BUAD 307 Final Cumulative Study Guide Questions And Answers
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Course
BUAD 307
Institution
BUAD 307
BUAD 307 Final Cumulative Study Guide Questions And Answers
Customer value ANS the relationship between benefits and the sacrifice necessary to obtain those benefits
Value = Benefits received / Sacrifices made
-Tools to provide customer value (4Ps
1. Product
2. Price
3. Place
4. Promotion
...
BUAD 307 Final Cumulative Study Guide Questions
And Answers
Customer value ANS the relationship between benefits and the sacrifice necessary to obtain those
benefits
Value = Benefits received / Sacrifices made
-Tools to provide customer value (4Ps
1. Product
2. Price
3. Place
4. Promotion
Considerations in determining suitability for products and services for sale online ANS -Value to
bulk ratio
-Selling a paper towel online is not that worth it
-Extent of customization
-Absolute margin
-The margin u make when u buy something and sell it online
-Focus on dollar margins ( absolute margins
-Consider cost to ship etc
-If u buy for .75 and sell for a dollar ,u have .25 margin
-Ability of consumer to evaluate quality and fit online
-Willingness of customers to pay for convenience
-Geographic dispersal of customers
-Vulnerability of inventory to loss of value
Relative costs in selling online, in retail settings, and combined mode ANS -All the work done by
the customer in the retail setting must be done by employees or
outside contractors (e.g., collecting all items in the purchase, bringing items to the
cashier for checkout, and transporting the items home) • -Several delivery attempts may need to be
reach the customer at home
,-Many common products—including liquid laundry detergent—are considered
-"hazardous" goods and cost more to ship
-The costs of handling each returned item are higher • --Rates of returned items are likely to be
higher since customers did not have an
opportunity to examine the merchandise closely
-Additional costs of packaging
Profitability of online firms in markets where costs of selling online are lower ANS Selling
Online means ppl think its low costs so ppl think high profit -- but u are competing with other brands
online so u are usually just breaking in
Collaborative filtering ANS a process that automatically groups people with similar buying
intentions, preferences, and behaviors and predicts future purchases
-Used by recommendation systems
comparing customers to other with similar purchasing history so items of interest can be identified
for potential new customers
-Ex Amazon notes what the consumer is purchasing, analyzes purchase patterns by similar
customers, suggests other items the customer might enjoy, and indicates what other people who
bought the focal item also added to their shopping carts
Basic Internet economics ANS -in a free market (w/ no major barriers to entry), prices, -in the
long run, are driven down to such levels that firms can make only profits to cover costs
-Supernormal profits may occur when competition is limited. H
-Online selling is high competition
Micro-payments—problems, opportunities, and applications ANS -payments of small amounts of
money, (songs, documents)
-problems arise with percentage of sale taken by Credit -Card Company
difficult and expensive to collect small amounts of money online
-Chicken and egg problem in prepaid micro-payments because few merchants would accept
payments from this service until a significant number of customers participate, and consumers would
wait to sign up until payments are widely accepted.
, -Opportunities - possible to sell a number of virtual products online at very low prices since MC of
production and distribution are minimal.
-Applications - itunes, cell phone purchases, credit cards online
-Typically micropayments are used for pay-per-use digital goods like movies, books, songs, but can
also be used to verify account identity or for online payment.
Consumer involvement (types and manifestations) ANS High involvement:
-greater attention
-deeper processing
-develops strong attitudes and purchase intentions
Low involvement:
-less attention
-peripheral processing
-generates weak attitudes and inc. use of cures
Associative Network of Knowledge ANS The linking of one concept to another in a web-like
format (ex: Lululemon- leggings, yoga, lemons, health, kombucha)
the brain uses associations between different "nodes" (ideas or other pieces of information) to
activate related others.
each node, in turn, potentially triggers others.
Tippability ANS The potential of a small factor to change a low stakes decision from one
alternative to another one
-interesting image on packaging
-premium (free gift)
-celebrity endorsement
Reasons for segmenting ANS Consumers differ in terms of needs and wants from the product
category
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