Managing Profitable Customer Relationships Part 2

63. Some firms find themselves in markets with many low-margin customers. As Assistant Marketing Director, what type of relationship would you develop with these customers? a. full partnerships b. basic relationships c. relationship marketing d. key customer marketing (b) 64. Many organizations today realize that in addition to providing financial benefits to customers, they must also add _____ benefits. a. social b. emotional c. rational d. psychographic (a) 65. By supplying customers with special equipment or computer linkages that help them manage their orders, payroll, or inventory, a business marketer would be building customer relationships by adding _____. a. greater customer service b. partnership marketing c. structural ties d. none of the above (c) 66. You have just read a report in a leading business magazine. It states that the major marketing developments as we enter the new millennium can be summed up in what single theme? a. relationship marketing b. connecting c. partnering d. networking (b) 67. You will learn that marketing ultimately involves attracting, keeping, and _____ profitable customers. a. tracking b. placing in a database c. growing d. none of the above (c) 68. We can say that the major force behind the new “connectedness” is explosive advances in information, transportation, and _____. a. computer telecommunications b. improved market research c. better-trained marketing departments d. Web sites (a) 69. A tremendous advantage of modern communication and advertising tools is that marketers can zero in on selected customers with carefully _____. a. selected customer profiles b. customized products c. flexible pricing ranges d. selected targeted messages (d) 70. You have just been told by your supervisor at work that a New Economy has emerged. What is the technology behind this new force? a. the Internet b. Web sites c. voice mail d. cell phones (a) 71. A recent study confirms that Internet penetration in the United States has reached what percent? a. 40 percent b. 50 percent c. 60 percent d. 70 percent (c) 72. Business-to-business marketing is growing at a tremendous pace. Sales in this arena are expected to reach _____ by the end of 2003. a. $1.6 trillion b. $2.7 trillion c. $3.0 trillion d. $3.6 trillion (d) 73. Pete Sanchez has just realized something that he needs to tell his marketing manager at work. Pete knows that today few firms still practice true _____. a. production orientation b. sales orientation c. mass marketing d. market segmenting (c) 74. Many marketers use a concept today to determine which customers can be served profitably and which ones cannot. They target the winning ones for pampering. What is this concept called? a. selective relationship management b. target marketing c. market segmenting d. selective targeting (a) 75. There is a trend today to do away with unprofitable customers. This ends up improving the _____ of the firm. a. database b. profitability c. image d. customer relationships (b) 76. In addition to connecting more deeply with customers, many companies are also connecting more _____. a. directly b. frequently c. inexpensively d. none of the above (a) 77. Suzie Chan strengthens her company’s connections with partners all along the supply chain. What type of management is she using? a. outside partnering b. supplier connecting c. channeling d. supply chain (d) 78. Most companies realize that they need partners to go beyond supply chain management. What do we call this association? a. strategic alliances b. strategic planning c. partnering d. mutual reciprocity (a) 79. Compared to the early 1990s, firms now find that _____ in every four dollars earned by the top 1,000 U.S. companies flows from _____. a. one; strategic planning b. two; superior marketing c. one; alliances d. none of the above (c) 80. Today, in countries around the world, managers are going beyond a local view of the company’s industry and competitors. _____ opportunities are becoming more common. a. Global b. Ethnic c. Subcultural d. Internal (a) 81. Your authors have expressed that in the next century winning companies may well be those that have built the best _____. a. channels of distribution b. sales force c. global networks d. governmental relations (c) 82. Many firms today are taking a proactive orientation by becoming more socially and _____ responsible. a. environmentally b. financially c. ethically d. all of the above (a) 83. Today, which of the following types of organizations use various marketing strategies in addition to larger corporations? a. small businesses b. minority owned businesses c. not-for-profit organizations d. all of the above (d) 84. Governmental agencies are becoming more involved in marketing as the years pass. When a local government advertises keeping the area’s streams and water supply cleaner, it is involved in _____. a. green marketing b. social marketing campaigns c. demarketing d. environmental marketing (b) 85. Is it true that every type of organization can connect through marketing? a. yes b. no c. maybe d. cannot be determined (a) 86. Many not-for-profit organizations are facing huge operating deficits that they must cover by more aggressive _____. a. volunteer service b. customer service c. advertising d. donor marketing (d) 87. A more modern view of marketing is that it has evolved from customer acquisition to customer _____. a. involvement b. care c. exploitation d. service (b) 88. The old marketing view emphasized trying to make a profit on each sale rather than trying to profit by managing what value? a. customer lifetime value b. customer satisfaction index c. cognitive dissonance d. all of the above (a) 89. Which word is missing from the following statement? Marketers need to _____, create, communicate, and deliver real value to customers. a. find b. understand c. explore d. seek (b) 90. Modern companies are improving their customer knowledge and customer _____. a. appreciation b. awareness c. connections d. none of the above (c) True – False 91. It is safe to say that today’s most important marketing concept is customer relationship management.