Top 10 learning questions for chapter 5

TOP 10 Learning Questions for

(Chapter 5: Creating Customer Value,

Satisfaction, and Loyalty)

Francine Luanne M CollantesSeptember 2011

http://francollantes.blogspot.com

1. How do customers make choices? This question can BEST be answered by which statement according to Philip Kotler?

A. Customers are strongly influenced by “recommendations from other consumers”.

B. Customers look at the costs and risks associated in buying the product or patronizing the service offered

C. Customers are value maximizersD. The power is with the customerE. Customers look at the long-term value in their

relationship with the company

2http://francollantes.blogspot.com

Customers form expectations of value and act on it

• Better educated and informed

consumers

• Have tools to verify claims

• Can seek out superior alternativesKotler’s example:Caterpillar led by maximizing total customer value in construction-equipment despite having Volvo, Hitachi, Komatsu around as competitors

A. Customers are strongly influenced by “recommendations from other consumers”.

B. Customers look at the costs and risks associated in buying the product or patronizing the service offered

C. Customers are value maximizersD. The power is with the customerE. Customers look at the long-term value in their

relationship with the company

1. How do customers make choices? This question can BEST be answered by which statement according to Philip Kotler?

2. Product, Services, Personnel, and Image belong to which category as determinants of Customer-Perceived Value?

A. Total Customer ValueB. Total Customer BenefitC. Total Customer CostD. Total Customer PropositionE. Total Customer Perception

Total Customer Benefit = perceived monetary value of benefit customers expect from a given market offering because of the product, service, people, & image

Total Customer Benefit

Product

Service

Personnel

Reference: Fig 4.1 Determinants of Customer-Perceived Value, A Framework for Marketing Management, 4th Ed, Philip Kotler and Kevin Lane Keller, 2009

Total Customer

Monetary

Energy

Psychological

Customer Perceived Value

2. Product, Services, Personnel, and Image belong to which category as determinants of Customer-Perceived Value?

A. Total Customer ValueB. Total Customer BenefitC. Total Customer CostD. Total Customer PropositionE. Total Customer Perception

3. Value Proposition consists of the whole cluster of benefits the company ________ to deliver

A. promisesB. perceivesC. proposesD. plansE. prepares

San Miguel’s value proposition lies on their promise of the experience of a “Samahang Walang Katulad”

3. Value Proposition consists of the whole cluster of benefits the company ________ to deliver

A. promisesB. perceivesC. proposesD. plansE. prepares

4. Loyalty is a deeply held commitment to rebuy or _______ a preferred product or service in the future despite situational influences.

A. repurchaseB. repatronizeC. reprocureD. repayE. repossess

Consumers have varying degrees of loyalty to specific brands, stores, and companies

Loyalty

• Repeat purchase

• Repeat patronage

4. Loyalty is a deeply held commitment to rebuy or _______ a preferred product or service in the future despite situational influences.

A. repurchaseB. repatronizeC. reprocureD. repayE. repossess

5. Which of the following statements best describe why there’s a need to build customer value?

A. Creating lasting customers is at the heart of every business

B. Creating lifelong customers is at the heart of every business

C. Creating long-term customers is at the heart of every business

D. Creating loyal customers is at the heart of every business

E. Creating lifetime customers is at the heart of every business

The only value your company will ever create is the value that comes from customers - now and in the future

Without customers, you don’t have any

business

A loyal customer looks at only you, regardless of other choices or alternatives present in the market

5. Which of the following statements best describe why there’s a need to build customer value?

A. Creating lasting customers is at the heart of every business

B. Creating lifelong customers is at the heart of every business

C. Creating long-term customers is at the heart of every business

D. Creating loyal customers is at the heart of every business

E. Creating lifetime customers is at the heart of every business

6. If a company’s performance falls short of expectations, the customer gets _________.

A. DistractedB. DispleasuredC. DissatisfiedD. DiscontentedE. Disappointed

Satisfaction

• Feelings of pleasure or disappointment

• Result of comparing:

• Perceived performance vs

Expectations

• High satisfaction = High customer

loyalty

Customers satisfaction is defined by matching both expectations and performance

6. If a company’s performance falls short of expectations, the customer gets _________.

A. DistractedB. DispleasuredC. DissatisfiedD. DiscontentedE. Disappointed

7. Which rule implies that a company could improve its profits by “firing its worst customers?

A. 150-40 ruleB. 150-50 ruleC. 150-30 ruleD. 150-20 ruleE. 150-10 rule

Large customers demand the ff:• considerable

service

• deep

discounts

• More COSTLY!

150-20 Rule: The most profitable 20% of customers may contribute 150% of your company’s profitability

Small-Medium customers do the ff:• Receive minimal

service

• pay full price

• Less COSTLY =

PROFITABLE!

7. Which rule implies that a company could improve its profits by “firing its worst customers?

A. 150-40 ruleB. 150-50 ruleC. 150-30 ruleD. 150-20 ruleE. 150-10 rule

8. Which of the following is true?A. Customer Relationship Management is the process of

carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty

B. Customer Relationship Management focuses on programs to attract and retain the right customers

C. Customer Relationship Management enables companies to provide excellent real-time customer service

D. None of the aboveE. All of the above

CRM is managing detailed information and individual touch points to maximize loyalty

Source: http://www.crm-strategy.net/crmpres.htm

Customer Relationship Management is in attracting and retaining the right customers

Prospects

Potentials

First-Timers

Patrons

Members

PARTNERS

Advocates

Sun Cellular uses detailed account information of its clients to provide real-time customer service as part of its CRM program

8. Which of the following is true?A. Customer Relationship Management is the process of

carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty

B. Customer Relationship Management focuses on programs to attract and retain the right customers

C. Customer Relationship Management enables companies to provide excellent real-time customer service through the effective use of individual account information

D. None of the aboveE. All of the above

9. It is the process of building, maintaining, and using customer databases contact, transact, and build customer relationships.

A. Database WarehousingB. Database MiningC. Database MarketingD. None of the aboveE. All of the above

1. Collect information

2. Store these information in a

database

3. Use these information to conduct

database marketing

For marketers to know their customers, they should follow a process

Reference: Downside of Database Marketing and CRM p.167, A Framework for Marketing Management, 4th Ed, Philip Kotler and Kevin Lane Keller, 2009

Mc Donalds uses its McDelivery Online to gather information from customers to build personal relationships with its customers

9. It is the process of building, maintaining, and using customer information to contact, transact, and build customer relationships.

A. Database WarehousingB. Database MiningC. Database MarketingD. None of the aboveE. All of the above

10. The following are the functions of Data Warehouses and Data Mining EXCEPT:

A. It allows businesses to capture, query, and analyze customer needs and responses

B. It makes it easy for everyone in the company to be customer oriented and use valuable information

C. It deepens customer loyaltyD. It avoids serious customer mistakesE. It allows business to make proactive,

knowledge-driven decisions

1. Some situations are not conducive to database

management

2. Building and maintaining it requires a huge

investment

3. It may be difficult to get everyone in the company to

be customer oriented and use the available

information

4. Not all customers want a relationship with the

company

5. The assumptions behind CRM may not always hold

Five main problems can prevent a firm from effectively using CRM

Reference: Downside of Database Marketing and CRM p.167, A Framework for Marketing Management, 4th Ed, Philip Kotler and Kevin Lane Keller, 2009

10. The following are the functions of Data Warehouses and Data Mining EXCEPT:

A. It allows businesses to capture, query, and analyze customer needs and responses

B. It makes it easy for everyone in the company to be customer oriented and use valuable information

C. It deepens customer loyaltyD. It avoids serious customer mistakesE. It allows business to make proactive,

knowledge-driven decisions

Top 10 learning questions for chapter 5

determinants of customer

customers satisfaction

longterm value

lasting customers

expectations of value

future15without customers

high customer loyalty

value maximizersthe

Business

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