Deck 21: Customer Relationship Management (CRM)

Question 1

Consumers are reluctant to enter information through point-of-sale interactions because of privacy violation fears.

Answer 1

False
Many point-of-sale software programs enable customers to easily provide information about themselves without feeling their privacy has been violated.

Question 2

Empowerment in a CRM environment is normally a process of collecting customer information through customers' feedback on products.

Answer 2

False
This is learning. Empowerment is the delegation of authority to solve customers' problems quickly.

Question 3

For a CRM system to be effective,customer information must be stored in a data matrix.

Answer 3

False
The information must be stored in a data warehouse,a central repository for data from various functional areas of the organization.

Question 4

Channel interactions are the relationships a manufacturer has with its distributors.

Question 5

Data consolidation is an analytical process that compiles actionable data about the purchase habits of a firm's current and potential customers.

Question 6

Customer relationship management (CRM)requires that organizations be organized around customer segments.

Question 7

Through the application of knowledge management,the Lands' End clothing catalog retailer would have learned that a substantial number of its customers would like Lands' End to offer a line of maternity wear.

Question 8

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.

Question 9

RFM analysis is used to delete unnecessary or duplicated data.

Question 10

Technology plays a major role in any CRM system.

Question 11

Data mining is used to find hidden patterns and relationships in the customer data stored in the data warehouse.

Question 12

Privacy issues are the primary reason for centralizing data in a CRM.

Question 13

Response lists are especially important in database creation because past behavior is a strong predictor of future behavior.

Question 14

Customer-centric is an internal management philosophy similar to the marketing concept.

Question 15

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.

Question 16

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.

Question 17

For a catalog retailer,the contact between the customer and the company's order taker would be an example of a touch point.

Question 18

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.

Question 19

Multinational companies often face difficult problems when pulling together internal data about their customers.

Question 20

The process of centralizing data in a CRM system is sometimes referred to as the interpolation of external and internal touch points.

Question 21

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

Question 22

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.

Question 23

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)

Question 24

A common CRM application is cross-selling other products or services to customers.

Question 25

A company that has a(n)_____ customizes its product offerings based on data generated through interaction between the customer and the company.

A) ethnocentric perspective
B) supply-based focus
C) sales orientation
D) supply-based focus
E) customer-centric focus

Question 26

As the second step in the CRM cycle a company must:

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) decide on a segmentation strategy

Question 27

While many catalog retailers send out a standard catalog to all potential customers,Land's End uses information it has gathered about customers in its CRM system to target the catalog to the individual.This approach used by Land's End is an example of the _____ approach.

A) shotgun
B) rifle
C) Square peg, square
D) Fishing pole
E) All of these statements can be used to describe the approach used by Land's End.

Question 28

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

Question 29

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.

Question 30

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

Question 31

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 less than 20 employees. This focus implies that Best Buy is _____.

A) ethnocentric
B) demand-based
C) sales-centric
D) supply-based
E) customer-centric

Question 32

_____ is a company-wide business strategy designed to optimize profitability,revenue,and customer satisfaction by focusing on highly defined and precise customer segments.

A) Organizational optimization
B) Consumer relationship marketing (CRM)
C) Total quality management (TQM)
D) Customer relationship management (CRM)
E) Market aggregation

Question 33

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

Question 34

Through campaign management,all areas of the company participate in the development of programs targeted to customers.

Question 35

As a predictive tool,data mining has limited utility.

Question 36

A basic assumption in any lifetime value calculation is that marketing to repeat customers is more profitable than marketing to first-time buyers.

Question 37

The United States has the most restrictive privacy laws in the world.

Question 38

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 Coke 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

Question 39

The My Coke Rewards program allows consumers to earn reward products and services by registering points they receive by consuming Coca Cola products.The My Coke Rewards program allows Coca Cola to collect information about consumers that they 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

Question 40

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

Question 41

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 areas
C) data mining
D) information search periods
E) observational points

Question 42

The executive vice president 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

Question 43

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

Question 44

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

Question 45

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

Question 46

Les Ailes de la Mode,a Quebec retail store that promotes the highest quality customer service,has not only established itself as a top retailer in the province,but also as 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

Question 47

_____ refers to the latitude organizations bestow on their representatives to negotiate mutually satisfying commitments with customers.

A) Consumer learning
B) Customerization
C) Empowerment
D) Autonomy
E) Interaction

Question 48

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

Question 49

_____ 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

Question 50

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

Question 51

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 the person 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

Question 52

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

Question 53

In a CRM environment,_____ is defined as the informal process of collecting customer information through customer contacts and feedback on product and service performance.

A) leveraging
B) knowledge management
C) interaction
D) data mining
E) learning

Question 54

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

Question 55

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

Question 56

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

Question 57

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

Question 58

Les Ailes de la Mode is a Quebec retail store that promotes the highest quality 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

Question 59

The traditional approach for acquiring data from customers is through:

A) encoding devices
B) media
C) feedback mechanisms
D) channel interactions
E) public relations

Question 60

_____ 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

Question 61

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

Question 62

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

Question 63

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

Question 64

_____ 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

Question 65

Taquan recently purchased a GE 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

Question 66

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

Question 67

Which type of list includes names and addresses of individuals who have responded to an offer of some kind?

A) interactive list
B) compiled list
C) recent list
D) response list
E) A-list

Question 68

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

Question 69

"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

Question 70

A(n)_____ list generally includes names and addresses gleaned from directories or membership rosters.

A) predictive
B) compiled
C) response
D) actionable
E) disintegrated

Question 71

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

Question 72

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

Question 73

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

Question 74

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

Question 75

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 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

Question 76

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

Question 77

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

Question 78

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

Question 79

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

Question 80

_____ is the process of finding 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