Question 1

The RFM score is obtained by ranking the customers on the basis of pricing patterns.

Accepted Answer

The RFM score is obtained by ranking the customers on the basis of three factors: Recency (when was the last time the customer made a purchase), Frequency (how often the customer makes purchases), and Monetary (how much they spend on each purchase). It is not based solely on pricing patterns.

Question 2

An RFM score of ________ means that if this customer goes to the competitor,loss to the company will be minimal.
A) 321
B) 333
C) 555
D) 111

Accepted Answer

C

Question 3

Database marketing is the application of business intelligence systems to the planning and execution of marketing programs.

Accepted Answer

Database marketing involves gathering and analyzing customer data to better understand their needs and preferences, and using this information to design targeted marketing campaigns. Business intelligence systems can help in the collection and analysis of customer data for database marketing purposes.

Question 4

In RFM analysis,an M score of ________ shows customers who have bought the least expensive item.
A) 2
B) 5
C) 1
D) 4

Accepted Answer

The answer of In RFM analysis,an M score of ________...

Question 5

Which of the following techniques uses a hierarchical arrangement of criteria to make predictions?
A) market-basket analysis
B) RFM technique
C) Cooke method
D) decision tree

Accepted Answer

The technique that uses a hierarchical arrangement of criteria to make predictions is the decision tree. It involves organizing data into a tree-like structure to represent different possible decision paths and outcomes. The decision tree analyzes data based on a series of questions or criteria, each of which leads to a set of possible outcomes. This makes it a popular tool for classification and prediction problems in data mining and statistical analysis.

Question 6

Which of the following is the first step in the process of producing an RFM score?
A) calculating income from most frequently bought items
B) calculating sales of the previous quarter
C) sorting customer purchase records by the date of most recent purchase
D) verifying customer IDs

Accepted Answer

The first step in creating an RFM score is to sort customer purchase records by the date of their most recent purchase. RFM stands for Recency, Frequency, and Monetary Value, and this step establishes the recency component of the score. The date of most recent purchase serves as a baseline for evaluating the recency of all other purchases.

Question 7

In market-basket terminology,a conditional probability estimate is referred to as ________.
A) support
B) cohesion
C) confidence
D) chance

Accepted Answer

Conditional probability estimate is referred to as confidence in market-basket terminology. Support refers to the frequency of an itemset occurring in a transaction database. Cohesion refers to the measure of how closely related items are within an itemset. Chance is not a term used in market-basket terminology.

Question 8

Which of the following RFM scores refer to the most valuable customer?
A) 111
B) 555
C) 123
D) 333

Accepted Answer

The answer of Which of the following RFM scores refer...

Question 9

If a customer has an RFM score of 113,which of the following actions should be implemented by the sales team?
A) should attempt to up-sell more expensive goods to this customer
B) should contact this customer immediately
C) should not waste any time on this customer
D) should set up an automated contact system for this customer.

Accepted Answer

The answer of If a customer has an RFM score...

Question 10

In market-basket terminology,the ratio of confidence to the base probability of buying an item is called ________.
A) cohesion
B) support
C) confidence
D) lift

Accepted Answer

The ratio of confidence to the base probability of buying an item is called lift. The lift value greater than 1 implies that the presence of an item in the antecedent increases the likelihood of the consequent. Therefore, lift is a better measure to determine the significance of the association between items in a market basket.

Question 11

What is the basic idea of the decision tree technique?
A) to analyze and rank customers according to their purchasing patterns
B) to select attributes that are most useful for classifying entities on some criterion
C) to determine annual sales patterns
D) to capture, store, analyze, and display geospatial data

Accepted Answer

The basic idea of the decision tree technique is to select attributes that are most useful for classifying entities on some criterion. This is done by creating a tree-like model of decisions and their possible consequences, where each branch represents a possible decision or occurrence, and each leaf node represents a classification or outcome. The technique is commonly used in data mining, machine learning, and statistical analysis to support decision-making and predictions.

Question 12

In market-basket terminology,________ is the term used to represent the probability that two items will be purchased together.
A) confidence
B) support
C) cohesion
D) assurance

Accepted Answer

The answer of In market-basket terminology,________ is the term used...

Question 13

________ shows how much the base probability increases or decreases when other products are purchased.
A) Lift
B) Support
C) Confidence
D) Cohesion

Accepted Answer

Lift shows the increase or decrease in the probability of an event occurring when another event has occurred. It is commonly used in market basket analysis to understand the relationship between different products and to identify cross-selling opportunities. Lift is calculated by dividing the probability of two events occurring together by the probability of them occurring separately. If the lift value is greater than 1, it means that the two events are positively correlated and if it is less than 1, it means they are negatively correlated.

