ONE THING TO REMEMBER: Rev- VC= CM-FC=Profit
Module 4 Review Questions
1. What are some of the primary reasons marketers need to understand
Basic drivers of consumer behaviour; culture, the economy, social influence,
consumer beliefs, and customer satisfaction. Such knowledge about the
customer and context is an important competitive knowledge advantage.
2. Define exploratory research. At what stage of the research process does it
take place? Where is the information typically gathered (i.e., internally,
externally or both)?
Exploratory research and data collection are undertaken when the problem
or research question is still fuzzy and management wants additional
information before undertaking further research. It is likely to include the
study of internal records, customer complaints, financial analysis trends, and
discussions with distributors and suppliers. It is a sensible way of boiling the
problem down to its essence.
3. What is descriptive research used to measure/determine? What are some
examples of descriptive research methods?
Descriptive survey research is typically used to describe customers, either
small numbers of customers in-depth or large numbers of customers by
survey research. It typically gathers descriptive profiles of customers and is
used to measure customer satisfaction, study product use and segment
customers. For example: How satisfied are you with the college of business?
Answers who, what, where, when, and why of consumer behaviour.
4. Why do marketers care about complex buying behaviour?
Complex buying behaviour means that there are differences between brands
and a high involvement. Buyers do extensive study about the products, and it
is really hard for a marketing expert to understand which buy would do
5. Determine the difference between Cross Sectional and Longitudinal
Cross-sectional research studies a cross-sectional sample of customers
responses at a specific point in time. Longitudinal research involves the
repeated measurement of the same customer and addresses customer
responses over a period of time.
6. Differentiate quantitative and qualitative research.
Quantitative is ideal for testing hypotheses, and for hard sciences trying to
answer specific questions. Quantitative research generally comes later in a
research project, once the scope of the project is well understood.
Qualitative research includes methods such as observation and in-depth
interviews with customers, suppliers, and middlemen. Many anthropology
majors trained in appropriate observation and interview methods are now
employed in market research and design firms. They study ethnography, the
www.notesolution.com way of life of people.
7. Cause and Effect = Does X ___________Y?
X does cause Y. Every time you have X you should have Y.
8. Understand correlation vs. causation.
Correlation refers to the different approach of two variables from
independence. Example: Is there a relationship between amount of time
spent on homework and grades?
Causation is the relationship held between events, objectives, or affairs. The
first A (the cause) is the reason that brings about the second event B (the
9. What are Focus Groups used for?
Focus groups are far and away the most common market research method
used today because they are very useful. A focus group consists of a group of
six to 12 carefully selected people who focus on a particular question or issue
in a free-wheeling discussion for about two hours. Used to test products and
product concepts, advertising creative and political messages.
10. Are Focus Groups used to represent beliefs, attitudes and behaviors or
simply to learn about them?
The purpose of focus groups is to learn about the beliefs, attitudes,
preferences and behaviour of the target customers. But it can be risky to use
focus groups to statiscally represent target customer behaviour.
11. What are the 3 kinds of Samples? Which sample is likely to be the most
effective/accurate? Why? What is a significant sample?
A probability sample is a sample where all of the respondents in the
population or segment to be studied have a known (non-zero) chance of being
chosen to be in the sample from the population/segment being studied. A
simple random sample is a probability sample where respondents are
randomly chosen from a complete list of the population. A convenience
sample is a sample that is gathered from a convenient pool of customers or
potential customers. To get a sense of demand for a new iced tea, how might a
marketer undertake a taste test against a premium supermarket brand? A
convenience sample of high-performing stores may be a more valid sample
than a representative sample of all stores if the goal is to understand the
beliefs, preferences, and behaviour of only high-performing stores and not all
The primary advantage of random probability samples is that they greatly
reduce the potential for sampling error showing up in the results. In addition,
sampling can be much more cost effective than surveying the whole
population (a survey of a whole population is called a census) and has the
additional advantage of not repeatedly bothering the entire population of
customers for feedback.
12. Describe some pros and cons of online research.
Pros: Online market research has increased the quality of the research by
reducing errors in several research processes. It has significantly reduced the
cost of research by 20-50 percent. It has sped up the whole market research
process, from taking weeks to days. Comparative studies suggest that online
open-ended questions elicit a lot richer response and less inhibited responses
than open-ended questions asked in mail or telephone surveys. It allows
www.notesolution.com firms to quickly study a segment of the target market and test new ideas.
Cons: An issue associated with the quality of online market research has
been how representative the sample is. The online respondents do not
represent the population at large, as low-income households and older
households are under-represented. There is more of a concern over
controlling who is participating in online market research.
13. What are some common survey errors?
The major problem with sampling is the risk of non-response error or
participation bias, which occurs when a particular customer group is under or
over represented in a sample. A more general problem is that households are
tired of being duped by sales pitches that pretend to be a market research
study, online and offline.
14. What is Habitual Shopping? How does Starbucks encourage habitual
shopping? Is there a difference between habitual shopping and brand
Habitual shopping is having a habit of shopping usually for stuff you dont
even need. What has worked in the past (rewarded us) is likely to work again
(reward us again) in the future. Habits allow us to save time making
decisions and to be thinking of other things as we do them. Habitual
shopping routines can often be executed more efficiently than new
behaviours. It provides a sense of discipline, order and control in our lives.
Brand loyalty, in marketing, consists of a consumers commitment to
repurchase or otherwise continue using the brand and can be demonstrated
by repeated buying of a product or service or other positive behaviors such as
word of mouth advocacy.
15. What is Recreational Shopping?
Evolution has also endowed us with curiosity and boredom, the yang to the
ying of mindless shopping. This often drives us to recreational shop the malls
and curiosity stores. An important recreational aspect of such hobbies is
shopping for supplies or to seewhat is new and improved.
16. What is Computer Based Expert Purchasing? What kind of organizations
uses it today?
For some purchases undertaken by very large companies or governments, it
is even possible to develop computer based expert systems that guide a
purchasing officer through a purchase decision. Future expert systems are
likely to integrate information from production that rates competing
suppliers in terms of defect rates within individual order batches, on-time
delivery and other performance criteria.
Company shopping behaviour can be viewed from two perspectives: the
engineering-user view and the purchasing b