Global Marketing, 6e (Keegan/Green)
Chapter 7 Segmentation, Targeting, and Positioning
1) Many Chinese women use whitening creams to lighten and brighten their complexions since white skin is associated with wealth.
Answer: TRUE
Diff: 1 Page Ref: 202
2) Market Segmentation is the process of evaluating the segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond.
Answer: FALSE
Diff: 2 Page Ref: 203
AACSB: Reflective Thinking
3) Sushi, Falafel, Tandoori Chicken or Pizza are in demand in many parts of the world. This phenomenon can be due to pluralization of consumption and segment simultaneity.
Answer: TRUE
Diff: 2 Page Ref: 204
AACSB: Multicultural and Diversity
4) The fact that significant numbers of pizza-loving consumers are found in many countries indicates that they are eating the exact same thing in all parts of the world.
Answer: FALSE
Diff: 1 Page Ref: 204
5) Conventional wisdom about market segmentation calls for acknowledging the emergence of global market segments that transcend national boundaries.
Answer: FALSE
Diff: 2 Page Ref: 204
AACSB: Reflective Thinking
6) The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers.
Answer: TRUE
Diff: 2 Page Ref: 205
AACSB: Reflective Thinking
7) A fact found by demographic segmentation is that by the year 2030, 20 percent of the U.S. population or 70 million will be 65 years old or older.
Answer: TRUE
Diff: 2 Page Ref: 205
AACSB: Analytic Skills
8) The assumption of homogeneity should be the cornerstone of a company's market segmentation effort.
Answer: FALSE
Diff: 2 Page Ref: 206
9) About two-thirds of world GNI is generated in the Triad countries, whereas only about 12 percent of the world's population is located in those countries.
Answer: TRUE
Diff: 2 Page Ref: 206
AACSB: Reflective Thinking
10) The United States ranks number one among nations in terms of both per capita income and in terms of income adjusted for purchasing power.
Answer: FALSE
Diff: 2 Page Ref: 206
AACSB: Analytic Skills
11) Swedish companies such as IKEA, Ericsson, and Saab have looked beyond their borders for significant growth opportunities since they have a high per capita income.
Answer: FALSE
Diff: 2 Page Ref: 207
AACSB: Reflective Thinking
12) When assessing market segments in terms of income data, global companies should avoid targeting countries with per capita incomes of less than $755.
Answer: FALSE
Diff: 2 Page Ref: 207
AACSB: Reflective Thinking
13) An extrapolation of current economic growth trends suggest that China, with its combination of high real income growth and relatively low population growth, is a strong candidate to become a leading world economic power.
Answer: TRUE
Diff: 2 Page Ref: 208
AACSB: Reflective Thinking
14) Ten most populous countries in the world account for roughly 60 percent of the world population.
Answer: TRUE
Diff: 2 Page Ref: 208
AACSB: Analytic Skills
15) Using averages alone, it is possible to underestimate a market's potential, for example, fast-growing, higher income segments are present both in India and China.
Answer: TRUE
Diff: 2 Page Ref: 208-209
AACSB: Reflective Thinking
16) The vast majority of India's population comprises a "bullock cart" segment whose households lack most comforts but typically own a television.
Answer: TRUE
Diff: 2 Page Ref: 209
AACSB: Reflective Thinking
17) A psychographic study showed that Porsche buyers could be divided into several distinct categories, one consisting of "Top Guns" who buy Porsches and expect to be noticed.
Answer: TRUE
Diff: 2 Page Ref: 211
18) Categories such as "successful idealists" and "affluent materialists" can be used to describe psychographic segments.
Answer: TRUE
Diff: 2 Page Ref: 211
AACSB: Reflective Thinking
19) The segmentation and targeting approach used by the same company can vary from country to country.
Answer: TRUE
Diff: 2 Page Ref: 211
AACSB: Reflective Thinking
20) For behavior segmentation, marketers use the 80/20 rule when assessing the consumers' usage rate, which means that 20 percent of the company's revenues or profits are accounted for by 80 percent of the firm's products or customers.
