BB Practice Essay Questions and MCQ (Part One - Chapters 1-7)

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BB Practice Essay Questions and MCQ (Part One - Chapters 1-7)

  1. 1. Consumer BehaviorPractice Questions and MC Questions (Part One: Chapters 1-7) 1-1
  2. 2. Note!!• It is important to practice some of the questions at the back of the text as well as attempt some Multiple-Choice Questions• The answers to the selected practice essay questions here do NOT represent a “model answer” and you are strongly advised to draft your own approach and give your own local examples• The MCQ do not have answers- practice these yourself and compare with your classmates 1-2
  3. 3. Review and discussion questions Chapter OneConsumer Behavior and Marketing Strategy 1-3
  4. 4. Review Questions7. How should marketing managers view the consumer, and howwill this view of the consumer help them to understand consumerpurchasing behaviour? The consumer should be viewed as a problem solver—adecision-making unit that takes in information, processes it in the light ofan existing situation, and takes the action that will, it is hoped, achievesatisfaction and enhance lifestyle. Managers can thus see that a purchaseis the means consumers have of solving (or trying to solve) manyproblems, both actual and potential.10. How relevant is the study of the consumer decision-makingprocess? As consumers make purchase decisions to enhance their presentor desired lifestyles, managers interested in influencing those consumersmust have a thorough understanding of this decision-making process. 1-4
  5. 5. Discussion Questions 1. Does the Internet present a particular challenge to marketers? Why or why not? The Internet represents a major shift in consumer behaviour. Recent statistics show that an increasing number of Australian consumers use the Internet to purchase products such as Christmas gifts. While some categories of products are more readily traded over the Internet, it can also affect the way marketing is undertaken in the firm. For example, segmentation may be less vital in that consumers volunteer to visit the site. Price may be customised. Promotion can involve only information that is needed. Hence, the Internet provides a new context in which to aim to deliver satisfaction. The principle is the same but the method is different. 1-5
  6. 6. 2. Is it possible to evaluate the ‘total’ or non-verbal meaning of an advertisement? If so, how should advertising experts proceed? With a variety of market research techniques (see Appendix A), it is possible to determine the non-verbal meaning of an advertisement. For example, a cigarette advertisement that shows young, healthy, attractive people having fun in a beach setting where the key participants are smoking provides a variety of non- verbal cues that contribute to the total meaning of the advertisement. Market researchers could determine the exact perceptions and meaning of the advertisement by creating a series of focus groups. Some groups could be smokers and others non-smokers. Other differentiations could be between teenagers, young adults, middle-aged adults and senior citizens. Projective techniques could also be used to uncover the total meaning of an advertisement. 1-6
  7. 7. 3. Of what use to practising marketing managers are models such as the consumer behaviour model? Even though the model does not allow for prediction, it provides a valuable understanding of how all the aspects of consumer behaviour fit together. The practising marketing manager needs to be aware of the interrelationships of the concepts of consumer behaviour in order to develop effective marketing strategy. 1-7
  8. 8. Multiple-Choice Questions 1-8
  9. 9. An understanding of consumer behaviour includes all of the following variablesexcept:A. amount purchasedB. consumers valuesC. economic situationsD. consumers perceptionsE. how purchases are consumedConsumer behaviour theory provides the manager with:A. more problems than it solvesB. concrete solutions to most marketing problemsC. the proper questions to ask in most market decision situationsD. solutions to problemsE. none of the given answersCustomer value is:A. derived from the price of the productB. the difference between all of the benefits derived from the total product and all ofthe costs of acquiring those productsC. the cost to the consumer of altering their behaviour to buy a productD. the difference between the perceived financial and social costs in obtaining theproduct and the financial and social gain in owning the productE. none of the given answers 1-9
  10. 10. The marketing manager should view the consumer as:A. a decision-making unitB. a problem solverC. being primarily concerned with economic factorsD. automatically responding in set ways to marketing stimuliE. A and B onlyWhich of the following is not treated as a major influence on consumer lifestyle:A. cultureB. reference groupsC. social statusD. motivesE. all of the given answers are major influencesMary needs a computer for her studies. She has some computer knowledge from herprevious purchase 5 years ago, but feels that she needs to read more computermagazines, consult several computer shops, and ask for advice from her IT friendsbefore she makes a purchase. What kind of decision-making is Mary experiencing:A. limitedB. extendedC. complexD. complicatedE. behavioural 1-10
  11. 11. Culture provides us with:A. sophisticated ways of behavingB. our expected norms of behaviourC. our basic physiological motivesD. all of the given answersE. none of the given answersGroups serve as a ____________ and as a ___________ for the individual:A. social stimulant, social determinantB. segmentation point, target marketC. source of encouragement, interpreter of informationD. reference point, source of informationE. none of the given answersWhich of the following often leads to lifestyle changes:A. the results of past consumption decisionsB. time-related events such as ageingC. external events such as a job changeD. all of the given answersE. none of the given answers 1-11
  12. 12. Review and discussion questions Chapter Two:Situational Influences 2-12
  13. 13. Review Questions3. What are the four types of situations that matter most to marketers? Give an example for each.The situation in which consumers receive information has an impact on their behaviour. We all know that the degree to which we see and listen to marketing communications is determined by whether we are alone or in a group, in a good mood or a bad one, in a hurry or not, and so on. Therefore, in terms of the communication situation, marketing managers have to answer questions such as: is it better to advertise on a happy or sad television program? A calm or exciting program?The purchase situation can also affect product selection. For example, mothers shopping with children are more likely to be influenced by the product preferences of their children than when they are shopping on their own. Also, if a consumer has a shortage of time (e.g. a student trying to make a purchase between classes), this can affect the store chosen, the number of brands considered and the price the consumer is willing to pay 2-13
  14. 14. The usage situation is the way in which the product will beused/consumed. For example, a consumer may serve a differenttype of wine to dinner guests than they would use personally ina non-social situation .A family may choose a different holidaydepending on which family members are going.Consumers must frequently dispose of products and/or productpackages after or before the product is used. Decisions made byconsumers regarding the disposal situation can create significantsocial problems, as well as marketing opportunities. 2-14
