Consumer Behaviour and Marketing Strategy Questions and Answers

Q: These goods are bought infrequently, which are used repeatably and which involve a reasonably high level of consumer risk :

These are durable goods.Durable goods, such as refrigerators, cars and furniture, last a long time and are used again and again, so they are bought infrequently. Because they cost more and the buyer lives with the choice for years, the purchase involves a fairly high level of risk, and consumers spend more effort comparing brands.Impulse goods are bought on the spur of the moment with little thought. Non-durable goods are consumed in one or a few uses and bought often. Luxury goods are defined by price and prestige, not by repeated use.

Q: ..................... is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and perceived alternatives

It is Customer perceived value.Philip Kotler defines customer perceived value as the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Benefits include product, service, personnel and image; costs include money, time, energy and psychological effort. Customers choose the offer with the highest perceived value.Perceived usefulness is a construct of the technology acceptance model, and 'failure avoidance rate' and 'report rating' are not marketing definitions of value.

Q: Nike lets consumers customize atheletic shoes for $ 10 more. A shoper with two different size feet can even get a non-matching pair. This would be example of which of following ?

This is an example of mass customization.Mass customization is the ability to prepare individually designed products on a mass basis, at little extra cost. Kotler uses exactly this example: Nike (through NIKEiD) lets buyers design their own shoes, choosing colours and features, and even order different sizes for each foot, for a small premium.Mass marketing offers one standard product to everyone, and niche marketing targets a narrow segment with a standard offer. Individualization (one-to-one marketing) is close, but the term for doing it at mass-production scale and cost is mass customization.

Q: One set of consumers, during a focus group session, indicated that Dell computers reminded them of a Surfer, Apple computer was equated to a mad scientists and IBM computers to scrooge from the Dicken's tale. Which of the following qualitative research approaches matches to the approaches described above :

The approach is brand personification.Brand personification asks consumers to describe a brand as if it were a person: what kind of person, what job, what personality. Comparing Dell to a surfer, Apple to a mad scientist and IBM to Scrooge (from Dickens's tale) is exactly this, and it reveals the human qualities consumers attach to each brand.Projective techniques is the broader family of methods to which personification belongs. Visualisation asks people to create a collage or picture of the brand's users, and laddering probes the chain of reasons behind a preference, from features to deeper values.

Q: Which of the following is not a factor in the Kano's Model ?

The one not in the Kano model is competitive factors.Noriaki Kano's model (1984) sorts product attributes by how they affect satisfaction: basic factors (must-be qualities that cause dissatisfaction if absent but add no delight when present), performance factors (satisfaction rises in proportion to how well they are delivered) and excitement factors (unexpected delighters that greatly raise satisfaction).The model also recognises indifferent and reverse attributes, but it has no category of 'competitive factors'.

Q: The objective of "defensive switching' is to :

The objective is to retain the customer, encouraging him or her to buy the same brand as before instead of switching.In sales promotion, offensive switching aims to pull customers away from rival brands, while defensive switching aims to protect the brand's existing buyers: promotions such as loyalty offers and pack bonuses are timed to stop current users being tempted away by competitors' deals.Getting consumers to buy a different brand from last time (option C) describes offensive switching. Store switching and pushing high-margin products are different promotional goals.

Q: These are a group of people in the process of diffusion who enjoy being at the leading edge of innovation and buy into new products at an early stage :

The group is the early adopters.In Rogers' diffusion of innovations, adopters fall into five groups: innovators (2.5%), early adopters (13.5%), the early majority (34%), the late majority (34%) and laggards (16%). Of the groups offered, the early adopters are the ones at the leading edge, taking up new products at an early stage; they are often opinion leaders whom others follow.The early majority adopts only after seeing others use the product, the late majority is sceptical and adopts after most people have, and laggards are the last, tradition-bound group.

