Deck 20: Customer Relationship Management

Question 1

Customer relationship management (CRM)requires that companies are organized around customer segments.

Answer 1

True

Question 2

The first step in establishing a customer relationship management (CRM)cycle is to acquire and capture all relevant information about existing and potential customers.

Answer 2

False

Question 3

The success of CRM can be directly measured by the effectiveness of suppliers in providing exactly what the company needs to satisfy its customers.

Answer 3

False

Question 4

When Amazon.com asks visitors to its Internet site to create wish lists and then invites them to send the lists to people who may be planning on buying them a present soon,it is relying on Web-based interactions to help it learn about its customers.

Question 5

For a catalog retailer,the contact between the customer and the company's order taker would be an example of a touch point.

Question 6

Data mining in a CRM environment is normally an informal process of collecting customer information through customers' feedback on products.

Question 7

Response lists are especially important in database creation because past behavior is a strong predictor of future behavior.

Question 8

The process of centralizing data in a CRM system is sometimes referred to as the interpolation of external and internal touch points.

Question 9

Channel interactions include store visits,conversations with salespeople,and wireless communication.

Question 10

Through the application of knowledge management,the Lands' End clothing catalog retailer would have learned that a substantial number of its customers would like Lands' End to offer a line of maternity wear.

Question 11

For a CRM system to be effective,customer information must be stored in a data mine.

Question 12

As a process strategy,customer relationship management (CRM)manages the interactions between a company and its customers.

Question 13

Transactions-based interactions are no different from any other type of touch point.

Question 14

Once a credit card is swiped,the retailer captures information about the product being purchased and information about the customer's credit history.

Question 15

Point-of-sales interactions are used both in marketing and in merchandising activities.

Question 16

Data enhancement is a file compression technique that allows companies to make more efficient use of their data warehouses.

Question 17

Multinational companies often face difficult problems when pulling together internal data about their customers.

Question 18

Transactions do not provide any information beyond the customer's name,address,and phone number.

Question 19

Data mining is an analytical process that compiles actionable data about the purchase habits of a firm's current and potential customers.

Question 20

The technological environment has no influence on customer relationship management (CRM)systems.

Question 21

Through campaign management,the organization's marketing department controls outbound communications to customers concerning product offerings.

Question 22

Volvo has a Web site that caters to car enthusiasts who might want to see concept cars evolve into real-life products.It would have used data mining to locate people who were car enthusiasts and innovators.

Question 23

Customer relationship management:

A) is often described as a closed-loop system
B) only involves personnel in marketing and management departments
C) organizes the company around functional departments
D) is a very simplistic method of encouraging customer satisfaction
E) is only a theory and has not been proven successful in any practical way

Question 24

Which of the following statements about the CRM cycle is true?

A) The letters CRM are an acronym for consumer relationship marketing.
B) The CRM cycle does not affect employees outside the marketing and management functional areas.
C) The CRM cycle is continuous and circular with no predefined start or end point.
D) The CRM cycle takes a simplistic perspective on customers.
E) All of these statements about the CRM cycle are true.

Question 25

By listening to customer feedback and informally gathering specific comments on benefits and features that the marketing department thought interested customers,the manufacturers of SUVs have made sure that every seat has at least one cup holder.The manufacturers of SUVs used:

A) knowledge management
B) learning
C) perceptual application
D) motivational research
E) database marketing

Question 26

As a predictive tool,data mining has limited utility.

Question 27

In a CRM environment,_____ is defined as the informal process of collecting customer information through customer contacts and feedback on product performance.

A) corporate modification
B) attitude adjustment
C) organizational perception
D) stimulus/response research
E) learning

Question 28

A company that has a(n)_____ customizes its product offerings based on data generated through interaction between the customer and the company.

A) ethnocentric perspective
B) demand-based focus
C) sales orientation
D) supply-based focus
E) customer-centric focus

Question 29

The way to people's hearts may be through their stomachs,but the marketers at Kraft Foods have decided not to rely exclusively on that maxim to secure the long-term loyalty of its customers.It is also making new product developments through data generated from interaction between Kraft and its customers.In other words,Kraft Foods:

A) is sales-oriented
B) has a standardization focus
C) is ethnocentric
D) has a customer-centric focus
E) is product-oriented

Question 30

_____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.

A) Knowledge management
B) Learning
C) Database marketing
D) Interactive marketing
E) Information marketing

Question 31

Lifetime value analysis is only helpful when it is used on current customers.

Question 32

To initiate the CRM cycle,a company must first:

A) establish marketing objectives
B) decide on a segmentation strategy
C) establish customer relationships within the organization
D) determine the level of interaction customers have with the organization
E) acquire and capture customer data for product categories

Question 33

RFM analysis is used to delete unnecessary or duplicated data.

