Chapter 5 Marketing Analytics: Welcome to the Era of Big Data! 1) CRM stands for ________. A) consumer relationship marketing B) consumer retention management C) customer relationship management D) customer retention marketing E) consumer response management Answer: C 2) A company's first step in customer relationship management should be to ________. A) rank its customers in terms of sales volume B) identify customers that cost the company money C) identify types of transactions and determine which will be abandoned D) identify customers and get to know them in as much detail as possible E) determine which aspect of the product will be customized to meet the individual needs of its customers Answer: D 3) Many marketing experts recommend ________ programs that allow a company to talk to individual customers and adjust elements of the marketing mix to satisfy the specific needs of each customer. A) customer relationship management B) psychographic segmentation C) transactional management D) B2B marketing E) C2C marketing Answer: A 4) In one-to-one marketing, what is the next step after a marketer has identified customers and knows them in as much detail as possible? A) interact with the customers and find ways to improve cost efficiency B) make efficiency of interactions with customers the priority C) differentiate among these customers in terms of both their needs and their value to the company D) customize some aspects of the products or services offered to each customer E) implement a mass customization program Answer: C 5) In one-to-one marketing, the final step is to ________. A) interact with the customers and find ways to improve cost efficiency B) make efficiency of interactions with customers the priority C) differentiate among these customers in terms of both their needs and their value to the company D) customize some aspects of the products or services offered to each customer E) implement a mass customization program Answer: D 6) Which of the following statements about CRM programs is true? A) The success of a CRM program relies on its use of mass communication channels. B) CRM programs include information gathered from each customer touchpoint. C) Internet technology is a barrier to the successful implementation of CRM programs. D) To succeed, all companies should engage in CRM every time they interact with a customer. E) Only consumer marketers can benefit from the use of CRM programs. Answer: B 7) Which of the following is NOT a focus of customer relationship management? A) customer prioritization B) share of customer C) lifetime value of the customer D) customer equity E) undifferentiated targeting Answer: E 8) Any direct interface between customers and a company–whether it is online, in-person, or over the phone–is called a(n) ________. A) share of customer B) customer target C) touchpoint D) customization E) analytic Answer: C 9) Companies that successfully practice customer relationship management measure success by ________. A) share of market and market growth rate B) business potential and industry potential C) share of customer and lifetime value of the customer D) PRIZM and VALS™ E) cost of customer and duration of relationship with customer Answer: C 10) CRM firms focus on increasing their share of ________, not share of market. A) profit B) audience C) segment D) usage E) customers Answer: E 11) The ________ is the potential profit generated by a single customer's purchase of a firm's products over the customer's lifetime. A) lifetime value of a customer B) priority of a customer C) segmentation of a customer D) share of a customer E) equity of a customer Answer: A 12) Which of the following statements about the lifetime value of a customer is true? A) CRM helps companies identify their customers' lifetime value. B) All customers have the same lifetime value. C) A customer's lifetime value is easy to calculate. D) A company can either increase customer share or a customer's lifetime value, but not both. E) The value of the customer is related to the value of the brand. Answer: A 13) ________ is the financial value of a customer throughout the lifetime of the customer relationship. A) Share of customer B) The customer perceptual map C) CRM D) Customer equity E) The 80/20 rule Answer: D 14) An increasing number of companies are considering their relationships with customers as financial assets. Such firms measure success by calculating the value of their ________. A) CRM B) VALS™ C) brand personality D) customer equity E) positioning Answer: D 15) To determine ________, firms compare the investments they make in acquiring and retaining customers to the financial return on those investments. A) segmentation B) share of customer C) brand personality D) customer equity E) positioning Answer: D 16) The owner of a pet grooming salon wants to calculate customer equity. Which of the following would be a step the owner of this pet grooming salon should complete? A) Compare investments made by the salon owner in acquiring the customer to the total amount of purchases made by the customer. B) Compare investments made by the salon owner to retain this customer to the total amount of taxes the salon owner pays. C) Ask the customer if she is planning on getting any new pets. D) Investigate how many other pet grooming salons are within five miles to determine the likelihood of this pet owner returning to this salon. E) Determine the age of the pet to estimate how much longer this customer may need the services of the salon. Answer: A 17) The dentist's office calling to remind you of your scheduled appointment for the next day is an example of ________. A) CRM B) customer equity C) undifferentiated targeting D) share of customer E) repositioning Answer: A 18) Through its CRM program, an online clothing company records information about each time a customer makes a purchase or clicks on a link through an email or an online advertisement. These interactions are examples of ________. A) customizations