Question 1

If marketers raise customer expectations too high, the buyer is likely to be disappointed. However, if the company sets expectations too low, it
A) must offer a fixed price.
B) will raise the value proposition.
C) will lower total customer cost.
D) will create customer loyalty.
E) won't attract enough buyers.

Accepted Answer

If a company sets expectations too low, it won't attract enough buyers because customers will perceive the product or service as low quality or not valuable enough. It's important for companies to find a balance in setting realistic expectations to attract and retain customers.

Question 2

When a consumer considers a product or service, he or she will choose whichever product or service delivers the highest customer perceived value. A retailer such as Zellers can improve it offerings in three ways. If Zellers improves products, personnel, and image benefits, it will
A) reduce total customer cost.
B) reduce product cost.
C) increase total customer benefit.
D) increase long-term loyalty.
E) reduce psychic costs.

Accepted Answer

Improving products, personnel, and image benefits will increase the overall customer benefit, as the customer will perceive more value in their interaction with Zellers. This will lead to higher customer satisfaction and increased loyalty in the long term.

Question 3

Enterprise Office Depot is a marketer that has moved from the traditional to a modern customer-oriented organization chart. In that case, we would expect to find the ________ of Enterprise, second in importance.
A) middle management
B) service department
C) top management
D) front-line people
E) marketing department

Accepted Answer

In a modern customer-oriented organization, front-line people are considered second in importance after customers, as they directly interact with and serve the customers.

Question 4

If a company increases customer satisfaction by lowering its price or increasing its services, the result may be
A) a loyalty program.
B) lower profits.
C) unsatisfying experiences.
D) decreased lifetime value.
E) customer defection.

Accepted Answer

Lowering prices or increasing services may result in lower profits for the company.

Question 5

________ are adept at building customer relationships, not just products.
A) Sales-centred companies
B) Customer-centred companies
C) Production-centred companies
D) Profit-centred companies
E) Promotion-centred companies

Accepted Answer

Customer-centred companies prioritize building and maintaining strong relationships with their customers, rather than solely focusing on producing and selling products. This approach often leads to increased customer loyalty and long-term success for the company.

Question 6

Total customer benefit is the perceived monetary value of the bundle of economic, functional, and ________ benefits customers expect from a given market offering.
A) fabricated
B) advertised
C) psychological
D) intangible
E) realized

Accepted Answer

Total customer benefit includes economic, functional, and psychological benefits, reflecting the total value customers perceive in a product or service.

Question 7

Which of the following is true for the modern company organization chart?
A) Frontline employees are less important than top management.
B) Customers are at the top of the pyramid.
C) Top management is at the top of the pyramid.
D) Customers are less important than middle management.
E) Frontline employees are at the top of the pyramid.

Accepted Answer

In modern company organization charts, the focus is increasingly customer-centric, placing customers at the top of the pyramid to emphasize their importance and the company's commitment to serving their needs.

Question 8

The opening vignette on Sobeys Inc. indicates that successful marketers are the ones that
A) understand the sales concept.
B) manage their customer base.
C) divorce themselves from a production mentality.
D) understand promotional strategy.
E) diversify their product line.

Accepted Answer

Successful marketers manage their customer base effectively, focusing on understanding and meeting the needs and preferences of their customers to build loyalty and repeat business.

Question 9

One large construction company has paid $19,000 for a Caterpillar tractor, yet when the company calculates the bundle of economic, functional, and psychological benefits of the tractor, they arrive at a figure much higher. The construction company's assessment is seen as the
A) total customer satisfaction.
B) value proposition.
C) total customer cost.
D) customer perceived benefit.
E) total customer benefit.

Accepted Answer

The construction company's assessment of the bundle of economic, functional, and psychological benefits of the tractor is referred to as the total customer benefit. This figure takes into account all the benefits that the customer perceives from owning the tractor, including its functional capabilities as well as any psychological benefits such as brand prestige or user satisfaction. The value proposition is a statement that outlines the unique benefits that a product or service offers to customers, while total customer cost refers to the monetary cost that a customer incurs when purchasing a product or service. Total customer satisfaction and customer perceived benefit are related concepts but do not capture the full range of benefits that the construction company is considering.

