Question

Fred and Ethel went to the Hummer dealership to buy a new H2. When they walked in, none of the salespersons approached them because Fred and Ethel's appearance didn't match that of someone they thought could afford to buy an H2. The salesperson relied on their "stereotype" of "Hummer Buyer."

a) Cultural assumption
b) Market segmentation
c) Customer profiling
d) Economic model

Answer 1

Salespersons at the dealership engaged in customer profiling by not approaching Fred and Ethel as potential buyers based on their appearance, reflecting prejudice and discrimination influenced by stereotypes and confirmation bias.

Step-by-step explanation:

When Fred and Ethel walked into the Hummer dealership and were not approached by salespersons due to their appearance not matching the stereotype of a typical "Hummer Buyer," the salespersons were engaging in customer profiling. This type of stereotyping, where individuals are judged and treated differently based on assumptions about their group, can lead to prejudice and discrimination. Firms generally have a profit incentive to sell to everyone regardless of differences such as race, ethnicity, religion, or gender. However, stereotypes and confirmation bias can interfere with such profit-driven motives, resulting in discriminatory practices that prevent businesses from serving a more diverse customer base and potentially hampering their growth and expansion