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Global Marketing, 9e, GE (Keegan)
Chapter 7 Segmentation, Targeting, and Positioning
1) The trend showing popularity of ethnic or regional foods such as sushi, falafel, or pizza
worldwide is referred to as the , which provides an opportunity for marketers to pursue
one or more segments on a global scale.
A) segmentation of markets
B) popularity of segmentation
C) promotion of products and services
D) identification of consumers
E) pluralization of consumption
Answer: E
Difficulty: 3: Challenging
Chapter LO: 7.1: Identify the variables that global marketers can use to segment global
markets and give an example of each.
AACSB: Application of knowledge
2) The efforts of global companies to reach low-income consumers in emerging markets

highlight the importance of skillful global market segmentation and targeting. Market
segmentation represents:
A) targeting prospective customers.
B) finding customers who can respond to advertisement.
C) promoting products and services internationally.
D) identifying customers who can help in promoting products.
E) identifying customers based on common characteristics.
Answer: E
Difficulty: 2: Moderate
3) When identifying global market segments, a fundamental guiding principle should be the need
to determine:
A) shared demographic characteristics.
B) similar languages.
C) similar needs and buying behavior.
D) similar ethnic backgrounds.
E) similar geographic regions.
Answer: C
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4) Demographic segmentation is based on measurable characteristics of populations
which includes all of the following examples except:
A) Asia is home to 500 million consumers aged 16 and younger.
B) India has more than half of the population younger than 25.
C) Consumers that buy Porsches would like to be noticed.
D) The United States is home to 28.4 million foreign-born residents with combined income of
$ 233 billion.
E) In the EU, the number of consumers aged 16 and under is rapidly approaching consumers
aged 60.
Answer: C
5) Global marketing authority, Theodore Levitt, has noted that many ethnic and
regional foods–sushi, for example–are enjoying popularity in many countries of the
world. This observation is known as the:
A) pluralization of consumption.
B) ethnicitization of consumption.
C) democratization of consumption.
D) sophistication of consumption.
E) domestication of consumption.
Answer: A
6) A. Coskun Samli had developed a useful approach to global market segmentation that
compares and contrasts "conventional" versus "unconventional" wisdom. An example of
unconventional wisdom can be identified with one of the following assumptions:
A) Since per capita annual income in India is about $1,420, all Indians have low income.
B) Consumers in Europe and Latin America are interested in World Cup soccer whereas
Americans are not.
C) There is a presence of a higher-income, middle-class segment in India.
D) The potential customer base for McDonald's in India is greater than in any developed country.
E) There is no running water and electricity in India.
Answer: C
Chapter LO: 7.1: Identify the variables that global marketers can use to segment global markets
and give an example of each.
7) The process of global market segmentation begins with the choice of one or more variables
to use as a basis for grouping customers. All of the following are variables that are commonly
used except:
A) demographics.
B) polycentrics.
C) behavioral characteristics.
D) benefits sought.
E) psychographics.
Answer: B
8) Based on 2013 projections, the top 10 nations ranked by per capita income does not include:
A) Switzerland.
B) Qatar.
C) Russia.
D) Norway.
E) Australia.
Answer: C
Difficulty: 1: Easy
9) Ericsson, IKEA, Saab, and other companies based in Sweden have looked beyond their
borders for significant growth market because:
A) Sweden has high total annual income.
B) Sweden has low total annual income.
C) Sweden has a fairly small population.
D) Sweden is land locked geographically.
E) Sweden has relaxed export policies.
Answer: C
10) The concentration of income in the high-income and large-population countries means that a
company can be "global" by targeting buyers in:
A) just 50 countries.
B) just 20 countries.
C) just 10 or fewer countries.
D) just 30 countries.
E) none of the above
Answer: C
11) A global segment is referred to as "global elite," which includes:

A) people between the ages of 12 and 19.
B) affluent, well-traveled persons.
C) the graying population.
D) technology professionals.
E) persons having power.
Answer: B
12) In 2013, the 10 most populous countries in the world accounted for just over
percent of the world income.
A) 20
B) 30
C) 40
D) 50
E) 60
Answer: E
13) McDonald's operates in over 118 countries; however, 80% of its restaurants are located
in nine countries which does not include the following country market:
A) Australia.
B) Brazil.
C) Germany.
D) India.
E) Japan.
Answer: D
14) The concentration of wealth in a handful of industrialized countries has significant

implications for global marketers. After segmenting in terms of a single demographic
variable–income– a company can reach the most affluent markets which does not include:
A) half of the EU nations
B) all of North America
C) Canada and Mexico
D) 90 percent of the world's population
E) Japan.
Answer: D
15) A global segment is referred to as "global teens" which includes:

A) people between the ages of 12 and 19.
C) young, global travelers.
Answer: A
16) A global segment is referred to as "global teens" which includes:
A) people with shared interest in fashions.
C) movie stars.
Answer: A
17) Psychographic segmentation involves grouping people in terms of their:

A) combined household income.
B) age and income.
C) attitudes, values, and lifestyle.
D) psychological well being.
E) gender.
Answer: C
18) Porsche AG uses the label "Top Guns" to describe one segment of its customers, namely
those who care about power and control and who expect to be noticed. Such a profile would be
based on which type of segmentation?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) gender
Answer: C
19) SRI International developed Values and Lifestyles (VALS). Such a consumer profile
would be helpful for which type of segmentation?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) gender
Answer: C
20) In the study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?"
researchers identified four lifestyle groups. The group that represents mainstream
European consumers was labeled as:
A) Successful Idealists.
B) Affluent Materialists.
C) Young Professionals.
D) Trendy Teens.
E) Disaffected Survivors.
Answer: E
21) In a study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?"

researchers identified different lifestyle groups. The segment that is concentrated in high-crime,
inner-city neighborhoods were classified as:
A) Successful Idealists.
B) Affluent Materialists.
C) Disaffected Survivors.
D) Trendy Teens.
E) Comfortable Belongers.
Answer: C
22) The law of disproportionality suggests that percent of the company's menu or
profits are accounted for the 20 percent of a firm's products or customers.
A) 50
B) 60
C) 70
D) 80
E) 90
Answer: D
23) The DMBB (D'arcy Massius Benton & Bowles) agency created a psychographic profile
of the Russian market. The categories include all of the following except:
A) Kuptsy.
B) Cossacks.
C) Elites.
D) Students.
E) Business Executives.
Answer: C
24) Sony's U.S. consumer segments include all of the following except:
A) Affluent.
B) Zoomers.
C) SoHo.
D) Gen Y.
E) Fashionists.
Answer: E
25) "Usage rates" and "user status" are important criteria for which segmentation variable?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) benefit
Answer: D
26) Campbell's Soup is making significant inroads into Japan's $500 million soup market as
time-pressed homemakers place a premium on convenience. This type of consumer segmentation
by Campbell's Soup is referred to as:
A) demographic.
B) occupational.
C) psychographic.
D) benefit.
E) behavioral.
Answer: D
27) According to Euromonitor International, the global market for foods that offer
health benefits is currently worth about $ billion in annual sales.
A) 300
B) 400
C) 500
D) 600
E) 700.
Answer: D
Difficulty: 1: Easy
28) Nutraceuticals are health food products which are manufactured by:
A) Kraft foods.
B) General Mills
C) Campbell's soups.
D) Nestléfoods.
E) Gerber foods.
Answer: D
29) Diageo PLC, V&S Vin & Spirit AB, and Seagram and other marketers know that Russians
consume a great deal of vodka. This type of market segmentation can be classified as:
A) demographic.
B) behavioral.
C) psychographic.
D) occupational.
E) benefit.
Answer: B
30) Several years ago, the D'arcy Massius Benton & Bowles (DMBB) agency created
psychographic profiles for several countries and regions." Which region did the survey
specifically focused on?
A) Asia
B) America
C) Europe
D) Australia
E) Far East
Answer: C
31) In response to increasing worldwide concerns about obesity, diabetes, and other food-related
health issues, some of the world's largest food companies are developing new products. Nestlé
and Groupe Danone SA have developed several health-foods which include all of the following
except:
A) Souvenaid.
B) Activa.
C) NutriChoice.
D) Nutraceuticals.
E) Medical Foods.
Answer: B
32) Procter & Gamble has identified a group of consumers in Europe who are willing to pay
premium prices for pet food that will improve the health of their pets. This is an example of
segmentation.
A) demographic
B) psychographic
C) ethnic
D) behavioral
E) benefit
Answer: E
33) Three Mexican retailers Famso, Grupo Gigante SA, and Grupo Comercial Chedraui SA
have opened stores in the United States. This is an indication of:
A) U.S. retailers were lagging behind in collecting demographic information.
B) the Mexican retailers provide better products than American stores.
C) the Hispanic American segments represent a great opportunity for marketers.
D) American businesses cannot compete with Mexican retailers.
E) the Mexican retailers would like to compete with businesses like Best Buy and Circuit City.
Answer: C
34) After convening worldwide employee conferences to study women's shaving
preferences, Schick-Wilkinson Sword introduced a shaving system for women that features a
replaceable blade cartridge.
Answer: TRUE
Difficulty: 1: Easy
35) Global market segmentation is based on the premise that companies should attempt to
identify consumers in different countries who share similar needs and desires.
Answer: TRUE
Difficulty: 1: Easy
36) Sushi, falafel, tandoori chicken or pizza is in demand in many parts of the world.
This phenomenon can be due to the pluralization of consumption and segment
simultaneity. Answer: TRUE
Difficulty: 1: Easy
37) Dove, a division of Unilever, traditionally targeted men and women with its Dove-branded
skin care products.
Answer: FALSE
Difficulty: 1: Easy
38) Global marketers must determine whether a standardized or an adapted marketing mix is
required to best serve the wants and needs of the consumers.
Answer: TRUE
39) For some consumer products such as cigarettes, soft drinks, and candy that have a
low per-unit cost, income is often a more valuable segmentation variable than is
population. Answer: FALSE
40) India has the youngest demographic profile among the world's large nations with more than
half of its population being younger than 25 and the number of young people below the age of 14
is greater than the entire U.S. population.
Answer: TRUE
41) By 2030, 30 percent of the U.S. population will be 65 years or older versus 13 percent
today. Answer: FALSE
Difficulty: 1: Easy
42) Ideally, GDP and other measures of national income converted to U.S. dollars should
be calculated on the basis of purchasing power parities or through direct comparisons of
actual prices for a given product.
Answer: TRUE
Difficulty: 1: Easy
43) Despite having comparable per capita incomes, other industrialized countries
are nevertheless quite small in terms of total annual income.
Answer: TRUE
44) Sweden's smaller population explains why IKEA, Saab, and Ericsson have looked
beyond their borders for significant growth opportunities.
Answer: TRUE
Difficulty: 1: Easy
45) Eighty percent of McDonald's restaurants are located globally in more than 20
countries. Answer: FALSE
46) Categories such as "successful idealists" and "affluent materialists" can be used to describe
age segmentation.
Answer: FALSE
47) A psychographic segmentation, "Comfortable Belongers" refers to "up-and-comers" of a