Answer: FALSE
Diff: 2 Page Ref: 213
AACSB: Reflective Thinking
21) Global benefit segmentation is based on a marketer's understanding of the problem a product solves, the benefit it offers, or the issue it addresses, regardless of geography.
Answer: TRUE
Diff: 2 Page Ref: 214
AACSB: Reflective Thinking
22) Based on the trends and segmentation of Europe's Single Market, marketers are particularly advised to take the Golden Grays seriously and market brands that provide happiness, convenience, and time savings.
Answer: TRUE
Diff: 2 Page Ref: 214
AACSB: Reflective Thinking
23) The widespread adoption of the Internet and other new technologies will result in new segmentation approaches to be developed in response to changing business environment.
Answer: TRUE
Diff: 2 Page Ref: 216
AACSB: Reflective Thinking
24) Thai Americans, Vietnamese Americans, and Chinese Americans, each of whom speak a different language, can be separated by ethnic segmentation.
Answer: TRUE
Diff: 2 Page Ref: 215
AACSB: Analytic Skills
25) When assessing potential country target markets, management should rely heavily on its network of contacts as a primary criterion for targeting.
Answer: FALSE
Diff: 2 Page Ref: 216
AACSB: Reflective Thinking
26) About 1.3 million cars are sold each year in India; in absolute terms, this is a relatively small number.
Answer: TRUE
Diff: 2 Page Ref: 217
AACSB: Reflective Thinking
27) India is the world's fastest growing cell phone market with the industry expanding at a rate of 50 percent annually with 5 million new subscribers added every month. This is an indication of continued private-sector growth.
Answer: FALSE
Diff: 2 Page Ref: 217-218
AACSB: Reflective Thinking
28) A market segment or country market characterized by strong competition may be a segment to target since it will be easier to enter a proven market.
Answer: FALSE
Diff: 2 Page Ref: 218
AACSB: Analytic Skills
29) Honda first created the market for small-displacement dirt bikes and then moved up market with bigger bikes targeted at casual riders.
Answer: TRUE
Diff: 1 Page Ref: 219
AACSB: Reflective Thinking
30) Marketing model drivers are key elements or factors required for a business to take root and grow in a particular country market environment.
Answer: TRUE
Diff: 2 Page Ref: 220
AACSB: Analytic Skills
31) In India, refrigeration is not widely available and this restricts many foreign companies to market items that need refrigeration. This can be considered as one of the "enabling conditions" that needs to be considered in a marketing model.
Answer: TRUE
Diff: 2 Page Ref: 220
AACSB: Analytic Skills
32) When making a decision about market entry timing, a company's management team should understand that the first-mover always becomes the market leader.
Answer: FALSE
Diff: 2 Page Ref: 221
AACSB: Reflective Thinking
33) Before targeting the North American market, the Lexus marketing team succeeded in making Lexus the number one luxury-car nameplate in Japan.
Answer: FALSE
Diff: 2 Page Ref: 222
AACSB: Reflective Thinking
34) Standardized global marketing is analogous to mass marketing in a single country and is also known as differentiated target marketing.
Answer: FALSE
Diff: 1 Page Ref: 223
AACSB: Reflective Thinking
35) Differentiated global marketing represents a more ambitious approach than concentrated target marketing.
Answer: TRUE
Diff: 2 Page Ref: 224
36) There is a significant difference between the "mass market" and the "premium market." In the premium market customers are looking for a good deal whereas in the mass market customers are looking for a product that fulfills their expectations.
Answer: FALSE
Diff: 2 Page Ref: 223-224
AACSB: Reflective Thinking
37) BMW's slogan "the ultimate driving machine," is an example of an attribute or benefit which has proven successful in their positioning strategy.
Answer: TRUE
Diff: 2 Page Ref: 224-225
AACSB: Reflective Thinking
38) IKEA, the home furnishings retailer based in Sweden, wraps itself in the Swedish flag — literally, since inside and out, their stores are decorated in the national colors of blue and yellow. This is an example of local consumer culture positioning.
