Chapter 2: Market Analysis
Chapter 2: Market Analysis
1. / Marketing research involves studying company customers and competitors along with the overall industry and environment.Ans: True
2. / Effective marketing research begins with a customer analysis.
Ans: False
3. / Political forces are the part of an environmental analysis that includes laws, regulations, and regulatory agencies that impact marketing.
Ans: True
4. / Social forces that impact business include changing demographics or population characteristics, shifting cultural and sub-cultural trends, and rising educational levels.
Ans: True
5. / In an environmental analysis, economic forces include such items as the price and availability of raw materials along with the unemployment rate.
Ans: True
6. / As the price elasticity of a product increases, managers become less concerned about raising the product's price.
Ans: False
7. / Technological forces in the environment include new products created by technology as well as product improvements and improvements in production methods.
Ans: True
8. / Semi-controllable factors in the environment have an impact on a company, but the company's leaders are able to exert some influence to reduce the impact.
Ans: True
9. / When Looking Fit Tanning Salon conducted an environmental analysis, the marketing team discovered that some states were considering legislation that would make it illegal for anyone under the age of 18 to tan without parental consent. This is an example of an analysis of semi-controllable forces.
Ans: False
10. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found that tanning has become a lifestyle for a large segment of the U.S. population. This is an example of an analysis of competitive forces.
Ans: False
11. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found that the fastest growing segment of individuals who use tanning salons is females from 16-19 years of age. This is an example of an analysis of economic forces.
Ans: False
12. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found an increase in the demand for new sunless products that provide an immediate cosmetic, tanned look without any UV exposure. This is an example of an analysis of technological forces.
Ans: True
13. / A competitive analysis involves constant surveillance of ongoing and anticipated industry trends.
Ans: True
14. / A competitive analysis begins with identifying the various levels of competition and the companies in the various levels.
Ans: True
15. / In a competitive analysis, the advantage of monitoring the web sites and advertisements of competitors is that the information gathered would be the same as would be seen by customers.
Ans: True
16. / In a competitive analysis, if a marketing manager wanted to see the competition as other people see them, then the best sources of such information would be web sites and advertisements by the competitors.
Ans: False
17. / In a competitive analysis, the advantage of collecting information through news articles and from trade and professional organizations is that the information will always be from a neutral source.
Ans: False
18. / Analyzing the competition can help a marketing manager learn how the organization and its products are perceived by customers.
Ans: True
19. / Brand parity is the situation where brands are perceived to be highly similar.
Ans: True
20. / Brand equity is the situation where brands are perceived to be highly similar.
Ans: False
21. / The two methods marketers use to establish a product's position in the marketplace are product differentiation and market segmentation.
Ans: True
22. / Product positioning is solely based on the place a good or service occupies in the marketplace relative to its competitors.
Ans: False
23. / In developing a product positioning approach, one of the components that must be considered is the frame of reference or product category.
Ans: True
24. / In developing the product positioning approach, one of the components that must be considered is the point of differentiation or uniqueness of the product.
Ans: True
25. / When BMW marketing materials stress the engineering and handling of the vehicles, the company is using a product positioning strategy based on product attributes.
Ans: True
26. / When Arm & Hammer advertises that its baking soda is excellent for putting on carpet to make it smell fresh, the company is using a product positioning strategy based on price.
Ans: False
27. / When positioning a product relative to competitors, the approach works best when a well known-brand is compared to a lesser known brand.
Ans: False
28. / Apple computers positioned its products as having superior graphics and therefore as being an ideal choice for graphic designers and for use in elementary and high schools. This is an example of positioning by product users.
Ans: True
29. / Cadillac promotes itself as the elite, best of the luxury cars, which is an example of positioning by attribute.
Ans: False
30. / The key to successful product positioning is finding a position a brand can occupy that is either unique or superior.
Ans: True
31. / Perceptual mapping can be used to investigate and determine the optimal market segmentation strategy for a product.
Ans: False
32. / Perceptual mapping is a useful tool in assessing product positioning because it identifies important purchase criteria and provides a visual representation of where a brand stands in relation to competitors.
Ans: True
33. / When brand parity exists, the marketing department is often forced to compete on price.
Ans: True
34. / When brand equity exists, the marketing department is often forced to compete on price.
Ans: False
35. / Product differentiation can be created in two ways: (1) an actual product difference and (2) the perception of a difference.
Ans: True
36. / Market segmentation involves categorizing customers into groups and the positioning the firm's product within the group.
Ans: False
37. / Most marketers understand demographic segmentation. Unfortunately, many stop with demographic variables and do not use psychographic, behavioral, or geographic segmentation to better understand the various market segments.
