Question 1

Which of the following retail analytic applications involves the use of search techniques to gain insights into customers' buying patterns?

Accepted Answer

Data mining is an information processing method that relies on search techniques to discover new insights into the buying patterns of customers,using large databases.

Question 2

Many products in a supermarket can be found in more than one place throughout the stores.What type of retail analytics technique is used to decide where to place products in a store?

Accepted Answer

The market basket analysis analyzes what the customer bought during a single visit.This information is useful to place merchandise in a store.

Question 3

A(n)_____ is used by catalog retailers and direct markets to identify the best prospects on the basis of how recently the customers made a purchase,how often they make purchases,and how much they spent.

Accepted Answer

An RFM analysis is used by catalog retailers and direct markets to identify the best prospects on the basis of how recently the customers have made purchases,how frequently they make purchases,and how much they have bought.

Question 4

Since Yolanda used _____ to analyze what her customers often buy together during a single store visit,she knows to place facial tissues by the cold medicine and Wonder bread by the Skippy Peanut Butter in her store.

Accepted Answer

The market basket analysis analyzes what the customer bought during a single visit.This information is useful to place merchandise in a store.

Question 5

Which of the following statements does NOT describe how retailers use a customer lifetime value (CLV)?

Accepted Answer

To estimate CLV,retailers use past behaviors to forecast future purchases.A customer who spends $100 each month would have a higher CLV because of their recency and frequency levels.Therefore,there is better potential to build this customer into a more valued customer than the one who just shops at the retailer twice a year.

Question 6

Based on the following customer purchase data,which customer would have a higher lifetime value to the retailer?

Accepted Answer

To estimate CLV,retailers use past behaviors to forecast future purchases.A customer who spends money each month would have a higher CLV than those who shop occasionally because of their recency and frequency levels.Both Marcia and Jan have high recency and frequency levels,however,Jan has the higher monetary level over Marcia.

Question 7

Why would the customer pyramid be more appropriate in identifying customer's lifetime value than utilizing the traditional 80-20 rule?

Accepted Answer

The two-segment scheme,"best" and "rest," does not consider important differences among the 80 percent of customers in the "rest" segment.Many of the customers in the "rest" category are potentially "best," or at least,good customers.

Question 8

If a U.S.retailer wants to conform to the European policies concerning how customer information is collected,which type of policy should it adopt?

Accepted Answer

In the USA,personal information is viewed as the public domain so in a sense,consumers are automatically "opted in" whether they realize it or not.In Europe,the perspective is that consumers own their personal information so retailers must get consumers to agree explicitly to share this personal information,or opt in.

Question 9

Which of the following statements is true of frequent-shopper programs?

Accepted Answer

Frequent-shopper programs are expensive;it is difficult to make changes in the programs;the effect of CRM programs are limited and not proven to be successful in obtaining the goals set forth by retailers;and it is hard to gain an advantage over competitors as programs can easily be duplicated.

Question 10

Which of the following statements is true of a tiered reward structure?

Accepted Answer

Many frequent-shopper programs contain cascading tier levels,such as silver,gold,and platinum.The higher the tier,the better the rewards.

Question 11

What does the 80-20 rule mean?

Accepted Answer

For most retailers,a relatively small number of customers account for the majority of their profits.This condition is often called the 80-20 rule-80 percent of the sales or profits come from 20 percent of the customers.

Question 12

_____ are applications of statistical techniques and models that seek to improve retail decisions through analyses of customer data.

Accepted Answer

Retail analytics are applications of statistical techniques and models that seek to improve retail decisions through analyses of customer data.

Question 13

_____ uses the data on recent purchases made by customers to evaluate the potential contribution of each customer segment.

Accepted Answer

The RFM method uses three factors to evaluate the potential contribution of each customer segment: how recently the customers in the segment made a purchase,how frequently they make purchases,and how much money they have spent.

Question 14

Which of the following terms best describes the type of data analysis that focuses on the composition of products purchased by a customer during a single shopping trip?