B) touchpoints C) analytics D) optimizations E) impressions Answer: B 19) Average collectors of an artist's miniatures will buy four new miniatures each year. The collectibles are available at a number of retail locations and from several catalog retailers. To ensure she gets a greater ________, the owner of The Door Gift Shop sends her customers who are collectors a postcard every time the store adds a new one to her store's inventory. A) share of communication B) segment profile C) customer allocation D) share of customer E) brand perception Answer: D 20) A building supply company has many high-volume customers and many low-volume customers. A CRM system would be LEAST likely to help management decide to use which of the following methods for communicating with low-volume customers? A) Every November, send each customer a new calendar that has the phone number of the building supply company printed on the cover. B) Once or twice a year, mail a new product catalog to each customer. C) Every few months, have a customer service representative from the building supply company call each customer. D) Have a sales representative make a personal one-on-one appointment with every low-volume customer at least twice a month. E) Give each low-volume customer the company Web address to check building supply products sold by the company. Answer: D 21) Customer relationship management (CRM) programs are often called interactive marketing programs. Answer: False 22) Customer relationship management (CRM) programs can systematically track customers' preferences and behaviors over time. Answer: True 23) A CRM strategy allows a company to identify its best customers, stay on top of their needs, and increase their satisfaction. Answer: True 24) The final stage in one-to-one marketing is to identify customers in terms of both their needs and their value to the company. Answer: False 25) CRM programs facilitate communication from a company to its customers and from customers to the company. Answer: True 26) During the interact step of one-to-one marketing, companies should focus on ways to improve the cost efficiency and effectiveness of the interaction. Answer: True 27) Historically, marketers have measured success in a product category by their market share. Answer: True 28) The term share of customer is synonymous with share of market. Answer: False 29) Using a CRM approach, customers are prioritized and communication is customized accordingly. Answer: True 30) The Union Express Web site tracking a lost package is an example of CRM. Answer: True 31) To better tailor the services it offers to the needs of specific customers, First City Bank should first collect, verify, and update the information it has about its customers. Answer: True 32) Explain the philosophy of customer relationship management (CRM). Answer: Customer relationship management (CRM) programs allow companies to talk to individual customers and adjust elements of their marketing programs in light of how each customer reacts to elements of the marketing mix. Communication with customers is key, as is fostering a long-term relationship with each profitable customer. Using CRM, companies take the view that share of customer is more important than share of market, and that relationships with customers are financial assets. 33) Explain the relationship between one-to-one marketing and CRM. Answer: One-to-one marketing is the concept of the company identifying and then addressing the specific needs and demands of its individual customers. The key to doing this is the implementation of CRM, customer relationship management. CRM helps companies get to know customers in as much detail as possible, differentiate among these customers, and then interact with customers in more cost-efficient and effective ways. Finally, a CRM system will help a company customize some or all aspects of its goods and services based on what has been learned through customer interactions. 34) Compare and contrast the concepts of lifetime value of a customer and customer equity. Answer: The lifetime value of a customer is the potential profit generated by a single customer's purchase of a firm's products over the customer's lifetime. Customer equity takes this concept one step further, comparing the investment a firm must make to acquire a customer and maintain a relationship with that customer to the financial return that could be expected from the customer. 35) A firm has segmented its customers into two groups: high-volume customers and low-volume customers. Explain the different styles of communication the firm should implement to reach each group of customers. Answer: A firm should look at the cost and time factors involved in the communication with customers within each group. These factors should then be compared to the possible profit generated by a long-term relationship with each customer group. The high-volume customers may require frequent contact from a personal sales representative. This may be an expensive means of communication, but without such communication, the firm may lose the valuable customer to a competitor. The low-volume customer may be adequately serviced by less expensive means such as mailed literature or occasional verbal communication via the telephone. 36) What are two ways the airline industry can benefit from the implementation of CRM systems? Explain your answer. Answer: CRM systems could help flyers by automating crucial information and reducing phone call volume. CRM could also be used to identify customers' flying patterns, favored destinations, and frequency of usage so that extra perks can be given to the "best" customers. 37) Describe the four steps of one-to-one marketing. Answer: Through one-to-one marketing, firms get to know the wants and needs of individual customers and use that information to customize goods and services. The first step of one-to-one marketing is identifying and getting to know customers in detail. The second step is to differentiate among these customers in terms of their needs and potential value to the company. The third step is interacting with the customers in order to determine how to improve cost efficiency and effectiveness. The final step is customizing services or goods based on information gained through interaction with the customer. 