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Test Bank CB 1st Canadian Edition

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Chapter 1: What Is CB and Why Should I Care?

TRUE/FALSE

1. An understanding of consumer behaviour can mean better business for companies, better public policy for governments, and a better life for individuals.

ANS: T PTS: 1 DIF: Easy REF: p. 4

OBJ: 01-1

2. While consumer behaviour refers to human thought and action, it is not considered a field of study.

ANS: F

Consumer behaviour can be defined from two different perspectives: (1) human thought and action and (2) a field of study that is developing an accumulated body of knowledge.

PTS: 1 DIF: Moderate REF: p. 4 OBJ: 01-1

3. Consumer behaviour can be thought of as the actions, reactions, and consequences that take place as the consumer goes through a decision-making process, reaches a decision, and then uses the product.

ANS: T PTS: 1 DIF: Easy REF: p. 4

OBJ: 01-1

4. Consumer behaviour is the set of value-seeking activities that take place as people go about addressing needs.

ANS: T PTS: 1 DIF: Easy REF: p. 4

OBJ: 01-1

5. The basic consumption process begins with the consumer recognizing that he or she wants something new.

ANS: F

Recognition of a need begins the consumption process. A want is simply a specific desire that spells out a way a consumer can go about addressing a recognized need.

PTS: 1 DIF: Hard REF: p. 5 OBJ: 01-1

6. The basic consumption process involves a consumer assessing the costs and benefits associated with a choice.

ANS: T PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-1

7. The final step in the consumption process is satisfaction.

ANS: F

The final step in the consumption process is value.

PTS: 1 DIF: Moderate REF: p. 5 OBJ: 01-1

8. An exchange is the acting out of a decision to give something up in return for something of equal value.

ANS: F

Something is given up in return for something of greater value.

PTS: 1 DIF: Hard REF: p. 5 OBJ: 01-1

9. Consumer behaviour represents the process by which goods, services, or ideas are used and transformed into value.

ANS: F

This is the definition of consumption, not consumer behaviour.

PTS: 1 DIF: Hard REF: p. 4-5 OBJ: 01-1

10. Costs involve more than just the price of the product.

ANS: T PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-1

11. Benefits are the only result of consumption.

ANS: F

Costs are also the result of consumption.

PTS: 1 DIF: Hard REF: p. 5 OBJ: 01-1

12. Consumer behaviour, as a field of study, is a very young field.

ANS: T PTS: 1 DIF: Hard REF: p. 6

OBJ: 01-1

13. Consumer behaviour has family roots in other disciplines such as economics, anthropology, and psychology.

ANS: T PTS: 1 DIF: Moderate REF: p. 6

OBJ: 01-1

14. Marketing’s roots in economics are evident in the production and distribution of goods.

ANS: T PTS: 1 DIF: Hard REF: p. 6

OBJ: 01-1

15. Psychology is the study of human reactions to their environment.

ANS: T PTS: 1 DIF: Easy REF: p. 7

OBJ: 01-1

16. The sub-disciplines of psychology that are highly relevant to consumer behaviour are social psychology and experimental psychology.

ANS: F

The sub-disciplines of psychology that are highly relevant to consumer behaviour are social psychology and cognitive psychology.

PTS: 1 DIF: Moderate REF: p. 7 OBJ: 01-1

17. Anthropology focuses on the thoughts, feelings, and behaviours that people have as they interact with other people.

ANS: F

Social psychology focuses on the thoughts, feelings, and behaviours that people have as they interact with other people.

PTS: 1 DIF: Moderate REF: p. 7 OBJ: 01-1

18. Cognitive psychology is helpful in understanding how consumers process information from marketing communications such as advertisements.

ANS: T PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-1

19. Marketing activities include the production, promotion, pricing, and distribution of goods, services, ideas, and experiences that provide value for consumers and other stakeholders.

ANS: T PTS: 1 DIF: Easy REF: p. 7

OBJ: 01-1

20. Consumer behaviour focuses primarily on the study of groups of people within a society.

ANS: F

Sociology focuses on the study of groups of people within a society. Consumer behaviour studies consumers as they go about the consumption process and encompasses knowledge from sociology as well as several other disciplines.

PTS: 1 DIF: Hard REF: p. 8 OBJ: 01-1

21. Anthropology has contributed to consumer behaviour research by allowing researchers to interpret the relationships between consumers and the things they purchase, the products they own, and the activities in which they participate.

ANS: T PTS: 1 DIF: Moderate REF: p. 8

OBJ: 01-1

22. A highly competitive marketplace in which consumers have many alternatives is more likely to result in better customer service than a marketplace with little competition.

ANS: T PTS: 1 DIF: Easy REF: p. 9

OBJ: 01-2

23. A market-oriented firm stresses the importance of creating value for customers among all employees.

ANS: T PTS: 1 DIF: Easy REF: p. 9

OBJ: 01-2

24. Relationship marketing is based on the belief that firm performance is enhanced through repeat business.

ANS: T PTS: 1 DIF: Easy REF: p. 10

OBJ: 01-2

25. Interaction points refer to direct contacts between the firm and a customer.

ANS: F

Touchpoints refer to direct contacts between the firm and a customer.

PTS: 1 DIF: Moderate REF: p. 10 OBJ: 01-2

26. One theory explaining why companies succeed or fail is attribution theory.

ANS: F

Resource-advantage theory is a theory explaining why companies succeed or fail and describes how the firm goes about obtaining resources from consumers in return for the value the resources create.

PTS: 1 DIF: Hard REF: p. 11 OBJ: 01-3

27. Benefits are the physical parts of a product.

ANS: F

Attributes are the physical parts of a product.

PTS: 1 DIF: Moderate REF: p. 11 OBJ: 01-3

28. A product is a potentially valuable bundle of benefits.

ANS: T PTS: 1 DIF: Moderate REF: p. 11

OBJ: 01-3

29. Undifferentiated marketing means that the same basic product is offered to all customers.

ANS: T PTS: 1 DIF: Easy REF: p. 12

OBJ: 01-3

30. Undifferentiated marketers generally adopt a market orientation.

ANS: F

Undifferentiated marketers generally adopt a product orientation.

PTS: 1 DIF: Moderate REF: p. 12 OBJ: 01-3

31. A market orientation means innovation is geared primarily toward making the production process as efficient and economic as possible.

ANS: F

This is a product orientation.

PTS: 1 DIF: Moderate REF: p. 12 OBJ: 01-3

32. Differentiated marketing can be taken to the extreme with a practice known as one-to-one marketing.

ANS: T PTS: 1 DIF: Easy REF: p. 13

OBJ: 01-3

33. Niche marketers specialize in serving one market segment.

ANS: T PTS: 1 DIF: Easy REF: p. 13

OBJ: 01-3

34. There are several approaches to studying consumer behaviour, but most researchers agree that the interpretive approach is the best.

ANS: F

Consumer researchers have many tools and approaches with which to study consumer behaviour, and researchers don’t always agree on which approach is the best.

PTS: 1 DIF: Hard REF: p. 15 OBJ: 01-4

35. Interpretive research seeks to explain the inner meanings and motivations associated with specific consumption experiences.

ANS: T PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-4

36. Quantitative research tools include things such as case analyses, clinical interviews, focus group interviews, and other tools in which data are gathered in a relatively unstructured way.

ANS: F

These are qualitative research tools.

PTS: 1 DIF: Moderate REF: p. 16 OBJ: 01-4

37. Data generated from qualitative research are considered “researcher-dependent.”

ANS: T PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-4

38. The roots of interpretive consumer research go back over 150 years to the earliest days of consumer research.

ANS: F

The roots of interpretive research go back over 50 years.

PTS: 1 DIF: Hard REF: p. 16 OBJ: 01-4

39. The motivational research era in consumer research proved to be very useful in providing satisfying explanations for consumer behaviour on a large scale.

ANS: F

The motivational research era proved disappointing in providing satisfying explanations of consumer behaviour on a large scale.

PTS: 1 DIF: Moderate REF: p. 16 OBJ: 01-4

40. Two common interpretative orientations are psychology and sociology.

ANS: F

Two common interpretative orientations are phenomenology and ethnography.

PTS: 1 DIF: Hard REF: p. 16 OBJ: 01-4

41. The phenomenological researcher relies on highly structured, formal interviews with consumers.

ANS: F

The phenomenological research relies on casual interviews.

PTS: 1 DIF: Moderate REF: p. 16 OBJ: 01-4

42. An ethnographic approach to studying consumers often involves analyzing the artifacts associated with consumption.

ANS: T PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-4

43. A researcher measuring consumers’ attitudes toward different brands on a scale ranging from 1 (very negative) to 5 (very positive) is using qualitative research.

