Deck 11: Relationship Marketing and Customer Relationship Management (CRM)

Question 1

In relationship marketing,the focus is on enticing a buyer to make an immediate purchase based on factors such as low price,convenience,or packaging.

Answer 1

False

Question 2

Relationship marketing views customers as equal partners in buyer-seller transactions.

Answer 2

True

Question 3

The sale of a product to a customer via a vending machine is typical of a transaction-based relationship.

Answer 3

True

Question 4

The buyer and seller exchanges in transaction-based marketing are characterized by limited communications and little or no ongoing relationships.

Question 5

At the second level of relationship marketing continuum,the buyers and sellers develop a dependence on one another that continues to grow over time.

Question 6

The first step in measuring customer satisfaction involves comparing actual sales to forecasted sales.

Question 7

The level 1 purchasers on a company's relationship marketing continuum receive specialized services and value-added benefits that may not be available from another firm.

Question 8

At the third-level of relationship marketing continuum,buyer-seller relationships are transformed structurally into business partnerships.

Question 9

Internal marketing involves selling products to employees of the firm at a discount.

Question 10

In the context of the relationship marketing continuum,the first-level relationship marketing programs typically rely on pricing and other financial incentives to motivate the customer into a buying relationship with a vendor.

Question 11

Companies focus on building loyal relationships with existing customers as retaining customers costs must less than acquiring new ones.

Question 12

One of the main goals of internal marketing is to keep the employees informed about corporate goals,strategies,and customer needs.

Question 13

The interactions at the first level of relationship marketing continuum are most likely to lead to a long-term relationship.

Question 14

The service department of an automobile firm calls its customers regularly after service to check the performance of the car.This is an example of the first level of interaction in the relationship marketing continuum.

Question 15

One of the steps involved in measuring customer satisfaction is compiling feedback from customers regarding present performance.

Question 16

Successful internal marketing efforts create satisfied employees who spread positive word-of-mouth messages to relatives,friends,and acquaintances.

Question 17

Customer satisfaction can be measured in terms of the gaps between what customers expect and what they perceive they have received.

Question 18

Transaction based marketing emphasizes retaining customers over making a sale.

Question 19

Companies that excel at satisfying customers provide their employees with the necessary tools to address customer requests and problems in a timely manner.

Question 20

Building and managing long-term relationships between buyers and sellers are the hallmarks of transaction-based marketing.

Question 21

As compared to happy customers,unhappy customers typically talk less about their buying experiences.

Question 22

Affinity marketing programs focus on creating extra value for consumers.

Question 23

The grassroots marketing approach relies on conventional and traditional marketing strategies.

Question 24

Viral marketing involves efforts that allow satisfied customers to spread the word about products to other customers.

Question 25

A company that gathers volunteers to try products and then relies on them to share their experiences with friends and colleagues is adopting a frequency marketing approach.

Question 26

Customer relationship management systems are more beneficial to retailers than to B2B firms.

Question 27

Companies can use database marketing to improve customer retention and referral rates.

Question 28

Many grocery chains require customers to have a membership card in order to receive sale prices or other discounts.These grocery chains are practicing database marketing.

Question 29

Widgets have become popular marketing tools as they can be easily passed on from one person to another through social networking sites.

Question 30

The cost of acquiring a new customer is equivalent to that of retaining a loyal customer.

Question 31

Marketers can use grassroots marketing approach to develop long-lasting,individual relationships with loyal customers.

Question 32

Successful customer relationship management systems reduce costs by empowering customers to find the information they need to manage their own orders.

Question 33

Database marketing involves the use of information technology to analyze data about customers and their transactions.

Question 34

Database marketing is not effective in identifying potential customers as it increases the marketing and promotion costs.

Question 35

Frequency marketing programs are promotional efforts sponsored by organizations that solicit involvement by individuals who share common interests and activities.

Question 36

Customer relationship management systems help firms to simplify complex business processes.

Question 37

Application service providers (ASPs)assist marketers by providing software when it is needed to capture,manipulate,and analyze masses of consumer data.

Question 38

Companies use knowledge obtained from databases to track customer buying patterns and to customize offerings and sales promotions.

Question 39

Affinity marketing consists of frequent-buyer or user marketing programs that reward customers with cash,rebates,merchandise,or other premiums.

Question 40

Customer relationship management (CRM)requires a top-down commitment to succeed and must penetrate every aspect of a firm's business.

