Consumer Beh

O LYMPIA B USINESS S CHOOL
School of Business and Marketing
ADVANCED DIPLOMA IN MARKETING
F ILO -T EXT
Consumer Behavior
October, 1998
R AFFLES E DUCATION G ROUP

Kuala Lumpur w Petaling Jaya w Penang w Singapore w Jakarta w
Bangkok w Beijing w London w New-York
Olympia Business School Consumer Behavior
Table of Contents
INTRODUCTION.......................................................................................................................................... 3
HOW TO USE THE FILO-TEXT? ............................................................................................................... 4
ASSESSMENT ............................................................................................................................................... 5
INDIVIDUAL ASSIGNMENT ............................................................................................................................ 5
MID-TERM ASSESSMENT .............................................................................................................................. 5
GROUP PROJECT ........................................................................................................................................... 5
FINAL E XAMINATION.................................................................................................................................... 6
ATTENDANCE.............................................................................................................................................. 6
FEES............................................................................................................................................................... 7
CONTACT-TIME.......................................................................................................................................... 7
FULL-TIME ................................................................................................................................................... 7
PART-TIME ................................................................................................................................................... 7
THE ACADEMIC PLANNER....................................................................................................................... 8
WEEK 1 ......................................................................................................................................................... 9
WEEK 2 ....................................................................................................................................................... 11
WEEK 3 ....................................................................................................................................................... 13
WEEK 4 ....................................................................................................................................................... 15
WEEK 5 ....................................................................................................................................................... 17
WEEK 6 ....................................................................................................................................................... 19
WEEK 7 ....................................................................................................................................................... 21
WEEK 8 ....................................................................................................................................................... 23
WEEK 9 ....................................................................................................................................................... 24
WEEK 10 ..................................................................................................................................................... 26
WEEK 11 ..................................................................................................................................................... 28
WEEK 12 ..................................................................................................................................................... 31
Olympia Business School Page 2

INTRODUCTION
The study of Consumer Behavior is the study of how individuals make decisions to spend
their available resources (time, money, and effort) on consumption-related items. It includes
the study of what they buy, why they but it, when they buy it, where they buy it, how often
they buy it, and how often they use it. Take the simple product toothpaste. Consumer
researchers want to know what types of toothpaste consumers buy (gel, regular, striped, in a
tube, with a pump); what brand (national brand, private brand, generic brand); why they buy
it (to prevent cavities, to remove stains, to brighten or whiten teeth, to use as a mouthwash, to
attract romance); where they buy it (supermarket, drugstore, convenience store); how often
they use it (when they wake up, after each meal, when they go to bed, or any combination
thereof); and how often they buy it (weekly, biweekly, monthly).
Although this subject on how and why consumers make decisions to buy goods and services,
consumer behavior research goes far beyond these facets of consumer behavior and
encompasses all of the behaviors that consumers display in searching for, purchasing using,
evaluating, and disposing of products and services that they key expect will satisfy their
needs. For example, a couple may experience dissatisfaction with their choice of an
automobile, perhaps because of continuing service problems. They may communicate their
dissatisfaction to friends and, in turn, influence their friends’ future automobile purchases.
They may vow never to buy the same make or model again, limiting their own future
selection decisions. Each of these possible consequences of consumer postpurchase
dissatisfaction has significant ramifications for automobile marketers, who have to build
postpurchase strategies into their promotional campaigns.

HOW TO USE THE FILO-TEXT?
The Filo-text is a tool providing you guidance for this subject. It provides you a general
information on the following:
• Assessment
• Attendance
• Fees
• Contact time
• The academic planner
For every week, it then provides you with the following information:
• The topic
• The objective(s) of the lecture
• The textbook and the chapter(s) and page(s) related to the given topic
• The other reference books available to you in the library.
• Additional reference material for your own research
• The objective(s) of the tutorial
• Questions to prepare for discussion during the tutorial
• Question for your personal research
Use the Filo-Text to prepare yourself prior to the lecture, between the lecture and the tutorial
and after the tutorial

