Question 1

A New York-based brand and customer loyalty and engagement research consultancy firm called The Agency conducts research annually to identify the top 100 brands with the highest levels of customer loyalty. Apple, WhatsApp, Google, YouTube, and Kindle lead the pack and demonstrate that consumers are enjoying long-term engagement with these companies. The top companies' ability to generate high levels of customer loyalty demonstrates these firms are engaging in ________ marketing.

Accepted Answer

Relationship marketing focuses on building long-term relationships with customers and creating customer loyalty. The fact that Apple, WhatsApp, Google, YouTube, and Kindle are identified as having high levels of customer loyalty suggests that they are engaging in relationship marketing.

Question 2

Businesses that view salesas the major means of increasing profits are operating with a _____ orientation.

Accepted Answer

Businesses that focus on sales as the main driver of profits are said to operate with a sales orientation. This approach places a high emphasis on closing deals and generating revenue through aggressive sales tactics.

Question 3

Panera is introducing some of its products into supermarkets, vending machines, college campuses, and other locations to increase its product availability and convenience. One reason Panera is doing so is to

Accepted Answer

Panera is introducing its products into various locations to increase convenience and availability for customers, which ultimately adds value to their offering. This move is aimed at increasing customer satisfaction and loyalty, which in turn benefits the company's bottom line.

Question 4

Netflix has one of the highest customer loyalty ratings in the entertainment industry with approximately 74% of current subscribers continuing to renew their subscription with Netflix on a month-to-month basis. In addition, many customers have cancelled their cable or satellite subscriptions and rely almost exclusively on streaming services such as Netflix for their entertainment. Netflix offers three different payment options or plans for customers-the basic plan at $7.99 per month, standard plan at $10.99 per month, or a premium plan at $13.99 per month. Thus, subscribers who renew on a monthly basis would pay between $95.88 and $167.88 per year to continue their Netflix service. If 74% of subscribers continue their service on an annual basis, Netflix is able to build a stable revenue stream based on repeat purchasers. A quick snapshot of one customer revealed that the customer had subscribed to the Premium plan for five years and generated over $700 in revenue to Netflix. Which of the following marketing terms best captures the importance of customer loyalty and its impact on Netflix?

Accepted Answer

Customer lifetime value (CLV) is the term used to measure the total worth of a customer to a business over their entire lifetime of being a customer. CLV takes into consideration the customer’s loyalty, purchasing behavior, and average purchase value to calculate their long-term value to the business. Netflix’s high customer loyalty rate and long-term subscribers like the example given in the question highlight the importance of customer lifetime value in their business strategy.

Question 5

Customer costs include anything the buyer must give up in order to obtain the benefits the product provides. The most obvious customer cost is

Accepted Answer

The most obvious customer cost is monetary price, as it refers to the actual financial cost the customer must bear in order to purchase the product. While the other options may also represent customer costs, monetary price is the most straightforward and clear-cut example.

Question 6

Organizations try to retain and increase long-term profitability through customer loyalty, which results from increasing

Accepted Answer

Customer loyalty is directly related to the value customers receive from products or services. By increasing customer value, organizations can retain customers and generate long-term profitability. Increasing production, market share, sales or market value may lead to short-term gains, but it does not ensure customer loyalty, which is crucial for sustainable profitability.

Question 7

Which of the following can help sustain interest in a product that has been around for a long time?

Accepted Answer

Promotion can help sustain interest in a product that has been around for a long time by refreshing its image, offering special deals, or highlighting its benefits in new and engaging ways.

Question 8

In the last several years, the Western part of the United States has faced severe drought conditions with a lack of rain in states such as New Mexico, Arizona, and California. In these communities, Walmart collects rainwater in underground tanks and saves it to water the store's landscaping. In addition, Walmart takes advantage of other opportunities to conserve water. It has installed high-efficiency urinals that reduce water use by 87% compared to the conventional 1-gallon-per-flush urinals throughout all new stores. These high-efficiency toilets use 20% less water compared to allowable EPA standards of up to 1.6 gallons per flush. Based on this information, it seems that Walmart is engaging in

Accepted Answer

Walmart's efforts to conserve water and implement environmentally friendly practices align with the principles of green marketing, which involves promoting products or practices that are environmentally sustainable.