  15. 15. 4. What are the five main categories of situational influences? Give an example for each.Physical surroundings include geographical and institutional location, décor, sounds, aromas, lighting, weather, and visible configurations of merchandise or other material surrounding the stimulus object.Social surroundings provide additional depth to a description of a situation. Examples are other people present, their characteristics, their apparent roles and the interpersonal interactions that are occurring.Temporal perspective may be specified in units ranging from time of day to season of the year. Time may also be measured relative to some past or future event for the situational participant. This allows conceptions such as time constraints imposed by prior commitments. 2-15
  16. 16. Task definition includes an intent or requirement to select,shop for or obtain information about a general or specificproduct. In addition, tasks may reflect different buyer anduser roles anticipated by the individual. For instance, a personshopping for a small appliance as a wedding gift for a friendis in a different situation than when shopping for a smallappliance for personal use.Antecedent states are momentary moods (e.g. anxiety,pleasantness, hostility or excitation) or momentary conditions(e.g. cash on hand, fatigue, illness) rather than long-termindividual traits. 2-16
  17. 17. 5. How do moods influence behaviour?Moods are transient feeling states that are generally not tied to a specific event or object. They tend to be less intense than emotions and may operate without the individual’s awareness. While moods may affect all aspects of a person’s behaviour, they generally do not completely interrupt ongoing behaviour as an emotion might. Individuals use such terms as ‘happy’, ‘cheerful’, ‘peaceful’, ‘sad’, ‘blue’ and ‘depressed’ to describe their moods.Moods both affect and are affected by the consumption process. For example, television program content can influence mood and arousal level, which, in turn, influences information-processing activities. Moods also influence decision processes and the purchase and consumption of various products. For example, one study found that positive moods were associated with increased browsing and ‘impulse’ purchasing. Negative moods also increased impulse purchasing in some consumers. 2-17
  18. 18. 8. How does crowding affect shopping behaviour?As shown in Figure 2.4 (p. 44) an increased physical density of the store creates perceptions of confinement and crowding. These perceptions in turn cause shoppers to modify their shopping strategies in that they reduce the time spent shopping, buy fewer items and alter their use of in-store information. The net outcome of this physical situation is dissatisfaction with the store, an unpleasant shopping experience and reduced confidence in the shopping that has taken place. 2-18
  19. 19. Discussion Questions 1. Discuss the potential importance of each situational influence if you are developing a marketing strategy to promote the purchase of: (a) a haircut (b) Hungry Jack’s (c) an MP3 player (d) tofu. Situational influencer Products Physical Social Temporal Task Antecedent Haircut 3 2 1 3 2 Hungry Jack’s 1 3 1 3 2 MP3 1 2 3 2 3 Tofu 1 3 3 3 1 1 = major influence likely 2 = slight influence possible 3 = less, or no, influence likely 2-19
  20. 20. 2. What product categories seem most susceptible to situational influences? Why? As a general category, service-type products (restaurants, theatres and so forth) seem particularly susceptible to situational influences that can be controlled. This is particularly true because these products use physical surroundings very much as a ‘part’ of the product. Products that are convenience goods (low-priced, frequently purchased, necessities etc.), such as toothpaste, are probably less susceptible to situational influence as a class. (Specific brand choice, however, may not be.) In contrast, specialty and shopping goods are probably more likely to be influenced by the situation. Consumers of these products would seem to exercise more choice about whether or not to purchase. Habit may be less important, and the purchase process itself may be more important. These factors all tend to increase situational influence. 2-20
  21. 21. 3. In those instances where marketers have little control over the consumption situation, why is it important that they understand how the situation relates to the consumption of their product? Point out to students that, even when the situation itself can’t be controlled, other more controllable factors can be changed to lessen (or enhance) the impact of the situation itself. This would be similar to a marketer being faced with a government regulation that can’t be changed, but that must be accounted for in the marketing strategy.4. How would you change the situational classification scheme presented in this chapter? There are many other approaches that could be taken, and this should be pointed out to students. Classification schemes based on events (e.g. being out for lunch), attitudes (e.g. attitude towards cooking after a tough day) and lifestyles may lead to different insights into the underlying influence of a use situation. Other factors could also be considered, such as perceived risk, satisfaction and the need to conform. These and other influences could be discussed in light of how they create use situations that influence purchase behaviour. 2-21
  22. 22. Multiple-Choice Questions 2-22
  23. 23. The choice of a fast food restaurant when a friend comes to visit, you are in the middle ofan interesting chat, and you discover it is time for lunch is influenced by:A. antecedent stateB. social surroundingsC. temporal perspectiveD. task definitionE. physical surroundingsThe usage situation deals with:A. how the product is purchasedB. who influences the product purchasedC. how we communicate to consumers about consumptionD. how and when the product is consumedE: all of the given answersWhen a consumer is so loyal to a particular brand that it is the only brand purchased, themarketer:A. should look closely at the communications situationB. must consider the usage situationC. can redefine the consumers task definition through advertisingD. can ignore the situational influencesE. none of the given answers 2-23
  24. 24. The five classes of situational influences are:A. physical surroundings, people, task definition, lighting and soundB. people, task definition, social surroundings, temporal factors and moodC. physical surroundings, social surroundings, temporal perspective, task definition andmoodD. people, task definition, mood, temporal factors and antecedent statesE. physical surroundings, social surroundings, temporal perspective, task definition andantecedent statesStore atmosphere is:A. the sum of all physical features of a retail environmentB. shown to affect consumers’ judgment of store qualityC. shown to affect consumers’ judgment of store imageD. known to influence shoppers’ moodsE. all of the given answersA group that stays longer in a restaurant because of the music has been influenced by the___________________ characteristic of the situation:A. antecedent stateB. physical surroundingsC. temporal perspectiveD. social surroundingsE. none of the given answersAnswer: B 2-24
  25. 25. Individuals shopping at a ‘convenience’ store rather than a store regularly shopped atbecause they are in a hurry, are being influenced by the ___________________ characteristic ofthe situation:A. antecedent stateB. physical surroundingC. temporal perspectiveD. task definitionE. none of the given answersA person who shops at a nicer store than normal because he/she is buying a gift ratherthan a personal item is influenced by the _____________________ characteristic of thesituation:A. antecedent stateB. social surroundingsC. temporal perspectiveD. task definitionE. none of the given answersAn individual who decides to purchase food at a take-away food store rather than cookwhen too tired has been influenced by the ____________________ characteristic of thesituation:A. utilisation orientationB. task definitionC. antecedent stateD. physical surroundingsE. none of the given answers 2-25
