CH1

Question 1

Define consumer behavior

Answer 1

Consumer behavior is the study of how people make decisions to buy, use, and dispose of products or services to meet their needs.

Question 2

Summarize the applications of consumer behavior

Answer 2

1. Marketing Strategy: Helps create successful, competitive marketing decisions.
2. Regulatory Policy: Guides effective consumer protection laws.
3. Social Marketing: Supports campaigns for positive societal change.
4. Informed Consumers: Enables smarter, more aware consumer choices.

Question 3

What is the first step in developing a marketing strategy?

Answer 3

The first step is analyzing the market the organization is considering.

Question 4

How are market segments identified in marketing strategy?

Answer 4

Market segments are identified based on factors such as demographics, media preferences, and geographic location.

Question 5

What is the basis for selecting target markets in a marketing strategy?

Answer 5

Target markets are selected based on the firm’s capabilities relative to the competition, considering current and forecasted economic and technological conditions.

Question 6

What is customer value in the context of marketing strategy?

Answer 6

Customer value is the difference between all the benefits derived from a total product and all the costs of acquiring those benefits.

Question 7

How do marketers increasingly view their products and services?

Answer 7

Marketers increasingly sell experiences, which are memorable events created for customers, alongside or even more than actual products and services.

Question 8

What are the ethical implications of marketing strategy?

Answer 8

Ethical implications can include concerns about injurious consumption, environmental effects like pollution, and broader social welfare impacts.

Question 9

What does market analysis require a thorough understanding of?

Answer 9

Market analysis requires understanding the consumption process of potential customers, the organization’s own capabilities, the capabilities of competitors, and the economic, physical, and technological environment.

Question 10

Why is understanding consumer behavior crucial in market analysis?

Answer 10

Understanding consumer behavior is crucial because it helps anticipate and react to customers’ needs and desires, which can be accomplished through marketing research.

Question 11

Why is it important to understand the capabilities and strategies of competitors?

Answer 11

Understanding competitors’ capabilities and strategies helps a firm meet customer needs better than the competition and anticipate how competitors might respond to a firm’s marketing actions.

Question 12

What key questions should a company answer regarding its competitors before taking significant marketing actions?

Answer 12

Some key questions are:
- Which firms will be hurt by the action?
- Which of those firms can respond and how (reducing prices, increasing advertising)?
- Is the company’s strategy robust enough to withstand competitor responses, or are contingency plans needed?

Question 13

How does international trade, like NAFTA, impact marketing strategy?

Answer 13

International agreements like NAFTA reduce trade barriers, increasing competition and raising consumer expectations for many products.

Question 14

What is a market segment?

Answer 14

A market segment is a portion of a larger market whose needs differ somewhat from the larger market.

Question 15

Why is market segmentation important for firms?

Answer 15

Market segmentation allows a firm to develop a product focused solely on the needs of a specific segment, enabling the firm to meet those needs better than a product attempting to meet the needs of multiple segments.

Question 16

What must a market segment be for it to be viable?

Answer 16

A market segment must be large enough to be served profitably.

Question 17

What are the four steps involved in market segmentation?

Answer 17

The four steps are:

1. Identifying product-related need sets.
2. Grouping customers with similar need sets.
3. Describing each group.
4. Selecting an attractive segment(s) to serve.

Question 18

What is a “need set” in market segmentation?

Answer 18

A need set refers to the fact that most products satisfy multiple needs. For example, a watch may satisfy needs for telling time, status, and style.

Question 19

How do firms identify product-related need sets?

Answer 19

Firms identify need sets through consumer research such as focus groups, depth interviews, and analysis of variables like age, gender, social class, and lifestyle.

Question 20

What information is needed to describe each group in market segmentation?

Answer 20

Groups are described in terms of their demographics, lifestyles, and media usage, to design an effective marketing program and understand the context in which the product is purchased and consumed.

Question 21

How does a company select an attractive segment to serve?

Answer 21

A company selects a segment based on its ability to provide superior customer value at a profit, considering factors such as segment size, growth, competition, and the cost of providing value.

Question 22

What should a company consider when developing a marketing strategy for each segment?

Answer 22

What should a company consider when developing a marketing strategy for each segment?

Question 23

What is the primary goal of a marketing strategy?

Answer 23

The primary goal of a marketing strategy is to answer the question, “How will we provide superior customer value to our target market?”

Question 24

What is the marketing mix?

Answer 24

The marketing mix is the combination of product, price, communications, distribution, and services provided to the target market to meet customer needs and deliver customer value.

Question 25

What are product-related decisions in marketing?

Answer 25

Product-related decisions include choices about the product itself, as well as packaging, branding, and logos, which have both functional and symbolic dimensions.

Question 26

What key questions must be answered when developing a communications strategy?

Answer 26

The key questions are: 1. Who do we want to communicate with? 2. What effect do we want the communication to have? 3. What message will achieve the desired effect? 4. What means and media should we use to reach the target audience? 5. When should we communicate with the target audience?

Question 27

What factors should be considered when deciding on communication methods?