38) Explain how a firm benefits from customers who make multiple purchases versus customers who make just one purchase. Answer: A firm's profitability and long-term success will be far greater if it develops long-term relationships with its customers so that those customers buy from this firm again and again. Costs will be far higher and profits lower if each customer purchase is a first-time sale, as it is more expensive to attract a new customer than it is to maintain a relationship with a current customer. 39) Identify any product or service. How can a marketer calculate the lifetime value of a customer relating to the purchase of this product or service? Explain your answer. Answer: Student answers will vary. A firm must estimate a customer's future purchases across all products from the firm. The lifetime value of a customer would be the total profit generated from purchases from this customer. For a subscription-based streaming service, a marketer can calculate the lifetime value of a customer by estimating the average subscription duration, monthly subscription fee, and anticipated customer retention rate over time. 40) With a CRM approach, how might a firm select different methods of contacting and communicating with customers based on their value? Answer: Using CRM, a firm would likely use the most expensive and most effective methods of contacting and communicating, such as personal selling, for its customers with the highest potential value. For low-volume, low-value customers, the firm is more likely to use less expensive methods of contact, such as direct mail. 41) The term Big Data refers to the ________. A) use of data warehouses to store structured and unstructured data B) exponential growth of structured and unstructured data that are difficult to process using traditional database techniques C) increasing number of everyday objects that are connected to the Internet and can communicate information about their use D) extraction and analysis of large amounts of data from websites E) collection and analysis of unstructured data by data scientists Answer: B 42) ________ is a term that refers to a system in which everyday objects are able to communicate information throughout an interconnected system. A) Big Data B) The Internet of Things C) Data Science D) Data warehousing E) Data mining Answer: B 43) When a company uses computer software to extract large amounts of data from social media platforms, it is using ________. A) data warehousing B) scanner data C) intelligent agents D) web scraping E) reality mining Answer: D 44) Through a process of ________, a company can identify a social media platform user's attitude toward a brand. A) data warehousing B) sentiment analysis C) search engine optimization D) predictive analytics E) reality mining Answer: B 45) CRM and ERP databases are examples of ________ sources of Big Data. A) social media B) NGO C) commercial entity D) government E) corporate Answer: E 46) Which of the following is true of information stored in departmental "silos'? A) Such information is best described as structured data. B) Such information is best described as unstructured data. C) Such information is unlikely to be shared with other departments in the firm. D) Such information is typically gathered from indirect sources. E) Such information is typically gathered by channel partners. Answer: B 47) Census data is an example of a ________ source of Big Data. A) social media B) partner database C) commercial entity D) government E) corporate information technology Answer: D 48) Scanner data is an example of a ________ source of Big Data. A) social media B) partner database C) commercial entity D) government E) corporate information technology Answer: C 49) Walmart's Retail Link provides real time purchase data to suppliers of goods sold at Walmart stores. Retail Link is an example of a ________ source of Big Data. A) social media B) partner database C) commercial entity D) government E) corporate information technology Answer: B 50) In a(n) ________, there is a two-way exchange of information between purchasing organizations. A) data warehouse system B) intelligent agent approach C) channel partner model D) data broker system E) market basket analysis Answer: C 51) Through a(n) ________, IBM has developed technology that is capable of thinking in a way that is closer to how humans think. A) reality mining system B) intelligent agent approach C) data warehouse approach D) data broker system E) predictive analytics approach Answer: C 52) Because of ________, it can be difficult to decide what data are useful and what data are not useful. A) conversion rates B) predictive analytics C) unstructured data D) search engine optimization E) information overload Answer: C 53) Big Data would most likely be measured in which of the following? A) megabytes B) bytes C) bits D) megabits E) terabytes Answer: E 54) To take advantage of the massive amount of data now available, sophisticated analysis techniques called ________ are becoming a priority for many firms. A) data mining B) prospecting C) cold calling D) data warehousing E) data tallying Answer: A 55) The process through which analysts sift through massive amounts of available data to identify unique patterns of behavior among different customer groups is called ________. A) structuring data B) information overload C) reality mining D) data warehousing E) data mining Answer: E 56) A company that compiles and uses large amounts of data to understand its customers is likely to have a ________ to store and process its data. A) distribution center B) data warehouse C) competitive intelligence center D) custom research project