Chapter 1: Consumer Behavior: Its Origins and

Strategic Applications
Multiple Choice Questions:
1. The behavior that consumers display in searching for purchasing using evaluating
and disposing of products and services that they e!pect "ill satisfy their needs is
#no"n as $$$$$.
a. production concept
b. selling concept
c. product concept
d. consumer behavior
e. selective relationships
%d& 'act (asy p. 1.)*
). As human beings "e all have the same biological needs but "e all ac+uire additional
needs that are shaped by our environment. Some of these ac+uired needs are common
to many people. The commonality of a need or interest constitutes a $$$$$.
a. target mar#et
b. mar#et segment
c. consumption decision
d. mar#eting mi!
e. product position
%b& ,nderstanding -oderate p. 1.)*
.. 'or the mar#eter one of the most important constants among all of us is that "e are
$$$$$.
a. producers
b. individuals
c. sellers
d. mar#et segments
e. consumers
%e& ,nderstanding -oderate p. 1.)*
/. The term 0consumer behavior1 describes t"o different #inds of consuming entities:
$$$$$ and $$$$$consumers.
a. non2profit& government
b. non2profit& for profit
c. personal& organi3ational
d. government& private
e. organi3ational& private
%c& 'act (asy p. 1..*
1
4. A personal consumer buys goods for $$$$$.
a. personal consumption.
b. consumption by co"or#ers.
c. home business.
d. schools.
e. government agencies.
%a& 'act -oderate p. 1..*
5. 6ane is in charge of purchasing at -ercy 7ospital. 8hen she puts in an order for
to"els for the hospital she is acting as a%n* $$$$$ "hereas "hen she buys to"els for
her family9s use she is acting as a%n* $$$$$.
a. private consumer& non2profit consumer
b. governmental consumer& non2profit consumer
c. organi3ational consumer& personal consumer
d. private consumer& public consumer
e. personal consumer& organi3ational consumer
%c& Application -oderate p. 1..*
:. The $$$$$ concept assumes that consumers are mostly interested in product
availability at lo" prices.
a. mar#eting
b. societal
c. product
d. production
e. technology
%d& 'act -oderate p. 1..*
;. The implicit mar#eting ob<ectives of the $$$$$ are cheap efficient production and
intensive distribution.
a. mar#et segmentation
b. product concept
c. selling concept
d. production concept
e. mar#eting concept
%d& 'act -oderate p. 1./*
=. The production concept ma#es sense as a business model "hen $$$$$.
a. consumers are most interested in product availability at lo" prices
b. consumers are interested in obtaining the product that offers them the highest
+uality best performance and most features
c. consumers have changing needs and insist that those needs be satisfied
d. consumers are unli#ely to buy the product unless they are persuaded to do so
e. consumers are not sensitive to price
%a& ,nderstanding -oderate p. 1./*
)
1>. Companies that use the $$$$$ as their business model strive constantly to improve
the +uality of their products and to add ne" features regardless of "hether the
consumer perceives a need for these ne" features.
a. mar#eting concept
b. product concept
c. selling concept
d. production concept
e. mar#et targeting
%b& ,nderstanding -oderate p. 1./*
11. The $$$$$ concept assumes that consumers "ill buy the product that offers them the
highest +uality the most features and the best performance.
a. production
b. mar#eting
c. selling
d. product
e. targeting
%d& 'act (asy p. 1./*
1). The product concept leads to mar#eting myopia "hich means that the $$$$$.
a. focus is on "hat consumers "ant and need
b. focus is on "hat is best for society
c. focus is on the product rather than the consumer
d. focus is on +uality of service
e. focus is on minimi3ing the cost of production
%c& 'act Challenging p. 1./*
1.. One of the underlying convictions of the $$$$$ is that consumers are unli#ely to buy
the product unless they are aggressively persuaded to do so.
a. production concept
b. selling concept
c. mar#et segmentation
d. product concept
e. societal concept
%b& 'act -oderate p. 1.4*
1/. Today the $$$$$ is typically utili3ed by mar#eters of unsought goods such as life
insurance.
a. product concept
b. societal mar#eting
c. selling concept
d. mar#eting myopia
e. production concept
%c& 'act (asy p. 1.4*
.
