Principles of Marketing

According to Theodore Levitt (1960), what was the fundamental mistake made by the railroad industry?

They defined their business as railroads rather than as transportation.

Which of the following is NOT one of the four conditions that, according to Levitt (1960), guarantee a self‑deceiving cycle of decline in growth industries?

Preoccupation with customer satisfaction over product features.

In “Marketing Myopia”, Levitt argues that the real genius of Henry Ford was not his production line but his understanding of what?

That setting a low price first would create demand, and then production would follow.

According to Levitt, what is the key difference between selling and marketing?

Selling focuses on the seller’s need to convert product into cash; marketing focuses on satisfying customer needs.

In the Consumer Decision Journey model (Court et al., 2009; Edelman, 2010), which stage has become more influential because of digital media and is often under‑invested by marketers?

Evaluate and advocate.

According to Edelman (2010), what is the primary problem with the traditional funnel model of consumer decision‑making?

It assumes consumers systematically narrow choices, while in reality they often expand their consideration set during evaluation.

Which of the following is NOT a characteristic of the Consumer Decision Journey as described by Edelman (2010)?

Marketing budgets should continue to allocate 70–90% of spend to the consider and buy stages.

What are the three types of media that Edelman (2010) argues marketers must balance in the digital age?

Paid, owned, and earned media.

In the case study of the electronics company (Edelman, 2010), what was the most influential touchpoint during the evaluate stage?

Amazon and other retail sites.

According to Kahneman’s peak/end rule, how do consumers remember an experience?

They remember the peak (most intense moment) and the end of the experience best.

Which of the following is an implication of the peak/end rule for service design?

Get bad experiences over early and finish on a high.

What is the “hedonic editing” principle (Thaler) in the context of customer experience?

Losses should be clustered into one touchpoint; gains should be spread out across multiple touchpoints.

Walden & Wilson (2009) identify three layers of customer experience. Which layer includes interactions with other customers, the physical environment, and vicarious experiences?

Environment.

According to Walden & Wilson (2009), what is “value‑in‑use”?

The realisation of the customer’s goals, purposes or objectives in using the product or service.

Which of the following is a myth about customer experience that Walden & Wilson (2009) debunk?

Experience is only about entertainment.

What is the key finding from the Coca‑Cola vs. Pepsi brain imaging study (McClure et al., 2004) regarding brand perception?

When the brand was known, Coke was perceived as tasting better, showing that cultural associations influence even basic sensory experiences.

In the London Symphony Orchestra case (Walden & Wilson), what were the four value‑in‑use outcomes sought by concert‑goers?

Soul food, social experience, relational connection, practical convenience.

According to Almquist, Senior & Bloch (2016), what is the relationship between the number of value elements a brand delivers and its Net Promoter Score (NPS)?

Companies that score high on four or more elements have three times the NPS of those with one high score.

Which of the following is NOT one of the four categories in the Elements of Value pyramid (Almquist et al., 2016)?

Cognitive.

Which element of value is most important across all industries, according to Almquist et al. (2016)?

Quality.

In the Elements of Value pyramid, what distinguishes life‑changing elements from functional elements?

Life‑changing elements address personal transformation, while functional elements address practical utility.

What is the main danger of using only demographic segmentation, illustrated by the example of Ozzy Osbourne and King Charles III?

People with identical demographics can have completely different needs and behaviours.

Which of the following is a valid criterion for a need‑based market segment?

Members are similar within the segment and distinct from members of other segments.

In the simple two‑step segmentation method (lecture slides), what are “differentiating motivators”?

Buying criteria on which customers vary and that influence choice among suppliers.

According to the psychology of branding literature, what is the “blocking effect”?

A strong established brand can prevent competing associations from being formed in consumers’ minds.

In the study by Fitzsimons, Chartrand & Fitzsimons (2008), what was the automatic effect of subliminally exposing participants to the Apple logo?

It increased creativity on subsequent tasks.

