Deck 11: Database and Direct Response Marketing and Personal Selling

Question 1

An operational database contains:

A)transactions and interactions individuals have with a firm.
B)information about current customers and customers of the competition.
C)customer transactions and follows accounting principles.
D)information about current customers, former customers, and prospects.

Answer 1

C

Question 2

The primary benefit of database marketing is:

A)the enhancement of customer loyalty.
B)higher sales.
C)greater profits.
D)greater brand parity.

Answer 2

A

Question 3

A lifetime value analysis creates a figure that represents the:

A)sales revenue generated by a customer throughout his or her lifetime with a brand or company.
B)present value of the profit revenue generated by a customer in a particular product category.
C)present value of the profit revenue of a customer throughout the lifetime of a relationship with a brand or company.
D)profit revenue of a customer throughout his or her lifetime.

Answer 3

C

Question 4

The process of building profiles of customers from a firm's database is:

A)data warehousing.
B)direct marketing.
C)location data tracking.
D)data mining.

Question 5

The easiest part of building a data warehouse is:

A)data coding through customer cluster analysis and lifetime value calculations.
B)the appended demographic and psychographic information.
C)obtaining the history of customer interactions and contact with a firm.
D)collecting customer names and addresses.

Question 6

The newest form of data analytics is location-data tracking, which is the process of:

A)making the data anonymous so that specific individuals cannot be identified.
B)analyzing data provided by mobile phone GPS technology and combining it with consumer profile information.
C)purging names from a list of individuals who live within a specified area that do not meet a target profile.
D)identifying individuals within a specified location that meet a firm's target audience for a mobile campaign.

Question 7

Using geocoding, a company's marketing department can add which of the following to each customer's record?

A)Demographic information and lifestyle data as well as the geographical codes
B)Total purchases made at each retail outlet in the area
C)Demographic and political information
D)A composite analysis of his or her neighbors

Question 8

Adding geographic codes to customer records to plot them on a map is called:

A)geoidentification.
B)geocoding.
C)finding neighborhood lifestyle clusters.
D)commercial database service analysis.

Question 9

Many marketing experts believe calculating the lifetime value of a market segment is superior to calculating the value for a single individual because it:

A)is a larger number.
B)is more stable than an individual.
C)adds costs that cannot be allocated per individual.
D)sums costs across a market segment.

Question 10

A digital marketing firm tracked the movement of individuals in downtown Chicago just prior and just after a Chicago Cub's baseball game to determine movement, restaurants visited, and stores visited. This illustrates the data analytics of:

A)data mining.
B)customer clustering.
C)location data tracking.
D)geocoding.

Question 11

Successful database marketing emphasizes two things:

A)sales and contribution margin.
B)identifying customers and building relationships.
C)lifetime value of customers and data mining.
D)data mining and data coding.

Question 12

In determining lifetime value for individual customers, customer acquisition costs are determined by dividing:

A)advertising costs by the number of customer transactions.
B)total marketing and advertising costs by the number of new customers.
C)total marketing and advertising costs by the number of total customers.
D)advertising costs associated with acquiring new customers by the number of new customers.

Question 13

With location-data tracking, the term "hashed" refers to the process of:

A)making the data anonymous so that specific individuals cannot be identified.
B)locating individuals within a specific distance of a specified location.
C)purging names from a list of individuals who live within a specified area that do not meet a target profile.
D)identifying individuals within a specified location that meet a firm's target audience for a mobile campaign.

Question 14

A marketing database contains:

A)transactions and interactions individuals have with a firm.
B)information about current customers and customers of the competition.
C)customer transactions and follows accounting principles.
D)information about current customers, former customers, and prospects.

Question 15

In calculating the lifetime value of a market segment, the figures that are the most difficult to obtain are:

A)retention rates.
B)fixed and variable costs.
C)database costs and acquisition costs.
D)marketing and advertising costs.