14. The consumer2oriented philosophy that evolved "hen mar#eters reali3ed it "ould be
easier to sell more goods to consumers "ho had already e!pressed interest is #no"n
as the $$$$$.
a. the selling concept
b. the mar#eting concept
c. the societal mar#eting concept
d. the customer satisfaction philosophy
e. the production concept
%b& ,nderstanding -oderate p. 1.4*
15. One of the central tenets of the $$$$$ is that companies "ill be able to sell more
goods more easily if they produce only those goods that they have already
determined that consumers "ill buy.
a. production concept
b. mar#eting concept
c. mar#et segment
d. target mar#et
e. selling concept
%b& ,nderstanding (asy p. 1.4*
1:. 'irms determine "hat goods consumers "ant through $$$$$.
a. mar#et research
b. mar#et targeting
c. mar#et segmentation
d. product positioning
e. value propositions
%a& 'act (asy p. 1.4*
1;. The #ey assumption underlying the mar#eting concept is that to be successful a
company must $$$$$.
a. minimi3e the cost of production in order to offer a product at the lo"est price
b. update its product line continually "ithout regard to the needs of consumers
c. determine the needs and "ants of specific target mar#ets and deliver the desired
satisfaction better than the competition
d. aggressively pursue consumers "ith advertising messages in order to convince
them to purchase the product
e. sell its products in a socially responsible "ay
%c& ,nderstanding -oderate p. 1.5*
/
1=. The selling concept focuses on the needs of the $$$$$ and on e!isting products "hile
the mar#eting concept focuses on the needs of the $$$$$.
a. manufacturer& seller
b. buyer& manufacturer
c. seller& buyer
d. seller& manufacturer
e. buyer& seller
%c& ,nderstanding (asy p. 1.5*
)>. The selling concept focuses on profit through $$$$$ "hile the mar#eting concept
focuses on profits based on $$$$$.
a. product innovation& aggressive advertising
b. sales volume& customer satisfaction
c. customer satisfaction& product innovation
d. customer satisfaction& aggressive advertising
e. product innovation& sales volume
%b& ,nderstanding Challenging p. 1.5*
)1. $$$$$ is developing a distinct image for the product in the mind of the consumer.
a. Targeting
b. ?ositioning
c. ?lacement
d. ?romotion
e. Segmenting
%b& 'act (asy p. 1.:*
)). The / ?s of the mar#eting mi! are $$$$$.
a. product@service price place people
b. potential price place people
c. product@service price place promotion
d. product@service promotion potential price
e. price purchase placement product@service
%c& 'act -oderate p. 1.=*
).. The process of dividing a mar#et into subsets of consumers "ith common needs or
characteristics is #no"n as $$$$$.
a. mar#et targeting
b. mar#eting ethics
c. product positioning
d. mar#et segmentation
e. social responsibility
%d& 'act (asy p. 1.;*
4
)/. Successful product positioning centers around t"o #ey principles: developing a
uni+ue selling proposition and communicating the $$$$$.
a. price
b. features and options
c. benefits the product "ill provide
d. "arranty details
e. store locations
%c& ,nderstanding -oderate p. 1.=*
)4. 0-e too1 products are $$$$$.
a. products that need to be bought along "ith the original product.
b. secondary products that customers need to be reminded to buy.
c. products that lac# a uni+ue image or benefit.
d. products that are classified as children9s toys and entertainment products.
e. products that are included for free "ith the desired product
%c& 'act -oderate p. 1.=*
)5. In the selling concept business model "hich of the four elements of the mar#eting
mi! is most heavily emphasi3edA
a. promotion
b. place
c. production
d. price
e. people
%a& ,nderstanding Challenging p. 1.=*
):. In the production concept business model "hich of the four elements of the
mar#eting mi! is most heavily emphasi3edA
a. product
b. proportion
c. price
d. place
e. promotion
%c& ,nderstanding Challenging p. 1.=*
);. In the product concept business model "hich of the four elements of the mar#eting
mi! is most heavily emphasi3edA
a. price
b. people
c. promotion
d. place
e. product
%e& ,nderstanding -oderate p. 1.=*
5
)=. Of the four ?s of the mar#eting mi! promotion includes $$$$$.
a. payment methods
b. public relations
c. "arranties
d. discounts
e. product si3e
%b& ,nderstanding -oderate p. 1.=*
.>. Of the four ?s of the mar#eting mi! product includes $$$$$.
