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Chapter 1

Marketing: Creating and Capturing Customer Value

GENERAL CONTENT: Multiple-Choie !uestions

1. Which of the following is central to any definition of marketing?a. demand managementb. transactionsc. customer relationshipsd. making a salee. making a profit

(c; p. 3; asy! "##$%&' $ommunication

). #ll of the following are accurate descriptions of modern marketing today*e+cept which one?

a. ,arketing is creation of -alue for customers.b. ,arketing is managing profitable customer relationships.c. %elling and ad-ertising are synonymous with marketing.d. ,arketing in-ol-es satisfying customers needs.e. ,arketing is used by for/profit and not/for/profit organi0ations.

(c; p. 3; asy! "##$%&' $ommunication

3. #t home* at school* at work* and at the local supermarket* #mericans see

almost e-erywhere they go.a. social marketing campaignsb. customer relationship managementc. marketingd. brand e+periencese. demand management

(c; p. 2; ,oderate! "##$%&' $ommunication

. #ccording to management guru 4eter 5rucker* 6he aim of marketing is to.a. create customer -alueb. identify customer demandsc. make selling unnecessaryd. set realistic customer e+pectationse. sell products


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4art 1' 5efining ,arketing and the ,arketing 4rocess

2. is defined as a social and managerial process by which indi-iduals andorgani0ations obtain what they need and want through -alue creation and e+change.a. %ellingb. #d-ertisingc. &artering

d. ,arketinge. =egotiating(d; p. 7; ,oderate! "##$%&' $ommunication

7. 6he steps of the fi-e/step marketing process are about understandingcustomers* creating customer -alue* and building strong customer relationships.a. first twob. first threec. first fourd. last threee. last four


>. #ccording to the simple fi-e/step model of the marketing process* a companyneeds to before designing a customer/dri-en marketing strategy.a. determine how to deli-er superior -alueb. build profitable relationships with customersc. use customer relationship management to create full partnerships with key

customersd. understand the marketplace and customer needs and wantse. construct key components of a marketing program

(d; p. 7; asy! "##$%&' $ommunication!

. are human needs as shaped by indi-idual personality and culture.a. =eedsb. Wantsc. 5emandsd. @aluese. +changes

(b; p. 7; asy!

:. When backed by buying power* wants become .a. social needsb. demandsc. physical needsd. self/esteem needse. e+changes

(b; p. > asy!

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$hapter 1' ,arketing' $reating and $apturing $ustomer @alue

19. Which of the following is an e+ample of a type of market offering?a. personsb. ideasc. informationd. e+periences

e. all of the abo-e(e; p. >; asy!

11. refers to sellers being preoccupied with their own products and losing sightof underlying consumer needs.a. %elling myopiab. ,arketing managementc. @alue propositiond. ,arketing myopiae. 6he product concept

(d; p. >; asy! "##$%&' $ommunication

1). When marketers set low e+pectations for a market offering* they run the risk of.a. disappointing loyal customersb. decreasing customer satisfactionc. failing to attract enough customersd. failing to understand their customers needse. incorrectly identifying a target market

(c; p. ; ,oderate! "##$%&' Aeflecti-e 6hinking

13. is the act of obtaining a desired obBect from someone by offeringsomething in return.a. # -alue propositionb. +changec. &riberyd. @aluee. 5onation

(b; p. ; asy!

1. n addition to attracting new customers and creating transactions* the goal ofmarketing is to customers and grow their business.a. encourageb. entertainc. retaind. recogni0ee. educate

(c; p. ; ,oderate! "##$%&' $ommunication



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12. is the set of actual and potential buyers of a product.a. # marketb. #n audiencec. # groupd. # segment

e. #n e+change(a; p. ; asy!

17. $onsumer research* product de-elopment* communication* distribution* pricing*and ser-ice are all core acti-ities.a. e+changeb. marketingc. managementd. productione. customer relationship management

(b; p. ; asy! "##$%&' $ommunication

1>. Which of the following is a likely result of a marketing strategy that attempts toser-e all customers?a. #ll customers will be delighted.b. $ustomer/percei-ed -alue will be increased.c. $ustomer e-angelists will become unpaid salespersons for the ser-ice or product.d. Cew customers will be satisfied.e. 6he company will likely need to follow up with a demarketing campaign.

(d; p. :; ,oderate! "##$%&' Aeflecti-e 6hinking

1. n the case of e+cess demand* may be reDuired to reduce the number ofcustomers or to shift demand temporarily or permanently.a. marketingb. demarketingc. -alue marketingd. surplusinge. negotiating

(b; p. :; asy! "##$%&' $ommunication

1:. 6he art and science of choosing target markets and building profitablerelationships with them is called .a. marketing managementb. positioningc. segmentationd. sellinge. managing the marketing effort

(a; p. :; asy! "##$%&' $ommunication



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)9. %electing which segments of a population of customers to ser-e is called.a. market segmentationb. positioningc. customi0ation

d. target marketinge. managing the marketing effort(d; p. :; asy!

