Exam #1 MKTG

Rather than being just a random activity, good marketing requires _____ in determining appropriate actions to produce sound decisions.

A) Corporate governance
B) thoughtful planning
C) short-term goals
D) profit orientation
E) win-lose attitude

B) Thoughtful planning
The ____ addresses how a product will be designed, how much it should cost, how it will be promoted, and how it will get to consumers.

A) marketing mix
B) competitive advantage
C) marketing plan
D) customer franchise
E) marketing exchange

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C) Marketing Plan
Understanding consumers’ _____ is fundamental to marketing success.
A) family connections
B) rituals and habits
C) needs and wants
D) educational attainment
E) physical locations
C) Needs and Wants
Crest toothpaste targets different consumer _____ by offering different types of toothpaste for smokers than it does for children based on their differing needs and wants.
A) fragments
B) geographics
C) modules
D) exchanges
E) segments
E) Segments
The goal of the marketing exchange is that the parties to the transaction be

A. close partners
B. interdependent
C. codependent
D. satisfied
E. savvy

D. Satisfied
At the most basic level, marketing involves ______ between the buyer and the seller. While being better off is the goal, it is not always the “basic” level.

A. respect
B. promotions
C. exchanges
D. persuasion
E. information

C. Exchanges
Dasani bottled water has created a valuable brand image with consumers. this is an integral part of the _____ component of the marketing mix.

a. price
b. place
c. planning
d. people
e. product

e. product
The ______ consists of product, price, place, and promotion as components of a firm’s offering.

a. marketing exchange
b. marketing mix
c. channel of distribution
d. customer franchise
e. marketing plan

b. marketing mix
Apple’s iPad is an example of which of the following types of marketing offerings?

a. innovation
b. goods
c. services
d. ideas
e. promotions

b. goods
A key attribute of services that differentiates it from a good is that a service is

a. easy to market
b. valuable
c. tangible
d. intangible
e. less expensive

d. intangible
When an optical center provides eye exams and new contact lenses as its offering, it is an example of which of the following combinations?

a. services and ideas
b. goods and services
c. needs and wants
d. programs and philosophies
e. tactics and strategies

b. goods and services
A group that sponsors bike helmet poster contests for children to promote bicycle safety is providing which of the following marketing offerings?

a. services
b. goods
c. ideas
d. innovations
e. promotions

c. ideas
Which of the following marketing mix variables is involved in the capture of value in the marketing exchange?

a. product
b. services
c. price
d. promotion
e. place

c. price
which of the following mix elements corresponds to what the buyer gives up in the marketing exchange?

a. product
b. price
c. promotion
d. distribution
e. place

b. price
Red Box uses the ________ element of the marketing mix to make movie rentals available for customers when and where they need them.

a. product
b. promotion
c. place
d. price
e. premium

c. place
Which of the marketing mix variables represents all the activities necessary to get the right product to the right customer when he customer wants it?

a. procurement
b. promotion
c. place
d. price
e. product placement

c. place
When marketers communicate the value proposition, it involves the _____ element of the marketing mix.

a. product
b. price
c. promotion
d. place
e. policy

c. promotion
When an electronics company sells its global positioning systems to a car manufacturer, it is engaged in ______ marketing.

a. B2B
b. B2C
c. C2C
d. A2B
e. C2B

a. B2B
The ______ era embraced the belief that a good product would sell itself.

a. sales-oriented
b. market-oriented
c. value-based
d. consumer-demand
e. production-oriented

e. production oriented
Which of the following is one of the core practices among value-oriented marketers?

a. keep information confidential, not sharing it among the firm’s different departments.

b. constantly measure benefits that customers receive against the costs of offerings.

c. maintain a transactional orientation in the seller-buyer relationship

d. manage the relationships among the employees.

e. consistently sell products below the cost of production.

b. constantly measure benefits that customers receive against the costs of offerings.
Recently, it has become more important for value-oriented marketers to _____ with customers.

a. move from transactional orientation to a transitional perspective

b. manage transactions more efficiently

c. reduce the number of transactions to improve relationships

d. move toward a relational perspective from a transactional orientation

e. consider how they can reduce their interactions

d. move towards a relational perspective from a transactional orientation
A national hotel chain engages in conversations with its customers through Facebook and even allows them to book their hotel reservations through the Facebook page. This is an example of marketing using

a. mobile media
b. traditional methods
c. unethical means
d. the supply chain
e. social media

e. social media
When companies work collaboratively to buy and sell, transport, and store merchandise through a channel of distribution, it involves the entire _______ for goods and services.

a. supply chain
b. promotion channel
c. relationship management system
d. productivity metrics
e. hierarchy of purchasers

a. supply chain
A firm relies on a wide variety of vendors to make and distribute its products. manufacturers buy raw materials from suppliers, use shipping companies to transport finished goods to multiple locations, and establish relationships with the retailers who sell them to consumers. Put all of these businesses together, and you have a

a. marketing plan
b. supply chain
c. value proposition
d. marketing mix
e. social marketing platform

b. supply chain
Because it has been at the center of success for many companies, marketing is considered a cornerstone of

a. ethics
b. supply chains
c. entrepreneurship
d. freedom of speech
e. the gross national product

c. entrepreneurship
Which of the following is one of the major considerations involved when a company develops its marketing strategy?

a. analysis of human resource policies
b. determination of sustainable business practices
c. review of all corporate standards
d. identification of target markets
e. summary of executive compensation

d. identification of target markets
Starbucks, Dunkin’ Donuts and McDonald’s all strive to provide good coffee and pastries to their customers. But despite these similarities, each firm selects its own target market, designs its own marketing mix, and chooses its own basis for building competitive advantage. These individual choices are directly related to each firm’s:

a. competitive focus
b. consumer franchise
c. market leadership
d. marketing strategy
e. competitive direction

d. marketing strategy
As an overall goal, _____ involves finding ways in which a company can best use its strengths to take advantage of attractive opportunities in the environment in order to outline specific actions to take appeal to potential customers.

a. establishing a mission
b. defining a mission
c. creating a values statement
d. marketing strategy
e. a strategic audit

d. marketing strategy
A _____ competitive advantage is not easily copied by competitors and so tends to be maintained over the long run.

a. generic
b. portfolio
c. segmented
d. sustainable
e. promotional

d. sustainable
Companies must deliver more value and satisfaction to target consumers than its competitors deliver, in order to gain:

a. competitive advantage
b. competitor analysis
c. a competitive benchmark
d. competitor-centered advantage
e. a competitive franchise

a. competitive advantage
Walmart is known for keeping its costs low as possible, partly by developing strong relationships with its suppliers. Based on the information, what is Walmart’s primary source of sustainable competitive advantage?

