978-0134129938 Chapter 9 Solution Manual Part 1

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REVIEW QUESTIONS

9-1. Why can “mindless” decision making actually be more efficient than devoting a lot of

thought to what we buy?

Sometimes the decision-making process is almost automatic; we seem to make snap

judgments based on very little information. At other times, coming to a purchase decision

begins to resemble a full-time job. A person may literally spend days or weeks thinking

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

9-2. List the steps in the model of cognitive decision-making.

Problem recognition, information search, evaluation of alternatives, product choice, and

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-3. What is purchase momentum, and how does it relate (or not) to the model of rational

decision-making?

Purchase momentum occurs when these initial impulses actually increase the likelihood

that we will buy even more (instead of less as our needs are satisfied), as if we are

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-4. Give an example of the type of purchase that each of the three types of decision-making –

cognitive, habitual, and affective – would most likely explain.

A cognitive decision is one that would involve rational thought such as choosing a new

(5 minutes, Chapter Objective 1, AACSB: Application of Knowledge)

9-5. Name two ways a consumer problem arises.

1) A person’s standard of comparison may be altered, 2) the quality of the consumer’s

(3 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

9-6. Give an example of the sunk-cost fallacy.

Simply put, the sunk-cost fallacy occurs when someone has paid for something and is

(5 minutes, Chapter Objective 3, AACSB: Application of Knowledge)

9-1

9-7. What is prospect theory? Does it support the argument that people are rational decision

makers?

Prospect theory, a descriptive model of how people make choices, finds that utility is a

function of gains and losses, and risk differs when the consumer faces options involving

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-8. “Marketers need to be extra sure their product works as promised when the first introduce

it.” How does this statement relate to what we know about consumers’ evoked sets?

People are more likely to add a new brand to the evoked set than one that we previously

considered but passed over, even after additional positive information has been provided

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-9. Describe the difference between a superordinate category, a basic level category, and a

subordinate category.

Categories exist in a taxonomy from most concrete to most abstract. The middle level,

known as a basic level category, is typically the most useful in classifying products,

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-10. What is an example of an exemplar product?

If a product is a good example of a category, it is more familiar to consumers and they

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-11. List three product attributes that consumers can use as product quality signals and

provide an example of each.

1) Price: Consumers commonly associate a higher price as an indicator of a higher level

of quality. 2) Country-of-origin: A common U.S. perception is that watches that are

(10 minutes, Chapter Objective 3, AACSB: Application of Knowledge

9-12. How does a brand name work as a heuristic?

9-2

Branding is a marketing strategy that often functions, as a heuristic because people

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-13. Describe the difference between inertia and brand loyalty.

Inertia exists when we buy a brand out of habit merely because it requires less effort. For

brand loyalty to exist, a pattern of repeat purchase must be accompanied by an

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

9-14. What is the difference between a non-compensatory and a compensatory decision rule?

Give one example of each.

Non-compensatory decision rules are choice shortcuts where a product with a low

standing on one attribute cannot make up for this position by being better on another

attribute. Unlike non-compensatory decision rules, compensatory decision rules give a

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-15. What is prime? How does it differ from a nudge?

A prime is a stimulus that encourages people to focus on some specific aspect of their

lives such as their financial well-being, or the environment. A nudge is a deliberate

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-16. What are some factors that influence how an organizational buyer evaluates a purchase

decision?

A number of factors influence the organizational buyer’s perception of the purchase

situation. These include his or her expectations of the supplier (e.g., product quality, the

competence and behavior of the firm’s employees, and prior experiences in dealing with

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

9-17. What is a prediction market?

A prediction market is one of the hottest trends in organizational decision-making

techniques. This approach asserts that groups of people with knowledge about an

industry are, collectively, better predictors of the future than are any of them as

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

9-18. Summarize the buyclass model of purchasing. How do decisions differ within each class?

The classic buyclass theory of purchasing divides organizational buying decisions

into three types that range from the least to the most complex. Three decision-making

dimensions describe the purchasing strategies of an organizational buyer. A straight

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

9-19. What are some of the ways in which organizational decisions differ within each class?

The purchase decisions that companies make frequently involve many people, including

those who do the actual buying, those who directly or indirectly influence this

decision, and the employees who will actually use the product or service. Organizations

and companies often use precise technical specifications that require a lot of knowledge

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

9-20. List three roles employees play in the organizational decision-making process.

Employees are often collaborators in the decision making process, or participate in the

problem solving process including the evaluation of product choices. Depending on the

9-4

decision, the choice may include some or all of the group members, and different group

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

9-21. What is the difference between an autonomic and syncretic decision?