)1. Camily 5ollar stores profitably focusing on buyers who ha-e relati-ely modestmeans is an e+ample of .a. con-enienceb. -alue pricingc. market segmentationd. target marketinge. -alue packing

(d; p. :; asy! "##$%&' Aeflecti-e 6hinking

)). is the set of benefits a company promises to deli-er its consumers to satisfytheir needs.a. # money/back guaranteeb. Eow pricingc. Food customer ser-iced. # -alue propositione. #n attribute

(d; p. ; ,oderate! "##$%&' $ommunication

)3. Which customer Duestion is answered by a companys -alue proposition?a. Why should buy your brand rather than a competitors?b.


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)2. Which of the following marketing management concepts is most likely to lead tomarketing myopia?a. customer/dri-en marketingb. customer/dri-ing marketingc. societal marketing

d. sellinge. production(e; p. 19; ,oderate! "##$%&' Aeflecti-e 6hinking

)7. 6he concept is aligned with the philosophy of continuous productimpro-ement and the belief that customers will choose products that offer highDuality* performance* and inno-ati-e features.a. productb. productionc. customerd. marketing

e. promotion(a; p. 19; ,oderate!

)>. 6he product concept says that a company should .a. impro-e marketing of its best productsb. market only those products with high customer appealc. focus on the target market and make products that meet those customers demandsd. de-ote its energy to making continuous product impro-ementse. make promoting products the top priority

(d; p. 19; ,oderate!

). &uild a better mousetrap and the world will beat a path to your door reflects the.a. production conceptb. marketing conceptc. selling conceptd. product concepte. target marketing

(d; p. 19; ,oderate! "##$%&' Aeflecti-e 6hinking

):. 6he concept calls for aggressi-e selling and focuses on generatingtransactions to obtain profitable sales.a. marketingb. productionc. productd. sellinge. societal marketing

(d; p. 19; asy!

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39. 6he concept holds that achie-ing organi0ational goals depends onknowing the needs and wants of target markets and deli-ering the desired satisfactionbetter than competitors do.a. productb. production

c. sellingd. eDuitye. marketing

(e; p. 11; asy! "##$%&' $ommunication

31. #ccording to the authors of your te+t* is -iewed not as hunting* butas gardening. 6hat is* a firm has to de-elop the right products for its customers.a. sellingb. productionc. marketingd. retailing

e. ad-ertising(c; p. 11; ,oderate! "##$%&' $ommunication

3). # firm that uses the selling concept takes a(n! approach.a. outside/inb. myopicc. inside/outd. marketing concepte. customer ser-ice

(c; p. 11; ,oderate!

33. Which of the following reflects the marketing concept philosophy?a. We dont ha-e a marketing department* we ha-e a customer department.b. Were in the business of making and selling superior products.c. We build them so you can buy them.d. When its profits -ersus customers needs* profits will always win out.e. Gou wont find a better deal anywhere.

(a; p. 11; ,oderate! "##$%&' Aeflecti-e 6hinking

3. $ustomer/dri-en marketing usually works well when and whencustomers .a. a clear need e+ists; are easy to identifyb. customers know what they want; can afford itc. a firm can deli-er the goods desired; are thoroughly researchedd. a clear need e+ists; know what they wante. a want e+ists; cannot afford it

(d; p. 11; ,oderate! "##$%&' $ommunication



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32. When customers dont know what they want or dont e-en know whats possible*the most effecti-e strategy is marketing.a. customer/dri-enb. customer/dri-ingc. societal

d. productione. product(b; p. 11; ,oderate! "##$%&' Aeflecti-e 6hinking

37. 6he societal marketing concept seeks to establish a balance between consumershort/run wants and consumer .a. short/run costs and profitsb. short/run ethicsc. long/run welfared. immediate healthe. -alue propositions

(c; p. 1); ,oderate! "##$%&' thical Aeasoning

3>. 6he concept holds that firms must stri-e to deli-er -alue to customersin a way that maintains or impro-es both the consumers and societys well being.a. marketingb. sellingc. productd. societal marketinge. eDuity

(d; p. 1); asy! "##$%&' thical Aeasoning

3. 6he three areas of consideration that should be balanced in the societal marketingconcept are consumer wants* societys interests* and .a. human welfareb. want satisfactionc. company profitsd. short/run wantse. long/term needs

(c; p. 1); asy! "##$%&; thical Aeasoning

3:. #ccording to the authors of your te+t* some fast/food restaurants offer tasty andcon-enient food at affordable prices* but in doing so they contribute to a nationalobesity epidemic and en-ironmental problems. 6hese fast/food restaurants o-erlookthe philosophy.a. marketing conceptb. product conceptc. production conceptd. societal marketing concepte. selling concept

(d; p. 1); ,oderate! "##$%&' thical Aeasoning



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9. 6he set of marketing tools a firm uses to implement its marketing strategy iscalled the .a. promotion mi+b. product mi+c. marketing mi+

d. 6H,e. marketing effort(c; p. 13; ,oderate!

