Chapter 06 - Market Targeting and Strategic Positioning

Chapter 06
Market Targeting and Strategic Positioning

True / False Questions

1. (p. 185) An example of selective targeting is Atodesk!s targeting of architects "ith its line of
compter aided design soft"are.
TRUE

Difficulty: Moderate

#. (p. 185) Product specialization involves offering $%ers a prodct differentiated from
competitors! prodcts and designed to appeal to cstomer needs and "ants not satisfied $%
competitors.
TRUE

Difficulty: Moderate

&. (p. 187) The satellite radio service market is illstrative of a matring prodct-market.
F!SE

Difficulty: Challenging

'. (p. 187) (ro"ing rapidl% ntil reaching high levels of hosehold penetration) micro"ave
ovens are no" a prodct market in decline.
F!SE

Difficulty: Challenging

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Chapter 06 - Market Targeting and Strategic Positioning
*. (p. 189) Targeting an emerging market is likel% to focs on a preference or se sitation that
corresponds to the vale proposition offered $% the ne" prodct.
TRUE

Difficulty: Challenging

6. (p. 190) All firms "hich enter the emerging and gro"th stages of the market srvive in the
matrit% stage.
F!SE

Difficulty: Eay

+. (p. 191) ,either targeting nor positioning strategies change in moving from the gro"th to
matrit% stages of the prodct-market.
F!SE

Difficulty: Eay

-. (p. 19!) The positioning strateg% integrates the marketing program .mix/ components into a
coordinated set of initiatives designed to achieve the firm!s positioning o$0ective.s/.
TRUE

Difficulty: Moderate

1. (p. 19!) 2n deciding ho" to position a $rand) it is sefl to std% the positioning of competing
$rands sing attri$tes that are important to existing and potential $%ers of the competing
$rands.
TRUE

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
10. (p. 199) Positioning sho"s ho" the compan% or $rand is the same as its competitors.
F!SE

Difficulty: Moderate


Multiple Choice Questions

11. (p. 18") 3hole 4oods Market) 2nc. provides prodcts that appeal to middle class $%ers "ho
have strong vale preferences for natral foods and are "illing to pa% premim prices for the
prodcts that are not often availa$le from other grocer% retailers. This grop of people is
3hole 4oods! 555555.
A. Commnications grop
6. 6rand centers
C. Mass market
"# Market target

Difficulty: Challenging

1#. (p. 185) The 55555 decision identifies the people or organi7ations in a prodct-market
to"ard "hich a firm directs its positioning strateg%.
# Market targeting
6. 6randing
C. Segmenting
8. Commnications strateg%

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
1&. (p. 187) Prodct-markets "hich are ne"l% formed are categori7ed as) 555555 and are created
$% factors sch as a ne" technolog%.
A. 8eclining
6. Matring
C# 9merging
8. (ro"ing

Difficulty: Moderate

1'. (p. 187) A 555555 prodct-market is actall% fading a"a% instead of experiencing a
temporar% decline or c%clical changes.
# 8eclining
6. Matring
C. 9merging
8. (ro"ing

Difficulty: Moderate

1*. (p. 187) (ro"ing rapidl% ntil reaching high levels of hosehold penetration) micro"ave
ovens are no" in a.n/ 555555 prodct market.
A. 8eclining
$# Matring
C. 9merging
8. (ro"ing

Difficulty: Moderate

16. (p. 188) The nm$er of competitors in a.n/ 555555 market initiall% consists of the first
market entrant and one or t"o other firms.
A. 8eclining
6. Matring
C# 9merging
8. (ro"ing

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
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Chapter 06 - Market Targeting and Strategic Positioning
1+. (p. 188) A 55555 is a t%pe of emerging market that is formed $% people:organi7ations "hose
needs and "ants have not $een satisfied $% availa$le prodcts.
A. Target market
$# Totall% ne" prodct market
C. ,e" prodct technolog% in an existing prodct market
8. (ro"ing market

Difficulty: Moderate

1-. (p. 188) The entr% of digital photograph% into the traditional camera and film market is an
example of a 55555 t%pe of emerging market.
A. Target market
$# Totall% ne" prodct market
C. ,e" prodct technolog% in an existing prodct market
8. (ro"ing market

Difficulty: Moderate

11. (p. 19#) The glo$al market strateg% of 55555 considers the extent to "hich standardi7ed
prodcts and other strateg% elements can $e designed to compete on a glo$al $asis.
A. Target market
6. Totall% ne" prodct market
C. ,e" prodct technolog% in an existing prodct market
"# (lo$al integration

Difficulty: Moderate

#0. (p. 19$) The remarka$le sccess of the ;arr% Potter $ooks demonstrates 55555 in an
nconventional "a% and crossing national $ondaries to reach the target market.
# Targeting on a glo$al $asis
6. Totall% ne" prodct market
C. ,e" prodct technolog% in an existing prodct market
8. Targeting a single contr%

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
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Chapter 06 - Market Targeting and Strategic Positioning
#1. (p. 19!) A.n/ 55555 positioning concept applies to prodcts that solve consmption-related
pro$lems for externall%-generated consmption needs.
A. 2conic
$# 4nctional
C. S%m$olic
8. 9xperiential

Difficulty: Eay

##. (p. 19!) A.n/ 55555 positioning concept relates to the $%er!s internall% generated need for
self-enhancement) role position) grop mem$ership or ego-identification
A. 2conic
6. 4nctional
C# S%m$olic
8. 9xperiential

Difficulty: Eay

#&. (p. 19!) A.n/ 55555 positioning concept is sed to position prodcts that provide sensor%
pleasre) variet% and:or cognitive stimlation.
A. 2conic
6. 4nctional
C. S%m$olic
"# 9xperiential

