CHAPTER 9

INDIVIDUAL DECISION MAKING Multiple Choice 1. The first stage in the consumer decision-making process is: a. information search. b. evaluation of alternatives. c. problem recognition. d. product choice. Ans e!" #c$ Di%%icult&" #E$ '(ct P()e" *9*+*9,- 'i)u!e 9./ 2. Jeff is tired of the numerous breakdowns and peeling paint on his old car. When Jeff begins to actively think about his car in this way which of the following consumer decision-making process steps is Jeff going through! a. "nformation search. b. #valuation of alternatives. c. $roblem recognition. d. $roduct choice. Ans e!" #c$ Di%%icult&" #E$ Applic(tion P()e" *9*+*9,- 'i)u!e 9./ %. Jeff has compared several models of cars for about two months and has finally decided to buy a red &olkswagen from a local dealership. 'ased on the stages of the consumer decision-making process listed below which stage most appropriately describes Jeff(s current position! a. "nformation search. b. #valuation of alternatives. c. $roblem recognition. d. $roduct choice. Ans e!" #0$ Di%%icult&" #E$ Applic(tion P()e" *9*+*9,- 'i)u!e 9./ ). Traditionally with respect to decision making consumers calmly and carefully integrate as much information as possible with what they already know about a product painstakingly weigh the pluses and minuses of each alternative and arrive at a satisfactory decision. This process most closely resembles which of the following perspectives! a. *ational perspective. b. 'ehavioral influence perspective. c. #+periential perspective. d. *isk perspective.

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Ans e!" #($ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *9*+*9, ,. -onsumers often accelerate their speed on the path to purchase because of initial impulses. "t is almost as if the consumer gets .revved up/ for a spending spree. "n formal consumer behavior terms what would such an action state be correctly named! a. 0rive. b. $urchase desire. c. $urchase cues. d. $urchase momentum. Ans e!" #0$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *9, 1. "f a decision is made primarily under conditions of low involvement and is a response to environmental cues that decision is best classified as being made from which of the following perspectives! a. *ational perspective. b. 'ehavioral influence perspective. c. #+periential perspective. d. *isk perspective. Ans e!" #1$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *9,+*92 2. *uby Thomas is the manager for woman(s plus-si3e specialty store. 4he believes that her store is enticing to her target market customers because each customer has a private fitting room with a knowledgeable staff person to assist in wardrobe choices. "n this case 5s. Thomas is following which of the following perspectives with respect to consumer decision-making! a. *ational perspective. b. 'ehavioral influence perspective. c. #+periential perspective. d. *isk perspective. Ans e!" #1$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *9,+*92 6. "f the 7estalt 8or the totality9 of a situation is stressed in making a consumer decision which of the following perspectives is being followed! a. *ational perspective. b. 'ehavioral influence perspective. c. #+periential perspective. d. *isk perspective. Ans e!" #c$ Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" *92 :. "f the purchase of a product is characteri3ed by the fact that the product is an e+pensive product is purchased infre;uently has high consumer involvement

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8because the consumer is unfamiliar with the product9 e+tensive thought is given to the purchase of the product. Which of the following stages of the buying decision behavior continuum most closely matches the above e+ample! a. *outine response behavior. b. 7raduated response behavior. c. <imited problem solving. d. #+tensive problem solving. Ans e!" #0$ Di%%icult&" #M$ Applic(tion P()e" *93+*93- 'i)u!e 9.*- T(1le 9./ 1=. -het decides to buy a new hedge trimmer to care for his bushes and shrubs. 4ince -het is familiar with the local lawn and garden shop and the brands that are carried there he uses a few simple decision rules to arrive at a purchase option. -het is following which of the following buying decision behavior continuum alternatives to make his decision! a. *outine response behavior. b. 7raduated response behavior. c. <imited problem solving. d. #+tensive problem solving. Ans e!" #c$ Di%%icult&" #M$ Applic(tion P()e" *93- 'i)u!e 9.* 11. *idley 'rown admits that he makes most of his food choices with an automaticity that drives his friends cra3y. >e eats hamburgers on 5onday chili on Tuesday steak on Wednesday chicken on Thursday and so on. >e likes order in his life and sees no reason to change. "n all likelihood *idley probably used which of the following types of decision making styles to provide this order to his food selection process! a. *outine response behavior. b. 7raduated response behavior. c. <imited problem solving. d. #+tensive problem solving. Ans e!" #($ Di%%icult&" #M$ Applic(tion P()e" *93- 'i)u!e 9.* 12. ??????????????????????? occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. a. $roblem recognition b. "nformation search c. #valuation of alternatives d. #valuation of the evoked set Ans e!" #($ Di%%icult&" #E$ '(ct P()e" *94 1%. -onsidering how problems can occur if a consumer runs out of gas on a long trip then which of the following situations would be most appropriate or true! a. The ;uality of the person(s actual state has moved downward.