1. 4erhaps the most important concept of modern marketing is .a. customer relationship managementb. e/mail ad-ertisingc. a Duality Web sited. properly trained sales peoplee. low prices

(a; p. 13; ,oderate! "##$%&' $ommunication

). &uilding* keeping* and growing profitable -alue/laden relationships with allcustomers of a company is called .a. customer lifetime -alueb. customer percei-ed -aluec. customer relationship managementd. database marketinge. societal marketing


3. $ustomer/percei-ed -alue is determined by a customers of the benefitsand costs of a market offering relati-e to those of competing offers.a. personal -alue perceptionb. appro+imated e+pectationsc. accurate assessmentd. obBecti-e e-aluatione. emotional understanding

(a; p. 1; ,oderate! "##$%&' Aeflecti-e 6hinking

. 6o capture the full essence of customer relationship management* which of thefollowing should a marketing manager take into consideration?a. owning customers for lifeb. capturing a customers lifetime -aluec. building o-erall customer eDuityd. creating a sense of community surrounding a brande. all of the abo-e

(e; p. 1; ,oderate! "##$%&' $ommunication



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2. 5eli-ering superior customer -alue and customer satisfaction is necessary forbuilding lasting .a. customer satisfactionb. customer databasesc. market share

d. customer relationshipse. profits(d; p. 1; asy! "##$%&' $ommunication

7. $ustomers buy from stores and firms that offer the highest .a. -alue for the dollarb. customer percei-ed -aluec. le-el of customer satisfactiond. company imagee. concern for societys interests

(b; p. 1; ,oderate!

>. is defined as the customers e-aluation of the difference between all thebenefits and all the costs of a marketing offer relati-e to those of competing offers.a. $ustomer relationship managementb. $ustomer satisfactionc. $ustomer e-angelismd. $ustomer percei-ed -aluee. ,arketing myopia

(d; p. 1; asy!

. Ced+ offers its customers fast and reliable package deli-ery. When Ced+customers weigh these aforementioned benefits against the monetary and psychiccosts of using the ser-ice* they are acting upon .a. loyaltyb. relationship marketingc. percei-ed customer -alued. social relationshipse. a societal marketing campaign

(c; p. 1; $hallenging! "##$%&' Aeflecti-e 6hinking

:. Which of the following is the term for customers who make repeat purchases andtell others about their positi-e e+periences with a product or ser-ice?a. satisfied customersb. customer e-angelistsc. butterfliesd. full partnerse. social customers

(b; p. 1; asy! "##$%&' $ommunication



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29. Which of the following strategies might a company use to increase customersatisfaction?a. decreasing -ariety of ser-ices offeredb. demarketingc. lowering prices

d. firing unprofitable customerse. limiting e+periences with a brand(c; p. 17; asy!

21. 6he =iketown running club that organi0es twice weekly e-ening runs is ane+ample of a .a. freDuency marketing programb. basic customer relationshipc. club marketing programd. consumer relationship management techniDuee. structural benefit pro-ided for top customers

(c; p. 1>; asy! "##$%&; Aeflecti-e 6hinking

2). CreDuent flyer programs offered by airlines are an e+ample of a .a. freDuency marketing programb. basic customer relationshipc. club marketing programd. consumer relationship management techniDuee. structural benefit pro-ided for top customers

(a; p. 17; asy!

23. Ising customer profitability analysis to weed out unprofitable customers andtarget winning ones for pampering is referred to as.a. customer relationship managementb. positioningc. database marketingd. selecti-e relationship managemente. prospecting

(d; p. 1>; asy!

2. Which of the following has not contributed to the deeper* more interacti-e natureof todays customer relationships?a. e/mailb. Web sitesc. online social networksd. traditional ad-ertisinge. -ideo sharing

(d; p. 1; ,oderate! "##$%&' Ise of 6



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22. Which of the following best e+plains why consumers ha-e greater power andcontrol in todays marketplace?a. 6he production concept and competition ha-e lowered prices.b. mplementation of the product concept has resulted in continually impro-ing

products.

c. $ustomer/dri-ing marketing creates products and ser-ices that meet customersfuture needs.d. ,ore companies are implementing societal marketing and weighing long/term

costs and benefits.e. 6hrough new communication technologies* customers ha-e more access to

information and more methods of sharing their opinions with other customers.(e; p. 1; ,oderate! "##$%&' Ise of 6

27. Freater consumer control means that companies must rely more on marketing by than by .a. interruption; in-ol-ement

b. interaction; intrusionc. sociali0ation; informationd. producing; sellinge. inspiration; competition