Answer: FALSE
Diff: 2 Page Ref: 228-229
AACSB: Reflective Thinking
39) Benetton uses the slogan "United Colors of Benetton" to position itself as a brand concerned with the unity of humankind. This type of strategy is referred to as GCCP (global consumer culture positioning).
Answer: TRUE
Diff: 2 Page Ref: 227-228
AACSB: Reflective Thinking
40) In France, the National Assembly approved a bill that would require Apple to share the iTunes software codes with other companies so that music downloads would play on all digital music players, not just iPods.
Answer: TRUE
Diff: 2 Page Ref: 230
AACSB: Reflective Thinking
41) Market segmentation represents:
A) targeting prospective customers.
B) finding customers who can respond to advertisement.
C) promoting products and services internationally.
D) identify customers who can help in promoting products.
E) an effort to identify and categorize customers based on common characteristics.
Answer: E
Diff: 2 Page Ref: 203
AACSB: Reflective Thinking
42) When identifying global market segments, a fundamental guiding principle should be the need to determine:
A) shared demographic characteristics.
B) similar languages.
C) similar needs and buying behavior.
D) similar ethnic backgrounds.
E) similar geographic regions.
Answer: C
Diff: 2 Page Ref: 204
AACSB: Reflective Thinking
43) Global marketing authority Theodore Levitt has noted that many ethnic and regional foods–sushi, for example–is enjoying popularity in many countries of the world. This observation is known as:
A) the pluralization of consumption.
B) the ethnicitization of consumption.
C) the democratization of consumption.
D) the sophistication of consumption.
E) the domestication of consumption.
Answer: A
Diff: 2 Page Ref: 204
AACSB: Reflective Thinking
44) Which of the following does not represent "conventional wisdom" regarding global segmentation?
A) assume heterogeneity between countries
B) assume homogeneity within a given country
C) focus heavily on macro-level cultural differences
D) acknowledge the existence of within country differences
E) assigning secondary priority to within country microsegments
Answer: D
Diff: 3 Page Ref: 204
AACSB: Reflective Thinking
45) Income and population are two variables that can be used in which type of segmentation?
A) ethnic segmentation
B) demographic segmentation
C) psychographic segmentation
D) behavioral segmentation
E) gender segmentation
Answer: B
Diff: 2 Page Ref: 205
AACSB: Reflective Thinking
46) Ideally, for comparative purposes, GNI and other measures of national income converted to U.S. dollars should be calculated on the basis of:
A) per capita income.
B) purchasing power parities.
C) high income countries.
D) low income countries.
E) local currency.
Answer: B
Diff: 2 Page Ref: 206-207
AACSB: Reflective Thinking
47) Ericsson, IKEA, Saab, and other companies based in Sweden have looked beyond their borders for significant growth market because:
A) it has high total annual income.
B) it has low total annual income.
C) it has a smaller population.
D) it is land locked geographically.
E) it has relaxed export policies.
Answer: C
Diff: 3 Page Ref: 207
AACSB: Reflective Thinking
48) The concentration of income in the high-income and large-population countries means that a company can be "global" by targeting buyers in:
A) just 50 countries.
B) just 20 countries.
C) just 10 or fewer countries.
D) just 30 countries.
E) none of the above
Answer: C
Diff: 3 Page Ref: 208
AACSB: Analytic Skills
49) A global segment is referred to as "global elite" which include:
A) people between the ages of 12 and 19.
B) affluent, well-traveled persons.
C) graying population.
D) technology professionals.
E) persons having power.
Answer: B
Diff: 3 Page Ref: 209
AACSB: Analytic Skills
50) Based on 2007 projections, the top ten nations ranked by GNI does not include:
A) United States.
B) Japan.
C) Russia.
D) Spain.
E) Italy.
Answer: C
Diff: 3 Page Ref: 207
AACSB: Analytic Skills
51) McDonald's operates in over 120 countries, however, 80 percent of its restaurants are located in nine countries which does not include the following country market:
A) Australia.
B) Brazil.
C) Germany.
D) India.