a. product excellence
b. customer excellence
c. operational excellence
d. locational excellence
e. cost excellence

c. operational excellence
Zappos, an online seller of shoes and other apparel, has as its central philosophy taking excellent care of its customer base so that they will repeatedly purchase from the company. Zappos is seeking to achieve a sustainable competitive advantage through:

a. product excellence
b. customer excellence
c. operational excellence
d. locational excellence
e. cost excellence

b. customer excellence
When a firm considers its overall objectives and considers the type of business it is in, it is engaged in which of the following steps of the marketing planning process?

a. defining the mission
b. conducting a situation analysis
c. identifying and evaluating opportunities
d. implementing the marketing mix
e. evaluating performance

a. Defining a mission
After a firm has conducted a SWOT analysis, it wold typically progress to the next step of the marketing planning process, which is:

a. defining the mission
b. analyzing the situation
c. identifying opportunities
d. implementing the marketing mix
e. evaluating performance

c. identifying opportunities
SWOT analysis is typically conducted during which step of the marketing planning process?

a. defining the mission
b. analyzing the situation
c. identifying opportunities
d. implementing the marketing mix
e. evaluating performance

b. analyzing the situation
a SWOT analysis involves an assessment of factors internal to the company, which include ________ and factors outside the company, which include ____________.

a. opportunities and threats; strengths and weaknesses

b. strengths and weaknesses; opinions and thoughts

c. substantial winning; opportunities and threats

d. strengths and weaknesses; opportunities and threats

e. a strategic worldview; options and tactics.

d. strengths and weaknesses; opportunities and threats
In recent years, as consumers have become more concerned with nutrition, McDonald’s has come under fire for the unhealthy nature of many of its menu items. In a SWOT analysis, this is an example of a(n):

a. strength
b. strategy
c. weakness
d. opportunity
e. threat

e. threat
The recent economic downturn benefited some fast food chains and inexpensive restaurants as consumers “traded down” from more expensive establishments. In a SWOT analysis, the weak economy represented a(n) ______ for these low-price restaurants.

a. strength
b. strategy
c. weakness
d. opportunity
e. threat

d. opportunity
When companies like Toyota develop different models of vehicles to meet the unique wants and needs of different groups of consumers, they are involved in:

a. a SWOT analysis
b. segmentation
c. product placement
d. market development
e. diversification

b. segmentation
Honda developed its CR-Z hybrid model to a distinct segment of consumers as a fun, green, sporty hybrid that stands out as being different from other hybrid models. This is an example of which of the following?

a. market development
b. product placement
c. market positioning
d. a situation analysis
e. a strategic business unit

c. market positioning
Toyota developed the Scion brand to appeal to young car buyers who might not want to purchase cars from the brand their parents own. Young car buyers represented Scion’s:

a. segmentation method
b. market positioning
c. target market
d. situation analysis
e. mission statement

c. target market
Firms make trade-offs between product and ______ to give customers the best value.

a. promotion
b. positioning
c. place
d. planning
e. price

e. price
If a firm makes sure a product is available for purchase when and where the customer wants it, which element of the marketing mix is involved?

a. product
b. price
c. promotion
d. people
e. place

e. place
On its web site, Amazon.com greets returning customers by suggesting items that might interest them. These recommendations are based on items they previously purchased, products that others with similar preferences purchased, and complementary products to items of current interest. This adds value through which of the following marketing mix elements?

a. product
b. price
c. promotion
d. people
e. place

a. product
Through which of the following marketing mix variables do companies capture value from consumers, thus generating revenue?

a. product
b. price
c. promotion
d. people
e. place

b. price
Which of the following is an example of a marketing metric that might be used to evaluate the performance of a company’s implementation of its marketing plan?

a. Four Ps (price, product, promotion, place)
b. SWOT analysis (strengths, weaknesses, opportunities, threats)
c. STP (segmentation, targeting, positioning)
d. GM (gross margin)
e. SBU (strategic business unit)

d. GM (Gross Margin)
When managers at auto maker General Motors evaluated the firm’s various divisions and chose to close some, including Saturn and Pontiac, it was involved in:

a. product development
b. demarketing
c. diversification
d. portfolio analysis
e. franchise reevaluation

d. portfolio analysis
Suppose that a major auto maker like General Motors determined that it would close down divisions that were in low-growth markets and that had low relative market shares. According to BCG Product Portfolio Analysis, General Motors would be selecting divisions in the ______ category for closure.

a. stars
b. cash cows
c. clunkers
d. question marks
e. dogs

e. dogs
The Toyota Camry is one of the best-selling family sedans in the USA. Sales in this particular market have been growing slowly, if at all, in recent years. According to BCG Product Portfolio Analysis, the Toyota Camry would be considered a:

a. star
b. cash cow
c. failure
d. question mark
e. dog

b. cash cow
Which of the following is one of the four major growth strategies?

a. portfolio analysis
b. micromarketing
c. product development
d. market leadership
e. product proliferation

c. product development
Starbucks introduced Via, its brand of instant coffee, to exploit the growth opportunities for new products in current markets. Chief Executive Howard Schultz called Starbucks’ Via Ready Brew “perhaps the biggest opportunity” in company history as he prepared for the instant coffee product’s North American rollout. This is an example of:

a. product development
b. market development
c. market penetration
d. product proliferation
e. micromarketing

a. product development
In an attempt to increase sales during a lagging economy, Macy’s has increased its advertising and sales promotions for its current products to stimulate sales in its current markets. Which of the following growth strategies is Macy’s employing?

a. product development
b. market development
c. market penetration
d. diversification
e. micromarketing

c. market penetration
If Starbucks opens stores in major Chinese cities, this is an example of which of the growth strategies?

a. product development
b. market development
c. market penetration
d. diversification
e. micromarketing

b. market development
Market penetration involves a ______ market; market development involves a ______ market.

a. new; current
b. new;new
c. current; new
d. current; current
e. current or new; new

c. current; new
Suppose that a car wash offers a 20% discount to its customers if they return for a second car wash within a week. This is an example of which growth strategy?

a. product development
b. market development
c. market penetration
d. diversification
e. micromarketing

c. market penetration
Which of the following entities is at the center of the marketing environment?

a. the company itself
b. corporate partners
c. competitors
d. consumers
e. culture

d. consumers
Which of the following frameworks for analysis is comprised of a company’s capabilities, competitors and corporate partners?

