Deck 6: Value for Customers

Question 1

Word-of-mouth advertising is also known as ________.

A) mass marketing
B) niche marketing
C) one-to-one communication
D) viral advertising
E) relationship marketing

Answer 1

D

Question 2

________ benefits relate to the specific attributes of the product.

A) Psychological
B) Comfort
C) Value
D) Functional
E) Brand

Answer 2

D

Question 3

A company could increase the perceived benefits of a product by ________.

A) reducing the purchase price
B) adding a desirable new feature to the product without increasing the purchase price
C) reducing the operating costs associated with the product
D) removing the warranty offered with the product
E) adding maintenance costs associated with owning the product

Answer 3

B

Question 4

To make data collected from customer satisfaction surveys useful, a company should do which of the following?

A) protect the information from data mining
B) compare the data to the company's previous ratings
C) purchase a formal CRM system
D) determine the CLV
E) offer a reward program

Question 5

A ________ is a graphical representation of the ratio between product benefits and costs.

A) fair value matrix
B) value map
C) loyalty map
D) data mine
E) customer relationship map

Question 6

Tommy Gray attempts to deliver customer satisfaction every day in his Audio Expressions installation business. He is a smart operator who knows that the key to this goal is to match ________ with ________.

A) company performance; competition
B) company performance; competitive prices
C) relationship building; performance tools
D) company performance; unique products
E) customer expectations; service quality

Question 7

A company's customer service quality plays the greatest role in customer satisfaction for ________.

A) defecting customers
B) neutral customers
C) a product involving short-term ownership
D) a product involving long-term ownership
E) unprofitable customers

Question 8

A product that falls within the fair value zone of a value map is perceived to deliver benefits that are ________ the product's cost.

A) greater than
B) less than
C) equal to
D) unrelated to
E) diminished by

Question 9

Which of the following strategies would a company most likely use to increase customer perceived value?

A) decreasing the variety of offered services
B) reducing data mining practices
C) lowering prices
D) "firing" unprofitable customers
E) limiting customer experiences with a brand

Question 10

A product that falls above the fair value line of a value map is perceived to deliver benefits that are ________ the product's cost.

A) greater than
B) less than
C) equal to
D) unrelated to
E) exaggerated by

Question 11

It is most accurate to say that a consumer's negative feeling about a purchase is the result of a product's performance not living up to ________.

A) its warranty
B) the company's expectations
C) the customer's expectations
D) social expectations
E) its fair value

Question 12

It is most accurate to say that customers buy from stores and companies that offer which of the following?

A) the highest value for the dollar
B) the highest customer perceived value
C) the highest level of customer satisfaction
D) the most attractive company image
E) the most concern for society's interests

Question 13

A buyer with a neutral response to a purchase is best described as which of the following?

A) loyal
B) switchable
C) dissatisfied
D) unprofitable
E) product champion

Question 14

A product that falls below the fair value zone of a value map is perceived to deliver benefits that are ________ the product's cost.

A) greater than
B) less than
C) equal to
D) unrelated to
E) diminished by

Question 15

Customer perceived value is defined as the difference between the ________ and the ________ of a product.

A) actual value; retail value
B) retailer's value; producer's costs
C) actual costs; perceived costs
D) perceived benefits; perceived costs
E) actual benefits; actual costs

Question 16

Customer perceived value is determined by a customer's ________ of the benefits and costs of a product.

A) personal assessment
B) rational expectations
C) accurate assessment
D) objective evaluation
E) emotional expectations

Question 17

A buyer with a ________ response to a purchase has reached the baseline level of satisfaction.

A) negative
B) defective
C) positive
D) delighted
E) neutral

Question 18

Which of the following is the term for customers who enthusiastically share their positive experiences with a product with friends, neighbors, and colleagues?

A) satisfied customers
B) product champions
C) neutral customers
D) switchable customers
E) defecting customers

Question 19

A product with a low perceived value is most likely to ________.

A) fall within the fair value zone on a value map
B) fall below the fair value line on a value map
C) have a high market share
D) have a low market share
E) have delighted customers

Question 20

________ is the degree to which a product meets or exceeds customer expectations.

A) Customer delight
B) Customer satisfaction
C) Customer perceived value
D) Customer perceived benefits
E) Value of customer

Question 21

Relationship marketing requires a company to make both a ________ and a ________.

A) short-term plan; transactional plan
B) short-term plan; data mining plan
C) long-term plan; proper investment of company resources
D) long-term plan; formal CRM commitment
E) formal CRM commitment; data mining plan

Question 22

A company would be likely to use information from the American Customer Satisfaction Index (ACSI) to answer all of the following questions EXCEPT which one?

