MNM2605 LONG QUESTIONS FROM SCOPE PLUS ANSWERS FOR
SEMESTER 2 – 2019.
Discuss any four (4) types of reference groups that a consumer can refer to in helping her with
this buying decision and provide an example of each type of reference group. (1 mark per
reference group discussion = 4 marks and 1 mark per example = 4 marks)
1. Formal Reference Group – this group consists of rules, a well-defined structure and
membership. It will include people like work colleagues or team mates from a sports team or
dance group.
2. Informal Reference Group – this group doesn’t have rules and is less rigid in structure. It will
include family members as well as friends.
3. Primary Reference Group – this reference group are who you have face to face daily
interaction with. It will consists of people like class mates from a school or university.
4. Secondary Reference Group – this group are people you don’t interact with on a daily bases.
They may be in a different country but has an influence on your life’s behaviour. It could be a
sports team that you support oversees that influence you.
5. Membership and non-membership Reference Group – with regards to the former, it requires
membership to be a part of this reference group. For instance a Church Congregation.
However, with regards to the latter reference group, you may not be a member but you still
model their behaviour.
6. Aspirational Reference Group – this is a group you aspiring to be a part of. For instance, an
elite group of people in politics or a graduation group of future professionals.
7. Dissociative Reference Group – this group is what you DO NOT want to be a part of or you
REJECT. It could be a smoking group or a gang group.
There are four (4) personality theories which have played a prominent role in the study of the
relationship between consumer behaviour and personality. Discuss these four personality
theories (2 marks per theory = 8 marks).
a. Freud’s Psychoanalytic Theory of personality – it’s the foundation for the study of
motivational research. It operates on the premise that human drive is largely unconscious and
serves as a motivation for customer actions. Motivational researches tend to focus on what
customers buy and use the purchases as a reflection and extension of a customer’s
personality. So in order words…a customer purchasing an expensive car is looking to enhance
his/her self-confidence.
b. Neo-Freudian – it’s the fundamental role for social relationship as a formulation and
development for personality. A person striving to overcome inferiority and anxiety. Although this
theory didn’t get widespread attention marketers have used it intuitively…a product that is
advertised as non-conforming would attract a customer that is looking for independence.
c. Trait Theory – focused on measuring personality into traits. Traits are specific and refer to
individual psychological characterises. This theory states that individuals have innate traits like
self-confidence, aggression, responsibility.
d. Gestalt Theory – stimuli from the environment are grouped together and viewed as a unified
whole. Used as a basis for evaluating consumer personality.
There are four (4) dominant types of households. Identify and discuss each type. (1 mark
per type = 4 marks)
1. The One-person household – this includes one independent person
2. The Nuclear Household – includes a single family nucleus which can further be described as
a married couple with or without children
3. The Extended Household – this is also referred to a basic household. It includes the nuclear
family as well as other relatives like grandparents, aunts, uncles, in-laws.
4. The Single Parent Household – this includes one parent with a minimum of one child.
This is becoming a common household with the large divorce rate or people having
children outside wedlock.
, You are the brand manager for Will’s product range. Discuss ten (10) factors that could
influence the spread or diffusion of innovation and give practical examples relating to
the newly introduced product by Will’s. (10 marks will be awarded for theory and 10 marks
will be awarded for the examples based on the given case study.)
Please note, I’m unable to provide examples on the case study because I do not have it so my
examples are generic
1. Complexity – this refers to how difficult or how complicated it is to understand or work the
innovation. The more complexed it is to understand and use, the slower the diffusion of
innovation will be. EG. For instance an Apple iPhone. Although it’s sold as an easy to
use smartphone, for consumers who are not tech-savvy and are limited with all the
boundaries given by Apple, who are not well informed about how to save downloaded
documents and whether it can be done on the phone itself or in a “cloud”. Then you have
the Samsung which is more user friendly, documents are automatically saved for you in
a file which is easy to access and you are not challenged with boundaries by the
operating system. This will cause the Apple iPhone to diffuse at a slower rate compared
to the Samsung smartphone due to the benefits mentioned above.
2. Compatibility – this refers to how compatible is the innovation to the consumers values,
beliefs and objectives of purchase and use. EG. The Monster energy drink is frowned
upon by some Christians because they believe the logo has a demonic representation.
