Why is market segmentation important? Describe three ways firms can segment consumer markets. Marketing is different in B2B markets than in consumer markets. Identify and explain three differences between the businesstobusiness market and the consumer market. Explain how mass marketing and relationship marketing differ. B2B Marketing
Chapter 13 - Marketing: Helping Buyers Buy TEST PLANNING TABLE FOR CHAPTER 13 Learning Objective LL:1 Knows Basic Terms and Facts LL:2 Understands Concepts and Principles LL:3 Applies Principles Define marketing and apply the marketing concept to both for-profit and nonprofit organizations 1,2,3,4,5,6,7,8,9,10,11,12, 13,14,15,16,17,18, 134,135,136,137,138,139, 139,140,141,142,143 19,20,21,22~, 144,145,146,147,148 23,24,25,26, 149,150,151,152,153, 247 Describe the four Ps of marketing 45,46,47,48,49,50,51, 163,164,165 Summarize the marketing research process Show how marketers use environmental scanning to learn about the changing marketing environment Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Compare the business-tobusiness market and the consumer market 27,28,29,30,31,32,33,34, 35,36,37,38,39,40,41,42, 43,44, 154,155,156,157,158,159, 160,161,162 53,54,55,56,57,58,59,60, 61,62,63,64,65,66, 172,173,174,175,176,177, 178,179,178,179,180 73,74,75,76,77,78,79,80, 81,82,83, 187,188,189,190,191,192, 193,194 52, 166,167,168,169,170, 171, 242, 250* 71,72, 183,184,185,186, 246, 248* 87, 197,198, 252* 88,89,90,91,92,93,94,95, 96,97,98,99,100,101,102, 103,104,105,106,107,108, 109,110, 111,112, 199,200,201,202,204,205, 206,207,208,209,210 113,114,115,116,117~, 211,212,213,214,215, 216,217 118,119,120,121,122, 218,219,220,221,222, 223,224,225,226,227, 228,229,230,231,232, 243,245, 249* 251* 123,124,125,126,127,128, 129,130, 233,234,235,236 131,132, 237,238 133, 239,240,241, 244 67,68,69,70, 181,182 84,85,86~, 195,196 Total number of test items: 252 True/false questions are in plain text Multiple choice questions are in bold text Questions on boxed material are in bold text with a tilde~ Essay questions are in bold underlined text Minicase questions are in bold with an asterisk* 13-1 Chapter 13 - Marketing: Helping Buyers Buy Chapter 13 Marketing: Helping Buyers Buy Answer Key True / False Questions Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have a value for customers, clients, partners, and society at large Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing The activities of marketers depend on what needs to be done to satisfy consumer wants and needs, in other words, helping the buyer buy Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing In the evolution of marketing, the production era assumed an unlimited market Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing The four eras of the evolution of marketing are (1) production, (2) selling, (3) advertising, and (4) stakeholder relationships Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing The focus of the production era was on distribution and advertising Answer: False 13-2 Chapter 13 - Marketing: Helping Buyers Buy AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing The tremendous demand for consumer goods and services after World War II helped launch the production era of marketing Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing In the production era the greatest marketing need was for distribution and storage Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing During the selling era, businesses turned from an emphasis on production to an emphasis on selling Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing The marketing concept has three parts: (1) a consumer orientation, (2) a service orientation, and (3) an advertising orientation Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 10 In the evolution of marketing, the marketing concept era emphasized selling and advertising in an effort to persuade consumers to buy existing products Answer: False 13-3 Chapter 13 - Marketing: Helping Buyers Buy AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 11 The marketing concept emphasizes that everyone from the president of the firm to the delivery people should be customer oriented Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 12 The marketing concept was used heavily by business when it was first suggested in the 1950s Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 13 Customer relationship management (CRM) is the process of learning as much as possible about customers and doing everything you can to satisfy them Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 14 The idea behind customer relationship management is to enhance customer satisfaction and stimulate long-term customer loyalty Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 15 Because the marketing concept emphasizes a profit orientation, marketing has not been used successfully by nonprofit organizations Answer: False 13-4 Chapter 13 - Marketing: Helping Buyers Buy AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 16 The primary focus of marketing today is on selling and advertising Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 17 During the early 1900s, businesses emphasized learning as much as possible about their customers and doing everything to satisfy them Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 18 Outstanding service after the sale was a primary focus of businesses during the selling era Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Easy Topic: The Evolution of Marketing 19 After World War II, the tremendous demand for goods and services among the returning veterans allowed businesses to sell whatever they produced without having to worry about what the competition was doing Feedback: Competition for the consumer's dollar was fierce after World War II This competition forced businesses to be more responsive to consumers, leading to the emergence of the marketing concept Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Medium