What is the “pioneering advantage” described by Carpenter & Nakamoto (1989)?

Pioneering brands become the category prototype, making it difficult for later entrants to compete.

According to the research by Ellis, Holmes & Wright (2010), why do early‑learned brand names have a privileged status in memory?

They are recognised faster and more accurately than later‑learned brands.

In the study by Brasel & Gips (2011) on Red Bull, what was the “double‑edged” effect of brand exposure?

Brand exposure primed performance only when expectations were met; if violated, performance dropped.

What is the distinction between points of parity (POP) and points of difference (POD) in brand positioning (Keller, Sternthal & Tybout, 2002)?

POPs are necessary associations for category credibility; PODs are associations that set the brand apart from competitors.

In the Subway case (Keller et al., 2002), what was the key point of parity that Subway had to establish before promoting healthfulness?

Good taste – essential for credibility in the fast‑food frame of reference.

According to Schmitt’s (2012) consumer‑psychology model of brands, what are the three layers of engagement?

Object‑centered (functional), self‑centered (personal relevance), and social (interpersonal/cultural).

Which of the following is NOT one of the five brand‑related processes in Schmitt’s (2012) model?

Transacting.

In Fournier’s (1998) brand relationship typology, what characterises a “best friendship” relationship with a brand?

Honesty, intimacy, revelation of the true self, and common personal interests.

What is the key finding from the Dimitriu & Warlop (2022) research on service‑to‑service brand extensions?

Service‑to‑service extensions are less constrained by similarity because service brands possess associations relevant across service categories.

Why did Virgin’s extension into product categories (e.g., cola, vodka) fail, while extensions into service categories succeeded?

Virgin’s service associations (customer service, fun) are relevant across service domains but not product domains.

What is “servitization” in the context of brand extensions (Dimitriu & Warlop, 2022)?

Adding service components to a product brand to imbue it with service associations, enabling it to extend to dissimilar service categories.

In the Burberry turnaround (Ahrendts, 2013), what was the core strategic decision that revitalised the brand?

Focus on heritage – making the trench coat the centre of everything and centralising design under one creative director.

What was one of the key mistakes Burberry made before 2006 that contributed to its decline?

Having 23 licensees worldwide producing inconsistent products, from kilts to cheap outerwear.

What is the “halo effect” in brand extensions (Dimitriu & Ryals, 2011)?

Leveraging the existing brand equity of the parent brand to reduce perceived risk for the new offering.

Why did the Motorola Envoy fail while the Palm Pilot succeeded?

Envoy had no clear frame of reference; Palm Pilot established points of parity with electronic organisers.

What is the “blocking effect” in brand positioning, as illustrated by Volvo?

Volvo’s association with “safety” makes it very difficult for other car brands to claim that benefit.

According to Dimitriu & Ryals (2011), why is a moderate degree of differentiation often better than radical differentiation for a brand extension?

Too little differentiation results in a “me‑too” product; too much makes the brand niche; moderate allows it to appeal to a broader market.

In the Nivea deodorant example (Dimitriu & Ryals), what point of parity did the brand have to establish before promoting “gentle and protective”?

It had to communicate that it “stops odour” – a functional requirement for the deodorant category.

What is the primary difference between a brand extension and a line extension?

A line extension is a new version within the same product class; a category extension enters a new product class.

According to Keller (2012), what percentage of new products are brand or line extensions?

80–90%.

What is brand dilution?

When over‑extension or inconsistent associations weaken the brand’s exclusivity and core meaning (e.g., Calvin Klein).

What is the elongation bias in volume perception (Raghubir & Krishna, 1999)?

Tall containers are perceived as more voluminous than short‑wide containers of equal volume.

What is the perceived size‑consumption illusion?

Consumers over‑compensate after expectation disconfirmation, consuming more from elongated containers because they felt they consumed less than expected.

What is the main finding of the Strack, Martin & Stepper (1988) study on facial feedback?

