Marketing management Exercises finding ways to involve the Web in their jobs. The company developed an online network to monitor its manufacturing practices, put its human resources reviews online, and established 24/7 service center for its plants. Welch sees GE as well-positioned to take advantage of the Internet, because he thinks content is the easy part of e-commerce while "infrastructure is the hard part, and we have the infrastructure to capitalize on. (fn McGinn, Daniel, " Jack Welch Goe Surfing, "Newsweek, Dec 25, 2000.) In the 20 years Jack Welch was at GEs helm, the company prospered tremendously. GE stock rose 3,098 percent between April 1981 and February 2001, compared with 896 percent growth for the S&P 500 during that same period. Once Welch named his successor -Jeffrey Immelt head of GEs medical imaging business -in November 2000, analysts wondered what effect the change would have on the company Immelt, like Welch, has professed a dedication to the Internet. He describes it as"a transformational technology that is right in our sweet spot. (fn Useem, Jerry, Meet 'Da Man, Fortune, Jan 8, 2001. )What remains to be seen, though, is whether Immelt will conduct ge through a period of prosperity the way Welch has 1. Marketing would appear to be an important part of what Welch did with GE. Where and how did Welch apply some of the marketing concepts discussed in the text? 2. If Welch returned to the company following the events of late 2001 and 2002 (September 11, 2001 and the Enron debacle), what changes do you think he might make in the GE marketing strategy
Marketing Management Exercises 5 finding ways to involve the Web in their jobs. The company developed an online network to monitor its manufacturing practices, put its human resources reviews online, and established a 24/7 service center for its plants. Welch sees GE as well-positioned to take advantage of the Internet, because he thinks content is the easy part of e-commerce while “infrastructure is the hard part, and we have the infrastructure to capitalize on.” (fn McGinn, Daniel, “Jack Welch Goes Surfing,” Newsweek, Dec 25, 2000.) In the 20 years Jack Welch was at GE’s helm, the company prospered tremendously. GE stock rose 3,098 percent between April 1981 and February 2001, compared with 896 percent growth for the S&P 500 during that same period. Once Welch named his successor – Jeffrey Immelt, head of GE’s medical imaging business – in November 2000, analysts wondered what effect the change would have on the company. Immelt, like Welch, has professed a dedication to the Internet. He describes it as “a transformational technology that is right in our sweet spot.” (fn Useem, Jerry, “Meet ‘Da Man,” Fortune, Jan 8, 2001. )What remains to be seen, though, is whether Immelt will conduct GE through a period of prosperity the way Welch has. 1. Marketing would appear to be an important part of what Welch did with GE. Where and how did Welch apply some of the marketing concepts discussed in the text? 2. If Welch returned to the company following the events of late 2001 and 2002 (September 11, 2001 and the Enron debacle), what changes do you think he might make in the GE marketing strategy?
Marketing management Exercises Ch2. Building Customer Satisfaction, Value, and Retention I Multiple Choice is the difference between the prospective cus tomer's evaluation of all the benefits and all the costs of an offering as compared to the perceived alternatives A. Total customer value B. Customer perceived value C. Total customer cost D. Customer gains 2. Customers develop their expectations about a product they will purchase from all of the following sources except A. unread e-mail B. friends C. past experience 3. Which of the following is not a tool for tracking and measuring customer satisfaction? A. Complaint and suggestion systems B. Customer satisfaction surveys Ghost she D. All of the above 4 companies are increasingly focusing on the need to manage core siness processes such as new-product development, customer attraction and retention and order fulfillment. A. Big B. High-profile ormance D. Highly competitive 5. Which of the following are not resources that are needed by companies to carry out its business processes? A. lab B. commercials D. information A company's consists of its structures, policies, and corporate culture, all of which can be dysfunctional in a rapidly changing business environment A
Marketing Management Exercises 6 Ch2. Building Customer Satisfaction, Value, and Retention ⅠMultiple Choice 1. _________________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering as compared to the perceived alternatives. A. Total customer value B. Customer perceived value C. Total customer cost D. Customer gains 2. Customers develop their expectations about a product they will purchase from all of the following sources except: A. unread e-mail B. friends C. past experience D. peers 3. Which of the following is not a tool for tracking and measuring customer satisfaction? A. Complaint and suggestion systems B. Customer satisfaction surveys C. Ghost shopping D. All of the above 4. ___________ companies are increasingly focusing on the need to manage core business processes such as new-product development, customer attraction and retention, and order fulfillment. A. Big B. High-profile C. High-performance D. Highly competitive 5. Which of the following are not resources that are needed by companies to carry out its business processes? A. labor B. commercials C. materials D. information 6. A company's _________ consists of its structures, policies, and corporate culture, all of which can be dysfunctional in a rapidly changing business environment. A. organization