a. economic factors
b. environmental factors
c. immediate environment
d. intermediate environment
e. macro environmental factors

c. immediate environment
The primary strength of Pepsi is the manufacture, distribution, and promotion of carbonated beverages. These describe which factor of a Pepsi consumers’ immediate environment?

a. competitive intelligence
b. corporate partners
c. company capabilities
d. competitors
e. culture

c. company capabilities
In the immediate environment, the first gator that affects the consumer is/are the

a. company itself
b. corporate partners
c. competitors
d. consumers
e. culture

a. company itself
When a firm evaluates likely reactions to its marketing activities, it is attempting to understand what aspect of the immediate environment?

a. the culture
b. the consumers
c. its competitors
d. its communicators
e. its corporate partners

c. its competitors
Ford Motor Company engages in partnerships with its suppliers, component part makers, unions, transport companies, and dealerships—collectively known as its

a. investors
b. customers
c. competitors
d. corporate partners
e. customer franchisors

d. corporate partners
Your text describes the macroenvironmental factors that operate in the external environment by which acronym?

a. RFID
b. CDSTEP
c. CCC
d. GEN X
e. SWOT

b. CDSTEP
Culture, demographics, social issues, technological advances, economic situations, and the political/regulatory environment are all factors that make up which of the following frameworks of analysis?

a. economic factors
b. environmental factors
c. immediate environment
d. intermediate environment
e. macro environmental factors

e. macro environmental factors
Broadly defined, ________ is/are the shared meanings, beliefs, morals, values, and customs of a group of people.

a. culture
b. demographics
c. social issues
d. psychographics
e. ethnicity

a. culture
When McDonald’s opened its fast food restaurants in European locations, it had to modify its product offering primarily due to differences in

a. country culture
b. regional culture
c. agricultural artifacts
d. cultural development
e. counter-cultural artifacts

a. country culture
In New England, soft drink beverages are called “soda” while in many other parts of the country they are called “pop.” This is an example of the effects of

a. demographics
b. country culture
c. regional culture
d. cultural development
e. cultural artifacts

c. regional culture
Which of the following is NOT a demographic listed in your text that would typically be used to identify consumer markets?

a. age
b. gender
c. race
d. state of residence
e. income

d. state of residence
Consumers that have similar purchase behaviors because they have shared experiences and are in the same stage of life are known as a _____ cohort.

a. lifestyle
b. demographic
c. relational
d. generational
e. situational

d. generational
Which of the following groups of people are referred to as “Digital Natives”?

a. Gen Y
b. Gen X
c. Baby Boomers
d. Gen Z
e. Millenials

d. Gen Z
After World War II, the birth rate in the United States rose sharply, resulting in a group known as

a. Generation Y
b. Generation X
c. the Baby Boomers
d. the Millenials
e. Generation Z

c. The Baby Boomers
_____ are the younger edge of Gen Y who have never lived without the Internet or easy access to cell phones.

a. baby boomers
b. tweens
c. technos
d. digital natives
e. millennials

b. tweens
The first generation of “latchkey” children, known as _____, includes those born between 1965 and 1976.

a. Gen Yers
b. Gen Xers
c. baby boomers
d. digital natives
e. millennials

b. Gen Xers
_____, also known as Millennials, constitutes more than 60 million members in the United States alone and were born between 1977 and 2000.

a. Generation Y
b. Generation X
c. Baby Boomers
d. Generation M
e. Generation Z

a. Generation Y
Virgin Atlantic hosts a service called Taxi2 to make it easier for passengers to share rides from the airport to their destination at a lower cost. In this way, Virgin Atlantic is responding to the social trend of

a. thrift
b. health and wellness concerns
c. greener consumers
d. privacy concerns
e. a time-poor society

a. thrift
Which of the following best represents the concept of the “lipstick effect”?

a. People who face increasing stress will often take better care of themselves.

b. Consumers wonder whether or not firms who call themselves “green” actually are.

c.The latest trend among consumers is to cope with a lack of leisure time by multitasking.

d. Consumers will treat themselves to small luxuries, but forego larger luxury items.

e.Technological advances are occurring so rapidly, consumers cannot keep up with the latest trends.

d. Consumers will treat themselves to small luxuries, but forego larger luxury items.
Advertising guidelines stating that companies cannot link unhealthy foods with cartoon and celebrity figures is geared toward which social trend?

a. thrift
b. health and wellness concerns
c. greener consumers
d. privacy concerns
e. a time-poor society

b. health and wellness concerns
The social trend of _____ is causing consumers to question whether or not firms are truly operating with consideration for the environment or simply changing marketing efforts in order to appear that they are.

a. thrift
b. health and wellness concerns
c. greener consumers
d. privacy concerns
e. a time-poor society

c. greener consumers
_____ involves a strategic effort by firms to supply customers with environmentally friendly merchandise.

a. greenwashing
b. eco-marketing
c. greener advertising
d. eco-selling
e. green marketing

e. green marketing
The ability of marketers to use mobile applications, Facebook, and Twitter to more effectively target and reach their customers is an example of which microenvironmental factor?

a. technological advances
b. the political/regulatory environment
c. culture
d. economic environment
e. natural environment

a. technological advances
An important economic factor is _____, which refers to the persistent increase in the prices of goods and services.

a. a recession
b. deflation
c. inflation
d. price gouging
e. gross domestic product

c. inflation
The discrepancy between a consumer’s actual state and desired state is associated with which of the following steps in the consumer decision process?

a. need recognition
b. information speech
c. alternative evaluation
d. purchase
e. post purchase

a. need recognition
Which of the following needs pertains to the performance of a product or service?

a. need recognition
b. functional needs
c. demographic needs
d. psychological needs
e. cultural needs

b. functional needs
_____ pertain to the personal gratification consumers associate with the product or service.

a. needs recognition
b. functional needs
c. demographic needs
d. psychological needs
e. personal needs

d. psychological needs
The vast majority of products and services are likely to satisfy

a. functional needs.

b. psychological needs.

c. personal needs.

d. both personal and functional needs.

e. both functional and psychological needs.

e. both functional and psychological needs
According to the consumer decision process, after consumers recognize the need for a product, they then engage in

a. psychological need recognition
b. an information search
c. an evaluation of alternatives
d. the purchase of the product
e. post purchase behavior

b. an information search
_____ involves the buyer considering their own personal knowledge about a product based on past experience.

