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Chapter 05 Understanding Customers: Business-To-Consumer Markets True/False Questions 1. Personal attributes such as age, education, occupation, income, and lifestyle are frequently used to define, identify, and classify an individual. Answer: True Rationale: Demographic characteristics such as age, education, income, and occupation are used to classify individuals into harmonized groups called social classes. 2. Internal factors affecting consumer choices are the most difficult to understand. Answer: True Rationale: Internal factors affecting consumer choices are personal characteristics and psychological attributes. Often, consumers themselves are not fully aware of the role these traits play in their decision making and these characteristics vary by individual, change over time, and affect decisions in complex ways. Internal factors are therefore the most difficult to understand. 3. Demographics is defined by the American Heritage Online Dictionary as "The characteristics of human populations and population segments, especially when used to identify consumer markets." Answer: True Rationale: The American Heritage Online Dictionary defines demographics as, "The characteristics of human populations and population segments, especially when used to identify consumer markets." 4. Motivation, attitude, perception, learning, and personality are all psychological attributes. Answer: True Rationale: Psychological attributes drive the need, shape the content and format of information stored in memory, and have an effect on point of view about products and brands. Psychological attributes include motivation, attitude, perception, learning, and personality. 5. According to the Model of the Consumer Decision Process, the marketing activities that affect consumer decision process include the value proposition, technology, and marketing communications. Answer: False Rationale: Value proposition, distribution, and marketing communications are the marketing activities that affect the consumer decision process. 6. Internet marketers have used the personas created by individuals on social Web sites to understand consumers' relationship with the Web community and company brands. Answer: True Rationale: Personas created by individuals on social Web sites put the "Web-empowered consumers" into groups based on their interests, attitudes, and personalities. This helps the marketers in the understanding of consumers' relationship with the Web community and company brands. 7. Personal characteristics refer to demographic and lifestyle attributes. Answer: True Rationale: Personal characteristics refer to demographic and lifestyle attributes and defines an individual in terms of age, education, occupation, income, lifestyle, and gender. 8. Throughout the life cycle stages, consumers typically stick with the same products and purchase decisions. Answer: False Rationale: As individuals age, their lives change dramatically, and as a result, so do their purchase patterns. So throughout the life cycle stages, consumers typically do not stick with the same products and purchase decisions. 9. Lifestyle refers to an individual's perspective on life and manifests itself in that person's activities, interests, and opinions (AIO). Answer: True Rationale: Lifestyle is how people choose to live. Individuals develop a particular lifestyle by choosing particular activities, developing unique interests, and holding on to specific opinions. 10. Gender roles are behaviors regarded as proper for men and women in a particular society. These roles do not change over time, but they do change across cultures. Answer: False Rationale: Gender roles are behaviors regarded as proper for men and women in a particular society. These roles change over time and across cultures. 11. Motivation is the force by which powerful unmet needs, or motives, prompt someone to action. Answer: True Rationale: Motivation is the stimulating power that induces and then directs behavior. It is the force by which powerful unmet needs, or motives, prompt someone to action. 12. Maslow's Hierarchy of Needs Theory suggests that individuals are not interested in luxuries until they have had basic needs met. Answer: True Rationale: As per Maslow's Hierarchy of Needs Theory, people advance to the next level if the lower needs are met. The marketing implication of this theory is that individuals are not interested in luxuries until they have had basic needs (food, shelter) met. 13. An attitude is a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes are seldom if ever neutral. Answer: True Rationale: A person's attitudes are formed by their values and beliefs. Attitudes are learned. They are favorable or unfavorable and seldom, if ever, neutral. 14. Attitudes are formed by values and beliefs. Cultural and personal values help form attitudes. Answer: True Rationale: A person's attitudes are formed by their values and beliefs. There are 2 categories of values: cultural and personal. 15. Perception is a system to select, organize, and interpret information to create a useful, informative picture of the world. Answer: True Rationale: There is so much information that it is not possible to make sense of everything so people use a process called perception to help manage the flow of environmental stimuli. This process selects, organizes, and interprets information to create a useful, informative picture of the world. 16. Marketers can affect learning by providing information using a message, format, and delivery that will encourage customers to retain the information in memory. Answer: True Rationale: Learning occurs when information is processed and added to long-term memory. Marketers can therefore affect learning by providing information using a message, format, and delivery that will encourage customers to retain the information in memory. 17. Personality trait theories suggest that individuals have unique personal characteristics but it is not possible to measure the differences between people. Answer: False Rationale: Personality trait theories suggest that individuals have unique personal characteristics. According to these theories, it is possible to measure the differences between people. 18. Two important elements of nonverbal communication are time and space. Asians and Americans have the same attitude towards both. Answer: False Rationale: Time and space are two important elements of nonverbal communication. Asians and Americans do not have the same attitude towards time. Asians are much more flexible about time. They are not as rigid as American in meeting appointment schedules. 19. An individual watching the American Idol TV show will react differently whether watching the show alone or at a party with friends. Answer: True Rationale: People are profoundly affected by their physical surroundings. An individual watching the American Idol TV show will react differently whether watching the show alone or at a party with friends. 20. Mike and Judy now find out they are going to have a baby and realize their Infiniti G35 coupe has to be replaced with a more practical vehicle. They engage in a thorough information search reviewing car magazines, soliciting opinions from friends and family, conducting online research, reading Consumer Reports, and test-driving a number of new cars and SUV's before making a final purchase decision. This is an example of extensive information search. Answer: True Rationale: Once a problem is recognized and action is required, people seek information to facilitate the best decision. The search for information operates on a continuum from limited to extensive. In this case, the number of resources consulted implies an extensive search. Multiple Choice Questions 21. Internal forces such as _______________ and _______________ affect consumer choices. A. Age, Attitude B. Culture, Education C. Personality, Society D. Learning, Culture E. Income, Culture Answer: A. Age, Attitude Rationale: Internal forces are characteristics which vary by individual, change over time, and affect decisions in complex ways. Age, attitude, education, personality, learning and income are examples of internal forces whereas culture and society are external in nature. 22. _______________, _______________, and _______________ are all marketing activities that affect the consumer decision process. A. Value proposition, technology, culture B. Culture, society, technology C. Value proposition, distribution, marketing communications D. Distribution, technology, culture E. Marketing Communications, technology, culture Answer: C. Value proposition, distribution, marketing communications Rationale: Value proposition, distribution, and marketing communications are all marketing activities that affect the consumer decision process. Factors such as technology, culture, and society are either external or environmental factors. 23. The fastest growing segment of the U.S. population since 1970 has been the _______________ age group. A. Birth -18 B. 65- 85 C. 21-34 D. 45-64 E. 25-44 Answer: E. 25-44 Rationale: The fastest growing segment of the U.S. population since 1970 has been the 25-44 age group as per U.S. Census Bureau data. 24. Graduating from college, getting married, and having a child all transform an individual's buying habits and refer to characteristics of the _______________. A. Lifecycle buying stage B. Family life cycle C. Life stage cycle D. Lifestyle cycle E. Family life stage Answer: B. Family life cycle Rationale: Changes in life stage (like graduating from college, getting married, or having a child) transform an individual's buying habits and are referred to as the family life cycle. These life changes mirror the individual's family environment. 25. Marketers put people into groups known as _______________ based on how consumers portray themselves socially on the Web. A. Facebookers B. Social Networkers C. You Tubers D. Net Nuts E. Personas 2.0 Answer: E. Personas 2.0 Rationale: "Personas 2.0."classifies people in the groups based on how they portray themselves socially on the Web. It aids marketers in the understanding of consumers' relationship with the Web community and company brands. 26. James is influenced by his work environment. He will likely _______________. A. Vacation at the same kinds of places as his coworkers B. Avoid vacationing at the same types of places as his coworkers C. Make different purchase decisions from his coworkers D. Shop in different locations than those he works with E. Wear clothes that set him apart from his coworkers Answer: A. Vacation at the same kinds of places as his coworkers Rationale: People are influenced by their work environment. People who work together tend to buy and wear similar clothes, shop at the same stores, and vacation at the same places. 