A) Which customers have the highest customer lifetime value?
B) How do customers perceive the quality of our product?
C) How do customers perceive the quality of our competitors' products?
D) What do our customers expect from our product?
E) How do customers perceive the value of our product?

Question 23

Which of the following is NOT one of the four steps in developing one-to-one relationships with customers?

A) customer identification
B) customer authorization
C) customer differentiation
D) customer interaction
E) customization

Question 24

Relationship marketing is also known as ________.

A) one-to-one marketing
B) niche marketing
C) mass marketing
D) viral advertising
E) word-of-mouth advertising

Question 25

Which of the following types of information would a company be LEAST interested in collecting using a CRM system?

A) customers' academic records
B) customers' ages
C) customers' jobs
D) customers' marital status
E) customers' purchasing patterns

Question 26

A company that assigns actual marketing costs to customers based on the costs of performing various marketing activities is conducting a customer ________ analysis.

A) retention
B) relationship
C) profitability
D) loyalty
E) interaction

Question 27

Which of the following is true about customer relationship management?

A) It relies solely on information from internal sources.
B) Its aim is to maximize profit margins.
C) Its aim is to increase the efficiency of each customer transaction.
D) Its aim is to maximize profitable customer relationships.
E) It relies solely on information from external sources.

Question 28

Which of the following statements about customer relationships is true?

A) Customers who are not profitable at the beginning of a relationship are highly unlikely to become profitable.
B) Small increases in customer retention rate can translate into substantial increases in a company's profits.
C) Today's successful companies are more likely to take a transaction-based view than a relationship-based view.
D) It costs more to retain existing customers than to recruit new customers.
E) Relationship marketing focuses only on those customers who are currently profitable.

Question 29

Information collected through CRM is stored in a ________.

A) customer database
B) data mine
C) marketing mix
D) loyalty program
E) balance sheet

Question 30

A company implementing CRM is better off collecting ________ information than ________ information.

A) personal; purchase history
B) personal; financial
C) differentiation; identification
D) too much; too little
E) too little; too much

Question 31

________ is the degree to which a customer will select a particular brand when a purchase from the product category is being considered.

A) Customer satisfaction
B) Product championship
C) Customer lifetime value
D) Customer loyalty
E) Customer perceived value

Question 32

It is more challenging to collect information about customers in the ________ market than in the ________ market.

A) business-to-business; consumer
B) business-to-business; consumer-to-business
C) consumer; business-to-business
D) consumer-to-business; business-to-business
E) consumer-to-business; consumer

Question 33

A company would be most likely to use which of the following to weed out unprofitable customers and target the most profitable ones for pampering?

A) CPV
B) CSR
C) NGO
D) CLV
E) the four Ps

Question 34

________ is defined as the activities used to establish, develop, and maintain customer sales.

A) Data mining
B) Customer relationship management
C) Customer retention
D) Customer satisfaction
E) Customer differentiation

Question 35

The practice of CRM requires ________ processes.

A) only internal
B) only external
C) only customer identification
D) only customer analysis
E) both internal and external

Question 36

To determine customer lifetime value, a company needs to know all of the following EXCEPT which one?

A) customer average purchases per year
B) costs to service the customer
C) customer retention rate
D) the company's discount rate
E) customer perceived costs

Question 37

According to the Pareto Principle, which of the following is true?

A) 60% of a company's customers generate 80% of the company's profits.
B) 20% of a company's customers generate 60% of the company's profits.
C) 80% of a company's customers generate 10% of the company's profits.
D) 20% of a company's customers generate 80% of the company's profits.
E) 60% of a company's customers are unprofitable.

Question 38

A company that offers tiered levels of service would be most likely to deliver the highest level of customer service to its ________ customers.

A) most profitable
B) least profitable
C) unprofitable
D) dissatisfied
E) discounted

Question 39

According to the time value of money, which of the following is true?

A) Revenue collected by a company now is worth less than the same amount of revenue collected in the future.
B) Revenue collected by a company now is worth more than the same amount of revenue collected in the future.
C) Revenue collected by a company now is worth the same amount as revenue collected in the future.
D) Small discounts offered for up-front payment will result in less total revenue.
E) Small discounts offered for cash payment will result in less total revenue.

Question 40

________ is the organizational commitment to developing and enhancing long-term, mutually beneficial relationships with profitable or potentially profitable customers.

A) Customer retention
B) Customer lifetime value
C) Customer satisfaction
D) Relationship marketing
E) Reward programming

Question 41

A loyalty program is also commonly known as a(n) ________ program.

