Evaluating and Selecting the Market Segments

Evaluating market segments primarily involves assessing:
A) Segment size and growth
B) Segment structural attractiveness
C) Company objectives and resources
D) All of the above
Answer: D

Which of the following is NOT a criterion for evaluating market segments?
A) Measurability
B) Accessibility
C) Product color
D) Substantiality
Answer: C

A substantial market segment is one that:
A) Is large and profitable enough to serve
B) Can be ignored safely
C) Is very similar to competitors
D) Is only defined by gender
Answer: A

When evaluating segments, “actionability” refers to:
A) The ability to develop effective programs to attract and serve the segment
B) Segment size
C) Market share
D) Industry growth
Answer: A

A segment is accessible if:
A) It can be effectively reached and served
B) It is the largest segment
C) It’s the most profitable
D) Competitors ignore it
Answer: A

Which factor relates to the risk of aggressive competitors or substitute products in a segment?
A) Substantiality
B) Segment structural attractiveness
C) Measurability
D) Accessibility
Answer: B

When segment sales are highly susceptible to price wars, it signals:
A) Structural unattractiveness
B) Measurability
C) Growth potential
D) Differentiation
Answer: A

A segment that matches a company’s long-term strategy is said to fit its:
A) Objectives and resources
B) Substantiality
C) Demographic profile
D) Geographic scope
Answer: A

High buyer power in a segment often means:
A) The company can dictate terms
B) The segment is less attractive
C) The segment is always profitable
D) Easy differentiation
Answer: B

When segment attractiveness is evaluated, company resources must be considered because:
A) Not all segments fit a firm’s strengths
B) All segments are equally profitable
C) Competition is irrelevant
D) Price is the only concern
Answer: A

A segment’s expected profitability can be affected by:
A) Market growth rate
B) Number of competitors
C) Barriers to entry and exit
D) All of the above
Answer: D

The process of targeting the most attractive segment(s) is called:
A) Segmentation
B) Differentiation
C) Market targeting
D) Positioning
Answer: C

“Differentiable” segments are those that:
A) Respond differently to marketing mix elements
B) Are difficult to identify
C) Are too small to serve
D) Are easy to reach
Answer: A

When choosing segments, a company should ensure:
A) Segment is aligned with company values
B) Segment can be reached and served profitably
C) Segment size justifies investment
D) All of the above
Answer: D

Overlapping segments can create problems because:
A) Marketing mixes may conflict
B) Communication may be confusing
C) Customers may receive inconsistent messages
D) All of the above
Answer: D

A market segment with high growth but low compatibility with company objectives is:
A) Always attractive
B) Not ideal to target
C) Always profitable
D) Best for undifferentiated marketing
Answer: B

Companies should avoid segments:
A) That are over-served by competitors
B) That offer low returns
C) With high regulatory risks
D) All of the above
Answer: D

The degree to which a segment is easy to measure and identify is called:
A) Measurability
B) Substantiality
C) Actionability
D) Accessibility
Answer: A

When choosing a segment, firms should prioritize segments where:
A) They can deliver superior value
B) Competitors are entrenched
C) Entry barriers are low
D) Price is the only factor
Answer: A

Niche segments are often attractive because:
A) They may be underserved
B) Larger competitors may overlook them
C) Profit margins can be higher
D) All of the above
Answer: D

Which of the following increases segment attractiveness?
A) High barriers to entry
B) Low supplier power
C) Low threat of substitutes
D) All of the above
Answer: D

Evaluating segment stability means analyzing:
A) Whether preferences are likely to change rapidly
B) Price levels
C) Supplier influence
D) Communication channels
Answer: A

The risk of focusing on a single segment includes:
A) Dependency on one group
B) Exposure to market downturns
C) Missing opportunities in other segments
D) All of the above
Answer: D

A segment with intense rivalry is:
A) Usually unattractive
B) Always profitable
C) Good for new entrants
D) Easily served
Answer: A

Companies with limited resources should often pursue:
A) Concentrated (niche) marketing
B) Mass marketing
C) Undifferentiated marketing
D) Multi-segment marketing
Answer: A

