Question 1 (5 points) BobbyGs coffee house has determined that their highly-satisfied customers purchase coffee 144 times/year, spend an average $4.00 per visit and seem to remain a customer for an average of 4 years. BobbyGs makes a 50% profit on each purchase and profit should be used for Life Time Value calculations. Current interest rates are at 5%, annual which remain constant. There is a 100% probability of customers returning each of the 4 years. BobbyGs has calculated the Life Time Value of these customers (using annual cash flow streams) to be in the range of ________.

$2,035 - $2,044

$2,300 - $2,310

$1,150 - $1,159

$1,015 - $1,024

Not enough information has been provided

Question 2 (1 point) A strategic group is a set of firms in an industry following the same or a similar strategy in a given target market.

True

False

Question 3 (1 point) According to the service-quality model, the fourth gap is the one between ________.

perceived service and expected service

service delivery and external communications

service-quality specifications and service delivery

management perception and service-quality specification

consumer expectation and management perception

Question 4 (1 point) In response to price cuts, from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower priced option to its product line. This is an example of which of the following responses to competitors price cut?

accepting a reduced market share

launching a fighter brand

using high-low pricing

raising the perceived value of a product

improving product quality

Question 5 (1 point) There is a(n) ________ where consumer perceptions on a service dimension would be deemed satisfactory, anchored by the minimum level consumers would be willing to accept and the level that customers believe can and should be delivered.

empathy

zone of tolerance

zone of forgiveness

perceived forgiveness

value definition

Question 6 (1 point) For newly introduced products with which the market is not familiar and for which instruction in proper use may be necessary, the overriding promotional objective should be________.

Differentiating the product.

Accentuating its value.

Increasing customer demand.

Increasing market share.

Providing information.