Chapter 1: Consumer Behavior: Its Origins and

Strategic Applications
Multiple Choice Questions:
1. The behavior that consumers display in searching for, purchasing, using, evaluating,
and disposing of products and services that they expect will satisfy their needs is
known as _____.
a. production concept
b. selling concept
c. product concept
d. consumer behavior
e. selective relationships
(d; Fact, Easy, p. 1.2)
2. As human beings, we all have the same biological needs, but we all acquire additional
needs that are shaped by our environment. Some of these acquired needs are common
to many people. The commonality of a need or interest constitutes a _____.
a. target market
b. market segment
c. consumption decision
d. marketing mix
e. product position
(b; Understanding, Moderate, p. 1.2)
3. For the marketer, one of the most important constants among all of us is that we are
_____.
a. producers
b. individuals
c. sellers
d. market segments
e. consumers
(e; Understanding, Moderate, p. 1.2)
4. The term consumer behavior describes two different kinds of consuming entities:
_____ and _____consumers.
a. non-profit; government
b. non-profit; for profit
c. personal; organizational
d. government; private
e. organizational; private
(c; Fact Easy, p. 1.3)

5. A personal consumer buys goods for _____.

a. personal consumption.
b. consumption by coworkers.
c. home business.
d. schools.
e. government agencies.
(a; Fact, Moderate, p. 1.3)
6. Jane is in charge of purchasing at Mercy Hospital. When she puts in an order for
towels for the hospital, she is acting as a(n) _____, whereas when she buys towels for
her familys use, she is acting as a(n) _____.
a. private consumer; non-profit consumer
b. governmental consumer; non-profit consumer
c. organizational consumer; personal consumer
d. private consumer; public consumer
e. personal consumer; organizational consumer
(c; Application, Moderate, p. 1.3)
7. The _____ concept assumes that consumers are mostly interested in product
availability at low prices.
a. marketing
b. societal
c. product
d. production
e. technology
(d; Fact, Moderate, p. 1.3)
8. The implicit marketing objectives of the _____ are cheap, efficient production and
intensive distribution.
a. market segmentation
b. product concept
c. selling concept
d. production concept
e. marketing concept
(d; Fact, Moderate, p. 1.4)
9. The production concept makes sense as a business model when _____.
a. consumers are most interested in product availability at low prices
b. consumers are interested in obtaining the product that offers them the highest
quality, best performance, and most features
c. consumers have changing needs and insist that those needs be satisfied
d. consumers are unlikely to buy the product unless they are persuaded to do so
e. consumers are not sensitive to price
(a; Understanding, Moderate, p. 1.4)

10. Companies that use the _____ as their business model strive constantly to improve
the quality of their products and to add new features, regardless of whether the
consumer perceives a need for these new features.
a. marketing concept
b. product concept
c. selling concept
d. production concept
e. market targeting
(b; Understanding, Moderate, p. 1.4)
11. The _____ concept assumes that consumers will buy the product that offers them the
highest quality, the most features and the best performance.
a. production
b. marketing
c. selling
d. product
e. targeting
(d; Fact, Easy, p. 1.4)
12. The product concept leads to marketing myopia, which means that the _____.
a. focus is on what consumers want and need
b. focus is on what is best for society
c. focus is on the product rather than the consumer
d. focus is on quality of service
e. focus is on minimizing the cost of production
(c; Fact, Challenging, p. 1.4)
13. One of the underlying convictions of the _____ is that consumers are unlikely to buy
the product unless they are aggressively persuaded to do so.
a. production concept
b. selling concept
c. market segmentation
d. product concept
e. societal concept
(b; Fact, Moderate, p. 1.5)
14. Today, the _____ is typically utilized by marketers of unsought goods such as life
insurance.
a. product concept
b. societal marketing
c. selling concept
d. marketing myopia
e. production concept
(c; Fact, Easy, p. 1.5)

