Why should marketing managers be interested in the study ...



Study guide for the first exam and example questions

[N.B.: correct answers to all example multiple-choice questions are shown at the very end]

Understanding consumer behavior: Mental models for marketers

I won't ask you anything about mental models in general (i.e., what they are, what issues you have to be aware of when you use them, etc.). However, you should be familiar with the following mental models: the marketing concept; market orientation; and the approach to business adopted by a market-oriented company. For example, I could ask you whether the Coca Cola Company acted in a market-oriented fashion when it introduced New Coke – why or why not?

In-class practice questions:

The managing director of a nonprofit professional theater company, which produces around 250 performances of nine productions per year, indicates that (a) the theater surveys audiences to find out the plays they would like to see in the future; (b) audience preferences are a key factor in play selection; and (c) play selection is driven more by audience preferences than artistic considerations.

• Would you call this theater market-oriented?

• What specific process should be used if this theater adopted a market-oriented approach to doing business?

Voss and Voss conducted a study with 101 nonprofit professional theaters in which they measured customer orientation, competitor orientation, and interfunctional coordination, as well as objective performance (subscriber attendance, single-ticket attendance, total income, and net surplus/deficit). They found that customer orientation was generally negatively related to performance, except for single-ticket attendance, where the relationship was nonsignificant. Isn’t this finding inconsistent with what we said in class?

Example multiple-choice questions:

1. Why should marketing managers be interested in the study of consumer behavior?

A Consumers are the focus of successful marketing strategies.

B The study of consumer behavior is firmly grounded in psychology.

C The study of consumer behavior provides a theory of the firm.

D Competing organizations are discovering marketing.

2. The marketing mix elements (product, price, communication, and distribution) when developed and presented to a specially selected target market in order to achieve organizational objectives

A could not be effective without formal research.

B may be referred to as a marketing strategy.

C will probably work in most markets.

D reflect a focus on the competition.

Consumer Behavior Research

You have to know about the three domains of research (substantive, conceptual and methodological). In particular, you should know the following things about the methodological domain: What two types of research are there? What are some of the weaknesses of correlational research? What are the essential features of experiments? What kinds of effects can experiments yield? I could give you a table summarizing the results of an experiment and you have to be able to interpret the findings in terms of main and interaction effects. You also have to understand the difference between internal and external validity. For example, I could ask you whether the internal or external validity of research findings is more important for marketers. Finally, you have to know the substantive problem addressed in Norman’s study, the hypotheses tested, and the major findings obtained.

In-class practice questions:

Based on a correlational study, a researcher finds that the more violent videos teenagers play, they more aggressive they are in school. He therefore concludes that playing violent video games causes young people to become more aggressive. This conclusion may not be justified because of the following reasons: 

a. A person may be predisposed to violence and this makes him or her play more violent video games.

b. The correlation between playing violent video games and aggressive behavior may be due to a third variable, such as association with friends who like violent video games and are also aggressive.

c. Both (a) and (b) are possible alternative explanations that may call into question the researcher’s conclusion. [correct answer]

Toward the end of the course, we’ll discuss the benefit congruency model of sales promotions, according to which a sales promotion will be more effective if the type of benefit offered by the promotion (utilitarian vs. hedonic) is consistent with the type of product (utilitarian vs. hedonic). To test this model, a researcher designs a study in which a marketer of laundry detergent (utilitarian product) or chocolates (hedonic product) uses either a reduction of the regular price (utilitarian promotion) or a free gift (hedonic promotion) to promote the product. The following table shows the results. Interpret the findings in terms of main of type of product and type of promotion and the interaction between the two factors. [no main effects, but significant interaction]

[pic]

Example multiple-choice question:

3. A two-factor experiment yielded the results shown in the following table (the cell entries are the means on a 7-point scale, assume that the result is significant if the means differ):

Factor B

4. 6

Factor A

4 4

The findings of this experiment show

A no main and interaction effects.

B two main effects but no interaction effect.

C no main effects but an interaction effect.

D two main effects and an interaction effect.

4. In a one-factor experimental design (i.e., a design with one manipulated variable),

A an interaction effect is the same as a main effect.

B interaction effects are always insignificant.

C an interaction effect is the opposite of a main effect.

D the concept of an interaction effect is not meaningful.

E main effects are not defined.

5. Marketers are concerned with the internal validity of experimental findings because they want to know how generalizable the results of a particular experiment are to other persons, settings, and times.

A true

B false

6. Experimental control of extraneous sources of variation and experimental manipulation of the variable(s) of interest are two important characteristics of experiments.

A true

B false

Memory, brand knowledge, brand equity, and brand extension

You have to know the multiple-store model of memory, in terms of both structures and processes. In particular, you have to know the following things about short-term memory: How do encoding, storage, and retrieval work? What are some important storage characteristics and what are their implications for consumer behavior? For example, I could ask you what characteristics of short-term memory a marketer has to take into account when designing a communication campaign. You should know the following things about long-term memory: How does encoding work? What does the experiment on advertising imagery show? How can ads be made memorable through advertising imagery? How is information stored in long-term memory? How does retrieval from long-term memory work (in terms of the spreading activation model)? What’s the difference between recall and recognition? Be sure to understand the experiments dealing with repetition, interference, and retrieval cues.

