1. The new BMW K1200 motorcycle is fast and smooth and pricy, when compared to the Suzuki SV650. The Suzuki is a competent, budget motorcycle which costs less than half the price of the BMW, has about half the horsepower, and has a "buzzy" ride above 95 miles per hour (the BMW will go 170+!). Both bikes deliver what their customers expect. Based on these facts, which is true?
a. The Suzuki delivers higher performance quality.
b. The BMW delivers higher conformance quality.
c. German engineering is superior to Japanese engineering.
d. Both bikes deliver conformance quality.
e. Both companies participate in total quality management programs.
2. Which of the following is NOT true, when speaking of quality?
a. Higher quality supports higher prices.
b. Quality that raises customer satisfaction is generally related to higher profits.
c. High quality can lower costs.
d. Total Quality Management is an organization-wide program stressing continuous improvement.
e. There is no correlation between relative product quality and company profitability.
3. Marketers play all of the following roles in helping their companies define and deliver high-quality goods and services to target customers, EXCEPT:
a. providing customer data to marketers with non-competing offers.
b. correctly identifying customer needs.
c. correctly filling customer orders.
d. ensuring customer satisfaction.
e. communicating customer needs to designers.
4. Which of the following is true of the customers?
a. You should never "fire" your worst customers.
b. The best hotel/motel customers outspend others by a ratio of 5 to 1.
c. For every 20 customers, a company will make 80 percent more profit.
d. The number of unprofitable customers is equal to the number of profitable ones.
e. The best customers outspend others by a ratio of 5 to 1 in retailing.
5. A is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the marketer's cost stream of attracting, selling, and servicing that person, household, or company.
a. good customer
b. sales customer
c. profitable customer
d. strong customer
e. marketing accountant
6. What are the two solutions to unprofitable customers?
a. Lower fees; reduce service.
b. Lower fees; increase service.
c. Raise fees; increase service.
d. Raise fees; reduce service.
e. There is only one solution to unprofitable customers-fire them!
7. is best conducted with the tools of an accounting technique called
.
a. Activity-based costing; LIFO inventory management
b. Serving unprofitable customers; customer profitability analysis
c. Sensitivity analysis; activity-based costing
d. LIFO inventory management; the Poisson distribution
e. Customer profitability analysis; activity-based costing
8. Which is true of competitive advantage?
a. companies that hope to endure must continually invent new advantages. b Benjamin Franklin .first talked about by it.
c. A customer advantage can be a customer advantage, even if customers do not value it.
d. it is the ability to copy the best practices of other companies.
e. being the fastest to the market guarantees competitive advantage, according to Porter's Five Forces.
9. Taco Bell estimates that a loyal customer might be worth $11,000 to the company. This number stems from something called .
a. (NPV)*(ROI)
b. customer lifetime value
c. the competitive present value of loyalty model (CPVLM)
d. repeat purchase analysis
e. brand equity
10. The more loyal the customers, the higher the customer equity. Which of the following is NOT a driver of customer equity?
a. Brand equity.
b. Relationship equity.
c. Lifetime equity.
d. Value equity.
e. All of the above are drivers of customer equity.
11. is the customer's objective assessment of the utility of an offering based on perceptions of its benefits relative to its costs.
a. Add-on selling equity
b. Brand equity
c. Acquisition equity
d. Value equity
e. Relationship equity
12. When Ping An insurance fields a call from a new or existing customer, the salespeople will often suggest additional services to meet the needs of the customer. This is related to which component of customer equity?
a. Acquisition.
b. Value equity.
c. Retention.
d. Relationship equity.
e. Add-on selling.
13. is the process of managing detailed information about individual customers and carefully managing all customer "touch points" to maximize customer loyalty.
a. Customer relationship management
b. Prospect identification
c. Growing value equity
d. Add-on selling
e. Mass customization
14. In the morning, Moreno's Restaurant is full of locals who seek inexpensive warm breakfasts. By lunchtime, the locals are all gone and the place fills with tourists who are hot, hungry, and thirsty after a day on the local beach. Owner Omar Moreno understands the dichotomy and has read about customer relationship management-he wants to serve
both groups profitably. Omar is probably at what stage of the Peppers and Rogers' framework for serving customers?
a. Identifying his prospects and customers.
b. Differentiating customers by need.
c. Differentiating customers by their value to the restaurant.
d. Interacting with individual customers to improve his knowledge about their needs and to build stronger relationships.
e. Customizing products, services, and messages for each customer.
15. Omar Moreno's restaurant has a very different type of customer, depending on time of day and time of year. Omar is looking to re-vamp the menus to make more profit. What is probably the most important first customer relationship management step he can take toward his goal?
a. Identify his prospects and customers.
b. Differentiate customers by need.
c. Differentiate customers by their value to the restaurant.
d. Interact with individual customers to improve your knowledge about their needs and to build stronger relationships.
e. Customize products, services, and messages for each customer.
16. Attracting, retaining, and growing customers is more difficult these days, for all of the following reasons EXCEPT:
a. customers are smarter.
b. customers are more demanding.
c. customers are less forgiving.
d. customers are approached by fewer and fewer competitive offers.
e. it is no longer enough to "produce" satisfied customers.
17. Fidelity Investments puts through certain customers' calls more quickly than others as a strategy for improving the value of the company's customer base. While on the phone, the longer-waiting customers hear messages encouraging them to complete their transactions via the company Web site. This is an example of which kind of strategy?
a. Reducing customer defection rate.
b. Increasing the longevity of the customer relationship.
c. Enhancing the potential growth potential of each customer.
d. Managing phone queues via illegal and discriminatory practices.
e. Making low-profit customers more profitable.