E) marketing research department Answer: B 57) Some cellular providers are signing deals with business partners wanting to market products based on specific phone users' locations and calling habits. These cellular providers are participating in a new trend called ________. A) telemarketing B) data warehousing C) reality mining D) virtual mining E) prediction marketing Answer: C 58) Which of the following has limited the practice of reality mining? A) lack of communication among departments within an organization B) difficulties analyzing unstructured data C) concerns about preventing information overload D) concerns about reactions to privacy infringement E) concerns about preventing customer abandonment Answer: D 59) ________ are companies that collect and sell personal information about consumers. A) Data brokers B) Search engine optimizers C) Data warehouses D) Web scrapers E) Channel partners Answer: D 60) Numeric or categorical information is referred to as ________. A) structured data B) unstructured data C) predictive data D) optimized data E) converted data Answer: D 61) The text of an email or a social media post would be referred to as ________. A) structured data B) unstructured data C) predictive data D) optimized data E) converted data Answer: D 62) Which of the following is the most accurate comparison of structured and unstructured data? A) More unstructured data than structured data is created every day. B) More structured data than unstructured data is created every day. C) Computers can organize and understand structured data but not unstructured data. D) Computers can organize and understand unstructured data but not structured data. E) Data mining and analysis has historically focused on unstructured data rather than structured data. Answer: A 63) A ________ is someone who searches through multiple, disparate data sources in order to discover insights that will provide a competitive advantage. A) search engine optimizer B) data broker C) data warehouser D) data scientist E) reality miner Answer: D 64) Which of the following is NOT one of the four main applications of data mining for marketers? A) customer retention B) customer acquisition C) customer abandonment D) competitive intelligence E) market basket analysis Answer: D 65) Through the data mining application of ________, marketers identify big-spending customers and target them for special offers that other customers won't receive. A) customer retention B) customer acquisition C) customer abandonment D) competitive intelligence E) market basket analysis Answer: A 66) Companies are most likely to use data mining results identifying unprofitable customers for ________. A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: D 67) Through the data mining application of ________, marketers target promotional strategies based on the records of which customers have recently purchased certain products. A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: E 68) Through the data mining application of ________, marketers offer promotions to noncustomers who share demographic characteristics with current customers. A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: C 69) A data scientist is also known as a(n) ________. A) intelligent agent B) search engine optimizer C) data broker D) business intelligence developer E) reality miner Answer: C 70) Which of the following is true about unstructured data? A) It cannot be combined with other data sources. B) Computer logic programs can identify and extract patterns in it. C) It must be analyzed manually. D) It is less valuable than structured data in terms of providing insights into customer behavior. E) It is more likely to come from direct sources than indirect sources. Answer: B 71) A new "smart" refrigerator has been designed with sensors that send information to the manufacturer about the refrigerator's use and performance. One advantage of the system is that it will detect any possible performance issues before they interfere with consumer use of the refrigerator and communicate that information to both the manufacturer and consumer so that service and/or repairs can take place immediately. This is an example of ________. A) the Internet of Things B) a data warehouse C) data mining D) sentiment analysis E) unstructured data Answer: A 72) Prep for Success is an educational services company that specializes in preparing students for selective private school entrance exams. Prep for Success sends information about its services to consumers who have purchased school supplies such as backpacks and lunchboxes online and live in a community with an average household income of above $85,000 per year. This is an example of a company using ________ for data creation. A) scanner data B) reality mining C) unstructured data D) direct paths E) indirect paths Answer: E 73) Walgreens customers can sign up for the Balance Rewards program, entering a member number or using a member card every time they make a Walgreens purchase in order to receive discounts and build up points that can be redeemed for rewards. Information that Walgreens collects through these purchases is best described as ________. A) scanner data B) reality mining C) unstructured data D) sentiment analysis E) data mining Answer: A 74) Soundz, a marketer of high-end headphones, wants to identify new markets in Asia with high potential for growth. Which of the following would be the best source of data to help the leadership at Soundz decide which new markets present the best opportunities? A) corporate information technology sources B) social media sources C) government sources D) commercial entity sources E) partner database sources Answer: C 75) Soundz, a marketer of high-end headphones, wants to better understand how consumers think and feel about its products. Which of the following would be the best tool to help the leadership at Soundz learn about consumer attitudes toward the brand? A) an intelligent agent B) reality mining