Topic: The Evolution of Marketing 13-5 Chapter 13 - Marketing: Helping Buyers Buy 20 It is the job of marketers today to persuade consumers to buy the goods and services those marketers have available to sell Feedback: Although marketers in the 1920s might agree with this statement, marketing today is about learning as much as possible about customers and then exceeding their expectations and helping them buy Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Medium Topic: The Evolution of Marketing 21 Social media is not having an effect on the emerging era of mobile/on-demand marketing Feedback: The digital age is increasing consumer power and this allows consumers to share information via many platforms, including social media Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Medium Topic: The Evolution of Marketing 22 The Seeking Sustainability box shows us that consumer relationship building can mean many different things In this case, Campbell’s and the Food Bank of South New Jersey are showing their great examples of being socially responsible and promoting sustainability, two attributes consumers are seeking more Feedback: With the Food Bank of South New Jersey, Campbell’s developed “Just Peachy Salsa” to give back to the community and prevent the environmental impact of dumping almost million bruised peaches Answer: True AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Medium Topic: The Evolution of Marketing 13-6 Chapter 13 - Marketing: Helping Buyers Buy 23 The marketing efforts at Rotary Enterprises place a great deal of emphasis on marketing goods that will earn the firm a profit This focus on profit orientation shows that Rotary has not yet adopted the marketing concept that emphasizes a customer orientation rather than a profit orientation Feedback: The marketing concept has three parts: a customer orientation, a service orientation, and a profit orientation The customer orientation and profit orientation components are not mutually exclusive, since firms are unlikely to earn a profit unless they are responsive to the needs of their customers Answer: False AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Hard Topic: The Evolution of Marketing 24 Sales representatives at the HomeWork Helper Appliances Store work hard to develop a close relationship with their customers and to provide satisfaction even after the sale These efforts by HomeWork Helper's sales personnel are part of the marketing process Feedback: Today, marketing has adopted the concept of customer relationship management This concept calls for learning as much about customers as possible and doing everything possible to satisfy them with goods and services over time Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Hard Topic: The Evolution of Marketing 25 Mike's Auto Repair works hard to find out what customers want and how to best meet their needs Based on feedback from customers, Mike now provides a written estimate before any work is done, offers a more comprehensive guarantee than competitors, and calls customers after servicing their cars to make sure they are satisfied These efforts suggest Mike is applying the concepts of customer relationship management Feedback: Customer relationship management is a concept that calls for learning as much as possible about customers and doing what it takes to satisfy and even delight them Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Hard Topic: The Evolution of Marketing 13-7 Chapter 13 - Marketing: Helping Buyers Buy 26 The McDonald's Foundation is a nonprofit organization that helps underprivileged children As a nonprofit organization, it should avoid performing marketing functions, since these functions are designed to help organizations earn a profit Feedback: Although the marketing concept does emphasize a profit orientation, marketing functions must be performed by almost all organizations, including those that not seek a profit Answer: False AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Hard Topic: The Evolution of Marketing 27 The main concern of the marketing mix is to please firm's stockholders Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 28 Placing a product in a location where people will buy it is part of the marketing mix Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 29 Designing a want-satisfying product is part of the marketing mix Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 30 Setting a price for the product or service is one element of the marketing mix Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 13-8 Chapter 13 - Marketing: Helping Buyers Buy 31 The primary factors involved in the marketing mix are sometimes called the intangibles of marketing Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 32 The marketing manager's job is to design a program that effectively combines the ingredients of the marketing mix Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 33 The four elements of the marketing mix are product, production, price, and predictability Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 34 Providing people with a description of a potential new good or service and asking if the idea appeals to them are key parts of the marketing process Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 35 Concept testing involves placing a product in a place where consumers will buy it Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 36 A test market refers to the people in a market that will be least likely to use the product or service the marketer is offering Answer: False 13-9 Chapter 13 - Marketing: Helping Buyers Buy AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 37 A brand name is generally thought of as part of the product Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 38 Test marketing involves developing an accurate description of the product and asking people if the proposed product appeals to them Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 