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Marketers theorize that consumers purchase decisions are driven by Updated on: 29 Oct 2023, 03:54
Originally posted by Sajjad1994 on 10 Mar 2022, 08:00.
Last edited by BottomJee on 29 Oct 2023, 03:54, edited 2 times in total.
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Marketers theorize that consumers’ purchase decisions are driven by the perception of value. This perception, often obtained through a cost-benefit analysis, can be manipulated by adding more features or by reducing the price. This is called the expectancy-value model. Let’s see an example.

Jack, who wants to purchase a laptop, has narrowed down his choices to 4 brands of laptop computers (A, B, C, D). He 1s interested in 5 attributes: Processor Performance (PP), Graphics Capability (GC), Size & Weight (SW), Battery life (BL), & Marked Price (MP) and is evaluating the offerings based on the same. Jack puts 30% priority on Processor Performance, 10% on Graphic Capability, and equal priority on Size & Weight, Battery life, and Price. He comes up with a number called Composite Attribute Value that is the weighted average of the performance of a brand’s offering against Jack’s priorities.

Each attribute is rated from 0 to 10, where 10 represents the highest performance.
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Composite Attribute Value for Jack is greatest for brand A.: No Jack purchase brand A based on customer value.: Yes Brand C scores lowest both in terms of customer value and Customer benefit.: Yes
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1. Consider each of the information given in tabs. Does the information in three tabs support the inference as stated below?
Yes No
Composite Attribute Value for Jack is greatest for brand A.
Jack purchase brand A based on customer value.
Brand C scores lowest both in terms of customer value and Customer benefit.
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Composite Attribute Value for Jack is greatest for brand A.: No Jack purchase brand A based on customer value.: Yes Brand C scores lowest both in terms of customer value and Customer benefit.: Yes

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\(X=\frac{Y(Z-5)}{5}\)
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2. Let X denote Customer Value, Y denote Customer Cost, and let Z denote Composite Attribute Value. Which of the following algebraic expressions represents relationship among X, Y & Z?
\(X=\frac{Y(Z-5)}{5}\)
\(X=\frac{4}{5*Y*Z}\)
\(X=\frac{Y(5-Z)}{5}\)
\(X=\frac{Y}{5(5-Z)}\)
\(X=\frac{YZ-5Z}{5}\)
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Reduce the marked price to $60.: No Add a faster processor to increases its Processor Performance rating to 9.: Yes Improve its graphics capability to the highest possible ranking.: Yes
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3. If Jack will decide buying laptop based on Customer Value, which of the possible strategies should company C implement so that it becomes Jack’s preferred choice?
Yes No
Reduce the marked price to $60.
Add a faster processor to increases its Processor Performance rating to 9.
Improve its graphics capability to the highest possible ranking.
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Reduce the marked price to $60.: No Add a faster processor to increases its Processor Performance rating to 9.: Yes Improve its graphics capability to the highest possible ranking.: Yes

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Marketers theorize that consumers purchase decisions are driven by 11 Mar 2022, 10:17
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Competition mode is off now.

OAs are:

Question #1:

No, Yes, and Yes

Question #2:

A

Question #3:

No, Yes, and Yes
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Marketers theorize that consumers purchase decisions are driven by 09 Jun 2024, 06:03
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KarishmaB Bunuel could you please explain the solution to this question?
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Can someone please explain the answer to these questions

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There is no explanation available in the question, kindly explain this question.
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Marketers theorize that consumers purchase decisions are driven by 15 Jun 2024, 00:46
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­Given - Jack, who wants to purchase a laptop, has narrowed down his choices to 4 brands of laptop computers (A, B, C, D). He 1s interested in 5 attributes: Processor Performance (PP), Graphics Capability (GC), Size & Weight (SW), Battery life (BL), & Marked Price (MP) and is evaluating the offerings based on the same. Jack puts 30% priority on Processor Performance, 10% on Graphic Capability, and equal priority on Size & Weight, Battery life, and Price. He comes up with a number called Composite Attribute Value that is the weighted average of the performance of a brand’s offering against Jack’s priorities.
Lets create a table using the priority as he given. 

