Chapter 14—Building Customer Relationships
TRUE/FALSE
1. Customer relationship management means different things to different businesses.
2. There must be a company-wide commitment to CRM concept if CRM is to be productive.
3. A transactional relationship is an association between a business and a customer that begins or ends
with a purchase or a business exchange.
4. The ability to enjoy one-on-one contact with customers has always been a competitive advantage for
large firms.
5. Regardless of the nature of the business, small firms can gain a competitive edge by providing
exceptional customer service.
6. Addressing a customer by name typically means very little to them.
7. It is important to keep in touch with a customer and make a sales pitch each time.
8. A customer complaint can be positive.
9. Initial CRM support efforts should be placed with the website as those personnel have the most
customer contact.
10. Lack of in-house expertise is a major justification for using outside CRM services.
11. A consumer’s recognition of a problem can be characterized as routine if the problem evolves over
time.
12. In some situations, a small business owner will have to influence need recognition; in others he may
simply be able to react to needs the consumer has identified.
13. In the information search and evaluation stage, the firm’s principal objective is to establish evaluative
criteria.
14. Evoked sets are features or characteristics of products or services that are used to compare brands.
15. An evoked set is a group of brands that a consumer is both aware of and willing to consider as a
solution to a purchase problem.
16. Post-purchase dissonance has been shown to be unrelated to customer satisfaction because it occurs
after customers have satisfied their needs.
17. Small businesses must strive to understand post-purchase dissonance among their customers and to
manage it effectively.
18. Post-purchase dissonance and consumer complaints are both directly related to customer satisfaction.
19. Only three classes of needs—social, psychological, and spiritual— can be connected to behavior
through motivations.
20. Consumer needs can be completely satisfied by proper customer relationship management.
21. An investigation of culture with a narrow definitional boundary (e.g., by age, geographic location, etc.)
is called perceptual categorization.
22. Marketers create needs that offer unique motivations to consumers.
23. A marketer must determine which motivations the consumer will perceive as acceptable to satisfy a
need in a given situation.
24. Attitudes have an indirect impact on consumer behavior.
25. Attitudes are forces that organize and give direction to the tension caused by unsatisfied needs.
26. Because culture drastically affects the behavior patterns and values of people, it has tremendous
impact on the purchase and use of products.
27. Educational level is the most single determinant of social class.
28. Every group to which an individual belongs is a reference group for that consumer.
29. In general, opinion leaders are considered to be knowledgeable, visible, and exposed in mass media.
MULTIPLE CHOICE
1. Economic benefits associated with maintaining relationships with current customers include:
a.
Small increases in customer retention can translate into large increases in profits.
b.
Existing customers spend less money than new customers.
c.
Order processing costs are higher for current customers.
d.
All of these.
2. CRM is the business version of
a.
the Ten Commandments.
b.
the Bill of Rights.
c.
the Golden Rule.
d.
Maslow’s Hierarchy of Needs.
3. A basic idea forming the foundation of customer loyalty for small firms includes the notion that
a.
superior customer service always leads to customer purchases.
b.
customer loyalty will mean constant customer satisfaction.
c.
small firms possess great potential for providing superior customer service.
d.
customer satisfaction is being ignored by large firms.
4. Abby is so satisfied with her green grocer that she refers her friends and colleagues, providing a(n)
_______ benefit of maintaining relationships with current customers.
a.
economic
b.
marketing
c.
psychological
d.
social
5. Diane is a loyal, long term customer at Burke’s Furniture Store. It would be expected that she would
a.
be willing to pay more for Burke’s Furniture’s products.
b.
have higher order-processing costs since she purchases so much.
c.
potentially spend less as she purchases more products over time.
d.
All of the above.
6. An approach that recognizes that, with every interaction, customers learn something about a company
that will affect their desire to do business there in the future is known as
a.
perceptual categorization.
b.
cognitive dissonance.
c.
transactional relationship.
d.
customer experience management.
7. Molly has had repeated positive experiences with her local coffee shop. They suggest new flavors,
call her by her first name, and donate to a local charity that Molly supports. Molly’s experiences, as a
result, contribute to the firm’s CRM _______.
a.
organizational culture
b.
customer cost
c.
value equation
d.
customer satisfaction
8. As an owner of a floral design business, Tim’s highest priority for the florist’s CRM program
should be
a.
marketing efforts to bring in customers who haven’t bought flowers recently.
b.
finding the right computer software for an online floral ordering program.
c.
determining if existing customers are satisfied with past floral arrangements.
d.
identifying how often customers will purchase flowers.
9. Most customer service problems are identified by
a.
personal observation.
b.
outside consultants.
c.
customer complaints.
d.
entries in a suggestion box.
10. To establish an effective customer service program, what should be completed first?
a.
customer service quotient
b.
mystery shopper visit
c.
survey on customer attitudes
d.
