Marketing CH 21

T/F: Customer relationship management requires that organizations be organized around customer segments.
true
T/F: Technology plays a major role in any CRM system
true
T/F: Data consolidation is an analytical process that compiles actionable data about the purchase habits of a firm’s current and potential customers.
false
T/F: Customer-centric is an internal management philosophy similar to the marketing concept.
true
T/F: Empowerment in a CRM environment is normally a process of collecting customer information through customers’ feedback on products.
false
T/F: Through the application of knowledge management, the Lands’ End clothing catalog retailer would have learned that a substantial number of its customers would like the company to offer a line of maternity wear
true
T/F: For a catalog retailer, the contact between the customer and the company’s order taker would be an example of a touch point
true
T/F: Touch points are any situations in which the company’s employees actually interact with customers. When a customer places an order through the company Web site, no touch point has been created.
false
T/F: When Amazon.com asks visitors to its Internet site to create wish lists and then invites them to send the lists to people who may be planning on buying them a present soon, it is relying on Web-based interactions to help it learn about its customers.
true
T/F: Consumers are reluctant to enter information through point-of-sale interactions because of privacy violation fears.
false
T/F: Channel interactions are the relationships a manufacturer has with its distributors.
false
T/F: The process of centralizing data in a CRM system is sometimes referred to as the interpolation of external and internal touch points.
false
T/F: For a CRM system to be effective, customer information must be stored in a data matrix.
false
T/F: Privacy issues are the primary reason for centralizing data in a CRM.
false
T/F: Response lists are especially important in database creation because past behavior is a strong predictor of future behavior.
true
T/F: Database elaboration is the addition of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of those customers or prospects.
false
T/F: Multinational companies often face difficult problems when pulling together internal data about their customers.
true
T/F: Data mining is used to find hidden patterns and relationships in the customer data stored in the data warehouse.
true
T/F: Volvo has a Web site that caters to car enthusiasts who might want to see concept cars evolve into real-life products. Volvo would likely have used data mining to locate people who were car enthusiasts and innovators.
true
T/F: RFM analysis is used to delete unnecessary or duplicated data.
false
T/F: A basic assumption in any lifetime value calculation is that marketing to repeat customers is more profitable than marketing to first-time buyers.
true
T/F: As a predictive tool, data mining has limited utility.
false
T/F: Through campaign management, all areas of the company participate in the development of programs targeted to customers.
true
T/F: A common CRM application is cross-selling other products or services to customers.
true
T/F: The United States has the most restrictive privacy laws in the world.
false
_____ is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.
a. Organizational optimization
b. Consumer relationship marketing (CRM)
c. Total quality management (TQM)
d. Customer relationship management (CRM)
e. Market aggregation
D
The My Coke Rewards program allows consumers to earn reward products and services by registering points they receive by consuming Coke products. The program also allows Coca-Cola to collect information about consumers that the company can use to optimize profitability, revenue, and customer satisfaction. The My Coke Rewards program is an example of a(n) _____ program.
a. organizational optimization
b. consumer relationship marketing (CRM)
c. total quality management (TQM)
d. customer relationship management (CRM)
e. market aggregation
D
Using technology provided by Smart Button software, the WNBA’s Los Angeles Sparks have implemented a new system that gathers information about its best customers, season ticket holders, and rewards those customers in many ways, including free tickets to Sparks home games and cash prizes. This is an example of a(n) _____ system.
a. organizational optimization
b. corporate relationship marketing (CRM)
c. total quality management (TQM)
d. customer relationship management (CRM)
e. call response marketing (CRM)
D
While many catalog retailers send out a standard catalog to all potential customers, Lands’ End uses information it has gathered about customers in its CRM system to target the catalog to the individual. This approach used by Lands’ End is an example of the _____ approach.
a. shotgun
b. rifle
c. square peg
d. fishing pole
e. All of these statements can be used to describe the approach used by Lands’ End.
