STUDY GUIDE FOR THE THIRD EXAM AND EXAMPLE QUESTIONS

Product positioning

You should be familiar with the two positioning models discussed in class (X-YZ, I-D-U) and be able to write a
positioning statement for a brand (using the template provided in class).

Example multiple-choice question:

1. In the I-D-U model of benefit emphasis the I refers to:

a. image.
b. ideal level.
c. interest.
d. importance.

2. 7-Up’s long-standing campaign to position itself as the Un-cola is a good example of positioning by
a. usage situation.
b. product class or product category.
c. sensory attributes.
d. users.
e. any of the above.

Case discussion: Saxonville Sausage Company (SSC)

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

(1) What’s the problem facing Saxonville Sausage Company? Why is Saxonville Sausage Company
considering launching a national Italian sausage brand?
(2) How can the market for Italian sausage be segmented? Use both product-specific and general,
and observable and latent segmentation bases to distinguish and characterize possible market
segments. What additional data would you need to make a target market decision?
(3) Discuss the X-YZ and I-D-U models of positioning in the context of this case.
(4) Draw a Hierarchical Value Map (HVM) for the Italian sausage market and discuss how the four
positioning concepts described in Exhibit 8 relate to the means-end chains contained in the HVM.
(5) Which brand name should Saxonville Sausage Company use for its Italian sausage?
(6) Which positioning concept would you choose, and why? Write a positioning statement for the
chosen positioning option.

Consumer response to product and price programs

In general, you should know how perceived quality, price, and value are related to each other.

With regard to perceived quality, you have to know what perceived quality means, how it differs from other
notions of quality, and how consumers form quality judgments. Specifically, you have to be able to explain the
difference between intrinsic and extrinsic cues and between search, experience, and credence properties. In
addition, you have to know which cues influence quality perceptions. We discussed the difference between
national brands and private labels as an application of the notion of extrinsic cues, and you have to understand the
implications of this work (esp. the experiment by Richardson et al.). Another application of the concept of
extrinsic cues was country-of-origin (COO) information, and you have to know how COO cues influence
consumer behavior. Furthermore, you have to understand how consumer ethnocentrism impacts the influence of
COO information on consumer behavior.

With regard to price, you have to understand the different roles played by price, esp. the way price relates to
quality (both objective and perceived). We discussed four topics relevant to the psychology of pricing. First, you
have to be able to discuss what we know about consumers’ price awareness and price consciousness. Second, you
have to know about the value function in prospect theory and the implications of prospect theory for pricing
(discounts vs. premiums, endowment effect, etc.). For example, I could ask you whether a company should
bundle or unbundle several different gains and to justify your answer using prospect theory. Third, you have to
know about the importance of reference prices in price perception. Finally, you have to know the material about
framing price differences.

With regard to value, you have to be familiar with the different meanings of value and how value relates to
purchase behavior.

In-class practice questions:

Normally, taste in a food product is a(n) ______ cue or property. However, when a store gives away free samples,
taste becomes a(n) ______ cue or property.

[fill in with search, experience, or credence property, or intrinsic/extrinsic cue]

A consumer prefers Italian brands of canned tomatoes to domestic brands because she feels that tomatoes ripened
“Under the Tuscan Sun” taste better. This example illustrates the ______ process by which COO cues can
influence consumer behavior.

– direct behavioral
– cognitive mediation
– affect transfer

When a person strongly agree with the following item, “Your friends will think you are cheap if you consistently
buy the lowest priced version of a product,” s/he is likely to see price in which role? If you were to market to this
kind of consumer, how should you set your prices?

Example multiple-choice questions:

3. Search goods are

a. goods whose quality can be evaluated before purchase.

b. goods for which consumers can get good deals when they search around.
c. goods whose quality can only be evaluated after purchase.
d. also called convenience goods.

4. Which of the following refers to the positive role of price?

a. price consciousness.
b. sale proneness.
c. price mavenism.
d. prestige sensitivity.