Ans: True
38. / Behavioral segmentation variables are used to examine consumer mental characteristics and predispositions connected to purchasing habits.
Ans: False
39. / Psychographic segmentation variables include personality, lifestyles, activities, interests, and opinions.
Ans: True
40. / Behavioral segmentation identifies segments by how consumers use a product, the benefits derived from products, and how often the product is purchased and used.
Ans: True
41. / In the business-to-business sector, demographic segmentation is the same as firmographic segmentation.
Ans: True
42. / In the business-to-business sector, segmenting by the number of employees or the sales volume of firms is firmographic segmentation.
Ans: True
43. / In the business-to-business sector, segmenting by quantity purchased or the frequency of purchases is firmographic segmentation.
Ans: False
44. / Once the market segmentation is complete, the firm's marketing manager must identify the segment or segments to pursue. The most important criterion in this selection process is the growth potential of the market segments.
Ans: False
45. / When identifying which market segment or segments to pursue, after a good product/market match has been identified, the next step is to examine the levels of competition within the market segments.
Ans: False
46. / In identifying which market segment or segments to pursue, company leaders will examine the retention potential and the lifetime value of potential customers, because the cost of acquiring new customers is much higher than the cost of retaining current customers.
Ans: True
47. / In identifying which market segment or segments to pursue, if a market segment is deemed to be viable from the standpoint of size and growth, then the analysis turns to the ability to retain customers and the level of competition within the segment.
Ans: False
48. / When conducting a customer analysis, the marketing team thinks about the three different types of customers: consumers, other businesses, and non-profit organizations.
Ans: True
49. / A customer analysis should answer the questions of who, where, when, and what. The “how” has been answered as part of the competitive analysis.
Ans: False
50. / In terms of conducting a customer analysis, the demographic and psychographic profiles of customers are developed when answering the “what” question.
Ans: False
51. / In terms of conducting the “where” in a customer analysis, the location or locations in which products are purchased are determined as well as any other products that are typically purchased with it.
Ans: True
52. / In conducting a customer analysis, the question of “when” is often tied closely to the question of “where.”
Ans: True
53. / When a problem or desire is triggered, a consumer first conducts an external search in which he or she examines information that can be used to solve the problem.
Ans: False
54. / During internal information search for information, a consumer who is neutral about the last brand purchased is the most likely to spend at least some time thinking about other brands.
Ans: True
55. / In an internal search for information, share of mind deals with brand recall and whether the consumer would consider the brand.
Ans: False
56. / If a brand creates a high share of mind, then it will almost always have a high share of heart.
Ans: False
57. / When measuring share of mind and share of heart, typically, for most brands, share of heart scores will be higher than share of mind scores.
Ans: False
58. / As brand parity increases within a product category, there will be less distance separating brands in terms of share of heart scores.
Ans: True
59. / When a consumer cannot satisfy a need for a good or service identified in an internal search, the individual will conduct an external search for additional information.
Ans: True
60. / When evaluating alternatives, consumers will evaluate alternative products as well as alternative brands within a product category.
Ans: True
61. / In evaluating alternatives, the third stage in the consumer decision-making process, consumers choose the brand they like the best or have the most positive feelings toward using the evoked set method of evaluation.
Ans: False
62. / Brands that a person will not consider for a purchase make up the inert set.
Ans: False
63. / In evaluating alternative brands, the multiattribute approach tends to be used for low involvement products that are not socially visible.
Ans: False
64. / The market potential is the total number of individuals, or businesses that could potentially purchase a particular product.
Ans: True
65. / Market demand is the total current existing demand for a product divided by the market share for each company.
Ans: False
66. / The sum of all brands sold within a product industry is called market potential.
Ans: False
67. / Company or brand demand is often referred to as the penetration rate.
Ans: False
68. / In terms of factors that influence the rate of market penetration, the greater the level of awareness for a new product, normally the higher the penetration rate will be.
Ans: True
69. / In terms of factors that influence the rate of market penetration, product availability is often an issue early in the release of a new product.
Ans: True
70. / In estimating brand demand, customer surveys are used in industries where the number of buyers is relatively small.
Ans: True
71. / For consumer goods companies and other types of high volume sales situations, an excellent method of estimating demand is customer surveys.
Ans: False
72. / If the sales force estimate approach is used to estimate demand for a product, the estimates provided tend to be inflated when the estimates are not going to be used to set quotas for salespeople.
Ans: True
73. / All of the quantitative methods of estimating brand demand rely on past sales histories for their projections of future sales.
Ans: True
74. / For current products on the market in relatively stable markets, quantitative methods of estimating brand demand work well.
Ans: True
75. / In using trend projections to estimate brand demand, the more demand in the past fluctuates, the more reliable a trend projection becomes.