  26. 26. Which of the following is not a social motive for shopping outside the home:A. communicating with others with similar interestsB. meeting with ones friendsC. acquiring status and authorityD. meeting or being near other peopleE. all of the given answersMuffin Break positions itself as the ideal place for a friendly chat. This is a marketing effortbased on the ________________ characteristic of the situation:A. temporal perspectiveB. social surroundingsC. antecedent conditionD. physical surroundingsE. C and D onlyWhen the marketer can neither control nor influence the physical situation:A. advertising should be increasedB. product improvements should be madeC. the sales force should be increasedD. the various elements of the marketing mix should be altered to match the needs andexpectations of the target marketE. none of the given answers 2-26
  27. 27. The advantage of large shopping malls according to consumer behaviour theory is:A. social experiences for consumersB. safe and comfortable area for shoppingC. consumers are exposed to a wide range of information and productsD. plenty of parkingE. A,B and CIt usually takes 3 seconds to buy a can of soft drink but it can months to choose theright car. This is an example of:A. task definitionB. temporal perspectiveC. moodD. antecedent stateE. momentary condition 2-27
  28. 28. Review and discussion questions Chapter Three: Problem Recognition 3-28
  29. 29. Review Questions1. What does purchase involvement mean? How does it differ from product involvement? We define purchase involvement as the level of concern for, or interest in, the purchase process, once the purchase process has been triggered by the need to consider a particular purchase. Purchase involvement is not the same as product involvement. A person may be very involved with a brand and have a very low level of involvement with the purchase process because of brand loyalty. Or a person could have a rather low level of involvement with a product but have a high level of purchase involvement because of a desire to set an example for a child or impress a friend who is on the shopping trip (situational factors). There are also individual differences in general involvement level and in the involvement response to particular situations. 3-29
  30. 30. 3. How do habitual, limited and extended decision making differ? How do the two types of habitual decision making differ? Habitual decision making, in effect, involves no decision per se. That is, a problem is recognised, an internal search (long-term memory) provides a single preferred solution (brand), that brand is purchased and an evaluation occurs only if the brand fails to perform as expected. Limited decision making covers the middle ground between habitual decision making and extended decision making. In its simplest form (lowest level of purchase involvement) it is very similar to habitual decision making. Extended decision making is the response to a very high level of purchase involvement. An extensive internal and external information search is followed by a complex evaluation of multiple alternatives. After the purchase, doubt as to its correctness is likely, and a thorough evaluation of the purchase takes place. 3-30
  31. 31. 6. What are the main uncontrollable factors that influence the desired state? • Culture/social class: These variables set broad boundaries on desired states. For example, in Australia and New Zealand cleanliness is a highly desired state. • Change in reference groups: This can have a major effect on consumer lifestyle and, hence, the desired performance of products that are purchased. Joining a business firm following graduation from university requires adapting to a new reference group and, subsequently, a new lifestyle, which may demand a different style of dress and behaviour. • Changes in household characteristics: The birth of a first child greatly alters one’s lifestyle and creates new problems, which need solutions. • Changes, or expected changes, in financial status: Receiving, or expecting to receive, a relatively large sum of money may alter desire for the kind of car one drives, and lead to a large discrepancy between what is desired and what exists. • Previous decisions: The purchase of a product (e.g. a new car) may trigger recognition of a need for insurance. • Individual development: As we evolve through different stages of socialisation, our lifestyle changes. For example, the choice of holidays could be expected to be different for a 12-year-old, a 25-year-old, and a 65-year-old. • Emotions: Sometimes consumers seek positive emotional experiences, and purchase goods and services to obtain such experiences. • Motives: Maslow suggests that as lower-level motives are satisfied, high-level motives begin to dominate the desired state. • Changing situations: The situation may influence problem recognition. For example, in hot weather people prefer cold drinks and in cold weather they prefer hot drinks. 3-31
  32. 32. 7. What are the main uncontrollable factors that influence the existing state? • Past decisions: These determine the individual’s set of problem solutions and resources. They provide the framework for the actual state. • Normal depletion: Examples of normal depletion include a tyre wearing out, running out of cereal or the need to change the oil in a car. • Product/brand performance: After purchasing a particular brand of shampoo, the consumer may find that its performance (actual state) is far below what is expected and desired in the performance of this shampoo. Thus, dissatisfaction with the shampoo would alter the consumer’s perceptions of the shampoo performance (actual state). • Individual development: The normal process of individual development can also influence our perception of an actual state. For example, a six-year-old has a different perception of the toys included in a cereal box than a twelve-year-old. As a result, the six-year-old is more likely to be satisfied with the toy (the actual state) than the twelve-year-old. • Governmental and consumer groups: These groups may provide information to the public that would alter the public’s perception of actual performance (state). Information on a car’s safety may alter perceptions of the actual state of certain cars. • Product availability: The absence of particular products, lack of awareness of products or brands, or inability to afford certain products all affect the actual state. For example, the relative lack of sodium-free food products in Australia has a major impact on the actual state of health of many consumers. • Situation: The presence of others, physical conditions and antecedent states are key elements of the actual state. 3-32
  33. 33. 9. In what ways can marketers react to problem recognition? Give several examples. • Modify the marketing mix (product, price, place and promotion) to resolve a particular problem and improve on the existing level of performance (actual state). • In the case of latent problem recognition, the marketer may stimulate problem recognition and direct search, evaluation and purchase of a product that resolves the problem. • For problem recognition for a problem of little importance, the marketer may bring greater attention to this problem (increase its perceived importance) while indicating a solution to this problem. • In some instances a marketer may try to reduce either the discrepancy that is the cause of the problem recognition and/or the importance attached to it, thereby reducing the intensity of the problem. 3-33
  34. 34. Discussion Questions2. Which products do you think are generally purchased or used for emotional reasons? How would the decision process differ for an emotion-driven purchase compared with a more functional purchase? Products such as perfume, fancy lingerie, evening dresses, ornate jewellery, sports cars etc. are often purchased or used to elicit a desired emotion. The decision process would differ in several ways. Importance of the product-use situation would be greater, and, hence, consumers would be more sensitive to potential alternatives that may enhance emotional experiences. Information search may be more extensive. In general, these would be very high-involvement purchases, and consumers would be more likely to recognise problems more quickly, and to search for better solutions more often. 3-34
