Deck 10: Developing and Maintaining Long-Term Customer Relationships

Question 1

Unlike other nonmonetary costs, opportunity costs are harder for marketers to control.

Answer 1

True

Question 2

Sales tax is an example of a transactional cost.

Answer 2

True

Question 3

In which of the following situations would a customer become more tolerable of weak or poor product performance?

A) When the customer is in a hurry.
B) When the customer's personal needs are high.
C) When the purchase situation is highly involving.
D) When the customer has fewer product alternatives.
E) When the purchase is for a special occasion.

Answer 3

D

Question 4

__________ focuses on more fully serving the needs of current customers.

A) ​Market share
B) ​Perceived value
C) ​Relationship capital
D) ​Lifetime value
E) ​Share of customer

Question 5

What is the primary disadvantage associated with using financial incentives as a means of developing customer relationships?

A) They take a long time to work.
B) Customers may resist the use of financial incentives.
C) They are highly expensive.
D) They can be easily imitated.
E) Customer trust is usually lacking.

Question 6

Larger financial institutions now offer a wide range of services under one roof, from banking to stock trading. These institutions have moved away from increasing their market share to instead focusing on increasing their:

A) share of market.
B) share of relationships.
C) share of customer.
D) relational share.
E) lifetime customer value.

Question 7

With respect to customer expectations, which of the following best describes the zone of tolerance?

A) It explains situations where customer expectations will be higher than normal.
B) It represents the degree to which customers recognize and are willing to accept variability in performance.
C) It explains situations where customer satisfaction will be exceptionally low.
D) It explains why customers tolerate weak performance when performance is beyond the control of the firm.
E) It explains situations where customers will hold lower than normal expectations.

Question 8

The room service at the Waldorf Astoria is an example of a symbolic or experiential attribute.​

Question 9

Companies should strive to delight their customers all the time.

Question 10

With respect to competitive advantages, many see __________ as the most important asset that an organization can possess, as it stems from the value generated by the trust, commitment, cooperation, and interdependence among relationship partners.

A) partnership capital
B) integrity
C) relationship capital
D) relational collaboration
E) professionalism

Question 11

Customers do not usually make independent judgments about satisfaction.

Question 12

Advocacy involves creating social bonds that prevent product or supplier switching.​

Question 13

__________ is defined as a business philosophy aimed at defining and increasing customer value in ways that motivate customers to remain loyal.

A) Lifetime value management
B) Customer orientation
C) Market orientation
D) Customer relationship management
E) Retention management

Question 14

__________ refers to the degree of superiority of a firm's goods or services. It is a relative term because it can only be judged in comparison to competing products or when compared to an internal standard of excellence.

A) Value
B) Durability
C) Quality
D) Satisfaction
E) Sustainability

Question 15

There are two types of monetary costs involved in the purchase of any product: transactional costs and life-cycle costs. Which of the following best exemplifies a life-cycle cost in the purchase of an automobile?

A) the actual purchase price
B) state or local taxes
C) anticipated repair expenses
D) registration fees
E) title fees

Question 16

The most basic strategy for enhancing and maintaining customer relationships is the offering of financial incentives.

Question 17

Why is relationship development in business markets riskier and more involving than relationship development in consumer markets? ​

A) ​There is less of an opportunity to develop profitable business relationships than individual consumer relationships.
B) ​Business customers do not move through the same sequence of stages in relationship development as consumers do.
C) ​Customers are less likely to switch brands, and businesses are likely to be price-sensitive.
D) ​Business buyers typically have fewer options to choose from, and financial risks are higher.
E) ​Business buyers have too many options, whereas consumers only have a few.

Question 18

Marketers should make it difficult for customers to complain because these complaints can easily create negative perceptions among other customers.

Question 19

Customer satisfaction occurs when actual performance exceeds the desired performance expectation.

Question 20

Lily loves to purchase high-end shoes and clothes that are the latest fashions. She is even willing to purchase uncomfortable clothing if it is considered fashionable. Lily is most concerned with the symbolic and experiential attributes of apparel.

Question 21

___________ include the immediate financial outlay or commitment that must be made to purchase a product.

A) ​Transactional costs
B) ​Life cycle costs
C) ​Nonmonetary costs
D) ​Opportunity costs
E) ​Experiential costs

Question 22

Discuss the strategies that can be used to enhance and maintain customer relationships. Identify the key advantages and disadvantages of each strategy, as well as examples of the marketing tactics that my be used.

Question 23

Discuss the relationship between customer expectations and customer satisfaction. What might cause expectations to be higher or lower? How is the zone of tolerance a useful diagnostic tool in terms of developing strategies aimed at improving customer satisfaction?

Question 24

With respect to the different components of the total product offering, supplemental products play the important role of:

A) meeting basic customer needs.
B) delivering the main core benefits of the product offering.
C) adding symbolic benefits to the product offering.
D) delivering the minimum level of quality demanded by customers.
E) differentiating the product offering from competing products.

