MBA 706 Test 2 Questions with Correct Answers Latest Update 2025/2026
Traditional Organizational Structure - Answers pyramid with the president at the top, man-
agement in the middle, and frontline people and customers at the bottom
Customer Perceived Value (CPV) - Answers the difference between the prospective customer's
evaluation of all the benefits and all the costs of an offering and the perceived alternatives
Total Customer Benefit - Answers the perceived monetary value of the bundle of economic,
functional, and psychological benefits customers expect from a given market offering because
of the product, service, people, and image
total customer cost - Answers the perceived bundle of costs customers expect to incur in
evaluating, obtaining, using, and disposing of the given market offering, including monetary,
time, energy, and psychological costs
Customer value analysis - Answers reveals the company's strengths and weaknesses relative to
those of various competitors.
The steps in this analysis are:
1. Identify the major attributes and benefits customers value.
2. Assess the quantitative importance of the different attributes and benefits.
3. Assess the company's and competitors' performances on the different customer values
against their rated importance.
4. Examine how customers in a specific segment rate the company's performance against a
specific majorcompetitoronanindividualattributeorbenefitbasis
5. Monitor customer values over time
Loyalty - Answers A deeply held commitment to rebuy or repatronize a preferred product or
service in the future despite situational influences and marketing efforts having the potential to
cause switching behavior.
value proposition - Answers consists of the whole cluster of benefits the company promises to
deliver; it is more than the core positioning of the offering.
value delivery system - Answers includes all the experiences the customer will have on the way
to obtaining and using the offering
Satisfaction - Answers is a person's feelings of pleasure or disap- pointment that result from
comparing a product's perceived per- formance (or outcome) to expectationS
, -depends on product and service quality
Periodic surveys - Answers can track customer satisfaction directly and ask additional
questions to measure repurchase intention and the respondent's likelihood or willingness to
recommend the company and brand to others.
quality - Answers Is the totality of features and characteristics of a product or service that bear
on its ability to satisfy stated or implied needs.
profitable customer - Answers a person, household, or company that over time yields a revenue
stream exceeding by an acceptable amount the company's cost stream for attracting, selling,
and serving that customer.
customer profitability analysis - Answers Is best conducted with the tools of an accounting
technique called activity based costing(ABC) The company estimates all revenue coming from
the customer, less all costs (including the direct and indirect costs of serving each customer)
*Companies that fail to measure their costs correctly are also not measuring their profit
correctly are most likely to misallocate their marketing efforts.
Customer Lifetime Value (CLV) - Answers describes the net present value of the stream of
future profits expected over the customer's lifetime purchases.
CLV calculations provide a formal quantitative framework for planning customer investment
and help marketers adopt a long-term perspective
Customer Relationship Management (CRM) - Answers is the process of carefully managing
detailed information about individual customers and all customer "touch points" to maximize
loyalty.
CRM enables companies to provide excellent real-time customer service through the effective
use of individual account information.
Customer touch point - Answers any occasion on which a customer encounters the brand and
product—from actual experience to personal or mass communications to casual observation.
Personalizing marketing - Answers is about making sure the brand and its marketing are as
personally relevant as possible to as many customers as possible—a challenge, given that no
two customers are identical.
Traditional Organizational Structure - Answers pyramid with the president at the top, man-
agement in the middle, and frontline people and customers at the bottom
Customer Perceived Value (CPV) - Answers the difference between the prospective customer's
evaluation of all the benefits and all the costs of an offering and the perceived alternatives
Total Customer Benefit - Answers the perceived monetary value of the bundle of economic,
functional, and psychological benefits customers expect from a given market offering because
of the product, service, people, and image
total customer cost - Answers the perceived bundle of costs customers expect to incur in
evaluating, obtaining, using, and disposing of the given market offering, including monetary,
time, energy, and psychological costs
Customer value analysis - Answers reveals the company's strengths and weaknesses relative to
those of various competitors.
The steps in this analysis are:
1. Identify the major attributes and benefits customers value.
2. Assess the quantitative importance of the different attributes and benefits.
3. Assess the company's and competitors' performances on the different customer values
against their rated importance.
4. Examine how customers in a specific segment rate the company's performance against a
specific majorcompetitoronanindividualattributeorbenefitbasis
5. Monitor customer values over time
Loyalty - Answers A deeply held commitment to rebuy or repatronize a preferred product or
service in the future despite situational influences and marketing efforts having the potential to
cause switching behavior.
value proposition - Answers consists of the whole cluster of benefits the company promises to
deliver; it is more than the core positioning of the offering.
value delivery system - Answers includes all the experiences the customer will have on the way
to obtaining and using the offering
Satisfaction - Answers is a person's feelings of pleasure or disap- pointment that result from
comparing a product's perceived per- formance (or outcome) to expectationS
, -depends on product and service quality
Periodic surveys - Answers can track customer satisfaction directly and ask additional
questions to measure repurchase intention and the respondent's likelihood or willingness to
recommend the company and brand to others.
quality - Answers Is the totality of features and characteristics of a product or service that bear
on its ability to satisfy stated or implied needs.
profitable customer - Answers a person, household, or company that over time yields a revenue
stream exceeding by an acceptable amount the company's cost stream for attracting, selling,
and serving that customer.
customer profitability analysis - Answers Is best conducted with the tools of an accounting
technique called activity based costing(ABC) The company estimates all revenue coming from
the customer, less all costs (including the direct and indirect costs of serving each customer)
*Companies that fail to measure their costs correctly are also not measuring their profit
correctly are most likely to misallocate their marketing efforts.
Customer Lifetime Value (CLV) - Answers describes the net present value of the stream of
future profits expected over the customer's lifetime purchases.
CLV calculations provide a formal quantitative framework for planning customer investment
and help marketers adopt a long-term perspective
Customer Relationship Management (CRM) - Answers is the process of carefully managing
detailed information about individual customers and all customer "touch points" to maximize
loyalty.
CRM enables companies to provide excellent real-time customer service through the effective
use of individual account information.
Customer touch point - Answers any occasion on which a customer encounters the brand and
product—from actual experience to personal or mass communications to casual observation.
Personalizing marketing - Answers is about making sure the brand and its marketing are as
personally relevant as possible to as many customers as possible—a challenge, given that no
two customers are identical.