Question 34

Synavant is a pharmaceutical company in Toronto,Ontario.Its director of business development told a group of investors,"There is a single database repository in this company from which everybody can access data about a customer or potential customers." Synavant is most likely using:

A) learned research
B) stimulus/response marketing
C) knowledge management
D) sales-oriented marketing
E) motivational research

Question 35

Data mining analyzes significant relationships simultaneously among several customer dimensions with vast data warehouses.

Question 36

_____ is a company-wide business strategy designed to optimize profitability,revenue,and customer satisfaction by focusing on highly defined and precise customer segments.

A) Organizational optimization
B) Consumer relationship marketing (CRM)
C) Total quality management (TQM)
D) Customer relationship management (CRM)
E) Market aggregation

Question 37

Which of the following statements about a CRM system is true?

A) A critical component of a CRM system is the use of the appropriate technology to store and integrate customer data.
B) A CRM system operates on the theory that all customers are equally important.
C) Due to privacy laws,a CRM system only disseminates customer information to those who are actually in day-to-day contact with customers.
D) A company using a CRM system must view its customers as bits of data.
E) All of these statements about a CRM system are true.

Question 38

European-based companies are much more likely to have adopted campaign management and other CRM techniques than U.S.-based organizations.

Question 39

Customer-centric is an internal management philosophy similar to:

A) utilitarianism
B) Herzberg's theory of motivation
C) the equity theory
D) the marketing concept
E) consumerism

Question 40

The difference between traditional marketing and customer relationship marketing can be compared to the difference between:

A) night and day
B) boning a fish and dressing a chicken
C) mice and elephants
D) shooting a rifle and a shotgun
E) circles and squares

Question 41

A(n)_____ is the point at which a customer and a company representative exchange information and develop learning relationships.

A) social contact
B) interaction
C) empowering moment
D) equilibrium point
E) transactional dyad

Question 42

Which of the following is a guideline for a successful CRM system?

A) Customer information is not retained past the initial contact with the customer.
B) Intuition and experience must define the products provided by the organization.
C) The product takes center stage in the organization.
D) Customer information is centralized.
E) All of these are guidelines for a successful CRM system.

Question 43

_____ interactions occur when a customer buys a product with his or her credit card.

A) Transaction-based
B) Relationship-based
C) Activity-based
D) Retail-centric
E) Distribution-focused

Question 44

The executive vice president of Hudson's Bay Company in Canada (a major retail chain)said in an interview,"We have to be able to offer customers what they want and when they want it.We need better insight into their spending--we have gaps in knowledge of how customers spend." _____ interactions would provide the retail chain the best opportunity for learning about its customers.

A) Point-of-sale
B) Relationship-based
C) Retail-centric
D) Technology-centric
E) Sales-oriented

Question 45

When viewed as an interaction between the organization and the customer,a transaction can produce all of the following data EXCEPT:

A) name,address,and phone number
B) information about the customer's relationship with other customers
C) past purchase history
D) information about the customer's relationship with the organization
E) average amount spent on purchases

Question 46

The Shell Company offers a Shell MasterCard,which can be used anywhere an ordinary credit card can be used.Every time the credit card is used,the Shell Company gathers information about consumer buying habits.The Shell Company relies on _____ interactions to gather customer information.

A) accounting-based
B) store-based
C) retail-centric
D) transaction-based
E) customer-centric

Question 47

In a CRM system,_____ are those areas of the business where customer data are gathered and used to guide and direct the decision making within that business unit.

A) touch points
B) focus areas
C) data mining
D) information search periods
E) observational points

Question 48

Les Ailes de la Mode is a Quebec retail store that promotes the highest quality customer service has not only established itself as a top retailer in the province,but also as a credit card and point program company,a cataloger,and even a publisher.Through gathering customer information for its credit cards and point program,through catalog orders,and through subscriptions to its publications,Les Ailes de la Mode has created several different:

A) focus areas
B) touch points
C) interrelationship promotions
D) distribution channels
E) sources of distribution information

Question 49

In Canada,Kraft Foods has launched its Web site (www.kraftcanada.com)with enhanced content that provides "what we [Kraft Foods] knew our consumers were looking for,based on the information they had shared." Kraft Foods is using _____ interactions to send and receive communications from its customers.

A) Web-based
B) product-centric
C) point-of-sale
D) transaction-based
E) technology-centric

Question 50

Hudson's Bay Company in Canada operates The Bay,Zellers,Home Outfitters,and hbc.com.At each of its stores,it gives HBC Rewards enables that members to earn points Consumers can redeem points in the HBC Rewards catalogue for various items,including travel,leisure and entertainment items,Air Miles reward miles,or Bay and Zellers gift certificates.To use the system,customers have to provide store personnel with their HBC card number.This introduction of the reward program enables Hudson's Bay to engage in _____ interactions with its customers.