27. The population of the U.S. is not only growing, it is _______________. A. Getting younger B. Becoming more homogenous C. Getting older D. Getting married earlier E. Having a shorter life expectancy Answer: C. Getting older Rationale: The population of the US is growing and it is also getting older. This is an important marketing insight. 28. Which of the following is an implication of the increasing number of women in the workforce? A. Video streaming Web sites are experiencing huge growth in traffic. B. Companies such as Whole Foods are witnessing increasing sales of organic foods. C. Retailers are offering a wide range of products targeted at single parents. D. Companies are including on-premise day care centers. E. Companies are focusing more on creating ergonomic work environments. Answer: D. Companies are including on-premise day care centers. Rationale: In 2009, 46% of the workforce was made up of women and is continuously growing. An example is the fact that companies are including on-premise day care centers as part of their benefits packages. 29. In 2009, _______________ percent of the workforce was made up of women. A. 46 B. 23 C. 54 D. 31 E. 65 Answer: A. 46 Rationale: In 2009, 46% of the workforce was made up of women and is continuously growing. 30. According to _______________, there are 5 levels of needs and people advance to the next level if the lower needs are met. A. Maslow's Hierarchy of Needs Theory B. Expectancy Theory C. Herzberg's Two-Factor Theory D. McClelland's Achievement Motivation Theory E. Aldelfer's ERG Theory Answer: A. Maslow's Hierarchy of Needs Theory Rationale: According to Maslow's Hierarchy of Needs Theory, there are 5 levels of needs (Physiological, Safety, Love/Social, Self-Esteem, and Self Actualization). People advance to the next level of need if the lower needs are met. 31. Maslow's Hierarchy of Needs Theory suggests that humans have wants and needs that influence their behavior. People advance only to the next level if the lower needs are met. The order of the needs is _______________. A. Safety, physiological, love/social, self-esteem, self-actualization B. Safety, love/social, physiological, self-esteem, self-actualization C. Physiological, love/social, safety, self-esteem, self-actualization D. Physiological, safety, love/social, self-esteem, self-actualization E. Physiological, safety, self-esteem, love/social, self-actualization Answer: D. Physiological, safety, love/social, self-esteem, self-actualization Rationale: According to Maslow's Hierarchy of Needs Theory, there are 5 levels of needs (Physiological, Safety, Love/Social, Self-Esteem, and Self Actualization). People advance to the next level of need if the lower needs are met. 32. _______________ is defined as learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. A. Perception B. Motivation C. Attitude D. Values E. Expectations Answer: C. Attitude Rationale: An attitude is defined as a "learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way." They are learned or at least influenced by new information. 33. _______________ is a subjective opinion about something. A. Belief B. Motivation C. Attitude D. Values E. Expectations Answer: A. Belief Rationale: Beliefs are a subjective opinion about something. Since they are subjective (emotional and not necessarily based on fact) marketers become concerned that a negative product belief will create a negative attitude about that product, making the attitude more difficult to overcome. 34. _______________ and _______________ are the two categories of values. A. Cultural, social B. Personal, cultural C. Religious, personal D. Family, religious E. Cultural, family Answer: B. Personal, cultural Rationale: While some values are shared by a society like American independence, others are personal and vary between individuals, like religious values. 35. Beliefs, once formed, are _______________ to change. A. Vulnerable B. Likely C. Resistant D. Expected E. Highly prone Answer: C. Resistant Rationale: Beliefs are a subjective opinion about something. Beliefs once formed, are resistant to change because they are generally based on emotions and not necessarily on facts. 36. ABC company is concerned about its customer's beliefs and values. ABC's marketing manager has customer evaluate the product's performance on a list of attributes. This is important information because most attitudes result from an individual's assessment of an object using a(n) _______________. A. Focus group B. Multiattribute model C. Positioning map D. Conjoint analysis E. AIO method Answer: B. Multiattribute model Rationale: Most attitudes result from an individual's assessment of an object using a multiattribute model that evaluates the object on several important attributes. Learning about how individuals evaluate various attributes is helpful to marketers in creating specific marketing messages and overall value proposition. 37. _______________ is a system to select, organize, and interpret information to create a useful, informed picture of the world. A. Motivation B. Perception C. Attitude D. Values E. Expectations Answer: B. Perception Rationale: There is so much information that it is not possible to make sense of everything so people use a process called perception to help manage the flow of environmental stimuli. This process involves selecting, organizing, and interpreting information to create a useful, informed picture of the world. 38. Mike and Mary see an ad for a new Sony LCD flat-panel television. Mike only watches the news but Mary wants a new TV set to view sports. Their perceptions of the ad may be _______________. A. Similar B. The same C. Very different D. Slightly similar E. A little different Answer: C. Very different Rationale: Individuals are exposed to a lot of information and people can not process or even retain all the information so they employ a psychological tool known as selective awareness to help them focus on what is relevant and eliminate what is not. Selective awareness will cause Mary to be more alert and receptive since she wants a new TV set to view sports. 39. An individual's perceptions of reality are shaped by these three psychological tools: _______________, _______________, _______________. A. Selective hearing, selective attention, selective vision B. Selective attention, selective distortion, selective retention C. Selective distortion, selective attention, selective vision D. Selective awareness, selective vision, selective attention E. Selective awareness, selective distortion, selective retention Answer: E. Selective awareness, selective distortion, selective retention Rationale: An individual's perception is his or her reality. Perception is shaped by three psychological tools: (1) Selective awareness - focus on what is relevant and eliminate what is not. (2) Selective distortion - Information can be misunderstood or made to fit existing beliefs. (3) Selective retention - placing in one's memory only those stimuli that support existing beliefs and attitudes about a product or brand. 40. On average, we are exposed to as many as _______________ messages daily. Since we cannot process, let alone retain all of these messages, we employ a psychological tool known as selective awareness. A. 5-10 B. 100-200 C. 2000-5,000 D. 500-1000 E. 8,000 -10000 Answer: C. 2000-5,000 Rationale: On average, we are exposed to between 2,000 and 5,000 messages a day. 41. Although individuals are exposed to 2,000 to 5,000 messages daily, all messages are not processed, retained and interpreted because of _______________, a psychological tool which helps individuals focus on what is relevant and eliminate what is not. A. Selective awareness B. Selective distortion C. Selective retention D. Selective attention E. Selective hearing Answer: A. Selective awareness Rationale: An individual is exposed, on average, to between 2,000 and 5,000 messages daily. People cannot process, let alone retain, all those messages, so they employ a psychological tool known as selective awareness to help them focus on what is relevant and eliminate what is not. 42. _______________ tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information which contradicts their beliefs and attitudes. A. Selective awareness B. Selective distortion C. Selective memory D. Selective retention E. Selective hearing Answer: D. Selective retention Rationale: Even if a stimulus is noticed and interpreted correctly, there is no guarantee it will be remembered. Selective retention is the process of placing in one's memory only those stimuli that support existing beliefs and attitudes about a product or brand. 43. Marketers are concerned about selective retention. In particular, they want consumers to transfer information from _______________ to _______________. A. Advertising, promotion B. Awareness, recall C. Person, person D. Short-term memory, long-term memory E. Simple to complex Answer: D. Short-term memory, long-term memory Rationale: Short-term memory is what is being recalled at the present while long-term memory is enduring storage, which can remain with the individual for years and years. The objective is to move the information into long-term memory so that the consumer needs a product, he or she will recall the advertiser's goods. 44. Someone suffering from flu and seeking information from friends, doctors, or medical Web sites about the best over-the-counter remedy for specific symptoms is engaged in _______________. A. Cognitive learning B. Brand management C. Cognitive association D. Operant conditioning E. Classical conditioning Answer: A. Cognitive learning Rationale: Cognitive learning involves mental processes that acquire information to work through problems and manage life situations. Since the person seeking information wants to solve a problem, he is engaged in cognitive learning. 45. _______________ is any change in the content or organization of long-term memory or behavior. A. Selective awareness B. Selective retention C. Learning D. Behavior modification E. Training Answer: C. Learning Rationale: Learning occurs when information is processed and added to long-term memory. Thus any change in the content or organization of long-term memory or behavior is called learning. 