CUSTOMER RELATIONSHIP MANAGEMENT Kumar and Reinartz

Concept, Strategy, and Tools

CHAPTER ONE

Multiple Choice Questions

1) Identify a strategy from among the following which is not applicable to CRM.
a) Identifying different types of customers
b) Developing better relationships with profitable customers
c) Locating and enticing customers who will be profitable
d) Treating all the customers as equal irrespective of their profitability.

2) The economic value of the customer relationship to the firm expressed on the basis of
contribution margin or net profit is called ____.
a) brand equity
b) relationship value
c) customer value
d) profitability of the firm

3) The practice of sales force automation within the sales function is an example of ____ CRM.
a) customer-facing front end level
b) functional level
c) strategic level
d) firm level

4) The key components of CRM from a business strategy perspective do not include ____.
a) the process of selecting profitable customers
b) shaping the interactions between company and customers
c) optimizing current and future value of customers
d) focusing on extracting maximum profit from a single transaction

5) Which among the following is not a recent customer trend?

a) Increase health consciousness
b) Expect companies to be sustainable
c) Expecting the lowest costs
d) Increased demand for authenticity

6) Which of the choices listed below is not a changing trend in the marketplace?
a) More intense competition for customers
b) More fragmentation in the market
c) Quality difference among products is increasing
d) Product differentiation is becoming more difficult

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CUSTOMER RELATIONSHIP MANAGEMENT Kumar and Reinartz
Concept, Strategy, and Tools

7) In social CRM customer values is also based on____.

a) Customers household size
b) Customer marital status
c) Customers online behavior
d) None of the above

8) Consumers increasingly use social media. With regards to this trend which of the following
is not a key opportunity for companies?
a) New learning opportunities (listening to consumers online)
b) Improvement of the timeliness of consumers feedback
c) Increased control over the consumer
d) Creation of new forms of communication strategies

9) Which of the following is an emerging demographic trend in developed countries?

a) The median age of adults drastically coming down
b) Increasing birth rate
c) Median age of adults going up
d) The population of young people increasing

10) Which of the choices below is not a major force that results in changes for modern firms
a) Prices
b) Marketing functions
c) Consumers
d) Marketplaces

True or False Questions

1) Telephone and email are examples of mass communication channels.

a) True
b) False

2) Cost reduction is the most critical challenge nowadays.

a) True
b) False

3) Strategic CRM is primarily driven by technological solutions.

a) True
b) False

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CUSTOMER RELATIONSHIP MANAGEMENT Kumar and Reinartz
Concept, Strategy, and Tools

4) CRM at a functional level focuses on customer satisfaction.

a) True
b) False

5) Social CRM aims to optimize the customer experience.

a) True
b) False

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CUSTOMER RELATIONSHIP MANAGEMENT Kumar and Reinartz
Concept, Strategy, and Tools

PRACTICE QUESTIONS

Multiple Choice Questions

1) Which of these is/are true about the traditional mass-marketing approach:

A In traditional marketing, standardized products were designed and delivered to meet the needs
of customer segments
B In traditional marketing, products were designed and delivered to meet the needs of individual
customers
C Traditional marketing was product-focused
D Traditional marketing was customer-focused
a) A only
b) B only
c) A and C
d) B and C
e) B and D

2) At the customer-facing front-end level of conceptualization of CRM, focus is on:

a) Technology
b) Total customer experience
c) Customer satisfaction
d) Marketing functions
e) Communication media

3) Which of the following does not hold true with respect to changes to consumers in the
current business environment?
a) Increased diversity in ethnicity
b) Increased free time
c) Increased use of apps
d) Increasing individualization
e) Increased demand for experience

4) When did companies start to integrate customer-facing front end systems with back-end
systems and with systems used by partners and suppliers?
a) In the first generation of CRM
b) In the second generation of CRM
c) In the third generation of CRM
d) In the fourth generation of CRM
e) They did not integrate front end with back end systems yet

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CUSTOMER RELATIONSHIP MANAGEMENT Kumar and Reinartz
Concept, Strategy, and Tools

5) Which of the following does not hold true with respect to changes in the marketing function?
a) Media Dilution
b) Channel Multiplication
c) Increasing Marketing Effectiveness
d) Decreasing Marketing Efficiency
e) None of the above

True or false

1) Changes in the business environment are driving the transactions in the marketplace to be
more and more product-based.
a) True
b) False

2) To address customers’ particular needs, the market must be broken down into multiple
segments, which facilitates individualized marketing.
a) True
b) False

3) The major challenge facing companies now is meeting consumer preferences rather than cost
reduction.
a) True
b) False

4) Social CRM refers to the fourth generation of CRM.

a) True
b) False

5) Companies should empower their consumers to perform minor services themselves but be
consistently available when customers’ problems grow more complex.
a) True
b) False

A. Briefly describe the stages of development of CRM, from the 1990’s until today.

II. What are the changes in the business environment with respect to the marketplace and
what are their consequences?