ASSESSMENT
Student assessment will be evaluated based on the following breakdown:
1. Individual Assignment 15%
2. Mid-Term Examination 15%
3. Group Project 20%
4. Final Examination 50%
Total 100%
INDIVIDUAL ASSIGNMENT
You will receive an individual assignment on week 2, which has be handed up on week 6.
The marked assignment will be returned on week 8.
The assignment will be based on topics covered between weeks 1 and 4 and includes drilling
and vocabulary exercises.
Failure to submit this assignment will result in an automatic failure in this assignment.
MID-TERM ASSESSMENT
A mid-term assessment will be held on week 8 and will be based on topics covered up to
week 6. Absence without a valid reason will result in an automatic failure of the examination.
GROUP PROJECT
A Group Project will be assigned to the students on the week 3. The team will be comprise 5
students.
The report of the group project will have to be submitted to the subject lecturer by no later
than week 10 and will be presented on week 11. No late submission will be entertained and
would automatically result in no marks awarded.

FINAL EXAMINATION
The final examination will be conducted on week 13 or week 14 and the paper is 3 hours.
Registration for the examination is open from week 6 and closes on week 9. Make sure you
register on time. Any registrations made on week 10 and 11 will be subject to penalty
charges. No late registrations will be entertained after week 11.
The format of the examination is as follows:
• Section A – Short Essay Questions (5) Answer All 5*4 = 20 Points
• Section B – Essay Questions. Answer 4 out of 6 4*20 = 80 Points
___________________________________________________________________________
• Total 100 Points
A TTENDANCE
Attendance for both the lecture and the tutorial is compulsory and absenteeism should be
covered with medical certificate or written letter by the parent/guardian. Failure to provide
such a document for absenteeism will be viewed as truancy by the student.
A minimum attendance of 80% is essential to justify attendance for any examination.

Punctuality is equally important. The lecturer is entitled to refuse entry into the classroom to
any student who is late.

F EES
The registration fee is to be paid upon enrolment. The course fee may be settled either in full,
by per semester or by instalments. Payment in full must be settled before the first lecture
while payment by the semester is payable on the first day of each semester. Payment by
monthly instalment is due on the first day of class of each month.
Any difficulty experienced in the settlement of the fees must be communicated to the
(Deputy) Principal. Failure to meet the (Deputy) Principal can result in the student being
barred from attending class.
C ONTACT -T IME
FULL-TIME
The duration of each class is 12 weeks and contact time is 1½ hours of lecture with 1½ hours
of tutorials per week.
PART-TIME
The duration of each class is 12 weeks and contact time is 1½ hours of lectures per week.
For successful results an additional 4 hours is recommended for personal studies, either
individually or in a group.

T HE A CADEMIC P LANNER
Week Date Topic
1 The Diversity of Consumer Behavior
2 Market Segmentation
3 Consumer Needs and Motivation & Personality and

Consumer Behavior
4 Consumer Perception & Learning and Consumer Involvement
5 The Nature of Consumer Attitudes & Communication and

Persuasion
6 Group Dynamics and Consumer Reference Groups and the

Family
7 Social Class and Consumer Behavior
8 Mid -Term Exam
9 The Influence the Culture and Cross-Culture on Consumer

Behavior
10 Personal Influence and the Opinion Leadership Process
11 The Diffusion of Innovation
12 Consumer Decision Making – Choosing and Consuming
Final Examination

WEEK 1
Lecture Topic: The Diversity of Consumer Behavior
Lecture Objective: *The Study of Consumer Behavior
*Why we study Consumer Behavior
*Why the field of Consumer Behavior developed
*Ethics in Marketing
*The Consumer Movement
*Ethics and Corporate Environment
Textbook:
Chapter(s) Pages
Consumer Behavior – Leon G. Schiffman & Leslie L. 1 1 - 20

Kanuk. Sixth Edition
Reference Books:
Consumer Behavior by Chris Rice
Understanding Customers by Rosemary Philips & Craig Simmons