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b. The ;uality of the person(s actual state has moved upward. c. The ideal state has moved upward. d. The ideal state has moved downward. Ans e!" #($ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *94 1). -onsidering how problems can occur if a consumer craves a newer flashier car then the consumer(s ideal state can move upwards. Which of the following terms matches this new state! a. @eed recognition. b. @eed deprivation. c. Apportunity recognition. d. Apportunity capitali3ation. Ans e!" #c$ Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" *94 1,. "f the 5ilk $roducer(s Bssociation of Bmerica runs an ad that says .0rink 5ilk Just for the >ealth of "tC/ then the association is appealing to which of the following types of demand! a. $rimary demand. b. 4econdary demand. c. Dinked demand. d. "nertia demand. Ans e!" #($ Di%%icult&" #E$ P()e" *94 11. "f we were to draw a diagram where a consumer(s ideal state was very near to his or her actual state which of the following terms would most likely describe the degree of problem recognition that would be occurring! a. Apportunity recognition. b. @eed recognition. c. Apportunity capitali3ation. d. @o problem. Ans e!" #0$ Di%%icult&" #H$ P()e" *95- 'i)u!e 9., 12. ??????????????????? is the process by which the consumer surveys his or her environment for appropriate data to make a reasonable decision. a. $roblem recognition b. #valuation of alternatives c. "nformation search d. $roduct choice Ans e!" #c$ Di%%icult&" #E$ '(ct P()e" *95 16. Jimmy loves to go to -ompE4B and Fust browse through the latest in video games

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and newest computer software. >e often spends two hours Fust looking and talking to other customers and salespeople about his interests. Which of the following search forms '#4T describes what Jimmy is doing! a. $repurchase search. b. &icarious search. c. *andom search. d. Angoing search. Ans e!" #0$ Di%%icult&" #M$ Applic(tion P()e" *95+*96- T(1le 9.* 1:. 4teven 4tuart was e+posed to information about stocks and bonds at an early age. >is mother and father always had financial brochures that prompted discussions about financial affairs at the dinner table when he was a kid. When it came time to plan for his own financial future he was surprised at the amount and depth of information that he had retained because of these brief childhood e+periences. Which of the following learning forms describes what happened to 4teven! a. Avert learning. b. &icarious learning. c. "ncidental learning. d. $sychological learning. Ans e!" #c$ Di%%icult&" #H$ Applic(tion P()e" *96 2=. Dent is a loyal -oca--ola drinker. Bs a college student he averages about si+ -okes a day. >e even prefers -okes to water. >owever today when he passes a vending machine in his dorm he buys a new flavor of soft drink called 'ig *ed. Which of the following most appropriately e+plains his behavior given the facts about Dent(s previous behavior! a. Dent is brand switching. b. Dent is variety seeking. c. Dent is influenced by advertising. d. Dent is influenced by peer pressure. Ans e!" #1$ Di%%icult&" #H$ Applic(tion P()e" *96+*99 21. $eople often make decisions on the basis of a mental accounting. Ane facet of this accounting is making a decision based on the way that a problem was posed. This is called: a. the sunk-cost fallacy. b. loss aversion. c. framing. d. positioning. Ans e!" #c$ Di%%icult&" #M$ '(ct P()e" ,77