A) fair value
B) reward
C) champion
D) lifetime
E) enrichment

Question 42

Sally purchased Brand X lotion. In comparing her perception of how the lotion made her skin feel and look to her expectations for Brand X lotion, Sally was measuring her level of ________.

A) customer perceived value
B) customer satisfaction
C) loyalty
D) demand
E) customer lifetime value

Question 43

Which of the following accurately describes an aspect of CRM systems?

A) They require little security.
B) They require few employee resources.
C) They require a major investment in technology.
D) They can not help to reduce a company's costs.
E) They offer fewer benefits to retailers.

Question 44

A company is most likely to see increased customer loyalty by practicing which step of the CRM process?

A) customer identification
B) customer authorization
C) customer differentiation
D) customer retention
E) customization

Question 45

Which of the following is a benefit a company can gain through using a CRM system?

A) creating marketing messages that appeal to all of its customers
B) reducing employee hours spent managing information flow
C) reducing company technology expenditures
D) identifying dissatisfied customers before losing them to the competition
E) eliminating the need for costly loyalty programs

Question 46

________ is the statistical analysis of large databases for the purpose of discovering hidden pieces of information.

A) Customer differentiation
B) Customer identification
C) Customization
D) Customer relationship management
E) Data mining

Question 47

Aric purchased a digital camera at a significant discount. Though the camera did not have all of the features he had wanted, he was pleased with the reduced price. Aric thought the photos he took with the camera were of a high quality, but he was disappointed that the camera did not have a larger memory and that its batteries needed to be replaced so frequently. Aric is best described as a ________ customer.

A) loyal
B) delighted
C) defecting
D) product champion
E) switchable

Question 48

Diana Dion is currently researching data sources from within her company to make marketing decisions. Diana is making use of ________ databases.

A) online
B) internal
C) external
D) public
E) search service

Question 49

In CRM, findings about customers discovered through ________ techniques often lead to marketing opportunities.

A) data collection
B) data mining
C) customer satisfaction
D) customer loyalty
E) customer value

Question 50

FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these benefits against the monetary cost of using FedEx along with any other costs of using the service, they are acting upon ________.

A) loyalty
B) relationship marketing
C) customer perceived value
D) share of wallet
E) customer lifetime value

Question 51

The functional benefit of a family car is to provide ________.

A) safety
B) transportation
C) status
D) savings
E) entertainment

Question 52

After calculating the CLV of its customers, American Auto Supplies identified its most profitable customers and also found that a significant percentage of its customers are unprofitable. Which of the following actions would American Auto Supplies most likely take based on these findings?

A) fire its unprofitable customers
B) offer the highest level of customer service to its unprofitable customers
C) encourage unprofitable customers to become product champions
D) discontinue discounts for all but its most profitable customers
E) provide slightly lower levels of customer service to its most profitable customers

Question 53

Joy recently tried Green Day's new organic cleaning product and has been so pleased with the results that she has purchased the same item again, along with other cleaning products from the company. Joy has also talked about Green Day's cleaning products with her friends, encouraging them to try the products for their effectiveness and great scent. Joy is best described as a ________ customer.

A) dissatisfied
B) defecting
C) product champion
D) switchable
E) satisfied

Question 54

Frequent flier miles are an example of ________ programs.

A) customer differentiation
B) customer identification
C) loyalty
D) customer lifetime
E) product champion

Question 55

Through customer ________, a company has the means to find groups of customers who share similar characteristics.

A) interaction
B) customization
C) differentiation
D) perception
E) retention

Question 56

At Gina's Nails, the posted policy is "Without our customers, we don't exist." Gina and her staff aim to delight each customer, and they are quick to offer discounts or extra services whenever a customer is anything less than satisfied. Gina and her staff strive to make every customer a repeat customer. It is most accurate to say that instead of focusing on each individual transaction, Gina and her staff put a priority on ________.

A) maintaining customer-perceived satisfaction
B) enlisting product champions
C) attracting new customers
D) increasing share of wallet
E) capturing customer lifetime value

Question 57

For which of the following products would a customer's level of satisfaction with the purchase MOST likely change over time?

A) coffee
B) mouthwash
C) a car with unexpected service needs
D) a pair of jeans
E) a DVD

Question 58

A company that is making an effort to improve customer relationships should look at customer interactions as ________.

A) separate transactions
B) isolated exchanges
C) ongoing conversations
D) one-size-fits-all situations
E) patternless encounters

Question 59

A company that uses a CRM system needs to take special precautions to protect which of the following?

A) customer perceptions
B) customer value
C) customer satisfaction
D) customer retention
E) customer privacy

Question 60

Shania works hard to foster an emotional relationship between her Internet customers and the beauty products and services that she and her staff sell. By promoting a company culture that values exceptional value and service, Shania aims to create ________ by going beyond the expected.

