Deck 12: Managing Relationships and Building Loyalty

Question 1

Successful customer relationships cannot be built if a firm is selective about the segments they target.

Answer 1

False

Question 2

Which of the following is one of the types of relational marketing?

A)Database marketing
B)Transactional marketing
C)Corporate marketing
D)B2B marketing
E)B2C marketing

Answer 2

A

Question 3

Technology is used to do all of the following EXCEPT ____________ in relational marketing.

A)identify and build a database of current and potential customers
B)handle discrepancies between order requests
C)deliver differentiated messages based on consumers' characteristics and preferences
D)track each relationship to monitor the cost of acquiring the consumer and the lifetime value of the resulting purchases
E)all of the above are ways technology is used in relational marketing

Answer 3

B

Question 4

As service companies grow larger and make increasing use of technologies such as interactive Web sites and self-service equipment, maintaining meaningful relationships with customers becomes less significant of a marketing challenge.

Question 5

The advantage to the service organization of having membership relationships is that it knows who its future customers are and, usually, what they think of the services offered.

Question 6

Which of the following is NOT one of the four customer tiers discussed by Zeithaml, Rust, and Lemon?

A)Platinum
B)Gold
C)Bronze
D)Iron
E)Lead

Question 7

Network marketing occurs mainly in a business-to-business context, where firms commit resources to develop positions in a network of relationships.

Question 8

Define loyalty in a service context.

Question 9

What three psychological effects do Dowling and Uncles argue that marketers need to examine?

A)Make versus buy decision; where buyers shop; how much buyers spend
B)Brand loyalty versus deal loyalty; where buyers shop; how much buyers spend
C)Brand loyalty versus deal loyalty; how buyers value rewards; timing
D)Make versus buy decision; how buyers value rewards; timing
E)Make versus buy decision; how buyers value rewards; how much buyers spend

Question 10

Good relationships start with a good fit between customer needs and company capabilities.

Question 11

A membership relationship is a formalized relationship between the firm and an identifiable customer that may offer special benefits to both parties.

Question 12

Which of the following is NOT one of the advantages to incremental profits of a loyal customer?

A)Profit from increased purchases.
B)Profit from decreased advertising.
C)Profit from reduced operating costs.
D)Profit from referrals to other customers.
E)Profit from price premiums.

Question 13

Most people can think of dozens of service firms they truly like and where they are committed to going back to.

Question 14

Many service firms put too much emphasis on value without enough consideration of the number of customers they will serve.

Question 15

The term ____________ has been widely used to describe repeated transactions that form a relationship between the buyer and the supplier.

A)relational services
B)relationship renewal
C)relationship justification
D)relationship management
E)relationship marketing

Question 16

Which of the following is NOT one of the key strategies used to reduce customer defections?

A)Eliminate nuisance customers.
B)Address key churn drivers.
C)Implement effective complaint handling and service recovery procedures.
D)Increase switching costs.
E)Analyze customer defections and monitor declining accounts.

Question 17

The wheel of loyalty is composed of which of the following three main components?

A)Create loyalty bonds; deliver quality service; segment the market
B)Create loyalty bonds; build higher level bonds; deliver quality service
C)Build a foundation for loyalty; create bundling; build higher level bonds
D)Build a foundation for loyalty; create loyalty bonds; reduce churn drivers
E)Create loyalty bonds; understand customer value; understand service value

Question 18

Which of the following are the three main zones of the satisfaction-loyalty relationship?

A)Direction; institution; affluence
B)Defection; indifference; affection
C)Detection; elimination; subversion
D)Detection; affluence; rejection
E)Direction; intention; rejection

Question 19

The two ends of the customer satisfaction/loyalty relationship are terrorist and apostle.

Question 20

Which of the following is NOT one of the strategies for developing loyalty bonds with customers?

A)Deepening the relationship
B)Lag-based bonds
C)Social bonds
D)Customization bonds
E)Structural bonds

Question 21

Customer satisfaction based on the ACSI) is highly related to the stock price of individual firms.

Question 22

Which of the following is NOT an aspect of ING Direct's no-frills strategy?

A)High interest rates
B)Offers only a handful of basic products
C)Lures low-maintenance customers
D)Firing customers who don't fit the profile
E)Increased contact with the bank

Question 23

Describe the difference between miles and points on British Airways.

Question 24

What are the two questions that need to be asked when analyzing the nature of a current relationship?

Question 25

ING Direct could be called the fast-food model of consumer banking because it is about as no-frills as it gets.

Question 26

Describe the "Iron" customer segment discussed by Zeithaml, Rust, and Lemon.

Question 27

Vanguard Group is very careful about acquiring the right type of customer.

Question 28

Discuss the framework of the five key processes involved in a CRM strategy.
e.g.face-to-face and online).The fourth process is information management.A firm's ability to maintain multichannel consistency and provide value creation, etc.rests on its management of information.Customer information demographics, etc.) and churn information turnover) are key aspects of information of which firms need to be aware.Finally, performance assessment allows a firm to know how well it is doing on creating value, achieving market and service delivery performance objectives, and its CRM process performance overall.

Question 29

DHL's less powerful accounts generate significantly lower profitability than their major accounts.

Question 30

Explain what a "structural bond" means.

Question 31

Which of the following is NOT an example of common CRM applications?

A)Data collection
B)Data analysis
C)Market reinvestment
D)Sales force automation
E)Call center automation

Question 32

Part of British Airways' strategy is that customers can earn BA points and air miles on other airlines.

Question 33

Define total relationship marketing.

Question 34

Vanguard's success is measured by which of the following?

A)Low redemption rates
B)High redemption rates
C)Low customer turnover
D)High customer turnover
E)Portfolio stability

Question 35

Describe the wheel of loyalty.

Question 36

Why do firms benefit from a price premium with loyal customers?

Question 37

Describe how Vanguard Group keeps its costs down to attract the right type of customer.

Question 38

Which of the following is an example of a service that involves discrete transactions within a membership context?

A)Repair under warranty
B)Insurance
C)Radio station
D)Car rental
E)Pay phone

Question 39

Which of the following is an example of a service that involves continuous delivery without a formal relationship?

A)Police protection
B)Movie theater
C)Restaurant
D)Banking
E)Insurance

Question 40

Give an example of a firm discussed in the chapter that successfully built a strategy on serving customer segments that were neglected by established players that didn't perceive them as sufficiently "valuable."

Question 41

Discuss how Vanguard Group's pricing is set up to reward the right kind of customers.

Question 42

Explain how AOL got itself into legal trouble with poor churn management.

Question 43

Discuss how tiering helps a leading U.S. market research agency better understand its customers.

Question 44

Discuss the benefits offered by British Airways to its Gold tier members.