  35. 35. Multiple-Choice Questions 3-35
  36. 36. Problem recognition involves:A. choosing between two or more potentially satisfactory alternativesB. a discrepancy between a situational variable and a psychological variableC. determining which of two or more alternative goals to pursueD. approach-approach conflictE. none of the given answersAnswer: EDifficulty: HighA problem of which the consumer is not aware is:A. a situational problemB. a potential problemC. a manifest problemD. an actual problemE. none of the given answersThe uncontrollable factors that affect the desired state include all of thefollowing except:A. changing family characteristicsB. previous decisionsC. individual developmentD. reference groupsE. all of the given answer 3-36
  37. 37. The uncontrollable factors that affect the actual state include all of the followingexcept:A. the situationB. dissatisfaction with the existing solutionC. changing financial expectationsD. efforts of consumer groupsE. all of the given answersThe existing or actual state is affected by:A. inability to afford certain productsB. absence of particular productsC. lack of awareness of products or brandsD. A and C onlyE. A, B and CAn approach to determining the problems consumers face by analysing thepurchase and/or use of a particular product or brand is known as:A. problem analysisB. activity analysisC. situation analysisD. latent problem analysisE. none of the given answers 3-37
  38. 38. Selective problem recognition involves:A. a discrepancy which any brand within a product category can reduceB. a discrepancy which a variety of brands within a product category can reduceC. recognition of a problem for which there is no solutionD. manifest problem recognitionE. none of the given answersAttempts by firms to ‘break into’ habitual or limited decision making when theirbrand is not currently used generally focus on:A. the desired stateB. the discrepancy between the existing and desired statesC the existing stateD. the current situationE. none of the given answersThe level of a person’s desire to resolve a particular problem depends on 2factors:A. the relative importance of the problem and the magnitude of the discrepancybetween the desired state and the actual stateB. information search and alternative evaluationC. environmental and situational factorsD. mood and motivationE. the involvement level of the product and previous decisions made 3-38
  39. 39. Suppressing problem recognition is done because:A. some companies want their consumers to have a low level of involvement fortheir productB. companies want consumers to be influenced primarily by packaging, price andother marketing variables at the point of purchaseC. government regulation of certain productsD. consumer movements limit promotion of some productsE. A and BTiming problem recognition can sometimes be difficult for a marketer toinfluence because:A. consumers vary in how long they decide they may have an actual problemB. some consumers aren’t influenced by marketing at allC. some consumer needs can arise suddenlyD. problem recognition is influenced by many factorsE. B and C 3-39
  40. 40. Review and discussion questions (selected) Chapter Four: Information Search 4-40
  41. 41. Review Questions1. When does information search occur? What is the difference between internal and external information search? Information search occurs in response to a recognised problem that is deemed important enough to resolve. Because an internal information search is much easier, less time consuming and less expensive than external search, internal search generally occurs first. This involves bringing relevant information from what is retained in long-term memory into current memory. If no satisfactory solution can be obtained, then an external information search would follow if warranted by the nature of the problem and its importance.2. What are evaluative criteria and how do they relate to information search? Evaluative criteria are those characteristics that are important to the consumer in the evaluation and choice of alternatives. With regard to information search, evaluative criteria—in part— guide information search by outlining what information should be sought in order to resolve a particular problem. 4-41
  42. 42. . What roles do the evoked set, the inert set, and the inept set play in a consumer’s information search? Why are some brands in a consumer’s evoked set and others in the inert set or the inept set? Those brands that a consumer is aware of (i.e. those in his or her awareness set) can be classified as belonging to either an evoked, inert or inept set. Consumers’ evoked sets include brands that they would readily consume. Brands in their inert sets are brands they are aware of but indifferent towards, and not likely to consume as long as brands in their evoked set are available. Brands in their inept sets are brands they are aware of, but dislike so much that they would not consume them. Consumers will focus their information search on brands in their evoked sets. Marketers of brands in a target consumer’s inert set have to work hard to get the consumer to seek additional information that could affect the inclusion of the marketer’s brand in the consumer’s evoked set. Consumers will rarely seek information on brands classified as inept. 4-42
  43. 43. 4. What are the primary sources of information available to consumers and what effect does each have on information search? The primary sources of information available to consumers are: personal sources, such as friends and family; independent sources, such as consumer groups, government agencies and non-partisan organisations; marketing sources, such as advertising, promotion, packaging and sales personnel; and experiential sources, such as direct product inspection or trial. Each source varies in its effect on different consumers but, in general, personal and experiential sources of information are perceived to be more credible; independent sources are perceived to be more factual; and marketing sources are perceived to be less objective yet more informative. 4-43
  44. 44. 6. How do different market characteristics affect a consumer’s information search effort? • Price range: The higher the price difference between brands, the greater the financial benefit of a search effort. • Number of alternatives: The larger the number of alternative solutions (brands and products), the greater the search. • Store distribution: The density of retail trade outlets affects the search effort. A lower density increases the cost of visiting a number of retail outlets and, hence, reduces the level of prepurchase information search. High store density lowers this cost and thus increases the likelihood of a search effort. • Information availability: The more information available, the greater the search, unless the ready availability of information has already produced sufficient learning. Information availability is increased by advertising, point-of-purchase displays, sales personnel, package information, other experienced consumers and independent sources. 4-44
