Essentials of Marketing 16th Edition By Perreault

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Sample Questions

Essentials of Marketing, 16e (Perreault)

Chapter 4 Focusing Marketing Strategy with Segmentation and Positioning

1) A market is a group of two or more sellers who offer substitute ways of satisfying customer needs.

Answer: FALSE

Explanation: A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

2) A market is a group of competitors selling similar products.

Answer: FALSE

Explanation: A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

3) The main difference between a “product-market” and a “generic market” is whether customer needs are similar or different.

Answer: FALSE

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

4) A generic market description looks at markets broadly and from a customer’s viewpoint.

Answer: TRUE

Explanation: A generic market description looks at markets broadly and from a customer’s viewpoint.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

5) A generic market is a market in which sellers offer substitute products which are so similar that customers see them as “all the same.”

Answer: FALSE

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

6) A product-market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs.

Answer: FALSE

Explanation: A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

7) A firm’s “relevant market for finding opportunities” should be bigger than the present product-market but not so large that it couldn’t expand and still be an important competitor.

Answer: TRUE

Explanation: The relevant market for finding opportunities should be bigger than the firm’s present product-market—but not so big that the firm couldn’t expand and be an important competitor.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

8) Product type describes the goods and/or services that customers want.

Answer: TRUE

Explanation: Product type describes the goods and/or services that customers want. Sometimes the product type is strictly a physical good or strictly a service.

Difficulty: 1 Easy

Topic: Naming Product-Markets and Generic Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

9) The definition of a product-market includes a product type, while the definition of a generic market does not include a product type.

Answer: TRUE

Explanation: A product-market definition includes a product type that describes the goods and/or services that customers want, whereas a generic market definition doesn’t include any product-type terms.

Difficulty: 1 Easy

Topic: Naming Product-Markets and Generic Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

10) A generic market description includes customer needs and product-type terms.

Answer: FALSE

Explanation: A generic market description doesn’t include any product-type terms. It consists of only three parts of the product-market definition—without the product type.

Difficulty: 2 Medium

Topic: Naming Product-Markets and Generic Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

11) Effective market segmentation is a two-step process that starts with naming broad product-markets and then goes on to segmenting these broad product-markets into more homogeneous submarkets.

Answer: TRUE

Explanation: Market segmentation is a two-step process of (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Reflective Thinking; Analytical Thinking

Accessibility: Keyboard Navigation

12) Market segmentation is a two-step process that involves naming broad product-markets and segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.

Answer: TRUE

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

13) Market segmentation says that target marketers should develop one good marketing mix aimed at a fairly large market.

Answer: FALSE

Explanation: Market segmentation deals with segmenting broad product-markets in order to select target markets and develop suitable marketing mixes.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

14) Marketing-oriented managers think of segmenting as a disaggregating process.

Answer: FALSE

Explanation: Marketing-oriented managers think of segmenting as an aggregating process.

Difficulty: 2 Medium

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

15) Marketing-oriented managers see segmenting as a process of aggregating people with similar needs into a group.

Answer: TRUE

Explanation: Marketing-oriented managers think of segmenting as an aggregating process—clustering people with similar needs into a “market segment.”

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

16) Ideally, segmenters should start with the idea that each person is “one of a kind” and can be described by a special set of dimensions that may be used to aggregate similar customers together.

Answer: TRUE

Explanation: Segmenters start with the idea that each person is one of a kind but that it may be possible to aggregate some similar people into a product-market. Segmenters see each of these one-of-a-kind people as having a unique set of dimensions.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

17) One of the difficult things about segmenting is that not every customer will neatly fit into some market segment.

Answer: TRUE

Explanation: The difficulty with segmenting is that some potential customers just don’t fit neatly into market segments. Forcing them into one of the groups would make these segments more heterogeneous and harder to please.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

18) The correct number of submarkets in a broad product-market is usually obvious, so the likelihood of managerial error is small.

Answer: FALSE

Explanation: Under broad product-market, a segmenter may aggregate submarkets into arbitrary numbers that are relatively homogeneous.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

19) A “good” market segment should be composed of people who are as homogeneous as possible with respect to their likely responses to marketing mix variables.

Answer: TRUE

Explanation: The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

20) “Homogeneous within” means that the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.