39 The marketing process includes decisions about the best way to get the product to the consumer Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 40 Setting prices higher than the competition can help create an image of quality Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 41 Intermediaries are firms in the middle of a series of organizations that distribute goods from producers to consumers Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Easy Topic: The Marketing Mix 13-10 Chapter 13 - Marketing: Helping Buyers Buy 231 Kelly buys only high-priced jeans and expensive sport shoes endorsed by her favorite entertainers Also, her attitudes and values are shaped by specific statements made by these celebrities She also supports causes and charities the celebrities endorse This illustrates how consumer decision making is influenced by: A marketing mix variables B cognitive dissonance C a reference group D primary group identification Feedback: A reference group is a group that an individual uses as a reference point in the formation of his or her beliefs, attitudes, values, or behavior Answer: C AACSB: Reflective Thinking Bloom’s: Apply Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: The Consumer Buying Process 232 Which of the following is the best example of cognitive dissonance? A John has been shopping for a new TV, but has not yet made a purchase because he is having trouble deciding which brand to buy B Julie decided to eat at a restaurant she previously avoided after learning that several movie stars she admires endorse the restaurant C Marquetto is torn between going to the movies with friends or staying home and studying for an exam tomorrow D Rico just bought an expensive HDTV and is already worried that he could have found a better deal if he had shopped more carefully Feedback: Cognitive dissonance is the term for the doubts a consumer may experience after making a purchase For example, consumers often begin to question whether they got the best product at the best price Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: The Consumer Buying Process 13-72 Chapter 13 - Marketing: Helping Buyers Buy 233 marketers include manufacturers, intermediaries, institutions, and the government A Profit seeking B Undifferentiated C Institutional D B2B Answer: D AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Easy Topic: B2B Marketing 234 In terms of the number and dollar volume of transactions, the B2B market is the consumer market A larger than B smaller than C the same size as D unrelated to Answer: A AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Easy Topic: B2B Marketing 235 Business-to-business markets tend to be: A dominated by marketing intermediaries B geographically concentrated C characterized by the presence of a large number of small buyers D more emotional than consumer markets Answer: B AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Easy Topic: B2B Marketing 236 The number of buyers in business-to-business markets is: A roughly the same as the number of buyers in the consumer market B much larger than the number in the consumer market C relatively small compared to the consumer market D controlled by government regulation Answer: C 13-73 Chapter 13 - Marketing: Helping Buyers Buy AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Easy Topic: B2B Marketing 237 Compared to consumer markets, B2B markets: A demand more promotional emphasis on radio and television in order to stimulate sales B rely less on relationship marketing C rely less on marketing intermediaries D are characterized by buyers who behave less rationally Feedback: B2B sales tend to be direct Manufacturers sell products directly to other businesses, while consumer goods often utilize wholesalers and retailers Answer: C AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Medium Topic: B2B Marketing 238 Which of the following statements about the B2B market is true? A The markets are often geographically dispersed B Industrial buyers are usually large C Industrial buyers tend to be more emotional in their purchasing decisions D The size of the market is smaller than the consumer market Feedback: The size of business customers is relatively large; that is, a few large organizations account for most of the employment and production of various goods and services Answer: B AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Medium Topic: B2B Marketing 13-74 Chapter 13 - Marketing: Helping Buyers Buy 239 Holly is a sophomore in college considering a degree in marketing She has asked several friends for advice and their comments are listed below Which of these comments is the most accurate and likely to help Holly? A Marketing offers business students a wide array of career options B Majoring in marketing rules out a meaningful career with a nonprofit organization C You should major in marketing only if you want to work in advertising or personal selling D Marketing is a career that offers stability, good pay and ample employment opportunities Marketing activities today are essentially the same as they were several decades ago Feedback: Marketing majors could pursue careers in personal selling, advertising, public relations, transportation and distribution, product management, marketing research, and a wide range of other areas Answer: A AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Hard Topic: The Evolution of Marketing 240 Hideki has just been transferred from a position in his firm where he dealt with the consumer market to a new job dealing with buyers in the B2B market Which of the following correctly identifies a key difference Hideki is likely to observe between consumer markets and business-to-business markets? A Businesses focus on developing wants and needs in consumer markets, while firms work to satisfy the existing needs of the B2B market B Relationship marketing tends to be much more important in consumer markets than in the business-to-business