This will cause a slow diffusion amongst that target audience as appose to the Red Bull
energy drink which may have a faster spread with this particular market.
3. Relative advantage – this refers to, is the customer’s needs being met by the
innovation..ie, lower cost rate or new way of doing things? EG. the Nedbank Pocket
Pause which allows Small Businesses to accept cards as appose to turning customers
away who don’t like carrying cash. For any small business it’s about increasing profits
and to turn customers away because they don’t have cash on them hinders this. This
innovation will allow a Small Business to pay a small monthly fee as appose to paying a
percentage off every transaction with the “Point of Sale” machine, so diffusion of this
innovation will increase rapidly amongst the target market.
4. Observation – is the consumer able to physically see the benefits and features of the
innovation before purchase. EG. the Phillips “no setting” Iron. The consumer will be able
to witness the salesperson demonstrating the use of the iron by showing him/her how it
switches from ironing cotton to silk and glides over images on T-shirts without damaging
the garment…all without changing a setting on the iron. Compared to the Phillips
Washing Machine where the consumer will only be able to observe the use of it once it
has been purchased and set-up at home. So consumers will adopt the iron much faster
than the washing machine due to the fact that they had the opportunity to experience
first-hand the benefits of the new product.
5. Trial - how easy is it for a low cost, low risk trial pack of the innovation to be available…if
this is available it will increase diffusion rapidly because the consumer will be able to
experience the innovation before purchasing it. EG. the new flavour Jacobs Kroning
Coffee. By handing out sample sachets, the consumers will be able to taste the coffee
and agree if it’s satisfactory before purchasing it.
6. Perceived Risk – if the consumer perceives the risk on the innovation to be high, then
diffusion will be slow. Risk can be psychological or financial. A financial risk is paying a
large amount for an innovation knowing you will not be able to receive your initial amount
should you not be satisfied. Using the example that is in the guide of a purchase of a
vehicle. Purchasing the latest Lexus…since vehicles depreciate in value once they leave
the showroom, the consumer will not be refunded the amount he/she paid if he/she is not
SEMESTER 2 – 2019.
Discuss any four (4) types of reference groups that a consumer can refer to in helping her with
this buying decision and provide an example of each type of reference group. (1 mark per
reference group discussion = 4 marks and 1 mark per example = 4 marks)
1. Formal Reference Group – this group consists of rules, a well-defined structure and
membership. It will include people like work colleagues or team mates from a sports team or
dance group.
2. Informal Reference Group – this group doesn’t have rules and is less rigid in structure. It will
include family members as well as friends.
3. Primary Reference Group – this reference group are who you have face to face daily
interaction with. It will consists of people like class mates from a school or university.
4. Secondary Reference Group – this group are people you don’t interact with on a daily bases.
They may be in a different country but has an influence on your life’s behaviour. It could be a
sports team that you support oversees that influence you.
5. Membership and non-membership Reference Group – with regards to the former, it requires
membership to be a part of this reference group. For instance a Church Congregation.
However, with regards to the latter reference group, you may not be a member but you still
model their behaviour.
6. Aspirational Reference Group – this is a group you aspiring to be a part of. For instance, an
elite group of people in politics or a graduation group of future professionals.
7. Dissociative Reference Group – this group is what you DO NOT want to be a part of or you
REJECT. It could be a smoking group or a gang group.
There are four (4) personality theories which have played a prominent role in the study of the
relationship between consumer behaviour and personality. Discuss these four personality
theories (2 marks per theory = 8 marks).
a. Freud’s Psychoanalytic Theory of personality – it’s the foundation for the study of
motivational research. It operates on the premise that human drive is largely unconscious and
serves as a motivation for customer actions. Motivational researches tend to focus on what
customers buy and use the purchases as a reflection and extension of a customer’s
personality. So in order words…a customer purchasing an expensive car is looking to enhance
his/her self-confidence.
b. Neo-Freudian – it’s the fundamental role for social relationship as a formulation and
development for personality. A person striving to overcome inferiority and anxiety. Although this
theory didn’t get widespread attention marketers have used it intuitively…a product that is
advertised as non-conforming would attract a customer that is looking for independence.
c. Trait Theory – focused on measuring personality into traits. Traits are specific and refer to
individual psychological characterises. This theory states that individuals have innate traits like
self-confidence, aggression, responsibility.
d. Gestalt Theory – stimuli from the environment are grouped together and viewed as a unified
whole. Used as a basis for evaluating consumer personality.