Jezek’s Zone analysis
11. Which consumer option for dealing with product or service dissatisfaction is the only one that is
desirable to a business?
a.
publicly obtain legal action against the business
b.
stop buying the product or service
c.
take no action
d.
privately complain to the business
12. CRM software programs
a.
are designed to help companies gather all customer contact information into multiple data
management programs.
b.
are often implemented into sales departments first since this area of a company typically
generates the greatest amount of customer contact.
c.
will require limited support resources for the proper implementation into the company.
d.
has a finite set of user-friendly tools to assist implementation resulting in more small
businesses adopting the programs.
13. A customer’s household income level would most likely be stored in which category of a customer
profile?
a.
Personal information
b.
Demographics
c.
Psychographic data
d.
Transactions
14. Freida used a discount coupon to purchase a new product. In which category of the customer profile
should this be recorded?
a.
Personal Information
b.
Lifestyle data
c.
Profile of past responses
d.
Transaction data
15. Information taken from warranty cards would be stored in which category of a customer profile?
a.
Personal information
b.
Complaints
c.
Lifestyle data
d.
Transactions
16. Yelp.com
a.
is an online forum where unhappy customers can post a negative review.
b.
is a way for firms to identify customer complaints more so than preferences.
c.
can build a business with limited effort by the business owner.
d.
All of the above are true about Yelp.com.
17. Mary, an independent sales representative, is hindered in her ability to be in contact with clients
because of dropped calls on her cell phone. Her decision to purchase a cellular booster for her phone
reflects Mary has just proceeded through the _____ stage of consumer decision making.
a.
purchase evaluation
b.
evaluative categorization
c.
need recognition
d.
cognitive dissonance
18. Jeff has concluded that his company selling professional football merchandise needs to increase its line
of shirts. He is in the ____ stage of the consumer decision making process.
a.
information search and evaluation
b.
need recognition
c.
post-purchase evaluation
d.
purchase decision
19. Linda is considering several colleges at which to finish her culinary degree. She is in the _____ stage
of the consumer decision making process.
a.
information search and evaluation
b.
need recognition
c.
post-purchase evaluation
d.
purchase decision
20. Bob never purchases bottled water when he is thirsty even if it is available. This behavior indicates
that bottled water
a.
does not meet Bob’s evaluative criteria.
b.
increases Bob’s cognitive dissonance.
c.
is not included in Bob’s evoked set.
d.
decreases Bob’s perceptual categorization.
21. According to consumer information-processing theory, _____ is the final stage through which
consumers progress.
a.
cognitive dissonance
b.
evaluative categorization
c.
post-purchase evaluation
d.
purchase decision
22. The shoes looked so cute in the store window, but after she brought them home Delia began having
second thoughts about her purchase. Delia is experiencing:
a.
post-purchase dissonance.
b.
post-purchase satisfaction.
c.
cognitive dissonance.
d.
post-decisional distress.
23. When Sarah decided to make an offer on a house, this action illustrated she is in the _____ stage of the
consumer decision making process.
a.
information search and evaluation
b.
need recognition
c.
post-purchase evaluation
d.
purchase decision
24. In what stage of the consumer decision making process is Josh when he becomes concerned whether
his friends will enjoy the video game he downloaded?
a.
information search and evaluation
b.
need recognition
c.
post-purchase evaluation
d.
purchase decision
25. Attending a prayer breakfast is most likely an attempt to satisfy which category of need?
a.
physiological
b.
psychological
c.
spiritual
d.
social
26. Individual processes that ultimately give meaning to stimuli that confront consumers are known as
a.
perceptions.
b.
motivations.
c.
attitudes.
d.
opinions.
27. Juan’s belief that all low calorie sodas taste awful is an example of
a.
cognitive dissonance.
b.
the elimination of an item in an evoked set.
c.
perceptual categorization.
d.
unilateral indifference.
28. The reason that a group of uniformed people walking down the street playing musical instruments is
recognized as a band is the result of
a.
characteristic profiling.
b.
evaluative criteria.
c.
perceptual categorization.
d.
problem recognition.
29. An enduring opinion that is based on a combination of knowledge, feeling, and behavioral tendency is
referred to as
a.
a motivation.
b.
a perception.
c.
an attitude.
d.
a cognition.
30. June has always believed that the resale furniture store doesn’t have quality furniture as it has been
used by others. This _____ may cause her to avoid the store and shop at a store specializing in new
furniture across town.
a.
attitude
b.
cognitive dissonance
c.
motivation
d.
perceptual categorization
31. Julie’s preference for the a certain style of barbeque developed in her state is the result of which
sociological influence?
a.
culture
b.
opinion leaders
c.
reference groups
d.
social class
32. Divisions in society with different levels of social prestige are called
a.
reference groups.
b.
cultures.
c.
social classes.
d.
perceptual categories.
33. Billy admires firemen. He wants to dress like them, wear a fireman’s hat, and pretend to put out fires.
For Billy, firemen are:
a.
a referral group.
b.
a reference group.
c.
a perceptual group.
d.
an associate group.
34. Erin often shops at a retail store where her friends shop because of her desire to be affiliated with the
group. The friends are exerting ______ power over Erin.
a.
expert
b.
group
c.
referent
d.
expert
35. In general, a person can be an opinion leader even if he or she is not
a.
knowledgeable.
b.
visible.
c.
exposed to the mass media.
d.
nationally known.
36. Aspiring science fiction writers study Isaac Asimov to learn the art of writing that genre. In this case,
Asimov would be considered:
a.
how a sub-cultural analysis impacts marketing efforts.
b.
an opinion leader with which businesses want to affiliate.
c.
a reference group for sci-fi writers
d.
a social class because of his lifestyle choices.
37. A winery promotes its products by holding wine tastings at the restaurants of outstanding local chefs.
The winery is utilizing which sociological influence?
a.
culture
b.
opinion leaders
c.
reference groups
d.
social class
38. Nikita’s decision to buy her shoes at the same shop that her boss patronizes is the result of which
sociological influence?
a.
culture
b.
opinion leaders
c.
reference groups
d.
social class
MATCHING
Match the term with its definition.
a.
Attitude
g.
Needs
b.
Culture
h.
Opinion leader
c.
Customer experience management
i.
Perception
d.
Customer Lifetime Value
j.
Perceptual categorization
e.
Customer relationship management
k.
Reference group
f.
Motivations
l.
Social classes
1. A small group that an individual allows to influence his or her behavior
2. Goal-oriented forces that organize and give direction to the tension caused by unsatisfied needs
3. Behavioral patterns and values that characterize a group of consumers in a target market
4. A group member who plays a key communication role
5. Divisions within a society having different levels of social prestige
6. An approach that recognizes that, with every interaction, customers learn something about a company
that will affect their desire to do business there in the future
7. The process of grouping things that are perceived as being similar
8. A company-wide business strategy designed to optimize profitability, revenue, and customer
satisfaction by focusing on specific customer groups
9. An enduring opinion based on a combination of knowledge, feelings, and behavioral tendencies
10. The starting point for all behavior
11. The total profit expected from all future sales to a customer
Match the term with its definition
a.
80/20 Principle
g.
Perceptual categorization
b.
Customer database
h.
Post-purchase dissonance
c.
Customer segmentation strategy
i.
Recency-frequency-monetary analysis
d.
Evaluative criteria
j.
Touch point
e.
Evoked set
k.
Transactional relationship
f.
Perception
12. A process of identifying customers that fit into smaller, more homogeneous groups
13. An analysis that reveals customers most likely to buy from a firm in the future because they have made
purchases recently, frequently, and in amounts that exceed some established minimum
14. An interaction between a business and its customers
15. The features or characteristics of a product or service that customers use for comparison
16. The individual processes that give meaning to the stimuli confronting consumers
17. A collection of information about a customer, including demographic data, attitudes, preferences, and
other behavioral characteristics, as defined by CRM goals
18. A principle that maintains that 80 percent of a company’s sales will come from 20 percent of its
customers
19. A group of brands that a consumer is both aware of and willing to consider as a solution to a purchase
need
20. The psychological tension or anxiety that occurs when a customer has second thoughts immediately
following a purchase
21. An association between a business and a customer that begins (or ends) with a purchase or a business
deal
ESSAY
1. List the five major economic benefits of maintaining relationships with current customers.
2. Caleb owns a small deli and is focusing on developing his business relationship with customers. What
four underlying beliefs should Caleb consider in order to develop and provide great customer service?
3. Identify five outcomes of customer satisfaction.
4. Discuss the importance of why small businesses should offer personal attention. What are
suggestions for implementing such procedures.
5. Identify and explain the importance of five indicators of extraordinary customer service.
6. How can technology improve customer relationships?
7. Aly’an is a country rock band that has a new CD and is gaining a fan base. The band wants to
connect with their fans, increase CD sales and have more shows. What are tools they could use to
drive more people to their website?
8. Sally is a new customer at Fit and Strong, a training facility for marathon athletes. Upon entering the
business, the receptionist asked Sally to fill out a customer profile questionnaire in order to collect data
for company files. What information is likely to be asked of Sally?
9. Compare CRM marketing efforts between current customers and new customers.
10. Briefly describe each stage of the customer decision making process.
11. Mandy is shopping for a new car. She is visiting a privately owned lot in her hometown and describes
to Jane, the salesperson, that she wants a four-door sedan with high fuel economy and a leather
interior. Jane then shows her three cars that she thinks may fit Mandy’s preferences. What stage of the
decision making process is Mandy in and what should Jane understand about Mandy’s search to
complete the sale?
12. Greg is a retired NBA basketball player who has returned to his small hometown to open a basketball
gym. There are no other businesses in his area like his concept and he wants to reach his customers.
What psychological influences on his consumers does Greg need to consider before opening his
location and how will they apply to the basketball gym?
13. What should entrepreneurs understand about sociological influences on customers?