46. The two fundamental approaches to learning include _______________ and _______________. A. Coaching, listening B. Trial and error, coaching C. Coaching, conditioning D. Conditioning, cognitive learning E. Conditioning, trial and error Answer: D. Conditioning, cognitive learning Rationale: Conditioning and cognitive learning are the two fundamental approaches to learning. Conditioning refers to reacting to stimuli and cognitive learning is more active and involves mental processes that acquire information to work through problems. 47. ABC company wants to create an association between two stimuli: Marketing information and a response. ABC Company is using _______________. A. Cognitive learning B. Brand management C. Cognitive association D. Operant conditioning E. Classical conditioning Answer: E. Classical conditioning Rationale: Classical conditioning seeks to have people learn by associating a stimulus and response. ABC company is using classical conditioning by trying to create an association between marketing information and a response. 48. When baby boomers hear music that connects them with positive memories and the product and brand that is being advertised, they reflect _______________. A. Conditioned learning B. Operant conditioning C. Cognitive learning D. Emotional memory E. Operant memory Answer: A. Conditioned learning Rationale: When individuals, particularly baby boomers, hear the songs from 1960s and 1970s, they connect the positive memory with the brand being advertised. This is conditioned learning, by connecting the stimulus such as music with a response such as a positive association with a particular brand. 49. Frito-Lay is using _______________ when it offers free in-store samples of Doritos for the express purpose of getting people to try the product, enjoy the product, and finally purchase a bag of Doritos. A. Operant conditioning B. Cognitive learning C. Sampling D. Product trial E. Classical conditioning Answer: A. Operant conditioning Rationale: Operant conditioning, entails rewarding a desirable behavior. Enjoying the Doritos reinforces the positive attributes of the product and increases the probability of a purchase. Since the consumer must choose to try the product for operant conditioning to occur, Frito-Lay wants to make the trial as easy as possible and hence distributes free in-store samples. 50. While conditioning requires little effort on the part of the learner, _______________ is more active and involves mental processes that acquire information to work through problems and manage life situations. A. Classical learning B. Long term memory C. Active learning D. Cognitive learning E. Operant learning Answer: D. Cognitive learning Rationale: Cognitive learning is a complex process which involves acquiring information to solve a problem or manage a life situation. 51. When Bob was asked to describe Sherry, he didn't describe her by talking about her age or education; rather, his comments about her sense of humor were reflecting her _______________. A. Appearance B. Personality C. Income D. Job type E. Aptitude Answer: B. Personality Rationale: Personal characteristics like sense of humor are personality traits. 52. _______________ is a unique set of personal qualities that produce distinctive responses across similar situations. A. Attitude B. Personality C. Situational state D. Personal characteristic E. A mind-set Answer: B. Personality Rationale: Personality is a set of consistent, enduring personal characteristics which varies from person to person. It is a set of unique qualities that produce distinctive responses across similar situations. 53. Personality trait theories all have two basic assumptions: (1) each person has a set of consistent, enduring personal characteristics, and (2) those characteristics can be measured to identify _______________. A. Differences between individuals B. Reactions in certain situations C. Common beliefs D. Moods E. Emotions Answer: A. Differences between individuals Rationale: Personality is a unique set of personal qualities (such as extroversion, agreeableness) and these qualities can be measured to identify differences between individuals. 54. José is _______________. He exhibits behavior that is considered careful, precise, and organized. A. An extrovert B. Agreeable C. Conscientious D. Trustworthy E. Finicky Answer: C. Conscientious Rationale: Individuals posses certain core traits then lead to outward characteristics, which are what people notice. Conscientiousness is a core trait which leads to exhibition of a behavior that is considered careful, precise, and organized. 55. Most personality traits are formed _______________. A. In the teen years B. All during one's life C. At major life events D. At an early age E. At birth Answer: D. At an early age Rationale: Most believe personality characteristics are formed at a relatively early age and can be defined in terms of traits such as extroversion, agreeableness etc. These core traits then lead to outward characteristics, which are what people notice. 56. Which of the following is an external factor that exerts a significant impact on consumer choices? A. Occupation B. Lifestyle C. Situational D. Learning E. Perception Answer: C. Situational Rationale: Three wide-ranging external factors that have the most significant impact on consumer choices are: cultural, situational, and social. 57. The most important external forces on consumer choices are _______________ forces. A. Culture and personality B. Culture, language, and, values C. Situational, social, and cultural D. Personality, subculture, and social Answer: C. Situational, social, and cultural Rationale: Three wide-ranging external factors that have the most significant impact on consumer choices are: cultural, situational, and social. 58. Marketing managers need to pay attention to culture as _______________. A. It shapes the way people respond to the product offering B. Not understanding culture means the risk of negative effect on product acceptance C. The value proposition should include cultural cues D. Customers filter messages through cultural influences E. All of the above Answer: E. All of the above Rationale: Culture is a primary driver of consumer behavior because it teaches values and product preferences and, in turn, affects perceptions and attitudes. Beginning in childhood and continuing on throughout life, people respond to the culture in which they live. 59. _______________ assimilates the shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society. A. Norms B. Ethics C. Moral code D. Culture E. Moral values Answer: D. Culture Rationale: Culture assimilates shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society. Culture is a primary driver of consumer behavior because it teaches values and product preferences and, in turn, affects perceptions and attitudes. 60. Values shared by Americans are _______________ while Japanese value _______________. A. Hard work and achievement, harmony and hierarchy B. Achievement and family, harmony and devotion C. Hard work and achievement, recognition and hierarchy D. Achievement and family, harmony and hierarchy E. Hard work and achievement, harmony and recognition Answer: A. Hard work and achievement, harmony and hierarchy Rationale: Among the values shared by Americans are achievement, hard work, and freedom while Japanese value social harmony, hierarchy, and devotion. 61. While culture affects people in many ways, three factors are particularly relevant in consumer behavior: _______________. A. Language, values, and attitude B. Language, attitude, and nonverbal communications C. Values, attitudes and language D. Values, beliefs, and language E. Language, values, and nonverbal communications Answer: E. Language, values, and nonverbal communications Rationale: Language is the primary communication tool in society. Cultural values are principles shared by a society. Non verbal communication is related to interpretation of facial expression and body language. These 3 factors are particularly relevant to consumer behavior. 62. _______________ are principles shared by a society that assert positive ideals. These principles are often viewed on a continuum. A. Attitudes B. Beliefs C. Mores D. Cultural values E. Moral beliefs Answer: D. Cultural values Rationale: Culture assimilates shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society. Cultural values are principles shared by a society and affect product preferences and consumption patterns. 63. In the United States, the obligation and commitment to family is often limited to an individual's immediate family, including their parents, children, and siblings. Most Latin American cultures, on the other hand, have a more wide-ranging definition of family that includes extended family members such as cousins and grandparents and also more inclusive with extended family members living together. This is an example of differences in _______________. A. Cultural values B. Norms C. Value preferences D. Family structure E. Living standards Answer: A. Cultural values Rationale: Cultural values are principles shared by a society that assert positive ideals and these values vary across nations. Definition of family is governed by cultural values and it varies from nation to nation. 64. What are the two important elements of nonverbal communication? A. Eye contact and voice modulation B. Power distance and time orientation C. Language and accent D. Values and beliefs E. Time and space Answer: E. Time and space Rationale: Two important elements of nonverbal communication are time and space. 65. _______________ is the means of communicating through facial expressions, eye behavior, gestures, posture, and any other body language. A. Cultural expression B. Non verbal communication C. Communiqué D. Situational communication E. Verbal communication Answer: B. Non verbal communication Rationale: Nonverbal communication is usually understood as the process of communication through sending and receiving wordless messages. It involves various means of communication other than the language like facial expressions and body language. 66. _______________ is NOT an example of negative nonverbal communications during a presentation. A. Swaying B. Stuttering C. Hands in pockets D. Fidgeting E. Eye contact Answer: E. Eye contact Rationale: Maintaining eye contact would be an example of positive nonverbal communication during a presentation. 