A) point-of sale and Web-based
B) customer-centric and technology-centric
C) retail-centric and Web-based
D) transaction-based and retail-centric
E) point-of-sale and retail-centric

Question 51

Which of the following statements about touch points is true?

A) Data gathered at external touch points,once interpreted,provide information that affects internal touch points.
B) A customer applying for a credit card is an example of an external touch point.
C) The marketing research department of a company with a CRM system is an example of an internal touch point.
D) A customer complaint is an example of an external touch point.
E) All of these statements about touch points are true.

Question 52

Volvo has a concept car Web site that caters to car enthusiasts who might want to see concept cars evolve into real life products.A "Forum" section allows people to submit opinions and questions--enabling Volvo to gauge consumer reaction to new ideas.Volvo is sending and receiving communications from consumers through _____ interactions.

A) relationship-based
B) product-centric
C) transaction-based
D) technology-centric
E) Web-based

Question 53

Which of the following statements about how the organization should use customer data is true?

A) Customer data should be accumulated over the customer's entire life span with the organization.
B) Once customer data is gathered,it is owned by the organization,which can use this information anyway it seems fit.
C) Customer data is unaffected by the internal process of empowerment.
D) The transaction-based touch point is not needed if information is centralized.
E) All of these statements about how the organization should use customer data are true.

Question 54

The guest at a Marriott stepped in a mud puddle on his way into the hotel.His shoes were drenched,and he had planned to wear them to an important sales presentation in an hour.The hotel concierge saw the guest's unhappy face and asked if he could help.After learning of the problem,the concierge loaned the guest his shoes to wear to the meeting.The concierge was able to handle the situation in a matter that created customer satisfaction because Marriott:

A) has a sales-orientation
B) uses knowledge management
C) limits customer interactions
D) empowers its employees
E) uses interactive marketing

Question 55

Which of the following is an example of a channel through which customer data is traditionally gathered?

A) store visits
B) conversations with salespeople
C) interactions via the Web
D) phone conversations
E) all of these

Question 56

_____ refers to the latitude organizations bestow on their representatives to negotiate mutually satisfying commitments with customers.

A) Consumer learning
B) Customerization
C) Empowerment
D) Autonomy
E) Interaction

Question 57

Using _____ interactions with customers while they were shopping in the store,Les Ailes de la Mode,a Quebec specialty retailer,learned that its customers wanted more and better trained store personnel.

A) transaction-based
B) Web-based
C) retail-centric
D) relationship-based
E) point-of-sale

Question 58

Les Ailes de la Mode is a Quebec retail store that promotes the highest quality customer service by maintaining the importance of each _____,the point at which customer and store personnel exchange information and develop learning relationships.

A) knowledge analysis
B) establishing equilibrium point
C) the transactional dyad
D) empowerment moment
E) interaction

Question 59

An organization should view all transactions as:

A) simply a financial exchange
B) deleterious to customer relationship management
C) the opportunity to collect vast amounts of data about the customer
D) the creation of customer-organization synergy
E) the closing of a channel

Question 60

The traditional approach for acquiring data from customers is through:

A) encoding devices
B) media
C) feedback mechanisms
D) channel interactions
E) personal selling

Question 61

L.L.Bean,Inc.has been reducing the number of catalogs it sends out over the past several years while increasing its sales and profits.With _____,L.L.Bean now uses a number of criteria to establish a model showing which catalogs buyers purchased from and to judge their likelihood of buying from a catalog that they have never purchased from.

A) predictive data
B) trending
C) correlation analysis
D) modeling
E) hypothesis testing

Question 62

Andy recently purchased a new surge protector for his computer using a $20 rebate offer.He completed the rebate certificate and sent it to the manufacturer.The rebate certificate contained Andy's full name,his phone number,his address,and some purchase information.Andy has most likely become part of the manufacturer's _____ list.

A) compiled
B) cookies
C) response
D) electronic cash
E) Internet research

Question 63

The core of the data warehouse is:

A) empowered employees
B) transaction channels of communication
C) point-of-sale interactions
D) the database
E) a compiled list

Question 64

An organization should NOT enhance a database with outside sources of information to:

A) learn more about customers or prospects
B) distinguish different customer groupings by more than product purchases
C) implement a market diversification strategy
D) increase the effectiveness of customer marketing programs
E) locate prospects who match particular profiles

Question 65

An on-line retailer like Orvis would use _____ to discover that customers who purchase flannel sheets also had a high probability of purchasing all-natural Christmas wreaths if the opportunity were made available.