Answer: TRUE

Explanation: The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

21) “Good” market segments should be homogeneous (similar) within, heterogeneous (different) between, substantial, and operational.

Answer: TRUE

Explanation: “Good” market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

22) “Good” market segments should be heterogeneous within and homogeneous between.

Answer: FALSE

Explanation: “Good” market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial, and operational.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

23) If a product-market segment is “homogeneous within,” it is called a “substantial” target market.

Answer: FALSE

Explanation: “Good” market segments meet the following criteria: (1) homogenous within; (2) heterogenous between; (3) substantial; and (4) operational. “Substantial” means that the segment is big enough to be profitable.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

24) A “substantial” market segment is one that is big enough to be profitable.

Answer: TRUE

Explanation: A substantial market segment is one that should be big enough to be profitable.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

25) Saying that a market segment is “substantial” means that it contains customers from a variety of demographic variables.

Answer: FALSE

Explanation: A substantial market segment is one that should be big enough to be profitable.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

26) Planning the Place and Promotion elements of a marketing mix is especially difficult if the dimensions of a product-market are not operational.

Answer: TRUE

Explanation: Operational segment dimensions should be useful for identifying customers and deciding on marketing mix variables like Place and Promotion.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

27) A product-market segment is “operational” if it is big enough to be profitable to the firm.

Answer: FALSE

Explanation: A product-market segment is “substantial” if it is big enough to be profitable to the firm.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

28) A personality trait like moodiness is a good example of an “operational” segmenting dimension.

Answer: FALSE

Explanation: Moodiness might be related in some way to purchases, but it would not be a useful dimension for segmenting.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-02 know what market segmentation is and how to segment product-markets into submarkets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

29) With the “multiple target market approach,” the marketer combines two or more homogeneous submarkets into one larger target market as a basis for one strategy.

Answer: FALSE

Explanation: The multiple target market approach deals with segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.

Difficulty: 1 Easy

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

30) The combined target market approach involves segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix.

Answer: FALSE

Explanation: The combined target market approach involves combining two or more submarkets into one larger target market as a basis for one strategy.

Difficulty: 2 Medium

Topic: Market Segmentation Defines Possible Target Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

31) A manager who aggregates all potential customers into a single product-market segment is likely to find that the segment is not homogeneous.

Answer: TRUE

Explanation: Aggregating all potential customers into a single product-market segment is dangerous because the more aggregating, the less homogeneous the customers in the single segment. Generally, it is safer for a firm to try to provide a smaller segment that is very homogeneous with superior value, and thus satisfy it better.

Difficulty: 1 Easy

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

32) The more heterogeneous a firm’s target market becomes, the more likely the firm will see competition from an innovative segmenter.

Answer: TRUE

Explanation: A segmenter wants to aggregate individual customers into some workable number of homogeneous (not heterogeneous) target markets so that it can target them more successfully and avoid competition.

Difficulty: 1 Easy

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

33) A segmenter is more likely than a combiner to really satisfy a target market and build such a close relationship with customers that it faces no real competition.

Answer: TRUE

Explanation: A segmenter that really satisfies the target market can often build such a close relationship with customers that it faces no real competition.

Difficulty: 2 Medium

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

34) A profit-oriented firm will usually want to continue aggregating potential customers into larger submarkets until every consumer fits neatly into some segment.

Answer: FALSE

Explanation: Some people are simply too unique to be catered to and may have to be ignored. A profit-oriented firm will continue aggregating potential customers until the segment is substantial (that is, the segment is big enough to be profitable).

Difficulty: 1 Easy

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

35) Making a very specific marketing mix for a particular group is always less profitable than a more general marketing mix that appeals to a larger segment.

Answer: FALSE

Explanation: A segmenter that offers a marketing mix precisely matched to the needs of the target market can often charge a higher price that produces higher profits. Customers are willing to pay a higher price because the whole marketing mix provides better customer value.

Difficulty: 2 Medium

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

36) Cost considerations usually favor more aggregating and larger market segments, but smaller segments may be required to satisfy needs more exactly.