67. Retailers devote a lot of time and resources to create the right physical surrounding to improve the customers' shopping experience. This indicates importance of _______________ factors. A. Situational B. Cultural C. Social D. Economical E. Internal Answer: A. Situational Rationale: People are profoundly affected by their physical surroundings. Retailers know that people respond differently to changes in color, lighting, location of the product within the store. This indicates importance of situational factors. 68. Stacy is from the United States. She is likely to be much more of a _______________ than her Latin American counterpart. A. Adventurer B. Clock watcher C. Procrastinator D. Hugger E. Relationship builder Answer: B. Clock watcher Rationale: Americans place a high value on time. As a result, they focus on scheduling and getting as much done in a given period as possible. Latin Americans, on the other hand, view time as much more flexible and give importance to spending time building interpersonal relationships. 69. Maria identifies with a specific religious group, which is a smaller subset of her culture. Maria's religious group is an example of a(n) _______________. A. Institution B. Social group C. Support network D. Subculture E. Society Answer: D. Subculture Rationale: A subculture is a group within the culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography. Maria's religious group is an example of subculture. 70. An individual watching an ad on the Major League Baseball World Series will act differently whether watching the show at home alone or at a party with friends due to differences in _______________. A. Physical surroundings B. Lighting C. Sounds D. Distractions E. Cultural values Answer: A. Physical surroundings Rationale: People are profoundly affected by their physical surroundings and it has a great deal of influence on reactions. 71. Jenny shops differently when her kids are crying than when her kids are enjoying the experience. This is due to differences in _______________. A. Household life cycle B. Personal circumstances C. Physical surroundings D. Social factors E. Cultural values Answer: B. Personal circumstances Rationale: An individual's behavior is always affected by his or her immediate personal circumstances. Crying kids would be an unpleasant distraction for Jenny. 72. An emerging consumer trend in many industrialized countries is the willingness to trade _______________ for _______________. A. Time, energy B. Service, money C. Service, time D. Time, value E. Time, money Answer: E. Time, money Rationale: Time is a resource. In many industrialized countries, consumers are willingness to trade time for money as they would like to have more time for family and are seeking ways to simplify their lives. 73. The household life cycle is changing due to changes in _______________. A. Cultural beliefs B. Cultural values C. Family structure D. Family life stage E. Social class Answer: C. Family structure Rationale: The household life cycle depends upon family structure and the family structures are changing due to various reasons like marrying later. Based on the family structure, different household will have different needs. 74. _______________ is a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income and occupation. A. Customer group B. Social class C. Sophistication standards D. Class structure E. Household Life Cycle (HLC) Answer: B. Social class Rationale: Social class ranks individuals into harmonized groups. Social class results from complex interaction among many characteristics. 75. People who know about many different types of products, initiate discussions about and respond to others' inquiries are called _______________. A. Opinion leaders B. Market mavens C. Influencers D. Early adopters E. Innovators Answer: B. Market mavens Rationale: Market mavens have information about many kinds of products, places to shop, and other facets of markets. They exert influence over an individual's product and brand choice. 76. Judy works at XYZ Pizza shop. She is a single mom and makes minimum wage. She recently purchased a BMW. This is an example of a(n) _______________. A. Irresponsible purchase B. Irrational choice C. Aspirational purchase D. Addictive behavior E. Compulsive shopping behavior Answer: C. Aspirational purchase Rationale: Aspirational purchases are products bought outside the individual's social standing. Since Judy makes minimum wage, she can not afford a BMW but still she has purchased it. 77. Mark is seeking out _______________ because he is unfamiliar with the new computer he wants to buy and needs reassurance from someone he can talk to about a product selection before purchasing it. A. A laggard B. Consumer reports C. Market research D. Information on the Internet E. An opinion leader Answer: E. An opinion leader Rationale: In the purchase selection process, buyers often seek out the input from opinion leaders who have knowledge in the category being purchased. 78. Jill is considered a(n) _______________ when it comes to wine because she has information about many kinds of wines, places to shop and other facets of the wine market. A. Laggard B. Market maven C. Leader D. Information haven E. Member of a reference group Answer: B. Market maven Rationale: Market mavens like Jill have information about many kinds of products, places to shop, and other facets of markets. 79. Tamara is searching for a new camera. This is a _______________, so the entire process will take longer. A. Big decision B. High-involvement purchase C. Low-involvement purchase D. Repeat purchase E. High cost product Answer: B. High-involvement purchase Rationale: When someone is involved in a purchase that has meaning to them it is called high-involvement and generally takes them a longer period of time to make the buying decision. 80. Matthew is not prompted to value new information about the latest new pet grooming tools. This is an example of _______________. A. High-involvement purchase B. Low-learning motivation C. Low level of commitment D. Low-involvement learning E. Low importance purchase Answer: D. Low-involvement learning Rationale: Low-involvement learning happens when people are not prompted to value new information. As in this example, in low-involvement learning, marketing stimuli occur when there is little or no interest in the information. 81. _______________ are the stages of the consumer decision making process. A. Problem recognition, evaluation of alternatives, product choice decision B. Problem recognition, evaluation of alternatives, product choice, evaluation C. Evaluation of alternatives, product choice, evaluation D. Evaluation of alternatives, information search, product choice E. Problem recognition, search for information, evaluation of alternatives, product choice decision, post-purchase evaluation. Answer: E. Problem recognition, search for information, evaluation of alternatives, product choice decision, post-purchase evaluation. Rationale: The consumer decision making is a five stage process. It begins with problem recognition, followed by search for information, evaluation of alternatives, product choice decision, and finally post-purchase evaluation. 82. Mia often has desires that reflect how she would like to feel or live in the present time. This is known as a(n) _______________. A. Fantasy world B. Ideal state C. Preferred state D. Preferred world E. Ideal world Answer: C. Preferred state Rationale: People live in the perceived reality of present time or real state. At the same time, people also have desires that reflect how they would like to feel or live in the present time and this is known as a preferred state. 83. Chris is hungry and would like to eat; eating would be considered the _______________. A. Preferred state B. Ideal situation C. Response D. Ideal outcome E. Goal Answer: A. Preferred state Rationale: People have desires that reflect how they would like to feel or live in the present time and this is known as a preferred state. Chris has a gap between feeling hungry and wanting to eat. Eating is the preferred state for Chris. 84. Josh notices that the low-fuel light is on as he is driving home. Without any additional information he stops at the local station on the way home to fill up. This is an example of _______________. A. Low involvement B. Limited information search C. Extensive information search D. Minimal information search E. External information search Answer: D. Minimal information search Rationale: A minimal information search is the kind of search where buying is done without any extensive information search. In this example, Josh stops at a local station to fill up without finding out any additional information. 85. _______________ include independent groups, personal associations, marketer-created information and experiences. A. External information sources B. Internal information sources C. Low information sources D. High information sources E. Preferred information bases Answer: A. External information sources Rationale: Various external information sources are independent groups, personal associations (friends and family), marketer-created information (sales brochures, advertising), and experiences (product trial and demonstrations). 86. Marcy has a(n) _______________ set, this encompasses the strongest purchase options for her. A. Complete B. Awareness C. Evaluation D. Alternative E. Evoked Answer: E. Evoked Rationale: As consumers move through the search for information, certain products may be eliminated in favor of others and brands will be evaluated and discarded. At the end, consumer will have a consideration set (also called an evoked set) which encompasses the strongest options. 87. _______________ tends to be more holistic, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. A. Rational choice B. Balanced choice C. Attitude-based choice D. State-of-mind choice E. Weighted choice Answer: C. Attitude-based choice Rationale: Attitude-based choices tend to be more holistic, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. 88. _______________ are NOT purchase event characteristics that affect the actual choice decision. A. Physical surroundings B. Social circumstances C. Time circumstances D. Biorhythms E. State of mind Answer: D. Biorhythms Rationale: Four purchase event characteristics affect the actual choice decision. They are physical surroundings, social circumstances, time circumstances, and state of mind. Biorhythms is not one of them. 89. Sabrina recently purchased a house and now she is fielding anxiety and doubts about her purchase. This is also known as _______________. A. Post-purchase dissonance B. Remorse C. Buyers dilemma D. Post-purchase remorse E. Post-purchase stress Answer: A. Post-purchase dissonance Rationale: High-involvement, large purchases where commitment can not be revoked easily often lead to a level of doubt or anxiety known as post-purchase dissonance. A house involves a high degree of commitment and so Sabrina's anxiety can be called post-purchase dissonance. 