Brand   PP    GC    SW     BL    MP   applying priority --> PP(30%) GC(10%) SW(20%) BL(20%) MP(20%) CCAV
A          8      6       4       4       8    ------------------->        2.4         0.6         0.8          0.8          1.6       6.2
B          6      9       6       4       6    ------------------->        1.8         0.9         1.2          0.8          1.2       5.9
C          5      4       9       7       4    ------------------->        1.5         0.4         1.8          1.4          0.8       5.9
D          7      8       4       6       7    ------------------->        2.1         0.8         0.8          1.2          1.4       6.3

Hence, 
1. Composite Attribute Value for Jack is greatest for brand A. --- No. (Highest value is for brand D)

2. Jack purchase brand A based on customer value.
For this lets calculate Customer value for each brand,
But before that we need to calculate CB - Customer benefit = CC * CCAV / 5 
CBforA = CCforA * CCAV / 5 = 150*6.2 / 5 = 186
Similarly CBforB = 139*5.9/5 = 164.02, CBforC = 127*5.9/5 = 149.86 and CBforD = 122*6.3/5 = 153.72
From this we will calculate Customer value
CVforA = CBforA - CCforA = 186 - 150 = 36
CVforB = CBforB - CCforB = 164.02 - 139 = 25.02
CVforC = CBforC - CCforC = 149.86 - 127 = 22.86
CVforD = CBforD - CCforD = 153.72 - 122 = 31.72
As CV is high for A Therefore, Jack purchase brand A based on customer value - Yes.

3. Brand C scores lowest both in terms of customer value and Customer benefit. - Yes  

4. Let X denote Customer Value, Y denote Customer Cost, and let Z denote Composite Attribute Value. Which of the following algebraic expressions represents relationship among X, Y & Z
This one was straight forward Option A - X = (Y*Z/5) - Y = Y*(Z/5 - 1)
X = Y*((Z-5)/5)

5. If Jack will decide buying laptop based on Customer Value, which of the possible strategies should company C implement so that it becomes Jack’s preferred choice?
For this we will need some observation check
i. Reduce the marked price to $60. - This doesn't going to impact on Customer Value it will still remain same. Hence No. 

ii. Add a faster processor to increases its Processor Performance rating to 9. - This will impact on CCAV, Value will increase by +1.2 also, it will increase value of CV. Hence Yes.

iii. Improve its graphics capability to the highest possible ranking. - Maximum possible ranking is 10 this will impact on CCAV, Value will increase by +0.6 also, it will increase value of CV. Hence Yes.­
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I think the first question itself serves as a hint that certain calculations are necessary to answer questions quickly:
Spending a few minutes to construct the table is essential:

A) From the First tab, we can compute the Composite Attribute Value for each of the Brands:
Composite Attribute Value (CAV)= [(Weight of Attribute 1*Ranking of Attribute 1)+(Weight of Attribute 2*Ranking of Attribute 2)+(Weight of Attribute 3*Ranking of Attribute 3)+(Weight of Attribute 4*Ranking of Attribute 4)+(Weight of Attribute 5*Ranking of Attribute 5)]/Total Weight

Note: The total weight (here) would be 1 (0.3+0.1+0.2+0.2+0.2)­



B) We can calculate the Customer Benefit and Customer Value using the following formulas
Customer Benefit= Customer Cost* CAV/5 (per the second tab)
Customer Value= Customer Benefit- Customer Cost (per the second tab)


 
Now, I believe the questions should be a breeze to answer.
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Marketers theorize that consumers purchase decisions are driven by 15 Jun 2024, 03:04
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Why will reducing $60 not impact? customer value is calculated by subtracting customer benefit from customercost 
hence if MP is reduced to 60 from 80, customer cost will reduce, inturn, increasing the customer value. 