B
When Coca-Cola sent users of the My Coke Rewards program digital coupons for free trials of its new Coke Zero product, more than 100,000 people redeemed them. It would have cost the company far more to randomly distribute enough coupons to the general market to get that level of sampling. This is an example of the power of the _____ approach.
a. rifle
b. machine gun
c. stealth marketing
d. gorilla marketing
e. shotgun
A
Customer relationship management is accomplished by all of the following EXCEPT:
a. offering the lowest prices of all major competitors
b. organizing the company around customer segments
c. establishing and tracking customer interactions with the company
d. fostering customer-satisfying behaviors
e. linking all processes of the company from its customers through its suppliers
A
The difference between traditional marketing and customer relationship marketing can be compared to the difference between:
a. night and day
b. boning a fish and dressing a chicken
c. mice and elephants
d. shooting a rifle and a shotgun
e. circles and squares
D
At its most fundamental level, a CRM approach is no more than:
a. the relationship cultivated by a salesperson with a customer
b. a mass marketing approach
c. a transactional selling approach
d. a customer satisfaction program
e. a differentiation strategy
A
To initiate the CRM cycle, a company must first:
a. establish marketing objectives
b. captures relevant customer data on interactions
c. identify customer relationships with the organization
d. understand the interactions the company has with current customers
e. Decides on a segmentation strategy
C
Which of the following statements about the CRM cycle is true?
a. The letters CRM are an acronym for consumer relationship marketing.
b. The CRM cycle does not affect employees outside the marketing and management functional areas.
c. The CRM cycle is continuous and circular with no predefined start or end point.
d. The CRM cycle takes a simplistic perspective on customers.
e. All of these statements about the CRM cycle are true.
C
When USAA insurance company collects relevant information from customers, such as date of last communication with the customer and how often the customer contacts the company, this is an example of:
a. establishing marketing objectives
b. capturing relevant customer data on interactions
c. identifying customer relationships with the organization
d. understanding the interactions the company has with current customers
e. deciding on a segmentation strategy
B
As the second step in the CRM cycle a company must:
a. establish marketing objectives
b. capture relevant customer data on interactions
c. identify customer relationships with the organization
d. understand the interactions the company has with current customers
e. decide on a segmentation strategy
D
Which of the following statements about a CRM system is true?
a. A critical component of a CRM system is the use of the appropriate technology to store and integrate customer data.
b. A CRM system operates on the theory that all customers are equally important.
c. Due to privacy laws, a CRM system only disseminates customer information to those who are actually in day-to-day contact with customers.
d. A company using a CRM system must view its customers as bits of data.
e. All of these statements about a CRM system are true.
A
A company that has a(n) _____ customizes its product and service offerings based on data generated through interactions between the customer and the company.
a. ethnocentric perspective
b. supply-based focus
c. sales orientation
d. supply-based focus
e. customer-centric focus
E
Best Buy instituted a system in all of its stores that customizes their product offerings for the five key customer segments it has identified: affluent professional males, young entertainment enthusiasts, upscale suburban moms, families who are practical technology adopters, and small businesses with fewer than 20 employees. This focus implies that Best Buy is:
a. ethnocentric
b. demand based
c. sales-centric
d. supply based
e. customer-centric
E
Customer-centric is an internal management philosophy similar to:
a. utilitarianism
b. Herzberg’s theory of motivation
c. the equity theory
d. the marketing concept
e. consumerism
D
The way to people’s hearts may be through their stomachs, but Kraft Foods has decided not to rely exclusively on that maxim to secure the long-term loyalty of its customers. It is also making new product developments through data generated from interaction between Kraft and its customers. In other words, Kraft Foods:
a. is sales oriented
b. has a standardization focus
c. is ethnocentric
d. has a customer-centric focus
e. is product oriented
D
In a CRM environment, _____ is defined as an informal process of collecting customer data through customer comments and feedback on product or service performance.
a. leveraging
b. knowledge management
c. interaction
d. data mining
e. learning
E
_____ refers to the latitude organizations give their representatives to negotiate mutually satisfying commitments with customers.