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22. <es Fust bought a megaphone of root beer. Bs he drinks from the giant cup he eventually becomes full. Ane of his friends comments ."f you don(t stop drinking that stuff you will get sick./ <es replies .>ey " bought it and " am not going to waste one drop of it./ <es(s behavior could best be described by which of the following mental biases to his decision-making process! a. The sunk-cost fallacy. b. <oss aversion. c. Graming. d. *isk positioning. Ans e!" #($ Di%%icult&" #M$ Applic(tion P()e" ,77 2%. Gor most people losing money is more unpleasant than gaining money is pleasant. This idea is at the basis of which of the following mental biases in decision-making! a. The sunk-cost fallacy. b. <oss-aversion. c. Graming. d. *isk positioning. Ans e!" #1$ Di%%icult&" #E$ '(ct P()e" ,77 2). Bs a general rule search is greater when all of the following occur #H-#$T: a. the purchase is important. b. when there is a need to learn more about the purchase. c. when two people are involved. d. when the relevant information is easily obtained and utili3ed. Ans e!" #c$ Di%%icult&" #H$ '(ct P()e" ,7* 2,. 4earch tends to be the greatest among those consumers who are ??????????????? about the product. a. only slightly knowledgeable b. ignorant c. highly knowledgeable d. only moderately knowledgeable Ans e!" #0$ Di%%icult&" #H$ '(ct P()e" ,7* 21. Bll of the following increase the likelihood that perceived risk will occur #H-#$T: a. the product is e+pensive. b. the product is comple+. c. the product will be visible to friends and associates. d. the product is large in si3e. Ans e!" #0$ Di%%icult&" #M$ '(ct P()e" ,72

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22. -onsumers with greater ??????????????? are less affected by perceived risks associated with the products they purchase. a. risk avoidance b. risk taking c. risk desires d. risk capital Ans e!" #0$ Di%%icult&" #M$ '(ct P()e" ,72 26. Which of the following types of perceived risk are most closely associated with the following buyer description: risk capital consists of self-esteem and self-confidenceI those who are insecure and uncertain are most sensitive to this form of risk! a. 5onetary risk. b. $hysical risk. c. 4ocial risk. d. $sychological risk. Ans e!" #c$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" ,72- 'i)u!e 9.4 2:. Which of the following types of perceived risk is most closely associated with the following buyer description: risk capital consists of affiliations and statusI those lacking self-respect or attractiveness to peers are most sensitive to this form of risk! a. 5onetary risk. b. $hysical risk. c. 4ocial risk. d. $sychological risk. Ans e!" #0$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" ,72- 'i)u!e 9.4 %=. 4hawna believes she is a practical consumer. 4he is always on the lookout for better ways to order her life and make housework easier. @ew products that promise to help with these work tasks catch her eye. >owever she sometimes makes mistakes in buying products that do not deliver on their promises to do the work re;uired. -onsidering the above description 4hawna could be prone to which of the following types of perceived risk! a. 5onetary risk. b. Gunctional risk. c. 4ocial risk. d. $sychological risk. Ans e!" #1$ Di%%icult&" #H$ Applic(tion P()e" ,72- 'i)u!e 9.4 %1. The alternatives actively considered during a consumer(s choice process are his or her ??????????????. a. inert set. b. evoked set.

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c. inept set. d. declared set. Ans e!" #1$ Di%%icult&" #E$ '(ct P()e" ,73 %2. -onsumers often position products based on various levels of abstraction within a given product category. "f a consumer sees ice cream as a fattening dessert which of the following levels of abstraction would the ice cream belong in! a. 4uperordinate level. b. Ardinate level. c. 4ubordinate level. d. 'asic level. Ans e!" #c$ Di%%icult&" #H$ Applic(tion P()e" ,75- 'i)u!e 9.5 %%. Jamie is considering ordering a dessert for lunch. 'efore she ever decides on the kind she prefers she must decide whether to get a fattening or nonfattening dessert. This decision relates to which of the following levels of abstraction of dessert categories! a. 4uperordinate level. b. Ardinate level. c. 4ubordinate level. d. 'asic level. Ans e!" #0$ Di%%icult&" #H$ Applic(tion P()e" ,75- 'i)u!e 9.5 %). ????????????????? are dimensions used to Fudge the merits of competing options. a. The evoked set b. #valuative criteria c. B level of abstraction d. B product comparison Ans e!" #1$ Di%%icult&" #E$ '(ct P()e" ,79 %,. Bttributes actually used to differentiate among choices are called: a. evaluation attributes. b. search attributes. c. differentiation attributes. d. segmentation attributes. Ans e!" #c$ Di%%icult&" #E$ '(ct P()e" ,79 %1. "n order for a marketer to effectively recommend a new decision criterion its communication should convey three pieces of information. Which of the following would @AT be among those pieces of information! a. "t should point out that there are significant differences among brands. attribute.

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b. "t should point out that there are significant differences between national and private 8store9 brands. c. "t should supply the consumer with a decision-making rule. d. "t should convey a rule that can be easily integrated with how the person has made this decision in the past. Ans e!" #1$ Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" ,/7 %2. 0irectories and portals Web site evaluators forums fan clubs and user groups are all forms of which of the following! a. Web retailers. b. -ybercash. c. 0esign groups. d. -ybermediaries. Ans e!" #0$ Di%%icult&" #E$ '(ct P()e" ,/7 %6. "n the study of consumer behavior another name for a mental or problem solving shortcut is a: a. .mommieism./ b. detail *ule. c. heuristic. d. e+perience *ule. Ans e!" #c$ Di%%icult&" #M$ Applic(tion P()e" ,// %:. 5elissa has heard her mother say many times .>igher-priced products are higher;uality products./ This form of decision rule is called a8n9: a. .5ommieism./ b. 0etail *ule. c. >euristic. d. #+perience *ule. Ans e!" #c$ Di%%icult&" #M$ Applic(tion P()e" ,//+,/* )=. 5el >oward is determined to make his used car lot a successful business venture. Ane of the cornerstones of his sales strategy is to make every used car appear as if it Fust rolled off the assembly line. >is cars are clean clean clean. 5r. >oward is relying on which of the following terms to send a signal of ;uality to his customers! a. 0emonstration signal. b. $roduct signal. c. $romotional signal. d. 0esign signal. Ans e!" #1$ Di%%icult&" #M$ Applic(tion P()e" ,/*+,/,

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)1. Bll of the following are common market beliefs #H-#$T: a. coupons are generally rip-offs and not worth the time to collect them. b. all brands are basically the same. c. a store(s character is reflected in its window displays. d. largest-si3ed containers are almost always cheaper per unit than smaller si3es. Ans e!" #($ Di%%icult&" #M$ Applic(tion P()e" ,/,- T(1le 9., )2. The tendency for people to prefer products from their own culture to those of another culture is called: a. +enophobia. b. ethnographics. c. ethnocentrism. d. altruism. Ans e!" #c$ Di%%icult&" #M$ '(ct P()e" ,/4 )%. <atrell finds that every time he goes to select athletic shoes he always buys the same brand. "n fact he doesn(t even remember trying on any of the other competitive brands even though some of these brands have attractive styles and prices. <atrell(s purchase decision process has become one of less and less effort. <atrell(s decision process is an e+ample of ???????????????. a. cognitive dissonance. b. brand loyalty. c. ineptness. d. inertia. Ans e!" #0$ Di%%icult&" #H$ Applic(tion P()e" ,/6 )). B survey indicated that consumers believed that there was no significant difference between brands of paper towels soaps and snack chips. This belief is due in part to which of the following! a. 'rand loyalty. b. 'rand parity. c. 'rand mi+ing. d. 7lobal branding. Ans e!" #1$ Di%%icult&" #M$ Applic(tion P()e" ,/9 ),. 4imple decision rules are ?????????????? meaning that a product with a low standing on one attribute cannot make up for this position by being better on another attribute. a. habit decision rules b. noncompensatory c. compensatory d. conFunctive rules

