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MKT 6301-Chapter 5

QuestionAnswer
1) Craig is the CMO of Speedoconnect, an Internet Services Provider that has been consistently losing market share for the past three quarters. Craig conducts a customer analysis to understand the weaknesses in the company's service operations. Which of the following groups is most critical in this customer analysis? Answer: former customers
2) In a customer analysis, understanding how to expand the market and achieve sales closer to market potential is most likely to be achieved by analyzing: Answer: people who have never purchased the product.
3) Which of the following analyses aims to group customers that differ from one another but show considerable similarity within the group? Answer: market segmentation
4) Which of the following refers to the decision about which customer groups a company will pursue for a particular brand or product line? Answer: market segmentation
5) When marketing managers select a market segment to pursue, it is called: Answer: selecting the target market.
6) Why is the concept of segmentation important? Answer: It implies an understanding that customers are heterogeneous.
7) Which of the following statements about the market segmentation approach is correct? Answer: With this approach, less money is wasted on customers who have low probability of buying the product.
8) A segmentation approach to the market is more efficient than a mass marketing approach because: Answer: money is spent only on those whom the manager has determined are potential customers.
9) Treating each customer separately and giving the perception that he or she is being treated as a unique segment by sending individualized communications is known as: Answer: one-on-one marketing.
10) Treating each customer seperately and giving the perception that he or she is being treated as a unique segment by delivering personalized products and services is known as: Answer: mass customization.
11) Which of the following terms is used to refer to one-to-one marketing? Answer: mass customization
12) A marketing manager's task is to identify variables that describe customers in terms of their own particular characteristics. These variables are called: Answer: descriptors.
13) Which of the following types of variables characterizes the differences between people in terms of income, age, occupation, education, and race? Answer: demographic
14) Which of the following types of variables characterizes the differences between people in terms of lifestyles, personalities, and social class? Answer: psychographic
15) Which of the following is an example of a geographic variable? Answer: climate
16) Which of the following is a demographic variable? Answer: generation
17) Which of the following is an example of a psychographic variable? Answer: lifestyle
18) Identify the most popular behavioral variables that are used to form segments. Answer: benefits and usage rate
19) Which of the following variables is an example of a behavioral variable? Answer: occasions
20) ________ is a currently popular age-related type of segmentation used to develop profiles of each generation. Answer: Cohort analysis
21) Which of the following analyses is more useful for trend-spotting than for developing segments for individual brands? Answer: cohort analysis
22) Which of the following generational cohorts were born between 1901-1924? Answer: GI Generation
23) Which of the following generational cohorts are the grandparents of the Millenials? Answer: Silent Generation
24) According to the VALS system developed by SRI International, ________ are successful, sophisticated, and active people with high self-esteem and significant resources. Answer: innovators
25) According to the VALS system developed by SRI International, ________ are mature, satisfied comfortable people who value order, knowledge and responsibility. Answer: thinkers
26) According to the VALS system developed by SRI International, ________ are avid customers and spend much of their money on clothing, fast food, music, movies, and video. Answer: experiencers
27) According to the VALS system developed by SRI International, ________ are both unsure about themselves and low in socioeconomic status. Answer: strivers
28) Which of the following best describes conservative, conventional people whose beliefs revolve around family, church, community, and their country? Answer: believers
29) According to the VALS system developed by SRI International, ________ are poor, ill-educated, low-skilled, and elderly, with concerns about their security and safety. Answer: survivors
30) Which of the following best describes the group consisting of practical people who have constructive skills and value self-sufficiency? Answer: makers
31) In technology-based markets, the marketing manager must understand who the different customers that will purchase the product at the introductory stage of the product life cycle and who will purchase the product as it matures. According to Everett Rogers, which of the following types of customers will be the first to buy the product? Answer: innovators
32) Marketing managers are interested in variables such as usage rate and degree of loyalty. Which category of descriptor variable do these fall under? Answer: behavioral
33) Which of the following tech customers are the biggest spenders, and the early adopters of new technology for home, office, and personal use? Answer: Fast Forwards
34) Which of the following tech customers seek entertainment but cannot find it on-line, and therefore prefer TV and other older media? Answer: Media Junkies
35) According to Everett Rogers, which of the following types of customers are generally not interested in technology for its own sake, but are good at detecting the value of a new product and how it will enhance their lives? Answer: early adopters
36) In technology-based markets, the marketing manager must understand who are the different customers that will purchase the product at the introductory stage of the product life cycle and who will purchase the product as it matures. Which of the following types of customers will be the last to buy the product? Answer: laggards
37) Which of the following best describes a major source of secondary information on market segments? Answer: syndicated data
38) A kind of syndicated data links together census data and purchasing data to form ________ segments. An example of this is Nielsen's PRIZM NE system. Answer: psychographic-like
39) Which of the following is a multivariate statistical procedure to reduce a set of variable to a smaller set that retains most of the information of the original set? Answer: factor analysis
40) Which of the following is the first step in the customer behavior model? Answer: need recognition
41) According to the needs hierarchy theory, basic human needs such as food, sleep, and water are examples of ________ needs. Answer: physiological
42) According to the needs hierarchy theory, ________ needs are based on job security and financial security. Answer: safety
43) According to the needs hierarchy theory, friendship, affection, acceptance by reference groups are examples of ________ needs. Answer: social
44) According to the needs hierarchy theory, success, self-esteem and prestige are examples of ________ needs. Answer: ego
45) According to the needs hierarchy theory, ________ need is achieving one's own potential and self-fulfillment. Answer: self-actualization
46) ________ sources of information are those that are retrieved from memory. Answer: Internal
47) Which of the following is an example of an internal source of information? Answer: past experiences with products
48) Which external source of information provided by the marketing manager is considered to be the most credible? Answer: word-of-mouth
49) Economic theory suggests that rational customers will collect information only to the point at which: Answer: the marginal benefit of obtaining the information in terms of incremental value to making a choice equals the marginal cost.
