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Chapter 8—Segmenting and Targeting Markets

3. A market is people or organizations that have:a. the ability, willingness, and power to buyb. a medium of exchange and products they desirec. needs and wants and an ability and willingness to buyd. unmet needs or wants and products or services that satisfy those unmet needs or wantse. communication, financial, and capital resources

A market is defined as having four imperative characteristics: people or organizations, needs and wants, ability to buy, and willingness to buy.PTS: 1 REF: 121 OBJ: 08-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Knowledge

4. A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have similar product needs.a. market universeb. market segmentc. aggregated marketd. segmentation basee. population sample

This is the definition of a market segment.PTS: 1 REF: 121 OBJ: 08-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Knowledge

7. _____ is the process of dividing a market into meaningful groups that are relatively similar and identifiable.a. Perceptual mappingb. Positioningc. Micromarketingd. Market samplinge. Market segmentation

This is the definition of market segmentation.PTS: 1 REF: 122 OBJ: 08-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

8. The purpose of market segmentation is to:a. reduce the market down to a size the firm can handleb. divide the market into equal size and profit regions for sales territoriesc. group a large number of markets together, enabling a company to serve them

simultaneouslyd. develop a generalized definition of the market as a wholee. enable the marketer to tailor marketing mixes to meet the needs of one or more specific

groups

The purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix.PTS: 1 REF: 122 OBJ: 08-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

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11. All of the following are criteria for successful market segmentation EXCEPT:a. substantialityb. identifiability and measurabilityc. accountabilityd. accessibilitye. responsiveness

The four criteria are substantiality, identifiability and measurability, accessibility, and responsiveness.

PTS: 1 REF: 122 OBJ: 08-3 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Analysis

12. To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria are:a. segmentability, targetability, reliability and validity, and homogeneityb. tangibility, inseparability, nonperishability, and uniquenessc. substantiality, identifiability and measurability, accessibility, and responsivenessd. reliability, flexibility, tangibility, and unbiasede. complexity, compatability, relative advantage, trialability, and observability

Useful segments should be substantial, identifiable and measurable, accessible, and responsive to different marketing mixes.


19. The requirement for a market segment to be responsive means:a. over half of the consumers in the identified segment will be actively interested in the

productb. all the segments identified by a marketer should respond to the marketing mixc. all the segments identified by a marketer should not respond to the marketing mixd. the segments identified by a marketer should not differ in the level of their responsiveness

to the marketing mixe. the segment identified by a marketer should differ in how it responds to the marketing mix

when compared to another segment confronted with the same mix

The target segment should respond differently to the marketing mix compared to other segments.

PTS: 1 REF: 122-123 OBJ: 08-3 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Comprehension

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22. If a market segment is especially motivated by coupons in newspapers, which segmentation success criterion is most influential in the success of this program?a. Responsivenessb. Identifiability and measurabilityc. Substantialityd. Accessibilitye. Functionality

Responsiveness is in force when a target segment responds differently (hopefully more positively) to the marketing mix than other segments.

PTS: 1 REF: 122-123 OBJ: 08-3 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Comprehension

23. A health club has a new fitness program for expectant mothers. After flyers were placed at the offices of area obstetricians, classes filled up within two days. Which segmentation success criterion was most influential in the success of this promotion?a. Substantialityb. Identifiabilityc. Measurabilityd. Causalitye. Responsiveness

Responsiveness is in force when a target segment responds differently (hopefully more positively) to the marketing mix than other segments.

PTS: 1 REF: 122-123 OBJ: 08-3 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Application

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24. _____ are characteristics of individuals, groups, or organizations that marketers use to divide a total market into segments.a. Differentiation guidesb. Segmentation basesc. Perceptual mapsd. Responsiveness quotientse. Accessibility quotients

This is the definition of segmentation bases.

