MGT 103: Chapter 9 (STP) UPDATED
ACTUAL Questions and CORRECT
Answers
Why segment markets? - CORRECT ANSWER - A business firm segments its markets so
it can respond more effectively to the wants of groups of potential buyers and thus increase its
sales and profits.
Market Segmentation - CORRECT ANSWER - aggregating prospective buyers into
groups that (1) have common needs and (2) will respond similarly to a marketing action
Market Segments - CORRECT ANSWER - - the relatively homogeneous groups of
prospective buyers that result from the market segmentation process
- each segment consists of people who are relatively similar to each other in terms of
consumption behavior
product differentiation - CORRECT ANSWER - - the creation of real or perceived product
differences
- a positioning strategy that some firms use to distinguish their products from those of
competitors (have consumers perceive the product as being different and better than competing
products)
- involves a firm using different marketing mix actions, like product features and advertising
- firms use this strategy as a result of different market segments
Segmentation: Linking Needs to Actions - CORRECT ANSWER - The process of
segmenting a market and selecting specific segments as targets is the link between the various
buyers' needs and the organization's marketing program
- leads to tangible marketing actions that can increase sales and profitability
, market-product grid - CORRECT ANSWER - a framework to relate the market segments
of potential buyers to products offered or potential marketing actions
When and How to Segment Markets - CORRECT ANSWER - - a business segments its
markets *when* it expects that this extra effort will increase its sales, profit, and return on
investment
- when expenses > potentially increased sales from segmentation, a firm should *not* attempt to
segment its market
1. One Product and Multiple Market Segments
2. Multiple Products and Multiple Market Segments (Ford having multiple models)
3. Segments of One (Mass Customization)
One Product and Multiple Market Segments - CORRECT ANSWER - Pros: Avoids the
extra costs of developing and producing additional versions of the product.
Example: Magazines/Books
- Although separate covers for magazines or separate advertisements for books (to attract the
different market segments) are expensive, these expenses are minor compared with the costs of
producing multiple versions of magazines or books for several different market segments
Multiple Products and Multiple Market Segments - CORRECT ANSWER - Example:
Ford's different lines of cars, SUVs, and pickup trucks are each targeted at a different type of
customer
Pros: very effective if it meets customers' needs better, doesn't reduce quality/increase price, and
adds to sales revenues and profits
Cons: The proliferation of different models and options can reduce quality and raise prices—
especially in relation to foreign imports (this is why Ford reduce the number of models/options
they have)
ACTUAL Questions and CORRECT
Answers
Why segment markets? - CORRECT ANSWER - A business firm segments its markets so
it can respond more effectively to the wants of groups of potential buyers and thus increase its
sales and profits.
Market Segmentation - CORRECT ANSWER - aggregating prospective buyers into
groups that (1) have common needs and (2) will respond similarly to a marketing action
Market Segments - CORRECT ANSWER - - the relatively homogeneous groups of
prospective buyers that result from the market segmentation process
- each segment consists of people who are relatively similar to each other in terms of
consumption behavior
product differentiation - CORRECT ANSWER - - the creation of real or perceived product
differences
- a positioning strategy that some firms use to distinguish their products from those of
competitors (have consumers perceive the product as being different and better than competing
products)
- involves a firm using different marketing mix actions, like product features and advertising
- firms use this strategy as a result of different market segments
Segmentation: Linking Needs to Actions - CORRECT ANSWER - The process of
segmenting a market and selecting specific segments as targets is the link between the various
buyers' needs and the organization's marketing program
- leads to tangible marketing actions that can increase sales and profitability
, market-product grid - CORRECT ANSWER - a framework to relate the market segments
of potential buyers to products offered or potential marketing actions
When and How to Segment Markets - CORRECT ANSWER - - a business segments its
markets *when* it expects that this extra effort will increase its sales, profit, and return on
investment
- when expenses > potentially increased sales from segmentation, a firm should *not* attempt to
segment its market
1. One Product and Multiple Market Segments
2. Multiple Products and Multiple Market Segments (Ford having multiple models)
3. Segments of One (Mass Customization)
One Product and Multiple Market Segments - CORRECT ANSWER - Pros: Avoids the
extra costs of developing and producing additional versions of the product.
Example: Magazines/Books
- Although separate covers for magazines or separate advertisements for books (to attract the
different market segments) are expensive, these expenses are minor compared with the costs of
producing multiple versions of magazines or books for several different market segments
Multiple Products and Multiple Market Segments - CORRECT ANSWER - Example:
Ford's different lines of cars, SUVs, and pickup trucks are each targeted at a different type of
customer
Pros: very effective if it meets customers' needs better, doesn't reduce quality/increase price, and
adds to sales revenues and profits
Cons: The proliferation of different models and options can reduce quality and raise prices—
especially in relation to foreign imports (this is why Ford reduce the number of models/options
they have)
