Kotler-Chapter-5-MCQ PDF

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Chapter 5 Creating Long-Term Loyalty Relationships 1) Which of the following is true for the modern company organization chart? B) Customers are at the top of the pyramid. 2) In the modern customer-oriented organizational chart, which of the following is considered to be at the top of the organizati...

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Chapter 5 Creating Long-Term Loyalty Relationships 1) Which of the following is true for the modern company organization chart? B) Customers are at the top of the pyramid. 2) In the modern customer-oriented organizational chart, which of the following is considered to be at the top of the organizational pyramid? D) customers 3) In a modern customer-oriented organization chart, the ________ of an organization immediately follow the customer segment. D) frontline people 4) ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. D) Customerperceived value 5) When a consumer considers a product or service, he or she will choose whichever product or service delivers the highest ________. A) customer-perceived value 6) ________ is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering. B) Total customer benefit 7) The bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering is called the ________. C) total customer cost 8) Which of the following is true for customer-perceived value? B) It is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. 9) Which of the following is the first step in customer value analysis? C) Identify the major attributes and benefits that customers value. 10) The final step of customer value analysis is to ________. D) monitor customer values over time 11) Cell phone manufacturer LZT has to choose between two options for sourcing parts: Japan-based Keiko Inc. and U.S.-based Global Tech. How can Keiko reduce the total customer cost for LZT? A) absorbing some risk by offering a warranty 12) ________ can be defined as a deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior. B) Loyalty

Difficulty: 13) TBS Bikes has recently introduced a series of bikes called Surami. The core positioning of TBS Bikes is “speed”. Surami is a five-gear bike and apart from speed, the company promises to include other features such as safety, good performance, and pollution control features. This describes the ________ of the bike. D) value proposition 14) A company’s ________ includes all the experiences the customer will have on the way to obtaining and using the offering. B) value delivery system 15) Sammy’s is a fast food chain that offers burgers, sandwiches, and shakes. It focuses its marketing efforts on all the experiences the customers will have on the way to obtaining their food order and eating it. Hence, Sammy’s is focusing its marketing efforts on its ________. E) value delivery system 16) Total customer satisfaction is measured based on the relationship of ________. B) perceived performance and expectation 17) Which of the following is true for customer satisfaction? E) Greater customer satisfaction has also been linked to higher returns and lower risk in the stock market. 18) ________ can track customer satisfaction directly, measure repurchase intention and also gauge a consumer’s willingness to recommend the company and brand to others. A) Periodic surveys 19) Field Grocery wants to learn the strengths and weaknesses in customer service at all the Field Grocery stores. Which of the following methods can it use for this? C) mystery shoppers 20) Of customers who register a complaint, ________. E) some will do business with the company again if their complaint is resolved 21) Which of the following is the best method of recovering customer goodwill? B) contacting the complaining customer as quickly as possible 22) ________ is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. C) Quality 23) When two brands of the same basic product deliver their respective promised quality, they are delivering ________. B) conformance quality 24) Rade and Talion are competitors in the business of manufacturing wrist watches. While Rade promises to deliver design and quality to its customers, Talion promises to

deliver durability and cost effectiveness. When both these companies deliver their respective promised qualities, they are delivering ________. E) conformance quality 25) The 80-20 rule reflects the idea that ________. D) the top 20% of customers often generate 80% of the company’s profits 26) A profitable customer ________. B) yields a revenue stream that exceeds the company’s cost stream 27) A ________ is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing that customer. B) profitable customer 28) Customer profitability analysis (CPA) is best conducted with the tools of an accounting technique called ________. D) activity-based costing 29) Which of the following is true for activity-based costing (ABC)? C) The tools of ABC can be used to conduct customer profitability analysis. 30) ________ describes the net present value of the stream of future profits expected over the customer’s lifetime purchases. B) Customer lifetime value 31) The aim of customer relationship management is to produce high customer ________. B) loyalty 32) ________ is the process of carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty. A) Customer relationship management 33) A customer ________ is any occasion on which a customer encounters the brand and product—from actual experience to personal or mass communications to casual observation. A) touch point 34) A customer touch point for Abacus Airlines would be an item such as ________. C) the reservations desk 35) Rachel and Josh are on vacation in Hawaii. When they arrived at the hotel, they were offered chilled juice. Their check-in formalities were handled by the staff. When they entered their room, they saw that chocolates had been placed on the pillows and a flower arrangement on the table. The hotel’s actions are an example of ________. E) a customer touch point