PTS: 1 REF: 123 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Knowledge

27. _____ is the segmenting of markets based on the region of the country or the world, market size, market density (number of people within a certain unit of land), or climate.a. Community segmentationb. Geographic segmentationc. Geodemographic segmentationd. PRIZM segmentatione. Demonstrated regionalization

This is the definition of geographic segmentation.

PTS: 1 REF: 123 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

PTS: 1 REF: 123-124 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Application

31. Almost all cell phones sold in the United States are black or gray. Almost all cell phones sold in Europe are colorful, and very few black phones are sold. A cell phone manufacturer knowing this information could use _____ segmentation when selling its phones internationally.a. geographicb. economicc. demographicd. benefite. multipositioning

Geographic segmentation includes segmenting markets by region of the country or world.

PTS: 1 REF: 123-124 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy | CB&E Model International PerspectiveMSC: BLOOMS Application

32. All of the following statements are reasons why consumer goods companies take a regional approach to marketing rather than a national approach EXCEPT:a. Many firms need to find new ways to generate sales because of sluggish and intensely

competitive markets.

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b. A regional approach gives marketing managers control over the competitive environment.c. Computerized checkout stations with scanners enable retailers to assess accurately which

brands sell the best in each region.d. Many packaged-goods manufacturers are introducing new regional brands intended to

appeal to local preferences.e. A more regional approach allows consumer goods companies to react more quickly to

competition.

The competitive environment is one of the noncontrollable factors in a company’s environment.

PTS: 1 REF: 124 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Distribution | CB&E Model Strategy MSC: BLOOMS Analysis

33. Marketers use _____ to segment markets because this information is widely available, and factors such as age or gender are often related to consumer purchasing and consumption behavior.a. benefitsb. psychographicsc. demographicsd. usage ratese. sociocultural attributes

Common bases of demographic segmentation are age, gender, income, ethnic background, and family life cycle.

PTS: 1 REF: 124 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

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34. Income, ethnic background, gender, and age are all examples of _____ segmentation bases.a. geodemographicb. organizationalc. demographicd. socioeconomice. psychographic

These are demographic characteristics of consumers.


44. In Miami, several radio stations broadcast in Spanish and play Latin music for the Hispanic people living in South Florida. The radio stations are using _____ segmentation.a. usage rateb. ethnicc. socioeconomicd. geographice. gender

In this case, ethnicity would be the demographic variable.

PTS: 1 REF: 126 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Application

46. A series of stages determined by a combination of age, marital status, and the presence or absence of children is known as the:a. generation gapb. family life cyclec. maturation processd. segmentation cyclee. psychographic process

This describes the family life cycle.

PTS: 1 REF: 126-127 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Knowledge

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49. Which of the following businesses would be most likely to use family life cycle segmentation?a. Those that produce and market computer software and hardwareb. The snack industryc. Fast-food restaurantsd. Business-to-business marketerse. Wedding planners, couples-only resorts, and day care centers

People in different stages of the family life cycle would be most likely getting married, going on a couples-only trip, or needing the services of a day care center.

PTS: 1 REF: 126-127 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Evaluation

50. _____ segmentation is based on personality, motives, and lifestyles.a. Psychographicb. Demographicc. Benefitd. Family life cyclee. Character

Personality, motives, and lifestyles are bases of psychographic segmentation.


51. All of the following are bases for psychographic segmentation EXCEPT:a. benefitsb. personalityc. motivesd. lifestylese. geodemographics

Benefit segmentation is a different segmentation strategy that groups customers on the basis of their needs and wants.


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57. _____ divides individuals into groups according to the way they spend their time, the importance of items in their surroundings, their beliefs, and socioeconomic characteristics.a. Life cycle segmentationb. Temporal segmentationc. Lifestyle segmentationd. Microsegmentatione. Macrosegmentation

This describes the essence of lifestyle segmentation.


58. _____ is a method that clusters potential customers into neighborhood lifestyle categories and is a combination of geographic, demographic, and lifestyle segmentations.a. Geodemographic segmentationb. Microsegmentationc. Sociocultural clusteringd. Acculturatione. Lifestyle segmentation

This is the definition of geodemographic segmentation.