ANS: F

Quantitative research uses numerical measurement and analysis tools.

PTS: 1 DIF: Hard REF: p. 17 OBJ: 01-4

44. Interpretation of quantitative research data is a function of the researcher’s opinion.

ANS: F

Unlike qualitative data, quantitative data are not researcher dependent; that is, the interpretation of the data is not a matter of opinion.

PTS: 1 DIF: Moderate REF: p. 17 OBJ: 01-4

45. Qualitative research better enables researchers to test hypotheses as compared to quantitative research.

ANS: F

Quantitative research better enables researchers to test hypotheses as compared to qualitative research.

PTS: 1 DIF: Moderate REF: p. 17 OBJ: 01-4

46. Trends shaping the value received by consumers include internationalization, technological changes, changing communications, changing demographics, and the changing economy.

ANS: T PTS: 1 DIF: Moderate REF: p. 18-20

OBJ: 01-5

47. Companies must deal only with geographical distances when operating in different countries.

ANS: F

Companies must deal with cultural distances as well.

PTS: 1 DIF: Moderate REF: p. 18 OBJ: 01-5

48. The Internet has made geographical distance almost a non-issue.

ANS: T PTS: 1 DIF: Easy REF: p. 19

OBJ: 01-5

49. One demographic trend impacting marketers is that households increasingly include two primary income providers.

ANS: T PTS: 1 DIF: Easy REF: p. 19

OBJ: 01-5

50. One demographic trend shaping consumer behaviour is the decreasing birth rates in the U.S. and Europe.

ANS: T PTS: 1 DIF: Moderate REF: p. 20

OBJ: 01-5

51. There is a standard definition for ethical behaviour in Canada.

ANS: F

People do not agree on exactly what behaviours should and should not be considered ethical.

PTS: 1 DIF: Easy REF: p. 5 OBJ: 01-1

52. Marketing ethics consist of societal and professional standards of right and fair practices that are expected of managers as they develop and implement marketing strategies

ANS: T PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-1

MULTIPLE CHOICE

1. What are the two perspectives from which consumer behaviour can be defined?

primary and secondary

human thought & behaviour and as a field of study

social and psychological

based on needs and based on wants

ANS: B PTS: 1 DIF: Easy REF: p. 4

OBJ: 01-2 BLM: Remember

2. A market researcher focuses on the psychological process, including the thoughts, feelings, and behaviour people experience once they realize they have an unmet need. What set of value-seeking activities is the researcher examining?

marketing

consumer behaviour

cognitive psychology

consumption

ANS: B PTS: 1 DIF: Moderate REF: p. 4

OBJ: 01-2 BLM: Higher Order

3. Poppy has decided that she should buy a car to get to her new job on the opposite side of town. In terms of the basic consumption process, what is this first step referred to as?

cost and benefit analysis

value assessment

want specification

need realization

ANS: D PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-2 BLM: Higher Order

4. What is the last step in the basic consumption process?

exchange

value

reaction

costs and benefits

ANS: B PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-2 BLM: Remember

5. Renee is going to a formal dance next month and goes shopping for a full-length gown. What does the gown exemplify in the basic consumption process?

need

want

reaction

satisfier

ANS: B PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-2 BLM: Higher Order

6. What is the term for the decision to give something up in return for something of greater value?

exchange

marketing

consumption

consumer behaviour

ANS: A PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-2 BLM: Remember

7. Customers pay money for products they believe will satisfy their needs and wants. What is the term for this transfer of money for goods or services?

benefit gratification

consumption

transformational marketing

exchange

ANS: D PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-2 BLM: Higher Order

8. What is the term for the negative results of consumption?

wants

reactions

costs

consequences

ANS: C PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-2 BLM: Remember

9. Dana and John are expecting their first child and are purchasing furniture for the nursery. They are searching the Internet, reading parents’ magazines and paying attention to the advertisements, and visiting many stores because they want to purchase the best quality furniture that fits their budget. In relation to the consumption process, what is the term for the effort they are expending to ensure they make the right decision?

a cost

a reaction

a value outcome

a benefit

ANS: A PTS: 1 DIF: Hard REF: p. 5

OBJ: 01-2 BLM: Higher Order

10. Henry buys a new laptop because of the numerous features and upgrades that are offered from this newer model. What are these features referred to in terms of the consumption process?

costs

benefits

enhancers

satisfiers

ANS: B PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-2 BLM: Higher Order

11. Apple sold more than 7 million iPads within months of launching the product. Prices for this product ranged from $499 to more than $800, and Apple had difficulty keeping up with the demand. Why were so many iPads sold?

satisfaction outweighed demand

need was greater than want

consumption exceeded the need

benefits were greater than costs

ANS: D PTS: 1 DIF: Hard REF: p. 5

OBJ: 01-2 BLM: Higher Order

12. What is the process by which goods, services, or ideas are used and transformed into value?

value transfer

cost conversion

benefits conversion

consumption

ANS: D PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-2 BLM: Remember

13. When consumers recognize they have an unmet need, they usually seek out specific products or services that they believe will satisfy that need and provide value to them. They are willing to give up something, such as money and effort, to find the products or services that will provide the benefits they seek. What is the term for this process that consumers go through to satisfy their needs?

marketing

consumption

exchange

purchase

ANS: B PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-2 BLM: Higher Order

14. A description for a marketing course in a university course catalogue states, “This course represents the study of consumers as they go about the consumption process.” What is the name of this course?

Consumer Marketing

Value-based Marketing

Consumption Marketing

Consumer Behaviour

ANS: D PTS: 1 DIF: Moderate REF: p. 6

OBJ: 01-2 BLM: Remember

15. Which of the following is NOT a discipline in which consumer behaviour has roots?

economics

accounting

anthropology

social psychology

ANS: B PTS: 1 DIF: Hard REF: p. 6

OBJ: 01-2 BLM: Higher Order

16. William has been researching production and consumption patterns in China for his employer. His work estimating demand for consumer products is part of which discipline?

marketing

psychology

economics

anthropology

ANS: C PTS: 1 DIF: Moderate REF: p. 6

OBJ: 01-2 BLM: Higher Order

17. Juan is majoring in a discipline that examines the production and consumption of goods and services. What is Juan’s major?

economics

accounting

anthropology

production management

ANS: A PTS: 1 DIF: Moderate REF: p. 6

OBJ: 01-2 BLM: Remember

18. Which discipline studies people’s reactions to their environment?

economics

psychology

anthropology

sociology

ANS: B PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-2 BLM: Remember

19. Marian is trying to decide on a major, so she takes an aptitude test offered by the career services office at her school. The results indicate that she is interested in understanding how people react to their environment and is concerned with their thoughts, feelings, and behaviours. Which discipline should Marian pursue?

economics

anthropology

psychology

biology

ANS: C PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-2 BLM: Higher Order

20. What is the area of focus for social psychologists?

the intricacies of mental reactions involved in information processing

the value-producing activities that facilitate exchanges between buyers and sellers

the relationships between people and their possessions

the thoughts, feelings. and behaviours that people have as they interact with other people

ANS: D PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-2 BLM: Remember

21. John is a psychologist who analyzes the thoughts, feelings, and behaviours that people have as they interact with other people in groups. What type of psychologist is John?

qualitative psychologist

group psychologist

cognitive psychologist

social psychologist

ANS: D PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-2 BLM: Higher Order

22. Melanie is a psychologist who studies consumer behaviour. She specializes in the mental reactions involved in consumer information processing, such as how advertisements persuade consumers to buy a product. Which field of psychology is Melanie practising?

qualitative psychology

personal psychology

cognitive psychology

social psychology

ANS: C PTS: 1 DIF: Hard REF: p. 7

OBJ: 01-2 BLM: Higher Order

23. Which area involves the multitude of value-producing activities that facilitate exchanges between buyers and sellers?

consumer behaviour

marketing

psychology

economics

ANS: B PTS: 1 DIF: Moderate REF: p. 7

OBJ: 01-2 BLM: Remember

24. Marketing as a recognized discipline grew out of two other disciplines. What are the two disciplines?

economics and psychology

psychology and anthropology

psychology and sociology

sociology and economics

ANS: A PTS: 1 DIF: Hard REF: p. 8

OBJ: 01-2 BLM: Remember

25. Which discipline should you study to learn about how groups of people interact within society?

economics

sociology

anthropology

cognitive psychology

ANS: B PTS: 1 DIF: Moderate REF: p. 8

OBJ: 01-2 BLM: Remember

26. Which discipline has contributed to consumer behaviour research by allowing researchers to interpret the relationships between consumers and the things they purchase, the products they own, and the activities in which they participate?