18. Verizon loses about one-fourth of its customers a year to competitors. Verizon's competitors suffer similar customer losses. What is this phenomenon called?
a. Customer churn.
b. The burnout rate.
c. Sperm-to-worm conversion.
d. The return phenomenon (TRP).
e. Net loss analysis.
19. The best thing a company can do is make it to complain.
a. very difficult
b. easy
c. moderately difficult
d. a two-step process
e. None of the above. Since complaints are not positive, companies should discourage them altogether.
20. Which of the following is NOT part of either of the two main ways to strengthen customer retention?
a. Make switching involve high search costs.
b. Deliver high customer satisfaction.
c. Make leavers forfeit all future customer opportunities.
d. Make leavers lose their loyal-customer discounts or other privileges.
e. Make leaving expensive financially.
21. Which is true in the customer-development process?
a. A disqualified prospect is the same as an inactive customer.
b. The ultimate customer is the one termed the "repeat" customer.
c. Some partners go on to become members.
d. Clients move on to become members and advocates if they remain active.
e. The best customers never convert to inactive or ex-customers.
22. Which is true in the customer-development process?
a. A disqualified prospect is the same as an inactive customer.
b. The ultimate customer is the one termed the "repeat" customer.
c. Some partners go on to become members.
d. Advocates are the same as clients.
e. A client becomes a member by joining a program that offers benefits.
23. Which is true in the customer-development process?
a. The two types of pre-customers are called suspects and prospects.
b. The ultimate customer is the one termed the "repeat" customer.
c. Some partners go on to become members.
d. First-time customers may convert to prospects.
e. The best customers never convert to inactive or ex-customers.
24. Which is NOT one of the five levels of investment in customer relationship building?
a. Basic marketing.
b. Retroactive marketing.
c. Accountable marketing.
d. Proactive marketing.
e. Partnership marketing.
25. Which statement is probably the most important when considering customer retention?
a. The impact of customer defection rate varies by industry.
b. Reducing customer defection can be costly.
c. Customer profit rate tends to increase over the life of the retained customer.
d. Customer retention management is often the job of the marketing department.
e. Repeat customers are easier to understand than are first-time customers.
26. Which is the first step to reducing customer defection?
a. Define and measure the retention rate.
b. Distinguish among the cause of attrition and identify those that can be better managed.
c. Estimate lost profits that result from lost customers.
d. Figure out how much it would cost to reduce the defection rate.
e. Listen to customers.
27. Which is the probably the most important step when trying to reduce the customer defection rate?
a. Define and measure the retention rate.
b. Distinguish among the cause of attrition and identify those that can be better managed.
c. Estimate lost profits that result from lost customers.
d. Figure out how much it would cost to reduce the defection rate.
e. Listen to customers.
28. Wal-Mart has a high number of customers and sells mostly low-margin goods. Their level of relationship marketing is probably _ .
a. accountable
b. proactive
c. partnership
d. unresponsive
e. basic or reactive
29. Independent bread route truck drivers sell their products to a limited number of retail outlets, such as convenience stores, and make frequent, personal deliveries of the goods. Their level of relationship marketing is probably .
a. partnership
b. accountable
c. reactive
d. proactive
e. basic
30. Which airline started enhancing their marketing first with frequent flier programs?
a. Hooters
b. American
c. Virgin
d. Jet Blue
e. Southwest
31. Frequency programs acknowledge that of a company's customers might account for of its business.
a. 30 percent; 50 percent
b. most; most
c. 20 percent; 80 percent
d. less than 5 percent; nearly all
e. 75 percent; a slight majority
32. Increasing the customer's proclivity to repurchase can be accomplished by doing each of the following, EXCEPT:
a. creating structural ties with the customer.
b. creating long-term contracts.
c. charging less for ongoing purchases.
d. building in escalator clauses on pricing.
e. turning the product into a long-term service.
33. A mental part supplier in China maintains its competitive edge with contracts against large competitors by knowing all his customers' names and how their businesses are doing. This is an example of forming strong customer bonds through .
a. adding financial benefits
b. adding frequency programs
c. adding structural ties
d. adding long-term contracts
e. adding social benefits
34. is an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships.
a. A customer database
b. Database marketing
c. A data "mine"
d. A data warehouse
e. A customer mailing list
35. All of the following are good uses of databases that companies compile, EXCEPT:
a. identifying good prospects.
b. drawing inferences about customer lifestyles.
c. deepening customer loyalty by remembering preferences.
d. reactivating through reminder promotional efforts.
e. avoiding sending the same customers two similar offers but with varying prices.
36. Which would be a reason to invest in a customer relationship management system?
a. When the product is a once-in-a-lifetime purchase, such as a grand piano.
b. Where customers for the product show little brand loyalty.
c. Where satisfied customers can convert into partners.
d. Where the product has a very small unit-sale amount, as with a candy bar.
e. Where the cost of gathering data is high.
37. Which of the following is NOT a downside of database marketing and CRM?
a. It requires a large, upfront investment.
b. It is difficult to get all employees customer-oriented.
c. Not all customers want a "relationship" with the company.
d. Skilled CRM professionals are easily found in a marketplace full of underemployed information systems specialists.
e. The assumptions underlying CRM may not always hold.
Academic requirements:
• Your work should be submitted in the formats outlined for each solution task in the assignment.