Nova Southeastern University

MKT 5070

Chapter 4 Creating Long-term Loyalty Relationships

1)Which of the following is true for the modern company organization chart?

1. 1. Frontline employees are less important than top management.
   2. Customers are at the top of the pyramid.
   3. Top management is at the top of the pyramid.
   4. Customers are less important than middle management.
   5. Frontline employees 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?
   1. sales
   2. top management
   3. front-line people
   4. customers
   5. middle management

3.                        is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
   1. Perceived usefulness
   2. Failure avoidance rate
   3. Total customer benefit
   4. Customer-perceived value
   5. Competitors' market share rate

4. When a consumer considers a product or service, he or she will choose whichever product or service delivers the highest                                                                .
   1. customer-perceived value
   2. customer-perceived cost
   3. customer profitability analysis
   4. customer equity
   5. customer lifetime value

5.                        is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering.
   1. Total customer cost
   2. Total customer benefit
   3. Total benefits of ownership
   4. Value proposition
   5. Value delivery system

6. The bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering is called the                                                                          .
   1. activity-based cost
   2. customer profitability analysis
   3. total customer cost
   4. product life-cycle cost
   5. direct product profitability

7. Which of the following is true for customer-perceived value?
   1. It is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a product.
   2. 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.
   3. It is the perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering.
   4. It is the net present value of the stream of future profits expected over the customer's lifetime purchases.
   5. It is the process of investigating the hierarchy of attributes consumers examine in choosing a brand if they use phased decision strategies.

8. 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?
   1. absorbing some risk by offering a warranty
   2. improving the functional aspects of the products
   3. augmenting the psychological benefits of the products
   4. training service personnel to improve their skills
   5. investing in brand building for the products

9.                        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.
   1. Value proposition
   2. Loyalty
   3. Satisfaction
   4. Respect
   5. Customer value

10. 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.
    1. total customer cost
    2. customer-perceived value
    3. value-delivery system
    4. value proposition
    5. total customer benefit

11. A company's                          includes all the experiences the customer will have on the way to obtaining and using the offering.
    1. value proposition
    2. value delivery system
    3. customer-value analysis
    4. total customer benefit
    5. total customer cost

12. 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 .
    1. horizontal marketing system
    2. cost versus benefit system
    3. consumption system
    4. marketing channel system
    5. value delivery system

13. Total customer satisfaction is measured based on the relationship of                             .
    1. expected value and total customer benefit
    2. perceived performance and expectation
    3. advertised outcomes and real outcomes
    4. past experience and present experience
    5. customer attitude and salesperson's attitude

14. Which of the following is true for customer satisfaction?
    1. Satisfaction is a deeply held commitment to rebuy or repatronize a preferred product despite situational influences.
    2. Consumers often form more favorable perceptions of a product with a brand that is new.
    3. The ultimate goal of a customer-centered firm is to create high customer satisfaction.
    4. Only increased customer satisfaction can help a company increase its profits.
    5. Greater customer satisfaction has also been linked to higher returns and lower risk in the stock market.

15.                        is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
    1. Performance
    2. Value
    3. Quality
    4. Customer retention
    5. Customer loyalty

16. When two brands of the same basic product deliver their respective promised quality, they are delivering .
    1. performance quality
    2. conformance quality
    3. unique quality
    4. accuracy quality
    5. customer support

17. 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 of these companies deliver their respective promised qualities, they are delivering            .
    1. performance quality
    2. customer support
    3. unique quality
    4. accuracy quality
    5. conformance quality

18. The 80-20 rule reflects the idea that                           .
    1. 20% of the company's profits are generated by the top 80% of customers
    2. the top 20% of customers are highly satisfied and 80% of customers will recommend the company to a friend
    3. 20% of customers are unprofitable, and 80% make up a company's profits
    4. the top 20% of customers often generate 80% of the company's profits
    5. any new product will be accepted by 20% of the customers immediately, but 80% of the customers will be up for grabs throughout the product's life cycle

19. A profitable customer                         .
    1. yields a cost stream that exceeds by an acceptable amount his revenue stream
    2. yields a revenue stream that exceeds the company's cost stream
    3. yields a cost stream that exceeds the company's revenue stream
    4. yields a revenue stream that exceeds by an acceptable amount his cost stream
    5. yields a revenue stream that equals the company's cost stream

20. 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.
    1. prospector
    2. profitable customer
    3. market challenger
    4. market nicher
    5. pioneer customer

21. Customer profitability analysis (CPA) is best conducted with the tools of an accounting technique called                                                                      .
    1. input-output analysis
    2. factor analysis
    3. revenue-based costing
    4. activity-based costing
    5. future date costing

22. Which of the following is true for activity-based costing (ABC)?
    1. ABC considers the real costs associated with each product.
    2. With ABC, the company can estimate all costs coming from the customer, less revenue.
    3. The tools of ABC can be used to conduct customer profitability analysis.
    4. It identifies the costs of products and services based on the revenue they generate.
    5. ABC allocates indirect costs in proportion to direct costs.

23.                        describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

1. Activity-based costing
2. Customer lifetime value
3. Customer value analysis
4. Customer-perceived value
5. Customer profitability analysis

24. The aim of customer relationship management is to produce high customer

                     .

1. 1. integrity
   2. loyalty
   3. innovation
   4. liability
   5. equity

25.                        is the process of carefully managing detailed information about individual customers and all customer "touch points" to maximize loyalty.
    1. Customer relationship management
    2. Customer lifetime value
    3. Customer profitability analysis
    4. Customer satisfaction analysis
    5. Customer-value delivery