Accepted Answer

The market basket analysis analyzes what the customer bought during a single visit.This information is useful to place merchandise in a store.

Question 15

_____ is a method often used in catalog and Internet channels to determine customer segments that a retailer should target for a promotion or send a catalog.

Accepted Answer

The RFM method is often used in catalog and Internet channels to determine customer segments that a retailer should target for a promotion or send a catalog.The method uses three factors to evaluate the potential contribution of each customer segment: how recently the customers in the segment made a purchase,how frequently they make purchases,and how much money they have spent.

Question 16

Which of the following statements correctly describes the practices regarding customer privacy in the U.S.?

Accepted Answer

Personal information in the United States is generally viewed as being in the public domain,and retailers can use it any way they desire.American consumers must explicitly tell retailers not to use their personal information-they must explicitly opt out.

Question 17

Which of the following statements is true of frequent-shopper programs?

Accepted Answer

Most programs simply offer customers price discounts that are available to all customers that register for the programs.These discounts are appealing to price-conscious shoppers but not necessarily to the high CLV shoppers.

Question 18

_____ help in measuring a customer's CLV by using the data collected about customers.

Accepted Answer

Retail analytics are applications of statistical techniques and models that seek to improve retail decisions through analyses of customer data.

Question 19

Millhouse loves books and often shops at a nearby Book Universe store.At the beginning of the year,he enrolled in a $5 program,and he would get a percentage off on the purchases he made throughout the year.Which of the following best demonstrates this type of approach toward customer retention?

Accepted Answer

Frequent-shopper programs,or loyalty programs,are marketing efforts that reward repeat buying behavior.

Question 20

Which of the following statements best describes a customer lifetime value (CLV)?

Accepted Answer

The value of a customer,called customer lifetime value (CLV),is the expected contribution from the customer to the retailer's profits over their entire relationship with the retailer.

Quiz 11: Customer Relationship Management

Which of the following retail analytic applications involves the use of search techniques to gain insights into customers' buying patterns?

Many products in a supermarket can be found in more than one place throughout the stores.What type of retail analytics technique is used to decide where to place products in a store?

A(n) _____ is used by catalog retailers and direct markets to identify the best prospects on the basis of how recently the customers made a purchase,how often they make purchases,and how much they spent.

Since Yolanda used _____ to analyze what her customers often buy together during a single store visit,she knows to place facial tissues by the cold medicine and Wonder bread by the Skippy Peanut Butter in her store.

Which of the following statements does NOT describe how retailers use a customer lifetime value (CLV) ?

Based on the following customer purchase data,which customer would have a higher lifetime value to the retailer?

Why would the customer pyramid be more appropriate in identifying customer's lifetime value than utilizing the traditional 80-20 rule?

If a U.S.retailer wants to conform to the European policies concerning how customer information is collected,which type of policy should it adopt?

Which of the following statements is true of frequent-shopper programs?

Which of the following statements is true of a tiered reward structure?

What does the 80-20 rule mean?

_____ are applications of statistical techniques and models that seek to improve retail decisions through analyses of customer data.

_____ uses the data on recent purchases made by customers to evaluate the potential contribution of each customer segment.

Which of the following terms best describes the type of data analysis that focuses on the composition of products purchased by a customer during a single shopping trip?

_____ is a method often used in catalog and Internet channels to determine customer segments that a retailer should target for a promotion or send a catalog.

Which of the following statements correctly describes the practices regarding customer privacy in the U.S.?

Which of the following statements is true of frequent-shopper programs?

_____ help in measuring a customer's CLV by using the data collected about customers.

Millhouse loves books and often shops at a nearby Book Universe store.At the beginning of the year,he enrolled in a $5 program,and he would get a percentage off on the purchases he made throughout the year.Which of the following best demonstrates this type of approach toward customer retention?

Which of the following statements best describes a customer lifetime value (CLV) ?