Question 1

Why is constructing a customer database potentially more difficult for customers making transactions in the stores?
A) Customer returns to the store confound the data
B) Store purchases with cash can be anonymous
C) Store customers are not interested in sharing personal information
D) Availability of store assortments is not always similar to website assortments
E) None of these

Accepted Answer

With in-store transactions, it can be difficult to identify customers because customers can pay with cash, cheque, or third-party credit cards, making the purchase virtually anonymous.

Question 2

Canada's new Privacy Act changes the way companies collect,use,or disclose customer information.Which of the following is not one of the principles upon which the act is based?
A) How a retailer plans to use customer data must be identified at the time of collection of the customer's information
B) A retailer does not need consent for the collection, use, or disclosure of personal data
C) Retailers must obtain consent from consumers prior to passing on their personal information to third parties
D) Retailers must keep personal information on consumers as accurate and up-to-date as possible
E) Retailers must make customers' personal information available upon their request

Accepted Answer

Option B is not one of the principles upon which the act is based, as it contradicts the act's requirement of obtaining consent for the collection, use, or disclosure of personal data. The other options (A, C, D, E) are all valid principles under Canada's new Privacy Act.

Question 3

A retailer wants to collect information about its customer purchases so that it can suggest appropriate products to its customers,but the retailer does not want to raise privacy concerns among its customers.Which of the following should it do?
A) Give customers a choice as to whether they give information
B) Tell consumers what information they are collecting
C) Allow consumers to view and correct any personal information held by an online retailer
D) Ensure that the information is held securely and is not passed on to other companies
E) All of these

Accepted Answer

All of the mentioned choices are important to ensure that the retailer collects customer information while maintaining their privacy concerns. By giving customers a choice as to whether they want to provide their information, the retailer is respecting their privacy and autonomy. By informing customers of what data is being collected, they can make an informed decision about whether to provide it or not. Allowing customers to view and correct any personal information held by the retailer further enhances customer trust and transparency. Finally, holding information securely and not sharing it with third-party companies helps protect customer data from unauthorized access or disclosure.

Question 4

The first step in the CRM process is:
A) analyzing data
B) constructing a customer database
C) developing CRM programs
D) identifying the target customers
E) implementing CRM programs

Accepted Answer

The first step in the CRM process is constructing a customer database. This database will contain all of the information that you need to know about your customers, such as their contact information, purchase history, and preferences.

Question 5

After Penny used ____________________ to analyze patterns in her store's CD sales,she realized that older buyers shopped during the earlier part of the day and younger shoppers visited her shop during the evening.
A) data cloning
B) data mining
C) information drafting
D) strategic analysis
E) redress analysis

Accepted Answer

Data mining refers to the process of analyzing large data sets to discover patterns and meaningful insights. This is exactly what Penny did to determine the shopping behaviors of different age groups in her store. The other choices listed do not accurately describe the process used by Penny to analyze her store's CD sales.

Question 6

Why are concerns about privacy acute for customers who use the electronic channel while they shop?
A) Electronic retailers ask for more information than necessary for a simple transaction
B) Consumers are concerned about their credit card security
C) A large amount of information can be collected without the consumer's knowledge
D) Consumers are concerned as to how the information is shared
E) All of these

Accepted Answer

The answer of Why are concerns about privacy acute for...

Question 7

When Loretta went to Amazon.ca to see if they had any new books about Australian wine,the first thing she saw was a personalized greeting.Which of the following best describes how Amazon.ca knew it was Loretta?
A) She ordered before and told them her name
B) Her name is on all of her shipments as well as her address
C) Amazon.ca placed cookies on her hard drive to identify her when she visits the website
D) Another retailer sold her private information to Amazon
E) She used a password

Accepted Answer

Amazon.ca most likely used cookies to identify Loretta when she visited their website. Cookies are small text files that websites place on a user's computer to track their activities and preferences. By using cookies, Amazon.ca could remember Loretta's name and personalize her browsing experience. The other options are unlikely as Loretta could simply have typed in her name and address during the checkout process, and a password would not necessarily reveal her name.

Question 8

Electronic retailers can collect transaction data for their data warehouse,but they can also collect information by placing cookies on a visitor's hard drive.What is a cookie?
A) A frequent shopper reward
B) A virus
C) Text files that identify pirated software
D) Text files that identify visitors when they return to a website
E) Text files used to determine demographic information

Accepted Answer

A cookie is a small text file that is placed on a visitor's hard drive by a website to identify them when they return to that website. Electronic retailers can use cookies to collect information on their visitors, such as their demographics and browsing habits, to improve their marketing and sales strategies.