15. The consumer-oriented philosophy that evolved when marketers realized it would be
easier to sell more goods to consumers who had already expressed interest is known
as the _____.
a. the selling concept
b. the marketing concept
c. the societal marketing concept
d. the customer satisfaction philosophy
e. the production concept
(b; Understanding, Moderate, p. 1.5)
16. One of the central tenets of the _____ is that companies will be able to sell more
goods, more easily, if they produce only those goods that they have already
determined that consumers will buy.
a. production concept
b. marketing concept
c. market segment
d. target market
e. selling concept
(b; Understanding, Easy, p. 1.5)
17. Firms determine what goods consumers want through _____.
a. market research
b. market targeting
c. market segmentation
d. product positioning
e. value propositions
(a; Fact, Easy, p. 1.5)
18. The key assumption underlying the marketing concept is that, to be successful, a
company must _____.
a. minimize the cost of production in order to offer a product at the lowest price
b. update its product line continually, without regard to the needs of consumers
c. determine the needs and wants of specific target markets and deliver the desired
satisfaction better than the competition
d. aggressively pursue consumers with advertising messages in order to convince
them to purchase the product
e. sell its products in a socially responsible way
(c; Understanding, Moderate, p. 1.6)

19. The selling concept focuses on the needs of the _____ and on existing products, while
the marketing concept focuses on the needs of the _____.
a. manufacturer; seller
b. buyer; manufacturer
c. seller; buyer
d. seller; manufacturer
e. buyer; seller
(c; Understanding, Easy, p. 1.6)
20. The selling concept focuses on profit through _____, while the marketing concept
focuses on profits based on _____.
a. product innovation; aggressive advertising
b. sales volume; customer satisfaction
c. customer satisfaction; product innovation
d. customer satisfaction; aggressive advertising
e. product innovation; sales volume
(b; Understanding, Challenging, p. 1.6)
21. _____ is developing a distinct image for the product in the mind of the consumer.
a. Targeting
b. Positioning
c. Placement
d. Promotion
e. Segmenting
(b; Fact, Easy, p. 1.7)
22. The 4 Ps of the marketing mix are _____.
a. product/service, price, place, people
b. potential, price, place, people
c. product/service, price, place, promotion
d. product/service, promotion, potential, price
e. price, purchase, placement, product/service
(c; Fact, Moderate, p. 1.9)
23. The process of dividing a market into subsets of consumers with common needs or
characteristics is known as _____.
a. market targeting
b. marketing ethics
c. product positioning
d. market segmentation
e. social responsibility
(d; Fact, Easy, p. 1.8)

24. Successful product positioning centers around two key principles: developing a
unique selling proposition, and communicating the _____.
a. price
b. features and options
c. benefits the product will provide
d. warranty details
e. store locations
(c; Understanding, Moderate, p. 1.9)
25. Me too products are _____.
a. products that need to be bought along with the original product.
b. secondary products that customers need to be reminded to buy.
c. products that lack a unique image or benefit.
d. products that are classified as childrens toys and entertainment products.
e. products that are included for free with the desired product
(c; Fact, Moderate , p. 1.9)
26. In the selling concept business model, which of the four elements of the marketing
mix is most heavily emphasized?
a. promotion
b. place
c. production
d. price
e. people
(a; Understanding, Challenging, p. 1.9)
27. In the production concept business model, which of the four elements of the
marketing mix is most heavily emphasized?
a. product
b. proportion
c. price
d. place
e. promotion
(c; Understanding, Challenging, p. 1.9)
28. In the product concept business model, which of the four elements of the marketing
mix is most heavily emphasized?
a. price
b. people
c. promotion
d. place
e. product
(e; Understanding, Moderate, p. 1.9)

29. Of the four Ps of the marketing mix, promotion includes _____.

a. payment methods
b. public relations
c. warranties
d. discounts
e. product size
(b; Understanding, Moderate, p. 1.9)
30. Of the four Ps of the marketing mix, product includes _____.
a. packaging
b. public relations
c. discounts
d. payment methods
e. distribution centers
(a; Understanding, Moderate, p. 1.9)
31. Of the four Ps of the marketing mix, place includes _____.
a. discounts
b. public relations
c. warranties
d. distribution centers
e. packaging
(d; Understanding, Moderate, p. 1.9)
32. Of the four Ps of the marketing mix, price includes _____.
a. payment methods
b. public relations
c. warranties
d. distribution centers
e. packaging
(a; Understanding, Moderate, p. 1.9)
33. Savvy marketers realize that in order to outperform competition, they must achieve
full profit potential from each and every customer by viewing each customer
interaction as a _____ rather than a _____.
a. returned product; satisfaction
b. relationship; transaction
c. confrontation; resolution
d. loss; maximum profit
e. source of profit; transaction
(b; Understanding, Moderate, p. 1.10)