economics

sociology

anthropology

cognitive psychology

ANS: C PTS: 1 DIF: Moderate REF: p. 8

OBJ: 01-2 BLM: Remember

27. Two factors should be considered when trying to understand how important serving customers well should be to any given organization. The first factor is the competitiveness of the marketing environment. What is the second factor?

price charged for the product or service

income level of customers

social impact

dependency of the marketer on repeat business

ANS: D PTS: 1 DIF: Moderate REF: p. 8

OBJ: 01-3 BLM: Remember

28. Kim moved from one house in a neighbourhood to another house in a nearby neighbourhood. She called her trash collection company to inform them of her address change and was dismayed to learn that her trash collection bill would be $10 a month higher than it was at her previous residence even though it is the same company. She commented on this and was told by the company that was the price and she could deal with removing her own trash if she didn’t like the price hike. Kim had to pay the higher price because there was no other company allowed to service this neighbourhood. Which of the following explains why Kim was treated so poorly by this company?

the trash company was dependent on her repeat business

no other competitors are providing this service

trash disposal is a regulated service

the company really doesn’t need her business

ANS: B PTS: 1 DIF: Easy REF: p. 8

OBJ: 01-3 BLM: Higher Order

29. Due to the competitive nature of the restaurant industry, Harry’s Town Pub has implemented a new employee training program that prioritizes providing high-quality customer service and focusing on patron satisfaction. Which type of orientation is Harry’s focusing on?

sales orientation

employee orientation

consumer orientation

inward orientation

ANS: C PTS: 1 DIF: Easy REF: p. 9

OBJ: 01-3 BLM: Higher Order

30. The Ritz-Carlton Hotel has a culture that embodies the importance of creating value for guests among all employees. One way this is implemented is by giving the front desk employees the authority to correct a problem presented by a guest without having to have approval from a manager. Which type of orientation does this company embrace?

market orientation

product orientation

sales orientation

outward orientation

ANS: A PTS: 1 DIF: Moderate REF: p. 9

OBJ: 01-3 BLM: Higher Order

31. Which type of marketing is based on the belief that a firm’s performance is enhanced through repeat business?

acquisition marketing

outward marketing

repetition marketing

relationship marketing

ANS: D PTS: 1 DIF: Easy REF: p. 10

OBJ: 01-3 BLM: Remember

32. What is the term for direct contacts between the firm and a customer?

touchpoints

intersections

interaction points

counterpoints

ANS: A PTS: 1 DIF: Moderate REF: p. 10

OBJ: 01-3 BLM: Remember

33. Which of the following is NOT an example of a touchpoint?

a consumer placing an order over the telephone

a customer asking an attendant for directions at an amusement park

a consumer replying to a request sent in an email by a company

a consumer watching a television commercial

ANS: D PTS: 1 DIF: Moderate REF: p. 10

OBJ: 01-3 BLM: Higher Order

34. According to the textbook, what is the ultimate hallmark of success for a business?

maximum profits

maximum sales

long-term survival

short-term sales

ANS: C PTS: 1 DIF: Easy REF: p. 10

OBJ: 01-4 BLM: Remember

35. Which theory has “obtaining resources from consumers in return for the value they create” as a basic tenet for explaining why companies succeed or fail?

attribution theory

resource-advantage theory

the theory of reasoned action

resource-elaboration theory

ANS: B PTS: 1 DIF: Hard REF: p. 11

OBJ: 01-4 BLM: Remember

36. What is the term for the physical parts of a product?

benefits

elements

attributes

components

ANS: C PTS: 1 DIF: Moderate REF: p. 11

OBJ: 01-4 BLM: Higher Order

37. Which of the following is NOT an example of a product attribute?

quality

satisfaction

styling

safety

ANS: B PTS: 1 DIF: Hard REF: p. 11

OBJ: 01-4 BLM: Higher Order

38. What is the definition of a product?

a potentially valuable bundle of benefits

a physical good offered to satisfy a need

an item offering perceived value to a target market

a resource allocated toward satisfying a felt need

ANS: A PTS: 1 DIF: Moderate REF: p. 11

OBJ: 01-4 BLM: Remember

39. Which business orientation offers the same basic product to all customers?

undifferentiated marketing

differentiated marketing

niche marketing

product marketing

ANS: A PTS: 1 DIF: Easy REF: p. 12

OBJ: 01-4 BLM: Remember

40. Walmart’s supply chain is as efficient and as economic as possible, which allows it to offer lower prices than competing retailers. With only a few exceptions, Walmart offers the same basic products in all of its stores, even worldwide. What orientation does this illustrate?

market orientation

customer orientation

production orientation

undifferentiated orientation

ANS: C PTS: 1 DIF: Hard REF: p. 12

OBJ: 01-4 BLM: Higher Order

41. Which of the following is practised by a company that embraces differentiated marketing?

adopting innovative production processes to gain efficiency and economies of scale

specializing in serving one market segment with particularly unique demand characteristics

focusing marketing efforts on the largest market segment

serving multiple market segments each with a unique product offering

ANS: D PTS: 1 DIF: Moderate REF: p. 13

OBJ: 01-4 BLM: Remember

42. Procter & Gamble sells six different brands of laundry detergent, each with a unique offering for different market segments. Which business orientation does this illustrate?

undifferentiated marketing

differentiated marketing

niche marketing

multiple marketing

ANS: B PTS: 1 DIF: Moderate REF: p. 13

OBJ: 01-4 BLM: Higher Order

43. Some marketers offer each individual customer a different product, so each customer is essentially treated as a segment of one. Which way of doing business does this represent?

personalized marketing

customer-based marketing

one-to-one marketing

niche marketing

ANS: C PTS: 1 DIF: Moderate REF: p. 13

OBJ: 01-4 BLM: Remember

44. Lane Bryant is a women’s clothing store specializing in stylish clothing and flattering fits for plus-sized women. Which business orientation best describes Lane Bryant’s approach?

niche marketing

one-to-one marketing

mass marketing

product marketing

ANS: A PTS: 1 DIF: Moderate REF: p. 13

OBJ: 01-4 BLM: Higher Order

45. When consumers study consumer behaviour, they should come to make better decisions. Which of the following topics can be helpful in enlightening consumers?

the idea that there are consequences associated with poor budget allocation

the lack of emotions in consumer decision making

the absence of social influences

the effect of technology on the production process

ANS: A PTS: 1 DIF: Moderate REF: p. 15

OBJ: 01-4 BLM: Remember

46. In which research approach to understanding consumers do researchers derive meaning from talking to people and observing behaviour rather than analyzing data?

interpretive research

quantitative research

concentric research

depth research

ANS: A PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Remember

47. Kayla is engaged in research that seeks to explain the inner meanings and motivations associated with purchasing clothing. She records and analyzes the words that consumers use to describe events and observes shoppers in stores. From that, she develops an understanding of what motivates shoppers. What type of research is Kayla performing?

quantitative research

interpretive research

sociological research

independent research

ANS: B PTS: 1 DIF: Hard REF: p. 16

OBJ: 01-5 BLM: Higher Order

48. What does it mean when research results are “researcher dependent”?

it means the design of the research is a function of the researcher’s skills and training

it means an unstructured research design was used and the results cannot be replicated by other researchers

it means that the results are significant only if the researcher validates them

it means the interpretation of the results is a matter of the researcher’s opinion until corroborate by other findings

ANS: D PTS: 1 DIF: Hard REF: p. 16

OBJ: 01-5 BLM: Remember

49. Which type of research includes tools such as case analyses, clinical interviews, focus group interviews, and other tools in which data are gathered in a relatively unstructured way?

quantitative research

qualitative research

preliminary research

secondary research

ANS: B PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Remember

50. Which of the following represents a pair of common interpretive research orientations?

regression and cluster analysis

phenomenology and ethnography

primary and secondary

qualitative and quantitative

ANS: B PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Remember

51. Which field of study represents the study of consumption as a “lived experience” and relies on casual interviews with consumers from whom the researcher has won confidence and trust?

touchpoint analysis

psychology

sociology

phenomenology

ANS: D PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Remember

52. Which field of study has roots in anthropology and often involves analyzing the artifacts associated with consumption?

sociology

phenomenology

ethnography

conjoint analysis

ANS: C PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Remember

53. Clark is a student who has been hired by a consumer research firm to help a pizza restaurant learn more about the student market. Part of his job entails hanging out with other students and observing how they decide when to order pizza, which pizza restaurants they order from, how they eat it, and what they do with the leftovers, if any. Clark learned from his observations that some students like to put French dressing on their pizza, which led the pizza restaurant to advertise and offer the dressing with orders. Which interpretive orientation does this best illustrate?

ethnography

quantitative research

sociology

grounded theory

ANS: A PTS: 1 DIF: Hard REF: p. 16

OBJ: 01-5 BLM: Higher Order

54. Which type of research addresses questions about consumer behaviour using numerical measurement and analysis tools?

quantitative

qualitative

interpretive

final

ANS: A PTS: 1 DIF: Easy REF: p. 17

OBJ: 01-5 BLM: Remember

55. A consumer research study analyzes the factors predicting a consumer’s likelihood to purchase a 3-D television, such as age, income, and stage of family life cycle. Data were collected from 3,000 consumers using a structured questionnaire. Which type of research does this represent?

qualitative

interpretive

quantitative

focused

ANS: C PTS: 1 DIF: Hard REF: p. 17

OBJ: 01-5 BLM: Higher Order

56. What is the difference between qualitative and quantitative research?

Qualitative research is used for hypothesis testing, and quantitative research is used only for descriptive analyses.

