Question

True or False Questions 1) For a small business, the mass-market approach is the best strategy.

( 2) A target market often includes more than one market segment.

3) A market segment is a group of consumers within a particular market that have something in common.

4) Psychographic data can only be collected for people, not businesses

. 5) The fact that more people buy flowers around Mother's Day is a buying pattern.

2 Exercise 1. Star Stone Company invests $3000 per year in inventory. If the company made 30 inventory purchases in a year, what is average Inventory investment?

2. If total cost of inventory $16,000 and average inventory investment is $800, what is inventory turnover?

3. Compare different inventory systems

4. Controlling inventory contributes to good inventory management, explain.

Answer 1

ANSWER:

TRUE OR FALSE:

1) For a small business, the mass-market approach is the best strategy. FALSE

Explanation: Mass-market approach is not the best strategy for a small business. In mass-marketing the goal of the marketer is to reach a large number of audience, without considering the interest of the audience, through TV advertisements, radio or print media. Though, it is a great strategy for finding more potential customer, it is not suitable for the small businesses. For a small business it is good to target a specific group of audience, who are genuinly interested. And this can be achieved better through Target marketing approach.

2) A target market often includes more than one market segment. TRUE

Explanation: A target market can be divided into different segments on the basis of various charateristics such as age, gender, income level, religion, geographical location, etc.

3) A market segment is a group of consumers within a particular market that have something in common. TRUE

Explanation: From a targeted market, consumers with similar qualities are grouped together into different segments. The four different types of market segments are:

• Demographic segmentation.
• Psychographic segmentation.
• Behavioral segmentation.
• Geographic segmentation.

4) Psychographic data can only be collected for people, not businesses. TRUE

Explanation: Yes, it can only be collected from people, because it is the study of consumer's attitude and behavior. It collects data, which shows, why a person spends on a particular product or service.

5) The fact that more people buy flowers around Mother's Day is a buying pattern. TRUE

Explanation: Yes, it can be considered as a buying pattern, because Every year in mother's day, many people buy flowers in order to gift their mother or mother-in-law, due to which the the demand for flowers go up around mother's day. The marketers must understand the buying pattern of the consumers in order to be successful. Buying pattern is basically understanding, how, when, where, for whom and in what amount consumers buy a particular product and service.

2 Exercise

1) Star Stone Company invests $3000 per year in inventory. If the company made 30 inventory purchases in a year, what is average Inventory investment?

Average inventory investment = total investment / no. of inventory purchases = 3000 / 30 = $100

On an average the company purchases inventory worth of $100 each time.

2) If total cost of inventory $16,000 and average inventory investment is $800, what is inventory turnover?

Inventory turnover = Cost of inventory / Average inventory investment = 16,000 / $800 = 20