Part A -
Question 1 - Which one of the following events occur when there is minimal focus on customers?
high customer loyalty
reduction in customer turnover
below-average profits
long-run strategies to improve sales
low cost of marketing and sales
Question 2 - Which of the following is an example of a company's external metrics?
return on sales
employee turnover
manufacturing defects
late deliveries
retaining customers
Question 3 - Which of the following is a forward-looking indicator of business success?
customer satisfaction
shareholder dividends
sales
market share
ROI
Question 4 - Which of the following is a component of a customer loyalty index?
customer satisfaction
average customer life
customer's income level
desire to repurchase
customer's demographic details
Question 5 - What is the customer retention for a company given an average customer life of four years?
40%
50%
75%
80%
100%
Question 6 - In general, it costs ____ times more to replace a customer than it costs to keep a customer.
2
3
4
5
6
Question 7 - To estimate the lifetime value of a customer at a given rate of customer retention, you need to compute the _____.
net present value of the customer's cash flow
customer satisfaction index
future customer value
customer loyalty index
gross percent margin of the company
Question 8 - Which of the following is considered an external performance benchmark for a product's performance in the market?
sales revenue
net profits
return on sales
relative product quality
assets as a percentage of sales
Question 9 - Net marketing contribution is equal to _____.
profits
profits - (other operating expenses)
gross profit - (marketing and sales expenses)
(all revenues) - (aII expenses)
(sales revenues) - (cost of goods sold)
Question 10 - Which of the following is true of the net marketing contribution of a firm?
It sets a benchmark to gauge improving or deteriorating marketing profitability.
General and administrative expenses are included to assess the net marketing contribution.
It is an internal in-process financial metric. It is equal to the revenues of the firm.
It includes all operating expenses.
Question 11 - Marketing Return on Investment is equal to ____.
profits/marketing & sales expenses x 100%
net marketing contribution/marketing and sales expenses x 100%
gross margin/total expenses x 100%
net marketing contribution/operating expenses x 100%
sales revenues/marketing and sales expenses x 100%
Question 12 - What is the marketing return on sales (marketing ROS) for a product line that generates $40 million in sales revenues with a net marketing contribution of $32 million?
75%
80%
100%
125%
150%
Part B -
Question 1 - A software manufacturer received permission from first-time buyers to observe their initial experience with the software in their homes, allowing the product developers to learn about what other software applications are running on the customer's system and how that software can interfere with or complement the product. This manufacturer is using the ____ design approach to understanding customer needs and discovering customer problems and frustration that arise when using their product.
ethnographic
empathic
observational
lead user
"stapie yourself to an order"
Question 2 - Three key sources of customer-perceived performance include perceived product performance, perceived service quality, and perceived company or brand reputation.
True
False
Question 3 - Market-based businesses differ from product-focused businesses in that market-based businesses _____.
focus on products and services
are providers of solutions
have a narrow view of customers' underlying problems
lack a strong customer focus
lack knowledge of customer usage
Question 4 - The purpose of needs-based segmentation is to offer product benefits that satisfy the needs of target customers.
True
False
Question 5 - A recent Consumer Reports study analyzed toasters and found that the average performance rating for all toasters tested was 70 with an average price of $33. Krups is a brand of toaster that sells for $32 and received an overall performance rating of 84. What is Krup's relative performance against other toasters tested?
4
38
83.5
98.5
120
Question 6 - Perceived customer value is determined by ________.
subtracting relative cost of purchase from relative performance
adding performance to enhancement value
dividing product performance by average performance
multiplying the marketing mix's four P's added to the service element
comparing the price-performance matrix entries
Question 7 - Calculate the perceived customer value if the relative performance of the product is 100 and its relative cost of purchase is 75.
25
75
100
125
175
Question 8 - Which of the following is true of needs-based market segments?
Relevant demographics that cause differences in needs include investments, size of investment portfolio, and portfolio diversification.
To make the segments actionable, the observable demographics and behaviors have to be determined.
The main advantage is that individual customers who fall into each segment can be identified.
The main advantage is that the segments are not directly based on specific customer needs.
The usage behaviors that cause difference in needs include income and assets.
Question 9 - Which of the following is used to determine a segment's marketing profitability?
customer retention index
net profit (after taxes)
gross profit
net marketing contribution
gross revenue
Question 10 - Dell Computers allows each customer to build a custom product to meet his or her specific needs, personal constraints and price considerations. By doing so, Dell also obtains important information about which features customers prefer, how preferences differ across demographic market segments and how they change over time. Dell is using which type of customer relationship marketing strategy?
mass-personalization
mass-customization
customer relationship management
sub-segment
multi-segment
Question 11 - Which of the following segmentation strategies involves using a highly targeted marketing effort directed at an overlooked, small group of target customers?
Mass market strategy
Adjacent segment strategy
Multi segment strategy
Large segment strategy
Niche segment strategy
Part C -
Question 1 - The maximum number of customers who can enter the market given a specific served market definition is known as _____.
a vertical market
current market demand
rate of entry
market potential
market penetration
Question 2 - Three fundamental forces that capture the shape of the market growth curve and the rate of market growth are market potential, market penetration, and the rate at which new customers enter the market.
True
False
Question 3 - Major sources of competitive advantage are cost advantage, differentiation advantage, and marketing advantage.