Answer 27

Factors to consider include the target market's preferences, media usage, language, and the timing of communication. For example, MasterCard adapts its language and communication channels to cater to Hispanic consumers, who are the largest and fastest-growing ethnic group in the U.S.

Question 28

What is the consumer decision process, and how does it impact firm outcomes?

Answer 28

The consumer decision process involves the steps consumers go through—from recognizing a need, becoming aware of a product, deciding it’s the best solution, purchasing it, and becoming satisfied. The outcomes of the firm’s marketing strategy depend on how well it aligns with the consumer decision process.

Question 29

What is product positioning?

Answer 29

Product positioning is the image of a product or brand in the consumer’s mind relative to competing products. It is shaped by marketing communications and direct experience, and it influences whether a consumer will choose the product when a need arises.

Question 30

Why is customer satisfaction a crucial outcome for firms?

Answer 30

Customer satisfaction is vital because it is often more profitable to retain existing customers than to acquire new ones. Satisfied customers are more likely to return for future purchases, making it an essential driver of long-term sales and profitability.

Question 31

What are the two key processes involved in need satisfaction for consumers?

Answer 31

The two key processes are actual need fulfillment and perceived need fulfillment. These processes may align, but they can also differ. For example, consumers may perceive a product meets their needs when it may not.

Question 32

What is injurious consumption?

Answer 32

Injurious consumption occurs when individuals or groups make consumption decisions that have negative consequences for their long-term well-being. This includes behaviors such as overspending, consuming unhealthy products, or engaging in harmful activities like gambling.

Question 33

How does consumption affect society economically?

Answer 33

Consumers' purchase decisions directly impact economic growth, the availability of capital, employment levels, and wage rates. Consumption patterns also influence the balance of payments and industry growth rates on both a national and global scale.

Question 34

How can a firm measure the success of its product positioning?

Answer 34

Firms measure the success of product positioning by assessing whether the product’s image aligns with the target market's expectations and whether it leads to increased sales and brand preference.

Question 35

What are internal influences in consumer behavior, and what do they include?

Answer 35

Internal influences are psychological factors that shape consumer behavior, including perception, learning, motivation, personality, emotion, and attitudes. These internal factors play a crucial role in how individuals process information and make decisions.

Question 36

How do perception and learning impact consumer behavior?

Answer 36

Perception is the process by which consumers interpret stimuli, while learning involves changes in memory structure. Both processes influence how consumers understand products and make purchase decisions based on prior experiences and acquired knowledge.

Question 37

What is the difference between self-concept and lifestyle in consumer behavior?

Answer 37

Self-concept is the totality of an individual's thoughts and feelings about themselves, while lifestyle is how they live, including their product choices, behaviors, and attitudes. Lifestyle reflects an individual’s self-concept and influences consumer decisions.

Question 38

How do consumers’ self-concept and lifestyle influence their purchasing decisions?

Answer 38

Consumers’ self-concept and lifestyle generate needs and desires that guide their consumption decisions. They make purchases consistent with their lifestyle, even if they are not consciously thinking about how those choices reflect their self-image.

Question 39

What is the consumer decision process?

Answer 39

The consumer decision process involves stages triggered by perceived problems or opportunities. These stages include problem recognition, information search, alternative evaluation, purchase, and post-purchase evaluation, which are influenced by emotions and situational factors.

Question 40

How do emotions influence consumer decisions?

Answer 40

Emotions often have a significant impact on consumer decisions, sometimes influencing behavior more than facts or logical analysis. Consumers may make purchases based on feelings or emotional reactions to products or advertisements.

Question 41

What are low-involvement decisions, and how do they relate to consumer behavior?

Answer 41

Low-involvement decisions are purchases that require little effort or thought. These decisions are often based on habitual behaviors, emotions, or convenience rather than detailed analysis of the product’s features or benefits.

Question 42

How does technology, particularly the Internet, influence the consumer decision process?

Answer 42

Technology, especially the Internet, has revolutionized consumer decision-making by providing easy access to information, product comparisons, reviews, and purchasing options. It also allows for more personalized marketing and faster decision-making.

Question 43

What is the significance of consumption beyond just meeting physical needs?

Answer 43

Consumption often holds deep meaning for consumers, as it can symbolize personal achievements, status, or social identity, in addition to fulfilling practical needs.

Question 44

How can consumption be a symbol of status?

Answer 44

Consumption can serve as a symbol of status when the products purchased are associated with success, wealth, or belonging to a particular social group, even if the functional need could be met by less expensive alternatives.

Question 45

What is the critique often associated with marketing strategies that promote consumption as a symbol of success?

Answer 45

Critics argue that marketing strategies that promote products as symbols of success or status often create undue pressure on consumers, encouraging them to spend more on expensive items in order to project a certain image, rather than meeting basic needs.

Question 46

Why is it important to consider the deeper meanings behind consumer behavior?

Answer 46

Understanding the deeper meanings behind consumer behavior helps marketers and regulators recognize that consumption is not just about fulfilling needs, but also about emotional, symbolic, and social fulfillment that can drive purchasing decisions.