chapter 6 smartbook
Which of the following is an example of organizations rejecting unprofitable customers? Multiple choice question. A bar refusing to serve more than four drinks to an individual A corporate lawyer refusing to take up a felony hit and run case A restaurant rejecting patrons who want to order food after its working hours A bank rejecting the credit card application of a customer with bad credit score
A bank rejecting the credit card application of a customer with bad credit score
Identify an example in which a relationship between an organization and a customer ends after a certain purpose is served. Multiple choice question. A bank stops service for customers who could not maintain sufficient funds in their checking account. A supermarket relocates to a different locality due to insufficient business. A restaurant escorts out drunk customers who create ruckus inside its premises. A pest control firm gets paid after fumigating a house.
A pest control firm gets paid after fumigating a house.
Which of the following clients is a partner to Strat and Sullivan law firm? Multiple choice question. Roger, who uses the firm to execute his trust fund Alisha, who has used the firm's service once for a trial against her former employer Angie, who has committed to long-term legal advice and receives special service from the firm Brett, who has just heard about the firm and wants to use its services
Angie, who has committed to long-term legal advice and receives special service from the firm
Which of the following is the primary goal of relationship marketing? Multiple choice question. Facilitating transactions despite maintaining a customer's perceived risk Encouraging customers to switch continually among providers Building and maintaining a base of profitable customers Acquiring new short-term customers for enhanced profitability
Building and maintaining a base of profitable customers
Multiple Select Question Select all that apply Identify the reasons why some dissatisfied customers prefer staying with the same service provider. (Check all that apply.) Multiple select question. Change forces customers to start from the lowest level of profitability tiers. Change requires customers to restructure their life. Change prevents customers from developing new habits of living. Change requires a great deal of effort.
Change requires customers to restructure their life. Change requires a great deal of effort.
Multiple Choice Question Identify a customer who is a stranger to Rover Corp. Multiple choice question. Svetlana, who buys frequently from the company Juan, who receives customized product offerings from the company Betty, who has bought the services of the company but is not yet a regular customer Charles, who is unaware of the existence of the company
Charles, who is unaware of the existence of the company
Multiple Choice Question In the context of relational benefits that customers experience in long-term service relationships, which of the following benefits involves feelings of trust in a provider along with comfort and lower anxiety in knowing what to expect? Multiple choice question. Confidence benefits Social benefits Special benefits Economic benefits
Confidence benefits
____ arise(s) when the customer is required to pay a penalty to switch providers. Multiple Choice Contractual costs Legal inertia Fixed costs Financial inertia Opportunity costs
Contractual costs
Which of the following is NOT a reason why a service firm may avoid a customer relationship with a particular customer? Customer is not divisible Customer is not profitable in the long run Customer is in the wrong segment Customer is difficult Customer is not always right
Customer is not divisible
Multiple Select Question Select all that apply Identify the factors that influence the relationship value of a customer. (Check all that apply.) Multiple select question. Special deals offered by competitors for a similar service Customers' feelings of trust or confidence in a provider Customer referrals generated over time The length of an average lifetime Sales of additional products and services over time
Customer referrals generated over time The length of an average lifetime Sales of additional products and services over time
Multiple Select Question Select all that apply Identify the factors that are essential for long-term customer retention. (Check all that apply.) Multiple select question. Customer satisfaction Social responsibility Service quality Differential treatment
Customer satisfaction Service quality
Multiple Choice Question Identify a true statement about the view of customers on profitability tiers. Multiple choice question. Customers at the lower levels consider profitability tiers as essential in order to receive faster service. Customers at the lower levels of profitability tiers resist and resent unequal treatment. Customers appreciate being categorized into a less desirable segment. Customers always remain unaware of the unequal treatment meted out to them.
Customers at the lower levels of profitability tiers resist and resent unequal treatment.