a. Consumer learning
b. Customerization
c. Empowerment
d. Autonomy
e. Interaction
C
Best Buy’s Performance Service Plan (PSP) guarantees products against damage and malfunctioning. All initial purchase contact information is kept in the customer database, along with copies of the PSP. If a customer calls Best Buy with a problem, the representative will have access to all this information and can either help the customer or refer him or her to another representative. The availability of this customer information tends to:
a. reduce customer calls
b. empower employees
c. encourage referrals to other employees
d. hurt employee morale
e. increase the need for management supervision
B
_____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.
a. Knowledge management
b. Learning
c. Database marketing
d. Interactive marketing
e. Information marketing
A
When Sony PlayStation users want to access amenities on the Sony Web site, they are required to log in and supply information such as their name, e-mail address, and birth date. They are also given the opportunity to complete a survey that captures much more information about them and their gaming habits. Sony gathers this information and makes it available internally to better serve the customer. This is an example of a company using:
a. learned research
b. stimulus/response marketing
c. knowledge management
d. sales-oriented marketing
e. motivational research
C
A(n) _____ is the point at which a customer and a company representative exchange information and develop learning relationships.
a. social contact
b. interaction
c. empowering moment
d. equilibrium point
e. transactional dyad
B
Les Ailes de la Mode is a Quebec retail store that promotes the highest quality of customer service by maintaining the importance of each _____, the point at which customer and store personnel exchange information and develop learning relationships.
a. moment of truth
b. intervention
c. data capture
d. response situation
e. interaction
E
In a CRM system, _____ are all areas of the business where customers have contact with the company and data may be gathered and used to guide and direct the decision making within that business unit.
a. touch points
b. focus points
c. data mining points
d. information search periods
e. observational points
A
Apple, Inc. has stores, a Web site, and a toll-free phone number where consumers can provide valuable information to the company in developing a CRM system. All these possible areas of the company where consumers can communicate with the business are called:
a. touch points
b. focus areas
c. data mining
d.
information search periods
e.
experimental points
A
The Detroit Tigers, a Major League Baseball team, used customer satisfaction surveys of season ticket holders to determine why the number of season ticket holders was declining. This survey was an example of a(n):
a. touch point
b. focus area
c. data search
d. information recognizance
e. observational point
A
Les Ailes de la Mode, a Quebec retail store that promotes the highest quality of customer service, has not only established itself as a top retailer in the province but also has a credit card and point program company, a cataloger and Internet seller, and even a publisher. Through gathering customer information for its credit cards and point program, through catalog and Internet orders, and through subscriptions to its publications, Les Ailes de la Mode has created several different:
a. focus areas
b. touch points
c. interrelationship promotions
d. distribution channels
e. sources of distribution information
B
Hudson’s Bay Company in Canada operates The Bay, Zellers, Home Outfitters, and Hbc.com. At each of its stores and its Web site, it gives HBC Rewards that enable members to earn points, which can be redeemed in the HBC Rewards catalog for various items, including travel, leisure and entertainment items, Air Miles reward miles, or Bay and Zellers gift certificates. To use the system, customers have to provide their HBC card number. This reward program enables Hudson’s Bay to engage in _____ interactions with its customers.
a. point-of sale and Web-based
b. customer-centric and technology-centric
c. retail-centric and Web-based
d. transaction-based and retail-centric
e. point-of-sale and retail-centric
A
Communications between customers and organizations that occur in stores or at information kiosks are called:
a. live interactions
b. point-of-sale interactions
c. empowerment points
d. survey interactions
e. product interactions
B
_____ interactions occur when customers buy products in a store.
a. Point-of-sale
b. Relationship-based
c. Cost-based
d. Retail-centric
e. Distribution-focused
A
The executive VP of Hudson’s Bay Company in Canada (a major retail chain) said in an interview, “We have to be able to offer customers what they want when they want it. We need better insight into their spending–we have gaps in knowledge of how customers spend.” _____ interactions would provide the retail chain the best opportunity for learning about its customers.
a. Point-of-sale
b. Relationship-based
c. Retail-centric
d. Technology-centric
e. Sales-oriented
A
The traditional approach for acquiring data from customers is through:
a. encoding devices
b. media
c. feedback mechanisms
d. channel interactions
e. public relations
D
Which of the following is an example of a channel through which customer data are traditionally gathered?