Ans: False
76. / In the quantitative methods for estimating demand, the trend projection technique allows for normal business or economic cycles.
Ans: False
77. / Among the quantitative methods for estimating brand demand, the exponential smoothing method is the most sophisticated form of forecasting and is often the most accurate.
Ans: False
78. / A market research program typically includes all of the following analyses except
A) / environmental analysis / C) / product package analysis
B) / competitive/industry analysis / D) / product positioning analysis
Ans: C
79. / Effective marketing research begins with a(n)
A) / environmental analysis / C) / market segment analysis
B) / competitive/industry analysis / D) / customer analysis
Ans: A
80. / An environmental analysis includes monitoring of all of the following forces except
A) political forces B) customer forces C) social forces D) economic forces
Ans: B
81. / An environmental analysis includes monitoring of all of the following forces except
A) / technological forces / C) / social forces
B) / semi-controllable forces / D) / psychological forces
Ans: D
82. / In an environmental analysis, which consists of laws, regulations, and regulatory agencies that impact marketing activities?
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: A
83. / In conducting an environmental analysis, the marketing manager becomes concerned about the possibility that corporate income taxes may be increased during the next legislative session. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: A
84. / In an environmental analysis, which forces that impact businesses include changing demographics or population characteristics, shifting cultural and sub-cultural trends, and rising educational levels?
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: B
85. / In conducting an environmental analysis, the marketing manager has noticed that most households do not consist of a traditional husband, wife and child group and often include individuals living together, both of the same sex of from different genders. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: B
86. / All of the following are social forces impact marketing except
A) / aging population as baby boomers retire
B) / shifting of population from northern and eastern United States to more southern and western states
C) / demand for greater product quality
D) / size and composition of family units
Ans: C
87. / While conducting an environmental analysis, a marketing manager becomes concerned about an increase in the price of gasoline products and the corresponding increase that will this will cause for transportation. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: C
88. / Which not an economic force that impacts marketing?
A) / levels of economic growth
B) / employment and unemployment rate
C) / prices and availability of raw materials
D) / product safety regulations
Ans: D
89. / In an environmental analysis, which create new products, product improvements, and improvements in production methods?
A) / political forces / C) / economic forces
B) / social forces / D) / technological forces
Ans: D
90. / In an environmental analysis, which impact a company, but company leaders are able to respond and exert some influence in return?
A) / political forces / C) / economic forces
B) / semi-controllable forces / D) / technological forces
Ans: B
91. / In an environmental analysis, semi-controllable variables include all of the following except
A) raw materials B) the local community C) suppliers D) financial institutions
Ans: A
92. / When Looking Fit Tanning Salon's marketing team conducted an environmental analysis, they found that California was considering legislation that would make it illegal for anyone under the age of 18 to tan without a doctor's or surgeon's prescription. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / semi-controllable forces / D) / social forces
Ans: A
93. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found that tanning has become a lifestyle for a large segment of the U.S. population. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / semi-controllable forces / D) / social forces
Ans: D
94. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found that the fastest growing segment of individuals who use tanning salons is females from 16-19 years of age. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / semi-controllable forces / D) / social forces
Ans: D
95. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they discovered that tanning involves spending disposable income and therefore it was impacted by local economic conditions. This is an example of an analysis of
A) / political forces / C) / economic forces
B) / semi-controllable forces / D) / social forces
Ans: C
96. / When Looking Fit Tanning Salon's marketing managers conducted an environmental analysis, they found an increase in the demand for new sunless products that provide an immediate cosmetic, tanned look without any UV exposure. This is an example of an analysis of
A) / technological forces / C) / economic forces
B) / semi-controllable forces / D) / social forces
Ans: A
97. / A competitive/industry analysis involves a(n)
A) / systematic monitoring of political, economic, and technological forces operating in an industry
B) / constant surveillance of ongoing and anticipated industry trends
C) / analysis of social trends that can impact the firm and the industry in which it operates
D) / monitoring only those firms that are considered to be direct competitors
Ans: B
98. / When marketing teams do not closely watch competitors and industry trends then the company may fail to
A) / recognize opportunities and lose customers to competitors
B) / see problems and as a result lose customer to competitors
C) / bid on jobs that allow competitors to win
D) / see who they are competing with and what advantages the primary competitor may have
Ans: A
99. / When considering the layers of competition of a discount retailer such as K-Mart, the direct competitors are
A) / discount stores including Target and Wal-Mart
B) / specialty stores such as Old Navy, Lane Bryant, and Gap
C) / department stores such as JC Penney, Belk's, and Dillard's
D) / other stores, including Bass Pro, Circuit City and Office Depot