markets C Buyers in the business-to-business markets tend to be more rational than buyers in consumer markets D Business-to-business markets make greater use of marketing intermediaries such as wholesalers and retailers than consumer markets Feedback: B2B buyers base their buying decisions on specifications and carefully weigh a variety of factors (such as price, quality, and service) before making a commitment to buy Consumer markets purchases are thought to be more emotional Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Hard Topic: B2B Marketing 13-75 Chapter 13 - Marketing: Helping Buyers Buy 241 After years of selling in the consumer market, Dave accepted a job as a salesperson for a firm that markets its products in the B2B market As he considers his new responsibilities, it's likely that he will: A find little difference between buyers in the consumer market and those in the businessto-business market B discover that decision making in the B2B market requires salespeople to be little more than order takers C learn that industrial buyers generally require more personal service than buyers in the consumer market D find that B2B buyers tend to purchase more on impulse than consumer buyers Feedback: There is much more emphasis on personal selling in B2B markets than in consumer markets Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Hard Topic: B2B Marketing 13-76 Chapter 13 - Marketing: Helping Buyers Buy Essay Questions 242 Describe the steps involved in the marketing process Answer: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at-large The first step in the marketing process is to identify a market opportunity This may involve marketing research Using the information gleaned from marketing research, the next step is to identify a target market and design a product to satisfy a want or need This may include anything that would enhance the product in the eye of consumers, such as the brand This process often includes concept testing, in which marketers develop a detailed and accurate description of a product and ask people for their reaction Marketers may also use test marketing Assuming these activities result in positive customer reaction, the firm then is likely to commit to the product, though the actual production may be outsourced to another firm The design and development of the product also involves coming up with an appropriate brand name that differentiates the firm's goods from those offered by competitors The next step in the marketing process is setting an appropriate price The pricing decision must look at a number of factors, such as the prices of competing products and costs of production, distribution and promotion Another decision that must be made concerns how the product will be distributed This involves decisions about the use of middlemen such as retailers and wholesalers The marketing process also involves developing an appropriate promotion strategy Promotion consists of all of the techniques sellers use to motivate people to buy their products and services It includes advertising, personal selling, public relations, publicity, and various forms of promotion such as coupons, contests, and rebates The last step in the marketing process is to build a relationship with the buyers This includes accepting advice and suggestions from customers and providing a way of resolving any unsatisfactory outcomes so that the customer is pleased AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Hard Topic: The Marketing Mix 13-77 Chapter 13 - Marketing: Helping Buyers Buy 243 Why is market segmentation important? Describe three ways firms can segment consumer markets Answer: The overall market for most products consists of such a diverse set of customers that a single business could not serve the entire market effectively Thus, firms usually try to segment the market into groups that have similar characteristics They then target the markets they believe they can profitably serve There are several ways to segment markets Among the most common approaches are: Geographic segmentation divides the market according to geographic regions Demographic segmentation groups customers according to factors such as age, income, or education Psychographic segmentation divides the market into groups with different lifestyles, attitudes, values, and interest Benefit segmentation identifies groups that seek different types of benefits from a product, such as comfort, convenience, or health and fitness Volume segmentation separates the market according to volume of product use AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: Market Segmentation 13-78 Chapter 13 - Marketing: Helping Buyers Buy 244 Marketing is different in B2B markets than in consumer markets Identify and explain three differences between the business-to-business market and the consumer market Answer: Students will choose three of the following: Marketing to manufacturers, institutions (for example hospitals or schools), commercial operations (retail stores), and the government is called business-to-business (B2B) marketing As in consumer markets, the basic idea in B2B markets is to "help buyers buy." However, the strategies used to achieve this goal differ because the nature of the buyers and the marketing environment are very different Students should identify and describe at least three of the following differences: The number of customers in the business-to-business market is relatively small The consumer market, on the other hand, consists of millions of households The size of industrial customers is relatively large compared to the consumer market A few large organizations account for most of the employment and production of various goods and services Business-to-business markets tend to be geographically concentrated; hence marketing efforts are often concentrated on the particular geographic areas This can simplify the process of distributing goods to a particular industrial market For