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1.
Compare and contrast the
traditional organization chart for an organization against the modern
customer-oriented organization chart.

2.
Provide
a customer-centered definition of the term quality.

103.
Differentiate
between performance quality and conformance quality. Give an example of two products that have
different performance quality but are of equal conformance quality.

104.
The
case for maximizing long-term customer profitability is captured in the concept
of customer lifetime value. How is
customer lifetime value calculated?

).

105.
Peppers
and Rogers outline a four-step framework for one-to-one marketing that can be
adapted to CRM marketing. What are those four steps?

106.
A key
driver of shareholder value is the aggregate value of the customer base. Identify the five strategies employed by
winning companies to improve the value of their customer base.

.

107.
Today,
companies are increasingly concerned about customer defection. There are three
main steps a company can take to reduce the defection rate. Characterize those
three steps.

108.
Discuss
the concepts of a data warehouse and datamining.

109.
Assume
that a marketing manager of a small company is in the process of implementing
the use of a database to assist his or her company in its marketing efforts.
Considering the information found in the text, list five ways that the
marketing manager might be able to use the database for marketing efforts.

110.
Describe
four situations or cases when building a customer database would not be
worthwhile for a company.

APPLICATION QUESTIONS

Multiple Choice

111.
John
Chambers, CEO of Cisco Systems, said, “Make your customer the center of your
culture.” Customer-centered companies
are adept at building customer relationships, not just producing products; they
are skilled in ________, not just product engineering.
a.
service
engineering
b.
market
engineering
c.
cultural
engineering
d.
innovation
engineering
e.
management
engineering

112.
Immediately
below the customers in a modern customer-oriented organization chart, we would
expect to find the ________ of an organization.
a.
top
management
b.
marketing
department
c.
middle
management
d.
frontline
people
e.
service
department

113.
All of
the following are considered to be customer costs EXCEPT ________.
a. financial cost of acquiring the product
b. financial cost of disposing of the product
c. time spent acquiring the product
d. the risk of social stigma associated with
acquiring the product
e. All of the above are considered to be
customer costs.

114.
When a
consumer considers a product or service, he or she will choose whichever
product or service delivers the highest ________.
a. customer-perceived value
b. customer-perceived cost
c. consumer discount
d. consumer relationship
e. consumer synergy

115.
Buyers
do not always make logical or rational decisions. They might purchase the most
expensive and least quality item for example. Which of the following would be
another good example of this behavior?
a. The buyer is not
seen by the seller as being very intelligent.
b. The buyer might
be under orders to buy at the lowest price.
c. The buyer might be underage.
d. The buyer might be under pressure to resist
sales messages.
e. The buyer refuses to listen to or read any
advertising.

116.
If a
company were to focus its marketing efforts on all the experiences the customer
will have on the way to obtaining and using the offering, it would be focusing
its marketing efforts on the customer’s ________.
a.
perception system
b.
cost versus benefit system
c.
demand
d.
psychological system
e.
value delivery system

117.
________
is defined as “a deeply held commitment to rebuy or repatronize a preferred
product or service in the future despite situational influences and marketing
efforts having the potential to cause switching behavior.”
a. Customer satisfaction
b. Customer value
c. Loyalty
d. Customer profitability
e. Quality

118.
Whether
the buyer is satisfied after purchase depends on the offer’s performance in
relation to the ________.
a. buyer’s reactions
b. buyer’s expectations
c. seller’s delivery
d. seller’s expectations
e. both the buyer’s and seller’s demands

119. Buyers form expectations in all of the
following ways EXCEPT ________.
a. from past buying experience
b. from friends’ and associates’
advice
c. from marketers’ information
d. from competitors’ information
e. from inherited traits

120.
Field
Grocery is considering using _________ to pose as customers and report on
strong and weak points in customer service at Field Grocery stores.
a.
intelligence
agents
b.
covert
operatives
c.
mystery
shoppers
d.
market
mavens
e.
opinion
leaders

