MBA Notes – Consumer Behavior Questions and Answers

Consumer Behavior is one of the important areas in the MBA (Master of Business Administration) degree. Being a broad topic, it requires proper attention and preparation. So, to help you pass the Consumer Behavior paper, in this article, I have tried to cover all the important Consumer Behavior questions.

If you are pursuing an MBA and looking for Consumer Behavior Questions, this article will be a one-stop solution for you. So, let’s dive deep and get ready for the Consumer Behavior paper.

Here are the Consumer Behaviour Questions with Detailed Answers

1. Define Consumer Behavior and explain the different kinds of consumers.

Answer: Consumer behavior is a very common term in the field of marketing. It basically implies the combination of decision processes, actions, previous experiences, and external influences that define consumers’ choice for purchasing certain products or services. In terms of marketing, consumer behavior indicates a psychology-based study on the purchasing decisions of people. It is a valuable instrument in identifying the motivations for consumers to purchase a specific product or service. Different aspects can influence consumer behavior, which are also important components of consumer behavior itself. 

For example, certain celebrities endorsing a smartphone brand could influence consumers’ buying behavior when looking for smartphones. Consumer behavior also focuses on the underlying motivations, social factors, psychological factors, and environmental factors that influence customers’ buying decisions and brand perceptions. Depending on the different factors underlying consumer behavior, businesses also have to reflect on consumers’ types for strengthening their marketing initiatives. 

Different Types of Consumers

The classification of consumers broadly into different categories on the basis of consumer behavior evaluation helps in easier development of consumer profiles. The common types of consumers include loyal customers, bargain hunters, need-based customers, impulse shoppers and wandering consumers. 

a.) Loyal Customers: As the name implies, loyal customers are very dedicated to a business and serve the foundation for the majority of income of the business. 

b.) Bargain Hunters: Bargain hunters are the consumers looking for the best deals in terms of price. 

c.) Need-based Customers: Need-based consumers make purchases according to their need for a particular product or service and are likely to make purchases with decisive thinking. 

d.) Impulse Shoppers: Impulse shoppers purchase anything while browsing across products and services. 

e.) Wandering Consumers: Wandering consumers are less likely to purchase anything unless providing the right stimulus for their interest. 

2. Describe the consumer research process?

Answer: The significance of consumer research in the field of marketing is not an unknown aspect for many businesses. Most importantly, companies planning to launch new products to the market are highly dependent on consumer research to ensure success. Consumer research is a vital tool for understanding consumers, their needs, preferences, values, beliefs, and expectations. The consumer research process can be explained in the following steps,

The consumer research process starts with definition of research objectives. It is important to plan out the goals and milestones for developing a proper design for the consumer research process. The research objectives help in establishing the foundation for understanding the type of information required in the process. 

The second step in the consumer research process refers to secondary research with focus on collecting internal and external data. Internal data from the organization itself and external data such as social media, directories, news sources, and user-generated content and market research reports are important secondary research requirements.

The primary research process starts now on the basis of the parameters inferred from secondary research. Primary research involves qualitative and quantitative research for identifying various data points. 

The final step in the consumer research process is the combination of findings from the research process. Then, the findings have to be communicated in a comprehensible manner with open-ended questions.

3. Explain the limitation of Consumer Research?

Answer: Effective consumer research is essential to ensure productive marketing strategies. However, researchers should also know about consumer research limitations to improve research value while addressing the setbacks for refined outcomes. Primary research limitations are largely evident in research quality, researcher bias, sample selection methods, and constraints of budget and time. The limitations on secondary research include verification of research and conflicting assumptions and motivations of research. 

4. Explain Maslow’s Need Hierarchy Theory. Discuss its importance?

Answer: Maslow’s Need Hierarchy Theory is a common mention in psychology that describes human behavior on the basis of a five-layered model of human needs. The visual depiction of the theory is generally a pyramid with needs arranged in an order of hierarchy from bottom to up. The theory implies that people have to fulfill the needs at the bottom of the pyramid before their move towards the needs in the higher levels.

The five layers of needs in the Maslow’s Need Hierarchy from bottom to top are as follows,

• Physiological needs
• Safety needs
• Belongingness and love needs
• Esteem needs
• Self-actualization

The importance of Maslow’s Hierarchy of Needs in the present times is debatable. However, it can help in identifying the ideal motivations for human behavior. In addition, the hierarchy of needs provides recognition for the fact that individuals have multiple needs and are capable of achieving their true potential.

5. Discuss the concept of perception?

Answer: Perception, in the simplest words, is the understanding of an individual about their surroundings, a specific person, thing, or place. In terms of psychology, it means a combination of processes that help in making sense of the stimulus encountered at all times. The process of perception starts with stimuli in the environment and finishes with our interpretation of the stimuli. Perception is basically an unconscious process that happens throughout the day without the awareness of an individual, while helping make sense of the events happening in a day.

6. What do you mean by ‘Learning’? Explain the steps involved in learning process?

Answer: Learning is probably one of the most commonly used words in the English language, especially in the academic sector. When an individual acquires new information, behavior, knowledge, skills, understanding, values, and abilities, the process is known as learning. The sources of learning could be different, and the final outcome may also vary.

However, here are the four important steps for the learning process –

• Search for the information and screening it 
• Ingesting the information and synthesizing it
• Utilizing the information and collection of feedback
• Regulation

For example, if you want to learn about a new recipe, then follow the four-step learning process.