Areas For Applications During Tutorials:
1. In the 1920s, Henry Ford remarked that his customers could have any colour car they
wanted, as long as it was black. Could the president of Ford Motor Company make the
same statement today? In your answer, discuss the changes in marketing philosophy
that have occurred since the 1920s.
2. How can the study of consumer behavior assist marketers in segmenting markets and
positioning products?
3. You are the brand manager of new line of biodegradable diapers that includes separate
versions for boys and girls. Describe how an understanding of consumer behavior is
useful to you in term of: (a) market segmentation strategy, (b) new product
introduction, (c) product life-cycle strategy, and (d) societal issues.
4. The upper-lower and lower-lower social classes together constitute more than half the
United States population. Is it ethical for marketers and the mass media to promote
products that most members of the lower classes cannot afford? Explain your answer.
5. Describe the interrelationship between the consumer behavior discipline and the
marketing concept.
QUESTIONS AVAILABLE FOR SELF ASSESSMENT
1. Explain the difference(s) between personal and organizational consumers. Discuss the
difference involved in marketing fax machines to personal consumers and to
organizational consumers.
2. Select a product you bought that has features you never used. Which one of the business
orientations discussed in the text may have guided that development of this product?
3. Find an advertisement for a new product. Identify the psychological, sociological, and
cultural factors that may influence consumers’ decisions regarding the purchase of this
product. In your opinion, will this product, succeed of fail in the marketplace? Explain
your answer.
4. Give an example of what you believe to be an unethical marketing practice. How can
this practice be stopped through government regulation? Can the industry stop this
practice? If so, how?
5. Select a product, brand, or service that you bought or used because it was particularly
suitable for your needs. Would you say that the development of this product or services
was guided by the marketing concept? If so, how?

WEEK 2
Lecture Topic: Market Segmentation
Lecture Objectives: *What is market segmentation?
*Who uses market segmentation?
*How market segmentation operates?
*Bases for segmentation
*Criteria for effective targeting of market segmentation
*Implementing segmentation strategies
Textbook:
Chapter(s) Pages
Consumer Behavior – Leon G. Schiffman & Leslie L. 3 48 - 77

Reference Books:

Area For Applications During Tutorials
1. What is market segmentation? How is the practice of market segmentation related to

marketing concept?
2. Discuss the advantages and disadvantages of using demographics as a basis for

segmentation. Can demographics and psychographics be used together to segment
markets? Illustrate your answer with a specific example.
3. Some marketers consider benefit segmentation as the segmentation approach most

consistent with the marketing concept. Do you agree or disagree with this view?
4. For each of the following products, identify the segmentation based that you consider
best for targeting consumers: (a) coffee, (b) soups, (c) home exercise equipment, (d)
portable telephones, and (e) nonfat frozen yogurt. Explain your choices.
5. Apply the criteria for effective segmentation to marketing product of your choice to
college students.
1. Are market segmentation, targeting, and positioning interrelated? Illustrate how these
three concepts can be used to develop a marketing strategy for a product of your choice.
2. Under which circumstances and for what types of products should a marketer segment
the market on the basis of: (a) awareness status, (b) brand loyalty, or (c) use situation?
3. Club Med is a prominent company in the vacation and travel industry .Describe how
the company can use demographics and psychographics to identify TV shows and
magazines in which to place its advertisements.
4. Does your lifestyle differ significantly from your parents lifestyle? If so, how are the
two lifestyles different? What factors cause these differences?
5. Do you anticipate any major changes in your lifestyle in the next 5 years? If so, into
which VALS 2 segment are you likely to belong five years from now? Explain.

WEEK 3
Lecture Topic: Consumer Needs and Motivation & Personality

And Consumer Behaviour
Lecture Objective: *What is motivation?
*The dynamic nature of motivation
*Types and systems of needs
*What is personality?
*Personality and understanding consumer diversity
Textbook:
Chapter(s) Pages
Consumer Behaviour – Leon G. Schiffman & Leslie L.

4-5 83 -141
Reference Books:
Consumer Behaviour by Chris Rice

Areas for application during tutorials
1. (a)“Marketers don’t create needs; needs preexist marketers.” Discuss this statement.
(b) Can marketing efforts change consumers’ needs? Why or why not?
2. Why are consumers’ needs and goals constantly changing? What factors influence the
formation of new goals?
3. Consumers have both innate and acquired needs. Gibe examples of each kind of need and
show how the same purchase can save to fulfill either or both kinds of needs.
4. Most human needs are dormant much of the time. what factors cause their arousal? Give
examples of ads for personal care products that are designed to arouse latent consumer
needs.
5. (a) what is motivational research?

