d.
Customer valuation
e.
Relationship marketing
56. Which of the following techniques used to analyze marketing databases considers whether a customer
has made a purchase recently as well as how often that customer makes a purchase?
a.
Recency-frequency-monetary analysis (RFM)
b.
Predictive modeling
c.
Customer valuation
d.
Data mining
e.
Lifetime value analysis
57. L.L. Bean, Inc. has been reducing the number of catalogs it sends out while increasing its sales and
profits. With _____, L.L. Bean now identifies customers who have purchased recently and often and
have spent considerable money. Such customers are most likely to purchase again.
a.
predictive data
b.
trending
c.
correlation analysis
d.
recency-frequency-monetary analysis
e.
hypothesis testing
58. Which of the following is a data manipulation technique that projects the future value of the customer
over a period of years using the assumption that marketing to repeat customers is more profitable than
marketing to first-time buyers?
a.
recency-frequency-monetary value (RFM) analysis
b.
cluster analysis
c.
lifetime value analysis (LTV)
d.
market segmentation
e.
predictive modeling
59. The basic assumption of _____ is that marketing to repeat customers is more profitable than marketing
to first-time buyers.
a.
customer segmentation
b.
predictive modeling
c.
customer valuation
d.
data manipulation
e.
lifetime value analysis
60. Lifetime value analysis can show marketers:
a.
how much they can spend to acquire new customers
b.
how valuable their current customers are
c.
who their best customers are
d.
which products are at the end of their useful lives
e.
introduce new customers selectively to specific marketing actions
61. _____ uses a past set of occurrences to predict the likelihood that some other occurrence, such as a
response or purchase, will take place in the future.
a.
Customer manipulation
b.
Predictive modeling
c.
Data mining
d.
Lifetime value analysis
e.
Causal research
62. The cable industry needs to identify current and future traffic patterns so it can manage the growth of
cable systems. Because of high costs, it is undesirable to buy bandwidth before it is needed. It is also
time-consuming to upgrade a cable system. Furthermore, consumers hate to wait for capacity
increases. Therefore, the industry should use _____ to determine when and where new systems should
be implemented.
a.
lifetime analysis
b.
recency-frequency-monetary analysis
c.
cross-selling
d.
speed of data communications
e.
predictive modeling
63. Ford Motor Company has launched an online effort to market its F-Series trucks. It hopes to use its
database capabilities to capture valuable data on car buyers. Ford plans on cross-referencing new
F-series owners with the database generated from this online campaign to see how many names are
duplicated. Ford will use these data to forecast which campaigns have the greatest probability of
success. Which of the following methods will Ford most likely use to analyze these data?
a.
Lifetime value analysis (LTV)
b.
Present value/future value assessment
c.
Recency-frequency-monetary analysis
d.
Predictive modeling
e.
Reach-frequency-media analysis
64. Which technique was likely used to suggest that a customer who wanted to buy a $29 shirt would also
be a likely prospect for a cigar humidor?
a.
Predictive modeling
b.
Customer segmentation
c.
Market aggregation
d.
Recency-frequency-monetary analysis
e.
Data interpolation
65. Data mining identifies the most profitable customers and prospects. Managers can then design
tailored marketing strategies to best appeal to the identified segments. In CRM this is commonly
referred to as _____ customer information to facilitate enhanced relationships with customers.
a.
manipulating
b.
leveraging
c.
harvesting
d.
converting
e.
managing
66. All of the following are common CRM marketing database applications EXCEPT:
a.
cross-selling other products or services
b.
designing targeted marketing communications
c.
activity-based costing applications
d.
improving customer service
e.
campaign management
67. Which of the following is a common CRM marketing database application?
a.
Campaign management
b.
Designing targeted marketing communications
c.
Improving customer service
d.
Cross-selling other products or services
e.
All of these
68. _____ involves developing product offerings customized for the appropriate customer segment and
then pricing and communicating these offerings for the purpose of enhancing customer relationships.
a.
Transaction management
b.
Campaign management
c.
Data mining
d.
Consumerism
e.
Knowledge management
69. Looking to build up its postpurchase relationships, Evans Auto Care recently launched a service
whereby customers can sign up to get e-mail service reminders, access information about their
vehicles, and receive special promotions. Evans Auto Care is using _____ to enhance its customer
relationships.
a.
modeling
b.
scoring
c.
valence management
d.
campaign management
e.
data mining
70. To target outdoor enthusiasts, Subaru of America added an outdoor life section to its Web site that is
organized by area of interest. The site will serve as a platform for co-marketing and promotional
programs. This offering of customized products to a customer segment for the purpose of enhancing
the auto manufacturer’s customer relationships is an example of:
a.
campaign management
b.
customer aggregation
c.
transaction segmentation
d.
data mining
e.
knowledge management
71. Les Ailes de la Mode, a Quebec retailer, offers its customers Les Ailes MasterCard. The card is
connected to a points program that offers one point for every $20 of purchases on the card and triple
that on purchases made at Les Ailes. It also incorporates an electronic chip, through which a $10
coupon is awarded to each member every month via the electronic gift card (on purchases of $10 or
more every month). Card members also receive free subscriptions to the retailer’s Les Ailes magazine.
