment, the business marketer is also choosing a competitive
environment.
b. The cost of research increases if a microlevel of segmentation is required.
c. Compared to their consumer goods counterparts, business marketers can more readily
change segmentation strategies, shifting attention from one segment to another.
d. both (a) and (c)
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
5. The business market can be segmented on several bases, broadly classified into two major categories:
a. economic and demographic.
, b. macro and micro.
c. top-down and bottom-up.
d. concentration and coverage.
e. organizational and end-use application.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
6. The business market can be segmented on several bases. Macro bases of segmentation center on:
a. characteristics of the buying situation.
b. characteristics of the buying organization.
c. the nature of the product application.
d. all of the above
e. both (a) and (c)
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
7. Bases of business or organizational market segmentation that center on the characteristics of the
buying organization and the buying situation are broadly categorized as:
a. macrosegmentation.
b. microsegmentation.
c. economic bases.
d. bottom-up bases.
e. concentration bases.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
8. Bases of business or organizational market segmentation that focus on the characteristics of decision-
making units are broadly classified as:
a. macrosegmentation.
b. microsegmentation.
c. economic bases.
d. demographic bases.
e. coverage bases.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
9. The microsegmentation of business markets center on characteristics of:
a. buying organizations (e.g., the size).
b. the product application (e.g., end market served).
c. decision-making units (e.g., decision style).
d. the purchasing situation (e.g., types of buying situation).
e. geographic regions (e.g., Midwest).
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
10. All of the following are potential macro bases of business market segmentation except:
a. purchasing strategy.
b. usage rate.
c. size.
d. product application.
, e. geographic location.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
11. All of the following are potential micro bases of business market segmentation except:
a. organizational innovativeness.
b. importance of purchase.
c. personal characteristics.
d. structure of decision-making unit.
e. type of buying situation.
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
12. Large buying organizations may possess unique requirements and respond to different marketing
stimuli than small firms. Research suggests that the degree of influence of presidents, vice presidents,
and owners _____ with an increase in corporate size.
a. remains constant
b. increases
c. decreases
d. none of the above
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
13. Park Rapids Electronics divides their market on the basis of NAICS category, end market served, and
type of buying situation. They have also developed a special strategy for large centralized buyers. They
are emphasizing:
a. macro bases of segmentation.
b. micro bases of segmentation.
c. a blend of macro and micro bases of segmentation.
d. psychographic and economic bases of segmentation.
e. none of the above
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
14. Chandler Machine Tool has been successful in segmenting their market using the following bases: (1)
NAICS category and (2) key purchasing criteria emphasized by particular groups of buyers within
each NAICS industry. They are using:
a. macro bases of segmentation.
b. micro bases of segmentation.
c. a blend of macro and micro bases of segmentation.
d. psychographic and economic bases of segmentation.
e. none of the above
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
15. Lansing Motor Works produces a line of precision motors. Based on feedback from the sales force,
management has learned that one of their new motors is especially well-suited to high-speed
packaging systems. The new motor requires less maintenance and has a longer useful life than
competing offerings. Lansing Motor Works is now concentrating on this segment. This provides an
illustration of segmentation on the basis of:
, a. usage rate.
b. purchasing strategy.
c. size of firm.
d. value-in-use.
e. organizational innovativeness.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
16. For the medical x-ray market, Du Pont initiated a formal positioning study among hospital
administrators, radiology department administrators, and technical managers in order to identify the
firm's relative standing and the specific needs (criteria) for each level of buying influence within each
potential segment. This provides an illustration of segmentation on the basis of:
a. the importance of purchase.
b. attitude toward vendors.
c. value-in-use.
d. key criteria.
e. decision-specific conflict.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
17. A segmentation study found that purchasers of IBM equipment are more concerned about software
support and breadth of product line and they are less concerned about absolute price and price
flexibility (i.e., willingness of suppliers to negotiate price). This provides an illustration of
segmentation on the basis of:
a. the importance of purchase.
b. key criteria.
c. the structure of the decision-making unit.
d. attitude toward vendors.
e. decision style.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
18. Concerning segmentation criteria, _____ concerns the degree to which segments respond differently to
different marketing mix elements, such as pricing or product features.
a. measurability
b. accessibility
c. substantiality
d. compatibility
e. responsiveness
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
19. Business market segmentation at the _____ level requires a higher level of market knowledge and,
therefore, a greater investment in research.
a. geographic
b. macro
c. micro
d. demographic
e. aggregate
ANS: C PTS: 1
MULTIPLE CHOICE
1. Concerning segmentation criteria, _____ refers to the degree to which information on the particular
buyer characteristic exists or can be obtained.
a. measurability
b. accessibility
c. substantiality
d. responsiveness
e. enforceability
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
2. Which of the following statements concerning business market segmentation is(are) true?
a. The decision to enter a particular market segment carries with it significant long-term
resource commitments for the industrial firm.
b. In evaluating alternative bases for segmentation, the marketer is attempting to identify
good predictors of differences in buyer behavior.