(b; p. 1:; ,oderate! "##$%&' $ommunication

2>. Which of the following is an e+ample of consumer/generated marketing?a. 6oyotas presence in online communitiesb. =ikes =ike 4lus running Web sitec. &,Ws use of brand/related consumer -ideos posted on -ideo/sharing Web sitesd. =eiman ,arcuss n$ircle Aewards program for its best customerse. 6he Ee+us $o-enant aimed at creating customer delight

(c; p. 1:; ,oderate! "##$%&' Ise of 6

2. 6o create customer -alue and build strong customer relationships* marketers knowthey cannot go it alone; therefore* they practice .a. partner relationship managementb. database marketingc. designing attracti-e websitesd. customer eDuitye. all of the abo-e

(a; p. )9; ,oderate! "##$%&' $ommunication

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2:. n todays world* marketing should be done by employees in anorgani0ation.a. marketingb. marketing* sales* and customer/supportc. sales and technology

d. managemente. all(e; p.)1; asy!

79. 6hrough * many companies today are strengthening their connections toall partners* from pro-iders of raw materials to components to final products that arecarried to final buyers.a. supply chain managementb. direct marketingc. partnership relationship marketingd. customi0ed marketing

e. de-iated marketing(a; p. )); asy! "##$%&' $ommunication

71. 6he final step in the marketing process is .a. capturing -alue from customersb. creating customer loyaltyc. creating customer lifetime -alued. understanding the marketplacee. designing a customer/dri-en marketing strategy

(a; p. )); asy!

7). %tew Eeonard* ownerJoperator of supermarkets* reacts ad-ersely to losing a singlecustomer sale.


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7. #ma0on.com le-erages relationships with its 32 million customers by offeringthem music* -ideos* gifts* toys* consumer electronics* and office products* amongother product items. &ased on pre-ious purchase history* the company recommendsrelated $5s* books* or -ideos that might be of interest. 6his helps #ma0on.comcapture a greater .

a. market shareb. customer lifetime -aluec. share of customerd. profitabilitye. customer base

(c; p. )3; ,oderate!

72. is the total combined customer lifetime -alues of all the companys currentand potential customers.a. %hare of customerb. $ustomer lifetime -alue

c. $ustomer eDuityd. 4rofitabilitye. %hare of market

(c; p. ); asy! %idebar item

77. 6he ultimate aim of customer relationship management is to produce .a. customer eDuityb. market sharec. sales -olumed. a reliable databasee. profits

(a; p. ); ,oderate!

7>. # highly profitable* short term customer is a .a. true friendb. butterflyc. strangerd. barnaclee. true belie-er

(b; p. ); ,oderate

7. 6he authors of your te+t classify customers into four relationship groups*according to the customers profitability and proBected loyalty. are thecustomers with the highest profit potential and strong loyalty.a. &arnaclesb. %trangersc. &utterfliesd. 6rue friendse. &ig fish

(d; p. )2; asy!



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7:. Which of the following statements about the nternet is most accurate?a. $ompanies are cautiously using the nternet to build closer relationships with

customers and marketing partners alike.b. 6he nternet is still in its infancy with few consumers buying products andJor

ser-ices online.

c. 6he nternet allows anytime* anywhere connections to information* entertainment*and communication.d. $onsumer e/commerce looks promising* but business/to/business e/commerce is

declining.e. Web ).9 in-ol-es a less balanced approach to online marketing than the original

dot/com boom did.(c; p. )7; asy! "##$%&' Ise of 6

>9. Which of the following is currently the fastest/growing form of marketing?a. consumer/generated marketingb. online marketing

c. mass media marketingd. social marketinge. word/of/mouth marketing

(b; p. )>; ,oderate! "##$%&' Ise of 6

>1. 6oday almost e-ery company* small and large* is affected in some way by.a. the societal marketing conceptb. customer relationship managementc. global competitiond. not/for/profit marketinge. customer/generated marketing

(c; p. )>; ,oderate! "##$%&' ,ulticultural and 5i-ersity

>). #s part of the rapid globali0ation of todays economy* companies are selling morelocally produced goods in international markets and .a. taking a local -iew of their industryb. purchasing more supplies abroadc. reducing competition within their industryd. downplaying concerns for social responsibilitye. competing solely in traditional marketplaces

(b; p. )>; ,oderate! "##$%&' ,ulticultural and 5i-ersity



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>3. &en K Lerrys challenges all stakeholders* including employees* top management*and e-en ice cream scoopers in their stores* to consider indi-idual and communitywelfare in their day/to/day decisions. #ctions such as this by companies sei0ing theopportunity to do well by doing good reflects .a. ethics

b. social responsibilityc. profit marketingd. marketinge. myopia

(b; p. ); ,oderate! "##$%&' thical Aeasoning

>. # church targeting different demographic groups to increase attendance is ane+ample of .a. for/profit marketingb. not/for/profit marketingc. mindless marketing

d. ethics in marketinge. societal marketing(b; p. ); ,oderate!"##$%&' $ommunication

>2. 6he first four steps of the marketing process focus on .a. understanding the marketb. deli-ering customer ser-icec. creating -alue for the customersd. understanding customer demands and needse. capturing -alue from customers

(c; p. ):; ,oderate! "##$%&' $ommunication

True"#alse

>7. %elling is managing profitable customer relationships.(Calse; p. 3; asy! "##$%&' $ommunication

>>. 6he twofold goal of marketing is to attract new customers by promising superior-alue and to keep and grow current customers by deli-ering satisfaction.

