Download Answer: a., moderate p. 36, Reflective

TEST ITEM FILE
CHAPTER 2: BUILDING DATABASES, SELECTING
CUSTOMERS, AND MANAGING RELATIONSHIPS
ESSAY
2-1.
Explain the value of customer loyalty programs and provide a specific example of
such a program.
(moderate, pp. 8-9, Reflective)
2-2.
Define database maintenance and briefly describe the three common database
maintenance activities that direct marketers perform.
(easy, pp. 11-18, Reflective)
2-3.
Detail five of the many ways direct marketers can use a customer database.
(easy, pp. 21-26, Reflective)
2-4.
Define database enhancement and overview the three specific reasons for
enhancing a customer database.
(moderate, pp. 28-29, Reflective)
2-5.
Explain the important concept of customer lifetime value and why direct
marketers calculate and use it.
(challenging, pp. 36-38, Reflective)
MULTIPLE CHOICE
2-6.
According to the text, which of the following is the primary way a company can
retain its customers?
A. Providing the customer information about the company
B. By keeping the customer satisfied and happy
C. Asking the customer to suggest ideas to make them happy
D. Extensive communication with the customer
(Answer: b., moderate p. 6, Reflective)
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2-1
2-7.
Which of the following are not types of programs sponsored by an organization to
encourage customer repeat purchases through program enrollment process?
A. Harris Teeter – VIC
B. McDonald Garden Center – Garden Rewards
C. Marriott – Honored Guest Program
D. All of the above are types of customer database programs
(Answer: d., moderate pp. 8-9, Reflective)
2-8.
The information contained in a customer database is called _____..
A. Source data
B. Valuable data
C. Informative data
D. Market data
(Answer: a., easy, p. 9, Reflective)
2-9.
Marketers develop _____ to avoid the problem of duplicating the same individual
or organization within a list.
A. Identification Number
B. Character ID
C. Match Code
D. Key Code
(Answer: c., moderate p. 12, Reflective)
2-10. The computerized process used to identify and delete duplicate names/addresses
within a house list is known as _____.
A. Elimination Process
B. Deletion Process
C. Duplicate Elimination
D. Merge-Purge Process
(Answer: d., easy, p. 13, Reflective)
2-11. If the same name/address is found on two or more response lists simultaneously,
that individual is characterized as a _____.
A. Frequent buyer
B. Multi-buyer
C. Continuous buyer
D. Product Lover
(Answer: b., moderate p. 15, Reflective)
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2-12. Whenever possible, direct marketers request address corrections through the
_____.
A. Department of Motor Vehicles (DMV)
B. Social Security Services
C. United States Postal Service
D. National Securities Association
(Answer: c., moderate p. 16, Reflective)
2-13. A technique developed by direct marketers to ensure that their customer lists are
not misappropriated or misused especially when rented to outside parties is called
_____.
A. Seeding
B. Targeting
C. Red Flagging
D. Spying
(Answer: a., easy, p. 19, Reflective)
2-14. According to your text, which of the following is/are not one of the eight ways a
direct marketer can use a customer database?
A. Retain the best customers.
B. Thank customers for their patronage.
C. Develop a customer communication program.
D. Receive a profit for selling information of customer database to competitors.
(Answer: d., moderate p. 21, Reflective)
2-15. The kinds of information that enhance a database through database enhancement
include all of the following except _____.
A. Geographic
B. Demographic
C. Economic
D. Social
(Answer: c., moderate p. 29, Reflective)
2-16. An analysis performed by a corporation found that a direct relationship exists
between the purchase of beer and diapers in the evening hours. This is an
example of _____.
A. Conservative Marketing
B. Customer Profiling
C. Data Mining
D. Communication Program
(Answer: c., moderate pp. 26-27, Analytical)
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2-3
2-17. Which of the following is not a reason to enhance a customer database?
A. To learn more about the customer.
B. To increase the effectiveness of future promotional activities targeted to
current customers.
C. To better prospect for new customers who are similar to current customers.
D. All of the above are reasons to enhance a customer database.
(Answer: d., moderate p. 28-29, Reflective)
2-18. _____ is the continuity value of a customer over future time and can be thought of
as an alternative term for customer lifetime value.
A. PAR
B. Return
C. MVP
D. ROI
(Answer: a., moderate p. 36, Reflective)
2-19. The concept of investing in new customers means that
A. A loss on every subsequent sale can be made up through volume over time.
B. New customer acquisition cost will be recovered over time.
C. Customers age rapidly.
D. Customers have no ongoing loyalty to a firm.
(Answer: b., challenging. 37, Reflective)
2-20. When compared with new customers, loyal customers do which of the following?
A. Spend less over time, cost less to serve and spend more on single purchases.
B. Are less profitable to the company than new customers.
C. Spend more over time, cost less to serve, are less price sensitive, and
generate referrals through word-of-mouth communication.
D. Account for more of the customer service complaints.
(Answer: c., challenging, p 6., Reflective)
2-21. According to the text, it costs approximately ________ times more to acquire a
new customer than it does to keep a current one.
A. 5-6
B. 6-8
C. 8-10
D. 10-12
(Answer: c., moderate p. 5, Analytical)
©2010 Pearson Education, Inc. publishing as Prentice Hall
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2-22. Database analytics rely on ____________ to analyze customer information.
A. data mining
B. profiling
C. modeling
D. All of the above
(Answer: d., moderate pp. 26-27, Reflective)
2-23. In direct marketing, “stealth” communications is primarily made possible due to
which of the following?
A. market research
B. source data
C. mass media
D. high-tech media
(Answer: b., challenging p. 20, Reflective)
2-24. In the customer value hierarchy, qualified “hand-raisers” who have identified
themselves as having an interest in your company are referred to as
______________.
A. prospects
B. advocates
C. clients
D. suspects
(Answer: a., moderate pp. 34-36, Reflective)
2-25. Which of the following concepts or terms is not associated with microtargeting?
A. personalization
B. lifestyle data
C. big idea
D. customization
(Answer: c., challenging, p. 38, Reflective)
©2010 Pearson Education, Inc. publishing as Prentice Hall
2-5
TRUE-FALSE
2-21. A customer database is the key to developing strong customer relationships and
retaining current customers.
(true, easy, p. 6, Reflective)
2-22. Customer relationship management focuses on the task of generating new
customers for the company.
(false, moderate, pp. 32-33, Reflective)
2-23. Customer loyalty programs are programs sponsored by an organization or firm to
encourage customer repeat purchases through program enrollment processes and
the distribution of awards and/or benefits.
(true, moderate, p. 8, Reflective)
2-24. Three components of transaction data that helps analyze each customer through
some variation include: recency, frequency, and efficiency.
(false, moderate, p. 10, Reflective)
2-25. In addition to being able to delete duplicate names and addresses, the mergepurge process has the ability to effectively remove names of individuals who have
expressed a desire not to receive solicitation.
(true, challenging, p. 14, Reflective)
2-26. The term “nixie” refers to mail that has been returned by the United States Postal
Service because it is undeliverable as addressed.
(true, easy, p. 16, Reflective))
2-27. Database analytics is where the direct marketer analyzes customer information
within the customer database to draw inferences about a n individual customer’s
needs.
(true, easy, p. 26, Reflective)
2-28. Database enhancement is the adding and overlaying of information to customer
records to better describe and understand the customer.
(true, easy, p. 28, Reflective)
2-29. The key to successful micro-targeting is targeting the right mass audience.
(false, moderate, p. 38, Reflective)
2-30. Often marketers use PRM to support a cause.
(true, moderate, p. 40, Reflective)
©2010 Pearson Education, Inc. publishing as Prentice Hall
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