Question 9

Customer satisfaction is affected by the amount of time it takes to get a question answered or a problem resolved.Retailers can minimize this time by:
A) increasing the number of people the customer deals with so the customer can see how the retailer really cares about revolving his or her complaints
B) delegating all handling of complaints to store managers only
C) providing customers with clear and precise instructions
D) using company jargon when dealing with customers so customers can learn about the products that are offered
E) doing all of these

Accepted Answer

Providing customers with clear and precise instructions can help minimize the time it takes for them to get a question answered or a problem resolved. This helps to avoid confusion and misunderstandings, which can add to the time it takes to resolve issues. Choices A, B, and D are not effective ways to minimize the time it takes to get customer questions answered or problems resolved. Increasing the number of people the customer deals with can actually add to the time it takes to resolve issues, delegating all handling of complaints to store managers only can lead to delays, and using company jargon can confuse customers further.

Question 10

Which of the following would be considered part of the customer database?
A) A customer's income
B) A customer's size
C) Whether the customer shopped on the retailer's website
D) Whether the customer responded to a recent promotion
E) All of these

Accepted Answer

A customer database typically includes information such as income, size, shopping behavior, and response to promotions, making all the options relevant.

Question 11

In the past,retailers used mass media advertising and price promotions to all customers.Now,they are beginning to provide more value to their best customers using targeted promotions and services to increase their:
A) community share
B) customer share
C) customer base
D) share of mind
E) share of wallet

Accepted Answer

Retailers are focusing on increasing their "share of wallet," which refers to the amount of a customer's total spending that a company captures in the products and services it offers. By targeting promotions and services to their best customers, retailers aim to increase the proportion of spending these customers allocate to them.

Question 12

A business philosophy and set of strategies,programs,and systems that focus on identifying and building loyalty with a retailer's most valued customers is called:
A) customer loyalty management
B) customer relationship management
C) most valued customer management
D) strategic consumer management
E) strategic relationship management

Accepted Answer

Customer relationship management (CRM) is a business philosophy and set of strategies, programs and systems that focus on identifying and building loyalty with a retailer's most valued customers. CRM helps retailers understand their customers' needs and preferences and provides a personalized shopping experience to build long-term relationships and improve customer retention.

Question 13

Which of the following best describes the type of data analysis that focuses on the composition of the bundle of products purchased by a household during a single shopping occasion?
A) Shopping basket analysis
B) Shopping cart analysis
C) Grocery cart analysis
D) Market basket analysis
E) Merchandising analysis

Accepted Answer

Market basket analysis is the type of data analysis that focuses on the composition of the bundle of products purchased by a household during a single shopping occasion. The term "market basket" refers to the collection of items that a customer buys from a store during a shopping trip.

Question 14

When Marcie purchased some paint for her window frames at The Home Depot,the cashier asked for her telephone number at the point-of-sale.Why did the retailer ask this question?
A) The retailer was collecting data for its database
B) The retailer was identifying her preference
C) The retailer was determining her level of trust in the store
D) The retailer was curious as to how many people from that area code shopped the store
E) The retailer was confirming forecasts for buyers

Accepted Answer

The retailer was collecting data for its database. The telephone number may be used for marketing purposes or to gather information about customer demographics and purchasing habits.

Question 15

What is the easiest way,of the following,for a retailer that has a CRM program to determine the potential location of new stores?
A) Ask customers where they shop
B) Distribute customer surveys asking customer store preferences
C) Track sales in stores
D) Track Internet sales
E) Review the customer database to see where customers live

Accepted Answer

Reviewing the customer database to see where customers live is the easiest way for a retailer with a CRM program to determine the potential location of new stores. This method would provide insight into where the retailer's customer base is concentrated, and therefore where a new store may be successful.

Question 16

CRM is based on the philosophy that retailers can increase their profitability by:
A) providing better assortments
B) expanding their services
C) extending hours of operation
D) building relationships with their better customers
E) building better relationships with vendors

Accepted Answer

CRM stands for Customer Relationship Management, which means businesses focus on building and maintaining relationships with their customers. By doing so, they can increase customer loyalty, repeat sales, and profitability. Therefore, the best choice is D, building relationships with their better customers. Although providing better assortments, expanding services, and extending hours of operation may improve customer satisfaction, they do not necessarily build relationships with customers. Building better relationships with vendors is important but not directly related to increasing profitability through CRM.

