CRM FINAL: Test #1, 2, 3, & 4
Rockwell Collins is a manufacturer of avionics and communication systems for corporate aircraft. in response to a general slowdown in the business aviation industry, Rockwell announced cutbacks for the items it makes for small and mid-sized Jets. based on this information, which of the following segmentation variables is Rockwell most likely to utilize? -Geographic -"Firmograph" -buying approach -psychographic
"Firmograph"
Assume Marriott International surveyed its customers and asked, "Using a 0-10 scale, how likely is it that you would recommend a Mariott hotel to a friend or colleague?" The results found that 9% of those surveyed were detractors (0-6), 62% were passives (7-8), and 29% were promoters (9-10). What is Marriott's net promoter score (NPS)? - 62 - 91 - 20 - 53 -33
20 --> NPS = % promoters - % detractors
A paper products company is concerned with distributors' reliance on price discounts. Although price discounts successfully increase sales during the price-discount promotions, sales decrease between those price promotions. A systematic reliance on discounts to drive sales is MOST likely to risk which of the following in the long-term? - Ability to deliver value to customers - Ability to capture value from customers - Ability to estimate customer equity - Ability to increase market share -Ability to measure customer lifetime value (CLV)
Ability to capture value from customers
According to the customer equity model, which of the following is not a factor in calculating customer equity? Value equity Brand equity Relationship equity All answers are correct
All answers are correct
An online subscription has calculated lifetime value (CLV) for 100,000 users. Which of the following is a strategic or managerial decision in which CLV could be useful to the company? - Determining which users to target based upon estimated profitability - Determining its limits to user acquisition costs - Determining investments into customer retention programs - Determining which users to target for customer development -All answers are correct
All answers are correct
Which of the following statements about business-to-business (B2B) firms is FALSE as it relates to developing a customer-centric strategy? Customer loyalty contributes to profitability B2B customers are cost-conscious, so measuring satisfaction is not possible Customer retention contributes to profitability B2B firms can increase revenues by getting customers to spend more B2B customer loyalty is linked to customer and investor loyalty
B2B customers are cost-conscious, so measuring satisfaction is not possible
You are the vice president of marketing for a regional chain of fine dining restaurants. You have created policies to ensure that every full-time employee has the training and skills to deliver the highest quality customer experiences. For example, every server is authorized to surprise customers with one-bite appetizers as part of the company's Customer Delight program. The company refers to these policies as employee empowerment. This is an example that best matches which of the four sets of activities for creating customer-centric culture? Coordination Cooperation Capability Connection
Capability
In 2015, Marriott Hotels offered guests complimentary GoPro hero4 cameras to use while vacationing at any one of the Marriott 17 Caribbean and Latin American resorts and hotels. Developing relationships with external partners to increase the value of an experience for customers is part of a set of activities referred to as _____. Coordination Cooperation Capability Connection
Connection
Former Trader Joe's president Doug Rauch says that the company abandoned the word consumer for the word customer. Why did it do so? Consumer is more impersonal. Customer is more individual. Customer is more individual. Consumer is too personal. Rauch Likes the word customer better than consumer It's competition uses the term consumers, and Trader Joe's wants to be different Trader Joe's thought it could get buzzed by changing what its employees call people
Consumer is more impersonal. Customer is more individual.
Firms CANNOT create: -Consumer segments -segmentation strategies -consumer targets -targeting strategies -positioning strategies
Consumer segments
Decades ago, 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 Aggressive selling in order to maximize sales volume Creating a large number of transactions in order to maximize a firm's market share Making products of moderate quality, that could be sold at the lowest possible price Making the highest quality products Conducting extensive research to discover customer needs
Creating a large number of transactions in order to maximize a firm's market share
Amazon's recommendations for potential customers who are considering a purchase includes related items using the phrase "customers who bought this item also bought" For example, Amazon would likely recommend a Kindle case when a customer was looking at a Kindle. Which customer development strategy does this exemplify? - Customer acquisition - Upselling - Cross-selling - Share of wallet -Redefining the business
Cross-Selling
Which of the following concepts refers to the total customer lifetime value (CLV) across all existing and future customers and serves as a good proxy for the overall firm value? - Customer acquisition - Customer equity - Customer retention - Customer profitability -Share of Wallet
Customer Equity
The process of collecting and using detailed information about individual customers during points of contact between a buyer and a seller is referred to as Brand equity Customer relationship management The marketing mix Touchpoint management Retro marketing
Customer relationship management
Which of the following statements about customer lifetime value (CLV) IS TRUE: - Information needed to calculate CLV for individual customers is typically easy to access - It is generally easy to identify direct costs for each customer - CLV must be calculated for each customer individually - Customers should be evaluated based on both CLV and strategic value - All answers are correct
Customers should be evaluated based on both CLV and strategic value
An independent marketing firm sells syndicated marketing research services to a variety of customers. An average corporate customer generates $6,000 in annual profits per year. The firm is considering investing in additional services to improve retention rates from 60% to 70%. Assuming a discount rate of 10%, the margin multiple is 1.20 for a 60% retention rate and 1.75 for a 70% retention rate. If the retention rate was improved from 60% to 70%, which of the following is the estimated difference in the customer lifetime value (CLV) of an average corporate customer? - $2200 - $3300 - $7200 - $10,500 -$19,700
Equation: 1.75*6,000=10,500; 1.20*6,000=7,200, then 10,500-7,200=3,300
By coupling small production runs with frequent "retirements" Ty Inc. fanned desire for its stuffed toy Beanie Babies. Stephen Brown describes this as holding back supply and delaying customers' gratification in order to avoid excess inventory and to make buyers feel lucky, which is referred to as
Exclusivity
True or False: Acquiring customers who do not appear attractive based on customer lifetime value (CLV) calculations should always be avoided.
FALSE
True or False: Because customers are the primary source of profit for a company, customer lifetime value (CLV) is a good proxy for company value.
FALSE
True or False: Customer lifetime value (CLV) is the present value of all future streams of revenue that an individual customer generates over the life of his or her business with the firm.
FALSE
True or false: A customer's lifetime value is static. Companies cannot change or influence a customer's lifetime value.
FALSE
True or false: Both customer lifetime value and customer equity are metrics applicable to the individual customer, combined, they provide information for understanding firm value.
FALSE
True or false: Building a customer-centric culture is more important for a service provider than it is for a manufacturer.
FALSE
True or false: Companies who focus on maintaining a continuous stream of products or services and establish categories in order to satisfy customers' unmet needs are innovating using market-driving strategies
FALSE
True or false: Competitor-focused organizations have high ratings in customer service
FALSE
True or false: Customer relationship management (CRM) is the process of collecting detailed information about individual customers at all touch points.
FALSE
True or false: In keeping with sound customer relationship management (CRM) strategies, firms should fire unprofitable customers as soon as they are identified
FALSE
True or false: Research suggests that the investment required to change customers from satisfied to completely satisfied will not provide an attractive financial return and is probably not a wise investment of resources
FALSE
The failure of Volkswagen's brand Phaeton in the United States is due in large part to the: Size of the luxury automobile Market Brand name: Phaeton Was not well received in the marketplace Fact that the Brand's equity in Europe was in the luxury market, not the economy market Fact that the brand's equity in the United States was in the economy market not the luxury Market Fact that Volkswagen could not compete with BMW
Fact that the brand's equity in the United States was in the economy market not the luxury Market
True or False: Statistical techniques like regression analysis cannot be used routinely to infer consumer's response to marketing actions. this is because the data series available to firms are often too long and large for individual-level analysis.
False
To compete successfully in business-to-business (B2B) markets, a company must do all the following EXCEPT: Gain deep customer insight Integrate branding with customer-centricity Reward employees for customer-focused innovation Focus heavily on products and technology Encourage employee participation, with special emphasis on delighting customers
Focus heavily on products and technology
Understanding why customers buy a product can help firms do all the following EXCEPT: -Form segments based on consumer lifestyles -convert on loyal consumers into loyal consumers -design products to appeal to new consumer groups -change their marketing strategy to increase profitability
Form segments based on consumer lifestyles
A branch manager of a rental company set a goal to increase customer satisfaction ratings. To achieve this goal, she authorized the sales associates to provide customers with additional price discounts. Although customer satisfaction rating increased, the branch manager later discovered that 20% of its rental contracts with the highest customer satisfaction ratings were also unprofitable. This group of highly satisfied but unprofitable customers represents the company's - Star customers - Vulnerable customers - Lost causes - Free Riders -Dealers
Free Riders
Dunkin' Donuts is expanding in several different countries. it offers stores Curry Donuts in India, dolce de leche Donuts in Peru, and Cherry Brandy Donuts in Germany. this is an example of segmentation based primarily on: -Demographics -Behavior -Psychographics -Geography -customization
Geography
Assume that Kroger (a grocery store) is attempting to increase its average retention rate from 75% to 80%. By how many months would this increase the expected customer lifetime? - 3 - 6 - 12 - 18 -24
How to solve: 100/100-75 (=4), then 100/100-80 (=5); Find the difference: 5-4 = 1 year or 12 months
As part of a strategy to improve customer satisfaction and loyalty, a sales manager has asked key salespeople to decrease their annual customer churn rate from 50% to 40% during the next fiscal year. Decreasing the customer churn rate to 40% will increase the average expected customer lifetime by. - 3 - 6 - 12 - 18 -24
How to solve: 100/50=2, 100/40=2.5; 2.5 - 2 = .5 years which is 6 months!
Alisa just purchased a beautiful designer bag with the brand name prominently displayed. She admits that she paid way too much for the bag. According to the customer-perceived value (CPV) equation, Alisaa may derive what type of benefit from this purchase? Service benefit Style benefit Product benefit Image benefit Personal benefit
Image benefit
Juan and Javier are two of the most effective salespeople at XYZ Corporation in terms of average revenue per customer. Juan tends to increase revenue per customer through upselling, while Javier is more likely to increase revenue per customer through cross-selling. Although both approaches are effective with existing customers, cross sell is more likely than upselling to: - Improve customer retention rate - Satisfy customer needs - Provide the information necessary to diagnose reasons for customer defection - Increase customer profitability -Decrease customer lifetime value.
Improve customer retention rate
According to the Customer Profitability/Customer Experience matrix, free riders have high customer experience yet low profitability. Which of the following is a tactic that is not likely to increase the profitability of free riders? - Increase customer delight - Increase prices - Reduce services -Reduce benefits
Increase customer delight
Which of the following is NOT a key action that can help organizations retain customers? - Diagnose the reasons for defection - Design an early detection system to predict defection - Create programs to target defections - Improve customer management by using the net promoter score (NPS) -Increase the customer churn rate
Increase the customer churn rate
Companies can employ various strategies to acquire customers. When Under Armour, INC introduced sportwear for women in the early 2000s, it acquired new customers who did not buy its sportwear clothing designed for mens. This was a successful attempt to acquire customers by ____. - Increasing marketing investment - Increasing market size - Offering discounts and incentives - Increasing effectiveness of customers acquisition programs -Generating positive word of mouth
Increasing market size
Gerber's Good Start line of formulas for infants and toddlers has high defection rates after a couple of years. Which of the following best characterizes the most likely reason for defection among Gerber's Good Start most loyal customers? - Dissatisfied switchers - Deliberative switchers - Lifestyle switchers - Target switchers -Value switchers
Lifestyle switchers
When a firm begins to charge high fees for additional services to unprofitable customers, it has determined that the ______ of those customers is too low to warrant the added efforts to maintain a relationship with them. Client value Lifetime value Relational value Market share 80/20 value
Lifetime value
Segmentation and targeting influence a company's resource allocation, potentially affecting strategic decisions in all of the following areas EXCEPT: -Price -Advertising -Customer management -Mission formulation -Salesforce
Mission formulation
Subscription-based services such as Netflix offer free, limited-time trials to new customers. Some services may extend the free trial period to customers who opt to unsubscribe to the service. This example is BEST associated with which broad strategy is designed to acquire customers. - Increase market size - Increase marketing investments - Increase the effectiveness of acquisition programs - Offer discounts and incentives -Generate positive word-of-mouth
Offer discounts and incentives
Tiffany & Co is an American luxury Jeweler headquartered in New York City. In the late 1980s, Tiffany & Co. ventured into the fragrance business by adding luxury perfumes to its product mix. Although perfumes are distinctly different than jewelry, both product categories appeal to the same target market. which of the directives for customer-centric branding strategies does this most closely represent? Plan brand extensions based on customer needs, not component similarities Make Brands as narrow as possible Make brand decisions subservient to decisions about customer relationships Take no heroic Measures Change how you measure brand equity
Plan brand extensions based on customer needs, not component similarities
During which step in the STP marketing process is the value proposition defined and an action plan developed? -Positioning -Planning -Segmentation -Targeting -profiling
Positioning
Burger King, White Castle, and several other chains known for beef patties are targeting young urban professionals who increasingly seek vegetarian foods. These restaurants now offer plant-based "burgers" and other meat substitutes. in this example, Segmentation and targeting are primarily influencing the organization's ___ strategy. -Product -Behavioral -customer management -benefit
Product
Customer perceived value (CPV) can be represented by the following equation: value=benefit-costs, where different benefits add up to total customer benefits, and different costs add up to total customer cost. The total customer benefit includes the following: Product, place, personal, and image benefits Product, services, sales, and image benefits Services, Personal, Image, and promotion benefits Product, Services, personal, and image benefits Services, place, product, and promotion benefits
Product, Services, personal, and image benefits
Customer value has two sides: capturing value through customer_____ and delivering value through customer______ - Profitability; satisfaction - Revenue; experience - Share of wallet; satisfaction - Revenue; satisfaction -Profitability; Experience
Profitability; Experience
For a segmentation to be useful, it must meet several criteria. which of the following is NOT among these criteria? -Identifiable -Accessible -Profitable -Substantial -actionable
Profitable
The Innovation funnel is a model that explains how ideas are turned into new products, but it does not explain some of the innovations that have been successful over the past few decades. the actions that are not included in the Innovation funnel are: Concept generation and selection Prototyping and testing Redefining value and raising expectations Manufacturing ramp-up and release Product design and pilot production
Redefining value and raising expectations
Which of the following is NOT one of the three crucial actions that a company may take when using customer centricity and innovation to fuel Market-driven strategies? Rely heavily on traditional new-product development Redefine value for customers in their respective markets Build powerful, cohesive business systems that could deliver more of that value than competitors Raise customer's expectations beyond the competition's reach
Rely heavily on traditional new-product development
Frito-lay's use of a demand landscape is an example of what type of model? Value presumption model All benefits model Resonance Focus model Benefit assertion model
Resonance Focus model
In the context of presenting benefits to customers, marketers should use a(n) ______ model, which involves demonstrating a deep understanding of customers' needs and differentiating or highlighting offerings on the few elements that matter most to target customers. Resonance focus All benefits Benefit assertion Value presumption
Resonance focus
Customer _______ is the percentage of customers who stay with a company in a given period, while customer ______ is the percentage of customers who leave a company within a given period of time. - Retention rate; churn rate - Retention rate; equity - Attrition rate; churn rate - Churn rate; retention rate -Attrition rate; defection rate
Retention rate; churn rate
H.J. Heinz company has estimated that average customer lifetime values (CLVs) are equally attractive for customers in two of its broad business-to-business segments: restaurants and hospitals. Heinz believes that its restaurant customers are generally loyal to Heinz brands, while hospitals often purchase competing brands such as Hunts. From the perspective of customer development, which of the following is an important piece of information missing from the estimates of customer lifetime value? - Customer acquisition costs - Customer retention rate - Customer profitability - Upselling -Share of wallet
Share of Wallet
Coordination as a set of activities that organizations may engage in to achieve a customer-centric culture includes: Sharing information across all functional units sharing sales across all functional units Developing customer-focused solutions
Sharing information across all functional units
he group of customers who receive high value from customer experience and who provide high value to the company are referred to as - Star customers - vulnerable customers - lost cause - free riders -all profitable customers
Star customers
True or False: A whale curve is a graphical representation of company profits displayed by plotting cumulative profits against the cumulative percentage of customers.
TRUE
True or False: Churn rates vary by company, industry, and country because culture and competition within an industry affect norms.
TRUE
True or False: For noncontractual buying situations, it is difficult for companies to determine retention rates because they may not know if the customer has defected or if the customer has simply not made a purchase during the time period.
TRUE
True or False: The goal of customer management is to grow the business profitability by acquiring, retaining, and developing the right customer.
TRUE
True or false: Cutting costs IS NOT the most effective way to increase customer-perceived value
TRUE
True or false: Frito-Lay created a demand landscape in order to (1) map its products to consumer behaviors (e.g., activities, projects, tasks, and to do's driven by goals, needs, urges, sensations, and desires in the social-cultural context) and (2) Position it's brand in the way people operate every day.
TRUE
True or false: What a product represents to customers and how it builds or maintains their self-image or personal identity is often more important than the product's actual attributes and capabilities in predicting whether or not a product succeeds in the marketplace
TRUE
In 2014, P&G announced that it would sell approximately half its brands in order to revive sales growth and save costs. At the time, P&G's top 80 Brands accounted for $84.1 billion in sales (95% of total profit), while the other 100 brands accounted for only $2.4 billion in sales. Which of the directives for customer-centric branding strategies does this most closely represent? Plan brand extensions based on customer needs Make Brands as narrow as possible Make brand decisions subservient to decisions about customer relationships Take no heroic Measures Change how you measure brand equity
Take no heroic Measures
Assume that a company has segmented its customers based on customer lifetime (CLV) and customer referral value (CRV). From a strategic perspective, a customer with a high CRV but a low CLV should be. - Retained at all costs - Targeted for customer development strategies to increase wallet share - Encouraged to make more referrals - Divested (no longer welcome as a customer) -Given additional discounts or incentives
Targeted for customer development strategies to increase wallet share
A firm preparing to introduce a new deodorant has learned that more competitors are offering products formulated for women than men. this finding most likely emerged during the____ step of the firm STP process. -Segmentation -Positioning -Targeting -Selection
Targeting
When determining the customer lifetime value (CLV) for a targeted group of customers, the important factor that the management of a company to consider is which? - How much it costs to acquire a customer - The contribution margin of this particular customer group - The benefit that will accrue to the company over the product life cycle its best-selling product for this group - Customer lifetime value is not static -Sales of the most popular product have a great impact on CLV
The contribution margin of this particular customer group
One way that customer-centricity fits into an organization is through the Knowledge Management system. The knowledge management system can best be described as understanding: The customer The competition The corporate values The corporate culture Customer centricity
The customer
Companies like Dell, Home Depot, and Palm created groundbreaking products and concepts using market-driving strategies. Which of the following statements is not an action common to these companies and their Market driving strategies? They all redefined value for customers in their respective markets They all built powerful, cohesive business systems that could deliver more value than competitors They all raise customers expectations be on the competition's reach They all made minor, incremental improvements to better satisfy customer needs All answers are correct
They all made minor, incremental improvements to better satisfy customer needs
Which of the following statements about value is FALSE? Value includes the concept of quality, but it is broader in scope Value takes into account every marketing program element Unlike quality, value means the same thing to all customers Value is critical to maintaining long-term customer relationships Value allows for the necessary balance among types of utility
Unlike quality, value means the same thing to all customers
JetBlue's "Even More Space" initiative allowed passengers to buy seats with more legroom for a slightly higher price. The initiative increased JetBlue's profit margin. Which customer development strategy does this exemplify? - Customer acquisition - Upselling - Cross-selling - Share of wallet -Redefining the business
Upselling
Reichheld Believes that a follow-up question should be added to a question about how a customer rates a product in order to determine which of the following? Why the customer completed the survey Whether the customer had planned to buy another, similar product Why the customer purchased the product or service Why the customer gave the product this rating Whether the customer would buy the product again
Why the customer gave the product this rating
A toothpaste manufacturer believes its most likely customers are parents of young children who value a brand with kid-friendly taste and texture. the company segmentation is probably based on: -Psychographics -accommodation of demographics and psychographics -behavioral characteristics -a combination of demographics and benefits sought
a combination of demographics and benefits sought
A brand manager has recently conducted a customer survey to measure the importance of Select attributes of a product, as well as the ratings of the company's offering and its competitors on those attributes. results indicate that the company's offering is not the Preferred Choice. generally, which of the following is NOT a possible course of action for improving preference for the company's products? -change customers mind about the importance of one or more attribute -change customers perceptions about its competitors performance on one or more attribute -change customers perceptions about the product on one or more attribute -all of these are possible courses of action
all of these are possible courses of action
A company that develops artificial flavorings for candy manufacturers uses research to refine its Market offerings. it studies require participants to make repeated comparisons between Pairs of products; and each pair, the products differ on key attributes of flavorings strength and price. the research approach of this firm is: -Latent class analysis -conjoint analysis -Cluster analysis -regression analysis -paired comparison analysis
conjoint analysis
Which of the following is NOT required to achieve a customer-centric culture? Coordination Cost Capability Connection
cost
The segmentation process begins by grouping: -competitors with similar needs and preferences -customers with similar lifetime values -Market offerings with similar sales potentials -customers with similar needs and preferences -customers with similar demographic profiles
customers with similar needs and preferences
Which of the following does the marketing process of segmentation, targeting, and positioning (STP) NOT address? -Potential customers -differences in customer preferences -potential competitors -which customers to pursue -how a firm defines its value proposition for its Target customers
differences in customer preferences (Doesn't talk about it since segmentation is based on grouping customers together in similar needs.)
The goal of cluster analysis is to group customers and determine the number of groups, or clusters, so that the: -distance between two customers in a cluster is minimized -distance between clusters is averaged -distance between two customers in a cluster is maximized -average distance between clusters is minimized
distance between two customers in a cluster is minimized
. A commercial cleaning company spends an average of $500 per year, per customer, in supplies, wages, and account maintenance. An average customer generates $1,000 in revenue per year. Assuming a discount rate of 12% and an annual retention rate of 80%, which of the following is the BEST estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation? - $500 - $1000 - $1250 - $1750 -$2225
equation: .80/(1+.12-.80) = 2.50, then 500*2.50 = $1250
Assume that a company calculates customer lifetime value (CLV) using a margin multiple. Assume the margin multiple is 2.5 and corresponds to an 80% retention rate ® with a 12% discount rate (i). Assume the estimated average monthly revenue of a customer is $125, and the estimated average monthly cost of a customer is $40. What is the CLV of the estimated average customer? - $1020 - $1125 - $2550 - $3000 -$3750
equation: annual profits= annual revenue-annual cost; (125*12)-(40*12)=1500-480=1020, then 1020*2.5=2550
True or false: The use of " firmographics" to segment business markets is equivalent to the use of psychographics to segment consumer markets.
false
A coffee maker manufacturing company is planning a new coffee maker that features 12 cup sizes, five Brew strings, three Auto timer settings, and espresso option, and a latte option. concept testing suggests that the number of functions that the coffee maker can perform is causing many customers to complain about the usability of the product. it is likely that that complaints are a result of___. -the functional value -the function benefit ratio -feature fatigue -experiential value -capability capacity
feature fatigue
Mass customization is most appropriate: -for technology products where the cost of new versions is extremely low -for technology products in Emerging Markets -in Industries with minimal competition -in markets where consumers have homogeneous needs
for technology products where the cost of new versions is extremely low
Conjoint analysis is an approach used to achieve preference-based segmentation by: -extending the multi-attribute model approach to new product categories -correlating preference data with response data -forcing consumers to make trade-offs between Pairs of products with different attributes -forcing consumers to articulate why they make certain purchases based on different attributes
forcing consumers to make trade-offs between Pairs of products with different attributes
California Closets is a maker of closet organizers and custom Storage Solutions. Its products are designed for people who live in small spaces. assuming the company plans to segment its Market based on a single variable, which of the following is most appropriate? -Benefits sought ( value) -geography( Urban versus Suburban) -psychographics( lifestyle) -Behavioral( usage rate) -Firmographics( Global versus regional)
geography(Urban versus Suburban) - (Explanation: Key word in the question: People who live in small spaces*. It cannot be psychographics due to how it does not talk about their lifestyle, activities, interests, etc.)
