Marketing Strategy Text and Cases 6th Edition by O. C. Ferrell -Test Bank

Chapter 10 Developing and Maintaining Long-Term Customer Relationships

MULTIPLE CHOICE

1. In times past, developing and implementing the “right” marketing strategy was all about __________. In today’s economy, however, that emphasis has shifted to developing strategies that attract and retain customers over the long term.
a. aggressive selling in order to maximize sales volume
b. creating a large number of transactions in order to maximize the firm’s market share
c. conducting extensive research to discover customer needs
d. making the highest quality product
e. making products of moderate quality that could be sold at the lowest possible price

ANS: B DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Introduction
KEY: Bloom’s: Comprehension

2. __________ is defined as a business philosophy aimed at defining and increasing customer value in ways that motivate customers to remain loyal.
a. Lifetime value management d. Customer relationship management
b. Customer orientation e. Retention management
c. Market orientation

ANS: D DIF: Difficulty: Easy NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Knowledge

3. With respect to competitive advantages, many see __________ as the most important asset that an organization can possess, as it stems from the value generated by the trust, commitment, cooperation, and interdependence among relationship partners.
a. partnership capital d. relational collaboration
b. integrity e. professionalism
c. relationship capital

ANS: C DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Comprehension

4. The PTL Corporation provides long-distance telephone services to consumer and business markets. The company recently initiated a marketing strategy designed to promote customer knowledge and educate customers about the company and its products. The strategy is also designed to prospect for new customers. At what stage of the customer relationship development process does PTL find itself?
a. repeat purchase d. advocacy
b. community e. client
c. awareness

ANS: C DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Application

5. Larger financial institutions now offer a wide range of services under one roof, from banking to stock trading. These institutions have moved away from increasing their market share to instead focus on increasing their:
a. share of market. d. relational share.
b. share of relationships. e. lifetime customer value.
c. share of customer.

ANS: C DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Application

6. Which of the following statements is FALSE regarding the use of the 80/20 rule in managing customer relationships?
a. Advances in technology and data collection techniques allow firms to profile customers in real time.
b. Twenty percent of customers provide 80 percent of business profits.
c. Some customers are too expensive to keep given the low level of profits that they generate.
d. The 80 percent of customers in the bottom tier should be fired so the firm can focus on its top customers.
e. The firm’s top customers are the most obvious candidates for retention strategies.

ANS: D DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Analysis

7. When a firm begins to charge high fees for additional services to non-profitable customers, it has determined that the __________ of those customers is too low to warrant added efforts at maintaining a relationship with them.
a. client value d. market share
b. lifetime value e. 80/20 value
c. relational value

ANS: B DIF: Difficulty: Easy NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Comprehension

8. Which of the following relationship strategies is most likely to be used by a health club as it tries to create social bonds with its clientele?
a. membership programs d. customer reminder notifications
b. coupons e. family discount programs
c. personalized training

ANS: A DIF: Difficulty: Moderate NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Application

9. What is the primary disadvantage associated with using financial incentives as a means of developing customer relationships?
a. They take a long time to work.
b. Customers may resist the use of financial incentives.
c. They can be expensive to use.
d. They can promote continual brand switching.
e. All of the above.

ANS: D DIF: Difficulty: Easy NAT: BUSPROG: Analytic
STA: DISC: Customer TOP: A-Head: Managing Customer Relationships
KEY: Bloom’s: Analysis

10. __________ refers to the degree of superiority of a firm’s goods or services. It is a relative term because it can only be judged in comparison to competing products or when compared to an internal standard of excellence.
a. Value d. Satisfaction
b. Durability e. Sustainability
c. Quality

ANS: C DIF: Difficulty: Easy NAT: BUSPROG: Analytic
STA: DISC: Customer
TOP: A-Head: Quality and Value: The Keys to Developing Customer Relationships
KEY: Bloom’s: Knowledge