Question 9

Rajesh Chakrabarti is in the process of creating, pricing, distributing, and promoting a new app to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment. Rajesh is engaging in

Accepted Answer

Rajesh Chakrabarti is engaging in marketing. Marketing involves creating, pricing, distributing, and promoting products or services to satisfy customers and develop relationships with stakeholders.

Question 10

Businesses that strive to determine what customers need or want and then develop products to satisfy those needs and wants are operating in a(n) ____ orientation.

Accepted Answer

The market orientation places the customer at the center of the organization's decision-making process. It requires that businesses understand their customers' wants and needs and develop products to satisfy them. This approach allows businesses to compete more effectively by providing products and services that meet customer needs better than competitors. The other options (production, sales, disruptive, and evolutionary) represent other business orientations that may not prioritize customer satisfaction in the same way.

Question 11

____ is a customer's subjective assessment of benefits relative to costs in determining the worth of a product.

Accepted Answer

Value is the customer's subjective assessment of benefits relative to costs in determining the worth of a product. The customer weighs the benefits and the cost of a product and decides whether it is worth buying, based on the perceived value.

Question 12

Which of the following would NOT be a customer cost considered in determination of product value?

Accepted Answer

Benefits received in exchange for the product are not a customer cost, but rather a benefit that the customer receives from purchasing the product. The other options (A, B, C, and E) are all customer costs that can be factored into the determination of product value.

Question 13

The equation a buyer applies to assess a product's value is

Accepted Answer

Value is perceived by customers as the benefits they receive from a product minus the costs they incur to acquire that product. These costs include not just the monetary price, but also time, effort, and any other resources expended.

Question 14

A company's customers, employees, shareholders, suppliers, governments, communities, and competitors comprise its

Accepted Answer

Stakeholders are individuals or groups who have an interest in or are affected by the actions of a company. This includes customers, employees, shareholders, suppliers, governments, communities, and competitors.

Question 15

Advances in technology, along with falling political and economic barriers and the universal desire for a higher standard of living, have made

Accepted Answer

Advances in technology, falling political and economic barriers, and the desire for a higher standard of living have made it easier and more common to market across national borders. This has led to increased globalization and the need for companies to have a global perspective in their marketing strategies.

Question 16

Hayden, a buyer for a medium-sized company, is assessing the value of competing software products for use in his firm. Which of the following would NOTbe a customer benefit considered in his determination of this product's value?

Accepted Answer

Although monetary price is a factor in determining the overall value of a product, it is not considered a customer benefit. The other options listed (speed of delivery, ease of installation, availability of technical support, and availability of training assistance) are all customer benefits that can enhance the overall value of the product.

Question 17

Creating long-term relationships with customers is a key component to surviving and thriving in today's competitive business landscape. One tactic many companies are deploying is the use of membership or loyalty programs where customers can accumulate points and receive discounts or free merchandise. For example, Omni Hotels encourages customers to join their membership program and provide key contact information such as their e-mail, address, and phone number. Omni Hotels offers benefits such as upgrades and free room nights based on the number of stays or points a customer has accumulated. This example demonstrates how Omni Hotels is utilizing

Accepted Answer

The tactic of using membership or loyalty programs to build long-term relationships with customers is a key component of customer relationship management. By collecting key contact information and offering rewards based on customer behavior, companies are able to better serve and retain their customers.

Question 18

Higher prices can be used competitively to

Accepted Answer

Higher prices can be used to establish a product's premium image, which can attract consumers who are willing to pay more for perceived higher quality or status. This can also differentiate a product from competitors and create a perceived sense of exclusivity.

Question 19

Which of the following is NOTa condition for an exchange to occur?

Accepted Answer

The exchange should provide benefit or satisfaction to both parties; therefore, it cannot be a condition that only the buyer benefits.

Question 20

The essence of marketing is

Accepted Answer

The essence of marketing is to create satisfying exchanges between customers and marketers, in which both parties benefit. This goes beyond simply selecting a target market, collecting information or maximizing market share. While providing value to customers is important, it is only one aspect of creating satisfying exchanges. Therefore, option C is the best choice.

Quiz 1: Customer-Driven Strategic Marketing