Study guide for the third exam and example questions
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:
b. ideal level.
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.
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....
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