Market segmentation is best defined as
A) Dividing a market into distinct groups of buyers with different needs or behaviors
B) Selling one product to all customers
C) Pricing products differently for each customer
D) Expanding production facilities
Answer: A
The purpose of market segmentation is to
A) Identify and target specific customer groups effectively
B) Increase overall costs
C) Standardize all marketing messages
D) Avoid competition
Answer: A
The process of selecting one or more segments to enter is known as
A) Market targeting
B) Product differentiation
C) Positioning
D) Market diversification
Answer: A
A target market refers to
A) A set of buyers sharing common needs that the company decides to serve
B) Every consumer in the economy
C) The least profitable customers
D) Competitor’s loyal customers
Answer: A
Mass marketing focuses on
A) Offering one product for the entire market
B) Individual customization
C) Niche market appeal
D) Relationship building
Answer: A
Differentiated marketing means
A) Targeting several segments with different offers
B) Ignoring segmentation
C) Selling one product universally
D) Avoiding product adaptation
Answer: A
Concentrated (niche) marketing strategy focuses on
A) One or few small segments with high potential
B) All available segments
C) Non-targeted mass approach
D) Government contracts only
Answer: A
Micromarketing aims to
A) Tailor products to local or individual customers
B) Reach broad markets
C) Avoid customization
D) Focus on national campaigns
Answer: A
Local marketing involves
A) Adapting brands to local needs and preferences
B) Global standardization
C) Online-only advertising
D) Ignoring geographic differences
Answer: A
Individual marketing (one-to-one) focuses on
A) Customizing products for individual customers
B) Producing large-scale goods
C) Ignoring customer feedback
D) Reducing costs through standardization
Answer: A
The process of dividing a market into groups based on geographic variables is called
A) Geographic segmentation
B) Behavioral segmentation
C) Psychographic segmentation
D) Demographic segmentation
Answer: A
Demographic segmentation divides markets by
A) Age, gender, income, education, and family size
B) Lifestyle and personality
C) Product benefits
D) Purchasing behavior
Answer: A
Psychographic segmentation groups buyers by
A) Lifestyle, social class, and personality traits
B) Age and gender
C) Product usage
D) Region or climate
Answer: A
Behavioral segmentation divides buyers by
A) Knowledge, attitudes, and responses to a product
B) Location
C) Income
D) Education level
Answer: A
Benefit segmentation is based on
A) The specific benefits consumers seek from a product
B) Price perception
C) Cultural background
D) Shopping frequency
Answer: A
Usage rate segmentation classifies customers as
A) Light, medium, or heavy users
B) Rural or urban buyers
C) Loyal or new
D) Price-sensitive or premium
Answer: A
Loyalty status segmentation categorizes customers by
A) Their degree of commitment to a brand
B) Income and wealth
C) Occupation type
D) Education level
Answer: A
The most popular base for segmenting consumer markets is
A) Demographic
B) Psychographic
C) Behavioral
D) Geographic
Answer: A
Multiple segmentation bases are used when
A) A single variable cannot capture market diversity
B) The market is homogeneous
C) Customers are identical
D) Firms want one universal message
Answer: A
An effective segmentation must be
A) Measurable, accessible, substantial, differentiable, and actionable
B) Large, visible, and global
C) Expensive and complex
D) Standard and static
Answer: A
Measurable segmentation means
A) The size and characteristics of the segment can be quantified
B) The segment is too small to measure
C) Customers are unreachable
D) Data is unavailable
Answer: A
Accessible segmentation implies
A) Segments can be effectively reached and served
B) The segment is too costly
C) Customers are hidden
D) Market is too diverse
Answer: A
Substantial segmentation ensures
A) The segment is large or profitable enough to serve
B) The segment is unstable
C) It has no future potential
D) It changes frequently
Answer: A
Differentiable segmentation means
A) Segments respond differently to marketing mix elements
B) Segments are identical
C) Segments overlap completely
D) Markets are uniform
Answer: A
Actionable segmentation requires
A) The company can design effective programs to attract and serve the segment