Holding a pen with the teeth (engaging smile muscles) made cartoons funnier; holding with the lips (inhibiting smile) made them less funny.

Which of the following is an example of grounded cognition (Krishna & Schwarz, 2014)?

Holding a warm cup leads to judging another person as warmer and more generous.

What is sound symbolism (Yorkston & Menon, 2004)?

The sound of a word (e.g., “frosh” vs. “frish”) influences the perceived attributes of the product (e.g., creaminess).

Why is taste considered an “amalgam of all five senses”?

Humans can only detect five pure tastes; the richness of food experiences comes from smell, touch, vision, and audition.

What was the failure of Crystal Pepsi attributed to?

The novel clear colour created expectations of a different taste; when the taste was the same, consumers were disappointed.

What is the Need for Touch (NFT) scale (Peck & Childers, 2003)?

A measure of individual differences in the enjoyment and functional need for touching products.

Which of the following is NOT a dimension of service quality according to Parasuraman, Zeithaml & Berry (1988)?

Price sensitivity.

According to the research on product contagion (Morales & Fitzsimons, 2007), what happens when a disgusting product touches a normal product?

The normal product is evaluated less favourably, even if no physical contamination remains.

What is the role of the limbic system in smell and memory?

The olfactory nerve has direct and short connections to the amygdala and hippocampus, which are involved in emotion and memory.

According to Krishna (2012), what is the main reason that scent‑encoded information lasts longer than information from other senses?

The proximity of the olfactory system to the limbic system means fewer synapses between sensation and memory storage.

In the study by Morrin & Ratneshwar (2003), what effect did ambient scent have on brand memory?

It increased recall and recognition of brands seen.

Which of the following best describes the effect of multi‑sense descriptions in advertising (Elder & Krishna, 2010)?

They increase sensory thoughts and enhance taste perceptions.

What is the “direct distance bias” in visual perception (Raghubir & Krishna, 1996)?

Paths with a shorter direct distance between endpoints are perceived as shorter, even if the actual length is the same.

What is the main managerial implication of the layered‑packaging taxonomy (Krishna, Cian & Aydinoğlu, 2017)?

Packaging includes outer, intermediate, and inner layers; each affects different stages of the customer experience (purchase vs. consumption).

Why does visual salience influence product choice (Milosavljevic et al., 2012)?

Consumers fixate longer on more salient items, and longer fixation increases the likelihood of choice and liking.

What is the effect of placing a product image on the right side of a package (for left‑to‑right readers)?

It is perceived as heavier (Deng & Kahn, 2009).

According to the research on conceptual metaphors (Cian, Krishna & Schwarz, 2015), where should rational product information (e.g., health) be placed on packaging?

At the top (higher).

Which of the following is NOT a key component of a service blueprint?

Customer satisfaction score.

In the context of new product development, what is the “stage‑gate” process (Cooper & Kleinschmidt)?

A structured process with decision gates (go/no‑go) at each stage to manage risk.

According to the diffusion of innovations theory (Rogers), which adopter category is characterised by being pragmatists who wait for proof of benefits before adopting?

Early majority.

What are the five qualities that determine the success of an innovation according to Rogers?

Relative advantage, compatibility, simplicity, trialability, observability.

Why is the “chasm” concept (Moore) important for new product launches?

It highlights the gap between early adopters (visionaries) and the early majority (pragmatists), which many innovations fail to cross.

How did Brompton Bikes successfully cross the chasm?

They started with a niche application (commuting enthusiasts), then gradually added accessories, expanded to new segments (urban couples), and built a lifestyle brand.

What is the difference between a market‑driven and a driving‑markets strategy (Jaworski, Kohli & Sahay, 2000)?

Market‑driven reacts to existing market structure; driving markets actively shapes the market or player behaviour.

According to Aaker (2012), what is “brand relevance” competition?

Creating a new sub‑category with a “must‑have” feature that makes competitors irrelevant.