Q: In Consumer Buying Behaviour, initiator is :

The initiator is the person who first suggests the idea of buying the product or service.Kotler lists five buying roles: the initiator, who first suggests buying; the influencer, whose views or advice affect the decision; the decider, who makes the decision; the buyer, who makes the actual purchase; and the user, who consumes or uses the product.The other options describe the buyer, the user and the influencer, so each names a different role.

Q: Selective Retention means that :

Selective retention means that people forget much that they learn but tend to retain information that supports their attitudes and beliefs.It is one of the three processes of selective perception. Because of it, a consumer is likely to remember the good points of a brand he already favours and forget the good points of competitors.The other options describe the other processes: twisting information into personal meanings is selective distortion, and noticing stimuli that are anticipated or that deviate strongly from the normal are features of selective attention.

Q: Psychographic segmentation divides customers based on the :

Psychographic segmentation divides customers by lifestyle and personality.Psychographics uses psychological traits, lifestyles (activities, interests and opinions) and values to group buyers. People in the same demographic group can have very different psychographic profiles, which is why marketers use it alongside demographics.Dividing by actual behaviour towards a product (usage rate, loyalty, benefits sought) is behavioural segmentation, by age, income or gender is demographic segmentation, and by location is geographic segmentation.

These goods are bought infrequently, which are used repeatably and which involve a reasonably high level of consumer risk :

A.Impulse goods
B.Luxury goods
C.Non-durable goods
D.Durable goods

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: D

These are durable goods.

Durable goods, such as refrigerators, cars and furniture, last a long time and are used again and again, so they are bought infrequently. Because they cost more and the buyer lives with the choice for years, the purchase involves a fairly high level of risk, and consumers spend more effort comparing brands.

Impulse goods are bought on the spur of the moment with little thought. Non-durable goods are consumed in one or a few uses and bought often. Luxury goods are defined by price and prestige, not by repeated use.

Discuss in Forum

..................... is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and perceived alternatives

A.Perceived usefulness
B.Failure avoidance rate
C.Report rating
D.Customer perceived value

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: D

It is Customer perceived value.

Philip Kotler defines customer perceived value as the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Benefits include product, service, personnel and image; costs include money, time, energy and psychological effort. Customers choose the offer with the highest perceived value.

Perceived usefulness is a construct of the technology acceptance model, and 'failure avoidance rate' and 'report rating' are not marketing definitions of value.

Discuss in Forum

Nike lets consumers customize atheletic shoes for $ 10 more. A shoper with two different size feet can even get a non-matching pair. This would be example of which of following ?

A.Mass Marketing
B.Mass Customization
C.Individualization
D.Niche Marketing

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: B

This is an example of mass customization.

Mass customization is the ability to prepare individually designed products on a mass basis, at little extra cost. Kotler uses exactly this example: Nike (through NIKEiD) lets buyers design their own shoes, choosing colours and features, and even order different sizes for each foot, for a small premium.

Mass marketing offers one standard product to everyone, and niche marketing targets a narrow segment with a standard offer. Individualization (one-to-one marketing) is close, but the term for doing it at mass-production scale and cost is mass customization.

Discuss in Forum

One set of consumers, during a focus group session, indicated that Dell computers reminded them of a Surfer, Apple computer was equated to a mad scientists and IBM computers to scrooge from the Dicken's tale. Which of the following qualitative research approaches matches to the approaches described above :

A.Projective techniques
B.Visualisation
C.Brand personification
D.Laddering

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: C

The approach is brand personification.

Brand personification asks consumers to describe a brand as if it were a person: what kind of person, what job, what personality. Comparing Dell to a surfer, Apple to a mad scientist and IBM to Scrooge (from Dickens's tale) is exactly this, and it reveals the human qualities consumers attach to each brand.

Projective techniques is the broader family of methods to which personification belongs. Visualisation asks people to create a collage or picture of the brand's users, and laddering probes the chain of reasons behind a preference, from features to deeper values.

Discuss in Forum

Which of the following is not a factor in the Kano's Model ?

