MGT 103 LATEST TEST PAPER ANSWERS AND
QUESTIONS SET A+
✔✔Compromise effect (extremeness aversion) - ✔✔Avoiding an extreme decision,
prompting users to pick a safer "middle ground."
✔✔Decoy effect (asymmetric dominance) - ✔✔The phenomenon whereby consumers
will tend to have a specific change in preference between two options when also
presented with a third option that is asymmetrically dominated.
✔✔postpurchase evaluation - ✔✔Consumer satisfaction/dissatisfaction after purchase
of product is critical
Degree of satisfaction is influenced by whether or not expectations of product quality
are met/exceeded
Marketing communications must create accurate expectations for the product
Cognitive dissonance (when behavior and attitude are not consistent) is common so
marketers do what they can to help to reduce it.
- Post-purchase regret is one form
✔✔Perception - ✔✔Process by which we select, organize, and interpret info from
outside world
- Exposure -> attention -> perception (info + interpretation)
- Drives behavior -> make sure perception is aligned with what you need it to be
- Ketchup example: green vs. red -> high rating until they saw the color
✔✔Shopping List Exercise by Nescafe (Haire 1950) - ✔✔A/B testing -> independent
variable was the type of coffee listed
Describe the person they thought wrote the shopping list
Results: Instant Coffee
Lazy, poorly organized, careless with money, inadequate wife & mother
,✔✔Conspicious Consumerism - ✔✔purchasing of goods and services with the purpose
of impressing others
✔✔Parody display - ✔✔status symbols that start in the lower-social classes and move
upward
✔✔Compensatory consumption - ✔✔Retail therapy
✔✔Aspiration group - ✔✔Do not currently belong to
Want to belong to
Want in
✔✔associative group - ✔✔Coworkers, neighbors, people you see all of the time
Already in
✔✔Dissociative group - ✔✔Group you don't belong to and don't want to belong to
Don't agree with what they like and do
Actively avoid
✔✔Identifying Potential Competitive Advantages - ✔✔Product differentiation
Services differentiation
Image differentiation
Personnel Differentiation
✔✔services differentiation - ✔✔differentiation through speedy, convenient, or careful
delivery
✔✔product differentiation - ✔✔a positioning strategy that some firms use to distinguish
their products from those of competitors
✔✔image differentiation - ✔✔a company or brand image should convey a product's
distinctive benefits and positioning
✔✔Personnel Differentiation - ✔✔Having better/different employees
✔✔General comments about consumer behavior - ✔✔Beware of common sense
Understand the nature of the relationship
Consumer research is a social science
Qualitative or quantitative?
✔✔Target market process - ✔✔Segmentation -> targeting -> positioning
, ✔✔one product and multiple market segments - ✔✔When an organization produces
only a single product or service and attempts to sell it to two or more market segments
✔✔Multiple Products and Multiple Market Segments - ✔✔multiple products are targeted
or aimed at multiple market segments and different types of customers
producing different products is more expensive than producing only a single product,
but the strategy is very effective if:
it meets customers' needs better,
doesn't reduce quality or increase price,
and adds to sales revenues and profits
✔✔Segments of One: Mass Customization - ✔✔Tailoring goods or services to the
tastes of individual customers on a high-volume scale
✔✔behavioristic segmentation - ✔✔buying behavior, segment how you purchase
Usage pattern, benefit sought, decision-making process
What people do and how they act
Observable actions
✔✔geographic segmentation - ✔✔dividing a market into different geographical units,
such as nations, states, regions, counties, cities, or even neighborhoods
✔✔psychographic segmentation - ✔✔Values, lifestyle, individual differences
Internal characteristics
Why do they care? Why do they choose this?
✔✔demographic segmentation - ✔✔segmenting markets by age, gender, income,
ethnic background, and family life cycle
MUST BE KNOWN to assess the size of target market & reach it effectively
✔✔80/20 rule - ✔✔a concept that suggests 80 percent of a firm's sales are obtained
from 20 percent of its customers
ROUGH estimate
✔✔Positioning Questions - ✔✔Build a profile of your ideal customer:
✔ What problems do they have?
✔ Who else might have those problems?
