Chapter 3: Customer Focus
TRUE/FALSE
1. Customers who are merely satisfied may often purchase from competitors because of convenience,
promotions, or other factors.
2. Loyal customers are more costly to do business with compared to other customers.
3. The internal customers of a company are those people who ultimately purchase and use the company’s
products.
4. The needs and expectations of external customers are different from those of consumers.
5. According to Juran, the customers who fall under the category of “vital few” typically need only
standardized attention as a group.
6. In the context of the dimensions of quality, as suggested by David A. Garvin, reliability is the amount
of use one gets from a product before it physically deteriorates.
7. The “reliability” dimension of a service depends on the ability of the service provider to provide what
was promised to the customers, dependably and accurately.
8. According to the Kano Model, ‘satisfiers’ are the basic requirements that customers expect in a
product or service which are generally not stated by customers but assumed as given.
9. The focus groups have a higher cost of implementation compared to other approaches used for
gathering customer information.
10. The effectiveness of the field intelligence method of gathering customer information depends upon a
culture that encourages open communication with superiors.
11. Affinity diagrams help firms to efficiently organize large volumes of information and identify natural
patterns or groupings in the information.
12. Complaints allow an organization to learn about product failures and service problems, particularly the
gaps between expectations and performance.
13. In the context of the gap model, a customer will be satisfied when the expected quality of a product is
higher than the actual quality.
14. Customer satisfaction or dissatisfaction takes place during moments of truth.
15. Customer contact employees are often the only means by which a customer interacts with an
organization.
16. Dissatisfied individual and business customers often tend to complain to the organization about the
problems.
17. Loyal customers are most likely to be dissatisfied when problems are not resolved after complaining to
the organization.
18. Customer-focused organizations empower their front-line people to do whatever is necessary to satisfy
a customer.
19. Customer –supplier partnerships help organizations to improve products through early design
recommendations and also reduce operations costs through better communications.
20. Customer relationship management systems help organizations to identify and target their most
profitable customers.
21. Customer satisfaction and engagement measurement allows an organization to identify causes of
dissatisfaction and failed expectations as well as drivers of delight to understand the reasons why
customers are loyal or not loyal to the company.
22. In the case of a customer satisfaction survey, formal written surveys tend to generate more qualitative
data than face-to-face interviews.
23. Customer satisfaction surveys will be effective when the questions included in the survey can provide
actionable results.
24. The net promoter score is the difference in the percentage of promoters and detractors.
25. The customer satisfaction measurement of “customer perceived value” focuses more on customer
satisfaction than on loyalty.
MULTIPLE CHOICE
1. The ASQ Quality Glossary defines customer _____ as “the result of delivering a
product or service that meets customer requirements.”
a.
engagement
b.
enrichment
c.
satisfaction
d.
loyalty
2. The term ‘customer engagement’ refers to:
a.
customers’ involvement in the early design and improvement of products.
b.
the strategic alliances of organizations with customers who share common values.
c.
the expectations that define the quality of customer contact with an organization.
d.
customers’ investment in or commitment to a brand and product offerings.
3. Which of the following is true of the American Customer Satisfaction Index?
a.
It is not effective in quantifying the value that customers place on products.
b.
It is based on customer evaluations of the quality of goods and services.
c.
It evaluates only the goods and services produced by the domestic firms.
d.
It is updated on a rolling basis once a year by measuring all the sectors of the economy.
4. Which of the following is true of consumers of an organization?
a.
The retail outlets which sell the products of an organization are considered the consumers
of that organization.
b.
The consumers of an organization receive inputs and produce outputs for other customers
the organization.
c.
The consumers of an organization are a part of one of the various departments or processes
of the organization.
d.
The consumers of an organization are the ultimate purchasers and users of the
organization’s products.
5. Internal customers of an organization are those people who:
a.
are not a part of the organization but are involved in the supply of the organization’s
products to the consumers.
b.
are not a part of the organization but sell resources to the organization so that the
organization can produce it products
c.
are a part of the organization who provide inputs and help to create outputs for customers.
d.
are the end users of a company’s products or services.
6. According to the classification system proposed by Juran, customers who belong to the group of ‘the
vital few’:
a.
need only standardized attention as a group.
b.
have needs and requirements that differ from general customers.
c.
can be targeted through mass marketing strategies.
d.
deserve special attention on an individual basis.
7. The net present value of a customer is:
a.
a measure of how customers assess the benefits of a product in making purchase decisions.
b.
a measure of the likelihood that satisfied customers will recommend the product to other
customers.
c.
the total profits (revenues associated with a customer minus the expenses needed to serve
a customer) discounted over time.
d.
the total value of the benefits offered by a customer in a customer-supplier partnership.
