Deck 3: Relationship Marketing and CRM

Question 1

Relationship marketing focuses on maintaining a continuous relationship with customers by providing value that increases their commitment to the company leading to increases in customer retention, customer lifetime value and greater share of wallet.

Answer 1

True

Question 2

Relationship marketing is applicable to a firm's dealings with suppliers and distributors.

Answer 2

True

Question 3

Some consumers satisfy their social needs dealing with company clerks and sales people.

Answer 3

True

Question 4

Consumers want to have deep relationships with every company they deal with and companies should act accordingly.

Question 5

A good way to deal with low and no-profit customers is simply provide them with lesser service.

Question 6

Most agree that CRM and relationship marketing are the same things.

Question 7

The goal of CRM is to establish close, personal relationships with all customers.

Question 8

It is consistent with CRM to provide personalized service to high value customers and no personalized service to no-profit customers.

Question 9

CRM looks at market share as one of the major keys to company profits.

Question 10

Relationship marketing has 3 basic features: relational databases, data silos and integrated marketing communications.

Question 11

Relationship marketing includes affinity marketing, loyalty marketing and key account management.

Question 12

Loyalty programs for all of their prominence are in the decline stage and companies must soon develop alternatives for they are becoming too pervasive and undifferentiated.

Question 13

Findings have shown that despite their intention, loyalty programs are an offensive strategy aimed at increasing a company's customer base.

Question 14

Companies have found that it costs more to retain old customers than to acquire new ones.

Question 15

Relationship marketing strategies benefit companies most if they engage in exchanges with customers that are transactional in nature.

Question 16

Butterflies are opinion leaders who spread the word about a company as well as being high-profit themselves.

Question 17

Strangers warrant highest investment since they are unfamiliar with a company's offerings and therefore offer good profit potential.

Question 18

Companies that invest in barnacles hope to turn them into butterflies.

Question 19

Since butterflies, true friends, barnacles and strangers are categories that each contains high-profit customers; companies should seek out the high-profit customers from each and invest equivalent amounts in their development.

Question 20

Trust pertains to a partner's reliability, honesty and integrity.

Question 21

One of the reasons that the marketing function is becoming more and more decentralized is that line managers became transaction oriented through the use of transactional databases.

Question 22

One of the reasons marketing has become more decentralized is that cross-functional in-house venture groups have been found to be successful in developing new products.

Question 23

Companies have traditionally been organized around products, markets, sales and channels.

Question 24

Despite all that is said and done, CRM belongs primarily to the marketing department.

Question 25

Proctor and Gamble has begun to organize around the concept of customer segment managers.

Question 26

Direct marketing grew due to 2 forces: 800 numbers and wide distribution of credit cards.

Question 27

True friends, according to Reinartz and Kumar, warrant CRM expenditures but not an overwhelming emphasis.

Question 28

Customer satisfaction can be measured in two ways: overall satisfaction and transaction specific satisfaction.

Question 29

Relationship marketing is a

A)strategy.
B)philosophy.
C)tactic useful in B2C relationships only.
D)tactic useful in B2B relationships only.
E)both A and B

Question 30

The problem with transactional customers is that

A)companies simply do not have enough of them.
B)they generate high profits but spend too much time bonding with employees during the transaction.
C)companies have a tendency to spend too much money marketing to them.
D)they transition too quickly into relational customers.
E)all of the above

Question 31

Which of the following is NOT true?

A)Relationship marketing focuses on establishing and maintaining close relationships with customers.
B)CRM is concerned with developing a portfolio of profit-maximizing customers.
C)The CRM philosophy may exclude having relationships with low- and no-profit customers.
D)The goal of CRM is to establish close and intense relationships with all customers, because one never knows when they might become extremely profitable.
E)all are true

Question 32

Before the development of Relationship Marketing in the late 1980s, companies

A)focused too intently on individuals and lost sight of the mass market.
B)focused too intently on institutional buyers and lost sight of final consumers.
C)focused too much on the sale and not enough on the relationship.
D)were not focused enough on the fourth P (people)
E)all of the above

Question 33

Relationship marketing looks at which of the following as the key to profits?

A)customer retention
B)customer market share
C)customer economies of scale
D)localization as opposed to globalization
E)all of the above

Question 34

Relationship marketing focuses on all but which one of the following?

A)prospects as opposed to customers
B)individuals as opposed to masses
C)developing a learning relationship
D)creating a bond between customers and brands
E)all of the above

Question 35

Relationship marketing has three basic features. Which of the following lists all three correctly?

A)relational databases, integrated marketing communications, capabilities for dialogue
B)relational databases, data silos, capabilities for dialogue
C)data silos, integrated marketing communications, capabilities for dialogue
D)relational databases, integrated marketing communications, call centers
E)relational databases, data silos, call centers

Question 36

Relationship marketing can include all but which of the following?