A.Competitive factors
B.Excitement factors
C.Performance factors
D.Basic factors

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: A

The one not in the Kano model is competitive factors.

Noriaki Kano's model (1984) sorts product attributes by how they affect satisfaction: basic factors (must-be qualities that cause dissatisfaction if absent but add no delight when present), performance factors (satisfaction rises in proportion to how well they are delivered) and excitement factors (unexpected delighters that greatly raise satisfaction).

The model also recognises indifferent and reverse attributes, but it has no category of 'competitive factors'.

Discuss in Forum

The objective of "defensive switching' is to :

A.Retain the customer by encouraging him/her to buy the same brand as was bought on earlier occasion instead of switching to a different brand on this purchase occasion.
B.Encourage store switching.
C.Encourage consumers to buy a different brand than the one that they bought on earlier purchase occasion or had the intention of buying now.
D.Encourage the customers to buy high margin products.

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: A

The objective is to retain the customer, encouraging him or her to buy the same brand as before instead of switching.

In sales promotion, offensive switching aims to pull customers away from rival brands, while defensive switching aims to protect the brand's existing buyers: promotions such as loyalty offers and pack bonuses are timed to stop current users being tempted away by competitors' deals.

Getting consumers to buy a different brand from last time (option C) describes offensive switching. Store switching and pushing high-margin products are different promotional goals.

Discuss in Forum

These are a group of people in the process of diffusion who enjoy being at the leading edge of innovation and buy into new products at an early stage :

A.Late majority
B.Early adopters
C.Early majority
D.Laggards

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: B

The group is the early adopters.

In Rogers' diffusion of innovations, adopters fall into five groups: innovators (2.5%), early adopters (13.5%), the early majority (34%), the late majority (34%) and laggards (16%). Of the groups offered, the early adopters are the ones at the leading edge, taking up new products at an early stage; they are often opinion leaders whom others follow.

The early majority adopts only after seeing others use the product, the late majority is sceptical and adopts after most people have, and laggards are the last, tradition-bound group.

Discuss in Forum

In Consumer Buying Behaviour, initiator is :

A.A person who first suggests the idea of buying the product or service
B.A person who makes the actual purchase
C.A person who first uses the product or service
D.A person whose advice influences the decision

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: A

The initiator is the person who first suggests the idea of buying the product or service.

Kotler lists five buying roles: the initiator, who first suggests buying; the influencer, whose views or advice affect the decision; the decider, who makes the decision; the buyer, who makes the actual purchase; and the user, who consumes or uses the product.

The other options describe the buyer, the user and the influencer, so each names a different role.

Discuss in Forum

Selective Retention means that :

A.People will twist information into personal meanings.
B.People are likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli.
C.People will forget much that they learn but will tend to retain infomation that supports their attitudes and beliefs.
D.People are more likely to notice stimuli that they anticipate.

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: C

Selective retention means that people forget much that they learn but tend to retain information that supports their attitudes and beliefs.

It is one of the three processes of selective perception. Because of it, a consumer is likely to remember the good points of a brand he already favours and forget the good points of competitors.

The other options describe the other processes: twisting information into personal meanings is selective distortion, and noticing stimuli that are anticipated or that deviate strongly from the normal are features of selective attention.

Discuss in Forum

10.

Psychographic segmentation divides customers based on the :

A.Actual behaviour of customers towards services
B.Difference in demographic factors
C.Location
D.Lifestyle and personality

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: D

Psychographic segmentation divides customers by lifestyle and personality.

Psychographics uses psychological traits, lifestyles (activities, interests and opinions) and values to group buyers. People in the same demographic group can have very different psychographic profiles, which is why marketers use it alongside demographics.

Dividing by actual behaviour towards a product (usage rate, loyalty, benefits sought) is behavioural segmentation, by age, income or gender is demographic segmentation, and by location is geographic segmentation.

Consumer Behaviour and Marketing Strategy Questions and Answers

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