(6rue; p. 2; ,oderate! "##$%&' $ommunication

>. :. 6he difference between human needs and wants is that needs are not influencedby marketers.

(6rue; p. 7; ,oderate!



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9. When backed by buying power* needs become demands.(Calse; p. 7; ,oderate!

1. ,arket offerings are limited to physical products.(Calse; p. >; ,oderate!

). ,arket offerings can include products* ser-ices* information* or e+periencesoffered to a market to satisfy a need or want.

(6rue; p. >; ,oderate!

3. When sellers focus on e+isting needs and lose sight of underlying customer wants*they suffer from marketing myopia.

(Calse; p. >; $hallenging!

. %mart marketers look beyond the attributes of the products and ser-ices they sell*focusing on se-eral ser-ices and products to create brand e+periences for consumers.

(6rue; p. >; ,oderate!

2. Mnly sellers of products* ser-ices* and ideas practice marketing* whereas buyersdo not.

(Calse; p. ; ,oderate!

7. ,arket segmentation is the process of seeking fewer customers and reduceddemand for profit ma+imi0ation only.

(Calse; p. :; $hallenging!

>. 5emarketing is a marketing philosophy focused upon product differentiation andpositioning.

(Calse; p. :; ,oderate!

. When it becomes necessary to reduce demand for a product or ser-ices* anorgani0ation may use demarketing to reduce or shift the number of customers.

(6rue; p. :; asy! "##$%&' $ommunication

:. ,arketing management is interested in ser-ing all customers in e-ery way toremain competiti-e in todays markets.

(Calse; p. :; ,oderate! "##$%&' $ommunication

:9. 6wo important Duestions underlying marketing strategy are Who is our targetmarket? and Whats our -alue proposition?

(6rue; p. :; $hallenging! "##$%&' $ommunication

:1. 6he production concept and product concept are orientations that can lead tomarketing myopia.

(6rue; p. 19; $hallenging!



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:). #mys law office has de-eloped a new format and wording for wills. 6he staffbelie-es they offer the most in Duality* performance* and inno-ati-e features.


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193. =ew communication technologies create challenges as well as ad-antages formarketers.

(6rue; p. 1; asy! "##$%&' Ise of 6

19. $onsumer/generated marketing* as relati-ely new phenomenon* has so far had

little impact as a marketing force.(Calse; p. 1:; ,oderate! "##$%&' $ommunication

192. -ery functional area of an organi0ation* not only a marketing department* canand should interact with customers.

(6rue; p. )1; ,oderate! "##$%&' $ommunication

Essa$

197. &riefly compare and contrast the concepts of needs* wants* and demands* gi-ing

an e+ample of each. 5iscuss how these concepts relate to marketing practices.


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119. Mne of the maBor de-elopments in marketing can be summed up in one word'relationships. 5efine customer relationship management and its associated tools andle-els of relationships.

$ustomer Aelationship ,anagement ($A,! is the process of building and

maintaining profitable customer relationships by deli-ering superior customer -alueand satisfaction. # company with mostly low/margin customers is likely to seek basicrelationships* using brand/building ad-ertising and sales promotion. #n organi0ationwith few customers and high margins* on the other hand* will work to create keypartnerships with select customers. 6o create stronger bonds with customers* somemarketers use tools such as financial benefits or rewards based on freDuency ofpurchase. Mther tools include social benefits* like offering key customers theopportunity to network and create communities through club marketing programs.#nother approach adds structural ties to the aforementioned financial and socialbenefits.


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11). n a short essay* discuss the opportunities and ad-antages that newcommunication technologies ha-e created for marketers.

6hrough the nternet and related technologies* people can now interact in direct andsurprisingly personal ways with large groups of others* from neighbors within a local

community to people across the world. With communication technologies such as e/mail* blogs* Web sites* online communities* and online social networks* todaysmarketers incorporate interacti-e approaches that help build targeted* two/waycustomer relationships. ,arketers can create deeper consumer in-ol-ement and asense of community surrounding a brand* making a brand a meaningful part ofconsumers con-ersations and li-es.


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11. n a short essay* describe and compare the four types of customers classified bytheir potential profitability to an organi0ation. dentify how an organi0ation shouldmanage each type of customer.

6he four types of customers are strangers* butterflies* true friends* and barnacles.

%trangers ha-e low potential profitability and loyalty. # companys offerings do notfit well with a strangers wants and demands. $ompanies should not in-est inbuilding a relationship with this type of customer. #nother type of customer in whicha company should not in-est is the barnacle. &arnacles are highly loyal but not -eryprofitable because there is a limited fit between their needs and the companysofferings. 6he company might be able to impro-e barnacles profitability by sellingthem more* raising their fees* or reducing ser-ice to them.


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A%%L&CAT&ON CONTENT: Multiple-Choie !uestions

117. Freg Williams now has the buying power to purchase the computer system he haswanted for the last si+ months. Fregs want now has become a .a. need

b. necessityc. demandd. satisfiere. transaction

(c; p. >; asy! "##$%&' Aeflecti-e 6hinking

11>. %hawn ,c$ork has an interesting Bob.


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1)9. Aailroads were once operated based on the thinking that users wanted trains ratherthan transportation* o-erlooking the challenge of other modes of transportation. 6hisreflects the .a. product conceptb. production concept

c. selling conceptd. marketing concepte. societal marketing concept

(a; p. 19; $hallenging! "##$%&' #nalytic 6hinking

1)1. Lolenes firm belie-es that consumers will not buy enough of its products unlessthe firm undertakes a large/scale selling and promotion effort. Lolenes firm ispracticing the .a. production conceptb. marketing conceptc. selling concept

d. relationship concepte. social ad-ertising campaign(c; p. 19; asy! "##$%&' Aeflecti-e 6hinking

1)). Which of the following phrases reflects the marketing concept?a. 6he supplier is king.b. ,arketing should be -iewed as hunting and not gardening.c. 6his is what make* wont you please buy it?d. 6his is what want* wont you please make it?e. none of the abo-e

(d; p. 11; $hallenging! "##$%&' Aeflecti-e 6hinking

1)3. ,arie Mrti0 enBoys her work at Cuturistic 5esigns* nc.


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1). Gou ha-e Bust taken a new position in an organi0ation and youre learning aboutthe Bob functions of your new colleagues. Gou obser-e that your marketing manager ishea-ily in-ol-ed in the process of building and maintaining profitable customerrelationships. Gour marketing manager freDuently speaks about the need to deli-ersuperior customer -alue and satisfaction. Gour manager is concerned with which one

of the following?a. database managementb. Web site hitsc. the societal marketing conceptd. donor marketinge. customer relationship management

(e; p. 13; asy! "##$%&' Aeflecti-e 6hinking

1)2. %ally purchased &rand P lotion. n comparing her perception of how the lotionperformed to her e+pectations for &rand P lotion* %ally was measuring her le-el of.

a. customer percei-ed -alueb. customer satisfactionc. e+changed. demande. customer lifetime -alue

(b; p. 1; ,oderate! "##$%&' Aeflecti-e 6hinking

1)7. 6ommy Fray attempts to deli-er customer satisfaction e-ery day in his #udio+pressions installation business.


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1). Gou are an assistant marketing director for a firm in a market with many low/margin customers. What type of relationship would it be most profitable for you tode-elop with these customers?a. full partnershipsb. basic relationships

c. club programsd. selecti-e relationshipse. community relationships

(b; p. 12; ,oderate! "##$%&' #nalytic 6hinking

1):. 4ete %anche0* a recent graduate of business school* has a different approach thanhis marketing manager* who belie-es in keeping customers at arms length and usingmass media ad-ertising. 4ete knows that today few successful firms still practice true and are instead turning to selecti-e relationship management.a. club marketingb. freDuency marketing

c. mass marketingd. customer satisfactione. marketing segmenting

(c; p. 1>; ,oderate! "##$%&' Aeflecti-e 6hinking

139. ,embers of the sales team at 5ekko nternational -isit only prospecti-ecustomers who purchase a minimum of Q29*999 of insulated wire per year. 5ekko isusing .a. selecti-e relationship managementb. a freDuency marketing programc. a club marketing programd. demarketinge. a structural marketing program

(#nswer' a; p. 1>; ,oderate! "##$%&' Aeflecti-e 6hinking

131. %u0ie $han strengthens her companys connections by treating suppliers of rawmaterials* -endors* and distributors as partners in deli-ering customer -alue. Whattype of management is she practicing?a. outside partneringb. inside partneringc. marketingd. supply chaine. customer de-elopment

(d; p. 1:; ,oderate! "##$%&' #nalytic 6hinking



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13). lisandra* a marketing manager at a regional chain restaurant* has decided tocreate a contest calling for customers to create commercials for the restaurant.Winning entries will be posted on the organi0ations home page. lisandras plan is ane+ample of .a. consumer/generated marketing

b. partner relationship managementc. customer lifetime -alued. community de-elopment around a brande. selecti-e relationship management

(a; p. 1:; ,oderate! "##$%&' Aeflecti-e 6hinking

133. #t Finas =ails* the posted policy is Without our customers* we dont e+ist.Fina and her staff aim to delight each customer* and they are Duick to offer discountsor e+tra ser-ices whene-er a customer is anything less than satisfied. nstead offocusing on each indi-idual transaction* Fina and her staff put a priority on.

