Question 1

Loyalty is a person's feelings of pleasure or disappointment that result from comparing a product's perceived performance to expectations.

Accepted Answer

A) True 
 B)False

Question 2

For a magazine, subscription renewal rate is a good measure of retention.

Accepted Answer

A) True 
 B)False

Question 3

________ is the process of carefully managing detailed information about individual customers and all customer "touch points" to maximize loyalty.

Accepted Answer

A)  Customer relationship management 
B)  Customer lifetime value 
C)  Customer profitability analysis 
D)  Customer satisfaction analysis 
E)  Customer-value delivery 
A)  Customer relationship management 
B)  Customer lifetime value 
C)  Customer profitability analysis 
D)  Customer satisfaction analysis 
E)  Customer-value delivery

Question 4

Permission marketing presumes that consumers know what they want.

Accepted Answer

A) True 
 B)False

Question 5

Customer lifetime value describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

Accepted Answer

A) True 
 B)False

Question 6

________ marketing is about making sure the brand and its marketing are as personally relevant as possible to as many customers as possible - a challenge, given that no two customers are identical.

Accepted Answer

A)  Personalizing 
B)  Permission 
C)  Identification 
D)  Database 
E)  Integrated 
A)  Personalizing 
B)  Permission 
C)  Identification 
D)  Database 
E)  Integrated

Question 7

A company should try to retain a customer only as long as the cost to discourage defection is lower than the lost profit.

Accepted Answer

A) True 
 B)False

Question 8

A customer ________ is any occasion on which a customer encounters the brand and product - from actual experience to personal or mass communications to casual observation.

Accepted Answer

A)  touch point 
B)  point of order 
C)  point of difference 
D)  pivot point 
E)  point of parity 
A)  touch point 
B)  point of order 
C)  point of difference 
D)  pivot point 
E)  point of parity

Question 9

A seller who is at a disadvantage has two alternatives: decrease total customer benefit or increase total customer cost.

Accepted Answer

A) True 
 B)False

Question 10

A Forrester study of 10,000 consumers of Amazon.com's electronics and home and garden products found that ________ percent found negative reviews helpful.

Accepted Answer

A)  20 
B)  30 
C)  40 
D)  50 
E)  60 
A)  20 
B)  30 
C)  40 
D)  50 
E)  60

Question 11

Provide an example of a big company that fought back against an unjustified complaint.

Accepted Answer

Student responses will vary. When Taco B

Question 12

Cell phone manufacturer LZT has to choose between two options for sourcing parts: Japan-based Keiko Inc. and US-based Global Tech. How can Keiko reduce the total customer cost for LZT?

Accepted Answer

Keiko can reduce the price or

Question 13

Which of the following is true for activity-based costing (ABC)?

Accepted Answer

A)  ABC considers the real costs associated with each product. 
B)  With ABC, the company can estimate all costs coming from the customer, less revenue. 
C)  The tools of ABC can be used to conduct customer profitability analysis. 
D)  It identifies the costs of products and services based on the revenue they generate. 
E)  ABC allocates indirect costs in proportion to direct costs. 
A)  ABC considers the real costs associated with each product. 
B)  With ABC, the company can estimate all costs coming from the customer, less revenue. 
C)  The tools of ABC can be used to conduct customer profitability analysis. 
D)  It identifies the costs of products and services based on the revenue they generate. 
E)  ABC allocates indirect costs in proportion to direct costs.

Question 14

Two products with very different performance qualities can have the same conformance quality if both products deliver their respective promised quality.

Accepted Answer

A) True 
 B)False

Question 15

Are complaints a good indicator of customer satisfaction? Why or why not?

Accepted Answer

No. Studies show that while customers ar

Question 16

Some customers inevitably become inactive or drop out. The challenge for marketers is to reactivate them through ________ strategies.

Accepted Answer

A)  win-back 
B)  retention 
C)  defection 
D)  sell-out 
E)  recuperation 
A)  win-back 
B)  retention 
C)  defection 
D)  sell-out 
E)  recuperation

Question 17

In a modern customer-oriented organization chart, the ________ of an organization immediately follow the customer segment.

Accepted Answer

A)  top management 
B)  marketing department 
C)  middle management 
D)  frontline people 
E)  lower management 
A)  top management 
B)  marketing department 
C)  middle management 
D)  frontline people 
E)  lower management

Question 18

Focusing disproportionate effort on high-profit customers will lead to lower customer profitability for those customers.

Accepted Answer

A) True 
 B)False

Question 19

A profitable customer is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling, and servicing the customer.

Accepted Answer

A) True 
 B)False

Question 20

To exploit the power of social media, marketers need to create tangible value for consumers, which can come from all of the following EXCEPT ________.

Accepted Answer

A)  discounts 
B)  coupons 
C)  information 
D)  solicitations 
E)  special offers 
A)  discounts 
B)  coupons 
C)  information 
D)  solicitations 
E)  special offers

Exam 5: Creating Long-Term Loyalty Relationships

Loyalty is a person's feelings of pleasure or disappointment that result from comparing a product's perceived performance to expectations.

For a magazine, subscription renewal rate is a good measure of retention.

________ is the process of carefully managing detailed information about individual customers and all customer "touch points" to maximize loyalty.

Permission marketing presumes that consumers know what they want.

Customer lifetime value describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

________ marketing is about making sure the brand and its marketing are as personally relevant as possible to as many customers as possible - a challenge, given that no two customers are identical.

A company should try to retain a customer only as long as the cost to discourage defection is lower than the lost profit.

A customer ________ is any occasion on which a customer encounters the brand and product - from actual experience to personal or mass communications to casual observation.

A seller who is at a disadvantage has two alternatives: decrease total customer benefit or increase total customer cost.

A Forrester study of 10,000 consumers of Amazon.com's electronics and home and garden products found that ________ percent found negative reviews helpful.

Provide an example of a big company that fought back against an unjustified complaint.

Cell phone manufacturer LZT has to choose between two options for sourcing parts: Japan-based Keiko Inc. and US-based Global Tech. How can Keiko reduce the total customer cost for LZT?

Which of the following is true for activity-based costing (ABC)?

Two products with very different performance qualities can have the same conformance quality if both products deliver their respective promised quality.

Are complaints a good indicator of customer satisfaction? Why or why not?

Some customers inevitably become inactive or drop out. The challenge for marketers is to reactivate them through ________ strategies.

In a modern customer-oriented organization chart, the ________ of an organization immediately follow the customer segment.

Focusing disproportionate effort on high-profit customers will lead to lower customer profitability for those customers.

A profitable customer is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling, and servicing the customer.

To exploit the power of social media, marketers need to create tangible value for consumers, which can come from all of the following EXCEPT ________.

Defining Marketing for the New Realities

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Analyzing Consumer Markets

Analyzing Business Markets

Tapping Into Global Markets

Identifying Market Segments and Targets

Crafting the Brand Positioning

Creating Brand Equity

Addressing Competition and Driving Growth

Setting Product Strategy

Designing and Managing Services

Introducing New Market Offerings

Developing Pricing Strategies and Programs

Designing and Managing Integrated Marketing Channels

Managing Retailing, Wholesaling, and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations

Managing Digital Communications: Online, Social Media, and Mobile

Managing Personal Communications: Direct and Database Marketing and Personal Selling

Managing a Holistic Marketing Organization for the Long Run

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