country's population.
Answer: FALSE
48) Sometimes it is preferable to market to a particular age group rather than a mind-set; in such
an instance, psychographic studies can help marketers arrive at a deeper understanding of
consumer behavior than is possible with traditional segmentation variables.
Answer: FALSE
49) For behavior segmentation, marketers use the 80/20 rule when assessing the consumers'
usage rate, which means that 20% of the company's revenues or profits are accounted for by
80% of the firm's products or customers.
Answer: FALSE
50) Pareto's Law suggests that 80% of a company's revenues or profits are accounted for by 20%
of a firm's products or customers.
Answer: TRUE
Difficulty: 1: Easy
51) When assessing potential country target markets, management should rely heavily on its
network of contacts as a primary criterion for targeting.
Answer: FALSE
52) Demographic changes can create opportunities for marketing innovation. Justify this
statement using examples.
Answer: Demographic changes can create opportunities which are unexpected or unforeseen.
For example, demographic change has been a driving force behind a renaissance of shopping
malls in the United States. The first enclosed mall opened in 1956. After over 50 years retail
experts were using terms like "dying culture" to describe American shopping malls. Although
America boasts approximately 1,500 malls, many have closed as the Internet has brought the
world's stores into American homes. Similarly in France, two entrepreneurs began rewriting the
rules of retailing years before Sam Walton founded the Walmart chain. Marcel Fournier and
Louis Defforey opened the first Carrefour ("crossroads") hypermarket in 1963. At the time,
France had a fragmented shop system that consisted of small, specialized stores with only about
5,000 square feet of floor space, such as the boulangerie and charcuterie. The shop system was
part of France's national heritage, and shoppers developed personal relationships with a shop's
proprietor. However, time-pressed, dual-parent-working families had less time to stop at several
stores for daily shopping. The same trend occurred in other countries.
53) Which of the following is true about efforts by automakers to target the Hispanic segment
in the United States?
A) Honda, Toyota, Ford, and GM all began targeting the segment years ago.
B) Honda and Toyota began targeting the segment years ago; Ford and GM launched their
efforts more recently.
C) Ford and GM began targeting the segment years ago; Honda and Toyota launched
their efforts more recently.
D) Only Ford and GM are targeting the Hispanic segment.
Answer: B
Chapter LO: 7.2: Explain the criteria that global marketers use to choose specific markets to
target.
AACSB: Analytical thinking
54) Which of the following criteria should marketers use when assessing opportunity in global
target markets?
A) current size of the segment
B) anticipated growth potential
C) competition
D) compatibility with company's overall objectives
E) all of the above
Answer: E
target.
55) Global automakers are targeting the U.S. market with SUVs. All of the following SUVs
are assembled or manufactured in the listed country except:
A) Porsche in Germany.
B) Honda in Japan.
C) Volkswagen in Slovakia.
D) Kia in India.
E) Mercedes-Benz in the United States.
Answer: D
target.
56) An example of a trap that marketers can set for themselves while targeting a foreign market
is to:
A) overstate the size and short-term attractiveness of individual country markets.
B) realize that short-term profit and revenue growth objectives may be hard to achieve.
C) restrain from being persistent to enter a country market.
D) ignore shareholders' or competitors' pressure not to "miss out" on a strategic opportunity.
E) enter a market based on time-consuming rigorous market analysis.
Answer: A
target.
57) Managers must decide how well a company's product fits the country market by asking all
of the following questions except:
A) Will adaptation be required?
B) Will import restriction drive up the product price?
C) Is it advisable to source locally?
D) Will strong home currency have an adverse impact on product price?
E) Will it be possible to neglect home-country regulations?
Answer: E
target.
58) The feasibility of targeting a particular market segment can be negatively impacted by
various factors. Which of the following is not of those factors?
A) regulatory hurdles.
B) cultural barriers.
C) lack of distribution system.
D) time required to establish business.
E) surplus demand.
Answer: E
target.
59) The basis for global marketing expert David Arnold's framework for screening intercountry
comparisons include:
A) demographic data.
B) "top-down" segmentation analysis.
C) "bottom-up" segmentation analysis.
D) income level.
E) population data.
Answer: C
target.
60) Basic criteria that marketers should keep in mind while assessing opportunities in global
markets include all of the following except:
A) current size of the market segment.
B) anticipated growth potential of the market.
C) compatibility with company's overall objectives.
D) competition in the market.
E) securing first mover advantage.
Answer: E
target.
61) Companies like Coca-Cola had the first-mover advantage since they were the first company
to enter a global market. The first-mover advantages include all of the following except:
A) best chance of becoming world leader.
B) advantage in adapting to the local culture.
C) lead in advertising and promotion exposure.
D) gain business experience.
E) substantial investments in marketing.
Answer: E
target.
62) India is the world's fastest growing cell phone market with the industry expanding at a rate
of 50% annually with 5 million new subscribers added every month. This is an indication of
continued private-sector growth.
Answer: FALSE
target.
63) France has a fragmented shop system that consisted of small, specialized stores such as the
boulangerie and charcuterie; which became a part of France's national heritage.
Answer: FALSE
target.
64) One of the advantages of targeting a market segment globally is that although the segment in
a single-country market might be small, even a narrow segment can be served profitably if the
segment exists in several countries.
Answer: TRUE
target.
65) A market segment or country market characterized by weak competition may be a