When one family member chooses a product, this is an autonomic decision. In traditional

households, for example, men often have sole responsibility to select a car, whereas

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

9-22. What are some differences between “traditional” and “modern” couples in terms of how

they allocate household responsibilities?

As women continue to work outside the home in great number, their influence on

household purchase decisions grows accordingly. The share of mothers employed

full- or part-time has quadrupled since the 1950s and today accounts for nearly three

quarters of women with children at home. The number of women who are their families’

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

9-23. What is a kin-network system?

Despite the shift in decision-making responsibilities, women are still primarily

responsible for the continuation of the family’s kin-network system, They maintain ties

among family members, both immediate and extended. Women are more likely to

9-5

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

9-24. Describe a heuristic a couple might use when they make a decision, and provide an

example of it.

Responses will vary by student, based on examples. The couple defines their areas of

common preference on obvious, objective dimensions rather than subtler, hard-to-define

cues. For example, they may easily agree on the number of bedrooms they need in the

new home, but they have a harder time when they need to agree on how the home should

look. The couple negotiates a system of task specialization in which each is responsible

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE

DISCUSS

9-25. Excessive food consumption may link to emotional issues such as feelings of inferiority

or low self-esteem. In some situations people consume products (especially food) as a

reaction to prior life experiences such as loss of a loved one or perhaps abuse as a child.

A British man whom the U.K. news media once dubbed “the world’s fattest man” when

he weighed in at 980 pounds is a case in point. He explained that as an adult his insatiable

desire to constantly eat stemmed from an abusive father and sexual abuse by a relative: “I

still had all these things going around in my head from my childhood. Food replaced the

love I didn’t get from my parents.” (The good news: after a gastric bypass operation this

man has lost almost two-thirds of his body weight). Obviously this is an extreme case,

and it certainly doesn’t mean that everyone who struggles with his or her weight is a

victim of abuse! Nonetheless, emotion often plays a role—a dieter may feel elated when

he weighs in at three pounds less than last week; however, if he fails to make progress he

may become discouraged and actually sabotage himself with a Krispy Kreme binge. Is it

ethical for food companies to exploit these issues by linking their products to

9-6

enhanced moods?

Responses will vary based on the beliefs of students. Students should consider the

cognitive, habitual, and effective aspects of consumer decision making. The feedback

(20 minutes, chapter Objective 1, AACSB: Ethical understanding and reasoning)

9-26. The chapter discusses ways that organizations can use “nudges” to change consumer

behavior. Critics refer to them as benevolent paternalism because they argue they force

people to “eat their vegetables” by restricting the freedom to choose. For example,

several cities including New York and Philadelphia have tried (unsuccessfully thus far) to

ban the sales of extra large portions of sugary drinks. What’s your take on these efforts –

should local, state or federal governments be in the business of nudging citizens to be

healthier?

Responses will vary based on the beliefs of the students. Students should understand how

much of the current work in behavioral economics demonstrates how a nudge—a

deliberate change by an organization that intends to modify behavior—can result in

(20 minutes, chapter Objective 1, AACSB: Ethical understanding and reasoning)

9-27. Why is it difficult to place a product in a consumer’s evoked set after it has already been

rejected? What strategies might a marketer use in an attempt to accomplish this goal?

It is difficult to place a product into an evoked set after it has been rejected because

consumers are “cognitive misers.” This means that people conserve their mental

Promotional strategies can be used to get the consumer to reconsider the product. Price

discounts, coupons, special offers, rebates, or free samples will increase the possibility

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-28. Technology has the potential to make our lives easier as it reduces the amount of clutter

we need to work through to access the information on the Internet that really interests us.

However, perhaps intelligent agents that make recommendations based only on what we

and others like us have chosen in the past limit us, in that they reduce the chance that we

will stumble on something (e.g., a book on a topic we’ve never heard of or a music group

that’s different from the style we usually listen to) through serendipity. Will the

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proliferation of “shopping bots” make our lives too predictable by only giving us more of

the same? If so, is this a problem?

Responses will vary by student. Intelligent agents are sophisticated software programs

that use collaborative filtering technologies to learn from past user behavior to

recommend new purchases. When you let Amazon.com suggest a new book, the site uses

an intelligent agent to propose novels based on what you and others like you have bought

in the past. The biggest problem Web surfers face these days is to narrow down their

understanding and reasoning)

9-29. It’s increasingly clear that many postings on blogs and product review Web sites

are fake or are posted there to manipulate consumers’ opinions. How big a problem

is this if consumers increasingly look to consumer-generated product reviews during the

stage of information search? What steps, if any, can marketers take to nip this problem in

the bud?