  45. 45. 7. How do different consumer characteristics influence a consumer’s information search effort? • Learning and experience: A satisfying experience, followed by repeat purchase of a particular brand of product, has the effect of reducing prepurchase information search. • Personality and self-concept: Different self-images and personality traits (such as open- mindedness and self-confidence) can affect consumer information search. Those who see themselves as deliberate shoppers, for example, engage in greater search than shoppers who do not have this aspect of self-concept. • Perceived risk: The greater the perceived risk related to a particular purchase (whether financial or psychological), the greater the motivation to make a satisfactory choice and, hence, the greater prepurchase search. • Socio-economic: Using occupation, education and income as a basis for describing socioeconomic differences, information search has been found to be greater for those in higher socioeconomic classes (i.e. those with higher occupational status, more education and larger incomes) than those in lower socio-economic classes. • Age and family life cycle: Age and stage of family life cycle are inversely related to information search. That is, younger consumers and those in the early stages of the family life cycle tend to exhibit greater pre-purchase information search than older consumers and those in later stages of the family life cycle. 4-45
  46. 46. 9. How do situational characteristics influence a consumer’s information search effort? • Time availability: The more time available for the purchase, the greater the search. • Purchase for others: Gift purchases generally evoke more search effort than purchases for self. • Pleasant surroundings: These may increase search within that store or shopping centre, but reduce total search effort. • Social surroundings: May increase or decrease search, depending on the nature of the social situation. • Physical/mental energy: Will increase search, compared to a situation of fatigue. 4-46
  47. 47. Discussion Questions3. Is it ever in the best interests of a marketer to encourage potential customers to carry out an extended pre-purchase search? Why or why not? Discussion of this question must focus on the relative position of the marketer. If the brand is in a position of strength—if the marketer’s brand is known—then the marketer may want to limit the search and direct it to his/her brand or product. However, if the firm’s brand is unknown, that firm’s strategy may be to encourage search, evaluation and comparison, since this activity could lead to a favourable evaluation and a greater probability of purchasing the lesser-known brand. 4-47
  48. 48. 8. How can marketers encourage consumers to search for information about their goods and services by using the Internet? Marketers can provide details of their web addresses in their advertising and promotion and on packaging. Also, if there other sources (such as the Australian Consumers’ Association website, www.choice.com.au) that provide independent information about different brands through their surveys, these could also be provided to assist consumers to evaluate and compare different brands in a product category. Also, companies might encourage consumers to visit some of the discussion forums or chat groups related to particular product categories. 4-48
  49. 49. Multiple-Choice Questions 4-49
  50. 50. Internal information search:A. almost never occursB. is most important in extended decisionsC. involves utilising information sources other than the individuals memoryD. is not sufficient to solve consumer problemsE. none of the given answersA consumer notices a new product in a store because of a point-of-purchasedisplay, and based on the information given in the display purchases the product.This is an example of:A. habitual decision makingB. limited decision makingC. extended decision makingD. internal searchE. none of the given answersExternal information can include all of the following except:A. direct experiences with the product through inspection or trialB. professional information provided in pamphlets, articles, and booksC. marketing-generated informationD. the opinions, attitudes and feelings of friends, neighbours and relativesE. all of the given answers can be included in external search 4-50
  51. 51. All of the brands that a consumer would consider for the solution of a particularproblem are known as the:A. inept setB. decision setC. evoked setD. inert setE. none of the given answersAll of the brands that a consumer is aware of but is indifferent toward are knownas the:A. inept setB. so what setC. evoked setD. inert setE. none of the given answersThe inert set is:A. all those brands a consumer would consider for the solution of a problemB. all those brands a consumer is aware of for the solution of a problemC. all those brands a consumer would not consider for the solution of a problemD. all those brands a consumer is aware of but is indifferent towardE. none of the given answers 4-51
  52. 52. The evoked set is:A. all those brands a consumer would consider for the solution of a problemB. all those brands a consumer is aware of for the solution of a problemC. all those brands a consumer would not consider for the solution of a problemD. all those brands a consumer is aware of but is indifferent towardE. none of the given answersWhich of the following is NOT one of the primary sources of informationavailable to consumers:A. personal sourcesB. experiential sourcesC. memoryD. independent sourcesE. all of the given answers are primary sources of informationConsumers engage in external search when:A. they perceive they can obtain a lower priceB. they perceive they can obtain a preferred styleC. the perceived cost of search is less than the perceived value of the searchD. the required information is availableE. none of the given answers 4-52
  53. 53. A brand in a product category characterised by extended decisions that is in theevoked set requires a(n) ________________ strategy:A. maintenanceB. disruptC. interceptD. acceptanceE. none of the given answersConsumer characteristics that are associated with a high level of external searchinclude all of the following except:A. extensive experience with the product categoryB. early stages of the household life cycleC. a high level of perceived risk in the purchaseD. a relatively high education levelE. all of the given answers are associated with a high level of external searchA brand in a product category characterised by extended decisions that is not inthe evoked set requires a(n) ________________ strategy:A. maintenanceB. disruptC. acceptanceD. preferenceE. none of the given answers 4-53
  54. 54. A brand in a product category characterised by limited purchase decisionsthat is not in the target markets evoked set needs a(n) _______________________strategy:A. disruptB. interceptC. acceptanceD. preferenceE. none of the given answersA brand in a product category characterised by limited purchase decisionsthat is in the target markets evoked set needs a(n) _______________________strategy:A. disruptB. interceptC. acceptanceD. preferenceE. none of the given answers 4-54
  55. 55. A disrupt strategy:A. is used by marketers when the brand they are promoting is not part of theevoked set and the target market engages in habitual decision making and thefirst task of this strategy is to disrupt the existing decision patternB. is marketing communications, such as comparative advertising, that is usedto disrupt the decision making behaviour of the consumerC. is used in high involvement situations where the consumers may displayhigh brand loyalty to a productD. is used in low involvement situations where consumers exhibit habitualpurchase behaviourCapture strategy is:A. marketing communications that are used to capture the consumer’sattentionB. capturing the consumer’s attention by using different tactics in theservicescape environmentC. used by marketers when the brand is in the target market’s evoked set andconsumers engage in limited decision makingD. used by marketers when the brand is in the target market’s inert set andconsumers engage in limited decision making 4-55
