Question 1

The term "customer" refers only to those individuals currently interacting with the firm and providing revenue to it through their purchases.

Accepted Answer

The term "customer" can refer to both current and potential individuals or entities that might interact with the firm, not just those currently providing revenue through purchases. It encompasses anyone who might use the firm's services or buy its products, regardless of their current transactional status.

Question 2

While no method of describing customers is perfect, AIO variables have proved valuable tools for segmentation and the creation of strategy.

Accepted Answer

AIO variables, which stand for Activities, Interests, and Opinions, are used in market research to understand consumer behavior better, allowing for effective segmentation and strategic planning.

Question 3

The firm produces features, but the customer buys benefits.

Accepted Answer

Customers purchase products or services based on the benefits they perceive these will provide, such as solving a problem or fulfilling a need, rather than the specific features or technical specifications of the products themselves.

Question 4

The multi attribute model of decision making has proved useful in the final consumer market, but is not practical for the industrial market.

Accepted Answer

The multi-attribute model of decision making is also practical for the industrial market because it helps in evaluating alternatives based on several attributes, which is crucial for complex and high-value decisions typical in industrial purchasing.

Question 5

A customer defines brand equity as the value of a product beyond that explainable by economic and functional attributes.

Accepted Answer

Brand equity refers to the additional value a product gains from its brand name beyond its functional benefits, encompassing aspects like consumer perceptions, experiences, and loyalty.

Question 6

Conjoint analysis typically employs regression analysis to determine the relative importance of the attributes of a product and the values of different levels of these attributes.

Accepted Answer

Conjoint analysis uses statistical techniques such as regression analysis to understand how consumers value different attributes of a product or service, allowing researchers to determine the relative importance of these attributes and their specific levels.

Question 7

Mass customization is an attempt to market products created from mass produced components that have been combined / assembled to meet the unique needs of their buyer / user.

Accepted Answer

Mass customization is a strategy that involves producing goods and services to meet individual customer's needs with near mass production efficiency, often using mass-produced parts that are then customized or assembled in various combinations.

Question 8

Cluster analysis seeks to identify and group individual consumers on the basis of shared behavior variables.

Accepted Answer

Cluster analysis is a statistical technique used to group individuals or objects that are similar to each other based on selected characteristics or behaviors, making it a useful tool for identifying consumer segments with shared behaviors.

Question 9

Chi-square is a non-parametric statistical technique that has little value in creating / analyzing market segments.

Accepted Answer

Chi-square is a valuable non-parametric statistical technique used for analyzing categorical data, which can be very useful in creating or analyzing market segments by examining relationships between categorical variables.

Question 10

Latent class analysis begins with individual customers and then aggregate them.

Accepted Answer

Latent class analysis starts with the assumption of a certain number of classes and then assigns individuals to these classes based on their responses or characteristics.

Question 11

The term "customer" does NOT include
A) Current customers
B) Customers of competitors
C) Customer service
D) Intermediate customers
E) Current noncustomers

Accepted Answer

The term "customer" refers to individuals or entities that purchase goods or services. "Customer service," however, is a support provided to customers before, during, and after purchasing and using goods or services. It does not refer to a type of customer, but rather to the assistance and advice provided to them.

Question 12

For consumer products, the person who makes the final decision through budget authorization in the household is known as the
A) Initiator
B) Influencer
C) Decider
D) Purchaser
E) User

Accepted Answer

The decider in a household is the person who makes the final decision regarding purchasing, including through budget authorization. This role is distinct from the initiator, influencer, purchaser, and user, who may contribute to the buying process in different ways but do not have the final say.

Question 13

Also known as lifestyle variable, this descriptive variable represents an evolution from general personality variables to attitudes and behaviors more closely related to consumption of goods and services.
A) Psychographic
B) Personality
C) Demographic
D) Socioeconomic
E) Geo-demographic

Accepted Answer

Psychographic variables focus on interests, activities, opinions, attitudes, and values, offering a more detailed perspective on consumer behavior related to the consumption of goods and services, beyond basic demographic or socioeconomic data.

Question 14

Organizations that face general needs before the bulk of the industry does and that benefit significantly by obtaining an early solution to those needs are BEST known as
A) Team leaders
B) Lead users
C) Early adopters
D) Entrepreneurs
E) Visionaries

Accepted Answer

Lead users are those who face needs ahead of the majority in their market and gain significantly from innovations that address these needs early on. They often play a key role in the development and testing of new products or services.