PRIZM is a commonly used segmentation system that groups consumers into: -life stage groups and social groups -life-stage groups and behavioral groups -social groups and behavioral groups -lifestyle groups and social groups
life stage groups and social groups
Among the segmentation variables related to past purchase behavior is consumers' share of wallet. this term refers to the: -money that a consumer spends with one firm as a share of all of the money that the consumer spends in that category -money that a consumer spends with the representative firm as a share of all the money spent by similar consumers -money that a consumer spends with one firm as a share of that consumer's discretionary income -total amount of money that a consumer spends as a share of that consumer's yearly expenditures
money that a consumer spends with one firm as a share of all of the money that the consumer spends in that category
In choosing a basis for segmentation, marketers may ask" who," "what," and "why" Questions about their customers. " what" variables focus primarily on the customer: -Geographics -Psychographics -purchase Behavior -needs and preferences
purchase Behavior
Specialty retailers like Restoration Hardware, LL Bean, and Anthropologie make heavy use of direct mail catalogs. such catalog marketers typically segment their Market based on three factors, Each of which describes the nature of different customers' past purchases and correlates well with future purchases. abbreviated as RFM, the factors are: -recency, frequency, and measurability -recall, familiarity, and measurability -recognition, frequency, and monetary value -recency, frequency, and monetary value
recency, frequency, and monetary value
A firm should consider three factors when choosing a Target segment, including not only the external factors of competition and segment characteristics but also the firms internal: -Revenue targets and market share -resources and competencies -strategic and tactical plans -sales goals and market share
resources and competencies
Which of the following is NOT a benefit of segmentation for organizations? -segmentation helps identify underserved customers -segmentation results in better products and services -segmentation makes marketing more convenient -segmentation enables targeted promotions
segmentation makes marketing more convenient
The GolfLife Company built a successful business by offering high-end golf clubs designed to meet the specific needs of experienced players for functionality and durability. The company then shifted its focus to cheaper "value" clubs, sold through discount Outlets to novices, experienced golfers, or would-be golfers concerned about price. The "value" strategy failed. Which of the following targeting approaches did GolfLife probably pursue and why was it unsuccessful? -Mass customization -targeting Niche segments -targeting all segments -targeting addressable segments
targeting all segments
Which of the following is NOT a limitation of the multi-attribute model? -the model is compensatory; that is, a high rating on an attribute can compensate for a low rating on another attribute -the model does not account for the relative importance of a tributes from the customer's perspective -consumers implicitly make trade-offs between a product's attributes, but they often find it difficult to articulate them in the form of a multi attribute Matrix -the model may not account for the difference between features and benefits -focusing on the trade-off between features May create a features or among the competitive products
the model does not account for the relative importance of a tributes from the customer's perspective
Which of the following represents the most significant risk to companies using a mass marketing approach? they may not realize economies of scale -they may overemphasize the benefits of customized products -they may lose customers to Niche marketers -they may lose customers to International Marketers -they may lose customers who feel that mass marketers are invading their privacy
they may lose customers to Niche marketers
In sparsely populated geographic regions, companies may have virtual monopoly because of the lack of alternatives available to customers. In these situations, some companies may charge prices that are not supported by the value provided to customers. This pricing strategy may also increase the likelihood that customers will switch providers if alternative were available. These customers may be referred to as - Star customers - vulnerable customers - lost causes - free riders -dealers
vulnerable customers
There are many potential segmentation variables, but these variables can be grouped into three basic categories. the categories include all the following EXCEPT: -Why do customers make the decisions they do? -what have the customers done? -who are the customers? -when do customers buy?
when do customers buy?
