Explain the three basic strategies for customer-based objectives
What will be an ideal response?
• Customer Acquisition (Getting Customers): Different types of companies adopt different types of customer
acquisition strategies to adapt to the needs of their particular market. Whether the company acquires new
customers using market penetration methods (like capturing competitors ' customers) or market development
methods (like selling existing services to a new group of customers), companies must ensure that customers value
their offering, or they will not be successful.
• Customer Retention (Keeping Customers): Having acquired the customer, companies use customer retention
strategies to keep them. Retention is not just a question of keeping customers; it is of keeping the right customers.
Spending large amounts to keep unprofitable customers rarely makes sense. To increase customer focus while still
maintaining profitability, companies must realize that different customers have different customer lifetime values
(the total profit resulting from the business relationship with the customer over their lifetime). As a result, many
companies employ customer tiering to rank their customers according to their customer lifetime value.
• Customer Revenue Growth (Growing Customers): Retaining customers helps keep customer lifetime value;
growing customers increases it. Customer revenue growth strategies typically involve increasing their lifetime
(introducing them to the product or service earlier to extend the relationship), increasing the amount of revenue
generated from every customer interaction (like super-sizing), or extending the company's value proposition to
provide an array of products and services that customers appreciate. Customer relationship management (CRM)
software helps grow customer value by capturing customer preferences so companies can tailor value-added
products and services to them.
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Which of the following statements is most appropriate?
a. Managers do the right thing. Leaders do things right. b. Managers do things right. Leaders do the right thing. c. Managers do little. Leaders do much. d. none of these
Define market-based transfer price. When should market-based transfer pricing be used? Explain your answer.
What will be an ideal response?
Equity is stressed most strongly by _______________________________ and _______________________________ unionism.
Fill in the blank(s) with the appropriate word(s).
John has been hired by Bubbaweiser Beer Company to purchase an airplane. He approaches
Sam who has a Cessna for sale. John does not mention that he is making this purchase on behalf of someone else. He negotiates a deal. Two weeks later, Sam learns that John did not negotiate the deal for himself, but was acting as an agent. Bubbaweiser declares bankruptcy and cannot buy the plane. John: A) Can be held liable on the contract because this was a partially disclosed agency. B) Can be held liable on the contract because this was an undisclosed agency. C) Can be held liable on the contract unless he was on a frolic and detour. D) Can be held liable on the contract simply because he is an agent. E) Cannot be held liable on the contract.