a. maintaining customer/percei-ed -alueb. enlisting customer e-angelistsc. attracting butterfliesd. con-erting strangerse. capturing customer lifetime -alue

(e; p. )); ,oderate! "##$%&' Aeflecti-e 6hinking

13. #fia* a team leader in charge of customer relationship management* is planningstrategies for impro-ing the profitability of her firms least profitable but loyalcustomers. %he is also e+amining methods for firing customers in this group whocannot be made profitable. 6o which of the following customer relationship groups dothese customers belong?a. butterfliesb. true friendsc. strangersd. barnaclese. short/term customers

(d; p. )2; ,oderate! "##$%&' Aeflecti-e 6hinking

132. Gour states department of education has budgeted a significant amount of moneyfor a radio* print* tele-ision* and online ad-ertising campaign emphasi0ing the long/term benefits* both educationally and professionally* of reading e-ery day. 6his is ane+ample of a(n! campaign.a. ethicalb. social marketingc. for/profitd. consumer/generatede. differentiated

(b; p. ):; ,oderate! "##$%&' Aeflecti-e 6hinking

) $opyright 8 )99: 4earson ducation* nc. 4ublishing as 4rentice


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'hort Ans(er

137. 6he management team at &ig &urritos* a new fast/food restaurant* wants tode-elop a new marketing plan. What would a marketing manager tell &ig &urritosmanagement team their twofold goal of marketingshould be?

6he twofold goal of marketing is to attract new customers by promising superior-alue and to keep and grow current customers by deli-ering satisfaction.

(p. 2; ,oderate! "##$%&' $ommunication

13>. $ulture and indi-idual personality shape human needs into wants. Whattransforms wants into demands?

Wants become demands when they are backed by purchasing power.(p. >; ,oderate!

13. ; ,oderate!

13:. ; $hallenging! "##$%&' #nalytic 6hinking

19. # modern marketing system relies on profitable relationships* including therelationship buyers ha-e with sellers. Cor e+ample* an organi0ations purchasingagents must identify sellers and negotiate for beneficial terms. $onsidering this* whatmight Wal/,art rely on in order to offer low prices?

Wal/,art must rely on suppliers that will pro-ide merchandise at low costs.(p.:; ,oderate! "##$%&' Aeflecti-e 6hinking



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11. 6he marketing team at &ead &eautiful* a line of Bewelry targeted at pre/teenagegirls* is meeting to formulate the products -alue proposition. What should teammembers consider as they define a -alue proposition for &ead &eautiful?

n considering &ead &eautifuls -alue proposition* the marketing team should identify

the benefits and -alues the company promises to deli-er to customers to satisfy theirneeds. 6he -alue proposition should differentiate &ead &eautiful from other similarproducts* answering the customers Duestion Why should buy this brand rather thana competitors?

(p. :; ,oderate! "##$%&' Aeflecti-e 6hinking

1). When demand for &eanie &abies was at its highest* manufacturers purposefullymaintained strong demand by limiting supply* which dro-e the price of &eanie &abiesup. +plain how such manufacturers were not carrying out the production concept.

6he production concept holds that consumers fa-or products that are a-ailable and

affordable. With this concept* manufacturers work to increase production andimpro-e manufacturing efficiency. &eanie &abies manufacturers purposefully limitedproduction* making their products less a-ailable and less affordable* a techniDue thatcontradicts the philosophy of the production concept.

(p. 19; $hallenging! "##$%&' #nalytic 6hinking

13. $ompany P carries organi0ational and office supplies and follows the sellingconcept. +plain how $ompany P may lose sight of customer relationships with theirmarketing orientation.

6he companys aim is to sell its supplies rather than make what the market wants;such a strategy creates sales transactions but not long/term relationships. 6hecompanys likely faulty assumption is that customers who are persuaded to buy theproduct will like it or that they will buy the product again e-en if they werent reallyinitially satisfied. $ompany P will not foster customer loyalty with this approach.


1. ,any companies* such as %outhwest #irlines* take an outside/in perspecti-e.


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12. # nineteenth/century street -endor in Eondon sang* Who will buy my fresh* redroses? 5id the -endor take an outside/in or inside/out perspecti-e? +plain.

6he -endors approach was inside/out. 6he roses were picked and a-ailable* so theywere an e+isting product. 6he -endors Bob was then to attract willing buyers for this

e+isting product rather than determine what his customers wanted and pro-ide aproduct to satisfy that want.(p. 11; $hallenging! "##$%&' #nalytic 6hinking

17. +plain why electronics and pharmaceuticals manufacturers may use customer/dri-ing marketing.

n such industries that e-ol-e so Duickly* consumers do not know e+actly what ispossible or what they may want in the future. When customers dont know what newproducts are a-ailable and how those products might fight their current and futureneeds* companies may use customer/dri-ing marketing to lead customers to the

products they want before they e-en know they want them.(p. 11; $hallenging! "##$%&' $ommunication

1>. $ompany #&$ implements its marketing strategy through a well/defined andcomplete marketing mi+. What elements does $ompany #&$ address in its marketingmi+?