50) Which of the following is one of the three sets of options that result from using internal and external information sources when seeking purchase alternatives? Answer: consideration set
51) As a result of the search for alternatives through internal and external information sources, customers form three different sets of options. The ________ set is the set of products from which the customer will choose to purchase. Answer: evoked
52) As a result of the search for alternatives through internal and external information sources, customers form three different sets of options. The ________ set is the set of products the customer has actually chosen within a specified period of time. Answer: purchase
53) Which of the following terms best describes the set of products that the customer has no intention of buying? Answer: inert set
54) For frequently purchased products, scanner panel data provide information about: Answer: purchase set.
55) Pure awareness research that uses ________ recall gives the respondents a list from which to choose brands. Answer: aided
56) The ________ model is a popular model of decision making that requires information about how useful or important each attribute is to the customer making a brand choice and how customers perceive the brands in the evoked set in terms of their attributes. Answer: multiattribute
57) Which of the following is not a key question raised in using the multiattribute model? Answer: What is the gross profit margin of the product?
58) While evaluating options in a consideration set, the marketing manager must determine the set of attributes customers use in making purchase decisions. Which of the following methods is not recommended because of the bias introduced? Answer: managerial judgement
59) The ________ model is any model in which a low score on one attribute can be offset by a higher score on another. Answer: compensatory
60) For frequently purchased products, ________ is critical to success because there are not enough new, untapped buyers to sustain a low-priced product for long. Answer: repeat buying
61) The stages of the family life cycle include all of the following except: Answer: teens.
62) Which of the following stages of the family life cycle best describes young married couples with younger children under age 6? Answer: full nest I
63) Which of the following stages of the family life cycle best describes older married couples with dependent children? Answer: Full nest III
64) Which of the following stages of the family life cycle best describes older married couples whose children do not live with them, and the head(s) have retired? Answer: Empty nest II
65) Socioeconomic status (SES) is often highly correlated with: Answer: occupation.
66) ________ is the concept that a customer will adopt an innovation only if he or she considers it to be an improvement over the current product being used to satisfy the same need. Answer: Relative advantage
67) Which of the following terms best explains the ability of potential users of a new product to use it on a limited basis before adoption? Answer: trialability
68) For many products and services, the value of owning them increases as the number of owners increases. This is the concept of: Answer: network externalities.
69) In regard to the adoption of new technologies, the extent to which customers are uncertain about the consequences of an action is termed as: Answer: perceived risk.
70) ________ is the person who actually authorizes payment for the product. Answer: The purchaser
71) Day of week is an evaluation that is most related to these categories of business. Answer: retail shopping, movies
72) Cycles defined in years as an evaluation is most related to these categories of business. Answer: durable goods' replacement cycles
73) A customer analysis is one of the key building blocks on which the marketing strategy rests. Answer: TRUE
74) If you are in an industrial products business, it is not important for you to understand your consumers. Answer: FALSE
75) Market segmentation breaks mass markets into segments that have different buying habits. Answer: TRUE
76) The concept of segmentation is important because it implies an understanding that customers are homogeneous. Answer: FALSE
76) The concept of segmentation is important because it implies an understanding that customers are homogeneous. Answer: TRUE
78) Psychographics divide the total market in a geographic area into segments based on activities, interests, values, opinions, personality characteristics and attitudes using statistical procedures. Answer: TRUE
79) According to the VALS system developed by SRI International, survivors are cautious customers. Answer: TRUE
80) According to Everett Rogers, the first buyers of a new product are the early adopters. Answer: FALSE
81) It is of little use for marketing managers to use a survey designed in-house to better understand the customer base. Answer: FALSE
82) Claritas's PRIZM system links together census data and purchasing data to form psychographic-like segments. Answer: TRUE
83) While syndicated research can show only what has happened in the past, using extrapolation, an accurate potential of a particular segment can be obtained. Answer: FALSE
84) Factor analysis is a multiple regression statistical procedure. Answer: FALSE
85) According to Abraham Maslow, physiological needs are basic human needs. Answer: TRUE
86) One of the jobs of the marketing manager is to translate characteristics into product benefits. This can be done using managerial judgment or marketing research. Answer: TRUE
87) Economic theory predicts that rational customers will collect information only to the point at which the marginal benefit of obtaining the information in terms of incremental value to making a choice equals the marginal cost. Answer: TRUE
88) The set of products that the customer has no intention of buying or has no information about is known as evoked set. Answer: FALSE
89) Perception, not reality, drives purchasing behavior. Answer: TRUE
90) FMCG products need more extensive information search than durable goods. Answer: FALSE
91) For frequently purchased products, repeat buying is critical to success. Answer: TRUE
92) From the customer's perspective, the unique problems associated with the marketing of technology based products are concentrated largely in the late growth or maturity stage of the product life cycle. Answer: FALSE
93) In considering the purchase of technology-based products, a customer will adopt an innovation only if she or he considers it to be an improvement over the current product being used to satisfy the same need. Answer: TRUE
94) The perceived complexity of the innovation is positively related to the success of an innovation. Answer: FALSE
95) Increase in trialability of an innovation is positively related to its success. Answer: TRUE
96) List and briefly describe the three major categories of segmentation variables. Answer:
97) List and briefly describe the major groups developed by SRI International's VALS system. Answer:
97) List and briefly describe the major groups developed by SRI International's VALS system. Answer:
99) List and briefly describe the five ordered levels of human needs according to Abraham Maslow. Answer:
100) List and briefly describe the three different sets of options formed by customers in the search for alternatives through internal and external information sources. Answer:
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