8. According to the dimensions of quality, as suggested by David A Garvin, _____ refers to the
probability of a product’s surviving over a specified period of time under stated conditions of use.
a.
Durability
b.
Reliability
c.
Conformance
d.
Serviceability
9. Which of the following dimensions of quality, as suggested by David A Garvin, refers to the degree to
which physical and performance characteristics of a product match pre-established standards?
a.
Conformance
b.
Reliability
c.
Performance
d.
Durability
10. Maple Products is a manufacturer of electronic goods that markets its products in several countries
across the world. The company makes sure that the spare parts of the products are available in all their
markets and also ensures that the technical personnel in their retail outlets are adequately trained to
repair their products. In the context of the dimensions of quality, as suggested by David A. Garvin, the
efforts taken by the company will enhance the _____ dimension of its product quality.
a.
durability
b.
reliability
c.
serviceability
d.
conformance
11. The _____ dimension of the quality, as suggested by David A. Garvin, refers to the amount of use one
gets from a product before it physically deteriorates or until replacement is preferable.
a.
durability
b.
reliability
c.
assurance
d.
serviceability
12. Most women in the township of Adington prefer to visit Sharon’s Hair Salon because of the attractive
interiors, well-designed equipment and neatly dressed employees. Which of the following dimensions
is influencing customer perceptions of quality in the above scenario?
a.
Empathy
b.
Assurance
c.
Responsiveness
d.
Tangibles
13. Which of the following dimensions that contribute to customer perceptions of quality refers to the
willingness of the service providers to help customers and provide prompt service?
a.
Assurance
b.
Empathy
c.
Reliability
d.
Responsiveness
14. The Kano Model of customer requirements uses the term “satisfiers” to refer to:
a.
the basic requirements that are generally not stated by a customer but are assumed as a
given.
b.
the aesthetic features of a product that do not add any value to the product.
c.
the requirements that customers expressly say they want in a product.
d.
the new or innovative features in a product that are not expected by customers in a
product.
15. According to the Kano Model, the basic requirements that customers expect in a product and which are
generally not stated by customers but assumed as given, fall into the category of _____.
a.
dissatisfiers
b.
exciters
c.
satisfiers
d.
delighters
16. According to the Kano model, which of the following features in a refrigerator is most likely to fall
under the category of a delighter?
a.
Temperature controls
b.
Defrost option that allows to clear the frozen ice
c.
A separate section for vegetables inside the refrigerator
d.
Anti-freeze feature that does not freeze food inside the refrigerator
17. According to the Kano Model, new or innovative features that customers do not expect or even
anticipate, fall under the category of _____.
a.
delighters
b.
dissatisfiers
c.
continuous improvements
d.
satisfiers
18. The term “voice of the customer” refers to:
a.
the performance levels or expectations that define the quality of customer contact with an
organization.
b.
the customer requirements as expressed in the customer’s own terms.
c.
the involvement of customers in the development of new products.
d.
customers’ investment or commitment to a brand or a product.
19. Affinity diagram is a tool that can be used by organizations to:
a.
measure the response of customers by allowing them to express their degree of satisfaction
on a five-point scale.
b.
gather and organize a large number of ideas or facts.
c.
streamline their communication process with the customers.
d.
train their employees on service recovery.
20. According to the gap model, the term “_____” refers to the needs and requirements of a customer.
a.
actual quality
b.
delighters
c.
expected quality
d.
exciters
21. According to the gap model, the term “_____” refers to the outcome of the production process and
what is delivered to the customer.
a.
expected quality
b.
delighter
c.
satisfier
d.
actual quality
22. Which of the following is most likely to be true of a customer-focused organization?
a.
They make it easy for the customers to conduct business.
b.
They do not encourage customer complaints as it will affect their brand image.
c.
They are less keen on engaging in a face–to-face conversation with the customers.
d.
They do not provide explicit guarantees and warranties to the customers.
23. Customer-focused organizations consider complaints as opportunities for improvement as:
a.
it allows them to test the aptitude and efficiency of their employees in handling customer
complaints.
b.
it allows them to reduce the cost of research and development because they come to know
about potential features through customers.
c.
effectively resolving complaints increases customer loyalty and retention.
d.
it helps employees understand what it feels like to be a customer.
24. Which of the following is an advantage offered by customer-supplier partnerships to businesses?
a.
It helps organizations in selecting their customer contact employees and training and
empowering them to meet and exceed customer expectations.
b.
It helps organizations to build and maintain a work environment conducive to the
well-being and growth of all employees by paying attention to their issues.
c.