(b) what are its strengths and weaknesses?
(c) How did Dr. Ernest Dichter apply Freudian theory to consumer behavior?
(d) How was motivational research used in the 1950s?
(e) how do marketers use the technique today?
Questions available for self-assessment
1. Describe personality trait theory. Give five examples of how personality traits can be used
in consumer research
2. How can a marketer of cameras use the research findings that the target market consists
primarily of inner-directed or other-directed consumers? Of consumers who are high (or
low) on innovativeness
3. Is their likely to be a difference in personality traits between individuals who readily

purchase foreign-made products and those who prefer to American-made products? How
can marketers use the consumer ethnocentrism scale to segment consumers?
4. A marketer of health foods is attempting to segment his or her market on the basis of self-
image. Describe the four types of consumer self-image and discuss which one(s) would
be effective for the stated people.
5. contrast the major characteristics of the following personality theories. (a) Freudian
theory, (b) Jungian theory, (c) Neo-Freudian theory, and (d) trait theory. In your answer,
illustrate how each theory is applied to the understanding of consumer behavior.

WEEK 4
Lecture Topic: Consumer perception & Learning and Consumer Involvement
Lecture Objective: What is perception?
The dynamics of perception
Consumer imagery
What is learning?
Behavioural learning theories
Cognitive learning theory
Brand loyalty
Textbook:
Chapter(s) Pages
Consumer Behavior- Leon g. Schiffman & 7 194-228

Leslie L. Kanuk. Sixth Edition
Reference Books:

1. How does sensory adaptation affect advertising effectiveness? How can marketers
overcome sensory adaptations?
2. Describe how manufactures of chocolate bars can apply their knowledge of differential
threshold to packages and prices during periods of: (a) rising ingredient costs, (b)
increasing competition, and (c) consumer nutrition concerns.
3. Does subliminal advertising work? Support your view.
4. How is perceptual mapping used in consumers research? Why are marketers sometimes
forced to reception their products or services? Illustrate your answer with examples.
5. Why is it more difficult for consumers to evaluate the quality of services than the
quality of products?
Questions available for self assessment
1. (a) Define the following memory structures: sensory store, working memory, and long-
term store. Apply each of these concepts to the development of an advertising
strategy.
(b) How does information overload affect the consumer’s ability to comprehend an ad
and store it in his or her memory?
2. Discuss the differences between low-and involvement media. How would you apply the
knowledge of hemispheral lateralization to the design of TV commercials and print
advertisements?
3. (a) How can the principals of classical conditioning theory and neo-pavlovian theory be
applied to the development of marketing strategies?
(b) How is the classical conditioning concepts of repetition applied to advertising?
4. (a) A cereal marketer is trying to use the concept of high- and low- involvement to target
market segments. How should the marketer measure consumers’ level of involvement
with cereal?
(b) Can social judgement theory be used to market cereal more effectively? Explain your
answer.
5. (a) How can a marketer distinguish between real and spurious brand loyal buyers? Is it
important for marketers to measure and understand the differences between the two
group? Why or why not?
(b) Describe the marketing errors in advertising, pricing, and in-store promotions that
might occur of a marketer fails to distinguish between the two groups.

WEEK 5
Lecture Topic: The Nature of Consumer Attitudes & Communication and

Persuasion
Lecture Objective:
• What are attitudes?
• Structural models of attitudes
• Components of communication
• The communication process
• Designing persuasive communication
Textbook:
Chapter (s) Pages
Consumer Behaviour – Leon G.Schiffman & Leslie 8 & 10 234 – 255