121.
3M
makes it easy for dialog to occur with its customers. 3M claims that over
two-thirds of its product-improvement ideas come from listening to ________.
a. customer suggestions
b. entrepreneurial product ideas
c. customer complaints
d. media feedback
e. customer reactions to competitive products

122.
According to GE’s former chairman, John F. Welch
Jr., “________ is our best assurance of customer allegiance, our strongest
defense against foreign competition, and the only path to sustained growth and
earnings.”
a.
Quality
b.
Customer satisfaction
c.
True value
d.
Sustainable enterprise
e.
Motivation

123.
With
respect to customer profitability analysis, ________ customers are the most
likely dropped as customers because of poor profitability.
a.
granite
b.
wood
c.
iron
d.
plastic
e.
lead

124.
Jim is a residential construction contractor. Although one particular realtor provides Jim
with a large volume of work, the realtor frequently demands discounts for
sending him customers. This realtor is
best described as a(n) ________ customer.
a.
platinum
b.
gold
c.
lead
d.
iron
e.
ivory

125.
Harrah’s has used effective ________ to almost
double its share of customers’ gaming budgets by targeting offers to specific
customer segments.
a.
customer relationship management
b.
customer lifetime value
c.
customer profitability analysis
d.
customer satisfaction analysis
e.
customer-value delivery
126.
Many banks and phone companies now charge fees for
once-free services to ensure minimum customer revenue levels. This is an example of ________.
a.
reducing the rate of customer defection
b.
making low-profit customers more profitable
c.
enhancing the growth potential for each customer
through cross-selling
d.
increasing the longevity of the customer
relationship
e.
focusing disproportionate effort on high-value
customers

127.
When Bob found out his friend was thinking about
buying a new car, he strongly recommended that his friend look into the newest
line of Ford sedans. Bob is best
characterized as a(n) ________ for Ford.
a.
first-time customer
b.
member
c.
partner
d.
advocate
e.
prospect

128.
Carol is currently considering buying a Motorola
cell phone offered by her service provider in conjunction with a two-year
service contract. Carol is best
characterized as a(n) ________ for Motorola.
a.
first-time customer
b.
member
c.
partner
d.
advocate
e.
prospect

129.
Southwest Airlines offers a Rapid Rewards program,
an example of a ________ that allows customers to count flights they have taken
toward free future flights.
a.
value proposition
b.
value delivery system
c.
club membership program
d.
one-to-one marketing program
e.
customer churn

130.
The
skillful use of database marketing and ________ has made catalog house
Fingerhut one of the nation’s largest direct-mail marketers.
a.
everyday
low prices
b.
expanded
home delivery options
c.
relationship
building
d.
competitor’s
mistakes
e.
retailer alliances

Short Answer

131.
What do modern managers believe is their
company’s only true “profit center”?

132.
Customer-perceived
value is based on two components. What are those components?

133.
What is the definition for customer-perceived value
(CPV)?

134.
Using European automobile giant Volvo as your
illustration, create a value proposition for the company.

135.
How do customers determine their level of
satisfaction with a product?

.

136.
Give an example of a “branded customer experience.”

137.
Companies need to be especially concerned today with
their customer satisfaction level. Why?

138.
Identify three ways companies with customer
complaints can recover customer goodwill.

139.
Define the termquality.

.

140.
What are the three ways that customer profitability
can be assessed?

141.
What are the four classifications (tiers) of
customers in customer profitability analysis using activity-based costing?

142.
What is a customer touch point?

143.
One-to-one marketing is not for every company. For whom does this style of marketing work
best?

144.
A 5% reduction in the customer defection rate can
increase profits by 25% to 85%, depending on the industry. Explain how this is so.

145.
Explain how a company frequency program might work.

146.
Describe the process of database marketing.

.

147.
How do companies use their databases to identify
prospects?

148.
Give an illustration of how a company can use a
customer database to reactivate customer purchases.

149.
One of the main problems that can prevent a firm
from effectively using CRM is that some of the assumptions behind CRM may not
always hold true. Give an example of one
of these assumptions that might not always hold true.

150.
According to information provided in the text, what
are the four main perils of CRM?

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