62. _____ is the process of grouping customers into market segments according to the benefits sought from the product.a. Benefit segmentationb. Value-added segmentationc. Lifestyle segmentationd. Macrosegmentatione. Psychographic segmentation

This is the definition of benefit segmentation.PTS: 1 REF: 129 OBJ: 08-4 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

69. Which type of segmentation divides a market by the amount of product bought or consumed?a. Benefit segmentationb. Characteristic segmentationc. Usage-rate segmentationd. Demographic segmentatione. Psychographic segmentation

This is the definition of usage-rate segmentation.

PTS: 1 REF: 129 OBJ: 08-4 TOP: AACSB Reflective Thinking

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KEY: CB&E Model Strategy MSC: BLOOMS Knowledge

70. Most airline frequent flyer programs reward the most frequent flyers with business class upgrades and flight lounge privileges. Airlines are using these rewards as a means of implementing _____ segmentation.a. lifestyleb. motivec. usage-rated. demographice. personality

Usage-rate segmentation divides a market by consumption so that firms can target their heavy users.


74. What does the 80/20 principle propose?a. Roughly 80 percent of the profit comes from 20 percent of the sales.b. Roughly 80 percent of a firm’s customers are repeat business.c. Roughly 50 percent of a firm’s customers purchase 80 percent of the sales volume of the

product.d. Roughly 20 percent of a firm’s customers purchase 80 percent of the sales volume of the

product.e. Sales are equally divided among heavy, medium, and light users, but they all need slightly

different products.

The 80/20 principle proposes that a minority of a firm’s customers purchase a majority of the volume of the product.


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75. The _____ proposes that a minority of a firm’s customers purchase a majority of the volume of the product.a. majority fallacyb. equity fallacyc. 80/20 principled. cannibalization rulee. optimizer principle

This is the definition of the 80/20 principle.


77. Business marketers focus on all of the following market segments EXCEPT:a. institutionsb. producersc. householdsd. resellerse. government

The business market consists of four broad segments: producers, resellers, government, and institutions. Households are part of the consumer market.


80. Firms can be categorized by the type of purchasing strategy they use. _____ usually contact familiar suppliers and place an order with the first that can meet product and delivery requirements.a. Strugglersb. Actualizersc. Optimizersd. Satisficerse. Experiencers

This is the definition of satisficers.


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81. Hank operates a plumbing and electrical supply store. He has categorized its business customers by their purchasing strategy. Hank has found it much easier to serve and satisfy the _____, who usually recontact familiar suppliers and place an order immediately if product and delivery requirements are acceptable.a. adoptersb. adaptersc. optimizersd. innovatorse. satisficers

Satisficers use a simple, quick purchasing strategy of looking for the first available adequate supplier.

PTS: 1 REF: 130 OBJ: 08-5 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Application

84. What is the first step in segmenting a market?a. Set the segmentation goalsb. Choose a basis or bases for segmenting the marketc. Select a market or product category for studyd. Profile and analyze segmentse. Select target markets

The steps in segmenting a market are (1) select a market or product category for study; (2) choose a basis or bases for segmenting the market; (3) select segmentation descriptors; (4) profile and analyze segments; (5) select target markets; and (6) design, implement, and maintain appropriate marketing mixes.


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85. All of the following are steps in the market segmenting process EXCEPT:a. determining the objectives of the segmentation strategyb. profiling and analyzing segmentsc. designing, implementing, and maintaining appropriate marketing mixesd. selecting a market or product category for studye. choosing a basis or bases for segmenting the market



86. June LaVista owns a health and fitness gym. After dividing her customers into four segments based on income range, age, level of fitness, and other selected segmentation descriptors, she wrote out a description of each segment’s size, expected growth, frequency of exercise, and overall profit potential. Which step in segmenting a market is LaVista engaged in?a. Profiling and analyzing her market segmentsb. Positioning her products to her market segmentsc. Targeting promotions to her market segmentsd. Differentiating her market segmentse. Concentrating her marketing mix on the most profitable marketing segments

The profiling and analysis of the segments step in segmenting a market involves analyzing the segments’ size, expected growth, purchase frequency, and so on.