34. _____ is defined as the ratio between the customers perceived benefits (economic,
functional and physiological) and the resources (monetary, time, effort,
psychological) used to obtain those benefits.
a. Customer satisfaction
b. Customer value
c. Customer relationship management
d. Consumer decision making
e. Consumer marketing
(b; Fact, Moderate, p. 1.10)
35. Lexus claims to deliver its buyers quality, zero defects in manufacturing, and superior
and personal post-purchase service. This is an example of _____.
a. quality control management
b. value proposition
c. customer satisfaction guarantee
d. corporate futuristic vision
e. market targeting
(b; Application, Moderate, p. 1.11)
36. The concept of customer satisfaction is a function of _____.
a. customer experience
b. customer knowledge
c. customer expectations
d. price paid
e. customer needs
(c; Fact, Moderate, p. 1.12)
37. An individuals perception of the performance of a product or service in relation to
ones expectations is known as _____.
a. market segmentation
b. customer satisfaction
c. market targeting
d. product placement
e. product promotion
(b; Fact, Easy, p. 1.12)
38. The overall objective of providing value to customers continuously and more
effectively than the competition is _____.
a. to continually win over customers from competitors
b. to produce compelling advertising message
c. to help recruit a dedicated workforce
d. to avoid government regulation of the industry
e. to have and to retain highly satisfied customers
(e; Fact, Easy, p. 1.13)

39. The Internet today allows for more customer intimacy and customization by offering
customers specific individual offers. This type of marketing is known as _____.
a. private marketing
b. one to one marketing
c. B2C marketing
d. relationship marketing
e. segment marketing
(b; Fact, Moderate, p. 1.13)
40. The fact that not all customers are equal in terms of profitability means that marketers
should focus on building _____.
a. relationships with all people who express an interest in the company
b. selective relationships
c. profit classification departments
d. higher barriers to entry
e. a continually improving reputation for innovation
(b; Understanding, Challenging, p. 1.13)
41. Customer profitability-focused marketing _____.
a. tracks costs and revenues of individual customers and then categorizes them into
tiers based on consumption behaviors that are specific to the companys offerings
b. minimizes the cost of production in order to offer the product at the best price
possible
c. aggressively markets products to consumers who do not necessarily think that
they need the product
d. continually updates the product without regard to the needs of the consumer
e. invests money in attracting customers that are very sensitive to price and are not
loyal to any given brand
(a; Fact, Moderate, p. 1.14)
42. _____ allow much greater customization of products, services and promotional
messages than older marketing tools.
a. Social marketing concepts
b. Consumer behavior theories
c. Organizational consumers
d. Product concepts
e. Digital technologies
(e; Understanding, Easy, p. 1.15)

43. The adoption of digital technologies has introduced the following drastic changes into
the business environment, _____.
a. customers are forced to deal with distribution outlets and middlemen in order to
obtain goods
b. the exchange between marketers and customers is less interactive than in the past
c. consumers face more barriers to accessing information
d. marketers can offer more products and services than ever before
e. market research has become significantly more difficult
(d; Fact, Moderate, p. 1.15-17)
44. Emerging digital technologies are allowing consumers to have more power than ever
before. This means that now, customers _____.
a. are required to buy goods and services from local vendors
b. are limited in the time of day that they are able to buy products
c. can use intelligent agents to locate the best prices for products or services
d. more limited in the range of products that they can purchase
e. are forced to acquire used items through middlemen instead of directly from the
original owner
(c; Understanding, Moderate, p. 1.15)
45. Marketers can most quickly and efficiently gauge the effectiveness of their online
promotional messages by _____.
a. hiring telemarketers to conduct brief survey calls to a sample of the customers
who browsed the website
b. tracking consumer clicks on various pages or links on the website
c. monitoring the sales response to particular changes to website content
d. having customers fill out a brief online survey asking their opinion and enticing
them with sweepstakes
e. convening consumer focus groups to evaluate the impression made by particular
changes in website content
(b; Understanding, Challenging, p. 1.16)
46. Currently, most of the digital communications between consumers and marketers
takes place via _____.
a. shipping companies
b. credit cards
c. computers connected to the web
d. PDAs
e. television
(c; Fact, Challenging, p. 1.17)