Question 17

Warren uses a Chapters Rewards card,a Blockbuster card,and a HBC Rewards card when he shops at these retailers.Each time he uses them,he is rewarded with reduced cost,free merchandise,or a credit.These cards are examples of:
A) store credit cards
B) frequent shopper cards
C) identification cards
D) third-party credit cards
E) retailer cards

Accepted Answer

The given cards are examples of frequent shopper cards because they reward the customer for shopping frequently at the retailer. Store credit cards are specific to a single retailer and usually offer credit as a reward. Identification cards are used for verification purposes and do not offer rewards. Third-party credit cards are issued by financial institutions and can be used anywhere, but do not offer rewards specific to a retailer. Retailer cards and frequent shopper cards are similar, but retailer cards may only offer discounts or rewards specific to that particular store, while frequent shopper cards can be used at multiple retailers.

Question 18

Tabi has information about a customer that includes what she has purchased,the colours,sizes and styles,and how she has responded to recent promotions.This information is collectively called:
A) a customer database
B) a customer information
C) demographics
D) a preferential database
E) a responsive information

Accepted Answer

The information Tabi has about the customer is collectively known as a customer database, which includes details like purchase history, sizes, colors, styles, and responses to promotions.

Question 19

During exam week,Herbert changed the menu in his restaurant to include more comfort food,after he used ___________________ and learned that although students are health conscious most of the year,they tend to desire "Mom's cooking" during times of stress.
A) affinity analysis
B) benefit analysis
C) data mining
D) information cloning
E) strategic analysis

Accepted Answer

Data mining involves analyzing and interpreting large amounts of data to uncover patterns, trends, and insights. Herbert likely used data mining to identify the trend of students seeking comfort food during times of stress. Affinity analysis involves identifying relationships between items purchased, benefit analysis involves weighing the pros and cons of a decision, information cloning is not a recognized term, and strategic analysis is too broad to be a specific method used in this scenario.

Question 20

Customer satisfaction is affected by the amount of time it takes to get a question answered or a problem resolved.Retailers can minimize this time by:
A) reducing the number of people the customer must contact
B) listening to the customer
C) providing the customer with clear and precise instructions
D) doing all of these
E) doing none of these

Accepted Answer

Retailers can minimize the time it takes to get a question answered or a problem resolved by implementing strategies that involve all the choices mentioned. By reducing the number of people the customer must contact, listening to the customer's grievances, and providing clear and precise instructions, retailers can ensure that customers are satisfied and their needs are met efficiently.

Quiz 14: Building Customer Loyalty: Customer Relationship Management and Service Strategies

Why is constructing a customer database potentially more difficult for customers making transactions in the stores?

Canada's new Privacy Act changes the way companies collect,use,or disclose customer information.Which of the following is not one of the principles upon which the act is based?

A retailer wants to collect information about its customer purchases so that it can suggest appropriate products to its customers,but the retailer does not want to raise privacy concerns among its customers.Which of the following should it do?

The first step in the CRM process is:

After Penny used ____________________ to analyze patterns in her store's CD sales,she realized that older buyers shopped during the earlier part of the day and younger shoppers visited her shop during the evening.

Why are concerns about privacy acute for customers who use the electronic channel while they shop?

When Loretta went to Amazon.ca to see if they had any new books about Australian wine,the first thing she saw was a personalized greeting.Which of the following best describes how Amazon.ca knew it was Loretta?

Electronic retailers can collect transaction data for their data warehouse,but they can also collect information by placing cookies on a visitor's hard drive.What is a cookie?

Customer satisfaction is affected by the amount of time it takes to get a question answered or a problem resolved.Retailers can minimize this time by:

Which of the following would be considered part of the customer database?

In the past,retailers used mass media advertising and price promotions to all customers.Now,they are beginning to provide more value to their best customers using targeted promotions and services to increase their:

A business philosophy and set of strategies,programs,and systems that focus on identifying and building loyalty with a retailer's most valued customers is called:

Which of the following best describes the type of data analysis that focuses on the composition of the bundle of products purchased by a household during a single shopping occasion?

When Marcie purchased some paint for her window frames at The Home Depot,the cashier asked for her telephone number at the point-of-sale.Why did the retailer ask this question?

What is the easiest way,of the following,for a retailer that has a CRM program to determine the potential location of new stores?

CRM is based on the philosophy that retailers can increase their profitability by:

Warren uses a Chapters Rewards card,a Blockbuster card,and a HBC Rewards card when he shops at these retailers.Each time he uses them,he is rewarded with reduced cost,free merchandise,or a credit.These cards are examples of:

Tabi has information about a customer that includes what she has purchased,the colours,sizes and styles,and how she has responded to recent promotions.This information is collectively called:

During exam week,Herbert changed the menu in his restaurant to include more comfort food,after he used ___________________ and learned that although students are health conscious most of the year,they tend to desire "Mom's cooking" during times of stress.

Customer satisfaction is affected by the amount of time it takes to get a question answered or a problem resolved.Retailers can minimize this time by: