978-0133866339 Chapter 11 Part 2

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48) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-1

49) Retail stores can use data mining to determine when to mark merchandise down and how

much to mark it down.

Question Tag: Critical Thinking

AACSB Category: Information technology

Objective: 11-1

50) Data mining and data coding of a firm’s database can help develop more personalized

marketing communications and marketing programs.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-1

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

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-1

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

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-1

53) What are the two types of data mining?

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-1

54) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

55) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

56) Using identification IDs and passwords on a website for customers allows 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

57) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

58) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

59) 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 Tag: Application

AACSB Category: Application of knowledge

Objective: 11-2

60) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

61) Personalized communications with customers through database information builds

relationships and leads to both repeat purchases and customer loyalty.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

62) A database marketing program provides the tools to personalize messages and track the

effectiveness of personalized marketing communications.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

63) Identification codes allow a visitor to a website to register with the site through an ID name

or number and a password.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

64) 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 Tag: Critical Thinking

AACSB Category: Information technology

Objective: 11-2

65) Maintaining customer profile information is important because the information helps the

marketing team create personalized communications.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

66) 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 Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-2

67) 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 Tag: Critical Thinking

AACSB Category: Reflective thinking

Objective: 11-2

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

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-2

69) 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.

Question Tag: Application

AACSB Category: Application of knowledge

Objective: 11-2

70) 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 Tag: Application

AACSB Category: Application of knowledge

Objective: 11-2

71) Discuss the concept of data-driven communication.

Question Tag: Synthesis

AACSB Category: Reflective thinking

Objective: 11-2

72) 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 Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

73) 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 Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

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 Tag: Critical Thinking

AACSB Category: Application of knowledge

Objective: 11-3

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 Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

76) According to Direct Marketing, 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 Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

77) 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 Tag: Definition (Concept)

AACSB Category: Reflective thinking

Objective: 11-3

78) To optimize permission marketing, firms must grant customers empowerment, which means

customers have:

A) power over when marketing material is sent to them.

B) control over what marketing material is sent to them.

C) control over when they can opt-out of the permission marketing program.

D) power throughout the entire relationship, not just at the beginning.

Question Tag: Definition (Concept)

Objective: 11-3

79) To maintain positive attitudes in a permission marketing program, consumers must be given

rewards along the way, not just at the beginning. Doing so creates the feeling of:

A) empowerment.

B) reciprocity.

C) loyalty.

D) satisfaction.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

80) Frequent flier miles in airline travel are a form of:

A) direct marketing.

B) permission marketing.

C) frequency program.

D) ride-along program.

Question Tag: Application

AACSB Category: Application of knowledge

Objective: 11-3

81) Typical goals for frequency or loyalty programs include all of the following except:

A) build brand parity.

B) induce cross-selling to existing customers.

C) differentiate a parity brand.

D) preempt the entry of a new brand.

Question Tag: Application

AACSB Category: Application of knowledge

Objective: 11-3

82) Customers cite all of the following benefits to being a member of frequency or loyalty

programs except:

A) better deals and offers.

B) entertaining content.

C) discounts and savings.

D) recognition and appreciation.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

83) Successful loyalty programs include the two principles of:

A) added value and reciprocity.

B) low costs and data mining.

C) data analysis and targeted messages.

D) utilizing digital marketing techniques and social media.

Question Tag: Definition (Concept)

AACSB Category: Reflective thinking

Objective: 11-3

84) For a company developing a loyalty program, the most attractive group of individuals is

________ users.

A) light

B) moderate

C) heavy

D) new

Question Tag: Definition (Concept)

AACSB Category: Reflective thinking

Objective: 11-3

85) In a frequency program, research indicates the best method is to provide rewards:

A) only when requested.

B) with every person.

C) using a fixed ratio schedule.

D) using a variable ratio schedule.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

86) The program designed to build long-term loyalty and bonds with customers through the use

of a database is:

A) permission marketing.

B) direct marketing.

C) customer relationship management.

D) frequency marketing.

Question Tag: Definition (Concept)

AACSB Category: Information technology

Objective: 11-3

87) The two primary metrics in customer relationship management (CRM) programs are:

A) data-driven communications and data-driven marketing programs.

B) lifetime value and customer cluster analysis.

C) data mining and data coding.

D) lifetime value of customers and share of customer.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

88) If Amelia spends $300 per year at Gap and spends an average of $1500 per year on clothes,

then the “share of customer” value for the Gap:

A) is 20 percent.

B) is 50 percent.

C) is $300.

D) cannot be determined with the information provided.

Question Tag: Critical Thinking

AACSB Category: Analytical thinking

Objective: 11-3

89) In developing a customer relationship management (CRM) program, the “share” of customer

term refers to the:

A) potential value that could be added to a given customer’s lifetime value.

B) lifelong earnings of a customer.

C) share of a customer’s income that is spent on a particular product.

D) percentage of time spent on acquiring the customer’s loyalty.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3

90) Typically, customer relationship management (CRM) programs should be designed to:

A) provide two-way communications.

B) increase sales and profits.

C) create customer value.

D) enhance customer loyalty.

Question Tag: Definition (Concept)

AACSB Category: Application of knowledge

Objective: 11-3