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Ans e!" #1$ Di%%icult&" #M$ '(ct P()e" ,/9+,*7 )1. -hen <o uses a decision rule that says .Anly buy well-known brand names/ when selecting a set of golf clubs. >e does not look at price the store or even discounts when purchasing clubs. -hen <o(s purchasing pattern is an e+ample of a consumer using a: a. habit decision rule. b. noncompensatory rule. c. compensatory rule. d. conFunctive rule. Ans e!" #1$ Di%%icult&" #M$ Applic(tion P()e" ,/9+,*7 )2. When the ??????????????????? of decision making is used the brand that is the best on the most important attribute is the one selected. a. le+icographic rule b. elimination-by-aspects rule c. conFunctive rule d. compensatory decision rule Ans e!" #($ Di%%icult&" #M$ '(ct P()e" ,*7 )6. When using the ??????????????? of decision making brands are evaluated on the most important attribute but specific cutoffs are imposed. a. le+icographic rule b. elimination-by-aspects rule c. conFunctive rule d. compensatory decision rule Ans e!" #1$ Di%%icult&" #H$ '(ct P()e" ,*7 ):. When using the ????????????????? of decision making a brand is chosen if it meets all the cutoffs but failure to meet any one of the cutoffs means it will be reFected. a. le+icographic rule b. elimination-by-aspects rule c. conFunctive rule d. compensatory decision rule Ans e!" #c$ Di%%icult&" #H$ '(ct P()e" ,*7 ,=. "f a consumer chooses the product alternative that has the largest number of positive attributes but does not throw out the product for not meeting all of the desired attributes then the consumer is using a8n9 ??????????????????? of decision making.

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a. le+icographic rule b. elimination-by-aspects rule c. conFunctive rule d. compensatory decision rule Ans e!" #0$ Di%%icult&" #M$ '(ct P()e" ,*/ T!ue8'(lse ,1. The first step in the consumer decision-making process is to conduct information search. Ans e!" #'(lse$ Di%%icult&" #E$ '(ct P()e" *9* ,2. Traditionally consumer researchers have approached decision makers from a rational perspective. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct P()e" *9* ,%. Alga decided to buy a product at her grocery store because of a .surprise special./ This is an illustration of the behavioral influence perspective at work in the decision-making process. Ans e!" #T!ue$ Di%%icult&" #M$ Applic(tion P()e" *9,+*92 ,). When $hyllis talks to her friends after school about buying a new evening gown she is undergoing the evaluation of alternatives( phase of the consumer decision making process. Ans e!" #'(lse$ Di%%icult&" #M$ Applic(tion P()e" *9,- 'i)u!e 9./ ,,. When a consumer makes a decision that stresses the 7estalt then the consumer is following the behavioral influence perspective toward decision-making. Ans e!" #'(lse$ Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" *92 ,1. Bn e+ample of a routine response behavior decision is one where the consumer is dealing with a familiar product class or brands. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *93- 'i)u!e 9.* ,2. >abitual decision-making is the lowest order of buying decision-making. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct P()e" *93

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,6. The highest risk and involvement for the consumer is found in the paralla+ method of problem solving. Ans e!" #'(lse$ Di%%icult&" #M$ '(ct P()e" *94- T(1le 9./ ,:. #valuation of alternatives occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. Ans e!" #'(lse$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *94 1=. -edric runs out of gas. >e thinks to himself .>ow stupid " am./ -edric has Fust e+perienced a form of problem recognition that is being dominated by a downward movement in his actual state. Ans e!" #T!ue$ Di%%icult&" #M$ Applic(tion P()e" *94+*95- 'i)u!e 9., 11. -laire remembers that wonderful taste that can only come from a .frosty mug/ of root beer. Bs she heads to the soft drink aisle in her grocery store she decides that today is the day to e+perience root beer again. -laire has Fust conducted what is called an internal search for information. Ans e!" #T!ue$ Di%%icult&" #M$ Applic(tion P()e" *95 12. "ncidental learning occurs after a very concentrated search for information. Ans e!" #'(lse$ Di%%icult&" #M$ '(ct P()e" *96 1%. &ariety seeking is especially likely to occur when people are in a bad mood because they are so .bummed/ that they will try anything. Ans e!" #'(lse$ Di%%icult&" #E$ '(ct (n0 Applic(tion P()e" *96 1). 0ecisions are influenced by the way a problem is posed. This is called framing. Ans e!" #T!ue$ Di%%icult&" #E$ '(ct P()e" ,77 1,. The loss aversion bias states that having paid for something makes us reluctant to waste it. Ans e!" #'(lse$ Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" ,77 11. Bs a general rule women are more inclined to search for information than men are. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct P()e" ,7* 12. 4earch for information tends to be greatest among those consumers who are