C) an ERP database D) sentiment analysis E) search engine optimization Answer: C 76) RBC Royal Bank wanted to evaluate the financial value of its substantial personal customer base to determine which type of customers were the most valuable to the bank. To do this, the bank looked at revenues and expenses from each of its financial products, including loans and credit card usage. To identify and then analyze this information, the bank utilized the MIS analysis technique called ________. A) data warehousing B) marketing research C) probability sampling D) data mining E) market basket analyzing Answer: D 77) Tabak catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. Through ________, it has found that customers who change residences are three times more likely than customers who do not move as frequently to buy tables, fax machines, and decorative products but are no more likely to buy jewelry or footwear. A) data mining B) prospecting C) sampling D) reality mining E) customer acquisition Answer: A 78) City Tours, a provider of bus and walking tours in major metropolitan areas in the United States, wants to more effectively and efficiently reach potential customers who are vacationing in cities such as New York, Los Angeles, and Chicago. Which of the following would be the best Big Data tool for City Tours to use to identify consumers who are currently vacationing in these locations and who might be likely to respond to promotional offers? A) search engine optimization B) prospecting C) sampling D) reality mining E) customer acquisition Answer: D 79) Scrambler is a popular smartphone app that users can download and play for free. The makers of Scrambler make the app profitable by selling information obtained about users as they play the game. The firm that makes Scrambler is best described as a(n) ________. A) search engine optimizer B) web scraper C) sentiment analyzer D) intelligent agent E) data broker Answer: E 80) The publisher of Lifting Life, a magazine and website about weightlifting, wants to develop a clear picture of how readers of the magazine and its competitors feel about the magazine. In order to accomplish this, Lifting Life will likely need to analyze ________ retrieved from social media posts related to weight lifting. A) optimized data B) structured data C) unstructured data D) market basket data E) converted data Answer: C 81) In her work at Powered Solutions, Angelica helps business clients identify, organize, and analyze data from social media sources, internal CRM databases, commercial entity sources, and government sources. Angelica would best be described as a(n) ________. A) web scraper B) reality miner C) data scientist D) intelligent agent E) data broker Answer: C 82) A catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. It has found that customers who change residences are three times more likely than customers who do not move as frequently to buy tables, fax machines, and decorative products but are no more likely to buy jewelry or footwear. By using data analysis to determine which promotion to target to customers who have recently moved, this catalog retailer has engaged in ________. A) customer retention B) customer acquisition C) customer abandonment D) customer accrual E) market basket analysis Answer: E 83) A catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. It has found that customers who are married, are between the ages of 31 and 44, and have moved within the past year are its most profitable customer segment. By sending promotional offers to noncustomers who also fit this description, this catalog retailer has engaged in ________. A) customer retention B) customer acquisition C) customer abandonment D) customer accrual E) market basket analysis Answer: B 84) Every action you take online leaves a digital imprint, data that can be used to create valuable insights into consumer behavior. Answer: True 85) Because of recent advances in data warehousing and data mining, the amount of data we produce is expected to decrease in the near future. Answer: False 86) Data about how consumers use everyday products is likely to increasingly be communicated through the Internet of Things. Answer: True 87) Marketers can collect and analyze detailed information about consumer attitudes toward a brand from social media sources such as Facebook and Twitter. Answer: True 88) A company that uses data mining is unlikely to need a data warehouse, as the company's data is constantly in use. Answer: False 89) For marketers today, gathering data is a bigger challenge than deciding how to use the data that are collected. Answer: False 90) Data mining can be used to identify customers who are not profitable and who should be abandoned. Answer: True 91) It is just as expensive for a company to retain good customers as it is to acquire customers. Answer: False 92) Sora is a teenager who loves to shop for clothes. She has a points card from Trend Town, her favorite shop. Sora's card is scanned each time she makes a purchase at Trend Town, and the more she uses the card, the more special offers she receives from the shop. Managers at Trend Town are likely to use information from Sora's shopping for the purpose of customer acquisition. Answer: True 93) Explain three ways in which Big Data can help marketers create competitive advantages. Answer: The collection and analysis of Big Data has the potential to provide competitive advantage in three main areas. First, marketers can use analytics to identify new opportunities that yield greater return on investment (ROI) on marketing efforts. Second, marketers can use insights they gain through the analysis of Big Data to create products and services that are better aligned with the actual desires of consumers. Finally, the use of Big Data can help marketers more efficiently and effectively deliver communications about products and services. 