This shows how CRM can be used:
a.
to retain loyalty
b.
in mass marketing
c.
to increase knowledge about the competition
d.
to create transactional relationships
e.
to develop a compiled list
72. Many high-end hotel chains award points for every dollar spent in one of their hotels. Customers who
earn a high number of points are given special privileges that may include upgraded hotel rooms or
several free nights. This is an example of the leveraging of customer information to:
a.
retain loyal customers
b.
reinforce competitive promotional decisions
c.
cross-sell other products and services
d.
design targeted marketing communications
e.
induce product trial by new customers
73. Drugstore chain CVS has an ExtraCare program that allows customers to register for a card that is
swiped prior to each purchase and gives discounts and offers special in-store promotions. The most
likely reason why CVS implemented this reward program is to:
a.
to reduce problems associated with cultural diversity
b.
to make sure the 80/20 principle is not influencing its activities
c.
to retain loyal customers
d.
to create cognitive dissonance
e.
to lessen the importance of customer service
74. Using customer database information to offer related products to customers is called:
a.
incremental selling
b.
cross-selling
c.
relationship marketing
d.
informed selling
e.
synergistic selling
75. Every time Barry orders running shoes from Road Runner Sports, the Web site or the operator on the
phone always tries to sell him something in addition to the shoes he ordered, such as socks or other
apparel. This is an example of:
a.
data mining
b.
cross-selling
c.
trading up
d.
database enhancement
e.
a database channel
76. According to the CEO of Allied Office Products, “We’re a head-count business: I know that if you
have a 60-person office, you should buy $300 worth of basic office supplies—paper, pens,
staples—from us with each order, but if that’s all we get, we stagnate. For us to grow, we have to
convince the customer, who already likes our products and service, to buy more than just basic
supplies; we have to increase the order by 10, 20, or 30 times.” Allied’s salespeople are trained to push
the company’s less traditional, higher-margin lines such as coffee and refreshments, printing and forms
management, and office furniture. Allied’s salespeople are engaging in:
a.
cross-selling
b.
trading up
c.
buyer empowerment
d.
alliance building
e.
bundling
77. Subaru of America targeted outdoor enthusiasts when it added an outdoor life section to its Web site,
organized by area of interest. The site will serve as a platform for co-marketing and promotional
programs and will allow Subaru to gather most overt and covert information. Which of the following
provides the most likely reason why Subaru has added this section to its site?
a.
To create cognitive dissonance
b.
To reduce problems associated with cultural diversity
c.
To increase the effectiveness of its channels of distribution
d.
To lessen the importance of customer service
e.
To design more targeted marketing communications
78. A segmented communications strategy to _____ users might encourage repeat purchases through a
direct incentive such as a limited-time price discount for ordering again.
a.
loyal
b.
infrequent
c.
brand-conscious
d.
heavy
e.
moderate
79. After Ruth and Mike had paid in advance for their week’s stay at a Vermont Inn, Ruth felt that they
might have chosen poorly and that they were committing themselves to stay at a place they might hate.
Then Ruth got a letter from the Inn’s owner stating that she was looking forward to their visit and
asking what they most enjoyed for breakfast. The hospitality of the letter dealt with Ruth’s cognitive
dissonance by:
a.
cross-selling
b.
disintermediation
c.
spamming and flaming
d.
implementing a penetration strategy
e.
reinforcing her purchase decision
80. _____ is the percentage of customers that repeatedly purchase products from a customer.
a.
Customer retention
b.
Purchase rate
c.
Customer loyalty
d.
Maintenance rate
e.
Exchange rate
81. CRM concerns many Americans because:
a.
of the large number of people who must be served
b.
not all customers have access to CRM marketing
c.
of the potential for invasion of privacy
d.
of the aggressive nature of marketers that use CRM
e.
of the expense to consumers
82. The Gramm-Leach-Bliley Act enforces privacy guidelines:
a.
for financial information
b.
for medical records
c.
that regulate telemarketers
d.
that regulate Internet marketers
e.
that regulate all business activities
83. All the following are U. S. privacy Acts EXCEPT:
a.
McCarthy Act
b.
Gramm-Leach-Bliley Act
c.
Health Insurance Portability and Accountability Act
d.
