AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
128) Explain how storing customer information in a database might better prepare carmaker Kia in customer relationship management.
Answer: Managing detailed information about customers may allow Kia to design new models based on customer demographics and desires for specific features. These "touch points" can be the key to long-term customer loyalty.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
129) Alex works in the marketing department of an international company. How can Alex use modern technologies to conduct market research and better serve his company's customers?
Answer: Alex could use the company's Web site and social media sites to monitor online discussions of the company's products and services. He could track customer-generated review systems or online data services to learn more about the needs and wants of his customers. Alex could create a customer database for the company to target individual customers with tailored offers.
AACSB: Information technology
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
130) How can a marketer increase its "share of customer"?
Answer: The marketer can offer greater variety to customers; in addition, the marketer can train employees to cross-sell and up-sell in order to market more products and services to existing customers.
AACSB: Reflective thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
131) Define customer relationship management and explain its associated tools and levels of relationships.
Answer: Customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. A company with mostly low-margin customers is likely to seek basic relationships, using brand-building advertising, public relations, and so on. An organization with few customers and high margins, on the other hand, will work to create full partnerships with key customers. To create stronger bonds with customers, some companies offer frequency marketing programs that reward customers who buy frequently or in large amounts. Other companies sponsor club marketing programs that offer members special benefits and create member communities.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
132) Explain why the aim of customer relationship management is to create not just customer satisfaction, but also customer delight.
Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Firms create customer delight by promising only what they can deliver and then delivering more than what they promised. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become willing marketing partners and "customer evangelists" who tell other potential customers about their positive experiences with the product.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
133) Define customer equity and explain how a company can increase it.
Answer: Customer equity is the sum of the lifetime values of all of the company's current and potential customers. It's a measure of the future value of the company's customer base. Clearly, the more loyal the firm's profitable customers, the higher its customer equity. Customer equity may be a better measure of a firm's performance than current sales or market share. To increase customer equity, companies should work to delight their customers and establish full relationships with their most profitable customers.