10

47. As consumers spend more time online and have more technological tools that enable
them to avoid exposure to TV ads, marketers are _____.
a. investing in flashier television advertisements to attract attention to themselves
b. buying more air time in an attempt to crowd out their competitors advertisements
c. lobbying for legislation that will prohibit the sale of devices that allow consumers
to avoid advertising on the basis that such devices are anti-competitive
d. reducing their advertising expenditures on the major networks and investing their
advertising dollars in newer media, such as the web
e. blocking out any mention of brand names during regular programming
(d; Challenging, p. 1.18)
48. The societal marketing concept calls on marketers to _____.
a. minimize production costs in order to offer the product at the lowest price
possible
b. aggressively market all products to all segments of society
c. track customer preferences via the Internet to improve customer research
databases
d. fulfill the needs of the target audience in ways that improve society as a whole,
while fulfilling the objectives of the organization
e. lobby for government regulation of their industries
(d; Fact, Moderate, p. 1.20)
49. A trade association might develop an industry-wide _____ in order to self-regulate its
members and deter government imposition of regulations.
a. production schedule
b. code of ethics
c. advertising slogan
d. distribution chain
e. quality standard
(c; Understanding, Easy, p. 1.21)
50. Whereas the traditional marketing concept uses one-way promotions whose
effectiveness is measured through sales data or marketing surveys, value and
retention-focused marketing _____.
a. uses interactive communications in which messages to customers are tailored
according to their responses to previous communications
b. creates loyalty programs based on the volume purchased
c. segments the market based on customers geographic, demographic,
psychological, sociocultural, lifestyle, and product-usage related characteristics
d. researches consumer needs and characteristics
e. focuses on the needs that a product satisfies, rather than the product itself
(a; Understanding, Challenging, p. 1.35, table 1-2)

11

51. The main deterrent to implementation of the societal marketing concept is _____.
a. the lack of research to aid the success of this concept.
b. the lack of evidence that proves the success of this concept.
c. the short term orientation in which manager performance is evaluated.
d. the lack of trained professionals to overlook its implementation.
e. low profit margins associated with social responsibility.
(c; Understanding, Challenging, p. 1.20)
52. The model of consumer decision making can be viewed as three distinct but
interlocking stages which include _____.
a. input, analysis, and output
b. environment, search, and evaluation
c. input, process, and output
d. analysis, decision making, and output
e. analysis, process, and output
(c; Fact, Moderate, p. 1.22)
53. The input stage of the model of consumer decision involves _____.
a. purchase behavior and post purchase evaluation
b. minimizing production costs
c. the firms marketing efforts and the external sociological influences on the
consumer
d. the manufacturers supply chain
e. how consumers make decisions
(c; Understanding, Moderate, p. 1.22)
54. The process stage of the model of consumer decision involves _____.
a. purchase behavior and post purchase evaluation
b. minimizing production costs
c. the firms marketing efforts and the external sociological influences on the
consumer
d. the manufacturers supply chain
e. how consumers make decisions
(e; Understanding, Moderate, p. 1.23)
55. The output stage of the model of consumer decision involves _____.
a. purchase behavior and post purchase evaluation
b. minimizing production costs
c. the firms marketing efforts and the external sociological influences on the
consumer
d. the manufacturers supply chain
e. how consumers make decisions
(a; Understanding, Moderate, p. 1.23)

12

Multiple Choice Mini Cases

CAR MINI CASE: In the early 1900s, Henry Ford made a fortune manufacturing Model
T cars and selling them cheaply, making the automobile affordable for a much larger
proportion of the population than had previously been the case. He accomplished this by
producing only one model of car and doing so cheaply and at high volumes through the
utilization of assembly line manufacture. In 1923, General Motors decided to increase
its market share in the automobile industry by offering, instead of just one model, as Ford
did, a variety of affordable mass-produced models to meet the various differing needs of
different types of consumers.
56. In the CAR MINI CASE, by identifying the automotive needs of different groups of
consumers, General Motors was _____.
a. targeting the market
b. positioning its product
c. developing a value proposition
d. segmenting the market
e. minimizing production costs
(d; Application, Moderate, p. 1.8)
57. In the CAR MINI CASE, Fords business approach focused primarily on the _____.
a. production concept
b. marketing concept
c. societal marketing concept
d. product concept
e. selling concept
(a; Application, Moderate, p. 1.3)
58. In the CAR MINI CASE, which of the following elements of the marketing mix was
central to Fords business model?
a. promotion
b. product
c. price
d. placement
e. production
(c; Application, Challenging, p. 1.9)
59. In the CAR MINI CASE, which of the following elements of the marketing mix was
central to General Motors business model, as distinct from that of Ford?
a. production
b. placement
c. price
d. promotion
e. product/service
(e; Application, Challenging, p. 1.9)