segment to avoid.
Answer: FALSE
target.
66) There is a tendency to overstate the size and short-term attractiveness of individual country
markets, especially when estimates are based primarily on demographic data such as income and
population.
Answer: TRUE
target.
67) When making a decision about market entry timing, a company's management team should
understand that the first-mover always becomes the market leader.
Answer: FALSE
target.
68) Marketing model drivers are key elements or factors required for a business to take root
and grow in a particular country market environment.
Answer: TRUE
target.
69) One of the first-mover disadvantages is that a late-mover competitor may reap benefit
from the investments made in marketing and establishing in a particular country.
Answer: TRUE
target.
70) BMW's slogan "the ultimate driving machine," is an example of an attribute or benefit
which has proven successful in their positioning strategy.
Answer: TRUE
target.
71) As Emirates and other middle eastern carriers penetrate more deeply into the world's largest
aviation market, they are becoming known for very high-quality in-flight service.
Answer: TRUE
target.
72) Middle eastern airlines have encountered some opposition. United Continental, American
Airlines, and Delta have filed complaints with the US Government that the state-owned carriers
are benefiting from substantial government subsidies.
Answer: TRUE
target.
73) Late movers in global markets can never succeed even by developing innovative
business models.
Answer: FALSE
target.
74) Differentiated global marketing represents a more ambitious approach than