(True) 92. The best-known dot com business name in the world is Ebay. (False) 93. Amazon.com is an outstanding marketing company. The key to its future is its relationships with its customers. (True) 94. Amazon.com’s unique blend of benefits includes huge selection, good value, convenience, and customer satisfaction. (False) 95. Internet-based companies tend to spend tremendous outlays on customer acquisition. (True) 96. Like Amazon.com, today’s successful companies at all levels have one thing in common – they are strongly supplier focused and heavily committed to cost savings. (False) 97. The simplest definition of modern marketing is managing profitable customer relationships. (True) 98. A thorough definition of marketing tells us that it is a business and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. (False) 99. The difference between human needs and wants is that needs are states of felt deprivation. (True) 100. Harry Porter is addressing customer needs by putting forth a set of benefits he promises to consumers to satisfy them. Harry is concerned with value proposition. (True 101. Smart marketers look beyond the attributes of the products and services they sell. They create brand meaning and brand experiences for consumers. (True) 102. Customer value in relation to a purchase depends on how well the product’s performance lives up to the customer’s expectations. (False) 103. The difference between the way economists and marketers view the term “market” is that economists refer to a collection of buyers and sellers who transact in a particular product class, as in the automobile or land markets. (True) 104. Marketing management is interested in serving all customers in every way to remain competitive in today’s markets. (False) 105. At times it becomes necessary to reduce demand for some products and services. When the government tries to reduce smoking of tobacco products, it adds more tax to the products and is practicing demarketing. (True) 106. Amy’s law office has developed a new format and wording for wills. The staff believes they offer the most in quality, performance, and innovative features. Her law office is practicing the production concept. (False) 107. The selling concept holds that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. (True) 108. Your department holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors do. Your department is practicing the selling concept. (False) 109. We say that the selling concept is an inside-out perspective. (True) 110. The major difference between customer-driving marketing and customer-driven marketing is that the former considers existing and latent needs, now and in the future. (True) 111. The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run and long-run welfare. (True) 112. L.L. Bean Company views marketing as the science and art of finding, retaining, and growing profitable customers. This firm practices societal marketing. (False) 113. Your supervisor is concerned with the entire stream of purchases each customer makes over the lifetime of his or her patronage. We call this customer lifetime value. (True) 114. Customers buy from businesses that offer the highest customer perceived value. (True) 115. A smart company tries to delight customers by promising more than it can deliver and delivering more than it promises. (False) 116. Loyal customers must be more than satisfied, they must be highly satisfied. (True) 117. To increase their “share of customer”, a firm concentrates on retaining as many customers as possible over their lifetimes. (False) 118. (False) 119. To practice customer equity, a company must be concerned with the total combined customer lifetime values of all major purchasers of its products. In order to develop full partnerships with key customers, firms should add financial and social benefits to customer purchases. (True) 120. The major marketing development of our day is summed up in a single theme called “connecting.” (True) Essay 121. Define marketing in more than one way. In its simplest definition it is managing profitable customer relationships. It also means satisfying customer needs. Marketing is applied as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. 122. How do marketers differentiate between needs, wants, and demands? Marketers realize that humans have needs when they are in a state of felt deprivation. These needs take on the form of wants as they are shaped by culture and individual personality. When backed by buying power, wants become demands. Companies research demands and supply the needs that drive them. 123. Explain marketing management in today’s terms. Marketing management is the art and science of choosing target markets and building profitable relationships with them. This involves getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Thus, marketing management involves managing demand, which in turn involves managing customer relationships. 124. Distinguish between value proposition and marketing offer. Companies address needs by putting forth a value proposition, which means a set of benefits that they promise to consumers to satisfy their needs. It is fulfilled through a marketing offer which offers some combination of products, services, information, or experiences to satisfy needs and wants in the market. 125. Describe the five marketing management orientations. The production concept holds that consumers will favor products that are available and highly affordable. The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Those who follow the selling concept hold that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. Using the marketing concept means that achieving organizational goals depends on knowing the needs and wants of target markets and delivering satisfactions better than competitors do. The societal marketing concept holds that the firm should determine the needs, wants, and interests of target markets. 126. Explain customer relationship management. Customer relationship is no longer defined as a customer database management activity. It is now the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. 127. Discuss strategies for building lasting customer relationships. Determining the customers’ lifetime values is the place to start. Next, customer perceived value and satisfaction must be built and delivered. When a firm builds customer loyalty and retention, it grows its share of customers and its “share of customer” through customer relationships and equity 128. Analyze the major challenges facing marketers heading into the new “connected” millennium. Marketers must connect faster and better with customers. The latest technologies must be used to ensure delivery of time-based competition. Web sites and ecommerce must be fine-tuned to connect with more carefully selected customers. Many companies are connecting directly with customers to customize their mix of products and services. Partnership relationship and supply chain management must be built with strategic alliances to make those domestic and global challenges. 129. Explain why Amazon.com is such a successful company. Amazon.com uses the latest in Web technology to build strong, one-to-one customer relationships based on creating genuine customer value. It turns a longterm profit as a result. This company has amassed 35 million customers by being relentlessly customer driven. A special experience is delivered to every customer to build customer loyalty.