With regard to brand knowledge and brand equity, you should know the following: How can brand knowledge be conceptualized? What is customer-based brand equity, how should it be managed, and how can it be measured? What are brand extensions, why are they useful, and why can they be problematic? What determines the success of brand extensions?

In-class practice questions:

Chunking serves to

A focus consumers’ attention on certain stimuli.

B increase the capacity of short-term memory. [correct answer]

C facilitate spreading activation.

D increase the capacity of long-term memory.

Consider the experiment on advertising imagery by Lutz and Lutz:

• What were the four manipulated experimental conditions?

• What was the dependent variable of interest?

• What did the experiment show?

We discussed three factors that influence the retrieval of information from long-term memory (based on the model of spreading activation). What are they? What are the implications of these factors for advertising to consumers?

Example multiple-choice questions:

7. When Miller Lite was introduced, the image of regular Miller beer suffered. This is an example of

A lack of brand recognition.

B dilution of the image of the core brand by a brand extension.

C unsuccessful brand extension.

D the salience of core brand associations in the extension context.

8. Encoding refers to

A the brief retention of sensory data that have been attended to.

B the retention of memory representations over time.

C the establishment of memory representations in sensory, short-term, or long-term memory

D the recovery of memory representations.

9. Brand awareness is important because

A in low-involvement contexts, brand choice may be based on brand awareness.

B in order for a brand to be chosen, it has to be in the consumer's consideration set.

C brand awareness is a prerequisite for the formation of other brand associations.

D all of the above.

10. One rule of thumb in advertising is "you can only say so much, so say it well." This suggests an implicit recognition of the:

A limited capacity of the cognitive system.

B notion that much of our cognitive processing is unconscious.

C the hierarchical structure of human memory.

D automatic nature of most cognitive processing.

11. Repetition improves recall because it strengthens associations between concepts in memory, while interference hurts recall because it increases the number of competing paths between concepts.

A true

B false

12. Brand recognition refers to the ability to generate the brand from memory when given the product class as a retrieval cue.

A true

B false

13. Elaborative rehearsal refers to silently repeating information to oneself in order to keep it active in short-term memory.

A true

B false

Mountain Man Brewing Company

You have to be able to discuss the five questions about the Mountain Man Brewing Company case:

1) Why has MMBC been successful in the past? Discuss all aspects of this success in terms of the company, its customers and competitors.

2) Discuss the Mountain Man Lager brand from the perspective of Keller’s model of brand knowledge. Does Mountain Man Lager have strong brand equity and if so, why? What has MMBC done to build customer-based brand equity?

3) Why has MMBC experienced difficulties in recent years in spite of its strong brand?

4) What options does Chris have? In particular, what are the implications of the “do nothing” option?

5) What are the pros and cons of introducing Mountain Man Light? Discuss this issue from the perspective of the model of brand extension discussed in class.

Perception

You have to know what perception is and what the three stages of the perceptual process are.

With regard to sensation, you should know the difference between absolute and differential thresholds and how these concepts can be applied to consumer behavior (subliminal persuasion, applications of Weber’s law). For example, I could ask you whether using subliminal stimuli in ads is a promising idea for increasing the persuasive power of ads.

With regard to attention, you have to know about the external and internal factors that influence attention. In particular, you have to be familiar with the notion of arousal potential and the three determinants of arousal potential. In addition, you have to understand the difference between controlled and automatic processes.

With regard to comprehension, you have to know about the steps involved in the comprehension process and how comprehension is a function of both top-down and bottom-up processes. You also have to be able to explain Celsi and Olson’s experiment on involvement as a determinant of attention and comprehension. Furthermore, you have to know what schemas are and how they impact comprehension. Specifically, you have to understand how schemas enable consumers to draw inferences (which may be misleading) and how schemas may help in evaluating new products.

In-class practice questions:

Based on past experience, a clothing retailer knows that he has to reduce the price on sales items by at least 20% in order for consumers to react to the price promotion. Assuming that this same percentage applies to price increases as well, he figures that he has to keep a price increase on an item that originally costs $300 ____ (below) the just noticeable difference of $____ ($60).

The use of fear appeals in ads is an attempt by marketers to get consumers’ attention by taking advantage of the arousal potential generated by

a) collative properties.

b) psychophysical properties.

c) ecological properties. [correct answer]

Example multiple-choice questions:

14. A marketer who has to increase a brand's price will try to

A keep the new price below the just noticeable difference.

B advertise the price increase.

C put the new price slightly above the just noticeable difference.

D make the price increase as subliminal as possible.

15. In a Benetton ad, a white man is handcuffed to a black man. Many people interpreted the black man as the criminal and the white man as the guard, even though one could only see the hands of the two men and the white man could have been the criminal and the black man the guard. This interpretation illustrates that

A perception frequently occurs in a bottom-up fashion.

B perception is never constructive and only based on the actual data.