a. impulse buying
b. an internal search for information
c. an external search for information
d. experiential search for information
e. needs recognition

b. an internal search for information
When John was considering buying a new car, he sought out unbiased information and ratings about different makes and models in Consumer Reports magazine as well as from Edmunds.com. Which of the following corresponds most closely to this aspect of the decision process?

a. impulse buying
b. an internal search for information
c. an external search for information
d. experiential search for information
e. needs recognition

c. an external search for information
The fact that a family would spend a lot more time researching the market before making a home purchase than it would in the decision to purchase an inexpensive dollhouse for the youngest member of household can best be explained which of the following concepts?

a. locus of control
b. performance risk
c. psychological risk
d. social risk aversion
e. perceived benefits versus perceived costs of search

e. perceived benefits versus perceived costs of search
Of the five types of risk associated with purchase decisions, which one involves the perceived danger inherent in a poorly performing product or service?

a. financial
b. social
c. physiological
d. performance
e. psychological

d. performance
External agencies and government bodies publish safety ratings for cars to help consumers alleviate _____ risk.

a. financial
b. social
c. physiological
d. performance
e. psychological

c. physiological
Alternative evaluation often occurs while the consumer is engaged which step of the consumer purchase process

a. need recognition
b. information search
c. purchase outcome behaviors
d. product purchase
e. post purchase evaluation

b. information search
When consumers are engaged in the consumer decision process, the specific brands or stores they can readily recall in a product category are referred to as their _____ set.

a. universal
b. retrieval
c. memory
d. evoked
e. brand

b. retrieval
When Catherine was considering different brands of jeans to buy, she limited the choices to threeshe would actually consider purchasing. These three brands make up her _____ set.

a. universal
b. retrieval
c. purchase
d. evoked
e. brand

d. evoked
Ethan considered three important attributes when deciding where he would do his banking: the convenience of the location, hours of operation, and interest rates for CDs. In this situation, these three attributes are called

a. attribute sets
b. evaluative sets
c. evaluative criteria
d. formative criteria
e. alternative evaluation

c. evaluative criteria
Angela considered all sporting goods stores to be roughly equivalent in most ways, however, she considered LL Bean to have an exceptional level of customer service. Customer service therefore, would be considered a _____ for her in evaluating sporting good stores.

a. determinant attribute
b. compensatory decision rule
c. noncompensatory decision rule
d. locus of control
e. retrieval set

a. determinant attribute
Nathan was shopping for a new pair of athletic shoes. Although it would have been nice to take the shoes home immediately after purchasing them, he was willing to trade off immediate availability because he found that he could purchase the shoes online for a 50% discount. This is an example of using a

a. determinant attribute
b. compensatory decision rule
c. noncompensatory decision rule
d. decision heuristic
e. conversion rate

b. compensatory decision rule
Because not all purchase intentions result in an actual purchase, marketers calculate the _____ to measure how effectively a decision to purchase a specific product results in a completed purchase.

a. performance risk
b. compensatory decision rate
c. noncompensatory decision rate
d. decision heuristic
e. conversion rate

e. conversion rate
Marketers that set unrealistically high consumer expectations of a product through advertising or other types of promotion, may generate higher initial sales, but it will eventually lead to _____ if the product fails to achieve these expectations.

a. high conversion rates
b. social risk
c. post purchase dissatisfaction
d. unfulfilling decision heuristics
e. habitual decision making

c. post purchase dissatisfaction
Roberta works out at a health club, goes to yoga classes and reads magazines about women’s health in order to satisfy her inner desires. Which of Maslow’s needs is Roberta fulfilling?

a. financial
b. physiological
c. safety
d. love
e. esteem

e. esteem
Sandy thinks the east side of her city is a great area to own a home and raise a family. John thinks the east side has a lot of crime, poor schools, and would be a poor choice of location to own a home and raise a family. Sandy and John have different _____ regarding the east side of the city.

a. temporal states
b. reference groups
c. needs
d. perceptions
e. motives

d. perceptions
When she was looking for a new car, Francesca was considering both American and foreign made vehicles, but her father and boyfriend both encouraged her to buy American-made brands. Which of the following social factors explain this type of influence?

a. culture
b. temporal state
c. lifestyle factors
d. reference groups
e. situational factors

d. reference groups
According to the Elaboration Likelihood Model, which of the following variables determines whether limited or extended problem solving will operate in a particular purchase decision?

a. purchase readiness
b. attentional capacity
c. likelihood of purchase
d. the level of involvement
e. the level of elaborate thinking

d. the level of involvement
A purchase decision which typically involves (at most) a moderate amount of effort and time is called

a. extended problem solving
b. limited problem solving
c. deep processing
d. high involvement processing
e. habitual decision making

b. limited problem solving
Kerry was in her grocery store and saw a display for a new organic yogurt. She had not planned to buy it, but decided on the spot to buy one and try it. Kerry’s purchase represents

a. habitual decision making
b. deep processing
c. impulse buying
d. high involvement processing
e. extended problem solving

c. impulse buying
Whenever Meredith buys toothpaste, she always automatically reaches for the same brand and puts it in her shopping cart with no thought or effort. Meredith is engaged in

a. habitual decision making
b. limited problem solving
c. impulse buying
d. high involvement processing
e. extended problem solving

a. habitual decision making
_____ reflects the link between consumers’ demand for a company’s product and the company’s purchase of necessary inputs to manufacture or assemble that particular product.

a. institutional purchasing demand
b. distribution
c. derived demand
d. wholesaling
e. reselling demand

c. derived demand
In B2B markets, _____ are firms that buy and reprocess products (a product is a good or service) before selling them again to the next buyer.

a. manufacturers
b. producers
c. resellers
d. institutions
e. governments

a. manufacturers
Which of the following is an example of a reseller?

a. manufacturer
b. producer
c. wholesaler
d. institution
e. government

c. wholesaler
In terms of business markets, organizations like hospitals that provide goods and services to people in their care are classified as

a. manufacturers
b. producers
c. resellers
d. institutions
e. governments

d. institutions
With its estimated outlay of $600 billion dollars for fiscal year 2011, the Pentagon represents which type of B2B organization?

a. manufacturer
b. distributor
c. reseller
d. institution
e. government

e. government
The business-to-business buying process is initiated by which of the following steps?

a. the RFP process
b. need recognition
c. proposal analysis
d. product specification
e. vendor performance assessment

b. need recognition
The acronym RFP, when used by those involved in business-to-business buying, stands for

a. request for pricing
b. reorder for products
c. request for products
d. request for proposals
e. request for performance

d. request for proposals
_____ is an entry point that is commonly used to find specific sites.

