Question 1

Which of the following statements does not describe personalization implemented as a CRM program?

Accepted Answer

A)   It overcomes a limitation of CRM strategies that treat all customers in a platinum segment as identical.
B)   With the availability of customer-level data and analysis tools, retailers can now economically offer unique benefits and target messages to individual customers.
C)   The Internet channel provides an opportunity for retailers to automate personalization and efficiently develop relationships similar to those that many small local retailers have with customers.
D)   It helps retailers to convert their unprofitable customers in the lead segment in the customer pyramid to best customers.
E)   The effective use of customer information in personalization programs creates the positive feedback cycle in the CRM process. D

Question 2

Which of the following approaches toward retaining customers has retailers offering unique benefits and targeted messages to individuals?

Accepted Answer

A)   Segmentation
B)   Personalization
C)   Frequent-shopper programs
D)   Add-on selling
E)   Community B

Question 3

CRM programs directed toward customers in the high-value segment

Accepted Answer

A)   offer more discounts.
B)   are focused on maintaining loyalty.
C)   give more importance to frequent-shopper programs.
D)   attempt to discourage 20 percent of shoppers.
E)   provide online shopping options without processing charges. B

Question 4

What is the primary objective of CRM process?

Accepted Answer

A)   To develop a base of loyal customers who patronize the retailer frequently
B)   To satisfy customers by providing discounts and special offers
C)   To increase the foot-traffic into retail stores
D)   To offer the best prices possible to their target customer
E)   To attract customers away from competitors

Question 5

Which of the following statements is True of the customer pyramid?

Accepted Answer

A)   Customers in the iron segment need special attention from the retailer to grow their potential to be better customers.
B)   All customers regardless of their segment must receive equitable promotional benefits.
C)   Customers in the lead segment buy merchandise on sale or abuse return privileges.
D)   Customers in the gold segment are the most profitable and loyal customers.
E)   Customers in the platinum segment place little emphasis on customer service.

Question 6

A specific type of data analysis that focuses on the composition of the bundle of merchandise purchased by a consumer during a single shopping trip is called a market basket analysis.

Accepted Answer

A) True 
 B)False

Question 7

Based on the following customer purchase data, which customer would have a higher lifetime value to the retailer?

Accepted Answer

A)   Marcia
B)   Jan
C)   Cindy
D)   Alice

Question 8

A business philosophy and set of strategies, programs, and systems that focuses upon identifying and building loyalty with a retailer's most valued customers is called

Accepted Answer

A)   customer loyalty management.
B)   strategic relationship management.
C)   most valued customer management.
D)   strategic consumer management.
E)   customer relationship management.

Question 9

Millhouse loves books and often shops at a nearby Book Universe store. At the beginning of the year, he enrolled in a $5 program, and he would get a percentage off on the purchases he made throughout the year. Which of the following best demonstrates this type of approach toward customer retention?

Accepted Answer

A)   Community
B)   Sales promotion
C)   Frequent-shopper program
D)   Personalization
E)   Special customer service

Question 10

Wilbur uses a Books-A-Million customer card, Kash-N-Karry customer card, Jerry's Cleaners customer card, and Sandwich Shop customer card when he shops at any of these retailers. Each time he uses them, he gets rewarded with reduced cost, free merchandise, or a credit. These cards form a part of

Accepted Answer

A)   assortment planning programs.
B)   retail analytic programs.
C)   frequent-shopper programs.
D)   privacy and CRM programs.
E)   market basket analysis.

Question 11

At La Rue Fashions, there is a certain customer who makes large purchases every Friday and returns everything two weeks later. In response, the manager recently created a policy and published it. It included specifics of the store's terms regarding returned merchandise stating that all tags must be intact; the clothing must not have been worn; and it must be returned within seven days to receive credit. Which of the following best describes the retailer's actions?

Accepted Answer

A)   Add-on selling
B)   Getting the lead out
C)   Data mining
D)   RFM analysis
E)   Cutting off services

Question 12

Developing retail programs for small groups or individual customers is referred to as

Accepted Answer

A)   cross selling.
B)   a loyalty program.
C)   a share of wallet program.
D)   add-on selling.
E)   1-to-1 retailing.

Question 13

Which of the following information does not form a part of the data warehouse for a retailer?

Accepted Answer

A)   Details of customer visits to the retailer's site
B)   A complete history of the customer's transactions
C)   Customer preferences such as brands and fabrics
D)   Demographic data for segmentation purposes
E)   Details of competitor patronization

Question 14

Many products in a supermarket can be found in more than one place throughout the stores. What type of retail analytics technique is used to decide where to place products in a store?

Accepted Answer

A)   Supermarket analysis
B)   Market basket analysis
C)   Location analysis
D)   Shopping cart analysis
E)   Merchandising analysis

Question 15

Customer loyalty can be enhanced by creating an appealing brand image.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements correctly describes the practices regarding customer privacy in the U.S.?

Accepted Answer

A)   In the U.S., Americans rely upon federal government to protect consumer privacy.
B)   Current legislation in the U.S. for consumer privacy forces strict protection of consumer privacy in retailing.
C)   The U.S. has more stringent consumer privacy laws than the European Union.
D)   In the U.S., the opt-out policy is applied when consumers' personal information is collected and used.
E)   In the U.S., personal information is generally viewed as being in the public domain, and retailers can use it in any way they desire.

Question 17

Since Yolanda used ________ to analyze what her customers often buy together during a single store visit, she knows to place facial tissues by the cold medicine and Wonder Bread by the Skippy Peanut Butter in her store.

Accepted Answer

A)   market basket analysis
B)   cookies
C)   merchandising analysis
D)   RFM analysis
E)   location analysis

Question 18

Which of the following statements does not describe the customer relationship management process that retailers implement?

Accepted Answer

A)   The process begins with the collection and analysis of data about a retailer's customers and the identification of its best customers.
B)   CRM is an iterative process that turns customer data into customer loyalty and repeat-purchase behavior.
C)   Retailers concentrate on providing more value to their best customers using targeted promotions.
D)   Loyal customers share a personal bond with retailers.
E)   All of these statements describe customer relationship management.

Question 19

Airlines and credit cards that offer points for each dollar spent are utilizing ________ for effective customer relationship management.

Accepted Answer

A)   a loyalty program
B)   cookies
C)   share of wallet
D)   market baskets
E)   communities

Question 20

What is a customer lifetime value (CLV), and how is it estimated?

Accepted Answer

The answer of What is a customer lifetime value (CLV),...

Exam 10: Customer Relationship Management