a. pac#aging
b. public relations
c. discounts
d. payment methods
e. distribution centers
%a& ,nderstanding -oderate p. 1.=*
.1. Of the four ?s of the mar#eting mi! place includes $$$$$.
a. discounts
b. public relations
c. "arranties
d. distribution centers
e. pac#aging
%d& ,nderstanding -oderate p. 1.=*
.). Of the four ?s of the mar#eting mi! price includes $$$$$.
a. payment methods
b. public relations
c. "arranties
d. distribution centers
e. pac#aging
%a& ,nderstanding -oderate p. 1.=*
... Savvy mar#eters reali3e that in order to outperform competition they must achieve
full profit potential from each and every customer by vie"ing each customer
interaction as a $$$$$ rather than a $$$$$.
a. returned product& satisfaction
b. relationship& transaction
c. confrontation& resolution
d. loss& ma!imum profit
e. source of profit& transaction
%b& ,nderstanding -oderate p. 1.1>*
:
./. $$$$$ is defined as the ratio bet"een the customer9s perceived benefits %economic
functional and physiological* and the resources %monetary time effort
psychological* used to obtain those benefits.
a. Customer satisfaction
b. Customer value
c. Customer relationship management
d. Consumer decision ma#ing
e. Consumer mar#eting
%b& 'act -oderate p. 1.1>*
.4. Be!us claims to deliver its buyers +uality 3ero defects in manufacturing and superior
and personal post2purchase service. This is an e!ample of $$$$$.
a. +uality control management
b. value proposition
c. customer satisfaction guarantee
d. corporate futuristic vision
e. mar#et targeting
%b& Application -oderate p. 1.11*
.5. The concept of customer satisfaction is a function of $$$$$.
a. customer e!perience
b. customer #no"ledge
c. customer e!pectations
d. price paid
e. customer needs
%c& 'act -oderate p. 1.1)*
.:. An individual9s perception of the performance of a product or service in relation to
one9s e!pectations is #no"n as $$$$$.
a. mar#et segmentation
b. customer satisfaction
c. mar#et targeting
d. product placement
e. product promotion
%b& 'act (asy p. 1.1)*
.;. The overall ob<ective of providing value to customers continuously and more
effectively than the competition is $$$$$.
a. to continually "in over customers from competitors
b. to produce compelling advertising message
c. to help recruit a dedicated "or#force
d. to avoid government regulation of the industry
e. to have and to retain highly satisfied customers
%e& 'act (asy p. 1.1.*
;
.=. The Internet today allo"s for more customer intimacy and customi3ation by offering
customers specific individual offers. This type of mar#eting is #no"n as $$$$$.
a. private mar#eting
b. one to one mar#eting
c. B)C mar#eting
d. relationship mar#eting
e. segment mar#eting
%b& 'act -oderate p. 1.1.*
/>. The fact that not all customers are e+ual in terms of profitability means that mar#eters
should focus on building $$$$$.
a. relationships "ith all people "ho e!press an interest in the company
b. selective relationships
c. profit classification departments
d. higher barriers to entry
e. a continually improving reputation for innovation
%b& ,nderstanding Challenging p. 1.1.*
/1. Customer profitability2focused mar#eting $$$$$.
a. trac#s costs and revenues of individual customers and then categori3es them into
tiers based on consumption behaviors that are specific to the company9s offerings
b. minimi3es the cost of production in order to offer the product at the best price
possible
c. aggressively mar#ets products to consumers "ho do not necessarily thin# that
they need the product
d. continually updates the product "ithout regard to the needs of the consumer
e. invests money in attracting customers that are very sensitive to price and are not
loyal to any given brand
%a& 'act -oderate p. 1.1/*
/). $$$$$ allo" much greater customi3ation of products services and promotional
messages than older mar#eting tools.
a. Social mar#eting concepts
b. Consumer behavior theories
c. Organi3ational consumers
d. ?roduct concepts
e. Cigital technologies
%e& ,nderstanding (asy p. 1.14*
=
/.. The adoption of digital technologies has introduced the follo"ing drastic changes into
the business environment $$$$$.