concentrated target marketing.
Answer: TRUE
target.
75) IKEA, the home furnishings retailer based in Sweden, wraps itself in the Swedish flag—
literally, since inside and out, their stores are decorated in the national colors of blue and
yellow. This is an example of local consumer culture positioning.
Answer: FALSE
target.
76) Due to globalization, "it is a small world after all." Also, vast scale migration of populations
due to various reasons, including opportunities, has created large segments of ethnic population.
Considering these facts, highlight the ethnic segmentation and its importance.
Answer: Due to several reasons, in many countries the population consists of ethnic groups.
For example, in the United States there are three major ethnic segments–African/Black
Americans; Asian Americans; and Hispanic Americans. In other countries there are different
combinations of ethnic population. Each segment shows great diversity and can be further
subdivided. Even those coming from one country may have differences in language, culture,
religion, and other attitudinal aspects. Their purchasing behavior is different within groups
and sub-groups. From a marketing standpoint these groups offer great opportunity. Companies
in a variety of industry sectors, primarily food and beverages, household goods, and financing
services can benefit by targeting these groups. For example, Japanese automakers have been
successful in targeting ethnic populations in different parts of the world.
target.
77) What are some of the pitfalls in assessing market potential and choosing target markets or
segments?
Answer: After segmenting a market, the next important step is to assess the attractiveness of
the identified segments. This is an important part when assessing emerging country markets as
potential targets. Several potential pitfalls in assessment should be taken into account. In
general, there is a tendency to overstate the size and short-term attractiveness of individual
country markets. This can happen if estimates are based primarily on demographic data such as
income and population. For example, the population figures in India and China can create a
bloated image. Short-term profitability may be hard due to prevailing conditions in these
emerging markets. Persistence and long-term outlook often pays off in new markets. A second
pitfall may originate from pressures placed on marketers by shareholders or competitors. The
possibility of missing out on entering a condition is in itself a stress-causing factor. Marketers
may find themselves overwhelmed at times by such pressures and the urge to react quickly.
Another factor may be the decisions made based on convenience or opinion of persons/advisors
not residing in the home country. The right representatives or distributors should be selected in
order to be successful.
target.
78) Discuss the basics of a framework for selecting target markets highlighting the
salient features of David Arnold's framework.
Answer: A framework for selecting target markets should take into account the market size of
the targeted market. The market size should then be multiplied by the competitive advantage in
that country. Multiplying the market size and competitive advantage index yields a market
potential. The next step in the analysis requires an assessment of the various market access
considerations. Finally, multiplying the market potential by the terms of access index gives the
final market potential. This framework takes into account the competitive advantage, market
potential and the terms of access. This framework should prove useful as a preliminary screening
tool for inter-country comparisons. However, it does not go far enough in terms of assessing
actual market potential. Global marketing expert David Arnold has developed a framework that
goes beyond demographic data and considers other marketing-oriented assessments of market
size and growth potential. Thus, instead of a "top-down" segmentation analysis beginning with,
for example, income or population data from a particular country, Arnold's framework is based
on a "bottom-up" analysis that begins at the product-market level. The product-market refers to a
market defined by a product category. For example, in the automotive industry that would refer
to luxury car market. Arnold's framework incorporates two core concepts: marketing model
drivers and enabling conditions. Marketing model drivers are key elements or factors required
for a business to take root and grow in a particular country market environment. The drivers may
differ depending on whether a company serves consumer or industrial markets. Enabling
conditions are structural market characteristics whose presence or absence can determine where
the marketing model can succeed. For example, in India, refrigeration is not widely available in
shops and market food stalls. This creates challenges for storing dairy products and confections.
So the enabling conditions are very important. After marketing-model drivers and enabling
conditions have been identified, the management should weigh the estimated costs associated
with entering and serving the market with potential short- and long-term revenue streams. One
way to determine the marketing model drivers and enabling conditions is to create a
product-market profile.
target.
79) Both Nestléand Cadbury determined that a liquid chocolate confection would be one way
to address the issue of India's hot weather. This is an example of:
A) differentiated target marketing.
B) standardized global marketing.
C) competitive global marketing.
D) target benefit marketing.
E) product-market decision
Answer: E
Chapter LO: 7.3: Understand how global marketers use a product-market grid to make
targeting decisions.
80) Lexus developed new diesel models as well as a gas-hybrid engine because Germans
want the option of buying vehicles with diesel engines.
Answer: TRUE
81) What important lessons did Virgin chief executive Richard Branson learn in the mid-1990s
when he launched Virgin Cola, directly targeting Coca-Cola's core market?
Answer: Starting a soft-drinks war with Coca-Cola was crazy. It was one of their highest
profile business mistakes, though it was also one of the things that raised the profile of the Virgin
name in America. By launching Virgin Cola they were having fun and reveling in bravado.
However, taking on Coke taught them two lessons: how to make a great cola with a different
taste; and how to antagonize a global business that brought in $28 billion in 2007, with profits of
$5 billion. They underestimated the power and the influence of a global brand that epitomizes the
strength and reach of American capitalism.
82) India's vehicle market can be segmented into:

A) First time car buyers
B) Generation Y drivers
C) different age group drivers
D) women drivers
E) scooter and motorcycle drivers
Answer: E
Chapter LO: 7.4: Compare and contrast the three main target market strategy options.
83) Marketing that involves creating the same marketing mix for a broad mass market of
potential buyers is referred to as:
A) differentiated target marketing.
B) standardized global marketing.
C) concentrated global marketing.
D) competitive global marketing.
E) target benefit marketing.
Answer: B
Chapter LO: 7.4: Compare and contrast the three main target market strategy
options. AACSB: Analytical thinking
84) The Swatch Group markets watches in all price ranges, from the Swatch brand at the low
end to luxury brands such as Longines, Blancpain, and Breguet. Which target market strategy
does this illustrate?
A) standardized global marketing
B) concentrated global marketing
C) differentiated global marketing
D) psychographic global marketing
Answer: C
85) Positioning refers to the act of:

A) determining what areas of the globe to target.
B) ensuring a choice retail shelf location.
C) differentiating a brand in customer's mind.
D) formulating a private label strategy.
E) formulating a companion product.
Answer: C
options. AACSB: Application of knowledge
86) Benetton uses the slogan "United Colors of Benetton" to position itself as a brand concerned
with the unity of humankind. This type of strategy is referred to as GCCP (global consumer
culture positioning).
Answer: TRUE
87) In the cosmetics industry, Unilever pursues differentiated global marketing strategies by
targeting both ends of the perfume market.
Answer: TRUE
88) Standardized global marketing is analogous to mass marketing in a single country and is
also known as differentiated target marketing.
Answer: FALSE
89) Assume that the market segment is judged to be large enough, and the strong competitors
are either absent or deemed to be vulnerable, then is it safe to enter the country?
Answer: If the market segment is judged to be large enough, and there are no strong existing or
potential competitors, one should not assume that it is safe to enter the country. There are several
other factors that can negatively impact a business. For example, significant regulatory hurdles
may be present that limit market access. The company may also encounter cultural barriers or
religious restrictions. Other marketing-specific issues can arise. For example, in India, three to
five years are required to build an effective distribution system for many consumer products.
Also, the approvals may take a considerably long period of time. Thus, apparent potential does
not guarantee success. Managers have a difficult decision in such conditions. If there are certain
prevailing conditions that require adaptation of products, then that should be taken into account.
Also, it is important to consider the question of whether targeting a particular segment is
compatible with the company's overall goals, its brand image, or established sources of
competitive advantage.
90) After evaluating identified segments, decisions have to be made whether to pursue a
particular opportunity or not. Assuming the decision is made to proceed, an appropriate targeting
strategy must be developed. Explain the basic categories of target marketing strategies and how
they can be implemented.
Answer: The three basic categories of target marketing strategies are: standardized marketing,
concentrated marketing, and differentiated marketing. Standardized global marketing is
analogous to mass marketing in a single country. It involves creating the same marketing mix for
a broad mass market of potential buyers. It is also known as undifferentiated target marketing
since it is based on the premise that a mass market exists around the world. Product adaptation is
minimized, and a strategy of intensive distribution ensures that the product is available in the
maximum number of retail outlets. The appeal of standardized global marketing is due to the
lower production costs. The concentrated target marketing involves devising a marketing mix to
reach a niche. A niche is a single segment of the global market. For example, in cosmetics,
Chanel has targeted the upscale, prestige segment of the market. Concentrated targeting is also
the strategy employed by the hidden champions of global marketing–companies unknown to
most people that have succeeded by serving a niche market that exists in many countries. These
companies define their markets narrowly and strive for global depth rather than national breadth.
The narrowing of market definition is the key principle in this strategy. The third category
differentiated global marketing, represents a more ambitious approach than concentrated target
marketing. It is also known as multi-segment targeting. It entails targeting two or more distinct
market segments with multiple marketing mix offerings. This strategy allows a company to
achieve wider market coverage. For example, in the sport utility vehicle segment, Rover has a
Range Rover at the high end of the market. A scaled down version, the Land Rover Discovery,
is offered which competes directly with the Jeep Grand Cherokee. The Freelander, its newest
vehicle, has been on sale in Europe for several years. Thus, there is a multi-pronged approach to
marketing.