What is the key lesson from the Emilia retail case (Ofek & Avery)?

A shift to everyday low pricing can fail if it ignores ingrained consumer reference prices and the psychological thrill of bargains.

According to Kohli & Suri (2011), what is the most powerful lever for improving profitability?

A 1% increase in price leads to an 11% increase in operating profit.

What is the “zone of price indifference” (Kohli & Suri, 2011)?

The range on either side of the current price over which demand is unlikely to change.

Which of the following is an example of price unbundling?

Airlines charging separately for checked baggage, seat selection, and meals.

What is “captive product pricing”?

A main product is sold at a low price, while complementary products (e.g., razor blades, printer cartridges) are sold at high margins.

What psychological principle explains why sales tags often show the original price crossed out?

Anchoring – the original price serves as an anchor, making the discounted price seem like a gain.

According to the Emilia case, why did customers perceive Emilia as offering less value after the “hablar claro” strategy?

They had anchored on artificially high list prices and perceived discounts as gains; removing discounts eliminated the thrill of the bargain.

What is the definition of a brand community (Muniz & O’Guinn, 2001)?

A specialised, non‑geographically bound community based on social relationships among admirers of a brand.

What are the three core markers of a brand community?

Consciousness of kind, rituals and traditions, moral responsibility.

Which of the following is an example of oppositional brand loyalty?

Apple enthusiasts criticising Microsoft.

In the Schau, Muñiz & Arnould (2009) framework, what are the four thematic categories of value‑creating practices?

Social networking, impression management, community engagement, brand use.

Which practice involves greeting new members and helping them learn the community culture?

Welcoming.

What is the “apprenticeship effect” in brand communities (Schau et al., 2009)?

New members start with simple practices and progressively adopt more complex ones as they gain status and competence.

According to Fournier & Lee (2009), what is one of the myths about brand communities?

A brand community exists to serve the business.

Which of the following is a reality about brand communities according to Fournier & Lee?

Smart companies embrace conflict because communities thrive on rivalries.

What is a “hypercommunity” (Kozinets, 2002)?

A well‑organised, short‑lived but caring and sharing community whose explicit attraction is an intense, temporary communal experience.

What are the three distancing practices used at Burning Man to escape market logics (Kozinets, 2002)?

Discursive positioning against the market, alternative exchange modes (gift economy), and re‑enchantment through art.

Why does Kozinets conclude that complete escape from the market is impossible?

Burning Man still relies on market infrastructure (tickets, branded goods, participants’ wealth), but temporary, local emancipation is possible.

What is the key difference between a brand community and a consumption community (Boorstin, 1969)?

A brand community is centred on a specific brand; a consumption community is centred on a shared activity, lifestyle, or experience.

According to Haenlein & Libai (2017), what is the main limitation of using only communication volume (e.g., number of tweets) to measure WOM program success?

It does not capture the actual value created in terms of customer equity (acquisition, development, retention).

What are the three archetypes of WOM programs identified by Haenlein & Libai (2017)?

Seeding programs, referral programs, and recommendation programs.

In the Ford Fiesta Movement case, why did Ford select 100 “Agents” rather than simply produce its own content?

Agents provided authentic, consumer‑generated content that was more credible and spread through their existing social networks.

What was the primary objective of the Ford Fiesta Movement?

To build awareness and interest in the 2011 Fiesta among millennials and educate them about sub‑compact cars.

According to Haenlein & Libai (2017), why is it better to launch a WOM program early in the product life cycle?

The ripple effect is larger when the potential market is larger, and each additional participant represents a larger percentage of the adopter base.

What is the distinction between mega‑influencers and micro‑influencers?

Mega‑influencers have very large followings (celebrities); micro‑influencers have smaller but highly engaged and trusted followings.

What is the “chasm” in the Ford Fiesta case?

The period between the end of the campaign and the actual car launch – Ford needed to keep the buzz alive and convert leads.