a. customers are forced to deal "ith distribution outlets and middlemen in order to
obtain goods
b. the e!change bet"een mar#eters and customers is less interactive than in the past
c. consumers face more barriers to accessing information
d. mar#eters can offer more products and services than ever before
e. mar#et research has become significantly more difficult
%d& 'act -oderate p. 1.1421:*
//. (merging digital technologies are allo"ing consumers to have more po"er than ever
before. This means that no" customers $$$$$.
a. are re+uired to buy goods and services from local vendors
b. are limited in the time of day that they are able to buy products
c. can use 0intelligent agents1 to locate the best prices for products or services
d. more limited in the range of products that they can purchase
e. are forced to ac+uire used items through middlemen instead of directly from the
original o"ner
%c& ,nderstanding -oderate p. 1.14*
/4. -ar#eters can most +uic#ly and efficiently gauge the effectiveness of their online
promotional messages by $$$$$.
a. hiring telemar#eters to conduct brief survey calls to a sample of the customers
"ho bro"sed the "ebsite
b. trac#ing consumer clic#s on various pages or lin#s on the "ebsite
c. monitoring the sales response to particular changes to "ebsite content
d. having customers fill out a brief online survey as#ing their opinion and enticing
them "ith s"eepsta#es
e. convening consumer focus groups to evaluate the impression made by particular
changes in "ebsite content
%b& ,nderstanding Challenging p. 1.15*
/5. Currently most of the digital communications bet"een consumers and mar#eters
ta#es place via $$$$$.
a. shipping companies
b. credit cards
c. computers connected to the "eb
d. ?CAs
e. television
%c& 'act Challenging p. 1.1:*
1>
/:. As consumers spend more time online and have more technological tools that enable
them to avoid e!posure to TD ads mar#eters are $$$$$.
a. investing in flashier television advertisements to attract attention to themselves
b. buying more air time in an attempt to cro"d out their competitors9 advertisements
c. lobbying for legislation that "ill prohibit the sale of devices that allo" consumers
to avoid advertising on the basis that such devices are anti2competitive
d. reducing their advertising e!penditures on the ma<or net"or#s and investing their
advertising dollars in ne"er media such as the "eb
e. bloc#ing out any mention of brand names during regular programming
%d& Challenging p. 1.1;*
/;. The societal mar#eting concept calls on mar#eters to $$$$$.
a. minimi3e production costs in order to offer the product at the lo"est price
possible
b. aggressively mar#et all products to all segments of society
c. trac# customer preferences via the Internet to improve customer research
databases
d. fulfill the needs of the target audience in "ays that improve society as a "hole
"hile fulfilling the ob<ectives of the organi3ation
e. lobby for government regulation of their industries
%d& 'act -oderate p. 1.)>*
/=. A trade association might develop an industry2"ide $$$$$ in order to self2regulate its
members and deter government imposition of regulations.
a. production schedule
b. code of ethics
c. advertising slogan
d. distribution chain
e. +uality standard
%c& ,nderstanding (asy p. 1.)1*
4>. 8hereas the traditional mar#eting concept uses one2"ay promotions "hose
effectiveness is measured through sales data or mar#eting surveys value and
retention2focused mar#eting $$$$$.
a. uses interactive communications in "hich messages to customers are tailored
according to their responses to previous communications
b. creates loyalty programs based on the volume purchased
c. segments the mar#et based on customers9 geographic demographic
psychological sociocultural lifestyle and product2usage related characteristics
d. researches consumer needs and characteristics
e. focuses on the needs that a product satisfies rather than the product itself
%a& ,nderstanding Challenging p. 1..4 table 12)*
11
41. The main deterrent to implementation of the societal mar#eting concept is $$$$$.
a. the lac# of research to aid the success of this concept.
b. the lac# of evidence that proves the success of this concept.
c. the short term orientation in "hich manager performance is evaluated.
d. the lac# of trained professionals to overloo# its implementation.
e. lo" profit margins associated "ith social responsibility.