It allows organizations to share the risks in new product development and improve
products through early design recommendations.
d.
It allows organizations to effectively respond to customers’ complaints by systematically
collecting and analyzing complaint data and using it for improvements.
25. Which of the following is a reason why organizations measure customer engagement and satisfaction?
a.
It helps them in determining their financial requirements and the required value of the cash
reserve ratio.
b.
It helps them to discover customer perceptions of how well the organization is doing in
meeting customer needs.
c.
It helps them to segment markets based on demographic characteristics of the customers.
d.
It helps them in determining their human resource requirements.
26. Which of the following is the first step in developing a customer satisfaction survey?
a.
Selecting the appropriate survey instrument
b.
Designing the survey
c.
Determining the purpose of the survey
d.
Selecting the group or individuals who will conduct the survey
27. Which of the following survey instruments is most commonly used because of low data collection
costs and ease of analysis associated with it?
a.
Formal written surveys
b.
Telephone interviews
c.
Focus groups
d.
Face-to-face interviews
28. Which of the following is a disadvantage associated with using formal written surveys as survey
instruments for measuring customer satisfaction?
a.
They generally measure predetermined perceptions of what is important to the customers.
b.
They incur high costs.
c.
They are very difficult to analyze.
d.
They are not effective in probing deeply into the issues.
29. Which of the following survey instruments is most likely to be effective in generating a significant
amount of qualitative information from the customers?
a.
Mail surveys
b.
Online surveys
c.
Focus groups
d.
Telephone interviews
30. While designing a customer satisfaction survey, organizations should use:
a.
compound questions.
b.
questions with double negatives.
c.
leading questions.
d.
questions that address only one issue or idea.
31. Which of the following is used by organizations to measure customer response by allowing them to
express their degree of opinion?
a.
Likert Scale
b.
Histogram
c.
R-chart
d.
Cause-and-effect diagram
32. The final task in designing a customer satisfaction survey is to:
a.
design the reporting format and the data entry methods.
b.
select the appropriate survey instrument.
c.
define the sample frame, or target group from which the sample is chosen.
d.
select the questions to be included in the survey.
33. Which of the following is true of customers who are regarded as “promoters” based on the net
promoter score associated with these customers?
a.
They spread negative comments about the organization.
b.
They usually defect at higher rates.
c.
They are less price-sensitive and more profitable.
d.
They are not likely to purchase from the organization again.
34. Which of the following is true of the ‘customer perceived value’ measurement used by organizations
to measure customer satisfaction?
a.
It measures customer satisfaction based on the likelihood of customers recommending the
product to other customers.
b.
It measures how customers assess benefits of the product against costs in making purchase
decisions.
c.
It focuses more on customer satisfaction than on customer loyalty.
d.
It takes into consideration only existing customers and not potential buyers.
35. The _____ dimension of the quality, as suggested by David A. Garvin, refers to how a product looks,
feels, sounds, tastes, or smells.
a.
aesthetics
b.
reliability
c.
assurance
d.
serviceability
ESSAY
1. Why do organizations engage in customer segmentation? What are the different approaches that can be
used for customer segmentation?
ANS:
2. What are customer contact requirements? Why is it important for organizations to train and develop
customer contact employees?
3. How do CRM systems help firms to maintain a competitive advantage?
4. Why do organizations measure customer satisfaction and engagement?
5. List some of the reasons why customer satisfaction efforts fail to produce useful results.
ANS:
CASE
1. What is Harley-Davidson, Inc. famous for?
2. What are the various products and services offered by Harley-Davidson?
3. How are the products of Harley-Davidson marketed to retail customers worldwide?
4. What are the various ways in which Harley-Davidson builds its competitive advantage?
5. How does Harley-Davidson define its customer segments for heavyweight (651+ cc) motorcycles?
ANS:
6. What is the vision of Harley-Davidson?
7. List some of the steps taken by Harley-Davidson to attract customers.
8. Discuss the Harley Owners Group concept established by Harley-Davidson.
9. Explain the “Creativity Model” established by Harley-Davidson.
10. Where are Harley-Davidson’s Complete Knock Down assembly plants built?
a. Germany and India
b. Germany and France
c. Brazil and India
d. France and Brazil
11. List some of the competitors of Unique Online Furniture, Inc.
12. What are the key customer requirements identified by Unique Online Furniture, Inc?
13. List some of the products sold by Unique Online Furniture, Inc.
14. How does Unique Online Furniture provide personal attention to its individual customers?
ANS:
15. What is the result of Unique Online Furniture’s customer-focused approaches?