Answer: TRUE

Explanation: Cost considerations usually encourage more aggregating and favor combining, as costs often drop due to economies of scale. On the other hand, many customers prefer to have their needs satisfied more exactly—and will be more satisfied by a segmenter that develops a marketing mix that more closely matches their needs.

Difficulty: 1 Easy

Topic: Target Marketers Aim at Specific Markets

Learning Objective: 04-03 know three approaches to market-oriented strategy planning.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

37) Dimensions that should be considered when segmenting consumer markets are: geographic location and other demographic characteristics; behavioral needs; urgency to get needs satisfied; and willingness to compare and shop.

Answer: TRUE

Explanation: Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers’ consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

38) When segmenting markets, one should look at geographic location and demographic characteristics, as well as customers’ desire and willingness to compare and shop; but behavioral needs aren’t important for this purpose.

Answer: FALSE

Explanation: Behavioral needs are important. Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers’ consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

39) Segmenting a broad product-market usually requires using several segmenting dimensions at the same time.

Answer: TRUE

Explanation: Regardless of whether customers are final consumers or organizations, segmenting a broad product-market usually requires using several different dimensions at the same time.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

40) Market segmentation applies only to consumer goods and services; it cannot be applied to business products.

Answer: FALSE

Explanation: Market segmentation can be applied to business products. Exhibit 4–9 shows the dimensions for segments markets when the customers are businesses, government agencies, or other types of organizations.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

41) Qualifying dimensions are those that actually affect the customer’s purchase of a specific brand in a product-market.

Answer: FALSE

Explanation: Qualifying dimensions are those relevant to including a customer type in a product-market.

Difficulty: 2 Medium

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

42) A determining dimension for segmenting markets actually affects the purchase of a specific brand in a product-market.

Answer: TRUE

Explanation: Determining dimensions are those that actually affect the customer’s purchase of a specific product or brand in a product-market.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

43) A marketing manager who is able to use qualifying dimensions in forming market segments will not need to worry about determining dimensions.

Answer: FALSE

Explanation: The more specific you want to be, the more particular the determining dimensions may be. The determining dimensions may seem minor. However, they are important.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

44) The qualifying dimensions help identify the “core benefits” that must be offered to everyone in a product-market.

Answer: TRUE

Explanation: The qualifying dimensions help identify the “core benefits” that must be offered to everyone in a product-market.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

45) International marketing typically requires less segmenting than domestic markets.

Answer: FALSE

Explanation: Success in international marketing requires even more attention to segmenting. There are over 192 nations with their own unique cultures, and they differ greatly in language, customs, beliefs, religions, race, and income distribution patterns.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

46) A firm involved in international marketing should pay even more attention to segmenting than a firm that sells only in the United States.

Answer: TRUE

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Reflective Thinking; Analytical Thinking

Accessibility: Keyboard Navigation

47) The first step in segmenting international markets is to group countries that are close to each other into “common markets.”

Answer: FALSE

Explanation: Segmenting international markets may require more dimensions. First, marketers segment by country or region—looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar.

Difficulty: 1 Easy

Topic: What Dimensions are Used to Segment Markets?

Learning Objective: 04-04 know dimensions that may be useful for segmenting markets.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

48) Clustering techniques try to find similar patterns within sets of data.

Answer: TRUE

Explanation: Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

49) Clustering is a technique that divides a large group of people into smaller groups, so that each small group is as diverse as the large group from which it was formed.

Answer: FALSE

Explanation: Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

50) Clustering techniques can be used in segmenting to help find similar patterns within sets of data to identify homogeneous groups of people.

Answer: TRUE

Explanation: Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking; Technology

Accessibility: Keyboard Navigation

51) Computer-aided segmenting approaches eliminate the need for managerial judgment and intuition in selecting segmenting dimensions.

Answer: FALSE

Explanation: Clustering approaches use computers to search all the data for homogeneous groups of people, but when the computer finds them, marketers then study the dimensions of the people in the groups to determine why the computer clustered them together. This involves managerial judgment and intuition.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking; Technology

Accessibility: Keyboard Navigation

52) A firm is most likely to rely on customer relationship management (CRM) approaches when it does not have a database of information on individual customers.

Answer: FALSE

Explanation: With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer’s past purchases as well as other segmenting information.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

53) CRM is a variation of the positioning approach.

