Chapter 3.2, Problem 2R

To determine

To Discuss: The different ways and benefits developing consumer knowledge base:

Explanation of Solution

Different ways of developing consumer knowledge base are:

• Perfect Knowledge:

The main and the best way to develop consumer knowledge are through having perfect knowledge of market conditions, about pricing, about product. For example like a seller knows that total quantity will be sold at this particular price, therefore a buyer/consumer must know the price of the product and related information.

• Implication of Consumer Knowledge Frame:

Since the consumer knowledge structure should reflect ‘what the consumer actually knows about the product and what marketers they ought to know’ therefore the structure should be a combination of marketing attributes, that conveys general product characteristics and to be incorporated in knowledge frame.

• Price Mechanism:

This is the most significant way of consumer knowledge base, as the price of the product is determined by the interaction of demand and supply in the market, therefore as a consumer they must know “how much is the demand and supply for a particular product and at which price it is being sold”.

Economics Concept Introduction

Introduction:

Consumer Knowledge Base refers that buyers are having perfect knowledge regarding ‘product availability’ and product price. As by having proper knowledge of products and prices, thus a firm cannot charge its own price even under the market is in monopoly or under the garb of ‘buyer’s ignorance’. Therefore, it is neither possible nor desirable for an individual firm to change price of the product.

It helps consumer to get information about a particular product, and can rectify - “how much quantity and of which quality they want to consume at what particular product.