Difficulty: 36) Customer relationship management enables companies to provide excellent realtime customer service through the effective use of ________. D) individual account information 37) ________ is based on the premise that marketers can no longer use “interruption marketing” via mass media campaigns. B) Permission marketing 38) ________ is the practice of sending messages only when consumers express a willingness to become more involved with the brand. B) Permission marketing 39) Which of the following is a step in one-to-one marketing that can be adapted for CRM marketing? E) Customize products, services, and messages to each customer. 40) Another term for high customer ________ is customer churn. B) defection 41) Which of the following can a company do to reduce defection? D) Distinguish the causes of customer attrition and identify those that can be managed better. 44) Satisfied customers constitute the company’s ________. A) customer relationship capital 45) Sapphire Toys actually sells more than toys. It also sells branded clothing, music CDs, and books for children. This expansion of dealership sales offerings is an attempt to increase the value of the customer base by ________. C) enhancing the growth potential of each customer through cross-selling 46) LifeTime Insurance screens its customers and tries to get unprofitable customers to buy services from competitors. This is an example of ________. B) terminating the relationship with low-profit customers 47) Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps the banks to ________. B) make low-profit customers more profitable 48) Which of the following is an example of focusing disproportionate effort on highprofit customers? B) 2Wheels has a club for its regular customers, organizing cycling events and parties for them. 49) Which of the following is an example of enhancing the growth potential of each customer through cross-selling? A) In addition to bicycles, 2Wheels stocks biking gear such as helmets, bottles, jackets and other accessories.

50) Which of the following is a policy a store can adopt to make low-profit customers more profitable? C) Though 2Wheels previously offered free delivery, it now charges for deliveries made outside the city. 51) Companies provide rewards to customers who buy often and in substantial amounts. These reward schemes are referred to as ________. B) frequency programs 52) Which of the following gains the most benefit from introducing a frequency program? A) the first company to introduce a frequency program in an industry 53) Club membership programs that are open to everyone who purchases a product or service ________. D) are useful for building a database of customers but are not very good as longterm loyalty builders 54) Southwest Airlines offers a Rapid Rewards program that allows customers to count flights they have taken toward free future flights. This is an example of a(n) ________. C) club membership program 55) Some customers inevitably become inactive or drop out. The challenge for marketers is to reactivate them through ________ strategies. A) win-back 56) A ________ is an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships. A) customer database 57) The process of building, maintaining, and using customer databases and other databases for the purpose of contacting, transacting, and building customer relationships is called ________. C) database marketing 58) A ________ is simply a set of names, addresses, and telephone numbers. B) customer mailing list 59) Using the information in his company’s ________ lets a telemarketer respond to customer inquiries more effectively because he or she can see a total picture of the customer relationship. A) data warehouse 60) Through ________, marketing statisticians can extract useful information about individuals, trends, and segments from the mass of data. A) data mining

Difficulty: 61) 2Wheels conducts exhaustive customer surveys to discover customer preferences and attitudes towards the brand. Sally uses cluster analysis to classify the data and help the company determine the trends in the information. Sally is using the technique of ________. E) data mining 62) Susan Lefferts’ company advertises widely. Ms. Lefferts uses business reply cards attached to her company’s magazine ads to build her company’s database. In which of the following ways would Ms. Lefferts most likely use the database? E) to identify prospects 63) Phil Langston has just ordered a number of expensive executive gifts that he will be sending as an appreciation token to a select few customers from his client database. In which of the following ways is Mr. Langston most likely using his database? C) to deepen customer loyalty 64) The skillful use of ________ has made catalog house Fingerhut one of the nation’s largest direct-mail marketers. C) database marketing 65) Which of the following is true for customer relationship marketing? B) Building and maintaining a customer database requires a large investment. 66) Which of the following is not conducive to database marketing? D) Uncle Jim’s sells its range of snacks in stores throughout the country 67) In which of the following cases is building a database worthwhile for the company? C) 2Wheels sells its most profitable products to repeat customers. 68) In which of the following cases is building a database worthwhile for the company? C) where the company has a long relationship with its customers 69) Which of the following is most likely to use database marketing? A) an airline 70) Which of the following statements demonstrates behavioral loyalty towards a brand? B) I always buy 2Wheels products when I’m looking for bike accessories.

The Marketing Funnel (Scenario) Amy and Jack were loyal customers of GreenFoods, a local grocery store. However, after a couple of incidents where they had to return products that were stale and out of date, the couple decided to try out VeggiesNmore, a chain store that recently opened in town. Both Amy and Jack must move through each stage in the marketing funnel before becoming loyal customers. 42) Jack has shopped at VeggiesNmore. He was happy with the experience and thought that this could be an alternative to GreenFoods. However, he is also keen to try out other stores in the neighborhood. He is in the ________ stage of the marketing funnel as far as shopping at VeggiesNmore is concerned. D) nonrejecter 43) Amy is in the “aware” stage of the marketing funnel when she says ________. B) she was informed about VeggiesNmore by her colleague at work 44) Satisfied customers constitute the company’s ________. A) customer relationship capital 45) Sapphire Toys actually sells more than toys. It also sells branded clothing, music CDs, and books for children. This expansion of dealership sales offerings is an attempt to increase the value of the customer base by ________. C) enhancing the growth potential of each customer through cross-selling 46) LifeTime Insurance screens its customers and tries to get unprofitable customers to buy services from competitors. This is an example of ________. B) terminating the relationship with low-profit customers 47) Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps the banks to ________. B) make low-profit customers more profitable 48) Which of the following is an example of focusing disproportionate effort on highprofit customers? B) 2Wheels has a club for its regular customers, organizing cycling events and parties for them. 49) Which of the following is an example of enhancing the growth potential of each customer through cross-selling? A) In addition to bicycles, 2Wheels stocks biking gear such as helmets, bottles, jackets and other accessories.