  56. 56. An intercept strategy is used when:A. an organisation in a shopping mall needs to intercept consumers who walk by astoreB. the objective is to intercept the consumer during the search for information onthe brands in the evoked setC. the objective is to intercept the consumer during the search for information onthe brands in the inert setD. B and CPreference strategy is used when:A. the objective is to make the brand the preferred one in the target market,placing it in the evoked set. This is especially used when the consumer undertakesextended decision makingB. the objective is to make the brand the preferred one in the target market,placing it in the inert set. This is especially used when the consumer undertakesextended decision makingC. the objective is to make the brand the preferred one in the target market,placing it in the evoked set. This is especially used when the consumer undertakeslimited decision makingD. the objective is to make the brand the preferred one in the target market,mainly through the use of marketing communication techniques 4-56
  57. 57. Review and discussion questions Chapter Five:Evaluating and Selecting Alternatives 5-57
  58. 58. Review Questions1. Define the term ‘evaluative criteria’. Evaluative criteria are the various features a consumer looks for in response to a particular type of problem. Before purchasing a calculator, a consumer might be concerned with cost, size, power source, capabilities, display and warranty. These would be the evaluative criteria. Someone else could approach the same purchase with an entirely different set of evaluative criteria, such as brand, memory and warranty.2. How can a marketing manager determine which evaluative criteria consumers use? The marketing manager can utilise either direct or indirect methods. Direct methods would include asking consumers what information they use, or, in a focus-group setting, observing what consumers verbalise about products and their attributes. Indirect methods, such as projective techniques, allow a person to indicate what ‘someone else’ (probably that very person) might do. Multidimensional scaling is a useful indirect technique. 5-58
  59. 59. . What is sensory discrimination and what role does it play in the evaluation of products? Sensory discrimination refers to an individual’s ability to distinguish between similar stimuli presented to one sense mode. This plays a major role in the evaluation of products that may differ in characteristics. For example, one stereo may be technically superior in sound characteristics, but listening to both this stereo and one of lesser technical quality may not allow you to sense this difference.6. What is meant by a just-noticeable difference? How have marketers used this concept in marketing products? The just-noticeable difference is the minimum amount of variation that would have to take place in a given stimulus such that a difference could be detected. Marketers attempting to differentiate their brand of product must find a level of performance between their brand and competitors’ brands that surpasses the j.n.d. However, a marketer may want to change a product or price but not have consumers perceive any change, and, hence, not surpass the j.n.d. 5-59
  60. 60. 7. What are surrogate indicators? How are they used in the consumer evaluation process? An attribute (evaluative criterion) used to stand for or indicate another attribute is a surrogate indicator. For many products it is difficult to assess quality; consumers may therefore use the price or image of the product as a basis for inferring the product’s quality.8. How have marketers used surrogate indicators in positioning various products? Marketers of clothing and alcoholic beverages use the price of these goods in product positioning because consumers often use the price of these goods as a surrogate indicator of quality. Hence, marketers of products that are difficult to differentiate on the basis of physical characteristics will use surrogate indicators like price and social status to imply quality. 5-60
  61. 61. Discussion Questions 4. The table below represents, for several brands of motorbikes, a particular consumer’s evaluative criteria, ranking of criteria importance, acceptable level of performance and judgments of performance. Discuss the brand choice this consumer would make when using the lexicographic, compensatory and conjunctive decision rules. Alternative brands Minimum Evaluative Criterion acceptable Honda BMW Vespa Kawasaki Triumph criterion importance performance Price 30 4 2 4 2 4 2 Horsepower 15 3 4 2 5 5 4 Weight 5 2 3 3 3 3 3 Economy 35 3 4 4 3 2 4 Colour 10 3 4 4 3 2 5 selection Frame 5 2 4 2 3 3 3 Note: 1 = very poor; 2 = poor; 3 = fair; 4 = good; 5 = very good 5-61
  62. 62. • Using a lexicographic decision rule, this consumer would first focus on the most important evaluative criterion specified in the table, economy (a relative weight of 35), and find that Honda, BMW and Triumph all perform equally well.• A compensatory rule that weights each score by its importance would produce the following scores: Honda—335, BMW—355, Vespa—300, Kawasaki—315, Triumph— 340. Therefore, BMW would be selected.• Using an elimination-by-aspects rule would mean that four brands meet the minimum standard on the most important criterion, economy (minimum acceptable = 3): Honda (4), BMW (4), Vespa (3), Triumph (4). Of these, only one meets the minimum standard on the second most important criterion, price (minimum acceptable = 4): BMW (4). BMW would be selected.• A conjunctive decision rule would produce no choice, as no brand meets all the minimum performance levels. Additional search, lower standards or a different rule would be required. 5-62
  63. 63. Multiple-Choice Questions 5-63
  64. 64. Evaluative criteria are:A. the alternatives available to solve a problemB. limited to the evoked setC. limited to the inept setD. the various features a consumer looks for in a product for solving a particular problemE. none of the given answersIndirect methods for determining which evaluative criteria are being used include:A. projective techniquesB. focus groupsC. interviewsD. A and B onlyE. none of the given answersWhich of the following is a common approach to determining consumers judgments ofbrand performance on specific evaluative criteria:A. semantic differential scaleB. conjoint analysisC. MARCD. linear programmingE. none of the given answer 5-64
  65. 65. Which of the following is a useful approach for determining the relative importanceconsumers assign to various evaluative criteria:A. semantic differential scaleB. conjoint analysisC. MARCD. linear programmingE. none of the given answersA just noticeable difference (j.n.d.) refers to:A. the relative difference in sensitivity between various sense modesB. the minimum amount that one item can differ from another with the difference still beingnoticedC. the difference in importance assigned to various evaluative criteriaD. minimum variation in evaluative criteria required for inclusion in a multi-dimensionalscaling solutionE. none of the given answersThe readily observable attribute of a product used to represent the performance level of aless observable attribute is known as:A. a surrogate indicatorB. a lexicographic attributeC. a compensatory attributeD. an interactive variableE. none of the given answers 5-65
  66. 66. The use of price as a surrogate indicator appears to decline with:A. increases in visible product differencesB. increases in prior product experienceC. availability of additional product informationD. all of the given answersE. none of the given answersGiven the following minimum standards: Price = 3, Quality = 4, and Ease of Use = 3,which of the following compact disc players would be chosen using the conjunctivedecision rule: Sanyo Sony PioneerPrice 4 5 2Quality 4 3 5Ease of Use 4 4 4A. SonyB. SanyoC. PioneerD. theres not enough information to decideE. none of the given answers compact disc players would be chosen 5-66