Multiple Select Question Select all that apply Identify the types of customers who are unprofitable to organizations in the long run. (Check all that apply.) Multiple select question. Customers who are willing to pay premium prices for one-to-one solutions that fit their individual requirements Customers who belong to segments that cannot cover the cost of service Customers who have already established structural bonds with their service providers Customers who require time investments more than what an organization can afford Customers who have unreliable credit histories
Customers who belong to segments that cannot cover the cost of service Customers who require time investments more than what an organization can afford Customers who have unreliable credit histories
The term customer intimacy is most closely related to the establishment of _____ bonds. Multiple Choice Social Structural Security Customization Financial
Customization
Sometimes firms have service encounters that fail because of ___________, who intentionally or unintentionally act in a way that is disruptive, rude, or aggressive. Multiple Choice Strangers Heterogeneous customers Profitable customers Dysfunctional customers
Dysfunctional customers
Which of the following is a human resource benefit for an organization in developing and maintaining a loyal customer base? Multiple choice question. Increased purchases Free advertising Decreased taxes Employee retention
Employee retention
Which of the following is a direct cost incurred to an organization due to dysfunctional customers? Multiple choice question. Increased workload for employees Expenses incurred by illegitimate claims Expenses related to employee turnover Loss of business due to spoiled service experience of other customers
Expenses incurred by illegitimate claims
Once a company has entered into a relationship with a customer, that relationship should never end.
F
True or false: Social bonding strategies become ineffective when combined with financial incentives. True false question.TrueFalse
F
Well-implemented retention strategies will have long-term success even if there is no solid base of service quality and customer satisfaction to build on.
F
True or False Question True or false: Customers continually switch service providers even after developing a social relationship with them. True false question.TrueFalse
F Social ties make it less likely for customers to consider switching. Even when they find a competitor offering a lower price, customers are less likely to switch from a service provider with whom they have social relationships.
One of the benefits of conducting marketing research on the Internet is the composition of the survey samples.
FALSE
When customers and firms reach the friend level of their customer relationship, firms generally focus on providing value comparable to the competition.
FALSE
With relationship marketing, customers receive the specific inherent benefits of receiving service value and nothing more.
FALSE
Multiple Choice Question Which of the following is an example of customer behavior benefits received by an organization through customer retention? Multiple choice question. Decreased income taxes Increased purchases over time Free word-of-mouth advertising Access to competitors' marketing strategies
Free word-of-mouth advertising
Which of the following is a concern raised by customers when they are segmented based on profitability tiers? Multiple choice question. High perceived risk Lack of lifetime profitability Intrusion into privacy High turnover costs
Intrusion into privacy
The gold tier
It consists of customers who are heavy users but want price discounts that limit margins.
The iron tier
It consists of customers who are not profitable enough for special treatment.
The lead tier
It consists of customers who cost money to a company.
The platinum tier
It consists of the most profitable customers in a company.
In the context of the evolution of customer relationships, identify a true statement about a company's acquaintance relationship with its customers. Multiple choice question. It facilitates transactions by reducing the perceived risk of customers. It concerns enhancing the existing relationship with customers. It focuses mainly on attracting customers and acquiring them. It focuses mainly on initiating communication with customers.
It facilitates transactions by reducing the perceived risk of customers.
Identify a true statement about building relationship with customers through social bonds. Multiple choice question. It focuses on understanding the wants and needs of customers. It focuses on developing one-to-one solutions that fit individual customers. It causes customers to endlessly switch among competitors. It makes companies view customers as nameless faces.
It focuses on understanding the wants and needs of customers.
Multiple Choice Question Identify a true statement about building relationship with customers through social bonds. Multiple choice question. It focuses on developing one-to-one solutions that fit individual customers. It makes companies view customers as nameless faces. It focuses on understanding the wants and needs of customers. It causes customers to endlessly switch among competitors.
It focuses on understanding the wants and needs of customers.
Identify the true statements about the relationship value of a customer. (Check all that apply.) Multiple select question. It helps firms single out customers who are willing to pay more for a particular service. It helps firms understand the financial impact of losing a customer. It encourages customers to switch continually among service providers. It looks at customers based on their profitability contributions to a firm.
It helps firms understand the financial impact of losing a customer. It looks at customers based on their profitability contributions to a firm.
Identify the true statements about the relationship value of a customer. (Check all that apply.) Multiple select question. It looks at customers based on their profitability contributions to a firm. It encourages customers to switch continually among service providers. It helps firms single out customers who are willing to pay more for a particular service. It helps firms understand the financial impact of losing a customer.
It looks at customers based on their profitability contributions to a firm. It helps firms understand the financial impact of losing a customer.
Identify a true statement about relationship marketing. Multiple choice question. It assumes that consumers favor switching continually among providers. It represents a paradigm shift toward acquiring new customers. It focuses mostly on a company's relationship with its employees. It primarily focuses on customer retention.
It primarily focuses on customer retention.
Which of the following economic benefits can be witnessed through customer retention? Multiple choice question. Lower service taxes Lower marketing costs Lower inventory costs Lower income taxes
Lower marketing costs
Identify an example of human resource management benefit received by a company through customer retention. Multiple choice question. A start-up company increasing its marketing costs for customer acquisition Loyal customers assisting in the company's service delivery A customer willing to pay more for a provider's service Loyal customers mentoring new customers on the company's rules of conduct
Loyal customers assisting in the company's service delivery
Identify an example of human resource management benefit received by a company through customer retention. Multiple choice question. Loyal customers mentoring new customers on the company's rules of conduct Loyal customers assisting in the company's service delivery A start-up company increasing its marketing costs for customer acquisition A customer willing to pay more for a provider's service
Loyal customers assisting in the company's service delivery
Multiple Choice Question In the context of the evolution of customer relationships, which of the following transforms a customer's relationship with a company from acquaintance to friendship? Multiple choice question. Creation of an exchange relationship Provision of a unique offering Reduction of perceived risk Initiation of communication
Provision of a unique offering
Which of the following statements about relationship surveys is true? Multiple ChoiceWith relationship surveys, the same respondents should be used each time the survey is administeredRelationship surveys should be conducted weeklyTo be reliable and valid, the relationship survey should be administered to all of the service provider's customersRelationship surveys are not statistically valid even though they are very useful to service providersSERVQUAL is a type of relationship survey
SERVQUAL is a type of transaction survey
Multiple Choice Question Identify an example of economic benefits witnessed through customer retention. Multiple choice question. Experienced customers assisting employees in service delivery Satisfied customers willing to pay more for a firm's services Experienced customers helping a firm's new customers during service delivery Satisfied customers trying out new service providers just for the sake of variety
Satisfied customers willing to pay more for a firm's services
Identify the switching costs for customers in changing service providers. (Check all that apply.) Multiple select question. Turnover costs Start-up costs Setup costs Contractual costs Learning costs
Setup costs Contractual costs Learning costs
Multiple Choice Question Which of the following customer relationship strategies are the most difficult to imitate by competitors? Multiple choice question. Contractual bonds Social bonds Financial bonds Structural bonds
Structural bonds
Which of the following makes it difficult for a customer to leave one service provider and begin relationship with another one? Multiple choice question. Switching barriers Differential treatment Profitability tiers Lifetime profitability
Switching barriers
Bundling and cross-selling are ways to implement a Level 1 retention strategy.
T
Social bonds alone may not tie the customer permanently to the firm, but they are much more difficult to imitate than financial incentives.
T
The ability to segment customers narrowly based on profitability implications may raise questions of privacy for customers.
T
The primary goal of relationship marketing is to build and maintain a base of profitable and committed customers through attraction, retention, and customer enhancement.
T
True or False Question True or false: Structural bonds are formed by delivering services to a client that are designed right into the service delivery system. True false question.TrueFalse
T
True or false: When ending relationships with customers, firms should communicate the reasons for terminating service. True false question.TrueFalse
T
Relationship marketing essentially represents a paradigm shift within marketing-away from an acquisitions/transaction focus toward a retention/relationship focus.
TRUE
Requirements research is very basic and essential because it determines the type of questions that will be asked on surveys and ultimately the improvements that will be attempted by the firm.
TRUE
What happens when a company targets its services to all customer segments? Multiple choice question. The company develops a relationship strategy that differentiates the firm from its competitors. The company is most likely to attract a customer whose requirements it cannot meet. The company increases the switching costs of customers. The company is most likely to treat its customers as partners.
The company is most likely to attract a customer whose requirements it cannot meet.
Multiple Choice Question In the context of evolution of customer relationships, identify a true statement about strangers. Multiple choice question. They receive customized product offering and interactions from companies. They play a key role in developing a firm's sustainable competitive advantage. They are customers who have not yet had any transactions with a firm. They are customers who have not interacted with a firm after their first purchase.
They are customers who have not yet had any transactions with a firm.
Multiple Choice Question Identify a disadvantage of financial incentive programs aimed at customer retention. Multiple choice question. They are difficult to initiate. They cannot be used to attract new customers. They cannot be used along with another relationship strategy. They are more likely to be short lived.
They are more likely to be short lived.
In the context of relational benefits that customers experience in long-term service relationships, identify a true statement about confidence benefits. Multiple choice question. They are used to encourage customers to switch continually among providers. They include getting preferential treatment from the service provider. They are the most important among the relationship benefits to customers. They occur exclusively in business-to-business service transactions.
They are the most important among the relationship benefits to customers.
Multiple Choice Question Identify a true statement about switching barriers. Multiple choice question. They facilitate customer retention in organizations. They help companies acquire new customers. They increase the turnover costs of companies. They increase the perceived risk of customers.
They facilitate customer retention in organizations.
Multiple Choice Question Which of the following is true of customization bonds? Multiple choice question. They cause customers to endlessly switch among competitors. They are not effective unless used in combination with financial incentives. They do not generally provide long-term advantages to an organization. They focus on developing one-to-one solutions to satisfy individual customer needs.
They focus on developing one-to-one solutions to satisfy individual customer needs.
In the context of benefits associated with a customer's long-term relationship with a firm, identify a true statement about social benefits. Multiple choice question. They are considered to be the most important of all relational benefits. They help improve a consumer's quality of life. They are the most important to customers. They make customers move down the ladder in the relationship continuum.
They help improve a consumer's quality of life.
Identify the attributes of dysfunctional customers. (Check all that apply.) Multiple select question. They are often the most profitable customer segment for an organization. They create structural bonds with employees of an organization. They often spoil other customers' service experience. They create mental stress for employees in an organization.
They often spoil other customers' service experience. They create mental stress for employees in an organization.
WedSafe is the name of one of several companies that provide wedding insurance. For example, in the event that a wedding is called off, the couple can insure themselves against loss of their nonrefundable deposits. If WedSafe's primary marketing effort is satisfying its customers, the company is in which stage of the customer relationship evolution? Multiple ChoiceAssociateProspectsLeadsAcquaintancesFriends
acquaitance
In the context of evolution of customer relationships, a firm's primary goal with strangers is to _____. Multiple choice question. develop sustainable competitive advantage provide value proposition acquire their business enhance the relationship
acquire their business
According to the _______, while advertising, sales, and promotions pour profits into your company, there will always be some customer defection, which has the potential to grow larger. Multiple ChoiceBucket theory of marketingService paradigm shift80/20 principleIceberg principle of relationshipsEcho principle of marketing
bucket theory of marketing
Kayla has been having her haircut by Duncan, a hairstylist at Studio 21 Salon, for five years. She has continued to use the same hairstylist even though the price of a haircut at Studio 21 Salon is $10 higher than at competing hair salons. Duncan stays up to date on the latest hairstyles and hair care products and Kayla always leaves the salon with a haircut she loves. Kayla realizes _____ benefits from her relationship with Duncan. Multiple ChoiceReliabilityTransformationalSelf-actualizationConfidenceTransactional
confidence