someone pls tell where am i going wrong
Purnank
­Given - Jack, who wants to purchase a laptop, has narrowed down his choices to 4 brands of laptop computers (A, B, C, D). He 1s interested in 5 attributes: Processor Performance (PP), Graphics Capability (GC), Size & Weight (SW), Battery life (BL), & Marked Price (MP) and is evaluating the offerings based on the same. Jack puts 30% priority on Processor Performance, 10% on Graphic Capability, and equal priority on Size & Weight, Battery life, and Price. He comes up with a number called Composite Attribute Value that is the weighted average of the performance of a brand’s offering against Jack’s priorities.
Lets create a table using the priority as he given. 

Brand   PP    GC    SW     BL    MP   applying priority --> PP(30%) GC(10%) SW(20%) BL(20%) MP(20%) CCAV
A          8      6       4       4       8    ------------------->        2.4         0.6         0.8          0.8          1.6       6.2
B          6      9       6       4       6    ------------------->        1.8         0.9         1.2          0.8          1.2       5.9
C          5      4       9       7       4    ------------------->        1.5         0.4         1.8          1.4          0.8       5.9
D          7      8       4       6       7    ------------------->        2.1         0.8         0.8          1.2          1.4       6.3

Hence, 
1. Composite Attribute Value for Jack is greatest for brand A. --- No. (Highest value is for brand D)

2. Jack purchase brand A based on customer value.
For this lets calculate Customer value for each brand,
But before that we need to calculate CB - Customer benefit = CC * CCAV / 5 
CBforA = CCforA * CCAV / 5 = 150*6.2 / 5 = 186
Similarly CBforB = 139*5.9/5 = 164.02, CBforC = 127*5.9/5 = 149.86 and CBforD = 122*6.3/5 = 153.72
From this we will calculate Customer value
CVforA = CBforA - CCforA = 186 - 150 = 36
CVforB = CBforB - CCforB = 164.02 - 139 = 25.02
CVforC = CBforC - CCforC = 149.86 - 127 = 22.86
CVforD = CBforD - CCforD = 153.72 - 122 = 31.72
As CV is high for A Therefore, Jack purchase brand A based on customer value - Yes.

3. Brand C scores lowest both in terms of customer value and Customer benefit. - Yes  

4. Let X denote Customer Value, Y denote Customer Cost, and let Z denote Composite Attribute Value. Which of the following algebraic expressions represents relationship among X, Y & Z
This one was straight forward Option A - X = (Y*Z/5) - Y = Y*(Z/5 - 1)
X = Y*((Z-5)/5)

5. If Jack will decide buying laptop based on Customer Value, which of the possible strategies should company C implement so that it becomes Jack’s preferred choice?
For this we will need some observation check
i. Reduce the marked price to $60. - This doesn't going to impact on Customer Value it will still remain same. Hence No. 

ii. Add a faster processor to increases its Processor Performance rating to 9. - This will impact on CCAV, Value will increase by +1.2 also, it will increase value of CV. Hence Yes.

iii. Improve its graphics capability to the highest possible ranking. - Maximum possible ranking is 10 this will impact on CCAV, Value will increase by +0.6 also, it will increase value of CV. Hence Yes.­
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PMehta - Reduced the Marked Price to $60 will have the following impact:

1. CAV- 5.9 (No Change)
2. Customer Cost- 60+20+11+3+4+9= 107 (Reduced from $127 to $107)
3. (New) Customer Benefit- 107*5.9/5= 126.26
4. (New) Customer Value- 126.26 - 107= 19.26 (Reduced from $22.86 to $19.26)

Note: The Customer value for A, B, and D remains the same as calculated previously.

Therefore, even after the change in Market Price, Product C is the least preferable.