13

RYANS RUNNERS MINI CASE: Ryan wants to open a store that caters to athletes, but,
due to space and budgetary constraints, he recognizes that he will not be able to offer the
same variety and selection of products as does the local athletic mega-store, so he has
decided to focus specifically on runners. He stocks shoes and related gear for runners,
and maintains a staff that is knowledgeable and enthusiastic about running. Ryans
advertising campaign emphasizes his stores high standard of customer service and
selection of products specifically tailored to meet the needs of the runner.
60. In the RYANS RUNNERS MINI CASE, the process of dividing the athletic market
into different subsets of shoe consumers, such as runners, basketball players, and
golfers, is known as _____.
a. market targeting
b. product placement
c. product positioning
d. market segmentation
e. social marketing
(d; Application, Moderate, p. 1.8)
61. In the RYANS RUNNERS MINI CASE, Ryan decides to focus his attention on that
segment of the market that is interested in running. This selection of a specific
market segment is known as _____.
a. social marketing
b. market targeting
c. product placement
d. market segmentation
e. product positioning
(b; Application, Moderate, p. 1.9)
62. In the RYANS RUNNERS MINI CASE, by portraying his store as a one-stop-shop
for all your running needs, Ryan has developed a distinct image for his store. This is
an example of _____.
a. segmentation
b. targeting
c. placement
d. positioning
e. social marketing
(d; Application, Challenging, p. 1.9)
63. In the RYANS RUNNERS MINI CASE, which of the four elements of the marketing
mix does Ryan emphasize in positioning his store in the marketplace?
a. place
b. positioning
c. promotion
d. price
e. product/service
(e; Application, Challenging, p. 1.9)

14

AIRLINE MINI CASE: Transatlantic Airlines flies between popular destinations in the
US and western Europe, and claims to deliver a first class experience for every
passenger. All ticket purchases are made on-line, and users of the Transatlantic website
must register before they search for flights. Transatlantic uses this information to
determine which consumers are generating the most profits for the company, which
services they purchase most frequently, and which services they are potentially interested
in but are not purchasing. This information is then used to make specific promotional
offers to profitable customers in an attempt to retain their business and to expand the
range of flight services that they purchase. Transatlantic also uses this information to
provide unexpected perks to highly profitable customers, like free upgrades to first class.
64. In the AIRLINE MINI CASE, Transatlantic Airlines identifies and offers specific
incentives to the most profitable customers, a practice is known as _____.
a. social marketing
b. customer profitability-focused marketing
c. market targeting
d. market segmentation
e. product positioning
(b; Application, Moderate, p. 1.14)
65. In the AIRLINE MINI CASE, when Transatlantic upgrades the seat assignment of
especially loyal customers, the airline is attempting to increase _____.
a. net revenue
b. production capacity
c. customer satisfaction
d. social responsibility
e. profit margins
(c; Application, Challenging, p. 1.12)
66. In the AIRLINE MINI CASE, Transatlantic Airlines advertises a first class
experience for every passenger. This is Transatlantics _____.
a. market segmentation
b. market target
c. product position
d. code of ethics
e. value proposition
(e; Application, Moderate, p. 1.11)
67. In the AIRLINE MINI CASE, by tracking flight searches and developing services to
better meet customers unfulfilled needs, Transatlantic adheres to the _____.
a. social marketing concept
b. production concept
c. selling concept
d. marketing concept
e. product concept
(d; Application, Challenging, p. 1.5)