Answer: FALSE

Explanation: A variation of the clustering approach is based on customer relationship management methods.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

54) CRM approaches are based on information from detailed customer databases.

Answer: TRUE

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

55) Firms that operate on the Internet are at a disadvantage when it comes to using approaches like CRM.

Answer: FALSE

Explanation: Firms that operate on the Internet are able to communicate with customers via a website or e-mail, which means that the whole effort is not only targeted but also very inexpensive. Further, it’s fast and easy for a customer to reply.

Difficulty: 1 Easy

Topic: More Sophisticated Techniques May Help in Segmenting

Learning Objective: 04-05 recognize how some computer-aided methods are used in segmenting

Bloom’s: Remember

AACSB: Analytical Thinking; Technology

Accessibility: Keyboard Navigation

56) By differentiating the marketing mix to do a better job meeting customers’ needs, the firm builds a competitive advantage.

Answer: TRUE

Explanation: By differentiating the marketing mix to do a better job meeting customers’ needs, the firm builds a competitive advantage. When this happens, target customers view the firm’s position in the market as uniquely suited to their preferences and needs.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Remember

AACSB: Reflective Thinking; Analytical Thinking

Accessibility: Keyboard Navigation

57) “Positioning” shows how proposed and/or present brands are located in a market as seen by customers.

Answer: TRUE

Explanation: Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it’s hard for the marketing manager to differentiate.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

58) “Positioning” means using a map to show where a firm’s products are distributed geographically.

Answer: FALSE

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

59) Positioning issues are especially important when competitors in a market appear to be very similar.

Answer: TRUE

Explanation: Positioning issues are especially important when competitors in a market appear to be very similar.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Remember

AACSB: Reflective Thinking; Analytical Thinking

Accessibility: Keyboard Navigation

60) A positioning analysis is a product-oriented approach.

Answer: TRUE

Explanation: In positioning analysis, once you know what customers think, you can then decide whether to leave the product alone or reposition it.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

61) Positioning analysis may lead a firm to segmenting, rather than combining.

Answer: FALSE

Explanation: Positioning analysis may lead a firm to combining—rather than segmenting—if managers think they can make several general appeals to different parts of a “combined” market.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

62) Marketing managers for Mountain Dew used a positioning statement to help focus efforts and gain market share in a competitive environment.

Answer: TRUE

Explanation: The marketing strategy based on Mountain Dew’s positioning statement helped it gain market share with 16- to 24-year-old males, its target market.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

63) Sometimes marketing managers use a positioning statement to provide focus for a marketing mix.

Answer: TRUE

Explanation: A positioning statement concisely identifies the firm’s desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm’s claims. It is sometimes used by marketing managers to provide focus for the marketing mix.

Difficulty: 1 Easy

Topic: Differentiation and Positioning Take the Customer Point of View

Learning Objective: 04-06 know what positioning is and why it is useful.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

64) A “market” consists of

1. A) customers who are willing to exchange something of value.

2. B) a group of potential customers with similar needs.

3. C) sellers offering various ways of satisfying customer needs.

4. D) All these answers are correct.

Answer: D

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

65) The process of marketing strategy planning is about

1. A) identifying as many market opportunities as can be imagined.

2. B) narrowing down possible market opportunities to the most attractive ones.

3. C) creating products that managers like.

4. D) choosing the most profitable market opportunity, regardless of the firm’s current abilities and resources.

5. E) figuring out how to offer products at the lowest possible price.

Answer: B

Explanation: The marketing strategy planning process involves careful evaluation of the market opportunities and then narrowing down to focus on the most attractive target market and marketing mix.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

66) When identifying a company’s market, managers need to avoid the mistake of

1. A) finding out what customers need.

2. B) thinking of a market as a group of customers with similar needs who will exchange money for goods and services that meet those needs.

3. C) trying to identify specific target markets within a general market.

4. D) describing their markets solely in terms of the products they sell.

5. E) thinking of the issue from the customer’s point of view.

Answer: D

Explanation: When identifying a company’s market, some managers get into trouble because they describe their markets solely in terms of products they sell.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

67) To understand the narrowing-down process, it is useful for mangers to think in terms of a ________ market and a ________ market.