a. Store visits
b. Conversations with salespeople
c. Interactions via the Web
d. Phone conversations
e. All of these
E
In a speech, David Poirier, chief information officer of Hudson’s Bay Company, a Canadian retailer, said, “We [Hudson’s Bay Company] had all kinds of data in different places. We didn’t have a single view of the customer until we focused on finding one method to manage relationships with our customers.” Hudson’s Bay would use a _____ to profile customer segments for better CRM marketing efforts.
a. data mart
b. customer information system
c. data warehouse
d. decision support system
e. data cluster
C
A _____ is a central repository for data from various functional areas of the organization that are stored and inventoried on a centralized computer system so that information can be shared across all functional departments of the business.
a. data mart
b. customer information system
c. data warehouse
d. decision support system
e. data cluster
C
Continental Airlines has a system that captures information on everything from flight schedules, seat inventories, and customer profiles that is accessible by 35 departments and 1,300 employees. Continental’s system is an example of a(n):
a. information mine
b. knowledge distribution center
c. information extraction unit
d. information storage unit
e. data warehouse
E
“Lots of organizations have customer data, but not in a way that’s useful,” said a speaker at a recent retail marketing conference. “Retailers have all kinds of data in different places–they don’t have a single view of the customer.” The speaker is saying that retailers do NOT use:
a. information distribution centers
b. data warehouses
c. information extraction mines
d. data intermediaries
e. marketing information systems
B
Dick’s Sporting Goods collects a vast amount of data through its Web site, direct mailings, and retail stores. To be useful, all of these data would be centralized in a(n):
a. data mart
b. decision matrix
c. data warehouse
d. decision support system
e. data cluster
C
A(n) _____ is a collection of data, especially one that can be accessed and manipulated by computer software.
a. database
b. data profile
c. algorithm
d. byte
e. interaction profile
A
The core of the data warehouse is:
a. empowered employees
b. transaction channels of communication
c. point-of-sale interactions
d. the database
e. a compiled list
D
Which type of list includes names and addresses of individuals who have responded to an offer of some kind?
a. An interactive list
b. A compiled list
c. A recent list
d. A response list
e. An A-list
D
Lesley Owens has limited money to invest in a mailing to people who might be interested in subscribing to a new magazine about making scrapbooks. She wants to mail to those prospects with the highest probability of becoming subscribers. Owens should use a:
a. compiled list
b. data mine
c. response list
d. management database
e. data warehouse activation
C
The Old Westbury College Foundation raised $80,000 at its “A Taste of Long Island,” a gala dinner where all proceeds went to support scholarship funds and educational programs at SUNY College at Old Westbury. Attendees were people who had contributed to the scholarship program previously and were reached through a:
a. compiled list
b. data mine
c. response list
d. management database
e. data warehouse activation
C
Taquan recently purchased a General Electric microwave oven using a $50 rebate offer. He filled out the rebate certificate and sent it to an address provided by GE. The rebate certificate contained Taquan’s full name, his phone number, his address, and some purchase information. Taquan has most likely become part of GE’s _____ list.
a. compiled
b. cookies
c. response
d. electronic cash
e. Internet research
C
A(n) _____ list generally includes names and addresses gleaned from directories or membership rosters.
a. predictive
b. compiled
c. response
d. actionable
e. disintegrated
B
Leah wants to develop a mailing list of people who have participated in bicycle rides for charities. She has offered to purchase a list of last year’s Alabama-based Ride for Life, which was held to raise funds for cancer research. Leah is building a(n) _____ list.