Question 16

Many times demographic and psychographic information about customers is not available through internal company records. In these situations:

A)the information can be purchased from external marketing research firms.
B)a company can offer customers an incentive to provide the necessary information.
C)the database can be appended with interaction and history information.
D)geocoding can be appended to each customer's record.

Question 17

An effective database contains:

A)every transaction a customer has with a firm and interactions that resulted in purchases.
B)all transactions and all interactions a customer has with a firm.
C)transactions and interactions of customers that have a high lifetime value.
D)only the transactions of customers.

Question 18

Customer clustering is attractive to marketers because it:

A)creates clusters from names purchased from a direct marketing vendor.
B)allows marketers to identify external data lists that match the firm's target customers.
C)creates clusters of a firm's actual customers based on important purchase criteria.
D)creates clusters based on the profile of a firm's best customers.

Question 19

Common forms of database coding are:

A)data mining and cluster customer analysis.
B)lifetime value analysis, customer cluster analysis, and location-data tracking.
C)lifetime value analysis and data mining.
D)geocoding, data mining and location-data tracking.

Question 20

The most cost-effective means of communicating with customers is:

A)the telephone.
B)through computer cookies.
C)the mail.
D)the internet and email.

Question 21

While database marketing can be used for selling products, the primary benefit is the enhancement of customer loyalty.

Question 22

Lifetime value is a figure that represents revenues and profits received from a customer throughout the lifetime of a relationship.

Question 23

The internet and email provide excellent, cost-effective channels of communication to build long-term relationships with customers.

Question 24

Data mining can be used for each of the following purposes except:

A)develop profiles of a firm's best customers.
B)develop profiles of customers who tend to purchase competing brands.
C)identify current customers who fit the profile of a firm's best customers.
D)identify current customers who would be good prospects for cross-selling other products.

Question 25

A marketing database follows accounting rules.

Question 26

Each of the following is an example of data mining except:

A)American Eagle studying how consumers respond to price markdowns.
B)Goody's analyzing baskets of merchandise purchased by individual consumers.
C)Target identifying the other retail stores customers use for particular products.
D)First Horizon Bank expanding its wealth management business by studying profiles of its best customers.

Question 27

Geocoding is adding geographic codes to customer records.

Question 28

Most marketing experts believe the most accurate method to calculate lifetime value is to calculate the lifetime value of a single customer rather than a market segment.

Question 29

Mailing addresses of individuals in a database should be updated at least once every two years and more often if they are used for frequent contacts.

Question 30

Successful database marketing requires a quality data warehouse.

Question 31

Repeat customers purchase more frequently and spend more money than do new customers.

Question 32

Retaining current customers is more expensive than gaining new customers.

Question 33

Geocoding allows for combining demographic information, geographic information, and purchase history data.

Question 34

Information about current customers, former customers, and prospects is contained within a firm's operational database.

Question 35

A data warehouse contains customer information such as customer email addresses, purchase and communication histories, and personal preference profiles.

Question 36

The data warehouse holds all customer data.

Question 37

Data mining is:

A)collecting addresses and zip codes of customers.
B)reviewing past purchases of a product by customers.
C)building profiles of customer segments and preparing models that predict their future purchase behavior.
D)selecting cities for data analysis.

Question 38

Successful database marketing emphasizes two things: identifying customers and producing sales.

Question 39

Purchase and website visit histories are sufficient to build a quality database.

Question 40

While it is important for a database to record every transaction with a customer, recording of interactions that are unrelated to a purchase are not necessary.

Question 41

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.

Question 42

List the tasks associated with databased marketing.

Question 43

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

Question 44

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

Question 45

What are the two types of data mining?

Question 46

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

Question 47

Describe trawling.

Question 48

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

Question 49

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

A)develop marketing programs customized for each customer.
B)place customers into segments for the purpose of data-driven marketing programs.
C)customize marketing programs to fit each market segment's profile.
D)establish one-on-one communications with each customer.

Question 50

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

A)the customer can be greeted personally, by name.
B)provides data for a customer cluster analysis.
C)the content of the web pages can be customized to fit the customer's past browsing behavior.
D)when an order is placed, the customer doesn't have to type in his/her address and credit card information.

Question 51

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

A)allow them to access components of the company's website that are not available to those who are simply browsing the website.
B)engage cookies to record personal information from the customer's computer.
C)allow a firm to customize the products it sells to fit the profile of each customer.
D)permit a company to engage in an email marketing campaign.

Question 52

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

Question 53

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

Question 54

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.

Question 55

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

Question 56

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.

Question 57

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

Question 58

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:

A)lifetime value and customer cluster analysis.
B)data mining.
C)customer profile information the customer has provided to the company.
D)customer profile information obtained through cookies.

Question 59

Define lifetime value. How is it determined?

Question 60

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

Question 61

Haley often purchases clothes from the VF Corporation online. On her birthday, the company sends her an email birthday card with a voucher for $20 off on her next online purchase. This is an example of:

A)data mining.
B)customer cluster analysis.
C)data coding.
D)trawling.

Question 62

Maintaining customer profile information is important because the information helps the marketing team create personalized communications.

Question 63

Response rates are often higher for permission marketing programs because consumers:

A)receive marketing materials for which they gave permission.
B)individuals who participate are high-frequency purchasers.
C)are not contacted by competing firms.
D)are contacted only by mail.

Question 64

When customers make contact with a company, the customer's profile, history, and other information contained in the database should be available to the company contact person at the time that he or she deals with the customer.

Question 65

Identification codes allow a visitor to a website to register with the site through an ID name or number and a password.

Question 66

Discuss the concept of data-driven communication.

Question 67

Trawling is the process of coding data files with lifetime values and customer cluster codes.

Question 68

When a customer makes a purchase over the internet, the only communication that is important is sending them a thank you and acknowledgment of the order.

Question 69

The primary reason for building a database, coding the information, and mining data is to use the output to build programs that will boost sales revenues.

Question 70

When promotional materials are only sent to customers who have given their approval, the program is called:

A)direct mail.
B)internet marketing.
C)permission marketing.
D)a frequency program.

Question 71

To optimize permission marketing programs, firms feature:

A)prizes and price discounts.
B)regular newsletters.
C)entertaining content and account information.
D)empowerment and reciprocity.

Question 72

Faith received an email from Volkswagen exactly one year after she purchased her Volkswagen. The company thanked her for her purchase and encouraged her to access the company's website. This is an example of trawling.

Question 73

The number one reason consumers remain in permission marketing programs is:

A)they receive account status updates.
B)contests and sweepstakes being offered.
C)price bargains offered.
D)the content is interesting.

Question 74

With a permission marketing program, customer permission is normally obtained:

A)through third-party marketing research firms.
B)when customers make an online purchase.
C)by providing an incentive, such as a free gift, a coupon, or entry into a sweepstakes.
D)by using cookies obtained from the individual's visit to the website.

Question 75

Consumers often ignore marketing information sent to them after joining a permission marketing program because:

A)the products are too costly.
B)the marketing pieces are not relevant any more.
C)they can no longer win prizes or receive free gifts.
D)the person has moved and did not leave a forwarding address or email.

Question 76

The process of searching a database for a specific piece of information, such as a birthday, for marketing purposes is:

A)data mining.
B)customer cluster analysis.
C)data coding.
D)trawling.

Question 77

A database marketing program provides the tools to personalize messages and track the effectiveness of personalized marketing communications.

Question 78

Personalized communications with customers through database information builds relationships and leads to both repeat purchases and customer loyalty.

Question 79

Customer contact personnel should not allow the lifetime value of individual customers affect the way they deal with customers because every customer should be treated equally.

Question 80

Ariana moved to a new apartment. She soon received a letter from Bed, Bath, and Beyond containing a coupon for merchandise she may need in her new apartment. This is an example of data mining.