15

True/False Questions:
68. Consumer behavior includes the behavior that consumers display in searching,
purchasing, evaluating and disposal of products and services.
(True; Fact, Easy, p. 1.2)
69. The term consumer behavior describes only the behavior of those who purchase
goods and services for their own use.
(False; Understanding, Easy, p. 1.2)
70. Organizational consumers in a consumer behavior sense include profit and non-profit
organization.
(True; Fact, Easy, p. 1.3)
71. The production concept assumes that consumers are mostly interested in product
availability at low prices.
(True; Understanding, Moderate, p. 1.3)
72. The production concept makes sense in developing countries where the main
objective is to expand the market.
(True; Understanding, Challenging, p. 1.4)
73. The product concept assumes that consumers will buy the product that offers them the
highest quality, the best performance and the most features.
(True; Fact, Easy, p. 1.4)
74. Marketing myopia is when the focus is on the product rather than on the consumer
needs it is supposed to satisfy.
(True; Fact, Moderate, p. 1.4)
75. The selling concept focuses on selling products that the target market demands.
(False; Fact, Moderate, p. 1.5)
76. The selling concept is typically utilized by marketers of unsought goods such as life
insurance.
(True; Application, Moderate, p. 1..5)
77. The key assumption underlying the marketing concept is that, to be successful, a
company must determine the needs and wants of specific target markets and deliver
better than the competition.
(True; Fact, Challenging, p. 1.6)

16

78. Companies that focus on understanding customers are able to continue to grow and
remain leaders in their industries in spite of increased competition and changing
business environments.
(True; Understanding, Moderate, p. 1.7)
79. Depending on where we are born, we all have different physiological needs.
(False; Understanding, Challenging, p. 1.8)
80. The four strategic tools that are used to implement the marketing concept include
segmentation, positioning, repositioning, and the marketing mix.
(False; Fact, Challenging, p. 1.8)
81. Most companies today are able to target all the market segments that they have
identified through their research.
(False; Understanding, Moderate, p. 1.9)
82. Successful product positioning centers around two key points: communicating the
benefits to the consumers, and developing and communicating a unique selling
proposition.
(True; Fact, Moderate, p. 1.9)
83. Me too products are products that lack a unique image or benefit.
(True; Fact, Easy, p. 1.9)
84. Perceived value is relative and objective.
(False; Understanding, Moderate, p. 1.10)
85. An example of customer value is enjoying a $250 meal at an expensive restaurant that
met or exceeded your expectations in terms of service, product and quality.
(True; Application, Moderate, p. 1.11)
86. Value propositions create customer expectations which companies must continuously
fulfill.
(True; Understanding, Moderate, p. 1.11)
87. The concept of customer satisfaction is a function of customer expectations.
(True; Understanding, Challenging, p. 1.12)
88. Sophisticated marketers today practice selective relationship building, which may
often lead to firing their own customers.
(True; Understanding, Challenging, p. 1.14)
89. Digital technologies allow for greater customization with greater efficiencies.
(True; Understanding, Easy, p. 1.15)

17

90. One example of emerging digital technologies is intelligent agents that allow
customers to locate the best prices from the convenience of their homes.
(True; Fact, Moderate, p. 1.15)
91. An example of customization is when Amazon.com sends mass e-mails to all their
existing customers telling them about a new promotional offer.
(True; Application, Easy, p. 1.16)
92. Much like traditional advertising, digital technologies allow for two-way interactive
exchanges between customers and marketers.
(False; Understanding, Easy, p. 1.16)
93. Narrowcasting is a method that enables marketers to develop and deliver more
customized messages to increasingly smaller markets on an ongoing basis.
(True; Fact, Challenging, p. 1.17)
94. The societal marketing concept advocates a short-term perspective in driving for
increased market share and quick profits.
(False; Understanding, Easy, p. 1.21)
95. Perceptions of a companys lack of social responsibility or unethical marketing
practices often have a negative affect on consumer purchase decision.
(True; Understanding, Moderate, p. 1.21)
96. Purchase behavior and post purchase evaluation are elements of the input stage of the
consumer decision-making model.
(False; Fact, Easy, p. 1.23)
97. The process stage of the consumer decision-making model focuses on how consumers
make decisions.
(True; Fact, Easy, p. 1.23)
Essay Questions:
98. Define consumer behavior. What is the scope of consumer behavior?
Answer:
Consumer behavior is defined as the behavior that consumers display in searching for,
purchasing, using, evaluating and disposing of products and services that they expect
will satisfy their needs. It focuses on how individuals make decisions to spend their
valuable resources, time, money and effort on consumption related items.
(Fact, Easy, p. 1.2)

18

99. What is the difference between the personal consumer and the organizational
consumer?
Answer:
The personal consumer buys goods and services for his or her own use, for the use
of the household, or as a gift. In each, the final user is the individual, or end user.
The organizational consumer includes profit and non-profit businesses,
government agencies, and institutions like schools, hospitals and prisons, all of
which buy products and services to run their organizations.
(Understanding, Moderate, p. 1.3)
100.