a. actionable
b. e-mail
c. response
d. compiled
e. predictive
D
_____ is the addition of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of customers or prospects.
a. Information formatting
b. Database enhancement
c. Data mining
d. Data shading
e. Predictive modeling
B
_____ is used to find hidden patterns and relationships in the customer data stored in the data warehouse.
a. Data profiling
b. Cluster analysis
c. Regression analysis
d. Customer profiling
e. Data mining
E
Wal-Mart captures point-of-sale transactions from thousands of stores in several countries and continuously transmits these data to its massive data warehouse. Wal-Mart allows more than 3,500 suppliers to access data on their products and perform data analyses. These suppliers use the data to identify customer buying patterns at the store level. They use this information to manage local store inventory and identify new merchandising opportunities. Both Wal-Mart and its suppliers are engaged in:
a. information formatting
b. database enhancement
c. data mining
d. data shading
e. descriptive modeling
C
Which of the following would allow an online retailer like Frontgate to learn that customers who purchase electronic products also purchase home office furniture?
a. Knowledge interpretation
b. Systems management
c. Data mining
d. Information extraction
e. Information search
C
Fingerhut, the catalog retailer, used _____ to determine that customers who change residences are three times more likely than customers who have not moved to buy tables, towels, and decorative products but are no more likely to buy jewelry or footwear. As a result, Fingerhut created a catalog for people who have changed residences.
a. data mining
b. information search
c. information retrieval channels
d. evoked sets
e. an information environment
A
Outdoor gear retailer Recreational Equipment, Inc. (REI) in Washington collects a vast amount of data through its Web site, direct mailings, and retail stores. When REI considers new store locations, it examines order data to find places with high concentrations of customers buying online and through the company’s catalogs. REI would be using _____ to identify potential store locations.
a. information formatting
b. database enhancement
c. data mining
d. data shading
e. customer prediction
C
Ford Canada has turned to the Internet to help it stand apart from its competitors in the automotive industry. One Internet ad shows a Ford truck driving out of a forest with its engine roaring and mud splattering on the screen. The wipers come on to reveal the Ford “Built Tough” logo, which then recedes to the side of the screen. The ad directs people to a site where they can sign up to receive direct mail from Ford. Ford Canada will combine this database with a database of new F-Series truck owners to look for significant patterns and trends. Ford Canada will use:
a. an information search system
b. knowledge trending
c. data interpolation
d. data graphing
e. data mining
E
Which of the following techniques used to analyze marketing databases considers whether a customer has made a purchase recently as well as how often that customer makes a purchase?
a. Recency-frequency-monetary analysis (RFM)
b. Predictive modeling
c. Customer valuation
d. Data mining
e. Lifetime value analysis
A
In the RFM analysis model, “R” stands for:
a. returning
b. recency
c. reimbursement
d. relationship
e. retention
B
In the RFM analysis model, “F” stands for:
a. frequency
b. function
c. free
d. forecast
e. framing
A
In the RFM analysis model, the “M” stands for:
a. marketing
b. management
c. motivation
d. maturity
e. monetary value
E
L.L. Bean has been reducing the number of catalogs it sends out while increasing its sales and profits. With _____, L.L. Bean now identifies customers who have purchased recently and often have spent considerable money. Such customers are most likely to purchase again.
a. predictive data
b. trending
c. correlation analysis
d. recency-frequency-monetary analysis
e. hypothesis testing
D
Which of the following is a data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers?
a. Recency-frequency-monetary value (RFM) analysis
b. Cluster analysis
c. Lifetime value analysis (LTV)
d. Market segmentation
e. Predictive modeling
C
The basic assumption of _____ is that marketing to repeat customers is more profitable than marketing to first-time buyers.
a. customer segmentation
b. predictive modeling
c. customer valuation
d. data manipulation
e. lifetime value analysis
E
_____ uses a past set of occurrences to predict the likelihood that some other occurrence, such as a response or purchase, will take place in the future.
a. Customer manipulation
b. Predictive modeling
c. Data mining
d. Lifetime value analysis
e. Causal research
B
The cable industry needs to identify current and future traffic patterns so it can manage the growth of cable systems. Because of high costs, it is undesirable to buy bandwidth before it is needed. It is also time-consuming to upgrade a cable system. Furthermore, consumers hate to wait for capacity increases. Therefore, the industry should use _____ to determine when and where new systems should be implemented.