B) No marketing effort
C) No clear customer insight
D) Lack of distribution
Answer: A
Business market segmentation variables include
A) Industry type, company size, location, and purchasing approach
B) Gender and age
C) Lifestyle and personality
D) Religion and culture
Answer: A
Macrosegmentation in business markets divides firms by
A) Broad characteristics like industry or size
B) Individual preferences
C) Employee age
D) Media habits
Answer: A
Microsegmentation further divides by
A) Specific buying situations or decision-making units
B) Company profits
C) Supplier networks
D) Country size
Answer: A
Segment attractiveness is evaluated based on
A) Size, growth, profitability, and structural fit
B) Advertising cost
C) Short-term trends
D) Managerial preference
Answer: A
Market targeting involves
A) Choosing which segments to serve and how
B) Defining total market
C) Conducting internal training
D) Outsourcing sales
Answer: A
Undifferentiated marketing is suitable when
A) Customer needs are similar
B) Market is fragmented
C) Strong competition exists
D) Customization is needed
Answer: A
Differentiated marketing increases
A) Sales and costs due to multiple segments
B) Efficiency and uniformity
C) Customer confusion
D) Price wars
Answer: A
Concentrated marketing is advantageous for
A) Smaller firms with limited resources
B) Large global corporations only
C) Standardized products
D) Government enterprises
Answer: A
Micromarketing includes
A) Local and individual marketing
B) Global campaigns
C) Television advertising
D) Supplier integration
Answer: A
The first step in segmentation and targeting is
A) Identify segmentation bases and variables
B) Choose media channels
C) Set pricing
D) Define product packaging
Answer: A
The second step in segmentation involves
A) Develop segment profiles
B) Execute ad campaigns
C) Hire distributors
D) Create partnerships
Answer: A
A segment profile describes
A) Customers’ demographics, behavior, and needs
B) Competitor’s R&D
C) Product cost
D) Supplier terms
Answer: A
After segmentation, marketers must
A) Evaluate each segment’s attractiveness
B) Ignore small segments
C) Expand globally
D) Reduce features
Answer: A
The final step in the segmentation process is
A) Selecting target segments and developing positioning
B) Launching promotions
C) Calculating ROI
D) Reducing costs
Answer: A
Market specialization strategy involves
A) Serving many needs of a particular customer group
B) Serving one product to all segments
C) Global standardization
D) Cost reduction
Answer: A
Product specialization means
A) Selling one product to multiple segments
B) Serving one segment with many products
C) Ignoring differentiation
D) Diversifying by geography
Answer: A
Selective specialization refers to
A) Targeting several unrelated segments
B) Serving all customers
C) Focusing on one large market
D) Single-brand focus
Answer: A
Full market coverage occurs when
A) A firm serves all customer segments with all products
B) A firm limits its offerings
C) Competition is absent
D) One product is sold globally
Answer: A
A segmentation tree is used to
A) Visualize how variables divide the market into groups
B) Illustrate product life cycle
C) Plan pricing
D) Design distribution
Answer: A
Behavioral segmentation can include
A) Occasion, benefits sought, user status, and loyalty
B) Country and climate
C) Age and gender
D) Occupation and income
Answer: A
Occasion segmentation identifies
A) When buyers purchase or use the product
B) Why customers dislike a product
C) How distribution works
D) Who the competitors are
Answer: A
User status segmentation divides buyers as
A) Non-users, ex-users, potential, first-time, and regular users
B) Male and female
C) Urban and rural
D) Educated and uneducated
Answer: A
In consumer segmentation, lifestyle is an example of
A) Psychographic variable
B) Behavioral variable
C) Demographic variable
D) Geographic variable
Answer: A
Benefit segmentation helps companies
A) Design products matching specific customer expectations
B) Set employee goals
C) Fix distribution costs
D) Reduce features
Answer: A
The ultimate goal of segmentation and targeting is
A) Delivering greater value to chosen customers profitably
B) Serving every customer equally
C) Reducing marketing activity
D) Avoiding competition
Answer: A
The key objective of market segmentation is
A) To understand and serve customers more effectively
B) To increase prices
C) To reduce innovation