example, a firm may be able to reduce storage and transportation costs by locating warehouses and shipping facilities in the same geographic area On the other hand, the consumer market is literally worldwide Industrial buyers are generally more rational than consumer buyers in their selection of goods and services making purchases based on specifications and a careful analysis of several factors B2B sales tend to be direct and eliminate the need for the marketing intermediaries which consumer markets use There is much more emphasis on personal selling in B2B markets since the B2B market consists of fewer customers that demand more personal service Conversely, advertising plays a larger role in the consumer market AACSB: Reflective Thinking Bloom’s: Apply Learning Objective: 13-06 Compare the business-to-business market and the consumer market Level of Difficulty: Hard Topic: B2B Marketing 13-79 Chapter 13 - Marketing: Helping Buyers Buy 245 Explain how mass marketing and relationship marketing differ Answer: Mass marketing means developing products and promotions to please large numbers of people This approach often relies heavily on mass media to send one-way messages designed to build a large market for the firm's products Relationship marketing moves away from mass production toward a more customized approach The marketer attempts to develop a two-way dialogue with customers The information obtained from this dialogue allows the firm to design products that exactly meet the requirements of individual customers The latest in technology enables sellers to work with individual buyers to determine their wants and needs and to develop goods and services specifically designed for them (e.g., hand-tailored shirts and unique vacations) One-way messages in mass media give way to a personal dialogue among participants When combined with enterprise resource planning (Chapter 9), firms can develop a smooth customer-oriented system AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: Relationship Marketing 13-80 Chapter 13 - Marketing: Helping Buyers Buy 246 Describe the steps involved in conducting marketing research Answer: There are four steps in the marketing research process: Define the question and determine the present situation Marketing research begins by identifying what the firm does well and what needs to be improved Researchers should have the freedom to discover what the problems are, what alternatives exist, what type of information is needed and how to go about gathering and analyzing the data Collect the data There are two major sources of data Secondary data is already published in the form of studies, reports or surveys conducted by someone else In order to minimize costs, researchers should begin by looking at secondary data Usually, however, secondary data doesn't provide all of the data researchers need Primary data is data gathered from surveys, questionnaires, interviews and other sources developed by the marketers themselves Analyze the data Researchers must analyze the data honestly so that useful alternatives to specific marketing opportunities can be identified Choose the best solution Researchers should present alternative solutions, indicate the solution they prefer and provide reasons for their preference In choosing the best solution, ethical considerations should be taken into account AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-03 Summarize the marketing research process Level of Difficulty: Hard Topic: Marketing Research 13-81 Chapter 13 - Marketing: Helping Buyers Buy 247 Identify and discuss the four eras of the evolution of marketing Answer: The evolution of marketing involved four eras: (1) production, (2) selling, (3) marketing, and (4) customer relationship The generally philosophy of the production era was "Produce as much as you can because there is a limitless market." From the time of the early settler to the early 1900s the production capacity fell short of consumer demand The greatest marketing need was for distribution and storage As a result of mass production techniques, business production capacity exceeded the immediate market demand by the 1920s During the selling era, marketing efforts focused on persuading consumers to buy existing products with little concern for service after the sale The boom in consumer spending and intensified competition following World War II marked the start of the marketing era Businesses recognized the need to be responsive to consumers' wants and needs in order to generate profits The marketing concept had three parts: (1) a customer orientation, (2) a service orientation, and (3) a profit orientation The final and present stage of the evolution of marketing is the customer relationship era The concept of customer relationship management involves learning as much as you can about customers so that you can exceed their expectations with goods and services Enhanced customer satisfaction will yield long-term profits and customer loyalty *Students may reference the emerging era of mobile/on-demand marketing This is not included in the four eras of marketing at this time AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 13-01 Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations Level of Difficulty: Hard Topic: The Evolution of Marketing 13-82 Chapter 13 - Marketing: Helping Buyers Buy Multiple Choice Questions Mini-Case Callie is a successful executive who is also a fitness enthusiast For years she worked out at Big Jim's Gym, the only gym in her small hometown However, she felt that the environment at Big Jim's was too masculine, and discovered that her female friends agreed They disliked the small, smelly locker room, and the limited selection of cardio equipment Most of them eventually quit going to Big Jim's Callie talked to Jim Nasium, the owner of Big Jim's, about things he could to attract more women, but Jim had little interest in making any changes "I've got all the business I can