Quantitative research is longitudinal, and qualitative research is cross-sectional.

Qualitative research is researcher dependent, and quantitative research is not.

Quantitative research results in primary data, and qualitative research results in secondary data.

ANS: C PTS: 1 DIF: Hard REF: p. 17

OBJ: 01-5 BLM: Higher Order

57. Which statement is NOT true regarding quantitative research?

common purpose is to test hypotheses or specific research questions

structured response categories provided

samples are typically large to produce generalizable results

results are subjective

ANS: D PTS: 1 DIF: Hard REF: p. 17

OBJ: 01-5 BLM: Higher Order

58. Which of the following is NOT a trend shaping the value received by consumers today?

internationalization

technological changes

market compression

changing demographics

ANS: C PTS: 1 DIF: Hard REF: p. 18

OBJ: 01-6 BLM: Remember

59. Which of the following is a demographic trend shaping consumer behaviour patterns?

increasing family size

increasing number of households with two primary income providers

increasing birthrates in the U.S. and Europe

decreasing levels of consumer affluence in the U.S.

ANS: B PTS: 1 DIF: Hard REF: p. 19

OBJ: 01-6 BLM: Remember

60. Which aspect of the changing economy likely has the most impact on consumer spending?

high interest rates

high tax rates

high prices

high unemployment rate

ANS: D PTS: 1 DIF: Hard REF: p. 20

OBJ: 01-6 BLM: Higher Order

RESTAURANT RESEARCH SCENARIO

Insight Research, a marketing research company, has been hired by a national chain of family restaurants to help them better understand their customers and how to serve them better. The restaurant chain has several competitors competing for the same type of customers and has experienced sales declines in the past few years. Researchers go “under cover” and pretend to be customers so that they will fit in while they observe the interactions between customers and the wait staff. Then they write a report of their interpretations of what they experienced personally while pretending to be a customer as well as what they saw regarding interactions of other customers with each other and with the employees of the restaurant. Some example conclusions drawn were that the employees were not especially attentive to the customers and that customers were overheard as saying they didn’t intend to come back. Some researchers also noted that the food was not very good, and they saw several customers send orders back.

61. Refer to Restaurant Research Scenario. What is the best reason why this restaurant chain should be concerned about customer satisfaction?

because all restaurants should be concerned about customer satisfaction

because the marketplace is competitive and the restaurant is dependent on repeat business

because serving customers well is just the right thing to do

because other restaurants in the marketplace are offering price discounts and delivering superior customer satisfaction

ANS: B PTS: 1 DIF: Hard REF: p. 8

OBJ: 01-3 BLM: Higher Order

62. Refer to Restaurant Research Scenario. When customers interact with the wait staff, what are these interactions called?

moments of truth

interactions

process nodes

touchpoints

ANS: D PTS: 1 DIF: Moderate REF: p. 10

OBJ: 01-3 BLM: Higher Order

63. Refer to Restaurant Research Scenario. Which of the following can be a criticism of the research approach used by Insight Research?

not providing useful information to the restaurant

results are objective

data are researcher dependent

interpretive research is not an acceptable approach for understanding consumer behaviour

ANS: C PTS: 1 DIF: Hard REF: p. 16

OBJ: 01-5 BLM: Higher Order

64. Refer to Restaurant Research Scenario. Which research approach is Insight Research using to better understand this restaurant’s customers?

quantitative

secondary

focused

qualitative

ANS: D PTS: 1 DIF: Moderate REF: p. 16

OBJ: 01-5 BLM: Higher Order

65. Refer to Restaurant Research Scenario. Which demographic trend discussed in Chapter 1 should result in the restaurant experiencing an increase, not a decrease, in sales?

rise in households with a stay-at-home mom

rise in households with two primary income providers

decreasing birth rates

advances in technology

ANS: B PTS: 1 DIF: Moderate REF: p. 19

OBJ: 01-6 BLM: Higher Order

66. What is the term for the standards or moral codes of conduct to which a person, group, or organization adheres?

value perceptions

market integrity

ethics

product principles

ANS: C PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-1 BLM: Remember

67. A marketing company decides to run an ad that incorrectly states that a product is much better than that of its competitors. What is this an example of?

increased value perception

a fair value exchange

good advertising

unethical behaviour

ANS: D PTS: 1 DIF: Easy REF: p. 5

OBJ: 01-1 BLM: Higher Order

68. What occurs when companies act with integrity?

their sales decrease

consumers take advantage of them

a fair value of exchange takes place

the price of their product increases

ANS: C PTS: 1 DIF: Easy REF: p. 4

OBJ: 01-1 BLM: Higher Order

69. How are consumers affected when companies act in an unethical manner?

their value perceptions increase

they are led to expect more than is delivered

the value equation is positive in their favour

they receive complete disclosure

ANS: B PTS: 1 DIF: Moderate REF: p. 5

OBJ: 01-1 BLM: Remember

70. Why is it very detrimental for companies in today’s world to “misbehave” or act unethically?

the marketplace for most products is very uncompetitive as consumers are very loyal to certain brands

consumers have limited choice for products and services as there are usually only a few major providers

disgruntled customers may stop buying but have no real influence over others in purchasing decisions

in the modern economy consumers have a great deal of power and play a large role in whether a company will succeed

ANS: D PTS: 1 DIF: Moderate REF: p. 6

OBJ: 01-1 BLM: Higher Order

ESSAY

1. Compare and contrast the concepts consumption and consumer behaviour.

ANS:

Consumer behaviour can be defined from two different perspectives. This is because the term refers to both:

(1) Human thought and action, and

(2) A field of study (human inquiry) that is developing an accumulated body of knowledge.

First, consumer behaviour is the set of value-seeking activities that take place as people go about addressing realized needs. Consumption represents the process by which goods, services, or ideas are used and transformed into value.

Consumer behaviour as a field of study represents the study of consumers as they go about the consumption process.

PTS: 1 DIF: Moderate REF: p. 4-5 OBJ: 01-2

2. Discuss the relevant contributions of one other discipline to the study of consumer behaviour.

ANS:

Consumer behaviour has roots in several other disciplines, such as economics, psychology (social psychology and cognitive psychology), marketing, sociology, and anthropology. Students can discuss any one of these.

Economics — the study of production and consumption. Marketing has its origins in economics, particularly with respect to the production and distribution of goods. By definition, economics also involves consumption. However, the economist’s focus on consumer behaviour is generally a broad, or macro, perspective, not individual consumers. Consumer behaviour researchers generally study consumer behaviour at a more micro level, often focusing on individual consumer behaviour.

Psychology — the study of humans’ reactions to their environment including behaviour and mental processes. Social psychology (group behaviour) and cognitive psychology (mental reactions), in particular, are highly relevant to consumer behaviour. Consumer behaviour most often takes place in some type of social setting; thus, social psychology and consumer behaviour overlap significantly. Every time a consumer evaluates a product, sees an advertisement, or reacts to product consumption, information is processed. Thus, cognitive psychology is also very relevant to consumer behaviour.

Marketing — involves the multitude of value-producing seller activities that facilitate exchanges between buyers and sellers. Consumer behaviour and marketing are very closely related. Exchange is ultimately involved in marketing and is central to consumer behaviour too. Marketing actions are targeted at and affect consumers while consumer actions affect marketers.

Sociology — focuses on the study of groups of people within a society. This has relevance for consumer behaviour because consumption often takes place within group settings or is in one way or another affected by group behaviour.

Anthropology — has contributed to consumer behaviour research by allowing researchers to interpret the relationships between consumers and the things they purchase, the products they own, and the activities in which they participate.