Question 10

If Volvo were to focus its marketing efforts on all the experiences the customer will have on the way to obtaining and using their offerings, it would be focusing its marketing efforts on the customer's
A) psychological system.
B) demand.
C) cost versus benefit system.
D) value-delivery system.
E) perception system.

Accepted Answer

Focusing on the experiences the customer will have on the way to obtaining and using a product or service is part of the value-delivery system. This includes not only the product itself but also the customer service, ordering process, and any additional benefits or conveniences offered to the customer. By emphasizing this aspect of their offerings, Volvo can differentiate themselves from competitors and create a more positive overall customer experience.

Question 11

RBC wants to understand what value propositions make sense to which customers. When the bank discovered that it sometimes makes sense to tell a customer her or she is not using the right service, even if that services generates less revenue in the short term, it was acting on a
A) return on quality.
B) customer lifetime value.
C) leverageable advantage.
D) competitive advantage.
E) customer profitability analysis.

Accepted Answer

RBC's focus on understanding which value propositions make sense for which customers is an example of customer lifetime value (CLV) analysis. This involves evaluating the long-term value a customer will bring to the company, which may involve recommending a lower-revenue service if it will ultimately result in higher CLV for that customer.

Question 12

The final step of customer value analysis is to _______
A) monitor customer values over time.
B) identify the major attributes and benefits that customers value.
C) assess the company's and competitors' performances on the different customer values against their rated importance.
D) examine how customers in a specific segment rate the company's performance.
E) assess the quantitative importance of the different attributes and benefits.

Accepted Answer

The final step of customer value analysis is to monitor customer values over time to ensure that the company continues to deliver the desired values and to detect any changes in customers' priorities or preferences that may require adjustments in the company's marketing offering.

Question 13

Derrick Lagodzki has just taken possession of new Toyota Yaris. Whether Derrick is satisfied after purchase will depend on the Yaris's performance in relation to
A) Toyota's expectations.
B) his expectations.
C) Toyota's delivery.
D) his reactions.
E) both Derrick's and Toyota's demands.

Accepted Answer

Derrick's satisfaction with the purchase will depend on how well the Yaris meets his expectations. The other options may also influence his satisfaction to some extent, but his own expectations are the primary factor.

Question 14

The perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychic costs is called the
A) total customer cost.
B) organizational expense ratio.
C) shopper's fatigue.
D) comparison shopping to comparison buying ratio.
E) analysis paralysis.

Accepted Answer

The perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering is referred to as total customer cost. This includes monetary, time, energy, and psychic costs. Option B is incorrect as it refers to the expense ratio for an organization. Option C, D, and E are not relevant to the concept of total customer cost.

Question 15

The ________ consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering.
A) value proposition
B) mission statement
C) corporate pledge
D) corporate perceived value
E) customer promise

Accepted Answer

The value proposition refers to the complete package of benefits that a company promises to deliver to customers, which may include factors beyond the core product or service offering. A mission statement typically outlines the company's overall purpose and values, while a corporate pledge or customer promise may be specific commitments related to customer service or quality. Corporate perceived value may refer to the customer's overall impression of the company, while the value proposition is a more specific concept.

Question 16

In the modern customer-oriented organizational chart, which of the following is considered to be at the top of the organizational pyramid?
A) Sales are at the top of the organizational pyramid.
B) Customers are at the top of the organizational pyramid.
C) Middle management is at the top of the organizational pyramid.
D) The president is at the top of the organizational pyramid.
E) Front-line people are at the top of the organizational pyramid.

Accepted Answer

In a customer-oriented organizational chart, customers are considered to be at the top of the organizational pyramid as the organization's main focus is to provide value to the customers and meet their needs and expectations. This approach recognizes that without satisfied customers, the organization cannot succeed in the long run. Other departments such as sales, middle management, and front-line staff are all part of the organization's effort to serve and satisfy customers. The president or CEO may be the ultimate decision-maker, but their role is to lead the organization in creating customer value.