True
False
Question 4 - The market development index is equal to the ______.
product of market potential and market growth.
ratio of current market demand to market potential.
ratio of current market demand to net marketing expenditure.
ratio of market potential and market growth.
product of current market demand and market potential.
Question 5 - The market share index is an indicator of _____.
actual market share relative to potential market share
current product awareness
a product's sales at a given stage of the product life cycle
what market share should be given certain expected levels of market performance
factors that influence market share
Question 6 - Share development index is the ratio of ______.
current market demand and market potential
volume sold and market share
market demand and market share
current performance and potential performance
market share index and share potential index
Question 7 - Calculate the market development index if the current market demand of the product is 240 million and the potential for market growth is 400 million.
640
166.67
160
80
60
Question 8 - Which of the following is a type of differentiation advantage?
product line advantage
operating cost advantage
channel advantage
market share advantage
service advantage
Question 9 - Which of the following is a type of marketing advantage?
service quality
operating expenses
variable costs
marketing expenses
product line advantage
Question 10 - Brand reputation advantage is a type of _____ advantage.
marketing cost
operating cost
channel
differentiation
variable cost
Question 11 - Which of the following formulas is used to calculate a company's relative market share?
total sales of the largest competitor - company's total sales
(company's market share/total share of the three largest competitors) x 100
company's targeted sales - company's net sales
(company's total sales/total sales of the largest competitor) x 100
(company's market share/company's potential market share) x 100
Question 12 - A software manufacturer received permission from first-time buyers to observe their initial experience with the software in their homes, allowing the product developers to learn about what other software applications are running on the customer's system and how that software can interfere with or complement the product. This manufacturer is using the ____ design approach to understanding customer needs and discovering customer problems and frustration that arise when using their product.
observational
lead user
"staple yourself to an order"
empathic
ethnographic
Question 13 - Three key sources of customer-perceived performance include perceived product performance, perceived service quality, and perceived company or brand reputation.
True
False
Question 14 - Market-based businesses differ from product-focused businesses in that market-based businesses _____.
have a narrow view of customers' underlying problems
lack a strong customer focus
lack knowledge of customer usage
are providers of solutions
focus on products and services
Question 15 - The purpose of needs-based segmentation is to offer product benefits that satisfy the needs of target customers.
True
False
Question 16 - Perceived customer value is determined by _____.
dividing product performance by average performance
multiplying the marketing mix's four P's added to the service element
comparing the price-performance matrix entries
adding performance to enhancement value
subtracting relative cost of purchase from relative performance
Question 17 - Which of the following is true of needs-based market segments?
The main advantage is that individual customers who fall into each segment can be identified.
The main advantage is that the segments are not directly based on specific customer needs.
The usage behaviors that cause differences in needs include income and assets.
To make the segments actionable, the observable demographics and behaviors have to be determined.
Relevant demographics that cause differences in needs include investments, size of investment portfolio, and portfolio diversification.
Question 18 - Which of the following is used to determine a segment's marketing profitability?
gross profit
net marketing contribution
gross revenue
net profit (after taxes)
customer retention index
Question 19 - Dell Computers allows each customer to build a custom product to meet his or her specific needs, personal constraints and price considerations. By doing so, Dell also obtains important information about which features customers prefer, how preferences differ across demographic market segments and how they change over time. Dell is using which type of customer relationship marketing strategy?
customer relationship management
sub-segment
multi-segment
mass-customization
mass-personalization
Question 20 - Which one of the following events occur when there is minimal focus on customers?
low cost of marketing and sales
long-run strategies to improve sales
below-average profits
reduction in customer turnover
high customer royalty
Question 21 - Which of the following is an example of a company's external metrics?
retaining customers
late deliveries
manufacturing defects
employee turnover
return on sales
Question 22 - Which of the following is a forward-looking indicator of business success?
ROI
market share
sales
shareholder dividends
customer satisfaction
Question 23 - Which of the following is a component of a customer loyalty index?
customer's demographic details
desire to repurchase
customer's income level
average customer life
customer satisfaction
Question 24 - What is the customer retention for a company given an average customer life of four years?
100%
80%
75%
50%
40%
Question 25 - In general, it costs _____ times more to replace a customer than it costs to keep a customer.
6
5
4
3
2
Question 26 - To estimate the lifetime value of a customer at a given rate of customer retention, you need to compute the _____.
gross percent margin of the company
customer loyalty index
future customer value
customer satisfaction index
net present value of the customer's cash flow
Question 27 - Which of the following is considered an external performance benchmark for a product's performance in the market?
assets as a percentage of sales
relative product quality
return on sales
net profits
sales revenue
Question 28 - Net marketing contribution is equal to ______.
(sales revenues) - (cost of goods sold)
(all revenues) - (all expenses)
gross profit - (marketing and sales expenses)
profits - (other operating expenses)
profits
Question 29 - Which of the following is true of the net marketing contribution of a firm? It includes all operating expenses.
It is equal to the revenues of the firm.
It is an internal in-process financial metric.
General and administrative expenses are included to assess the net marketing contribution.
It sets a benchmark to gauge improving or deteriorating marketing profitability.
References - Chapter 1-6 of this book: Market Based Management: Strategies for Growing Customer Value & Profitability, 6e -Roger J. Best ISBN: 0130387754.