Question 1

A sporting goods store could use customer clustering to group customers based on the type of sporting goods they purchased, such as fishing supplies, hunting supplies, and camping equipment.

Accepted Answer

Customer clustering is a technique used to group customers based on similarities in their behavior or purchase history. In the case of a sporting goods store, this technique could be used to identify different groups of customers based on the types of sporting goods they purchased, such as fishing supplies, hunting supplies, and camping equipment. By understanding the characteristics and preferences of different customer groups, the store could tailor its marketing and promotional efforts to better meet the needs and interests of its customers.

Question 2

List the tasks associated with databased marketing.

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Question 3

Retail stores can use data mining to determine when to mark merchandise down and how much to mark it down.

Accepted Answer

Retail stores can analyze data such as sales patterns, inventory levels, and competitor pricing to determine the optimal time and discount amount for markdowns. This can help improve sales and minimize excess inventory.

Question 4

Customer service representatives can use an individual's lifetime value to determine how to interact with a customer.

Accepted Answer

Customer lifetime value (CLV) is the total worth of a customer to a business over the course of their relationship. It helps customer service representatives to decide how to interact with a customer in order to maximize their value to the business. For example, if a customer has a high CLV, it may make sense to offer them more personalized service or incentives to retain their business.

Question 5

What are the two types of data mining?

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Question 6

What is a data warehouse and what type of data should it contain?

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Question 7

Describe trawling.

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Question 8

Identify and describe the three primary types of data coding processes.

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Question 9

The primary reason for building a database, coding the information, and mining the data is to use the output to:

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Question 10

Using identification IDs and passwords on a website for customers allow for each of the following customer benefits except:

Accepted Answer

Identification IDs and passwords on a website for customers can provide personalization benefits such as greeting the customer by name, customizing web pages to fit past behavior, and saving time when placing orders by not having to re-enter personal information. However, they do not provide data for a customer cluster analysis, which would require additional data collection and analysis.

Question 11

A database-driven marketing program starts with assigning IDs and passwords to individual internet customers that:

Accepted Answer

Assigning IDs and passwords to individual internet customers allows them to access components of the company's website that are not available to those who are simply browsing the website. This can help the company provide a personalized experience for the customer, which can increase customer loyalty and sales. It also allows the company to track individual customer behavior and tailor their marketing efforts accordingly.

Question 12

Key figures in calculating the lifetime value of a consumer or set of consumers are revenues, costs, and purchase history.

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Question 13

Customer clustering involves building profiles of consumer groups and preparing models that predict future purchase behaviors.

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Question 14

Through lifetime value analysis, a company can build a profile of its best customers, which can then be used to identify prospective new customers or upgrade current customers to a higher level of purchasing.

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Question 15

Describe geocoding, customer clusters, and location-data tracking.

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Question 16

In calculating lifetime value, the cost of acquiring a customer is typically determined by dividing the total marketing and advertising costs by the firm's total number of customers.

Accepted Answer

The cost of acquiring a customer is determined by dividing the total marketing and advertising costs by the number of new customers acquired, not the total number of customers.

Question 17

Coding of customer data can produce information that can be used to group customers into clusters based on a wide variety of criteria.

Accepted Answer

Customer data can be coded to identify patterns and similarities among customers, which can be used to group them into clusters based on different criteria such as demographics, behaviour, preferences, and more. This helps organizations to better understand their customers, personalize marketing messages, improve customer engagement, and optimize business strategies.

Question 18

Many companies that sell clothes over the internet will email messages or an email newsletter to customers who are interested in keeping up with the latest fashion news. This strategy is most successful if it is based on:

Accepted Answer

Customer profile information provided by the customer themselves is the most reliable and accurate data to base email marketing campaigns on. This information can include preferences, past purchases, and interests, which can be used to tailor personalized messages and offers to the customer. Cookie data or data mining may not always provide accurate information, and lifetime value and customer cluster analysis may not necessarily capture the customer's specific interests and preferences.

Question 19

Define lifetime value. How is it determined?

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Question 20

Data mining and data coding of a firm's database can help develop more personalized marketing communications and marketing programs.

Accepted Answer

Data mining and data coding can help a firm analyze its database to identify patterns and trends in customer behavior, preferences, and purchasing patterns, which can be used to create more personalized and targeted marketing communications and programs.

Quiz 11: Database and Direct Response Marketing and Personal Selling