Consumer Behavior
When a consumer relies on reviews and specifications online before purchasing a new smartphone, this stage of the consumer decision-making process is:
A. Need recognition
B. Information search
C. Evaluation of alternatives
D. Purchase decision
E. Post-purchase behavior
B. Information search
The information search stage involves seeking out information to satisfy a need, including researching product specifications and reviews for a smartphone.
A local coffee shop wants to target customers who are environmentally conscious and prefer to support businesses that engage in sustainable practices. Which type of segmentation should the coffee shop primarily use?
A. Sociodemographic segmentation
B. Behavioral segmentation
C. Psychographic segmentation
D. Geographic segmentation
E. Volume and profitability
C. Psychographic segmentation
Psychographic segmentation focuses on the attitudes, values, lifestyles, and opinions of consumers. Targeting environmentally conscious customers falls under this category as it relates to their values and lifestyle choices.
For a software company targeting businesses, which segmentation variable is least likely to be used?
A. Company size
B. Geographic location
C. Procurement policies
D. Organizational culture
E. Individual customer's age
E. Individual customer's age
In B2B marketing, the focus is on organizational characteristics rather than individual demographics like age, making it the least relevant segmentation variable in this context.
A small tech startup has developed a fitness app that incorporates advanced analytics to provide personalized workout plans. After conducting market research, they've identified a potential user segment consisting of young professionals aged 25-35 who are tech-savvy and have a high interest in maintaining an active lifestyle. Which of the following steps should the startup take NEXT to ensure their segmentation is effective?
A. Immediately start a mass marketing campaign targeting young professionals in all industries.
B. Focus exclusively on this segment and stop considering other potential user groups.
C. Develop a generic marketing strategy that appeals to all age groups to maximize outreach.
D. Verify the segment is substantial enough to pursue profitably by estimating its size and potential market value.
E. Ignore the segment stability since tech-savvy individuals are always open to new technologies.
D. Verify the segment is substantial enough to pursue profitably by estimating its size and potential market value.
Before proceeding with targeted marketing efforts, it's crucial to ensure that the identified segment is substantial, meaning it's large enough for the company to serve profitably. This step ensures that resources are invested wisely in segments that offer sufficient potential return on investment.
Given the understanding of a perceptual map, which of the following best describes its primary purpose?
a) To analyze a brand's financial status.
b) To understand a brand's image and brand-created associations in the market.
c) To map out competition based on price and quality.
d) To visualize a brand's position in the market relative to competitors based on certain attributes.
e) To assess a brand's trademark and licensing potentials.
d) To visualize a brand's position in the market relative to competitors based on certain attributes.
A perceptual map is a tool used to visualize the position of a brand (or multiple brands) in the market relative to competitors based on specific attributes, like "Sporty - Roomy" or "High to Low Prestige". It helps brands identify gaps, competitive strengths, and areas of opportunity.
Which of the following is most associated with a purchase using cognitive processes compared to emotional factors?
a Real-estate loan
b Rolex watch
c Sports car
d Honeymoon
a
When consumers make purchases that use cognitive processes, such as a real-estate loan, they identify facts, costs, conditions, and terms of a product. For all of their other purchases, they use emotions driven by the heart and ego to make decisions.
"TechGlow," a tech-gadget company, has decided to target young professionals with their new range of smart wearable gadgets. They've identified that this segment values seamless integration with their other devices and stylish designs. In the context of Positioning, what should "TechGlow" prioritize?
A. Profile the segment of young professionals further.
B. Develop an action plan emphasizing the integration and design of their gadgets.
C. Determine the overall size of the young professionals market.
D. Assess other potential segments for future expansion.
E. Merge the preferences of young professionals with other segments.
B. Develop an action plan emphasizing the integration and design of their gadgets.
For positioning, once the value proposition for a target segment is defined (in this case, seamless integration and stylish design), the next step would be to develop an action plan tailored to these identified needs and preferences.
"GreenBeans," a sustainable clothing brand, is working on its market segmentation. They identified two main variables: consumer buying behavior and age groups. They noticed that younger consumers, aged 18-25, are more influenced by trends, while older consumers, aged 40-55, are influenced by the sustainability factor. Which of the following statements best describes the link between these segmentation variables?
A. Age is the sole determinant of buying behavior among GreenBeans' consumers.
B. Younger consumers don't care about sustainability.
C. Consumer buying behavior varies with age, indicating a potential interaction between these segmentation variables.
D. All consumers value trends and sustainability equally.
E. GreenBeans should target only the older age group as they care about sustainability.
C. Consumer buying behavior varies with age, indicating a potential interaction between these segmentation variables.
The information provided suggests that different age groups have varying buying behaviors, emphasizing the linkage between age and buying behavior as segmentation variables.
