Name:
Class:
Date:
Vocabulary Review
Directions: In the space provided, write a sentence that correctly uses each of the following terms.
Your sentence should not be a definition of the term. 5 points each
1. demographics
2. secondary data
3. focus group
4. competition
5. customer profile
True or False
Directions: Write True or False in the space following each statement to show
whether it is true or false. 2 points each
1. Entrepreneurs estimate demand for their products and services by identifying their
target market.
2. A customer profile should include demographic data but not psychographic data.
3. A market segment is made up of people with common characteristics.
4. To gather information for market research, you can use either secondary data or primary data but
not both.
5. Collecting primary data can be expensive and time-consuming.
6. Secondary data are found in already published sources.
7. Observation is the best research method if you want to find out people’s opinions.
8. Your indirect competitors are those businesses that make most of their money selling products or
services that are the same as or similar to yours.
9. One reason why small entrepreneurs can compete successfully with large retailers is because
large retail chains carry more than one product line.
10. Your analysis of competitors should include their prices, locations, and facilities.
Multiple Choice
Directions: Select the letter that represents the word, or group of words, that correctly completes the
statement. 2 points each
1. Data that helps you determine how often potential customers use a particular service is called
(a) a customer profile, (b) demographic data, (c) psychographic data, (d) use-based data.
2. Data that helps you determine where your potential customers live and how far they will travel to
do business with you is called (a) use-based data, (b) geographic data, (c) census data, (d)
secondary data.
3. The data collected in a telephone survey are (a) secondary data, (b) primary data, (c) population
data, (d) computer data.
4. Touch points are areas where a customer (a) likes a particular product, (b) might have contact
with a company, (c) enjoys shopping in a mall, (d) will try a new service.
5. Customer relationship management (a) focuses on understanding customers as individuals, (b)
might have contact with a company, (c) enjoys shopping in a mall, (d) will try a new service.
6. As an entrepreneur, you may find that indirect competitors (a) are more difficult to locate than
direct competitors, (b) are usually located in malls or shopping centers, (c) make most of their
money selling the same product or service that you sell, (d) none of these
7. Competitive analysis does all of the following except (a) list competitors, (b) summarize competitor
products and prices, (c) identify threats from a competitor, (d) research a competitor’s business
plan.
8. All of the following are strategies designed to maintain customer loyalty except (a) providing storespecific credit cards, (b) locating in a city center, (c) listening to customers and responding to
feedback, (d) having more convenient hours than other businesses.
9. Psychographics are data that describe a group of people in terms of their (a) lifestyle habits, (b)
personality traits, (c) opinions, (d) all of these
10. Most products and services appeal to (a) a large number of people, (b) the demographic market,
(c) a market segment, (d) none of these
Problem Solving
Directions: Answer the following questions in the space provided. 10 points each
1. An entrepreneur developed the following customer profile for her pet store.
Customer Profile for a Pet Store
 Individual or couple 25 to 55 years of age
 Own one or more pet stores
 One or both members of household work full time in profession field
 Want high-quality pet foods and accessories
 Willing to pay high prices for high quality
 Live in exclusive city residential area
 Average household income: $135,000
Which of the information in the profile is demographic data?
Which of the information is psychographic data?
Which of the information is geographic data?
2. List five market segments for the retail clothing market. Hint: think about the various
departments within a retail store.
Web Activity: Groups of customers within a large market who share common characteristics are
known as market segments. The You Are Where You Live feature on the MyBestSegments.com
website describes every U.S. neighborhood in terms of lifestyle types.
15 points
Direction: Follow this link: http://www.claritas.com/MyBestSegments/Default.jsp?ID=20
Enter your own ZIP Code and the security code shown on the screen. Choose the PRIZM system
and review the quick facts and most common segments shown in green, blue, and pink. Double click
on the market segments to learn more about them. Answer the following questions:
1) What quick fact results did you find for your zip code?
2) In which lifestyle type (if any) do you think you and your family fit? Explain your answer.
3) Now choose the ConneXions system. Do the results differ from those found under the PRIZM NE
system? Explain.
4) Which system do you think more accurately describes your neighborhood? Explain.