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moderately knowledgeable about the product. Ans e!" #T!ue$ Di%%icult&" #E$ '(ct (n0 Applic(tion P()e" ,7* 16. Bs a general rule purchase decisions that involve e+tensive search also entail some kind of perceived risk. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct P()e" ,72 1:. 4ylvester is a financially poor college student. >e tries to make every purchase decision a wise one because of his economic condition. 'ased on the types of risk mentioned in the te+t 4ylvester(s primary risk when making decisions would appear to be psychological risk. Ans e!" #'(lse$ Di%%icult&" #M$ Applic(tion P()e" ,72- 'i)u!e 9.4 2=. The alternatives actively considered during a consumer(s choice process are his or her consumption boundaries. Ans e!" #'(lse$ Di%%icult&" #H$ '(ct P()e" ,73 21. With respect to product categori3ation and the levels of abstraction associated with this categori3ation a dessert category such as a pie is an e+ample of a superordinate level of abstraction. Ans e!" #'(lse$ Di%%icult&" #H$ Applic(tion P()e" ,75- 'i)u!e 9.5 22. #valuative criteria are the dimensions used to Fudge the merits of competing options. Ans e!" #T!ue$ Di%%icult&" #E$ '(ct P()e" ,79 2%. B shortcut to making a decision is called inertia. Ans e!" #'(lse$ Di%%icult&" #M$ '(ct P()e" ,// 2). Jonesey will only buy the lowest-priced spark plug when he goes shopping for auto supplies. 4ince his car is very old he really doesn(t care about any other ;ualities. Jonesy is using what is called the noncompensatory decision-making rule format. Ans e!" #T!ue$ Di%%icult&" #M$ Applic(tion P()e" ,/9+,*7 2,. The le+icographic rule of decision making states that the brand that is the best on the most important attribute is the one selected. Ans e!" #T!ue$ Di%%icult&" #M$ '(ct P()e" ,*7

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Ess(& 9uestions 21. <ist the five stages of the consumer decision-making process. 0efine each of the maFor stages. $rovide an e+ample that demonstrates how a consumer might progress through the model. Ans e!" The five stages are problem recognition information search evaluation of alternatives product choice and outcomes. 8a9 Problem recognition occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. 8b9 Information search is the process by which the consumer surveys his or her environment for appropriate data to make a reasonable decision. 8c9 Evaluation of alternatives--during this phase the alternatives actively considered during a consumer(s choice process are his or her evoked set. This set comprises the products already in memory and other prominent ones from the retail environment. 8d9 Product choice--a product is or is not chosen to solve the buyer(s problem. 8e9 Outcomes--if a product is selected it will either be satisfactory or unsatisfactory. "f no product is selected the process may begin again at a future time. #+ample: See the example found in Figure 9.1 for an illustration. Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *9*+*9,- 'i)u!e 9./ 22. 'riefly characteri3e the three perspectives on decision-making emphasi3ed in the te+t. Ans e!" The three perspectives on decision-making emphasi3ed in the te+t were: 8a9 B rational perspective--in this view people calmly and carefully integrate as much information as possible with what they already know about a product painstakingly weigh the pluses and minuses of each alternative and arrive at a satisfactory decision. 8b9 B behavioral influence perspective--under these circumstances managers must concentrate on assessing the characteristics of the environment such as the design of a retail outlet or whether a package is enticing that influence members of a target market. 5any times these decisions 8made with this perspective in mind9 are of the lowinvolvement type where store environment has an effect on the decisions to be made. 8c9 Bn experiential perspective--in these cases no single ;uality may be the determining factor in the decision. This perspective stresses the 7estalt 8or totality9 of the product or service. 5arketers in these areas focus on measuring consumers( affective responses to products or services and develop offerings that elicit appropriate subFective reactions. Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" *9*+*9, 26. -ompare limited versus e+tended problem solving.

