Kay and Lucy Are Both Consumer Researchers

question 28

Essay

Kay and Lucy are both consumer researchers.They are arguing about various research approaches.Kay says, "Lucy, I don't understand why you waste your time doing all of those experiments.Consumer behavior can't be researched like chemistry because they are irrational and totally unpredictable!" Lucy responds, "I don't agree.Consumers behavior more consistently than you might think, and it is perfectly appropriate to apply the scientific method-approach to studying consumers.Only by treating consumer behavior as a science can we generate generalizable theories of behavior."
Based on Kay and Lucy's discussion, what consumer behavior research approach does Kay most support and Lucy most support?

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Cost of Retained Earnings

The opportunity cost for shareholders for having the company retain the earnings instead of distributing them, often considered in investment and dividend decisions.

Risk Free Rate

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield on government bonds.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than one indicates higher than market volatility.