There are four (4) dominant types of households. Identify and discuss each type. (1 mark
per type = 4 marks)
1. The One-person household – this includes one independent person
2. The Nuclear Household – includes a single family nucleus which can further be described as
a married couple with or without children
3. The Extended Household – this is also referred to a basic household. It includes the nuclear
family as well as other relatives like grandparents, aunts, uncles, in-laws.
4. The Single Parent Household – this includes one parent with a minimum of one child.
This is becoming a common household with the large divorce rate or people having
children outside wedlock.
, You are the brand manager for Will’s product range. Discuss ten (10) factors that could
influence the spread or diffusion of innovation and give practical examples relating to
the newly introduced product by Will’s. (10 marks will be awarded for theory and 10 marks
will be awarded for the examples based on the given case study.)
Please note, I’m unable to provide examples on the case study because I do not have it so my
examples are generic
1. Complexity – this refers to how difficult or how complicated it is to understand or work the
innovation. The more complexed it is to understand and use, the slower the diffusion of
innovation will be. EG. For instance an Apple iPhone. Although it’s sold as an easy to
use smartphone, for consumers who are not tech-savvy and are limited with all the
boundaries given by Apple, who are not well informed about how to save downloaded
documents and whether it can be done on the phone itself or in a “cloud”. Then you have
the Samsung which is more user friendly, documents are automatically saved for you in
a file which is easy to access and you are not challenged with boundaries by the
operating system. This will cause the Apple iPhone to diffuse at a slower rate compared
to the Samsung smartphone due to the benefits mentioned above.
2. Compatibility – this refers to how compatible is the innovation to the consumers values,
beliefs and objectives of purchase and use. EG. The Monster energy drink is frowned
upon by some Christians because they believe the logo has a demonic representation.
This will cause a slow diffusion amongst that target audience as appose to the Red Bull
energy drink which may have a faster spread with this particular market.
3. Relative advantage – this refers to, is the customer’s needs being met by the
innovation..ie, lower cost rate or new way of doing things? EG. the Nedbank Pocket
Pause which allows Small Businesses to accept cards as appose to turning customers
away who don’t like carrying cash. For any small business it’s about increasing profits
and to turn customers away because they don’t have cash on them hinders this. This
innovation will allow a Small Business to pay a small monthly fee as appose to paying a
percentage off every transaction with the “Point of Sale” machine, so diffusion of this
innovation will increase rapidly amongst the target market.
4. Observation – is the consumer able to physically see the benefits and features of the
innovation before purchase. EG. the Phillips “no setting” Iron. The consumer will be able
to witness the salesperson demonstrating the use of the iron by showing him/her how it
switches from ironing cotton to silk and glides over images on T-shirts without damaging
the garment…all without changing a setting on the iron. Compared to the Phillips
Washing Machine where the consumer will only be able to observe the use of it once it
has been purchased and set-up at home. So consumers will adopt the iron much faster
than the washing machine due to the fact that they had the opportunity to experience
first-hand the benefits of the new product.
5. Trial - how easy is it for a low cost, low risk trial pack of the innovation to be available…if
this is available it will increase diffusion rapidly because the consumer will be able to
experience the innovation before purchasing it. EG. the new flavour Jacobs Kroning
Coffee. By handing out sample sachets, the consumers will be able to taste the coffee
and agree if it’s satisfactory before purchasing it.
6. Perceived Risk – if the consumer perceives the risk on the innovation to be high, then
diffusion will be slow. Risk can be psychological or financial. A financial risk is paying a
large amount for an innovation knowing you will not be able to receive your initial amount
should you not be satisfied. Using the example that is in the guide of a purchase of a
vehicle. Purchasing the latest Lexus…since vehicles depreciate in value once they leave
the showroom, the consumer will not be refunded the amount he/she paid if he/she is not
