CB ASSIGNMENT 2

SUBMITTED TO Dr. SHURUTI JAIN SUBMITTED BY MUNISH SYAL ROLL NO. 2010085

Q1: Would you consider the purchase of a card like American Express card a low involvement or a high involvement decision? Give reason for your answer. Answer: The purchase of an American Express card is a high involvement decision, because the way American Express has established its image in the market, it is consider to be a high end card which is priced higher than any other normal card in the market and its main focus on the quality of the service. They want American Express card to be perceived as not suitable for everyone just to maintain its prestige. In the high involvement purchase decisions the customers put more time and thinking while buying the product. American Express cards image is of an exclusive card. So, because of these reasons the purchase of American Express card is high involvement decision. Q2: How is the concept of social class relevant to marketing of American Express card? Answer: Social class is an open group of individuals who have similar social rank. The criterias can be occupation, education, income, wealth, race, ethnic groups and possessions. Social class influences the buying behaviour of a customer. Now the concept of social class is relevant to marketing of American Express card because people use these cards to convey their status that is why American Express has carefully created an image of an exclusive card which is not suitable for everybody and which is for a limited section of people. American Expresss target customer segment is also high spenders who can spend high on shopping and they are not price sensitive customer, So thats why they need to have that kind of image for their card also. Thats why the concept of social class relevant to marketing of American Express card.

Q3: How has American Express used the concept of social class in marketing its credit cards? Answer: In the marketing of American Express card the concept of social class is used. They have created and maintained an exclusive image for their card, which is not suitable for everybody but for a limited section of people who have the resources to afford it. American Express segments card owners by lifestyle and income, and then aims services appropriately for each group, such as extra travel insurance for senior citizens concerned with security or a special magazine for students. American Express' strategy has been to focus strictly on upscale spenders in top-line establishments. The American Express card has carefully built its image over a period of time by stressing five factors affecting its prestige: higher price, high quality, limited supply, higher qualifications and exclusive reference groups. The card has been prices far higher than alternative bank cards. Because the American Express card is priced higher than most other cards around the world it connotes much prestige. This is how the concept of social class has been used by American Express in the marketing of their credit cards.

Case 2:- More Hybrid, please!

Q 1:- The chapter discussed a number of product characteristics that influence the diffusion process. How does the Honda insight (and hybrid vehicles in general),rate on each of these characteristics? Answer There are five product characteristics that influence the diffusion process are:1. Relative advantage:- It can be define as the degree to which potential customer perceive a new product as superior to existing substitutes, but in this case Honda lunched a new vehicle called the insight which are of five passenger four-door sedan but this is not a new hybrid of Honda because they already lunched insight in 1999 which are of two-seater so we can say

that there is not as much innovative product which can be expected by Honda. In spite of this toyotas prius will only be available as a hybrid which cost is higher than Honda hybrid and its sells is about 160,000 hybrid in U.S annually. Honda doesnt provide new which are provide by Toyota due to this reason Honda doesnt carry relative advantage over Toyota. 2. Compatibility:-the degree to which potential consumer feel a new product is consistent with their present needs, value and practices is a measure of its compatibility. In this case Honda targeted a new segment i.e. big family like 4-5 passenger. They fulfill its basic or desire of those customer who have large family so in this characteristics we can say that this product is compatible. 3.Complexity:-It can be define as the degree to which a new product is difficult to understand or use, affect product acceptance. Clearly, the easier it is to understand and use a product, the more likely is to be accepted. In this case Honda introduce hybrid vehicle of four-door sedan which are not complex in nature which is easily to carry out having a version of civic automobile .Due to presence of civic engine it change all difficult task in smooth way so by this manner we can say that Honda hybrid doesnt carry complexity. 4. Trialability:- Trialability refers to degree to which a new product tried on a limited basis. The greater the opportunity to try a new product, the easier its for consumer to evaluate it and ultimately adopt it. Firstly customer can trial this product called Honda insight , he check or see that car in all aspect whether seats are comfortable or not and all the necessary instrument is present or not then if customer wants to buy this car then this features leads to adaptation process of consumer. 5. Observability:- Observability or communicability is the ease with which a products benefits or attributes can be observed, imagined , or describe to potential consumer. Tangible product is promoted more easily than an intangible product for example deodorant. but in this case product i,e car can be fulfil the characteristics of product i,e observability because product can be seen or touch or can be observe the response of that product. Rating can be followed by this manner:1st rank-compatibility 2nd rank-observability 3rd rank-complexity

4th rank-observability 5th rank-relative advantage

Ques2:-How important will personal and impersonal information sources be in a customers decision to purchase the Honda insight? Answer- communication can be either impersonal or personal. In marketing, the source of impersonal communication are organization (either for profit or not for-profit) that develop and transmit appropriate message through their marketing department ,advertising or public relation agencies and spokesperson. The target or receiver of such message usually is a specific audience or several audience that the organization is trying to inform, influence, or persuade. Personal communication can be either formal sources (e.g., a salesperson in a physical or virtual retail location) or informal sources (e.g., peers with whom the consumer communicates face to face or via electronic means).it generates a trust and believes among peoples. Impersonal communication:- Through impersonal communication consumer can analyse the decision whether is to buy or not with the help of various marketing mix called advertising, publicity, public relation or other marketing mix. Consumer can buy a particular product by watching adds on television. He can easily convince or persuade by promotion of different advertisement. Personal communication:- personal communication is either formal or informal so most of the consumer can collect information from various sources. Some businesses restrict your personal communication while you are at work (no phone calls to friends, no personal emails, etc) during Working hours. Also there are some people that you may not like. You would probably not engage in personal communication with them, but you may have to do business communication with them as part of your job.