87. After selecting a market for study and choosing bases for segmenting that market, the next step is to:a. select segmentation descriptorsb. implement and maintain a marketing mixc. design a marketing mixd. profile and analyze segmentse. select target markets



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89. Market segmentation:a. is a scientific technique for selecting ways to attract specific population samplesb. is rarely done by consumer products companiesc. only needs to be done once for each productd. should be redone periodicallye. should be done every time a product enters a new stage of its life cycle

Markets are dynamic, so it is important that companies proactively monitor their segmentation over time.


90. A(n) _____ is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.a. heterogeneous segmentb. target marketc. responsive segmentd. aggregated markete. undifferentiated target

This is the definition of a target market.PTS: 1 REF: 131 OBJ: 08-7 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer MSC: BLOOMS Knowledge

93. Which target marketing strategy views the market as one big market with no individual segments and thus uses a single marketing mix?a. Undifferentiatedb. Concentratedc. Niched. Uniforme. Multisegmented

A firm using an undifferentiated targeting strategy essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments.PTS: 1 REF: 131-132 OBJ: 08-7 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

96. All of the following are advantages of using a concentrated targeting strategy EXCEPT:a. concentration of resourcesb. can better meet the needs of a narrowly defined segmentc. allows some small firms to better compete with larger firmsd. strong positioninge. cannibalization

Cannibalization is a disadvantage of multisegment targeting. See Exhibit 8.2.


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97. A(n) _____ strategy entails selecting one segment of a market to target and focuses on understanding the needs, motives, and satisfactions of the members of that segment, as well as on developing a highly specialized marketing mix.a. universal productb. undifferentiated targetingc. concentrated targetingd. market developmente. product development

Concentrated targeting strategy selects one segment of a market for targeting marketing efforts.PTS: 1 REF: 133 OBJ: 08-7 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

99. When a firm uses a concentrated targeting strategy, it can:a. view the total market as receptive to its productb. offer a highly specialized marketing mixc. reach customers in two or more segments that might otherwise be missedd. avoid the danger of putting all resources in one micromarkete. concentrate on one generalized product to fit the mass market, maximizing sales volume

Concentrated targeting focuses on one target market and develops a highly specialized mix.PTS: 1 REF: 133 OBJ: 08-7 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

107. _____ is one of the potential disadvantages associated with a multisegment strategy.a. Inadequate demandb. Demarketingc. Lower profitsd. Cannibalizatione. Loss of synergy

Cannibalization is a situation that occurs when sales of a new product cut into sales of a firm’s existing products.PTS: 1 REF: 134 OBJ: 08-7 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

111. An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer is referred to as:a. 80/20 marketingb. interpersonal marketingc. zoned marketingd. one-to-one marketinge. individual marketing

This is the definition of one-to-one marketing.PTS: 1 REF: 134 OBJ: 08-8 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

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114. Increasing share of customer means:a. selling more products to each customerb. increasing the number of customersc. winning market share from competitorsd. the sales due to a customer relative to the costs of attaining and retaining that customere. individual customer revenue minus costs to satisfy that customer

Share of customer represents how much a customer spends with a business, so increasing customer share attempts to sell more products to each customer rather than attempting to gain more customers overall.PTS: 1 REF: 134 OBJ: 08-8 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

115. The basic goal of one-to-one marketing is to:a. increase the market for the product category to new and current customersb. eliminate the use of mass media for promotion and locate a direct communications

channelc. increase operating costs and locate new customersd. reduce the number of company employees and increase overall salese. reduce costs through customer retention and increase revenue through customer loyalty

Loyal customers are less costly to maintain than acquiring new customers.PTS: 1 REF: 134 OBJ: 08-8 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Comprehension

116. All of the following have been identified as trends that will lead to the continuing growth of one-to-one marketing EXCEPT:a. the growing number of customers who do not have time to spend shoppingb. the fact that consumers do not want to be treated like the massesc. technology that allows the collection of detailed information on customersd. consumers are loyal to companies and brands that have earned their loyalty and reinforce

it at every purchase occasione. mass marketing is no longer appropriate, especially for consumer packaged-goods

products

All of these are trends impacting the growth of one-to-one marketing except the inappropriateness of mass marketing for consumer packaged-goods products.


118. Product positioning is the process of:a. finding the correct location for retail outlets to sell a product categoryb. finding the right channel of distribution for a productc. creating the desired image of the firm’s productd. competing with competitors’ products in the retailers’ stores for the best position on the

shelfe. pricing the product to be at a competitive level with other brands on the market

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Positioning is developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.PTS: 1 REF: 135 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

119. _____ is the development of a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general and is related to the place a product occupies in consumers’ minds relative to competing offerings.a. Market differentiationb. Diversificationc. Combination marketingd. Positioninge. Market aggregation

This is the definition of positioning.PTS: 1 REF: 135 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Knowledge

121. The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings is referred to as a product’s:a. statusb. equityc. framed. rolee. position

This is the definition of a product’s position.PTS: 1 REF: 135 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Product MSC: BLOOMS Knowledge

124. Products such as bleaches, aspirin, unleaded regular gasoline, and some soaps are distinguished by differences such as brand names, packaging, color, smell, or “secret” additives. With these products, marketers attempt to convince customers that their product is significantly different from the others and should therefore be demanded over competing brands. These marketers are using:a. cannibalizationb. perceptual mappingc. psychographic targetingd. integrated marketinge. product differentiation

Product differentiation is a positioning strategy that some firms use to distinguish their products from those of competitors.PTS: 1 REF: 135 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Product MSC: BLOOMS Application

127. Which of the following is a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds?a. Perceptual mappingb. Product positioningc. Market segmentationd. Product tracinge. Laddering

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This is the definition of perceptual mapping.PTS: 1 REF: 136 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Product MSC: BLOOMS Knowledge

129. All of the following are typical bases for positioning EXCEPT:a. attributeb. price and qualityc. distributiond. emotione. product user

Typical bases for positioning include attribute, price and quality, use or application, product user, product class, competitor, and emotion.

PTS: 1 REF: 136-137 OBJ: 08-9 TOP: AACSB Reflective ThinkingKEY: CB&E Model Strategy MSC: BLOOMS Analysis

133. Changing consumers’ perceptions of a brand in relation to competing brands is known as:a. positioningb. repositioningc. reintermediationd. demarketinge. reengineering

This is the definition of repositioning.


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Chapter 21—Customer Relationship Management (CRM) 1. _____ is a company-wide business strategy designed to optimize profitability, revenue, and customer

satisfaction by focusing on highly defined and precise customer groups.a. Organizational optimizationb. Consumer relationship marketing (CRM)c. Total quality management (TQM)d. Customer relationship management (CRM)e. Market aggregation

This is the definition of customer relationship management (CRM).

PTS: 1 REF: 337 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Knowledge

6. Customer relationship management is accomplished by all of the following EXCEPT:a. offering the lowest prices of all major competitorsb. organizing the company around customer segmentsc. establishing and tracking customer interactions with the companyd. fostering customer-satisfying behaviorse. linking all processes of the company from its customers through its suppliers

CRM is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments, but it does not mean that offering the lowest prices is necessary.

PTS: 1 REF: 337 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Analysis

7. The difference between traditional marketing and customer relationship marketing can be compared to the difference between:a. night and dayb. boning a fish and dressing a chickenc. mice and elephantsd. shooting a rifle and a shotgune. circles and squares

If you have good aim, a rifle is the more effective weapon to use (i.e., CRM).