c. Segmentation decisions can be reversed more easily in the business market than in the
consumer market.
d. all of the above
e. (a) and (b) only
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
3. Market segmentation is:
a. more useful to consumer goods marketers than to business marketers.
b. of little value to business marketers that concentrate on the governmental and institutional
sectors of the organizational market.
c. difficult to apply in the business market because groups, not individuals, make many
purchasing decisions.
d. a useful tool for both business and consumer goods marketers.
e. inappropriate for low market share firms.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
4. Which of the following statements concerning business market segmentation is(are) false?
a. In selecting a market segment, the business marketer is also choosing a competitive
environment.
b. The cost of research increases if a microlevel of segmentation is required.
c. Compared to their consumer goods counterparts, business marketers can more readily
change segmentation strategies, shifting attention from one segment to another.
d. both (a) and (c)
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
5. The business market can be segmented on several bases, broadly classified into two major categories:
a. economic and demographic.
, b. macro and micro.
c. top-down and bottom-up.
d. concentration and coverage.
e. organizational and end-use application.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
6. The business market can be segmented on several bases. Macro bases of segmentation center on:
a. characteristics of the buying situation.
b. characteristics of the buying organization.
c. the nature of the product application.
d. all of the above
e. both (a) and (c)
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
7. Bases of business or organizational market segmentation that center on the characteristics of the
buying organization and the buying situation are broadly categorized as:
a. macrosegmentation.
b. microsegmentation.
c. economic bases.
d. bottom-up bases.
e. concentration bases.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
8. Bases of business or organizational market segmentation that focus on the characteristics of decision-
making units are broadly classified as:
a. macrosegmentation.
b. microsegmentation.
c. economic bases.
d. demographic bases.
e. coverage bases.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
9. The microsegmentation of business markets center on characteristics of:
a. buying organizations (e.g., the size).
b. the product application (e.g., end market served).
c. decision-making units (e.g., decision style).
d. the purchasing situation (e.g., types of buying situation).
e. geographic regions (e.g., Midwest).
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
10. All of the following are potential macro bases of business market segmentation except:
a. purchasing strategy.
b. usage rate.
c. size.
d. product application.
, e. geographic location.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
11. All of the following are potential micro bases of business market segmentation except:
a. organizational innovativeness.
b. importance of purchase.
c. personal characteristics.
d. structure of decision-making unit.
e. type of buying situation.
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
12. Large buying organizations may possess unique requirements and respond to different marketing
stimuli than small firms. Research suggests that the degree of influence of presidents, vice presidents,
and owners _____ with an increase in corporate size.
a. remains constant
b. increases
c. decreases
d. none of the above
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
13. Park Rapids Electronics divides their market on the basis of NAICS category, end market served, and
type of buying situation. They have also developed a special strategy for large centralized buyers. They
are emphasizing:
a. macro bases of segmentation.
b. micro bases of segmentation.
c. a blend of macro and micro bases of segmentation.
d. psychographic and economic bases of segmentation.
e. none of the above
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
14. Chandler Machine Tool has been successful in segmenting their market using the following bases: (1)
NAICS category and (2) key purchasing criteria emphasized by particular groups of buyers within
each NAICS industry. They are using:
a. macro bases of segmentation.
b. micro bases of segmentation.
c. a blend of macro and micro bases of segmentation.
d. psychographic and economic bases of segmentation.
e. none of the above
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
15. Lansing Motor Works produces a line of precision motors. Based on feedback from the sales force,
management has learned that one of their new motors is especially well-suited to high-speed
packaging systems. The new motor requires less maintenance and has a longer useful life than
competing offerings. Lansing Motor Works is now concentrating on this segment. This provides an
illustration of segmentation on the basis of:
, a. usage rate.
b. purchasing strategy.
c. size of firm.
d. value-in-use.
e. organizational innovativeness.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
16. For the medical x-ray market, Du Pont initiated a formal positioning study among hospital
administrators, radiology department administrators, and technical managers in order to identify the
firm's relative standing and the specific needs (criteria) for each level of buying influence within each
potential segment. This provides an illustration of segmentation on the basis of:
a. the importance of purchase.
b. attitude toward vendors.
c. value-in-use.
d. key criteria.
e. decision-specific conflict.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
17. A segmentation study found that purchasers of IBM equipment are more concerned about software
support and breadth of product line and they are less concerned about absolute price and price
flexibility (i.e., willingness of suppliers to negotiate price). This provides an illustration of
segmentation on the basis of:
a. the importance of purchase.
b. key criteria.
c. the structure of the decision-making unit.
d. attitude toward vendors.
e. decision style.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
18. Concerning segmentation criteria, _____ concerns the degree to which segments respond differently to
different marketing mix elements, such as pricing or product features.
a. measurability
b. accessibility
c. substantiality
d. compatibility
e. responsiveness
ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Managing strategy & innovation
19. Business market segmentation at the _____ level requires a higher level of market knowledge and,
therefore, a greater investment in research.
a. geographic
b. macro
c. micro
d. demographic
e. aggregate
ANS: C PTS: 1