D) To control distribution channels
Answer: A
Segmentation helps marketers
A) Focus resources on the most profitable customer groups
B) Sell to everyone in the market
C) Avoid competitive analysis
D) Reduce promotional efforts
Answer: A
A heterogeneous market is characterized by
A) Buyers with diverse needs and preferences
B) Buyers with identical demands
C) Limited competition
D) No need for segmentation
Answer: A
A homogeneous market implies
A) Buyers respond similarly to marketing efforts
B) Wide differences in preferences
C) Many unique segments
D) Multiple brand perceptions
Answer: A
The STP process stands for
A) Segmentation, Targeting, and Positioning
B) Sales, Training, and Promotion
C) Strategy, Testing, and Pricing
D) Service, Target, and Product
Answer: A
Segmentation variables are chosen based on
A) Relevance to customer behavior and marketing goals
B) Convenience for managers
C) Random data
D) Company structure
Answer: A
Demographic segmentation remains popular because
A) Demographics are easy to measure and strongly related to preferences
B) They are rare and abstract
C) They don’t affect marketing
D) They’re unrelated to buying behavior
Answer: A
Geodemographic segmentation combines
A) Geographic and demographic variables
B) Psychological and behavioral factors
C) Product and price
D) Age and lifestyle only
Answer: A
Psychographic segmentation is useful when
A) People with similar demographics behave differently
B) All buyers are alike
C) The market is small
D) Pricing is uniform
Answer: A
Behavioral segmentation focuses on
A) Why, when, and how customers buy
B) The physical features of a product
C) Distribution patterns
D) Competitor advertising
Answer: A
Occasion-based segmentation is used by marketers to
A) Target customers during specific purchase or usage times
B) Divide markets by gender
C) Focus on psychographic data
D) Ignore timing of purchases
Answer: A
An example of benefit segmentation is
A) Toothpaste buyers seeking whitening, freshness, or sensitivity protection
B) Dividing by age
C) Splitting by income
D) Sorting by gender
Answer: A
User status segmentation includes
A) Nonusers, potential users, first-time users, and regular users
B) High-income and low-income
C) Rural and urban
D) Old and young
Answer: A
Usage rate segmentation divides buyers into
A) Light, medium, and heavy users
B) Loyal and non-loyal
C) Male and female
D) Urban and rural
Answer: A
Loyalty segmentation helps identify
A) Customers with strong brand commitment
B) Customers by age
C) Channels of distribution
D) Random purchase frequency
Answer: A
Attitude segmentation divides buyers based on
A) How they feel toward a product or brand
B) How much they earn
C) Their geographic region
D) Their education level
Answer: A
Multiple segmentation is used to
A) Create more precise marketing strategies
B) Complicate research unnecessarily
C) Increase confusion
D) Reduce segmentation accuracy
Answer: A
The PRIZM system classifies consumers based on
A) Demographic and lifestyle clusters
B) Product usage
C) Pricing sensitivity
D) Advertising response
Answer: A
A profitable segment is one that
A) Offers sufficient sales and margins to justify marketing efforts
B) Is small and declining
C) Requires high costs with low returns
D) Is difficult to measure
Answer: A
Segment attractiveness depends on
A) Market size, growth, competition, and company fit
B) Advertising reach only
C) Price volatility
D) Channel relationships
Answer: A
Strategic fit evaluates
A) Whether the company’s strengths match segment opportunities
B) If the market is large enough
C) If the competitor is dominant
D) If advertising costs are low
Answer: A
A differentiated targeting strategy aims to
A) Develop unique marketing mixes for multiple segments
B) Offer one standardized product
C) Avoid customization
D) Focus only on local markets
Answer: A
Concentrated targeting is best for
A) Companies with limited resources focusing on niche segments
B) Large firms seeking all markets
C) Homogeneous consumers
D) High-volume producers
Answer: A
Micromarketing is ideal when
A) Customer data allows for precise individual customization
B) The market is identical
C) Mass production dominates
D) Global reach is the goal
Answer: A
Local marketing adjusts
A) Product and promotion to the needs of specific cities or neighborhoods
B) Company strategy globally
C) Supplier costs
D) Brand logos only
Answer: A
Individual marketing is made feasible by