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8. At its most fundamental level, a CRM approach is no more than:a. the relationship cultivated by a salesperson with a customerb. a mass marketing approachc. a transactional selling approachd. a customer satisfaction programe. a differentiation strategy

Fundamentally, a CRM approach is no more than the relationship cultivated by a salesperson with the customer.

PTS: 1 REF: 338 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Knowledge

9. To initiate the CRM cycle, a company must first:a. establish marketing objectivesb. captures relevant customer data on interactionsc. identify customer relationships with the organizationd. understand the interactions the company has with current customerse. Decides on a segmentation strategy

To initiate the CRM cycle, a company must first identify customer relationships with the organization.

PTS: 1 REF: 338 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Comprehension

10. Which of the following statements about the CRM cycle is true?a. The letters CRM are an acronym for consumer relationship marketing.b. The CRM cycle does not affect employees outside the marketing and management

functional areas.c. The CRM cycle is continuous and circular with no predefined start or end point.d. The CRM cycle takes a simplistic perspective on customers.e. All of these statements about the CRM cycle are true.

CRM is often described as a closed-loop system that builds relationships with customers––one that is continuous and circular with no predetermined starting or end points.

PTS: 1 REF: 338 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Analysis

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12. As the second step in the CRM cycle a company must:a. establish marketing objectivesb. capture relevant customer data on interactionsc. identify customer relationships with the organizationd. understand the interactions the company has with current customerse. decide on a segmentation strategy

To initiate the CRM cycle, a company must first identify customer relationships with the organization. Next, the company must understand the interactions with current customers.

PTS: 1 REF: 338 OBJ: 21-1 TOP: AACSB Reflective ThinkingKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Comprehension

13. Which of the following statements about a CRM system is true?a. A critical component of a CRM system is the use of the appropriate technology to store

and integrate customer data.b. A CRM system operates on the theory that all customers are equally important.c. Due to privacy laws, a CRM system only disseminates customer information to those who

are actually in day-to-day contact with customers.d. A company using a CRM system must view its customers as bits of data.e. All of these statements about a CRM system are true.

Information technology is used not only to enhance the collection of customer data, but also to store and integrate customer data throughout the company and, ultimately, to “get to know” customers on a personal basis. See Exhibit 21.1.

PTS: 1 REF: 338 OBJ: 21-1 TOP: AACSB TechnologyKEY: CB&E Model Customer | CB&E Model Strategy MSC: BLOOMS Analysis

14. A company that has a(n) _____ customizes its product and service offerings based on data generated through interactions between the customer and the company.a. ethnocentric perspectiveb. supply-based focusc. sales orientationd. supply-based focuse. customer-centric focus

A customer-centric focus is an internal management philosophy similar to the marketing concept.


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16. Customer-centric is an internal management philosophy similar to:a. utilitarianismb. Herzberg’s theory of motivationc. the equity theoryd. the marketing concepte. consumerism

Under this philosophy, the company customizes its product and service offering based on data generated through interactions between the customer and the company.


18. In a CRM environment, _____ is defined as an informal process of collecting customer data through customer comments and feedback on product or service performance.a. leveragingb. knowledge managementc. interactiond. data mininge. learning

This is the definition of learning (in a CRM environment).


19. _____ refers to the latitude organizations give their representatives to negotiate mutually satisfying commitments with customers.a. Consumer learningb. Customerizationc. Empowermentd. Autonomye. Interaction

Empowerment is the delegation of authority to solve customers’ problems quickly––usually by the first person the customer notifies regarding the problem.


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21. _____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.a. Knowledge managementb. Learningc. Database marketingd. Interactive marketinge. Information marketing

This is the definition of knowledge management.


23. A(n) _____ is the point at which a customer and a company representative exchange information and develop learning relationships.a. social contactb. interactionc. empowering momentd. equilibrium pointe. transactional dyad

An interaction is a touch point at which a customer and a company representative exchange information and develop learning relationships, but with CRM, it is the customer, not the organization, that defines the terms of the interaction.


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ecarter2/csub f15 courses/module 3 pool... · web viewdue to privacy laws, a crm system only...

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