94) Describe the different types of Big Data sources available to marketers. How can marketers use this information? Answer: There are five different types of Big Data sources that marketers can use. One external source is social media. When consumers interact with each other and with brands online, they generate a wealth of information about their attitudes toward products and how they use them in their daily lives. This information, when collected and analyzed, can help marketers develop an understanding of how consumers perceive their brands. Internal, or direct, Big Data sources are a firm's corporate information technology sources, such as CRM databases and web analytic databases. This information tells marketers how specific consumers are interacting with the firm over time. Government and NGO sources are a type of indirect source that can provide a range of information, such as demographic information about consumers or economic conditions in specific regions of the country or world. This information can help marketers better understand consumers and potential markets. Two other sources for Big Data are commercial entity sources and partner database sources. Commercial entity sources are companies that collect data about consumers and then sell that data to marketers, helping marketers understand the purchasing habits of different types of consumers. Partner database sources are channel partners that share information, such as a retailer sharing purchasing information with the producers of the goods it sells to end users. This real-time information helps marketers understand where and when consumers want their products. 95) Theresa Fielding owns an Internet company that sells gift baskets. Each customer can pick out what she wants in the basket to make it a personalized gift. Theresa has demographic information about buyers stored in the company database. The database also has the address of each basket recipient, when each basket was sent, the contents of each basket, and if it was sent for a special occasion. How could Theresa use this database? Answer: Theresa has an opportunity to engage in a small-business version of data mining. She could use a data mining program to identify unique patterns of behavior among her different customer groups. Identifying and understanding the habits of her current customers will help Theresa with customer acquisition, or attracting new customers. Data mining could help Theresa increase customer retention and loyalty by identifying the most important customers and then targeting them with special offers and inducements to buy more. Theresa could also use data mining for market basket analysis, using the records of customers who have bought certain products to develop promotional strategies. Finally, Theresa could use data mining to identify unprofitable customers who should be abandoned. 96) How could the Internet of Things benefit marketers? Answer: The Internet of Things refers to a system in which everyday objects are connected to the Internet and able to communicate information about their performance and use. Through the Internet of Things, marketers could have access to information about how consumers actually use products every day–information that previously needed to be acquired through costly traditional market research–and then use that information to develop consumer insights. 97) Explain how a sporting goods retailer could use both direct and indirect paths to data creation. Answer: The retailer could use a direct path to data creation by collecting information about in-store purchases through scanner data and customer reward programs and then offering promotions to current customers. The retailers could use an indirect path to data creation by collecting demographic data about current customers and then sending promotional offers to potential customers who match the demographic profiles of their profitable customers. 98) What is the purpose of data mining? Answer: Researchers rely on data mining to help them use information in extremely large databases to identify unique patterns of behavior among different customer groups. 99) What is the difference between structured and unstructured data? Answer: Structured data is typically either numeric or categorical and can be organized and formatted in a way that is easy for computers to read, organize, and understand. Unstructured data, on the other hand, contains non-numeric information that is not as easily organized and understood by computers. The text of an email is an example of unstructured data. 100) A gambling casino gives its high-spending players free rooms in its hotels along with free meals and tickets to the entertainment shows at the casino. What application of data mining is the casino using? Answer: The casino is using data mining for customer retention and loyalty. The firm can identify big-spending customers and then target them for special offers and inducements other customers will not receive. 101) Which of the following is NOT a process included in marketing analytics? A) collecting data about marketing efforts B) creating marketing efforts C) measuring marketing efforts D) analyzing marketing efforts E) assessing marketing efforts Answer: B 102) Which of the following is true about marketing analytics? A) Its importance has increased as consumers conduct more of their daily activities online. B) It generates Big Data to be used in marketing decision making. C) It is a departmental approach to separately analyzing the performance of different marketing initiatives. D) It can be used for information gathered from traditional marketing efforts but not from digital marketing channels. E) It can be used for information gathered from digital marketing channels but not from traditional marketing efforts. Answer: A 103) Which of the following is an example of digital advertising? A) television commercial B) billboard C) search ad D) print magazine ad E) print newspaper ad Answer: C 104) Which of the following is NOT an example of a digital marketing channel? A) television B) email C) social media