90. _______________ relates to the actual performance features of the product and answers the question: Did the product do what it was supposed to do? A. Symbolic performance B. Instrumental performance C. Performance D. Feature performance E. Tangible performance Answer: B. Instrumental performance Rationale: Instrumental performance relates to the actual performance features of the product and tries to find out if the product could do what it was supposed to do. Short Answer Questions 91. Give an example of how selective retention can hurt an organization. Answer: Selective retention tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information to the contrary. Audi, despite strong products and sales, still suffers from negative perceptions because of product problems related to the Audi 5000. Some people still remember a problem with sudden acceleration in the car that led to several accidents. While later research suggested the problem was not as severe as originally reported, Audi has had trouble overcoming persistent consumer attitudes over the past 20 years. 92. Think about your high school friends who did not go to college. Perhaps they joined the military, went to a trade school, became stay at home parents or went directly into the work force. You and they are still the same age but your lifestyles are probably very different. Explain the disadvantage of using demographic segmentation and suggest other methods of segmentation that would be better to reach you and your friends. Answer: Demographic segmentation has the disadvantage of assuming similar needs and preferences based solely on age, overlooking the diverse lifestyles and interests of people within the same demographic. Psychographic segmentation, which considers personality, values, and lifestyles, or behavioral segmentation, which focuses on purchasing habits and usage patterns, would better address the varied interests and needs of you and your high school friends. 93. How does age affect purchase behavior? Answer: As individuals age, their lives change dramatically, and as a result, so do their purchase patterns. From childhood to retirement, purchase behavior is shaped by a person's stage of life, and while specific aspects of the marketing mix change from one generation to the next, children still want to play, families still need homes and everything that goes in them, and seniors still focus on retirement. Marketers realize that changes in life stage (for example, graduating from college, getting married, or having a child) transform an individual's buying habits and are referred to as the family life cycle. These life changes mirror the individual's family environment and include the number, age, and gender of the people in the immediate family. 94. Explain some different lifestyle trends in the United States. Tell how marketers are adapting to these trends. Answer: Health-conscious eating: • Americans are turning to healthier eating styles, which can be seen in most restaurants with new low-calorie and low-carbohydrate menus. • Season's 52—Darden Restaurants new restaurant chain features a changing menu of healthy foods. Single-parent homes: • Although the majority of families in the United States consist of two-parent homes, single-parent homes are increasing steadily. • Target. Wal-Mart, and other retailers offer a wide range of books. DVDs, and other products targeted at single parents. Online era: • There has been a steady increase in online shopping and information gathering. This is only expected to increase as technology increases. • Amazon—One of the first and largest online shopping websites. Amazon continues to experience double-digit growth every year. Women in the workforce: • In 2007, 46% of the workforce was made up of w omen and is continuously growing. As more and more w omen begin their careers, we have seen more and more men help in raising the kids. • Day care centers—Companies are including on-premise day care centers as part of their benefits packages; in addition, private centers continue to see significant growth. 95. What are gender roles? Provide an example of how they have changed over time in the United States. Answer: Gender roles are behaviors regarded as proper for men and women in a particular society. These roles change over time and across cultures. In general, women have been adding new roles as they move into the workforce and positions of political power. In the United States, this means that men and women are more likely to share responsibilities than live in a traditional household where the men work and women stay at home to raise the children. 96. What are the marketing implications for Maslow's Hierarchy of Needs Theory, Herzberg's Two Factory Theory, Aldelfer's ERG Theory and McClelland's Achievement Motivation Theory? Answer: • Maslow’s Hierarchy of Needs Theory: ◦ Certain individuals are not interested in luxuries until they have had basic needs (food, shelter) met. • Herzberg’s Two Factor Theory: ◦ Satisfying hygiene factors does not create a loyal employee or customer. For a company to really create satisfied employees it is important to focus on motivators. • Aldelfer’s ERG Theory: ◦ People need a sense of belonging and social interaction. Creating a relationship with the customers extends the customers satisfaction with the product. • McClelland’s Achievement Motivation Theory : ◦ Companies can be successful targetmg one of three basic needs (need for achievement, need for power or need for affiliation. 97. What are values? Explain the different types of values. Answer: Values help form attitudes. There are two categories of values. The first refers to cultural values based on national conscience. Americans, for example, value hard work and freedom among other things. In Japan, national values include reciprocity, loyalty, and obedience. The second category is personal values held by the individual. Products possessing characteristics consistent with a person's value system are viewed more favorably. 98. Why is perception of a product important in marketing? Answer: In marketing, perception of a product is even more important than the reality of that product because, in a very real sense, an individual's perception is his reality. Perception drives attitudes, beliefs, motivation, and, eventually, behavior. Since each individual's perception is unique, everyone's perceptual response to the same reality will vary. Two people will see an ad for a new Sony LCD flat panel television, but their perception of the ad will be very different. One may see a high-quality television worth the money, while the other sees an overpriced television that does not warrant a premium price. Their attitude toward the ad and the product are affected by their perceptions. 99. Three psychological tools shape perception: Selective awareness, selective distortion and selective retention. Explain these tools. Answer: People cannot process, let alone retain all of the messages they are exposed to, so they employ a psychological tool known as selective awareness to help them focus on what it is relevant and eliminate what is not. The challenge for marketers is breaking through people's decision rules, which are designed to reject the vast majority of stimuli they see every day. Breaking through the customer's selective awareness is an important first step. However, even if a stimulus is noticed, there is no guarantee it will be interpreted accurately. Information can be misunderstood or made to fit existing beliefs, a process known as selective distortion. Even if a stimulus is noticed and interpreted correctly, there is no guarantee it will be remembered. While selective awareness significantly controls the amount of information available to the individual's consciousness, selective retention acts as an additional filter. Selective retention is the process of placing in one's memory only those stimuli that support existing beliefs and attitudes about a product or brand. 100. What is the difference between short-term memory and long-term memory? Which type of memory are marketing managers concerned about? Why? Give an example. Answer: There are two types of memory—short and long term. Short-term memory is what is being recalled at the present time and is sometimes referred to as working memory, while long-term memory is enduring storage, which can remain with the individual for years. Marketing managers are particularly interested in understanding an individual's long-term memory recall about their brand due to selective retention. Selective retention tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information to the contrary. Audi, despite strong products and sales, still suffers from negative perceptions because of product problems related to the Audi 5000. Some people still remember a problem with sudden acceleration in the car that led to several accidents. While later research suggested the problem was not as severe as originally reported, Audi has had trouble overcoming persistent consumer attitudes over the past 20 years. 101. What is personality? Explain the two basic assumptions personality trait theories all have in common. Answer: Personality is a set of unique personal qualities that produce distinctive responses across similar situations. Many theories of personality have been developed, but marketers tend to focus on personality trait theories because they offer the greatest insights on consumers. Personality trait theories all have two basic assumptions: (1) each person has a set of consistent, enduring personal characteristics, and (2) those characteristics can be measured to identify differences between individuals. 