L. Kanuk. Sixth Edition
280 – 313
Reference Books:
Consumer Behaviour by Chirs Rice

1. Explain how situational factors are likely to influence the degree of consistency between
attitudes and behavior.
2. Because attitudes are learned predispositions to respond, why don’t marketers and
consumer researches just measure purchase behaviour and forget attitudes?
3. Explain a person’s attitude toward visiting Disney World in terms of the tricomponent
attitude model.
4. Multi attribute models examine attitudes in terms of selected product attributes. What are
the attributes on which you would like to evaluate your lecturer at the end of the
semester? On which attributes would you evaluate this filotext?
5. Should a marketer of luxury cars use the attitude-toward-object model, the attitude-
toward-behavior model, or the theory-of-reasoned-action model in assessing consumers’
attitudes toward the company’s cars? Explain your answer.
1. Explain the differences between feedback from interpersonal communications and

feedback from impersonal communications. How can the marketer obtain and use each
kind of feedback.
2. List and discuss the effects of psychological barriers on the communications process.
How can a marketer overcome the communications barriers known as “noise”?
3. a). What factors influence the perceived credibility of an informal communications

source? List and discuss factors that determine the credibility of formal
communications sources of product information.
b). What are the implication of the sleeper effect for selection of spokespersons and the
scheduling of advertising messages?
4. Explain the difference(s) between direct mail and direct marketing. Discuss the reasons
for the continued growth of direct marketing and the objectives of direct marketing.
5. a). Should marketers use more body copy that artwork in print ads?
b). For what kinds of audiences would you considers using comparative advertising?
Why?

WEEK 6
Lecture Topic: Group Dynamic and consumer Reference Groups & The Family
Lecture Objective:
• What is a group?
• Reference group
• Applications of the reference group
• Functions of the family
• Family decision making
• Family life cycle
Textbook:
Chapter(s) Pages
Consumer Behaviour – Leon G. Schiffman & Leslie 11 & 12 320 – 342

L.Kanuk. Sixth Edition
346 - 371
Reference Books:
Consumer Behaaviour by Chirs Rice

1. Describe one group that serves as an aspirational group for you and another that serves as
an avoidance group. In what ways have they influenced your consumption patterns?
2. When is using an aspirational group likely to be a more effective advertising strategy than
a contractual group?
3. Virtually all group develop norms and codes of behavior. Identify five norms that guide
the behavior of students and lecturers in your college. Are your fellow students a
normative or comparative reference group for you? Explain.
4. What reference group factors are likely to influence a smoker’s decision as to whether or
not to use a nicotine patch in the quest to quit smoking?
5. Many celebrities who are considered to be persuasive role models often appear in TV
beer commercials. Does the use of such celebrities in beer advertising constitute an
unethical marketing practice? Discuss.
1. Some consumer behavior researchers maintain that the family, rather than the individual,
should be the unit of analysis in consumer behavior. What are the advantages and
disadvantages of using the family as the unit of analysis?
2. How does the family influence the consumer socialization of children? What role does
television advertising play in consumer socialization?
3. Which of the five stages of the traditional family life cycle constitute thee most lucrative
segment(s) for the following products and services: (a). telephone party line, (b). a Club
Med vacation, (c). Domino’s pizza, (d). compact disc players, (e). mutual funds, and (f).
motor homes? Explain your answers.
4. In purchasing a new television set, how would you expect the following factors to
influence the dynamics of husband-wife decision making: (a). The features of the
product; (b). the family’s role structure orientation; and (c). the stage of the decision-
making process. How would you use the assessments you listed above in advertising a
new model TV set?
5. a). Describe the role of young children in the family consumption process.
b). What role do teenagers play in family decision making?
c). What is the marketing significance of the increase in the number of latchkey kids and
their distinctive lifestyle?

WEEK 7
Lecture Topic: Social Class and Consumer Behavior
Lecture Objective:
• What is social class?
• Measurement of social class
• Lifestyle profiles of social class
• Social class mobility
• Selected consumer behavior applications of social class
Textbook:
Chapter (s) Pages
Consumer Behavior – Leon G. Schiffman & Leslie 13 376-402