Multiple Choice Question Jenna is a customer of FedSecure Insurance for more than five years. She is comfortable with the service provider and has already developed feelings of trust. She is familiar with the service and knows what to expect from the company. In the context of relational benefits received by customers, this is an example of _____. Multiple choice question. social benefits behavior benefits economic benefits confidence benefits
confidence benefits
All of the following are among the criteria for an effective service research program EXCEPT: Multiple ChoiceMeasures priorities or importanceIncludes perceptions and expectationsConsiders only qualitative researchIncludes measures of loyalty or behavioral intentionsOccurs with appropriate frequency
considers only qualitative research
Multiple Choice Question Brenda signs up for a new Internet broadband plan with a reputed service provider. The plan requires Brenda to use the service for a minimum of two years. If Brenda chooses to switch service before the end of two years, she must pay an additional $200 as a penalty. This penalty is an example of _____. Multiple choice question. setup costs contractual costs turnover costs learning costs
contractual costs
Multiple Choice Question When a customer is required to pay a penalty before switching service providers, _____ arise. Multiple choice question. learning costs turnover costs setup costs contractual costs
contractual costs
In the context of benefits received by organizations through customer retention, a loyal customer serving as a mentor to help a new customer understand a firm's rules of conduct is an example of _____. Multiple choice question. confidence benefits customer behavior benefits economic benefits special treatment benefits
customer behavior benefits
TransCity Hospital is a renowned hospital known for its exceptional medical services. The hospital has great reviews in social media. The word-of-mouth advertising provided by its former patients helps the hospital acquire new customers. In the context of relational benefits received by companies, this is an example of _____. Multiple choice question. economic benefits customer behavior benefits social benefits special treatment benefits
customer behavior benefits
An assumption of relationship marketing is that _____. Multiple choice question. most customers prefer switching continually among providers in search for value rewarding salespeople for customer acquisition benefits a company companies can acquire new customers even without advertising and promotion programs customer retention is less expensive than customer acquisition
customer retention is less expensive than customer acquisition
Multiple Choice Question Companies need to initiate the relationship development process by _____. Multiple choice question. encouraging customers to switch continually among providers segmenting customers based on profitability increasing advertising costs delivering a good core service
delivering a good core service
In the context of evolution of customer relationships, a company can establish a partner relationship with customers by _____. Multiple choice question. delivering highly personalized offerings attracting them and acquiring their business initiating communication with them providing a value proposition
delivering highly personalized offerings
Rico's Auto Shop is an auto repair company known for delivering quality service to its customers. The company charges 15 percent more than that of its competitors' charge. However, its customers still remain loyal to the firm due to the exceptional service quality. In the context of relational benefits received by companies, this is an example of _____. Multiple choice question. social benefits customer behavior benefits economic benefits human resource management benefits
economic benefits
During the partnership stage of customer relationships, a firm primarily focuses on _____. Multiple choice question. enhancing the relationship with customers initiating communication with potential customers providing a value proposition to customers acquiring the business of new customers
enhancing the relationship with customers
Multiple Choice Question A firm can retain its customers by _____. Multiple choice question. increasing the customers' perceived effort in switching service providers increasing its spending on advertising and promotion encouraging customers to switch continually among providers minimizing the costs associated with serving its customers
increasing the customers' perceived effort in switching service providers
According to the customization approach, customer loyalty can be encouraged through _____. Multiple choice question. intimate knowledge about individual customers higher spending on advertising and promotion short-term financial incentives bundling and cross-selling of services to customers
intimate knowledge about individual customers
In the context of switching costs, ________ _________are costs that are associated with learning the idiosyncrasies of using a new product or service.