102. What is culture? How has technology affected culture? Why should marketers be aware of culture? Answer: Culture assimilates shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society. In school, children learn basic cultural values through interaction with classmates and formal classroom learning. At a very early age, young people learn values and concepts about their culture. Among the values shared by Americans, for example, are achievement, hard work, and freedom while Japanese value social harmony, hierarchy, and devotion. Culture is a primary driver of consumer behavior because it teaches values and product preferences and, in turn, affects perceptions and attitudes. Beginning in childhood and continuing on throughout life, people respond to the culture in which they live. In recent years, despite the globalization of communications and universal nature of the Internet, people have developed a heightened awareness of their own culture and subculture. Marketers need to be aware of culture for two reasons. First, learning a target market's culture is essential to an effective marketing strategy. Creating a value proposition that incorporates cultural cues is a prerequisite to success. Second, failing to understand cultural norms has a significant negative effect on product acceptance. 103. What is language? Give an example of how language conveys much more about society and values. Answer: Language is an essential cultural building block and the primary communication tool in society. At the most basic level it is important to understand the language, making sure that words are understood correctly. However, language conveys much more about a society and its values. Scandinavian cultures, for example, place a high value on spending time together. They have more words to express "being together" than English does, and their meaning implies a more intimate sharing of thoughts and ideas. These concepts do not translate into the Anglo-American language and are not easily understood. 104. What are cultural values? Provide examples of different cultural values. Answer: Cultural values are principles shared by a society that assert positive ideals. These principles are often viewed on a continuum. Consider the value of limited versus extended family. In the United States, the obligation and commitment to family is often limited to an individual's immediate family, including their parents, children, and siblings. Most Latin American cultures, on the other hand, have a more wide-ranging definition of family that includes extended family members such as cousins and grandparents and also more inclusive with extended family members living together. 105. What problems can organizational employees experience due to differences in nonverbal communication? How does this affect marketing? Answer: While a number of factors fall into this category let's focus on two: Time and personal space. The perception of time varies across cultures. Americans and Western Europeans place a high value on time and view it in discrete blocks of hours, days, and weeks. As a result, they focus on scheduling and getting as much done in a given period as possible. Latin Americans and Asians, on the other hand, view time as much more flexible and less discrete. They are not as concerned with the amount of work that gets done in a given time block. How does this affect marketing? Salespeople who have been trained in an American sales environment are often frustrated to find their Asian and Latin American customers less concerned about specific meeting times and more concerned about spending time building a personal relationship. 106. What is a subculture? Provide examples of different subcultures. Answer: A subculture is a group within the culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography. While part of the larger culture, subcultures are also different from each other. The United States is perhaps the best example of a country with a strong national culture that also has a number of distinct subcultures (see Exhibit 7.7). Several subcultures in the United States have become such powerful forces that companies now develop specific marketing strategies targeted at those groups. Large companies such as Procter & Gamble and General Motors have begun targeting the Hispanic and African-American markets with specific products, distribution channels, and marketing communications. For example, Procter & Gamble created a line of beauty care products called Textures and Tones that includes new products, packaging, and promotional campaigns targeted specifically for African-American women in the United States and Latin America. L'Oreal, the cosmetics company, has a research center outside Chicago that focuses exclusively on the African-American market and has resulted in a number of products in its Soft-Sheen Carson and Mizani brands. 107. What are opinion leaders and market mavens and how do they influence the purchase decision? Answer: Opinion leaders fulfill an important role by classifying, explaining, and then bestowing information, most often to family and friends but occasionally to a broader audience, as is the case with Walter Mossberg. People seek out opinion leaders for a variety of reasons, including unfamiliarity with a product, reassurance about a product selection before purchasing, and anxiety resulting from high involvement with the purchase of a particular product. Anyone whose opinions are valued by the individual can be an opinion leader. For instance, the friend who enjoys cars could be an opinion leader about automobiles; the relative with a background in information technology might be the expert on technology. While opinion leaders are often defined by product class, such as Mossberg's expertise in technology, another influential group has emerged. This new group, whose members are called market mavens, has information about many kinds of products, places to shop, and other facets of markets, and the members initiate discussions with consumers and respond to requests from consumers for market information. The key difference between opinion leaders and market mavens is the focus on their market knowledge. Market mavens have a broader understanding and expertise that goes beyond product to include other elements of the purchase decision such as shopping experience and price. In their role as information gatekeepers, opinion leaders and market mavens exert influence over an individual's product and brand choice. As a result, marketers seek to understand the roles of these two groups so they can identify the members and, in turn, encourage them to try a particular product. 108. What is degree of affiliation, and the primary group, and secondary group? When might the degree of affiliation change? Answer: The degree of affiliation indicates the amount of interpersonal contact an individual has with the reference group. Primary groups are marked by frequent contact, while less frequent or limited dealings are known as secondary groups. Individuals come in frequent contact with co-workers, close friends, and other groups such as religious, special interest, or hobby groups that may be primary or secondary depending on the level of contact. Over time, the degree of affiliation will likely change; for example, when someone changes jobs the primary group of co-workers will also change. 109. Explain post-purchase dissonance. How do consumers reduce dissonance? How can companies help reduce dissonance? Answer: High-involvement, large purchases often lead to a level of doubt or anxiety known as post-purchase dissonance. Most purchases occur with little or no dissonance. The likelihood of dissonance increases if one or more of the following purchase decision attributes are present: (1) purchases with a high degree of commitment that are not easily revoked; (2) purchases that carry a high degree of importance for the customer; (3) purchases where alternatives are rated equally and the purchase decision is not clear. Also, the individual's own predisposition for anxiety can create additional dissonance. Big-ticket purchases frequently include several of those characteristics. For example, buying a house, the single biggest purchase most people will ever make, is a big commitment that can be complicated when the consumer evaluates two or three homes as more or less equal. The single most effective method used to reduce dissonance is a thorough information search and evaluation of alternatives. When consumers are confident that due diligence has been done, they have less anxiety after the purchase. If dissonance remains a problem, additional information can be sought to reduce anxiety and reinforce the decision. Marketers can direct marketing communications to reduce dissonance particularly with large purchases such as automobiles. As part of a CRM program, many companies follow up with customers after the purchase to assess their satisfaction. 110. Why are marketers concerned about how products are disposed once they are no longer in use? What are companies doing to be more environmentally aware? Answer: Environmental concerns consistently rank as a major issue for consumers in many parts of the world. People living in the United States, for example, produce nearly 2,000 pounds (1 ton) of garbage per person every year. Once a product is consumed, in most cases, a physical object remains and needs to be disposed of. New technologies such as computer CPUs and monitors are particularly difficult to discard because they contain dangerous chemicals. Environmentally friendly products encourage proper use and disposal. Companies including Coca-Cola use recycled materials in their manufacturing and packaging. At the same time, companies are encouraging consumers to recycle on their own. Dell and other computer companies have a program that encourages consumers to recycle their old computers. Essay Questions 111. Both internal and external forces influence consumers in the decision making process. Explain the internal psychological and personal characteristics that affect consumer choices. Answer: See Exhibit 5.2. Personal Characteristics: Age, education, occupation, income, lifestyle, gender Psychological Attributes: Motivation, attitude, perception, learning, personality Internal psychological factors affecting consumer choices include motivations, perceptions, attitudes, and beliefs, which drive individual desires and decision-making. Personal characteristics such as age, lifestyle, personality, and self-concept also play a crucial role, as they shape preferences and influence how consumers perceive and evaluate products and services. 