A) Advances in digital technologies and data analytics
B) Limited data
C) Standardized products
D) Cost constraints
Answer: A
The VALS framework segments consumers by
A) Values, attitudes, and lifestyles
B) Income and location
C) Behavior and benefit
D) Loyalty and demographics
Answer: A
In business markets, segmentation can be done by
A) Industry, company size, location, and usage rate
B) Personality
C) Age
D) Family size
Answer: A
Purchasing approach segmentation divides business buyers by
A) Buying process, decision structure, and relationship orientation
B) Age and gender
C) Price levels
D) Geographic scope
Answer: A
Situational segmentation identifies
A) Temporary needs or purchase contexts influencing buyer behavior
B) Demographic profiles
C) Economic conditions
D) Price fluctuations
Answer: A
Segmentation precision increases with
A) More detailed data and analytics
B) Lack of research
C) Guesswork
D) Broad targeting
Answer: A
Customer persona development helps marketers
A) Visualize the ideal customer for each segment
B) Replace segmentation
C) Plan supply chains
D) Measure production costs
Answer: A
Cluster analysis is used to
A) Identify natural groupings among customers based on shared characteristics
B) Calculate prices
C) Forecast demand only
D) Design ads
Answer: A
Segmentation evaluation requires balancing
A) Attractiveness and company capability
B) Advertising and pricing
C) Distribution and design
D) Loyalty and cost
Answer: A
Segment stability is important because
A) Rapidly changing segments are harder to serve effectively
B) Dynamic markets reduce innovation
C) It simplifies logistics
D) It ensures fixed pricing
Answer: A
Segment profitability depends on
A) Expected revenue minus costs to serve
B) Number of competitors
C) Total market size
D) Advertising reach
Answer: A
A segment with low accessibility is one
A) Difficult to reach through existing distribution or communication channels
B) Easy to serve
C) Already saturated
D) Very profitable
Answer: A
Actionable segments allow firms to
A) Design effective marketing programs to attract and serve them
B) Avoid targeting
C) Use random messaging
D) Skip product differentiation
Answer: A
Niche marketing offers
A) Higher margins and deeper customer loyalty in smaller markets
B) Broad reach at low cost
C) Generic advertising
D) Limited customization
Answer: A
Segment interrelationships help firms
A) Identify overlap and synergy among segments
B) Increase competition
C) Reduce product variety
D) Eliminate research
Answer: A
Behavioral variables often provide
A) The best starting point for segmenting consumer markets
B) Poor insights
C) Irrelevant information
D) Limited data
Answer: A
Segment homogeneity within means
A) Members of a segment share similar needs
B) Members differ greatly
C) No shared characteristics
D) Random patterns
Answer: A
Segment heterogeneity between implies
A) Segments differ clearly from one another
B) Segments overlap completely
C) Customers act identically
D) No clear distinctions exist
Answer: A
Targeting strategy choice depends on
A) Company resources, product variability, and competitor strategy
B) Employee preferences
C) Random market selection
D) Supplier demands
Answer: A
Positioning follows segmentation and targeting because
A) It defines how a brand should be perceived by the chosen segments
B) It determines cost structures
C) It organizes logistics
D) It sets production schedules
Answer: A
The goal of segmentation and targeting is to
A) Create value for both company and customers
B) Reduce marketing activity
C) Limit product diversity
D) Focus on cost only
Answer: A
Mass customization combines
A) Efficiency of mass production with individual tailoring
B) Global standardization
C) Uniform product design
D) High-cost production
Answer: A
A segmentation strategy failure can occur when
A) The firm targets unprofitable or unreachable segments
B) Segments are clearly defined
C) Customer insight is strong
D) Marketing messages are aligned
Answer: A
The most profitable customer segments are often
A) Loyal, high-value buyers with recurring purchases
B) Occasional users
C) Price-sensitive customers
D) First-time buyers
Answer: A
The ultimate benefit of segmentation and targeting is
A) Efficient resource allocation and higher customer satisfaction
B) Increased advertising waste
C) Homogeneous demand
D) Reduced differentiation
Answer: A
The foundation of segmentation is based on
