Integrated Advertising, Promotion, and Marketing Communications, 7e (Clow)
Chapter 11 Database and Direct Response Marketing and Personal Selling
1) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
2) The primary benefit of database marketing is:
A) the enhancement of customer loyalty.
B) higher sales.
C) greater profits.
D) greater brand parity.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
3) 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.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
4) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
1
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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
6) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
7) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
8) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
2
9) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
10) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
11) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
12) 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.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
3
13) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
14) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
15) 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 Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
16) 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 along an important purchase criteria.
D) creates clusters based on the profile of a firm’s best customers.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-1
4
17) With location-data tracking, the term “hashing” 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
18) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
19) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
5
20) 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 Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
21) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
22) All of the following are examples 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 Tag: Application
AACSB Category: Application of knowledge
Objective: 11-1
23) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
6
24) An online database is a key element for Paula Ramirez as a sales representative for Strativa
Pharmaceuticals.
Question Tag: Definition (Concept)
Objective: 11-1
25) Retaining current customers is more expensive than gaining new customers.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
26) Repeat customers purchase more frequently and spend more money than do new customers.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-1
27) Successful database marketing emphasizes two things: identifying customers and producing
sales.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
28) While database marketing can be used for selling products, the primary benefit is the
enhancement of customer loyalty.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
29) Successful database marketing requires a quality data warehouse.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
7
30) The data warehouse holds all customer data.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
31) A marketing database follows accounting rules.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
32) Information about current customers, former customers, and prospects is contained within a
firm’s operational database.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
33) A data warehouse contains customer information such as customer email addresses, purchase
and communication histories, and personal preference profiles.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
34) 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 Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
35) The internet and email provide excellent, cost-effective channels of communication to build
long-term relationships with customers.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
8
36) 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 Tag: Application
AACSB Category: Information technology
Objective: 11-1
37) Purchase and website visit histories are sufficient to build a quality database.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
38) Geocoding is adding geographic codes to customer records.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
39) Geocoding allows for combining demographic information, geographic information, and
purchase history data.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-1
40) Lifetime value is a figure that represents revenues and profits received from a customer
throughout the lifetime of a relationship.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
41) 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 Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
9
42) 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 Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-1
43) Key figures in calculating the lifetime value of a consumer or set of consumers are revenues,
costs, and purchase history.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
44) Customer service representatives can use an individual’s lifetime value to determine how to
interact with a customer.
Question Tag: Application
AACSB Category: Reflective thinking
Objective: 11-1
45) Coding of customer data can produce information that can be used to group customers into
clusters based on a wide variety of criteria.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-1
46) 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, etc.
Question Tag: Application
AACSB Category: Application of knowledge
Objective: 11-1
47) Customer clustering involves building profiles of consumer groups and preparing models
that predict future purchase behaviors.
Question Tag: Critical Thinking
AACSB Category: Information technology
Objective: 11-1
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