a. web hosting site
b. an internet
c. a web portal
d. a micro blog
e. a web link

c. Web Portal
In this stage of the business-to-business buying process, firms are likely to narrow their selection to a few suppliers, often those with which they have existing relationships, and discuss key terms of the sale.

a. the RFP process
b. Vendor specification
c. product specification
d. vendor performance assessment
e. proposal analysis and supplier selection

e. proposal analysis and supplier selection
What is the final stage in the business-to-business buying process?

a. RFP process
b. vendor performance assessment
c. order specification
d. need recognition
e. proposal analysis and supplier selection

b. vendor performance assessment
John is involved in the buying center of a large organization. He ultimately will determine whether to buy, what to buy, how to buy, or where to buy. What role does John play in this situation?

a. initiator
b. influencer
c. decider
d. buyer
e. gatekeeper

c. decider
The individual who controls the flow of information or access to important decision makers serves as the _____ in the buying center.

a. user
b. initiator
c. decider
d. influencer
e. gatekeeper

e. gatekeeper
Pharmaceutical companies have been criticized for direct-to-consumer television ads promoting the use of their brands of medication for specific medical conditions. With respect to buying centers, the pharmaceutical company plays the role of _____ in this situation.

a. initiator
b. influencer
c. decider
d. buyer
e. gatekeeper

b. influencer
A firm’s _____ reflects the set of values, traditions, and customs that guide its employees’ behavior.

a. marketing strategy
b. marketing plan
c. ethical climate
d. demographics
e. organizational culture

e. organizational culture
In a(n) _____ buying center, there may be many participants, but one person makes the decision alone.

a. autocratic
b. consensual
c. consultative
d. democratic
e. republic

a. autocratic
In a(n) _____ buying center, one person is authorized to make a decision, but input from others is gathered before doing so.

a. republic
b. autocratic
c. democratic
d. consensual
e. consultative

e. consultative
In _____ buying centers, all members of the team must reach a collective agreement that they can support a particular purchase.

a. autocratic
b. consensus
c. consultative
d. democratic
e. republic

b. consensus
Autocratic buying centers are characterized by:

a. a single decision maker
b. collective agreement
c. majority rule
d. the solicitation of many opinions
e. many decision makers

a. a single decision maker
Although social media is used to build relationships, in the B2B context, the majority of B2B marketers use _____ for their marketing efforts.

a. facebook
b. twitter
c. linkedin
d. hootsuite
e. white papers

e. white papers
Most B2B buying situations can be categorized into three types: new buys, straight rebuys, and

a. standard rebuys
b. capital buys
c. modified rebuys
d. repeat buys
e. strategic buys

c. modified rebuys
Franks Pizza oven is broken and Frank will need to buy a replacement. The purchase of capital equipment such as the ovenis an example of a _____ situation.

a. straight rebuy
b. standard rebuy
c. modified rebuy
d. new buy
e. capital buy

d. new buy
In a _____ situation, the buying center is likely to proceed through all six steps in the buying process and involve many people in the buying decision.

a. straight rebuy
b. standard rebuy
c. modified rebuy
d. new buy
e. capital buy

d. new buy
The University will purchase new computers during the summer to update its computer labs. Although the new computers will be more advanced in terms of their technology, the purchase itself will involve some of the same considerations as those used for previous purchases. This is an example of which of the following types of buying situation?

a. straight rebuy
b. standard rebuy
c. modified rebuy
d. new buy
e. capital buy

c. modified rebuy
When Kinko’s replenishes its supply of copy paper, it most likely involves a _____ situation.

a. new buy
b. standard buy
c. modified rebuy
d. straight rebuy
e. material rebuy

d. straight rebuy
In _____, the buyer is often the only member of the buying center involved in the process.

a. new buys
b. standard rebuys
c. modified rebuys
d. straight rebuys
e. material buys

d. Straight rebuys
What does marketing apply to
1. products
2. services
3. people
4. places
5. concepts/ideas
Does marketing apply to the following?

1. texas tourism
2. pick out out songs on iTunes
3. which gas station to go to
4. presidential elections
5. professor trying to get students to attend class
6. what time you go to sleep

1. yes
2. yes
3. yes
4. yes
5. yes
6. no – has nothing to do with marketing because there is no specific time
4Ps= the marketing mix
1. product
2. price
3. place
4. promotion
The driving force when creating the marketing mix is:
the consumers needs and wants

** 1. look at their needs and wants
2. work backwards

Marketing provides four consumer utilities:
1. form utility
2. time utility
3. place utility
4. possession utility

***consumption utility DOES NOT exist

Form utility
more consistent with uniform quality
Time utility
have it immediately
Place utility
available everywhere
Possession utility
available in the amount you need
What are the aspects of marketing
1. Creating value (most important part of marketing)

2. Occurs in many settings

3. Satisfy customer needs (ie. phone calls )

4. Exchanges–> all parties in exchanges should be satisfied

5. The 4Ps

6. Performed by individuals and organizations

What is an exchange
premise of all marketing even if its doesn’t involve money
what is exchange according to olson
The primary economical element of marketing
What does exchange entail?
1. two or more parties with unsatisfied needs – direct exchange

Seller Buyer

2. each one can satisfy each other’s needs – product exchange

3. able to find each other – place exchange (indirect)

Seller Buyer
Agent; whole sellers, distributors, retailers
(Intermediaries)

4. Both can value what the other has -price aspect (they can agree on a price)

5. communicate and present – promotion aspect

What is the key point of exchange?
The exchange should focus on maximizing the buyer and seller’s value because they are able to find each other, communicate and agree on price
What does pricing include
Everything a buyer is giving up:

1. money
2. time
3. energy

Place
Delivers the value proposition

EX: internet site; physical store (brick and mortar)

