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CHAPTER FIFTEEN
CUSTOMER RELATIONSHIP MANAGEMENT
Multiple Choice
1. Which of the following represents a major shift in current marketing practice?
a. From high fixed costs to low fixed costs
b. From mass marketing to individualized marketing
c. From focusing on a small base of customers to focusing on acquiring many new
customers
d. All of the above
2. A firm using relationship marketing focuses on ________.
a. market share
b. wallet share
c. time share
d. relationship share
3. Companies can use relationship marketing techniques to build relationships with
________.
a. customers
b. employees
c. lateral partners
d. all of the above
4. Which of the following is a facet of customer relationship management (CRM)?
a. customer service
b. sales force automation
c. marketing automation
d. all of the above
5. Social CRM means that companies must interact with customers ________.
a. on the customer’s terms
b. based on company data
c. based on company strategy
d. based on company desires
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6. In order to keep customers from viewing their communications as spam, the firm should
build relationships by ________.
a. offering promotions
b. purchasing new consumer lists periodically
c. using consumer information to build more precise target profiles
d. rewarding customers for giving out their friend’s e-mail addresses
7. Which of the following is referred to as level one of relationship marketing?
a. Marketers learn the names and needs of customers
b. Marketers create solid solutions to customer problems
c. Marketers build a financial bond with customers by using pricing strategies
d. Marketers stimulate social interaction with customers
8. Which of the following is an advantage of connecting customers with supply chain
businesses?
a. all companies will share transaction data so inventories can be kept low
b. customer service reps will have up-to-the-minute inventory information and be able
to help consumers more immediately
c. upstream firms can use data to design products that better meet consumer needs
d. all of the above
9. As more companies integrate customer relationship management (CRM) and supply chain
management (SCM) activities ________.
a. they will experience an increase in variable costs
b. they will slightly less able to learn how to create value throughout the supply chain
c. they will become more responsive to individual customer needs
d. all of the above
10. If two or more companies were to link their intranet networks for the purpose of sharing
information, then they would have a(n) ________.
a. supply chain
b. extranet
c. ethernet
d. internet
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11. Companies obtain transactional, behavioral, and interaction data about prospects,
business customers, and end customers through ________.
a. personal disclosure
b. automated tracking of the sales force
c. Web site activity
d. all of the above
12. CRM allows companies to leverage their resources by investing more in the ________
customers.
a. average
b. least profitable
c. most lucrative
d. none of the above
13. When everyone in the company who touches the customer understands all aspects of the
customer’s relationship with the company, this is regarded as ________.
a. owning the customer’s total experience
b. streamlining business processes that impact the customer
c. having a 360-degree view of the customer relationship
d. fostering community
14. Important tools that aid firms in customizing products to groups of customers or
individuals include ________ strategies that reside on the company’s Web and e-mail
servers, and ________ strategies that are initiated by internet users.
a. push; pull
b. pull; push
c. marketing; brochureware
d. marketing; inquiry
15. Using _________ firms can develop customized web pages based on visitor behavior.
a. Web log analysis
b. ongoing e-mail
c. client-side tools
d. agents
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16. ________ allows marketers to monitor users’ online behavior and make instantaneous
and/or automatic adjustments to online promotional offers and web content.
a. Collaborative filtering
b. Real-time profiling
c. An agent
d. E-mail communication
17. Through real-time chat, bulletin boards/newsgroups, and email postings at its Web site,
companies are able to ________.
a. aggregate data used to design marketing mixes that meet user needs
b. build community
c. learn about products
d. all of the above
18. Software agents such as shopping agents and search engines ________.
a. scour the internet for terms matching the users’ search criteria
b. use Web portals to access partner information
c. are forms of experiential marketing
d. match user input to databases and return customized information
19. Individualized web portals are most often used to build relationships in the ________.
a. B2C market
b. B2B market
c. B2G market
d. G2C market
20. All of the following are metrics used to assess the internet’s value in delivering CRM
except ________.
a. lifetime value (LTV)
b. cost savings
c. employee satisfaction
d. customer satisfaction
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True/False
21. Most businesses spend more money acquiring new customers than they spend keeping
current customers.
a. True
b. False
22. Customer service occurs only post-purchase when customers have questions or
complaints.
a. True
b. False
23. Most customers would prefer to be brand disloyal in favor of finding the lowest price for
each purchase, so marketers must entice them into loyalty through special offers.
a. True
b. False
24. One important tenet of CRM is that it is better to attract, retain, and grow customers than
to focus only on customer acquisition.
a. True
b. False
25. Social CRM does not retain any of the tenets of CRM 1.0.
a. True
b. False
26. Permission marketing dictates that customers will be pleased to receive e-mail for which
they have opted-in.
a. True
b. False
27. Lively and useful chat and bulletin boards increase repeat site visits and stickiness.
a. True
b. False
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28. Wireless users want only graphic data due to the screen size and download time for text.
a. True
b. False
29. Post-transaction customer service is an important part of the customer care life cycle.
a. True
b. False
30. No matter how good a company may be at retaining customers, new customer acquisition
is still an important activity.
a. True
b. False
31. Personalization involves ways that marketers individualize in an impersonal, computer
networked environment.
a. True
b. False
32. Unlike SCM, CRM activities usually refer to back-end operations.
a. True
b. False
Essay Questions
33. Why are the three pillars of relationship management?
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34. Why is it important to implement CRM effectively and efficiently? In what ways can a
firm ensure that their use of CRM is both effective and efficient?
(Difficult; LO2; Analytic Skills)
35. Discuss the major principles behind Social CRM (CRM 2.0), and contrast it with CRM 1.0.
36. What is the difference between push strategies and pull strategies used by firms that
customize products to customers? Your answer should include an example of each.
37. The text notes that relationship marketing is practiced on three levels. Describe each of
the three levels from the lowest to the highest.
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38. Explain what is meant by CRM-SCM Integration. What are the advantages of this
integration for internet companies?
39. Give an example of a time when you experienced some aspect of CRM via the internet.
Did this experience represent a CRM success or failure in your mind? Why?