  67. 67. Given the following attribute cut-offs: Price = 5, Quality = 5, and Ease of Use = 4, whichof the following computers would be chosen using the disjunctive decision rule: Hewlett-Packard Macintosh IBMPrice 5 4 4Quality 4 3 5Ease of Use 3 3 3A. Hewlett-PackardB. MacintoshC. IBMD. Hewlett-Packard and IBM would be considered furtherE. Macintosh and IBM would be considered furtherGiven the following attribute cut-offs: Price = 5, Quality = 5, and Ease of Use = 4, whichof the following compact disc players would be chosen using the disjunctive decisionrule: Sony Sanyo Pioneer Price 5 4 4 Quality 4 3 5 Ease of Use 3 3 3A. SonyB. SanyoC. PioneerD. Sony and Pioneer would be considered furtherE. Sanyo and Pioneer would be considered further 5-67
  68. 68. You are given the following information: Rank Cut-off PointPrice 1 4Quality 2 4Ease of Use 3 3Which of the following compact disc players would be chosen using the elimination-by-aspects decision rule: Sony Sanyo PioneerPrice 3 5 4Quality 4 4 4Ease of Use 3 2 3A. SonyB. SanyoC. PioneerD. Sanyo and Pioneer would be considered furtherE. none of the above compact disc players would be chosen 5-68
  69. 69. If using the lexicographic rule:A. it is essential if this rule is used by the target market that the product equalsor exceeds the performance of all other competitors on the most importantcriteriaB. it is essential if this rule is used by the target market that the product equalsor exceeds the performance of all other competitors on all criteriaC. it is essential if this rule is used by the target market that the product onlyhas to satisfactorily meet the criteriaD. none of the given answers is trueElimination-by-aspects rule would be best used by a consumer when:A. they have an important attribute that ranks far higher than all othersB. they have several attributes that ranks far higher than all othersC. they want a product which satisfies all criteria and has an important attributethat ranks far higher than all othersD. they want a product which ranks high on all criteria and has an importantattribute that ranks far higher than all othersE. none of the given answers is true 5-69
  70. 70. Review and discussion questions (selected) Chapter Six:Outlet Selection and Product Purchase 6-70
  71. 71. Review Questions2. What is store image and what are its dimensions and components? Store image is the overall perception of a particular retail outlet that is formed on the basis of impressions of that store, and comparable stores, in terms of the attributes commonly used to describe that particular type of retail outlet. A favourable store image can be expected to correspond with a favourable attitude towards that store and the intention to shop there for merchandise offered by that store (see Table 6.5, p.161).3. Describe the impact of retail advertising on retail sales. R et a i l price advertising at tr acts people to stor es, g ene r at e s sal es of the advertised i t e ms and increases s al es of other, unadvertised i t ems in th e store. In addition, both price and non-price advertising affect t h e s to re’ s i mage. (See Figur e 6. 1 o n p. 16 3, Fi g ur e 6. 3 on p .1 7 0 an d Exh i b it 6 .1 o n p .15 6. ) 6-71
  72. 72. 8. What can happen in response to a stockout? A stockout, the situation when a store is temporarily out of a particular brand, can obviously affect a consumer purchase decision in that the consumer must then decide whether to: (a) buy the same brand but at another store (b) switch brands (c) delay the purchase and buy the desired brand later at the same store (d) forgo the purchase altogether. Table 6. 8 (p. 173) and Figur e 6.5 ( p. 174) su mmar i se the impacts o f a sto cko u t situ at io n. 6-72
  73. 73. 10. What are some of the barriers to online shopping? As shown in Table 6.4 (p.160), the most common reasons for not shopping online were: they had no need to or they had not bothered to try; they had concerns about giving their credit card details online; and they had a preference for shopping in person. Various research studies have identified that some Internet users prefer online shopping over in-store shopping because of its convenience and time-saving potential. But many consumers still like shopping at stores and retail centres because this allows them to see, feel, touch and try on the products before they buy. Even though convenience is still a prime motivator for shopping online, the role of social interaction is seen as an obstacle to shopping online. Retailers can simulate the features of a physical store online; however, they also need to consider how they can replicate social interaction—perhaps through chat- groups or discussion forums with consumers. 6-73
  74. 74. Discussion Questions 4. What in-store characteristics could retailers use to enhance the probability of purchase by individuals who visit a store? Describe each factor in terms of how it should be used and describe its intended effect on the consumer for the following products: (a) toothpaste (b) a surf board (c) lemons (d) magazines (e) dessert at a restaurant (f) statistics software. Construct the table below and discuss the degree to which each in-store influence plays a role in the purchase of the products listed. While many answers are possible, those summarised below are easily deduced from most consumers’ experiences. 6-74
  75. 75. POP display Store layout Sales personnel Promotional deals Method of Atmosphere Type of product purchase(a) Toothpaste X X(b) Surfboard X X X(c) Lemons X X X(d) Magazines X X(e) Dessert at a restaurant X X(f) Statistics software X X 6-75
  76. 76. Multiple-Choice Questions 6-76
  77. 77. When making a purchase decision, a consumer can follow the sequence:A: outlet selection first, brand selection secondB. outlet and brand selection simultaneouslyC. brand (or item) selection first, outlet selection secondD. all of the given answersFor a target market using a ‘brand first/outlet second’ decision sequence, a retailershould:A. have price specials on brandsB. use image advertisingC. stock many brands and/or key brandsD. A and C onlyFor a target market using a ‘brand first/outlet second’ decision sequence, amanufacturer should NOT:A. use brand availability advertisingB. develop brand image managementC. use more exclusive distributionD. none of the given answersE. A and C only 6-77
  78. 78. Shopping orientation refers to:A. the situation that led to a particular shopping tripB. the general approach one takes to acquiring both brands and non-purchasesatisfactions from various forms of retail outletsC. whether the decision process was brand first/store second, store first/brandsecond or simultaneousD. the level of service provided by a retail outletPoint-of-purchase displays generally have:A. no influence on brand choiceB. modest influence on brand choiceC. high influence on brand choiceD. their major influence on product category salesThe attributes and components affecting an online store would include:A. wide range of goods and servicesB. lower pricesC. web page design and layoutD. all of the given answers 6-78
  79. 79. Kylie is excited by new technology, has a home computer and pay TV, worksfull-time, likes to spend time with her family, has a high monthly groceryexpenditure, likes to browse the Internet for hours and finds buying groceriesonline appealing. She is a(n):A. active shopperB. modern responsibleC. time starvedD. TraditionalistThe effectiveness of sales personnel is influenced by the interaction(s) of the:A. salesperson’s resourcesB. nature of the customer’s buying taskC. customer-salesperson relationshipD. all of the given answersA stockout situation is:A. caused when a store is temporarily out of a particular brand or productB. caused by a failure to integrate place correctly into the retail channelC. market demand being underestimated due to a failure to understandconsumer behaviourD. B and C 6-79
  80. 80. Raechel’s House of Beauty, a hairdresser and beautician aimed at the sub-30market, has the latest music playing, air-conditioning, comfortable lounges andmocktails in the waiting area. These are all examples of:A. store layoutB. store atmosphereC. servicescapeD. AtmosphericsPurchases that are made as a result of the consumer seeing a product, whichacts as a reminder that they need it, are called:A. impulse purchasesB. reminder purchasesC. unplanned purchaseD. none of the given answersThe risks that consumers face when purchasing a product is classified as:A. financial riskB. social riskC. performance and psychologicalD. all of the given answers 6-80