L. Kanuk. Sixth Edition
Reference Books:
Understanding Customers by Resemary Philips & Craig Simmons

Areas for applications during tutorials
1. Marketing researchers generally use the objective method to measure social class, rather
than the subjective or reputational method. Why is the objective method preferred by
researches?
2. Under what circumstances would you expect income to be a better predictor of consumer
behavior than a composite measure of social class (e.g., based on income, education and
occupation)? When would you expect the composite social-class measure to be superior?
3. Describe the correlation between social status (or prestige) and income. Which is a more
useful segmentation variable? Discuss.
4. Which status-related variable, occupation, education or income, is the most appropriate

segmentation base for: (a) expensive vacations, (b) opera subscriptions, (c) People
magazine subscriptions, (d) fat-free foods, (e) personal computers, (f) pocket-size cellular
telephones, and (g) health clubs?
5. Consider the Rolex watch, which has a retail range starting at about $2000 for a stainless-
steel model to thousands of dollars for a solid-gold model. How might the Rolex
company use geodemographic clustering in its marketing efforts?
1. How would you use the research evidence on affluent households to segment the market
for: (a) home exercise equipment, (b) vacations, and (c) banking services?
2. How can a marketer use knowledge of consumer behavior to develop financial services
for affluent consumers? For “downscale” consumers?
3. You are the owner of two furniture stores, one catering to upper-middle-class consumers
and the other to lower-class consumer. How do social-class differences influence each
store’s: (a) product lines and styles, (b) advertising media selection, (c) the copy and
communications style used in the ads, and (d) payment policies?
4. Select two households featured in two different TV series or sitcoms. Classify each
household into one of the social classes discussed in the text and analyze its lifestyle and
consumption behavior.
5. Prepare an Index of Stated Characteristics of your relatives and compute their social class.

WEEK 8
MID-TERM EXAM

WEEK 9
Lecture Topic: The Influence of Culture and Cross-culture on Consumer

Behavior
Lecture Objective: *What is culture?
*Characteristics of culture
*The measurement of culture
*Cross-culture consumer analysis
*Cross-culture psychographics segmentation
Textbook:
Chapter(s) Pages
Consumer Behavior – Leon G. Schiffman & 14 &16 406-436

472-493
Reference Books:

1. Distinguish between beliefs, values, and customers. Illustrate how the clothing a person
wears at different times or for different occasions is influenced by customs.
2. A manufacturer of fat-free granola bars is considering targeting school-age children by
positioning its product as a healthy, nutritious snack food. How can an understanding of
the three forms of cultural learning be used in developing an effective strategy to target
the intended market?
3. The Citrus Growers of America is planning a promotional campaign to encourage the
drinking of orange and grapefruit juice in situations in which many consumers normally
consumer soft drinks. Using the Rokeach Value Survey Instrument, identify relevant
cultural, consumption-specific, and product-specific values for citrus juices as an
alternative to soft drinks. What are the implications of these values for an advertising
campaign designed to increase the consumption of citrus juices?
4. Describe how a marketer can use some of the social trends to position a microwave oven.
5. For each of the products and activities listed below:
a) Identify the core values most relevant to their purchase and use.
b) Determine whether these values encourage or discourage use or ownership.
c) Determine whether these core values are shifting and, if so, in what direction. The
products and activities are:
I. Compact disc players
II. Telephone answering machines
III. Toothpaste
IV. Diet soft drinks
V. Foreign travel
1. With all the problems facing companies that go global, why are so many companies
choosing to expand internationally? What are the advantage of expanding beyond the
domestic market?
2. What is cross-cultural consumer analysis? How can multinational company use cross-
cultural research to design each factor in its marketing mix? Illustrate your answer with
examples.
3. What are the advantages and disadvantages of global promotional strategies?
4. Should Head & Shoulders shampoo be sold worldwide with the same formulation? In the
same package? With the same advertising theme? Explain your answer.
5. What advice would you give to an American retailer who wants to sell women’s clothing
in Japan?