Difficulty: 50) Which of the following is a policy a store can adopt to make low-profit customers more profitable? C) Though 2Wheels previously offered free delivery, it now charges for deliveries made outside the city. 51) Companies provide rewards to customers who buy often and in substantial amounts. These reward schemes are referred to as ________. B) frequency programs 52) Which of the following gains the most benefit from introducing a frequency program? A) the first company to introduce a frequency program in an industry 53) Club membership programs that are open to everyone who purchases a product or service ________. D) are useful for building a database of customers but are not very good as longterm loyalty builders 54) Southwest Airlines offers a Rapid Rewards program that allows customers to count flights they have taken toward free future flights. This is an example of a(n) ________. C) club membership program 55) Some customers inevitably become inactive or drop out. The challenge for marketers is to reactivate them through ________ strategies. A) win-back 56) A ________ is an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships. A) customer database 57) The process of building, maintaining, and using customer databases and other databases for the purpose of contacting, transacting, and building customer relationships is called ________. C) database marketing 58) A ________ is simply a set of names, addresses, and telephone numbers. B) customer mailing list 59) Using the information in his company’s ________ lets a telemarketer respond to customer inquiries more effectively because he or she can see a total picture of the customer relationship. A) data warehouse 60) Through ________, marketing statisticians can extract useful information about individuals, trends, and segments from the mass of data. A) data mining

61) 2Wheels conducts exhaustive customer surveys to discover customer preferences and attitudes towards the brand. Sally uses cluster analysis to classify the data and help the company determine the trends in the information. Sally is using the technique of ________. E) data mining 62) Susan Lefferts’ company advertises widely. Ms. Lefferts uses business reply cards attached to her company’s magazine ads to build her company’s database. In which of the following ways would Ms. Lefferts most likely use the database? E) to identify prospects 63) Phil Langston has just ordered a number of expensive executive gifts that he will be sending as an appreciation token to a select few customers from his client database. In which of the following ways is Mr. Langston most likely using his database? C) to deepen customer loyalty 64) The skillful use of ________ has made catalog house Fingerhut one of the nation’s largest direct-mail marketers. C) database marketing 65) Which of the following is true for customer relationship marketing? B) Building and maintaining a customer database requires a large investment. 66) Which of the following is not conducive to database marketing? D) Uncle Jim’s sells its range of snacks in stores throughout the country 67) In which of the following cases is building a database worthwhile for the company? C) 2Wheels sells its most profitable products to repeat customers. 68) In which of the following cases is building a database worthwhile for the company? C) where the company has a long relationship with its customers 69) Which of the following is most likely to use database marketing? A) an airline 70) Which of the following statements demonstrates behavioral loyalty towards a brand? B) I always buy 2Wheels products when I’m looking for bike accessories.

71) Managers who believe the customer is the company’s only true “profit center” consider the traditional organization chart to be obsolete. Answer: TRUE 72) The modern customer-oriented organization chart places top management at the top of the pyramid. Answer: FALSE 73) Customer-perceived value is based on the difference between benefits the customer gets and costs he or she assumes for different choices. Answer: TRUE 74) Total customer cost consists of only the non-monetary costs in evaluating, obtaining, using, and disposing of the given market offering. Answer: FALSE 75) Customer-perceived value is the perceived monetary value of all the purchases a customer makes on an annual basis. Answer: FALSE 76) A seller who is at a disadvantage has two alternatives: decrease total customer benefit or increase total customer cost. Answer: FALSE 77) The value proposition is stated in the price of a product and readily recognized by the average consumer. Answer: FALSE 78) The value delivery system includes all the experiences the customer will have on the way to obtaining and using the offering. Answer: TRUE 79) The value proposition is also known as the core positioning of the offering. Answer: FALSE 80) Loyalty is a person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance to expectations. Answer: FALSE 81) Customer satisfaction is the only way by which a firm can increase its profitability. Answer: FALSE 82) Consumers’ expectations result exclusively from past buying experiences. Answer: FALSE 83) The best thing a company can do in the face of company mistakes is to discourage the customer from complaining. Answer: FALSE 84) Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Answer: TRUE 85) Conformance quality and performance quality are identical in the marketing sense. Answer: FALSE

86) Two products with very different performance qualities can have the same conformance quality if both products deliver thei...