Compare the selling concept and the marketing concept on three major points.
Answer:
The selling concepts major focus is to sell the products that the marketer is best
at producing. The marketing concept does the opposite; it makes what it knows
will sell.
The selling concept is used for products that consumers are unlikely to buy;
hence, it requires some form of hard sell approach. The marketing concept has
already ensured the product is in demand by conducting consumer research to
explore their needs.

The selling concept does not consider customer satisfaction and long term
relationships. The marketing concept focuses on customer satisfaction and
building and strengthening relationships with their customers to ensure repeat
business.
(Understanding, Challenging, p. 1.5-6)

19

101.

Talk briefly about market segmentation, targeting, and positioning.

Answer:
Market segmentation is the process of dividing a market into a subset of
consumers with common needs or characteristics. Since most companies have
limited resources, very few companies are able to pursue all the segments that
they have identified.
Market targeting is selecting one or more of the segments identified as the groups
that the company will pursue.

Positioning is developing a distinct image for the product or service in the mind of
the consumeran image that will differentiate the offering from competing ones,
and that will perform better than the competition at satisfying the same need. It
also means that the company should develop a unique selling proposition and
communicate the benefits of the product to the customers.
(Understanding, Moderate, p. 1.8-9)
102.

In terms of expectations, when is a customer not satisfied, satisfied, and

delighted?
Answer:

A customer is satisfied when the expectations have been met, a customer is

dissatisfied when expectations have not been met and the product did not perform
as expected. A customer is highly satisfied or delighted when the product or
service has exceeded the expectations of the customer.
(Understanding, Easy, p. 1.12)
103.

Identify and discuss the reasons for which small reductions in customer defections
produce significant increases in profits.
Answer:

There are four primary reasons why small reductions in customer defections
produce significant increases in profits. 1) Loyal customers buy more products.
2) Loyal customers are less price sensitive and pay less attention to competitors
advertising. 3) Servicing existing customers, who are familiar with the firms
offerings and processes, is cheaper. 4) Loyal customers spread positive word of
mouth and refer other customers. In addition, marketing efforts aimed at
attracting new customers are expensive. In saturated markets, there may not even
be new customers.
(Understanding, Moderate, p. 1.13)

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104.

Discuss some of the positive effects of the adoption of digital technologies on

todays marketing practices.
Answer:

Digital technologies allow for greater customization of products, services and

promotional messages than other marketing tools. They enable marketers
to build
technologies enable marketers to collect and analyze data on
consumers buying patterns and personal characteristics and preferences.
(Understanding, Moderate, p. 1.15)
105.

Digital technologies allow for consumers to have more power than ever before.
How?
Answer:

Consumers today are able to use intelligent agents that allow them to locate the
best prices for products and services, bid on various marketing offerings (e-bay),
bypass distribution outlets and middlemen, and shop for goods around the clock
from the convenience of their homes.
(Fact, Easy, p. 1.15)
106.

How has TiVo presented a challenge to marketers?

Answer:

The TiVo digital recorder allows viewers to control what they watch on TV, when
they watch it and whether or not to watch the commercials for which marketers
spend billions of dollars per year. The TiVo recorder downloads programming
information and allows users to record many hours of TV programming into a
hard drive without the hassle of videocassettes. This means that the power is
shifting from the broadcaster to the viewer, and viewers are deciding to skip the
commercials.
(Understanding, Challenging, p. 1.18)

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107.

What does the societal marketing concept entail? What is a major reason many
marketers do not adhere to the societal marketing concept?
Answer:
The societal marketing concept requires marketers to adhere to principles of
social responsibility in the marketing of their goods and services; that is, they
should endeavor to satisfy the needs and the wants of their target markets in ways
that preserve and enhance the well-being of consumers and society as a whole.

A major reason many marketers do not adhere to the principles of the societal
marketing concept is the short-term orientation embraced by most business
executives in their drive for increased market share and quick profits. Since the
societal marketing concept advocates a long-term perspective, it will not fit in to
the short-term goals of many executives.
(Understanding, Challenging, p. 1.20)

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