"GreenThumb" specializes in gardening tools and supplies. They recently identified a small segment of urban apartment dwellers who are keen on balcony gardening. This segment is unique and very specific but has shown a rising interest in personalized solutions. If "GreenThumb" wants to cater specifically to this segment’s unique needs using a single marketing mix, which targeting strategy would they employ?
A. Mass Marketing
B. Segment Marketing
C. Niche Marketing
D. Personalized Marketing
E. None of the above
C. Niche Marketing
The segment described is very specific (urban apartment dwellers interested in balcony gardening). Niche Marketing involves tailoring a single marketing mix to cater to such a small and specific segment.
A company uses a perceptual map and notices that there's a gap in the market, suggesting no competitors are currently satisfying a particular consumer segment's needs. What should the company be cautious about before launching a product in that gap?
a) The gap automatically means there is a high demand.
b) The perceptual map's reliability is unquestionable.
c) Just because there is a gap doesn't mean there is demand.
d) The perceptual map guarantees the success of a product launched in the gap.
e) All competitors will immediately follow into the gap.
c) Just because there is a gap doesn't mean there is demand.
While perceptual maps are valuable tools for spotting market gaps, it doesn't always signify a demand for that specific attribute combination. Further market research and segmentation are necessary to validate genuine demand.
Sophia is deciding which smartphone to buy. She spends weeks researching different models, comparing their features, prices, and customer reviews. This behavior indicates Sophia's decision-making process is primarily:
A) Low involvement
B) Satisficing
C) Emotional
D) Optimizing
E) Cognitive
D) Optimizing
Sophia is making an optimizing decision as she thoroughly compares all available options, which is characteristic of high involvement and cognitive decision-making processes, seeking the best possible choice.
"HealthyMunch," a health food brand, has identified three market segments: fitness enthusiasts, individuals with dietary restrictions, and busy professionals looking for quick healthy meals. They've assessed that the busy professionals segment has the highest purchasing power but is also heavily targeted by competitors. Given the principles of Targeting, what should "HealthyMunch" consider doing?
A. Focus entirely on the fitness enthusiasts since it’s a unique segment.
B. Develop a value proposition for individuals with dietary restrictions.
C. Assess the attractiveness of each segment before making a decision.
D. Tailor their marketing mix based on the largest segment size.
E. Merge all three segments and create a general marketing plan.
C. Assess the attractiveness of each segment before making a decision.
When targeting, companies need to determine a segment's attractiveness and decide which segment(s) to focus their marketing efforts on. While the segment of busy professionals has high purchasing power, other factors, such as competition, should also be considered.
Based on the concept of "Points of Parity (POP)," which of the following is true about a brand's competitive strategy?
A) A brand must always exceed competitors in every attribute to be successful.
B) POP represents the attributes a brand should minimize to focus only on its points of difference (POD).
C) POP ensures that a brand meets the minimum standards required in the market to stay relevant alongside competitors.
D) POP highlights unique consumer preferences that only your brand can satisfy.
E) POP represents the attributes that distinguish a brand and create a competitive advantage over others.
C
Points of Parity are those attributes that match the competition to ensure the brand can compete on essential elements. These are the foundational aspects required for market relevance but do not necessarily create a competitive advantage.
A beverage company is considering launching a new fruit juice targeted at (A) a niche group of fitness enthusiasts in a small town, or (B) young professionals across a major city who prefer quick, healthy drink options. Considering the need for the segment to be substantial, which option should the company consider?
A. Option A, because the niche group can be targeted more personally.
B. Option B, because the segment is larger and more profitable to serve.
C. Option A, because smaller segments are easier to reach and serve.
D. Option B, because young professionals might not be interested in healthy drink options.
E. Neither, as both options do not fulfill the criteria of being substantial.
B
Option B is the better choice as young professionals across a major city represent a larger, more substantial segment. This segment is large enough for the company to serve profitably, aligning with the principle that a segment needs to be substantial to be useful and profitable for the company.
Imagine "BeauCafe", a renowned coffee brand, decides to release a new line of premium leather handbags. Which type of brand strategy is BeauCafe employing for this decision?
a) Line Extensions
b) Brand Extensions
c) Multibrands
d) New Brands
e) Private Brands
b) Brand Extensions
BeauCafe is known for coffee but is now venturing into a completely different product category (handbags) using the same brand name. This is termed as "Brand Extensions".
The phase 3 post-purchase process for a high-involvement shopper is best described as:
a evaluating self as astounded or disappointed.
b reevaluating the purchase only moderately unless switching brands.
c reevaluating the purchase little or not at all.
d reevaluating the purchase to a significant extent and likely to have buyer’s remorse.
c
Performing little immediate reevaluation is most associated with a high-involvement shopper.