1. A) generic; product

2. B) buyer’s; seller’s

3. C) goods; services

4. D) primary; secondary

5. E) risky; certain

Answer: A

Explanation: To understand the narrowing-down process, it is useful to think of two basic types of markets. A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

68) A market in which sellers offer various, often diverse, ways of satisfying needs is called a ________ market.

1. A) product

2. B) diverse

3. C) general

4. D) relevant

5. E) generic

Answer: E

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

69) A ________ is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services.

1. A) segment

2. B) market

3. C) product

4. D) consumer forum

5. E) generic industry

Answer: B

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

70) A marketing manager has just learned about generic markets. This may lead the manager

1. A) to see a larger set of potential competitors.

2. B) to put less emphasis on market penetration or market development opportunities and more emphasis on product development opportunities.

3. C) to think about new ways of satisfying the needs of his or her current customers.

4. D) All these answers are correct.

Answer: D

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Any one of many very different products may satisfy those needs so this would be a reason to emphasize product development opportunities more.

Difficulty: 3 Hard

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Create

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

71) Compared to a product-market, a generic market

1. A) is more narrowly defined.

2. B) has sellers offering a more diverse set of products.

3. C) can never help marketers identify opportunities.

4. D) None of these answers is correct.

Answer: B

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

72) Which of the following is most likely to happen in a generic market?

1. A) Sellers offer various, often diverse, ways of satisfying broadly similar needs.

2. B) Consumers are offered various close substitute ways of satisfying needs.

3. C) Everything is the same as in a product-market.

4. D) Customers have very diverse needs.

5. E) Sellers produce unbranded products.

Answer: A

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

73) A ________ market is a market with broadly similar needs and sellers offering various—and often diverse—ways of satisfying those needs.

1. A) planned

2. B) target

3. C) central

4. D) generic

5. E) relevant

Answer: D

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

74) A ________ market is a market with broadly similar needs and sellers offering various—and often diverse—ways of satisfying those needs.

1. A) homogeneous

2. B) product

3. C) relevant

4. D) generic

5. E) target

Answer: D

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

75) A generic market

1. A) may include sellers who compete in different product-markets.

2. B) would probably be broader than the firm’s target market.

3. C) might be composed of several different product-markets.

4. D) has sellers offering a more diverse set of products.

5. E) All these answers are correct.

Answer: E

Explanation: A generic market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. It may be composed of several different product-markets and its sellers may also compete in different product-markets. By definition, a generic market is likely broader than the firm’s target market.

Difficulty: 3 Hard

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

76) In a generic market,

1. A) diverse types of products may compete for customers.

2. B) customers have broadly similar needs.

3. C) there may be many ways to satisfy customers’ needs.

4. D) sellers may compete in different product-markets.

5. E) All these answers are correct.

Answer: E

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers also compete in different product-markets.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

77) A generic market is one in which

1. A) products from different industries compete for customers by trying to satisfy the same basic need.

2. B) no firm can establish a competitive advantage.

3. C) a number of firms are all offering new or improved products in an effort to increase sales.

4. D) one seller has a patent for a superior product and other competitors imitate the leader with inferior products.

5. E) None of these answers is correct.

Answer: A

Explanation: A generic market is a market with broadly similar needs—sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

78) A generic market

1. A) related to a consumer’s functional need is smaller than a related product-market.

2. B) might involve competition among skis, roller blades, bicycles, and ice skates.

3. C) might logically include rubber, cement, a lamp, and a CD player.

4. D) is usually narrower than the firm’s target market.

5. E) All these answers are correct.

Answer: B

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

79) A digital camera, a computer video camera, and a computer scanner might compete in the same

1. A) single target market.

2. B) generic market.

3. C) multiple target market.

4. D) combined target market.

5. E) product-market.

Answer: B

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

80) A transistor radio, an MP3 player, and a portable CD player might compete in the same

1. A) single target market.

2. B) multiple target market.

3. C) product-market.

4. D) combined target market.

5. E) generic market.

Answer: E

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

81) A pencil, a dictating machine, and a word processor might compete in the same

1. A) target market.

2. B) generic market.

3. C) product-market.

4. D) Any of these could be correct.

Answer: B

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

82) Which of the following is the best example of a generic market?