PTS: 1 DIF: Moderate REF: p. 6-8 OBJ: 01-2

3. Explain why consumers get treated differently in different types of exchange environments. Give an example of a situation where you were treated poorly by a business and explain why you might have been treated that way.

ANS:

Two questions help explain how important serving customers well should be to any given organization:

(1) How competitive is the marketing environment?

(2) How dependent is the marketer on repeat business?

A business operating in a market with little or no competition and a captive audience can still survive no matter how poor the service because they know consumers will return to do more business if that is the only option available (e.g., driver’s licence bureau). On the other hand, a business operating in a highly competitive marketplace in which consumers have many alternatives practically ensures good customer service.

Students’ examples will vary, but they should include a discussion of one or both questions above in their explanation.

PTS: 1 DIF: Moderate REF: p. 8-9 OBJ: 01-3

4. Explain the role of consumer behaviour in business and society.

ANS:

Consumer behaviour (CB) is important in at least three ways:

(1) CB as an input to business/marketing strategy.

(2) CB as a force that shapes society.

(3) CB as an input to making responsible decisions as a consumer.

Consumer behaviour influences the way a company will do business. Undifferentiated marketing means that the same basic product is offered to all customers. Differentiated marketers serve multiple market segments each with a unique product offering. Niche marketing is practised by firms that specialize in serving one market segment with particularly unique demand characteristics. Understanding customers and potential customers guides marketers to the appropriate way of doing business for a given situation.

The things that people buy and consume end up determining the type of society in which we live. Things like customs, manners, and rituals all involve consumption-value producing activities. Therefore, our collective choices as consumers shape the societies in which we live.

Finally, when consumers study consumer behaviour, they should come to make better decisions. Several topics can be particularly helpful in enlightening consumers including:

(1) Consequences associated with poor budget allocation.

(2) The role of emotions in consumer decision making.

(3) Avenues for seeking redress for unsatisfactory purchases.

(4) Social influences on decision making, including peer pressure.

(5) The effect of the environment on consumer behaviour.

PTS: 1 DIF: Hard REF: p. 10-15 OBJ: 01-4

5. Apple wants to learn how consumers use its blockbuster product, the iPad. Suggest an appropriate research approach and describe how it can be implemented.

ANS:

Students’ responses will vary. Either a qualitative or a quantitative approach is appropriate.

Qualitative research tools include things such as case analyses, clinical interviews, focus group interviews, and other tools in which data are gathered in a relatively unstructured way. Data of this type require that the researcher interpret their meaning. Therefore, the data are considered “researcher-dependent.” Interpretive research, which seeks to explain the inner meanings and motivations associated with specific consumption experiences, falls into the category of qualitative research. Two common interpretive orientations are phenomenology and ethnography. Students’ examples will vary, but if they describe this research approach, they should describe one that is unstructured and does not rely on numerical answers.

Quantitative research addresses questions about consumer behaviour using numerical measurement and analysis tools. The measurement is usually structured, meaning that the consumer will simply choose a response from among alternatives supplied by the researcher. Unlike qualitative research, the data are not researcher dependent. This type of research better enables researchers to test hypotheses as compared to interpretive research. Quantitative research is more likely to stand on its own and not require deep interpretation. Students’ examples will vary, but if they suggest this research approach, they should describe activities such as using questionnaires to gather numerical answers and statistical analyses.

PTS: 1 DIF: Hard REF: p. 16-17 OBJ: 01-5

6. Briefly discuss three recent trends shaping consumer behaviour.

ANS:

Five trends shaping the value received by consumers today are discussed in the chapter: (1) internationalization, (2) technological changes, (3) changing communications, (4) changing demographics, (5) changing economy. Students can discuss any three.

Internationalization — While businesses are expanding worldwide, companies must deal not only with geographical distances, but with cultural distances as well. Although chains, such as Starbucks, can be found worldwide, consumers are not alike everywhere these firms operate.

Technology — The Internet has made geographical distance almost a non-issue, consumers can shop on their own schedule, and communication technology has also advanced tremendously.

Communications — Technology is changing how consumers communicate with each other. Electronic communications are replacing face-to-face communications, with older consumers embracing email and younger ones relying on social media.

Demographics — In most of the Western world, notable demographic trends have shaped consumer behaviour patterns greatly. First, households increasingly include two primary income providers. Second, family size is decreasing throughout Canada, the U.S., and Europe. China and India offer opportunities due to their large populations.

Economy — High unemployment rates and financial market turmoil have led consumers to be more cautious and react favourably to price-cutting policies. Consumers perceive lower discretionary income.

PTS: 1 DIF: Moderate REF: p. 17-20 OBJ: 01-6

7. In addition to the demographic trends discussed in Chapter 1, discuss one other demographic trend in the Western world and how that trend will influence consumer behaviour.

ANS:

The chapter discusses two demographic trends: households with two primary income providers and declining birth rates. Other trends students might discuss are:

(1) aging population — a large percentage of the Canadian population, “baby boomers,” retiring will increase demand for financial services, leisure products, and health care.

(2) increasing immigration — it is predicted that by 2017 more than one in five people in Canada will have been born in another country.

These are just suggestions of what students might discuss. Specific answers to this question are not found in this chapter.

PTS: 1 DIF: Hard REF: p. 19 OBJ: 01-6

8. Briefly describe the overarching ethical principles as set out by the Canadian Marketing Association.

ANS:

Overarching Ethical Principles

Personal Information Practices

Marketers must promote responsible and transparent personal information management practices in a manner consistent with the provisions of the Personal Information Protection and Electronic Documents Act (Canada) and/or applicable provincial legislation and the 10 privacy principles detailed in Section J of this Code.

Truthfulness

Marketing communications must be clear and truthful. Marketers must not knowingly make a representation to a consumer or business that is false or misleading.

Campaign Limitations

Marketers must not participate in any campaign involving the disparagement or exploitation of any person or group on the grounds of race, colour, ethnicity, religion, national origin, gender, sexual orientation, marital status or age.

Marketers must not participate in the dissemination of unsolicited material that is sexually explicit, vulgar or indecent in nature, except where required to do so by law, such as a common carrier.

Marketers must not participate in the dissemination of any material that unduly, gratuitously and without merit exploits sex, horror, mutilation, torture, cruelty, violence or hate, except where required to do so by law, such as a common carrier.

Marketers must not knowingly exploit the credulity, lack of knowledge or inexperience of any consumer, taking particular care when dealing with vulnerable consumers. The term “vulnerable consumer” includes, but is not limited to children, teenagers, people with disabilities, the elderly and those for whom English or French is not their first language.

PTS: 1 DIF: Moderate REF: p. 5 OBJ: 01-1

#Test Bank CB 1st Canadian Edition

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Test Bank CB 1st Canadian Edition Solution

For Order This and any Other Test

Bank And solutions Manuals,Course,

Assignments,Discussions,Quizzes,Exams

CHAPTER 1

WHAT IS CB, AND WHY SHOULD I CARE?

WHAT DO YOU THINK? POLLING QUESTION

In any business, the customer is truly the most important person.

Strongly disagree 1

Strongly agree

Have students access www.icancb.com to answer the polling questions for each chapter of CB. Ask them to take the online poll to see how their answers compare with those of other students taking consumer behaviour courses across the country. Then turn to the last page of the chapter to find the What Others Have Thought box feature. This graph is a snapshot of how other consumer behaviour students have answered this polling question thus far.

LEARNING OUTCOMES

After studying this chapter, the student should be able to:

LO1 Understand marketing ethics and consumer misbehaviour.

LO2 Understand the meaning of consumption and consumer behaviour.

LO3 Describe how consumers get treated differently in various types of exchange

environments.

LO4 Explain the role of consumer behaviour in business and society.

LO5 Be familiar with basic approaches to studying consumer behaviour.

LO6 Describe why consumer behaviour is so dynamic and how recent trends affect

consumers.

SUGGESTED LECTURE OPENER

Consumer behaviour is driven by many things, including the weather. If your sprinkler breaks down during a dry, hot spell, you are likely to replace it quickly. However, you might have to travel to the back of the store before you get to the product you need, passing by fans, bathing suits, and air conditioners along the way. Savvy marketers use consumers’ seasonal needs to drive sales and promote other products. Canada’s unseasonably warm winter of 2011/12 even led to a mini housing boom, driving home sales up 6.7% from the previous year, according to Garry Marr’s article in the March 15, 2012 edition of The Financial Post.

KEY CONCEPTS WITH POWERPOINT® SLIDES

Slide 1 Slide 2 Slide 3

What can I do in class?

Q: Ask students to explain the link between the recent economic downturn and consumption.

A: Answers will vary but should include discussion of the housing market, appliance and furniture purchases, fewer requests for services, and loss of jobs.