✔ What solution(s) can you develop to
solve these problems?
QUESTIONS SET A+
✔✔Compromise effect (extremeness aversion) - ✔✔Avoiding an extreme decision,
prompting users to pick a safer "middle ground."
✔✔Decoy effect (asymmetric dominance) - ✔✔The phenomenon whereby consumers
will tend to have a specific change in preference between two options when also
presented with a third option that is asymmetrically dominated.
✔✔postpurchase evaluation - ✔✔Consumer satisfaction/dissatisfaction after purchase
of product is critical
Degree of satisfaction is influenced by whether or not expectations of product quality
are met/exceeded
Marketing communications must create accurate expectations for the product
Cognitive dissonance (when behavior and attitude are not consistent) is common so
marketers do what they can to help to reduce it.
- Post-purchase regret is one form
✔✔Perception - ✔✔Process by which we select, organize, and interpret info from
outside world
- Exposure -> attention -> perception (info + interpretation)
- Drives behavior -> make sure perception is aligned with what you need it to be
- Ketchup example: green vs. red -> high rating until they saw the color
✔✔Shopping List Exercise by Nescafe (Haire 1950) - ✔✔A/B testing -> independent
variable was the type of coffee listed
Describe the person they thought wrote the shopping list
Results: Instant Coffee
Lazy, poorly organized, careless with money, inadequate wife & mother
,✔✔Conspicious Consumerism - ✔✔purchasing of goods and services with the purpose
of impressing others
✔✔Parody display - ✔✔status symbols that start in the lower-social classes and move
upward
✔✔Compensatory consumption - ✔✔Retail therapy
✔✔Aspiration group - ✔✔Do not currently belong to
Want to belong to
Want in
✔✔associative group - ✔✔Coworkers, neighbors, people you see all of the time
Already in
✔✔Dissociative group - ✔✔Group you don't belong to and don't want to belong to
Don't agree with what they like and do
Actively avoid
✔✔Identifying Potential Competitive Advantages - ✔✔Product differentiation
Services differentiation
Image differentiation
Personnel Differentiation
✔✔services differentiation - ✔✔differentiation through speedy, convenient, or careful
delivery
✔✔product differentiation - ✔✔a positioning strategy that some firms use to distinguish
their products from those of competitors
✔✔image differentiation - ✔✔a company or brand image should convey a product's
distinctive benefits and positioning
✔✔Personnel Differentiation - ✔✔Having better/different employees
✔✔General comments about consumer behavior - ✔✔Beware of common sense
Understand the nature of the relationship
Consumer research is a social science
Qualitative or quantitative?
✔✔Target market process - ✔✔Segmentation -> targeting -> positioning
, ✔✔one product and multiple market segments - ✔✔When an organization produces
only a single product or service and attempts to sell it to two or more market segments
✔✔Multiple Products and Multiple Market Segments - ✔✔multiple products are targeted
or aimed at multiple market segments and different types of customers
producing different products is more expensive than producing only a single product,
but the strategy is very effective if:
it meets customers' needs better,
doesn't reduce quality or increase price,
and adds to sales revenues and profits
✔✔Segments of One: Mass Customization - ✔✔Tailoring goods or services to the
tastes of individual customers on a high-volume scale
✔✔behavioristic segmentation - ✔✔buying behavior, segment how you purchase
Usage pattern, benefit sought, decision-making process
What people do and how they act
Observable actions
✔✔geographic segmentation - ✔✔dividing a market into different geographical units,
such as nations, states, regions, counties, cities, or even neighborhoods
✔✔psychographic segmentation - ✔✔Values, lifestyle, individual differences
Internal characteristics
Why do they care? Why do they choose this?
✔✔demographic segmentation - ✔✔segmenting markets by age, gender, income,
ethnic background, and family life cycle
MUST BE KNOWN to assess the size of target market & reach it effectively
✔✔80/20 rule - ✔✔a concept that suggests 80 percent of a firm's sales are obtained
from 20 percent of its customers
ROUGH estimate
✔✔Positioning Questions - ✔✔Build a profile of your ideal customer:
✔ What problems do they have?
✔ Who else might have those problems?
✔ What solution(s) can you develop to
solve these problems?