The answer is No­
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Marketers theorize that consumers purchase decisions are driven by 15 Jun 2024, 04:33
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PMehta
Why will reducing $60 not impact? customer value is calculated by subtracting customer benefit from customercost 
hence if MP is reduced to 60 from 80, customer cost will reduce, inturn, increasing the customer value. 

someone pls tell where am i going wrong
Purnank
­Given - Jack, who wants to purchase a laptop, has narrowed down his choices to 4 brands of laptop computers (A, B, C, D). He 1s interested in 5 attributes: Processor Performance (PP), Graphics Capability (GC), Size & Weight (SW), Battery life (BL), & Marked Price (MP) and is evaluating the offerings based on the same. Jack puts 30% priority on Processor Performance, 10% on Graphic Capability, and equal priority on Size & Weight, Battery life, and Price. He comes up with a number called Composite Attribute Value that is the weighted average of the performance of a brand’s offering against Jack’s priorities.
Lets create a table using the priority as he given. 

Brand   PP    GC    SW     BL    MP   applying priority --> PP(30%) GC(10%) SW(20%) BL(20%) MP(20%) CCAV
A          8      6       4       4       8    ------------------->        2.4         0.6         0.8          0.8          1.6       6.2
B          6      9       6       4       6    ------------------->        1.8         0.9         1.2          0.8          1.2       5.9
C          5      4       9       7       4    ------------------->        1.5         0.4         1.8          1.4          0.8       5.9
D          7      8       4       6       7    ------------------->        2.1         0.8         0.8          1.2          1.4       6.3

Hence, 
1. Composite Attribute Value for Jack is greatest for brand A. --- No. (Highest value is for brand D)

2. Jack purchase brand A based on customer value.
For this lets calculate Customer value for each brand,
But before that we need to calculate CB - Customer benefit = CC * CCAV / 5 
CBforA = CCforA * CCAV / 5 = 150*6.2 / 5 = 186
Similarly CBforB = 139*5.9/5 = 164.02, CBforC = 127*5.9/5 = 149.86 and CBforD = 122*6.3/5 = 153.72
From this we will calculate Customer value
CVforA = CBforA - CCforA = 186 - 150 = 36
CVforB = CBforB - CCforB = 164.02 - 139 = 25.02
CVforC = CBforC - CCforC = 149.86 - 127 = 22.86
CVforD = CBforD - CCforD = 153.72 - 122 = 31.72
As CV is high for A Therefore, Jack purchase brand A based on customer value - Yes.

3. Brand C scores lowest both in terms of customer value and Customer benefit. - Yes  

4. Let X denote Customer Value, Y denote Customer Cost, and let Z denote Composite Attribute Value. Which of the following algebraic expressions represents relationship among X, Y & Z
This one was straight forward Option A - X = (Y*Z/5) - Y = Y*(Z/5 - 1)
X = Y*((Z-5)/5)

5. If Jack will decide buying laptop based on Customer Value, which of the possible strategies should company C implement so that it becomes Jack’s preferred choice?
For this we will need some observation check
i. Reduce the marked price to $60. - This doesn't going to impact on Customer Value it will still remain same. Hence No. 

ii. Add a faster processor to increases its Processor Performance rating to 9. - This will impact on CCAV, Value will increase by +1.2 also, it will increase value of CV. Hence Yes.

iii. Improve its graphics capability to the highest possible ranking. - Maximum possible ranking is 10 this will impact on CCAV, Value will increase by +0.6 also, it will increase value of CV. Hence Yes.­
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­Refer to equation of 'X' is multiple of customer cost 'Y' if we reduce marked price to 60 means we are reducing customer cost means we are directly reducing Customer value Hence No impact.
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Marketers theorize that consumers purchase decisions are driven by 29 Dec 2024, 05:34
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How is one supposed to solve this question in 6 minutes ( assuming 2 mins per question)
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But in the Question it is said that the ratings given are weighted rating themselves then why we need to calculate it again? It should have mentioned just 'rating' what is the purpose of term 'weighted rating' then?
Purnank
­Given - Jack, who wants to purchase a laptop, has narrowed down his choices to 4 brands of laptop computers (A, B, C, D). He 1s interested in 5 attributes: Processor Performance (PP), Graphics Capability (GC), Size & Weight (SW), Battery life (BL), & Marked Price (MP) and is evaluating the offerings based on the same. Jack puts 30% priority on Processor Performance, 10% on Graphic Capability, and equal priority on Size & Weight, Battery life, and Price. He comes up with a number called Composite Attribute Value that is the weighted average of the performance of a brand’s offering against Jack’s priorities.
Lets create a table using the priority as he given.

