NAME- AKHILESH KUMAR

ROLL NO- 2010010

SECTION- A

TASK 1

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- Involvement depends upon how much time, thought, energy and other resources

people spend to start the purchase process. The purchase of a card like American Express

having purchasing behaviour is a high involvement decision. The main reason behind the

high involvement decision is the high costs associated with the card Also this card has

promoted its image as a high prestige card having a snob appeal and makes the customers

spend much time in making the purchase decision is the fact that the card is used in everyday

life. American express card provides a high-quality image based on ordering more and better

services than other cards.

Q2. How is the concept of social class relevant to marketing of American Express card?

Answer- The concept of social class is extremely relevant to the marketing of the American

Express Card. The main aim of the company is to focus on the higher class (premium

customer). It has targeted the higher salaried class. The distinction lies not in where is it used

like at the expensive restaurants or at the small petrol pumps or who uses it. The distinction is

the card itself and sets apart the user from the general public.

The five factors have been carefully woven together to build its image over a period of

time like higher price, higher quality, limited supply, higher qualifications and exclusive

reference groups. 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 price far higher than

alternative bank cards.

Q3. How has American Express used the concept of social class in marketing its credit cards?

Answer- The American Express used the concept of social class in marketing its credit cards

in the following ways:

American express welcome at over 1800 Cineplex movie theatres and has been tested

at McDonald's. People who are above-average salaried they are welcome, but also

college students, who have potential for greater earnings.

The company maintains a profile of 450 attribute and purchasing patterns on all

cardholders that is updated weekly.

AmEx 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.

AmEx ran the 'Do you Know Me?' campaign which presented interesting and well-

known famous-named people who were not recognizable but were accorded

importance when they used the American Express Card. The promise was that the

ordinary user would also be accorded prestige when they used the card. In the long-

running 'Membership Has Its Privileges' campaign, cardholders are showing enjoying

the man, benefits of the card's services.

AmEx then piles its customer database with bill suffers or catalogs to sell other items

to receptive buyers. By carefully targeting direct marketing efforts to cardholders only

for products and services that are relevant to them, the company tries to avoid

harming the client relationship.

TASK 2

Q 1) The chapter discussed a number of product characteristics that influence the diffusion process. How does the Honda insight (and hybrid vehicles in generals), rate on each of these characteristics?

Answer- There are five product characteristic that influences the diffusion process.

a) relative advantage - The Insight is thousands of dollars cheaper, gets comparable fuel

economy, has a crisper look and provides a more agile and enjoyable ride. On the other hand

the Prius is classed as a mid-sized car based on its interior volume, the Insight is a compact.

The dashboard of the Insight looks like a blending of the Honda Civic and Honda Fit.

b) Compatibility - The Advanced Compatibility Engineering body structure is a Honda

insight exclusive body design that enhances occupant protection and crash compatibility in

frontal collisions. The ACE design utilizes a network of connected structural elements to

distribute crash energy more evenly throughout the front of the vehicle. This enhanced frontal

crash energy management helps to reduce the forces transferred to the passenger

compartment and can help to more evenly disperse the forces transferred to other vehicles in

a crash.

c) Observability – It looks nice because of its modern look, stylish and aerodynamic, very

comfortable in back as well as front( very roomy), drives great and reliability also. Its fully

loaded feature is definitely worth getting for the price.

d) Complexity - Compared to the Prius, the 2010 Honda Insight is a lot less complex, at least

in the drivetrain department. It has an eight-valve SOHC 1.3-liter inline-4 engine rated at 88

hp and 88 lb-ft of torque. It also has a CVT. Between the engine and the CVT is a small

electric motor. It can't motivate the Insight on its own as frequently or as fast as does the

Prius motor, but when it joins forces with the gas engine, it provides the compact front-

wheel-drive hatchback with a respectable 98 hp at 5,800 rpm and 123 lb-ft of torque from

1,000-1,500 rpm. To its credit, the engine is not unpleasant to the ear. The blending of gas

and electric power is seamless enough, but the car feels jerky coming out of idle from a stop.

e) Trialability -Trialability is the degree to which an innovation may be experimented with

limited basis. New ideas that can be tried on an instalment plan will generally be adopted

more quickly than innovations that are not divisible. So, the greater the opportunity to try a

new product, the easier it is for consumers to evaluate it and ultimately adopt it. People must

do trialability before purchasing vehicle, but they will not get more number of chances.

Q 2) How important will personal and impersonal information sources be in a consumer’s decision to purchase the Honda insight?

Answer – Both personal and impersonal information sources be in a consumer’s decision

will play a vital role in purchasing the Honda insight. Personal sources of information are the

most preferred by consumers in decision making. On the other hand, family members and

extensionists/advisors are the most used information sources and therefore confirm the basis

of the Trusted People group. Impersonal information sources means without reference to any

individual person and word of mouth .impersonal information sources belongs to television,

internet, bill boards, media advertising, also influences consumer decision making. Personal

information sources have more power to influence consumer decision making than

impersonal information sources. Research also reveals that consumer decision making based

on personal information sources have higher success rate.