Podcast
Questions and Answers
What is the concept behind the Switching-Cost Effect?
What is the concept behind the Switching-Cost Effect?
- Buyers are less sensitive to the price of a product as the added costs of switching a supplier decreases
- Buyers are more sensitive to the price of a product as the added costs of switching a supplier decreases
- Buyers are less sensitive to the price of a product as the added costs of switching a supplier rises (correct)
- Buyers are more sensitive to the price of a product as the added costs of switching a supplier rises
What does the Difficult-Comparison Effect suggest about economic value?
What does the Difficult-Comparison Effect suggest about economic value?
- It assumes that customers do not consider economic value in their purchase decisions
- It assumes that customers always make rational decisions based on economic value
- It assumes that customers can actually compare what the alternative suppliers have to offer (correct)
- It assumes that customers cannot compare what the alternative suppliers have to offer
Why do customers in the real world resort to heuristics and mental shortcuts according to the text?
Why do customers in the real world resort to heuristics and mental shortcuts according to the text?
- Because they do not care about making informed decisions
- Because they do not have enough time to make informed decisions or understand consequences of poor choices (correct)
- Because they have perfect information about all alternatives
- Because they always make rational decisions based on economic value
What is true value according to the text?
What is true value according to the text?
According to market research on willingness-to-pay, what is the assumption about purchase decisions?
According to market research on willingness-to-pay, what is the assumption about purchase decisions?
Customers in the real world are fully informed of alternatives and act in rational ways according to the text.
Customers in the real world are fully informed of alternatives and act in rational ways according to the text.
Buyers are more sensitive to the price of a product as the added costs of switching a supplier rises according to the Switching-Cost Effect.
Buyers are more sensitive to the price of a product as the added costs of switching a supplier rises according to the Switching-Cost Effect.
The Competitive-Reference Effect assumes that customers rely heavily on heuristics and other mental shortcuts to guide their decision process.
The Competitive-Reference Effect assumes that customers rely heavily on heuristics and other mental shortcuts to guide their decision process.
The Difficult-Comparison Effect suggests that customers can easily compare what the alternative suppliers have to offer.
The Difficult-Comparison Effect suggests that customers can easily compare what the alternative suppliers have to offer.
The assumption in market research on willingness-to-pay is that purchase decisions are motivated by considerations of value delivered.
The assumption in market research on willingness-to-pay is that purchase decisions are motivated by considerations of value delivered.