Question 41

An internal partnership consists of a relationship that involves long-term exchanges of goods or services in return for cash.

Question 42

A lateral partnership is a strategic relationship that involves direct buyer-seller interactions.

Question 43

Affinity marketing is a cooperative arrangement in which two or more organizations join to sell their products in an allied marketing campaign.

Question 44

Alken Technologies has a support team that is dedicated to provide sales and service to its largest customers to pay attention to their special needs.This marketing technique used by Alken to show commitment to its customers,is referred to as internal marketing.

Question 45

Buyer-seller relationships between companies involve working together to provide advantages that benefit both parties.

Question 46

Firms with similar skills and resources form a partnership to reduce costs.

Question 47

Cobranding is a cooperative arrangement in which two or more businesses team up to closely link their names on a single product.

Question 48

Firms focus on acquiring new customers rather than retaining existing customers,as new customers account for nearly 70 percent of new business for a firm.

Question 49

Lateral partnership is a relationship that involves customers within an organization.

Question 50

The use of national account selling technique helps a business to strengthen its buyer-seller relationship.

Question 51

In a buyer partnership,the supplier must meet the unique needs of the purchaser in order to make the relationship successful.

Question 52

National account selling technique is used by marketers to serve their largest and most profitable customers.

Question 53

A partnership is an affiliation of two or more companies that help each other achieve common goals.

Question 54

It is essential for an organization to build and maintain internal partnerships in order to meet the needs of its external partnerships.

Question 55

Organizations must share similar values and goals for a partnership to succeed in the long run.

Question 56

Often,the desirability of partnering in the business market is based on the fact that each firm brings to the partnership something the other needs but cannot provide on its own.

Question 57

Research alliances between for-profit firms and colleges and universities are examples of lateral partnerships.

Question 58

Customer win-back is a customer relationship management strategy that focuses on acquiring new customers.

Question 59

The term "buzz marketing" refers to a promotional effort in which a dedicated sales team is assigned to a firm's major customers to provide sales and service.

Question 60

Some of the motives for firms to enter into partnership are warding off threats of future competition,raising or creating barriers to entry,and learning new skills.

Question 61

A strategic alliance can be formed only between those firms that serve the same industry.

Question 62

Reviewing customer comments and feedback and monitoring the click-through behavior on websites help companies to set appropriate,measurable goals for relationship programs.

Question 63

Strategic alliances typically include only the largest firms in any industry because of the amount of capital required to invest in shared facilities.

Question 64

The supply chain management process has no influence on the relationship of the company with the product's end users.

Question 65

Quick-response merchandising is a just-in-time strategy that reduces the time merchandise is held in inventory,resulting in substantial cost savings.

Question 66

The customer lifetime for a consumer product,such as microwave,will be longer compared to that of expensive products such as automobiles.

Question 67

A firm forming a partnership with another firm at the same level in the supply chain is creating a horizontal alliance.

Question 68

A vendor-managed inventory is an inventory management system in which the seller-in an existing agreement with a buyer-determines how much of a product is needed.

Question 69

Electronic data interchange opens new channels for gathering marketing information and helps to develop long-term business-to-business relationships.

Question 70

The payback period in a customer relationship is the length of time it takes to break even on customer acquisition costs.

Question 71

A strategic alliance is a partnership in which two or more companies combine resources and capital to create competitive advantages in a new market.

Question 72

One of the key criteria considered while forming a strategic alliance is the size and location of the partner firm.

Question 73

Electronic data interchange (EDI)involves computer-to-computer exchanges of invoices,orders,and other business documents.

Question 74

The term "lifetime value of a customer" refers to revenues and intangible benefits such as referrals and customer feedback a customer brings to the seller over an average lifetime of their relationship,less the amount the company must spend to acquire,market to,and service the customer.

Question 75

Business partners can communicate with each other through web services only if they are using the same software and network platforms.

Question 76

Joint ventures established by alliance partners operate more flexibly and change more easily with the change in market conditions,compared to cooperative alliances.

Question 77

In a cooperative alliance,the partners establish a new business unit in which each takes an ownership position.

Question 78

A strategic alliance formed between firms at adjacent stages in a supply chain is considered a vertical alliance.

Question 79

Assume that Ford has established a strategic alliance with Michelin to design an exclusive line of tires for Ford automobiles.The Ford-Michelin strategic alliance would be a horizontal alliance.

Question 80

A downstream relationship in the supply chain refers to the relationship between a company and its customers,including the end users of its product.