Student Name ___________________________
Spring 2007
BA342
Consumer Behavior
First Hour Exam
Dr. Geoffrey P. Lantos
Part 1 12
points ______
Part 2 28
points ______
Part 3 64
points ______
Total Points Deducted ______
Total Points Earned 104 points ______
Your Grade ______
PART I: CONCEPTS (12
points - 4 points each)
Please briefly define in your own words, and in one or two sentences, three of the following four concepts as each relates to consumer behavior. You may use examples to help clarify your answers where examples are not specifically asked for.
1. Decision heuristics (Define and cite an example)-
2. Ego risk –
3. Atmospherics -
4. Instrumental performance -
PART II:
DESCRIPTIVE SHORT ANSWER (28 points)
Please briefly answer the required number of questions for each Section as they relate to consumer behavior in either a short paragraph or else in outline form—complete sentences need not be used. You may use graphs, figures, charts, equations, etc., where appropriate. Be sure you answer all parts of all questions that you choose to answer.
Section A (16 points): Answer four of the following five 4-point questions
1. (4 points) What is problem analysis and what is its relationship to problem-based ideation?
2. (4 points) Describe the logic behind and the marketing research process of means-end chain analysis.
3. (4 points) Cite two marketplace conditions under which the production concept might be successful.
4. (4 points) Shopping online on the Internet has pretty much lost its novelty for most people. So, cite four reasons why so many people sometimes prefer internet shopping to traditional retail shopping.
5. (4 points) “A consumer’s preferred brand—the one toward which she has the most positive attitude—will become the one she buys.” Cite three general reasons why this could be a false statement.
Section B (12 points): Answer both of the following 6-point questions
6. (6 points) What is differentiated marketing? Cite two major advantages and one big disadvantage for using this strategy relative to undifferentiated marketing.
7. (6 points) Cite three general situations in which the assumption of consumer sovereignty breaks down (so-called market failures). (More room on next page)
PART III: APPLIED
SHORT ANSWERS (64 points)
Please briefly answer the required number of questions for each Section as they relate to Consumer Behavior in either a short paragraph or else in outline form—complete sentences need not be used. Be sure to answer all parts of all questions that you choose to answer.
Section A (30 points): Answer five
the following six 6-point questions
1. (6 points) Describe how the ad for Transamerica financial planning services is speaking to satisfying both functional/utilitarian needs as well as hedonic/experiential needs.
2. (6 points) Which marketing management philosophy is illustrated in each of the following scenarios? Briefly explain.
a. (3 points) Holly Wood was a director of “B” Hollywood movies. She told her producer, Buzz Saw, that she believed movies need more razzle-dazzle technology. Beyond crisp video and audio, she wanted to introduce surround-smell using newly-developed digital aromatic technology. She thought this was pretty cool “gee-whiz” technology.
b. (3 points) Ethel Chloride is the Advertising Director for Abbott & Costello Advertising, Inc. She thinks that the key to effective advertising that moves virtually any product, good or bad, is lots of media tonnage, high frequency, repetitive advertising that hammers the brand name, and a catchy slogan, all pounded into the consumer’s brain until she can’t forget it.
3. (6 points) How rational is each of the following consumers behaving, according to classical economic theory?
a.. Hugo First’s wife Fanny insists on purchasing a new automatic dishwasher since the old one is leaving the dishes rather dirty. The only savings the Firsts have is several thousand dollars in mutual funds for their children’s college educations. Fanny is afraid to borrow against this money since “We’re saving it for the children.” Instead, she wishes to charge the dishwasher’s cost to their Visa credit card and pay back a few hundred dollars every month for the next several years at 18% interest. Hugo thinks this is irrational since they can borrow from the kids’ mutual funds and repay a few hundred dollars each month plus a more reasonable rate of interest such as the 6 per cent that the funds are currently earning. (Be sure to explain whether Luke’s thinking is rational as well as if Fanny’s attitude is rational from her own perspective.)
b. Luke Warm enrolled for $1,200 in a course in Sports
Management from the
4. (6 points) Cite two traditional theories of consumer behavior that the ad for the Re/Max real estate could be interpreted to be speaking to. Briefly explain each such motivational theory in the context of this ad. Then, cite a third such theory a different ad for Re/Max could appeal to and briefly describe how such an ad could relate to that theory’s purchase motive.
5. (6 points) Name some brands in your evoked set for candy bars. Why do you include them? Are there any brands in your awareness set that aren’t in your evoked set? Explain.
6 (6 points) Which type of decision rule (lexicographic, compensatory multiattribute, etc.) is each of the following consumers using? Briefly explain.
a. Adam Bomm is in the market for a lawn mower for the yard in the home he just purchased. Since he has a limited income, any brand must cost under $250. In addition, it must have at least 7 horsepower since his yard has some steep hills. Other lawn mower criteria just aren’t very important to Adam.
b. Shirley U. Jest is one fussy sweater shopper. For starters, most important is that it be made of cashmere. All brands in a store made of anything else are immediately rejected. She then inspects the remaining brands and eliminates any that aren’t on sale for at least 20% off. Third, she weeds out any remaining brands that pass these first two hurdles but that have any but one of her favorite three brand names.
Section B (24 points): Answer three of the following five 8-point questions
7. (8 points)
a. Cite a specific demographic variable, psychographic variable, and behavioral variable for defining market segments that the advertisement for Transamerica seems to be using. Describe the resulting target market profile.
b. Which target marketing strategy—undifferentiated, differentiated, or concentrated—is being used by TransAmerica? Explain. What advantages of this segmentation strategy do you suppose caused TransAmerica to choose that strategy?
8. (8 points) Describe the positioning (psychological and/or physical) in the ad for Milk n’ Cereal Bars, using four positioning criteria we discussed in Exercises 6 and 7 in the textbook. (Make any reasonable assumptions you wish.)
9. (8 points)
a. How does the ad for ReMax real estate seem to be reducing cognitive dissonance for someone who recently purchased a home using ReMax’ services?
b. Cite three reasons why ReMax expects many recent home buyers to experience dissonance.
10. (8 points) Explain how each of the three mediating factors (“It depends” factors) which determine involvement could affect the level of involvement in a consumer’s purchase of a house from Remax realtors.
11. (8 points) Which level of decision making (consumer's learning stage)—extended decision making, limited decision making, or routine decision making—would the typical consumer be in for General Mills cereal bars? Explain. What does this suggest for the nature of their advertising? Is the ad "on track" according to this theory? (More room on next page)
Section C (10 points): Answer the following 10-point question
12. (10 points)
a. (6 points) Cite and briefly describe three types of perceived risks which could arise in the purchase and use of a cell phone.
b. (4 points) Cite two risk reduction strategies consumers might use to alleviate one or more of these risks.