91) What factors should be considered by cosmetic companies to be successful in markets in
Brazil, Russia, India, and China?
Answer: Noting that there is no "one-size-fits-all" ideal of beauty, cosmetic marketers should
consider the sensitivity to local cultural preferences. Each customer is free to have her own
aspirations. They have to offer the best quality and the best product to satisfy local customers.
Many Asian women use whitening creams to lighten and brighten their complexion. In China,
white skin is associated with wealth. Companies have to understand what beauty means to
Chinese women and what they look for. Product offerings and communications therefore have to
be adjusted accordingly. Market research is critical to understanding women's preferences in
different parts of the world. Japanese women prefer to use a compact foundation rather than a
liquid. Humid conditions in tropical countries, like India, should be taken into account. How
many times women clean their faces should be taken into account. In China, mass-market and
premium brands should be considered in order to fulfill requirements of the top and general
market. In India, the number of working women is increasing dramatically, and consumer
attitudes are shifting. Due to advances in technology and access to television, women are getting
more beauty conscious. Coloring gray hair is also an important consideration for women in India.
Thus, for each country different factors have to be considered since preferences for beauty
products vary from country to country.
92) For years, ads for Volvo automobiles stressed safety features and protection in the event of
a crash. Thus, Volvo automobiles developed a reputation based on which positioning strategy?
A) use/user
B) attribute/benefit
C) competition
D) high touch
E) quality/price
Answer: B
Chapter LO: 7.5: Describe the various positioning options available to global marketers.
93) BMW advertises its cars as the "ultimate driving machine" which is described as
positioning based on:
A) high touch.
B) use/user.
C) attribute/benefit.
D) competition.
E) quality/price.
Answer: C
94) Some of Body Shop's recent advertising has emphasized the difference between the
company's principles and those of "mainstream" cosmetics companies on such issues as animal
testing. As described here, Body Shop's ads illustrate positioning by:
A) competition.
B) niche.
C) quality/price.
D) attribute/benefit.
E) culture.
Answer: A
95) Which of the following is generally true about the marketing of high-touch products such as
fine china and crystal?
A) It relies equally on specialized information and image.
B) It relies less on image and more on specialized information.
C) It relies less on specialized information and more on image.
D) Neither image nor specialized information is relevant to the marketing of high-touch
products.
E) It relies partially on specialized information and partially on
image. Answer: C
96) Consumers shopping for high-touch products, such as fine perfume, are generally
energized by motives.
A) emotional
B) rational
C) both emotional and rational
D) neither emotional nor rational
E) high-tech
Answer: A
97) When a marketer understands that a product satisfies a buyer's rational criteria while
also evoking an emotional response, the marketer should:
A) only target consumers in high-income countries.
B) utilize a multi-tiered targeting strategy rather than a concentrated strategy.
C) commission psychographic segmentation studies to augment demographic data.
D) create advertising that reflects a bipolar, high-tech and high-touch approach.
E) follow normal targeting strategy.
Answer: C
98) Which of the following is true of advertising for the Heineken and Foster's brands in
the United States?
A) Both Heineken and Foster's utilize the GCCP strategy.
B) Both Heineken and Foster's utilize the FCCP strategy.
C) Heineken utilizes the GCCP strategy; Foster's utilizes the FCCP strategy.
D) Heineken utilizes the FCCP strategy; Foster's utilizes the GCCP strategy.
E) Heineken utilizes the LCCP strategy; Foster's utilizes the GCCP
strategy. Answer: C
99) The world's best-known cosmetics companies are setting their sights on a lucrative new
market segment: the emerging middle classes in countries such as Brazil, Russia, India, and
China. However, these companies have to understand:
A) that women's preferences for cosmetics are same in all countries.
B) that Chinese consumers are not willing to invest in beauty products.
C) what beauty means to Chinese women.
D) that working Indian women currently prefer only local brands.
E) cosmetics are preferred mostly by the top end of the market in
China. Answer: C
100) The strategy that identifies a brand as a symbol of a particular global segment is known as:
A) foreign consumer culture positioning.
B) global consumer culture positioning.
C) local consumer culture positioning.
D) global market positioning.
E) demographic market positioning.
Answer: B
101) Unilever and other consumer goods companies often engage in differentiated
target marketing, offering a full range of brands within a given product category.
Answer: TRUE
102) Implicit or explicit reference to competitors can provide the basis for an
effective positioning strategy
Answer: TRUE
103) What is psychographic segmentation, and how do marketers use it in targeting