Question 15

The ultimate consumer profile is based on the consumer's
A) Demographics
B) Lifetime value
C) Personality
D) Income
E) Occupation

Accepted Answer

The answer of The ultimate consumer profile is based on...

Question 16

Identify the INCORRECT statement about unprofitable customers.
A) Credit card holders who pay off their balances on time are not unprofitable
B) Unprofitable customers could be cable subscribers in remote areas
C) "High maintenance" customers who heavily use free services may be unprofitable
D) Customers unprofitable in the short run may be very profitable in the long run
E) Firms with high percentages of unprofitable customers are often involved in "slamming."

Accepted Answer

Credit card holders who pay off their balances on time can actually be unprofitable for credit card companies because these companies do not earn interest revenue from these customers.

Question 17

This category of potential customers, based on where they are in terms of relating to the product, involves those who not only buy the product but actively encourage others to do so too.
A) Aware
B) Advocates
C) Attracted
D) Active
E) Accepting

Accepted Answer

Advocates are customers who not only purchase a product but also actively promote and recommend it to others, going beyond mere acceptance or regular use.

Question 18

The multiattribute model does NOT assume that
A) The customer decision making is occurring in the consumer and not industrial context
B) Customers have a perception about how much of each attribute is contained in a product category
C) Consumers place a weight / importance on each attribute
D) Consumers use some "rule" to combine attributes and weights
E) Products in a product category are a collection of attributes

Accepted Answer

The multiattribute model applies to both consumer and industrial contexts, not exclusively to consumer contexts. It assumes that customers evaluate products based on perceived attributes, the importance of these attributes, and a combination rule for decision-making, applicable across different types of markets.

Question 19

This method, of determining perceptions, provides a spatial representation of the brands in a product category based on customers' perceptions of similarity among products.
A) Chi square test
B) Graded paired comparison
C) Multidimensional scaling
D) Regression analysis
E) Constant sum rating

Accepted Answer

Multidimensional scaling is a statistical technique that provides a spatial representation of the brands in a product category based on customers' perceptions of similarity among products.

Question 20

The _____ method to determine customers' perceptions allows the product manager to infer the importance of different product attributes from customer rank orderings of alternative product bundles of attributes.
A) Perceptual mapping
B) Conjoint analysis
C) Multidimensional scaling
D) Feature mapping
E) Balance scorecard

Accepted Answer

Conjoint analysis is the correct method for determining customers' perceptions by allowing a product manager to infer the importance of different product attributes from customer rank orderings of alternative product bundles of attributes. This technique involves presenting consumers with a set of products (or product descriptions) that have varying levels of different attributes and then analyzing their preferences or choices to determine the implicit valuation of individual attributes.

Quiz 5: Customer Analysis

The term "customer" refers only to those individuals currently interacting with the firm and providing revenue to it through their purchases.

While no method of describing customers is perfect, AIO variables have proved valuable tools for segmentation and the creation of strategy.

The firm produces features, but the customer buys benefits.

The multi attribute model of decision making has proved useful in the final consumer market, but is not practical for the industrial market.

A customer defines brand equity as the value of a product beyond that explainable by economic and functional attributes.

Conjoint analysis typically employs regression analysis to determine the relative importance of the attributes of a product and the values of different levels of these attributes.

Mass customization is an attempt to market products created from mass produced components that have been combined / assembled to meet the unique needs of their buyer / user.

Cluster analysis seeks to identify and group individual consumers on the basis of shared behavior variables.

Chi-square is a non-parametric statistical technique that has little value in creating / analyzing market segments.

Latent class analysis begins with individual customers and then aggregate them.

The term "customer" does NOT include

For consumer products, the person who makes the final decision through budget authorization in the household is known as the

Also known as lifestyle variable, this descriptive variable represents an evolution from general personality variables to attitudes and behaviors more closely related to consumption of goods and services.

Organizations that face general needs before the bulk of the industry does and that benefit significantly by obtaining an early solution to those needs are BEST known as

The ultimate consumer profile is based on the consumer's

Identify the INCORRECT statement about unprofitable customers.

This category of potential customers, based on where they are in terms of relating to the product, involves those who not only buy the product but actively encourage others to do so too.

The multiattribute model does NOT assume that

This method, of determining perceptions, provides a spatial representation of the brands in a product category based on customers' perceptions of similarity among products.

The _____ method to determine customers' perceptions allows the product manager to infer the importance of different product attributes from customer rank orderings of alternative product bundles of attributes.