A)affinity marketing
B)loyalty marketing
C)co-marketing
D)key account management
E)transaction-focused interaction

Question 37

In B2B environments, relationship marketing includes which of the following?

A)solution selling
B)enumeration district selling
C)AIDA selling
D)CPM selling
E)FSI selling

Question 38

Relational exchanges do NOT take place between a firm and its

A)service providers.
B)government entities.
C)ultimate consumers.
D)intermediate customers.
E)all are possible relational exchange partners

Question 39

Relational exchanges do NOT take place between a firm and its

A)competitors .
B)non-profit organizations.
C)functional departments.
D)employees.
E)all are possible relational exchange partners.

Question 40

Loyalty or frequency programs are characterized by all but which one of the following?

A)They can provide savings.
B)They are in the decline stage.
C)They can provide recognition.
D)They can provide ease of shopping.
E)They can provide greater efficiency in decision making.

Question 41

Findings have shown that

A)by dealing with a limited number of companies, consumers achieve cognitive consistency.
B)consumers prefer diversity, they like choice, and they prefer dealing with a large number of companies.
C)loyalty programs are an offensive strategy aimed at increasing the customer base.
D)loyalty programs, surprisingly, are not as developed in global companies as they are in large domestic companies.
E)loyalty programs are on the decrease world-wide.

Question 42

Companies have found that

A)it costs more to retain old customers than to acquire new ones.
B)old customers get jaded, bored, and are constantly looking for deals.
C)market share is approximately twice as profitable as increasing wallet share.
D)economies of scale are approximately three times as profitable as the average retention strategy.
E)cross-selling and up-selling are types of retention strategies.

Question 43

Relationship marketing strategies befit companies most if they engage in exchanges with customers that are

A)transactional.
B)emotional.
C)discrete.
D)level skewed.
E)based on convenience goods.

Question 44

Two examples of relationship marketing are

A)horizontal and concentric customer focus.
B)vertical and lateral bonding.
C)customization and personalization.
D)functional and discrete bonding.
E)all are good examples

Question 45

"Butterflies" are

A)the type of customer every company strives to capture.
B)opinion leaders who spread the word about a company as well as being high profit themselves.
C)generally short-term customers that companies should not invest too much in.
D)less profitable than the stable "barnacles."
E)all except C

Question 46

"Strangers"

A)warrant the highest investment since they are unfamiliar with a company's offerings.
B)can metamorphose into butterflies through loyalty programs.
C)can become a company's "apostles" when moved up the hierarchy of effects.
D)may be low profit initially but offer true potential.
E)warrant little or no investment.

Question 47

"Barnacles"

A)are the most loyal customer base because they stick with a company .
B)are a long-term and low-profit customer segment.
C)are a short-term customer base that has long-term potential.
D)are turned into butterflies as soon as possible .
E)The cash cows for most organizations

Question 48

Companies should invest the most in

A)butterflies.
B)true friends.
C)barnacles.
D)strangers.
E)all four categories because each may contain high-profit customers.

Question 49

Which term refers to a person's confidence in a partner's reliability, honesty, and integrity?

A)trust
B)satisfaction
C)commitment
D)cognitive consistency
E)none of the above

Question 50

When exchange partners reach this, other primary exchange partners are virtually excluded from consideration.

A)trust
B)satisfaction
C)commitment
D)cognitive consistency
E)integration rationalization

Question 51

The major difference between relationship marketing and CRM is that

A)CRM includes aspects of systems architecture as well as strategies.
B)relationship marketing is practiced in a centralized marketing environment, whereas CRM is practiced in a decentralized marketing environment.
C)relationship marketing is transaction oriented whereas CRM is not.
D)relationship marketing is B2B oriented whereas CRM is B2C oriented.
E)CRM only applies to final consumers whereas relationship marketing applies to consumers as well as all channel members.

Question 52

The marketing function used to be centralized and now is becoming more and more decentralized. What is a major reason for this?

A)line managers are closer to the customer
B)line managers became transaction oriented through use of transactional databases
C)line managers experimented successfully with direct-marketing approaches
D)A, B and C are all correct
E)Only A and C are correct

Question 53

Which is not a reason for marketing becoming more decentralized?

A)cross-functional in-house venture groups have been found to be successful in developing new products
B)the U.S. recession of the early 1990s caused companies to question the effectiveness of their mass marketing efforts.
C)the growth of the CCC and the fact their market information is applicable to all departments, not just marketing
D)marketing researchers' abilities to data mine the vast amounts of customer data in data warehouses and data marts
E)all of the above

Question 54

Companies have traditionally been organized around

A)products.
B)markets.
C)sales.
D)channels.
E)all of the above

Question 55

Despite all that is said and done, CRM belongs primarily to

A)IT.
B)marketing.
C)CCC.
D)CRM task force.
E)none of the above