a. lifetime analysis
b. recency-frequency-monetary analysis
c. cross-selling
d. speed of data communications
e. predictive modeling
E
Ford Motor Company has launched an online effort to market its F-Series trucks. It hopes to use its database capabilities to capture valuable data on car buyers. Ford plans on cross referencing new F-Series owners with the database generated from this online campaign to see how many names are duplicated. Ford will use these data to forecast which campaigns have the greatest probability of success. Which of the following methods will Ford most likely use to analyze these data?
a. Lifetime value analysis (LTV)
b. Present value/future value assessment
c. Recency-frequency-monetary analysis
d. Predictive modeling
e. Reach-frequency-media analysis
D
Which technique was likely used to suggest that a customer who wanted to buy a $29 shirt would also be a likely prospect for a cigar humidor?
a. Predictive modeling
b. Customer segmentation
c. Market aggregation
d. Recency-frequency-monetary analysis
e. Data interpolation
A
Data mining identifies the most profitable customers and prospects. Managers can then design tailored marketing strategies to best appeal to the identified segments. In CRM, this is commonly referred to as _____ customer information to facilitate enhanced relationships with customers.
a. manipulating
b. leveraging
c. harvesting
d. converting
e. managing
B
_____ involves developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships.
a. Transaction management
b. Campaign management
c. Data mining
d. Consumerism
e. Knowledge management
B
All of the following are common CRM marketing database applications EXCEPT:
a. cross-selling other products or services
b. designing targeted marketing communications
c. activity-based costing applications
d. improving customer service
e. campaign management
C
Which of the following is a common CRM marketing database application?
a. Campaign management
b. Designing targeted marketing communications
c. Improving customer service
d. Cross-selling other products or services
e. All of these
E
Looking to build up its postpurchase relationships, General Motors recently launched a service whereby GM vehicle owners can sign up to get e-mail service reminders, access information about GM vehicles, and receive special promotions. GM is using _____ to enhance its customer relationships.
a. modeling
b. scoring
c. valence management
d. campaign management
e. data mining
D
To target outdoor enthusiasts, Subaru of America added an outdoor life section to its Web site that is organized by area of interest. The site will serve as a platform for co-marketing and promotional programs. This offering of customized products to a customer segment for the purpose of enhancing the auto manufacturer’s customer relationships is an example of:
a. campaign management
b. customer aggregation
c. transaction segmentation
d. data mining
e. knowledge management
A
Les Ailes de la Mode, a Quebec retailer, offers its customers Les Ailes MasterCard. The card is connected to a points program that offers one point for every $20 of purchases on the card and triple that on purchases made at Les Ailes. It also incorporates an electronic chip, through which a $10 coupon is awarded to each member every month via the electronic gift card (on purchases of $10 or more every month). Card members also receive free subscriptions to the retailer’s Les Ailes magazine. This shows how CRM can be used:
a. to retain loyalty
b. in mass marketing
c. to increase knowledge about the competition
d. to create transactional relationships
e. to develop a compiled list
A
Many high-end hotel chains award points for every dollar spent in one of their hotels. Customers who earn a high number of points are given special privileges that may include upgraded hotel rooms or several free nights. This is an example of the leveraging of customer information to:
a. retain loyal customers
b. reinforce competitive promotional decisions
c. cross-sell other products and services
d. design targeted marketing communications
e. induce product trial by new customers
A
Hudson’s Bay Company has Canada’s largest reward program–HBC Rewards–which enables members to earn points at Hudson’s Bay family of stores, including The Bay, Zellers, Home Outfitters, and Hbc.com. Consumers can redeem points for over 600 rewards in the HBC Rewards catalog, including travel, leisure and entertainment items, Air Miles reward miles, or Bay and Zellers gift certificates. Which of the following provides the most likely reason why Hudson’s Bay Company implemented this reward program?