different world markets?
Answer: Psychographic segmentation involves grouping people in terms of their attitudes,
values, and lifestyles. Respondents are carefully selected by asking questions to assess their
attitudes, values, and lifestyles. There are different companies that provide services and help in
assessing these psychographic variables. Different groups are given names based on the
attributes which describe their attitudes, values, and lifestyles. Automakers rely on this
segmentation since the purchase behavior of a considerable size of consumers is dependent on
psychographic values. A psychographic study showed that Porsche buyers could be divided into
several distinct categories. One of the categories, "Top Gun" was found to buy Porsches and
expect to be noticed. Proud Patrons and Fantasists, on the other hand, found such conspicuous
consumption as irrelevant. Thus, automakers can design autos based on the preferences of
populations grouped under each category. It is preferable to market to a mind-set rather than a
particular age group. For finding such a group, psychographic studies are important. These
analyses are expensive and require careful interpretations. SRI International, one of the market
research organizations, has developed VALS/VALS 2 analyses of consumers based on
psychographic values. A research team in Europe identified four lifestyle groups: Successful
Idealists, Affluent Materialists, Comfortable Belongers and Disaffected Survivors. The first two
groups represent the elite, while the latter two represented the mainstream European consumers.
It should be noted that the segmentation and targeting approach used by a company can vary
from country to country. Methods that can truly assess a population segment of a country should
be employed for psychographic segmentation.
104) Colgate Total toothpaste is positioned as the brand that addresses all aspects of oral health.
Such positioning is very important from a business point of view. How does positioning help in
deciding on a marketing strategy? What are the differences between using "attribute or benefit"
and "quality and price" as positioning strategy?
Answer: Positioning refers to the act of differentiating a brand in customers minds in relation
to competitors in terms of attributes and benefits that the brand does and does not offer. It is the
process of developing strategies for marketing purposes. It is frequently used in conjunction with
the segmentation variables and targeting strategies. "Attribute or benefit" strategies are used to
expose a particular product attribute, benefit, or other special feature. Aspects such as economy,
reliability, multiple uses, durability, and simplicity are very commonly used to describe the
attributes of a product or service. For example, Visa's advertising theme "It's Everywhere You
Want to Be" exposes its benefit of being useful at any place in the world. Thus, these types of
slogans, themes, or jingles very cleverly outline the benefits or attributes of a product. A similar
strategy that is used is related to "Quality and Price." This strategy can be considered in light of a
continuum from high fashion/quality and high price to good value. Swatch watches advertise
their quality, Swiss origin, as well as affordable price. This way price is always tied to the quality
and durability of the product or service.
105) What are the major differences between global, foreign, and local consumer culture
positioning? Why are these differences significant? Give examples of how companies are
trying to lure customers using these positioning strategies.
Answer: Global consumer culture positioning (GCCP) is defined as a strategy that identifies
the brand as a symbol of a particular global culture or segment. It has proven to be an effective
strategy for communicating with global teens, cosmopolitan elites, and globe-trotting laptop
warriors who consider themselves members of a transnational commerce culture. For example,
Sony's slogan "My First Sony" is positioned as the electronics brand for youngsters around the
globe with discerning parents. Benetton uses the slogan "United Colors of Benetton" to position
itself as a brand concerned with the unity of humankind. Categories of products that lend
themselves to this positioning are both associated with high levels of customer involvement and
by a shared "language" among users. High tech products such as iPod, iPhone, MP3 players,
video cameras, and all such technology-prone items fall into these categories.
Foreign consumer culture positioning (FCCP) associates the brand's users, use occasions, or
production origins with a foreign country or culture. Foster's Brewing Group's U.S. advertising
proudly uses the brand's nation of origin in all of its print ads and other promotions as being
Australian. Local consumer culture positioning (LCCP) strategy associates the brand with local
cultural meanings, reflects the local culture's norms, portrays the brand as consumed by local
people in the national culture, or depicts the product as locally produced for local consumers.
Budweiser's U.S. advertising particularly focuses on local aspects.

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Global Marketing, 9e, GE (Keegan)

Chapter 7 Segmentation, Targeting, and Positioning

2) The efforts of global companies to reach low-income consumers in emerging markets

11) A global segment is referred to as "global elite," which includes:

14) The concentration of wealth in a handful of industrialized countries has significant

15) A global segment is referred to as "global teens" which includes:

17) Psychographic segmentation involves grouping people in terms of their:

21) In a study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?"

47) A psychographic segmentation, "Comfortable Belongers" refers to "up-and-comers" of a

65) A market segment or country market characterized by weak competition may be a

74) Differentiated global marketing represents a more ambitious approach than

82) India's vehicle market can be segmented into:

85) Positioning refers to the act of:

103) What is psychographic segmentation, and how do marketers use it in targeting

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