D) search engine E) pay per click advertisements Answer: A 105) Through ________ pricing, a marketer pays for an advertisement based on the number of times users select the advertisement and are directed to the product's webpage. A) cost per impression B) cost per customer C) cost per order D) cost per click E) cost per conversion Answer: D 106) Through ________ pricing, a marketer pays for an advertisement based on how many times an advertisement appears on a webpage viewed by users. A) cost per impression B) cost per customer C) cost per order D) cost per click E) cost per conversion Answer: A 107) Through ________, a firm tries to guarantee that its brand will appear at or near the top of lists of typical search phrases related to its business. A) cost per impression pricing B) conversion rates C) search engine optimization D) search engine analytics E) predictive analytics Answer: A 108) ________ are techniques that use large quantities of data and variables to forecast specific future outcomes of marketing efforts. A) Marketing analytics B) Conversion rates C) Marketing metrics D) Search engine analytics E) Predictive analytics Answer: A 109) A real estate company places ads on a local newspaper's website. The real estate company pays the newspaper based on how many times readers of the newspaper's website select the ads and enter the real estate company's website. This is an example of ________ pricing. A) cost per impression B) cost per customer C) cost per order D) cost per click E) cost per conversion Answer: D 110) A regional restaurant chain wants to place ads on a local newspaper's website. The marketing team at the restaurant chain knows from experience that about five percent of the people who see its ads on a newspaper's website will click on the ad to get more information or sign up for a promotion. Because the marketing team wants to keep the price of running the ads low, the restaurant chain will likely opt for ________ pricing. A) cost per impression B) cost per customer C) cost per order D) cost per click E) cost per conversion Answer: A 111) The marketing team at Joe's Auto World wants to use the information it collected from last year's online advertising campaigns, the most recent Census, and the company's internal CRM system to forecast the effectiveness of two proposed advertising campaigns for the upcoming year. To accomplish this, the marketing team at Joe's Auto World will most likely use ________. A) marketing controls B) conversion rates C) sentiment analysis D) predictive analytics E) search engine optimization Answer: D 112) It is more difficult to determine the ROI on traditional media efforts such as TV commercials than the ROI on digital media efforts such as banner ads. Answer: True 113) Cost per impression advertising is typically more expensive than cost per click advertising. Answer: False 114) Marketers for Ranch Life, a Connecticut family resort that offers horseback riding and a waterpark, want to make sure that Ranch Life comes up at the top or near the top of every list of online search results for the phrases "Connecticut family vacation," "Connecticut horseback riding," and "Connecticut waterpark." Ranch Life marketers will likely use predictive analytics to achieve this goal. Answer: False 115) John Wanamaker, a famous retailer from the late 1800s, is credited with saying "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." Explain the marketing issue highlighted by this quote and how marketing analytics affects this issue. Answer: John Wanamaker's quote refers to the problem of not being able to connect specific marketing activities, such as advertisements or promotions, to specific outcomes, such as increased sales or new customers. Marketers want to be able to tie specific actions in advertising to measurable results, which has been difficult to do for traditional advertising forms such as television, radio, and billboards. In other words, marketers want to know what types of advertising work so they can put more resources into those efforts and fewer resources into less effective advertising methods. Through marketing analytics, marketers can collect, measure, analyze, and assess the effectiveness of different marketing efforts so that they can identify and compare the return on investment of each marketing channel. 116) How can a marketer determine the effectiveness of a banner ad on a website? Answer: The return on investment (ROI) of a banner ad can be calculated by tracing the number of consumers who make an online purchase on the marketer's product page after clicking on the ad. 117) Explain two reasons that digital marketing has become an increasingly important element of the marketer's toolbox. Answer: One reason that digital marketing has become more important is that consumers use digital media more than ever, with 86 percent of Americans using the Internet and 73 percent of Americans using at least one social networking site. A second reason that digital marketing has become more important is that it is easier for marketers to track and analyze the effectiveness of digital marketing efforts. 118) Why is search engine optimization an important process for online marketers? Answer: Search engine optimization is an important process for online marketers because more and more people search for product information online. If a company's website does not appear at or near the top of an online search for a phrase related to the company's products and services, then consumers are less likely to visit the company's website. Instead, they will select websites that appear at or close to the top of the list of search results. 