CAN-SPAM Act
e.
all these are privacy acts
84. When Ford Motor Company launched an online effort to market its F-Series trucks, it created a
database. One potential problem with the use of this database is:
a.
that customers may perceive it as an invasion of privacy
b.
that the database may be used to generate unrepresentative focus groups
c.
that media alternatives may be eliminated from promotional campaigns
d.
that it may lead to more experimental research
e.
the lack of adequate personal information on customers
85. Countries in _____ generally have the strictest legislation regarding the collection and use of customer
data.
a.
Asia
b.
North America
c.
Africa
d.
Europe
e.
South America
If you think George Clooney’s character in the movie Up in the Air was pure fiction, think again.
Clooney portrayed a frequent flier who enjoyed top-of-the-line perks the likes of which even most
“elite” fliers don’t experience. That’s because he was a member of American Airline’s
invitation-only ConciergeKey recognition program. Most airlines maintain these unpublished super
elite frequent-flier plans, such as Continental’s Chairman’s Circle and Delta’s Executive Partner
programs. These programs are reserved for the highest-volume customers in terms of miles flown or
highest-value in terms of revenue. You’ll have to fly upwards of 300,000 miles or spend $50,000 a
year to be invited.
86. Refer to Frequent Fliers. Airlines’ commitment to providing premium customer service to its most
valuable customers indicates a commitment to:
a.
customer relations mapping (CRM)
b.
consumer relationship marketing (CRM)
c.
internal transactional marketing
d.
customer relationship management (CRM)
e.
consumer replacement market (CRM)
87. Refer to Frequent Fliers. American Airlines gives its gate employees the authority to hold up a
connecting flight when a ConciergeKey member’s incoming flight is delayed. The delegation of this
authority to a gate employee is called:
a.
empowerment
b.
trickle-down management
c.
centralization
d.
synergy
e.
knowledge management
88. Refer to Frequent Fliers. Most airlines have considerable information regarding their frequent fliers,
some of which was purchased from outside vendors. Purchasing information on customers to better
describe their needs or to determine how responsive they might be to marketing programs is called:
a.
data mining
b.
database enhancement
c.
data warehouse
d.
database expansion
e.
knowledge management
89. Refer to Frequent Fliers. Airlines have estimated the future value of these elite fliers and found that
they are very profitable for their business. What technique did the airlines use to project the future
value of these fliers over a period of several years?
a.
RFM analysis
b.
Lifetime value analysis (LTV)
c.
Cluster analysis
d.
Conjoint analysis
e.
Data enhancement analysis
90. Refer to Frequent Fliers. The ConciergeKey program, which rewards key customers for making
multiple purchases, is an example of a(n):
a.
RFM program
b.
LTV program
c.
loyalty program
d.
customer relationship program
e.
interactive program
As flextime, consulting, telecommuting, and downsizing make it more difficult for people to donate
blood at the workplace, Brooklyn/Staten Island Blood Services has launched a CRM marketing
campaign to boost awareness and repeat donations. Early in the campaign it went to its listings of
previous donors and pulled out those with birthdays in February, March, and April. These donors were
sent a birthday card with the greeting, “On the anniversary of your life, would you consider saving
another’s life?“
91. Refer to Blood Services. The card sent by the organization is an example of a:
a.
touch point
b.
transformational exchange
c.
predictive campaign
d.
point-of-sale interaction
e.
service message
92. Refer to Blood Services. The information about past donors is stored in the organization’s:
a.
integration systems
b.
information repository
c.
data mine
d.
database
e.
spreadsheet
93. Refer to Blood Services. The organization developed a _____ list of donors to receive birthday cards.
a.
compiled
b.
benefit-based
c.
response
d.
feedback
e.
proactive
94. Refer to Blood Services. What technique did the organization use to analyze its donor information?
a.
data identifying
b.
recency-frequency-monetary analysis
c.
niche marketing
d.
predictive modeling
e.
customer segmentation
95. Refer to Blood Services. The organization used CRM marketing to:
a.
cross-sell other products
b.
design targeted marketing communications
c.
increase effectiveness of its distribution strategy
d.
define customer service
e.
do all of these things
General Mills has created Que Rica Vida magazine, which seeks to build relationships with newly
acculturated Latina moms by providing them with culturally relevant lifestyle information and expert
advice on the topics of education, holiday occasions, health and wellness, and family—issues of great
importance to Hispanic families in America. Each issue normally contains 6-10 General Mills
coupons. In addition to the magazine, General Mills also has a Web site of the same name:
QueRicaVida.com, as well as a Spanish-language iPad application that provides Spanish-speaking
consumers with instant access to more than 900 Latin-inspired recipes.