Brand PP GC SW BL MP applying priority --> PP(30%) GC(10%) SW(20%) BL(20%) MP(20%) CCAV
A 8 6 4 4 8 -------------------> 2.4 0.6 0.8 0.8 1.6 6.2
B 6 9 6 4 6 -------------------> 1.8 0.9 1.2 0.8 1.2 5.9
C 5 4 9 7 4 -------------------> 1.5 0.4 1.8 1.4 0.8 5.9
D 7 8 4 6 7 -------------------> 2.1 0.8 0.8 1.2 1.4 6.3

Hence,
1. Composite Attribute Value for Jack is greatest for brand A. --- No. (Highest value is for brand D)

2. Jack purchase brand A based on customer value.
For this lets calculate Customer value for each brand,
But before that we need to calculate CB - Customer benefit = CC * CCAV / 5
CBforA = CCforA * CCAV / 5 = 150*6.2 / 5 = 186
Similarly CBforB = 139*5.9/5 = 164.02, CBforC = 127*5.9/5 = 149.86 and CBforD = 122*6.3/5 = 153.72
From this we will calculate Customer value
CVforA = CBforA - CCforA = 186 - 150 = 36
CVforB = CBforB - CCforB = 164.02 - 139 = 25.02
CVforC = CBforC - CCforC = 149.86 - 127 = 22.86
CVforD = CBforD - CCforD = 153.72 - 122 = 31.72
As CV is high for A Therefore, Jack purchase brand A based on customer value - Yes.

3. Brand C scores lowest both in terms of customer value and Customer benefit. - Yes

4. Let X denote Customer Value, Y denote Customer Cost, and let Z denote Composite Attribute Value. Which of the following algebraic expressions represents relationship among X, Y & Z
This one was straight forward Option A - X = (Y*Z/5) - Y = Y*(Z/5 - 1)
X = Y*((Z-5)/5)

5. If Jack will decide buying laptop based on Customer Value, which of the possible strategies should company C implement so that it becomes Jack’s preferred choice?
For this we will need some observation check
i. Reduce the marked price to $60. - This doesn't going to impact on Customer Value it will still remain same. Hence No.

ii. Add a faster processor to increases its Processor Performance rating to 9. - This will impact on CCAV, Value will increase by +1.2 also, it will increase value of CV. Hence Yes.

iii. Improve its graphics capability to the highest possible ranking. - Maximum possible ranking is 10 this will impact on CCAV, Value will increase by +0.6 also, it will increase value of CV. Hence Yes.­
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Marketers theorize that consumers purchase decisions are driven by 10 Nov 2025, 09:44
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mkeshri185
But in the Question it is said that the ratings given are weighted rating themselves then why we need to calculate it again? It should have mentioned just 'rating' what is the purpose of term 'weighted rating' then?

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The numbers in the table (like 8, 6, 4, etc.) are raw performance scores, not yet weighted. “Weighted average” means those scores must still be multiplied by Jack’s stated priorities (30%, 10%, and 20% each for the others) to reflect how much importance he gives each attribute.
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Marketers theorize that consumers purchase decisions are driven by 22 Nov 2025, 09:38
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This is extremely calculation-intensive. Solving this ate up almost 10 minutes, averaging >3 min per question. Is there an accurate, reliable way to estimate the answers? If not, what is the ideal strategy to tackle such questions on the GMAT?
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