112. Maslow's theory of motivation is the most popular human motivational theory. Explain the theory and its marketing implications. Answer: Many theories have been developed over the years to explain human motivation. The best known and most popular of these theories is the Hierarchy of Needs, which was developed by psychologist Abraham Maslow. Maslow's theory proposes a series of needs that flow from lower order (physiological) to higher order (self-actualization). The theory suggests that people meet physiological needs such as hunger and sleep before they satisfy other needs. Once those needs are satiated, other needs become more important. At the highest level in the hierarchy, people seek human ideals related to justice, wisdom, and the meaning of life. Maslow asserts that people never fully meet this need, and higher order needs continue through an individual's life. 113. Explain the differences between values and beliefs. Provide an example of how attitudes about a product or brand are formed by values and beliefs. Answer: Initially, a person's attitudes are formed by their values and beliefs. There are two categories of values. The first refers to cultural values based on national conscience. Americans, for example, value hard work and freedom among other things. In Japan, national values include reciprocity, loyalty, and obedience. The second category is personal values held by the individual. Products possessing characteristics consistent with a person's value system are viewed more favorably. While values may be based, in part, on fact, beliefs are a subjective opinion about something. Since they are subjective (emotional and not necessarily based on fact) marketers become concerned that a negative product belief will create a negative attitude about that product, making the attitude more difficult to overcome. It is also important to note that beliefs, once formed, are resistant to change. Personal experiences, marketing communication, and information from trusted sources, such as family members or friends, all shape a person's belief system. Values and beliefs come together to shape attitudes about an object whether it is Coke, the environment, or your favorite sports team. This overall predisposition is the result, generally, of an individual's assessment of that object on several attributes. For example, an attitude about Coke could be based on attributes such as health, which could be a positive belief—Coke's caffeine gives you energy—or a negative belief—Coke has a lot of sugar and calories. Coke is presented as a fun, youthful drink and youth is an American value. 114. What are the different types of learning? Explain whether conditioning or cognitive learning is more active and why. Please provide examples. Answer: There are two fundamental approaches to learning. The first, conditioning, involves creating an association between two stimuli. There are two types of conditioning: Classical and operant. Classical conditioning seeks to have people learn by associating a stimulus (marketing information, brand experience) and response (attitude, feeling, behavior). Recently, many companies have started using popular songs from the 1960s and 1970s in their advertising. When individuals, particularly baby boomers, hear that music it connects them with positive memories and, not coincidentally, the product and brand being advertised. This is conditioned learning, by connecting the stimulus such as music with a response such as a positive association with a particular brand. The other type of conditioning, operant conditioning, entails rewarding a desirable behavior, for example a product trial or purchase, with a positive outcome that reinforces that behavior. For example, many different types of food retailers offer product samples in their stores. Frito-Lay, for instance, offers free in-store samples of Doritos for the express purpose of getting people to try the product, enjoy the product, and finally purchase a bag of Doritos. Enjoying the Doritos reinforces the positive attributes of the product and increases the probability of a purchase. Since the consumer must choose to try the product for operant conditioning to occur, Frito-Lay wants to make the trial as easy as possible. While conditioning requires very little effort on the part of the learner, cognitive learning is more active and involves mental processes that acquire information to work through problems and manage life situations. Someone suffering from the flu and seeking information from their friends, doctors, or medical Web sites about the best over-the-counter remedy for their specific symptoms is engaged in cognitive learning. They are looking for information to help solve a problem. Marketers must understand consumers sometimes engage in this type of activity and be proactive in providing the information sought by the consumer. Consider a box of Theraflu caplets, Theraflu Daytime cold lists six symptoms right on the front of the box that the product will help relieve. This kind of information is critical at the point of purchase as an individual considers which product will help him feel better faster. 115. What is nonverbal communication? What are the two factors of nonverbal communication? Answer: Time and space are the two elements. American and Western Europeans place a value on time and scheduling meetings, etc. They see time as linear unit. Asians and South Americans see time as much more fluid and are interested in building personal relationships and not clockwatching. 116. What is involvement? Explain low and high involvement learning/purchase decisions. Discuss marketing strategies for both low and high involvement purchase decisions. Involvement mediates the product choice decision. Involvement is activated by three elements: The individual's background and psychological profile, the aspirational focus, and the environment at the time of the purchase decision. Answer: When a consumer is concerned with the outcome of the process, they will spend more time learning about product options and become more emotionally connected to the process and the decision. Someone stimulated to acquire new information is engaged in high-involvement learning. For example, someone interested in purchasing a new car will seek out product reviews in Consumer Reports and online sources to discover information that will assist in the choice decision. A high level of involvement usually means the entire process takes longer. High-involvement consumers report high levels of satisfaction in their purchase decision. This is not surprising since these consumers spend more time engaged in the decision process and, therefore, are more comfortable in their decision. While high involvement purchases are more significant to the consumer, the vast majority of purchases involve limited or low involvement. From the purchase of gasoline to the choice of restaurants, decisions are often made almost automatically, often out of habit, with little involvement in the purchase decision. The reality is that consumers tend to focus their time and energy on high-involvement purchases while making many purchases with little or no thought at all. Marketers can provide consumers with rich sources of data and make information easily accessible for high involvement purchasers. Low-involvement learning happens when people are not prompted to value new information. This is more prevalent than high-involvement learning because the vast majority of marketing stimuli occur when there is little or no interest in the information. While people are not actively seeking the information, they are exposed to advertising and this, in turn, affects their attitudes about a brand. Research suggests that people shown ads in a low-involvement setting are more likely to include those brands in the choice decision process. Low-involvement consumers spend little time comparing product attributes and frequently identify very few differences across brands. Because the decision is relatively unimportant, they will often purchase the product with the best shelf position or lowest price with no evaluation of salient product characteristics. Marketers consider several strategies in targeting low-involvement consumers. The objective of these strategies is to raise consumer involvement with the product. Generally, time is the defining characteristic for these strategies. Short-term strategies involve using sales promotions such as coupons, rebates, or discounts to encourage trying the product and then hoping the consumers will raise their product involvement. Long-term strategies are more difficult to implement. Marketers seek to focus on the product's value proposition, creating products with additional product features, better reliability, or more responsive service to increase customer satisfaction. Additionally, strong marketing communications campaigns that speak to consumer issues or concerns can raise involvement with the product. A classic example of this tactic is Michelin's highly effective and long running advertising campaign that links a relatively low-involvement product, tires, with a significant consumer concern, family safety. Tires are not typically a high-involvement product, however, when the voiceover on the commercial says, "Because so much is riding on your tires" while showing a baby riding in the car, consumer involvement in the product and more specifically the brand increases. While a low-involvement consumer demonstrates little or no brand loyalty, they are also, by definition, open to brand switching. As a result, brands can experience significant gains in consumer acceptance with an effective, comprehensive marketing strategy. Conditioning works well with low-involvement purchases such as the purchase of gasoline where people frequently purchase from the same station because of various factors such as price and location. 