Marketing Final Exam

Advantages potentially include greater sales volume

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Unformatted text preview: n a desirable market segment. Disadvantages include segments that are too small, changing segments, and threat of competitive advances. MULTISEGMENT TARGETING STRATEGY. When a firm chooses to serve two or more welldefined market segments and develops distinct marketing mixes for each segment, it is practicing multisegment targeting. Advantages potentially include greater sales volume, higher profits, larger market share, and economies of scale in manufacturing and marketing. Disadvantages include high costs and cannibalization. PTS: 1 REF: 131-134 Communication KEY: CB&E Model Strategy OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 17. Define multisegment targeting and discuss the advantages and disadvantages of this targeting strategy. ANS: A firm that chooses to serve two or more well-defined market segments and develops a distinct marketing mix for each has a multisegment targeting strategy. This strategy offers many potential benefits to firms, including greater sales volume, higher profits, larger market share, and economies of scale in manufacturing and marketing. Yet it may also involve greater product design, production, promotion, inventory, marketing research, and management costs. Another potential disadvantage is cannibalization, which occurs when sales of a new product cut into sales of a firm’s existing products. PTS: 1 REF: 134 Communication KEY: CB&E Model Strategy OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 18. Define cannibalization. Is it always bad? Explain. ANS: Cannibalization occurs when sales of a new product cut into sales of a firm’s existing products. Cannibalization would be preferred over losing sales to a competitor. Cannibalization can also help to build new business. PTS: 1 REF: 134 Communication KEY: CB&E Model Product OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 19. What is one-to-one marketing, and what is the primary goal for companies that adopt the one-toone approach? Describe the difference between a one-to-one marketing approach and the traditional approach to mass marketing. ANS: One-to-one marketing is an individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer. The goal is to reduce costs through customer retention and increase revenue through customer loyalty. The difference between one-to-one marketing and the traditional mass-marketing approach can be compared to shooting a rifle and a shotgun. If you have good aim, a rifle is the more efficient weapon to use. A shotgun, on the other hand, increases your odds of hitting the target when it is more difficult to focus. Instead of scattering messages far and wide across the spectrum of mass media (the shotgun approach), one-to-one marketers look for opportunities to communicate with each individual customer (the rifle approach). PTS: 1 REF: 134 Communication KEY: CB&E Model Strategy OBJ: 08-8 TOP: AACSB MSC: BLOOMS Synthesis 20. Discuss the four trends that...
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This document was uploaded on 09/29/2013.

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