Question 17

Buyers do not always make logical or rational decisions. They might purchase the most expensive and least quality item for example. Which of the following would be another good example of this behaviour?
A) The buyer might be underage.
B) The buyer might be under pressure to resist sales messages.
C) The buyer is not seen by the seller as being very intelligent.
D) The buyer might be under orders to buy at the lowest price.
E) The buyer refuses to listen to or read any advertising.

Accepted Answer

The buyer might be under orders to buy at the lowest price.

Question 18

________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
A) Report rating
B) Competitors market share rate
C) Perceived usefulness
D) Customer perceived value
E) Failure avoidance rate

Accepted Answer

This definition refers to Customer Perceived Value, which is determined by subtracting the total perceived cost of an offering from the total perceived benefits. It takes into account the customer's evaluation of alternative options in the market.

Question 19

In applying a customer's perceived value to a decision, a seller who is at a customer perceived value disadvantage has two alternatives: to increase total customer benefit or
A) offer an extended warranty.
B) lose the sale to the competitor.
C) advertise more frequently.
D) decrease total customer cost.
E) increase a cash-back bonus.

Accepted Answer

Decreasing total customer cost is the best choice for a seller who is at a customer perceived value disadvantage. This can be achieved by lowering the price or offering discounts to increase the value proposition. The goal is to make the customer feel like they are getting a better deal, thereby increasing their perceived value of the product or service. Offering an extended warranty or increasing a cash-back bonus may also help, but these options alone may not be enough to overcome a customer perceived value disadvantage.

Question 20

Which of the following is the first step in customer value analysis?
A) Identify the major attributes and benefits that customers value.
B) Examine how customers in a specific segment rate the company's performance.
C) Assess the company's and competitors' performances on the different customer values against their rated importance.
D) Monitor customer values over time.
E) Assess the quantitative importance of the different attributes and benefits.

Accepted Answer

The first step in customer value analysis is to identify the major attributes and benefits that customers value. Only after identifying these attributes can a company assess how well it is performing in delivering them and how it can improve its offerings.

Quiz 5: Creating Long term Loyalty Relationships

If marketers raise customer expectations too high, the buyer is likely to be disappointed. However, if the company sets expectations too low, it

When a consumer considers a product or service, he or she will choose whichever product or service delivers the highest customer perceived value. A retailer such as Zellers can improve it offerings in three ways. If Zellers improves products, personnel, and image benefits, it will

Enterprise Office Depot is a marketer that has moved from the traditional to a modern customer-oriented organization chart. In that case, we would expect to find the ________ of Enterprise, second in importance.

If a company increases customer satisfaction by lowering its price or increasing its services, the result may be

________ are adept at building customer relationships, not just products.

Total customer benefit is the perceived monetary value of the bundle of economic, functional, and ________ benefits customers expect from a given market offering.

Which of the following is true for the modern company organization chart?

The opening vignette on Sobeys Inc. indicates that successful marketers are the ones that

One large construction company has paid $19,000 for a Caterpillar tractor, yet when the company calculates the bundle of economic, functional, and psychological benefits of the tractor, they arrive at a figure much higher. The construction company's assessment is seen as the

If Volvo were to focus its marketing efforts on all the experiences the customer will have on the way to obtaining and using their offerings, it would be focusing its marketing efforts on the customer's

RBC wants to understand what value propositions make sense to which customers. When the bank discovered that it sometimes makes sense to tell a customer her or she is not using the right service, even if that services generates less revenue in the short term, it was acting on a

The final step of customer value analysis is to _______

Derrick Lagodzki has just taken possession of new Toyota Yaris. Whether Derrick is satisfied after purchase will depend on the Yaris's performance in relation to

The perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychic costs is called the

The ________ consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering.

In the modern customer-oriented organizational chart, which of the following is considered to be at the top of the organizational pyramid?

Buyers do not always make logical or rational decisions. They might purchase the most expensive and least quality item for example. Which of the following would be another good example of this behaviour?

________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

In applying a customer's perceived value to a decision, a seller who is at a customer perceived value disadvantage has two alternatives: to increase total customer benefit or

Which of the following is the first step in customer value analysis?