learning costs
Multiple Choice Question The strategy used by a luxury car manufacturer to target customers in the low-income category is an example of _____. Multiple choice question. marketing to the wrong segment catering to compatible market segments establishing structural bond with potential customers using financial incentives to attract customers
marketing to the wrong segment
The overriding goal of relationship marketing is to _____. Multiple choice question. move customers up in the relationship continuum build and maintain a strong relationship with suppliers encourage customers to switch continually among providers initiate communication with potential customers
move customers up in the relationship continuum
Multiple Choice Question Omar is a technology billionaire who owns OmarTechno Corp. He is a customer of TechHost Cloud Storage Service for more than five years. He has already established a committed relationship with the firm. He also receives customized services that are designed exclusively for his company. In this case, Omar is a(n) _____ to TechHost. Multiple choice question. friend acquaintance competitor partner
partner
Multiple Choice Question Omar is a technology billionaire who owns OmarTechno Corp. He is a customer of TechHost Cloud Storage Service for more than five years. He has already established a committed relationship with the firm. He also receives customized services that are designed exclusively for his company. In this case, Omar is a(n) _____ to TechHost. Multiple choice question. friend acquaintance partner competitor
partner
In acquaintance relationships, firms generally focus on: Multiple ChoiceInducing product trial and adoptionCreating clear and easily comprehended communicationsGaining specific knowledge of customer's needsProviding value comparable to the competition
providing value in comparable to the competition
Benford Bank hired marketing researchers when it noticed many people who had savings accounts with the bank did not have checking accounts and credit cards with it. The researchers would conduct _____ research if they wanted to test the hypothesis that customers do not like the checking account and credit card services of Benford Bank. Multiple Choice Functional Quantitative Qualitative ExploratorySecondary
quantitative
____ marketing focuses on keeping and improving current customers, rather than concentrating on acquiring new customers. Multiple ChoiceExpansionStrategicBenefitRelationshipTransaction
relationship
When a firm has an acquaintance relationship with a customer, its primary goal is to _____. Multiple choice question. acquire new business develop sustainable competitive advantage satisfy the customer initiate communication with the customer
satisfy the customer
Multiple Choice Question Howard regularly services his car in Ronny's Auto Repairs. As the service charges get more expensive, Howard takes his car to a new auto repair shop. Since Howard has no idea about the services performed in the vehicle, the new mechanic suggests a complete vehicle checkup before addressing the specific issue. The costs associated with the complete vehicle checkup are an example of _____. Multiple choice question. learning costs setup costs turnover costs contractual costs
setup costs
In some long-term customer-firm relationships, a service provider may become part of a customer's __________ , such as when a hairdresser serves as a personal confidant, or a proprietor of a local retail store is known as a central figure in the neighborhood network. Multiple ChoiceAssurance groupSocial support systemSelf-actualizationUtility transferEsteem benefits PrevQuestion 13 of 20 Total13 of 20Visit question mapNext
social support system
Multiple Choice Question A fashion store offers an additional 20 percent discount on its products for customers who have purchased from the store for more than $2 thousand in the last six months. This is an example of _____. Multiple choice question. social benefit customer behavior benefit confidence benefit special treatment benefit
special treatment benefit
Receiving the "benefit of the doubt" from a service provider is an example in which a customer enjoys _____. Multiple choice question. social benefit economic benefit special treatment benefit customer behavior benefit
special treatment benefit
Troy is a long-time customer of RM Auto Service. After servicing his company car, he misplaces the bill he receives. The bill is crucial to claim the money spent for the service. The auto shop manager knows that Troy is a regular customer and provides him with a copy of the bill after searching the database. In the context of relational benefits, this is an example of _____. Multiple choice question. special treatment benefit economic benefit confidence benefit customer behavior benefit
special treatment benefit
Rico, a prominent football player, searches for a store for buying new football gear. RNC Inc., a sports equipment store, hears about Rico's needs and initiates communication with him. Rico is still considering his options for purchase. In the context of the evolution of customer relationships, Rico is a(n) _____ to RNC Inc. Multiple choice question. acquaintance stranger partner friend
stranger
At the partnership stage of the customer relationship, the firm is most concerned with: Multiple ChoiceCustomer satisfactionThe enhancement of its relationship with the customerCustomer retentionCreating a competitive advantageCreating service loyalty
the enhancement of its reltionship with the customer
One of the advantages of financial incentive programs offered to loyal customers is that _____. Multiple choice question. they cannot be easily imitated by competitors they are not difficult to initiate they are useful in long-term customer retention they build relationships through interpersonal bonds
they are not difficult to initiate
In the context of the evolution of customer relationships, a primary goal for companies at the friendship stage is _____. Multiple choice question. to satisfy customers to retain customers to initiate communication to create awareness
to retain customers
When Tom and Ruth checked out of the Marriott Hilton Head Resort, they were each given a brief postage paid survey to complete and return through the mail. The survey asked 15 questions about their stay at the Marriott Resort. It covered such attributes as overall satisfaction, check-in speed/efficiency, cleanliness, decor and comfort of their room, friendliness and efficiency of the staff, quality of dining experience, quality of merchandise/gift shop, intention to return, and willingness to recommend to friends. Which of the following types of research did Marriott conduct? Multiple Choice Trailer calls Lost customer research Relationship surveys Critical incidents studies Complaint solicitation
trainer calls