A) Recognizing diversity among customers in their needs and behaviors
B) Producing identical goods for all
C) Avoiding differentiation
D) Reducing competition
Answer: A
Market heterogeneity refers to
A) The existence of distinct groups of buyers with different characteristics
B) A market with similar preferences
C) Lack of consumer variation
D) Uniform demand
Answer: A
The segmentation process helps firms
A) Identify profitable groups to target effectively
B) Expand production capacity
C) Increase costs unnecessarily
D) Eliminate competitors
Answer: A
Macro segmentation divides markets based on
A) Broad features like industry, company size, or geography
B) Individual behavior
C) Lifestyle and attitudes
D) Purchasing volume only
Answer: A
Micro segmentation focuses on
A) Specific decision-making characteristics within each segment
B) Regional boundaries
C) Price elasticity
D) Media selection
Answer: A
Firmographics are to B2B markets as
A) Demographics are to consumer markets
B) Benefits are to psychographics
C) Culture is to pricing
D) Advertising is to promotion
Answer: A
A market segment is most useful when it
A) Is measurable, substantial, accessible, differentiable, and actionable
B) Is temporary and vague
C) Lacks data
D) Is small and unstable
Answer: A
Differentiable segments ensure that
A) Each segment responds uniquely to marketing strategies
B) All segments react identically
C) Market research is unnecessary
D) Segments overlap completely
Answer: A
Substantiality of a segment means
A) It’s large or profitable enough to justify serving
B) It’s too small to pursue
C) It’s homogeneous
D) It’s inaccessible
Answer: A
Actionable segmentation requires
A) The company can implement marketing programs effectively
B) Market potential is unknown
C) Data is incomplete
D) No marketing plan is needed
Answer: A
The geodemographic segmentation system classifies households by
A) Location and socioeconomic factors
B) Brand loyalty
C) Shopping frequency
D) Product category
Answer: A
A behavioral segment based on “occasion” focuses on
A) When customers buy or use a product
B) Why they dislike a brand
C) Their income level
D) The store location
Answer: A
Benefit segmentation assumes
A) Consumers purchase for different benefits sought
B) Customers buy randomly
C) Brand loyalty drives all purchases
D) Markets don’t vary
Answer: A
Segmenting by loyalty status helps identify
A) Brand-switchers versus committed users
B) High-income consumers
C) Heavy users only
D) Regional markets
Answer: A
Segment size and growth are critical because
A) They determine potential revenue and future expansion
B) They reduce marketing effort
C) They lower R&D cost
D) They replace differentiation
Answer: A
Competitive intensity in a segment matters because
A) High competition can reduce profitability
B) It always increases market size
C) It ensures product stability
D) It guarantees growth
Answer: A
Market targeting follows segmentation to
A) Decide which segments to enter
B) Define product pricing
C) Reduce advertising cost
D) Avoid competition
Answer: A
A target market is
A) A specific group of potential customers a firm chooses to serve
B) The entire population
C) A random audience
D) Competitors’ customers
Answer: A
Undifferentiated marketing offers
A) One product to the whole market without segment distinctions
B) Multiple variations
C) Customization for individuals
D) Niche strategies
Answer: A
Differentiated marketing involves
A) Designing separate offerings for each segment
B) Serving all customers equally
C) Ignoring differences
D) Eliminating variety
Answer: A
Concentrated (niche) marketing focuses on
A) Serving one or few well-defined segments
B) Mass market outreach
C) Random advertising
D) Product standardization
Answer: A
Micromarketing tailors products to
A) Specific individuals or local markets
B) Entire countries
C) Large corporations only
D) Uniform global audiences
Answer: A
Local marketing customizes strategies for
A) Neighborhoods, cities, or regions
B) Global consumers
C) Industry buyers
D) Digital platforms only
Answer: A
Individual marketing is enabled by
A) Advanced data analytics and personalization technology
B) Broad national campaigns
C) Lack of consumer data
D) Manual operations
Answer: A
One-to-one marketing focuses on
A) Building long-term personalized relationships
B) Standardized messaging
C) Minimal customization
D) Mass production
Answer: A
Behavioral segmentation is powerful because