LO1. Understand marketing ethics and consumer misbehaviour.

Slide 4

Marketing Ethics and Consumer Misbehaviour

There are times when consumers misbehave and act in an unethical manner and there are times when marketers misbehave and act unethically. Scandals, manipulative marketing practices, and deceptive advertising can upset the value equation associated with a given exchange. Ultimately, consumers may vote with their wallets by changing their own buying behaviour and potentially that of family and friends, as well.

Slide 5 Slide 6

LO2. Understand the meaning of consumption and consumer behaviour. Consumption and Consumer Behaviour

Slide 7 Slide 8

Consumer Behaviour as Human Behaviour

Consumer behaviour is the set of value-seeking activities that takes place as people go about addressing their needs.

Slide 9

The Basic CB Process

This process is detailed in Exhibit 1.2. In this chapter, the purchase of a BlackBerry Bold is described. In the first step, the consumer determines a need for a new cellphone with better access to other people, media, and the Internet. The want is to fit into society’s norms; therefore, the consumer visits a cellphone store. The exchange occurs when money is exchanged for the phone. The costs involve the actual price of the product as well as the time and physical effort to visit the store. The benefits are the positive results of the purchase, such as better work performance. The reaction follows the purchase when the consumer evaluates the effectiveness of the phone. Ultimately, the process results in a perception of value.

Consumption

Consumption represents the process by which goods, services, or ideas are used and transformed into value.

Slide 10

Economics and Consumer Behaviour

Economics is the study of production and consumption.

Consumer Behaviour as a Field of Study

This relatively young field of study (initiated in the 1960s) represents the study of consumers as they go about the consumption process. Consumer behaviour is also referred to as buyer behaviour, or the science of studying how consumers seek value in an effort to address real needs.

Slide 11 Slide 12

LO3. Describe how consumers get treated differently in various types of exchange environments.

Slide 13

The Ways in Which Consumers Are Treated

The customer is treated differently depending on the place of business and type

of service being performed. Consider the following two questions to understand the importance to any given organization of providing good service to customers:

1. How competitive is the marketing environment?

2. How dependent is the marketer on repeat business?

Slide 14 Slide 15

What can I do in class?

Q: Ask students to name places where the consumer was not “king,” such as places where the wait time was too long or the establishment was not clean.

A: Examples used in the book include the passport office, Service Canada, a dining establishment, and an apparel retailer.

Competition and Consumer Orientation

What does a consumer do if their wait time at the passport office is too long? If the alternative is not to travel, the consumer will tend to tolerate poor service.

The opposite experience is consumer (customer) orientation, in which the business prioritizes the customer. A consumer orientation is a key component of a firm with a market-oriented culture. The organizational culture that embodies the importance of creating value for customers among all employees is called a market orientation.

Slide 16

Relationship Marketing and Consumer Behaviour

Relationship marketing is based on the belief that a firm’s performance is enhanced through repeat business. Relationship marketing is the recognition that customer desires are recurring and that a single purchase may be only one touchpoint in an ongoing series of interactions with a customer. Touchpoints may include any type of correspondence with the consumer (i.e., email, phone call, text message, and face-to-face contact). Each touchpoint represents a way for the business to build value with the customer.

What can I do in class?

Q: Ask students to provide examples of relationship marketing. Why should a company take the time to establish a repeat customer?

A: Examples could include emails that customers receive on a weekly basis or loyalty cards for movie rentals and groceries. It’s cheaper for a business to build customer relationships than to establish new customers.

LO4. Explain the role of consumer behaviour in business and society. Consumer Behaviour’s Role in Business and Society

Slide 17

Consumer Behaviour and Marketing Strategy

Consumer behaviour is not only an interesting subject, but also an important topic to understand from multiple perspectives:

1. CB provides an input to business/marketing strategy.

2. CB provides a force that shapes society.

3. CB provides an input to making responsible decisions as a consumer.

Businesses have a goal of achieving long-term survival. Companies that achieve that goal do so by obtaining resources from consumers in return for the value they create. This helps to explain resource-advantage theory. Exhibit 1.4 lists several companies, their products, and when they first started doing business.

Slide 18 Slide 19 Slide 20

What Do People Buy?

Theodore Levitt, a famous marketing researcher, noted that consumers don’t really seek products. Companies ultimately need to understand why people buy their products in order to understand how to keep their business current. Products that are on their way to obsolescence include VHS tapes, tape recorders, and CD players.

Slide 21

Ways of Doing Business

Various ways of doing business are summarized in Exhibit 1.5, including:

1. Undifferentiated marketing—Offering the same product to all customers with no customization.

2. Differentiated marketing—Serving multiple market segments with different product offerings, such as the variety of products found in a Toyota car dealership.

3. Niche marketing—Serving one market segment with unique needs. For example, The Running Room targets runners to the exclusion of other recreational and competitive athletes.

Slide 22

Consumer Behaviour and Society

The items that people buy and consume are representative of the type of society in which they live. For example, how does society treat smoking? Today, smoking is frowned upon not only in Canada and the United States, but also in Europe, where many places have embraced a non-smoking policy. However, smoking was commonplace and acceptable 40 years ago. Smoking is a consumption behaviour that is no longer valued by society at large in Canada.

Slide 23

What can I do in class?

Q: Ask students how many of them smoke. When did they start smoking and why? How have their consumption patterns changed?

A: You will likely see a decline in the number of smokers each year. However, particular regions of Canada as well as colleges or universities might have different numbers.

Consumer Behaviour and Personal Growth

This section is based on life stages. Many university students are acquiring large amounts of credit card debt, contributing to the average Canadian debt of $110,000 per household (including mortgage) in 2009.

Several topics can be particularly helpful in enlightening consumers about consumer behaviour, including:

1. Consequences associated with poor budget allocation

2. The role of emotions in consumer decision making

3. Avenues for seeking redress for unsatisfactory purchases

4. Social influences on decision making, including peer pressure

5. The effect of the environment on consumer behaviour

The Motorola “Brick” phone of the 1980s led to smartphones being widely used today. In both Canada and the United Kingdom a large population of children age 10–14 have their own cellphones. Restrictions are being put on mobile phone users ranging from safety issues while driving to etiquette issues for phone use in public places.

Slide 24 Slide 25

What can I do in class?

Q: Ask students their opinions of the list on page 16 about mobile phone etiquette. Should people be restricted on how they use their phone in a public place?

A: Student answers will vary greatly.

LO5. Be familiar with basic approaches to studying consumer behaviour. Different Approaches to Studying Consumer Behaviour

Slide 26

There is no single “best” way to study consumer behaviour. The following research methods should be considered.

Interpretive Research

Interpretive research seeks to explain the inner meanings and motivations associated with specific consumption experiences. Methods include observations and words that consumers use to describe events.

Interpretive research generally falls into the category of qualitative research. Qualitative research tools include case analyses, clinical interviews, focus group interviews, and other tools in which data are gathered in a relatively unstructured way.

Interpretive researchers adopt one of several orientations. Two common interpretive orientations are phenomenology and ethnography. Phenomenology represents the study of

consumption as a “lived experience.” Ethnography has roots in anthropology and often involves analyzing the artifacts associated with consumption.

Quantitative Consumer Research

Quantitative research addresses questions about consumer behaviour by using numerical measurement and analysis tools. The measurement is usually structured, meaning that the consumer will simply choose a response from among alternatives supplied by the researcher. In

other words, structured questionnaires typically involve multiple choice type questions. If consumers have an average attitude score of 50 for Brand A and 75 for Brand B,

it can objectively be said that consumers tend to prefer Brand B. Experimental methodologies are also a key component of quantitative research, and offer the only research method to directly assess cause-and-effect relationships. Exhibit 1.6 summarizes some key differences between quantitative and qualitative research.

Slide 27 Slide 28 Slide 29

LO6. Describe why consumer behaviour is so dynamic and how recent trends affect consumers.

Consumer Behaviour Is Dynamic

Slide 30

Today, consumers do not need to wait for a store to open in order to shop. Consumers can visit virtual stores 24 hours a day/7 days a week. The trends that are shaping the value received by consumers today are discussed in this section.

Slide 31

What can I do in class?

Q: Ask students how they feel about companies like 33Across analyzing their social networking communications to find out about products.

A: This statement should spark some debate among students to discuss how the information they volunteer online through social networking may be used. Companies strive to meet consumer demands, offer increasingly innovative products, and grow in response to increased sales. Is it OK that they gain the information for these innovative products by tracking us online?