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Ans e!" The following situations are among those that characteri3e limited problem solving: low risk and involvement little search information processed passively an in-store decision likely weakly-held beliefs only most prominent criteria used alternatives are perceived as basically similar noncompensatory strategy used limited shopping time and choice is influenced by in-store displays. The following situations characteri3e e+tended problem solving: high risk and involvement e+tensive search information processed actively multiple sources consulted prior to store visits strongly-held beliefs many criteria used significant differences perceived among alternatives compensatory strategy used many outlets shopped if needed and communication with store personnel is often desirable. Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *94- T(1le 9./ 2:. 0efine problem recognition. 4how how problems can arise. 7ive a brief e+ample to illustrate the problem recognition process. Ans e!" $roblem recognition occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. @otice that Gigure :.% matches the e+ample used in the te+t about a person running out of gas. $roblem recognition can occur in two ways: 8a9 there is a downward movement of the actual state 8a person runs out of gas9 and 8b9 there is an upward movement in the ideal state 8such as a person craving something that they do not currently have9. Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" *94+*95- 'i)u!e 9., 6=. 0escribe the various forms of bias that might be present in the information search portion of the decision-making process. 'e sure to specifically identify and e+amine these biases. Ans e!" 'iases begin because of the way consumers view situations and information about those situations or the way a problem is posed 8called framing9. 8a9 The sunk cost fallac!--having paid for something make us reluctant to waste it 8even if this decision costs us something9. 8b9 "oss aversion--people place much more emphasis on loss than they do on gain. Prospect theor! finds that utility is a function of gains and lossesI risk differs when the consumer faces options involving gains versus those involving losses. 8c9 #ental accounting--demonstrates that e+traneous characteristics of the choice can influence our selections even though they wouldn(t if we were totally rational decision makers. Di%%icult&" #H$ '(ct P()e" ,77

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61. $urchase decisions that involve e+tensive search also entail some kind of perceived risk 8a belief that the purchase potentially could have negative conse;uences9. @ame five perceived risks indicate the kinds of consumers most vulnerable to each risk and indicate the types of purchases most sensitive to each. Ans e!" The five basic kinds of risk include both obFective 8e.g. physical danger9 and subFective factors 8e.g. social embarrassment9. -onsumers with greater Jrisk capitalJ are less affected by perceived risks associated with the purchases. The five basic kinds of risk include: #onetar! risk - *isk capital consists of money and property. Those with relatively little income and wealth are most vulnerable. $urchases most sensitive to it: high-ticket items that re;uire a substantial e+penditure such as cars houses. Functional risk - *isk capital consists of alternate means of performing the function or meeting the need. $ractical consumers are the most sensitive. $urchases most sensitive to it: products or services whose purchase and use re;uires the buyerKs e+clusive commitment and precludes redundancy. Ph!sical risk - *isk capital consists of physical vigor health and vitality. Those who are elderly frail or in ill health are most vulnerable. $urchases sensitive to it: mechanical or electrical goods 8such as vehicles flammables9 drugs and medical treatment food and beverages. Social risk - *isk capital consists of self-esteem and confidence. Those who are insecure and uncertain are most sensitive. $urchases sensitive to it: socially visible or symbolic goods such as clothes Fewelry cars homes or sports e;uipment. Ps!chological risk - *isk capital consists of affiliations and status. Those lacking respect or attractiveness to peers are most sensitive. $urchases sensitive to it: e+pensive personal lu+uries that may engender guilt durables and services whose use demands self-discipline or sacrifice. Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" ,72- 'i)u!e 9.4 62. What is an evoked set! -reate an e+ample to illustrate the term. Ans e!" The evoked set consists of all those product alternatives actively considered by the consumer during hisLher choice process. "t is composed of products already in memory 8the retrieval set9 as well as those prominently displayed in the retail environment. Students ma! create their o$n examples% ho$ever& these examples should be consistent $ith the material on page '() in the test. Di%%icult&" #E$ '(ct (n0 Applic(tion P()e" ,73