Promotion
Communication by a marketer that informs (facts about the product), persuades (getting you to do something and why), and reminds (don’t forget about us) potential buyers about a product
What does promotion enhance
enhances a products perceived value
Promotion EX: Got Milk Campaign
1. repositioned milk against soda
2. targeted an industry as a whole not a specific brand
3. in 1916 the dairy council invented the four food groups and promoted with posters in schools in order to convince kids to drink milk
Promotion EX: Budweiser Glidesdales Ads
are reminder ads
Successful products do what?
fulfill unsatisfied needs
what does the marketing timeline include
1. production concept ~ 1900-1920
2. product concept ~ 1920-1945
3. selling concept ~ 1945-1960
4. marketing concept ~ 1960-1990
5. marketing orientation ~ 1990-present
production concept
1. also known as the production-oriented era
2. producer driven
3. Model T was only available in black
4. a good product will sell itself
5. often neglects consumer needs(most important)
6. marketing was an after thought to production
Production concept:
1. producer driven
2. Company’s offer variety and choices
3. kellogs, general mills, and post make 85% of cereals, just variations of each other
4. planned obsolescence is when things go out of style and force a rebuy to occur
Selling concept:
1. 1945 is the exact year on exam
2. producer driven
3. also known as the sales-oriented era
4. began because of excess capacity from WW2
5. hard-sell/personal selling approach: door to door selling
6. introduction of marketing tactics and gimmicks
7 TV ds and product placement – ie. soap operas
Marketing concept:
1. sometimes called the market-oriented era
2. Consumer driven
3. begin with the needs of the customers and then work backwards
4. led to studying consumer behavior
5. customer is king!!!
marketing orientation
1. consumer driven
2. develop an ongoing relationship with customers
3. CRM (customer retention management)
4. It led to database marketing
5. social marketing
SWOT Analysis
Strengths, Weaknesses, Opportunities, and Threats
Strengths
1. positive internal
2. uses strengths to create positioning strategy

** company

Weaknesses
1. negative internal
2. things company does poorly
3. “sole supplier”

** company

Opportunities
1. positive external

** industry

Threats
1. negative external

** industry

SWOT Exam Question
Would you call a sole wood supplier a strength, weakness, opportunity, or threat.
Marketing Plan Steps
1. business mission and objective – must be measurable

2. situational analysis – SWOT

3. Identify Opportunities – STP (segmentation, targeting, and positioning)

4. Implement Marketing Mix (4Ps)

4 1/2. Resource Allocation – how much money to spend on something

5. evaluate performance using marketing metrics

Marketing Plan Phases
1. Planning Phase
– Business Mission & Objectives
– Situational Analysis

2. Implementation Phase
– Identify Opportunities
– Implement Marketing Mix
– Resource Allocation

3. Control Phase
– Evaluate performance using marketing metrics

Goals of marketing campaigns
3 Main Goals:
– Increase market share
– maximize profits
– increase sales

Other Goals:
– Brand awareness
– high quality/ performance
– innovation
– high satisfaction levels
– Loyalty levels
– social responsibility

Increase market share:
one of the most significant measurements of market power

** the higher the market share = the more leverage within the channel –> more ability to promote

Maximize Profits
1. assumed the most common goal by outsiders
2. Two types:
– immediate profit: only works with a scarce supply
– long-term profit (most common): quality product and service at a fair price and profit margin

**price gouging

Price gouging:
super low unfair prices –> people will start to compete
Increase Sales
Two Types:
1. Revenue – measured by total dollars
– most important in a cash-strapped situation (need money now in order to produce any units)

2. Unit sales – how many individual items you sell –> measured by volume

Brand Awareness
“Top of the mind”
High Quality/ Performance
Want to be known as the best
Innovation
rarely the number one goal
High Satisfaction Levels
Two Types:
1. Employee satisfaction (starbucks)
– Happy EEs lead to happy customers
2. Customer Satisfaction
-turn customers into loyal customers
Loyalty levels
elaboration is the most desirable result

**elaboration is when a customer markets for you

Macro-Strategies for Developing a Sustainable Competitive Advantage
1. operational excellence

2. product excellence

3. customer excellence

4. locational excellence

Operational Excellence
1. Efficient operations
2. Excellent supply chain
3. human resource management
Product Excellence
1. products with high perceived value
2. effective branding and positioning
Customer Excellence
1. Retaining loyal customers
2. Excellent customer service
Locational Excellence
1. good physical location
2. internet presence
3. not easily duplicated
What is the least effect way to develop a competitive advantage because it is the easiest for competitors to copy
Having the lowest prices
The best way to create a sustainable competitive advantage is to position the brand: _______ and ________
Clearly and distinctively
Lifetime value of a customer
Even if a relationship with a customer is unprofitable at first, over time building that relationship will be worthwhile because as it continues, it become profitable

Ex: olson gave example of her father selling cars for ford

What is based around the idea of lifetime values of customers
Customer retention programs
The best and most effective marketing strategies require:
Careful planning
If marketers don’t _____________ they will not be able to communicate value to their target segments
understand their customer’s
A firms market share is determined by the firm’s _______ divided by the ________________.
sales; overall market size
When a firms share is compared to the market shares of competitors this is calculation of:
relative market share
Portfolio Analysis
Based on 2 measurements:

1. Growth potential in the category
– high growth means more competition
– Industry wide growth

2. Relative market share
– based on numbers not feelings

*** must have both to determine something

Portfolio analysis includes
1. cash cows
2. stars
3. question marks/problem children
4. dogs

**goal: to have a mixture of different products at different ages

Cash Cows
1. high relative market share
2. low growth market
3. typically generate excess cash
4. support other product lines
5. they’re easy to take care of, but don’t forget about them

EX: tide from proctor and gamble

Stars:
1. high relative market share
2. high growth market
3. often the first move into the industry
4. in order to continue to grow, companies must continue to invest
5. expensive to maintain, and takes a lot of time and attention
6. hope that they will become cash cows and not problem children

**falling stars go sideways and turn into question marks

**EX: Ipad or Prius

Question marks/ Problem children
1. low relative market share
2. high growth market
3. also known as problem children
4. hope that they become stars
5. require a significant amount of resources
6. most managerially intensive
7. new products usually start as problem children (with existing competitors in the industry)
8. it is possible to rehabilitate fallen stars by reinvesting money, time and attention
Dogs
1. Low market share
2. low growth market
3. should be phased out unless it helps with the sales of another successful product (compliments another product)
4. sometimes kept alive for sentimental reasons
5. do not do a lot, but they do fulfill a particular purpose
Growth option model includes:
1. market penetration
2. market development
3. production development
4. diversification
Market Penetration
1. Easiest growth option
2. increase consumption by selling more of a current product to a current customer
– buy more frequently; larger sizes; and multipack
3. new uses for your product (baking soda)
4. old and related users (previous and someone to a current user – elaboration)
5. increase promotion in current stores
6. use CRM programs to sell more to existing customers
7. Encourage current customers to make posts of Facebook when they purchase a product in the hopes that their friends will also buy the product
Market Penetration Exam Question:
Penetration is the easiest because its the least amount of learning about consumer behavior and production technology
Market development:
1. second easiest growth option
2. sell current product to a new segment of customer
3. enter with essentially the same marketing mix
4. either look at new segments within the domestic markets or foreign markets
5. expanding internationally is considered more risky than expanding domestically