a. To reduce problems associated with cultural diversity
b. To make sure the 80/20 principle is not influencing its activities
c. To retain loyal customers
d. To create cognitive dissonance
e. To lessen the importance of customer service
C
Using customer database information to offer related products to customers is called:
a. incremental selling
b. cross-selling
c. relationship marketing
d. informed selling
e. synergistic selling
B
Every time Barry orders running shoes from Road Runner Sports, the Web site or the operator on the phone always tries to sell him something in addition to the shoes he ordered, such as socks or other apparel. This is an example of:
a. data mining
b. cross-selling
c. trading up
d. database enhancement
e. a database channel
B
According to the CEO of Allied Office Products, “We’re a head-count business: I know that if you have a 60-person office, you should buy $300 worth of basic office supplies—paper, pens, staples—from us with each order, but if that’s all we get, we stagnate. For us to grow, we have to convince the customer, who already likes our products and service, to buy more than just basic supplies; we have to increase the order by 10, 20, or 30 times.” Allied’s salespeople are trained to push the company’s less traditional, higher-margin lines such as coffee and refreshments, printing and forms management, and office furniture. Allied’s salespeople are engaging in:
a. cross-selling
b. trading up
c. buyer empowerment
d. alliance building
e. bundling
A
Subaru of America targeted outdoor enthusiasts when it added an outdoor life section to its Web site, organized by area of interest. The site will serve as a platform for co-marketing and promotional programs and will allow Subaru to gather most overt and covert information. Which of the following provides the most likely reason why Subaru has added this section to its site?
a. To create cognitive dissonance
b. To reduce problems associated with cultural diversity
c. To increase the effectiveness of its channels of distribution
d. To lessen the importance of customer service
e. To design more targeted marketing communications
E
After Ruth and Mike had paid in advance for their week’s stay at a Vermont Inn, Ruth felt that they might have chosen poorly and that they were committing themselves to stay at a place they might hate. Then Ruth got a letter from the Inn’s owner stating that she was looking forward to their visit and asking what they most enjoyed for breakfast. The hospitality of the letter dealt with Ruth’s cognitive dissonance by:
a. cross-selling
b. disintermediation
c. spamming and flaming
d. implementing a penetration strategy
e. reinforcing her purchase decision
E
CRM concerns many Americans because:
a. of the large number of people who must be served
b. not all customers have access to CRM marketing
c. of the potential for invasion of privacy
d. of the aggressive nature of marketers that use CRM
e. of the expense to consumers
C
When Ford Motor Company launched an online effort to market its F-Series trucks, it created a database. One potential problem with the use of this database is:
a. that customers may perceive it as an invasion of privacy
b. that the database may be used to generate unrepresentative focus groups
c. that media alternatives may be eliminated from promotional campaigns
d. that it may lead to more experimental research
e. the lack of adequate personal information on customers
A
Refer to Frequent Flyers. Airlines’ commitment to providing premium customer service to its most valuable customers indicates a commitment to:
a. customer relations mapping (CRM)
b. consumer relationship marketing (CRM)
c. internal transactional marketing (ITM)
d. customer relationship management (CRM)
e. consumer replacement market (CRM)
D
Refer to Frequent Flyers. American Airlines gives its gate employees the authority to hold up a connecting flight when a ConciergeKey member’s incoming flight is delayed. The delegation of this authority to a gate employee is called:
a. empowerment
b. trickle-down management
c. centralization
d. synergy
e. knowledge management
A
Refer to Frequent Flyers. Most airlines have considerable information regarding their frequent flyers, some of which has been purchased from outside vendors. Purchasing information on customers to better describe their needs or to determine how responsive they might be to marketing programs is called:
a. data mining
b. database enhancement
c. data warehouse
d. database expansion
e. knowledge management
B
Refer to Frequent Flyers. Airlines have estimated the future value of these elite flyers and found that they are very profitable for their business. What technique did the airlines use to project the future value of these flyers over a period of several years?
