23. The type of firm that typically has established capabilities in fulfillment and customer service:
ANS: B REF: p. 88
TRUE/FALSE 1. The interactivity of the Internet is important to its usefulness as a direct-response medium.
ANS: T REF: p. 82
2. It is not important whether the Internet is recognized as a direct-response medium or not.
ANS: F REF: p. 82
3. The immediacy of the Internet can be employed to satisfy the consumer's desire for instant gratification.
ANS: T REF: p. 82
4. A direct-response offer must include a call to action.
ANS: T REF: p. 86
5. It is impossible to calculate the value of a fan on social media.
ANS: F REF: p. 95
6. A "sticky" website is one that can last for a considerable period of time without major changes and updates.
ANS: F REF: p. 86
7. The "back end" refers to business functions like warehousing and distribution that are not a concern of the marketer.
ANS: F REF: p. 85
8. CLV is essentially the NPV of all sales to a given customer.
ANS: F REF: p. 92
9. In CLV calculations the discount rate is based solely on the current interest rate.
ANS: F REF: p. 92
10. Marketers should be attempting to acquire more new customers like their best current customers.
ANS: T REF: p. 94
11. Response modeling is a form of predictive modeling.
ANS: T REF: p. 105
12. A data warehouse is a repository where data that is no longer current is stored.
ANS: F REF: p. 104
13. Data mining tools are designed to sift through large quantities of data looking for patterns of customer behavior.
ANS: T REF: p. 106
14. Information-driven marketing can be thought of as a process that permits interactions, transactions, personalization and customization.
ANS: T REF: p. 110
15. All offers are a form of sales promotion.
ANS: T REF: p. 85
1. The most effective Internet marketing programs make use of the Four I's. Identify each of them, carefully explain what it means and why it is important, and give an example of each in action in an Internet marketing program.
The Four Is are:
Interactive: two way dialog is a possible definition
REF: p. 82
2. Customer Lifetime Value is one of the most-discussed topics in marketing today. Explain what CLV means, the basic structure of a CLV calculation, and give one or more examples of how it can be used to improve marketing programs.
The best short definition is probably "the net present value of a future revenue stream, less the costs of serving the customer."
I try to get students to remember the basic structure from the text:
Net Customer Revenue
Cost of Goods Sold
Cost of Servicing
× Cost of Capital/Discount Rate
The Safeway example or the Facebook calculations in the chapter will be the easiest unless you have gone over other specific examples. The Harrah's example is not very detailed, but good students may recognize the importance of customer value in deciding what services and incentives to offer to gambling customers.
REF: pp. 91-95
3. The text suggests that, as marketers learn more about their customers, they can engage in programs of increasing complexity and effectiveness. Discuss this concept in detail.
The easiest way for students to approach this would be the hierarchy of customer-focused strategies. That is intended to illustrate that more data allows for more targeted, focused, and perhaps complex marketing programs. The analytical hierarchy—profiling to segmentation to predictive modeling—represents another approach. Data increases relevance, which should lead to effectiveness. You might want to ask them to develop an example instead of just relying on concepts.