Consumer response to sales promotion programs

First, you have to be able to define sales promotions and know what types of sales promotions there are. You
should also be familiar with the most common forms of consumer and retailer promotions. Second, you should be
able to discuss the different benefits offered by sales promotions and explain the benefit congruency model of
sales promotions. This is clearly discussed in the Chandon et al. article. Third, you have to know how
instrumental conditioning (IC) works and how it differs from classical conditioning. You also have to understand
what types of consequences can be used in IC to achieve certain purposes, and what schedules of reinforcement
are available. Finally, you should be able to explain the foot-in-the-door and door-in-the-face influences
strategies.

Example multiple-choice questions:

5. Utilitarian benefits of sales promotions include the following:

a. Value expression, exploration, and savings.

b. Convenience, savings, and quality.
c. Convenience, exploration, and savings.
d. Convenience, exploration, and entertainment.
Consumer response to communication programs

You have to know what is meant by an attitude and what components of an attitude are usually distinguished. In
addition, you have to know how attitudes can be measured.

The elaboration likelihood model of persuasion is the most comprehensive model of attitude change. You have to
know the two routes to persuasion distinguished in the model, when persuasion occurs via which route, and how
the two routes differ in terms of persuasion effects. Be sure you understand the experiment on involvement and
persuasion by Petty et al.

With regard to the central route to persuasion, you have to be able to describe Fishbein’s EV model of attitude
formation and what attitude change strategies can be derived from the model. You also have to know the
cognitive response model of persuasion and how marketers can use the model to understand the persuasion
process.

With regard to the peripheral route, you have to be able to explain classical conditioning and understand under
what conditions classical conditioning is expected to be successful. You also have to know how classical
conditioning can be used in an advertising setting.

You also have to understand how consumer behavior is explained by the Theory of Reasoned Action. For
example, you should know how the theory can be used to predict consumer behavior, as discussed in the in-class
exercise on coupon usage. You should also know when the theory is expected to explain consumer behavior well.

In-class practice questions:

In a commercial for Lee jeans, women are shown struggling to squeeze into their jeans. At the very end one
woman easily slips into her pair of Lee jeans. The commercial ends with the tagline, “It’s not a better body you
need, but better jeans.”

(1) Interpret this ad from the perspective of the three attitude change strategies suggested by the EV model
of attitudes.
(2) Based on the ELM, under what conditions would this ad be effective?

Example multiple-choice questions:

6. When classical conditioning is successful, a previously neutral stimulus comes to elicit a response similar to
that elicited by:

a. a conditioned stimulus.
b. an unconditioned stimulus.
c. a classical stimulus.
d. a respondent stimulus.
e. a conditioned response.

7. Salient beliefs are critical to researchers in understanding consumer attitudes because

a. active memory has extensive processing capacity.

b. only a few activated beliefs cause an attitude to form.
c. consumers use many beliefs to shape an attitude.
d. these beliefs are generalizable to most consumers.

8. The use of simulated social conversations about desirable group behavior in advertising is probably directed at
behavioral intention weighted toward

a. Ao.
b. Aact.
c. MC.
d. SN.

9. The pairing of a neutral stimulus with another stimulus which already elicits a specific unconditioned response
is called
 a. operant conditioning.
b. classical conditioning.
c. instrumental conditioning.
d. vicarious learning.

10. Which of the following attitude change strategies follow(s) from the EV model?

a. add a new positive belief.

b. increase the evaluation of a strongly held positive belief.
c. increase the strength of an existing positive belief.
d. all of the above.

Consumer response to distribution programs

You should be able to discuss the implications of planned vs. unplanned purchasing on store management. You
also have to know what retailers do to manage the store environment. In particular, you should know the model of
store atmosphere and be able to discuss the effects of music on shopping behavior. You should also know what is
meant by micromerchandising and what aspects of shelf management influence the profitability of the category
and individual brands.

Example multiple-choice questions:

11. Space to movement shelf management refers to

a. arranging products based on ease of shopping.

b. customizing product allocations in proportion to market share.
c. the use of cross-merchandising.
d. putting products at eye level.

12. The experiment on background music to affect the behavior of supermarket shoppers showed that

a. slow-tempo music led to higher sales.

b. fast-tempo music led to greater awareness that music was playing in the store.
c. music contributed to better store atmosphere.
d. fast tempo music led to higher sales.

Correct answers: 1d, 2b, 3a, 4d, 5b, 6b, 7b, 8d, 9b, 10d, 11b, 12a.