Difficulty: Eay

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Chapter 06 - Market Targeting and Strategic Positioning
#'. (p. #00) 55555 sch as) preference maps can gide anal%sis in considering alternative
marketing program strategies $% mapping cstomer preferences for varios competing $rands
compared to cstomers! ideal preferences.
# Cstomer and competitor research
6. Test marketing
C. Anal%tical techni<es
8. 4nctional research

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
#*. (p. #01) 55555 generates information a$ot the commercial feasi$ilit% of a promising ne"
prodct) ne" positioning strategies and changes in the marketing program components .e.g.)
different amonts of advertising expenditres/.
A. Cstomer and competitor research
$# Test marketing
C. Anal%tical techni<es
8. 4nctional research

Difficulty: Moderate

#6. (p. #01) 55555 is .are/ are prodcing promising reslts $% incorporating research data into
formal models for decision anal%sis.
A. Cstomer and competitor research
6. Test marketing
C# Anal%tical techni<es
8. 4nctional research

Difficulty: Moderate

#+. (p. #01) 55555 "hen cstomers have too narro" an nderstanding of the compan%) prodct
or $rand. 4or example) Mont 6lanc sells pens for several thosand dollars) $t it is important
to the compan% that the consmer is a"are that Mont 6lanc pens are availa$le in mch
cheaper models.
A. 8o$tfl positioning
6. =nder positioning
C# >ver positioning
8. Confsed positioning

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
#-. (p. #01) 55555 occrs "hen fre<ent changes and contradictor% messages mix p cstomers
regarding the positioning of the $rand.
A. 8o$tfl positioning
6. =nder positioning
C. >ver positioning
"# Confsed positioning

Difficulty: Moderate

#1. (p. #01) 55555 "hen cstomers have onl% vage ideas a$ot the compan% and its prodcts
and do not perceive an%thing distinctive a$ot them.
A. 8o$tfl positioning
$# =nder positioning
C. >ver positioning
8. Confsed positioning

Difficulty: Moderate

&0. (p. #01) 55555 occrs "hen the claims made for the prodct or $rand are not regarded as
credi$le $% the cstomer.
# 8o$tfl positioning
6. =nder positioning
C. >ver positioning
8. Confsed positioning

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning

Essa% Questions

&1. (p. 190) 6riefl% explain the t%pical prodct life c%cle in terms of the sales and profits
$ehavior.
2n the life c%cle of a t%pical prodct) sales $egin at the time of introdction and increase over
the pattern sho"n. Profits initiall% lag sales) since expenses often exceed sales dring the
initial stage of the prodct life c%cle as a reslt of heav% introdctor% expenses. Total sales
and profits decline after the prodct reaches the matrit% stage. T%picall%) profits fall off
$efore sales.

Difficulty: Moderate

&#. (p. 190) 2dentif% and discss the three possi$le targeting strategies in gro"th markets.
The three targeting strategies in gro"th markets are? .1/ extensive market coverage $% firms
"ith esta$lished $sinesses in related markets@ .#/ selective targeting $% firms "ith diversified
prodct portfolios and .&/ ver% focsed targeting strategies $% small organi7ations serving one
or a fe" market segments.
A selective targeting strateg% is feasi$le "hen $%ers! needs are differentiated or "hen
prodcts are differentiated. The segments that are not served $% large competitors provide an
opportnit% for a small firm to gain competitive advantage. The market leader.s/ ma% not find
a small segment attractive enogh to seek a position in the segment. 2f the $%ers in the
market have similar needs) a small organi7ation ma% gain advantage throgh speciali7ation)
concentrating on a specific prodct or component.

Difficulty: Challenging

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Chapter 06 - Market Targeting and Strategic Positioning
&&. (p. 191) 9xplain the consmer $ehavior of $%ers in matre markets affecting $rand
management.
6%ers in matre markets are experienced and increasingl% demanding. The% are familiar
"ith competing $rands and displa% preferences for particlar $rands. The ke% marketing isse
is developing and sstaining $rand preference) since $%ers are a"are of the prodct t%pe and
its featres. Man% top $rands like Coca-Cola) (illette and 3rigle%!s have held their leading
positions for more than half a centr%. This highlights the importance of o$taining and
protecting a lead position at an earl% stage in the development of a market.

Difficulty: Moderate

&'. (p. 19!) 9xplain the relationship $et"een the positioning strateg% and the marketing program
.mix/ components.
The positioning strateg% integrates the marketing program .mix/ components into a
coordinated set of initiatives designed to achieve the firm!s positioning o$0ective.s/.
8eveloping the positioning strateg% incldes determining the activities and reslts for "hich
each marketing program component .prodct) distri$tion) price) promotion/ "ill $e
responsi$le) choosing the amont to spend on each program component and deciding ho"
mch to spend on the entire program.

Difficulty: Moderate

&*. (p. #0#) 9xplain the relationship $et"een positioning strategies and mltiple targeting
strategies. (ive an example.
Positioning strategies $ecome particlarl% challenging "hen management decides to target
several segments. The o$0ective is to develop an effective positioning strateg% for each
targeted segment. The se of a different $rand for each targeted segment is one "a% of
focsing a positioning strateg%. The (ap emplo%s this strateg% "ith its (ap) 6anana Aep$lic
and >ld ,av% $rands.
2t is a challenge for a compan% "ith a clear positioning and segment choice in place to also
target additional segments "hich ma% ndermine the strength of positioning in the existing
segment. This isse ma% $e particlarl% important to maintaining gro"th in matre markets.

Difficulty: Moderate

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Chapter 06 - Market Targeting and Strategic Positioning
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