Market positioning is typically done:
A) After segment evaluation and selection
B) Before segmentation
C) Before targeting
D) During resource allocation
Answer: A

The fit between a segment and a company’s core competencies is called:
A) Compatibility
B) Measurability
C) Substantiality
D) Differentiation
Answer: A

When evaluating segments, which is least relevant?
A) Segment’s historical performance
B) Segment leader’s social media following
C) Projected profitability
D) Strategic fit
Answer: B

If a segment is too costly to reach and serve, it is considered:
A) Inaccessible
B) Profitable
C) Substantial
D) Attractive
Answer: A

To minimize risk, some firms target:
A) Multiple segments (diversification)
B) The largest segment only
C) Segments with most competitors
D) None of the above
Answer: A

When evaluating international segments, firms should consider:
A) Cultural differences
B) Legal barriers
C) Economic environments
D) All of the above
Answer: D

Segment selection often requires:
A) Trade-offs between potential sales and risk
B) Ignoring smaller segments
C) Always choosing the most innovative segment
D) Avoiding all competitors
Answer: A

A segment that is highly loyal but small may be chosen if:
A) It fits the company’s expertise and profit goals
B) Competitors are absent
C) It can be served cost-effectively
D) All of the above
Answer: D

Evaluating segment growth potential includes considering:
A) Demographic trends
B) Industry forecasts
C) Social changes
D) All of the above
Answer: D

High supplier power in a segment makes it:
A) More attractive
B) Less attractive
C) Always profitable
D) Ideal for market entry
Answer: B

If a company can uniquely satisfy a segment’s needs, this segment is:
A) A good candidate for targeting
B) To be avoided
C) Structurally unattractive
D) Ignored
Answer: A

To select the best segments, a company should use:
A) Objective data and systematic analysis
B) Gut feeling only
C) Lowest cost targeting
D) Shortest sales cycle
Answer: A

Firms may deselect segments if:
A) Regulatory risk is too high
B) Segment profitability is too low
C) Customers are hard to reach
D) All of the above
Answer: D

Which is a signal that a segment may NOT be attractive?
A) Low profit margins
B) High switching costs for customers
C) Low bargaining power of suppliers
D) Few competitors
Answer: A

The company’s own competencies and resources should be matched to:
A) Segment opportunities
B) Segment growth rates only
C) Competitor strengths
D) All segments equally
Answer: A

An attractive segment is one where:
A) Competition is weak
B) Customers are loyal
C) Barriers to entry are high
D) All of the above
Answer: D

When markets are dynamic, segment attractiveness should be:
A) Regularly reassessed
B) Ignored
C) Evaluated once only
D) Based solely on intuition
Answer: A

One pitfall in segment evaluation is:
A) Overestimating growth
B) Underestimating competitor responses
C) Ignoring customer needs
D) All of the above
Answer: D

If a company’s brand image is weak in a segment, it should:
A) Consider repositioning
B) Avoid the segment
C) Increase promotion
D) All of the above
Answer: D

Overlapping segments may result in:
A) Cannibalization of sales
B) Confused positioning
C) Higher marketing costs
D) All of the above
Answer: D

A highly regulated segment requires:
A) Close monitoring of legal requirements
B) High investment in compliance
C) Risk assessment
D) All of the above
Answer: D

When a segment is highly price sensitive, firms should:
A) Prepare for lower margins
B) Compete on cost
C) Consider value-added differentiation
D) All of the above
Answer: D

Market segment selection should consider:
A) Customer lifetime value
B) Acquisition and servicing costs
C) Potential for brand growth
D) All of the above
Answer: D

After selecting target segments, firms must:
A) Develop positioning and marketing mix
B) Deselect other markets
C) Increase prices
D) Cease innovation
Answer: A

The ultimate aim in segment evaluation and selection is:
A) Maximize company value and competitive advantage
B) Serve every possible customer
C) Lower product quality
D) Focus on short-term gains only
Answer: A

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