91) The most common database-driven marketing programs are permission marketing, frequency
programs, and digital marketing.
Question Tag: Definition (Concept)
AACSB Category: Information technology
Objective: 11-3
92) A permission marketing program means promotions are only sent to customers who grant
permission to receive them.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
93) Permission is normally obtained from individuals in exchange for an incentive in permission
marketing programs.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
94) An important key to success in permission marketing programs is to make sure participants
have actually agreed to participate and not been tricked into participating or signed up without
their knowledge.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
95) The number one reason that individuals remain loyal to a permission marketing program
after they have joined is a chance to win prizes in a contest or sweepstakes.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
96) Empowerment and reciprocity are important elements in a permission marketing program.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
21
97) For long-term success in permission marketing programs, customers should feel empowered,
which means they are able to choose their incentive when they join the permission program.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-3
98) For customers to maintain a positive attitude toward permission marketing programs,
rewards must be offered continually and not just at the beginning of the program.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
99) When customers in a permission marketing program receive rewards during the program in
addition to at the beginning, it creates a feeling of empowerment.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-3
100) A frequency program provides incentives that are designed to encourage customers to make
repeat purchases.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
101) Companies develop frequency programs to encourage customer loyalty and to generate
sales.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
22
102) A key principle in developing a loyalty or frequency program is to design the program to
enhance the value of what the product offers to customers.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
103) The value of the reward in a frequency program has no relationship on the effort individuals
will expend to obtain the reward.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
104) With a frequency program, consumers are more likely to put forth greater effort to obtain
luxury goods as opposed to necessity items.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
105) Heavy users of a good or service are the best segment to target with a frequency program.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-3
106) In providing rewards for a frequency program, a variable ratio reward schedule is superior
to regularly scheduled rewards.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-3
107) A program designed to build long-term loyalty and bonds with customers through the use of
a personal touch facilitated by technology is a customer relationship management program.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
23
108) Customer relationship management programs are built on two primary metrics: lifetime
value of customers and data mining.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
109) The basic idea behind customer relationship management is that companies can use
databases to customize products and communications to customers that would result in higher
sales and profits.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
110) The lifetime value of a customer is based on the idea that the amount of money customers
spend with a firm increases over time.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
111) In CRM the share of a customer refers to a customer’s potential value.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
112) In general, customer relationship management programs should be designed to enhance
customer loyalty.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-3
24
113) Identify and describe the three primary types of data-driven marketing programs.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-3
114) Selling products to customers without the use of other channel members is:
A) database marketing.
B) direct marketing or direct-response marketing.
C) indirect marketing.
D) by-pass marketing.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
115) The most common method of direct marketing is:
A) direct mail.
B) telemarketing.
C) direct response mass media.
D) emails.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
116) According to the Direct Marketing Association, about 60 percent of a typical direct
marketing budget targets:
A) former customers who have not purchased recently.
B) prospecting for new customers.
C) retaining current customers.
D) individuals from an internal customer list.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
25
117) In purchasing a direct mailing list, a response list consists of individuals who have:
A) met a specific demographic profile.
B) responded to previous direct mail offers made by the company purchasing the list.
C) made purchases or responded to direct mail offers in the past.
D) responded to a direct mail offer within the last 30 days.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
118) In purchasing a direct mailing list, a hot list consists of individuals who have:
A) met a specific demographic profile.
B) responded to previous direct mail offers made by the company purchasing the list.
C) made purchases or responded to direct mail offers in the past.
D) responded to a direct mail offer within the last 30 days.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
119) In purchasing a direct mailing list, a compiled list consists of individuals who have:
A) met a specific demographic profile.
B) responded to previous direct mail offers made by the company purchasing the list.
C) made purchases or responded to direct mail offers in the past.
D) responded to a direct mail offer within the last 30 days.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
120) Morgan is the marketing manager for a small auto parts retailer. She wants to purchase a list
that has the highest probability of producing sales. The best list for her to purchase would be a(n)
________ list.
A) response
B) internal customer
C) hot
D) compiled
Question Tag: Application
AACSB Category: Application of knowledge
Objective: 11-4
26
121) Online sales are often spurred through offline direct response marketing approaches. The
most likely direct response marketing source is a(n):
A) direct mail flyer.
B) email.
C) catalog.
D) telemarketing call.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
122) Successful cataloging requires:
A) a companion website to facilitate purchasing.
B) an enhanced database for better targeting to specific customers.
C) data mining to determine profiles of high catalog purchasers.
D) digital direct-to-press technology.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-4
123) When Carrie hosts a party for Mark cosmetics and invites her friends and relatives in an
effort to encourage them to purchase some Mark products, it is which method of direct response
marketing?
A) Trawling
B) Direct sales
C) Permission marketing
D) A frequency program
Question Tag: Application
AACSB Category: Application of knowledge
Objective: 11-4
124) The least popular form of direct marketing is:
A) email.
B) direct mail.
C) inbound telemarketing.
D) outbound telemarketing.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
27
125) Outbound direct response telemarketing is most successful when:
A) it is tied into a database and either customers or prospects are called.
B) calls are made from a compiled list.
C) individuals who have visited the company’s website are called.
D) it is used for cross-selling.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-4
126) Direct response marketing is selling products to customers without the use of other channel
members.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
127) According to the Direct Marketing Association, about 60 percent of direct marketing
expenditures are spent on retaining current customers.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
128) In terms of responding to a direct mail offer, a PURL offers the advantage of preloading all
of an individual’s personal data to a personalized website.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
129) The most common form of direct marketing is email.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
28
130) If a company is using its own data list generated by its database for a direct mail campaign,
it is important to parse the list to separate active customers from inactive customers so different
mailers can be sent to each group.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
131) Mailing direct offers to individuals who have purchased in the past, but not recently, will
usually yield better results than a cold-call mailing list from a broker.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-4
132) In purchasing a mailing list, a response list consists of customers who have purchased the
product before and have responded to direct mail offers for the product being advertised.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-4
133) In purchasing a mailing list, a “hot list” is individuals that have responded to a direct mail
offer within the last 90 days.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
134) Of the different types of mailing lists that can be purchased, the least expensive is a
response list.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-4
29
135) A primary advantage of direct mail is that mail can be easily targeted to specific consumer
groups and to specific individuals.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 11-4
136) Many consumers believe online shopping has replaced catalogs, but research reveals that
receiving a catalog is often the first step in the buying cycle for consumers.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
137) Catalogs offer the advantages of being long lasting, low-pressure, and viewed at a person’s
leisure.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
138) Successful cataloging requires data mining that allows for targeting of recipients.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 11-4
139) Catalogs are an essential selling tool for many business-to-business marketing programs.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
140) The internet has not been a successful medium for direct response advertising.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 11-4
30