handle," he told Callie "Why should I spend a bunch of money to redecorate and add extra equipment? Besides, lots of the guys who work out here tell me they like the simple, no-frills atmosphere." Frustrated by Jim's indifference to her ideas, Callie began looking into the possibility of starting a club to appeal to young, well-educated women After visiting gyms in other towns and talking to several friends to get ideas, she came up with a detailed plan for her club She then described her ideas to women in the community to see how much interest there was in this type of facility The extremely positive response encouraged her to go ahead with her plans It took a while, but she ultimately obtained the financial backing to go into business Callie calls her new health club ShapeUP It offers a spacious and attractive locker room, better cardio equipment, a child care area so young mothers can have someone watch their toddlers while they work out, and exercise classes designed to appeal to young women When a woman joins her club, Callie schedules a free session with a personal trainer who works with the new member to design a personalized workout program Callie tries hard to keep close to her customers, sending them a monthly newsletter that includes a survey asking what they like and don't like about ShapeUP She wants to please her existing customers and keep them coming back In fact, now that ShapeUP has a strong membership base, Callie believes it is more important to keep existing customers loyal than to attract new customers In addition to the comments from her own customers, Callie also spends a lot of time tracking economic, social, and competitive trends in the gym industry, trying to identify factors that can affect the marketing success of her club She subscribes to several journals that cover trends and report on research findings related to the business She has found that these journals provide her with an inexpensive source of useful information 13-83 Chapter 13 - Marketing: Helping Buyers Buy 248 When Callie wants to obtain information to research changes in her market or determine what her customers are likely to want in the future, she relies on the articles and data available in trade journals, feedback from surveys, and personal interviews of her customers Which of the following statements about Callie's sources of information is most accurate? A Callie is relying entirely on primary data for her research needs B Callie is relying entirely on secondary data for her research C The surveys and personal observations provide primary data, while the journals provide secondary data D The surveys and personal observations provide secondary data, while the journals provide primary data Feedback: Secondary data is data that has already been researched by others and published in books and journals or made available online Primary data is obtained when marketers their own research Two common ways of obtaining primary data are conducting personal interviews and conducting surveys Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-03 Summarize the marketing research process Level of Difficulty: Hard Topic: Marketing Research 249 The fact that ShapeUP is designed to appeal to women of a certain age, education and income level, means that Callie is using: A demographic segmentation B psychographic segmentation C volume segmentation D geographic segmentation Feedback: Demographic segmentation is based on factors such as age, education, and income Answer: A AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: Market Segmentation 13-84 Chapter 13 - Marketing: Helping Buyers Buy 250 When Callie developed a detailed description of her ideas for a gym and asked for feedback from women about the proposal, she was engaging in: A test marketing B psychographic segmentation C concept testing D prototype analysis Feedback: Concept testing involves developing an accurate description of a product and asking people whether the idea appeals to them Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-02 Describe the four Ps of marketing Level of Difficulty: Hard Topic: The Marketing Mix 251 Which of the following statements about Callie's marketing approach is most accurate? A Callie is basing her marketing approach on a variation of the mass marketing strategy B Callie's marketing strategy appears to be consistent with several key aspects of relationship marketing C Many recent studies suggest that Callie will be unable to earn a reasonable profit because she is serving too small a segment of the market rather than the entire market D Callie's marketing efforts put too much emphasis on retaining existing customers and not enough on obtaining new customers Feedback: Callie's approach has several elements of relationship marketing, including (1) recognition of the need to offer programs designed to meet the individual needs of customers, and (2) making an effort to develop personal dialogues with customers Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-05 Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior Level of Difficulty: Hard Topic: Relationship Marketing 13-85 Chapter 13 - Marketing: Helping Buyers Buy 252 When Callie attempts to identify economic, social, and competitive factors that could affect her success in the gym market, she is engaging in: A positioning analysis B concept testing C target marketing D environmental scanning Feedback: Environmental scanning is the process of identifying the factors that can affect a firm's marketing success This process involves looking at the various aspects of the surrounding environment, including the economic, social, and competitive conditions faced by the firm Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 13-04 Show how marketers use environmental scanning to learn about the changing marketing environment Level of Difficulty: Hard Topic: The Marketing Environment 13-86 ... 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