** start with domestic markets then go to foreign markets

Production development
1. firms develop new products for their existing customers
2. many times firms use customer input for product expansion
3. have to learn new industries and how to produce something new
4. Three types:
– related products (slightly changing products such as coke to coke zero)
– after market (more difficult, but can be more profitable such as microsoft creating the xbox)
– different product and/or industry (gerber creating food to accessories)
Diversification
1. firms create new products and target a new segment of customers
2. if the market is saturated, you must move onto another market
3. cheaper to advertise to a new market: don’t even waste your time
At the Double Tree Hotel employees are expected to put in extra effort to make sure that their customers are well taken care of and happy. Management enforces this in the hopes that customers will become loyal customers and always choose Double Tree as their hotel of choice. This is an example of a company taking steps to:

a. become environmentally friendly
b. increase market share
c. increase efficiency within the supply chain
d. sustain a competitive advantage

D. sustain a competitive advantage
As the Christmas season approaches Big Lots deciders to discount their Christmas Essentials Line. They bring in Mary to determine which products to mark down and what percent off they should be. As well as creating the media to include in local newspapers and alerting their distributers that there will be an increase in the number of Christmas items needed this month. Mary has ben told to focus on:

a. creating a sustainable competitive advantage
b. the marketing mix
c. increasing customer loyalty
d. a SWOT analysis

B. the marketing mix
SWOT analysis is part of the :

a. planning phase
b. implementation phase
c. control phase
d. none of these

A. planning phase
Despite the fact that many large corporations have large market shares in their industries; some small shops are able to survive. This is probably because the small shops have:

a. lower prices
b. a sustainable competitive advantage
c. effective advertising campaigns
d. superior metrics to evaluate marketing plans

B. a sustainable competitive advantage
Sometimes these smaller shops advertise that they are “local” or “family owned since 1945,” this is part of their:

a. positioning strategy
b.target market
c. penetration strategy
d. operational excellence

A. positioning strategy
Which of the following assess the external environment? (choose all that apply)

a. opportunities
b. strengths
c. Threats
d. weaknesses

Opportunities and Threats
Which of the following assess the internal environment? (choose all that apply)

a. opportunities
b. strengths
c. Threats
d. weaknesses

Strengths and Weaknesses
McDonald’s introduced the Happy Meal in order to:

a. Cut costs
b. reduce obesity by decreasing portion size
c. target a new segment
d. compete with other fast food restaurants

C. target a new segment
Stone Brewery has become the best brewery in SD and was ranked #14 best brewery in the US. Now, Stone is looking to expand internationally. Which of the following growth strategies is Stone representing?

a. market penetration
b. product development
c. market development
d. diversification

C. Market development
Real Estate Agents can only buy/sell houses in the state that they are licensed in. This is a way for the government to restrict which of the following growth strategies?

a. market penetration
b product development
c. market development
d. diversification

C. Market development –> limits the markets they can compete in
3D Systems Inc.. is the leader in the new and quickly growing 3D printing market. How should 3D Systems Inc, handle allocating funds when looking at their 3D printers?

a. the 3D printers are highly profitable and can support other product lines

b. The 3D printers are sucking up too many funds and investments should be reduced

c. 3D Systems Inc will have to allocate late amounts of funds to their 3D printer in order to promote the most amount of growth

d. not enough info is given

c. 3D Systems Inc will have to allocate late amounts of funds to their 3D printer in order to promote the most amount of growth
Ivory Soap was Proctor and Gamble’s first product. Even though it isn’t very profitable, they still make it. This is an example of a:

a. star
b. cash cow
c. question mark
d. dog

D. dog
Environmental Scanning
You cannot create a marketing plan without looking at the big picture

**Before developing the 4Ps, management MUST assess the market environment

Environmental Scanning – Target Market
Target Market is affected by :

1. the macro-environment
2. the micro-environment (immediate marketing environment)

Macro-Environment
Macro is external

Micro is internal

Micro-Environmental Factors
1. the company: the firm itself
2. corporate partners –> suppliers/distributers
3. competition
What is the macro-environment
the market place at large
What does the Macro-environment include:
C- culture
D- demographic
S- social issues
T- technological advances
E- economic situation
P- political/regulatory environment

*** competition is NOT included

Marketers look at the macro/mircro environment as well as the needs of the consumers in order to find?_______. Why is this difficult? _____________
potential opportunities

difficult because consumers ability to purchase changes over time and their needs and wants change

Marketers have a ___________ not ________ strategy when scanning the environment
Proactive not reactive
When times change, your industry could become _________. constantly scanning the environment for new opportunities can help you continue in a new direction
obsolete
Example of scanning environment for new opportunities
Hoover used to make buggy whips and saw a need for vacuums
Industries on their way out?
1. Film –> only digital
2. travel agents
3. real estate agents
4. banking
5. book stores
6. legal services
7. post office
Macro-economic factors effect:
social, political, cultural, and technological factors
Correlation of the Macro-economy on industries (commodities):
1. Neutral – things you won’t buy less of in a bad economy or more of in a better economy

2. Positive – better economy the higher the sales; bad economy the lower the sales

3. Negatively – better economy the lower the sales; bad economy the higher the sales; little luxuries: chocolate, cheap liquor, cigarettes (small purchases to make yourself feel better)

Ex: we buy gold company, dry cleaners, MBA programs

Micro-economic factors
industry specific factors
Social trends include
1. time poor society
2. privacy
3. green marketing
Time poor society
Consumers looking for ways to maximize their limited time

– do this with multitasking
– hard to market to because they are generally distracted when ads are running
– people re busier than ever, less leisure time

**combat this by: making products accessible where ever and whenever the customer wants them; increase bus signs, billboards, and internet ads

Privacy
Example:

the creation of the do not call list to combat unwanted solicitations

Green marketing
Refers to the marketing of environmentally conscious products

– environmental awareness is more prevalent in Europe than the US

– Green products add value that other products cannot have

_________ data allows marketers to determine which TV time slots would be ideal to run ads during
Demographic
__________ are groups of people of the same generation. They are said to have similar buying habits because they are in the same stage of life and have lived during the same points in history
Generational Cohorts
Generation Y:
1. 60+ million americans
2. born between 1977 and 2000
3. this generation puts a strong emphasis on work/ life balance and are experts at multitasking with media
__________ have never lived without easy access to the internet and cell phones
Tweens
Aging population
today there are more wealthy grandparents with fewer grandchildren
Family structure:
1. replacement rates – average women is having less kids than in 1960