9-30. Commercial Alert, a consumer group, is highly critical of neuromarketing. The group’s

executive director wrote, “What would happen in this country if corporate marketers and

political consultants could literally peer inside our brains and chart the neural activity that

leads to our selections in the supermarket and voting booth? What if they then could

trigger this neural activity by various means, so as to modify our behavior to serve their

own ends?” What do you think? Is neuromarketing dangerous?

The idea that neuromarketing is any more dangerous than more traditional methods of

market research rests on two assumptions. 1) These methods allow marketers to read

(10 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning

Abilities)

9-31. Research supports the argument that the way we pay for a product changes the way we

perceive it. More specifically, credit cards prime people to focus less on the costs of the

item and more on the benefits. Using plastic decouples the expense of the purchase so we

tend to buy more when we can charge it. Newer innovations like digital wallets take this a

step further so payment— at least at the time of purchase—is even less painful. Are these

9-8

formats going to create problems if they prime us to think more about short-term

gratification and less about the long-term hit to our budgets?

Responses will vary by student but should consider the idea of priming consumers in the

decision making process. Researchers who work on prospect theory analyze how the

value of a decision depends on gains or losses; they identify principles of mental

accounting that relate to the way we frame the question as well as external issues that

shouldn’t influence our choices, but do anyway. The notion that even subtle changes in a

(20 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning

Abilities)

9-32. As more people enter virtual worlds like Second Life and Kaneva, family

decision-making research may have to include our virtual partners (and children?) as

well. Do you agree? How do you think consumer researchers could use a virtual world to

help them understand decision making in the real world? Responses will vary by student.

One analysis of family decision making took a closer look at the idea that family

members mutually construct a family identity that defines the household both to members

(20 minutes, Chapter Objective 7, AACSB: Ethical Understanding and Reasoning

Abilities)

9.33 Industrial purchase decisions are totally rational. Aesthetic or subjective factors don’t –

and shouldn’t – play a role in this process. Do you agree?

Student responses will vary but should address several issues that are key in B2B

decision making. The purchase decisions that companies make frequently involve many

people, including those who do the actual buying, those who directly or indirectly

(15 Minutes, Chapter Objective 6, AACSB: Reflective Thinking)

9.34. We can think of college students who live away from home as having a substitute

“family.” Whether you live with your parents, with a spouse, or with other students, how

are decisions made in your college residence “family”? Do some people take on the role

of mother, father, or child? Give a specific example of a decision that had to be made and

the roles members played.

Scenarios and examples will vary by student but should identify the roles of various

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

9-35 The promotional products industry thrives on corporate clients that order $19 billion per

year of T-shirts, mugs, pens, and other branded items that are intended to keep their

organizations at the forefront of their customers’ minds. This has caused a lot of backlash,

especially in the medical/pharmaceutical industry where critics worry about the undue

influence of these advertising messages. Stanford University Medical Center prohibits its

physicians from accepting even small gifts, such as pens and mugs, from pharmaceutical

sales representatives under a new policy that it hopes will limit industry influence on

patient care and doctor education. The new policy is part of a small but growing

movement among medical centers (Yale and the University of Pennsylvania have similar

policies). The policy also prohibits doctors from accepting free drug samples and from

publishing articles ghostwritten by industry contractors in medical journals (a fairly

common practice). These changes come at a time when many of us are concerned about

the safety and rising cost of drugs and medical devices. About 90 percent of the

pharmaceutical industry’s $21 billion marketing budget targets physicians. Some studies

have shown that even small gifts create a sense of obligation; one critical study charged

that free drug samples are “a powerful inducement for physicians and patients to rely on

medications that are expensive but not more effective.” Indeed, some industry documents

from a civil lawsuit show that big pharmaceutical companies sometimes calculate to the

penny the profits that doctors could make from their drugs. Sales representatives shared

those profit estimates with doctors and their staffs, the documents show. In response to

pressure in the market, the pharmaceutical industry is largely banning the use of

promotional products. One result is that the businesses that supply these premiums will

lose around $1 billion per year in sales. What do you think about this initiative? Is it fair

to deprive an industry of its livelihood in this way? Why or why not? Where is the line

between legitimate promotion of one’s products and unethical practice? Should

9-10

professionals engage in organizational decision making that has such far-reaching

medical and financial ramifications? Is this philosophy selfish?

Student responses will vary. Students should indicate an understanding of an evoked set

as well as a consideration set. Product positioning might also be discussed here.

(30 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning

Abilities)

9-11