A) It links marketing directly to actual consumer behavior
B) It relies on intuition
C) It ignores purchase patterns
D) It avoids data
Answer: A
A multi-segment strategy allows firms to
A) Serve multiple segments with different products
B) Focus on only one region
C) Offer identical items globally
D) Minimize product lines
Answer: A
The VALS model categorizes consumers by
A) Values, attitudes, and lifestyles
B) Gender and income
C) Geographic region
D) Price preference
Answer: A
Psychographic segmentation helps marketers
A) Understand motivations and lifestyle differences among consumers
B) Focus only on demographic data
C) Avoid customization
D) Reduce research needs
Answer: A
Lifestyle segmentation divides customers by
A) Their interests, opinions, and daily activities
B) Their job titles
C) Age only
D) Product brand
Answer: A
User status distinguishes
A) Nonusers, potential users, and regular users
B) Gender
C) Climate zones
D) Price points
Answer: A
Usage rate segmentation is valuable because
A) Heavy users often account for a large share of total sales
B) All customers buy equally
C) Low users dominate revenue
D) Frequency doesn’t matter
Answer: A
Occasion segmentation is used by firms like
A) Greeting card companies or beverage brands tailoring messages to holidays
B) Oil refineries
C) Machinery manufacturers
D) Telecom regulators
Answer: A
Benefit segmentation helps a brand identify
A) Which product features different customers value most
B) Which distributor to choose
C) How to reduce prices
D) How to cut costs
Answer: A
Market segmentation adds value by
A) Aligning company offerings with specific customer needs
B) Eliminating competition
C) Raising marketing costs
D) Reducing differentiation
Answer: A
Strategic segmentation integrates
A) Segmentation with long-term company goals
B) Only short-term promotions
C) Local pricing
D) Supplier contracts
Answer: A
Dynamic segmentation involves
A) Updating segment definitions as market conditions evolve
B) Keeping static classifications
C) Ignoring data trends
D) Fixed pricing
Answer: A
Predictive segmentation uses
A) Statistical models to forecast future segment behavior
B) Gut feeling
C) Random sampling
D) One-time surveys
Answer: A
Cluster analysis in segmentation
A) Groups customers by natural similarities in behavior or demographics
B) Tests ad recall
C) Measures production cost
D) Sets pricing
Answer: A
Data-driven segmentation relies on
A) Big data analytics and AI tools to refine customer groups
B) Manual categorization
C) Guesswork
D) Random observations
Answer: A
Segment prioritization means
A) Ranking segments based on profitability and strategic alignment
B) Targeting all customers equally
C) Ignoring small markets
D) Focusing on competitors
Answer: A
Niche marketing creates value through
A) Expertise, strong focus, and customer intimacy
B) High volume and low cost
C) Random sales
D) Minimal research
Answer: A
Target market selection requires
A) Evaluating segment attractiveness and fit with company resources
B) Following industry trends
C) Copying competitors’ strategy
D) Reducing variety
Answer: A
Perceptual maps are used to
A) Visualize how consumers perceive brands in a market
B) Measure production output
C) Determine supplier costs
D) Identify pricing errors
Answer: A
Positioning follows targeting because
A) The company must define how it will serve chosen segments
B) The product is ready for distribution
C) Sales have begun
D) Costs are minimized
Answer: A
A company using mass marketing focuses on
A) Common needs of the entire market
B) Segment-specific preferences
C) Niche differentiation
D) Individual customization
Answer: A
A differentiated strategy typically
A) Increases total sales but also marketing costs
B) Reduces brand awareness
C) Simplifies operations
D) Eliminates choice
Answer: A
One-to-one marketing builds loyalty by
A) Personalizing interactions and communications
B) Ignoring feedback
C) Reducing service quality
D) Offering one generic message
Answer: A
Behavior-based targeting in digital marketing uses
A) Online user actions and preferences to tailor offers
B) Geographic location alone
C) Price points
D) Supplier feedback
Answer: A
The ultimate aim of identifying market segments and target customers is
A) To deliver superior value to specific groups profitably
B) To minimize brand differentiation
C) To avoid competition entirely
D) To generalize marketing approaches
Answer: A