Internationalization

Many store chains have expanded outside their home markets. Consequently, companies must deal not only with geographical distances, but with cultural distances as well. The book discusses two examples—Starbucks and Outback Steakhouse. Each corporation must adapt its product menu to the country in which it operates. For example, in Seoul, Outback Steakhouse serves kimchi (fermented cabbage) on the menu, which is neither American nor Australian.

Slide 32

Technological Changes

In the mid-20th century, television revolutionized consumer behaviour. Not only did TV change advertising forever, but true home shopping became a possibility. Although technology continues to change, the basic consumer desire for value has not changed. In fact, the dot-com

failures of the late 1990s illustrated that companies can fail if they do not enhance the value that consumers receive when buying online.

Changing Communications

Consumers’ favourite form of communication used to be face-to-face. Now, many consumers choose the telephone as their preferred communication method (either by voice or text message). Email and social networks are also used. Marketers are learning quickly how to use these tools to communicate with consumers.

Changing Demographics

Over the last 25 years, changing demographics mean families include two primary income providers and fewer people make up a family in North America and Europe, resulting in stagnant population growth. This leads marketers around the world to look harder at countries with increasing populations, like China and India.

Changing Economy

Much of the developed world has faced a recent downturn in the economy, so consumers have less money to spend. Hearing about other economies around the world that are also in turmoil causes consumers to be more cautious as well.

VIDEO CLIP

PowerPoint Clip from Netflix

Run time 1:24 minutes

Slide 33

Netflix is a subscription service that provides streaming video over the Internet or delivers DVDs via mail. Netflix changed the way people rent movies and TV shows by cutting out the “shop front.” For a monthly fee, consumers have increased selections, no late fees, the ability to rent as many times as they like, and no need to leave their homes. Headquartered in Silicon Valley, CA, Netflix maintains distribution centres all over North America in order to maintain the company’s business model of speedy delivery and catering to consumers’ convenience needs.

Ask your students:

1. How has Netflix’s business model successfully tapped into consumer behaviour?

Answer: By removing the need to drive to a store to rent or return films and by removing late fees, Netflix provides considerably greater consumer convenience than the traditional method of film rental.

2. How does Netflix use consumer behaviour and the Internet to avoid becoming obsolete as technology changes?

Answer: Netflix provides a website with film summaries, reviews, a queue for tracking and rating your videos, as well as a service called “Watch Instantly” that allows consumers even more convenience by eliminating the need to wait for a DVD to arrive in the mail. This delivery method uses current technology to stream video instantly to consumers.

END OF CHAPTER MATERIAL

CASE ANSWERS: The Hudson’s Bay Company

1. Using the basic consumption process in Exhibit 1.2, discuss how a young Canadian “consumes” clothing.

Answer: Consumers develop a need for new clothing in a variety of ways—new clothes for school or work, the introduction of a new fashion trend, or the desire to fit in with a particular group. Clothes are necessary to keep consumers warm and protected from the elements, but they are also a fashion item and young consumers like to feel good about the clothes they wear because it brings them self-esteem.

These needs drive consumers to want clothing that not only serves the basic functional needs, but also looks attractive and makes them feel fashionable and good about themselves. For this reason, they may be attracted to The Bay’s positioning as a store that’s in touch with fashion trends, with many fashion-forward labels in stock.

Consumers’ wants may lead them to consider an exchange with The Bay if the clothing styles in fact do closely match their desires.

The decision to participate in an exchange (or to forgo one) has costs and benefits. Clothing costs money, and trendy labels tend to cost more than less current designs or lower quality items. In return, however, consumers may project an improved image, and boost their self-esteem. To the extent that consumers believe they are supporting a Canadian retailing institution (regardless of its current ownership), they may gain additional value from the exchange.

If consumers indeed achieve the goal of projecting the desired image and feeling good about themselves, they will react favourably to their purchase from The Bay. The consumer will in that case experience positive value. If the product does not achieve those ends, then no positive value will have been received.

2. Do you think it makes sense for The Bay to pursue more fashionable apparel brands to attract younger shoppers?

Answer: Answers may vary. The Bay’s strategy of offering more fashionable apparel brands in order to attract young shoppers is a good business decision if it addresses a real need that its target market can afford to satisfy. If successfully implemented, the strategy may allow The Bay to differentiate itself from lower-priced competitors that do not offer higher-end fashion brands, while offering an alternative to exclusive, high-fashion retailers such as Holt-Renfrew.

3. Is The Bay a consumer-oriented company?

Answer: Based on its stated desire to cater to the wants and needs of a specific market segment (young consumers), The Bay appears to have adopted a consumer-oriented approach. Hiring a high-profile CEO from within the fashion industry and aggressively pursuing the fashion brands most desired by its customers are further proof of a desire to maximize consumer satisfaction. Its awareness of competitors’ strategies indicates that this is part of a market-oriented business approach.

4. What sort of research will Bonnie Brooks need to drive her strategic decisions for The Bay in the next few years? Interpretive, quantitative, or experimental?

Answer: No single type of research is likely to provide answers to all the questions Ms. Brooks is likely to have. Quantitative approaches can analyze consumers’ current buying patterns, indicating where specific types of products (such as fashion brands) are being purchased, who is buying them, how frequently they buy, and so on. Point-of-sale technologies provide a wealth of data the researcher can analyze to form a detailed picture of consumer buying habits. This information may need to be supplemented with interpretive research, which can help to explain the motivation behind these patterns, such as why certain consumers prefer to do business with certain types of stores. Finally, experimental research may be useful in assessing the effectiveness of specific marketing approaches. A test market can be a very useful tool in helping a retail chain to develop the most effective way to display, promote, and price its merchandise.

5. Almost any business involves some ethical questions. In this case, do you see any problems with positioning The Bay as Canada’s oldest corporation when it is owned by an American private equity firm?

Answer: Answers will vary. Many brands are associated with a country of origin that no longer reflects its ownership (or never did so). The quintessentially British Mini Cooper brand is owned by Germany’s BMW, while Jaguar belongs to India’s Tata. Roots, which uses Canada and the beaver as part of its brand imagery, was founded by two Americans. Tim Hortons remained a Canadian icon even after its purchase by U.S.-based Wendy’s.

Students will have varying opinions on The Bay’s ability to retain its Canadian heritage and the ethical issues of potential misrepresentation.

REVIEW QUESTIONS

(*) Indicates material on prep cards.

1. [LO1] List two perspectives from which consumer behaviour can be defined.

Answer: Consumer behaviour can be defined as (1) a field of study and as (2) human activity involving human thoughts and actions.

2. [LO1] Define consumer behaviour from both perspectives.

Answer: Consumer behaviour as a field of study represents the study of consumers as they go about the consumption process. In this sense, consumer behaviour is the science of studying how consumers seek value in an effort to address real need.

Consumer behaviour as a human activity is the set of value-seeking activities that take place as people go about addressing realized needs.

3. [LO1] List each stage in the consumption process, and briefly describe this process.

Answer: The stages include needs, wants, exchange, costs and benefits, reaction, and value. The basic consumption process is a chain reaction of events through which consumers receive value (i.e., the steps in consumption).

4. *[LO1] What is consumption? Provide three examples of something you have “consumed” recently, and illustrate the concept of consumption with each example.

Answer: Consumption represents the process by which goods, services, or ideas are used and transformed into value. Examples should be easy. Music is enjoyable only when one listens to it (and likes it). Consumption can turn an mp3 file into value by listening.

5. [LO1] Explain the interrelationships among economics, psychology, marketing, and consumer behaviour.

Answer: In some ways, economics is an overarching discipline in that it also studies consumption but at a more abstract level than does consumer behaviour. Marketing studies stemmed from economics and psychology, and marketing itself represents potentially value-producing activities aimed at addressing consumer needs. As a field of study, consumer behaviour grew from the marketing field, and it was very much influenced by psychology because great emphasis was placed on the way consumers made decisions.

6. [LO2] What role does competition play in determining the way in which consumers are treated in the marketplace?

Answer: Competition eventually drives businesses toward a consumer orientation because the firm that doesn’t serve customers well is vulnerable to the customer going elsewhere. Thus, the more competitive the market, the greater the chance that the consumer is treated with respect as a valuable resource to the firm. Because firms depend on repeat business (and as they recognize the advantages of doing so), they are more likely to treat customers better in an effort to build or maintain a strong relationship.

7. [LO2] Define consumer orientation. How do firms become consumer oriented?

Answer: Consumer (customer) orientation refers to a way of doing business in which the actions and decision making of the institution prioritize consumer value and satisfaction above all other concerns. A consumer orientation is often a response to a competitive marketplace.

8. [LO2] Think about a consumer on a business trip out of town. What “touchpoints” take place during a typical day in a hotel for a business traveller?