A) customer delight
B) customer satisfaction
C) switchable customers
D) neutral customers
E) a fair value zone

Question 61

Refer to the scenario below to answer the following questions.
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a bluff overlooking the Maine coast, Seagull Terrace had attracted thousands of visits during the summer months, but then faced a tremendous downturn in business during the winter months. "But, given the industry in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan involved a seasonal promotional gimmick to be implemented from early winter to late spring that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers delicious entrees, but we'd like to expand that. We provide health club privileges off-site, but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities! With an indoor pool area, I will eventually offer weekend get-aways throughout the winter."
During her second winter at Seagull Terrace, Carol identified several business travelers who were repeat customers and who were enthusiastic about the value offered by the resort. Carol offered a special discount and reward program for those travelers who made recommendations to friends and colleagues that would lead to new customers for Seagull Terrace. Carol was interested in creating ________.

A) customer satisfaction
B) customer retention
C) product champions
D) switchable customers
E) customer differentiation

Question 62

A company can increase the perceived value of its product by increasing the perceived benefits, increasing the perceived costs, or a combination of the two.

Question 63

The only way for a company to accurately measure customer satisfaction is through independent rating organizations such as J.D. Power and Associates and the American Customer Satisfaction Index.

Question 64

The majority of consumers listen to and follow the product opinions of their friends and family members.

Question 65

A potential customer is more likely to use a value map than a marketing manager is.

Question 66

Refer to the scenario below to answer the following questions.
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a bluff overlooking the Maine coast, Seagull Terrace had attracted thousands of visits during the summer months, but then faced a tremendous downturn in business during the winter months. "But, given the industry in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan involved a seasonal promotional gimmick to be implemented from early winter to late spring that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers delicious entrees, but we'd like to expand that. We provide health club privileges off-site, but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities! With an indoor pool area, I will eventually offer weekend get-aways throughout the winter."
Carol asks guests to complete a customer satisfaction survey before they leave the resort. In addition to asking for demographic information and 1-10 ratings on aspects of the stay at the resort, the survey asks guests for suggestions on what types of services they'd like to see at the hotel. Carol most likely intends to use this information as part of a(n) ________ system.

A) four Ps
B) marketing mix
C) customer relationship management
D) perceived value
E) value map

Question 67

A satisfied customer is the most loyal type of customer.

Question 68

Customer information in a CRM system should be constantly updated.

Question 69

A successful CRM system will collect information to help a company assess its customers' needs.

Question 70

As a general rule, about 20% of a company's customers generate a loss instead of a profit for the company.

Question 71

Refer to the scenario below to answer the following questions.
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a bluff overlooking the Maine coast, Seagull Terrace had attracted thousands of visits during the summer months, but then faced a tremendous downturn in business during the winter months. "But, given the industry in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan involved a seasonal promotional gimmick to be implemented from early winter to late spring that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers delicious entrees, but we'd like to expand that. We provide health club privileges off-site, but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities! With an indoor pool area, I will eventually offer weekend get-aways throughout the winter."
By offering a discount to visitors from early winter to late spring, Carol changed the ________ of a stay at Seagull Terrace.

A) perceived benefits
B) perceived costs
C) actual benefits
D) retail value
E) secondary costs

Question 72

The emotional experience that a customer has with a purchase will be either positive or negative.

Question 73

Positive word-of-mouth advertising from a company's delighted customers is more effective than an advertising campaign developed by a company.

Question 74

In modern marketing, the majority of most companies' marketing efforts are geared toward cultivating relationships with loyal customers.

Question 75

A value map can be used to track the perceived values of competitors' products.

Question 76

A loyal customer is, by definition, the most profitable kind of customer.

Question 77

Tommy Baker is in charge of CRM for American Pie Nostalgia. As a result of his successful efforts in this area, his firm will likely enjoy all of the following EXCEPT ________.

A) providing higher levels of customer services
B) developing deeper customer relationships
C) creating offers tailored to specific customer requirements
D) understanding the competition better
E) identifying trends in customer concerns

Question 78

The number of products available to potential buyers has decreased in recent decades.

Question 79

A delighted customer is more likely than a switchable customer to be a product champion.

Question 80

Kristopher works for the marketing department of a large firm. His job involves using information provided by the company's CRM system to write email and text messages to customers that appeal to their specific needs and characteristics. Kristopher is involved in the ________ step of customer relationship management.

A) customer identification
B) customer authorization
C) customer differentiation
D) customer loyalty
E) customization