a. RFM analysis
b. Lifetime value analysis (LTV)
c. Cluster analysis
d. Conjoint analysis
e. Data enhancement analysis
B
Refer to Frequent Flyers. The ConciergeKey program, which rewards loyal customers for making multiple purchases, is an example of a(n):
a. RFM program
b. LTV program
c. loyalty program
d. customer relationship program
e. interactive program
C
Refer to Blood Services. The card sent by the organization is an example of a:
a. touch point
b. transformational exchange
c. predictive campaign
d. point-of-sale interaction
e. service message
A
Refer to Blood Services. The information about past donors is stored in the organization’s:
a. integration systems
b. information repository
c. data mine
d. database
e. spreadsheet
D
Refer to Blood Services. The organization developed a _____ list of donors to receive birthday cards.
a. compiled
b. benefit-based
c. response
d. feedback
e. proactive
C
Refer to Blood Services. What technique did the organization use to analyze its donor information?
a. Data identifying
b. Recency-frequency-monetary analysis
c. Niche marketing
d. Predictive modeling
e. Customer segmentation
E
Refer to Blood Services. The organization used CRM marketing to:
a. cross-sell other products
b. design targeted marketing communications
c. increase effectiveness of its distribution strategy
d. define customer service
e. do all of these things
B
Refer to Kraft Foods. Kraft’s food & family magazine is a component in a program that allows Kraft to gather information about, and build a relationship with, a group of their best customers. In other words, the food & family magazine is a component in Kraft’s _____ program.
a. customer relations mapping (CRM)
b. consumer relationship marketing (CRM)
c. internal transactional marketing (ITM)
d. customer relationship management (CRM)
e. consumer replacement market (CRM)
D
Refer to Kraft Foods. Kraft’s food & family magazine encourages customers to visit the company’s Web site to vote and provide ratings and feedback on their favorite recipes. Kraft then sends a “thank-you” e-mail for responding to their Web site. All of these activities show that Kraft is:
a. customer-centric
b. product oriented
c. sales oriented
d. customer service focused
e. goal oriented
A
Refer to Kraft Foods. When Kraft Food’s employees share information about customers gathered through the food & family initiative, they are practicing:
a. interaction management
b. knowledge management
c. profit-oriented management
d. lead management
e. performance management
B
Refer to Kraft Foods. Consumers who receive food & family magazine have several contacts with Kraft Foods in which there is a sharing of information. For example, readers must complete a profile to receive the magazine. Also, consumers are allowed to send in recipes and to vote and provide ratings and feedback on their favorite recipes at Kraftfoods.com. Each of these contacts is considered a:
a. touch point
b. customer interaction point
c. learning point
d. customer-centric point
e. moment of sharing
A
Refer to Kraft Foods. To be useful to the whole organization, the data collected by Kraft Foods through their food & family magazine initiative must be centralized. This process of centralizing data for a CRM system is termed:
a. data packing
b. data pooling
c. data cleaning
d. data mining
e. data warehousing
E
Refer to Los Angeles Sparks. The information gathered from ticket holders will probably become part of the organization’s _____ list.
a. compiled
b. cookies
c. response
d. electronic cash
e. Internet research
C
Refer to Los Angeles Sparks. Sparks’ season ticket holders that frequent the Sparks’ fan Web site have spent money to buy their season tickets and are likely to purchase again. Which type of analysis will help Sparks identify those customers most likely to purchase again because they have bought recently?
a. The 80/20 customer
b. Loyalty
c. RFM
d. CRM analysis
e. Cohort value
C
Refer to Los Angeles Sparks. Suppose that the Sparks management sees six categories of fans at their games. They feel that some people at Sparks games generally fall within one of the following six groups: (1) general sports fans, (2) basketball fans, (3) Sparks fans, (4) general fans of women’s sports, (5) fans of opposing teams, and (6) those seeking entertainment. Dividing customer groups down in this manner is termed:
a. customer data mining
b. customer segmentation
c. customer targeting
d. customer positioning
e. customer centric
B
Refer to Los Angeles Sparks. Home Court Advantage is an example of a _____ program.
a. reward
b. incentive
c. co-branding
d. loyalty
e. cohort
D
Refer to Los Angeles Sparks. Some consumers may not want others to provide their names to the Sparks organization. This reflects which concern regarding CRM programs?
a. Effectiveness
b. Expense
c. Consumer privacy
d. Consumer dissonance
e. Consumer apathy
C