#s part of its complete marketing mi+* $ompany #&$ has created a marketing offerthat satisfies an identified customer need (product!* determined a selling price*decided how to distribute (place! the offer* and communicated with the targetcustomer about the offer (promotion!.

(p. 13; ,oderate! "##$%&' $ommunication

1. What determines whether sellers create basic relationships or full partnershipswith customers?

6he type of relationship a seller seeks to create with its customers is dependent on thenumber of customers and their profitability. # company with many low/margincustomers de-elops basic relationships; a company with Bust a few high/margincustomers in-ests resources to create full partnerships.

(p. 17; ,oderate! "##$%&' Aeflecti-e 6hinking



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1:. +plain why a supermarket owner might consider customer lifetime -alue when adisgruntled customer lea-es the store dissatisfied.

$ustomer lifetime -alue is the entire stream of purchases a customer would makeo-er a lifetime. f a supermarket customer is dissatisfied and decides to shop for his or

her weekly groceries elsewhere* the owner does not lose only the profit from oneweeks worth of groceries. nstead* the owner loses the possible profit of a weeksworth of groceries for each and e-ery weekNup to a lifetime of weeksNthedissatisfied customer takes his or her business elsewhere.

(p. )); ,oderate! "##$%&' Aeflecti-e 6hinking

129. 6he lectronic dge* a retail chain that sells all types of electronics* wants toincrease its share of customer. What steps should the company take to achie-e thisgoal?

6he lectronic dge can offer greater -ariety to customers* encouraging them to buy

more products. #lso* the company can train employees to cross/sell and up/sell inorder to market additional and more e+pensi-e products and ser-ices to e+istingcustomers.

(p. )3; ,oderate! "##$%&' Aeflecti-e 6hinking

121. +plain what marketers can e+pect from indi-iduals in the customer relationshipgroup classified as butterflies.

&utterflies are profitable but not loyal. ,arketers should enBoy this type ofcustomer for the moment because they soon flutter off. ,arketers should createprofitable and satisfying transactions with butterflies* then cease in-esting in themuntil the ne+t time around. ,arketers can e+pect transactions with butterflies whenconditions are optimal for the customer* but they should not e+pect butterflies tobecome loyal customers.

(p. ); ,oderate!

12). #ble works in the marketing department of an international company. n whatways might #ble use modern technologies to conduct market research in order tolearn more about and better ser-e his companys customers?

#ble could use -ideoconferencing to monitor customer focus groups discussing thecompanys products and ser-ices in -arious locations. #ble could use online dataser-ices to learn more about the needs and wants of his customers* or he could createa customer database for the company to target indi-idual customers with tailoredoffers.

(p. )7; ,oderate! "##$%&' Ise of 6

3) $opyright 8 )99: 4earson ducation* nc. 4ublishing as 4rentice


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123. n what ways might e-en a local retailer find itself touched by globalcompetition?

# local retailer might ha-e global suppliers and customers. 6he retailers goods maycome from abroad* or components of those goods may be produced or assembled

abroad. n addition* a local retailer may also sell goods o-er the nternet tointernational customers.(p. )>; ,oderate! "##$%&' #nalytic 6hinking

12. f a firm practices caring capitalism in its social responsibility efforts* as does&en K Lerrys and %aturn* where does the firm place its focus?

%uch firms focus on the social impact of their actions* distinguishing themsel-es bybeing ci-ic/minded and socially responsible. 6hey may build social responsibility intotheir company -alue and mission statements.

(p. ); ,oderate! "##$%&' thical Aeasoning

122.


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127. &ased on the marketing process* what are $arol @eldts strengths?

$arol can draw upon many business resources* including her facility and location.nstead of mass marketing* she focused on customer relationships and was able to

understand her customers needs and wants. Ising that understanding* she deli-eredsuperior -alue through her marketing program* which created customer delight.(p. 7; asy! "##$%&' #nalytic 6hinking

12>. What is included in the marketing offering at %eagull 6errace?

%eagull 6errace pro-ides acti-ities and amenitiesNsuch as a delicatessen* health clubpri-ileges* and reno-ated roomsNthat make a nights stay more satisfying. 6hese-arious acti-ities and amenities are sought by two targeted groupsN seasonal -isitorsand year/round business tra-elers.

(p. >; ,oderate! "##$%&' #nalytic 6hinking

12. ; ,oderate! "##$%&' #nalytic 6hinking

12:.


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17). n what ways might $arol @eldt be implementing the selling concept?

$arol understands that the success of %eagull 6errace* as she -iews it* reDuires alarge/scale selling effort with promotional gimmicks.


173.

armstrong9e tif 01

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