Answer: Touchpoints are direct contacts between a firm and a customer. A day for the traveller may involve the following touchpoints:

Wake-up call

Visiting the fitness centre

Going down for breakfast and being served Asking for directions

Checking out of the hotel

Getting help with transportation

9. [LO2] How is niche marketing different than differentiated marketing?

Answer: Niche marketers are pursuing exchanges within one market segment. Differentiated marketers attempt to serve multiple segments with multiple products.

10. [LO3] List three main reasons why consumer behaviour is such an important topic to understand.

Answer: Consumer behaviour is important in at least three ways:

CB as an input to business/marketing strategy CB as a force that shapes society

CB as an input to responsible consumer decision making

11. [LO3] How can consumer behaviour contribute to public policy?

Answer: Public policy includes measures taken to restrict consumer freedom in the interest of the common good. Restrictions on consumer freedom exist in the form of traffic laws as well as restrictions on trade, such as prescription drugs, and consumption activities, such as smoking. Such decisions should only be made with a thorough understanding of the consumer behaviour issues involved, such as consumer psychology and sociology and the impact of such decisions on the marketplace and economy.

12. *[LO4] What two basic approaches to studying (i.e., researching) consumer behaviour are discussed in this chapter? How do they differ?

Answer: Interpretive research seeks to explain the inner meanings and motivations associated with specific consumption experiences. Quantitative research addresses questions about consumer behaviour by using numerical measurement and analysis tools. Exhibit 1.5 demonstrates specific differences between the approaches.

13. [LO4] When a researcher gathers information from consumers, such as household income and family size, and then uses this information to determine how much families will spend on a home, what “type” of research is being used here? Explain.

Answer: Quantitative research is being used because these measures will involve concrete, numeric measurements and statistical analyses to provide information.

14. [LO5] What is meant by the phrase “consumer behaviour is dynamic”?

Answer: Consumers are constantly changing, and therefore marketers’ responses to consumers are constantly changing, too. Several marketplace trends contribute to the

dynamic nature of consumer behaviour: internationalization, changing technologies, and changing demographics.

15. *[LO5] How is the fact that communication media preferences are changing affecting consumer behaviour and the effective use of consumer behaviour in business?

Answer: Consumers no longer communicate by voice to the extent that they used to. In fact, younger consumers have turned to social networking as a preferred means of communication. Older consumers may still prefer speaking to someone in person or on the phone. Middle-aged consumers may prefer email. Marketers have had to change the way they communicate with their consumers and one result is a shift in resources toward social networking sites like Facebook as a way of reaching customers with effective marketing communication.

INTERACTIVE/APPLICATION EXERCISES

16. *Ethics is an important aspect of consumer behaviour. Later chapters will focus on ethics in more detail. However, given that consumer behaviour is useful from a business, societal, and personal viewpoint, in which area are ethics and consumer behaviour most closely related? Explain your choice.

Answer: Students can defend any area by discussing the behaviour of people involved in consumption and action. Students are likely to choose the societal viewpoint because issues such as public policy are most closely associated with ethics. However, students should also consider behaviour from both the individual consumer and potential marketing employee perspectives.

17. Review the following situations, and discuss the relevance of consumer behaviour to explain each scenario:

A student selling a textbook back to the university bookstore

A student purchasing a value meal from an on-campus fast-food stand A family purchasing a new home

A corporate CEO taking a prospective customer to lunch

A consumer injured during a pick-up football match who is given a tetanus shot at a first aid clinic

A consumer in a third-world nation who is considering the purchase of a battery-operated television from a government-owned store

Answer: Any activity involving consumer decisions that could lead to differing amounts of value is clearly relevant to consumer behaviour. The case of the injured football player is the least relevant scenario because the consumer has very little choice.

18. Do some research on the Internet on the following multinational companies:

Tesco Auchan

Lotte Department Store Walmart

Sephora Exxon

Based on the descriptions of these companies found on the Internet, which way of treating customers do you believe each has adopted? Which company would you argue is the most multinational?

Answer: All of these companies are multinational in the sense that they have operations in multiple countries. Sephora and Exxon probably have operations in more countries than do the others. The answer to which orientation each company has adopted to deal with their customers should be related to the degree of competition as well as the potential amount of government regulation that each company faces.

19. The following is a way to get a little practice as an interpretive researcher. Find two consumers who are significantly older than you, two consumers slightly older than you, and two consumers substantially younger than you who will allow you to observe them while they browse the Internet. Collect some field notes that describe their behaviour as well as the discussion that you have with them during the exercise. Based on these interviews, prepare a brief report on the way people from different generations obtain value from their use of the Internet.

Answer: Students should attempt to provide explanations of behaviour by interpreting what they see and what the consumer does.

20. *Team Exercise: Use the Internet to do a brief research paper on a current public policy issue in which consumer behaviour plays an important role. Develop an opinion on whether some type of new regulation or restriction might actually address the issue and create a better societal outcome. Prepare a brief skit to enact your issue, and summarize the ways in which knowledge of consumer behaviour can contribute to understanding the issue.

Have some fun with this. Relate the consumer behaviours to the amount of competition involved and the fact that public policy has both advantages and disadvantages for consumers.

Answer: Students tend to focus more quickly on the short-term advantages without considering the long-term market implications of regulations.

21. Team Exercise: Interview at least five consumers from each of the following age groups: 10–15 years old, 20–29 years old, 35–45 years old, and over 55 years old. Ask the consumers what is their preferred method of communicating with a) friends, b) family, and c) businesses. Also, ask them what types of products they use to help them communicate with friends and family. Do the results suggest that they derive value from all communication technologies to the same degree, or do they use different technologies to communicate? Do you think the answers would be the same if you were dealing with consumers from Europe, Mexico, or Japan? How might firms cope with the dynamics of this situation?

Answer: Students should focus on the dynamic nature of consumer behaviour in discussing the results of the interviews.

GROUP ACTIVITY

Track consumption patterns in your class over the next week. Have students work in teams of two or as individuals if class size permits. This activity can also be used as a trimester- or semester-long project and will work best at the beginning of the term. Have students collect their receipts throughout the week and track all purchases from books to bottles of water. Students will meet in their groups during the second class and compare their purchase patterns. Students should present their findings in the following journal entry format.

Feelings

Items

Place of

Planned or

Descriptive

Reason for

Associated with

Date

Purchased

Purchase

Price

Impulse?

Information

Purchase

Week 1

Books

Bookstore

$190

Planned

Needed for

Course

Positive,

9/7/13

class

requirement

should get a

good grade

now.

CHAPTER VIDEO CASE

To view the video case ReadyMade Do It Yourself, go to the CB companion website www.icancb.com to select this video.1

In 2001, when Grace Hawthorne, CEO, and Shoshana Berger, Editor-in-Chief,

came up with their idea for ReadyMade, there were no other publications with their unique do-it - yourself (DIY) theme. ReadyMade was to be a magazine about fun and creative projects for the home. Since its development, the bi-monthly magazine has enjoyed a loyal subscriber base and continues to gain readership across the country. All issues include numerous do-it-yourself (DIY) projects, each rated by their level of difficulty, as well as several feature articles exploring the latest in innovation and design. In this video, pay attention to ReadyMade’s methods as they launched their magazine. Note also how ReadyMade uses its knowledge of its consumer base to tailor the product.

Ask your students:

1. While the ReadyMade magazine was still in the design stages, very little research was done to determine whether an interested market existed. Did this adversely affect the magazine as it moved forward to publication? Explain.

Answer: The founders of ReadyMade magazine did little formal research, but they were immersed in the lifestyles and expectations of their target market, which in essence, was themselves. Whether their subscriber base would have been larger at the outset had they done more research is difficult to say, but since launching, the DIY market segment has grown exponentially and perhaps carried them along. Perhaps ReadyMade’s founders were lucky, or perhaps they were inspired. CEO Grace Hawthorne remarked that their marketing plan was, in essence, “if [we] build it, they will come.”

2. How does the cover of ReadyMade magazine reflect the principles of packaging design as influenced by the known behaviour of its consumers?

Answer: The cover of ReadyMade magazine is carefully designed to provide a new reader, with just one glance, an understanding of the magazine’s purpose: a dual-gender, youth-spirited, DIY, project-related, home improvement guide.

3. To what extent does ReadyMade rely on opinion leaders to promote the magazine? Is this a successful tactic?

Answer: ReadyMade heavily relies on peer-to-peer recommendations; those DIY peers are the opinion leaders in the DIY market segment and have generated new subscriptions. For the DIY market, relying on opinion leaders has proven a successful tactic.

#Test Bank CB 1st Canadian Edition Solution

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