%c& ,nderstanding Challenging p. 1.)>*
4). The model of consumer decision ma#ing can be vie"ed as three distinct but
interloc#ing stages "hich include $$$$$.
a. input analysis and output
b. environment search and evaluation
c. input process and output
d. analysis decision ma#ing and output
e. analysis process and output
%c& 'act -oderate p. 1.))*
4.. The input stage of the model of consumer decision involves $$$$$.
a. purchase behavior and post purchase evaluation
b. minimi3ing production costs
c. the firm9s mar#eting efforts and the e!ternal sociological influences on the
consumer
d. the manufacturer9s supply chain
e. ho" consumers ma#e decisions
%c& ,nderstanding -oderate p. 1.))*
4/. The process stage of the model of consumer decision involves $$$$$.
a. purchase behavior and post purchase evaluation
b. minimi3ing production costs
c. the firm9s mar#eting efforts and the e!ternal sociological influences on the
consumer
d. the manufacturer9s supply chain
e. ho" consumers ma#e decisions
%e& ,nderstanding -oderate p. 1.).*
44. The output stage of the model of consumer decision involves $$$$$.
a. purchase behavior and post purchase evaluation
b. minimi3ing production costs
c. the firm9s mar#eting efforts and the e!ternal sociological influences on the
consumer
d. the manufacturer9s supply chain
e. ho" consumers ma#e decisions
%a& ,nderstanding -oderate p. 1.).*
1)
Multiple Choice Mini Cases
CAR MINI CASE: In the early 1900s, Henry Ford made a fortune manufacturn! Model
" cars and selln! them chea#ly, ma$n! the automo%le afforda%le for a much lar!er
#ro#orton of the #o#ulaton than had #re&ously %een the case' He accom#lshed ths %y
#roducn! only one model of car and don! so chea#ly and at h!h &olumes throu!h the
utl(aton of assem%ly lne manufacture' In 19)*, +eneral Motors decded to ncrease
ts mar$et share n the automo%le ndustry %y offern!, nstead of ,ust one model, as Ford
dd, a &arety of afforda%le mass-#roduced models to meet the &arous dffern! needs of
dfferent ty#es of consumers'
45. In the CAE -IFI CAS( by identifying the automotive needs of different groups of
consumers General -otors "as $$$$$.
a. targeting the mar#et
b. positioning its product
c. developing a value proposition
d. segmenting the mar#et
e. minimi3ing production costs
%d& Application -oderate p. 1.;*
4:. In the CAE -IFI CAS( 'ord9s business approach focused primarily on the $$$$$.
a. production concept
b. mar#eting concept
c. societal mar#eting concept
d. product concept
e. selling concept
%a& Application -oderate p. 1..*
4;. In the CAE -IFI CAS( "hich of the follo"ing elements of the mar#eting mi! "as
central to 'ord9s business modelA
a. promotion
b. product
c. price
d. placement
e. production
%c& Application Challenging p. 1.=*
4=. In the CAE -IFI CAS( "hich of the follo"ing elements of the mar#eting mi! "as
central to General -otors9 business model as distinct from that of 'ordA
a. production
b. placement
c. price
d. promotion
e. product@service
%e& Application Challenging p. 1.=*
1.
R.AN/S R0NNERS MINI CASE: Ryan 1ants to o#en a store that caters to athletes, %ut,
due to s#ace and %ud!etary constrants, he reco!n(es that he 1ll not %e a%le to offer the
same &arety and selecton of #roducts as does the local athletc me!a-store, so he has
decded to focus s#ecfcally on runners' He stoc$s shoes and related !ear for runners,
and mantans a staff that s $no1led!ea%le and enthusastc a%out runnn!' Ryan/s
ad&ertsn! cam#a!n em#has(es hs store/s h!h standard of customer ser&ce and
selecton of #roducts s#ecfcally talored to meet the needs of the runner'
5>. In the EHAF9S E,FF(ES -IFI CAS( the process of dividing the athletic mar#et
into different subsets of shoe consumers such as runners bas#etball players and
golfers is #no"n as $$$$$.
a. mar#et targeting
b. product placement
c. product positioning
d. mar#et segmentation
e. social mar#eting
%d& Application -oderate p. 1.;*
51. In the EHAF9S E,FF(ES -IFI CAS( Eyan decides to focus his attention on that
segment of the mar#et that is interested in running. This selection of a specific
mar#et segment is #no"n as $$$$$.
a. social mar#eting
b. mar#et targeting
c. product placement
d. mar#et segmentation
e. product positioning
%b& Application -oderate p. 1.=*
5). In the EHAF9S E,FF(ES -IFI CAS( by portraying his store as a one2stop2shop
for all your running needs Eyan has developed a distinct image for his store. This is
an e!ample of $$$$$.
a. segmentation
b. targeting
c. placement
d. positioning
e. social mar#eting
%d& Application Challenging p. 1.=*

5.. In the EHAF9S E,FF(ES -IFI CAS( "hich of the four elements of the mar#eting
mi! does Eyan emphasi3e in positioning his store in the mar#etplaceA
a. place
b. positioning
c. promotion
d. price
e. product@service
%e& Application Challenging p. 1.=*
1/
AIR2INE MINI CASE: "ransatlantc Arlnes fles %et1een #o#ular destnatons n the
0S and 1estern Euro#e, and clams to del&er 3a frst class e4#erence for e&ery
#assen!er'5 All tc$et #urchases are made on-lne, and users of the "ransatlantc 1e%ste
must re!ster %efore they search for fl!hts' "ransatlantc uses ths nformaton to
determne 1hch consumers are !eneratn! the most #rofts for the com#any, 1hch
ser&ces they #urchase most fre6uently, and 1hch ser&ces they are #otentally nterested
n %ut are not #urchasn!' "hs nformaton s then used to ma$e s#ecfc #romotonal
offers to #rofta%le customers n an attem#t to retan ther %usness and to e4#and the
ran!e of fl!ht ser&ces that they #urchase' "ransatlantc also uses ths nformaton to
#ro&de une4#ected #er$s to h!hly #rofta%le customers, l$e free u#!rades to frst class'
5/. In the AIEBIF( -IFI CAS( Transatlantic Airlines identifies and offers specific
incentives to the most profitable customers a practice is #no"n as $$$$$.
a. social mar#eting
b. customer profitability2focused mar#eting
c. mar#et targeting
d. mar#et segmentation
e. product positioning
%b& Application -oderate p. 1.1/*

54. In the AIEBIF( -IFI CAS( "hen Transatlantic upgrades the seat assignment of
especially loyal customers the airline is attempting to increase $$$$$.
a. net revenue
b. production capacity
c. customer satisfaction
d. social responsibility
e. profit margins
%c& Application Challenging p. 1.1)*

55. In the AIEBIF( -IFI CAS( Transatlantic Airlines advertises 0a first class
e!perience for every passenger.1 This is Transatlantic9s $$$$$.
a. mar#et segmentation
b. mar#et target
c. product position
d. code of ethics
e. value proposition
%e& Application -oderate p. 1.11*
5:. In the AIEBIF( -IFI CAS( by trac#ing flight searches and developing services to
better meet customers9 unfulfilled needs Transatlantic adheres to the $$$$$.
a. social mar#eting concept
b. production concept
c. selling concept
d. mar#eting concept
e. product concept
%d& Application Challenging p. 1.4*
14
True/False Questions:
5;. Consumer behavior includes the behavior that consumers display in searching
purchasing evaluating and disposal of products and services.
%True& 'act (asy p. 1.)*
5=. The term consumer %eha&or describes only the behavior of those "ho purchase
goods and services for their o"n use.
%'alse& ,nderstanding (asy p. 1.)*
:>. Organi3ational consumers in a consumer behavior sense include profit and non2profit
organi3ation.
%True& 'act (asy p. 1..*
:1. The production concept assumes that consumers are mostly interested in product
availability at lo" prices.
%True& ,nderstanding -oderate p. 1..*
:). The production concept ma#es sense in developing countries "here the main
ob<ective is to e!pand the mar#et.
%True& ,nderstanding Challenging p. 1./*
:.. The product concept assumes that consumers "ill buy the product that offers them the
highest +uality the best performance and the most features.
%True& 'act (asy p. 1./*
:/. -ar#eting myopia is "hen the focus is on the product rather than on the consumer
needs it is supposed to satisfy.
%True& 'act -oderate p. 1./*
:4. The selling concept focuses on selling products that the target mar#et demands.
%'alse& 'act -oderate p. 1.4*
:5. The selling concept is typically utili3ed by mar#eters of unsought goods such as life
insurance.
%True& Application -oderate p. 1..4*
::. The #ey assumption underlying the mar#eting concept is that to be successful a
company must determine the needs and "ants of specific target mar#ets and deliver
better than the competition.
%True& 'act Challenging p. 1.5*
15
:;. Companies that focus on understanding customers are able to continue to gro" and
remain leaders in their industries in spite of increased competition and changing
business environments.
%True& ,nderstanding -oderate p. 1.:*
:=. Cepending on "here "e are born "e all have different physiological needs.
%'alse& ,nderstanding Challenging p. 1.;*
;>. The four strategic tools that are used to implement the mar#eting concept include
segmentation positioning repositioning and the mar#eting mi!.
%'alse& 'act Challenging p. 1.;*
;1. -ost companies today are able to target all the mar#et segments that they have
identified through their research.
%'alse& ,nderstanding -oderate p. 1.=*
;). Successful product positioning centers around t"o #ey points: communicating the
benefits to the consumers and developing and communicating a uni+ue selling
proposition.
%True& 'act -oderate p. 1.=*
;.. 0-e too1 products are products that lac# a uni+ue image or benefit.
%True& 'act (asy p. 1.=*
;/. ?erceived value is relative and ob<ective.
%'alse& ,nderstanding -oderate p. 1.1>*
;4. An e!ample of customer value is en<oying a I)4> meal at an e!pensive restaurant that
met or e!ceeded your e!pectations in terms of service product and +uality.
%True& Application -oderate p. 1.11*
;5. Dalue propositions create customer e!pectations "hich companies must continuously
fulfill.
%True& ,nderstanding -oderate p. 1.11*
;:. The concept of customer satisfaction is a function of customer e!pectations.
%True& ,nderstanding Challenging p. 1.1)*
;;. Sophisticated mar#eters today practice selective relationship building "hich may
often lead to 0firing1 their o"n customers.
%True& ,nderstanding Challenging p. 1.1/*
;=. Cigital technologies allo" for greater customi3ation "ith greater efficiencies.
%True& ,nderstanding (asy p. 1.14*
1:
=>. One e!ample of emerging digital technologies is 0intelligent agents1 that allo"
customers to locate the best prices from the convenience of their homes.
%True& 'act -oderate p. 1.14*
=1. An e!ample of customi3ation is "hen Ama3on.com sends mass e2mails to all their
e!isting customers telling them about a ne" promotional offer.
%True& Application (asy p. 1.15*
=). -uch li#e traditional advertising digital technologies allo" for t"o2"ay interactive
e!changes bet"een customers and mar#eters.
%'alse& ,nderstanding (asy p. 1.15*
=.. Farro"casting is a method that enables mar#eters to develop and deliver more
customi3ed messages to increasingly smaller mar#ets on an ongoing basis.
%True& 'act Challenging p. 1.1:*
=/. The societal mar#eting concept advocates a short2term perspective in driving for
increased mar#et share and +uic# profits.
%'alse& ,nderstanding (asy p. 1.)1*
=4. ?erceptions of a company9s lac# of social responsibility or unethical mar#eting
practices often have a negative affect on consumer purchase decision.
%True& ,nderstanding -oderate p. 1.)1*
=5. ?urchase behavior and post purchase evaluation are elements of the input stage of the
consumer decision2ma#ing model.
%'alse& 'act (asy p. 1.).*
=:. The process stage of the consumer decision2ma#ing model focuses on ho" consumers
ma#e decisions.
%True& 'act (asy p. 1.).*
Essay Questions:
=;. Cefine consumer behavior. 8hat is the scope of consumer behaviorA
Ans"er:
Consumer behavior is defined as the behavior that consumers display in searching for
purchasing using evaluating and disposing of products and services that they e!pect
"ill satisfy their needs. It focuses on ho" individuals ma#e decisions to spend their
valuable resources time money and effort on consumption related items.
%'act (asy p. 1.)*
1;
==. 8hat is the difference bet"een the personal consumer and the organi3ational
consumerA
Ans"er:
The personal consumer buys goods and services for his or her o"n use for the use
of the household or as a gift. In each the final user is the individual or end user.
The organi3ational consumer includes profit and non2profit businesses
government agencies and institutions li#e schools hospitals and prisons all of
"hich buy products and services to run their organi3ations.
%,nderstanding -oderate p. 1..*
1>>. Compare the selling concept and the mar#eting concept on three ma<or points.
Ans"er:
The selling concept9s ma<or focus is to sell the products that the mar#eter is best
at producing. The mar#eting concept does the opposite& it ma#es "hat it #no"s
"ill sell.