• Search for information on new recipes and sort them out according to your preferences.
• Watch the videos and understand the instructions in the videos. 
• Use the information learnt from the videos to make the recipe yourself and collect feedback from family members.
• Change the method of making the recipe based on feedback. 

7. What are the communication skills a manager must acquire for success in his work?

Answer: Managers must acquire the following notable communication skills for ensuring their success in professional responsibilities,

• Knowledge of diverse communication styles
• Ability to ask the right questions
• Clarity of communication
• Effective listening
• Abilities for navigating difficult conversations
• Adaptability for obstacles to communication
• Team-building skills

8. What are the common barriers to communication? How do you overcome them?

Answer: The general barriers to communication are emotional barriers, physical barriers for non-verbal communication, lack of attention, distractions, environmental barriers, and perception differences. Cultural differences, false assumptions, prejudices, and language differences also contribute to impeding communication. So, the solution to these problems is evident in understanding the process of communication effectively. Rather than assuming communication as the interaction between two parties, communication should be treated as a process of meaningful exchange of information. Identification of value in the communication process and resolution of the barriers with open-mindedness can help in overcoming the obstacles to effective communication. 

9. Discuss the general principles of effective communication?

Answer: The general principles of effective communication evolve with the changing times. However, here are some of the consistent general principles for effective communication,

• Clarity of ideas and objectives in the communication process
• Attention 
• Consistency
• Appropriate language
• Environmental setting 
• Listening and understanding 
• Flexibility 

10. Why does an organization need multiple channels of communication?

Answer: Organizations are slowly expanding in terms of operations and have the requirements to communicate with clients, stakeholders, customers, and investors. In addition, businesses need internal channels of communication for ensuring interaction between employees. Therefore, organizations need multiple communication channels for maintaining distinctiveness between the different business communications to external stakeholders. In addition, multiple channels of communication can improve internal productivity of the organization. 

11. Explain the essence of a good communication system in an organization?

Answer: The characteristics of a good communication system for a business are as follows,

• It must provide a platform for complete interactions without interruptions.
• It must deliver messages concisely.
• It should include a facility for feedback.
• It should support different languages.
• It should support integration with other business processes.

12. Explain the nature of group in an organization. Explain the kinds of groups?

Answer: The nature of group in an organization or group nature refers to the dynamics that happen when two or multiple people work in collaboration for achieving the organization’s objectives. Groups are an essential component in an organization’s functioning as they serve the basic purpose of organization structure while also delivering particular results for any organization.

There are generally two kinds of groups in an organization, such as formal and informal groups. Formal groups are basically formed to help in achieving certain organizational objectives. On the other hand, informal groups develop with group members that have been working together for a long period of time. 

13. Why do you understand by Group Dynamics? Why do groups come into existence?

Answer: Group dynamics basically refers to the understanding of the forces in a group. The interactions among people in a group and the factors underlying the interactions establish group dynamics. For example, the common objectives and goals bring the group members together while ensuring compliance with specific culture and values. 

The most important reasons for the existence of groups in an organization are as follows,

• Groups offer a new perspective for members to think about specific issues in an organization.
• Groups deliver the impact of synergy, thereby multiplying the impact of ideas.
• Groups are crucial tools for fostering team spirit.
• Group dynamics can be a source of job satisfaction for group members
• Groups offer chances for collaboration and coordination to improve productivity 

14. What are the various advantages of forming committees? What are its limitations?

Answer: Committees are far more functional than their assumed role in addressing specific tasks or functions. The increasing complexity and growth of enterprises has presented the need to form committees. The formation of committees has multiple advantages such as collection of ideas and opinions of various experts alongside improvement in cooperation among experts. Formation of committees also provides representation to different interests in an organization. Most important of all, participation in committees delivers professional training advantage to all the young executives. So, committees also provide the perfect foundation for businesses to develop their leadership pool for the long-term. 

On the contrary, it is also important to reflect on the limitations of committee formation to anticipate the ideal use cases in which developing a committee may not be a better option. One of the first aspects of committee formation is the cost factor as businesses have to invest a lot in organizing meetings alongside providing travelling expenses and other allowances. Another notable setback with forming committees is the lack of clarity on accountability in event of wrong decisions of the committee. 

15. How the economy is measured in international trade?

Answer: The exchange of goods, services, finance and investments among countries and the businesses in them establish the foundation for economy in international trade. So, countries need to measure the economy in international trade for understanding the impact of the transactions on the economy. The measurement of international trade can help in forming ideal trade policies, trade agreements and regulations. The two significant instruments that can help in measuring the economy in international trade are balance of payments and balance of trade. Countries could measure the economy in international trade through balance of trade, which is basically the difference between the value of exports of the country and its imports. Countries could get only two possible results from the calculation of balance of trade i.e. either trade deficit or trade surplus.

Trade deficit is evident in case of higher value of imports while trade surplus implies a higher value of exports. The second indicator of economy in international trade is the balance of payments. The balance of payments is the difference between the total influx of money into the country and total flow of money going out of the country for a specific period of time. The balance of payments encompasses all economic transactions between individuals, companies and the government with the remaining world. So, the balance of payments takes various factors into account such as foreign investments, goods exports and imports, loans and foreign aid, financial transfers and financial capital.

Final Notes

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