WEEK 10
Lecture Topic: Personal Influence and the Opinion Leadership Process
Lecture objective: * What is opinion leadership?
* Dynamic of the opinion leadership
* Frequency and overlap of opinion leadership
* The situational and environment of opinion leadership
* Opinion leadership and the firms promotional strategy
Textbook:
Chapter(s) Pages
Consumer Behavior – Leon G. Schiffman & 17 500 - 525

Reference Books:

1. Why is an opinion leader a more credible source of product information than an

advertisement for the same product?
2. Are they any circumstances in which information from advertisements is likely to be

more influential than word-of-mouth?
3. Why would a consumer who has just purchased an expensive fax machine for home
use attempt to influence the purchase behavior of others?
4. Is an opinion leader for 35-mm cameras likely to be an opinion leader for Spandex
clothing? Discuss.
5. The two step flow of communication theory has been modified to portray more
accurately the flow of information. Briefly describe this modification and explain its
relevance to the marketing strategist.
1. How can marketers combat negative word-of-mouth?
2. Find ads that simulate and ads that stimulate opinion leadership and present them in
class.
3. Can you think of negative rumors that you have heard recently about a company or a
product? If so, present them in class.
4. Describe two situations in which you served as an opinion leader and two situations in
which you sought consumption-related advice/information from an opinion leader.
Indicate your relationship to the persons with whom you interacted. Are the
circumstances during which you engaged in word-of-mouth communications
consistent with those in the text’s material? Explain.
5. For each of the following products and services, indicate who you would go to for
information and advice: (1) the latest fashion in clothes, (2) banking, (3) air travel, (4)
the “hottest” night clubs, (5) vacation destinations, and (6) personal copiers. for each
situation, indicate the person’s relationship to you and your reasons for selecting him
or her as the source of information and advice.

WEEK 11
Lecture Topic: The Diffusion of Innovations
Lecture Objective: * The diffusion process
* The adoption process
* A profile of the consumer innovator
Textbook:
Chapter(s) Pages

Reference Books:

1. What are the essential difference between firm-product-, market-, and consumer-oriented
definitions of a new products? Which definition do you feel is most suitable for the
marketers of a Caller ID telephone service that displays the caller’s telephone number on
the phone of the person being called? Explain your answer.
2. Would you classify each of the following as a continuous innovation, a dynamically

continuous innovation, or a discontinuous innovation? Explain your answer.
a) Sony’s Video Walkman (a portable TV and VCR)
b) A PC fax/modem that enables the users to send and receive faxes directly from a
personal computer
c) A pocket-size cellular telephone
3. Select three of the products listed in Question 2 and describe the diffusion pattern that
you except each product to have. Justify your answer.
4. Describe how manufacturer might use knowledge of the following product characteristics
to spend up the acceptance of pocket-sized cellular telephones:
(a) Relative advantage
(b) Compatibility
(c) Complexity
5. Toshiba has introduced a new laptop computer that weighs seven pounds, has a color
screen, and a powerful processor, into which a full-sized desktop screen and keyboard can
be easily plugged. How can the company use the diffusion-of-innovations framework to
develop promotional, pricing, and distribution strategies targeted to:
a) Innovators
b) Early adopters
c) Early majority
d) Late majority

1. Is the curve which describes the sequence and proportion of adopter categories among the
population similar in shape to the products life cycle curve? Explain your answer. How
would you use both curve to develop a marketing strategy?
2. Compare and contrast the adoption and diffusion processes. Discuss each process in terms
of the market acceptance of fax machines.
3. Sony is introducing a 60-inch TV with a built-in VCR, a picture-in-picture feature, and a

feature that allows the viewer to simultaneously view frozen frames of the last signals
received from twelve channels.
(a) What recommendations would you make to Sony regarding the initial target market
for the new TV model?
(b) How would you identify the innovators for this product?
4. Identify a product, service, or style that recently was adopted by you and/or some of your
friends. Identify what type of innovation it is and describe its diffusion process up to this
point in time. What are the characteristics of people who adopted it first? what types of
people did not adopt it? What features of the product, service, or style are likely to
determine its eventual success or failure?
5. With the advancement of digital technology, some companies plan to introduce

interactive TV systems that will allow viewer to select films from “video libraries” and
view them on demand. Among people you know, identify two who are likely to be the
innovators for such a new service and construct consumer profiles using the
characteristics of consumer innovators.