The selling concept is used for products that consumers are unli#ely to buy&
hence it re+uires some form of 0hard sell1 approach. The mar#eting concept has
already ensured the product is in demand by conducting consumer research to
e!plore their needs.
The selling concept does not consider customer satisfaction and long term
relationships. The mar#eting concept focuses on customer satisfaction and
building and strengthening relationships "ith their customers to ensure repeat
business.
%,nderstanding Challenging p. 1.425*
1=
1>1. Tal# briefly about mar#et segmentation targeting and positioning.
Ans"er:
-ar#et segmentation is the process of dividing a mar#et into a subset of
consumers "ith common needs or characteristics. Since most companies have
limited resources very fe" companies are able to pursue all the segments that
they have identified.
-ar#et targeting is selecting one or more of the segments identified as the groups
that the company "ill pursue.
?ositioning is developing a distinct image for the product or service in the mind of
the consumerJan image that "ill differentiate the offering from competing ones
and that "ill perform better than the competition at satisfying the same need. It
also means that the company should develop a uni+ue selling proposition and
communicate the benefits of the product to the customers.
%,nderstanding -oderate p. 1.;2=*
1>). In terms of e!pectations "hen is a customer not satisfied satisfied and
delightedA
Ans"er:
A customer is satisfied "hen the e!pectations have been met a customer is
dissatisfied "hen e!pectations have not been met and the product did not perform
as e!pected. A customer is highly satisfied or delighted "hen the product or
service has e!ceeded the e!pectations of the customer.
%,nderstanding (asy p. 1.1)*
1>.. Identify and discuss the reasons for "hich small reductions in customer defections
produce significant increases in profits.
Ans"er:
There are four primary reasons "hy small reductions in customer defections
produce significant increases in profits. 1* Boyal customers buy more products.
)* Boyal customers are less price sensitive and pay less attention to competitors9
advertising. .* Servicing e!isting customers "ho are familiar "ith the firm9s
offerings and processes is cheaper. /* Boyal customers spread positive "ord of
mouth and refer other customers. In addition mar#eting efforts aimed at
attracting ne" customers are e!pensive. In saturated mar#ets there may not even
be ne" customers.
%,nderstanding -oderate p. 1.1.*
)>
1>/. Ciscuss some of the positive effects of the adoption of digital technologies on
today9s mar#eting practices.
Ans"er:
Cigital technologies allo" for greater customi3ation of products services and
promotional messages than other mar#eting tools. They enable mar#eters
to build technologies enable mar#eters to collect and analy3e data on
consumers9 buying patterns and personal characteristics and preferences.
%,nderstanding -oderate p. 1.14*
1>4. Cigital technologies allo" for consumers to have more po"er than ever before.
7o"A
Ans"er:
Consumers today are able to use 0intelligent agents1 that allo" them to locate the
best prices for products and services bid on various mar#eting offerings %e2bay*
bypass distribution outlets and middlemen and shop for goods around the cloc#
from the convenience of their homes.
%'act (asy p. 1.14*
1>5. 7o" has TiDo presented a challenge to mar#etersA
Ans"er:
The TiDo digital recorder allo"s vie"ers to control "hat they "atch on TD "hen
they "atch it and "hether or not to "atch the commercials for "hich mar#eters
spend billions of dollars per year. The TiDo recorder do"nloads programming
information and allo"s users to record many hours of TD programming into a
hard drive "ithout the hassle of videocassettes. This means that the po"er is
shifting from the broadcaster to the vie"er and vie"ers are deciding to s#ip the
commercials.
%,nderstanding Challenging p. 1.1;*
)1
1>:. 8hat does the societal mar#eting concept entailA 8hat is a ma<or reason many
mar#eters do not adhere to the societal mar#eting conceptA
Ans"er:
The societal mar#eting concept re+uires mar#eters to adhere to principles of
social responsibility in the mar#eting of their goods and services& that is they
should endeavor to satisfy the needs and the "ants of their target mar#ets in "ays
that preserve and enhance the "ell2being of consumers and society as a "hole.
A ma<or reason many mar#eters do not adhere to the principles of the societal
mar#eting concept is the short2term orientation embraced by most business
e!ecutives in their drive for increased mar#et share and +uic# profits. Since the
societal mar#eting concept advocates a long2term perspective it "ill not fit in to
the short2term goals of many e!ecutives.
%,nderstanding Challenging p. 1.)>*
))