E) Japan.
Answer: D
Diff: 2 Page Ref: 208
AACSB: Analytic Skills
52) Psychographic segmentation involves grouping people in terms of their:
A) combined household income.
B) age and income.
C) attitudes, values and lifestyle.
D) psychological well being.
E) gender.
Answer: C
Diff: 2 Page Ref: 210-211
AACSB: Reflective Thinking
53) Porsche AG uses the label "Top Guns" to describe one segment of its customers, namely those who care about power and control and who expect to be noticed. Such a profile would be based on which type of segmentation?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) gender
Answer: C
Diff: 2 Page Ref: 210-211
AACSB: Reflective Thinking
54) A marketing manager for the Mars candy company is studying a single-country psychographic profile that includes segment labels such as "Cossacks" and "kuptsy." What country does the survey cover?
A) India
B) Japan
C) Russia
D) China
E) Vietnam
Answer: C
Diff: 2 Page Ref: 212
55) "Generation Y," "Golden Grays," and "Globerations" are three market segments that have been described in:
A) Japan.
B) Russia.
C) the European Union.
D) the United States.
E) Brazil.
Answer: C
Diff: 2 Page Ref: 214
AACSB: Reflective Thinking
56) Which of the following is not a characteristic associated with the Golden Grays segment in Europe's single market?
A) consider it important to mix fun and work
B) enjoy high-tech gaming
C) deluged with passive information
D) expect biotechnology to extend life expectancy
E) share few family activities
Answer: E
Diff: 3 Page Ref: 214
AACSB: Reflective Thinking
57) Which of the following is not a characteristic associated with the Generation Y segment in Europe's single market?
A) share numerous family activities
B) less reverence toward established authorities
C) view leisure time in "pay-per-play" terms
D) increasingly tech-savvy
E) deluged with positive information
Answer: E
Diff: 3 Page Ref: 214
AACSB: Reflective Thinking
58) Tambrands markets feminine hygiene products around the globe. The company divides markets on the basis of past, present, and future product usage. Which kind of segmentation does this represent?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) geographic
Answer: D
Diff: 2 Page Ref: 213-214
AACSB: Reflective Thinking
59) Diageo PLC; V&S Vin & Spirit AB; and Seagram and other marketers know that Russians consume a great deal of Vodka. This type of market segmentation can be classified as:
A) demographic.
B) behavioral.
C) psychographic.
D) occupational.
E) benefit.
Answer: B
Diff: 2 Page Ref: 212
AACSB: Reflective Thinking
60) "Usage rates" and "user status" are important criteria for which segmentation variable?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) benefit
Answer: D
Diff: 2 Page Ref: 213-214
AACSB: Reflective Thinking
61) Which of the following is probably the biggest impediment to Tambrands's efforts to expand the market for its Tampax brand feminine hygiene products in developing nations?
A) lack of demographic information
B) underdeveloped distribution infrastructure
C) religious and cultural mores
D) preference for less expensive local brands
E) lack of advertisement and promotion
Answer: C
Diff: 2 Page Ref: 215
AACSB: Multicultural and Diversity
62) Procter & Gamble has identified a group of consumers in Europe who are willing to pay premium prices for pet food that will improve the health of their pets. This is an example of ________ segmentation:
A) demographic
B) psychographic
C) ethnic
D) behavioral
E) benefit
Answer: E
Diff: 2 Page Ref: 214-215
AACSB: Reflective Thinking
63) Which of the following is true about efforts by automakers to target the Hispanic segment in the United States?
A) Honda, Toyota, Ford, and GM all began targeting the segment years ago.
B) Honda and Toyota began targeting the segment years ago; Ford and GM launched their efforts more recently.
C) Ford and GM began targeting the segment years ago; Honda and Toyota launched their efforts more recently.
D) Only Ford and GM are targeting the Hispanic segment.
E) none of the above
Answer: B
Diff: 2 Page Ref: 215-216
AACSB: Analytic Skills
64) Which of the following best describes the decision by South Korean automaker Kia Motors about targeting the U.S. automotive market?