WEEK 12
Lecture Topic: Consumer Decision Making-Choosing and Consuming
Lecture Objective: *What is a decision?
*Levels of consumer decision making
*A model of consumer decision making
*Beyond the decision-consuming and possessing
*Relationship marketing
Textbook:
Chapter(s) Pages

Reference Books:

1. Compare and contrast the economic, passive, cognitive, and emotional models of
consumer decision making.
2. What kinds of marketing and sociocultural inputs would influence the purchase of (a) a
TV with a built-in VCR, (b) a concentrated liquid laundry detergent, and (c) fat –free ice-
cream? Explain your answer.
3. Identify three different products that you believe require a reasonably intensive
prepurchase search by a consumer.
4. For each of the products that you listed, identify the perceived risks that a consumer is
likely to experience before a purchase. Discuss how the marketers of these products can
reduce perceived risks.
5. How can a marketers of very light, very powerful laptop computers use its knowledge of
customers expectations in deigning a marketing strategy?
1. How do consumers reduce postpurchase dissonance? How can marketers provide positive
reinforcement to consumers after the purchase to reduce their dissonance?
2. The Gillette Company, Which produces the highly successful Sensor shaving blade, has
recently introduced a clear gel antiperspirant and deodorant for men. Identify the
perceived risks associated with the purchase of this new product and outline a strategy
designed or reduce these perceived risks during the product’s introduction.
3. Albert Einstein once wrote that “the whole of science is nothing more than a refinement
of everyday thinking. “ Do you think that this quote applies to the development of the
consumer decision-making model?
4. Describe the need recognition process that look place before you purchased your last can
of soft drink. How did it pair of sneakers? What role, if any, did advertising play in your
need recognition?
5. Select a newspaper or magazines advertisement that attempts: (a) to provide the customer
with a decision or (b) to reduce the perceived risks(s) associated with a purchase.
Evaluate the effectiveness of the ad you selected.

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O LYMPIA B USINESS S CHOOL

School of Business and Marketing

ADVANCED DIPLOMA IN MARKETING

R AFFLES E DUCATION G ROUP

HOW TO USE THE FILO-TEXT? ............................................................................................................... 4

Olympia Business School Page 2

Olympia Business School Page 3

HOW TO USE THE FILO-TEXT?

• The academic planner

• The objective(s) of the lecture

• The other reference books available to you in the library.

• Additional reference material for your own research

• The objective(s) of the tutorial

• Questions to prepare for discussion during the tutorial

• Question for your personal research

Olympia Business School Page 4

Student assessment will be evaluated based on the following breakdown:

1. Individual Assignment 15%

2. Mid-Term Examination 15%

3. Group Project 20%

4. Final Examination 50%

Olympia Business School Page 5

The format of the examination is as follows:

• Section A – Short Essay Questions (5) Answer All 5*4 = 20 Points

• Section B – Essay Questions. Answer 4 out of 6 4*20 = 80 Points

• Total 100 Points

A minimum attendance of 80% is essential to justify attendance for any examination.

Olympia Business School Page 6

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Week Date Topic

1 The Diversity of Consumer Behavior

3 Consumer Needs and Motivation & Personality and

4 Consumer Perception & Learning and Consumer Involvement

5 The Nature of Consumer Attitudes & Communication and

6 Group Dynamics and Consumer Reference Groups and the

7 Social Class and Consumer Behavior

8 Mid -Term Exam

9 The Influence the Culture and Cross-Culture on Consumer

10 Personal Influence and the Opinion Leadership Process

11 The Diffusion of Innovation

12 Consumer Decision Making – Choosing and Consuming

Olympia Business School Page 8

Lecture Topic: The Diversity of Consumer Behavior

Lecture Objective: *The Study of Consumer Behavior

*Why we study Consumer Behavior

*Why the field of Consumer Behavior developed

*The Consumer Movement

*Ethics and Corporate Environment

Consumer Behavior – Leon G. Schiffman & Leslie L. 1 1 - 20

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

Olympia Business School Page 9

Areas For Applications During Tutorials:

QUESTIONS AVAILABLE FOR SELF ASSESSMENT

Olympia Business School Page 10

Lecture Topic: Market Segmentation

Lecture Objectives: *What is market segmentation?

*Who uses market segmentation?

*How market segmentation operates?

*Bases for segmentation

*Criteria for effective targeting of market segmentation

*Implementing segmentation strategies

Consumer Behavior – Leon G. Schiffman & Leslie L. 3 48 - 77

Consumer Behavior by Chris Rice