2. age of parents varies – in china the age of parents is very consistent

3. Single, divorced and blended families – some industries benefit from this: appliance and hotel&travel

4. Changing Roles in Families

– Patriarchy : dad makes decisions
– Matriarchy: mom makes decisions
– Democratic: everyone makes decisions
– Filiarchy: kids run the family

****Family is a precisely defined reference group

law to control and protect:
consumers, employees, and competition
America has ________ laws than any other country
more
Regulations that protect and constrain industries:
1. labels and packaging
2. intellectual property rights
3. safety issues
4. predatory (unfair) pricing
5. environmentally friendly actions
6. anti-monopolistic actions
Different Laws:
There are differences in laws nationally, statewide, and municipality

Ex: laws regarding sale and marketing of liquor varies state-to-state and city-to-city

Laws create __________ and _______.
opportunities and threats

***opportunities for smart managers

A compliance market is more ___________ ____________
price sensitive

Ex: all public restrooms have to have toilet seat covers, but companies are going to purchase the least expensive ones

Why have laws been created?
to discourage monopolies in order to encourage competition, keep prices from going up, and choices from going own

ex: food and drug administration (FDA) was created by the Federal Food and Drug Act

Ex: the CAN-SPAM act of 2003: created penalties for junk mail

America is the most ________ ___________.
ethnically diverse
____ __________ __________: to cultural differences between different areas of a country.
A regional culture
Culture affects _____ ______ ______ and _____ potential customers make purchases
when, what, how and where
Approximately 80 percent of all population growth in the next 20 years is expected to come from ______ ______.
minority groups
Who are the fastest growing minority population.
Asian Americans
___________: one trait that best describes you
cardinal value
America loves ________
choices
what is the most enduring of all influences on behavior
culture
Technology:
With new advances in technology, retailers can easily meet inventory needs by tracking production, distribution, and sales

– low tech
– high tech

Low Tech
even simple low tech problems can constrain marketing

Ex: heinz ketchup used glass bottles because tomato acid would eat through plastic. –> They created marketing campaign around the “slow pour”

Can impact entire industry:
– skiing and snowboarding
– flowers are farmed and jetted globally
– laser eye surgery

High Tech
expectations involving the cost of innovation affect pricing

– Napster mentality
– magic moments

Napster mentality
generation Y belies that if its downloadable it should be free
Magic moments
product or service that consumers resist at first but then cross a threshold and cannot live without it

ex: electric garage door opener; GPS; and TIVO/ DVR

once you choose your target market, __________________________
its very hard to change
4Ps are?
controllable
the consumer is the ____________ of all marketing activities
center
________ loans: often containing high fees, hidden costs, and higher rates of interest and target ____________ consumers
Predatory; vulnerable
In order to best focus their marketing efforts, effective firms choose to target customer needs that:
match the firms core competency (what your firm does best)
Factors in evaluating competitors:
1. potential reactions to marketing activities
2. strengths
3. weaknesses
in the last few years, US incomes have become more:
unevenly distributed
offering exclusive or one-of-a-kind promotions appeals to ___ income groups
upper
Gaps in income groups create:
opportunities to market to separate income levels
In order to discover useful trends and predictions about consumer marketers:
combine data from different demographic research
True or False? Gender roles have changed in the past several years.
true–> roles have become blurred
__________ make decisions about purchasing items like computer, cars, appliances.
women
_______ is the most affected by long term interest rates
Housing
because of the ______ from the macro-environment and micro-environment on the marketing mix, the target market is ________ to change.

a. opportunities, hard
b. constraints, easy
c. constraints, hard
d. opportunities, easy

C. constraints, hard
an increase in the dry cleaning industry is a subtle indicator that:

a. the economy is doing well
b. the economy is doing worse
c. unemployment is increasing
d. both b and c

D. both b and c
When studying consumer behavior, marketers often:
borrow from psychology and sociology in order to develop strategies for dealing with discovered behavioral traits
when choosing between competing products, customers base their decision on the:
perceived value of a product
The consumer decision process model (B2C)
The steps consumers go through before, during, and after making purchases:

1. need recognition –> where the buying process begins

2. information search

3. alternative evaluation

4. purchase

5. post purchase

Step #1: Need Recognition
1. the consumer recognizes an unsatisfied need

2. a consumer realizes they have a need when they recognize that there is a difference between their actual state and desired state

3. the greater the difference, the greater a consumer’s need recognition will be

4. functional and psychological needs
– the majority of products and services satisfy both functional and psychological needs

Functional needs
pertain to the performance of a product
psychological needs
pertain to the personal gratification associated with the product
in order to be successful at marketing a product, the firm must determine the correct ____________ of functional and psychological needs tat best appeals to its target segment
balance
Step #2: Information Search
1. after recognizing that they have a need, consumers then begin to search for information

– Internal search
– External search

internal search
buyer examines their knowledge and memories about the product from past experiences

– how brands appeal to the subconscious
– measured using neurobiology

external search
buyer seeks outside information to fill in gaps from internal search

– media, salespeople, friends, family
– consumer reports are a way for consumers to get unbiased sources of information about products
– consumers now rely on the internet for increasingly more information searches

word of mouth
hearing about a product from someone
word of sight
seeing someone with a product
secondary sources
internet, consumer reports, periodicals
primary search
hands on or demos/ samples at costco
factors affecting consumers’ search processes
1. perceived benefits versus perceived costs of search (is it worth the time and effort to search for information about the product or service?)

2. locus of control
-internal ( people believe they have some control over outcomes – generally engage more in search activities)
– external ( people who believe fate controls all outcomes

3. actual or perceived risk
– the greater the risk, the more likely the consumer is to engage in extended search for information
1. performance risk (perceived danger in poor performance – why it didn’t work)
2. financial risk ( initial cost of purchase; cost of using the item or purchase)
3. social risk ( a fear of how others will react to the purchase)
4. physiological risk/safety risk ( fear of actual harm that could come from improper performance

4. type of product or service

5. frequency of repeat services

Step #3: Evaluation of alternatives
after a consumer is aware of a problem and gathered information about the possible options they next have to evaluate the alternatives

**decision between brands

1. primary vs. secondary differences
2. compensatory vs. noncompensatory
3. attribute sets

Primary difference
demand for an entire product category (industry)

Ex: tablet/e-reader

secondary difference
demand for a specific brand

ex: nook /apple