Question 25

Which of the following IS NOT good advice with respect to leveraging customer satisfaction from a strategic point of view?

A) Understand what can go wrong in fulfilling customers' needs.
B) Offer a satisfaction guarantee.
C) Flesh out all uncontrollable issues to prevent them.
D) Make it easy for customers to complain.
E) Make customer satisfaction measurement an ongoing priority.

Question 26

In the purchase of a product, time, effort, risk, and opportunity costs are all examples of:

A) nonmonetary costs.
B) soft costs.
C) tangible costs.
D) experiential costs.
E) monetary costs.

Question 27

Which of the following statements about value is FALSE?

A) Value includes the concept of quality, but it is broader in scope.
B) Value takes into account every marketing program element.
C) Value, unlike quality, means the same thing to all customers.
D) Value is critical to maintaining long-term customer relationships.
E) Value allows for the necessary balance among the five types of utility.

Question 28

Assume a customer planning to purchase a Wii U gaming console made this statement: "Given the expense and all the hype about the new Wii U, it ought to be the best gaming console ever made." What type of expectation does this customer have about the Wii U?

A) an ideal expectation
B) a normative expectation
C) an experience-based expectation
D) a minimum tolerable expectation
E) a highly involved expectation

Question 29

Which of the following activities is used to maintain clients rather than simply acquire customers?

A) ​Mass marketing
B) ​Increase in market share
C) ​Value-based pricing strategy
D) ​Short-term strategic focus
E) ​Segmentation based on homogeneous needs

Question 30

Which of the following statements is FALSE regarding the use of the 80/20 rule in managing customer relationships?

A) Advances in technology and data collection techniques allow firms to profile customers in real time.
B) Twenty percent of customers provide 80 percent of business profits.
C) Some customers are too expensive to keep given the low level of profits that they generate.
D) The 20 percent of customers in the bottom tier should be fired so the firm can focus on its top customers.
E) The firm's top customers are the most obvious candidates for retention strategies.

Question 31

In times past, developing and implementing the "right" marketing strategy was all about __________. In today's economy, however, that emphasis has shifted to developing strategies that attract and retain customers over the long term.

A) aggressive direct selling in order to maximize sales volume
B) creating a large number of transactions in order to maximize the firm's market share
C) conducting extensive research to discover customer needs
D) making the highest quality product
E) making products of moderate quality that could be sold at the lowest possible price

Question 32

Which of the following is an example of a monetary life cycle cost?

A) ​Quality
B) ​Exclusive features
C) ​Opportuity costs
D) Product design
E) ​Accessories

Question 33

Which of the following relationship strategies is most likely to be used by a health club as it tries to create social bonds with its clientele?

A) membership programs
B) coupons
C) personalized training
D) customer reminder notifications
E) family discount programs

Question 34

The PTL Corporation provides long-distance telephone services to consumer and business markets. The company recently initiated a marketing strategy designed to promote customer knowledge and educate customers about the company and its products. The strategy is also designed to prospect for new customers. At what stage of the customer relationship development process does PTL find itself?

A) repeat purchase
B) community
C) awareness
D) advocacy
E) client

Question 35

In terms of managing customer expectations, what are the three possible outcomes that may occur when expectations are compared to actual product performance? What should marketers do to manage expectations effectively, especially when customers' expectations are unrealistic? Should a firm attempt to delight its customers by constantly exceeding their highest expectations?

Question 36

Meghan recently took her parents to a gourmet restaurant for their 25^th wedding anniversary. The evening was exceptional, with everyone receiving the utmost in terms of quality and value. However, when reflecting on the experience the next day, Meghan decided that she was not fully satisfied. Why might this happen?

A) Because satisfaction has nothing to do with quality or value.
B) Because satisfaction occurs over time, whereas perceptions about quality and value occur immediately.
C) Because dissatisfaction is based on an entirely different set of factors than satisfaction.
D) Because satisfaction can be based on factors that have nothing to do with quality or value.
E) Because perceived quality usually goes down in a group setting.

Question 37

When a firm begins to charge high fees for additional services to non-profitable customers, it has determined that the __________ of those customers is too low to warrant added efforts at maintaining a relationship with them.

A) client value
B) lifetime value
C) relational value
D) market share
E) 80/20 value

Question 38

Discuss the role of value in developing long-term customer relationships. In your discussion, explain the value formula and its component parts. How can the value formula help marketers design strategies to optimize customer value?

Question 39

In service offerings, the core product is typically composed of three interrelated dimensions. What are these dimensions?

A) people, technology, and facilities
B) people, processes, and physical evidence
C) processes, employees, and facilities
D) customers, employees, and processes
E) reputation, operations, and quality