117. How do consumers evaluate alternatives? Compare and contrast the three perspectives by which consumers make product choices. (End of question—formatting problem) Consumers begin with a complete set of alternatives. At some point in the search for information, often during the internal information search, people begin to limit the number of alternatives under consideration. From a practical perspective, it is simply not possible to gather and process information on many different options. This is known as bounded rationality and defines people's limited capacity to process information. As consumers move through the search for information, certain products (PDAs) may be eliminated in favor of others (cell phones) and brands will be evaluated and discarded. Answer: The awareness set reduces the number of options. At a minimum, the number of different product categories, if considered, will be reduced. It also means that some brands are discarded from the list of alternatives. Interestingly, the awareness set can include choices across product categories. In our example, it is still possible for a particular brand of PDA and cell phone to remain in the awareness set despite the fact they are different product categories. From the awareness set, individuals conduct additional information search. Based on additional information and evaluation, a consideration (evoked) set is created, which encompasses the strongest options. It is from the consideration set that the product decision is made. Concurrent with the search for information is the analysis and evaluation of possible product choices. Consumers move, sometimes quickly, from many options to a more restricted awareness set and from there to a final consideration set from which a decision is made. During this process, the individual is constantly evaluating the alternatives based on internal and external information. Frequently, the product choice encompasses a mix of all three choice perspectives: Emotional, attribute and attitude. Not all purchases are made strictly for rational reasons. Indeed, product choices can be emotional choices, based on attitudes about a product, or based on attributes of the product depending on the situation. An individual goes to Starbucks for the personal pleasure of enjoying a cappuccino (emotional). That same person also considers Starbucks the best choice for getting together with friends after evaluating other choices (attitude based). Finally, the individual finds Starbucks' cappuccinos simply taste better than other competitors (attribute based). While emotions have been considered an important factor in decision making for many years, it is only recently that marketers began to develop specific marketing strategies targeting emotion-based decisions. Product design and execution even focus on creating an emotional response to the product. From there, marketing communications connect the product to the target audience using images and words that convey an emotional connection. Attitude-based choices tend to be more holistic, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. It is not uncommon for beliefs to affect the actual product decision. For example, "it is important to buy cars made in America" or the opposite, "foreign cars are better than American products." When two brands are judged to be relatively the same, people frequently look to existing attitudes to guide their decision. When someone responds to a question about why he bought a particular product with, "I always buy . . ." or "this is the only brand I use . . ." they are likely making an attitude-based choice decision. The most prevalent approach to product decisions is attribute-based choice based on the premise that product choices are made by comparing brands across a defined set of attributes. These evaluative attributes are the product features or benefits considered relevant to the specific problem addressed in the purchase decision. Antilock brakes are a product feature that translates into a consumer benefit—better control in a hazardous situation. Most consumers could not describe how antilock brakes actually work but are quite aware of the benefits and would eliminate a car from the choice process if it failed to have that product feature. Not all evaluative attributes are tangible. Brand image, attitudes about a brand and prestige can also be used as evaluative criteria. 118. Many factors contribute to the final product choice decision. List and explain four purchase event characteristics that affect the actual choice decision. Are all/any of these characteristics under the marketer's control? How do consumers make final purchase decisions? Answer: • Physical surrounding, social circumstances, time and state of mind are all purchase event characteristics that affect the final purchase decision. Physical surrounding is the environment for the purchase. From store colors to the employees, consumers respond to their physical environment. For example, crowding can have a negative effect on purchase decisions because, if the store becomes too crowded, people will forgo the purchase, perhaps going somewhere else. • Social circumstance is the social interaction at the time of purchase. Shopping is a social activity and people are influenced by the social interaction at the time of purchase. Trying on an outfit alone may lead to purchase; however, when putting on the outfit while shopping with a friend, it is unlikely the clothing will be purchased if the friend does not like it. • Time is the amount of time an individual has to make the purchase. The product choice decision can be affected by time pressure. The consumer will be less willing to wait for the best solution and more likely to purchase an acceptable alternative. • State of mind is the consumer's state of mind at time of purchase. A consumer's mood influences the purchase decision. People in a positive state of mind are more likely to browse. Negative mood states are less tolerant and lead to increased impulse and compulsive purchases. Some of these characteristics are at least nominally in the marketer's control. Other characteristics, such as an individual's state of mind, are uncontrollable and must be dealt with at the moment of purchase by employees who, it is hoped, have the skills and training needed to handle difficult situations. Along with this, marketers control some of the decisions consumers make by providing options. The final purchase decision is not a single decision; the consumer confronts five important decisions that make up the final purchase decision. These include: • What: Select the product and, more specifically, the brand. Included as part of the product choice are decisions about product features, service options, and other characteristics of the product experience. • Where: Select the point of purchase. Select the retailer and, increasingly, the channel—retail store (bricks) or online (clicks)—through which the product is to be purchased. • How much: Choose the specific quantity to be purchased. For example, warehouse clubs, such as Sam's Club and Costco, offer consumer options on purchase quantity. If you have the ability to store products, it is possible to save money by purchasing in larger quantities. • When: Select the timing of the purchase. The timing of the purchase can make a difference in the final purchase price. Car dealers traditionally offer better deals at the end of the month as they try to meet monthly sales quotas. Through sales and other marketing communications, marketers encourage consumers to purchase sooner rather than later. • Payment: Choose the method of payment. The selection of a payment method makes a big difference to the consumer and marketer. Marketers want to make it easy for the consumer to purchase; however, not all payment methods are equal. Credit cards charge the retailer a fee that, in turn, is passed popular with younger adults and combines the convenience of a credit card with the fiscal responsibility of using cash. Indeed, the consumer can often choose not purchase the product at all, as other choices are available besides purchase. They can rent or lease products such as automobiles, making it possible to use products they could not normally afford. 119. Products are evaluated on two dimensions to determine satisfaction/dissatisfaction in the minds of consumers. How are they evaluated? If consumers are dissatisfied, what happens? Answer: Most products are evaluated on two dimensions—instrumental performance and symbolic performance. Instrumental performance relates to the actual performance features of the product and answers the question: Did the product do what it was supposed to do? Symbolic performance refers to the image-building aspects of the product and answers the question: Did the product make me feel better about myself? A product that performs poorly on instrumental dimensions will ultimately lead to dissatisfaction. However, for a consumer to be fully satisfied with the product, it must perform well both instrumentally and symbolically. A new Hyundai automobile may have scored high on instrumental performance but low on symbolic performance. Is the customer dissatisfied? No, but it is not certain that person will purchase another Hyundai. There are two primary outcomes of consumer dissatisfaction with a product: A customer will either change his or her behavior or do nothing. When a customer has an unfavorable experience at the bank, she may not leave but her opinion of the bank diminishes. Over time, this will erode the consumer's evaluation of the bank. The second result of consumer dissatisfaction is a change in behavior. The consumer may simply choose to stop shopping at that store or purchasing a particular product. Another option is complain to management. Marketers are aware that for every complaint, there are eight "quiet" but dissatisfied consumers who chose to walk away. An even greater concern is consumers telling friends about a bad experience or complaining to government agencies. Finally, dissatisfied consumers who believe their legal rights have been violated may take legal action for damages related to the purchase experience. 120. Discuss post-purchase dissonance. What is the difference in dissonance with high involvement and low involvement products? How do consumers reduce dissonance? Answer: High-involvement, large purchases often lead to a level of doubt or anxiety known as post-purchase dissonance. Most purchases occur with little or no dissonance. The likelihood of dissonance increases if one or more of the following purchase decision attributes are present: (1) a high degree of commitment that is not easily revoked; (2) a high degree of importance for the customer; (3) alternatives are rated equally and the purchase decision is not clear. Also, the individual’s own predisposition for anxiety can create additional dissonance. Big-ticket purchases frequently include several of those characteristics. How do consumers reduce dissonance? The single most effective method is a thorough information search and evaluation of alternatives. When consumers are confident that due diligence has been done, they have less anxiety after the purchase. If dissonance remains a problem, additional information can be sought to reduce anxiety and reinforce the decision. Marketers can direct marketing communications to reduce dissonance particularly with large purchases such as automobiles. As part of a CRM program, many companies follow up with customers after the purchase to assess their satisfaction. Test Bank for Essentials of Marketing Management Greg W. Marshall, Mark W. Johnston 9780078028786, 9780071082020, 9780077400187

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