Consumer Behaviour and Marketing Strategy Questions and Answers

Answer: A

A channel with no intermediaries is a direct channel.

In a direct marketing channel the company sells straight to final buyers, through its own sales force, company stores, catalogues, telephone or its website. Eureka Forbes's door-to-door sales and Dell's online sales are classic examples. Kotler calls this a zero-level channel.

An indirect channel uses one or more intermediaries, such as wholesalers and retailers. 'Flexible' and 'static' channels are not standard classifications of marketing channels.

Answer: B

Minor stimuli that decide when and how a person responds are cues.

In the learning model of consumer behaviour used by Kotler, a drive is a strong internal stimulus that impels action, and cues are the minor stimuli, such as seeing the product in a shop window, an advertisement or a friend's recommendation, that determine when, where and how the person responds. Response and reinforcement complete the model.

Drives and motives are the strong internal stimuli, not the minor ones. Perception is the process by which a person selects, organises and interprets information.

Answer: A

Physical evidence helps customers evaluate the service.

Services are intangible, so customers cannot see or touch what they are buying before they buy it. Physical evidence, one of the extra Ps of the services marketing mix, supplies tangible cues: the building, its decor and cleanliness, the staff's uniforms, brochures, the website and the receipt. Customers use these cues to judge the quality of a service they cannot otherwise inspect.

Physical evidence is aimed at the customer, so its role is not mainly to help the provider deliver or evaluate the service, nor to let a third party assess quality.

Answer: C

When a service encounter falls short of expectations it is a service failure.

Service failure occurs when the service delivered does not meet the customer's expectations, for example a delayed flight or a wrong order. In the gaps model of service quality, it reflects a gap between expected and perceived service.

Service recovery is what the firm does after a failure to put it right, such as an apology, a refund or a replacement. The servicescape is the physical environment in which the service is delivered, and the service mix is the set of services a firm offers. Neither names the failure itself.

Answer: C

Brand equity generally means brand value.

Brand equity is the added value a brand name gives a product beyond its functional benefits: the premium customers will pay, the loyalty they show and the ease with which the brand can be extended. Aaker describes it in terms of brand awareness, perceived quality, brand associations and brand loyalty, and it can be measured financially as the value of the brand to its owner.

Brand attitude and brand positioning are components or drivers of brand equity, not the thing itself. Brand sales are a result of a strong brand and can rise through price cuts without any increase in equity.

Answer: C

This is Discriminative pricing.

Price discrimination means selling the same product at different prices to different segments, where the difference is based on how sensitive each segment is to price (its price elasticity) rather than on differences in cost. Examples are student discounts, off-peak fares and different prices in different markets. It requires segments that can be separated.

Competitive pricing follows competitors' prices, and variable pricing changes prices over time or by negotiation. 'Judgemental' is not a recognised pricing method.

Answer: A

The paper's key is Intermittent advertising.

In the maturity stage sales have stopped growing and the brand is already well known, so the aim shifts from creating awareness to holding share against rivals. A schedule that alternates bursts of advertising with quieter periods, to remind buyers at lower cost, suits that stage; this is the idea behind the keyed option.

Heavy advertising and a larger budget are what textbooks tie to the introduction stage, when awareness has to be built, and stopping advertising is associated with the decline stage. I could not find a source that names intermittent advertising as the maturity strategy, and some texts describe maturity advertising as stressing brand differences, so the answer rests on the key and is not independently confirmed.

Answer: D

This is a Corporate VMS.

A vertical marketing system (VMS) is a channel in which producers, wholesalers and retailers act as a unified system. In a corporate VMS successive stages of production and distribution are under single ownership: one firm owns the other members of the channel, or the whole channel.

In an administered VMS coordination comes from the size and power of one member, not ownership. In a contractual VMS independent firms are bound by contracts, as in franchises and voluntary chains. 'Coordinated VMS' is not one of the three types.

Answer: B

Store brands are also called Private brands.

A private brand (private label, store brand or distributor brand) is created and owned by a retailer or wholesaler rather than a manufacturer, for example a supermarket's own range. Retailers use them for higher margins and to build store loyalty.

Unsought, shopping and speciality products are categories of consumer products classified by how consumers buy them, not by who owns the brand.

Answer: C

The consumer behaviour model is the Howard Sheth model.

John Howard and Jagdish Sheth's model of buyer behaviour (1969) explains how buyers process inputs from the marketing and social environment, through perceptual and learning constructs, to reach purchase decisions. It is one of the classic comprehensive models of consumer behaviour.

The BCG matrix is a portfolio planning tool, Porter's five forces model analyses industry competition, and Argyris's model (immaturity-maturity) concerns personality and organisation, not consumer buying.