96. Refer to Que Rica Vida. General Mills’ Que Rica Vida magazine is a component in a program that
allows General Mills to gather information about, and build a relationship with, a group of customers
from the Spanish-speaking community. In other words, the magazine is a component in General
Mills’ _____ program.
a.
customer relations mapping (CRM)
b.
consumer relationship marketing (CRM)
c.
internal transactional marketing
d.
customer relationship management (CRM)
e.
consumer replacement market (CRM)
97. Refer to Que Rica Vida. General Mills’ Que Rica Vida magazine encourages customers to visit the
accompanying Web site to vote and provide ratings and feedback on their favorite recipes. The
company then sends a “thank you” email for responding to their Web site. All of these activities show
that General Mills is:
a.
customer centric
b.
product oriented
c.
sales oriented
d.
customer service focused
e.
goal oriented
98. Refer to Que Rica Vida. When General Mills employees share information about customers gathered
through the Que Rica Vida initiative, they are practicing:
a.
interaction management
b.
knowledge management
c.
profit oriented management
d.
lead management
e.
performance management
99. Refer to Que Rica Vida. To be useful to the whole organization, the data collected by General Mills
through their Que Rica Vida initiative must be centralized. This process of centralizing data for a CRM
system is termed:
a.
data packing
b.
data pooling
c.
data cleaning
d.
data mining
e.
data warehousing
100. Refer to Que Rica Vida. The Que Rica Vida magazine and Web site are targeted to a specific group of
customers: newly acculturated Latina moms. This is an example of:
a.
customer segmentation
b.
RFM analysis
c.
LTV analysis
d.
predictive modeling
e.
guerilla marketing
The WMBA’s Los Angeles Sparks is an example of a sports franchise adopting a CRM approach to
grow their fan base. The Sparks CRM system, provided by software vendor “Smart Button” manages
all email promotions sent to fans. Additionally, the sparks online fan site keeps fans informed of
upcoming games, practices open to the public, team events, and more. The Sparks also instituted their
new Home Court Advantage program that awards season ticket holders points for each seat they
purchased for the season, that ticket holders can give to others. The ticket holders can actually earn
extra points by telling Sparks at ticket renewal time who’s getting the seats. At the end of the season,
the top three point-givers receive cash prizes. The Sparks organization is gathering information on the
ticket holder as well as the people that attend games with the free tickets. As a result, the Sparks have
seen a sharp rise in late-season ticket sales this year.
101. Refer to the Los Angeles Sparks. The information gathered from ticket holders will probably become
part of the organization’s _____ list.
a.
compiled
b.
cookies
c.
response
d.
electronic cash
e.
Internet research
102. Refer to the Los Angeles Sparks. Sparks’ season ticket holders that frequent the Sparks’ fan Web site
have spent money to buy their season tickets and are likely to purchase again. Which type of analysis
will help Sparks identify those customers most likely to purchase again because they have bought
recently?
a.
80/20 customer
b.
loyalty
c.
RFM
d.
CRM analysis
e.
Cohort value
103. Refer to the Los Angeles Sparks. Suppose that the Sparks management sees six categories of fans at
their games. They feel some people at Sparks games generally fall within one of the following six
groups: 1) general sports fans, 2) basketball fans, 3) Sparks fans, 4) general fans of women’s sports, 5)
fans of opposing teams, and 6) those seeking entertainment. Dividing customer groups down in this
manner is termed:
a.
customer data mining
b.
customer segmentation
c.
customer targeting
d.
customer positioning
e.
customer centric
104. Refer to the Los Angeles Sparks. The Home Court Advantage Program is an example of a _____
program.
a.
reward
b.
incentive
c.
co-branding
d.
loyalty
e.
cohort
105. Refer to the Los Angeles Sparks. Some consumers may not want others to provide their names to the
Sparks organization. This reflects which concern regarding CRM programs?
a.
Effectiveness
b.
Expense
c.
Consumer privacy
d.
Consumer dissonance
e.
Consumer apathy
ESSAY
1. Comment on the following statement: “A CRM cycle is a rather simplistic customer service strategy.”
Is this an accurate statement? Provide an alternative explanation of a CRM cycle.
2. Describe the actions of a company that is referred to as having a customer-centric focus.
3. What is knowledge management? What type of companies use knowledge management?
4. How can a company measure its success at implementing customer relationship management (CRM)
techniques? How does empowerment influence CRM marketing?
5. Explain the importance of interactions in a customer relationship management system. Most colleges
and universities have some form of CRM system. Describe an interaction that occurs at your
institution.
6. What is a touch point? Give two examples of touch points.
7. Compare and contrast a data warehouse and a database.
8. Distinguish between a compiled list and a response list. Which is most valuable to marketers?
9. Briefly describe how and why an organization uses data mining. What are some commonly used types
of data analysis?
10. Briefly describe five of the many common CRM marketing database applications.
11. What is RFID technology? Explain why it is used and how it works, and describe the main implication
of this technology.
12. You have decided your business should adopt a CRM marketing approach. You have invested in
computer software that captures customer data such as name, address, age, education, and lifestyle
characteristics. Now, you find many customers are reluctant to provide you with such information.
What are the general consumer concerns regarding this issue, and how could you address these
concerns?