A) knowledge interpretation
B) systems management
C) data mining
D) information extraction
E) information search

Question 66

_____ is the process of finding hidden patterns and relationships in the customer data stored in the data warehouse.

A) Customer information management (CIS)
B) Data feedback
C) Information retrieval
D) Information extraction
E) Data mining

Question 67

_____ is simply the act of building a model in a situation where the answer is known and then applying the model in a situation where the answer is unknown.

A) Correlation analysis
B) Trending
C) Consumer simulation
D) Patterning
E) Modeling

Question 68

Ford Canada has turned to the Internet to help it stand apart from its competitors in the automotive industry.One Internet ad shows a Ford truck driving out of a forest with its engine roaring and mud splattering on the screen.The wipers come on to reveal the Ford "Built Tough" logo,which then recedes to the side of the screen.The ad directed people to a site (www.ford.ca/builtfordtough)where they could sign up to receive direct mail from Ford.Ford Canada will combine this database with a database of new F-series truck owners to look for significant patterns and trends.Ford Canada will use:

A) an information search system
B) knowledge trending
C) data interpolation
D) data graphing
E) data mining

Question 69

"Lots of organizations have customer data,but not in a way that's useful," said a speaker at the Canadian Marketing Association's National Convention."Retailers have all kinds of data in different places--they didn't have a single view of the customer." The speaker is criticizing how retailers do NOT use:

A) information distribution centers
B) data warehouses
C) information extraction mines
D) data intermediaries
E) marketing information systems

Question 70

Fingerhut,the catalog retailer,used _____ to determine that customers who change residences are three times more likely than customers who have not moved to buy tables,fax machines,and decorative products but no more likely to buy jewelry or footwear.As a result,Fingerhut created a catalog for people who have changed residences.

A) data mining
B) information search
C) information retrieval channels
D) evoked sets
E) an information environment

Question 71

Lesley Owens has limited money to invest in a mailing to people who might be interested in subscribing to a new magazine about making scrapbooks.She wants to mail to those prospects with the highest probability of becoming subscribers.Owens should use a:

A) compiled list
B) data mine
C) response list
D) management database
E) data warehouse

Question 72

Which of the following is a data mining technique based on the notion that "birds of a feather flock together?"

A) lifetime transactional audit
B) RFM analysis
C) actionable predicting
D) patterning
E) modeling

Question 73

In a speech,David Poirier,executive VP,CIO of Hudson's Bay Company,a Canadian retailer,said,"We [Hudson's Bay Company] had all kinds of data in different places.We didn't have a single view of the customer until we focused on finding one method to manage relationships with our customers." Hudson's Bay would use a _____ to profile customer segments for better CRM marketing efforts.

A) data mart
B) customer information system
C) data warehouse
D) decision support system
E) data cluster

Question 74

Fingerhut,the catalog retailer,used _____ to determine that customers who change residences are three more likely as customers who have not moved to buy tables,fax machines,and decorative products but no more likely to buy jewelry or footwear.As a result,Fingerhut created a catalog for people who have changed residences.

A) the automated prediction of trends and behaviors and the automated discovery of previously unknown patterns
B) customer-initiated information systems
C) trend analysis and hypothesis testing to reveal trends in consumer behavior
D) automatic extrapolation to predict past behavior
E) internal touch centers and extrapolation of that information by managers

Question 75

A(n)_____ list generally includes names and addresses gleaned from directories or membership rosters.

A) predictive
B) compiled
C) response
D) actionable
E) aggregated

Question 76

_____ is useful in the identification of an organization's most profitable customers and prospects.

A) Information searches
B) A marketing-controlled source
C) Data mining
D) A distribution intermediary
E) Knowledge interpolation

Question 77

A _____ is essentially a very large,corporate-wide database,culled from a number of separate systems,such as billing,accounting,order fulfillment,distribution,customer service,and marketing and sales,already in place within an organization.

A) data mart
B) customer information system
C) data warehouse
D) decision support system
E) data cluster

Question 78

Alexis is very interested in developing a mailing list of people who enjoy stenciling as a hobby.She has offered to purchase a list of the current members of the Stencil Artisans League.Alexis is building a(n)_____ list.

A) actionable
B) e-mail
C) response
D) compiled
E) predictive

Question 79

_____ is the overlay of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of customers or prospects.

A) Information formatting
B) Database enhancement
C) Data mining
D) Data shading
E) Predictive modeling

Question 80

A(n)_____ is a central repository for data from various functional areas of the organization.These data can be shared by all of the organization's departments.

A) information mine
B) knowledge distribution center
C) information extraction unit
D) information intermediary
E) data warehouse