119) ________ are measures that marketers can use to watch the performance of their marketing efforts. A) Predictive analytics B) Marketing metrics C) Marketing controls D) Touchpoints E) Data warehouses Answer: B 120) ________ are put in place to identify deviations in expected performance of marketing efforts. A) Predictive analytics B) Marketing metrics C) Marketing controls D) Touchpoints E) Data warehouses Answer: C 121) Which of the following is NOT an example of a marketing metric? A) bounce rate B) market share C) touchpoint D) cost per order E) click-through rate Answer: C 122) Conversion rate is an example of ________. A) search engine optimization B) predictive analytics C) sentiment analysis D) customer equity E) marketing metrics Answer: E 123) Marketers use the metric of ________ to see the effectiveness of their marketing efforts in comparison to their competitors' actions. A) clickthrough rate B) conversion rate C) bounce rate D) sentiment analysis E) market share Answer: E 124) Marketers use the metric of ________ to see how engaging a website is to visitors in terms of the extent to which visitors explore it. A) clickthrough rate B) conversion rate C) bounce rate D) sentiment analysis E) market share Answer: C 125) Marketers use the metric of ________ to understand where web traffic is coming from and which marketing investments are generating enough interest in users to get them to follow a link to a product webpage. A) clickthrough rate B) conversion rate C) bounce rate D) sentiment analysis E) market share Answer: A 126) To determine the ________, marketers need to know the total advertising costs and the total number of purchases made. A) bounce rate B) conversion rate C) cost per order D) clickthrough rate E) market share Answer: C 127) In marketing metrics terms, a(n) ________ is desired consumer action. A) bounce B) conversion C) share D) control E) optimization Answer: B 128) Through the use of marketing metrics, the marketing team for the charity American Harvest, a national food bank program, learned that there was a significant increase in positive mention of American Harvest in discussions on social networks. American Harvest marketers quickly decided to increase the number of ads the charity was running on these social networks. This is an example of the use of ________. A) predictive analytics B) conversion rate C) market share D) marketing control E) bounce rate Answer: D 129) The marketing team for the charity American Harvest, a national food bank program, wants to understand the effectiveness of its fundraising efforts in comparison to those of similar charities such as Action Against Hunger and Feed America. American Harvest will most likely use the metric of ________. A) customer equity B) conversion rate C) market share D) share of customer E) bounce rate Answer: C 130) To determine an ad's click-through rate, marketers must know both the number of click-throughs and the number of impressions. Answer: True 131) Marketers for Ranch Life, a Connecticut family resort that offers horseback riding and a waterpark, want to determine what percentage of people who visit the resort's webpage actually sign up to receive emails about promotions and special programs at the resort. To do this, Ranch Life marketers will need to calculate the conversion rate. Answer: True 132) The marketing team for Lots-o-Chocolate wants to understand the effectiveness of the different components of its digital marketing campaign and put more resources toward its three top-performing sites for ads. How can the marketing team use marketing metrics and marketing control to achieve their objective? Answer: Marketing metrics are specific measures that help marketers watch the performance of their marketing actions. Lots-o-Chocolate would likely use the marketing metric of click-through rates to identify where web traffic is coming from and which online ads are generating enough interest for viewers to click on them. The marketing team would also likely look at the metric of conversion rate to better understand how effective their advertising is at persuading consumers to take desired actions, such as signing up to receive promotional offers. The team could put marketing controls in place to alert them to very low or very high performing online ads. With this type of control, marketers could quickly change the allocation of ad dollars toward the most effective websites and away from the least effective ones. 133) What is the difference between a click-through rate and a conversion rate? Explain why marketers may want to use both metrics. Answer: A click-through rate indicates the percentage of viewers of a website ad who click on the ad and are then taken to the product's webpage. This metric identifies who was interested enough to click on the ad, but it doesn't identify who took action on the product's webpage. This information can be found by calculating the conversion rate, which compares the total number of desired actions taken by viewers of the site to the total number of visitors to the website. 134) Briefly explain how marketers use marketing controls. Answer: Marketers use marketing controls to identify any shifts in expected performance of marketing efforts. These shifts can be positive or negative. Once a deviation from expected performance is identified, marketers can quickly act to adjust their marketing efforts to better achieve the desired results. 135) Identify two actions other than the purchase of a good or service that could be measured through calculation of a conversion rate. Answer: Answers may vary but may include signing up for a mailing list, following a company via social media, or signing up for a loyalty rewards program. Two actions other than the purchase of a good or service that could be measured through calculation of a conversion rate are: 1. Newsletter Sign-ups Conversion Rate: Calculating the percentage of website visitors who sign up for a newsletter. 2. Lead Generation Conversion Rate: Calculating the percentage of website visitors who fill out a contact form or request more information. Test Bank for Marketing: Real People, Real Choices Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart 9780132948937, 9780135199893, 9780134292663, 9780135209929
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