C perception is frequently influenced by irrelevant factors.

D perception frequently occurs in a top-down fashion.

16. In the experiment dealing with pragmatic implication, participants were able to distinguish between implied claims and assertions

A in all experimental conditions.

B when they were warned about pragmatic implication and they rated each ad immediately after being exposed to it or they had a written transcript of the ad.

C when they provided their ratings after a delay.

D when they were not involved in the experimental task.

17. Why are the meanings produced by elaborate comprehension processes more memorable?

A Because fewer meanings are produced, there is less chance that they will be forgotten.

B The level of situational involvement associated with these meanings is much higher than with other processes.

C Elaboration produces mostly concrete level meanings, and these are easier for consumers to retrieve from memory.

D Because elaborate meanings tend to be highly interconnected in memory, they are easier to retrieve.

18. To understand the inferences consumers make, marketers must primarily attend to and examine:

A the knowledge structures consumers use during comprehension processes.

B the level of involvement present during consumers’ comprehension processes.

C consumers’ motivation to engage in comprehension processes.

D the extent to which consumers use automatic or controlled comprehension processes.

19. A situation in which a consumer is unable to taste the difference between two unmarked bottles of Bud Light and Miller Light is an illustration of the concept of absolute sensory thresholds.

A true

B false

Affect

You have to know what affect is and what kinds of affective states there are.

With regard to mood, you have to know about the effects of moods on memory, judgments, and behavior. In particular, you should be able to explain the experiment by Schwarz and Clore on the effects of mood on judgments of life satisfaction. For example, I could ask you what giving a small gift has on consumers’ willingness to participate in a survey and their answers to survey questions about their satisfaction with various products they own.

With regard to emotions, you have to understand the difference between the categorical and dimensional approach to emotions. You also have to know how the retrieval of emotion-laden autobiographical memories influences ad and brand evaluations and how regret and dissatisfaction differ.

Example multiple-choice questions:

20. The concept of state-dependent memory suggests that

A material that is congruent with a person's mood at encoding is remembered better than incongruent material

B material that is congruent with a person's mood at retrieval is remembered better than incongruent material

C match between mood at encoding and mood at retrieval leads to better memory than a mismatch.

D positive mood leads to better memory than negative mood.

21. A survey was conducted in which 100 respondents evaluated product A and another 100 respondents evaluated product B. Mean evaluations for products A and B were 5.5 and 4.0, respectively. However, the survey was conducted immediately following the Super Bowl, and the respondents who rated product A were all residents of the city with the winning team and the respondents who rated product B were all residents of the city with the losing team. If the outcome of the Super Bowl led to differences in mood,

A the difference in evaluations between the two products would have been even higher in the absence of mood effects.

B the difference in evaluations between the two products would have been lower in the absence of mood effects.

C the survey results are unaffected because moods primarily affect memory.

D the survey results are a true indicator of people’s reactions to the two products

. 22. If there is a conflict between a choice alternative that yields immediate pleasure but may be associated with less favorable cognitions and another choice alternative for which the opposite is true, the alternative associated with more positive affect is likely to be chosen when [skip this question because we didn’t discuss this experiment]

A consumers are exposed to the real alternatives rather than photographs of the alternatives, regardless of how much attention they devote to the decision.

B consumers can’t devote a lot of attention to the decision and choose between real alternatives rather than photographs of the alternatives.

C consumers do not devote a lot of attention to the decision, regardless of whether they are exposed to the real alternatives of photographs of the alternatives.

D consumers devote a lot of attention to the decision and choose between real alternatives rather than photographs of the alternatives.

E consumers devote a lot of attention to the decision and choose between photographs of the alternatives rather than the real alternatives.

Motivation

You also have to know what values are and you have to understand the three approaches to values that we discussed in class. You do not have to memorize the specific values distinguished by the various frameworks, but you have to know the basic idea underlying each approach.

You also have to know what we mean by involvement, what kinds of involvement there are, and how involvement can be measured (including what leads to involvement in the involvement profile).

You should be familiar with the basic ideas of means-end chain theory and laddering and be able to explain how means-end chain theory is used for formulating advertising strategy (MECCAS) and evaluating advertising executions (STRATA). For example, I might give you an ad and ask you to critique it from the perspective of the means-end chain approach.

.

Example multiple-choice questions:

23. When compared to intrinsic self-relevance, situational self-relevance of a product will be:

A more enduring.

B more variable.

C constant across different situations.

D a function of the values held by consumers.

24. Which of the following is a key assumption of the means-end approach:

A Product meanings vary in abstraction primarily at the consequence level.

B Consumers' product knowledge is organized in terms of advertised product attributes.

C Once the means-end knowledge structures have been created, they are essentially fixed and are not easily changed.

D The meaning of a product attribute is based upon the consequences and values it is perceived to have.

Correct answers: 1A, 2B, 3D, 4D, 5B, 6A, 7B, 8C, 9D, 10A, 11A, 12B, 13B, 14A, 15D, 16B, 17D, 18A, 19B, 20C, 21B, 22B, 23B, 24D.

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