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6%. What is a cybermediary! <ist and briefly describe three different forms the cybermediary can take. 'e specific in your description of the three forms. Ans e!" B c!bermediar! is an intermediary that helps to filter and organi3e online market information so that customers can identify and evaluate alternatives more efficiently. Gorms 8according to the chapter9 include: 8a9 *irectories and portals--general services that tie together a large variety of different sites. 8b9 +eb site evaluators--reduce the risk to consumers by reviewing sites and recommending the best ones. 8c9 Forums& fan clubs& and user groups--offer product-related discussions to help customers sift through options. 8d9 Financial intermediaries--authori3e payments from buyer to seller. 8e9 Intelligent agents--sophisticated software programs that use collaborative filtering technologies to learn from past user behavior in order to recommend new purchases. Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" ,/7 6). What is a decision-making heuristic! 0escribe two typical heuristics used in consumer decision-making situations. Ans e!" >euristics are mental short-cut Jrules of thumbJ consumers use to save time and effort in the decision-making process. >euristics may be based upon previous e+perience reports from others or beliefs. They may range from the very general 8e.g. J>igher-priced products are higher-;uality products.J9 to the very specific 8e.g. J'uy 0omino thatKs the brand of sugar my mother always bought.J9. Typical heuristics include: $riceL;uality relationship - That price is positively correlated with ;uality is one of the most pervasive market beliefsI for the most part it is Fustified. @ovice consumers may in fact consider price as the only relevant product attribute. *eliance on a product signal - 4ometimes consumers tend to infer hidden dimensions of products from observable attributes. B common e+ample is the clean and shiny e+terior of a used car up for sale. -onsumers lacking knowledge may use signals such as how long the company has been in business how well known the brand name is price etc. -Fudgments which may be faulty. -ommon market beliefs - There are many consumer beliefs about relationships in the marketplace not all of which are accurate: e.g. locally-owned stores give the best service all brands are basically the same etc.

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'rand names - When a consumer consistently purchases the same brand over time sLhe may do it out of true brand loyalty or simply from inertia because less effort is re;uired. #.g. the heuristic might be J" always buy 4ony products.J -ountry of origin - -onsumersK reactions to imports are mi+ed: in general people rate their own countryKs products more favorably than they do foreign productsI products from industriali3ed countries are more highly rated than those from developing countries. -ertain items associated with specific countries may benefit from these linkages e.g. shoes made in "taly are pri3ed. Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" ,//+,/5- T(1le 9., 6,. 0efine noncompensatory rules used in purchase decision-making. 7ive illustrations of the types of rules that might fall under this category. Ans e!" When consumers consider attributes of several product choices they may follow a simple noncompensatory decision rule meaning that they feel a product with a high standing on one attribute cannot Jmake up forJ 8or compensate for9 poor performance on another. ,oncompensator! decision rules - These decision rules are characteri3ed by e+clusion: low standing on one attribute cannot be ignored because of good performance on other attributes. 4trong attributes do not compensate for weak ones. Dinds of rules include: "exicographic rule - The brand that is best on the most important attribute is selected. "n the event of a tie brands are evaluated on the ne+t most important attribute. Elimination b! aspects rule - 'rands are compared for the presence of the attribute considered most important. "f the feature is not present that alternative is reFected. -on.unctive rule - 5inimum cutoffs are established for each attribute the brands possess. The brand must meet all cutoffs to be considered. Di%%icult&" #H$ '(ct (n0 Applic(tion P()e" ,/9+,*7 61. 0efine compensatory rules used in purchase decision-making. 7ive illustrations of types of rules that might fall under this category. Ans e!" -ompensator! decision rules - $roducts are compared overall: relatively lower performance on some attributes may be outweighed by relatively higher performance on other attributes. 4trong performance can compensate for weaker elements. Dinds of rules include:

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Simple additive rule - This operates when the consumer selects the alternative having the largest number of positive attributes. +eighted additive rule - This operates when each attribute varies in relative importance to the consumer. *atings on each attribute are intuitively multiplied by their importance weights. Di%%icult&" #M$ '(ct (n0 Applic(tion P()e" ,*/

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