Consumer Behaviour and Marketing Strategy Questions and Answers

Answer: C

Patronage motive is related to emotion.

Buying motives are commonly split into product motives, the reasons for wanting a particular product, and patronage motives, the reasons for choosing a particular shop or seller. Patronage motives are in turn grouped as emotional (a favourite shop, habit, familiarity) and rational (price, range, after-sale service). Among the four words offered, only emotion is the name of a patronage-motive category.

'Cost' would belong to the rational side, and 'induce' and 'outcome' are not patronage-motive terms. Texts differ in how they list patronage motives, so the key's reading is the textbook one and not the only possible grouping.

Answer: B

The ratio is customer value (printed 'Customber Value').

Customer (perceived) value is the relationship between the benefits a customer expects from an offering and the costs, in money, time, energy and effort, incurred to obtain them. The higher the benefits relative to the costs, the greater the value.

Customer satisfaction is how far the actual performance meets expectations after purchase, retention is keeping customers over time, and loyalty is a commitment to rebuy; none is defined as a ratio of benefits to resources spent.

Answer: D

The statement that is NOT true is that consumer satisfaction is not different from consumer loyalty.

Satisfaction is a post-consumption judgement: a mild, positive emotional state that results from a cognitive appraisal of the consumption outcome. Options A, B and C describe it correctly.

Loyalty is a different construct, a deep commitment to rebuy a brand consistently. Satisfied customers may still switch, and loyalty involves repeat behaviour and attachment that satisfaction alone does not guarantee, so treating them as the same concept is wrong.

Answer: B

The main elements are (b), (c) and (d) only.

Once dealers are in place, a manufacturer keeps them motivated mainly through financial and relational means: attractive trade discounts or margins, special incentives such as bonuses and contests, and effective two-way communication and support.

The territory of operation is settled when a dealer is appointed and written into the dealership terms, so it is part of selection and appointment rather than the ongoing motivation that follows. That rules out every option containing (a).

Answer: A

The first-year customer lifetime value is CLV(1) = M*r / (1 + d).

With a constant margin m per period, a retention rate r and a discount rate d, the lifetime value is the sum of the discounted expected margins:

\[ CLV = \sum_{t=1}^{\infty} \frac{m\,r^{t}}{(1+d)^{t}} \]

The term for the first year is \(t = 1\), so \(CLV(1) = \frac{m\,r}{1+d}\): the margin, multiplied by the probability r that the customer is retained, discounted back one period. This is option A, where the paper prints the margin as a capital M.

B adds r to the margin where it should multiply it. C subtracts, and uses 1 - d, which would raise value as the discount rate rises. D has the right numerator but divides by (1 - d) instead of (1 + d), so it grows with the discount rate instead of shrinking.

Answer: B

This is a traffic building campaign.

In digital marketing texts, a traffic building campaign is the use of both online and offline promotion techniques, such as search, online advertising, e-mail, print and broadcast media, to increase the audience of a website.

Search engine optimisation improves a site's position in organic search results, search engine marketing promotes a site through search engines (paid and organic), and the quality score is a search advertising metric; these are online-only techniques or measures, not campaigns combining online and offline promotion.

Answer: A

This is viral marketing.

Viral marketing is the digital version of word of mouth: content is created so that consumers pass company-developed products, services or information on to others online, spreading the message from person to person like a virus.

Microsites are small, separate websites for a particular campaign, interstitials are ads that appear between web pages, and contextual placements are ads placed next to related content; none relies on consumers passing the message along.

Answer: D

Online marketing cannot be done through a physical market place.

Marketers create an electronic presence by building websites and placing ads online, by participating in forums, newsgroups and web communities, and by using web-casting and e-mail. All of these are channels on the internet.

A physical market place is, by definition, an offline channel, so it is the only option that is not a way of doing online marketing.

Answer: D

This is sales promotion.

Sales promotion consists of a diverse collection of incentive tools, mostly short term, such as coupons, samples, discounts, contests and trade allowances, designed to stimulate quicker or greater purchase of a product by consumers or the trade.

Advertising gives a reason to buy, while sales promotion gives an incentive to buy now. Personal selling uses face-to-face presentation, and publicity is unpaid media coverage.

Answer: C

The statement that marketing is a human activity directed at satisfying needs and wants through the exchange process is that of Philip Kotler. Cundiff and Still define marketing as the performance of business activities that direct the flow of goods to the consumer, and Kenneth Andrews is known for corporate strategy. So (C) is the key. The statement speaks of needs, wants and exchange, which are key terms in Kotler's definition.