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Question 1 of 1
Read the text and answer the questions. Type your answers in the spaces provided.
Reading Passage 1
A. Consumer Behaviour principles are used to establish what, why, how and when customers buy products; information collected via such studies is utilised by marketing managers to assist them in developing the most effective strategies to sell their products. Consumer behaviour analysis is, in essence, a combination of knowledge from a business, economic, sociological and psychological perspective. Different industry types apply various strategies related to consumer behaviour as they know that we, the customers, generally act and think differently depending on what type of product we are purchasing.
B. The decision making process we go through when we are buying something new is classified by experts as ranging from ‘high’ to ‘low’ involvement. High involvement consumer behaviour is characterised by including a significant level of risk from the buyer’s perspective; this risk can relate to personal or social risk, i.e. we may feel that the type of product or service we buy will affect our status; or economic risk, meaning that the product or service is expensive. These tend to be commodities that we do not buy on a regular basis. For example, purchases such as cars, houses and expensive technical equipment can be classified as high involvement. Typically, for these kinds of goods, buyers will not make decisions quickly but go through an extensive decision-making process, often consult others for advice or recommendation and are highly likely to research a number of alternatives before making a final decision.
C. In contrast, low involvement consumer behaviour involves far lower levels of perceived risk and the consumer typically spending minimal time and effort making the decision; products which involve low involvement being fast moving consumer goods (FMCGs) such as bread, milk and washing powder. Purchase of these types of products often becomes routine behaviour, in that a certain brand may routinely be purchased and little or no consideration is given to alternatives on offer. For household goods, many consumers may even buy the same brand throughout their entire life; the initial decision being influenced by products they were already familiar with because their parents had traditionally purchased them while they were growing up.
D. Many products may fall somewhere between these two categories and are categorised as involving limited decision-making and having medium levels of risk. To illustrate, we may not typically spend as long deciding on a new and expensive outfit to wear for a special occasion as we would buying a car; nevertheless, we would generally give such a purchase more consideration than buying a soft drink at the local store. Some purchases may be classified as impulse purchases, in that we decide without premeditation that we will buy them; going shopping for a new outfit and also returning from our shopping spree with an unplanned pair of shoes would be an example of this.
E. The design and environment of the outlets in which we shop are often carefully planned around consumer behaviour principles, encouraging shoppers to spend at optimum levels. A great deal of research and consideration is devoted to the layout of the local supermarket, for example. Encouraging positive sensory perceptions from customers is of great importance; therefore, many supermarkets play relaxing background music to lift the mood of their customers and to encourage them to relax and take their time. After all, the longer a shopper stays in the store, the more they are likely to buy. Stimulation of a customer’s sense of smell has also been observed to improve sales; most supermarkets have bakery outlets, for example, and many choose to bake steadily throughout the working day; not only to meet demand but also because marketers are aware that the pleasant aroma of baking bread is very successful in inspiring purchase.
F. Since, as previously discussed, many shoppers will routinely purchase the same brand with little consideration, constant availability is vital from the manufacturer’s perspective, and sound distribution and delivery channels are necessary to ensure that their products are always available in store. For the same reasons, manufacturers vie for shelf positioning, always wanting their product to be easily seen by potential customers; if shoppers cannot find a product because it is unavailable, hidden from view or unnecessarily inaccessible – on a top shelf for example – they may be easily persuaded to simply pick up an alternative. Research has shown that end of aisle locations, or positioning in isolated island displays can significantly increase sales of FMCG products and as a consequence many manufacturers of well-known and powerful brands negotiate such positions in supermarket stores for their products. Such positioning is likely to stimulate customers new to the brand to purchase impulsively. In the same way, inviting aromas are geared towards encouraging shoppers to decide to buy products they had no intention of buying.
G. Pricing and promotional strategies also have a dramatic influence on consumer behaviour and resultant sales. Cheaper-end pricing of certain types of products can, in fact, be detrimental to success. Perfume, for example, is considered by many shoppers to be a luxury item and therefore a higher price can actually reinforce perceived quality. Research studies have shown that when respondents are asked to choose between two fragrances which are, in fact, exactly the same but carry a different price tag, approximately two thirds of people state their preference for the more expensive sample. On the other hand, special offers and discounts, when used with brand names we are familiar with and have less romantic perceptions about, can generate a huge increase in sales, many consumers purchasing in greater quantities than would be their usual habit.
H. Marketers are also very aware of the way in which people are generally eager to amass supplies for later need and our sensitivity to short supply. They use their knowledge of this aspect of human nature to stimulate purchase. Triggers to encourage consumers to buy in larger quantities have proven to be very successful when limitations are placed on the number of items available for sale. For example, when signs are placed on items such as ‘special offer $***…no more than 5 available to individual customers’ , tendencies to purchase maybe 3 or 4 of the items in question, rather than the routine 1 or 2, have been observed. In order to analyse the impact of ‘short supply’ separately from the discounted price, market research trials have placed restrictions on quantity without an accompanying price reduction, yet similar trends in increased levels of purchase were still observed, indicating that an individual’s sensitivity to perceived limitation may actually be at least as influential over their buying behaviour as being able to acquire a bargain. Further research will provide more concrete evidence.
Reading Passage 1
Questions 1 to 5
Do the following statements agree with the information given in the reading passage?
In boxes 1-5 on your answer sheet write
TRUEif the statement agrees with the information FALSEif the statement contradicts the information NOT GIVEN if there is no information on this
1. Economic risk as perceived by the customer is more significant than social risk they may attach to purchase.
2. Companies invest a great deal of money into advertising persuading customers to remain loyal to their products.
3. All purchases involve some level of contemplation prior to embarking on a shopping trip.
4. Positioning of products in a store can influence a customer’s usual behaviour.
5. Pricing can have both a positive and negative impact on consumer perceptions.
Questions 6 and 11
Complete the table below.
Choose NO MORE THAN THREE WORDS from the passage for each answer.
Level of involve-ment
Low level of risk
Medium levels or risk
Significant level of risk
For example: bread
Clothes for a 8.
For example: vehicles, houses and 9.
Decision making process
Minimal decision making (often 6. behaviour)
Limited decision making
Familiarity from observing 7.
Consultation and 11.
Questions 12 and 13
Choose TWO letters, A-E.
Type your answers in boxes 12 and 13 on your answer sheet.
Which TWO of the following are effective ways of encouraging customers to buy?
(a) discouraging customers to linger in store
(b) strategic placement of products
(c) considering the needs of the customer
(d) stimulation by sight, smell and taste
(e) encouraging customers to unwind
(f) making purchase awkward for customers
Choose the correct letter, A-D.
14. Research findings regarding price bargains and creating a sense of urgency to buy
(a) are inconclusive as to which tactic is more effective
(b) confirm that perceived limitation is more motivating to shoppers than price
(c) indicate that urgency is more likely to inspire purchase then discounts
(d) raise doubt that either method is particularly effective
Choose the correct letter, A-D.
Which of the following is the most suitable title for the passage?
(a) Differing thought processes for different purchases