A firm preparing to introduce a new deodorant has learned that more competitors are offering products formulated for women than men. This finding most likely emerged during the ________ step of the firm’s STP process.
a. Segmentation
b. Positioning
c. Targeting
d. Selection
e. Purchasing
c. Targeting
During the targeting step, firms evaluate different segments and decide which one(s) to focus on. In this case, the firm identified an opportunity related to gender-based product availability and would use this information to decide if they should target men specifically, given the competition's focus on women.
A small beverage company wants to enter a market dominated by a few large competitors. Which strategy should it adopt to effectively challenge the established market players?
A) Focus on developing a wide range of flavors to appeal to all market segments.
B) Use counter-segmentation to offer products that appeal to overlooked customer groups.
C) Directly compete on price with the largest competitor.
D) Segment the market based on demographic factors and target the largest segment.
E) Avoid any form of segmentation and focus solely on product quality.
B
For a challenger, counter-segmentation can be a more effective strategy. By focusing on customer groups that have been overlooked by the dominant players, the company can carve out a niche for itself without directly confronting the market leaders on their own terms.
"ReadNow," a book publishing company, traditionally catered to the mass market with generic novels. However, with an influx of specialized reader segments emerging, such as young adult fantasy enthusiasts or historical fiction aficionados, "ReadNow" is contemplating a change in strategy. What type of targeting strategy would best allow "ReadNow" to cater to these specific reader interests without alienating the broader market?
A. Mass Marketing
B. Niche Marketing
C. Segment Marketing
D. Personalized Marketing
E. None of the above
C. Segment Marketing
Segment Marketing will enable "ReadNow" to adapt its marketing mix to cater to the specific needs and preferences of these emerging reader groups. By tailoring specific books or series to different reader segments, "ReadNow" can cater to both specialized interests and the broader market.
A company, "HydroTech", produces state-of-the-art water filtration systems. They've developed a new filtration product that provides a faster flow rate than any other product on the market. To introduce this new product, they decided to use the "HydroTech" name but with a unique design and logo different from their primary water filtration systems. What brand development strategy is HydroTech using?
a) Line Extensions
b) Brand Extensions
c) Multibrands
d) New Brands
e) Private Brands
a) Line Extension
HydroTech is introducing a product in a category they're known for (water filtration) but with a same brand name and/or logo. This strategy is termed as creating "Line extension"
Caty’s Cycles sells a wide variety of motorcycles. Which of the following efforts is NOT a technique Caty’s could use to minimize barriers to purchase?
a Offer multiple options for financing
b Employ knowledgeable and customer-focused salespeople
c Offer easy-to-understand prices and discounts
d Share brand recommendations based on a level of expertise or expected product use
e All answers are correct
e
The purchase phase may entail making choices about which brand to buy, from whom to buy, how many to buy, when to buy, and how to pay. However, many factors can intervene between the moment a consumer decides to buy and the moment of actual purchase. Companies should anticipate barriers to purchase and attempt to minimize them.
"SportyGear" is a company producing athletic wear. After conducting market research, they discovered three primary segments: professional athletes, casual gym-goers, and fitness newbies. However, the company has limited resources and wants to ensure they pick a segment that has the most potential for growth and hasn't been saturated by competitors. Based on the material, which criteria should "SportyGear" prioritize in their decision-making? (choose TWO options / no partial points)
A. Accessibility
B. Adaption Costs
C. Differentiable/Competitive Situation
D. Size / Measurable
E. Growth
C. Differentiable/Competitive Situation and E. Growth
"SportyGear" needs to identify a segment with potential growth (indicating future profitability) and ensure that they can offer something unique in a segment where competitors haven't already fully met the needs.
Evaluate the following statement and explain why.
On a perceptual map, two brands, "Brand A" and "Brand B", appear close together based on price perception. Therefore, in reality, prices of "Brand A" and "Brand B" are very similar.
No, it is not true.
In reality, "Brand 1" is priced significantly higher than "Brand 8". It is because the map is based on customers’ perception, which can differ from real market values.
To maximize usefulness of your segmentation, the segment must be _____________________. (CHOOSE ALL CORRECT ONES)
A. Identifiable
B. Substantial
C. Accessible
D. Reasonable
E. Actionable
A, B, C, E
◦ Identifiable ◦ Substantial ◦ Accessible ◦ Stable ◦ Differentiable ◦ Actionable
Considering the concept of a perceptual map, if "EcoDrive", a car brand, finds there's a gap in the market for affordable cars with high-end luxury features and they introduce a new car model to fill this gap, what strategy have they primarily employed based on the perceptual map's insights?
a) Differentiation
b) Repositioning
c) Reinforcing
d) Multibranding
e) Brand Valuation
a) Differentiation
By identifying a gap in the market using a perceptual map and then introducing a product to fill that gap, "EcoDrive" is employing a "Differentiation" strategy. They are creating a unique market position that distinguishes them from competitors.