107) In a short essay, discuss the challenges and advantages that new communication technologies have created for marketers.
Answer: Through the Internet and related technologies, people can now interact in direct and surprisingly 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, today's marketers incorporate interactive
approaches that help build targeted, two-way customer relationships. Marketers can create deeper consumer involvement and a sense of community surrounding a brand, making a brand a
meaningful part of consumers' conversations and lives. However, while new communication tools create relationship-building opportunities for marketers, they also create challenges. They give consumers a greater voice, and therefore greater power and control in the marketplace. Today's consumers have more information about brands than ever before, and they have a wealth of
platforms for airing and sharing their brand views with other consumers. This benefits companies when views of its products are positive, but can be damaging when customers share stories of negative experiences with a company's products. Diff: 2 Page Ref: 18 AACSB: Use of IT Skill: Application Objective: 1-4
108) Define customer equity and explain how a company can increase it.
Answer: Customer equity is the sum of the lifetime values of all a company's current and potential customers. Customer equity is dependent upon customer loyalty from a firm's profitable customers. Because customer equity is a reflection of a company's future, companies must manage it carefully, viewing customers as assets that need to be maximized. To increase customer equity, companies should work to delight their customers and establish full relationships with their most profitable customers. Diff: 1 Page Ref: 23 AACSB: Analytic Skills Skill: Application Objective: 1-4
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109) In a short essay, describe and compare the four types of customers classified by their potential profitability to an organization. Explain how an organization should manage each type of customer.
Answer: The four types of customers are strangers, butterflies, true friends, and barnacles.
\a stranger's wants and demands. Companies should not invest in building a relationship with this type of customer. Another type of customer in which a company should not invest is the
\their needs and the company's offerings. The company might be able to improve barnacles'
profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be \However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should use
promotional blitzes to attract these customers, create satisfying and profitable transactions with them, and then cease investing in them until the next time around. The final type of customers is \company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to convert true friends into customer evangelists who tell others about their good experiences with the company. Diff: 3 Page Ref: 24 AACSB: Analytic Skills Skill: Application Objective: 1-4
110) Explain how the Internet has transformed the way in which we do business today.
Answer: The Internet links individuals and businesses of all types to each other. The Internet allows firms access to exciting new marketspaces. The Internet has spawned an entirely new breed of \–the \
introduced companies that are both savvy and face promising futures. These companies use a set of new Web technologies to reach customers, including blogs (web logs), vlogs (video-based logs), and social networking sites. \companies, with online presences aimed at attracting new customers and strengthening bonds with current customers. Approximately 65% of American Internet users now shop online, making a Web presence a necessity for any organization. Diff: 1 Page Ref: 26 AACSB: Use of IT Skill: Application Objective: 1-5
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111) Greg Williams now has the buying power to purchase the computer system he has wanted for the last six months. Greg's want now has become a(n) ________. A) need B) necessity C) demand D) exchange E) transaction Answer: C Diff: 1 Page Ref: 6 AACSB: Reflective Thinking Skill: Application Objective: 1-2
112) To avoid traffic gridlock in large metro areas, a community might use ________ to discourage travelers from driving during peak commuting hours. A) target marketing B) market segmentation C) demarketing D) marketing
E) the production concept Answer: C Diff: 1 Page Ref: 9 AACSB: Reflective Thinking Skill: Application Objective: 1-3
113) Cathy's Clothes is a small retail chain successfully selling women's clothing and accessories with a profitable focus on buyers who have relatively modest means. This is an example of ________.
A) convenience B) social marketing C) market segmentation D) target marketing E) value packing Answer: D Diff: 2 Page Ref: 8 AACSB: Reflective Thinking Skill: Application Objective: 1-3
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114) Jolene's firm markets preplanning services for a mortician. She finds that most of her target market wants to avoid discussing their future funeral needs, and she must somehow first get their attention. Jolene's firm is most likely practicing the ________. A) production concept B) marketing concept C) selling concept
D) relationship concept
E) societal marketing concept Answer: C Diff: 2 Page Ref: 10 AACSB: Reflective Thinking Skill: Application Objective: 1-3
115) Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further for increased consumer affordability. This reflects the ________ concept. A) product B) production C) selling D) marketing
E) societal marketing Answer: B Diff: 2 Page Ref: 9 AACSB: Reflective Thinking Skill: Application Objective: 1-3
116) Railroads were once operated based on the thinking that users wanted trains rather than transportation, overlooking the challenge of other modes of transportation. This reflects the ________ concept. A) product B) production C) selling D) marketing
E) societal marketing Answer: A Diff: 3 Page Ref: 10 AACSB: Reflective Thinking Skill: Application Objective: 1-3
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117) Which of the following reflects the marketing concept? A) \
B) \C) \D) \E) \Answer: D Diff: 3 Page Ref: 10 AACSB: Reflective Thinking Skill: Application Objective: 1-3
118) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the ________ philosophy. A) marketing concept B) product concept C) production concept
D) societal marketing concept E) selling concept Answer: D Diff: 1 Page Ref: 11 AACSB: Reflective Thinking Skill: Application Objective: 1-3
119) Members of the sales team at Dekko International visit only prospective customers who purchase a minimum of $50,000 of insulated wire per year. Dekko is using ________. A) selective relationship management B) a frequency marketing program C) a club marketing program D) demarketing
E) a value proposition Answer: A Diff: 2 Page Ref: 17 AACSB: Reflective Thinking Skill: Application Objective: 1-4
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