  81. 81. Review and discussion questions (selected) Chapter Seven:Postpurchase and Customer Satisfaction and Loyalty 7-81
  82. 82. Review Questions1. What characteristics of a purchase situation are likely to contribute to postpurchase dissonance? Postpurchase dissonance refers to an after-purchase psychological condition in which the purchaser experiences some doubt or worry about the wisdom of the purchase just made. Characteristics of the purchase situation that are likely to contribute to postpurchase dissonance include: • The degree of irrevocability of the decision. The easier it is to alter the decision, the less likely it is that the consumer would experience dissonance. • The importance of the decision to the consumer. The more important the decision is to the consumer, the more likely it is that dissonance will occur. • The difficulty of choosing among alternatives. The harder it is to select from among the alternatives, the more likely it is that the consumer will experience postpurchase dissonance. • The individual’s tendency to experience anxiety. Some individuals have a higher tendency to experience anxiety than others. The higher the tendency to experience anxiety, the more likely it is that the individual will experience postpurchase dissonance. 7-82
  83. 83. 2. In what ways can a marketer help to reduce postpurchase dissonance? Postpurchase dissonance may be reduced through advertisements aimed at recent purchasers of a product. A letter sent to a consumer immediately after purchase has the effect of reducing postpurchase dissonance. Generous warranties, postpurchase service, and easy return or exchange policies could also reduce the chances of postpurchase dissonance occurring. Any of these would perhaps reduce the dissonance that might be experienced in purchasing a product, since consumers know they have options available either to alter that decision after purchase or to ensure its satisfaction in terms of product performance.3. Why are marketers interested in disposal? Product disposal is important to marketing strategy because: • sometimes disposal must precede product use due to financial or space limitations • certain disposal strategies may give rise to a used or rebuilt market; and • difficult or unsatisfactory disposal alternatives may cause some consumers to withdraw from the market for a particular item. 7-83
  84. 84. 9. What is the relationship between product satisfaction and repurchase behaviour? What is the difference between repeat purchase and brand loyalty? Positive evaluation of and satisfaction with a product and/or brand are necessary conditions for repeat purchase of that product or brand. As long as other alternatives exist, consumers not satisfied with brand performance will seek other alternatives to satisfy their needs. The difference between repeat purchase behaviour and brand-loyal repeat purchase behaviour is that brand-loyal purchasers are psychologically committed to the brand purchased. Therefore, a consumer who makes repeat purchases of a certain brand of coffee, but is not psychologically committed to that brand of coffee, could not be considered brand loyal. A consumer exhibiting the same purchase behaviour but also expressing strong commitment to the brand is brand loyal.10. What characteristics have been found to distinguish brand loyal consumers from repeat purchase consumers? Based on a repeat-purchase measure of brand loyalty, there is little evidence to support any differences between loyal and non-loyal consumers in terms of socio-economic, demographic and psychological differences. In addition, there is only limited evidence that reference groups influence brand loyal behaviour. Loyalty to a particular store, however, has been found to be systematically related to brand loyalty. That is, the more store-loyal a consumer, the more likely the consumer will exhibit high brand loyalty. 7-84
  85. 85. Multiple-Choice Questions 7-85
  86. 86. The likelihood and magnitude of postpurchase dissonance increases for all ofthe following except:A. the more irrevocable the decisionB. the more difficult it is to choose among alternativesC. the more important the decision isD. all of the given answers increase postpurchase dissonanceWhich of the following is not an approach to reducing dissonance?A. increase the desirability of the brand purchasedB. decrease the desirability of the rejected alternativeC. decrease the importance of the purchase decisionD. all of the given answers are approaches for reducing dissonanceSome, but not all, consumer purchases:A. involve extensive postpurchase dissonanceB. do not involve postpurchase dissonanceC. involve postpurchase dissonance only if limited prepurchase alternativeevaluation was utilisedD. A and C 7-86
  87. 87. Most studies treat non-loyal repeat purchasers of a brand of the same as:A. repeat customersB. unibrand purchasers onlyC. unibrand and multibrand purchasersD. those loyal to another brand, and non-use purchasersRelationship marketing has these key elements:A. customisation and augmentationB. developing a core service or productC. pricing to encourage loyaltyD. all of the given answersRepeat purchase behaviour is frequently referred to as:A. brand loyaltyB. relationship marketingC. customer satisfactionD. customer retention 7-87
  88. 88. Which one is NOT an element of relationship marketing:A. developing a core product around which to build customer relationshipsB. pricing in a manner that encourages loyaltyC. engaging in internal marketing in order to perform well for customersD. all of the given answers are elements of relationship marketingWhich of the following are ways in which disposal decisions may influencemarketing strategy:A. Disposal may be necessary before acquisition of a replacement for financial orspace reasons.B. Socially conscious consumers may consider disposal alternatives as importantevaluative criteria in the purchase decision.C. Environmentally sound disposal decisions benefit society as a whole.D. All of the given answers influence marketing strategy.If a consumer has a high-performance expectation for a product, and after useperformance is perceived as better than expected, this consumer will be:A. nonsatisfiedB. dissatisfiedC. satisfiedD. unsatisfied 7-88
  89. 89. With respect to clothing, it has been found that:A. dissatisfaction is caused by a failure of instrumental performance whilesatisfaction requires both instrumental and symbolic performance at theexpected levelB. dissatisfaction is caused by a failure of symbolic performance whilesatisfaction requires both instrumental and symbolic performance at theexpected levelC. dissatisfaction results if either symbolic or instrumental performance isbelow expectationD. satisfaction requires that either symbolic or instrumental performanceexceed expectationsBrand loyalty differs from repeat purchase behaviour in that brand loyalty:A. involves at least 90 per cent of product category purchases with a singlebrandB. must exist over a minimum of 6 repurchase cyclesC. must not include any purchase of another brand when the primary brand isavailableD. implies a psychological commitment to the brand 7-89
  90. 90. The difference between repeat purchase behaviour and brand loyalty isexplained by the statements below EXCEPT:A. repeat purchase often results in brand loyaltyB. brand loyalty implies a psychological commitment to the brandC. repeat purchase may exist because there is only one brand in thatproduct categoryD. brand loyalty is biasedMany consumers judge the performance of a clothing product on itsappearance over time. This is an example of:A. instrumental performanceB. symbolic performanceC. satisfaction measurementD. none of the given answers 7-90

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