Marketing management Exercises B. rules C. policies 7. companies are acknowledged as the industry leaders and widely admired; they set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money A. Utopian B. Encouraging C. Comparison 8. The primary activities that represent creating value for customers as part of the value chain tool include all of the following except B. operations C. technol D. marketing and sales 9. Some of the ways that a company can seek to increase their profits and sales by searching for new customers include all of the following except A. ads B. reading the obituaries 10. Which of the following descriptions would best characterize a highly satisfied A. Buys more products and services B. Visits competitors on a regular basis C. Try other brands to make sure they are loyal to a company D. Would not complain so they can appear to remain loyal 11. Which of the following would best describe the calculation of a customer's lifetime A. The present value of the stream of future costs expected over the lifetime B. The present value of the stream of future income increases expected over the C. The future value of the stream of future costs expected over the lifetime D. The present value of the stream of future profits expected over the lifetime is the customer's objective assessment of the utility of an offering based on perceptions of its benefits relative to its cost A. Relations equity B. Brand equity 13. There are five different levels of investment n customer-relationship building. They are basic, reactive, proactive, partnership, and what? A. Subjective
Marketing Management Exercises 7 B. rules C. policies D. culture 7. _______________ companies are acknowledged as the industry leaders and widely admired; they set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money. A. Utopian B. Encouraging C. Comparison D. Visionary 8. The primary activities that represent creating value for customers as part of the value chain tool include all of the following except: A. inbound logistics B. operations C. technology D. marketing and sales 9. Some of the ways that a company can seek to increase their profits and sales by searching for new customers include all of the following except: A. ads B. reading the obituaries C. direct mail D. phone calls 10. Which of the following descriptions would best characterize a highly satisfied customer? A. Buys more products and services B. Visits competitors on a regular basis C. Try other brands to make sure they are loyal to a company D. Would not complain so they can appear to remain loyal 11. Which of the following would best describe the calculation of a customer's lifetime value? A. The present value of the stream of future costs expected over the lifetime B. The present value of the stream of future income increases expected over the lifetime C. The future value of the stream of future costs expected over the lifetime D. The present value of the stream of future profits expected over the lifetime 12. ____________ is the customer's objective assessment of the utility of an offering based on perceptions of its benefits relative to its cost. A. Relations equity B. Brand equity C. Value equity D. Net equity 13. There are five different levels of investment in customer-relationship building. They are basic, reactive, proactive, partnership, and what? A. Subjective
Marketing management Exercises B. Accountable D. Accounting 14. Creating structural ties with customers is a long-term process for a company. Which of the following would not be a good suggestion for creating those ties? A. Concentrate on current sales B. Create long-term contracts C. Charge a lower price to consumers who buy larger supplies D. Turn the product into a long-term service 15.A advantage is one that a company can use as a springboard to new advantages B. relationshi D. leverageable II True or False 1. Total customer value is the bundle of costs customers expect to incur in evaluating obtaining, using, and disposing of the given market offering.(F) 2. A person,'s feelings of pleasure or disappointment resulting from comparing a product's performance (or outcome) in relation to his or her own performance(or outcome)is called satisfaction. (F) 3. Customer expectations are created by buying experience, friends and associates advice, and marketers'and competitors' information and promises 4. A value inquest consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering.(F 5. One of the tools used to track and measure customer satisf action is a complaint and estion sy 6. Companies that navig ate all the pitfalls to reach their customer value and satisfaction goals are called high-performance companies (T) 7. Examples of resources that a company can use to carry on its business processes are labor, materials, and information. 8. The shared stories, experiences, beliefs, and norms that every employee has and shares within a company are called policies. (F) 9. Visionary companies are acknowledged industry leaders and are widely admired, set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money. D) 10. A value chain is a tool used by a company to identify ways to create more customer value through its activities. T) 11. The process of calculating a company's customer defection rate is called customer scrambling.(F) 12. A highly satisfied consumer stays loyal longer, buys more products talks favorably about the company, and shops at competitors regularly to keep up with price
Marketing Management Exercises 8 B. Accountable C. Objective D. Accounting 14. Creating structural ties with customers is a long-term process for a company. Which of the following would not be a good suggestion for creating those ties? A. Concentrate on current sales B. Create long-term contracts C. Charge a lower price to consumers who buy larger supplies D. Turn the product into a long-term service 15. A _________________ advantage is one that a company can use as a springboard to new advantages. A. customer B. relationship C. contractual D. leverageable ⅡTrue or False 1. Total customer value is the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering. (F) 2. A person's feelings of pleasure or disappointment resulting from comparing a product's performance (or outcome) in relation to his or her own performance (or outcome) is called satisfaction. (F) 3. Customer expectations are created by buying experience, friends' and associates' advice, and marketers' and competitors' information and promises. (T) 4. A value inquest consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering. (F) 5. One of the tools used to track and measure customer satisfaction is a complaint and suggestion system. (T) 6. Companies that navigate all the pitfalls to reach their customer value and satisfaction goals are called high-performance companies. (T) 7. Examples of resources that a company can use to carry on its business processes are labor, materials, and information. (T) 8. The shared stories, experiences, beliefs, and norms that every employee has and shares within a company are called policies. (F) 9. Visionary companies are acknowledged industry leaders and are widely admired, set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money. (T) 10. A value chain is a tool used by a company to identify ways to create more customer value through its activities. (T) 11. The process of calculating a company's customer defection rate is called customer scrambling. (F) 12. A highly satisfied consumer stays loyal longer, buys more products talks favorably about the company, and shops at competitors regularly to keep up with price
Marketing m 13. Customer lifetime value describes the present value of the stream of future profits expected over the customers lifetime purchases. T 14. Value equity is the customer's subjective and intangible assessment of the brand above and beyond its objectively perceived value.(F) 15. A customer advantage is something that a comp any can use as a springboard to new Ill Essay Questions 1.From your own personal standpoint, state three ways in which you create your expectations about your purchases as a consumer. 2. Core competencies are important for a business to recognize in themselves in order to e competitive Core competencies have three characteristics. State them 3. What is the difference between a visionary company and a comparison company? IV Marketing Spotlight Charles Schwab Charles Schwab founded the discount brokerage named for him in 1974. The company's no-frills investment offerings were predicated on Charles Schwab's distaste for traditional brokers, who he labeled"hucksters of inside inf omation, always trying to get me to buy this product or investment. Until 1993, Schwab's brokers were instructed not to offer investment advice, but rather to refer curious customers to publicly available research from Standard Poors or Morningstar Schwab benefited from the online trading boom. Long before any of the traditional brokerage houses considered an e-commerce move. in 1997 Schwab was one of the first discount brokerages to offer online trading It offered online trades at $29.95 for the first 1000 shares compared with the per-trade fees that exceeded $100. Starting at zero in 1995, online trades accounted for 85 percent of all trades executed by Schwab by 2001. The company s retail assets grew threefold to almost $1 trillion during the same time period, putting it in league with the biggest brokerages in America. Between 1997 and 2000, daily trades rose 183 percent. while profits increased 112 percent during that time frame Schwab's marketing activities helped the company become a household name synonymous with online trading Early ads used real Schwab customers and employees in testimonial advertisements. In 1999, the company enlisted celebrity spokespersons to advertise its full-service online investing offerings. The humorous ads featured sports stars such as football player Shannon Sharpe and tennis star Anna Kournikova in cameo roles as Schwab customers who surprised competitors with their knowledge of investing principles. The tagline served to reinforce Schwab's dif ference from online-only brokerages: "We' ve created a smarter kind of investing We've created a smarter kind of investor These ads were part of Schwab's $200 million marketing budget for 1999
Marketing Management Exercises 9 comparisons. (F) 13. Customer lifetime value describes the present value of the stream of future profits expected over the customer's lifetime purchases. (T) 14. Value equity is the customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value. (F) 15. A customer advantage is something that a company can use as a springboard to new advantages. (F) Ⅲ Essay Questions 1. From your own personal standpoint, state three ways in which you create your expectations about your purchases as a consumer. 2. Core competencies are important for a business to recognize in themselves in order to be competitive. Core competencies have three characteristics. State them. 3. What is the difference between a visionary company and a comparison company? Ⅳ Marketing Spotlight Charles Schwab Charles Schwab founded the discount brokerage named for him in 1974. The company's no-frills investment offerings were predicated on Charles Schwab's distaste for traditional brokers, who he labeled "hucksters of inside information, always trying to get me to buy this product or investment." Until 1993, Schwab's brokers were instructed not to offer investment advice, but rather to refer curious customers to publicly available research from Standard & Poor's or Morningstar. Schwab benefited from the online trading boom. Long before any of the traditional brokerage houses considered an e-commerce move, in 1997 Schwab was one of the first discount brokerages to offer online trading. It offered online trades at $29.95 for the first 1000 shares, compared with the per-trade fees that exceeded $100. Starting at zero in 1995, online trades accounted for 85 percent of all trades executed by Schwab by 2001. The company's retail assets grew threefold to almost $1 trillion during the same time period, putting it in league with the biggest brokerages in America. Between 1997 and 2000, daily trades rose 183 percent, while profits increased 112 percent during that time frame. Schwab's marketing activities helped the company become a household name synonymous with online trading. Early ads used real Schwab customers and employees in testimonial advertisements. In 1999, the company enlisted celebrity spokespersons to advertise its full-service online investing offerings. The humorous ads featured sports stars such as football player Shannon Sharpe and tennis star Anna Kournikova in cameo roles as Schwab customers who surprised competitors with their knowledge of investing principles. The tagline served to reinforce Schwab's difference from online-only brokerages: "We've created a smarter kind of investing. We've created a smarter kind of investor." These ads were part of Schwab's $200 million marketing budget for 1999