1. A) the senior citizen recreation market

2. B) the designer shoes market

3. C) the frozen yogurt market

4. D) the transportation market

5. E) the Hispanic-American market

Answer: A

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A generic market description looks at markets broadly and from a customer’s viewpoint.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

83) Which of the following is the best example of a generic market?

1. A) the meat market

2. B) the minivan market

3. C) the e-commerce market

4. D) the beer market

5. E) the “singles” entertaining market

Answer: E

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers in a generic entertainment-seeker market have to focus on the needs the customers want satisfied.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

84) Which of the following is the best example of a generic market?

1. A) the adult “personal expression” market

2. B) the roller blade market

3. C) the female exercise shoes market

4. D) the sports drink market

5. E) the sporting goods market

Answer: A

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A “personal expression” market is an example of a generic market.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

85) Which of the following is LEAST likely to compete in the same generic market with the others?

1. A) garlic powder

2. B) pepper

3. C) Tabasco sauce

4. D) salt

5. E) potato chips

Answer: E

Explanation: A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other.

Difficulty: 3 Hard

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

86) Which of the following is LEAST likely to compete in the same generic market with the others?

1. A) long-stem roses

2. B) tomatoes

3. C) champagne

4. D) greeting cards

5. E) telegrams

Answer: B

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

87) Which of the following is LEAST likely to compete in the same generic market with the others?

1. A) popcorn

2. B) soft drinks

3. C) napkins

4. D) cookies

5. E) ice cream

Answer: C

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

88) Which of the following is LEAST likely to compete in the same generic market as the others?

1. A) ice cream

2. B) apple pie

3. C) fruit salad

4. D) chocolate chip cookies

5. E) pretzels

Answer: E

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

89) Which of the following is the WORST example of a generic market?

1. A) the information storage market

2. B) the recreation market

3. C) the designer jeans market

4. D) the home improvement market

5. E) the entertainment market

Answer: C

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

90) What is the main difference between a generic market and a product-market?

1. A) A generic-market involves a less similar set of needs than does a product-market.

2. B) A product-market is usually larger than a generic market.

3. C) Product-markets usually don’t involve competition, but generic markets do.

4. D) Sellers in a generic market are more concerned with prices than sellers in a product-market.

5. E) There is no difference between the two.

Answer: A

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

91) One basic difference between a generic market and a product-market is seen in

1. A) whether or not sellers in the market rely on e-commerce.

2. B) how similar the competing sellers’ products are.

3. C) whether customer needs are similar or different.

4. D) whether the market includes only buyers—or both buyers and sellers.

5. E) There is no difference—the terms mean the same thing.

Answer: B

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

92) A ________ is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

1. A) generic market

2. B) standard market

3. C) target market

4. D) global market

5. E) product-market

Answer: E

Explanation: A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

93) Which if the following describes a product-market most accurately?

1. A) Exchanges are based on barter rather than money.

2. B) One seller has a patent for a superior product and other firms try to imitate the leader the best they can.

3. C) All the customers want the same product but will consider a substitute if their preferred brand is not available.

4. D) Competing sellers offer physically or conceptually similar products.

5. E) No intermediaries operate in the market.

Answer: D

Explanation: A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. In a product-market concerned with specific products, consumers compare them with similar products that may satisfy their needs.

Difficulty: 1 Easy

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

94) A product-market is one in which

1. A) products from different industries compete for customers by trying to satisfy the same basic need.

2. B) price is the determining factor in deciding which brand to buy.

3. C) all the customers want the exact same product but will consider a substitute if their preferred brand is not available.

4. D) one seller has a monopoly and there is no competition.

5. E) None of these answers is correct.

Answer: E

Explanation: A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

95) A product-market is one in which

1. A) demand is inelastic.

2. B) products that are close substitutes for each other compete for customers by trying to satisfy very similar needs.

3. C) breakthrough opportunities are no longer possible.

4. D) one seller has a patent for a superior product and other competitors try to imitate the leader.

5. E) All these answers are correct.

Answer: B

Explanation: A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Difficulty: 2 Medium

Topic: Search for Opportunities can begin by Understanding Markets

Learning Objective: 04-01 define and describe generic markets and product-markets.

Bloom’s: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

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