Question 14

In RFM analysis,an F score of 1 shows that ________.
A) the customer has bought the least expensive item
B) the customer has frequently placed an order
C) the customer has always bought the most expensive item
D) the customer has rarely made a purchase

Accepted Answer

An F score of 1 in RFM analysis indicates that the customer has frequently placed orders. F score is calculated based on the frequency of customer purchases. The higher the F score, the more frequently the customer has made purchases. Therefore, a score of 1 indicates a frequent purchaser.

Question 15

In marketing transactions,the fact that customers who buy product X also buy product Y creates a(n)________ opportunity.
A) relationship selling
B) cross selling
C) value added selling
D) persuasive selling

Accepted Answer

Cross selling refers to the marketing technique of offering complementary products to customers who have purchased a particular product, based on the observation that customers who buy product X are likely to also buy product Y. Relationship selling refers to building long-term relationships with customers, value-added selling focuses on emphasizing the additional value that a product/service offers, and persuasive selling involves convincing customers to purchase a product/service. None of these options fully capture the concept of customers buying complementary products, making B the best choice.

Question 16

Data-mining techniques are essential for database marketing.

Accepted Answer

Data-mining techniques are used to uncover useful or relevant patterns in large databases, which can then be used for marketing campaigns, target audience identification, and personalized messaging. Therefore, it is true that these techniques are essential for database marketing.

Question 17

Which of the following is a way of analyzing and ranking customers according to their purchasing patterns?
A) composite forecasts
B) RFM analysis
C) Cooke method
D) Delphi technique

Accepted Answer

RFM analysis (Recency, Frequency, Monetary) is a method of analyzing and ranking customers according to their purchasing patterns based on three factors: how recently a customer has made a purchase (recency), how frequently they make purchases (frequency), and how much they spend on each purchase (monetary). This can be used to identify high-value customers, as well as to target specific marketing campaigns to different segments of customers. Composite forecasts are a method of predicting future demand by combining multiple forecasts, the Cooke method is a technique for optimizing experimental designs, and the Delphi technique is a method of decision-making by assembling a panel of experts to provide their opinions and feedback.

Question 18

Which of the following marketing techniques refers to the application of business intelligence systems to the planning and execution of marketing programs?
A) ambush marketing
B) viral marketing
C) database marketing
D) guerrilla marketing

Accepted Answer

Database marketing involves using business intelligence systems to collect customer data and use it to plan and execute targeted marketing programs. Ambush marketing is a strategy where a company exploits an event without paying for sponsorship, viral marketing involves using social media and word-of-mouth to promote a product or service, and guerrilla marketing is a high-energy and unconventional approach to marketing. None of these techniques specifically involve the use of business intelligence systems.

Question 19

Which of the following is a data mining technique for determining sales patterns?
A) RFM analysis
B) market basket analysis
C) composite analysis
D) Cooke analysis

Accepted Answer

Market basket analysis is a data mining technique used to determine sales patterns by analyzing which items are frequently purchased together. It helps retailers to optimize their product placement and promotional strategies. RFM analysis categorizes customers based on their purchasing behavior, composite analysis is a statistical technique used to analyze multiple variables, and Cooke analysis is not a commonly used data mining technique in retail sales analysis.

Question 20

In RFM analysis,an R score of 5 shows that ________.
A) the customer has not made recent purchases
B) the customer has bought the most expensive item
C) the customer has frequently ordered costly items
D) the customer has purchased high end items lately

Accepted Answer

The answer of In RFM analysis,an R score of 5...

Quiz 27: Database Marketing

The RFM score is obtained by ranking the customers on the basis of pricing patterns.

An RFM score of ________ means that if this customer goes to the competitor,loss to the company will be minimal.

Database marketing is the application of business intelligence systems to the planning and execution of marketing programs.

In RFM analysis,an M score of ________ shows customers who have bought the least expensive item.

Which of the following techniques uses a hierarchical arrangement of criteria to make predictions?

Which of the following is the first step in the process of producing an RFM score?

In market-basket terminology,a conditional probability estimate is referred to as ________.

Which of the following RFM scores refer to the most valuable customer?

If a customer has an RFM score of 113,which of the following actions should be implemented by the sales team?

In market-basket terminology,the ratio of confidence to the base probability of buying an item is called ________.

What is the basic idea of the decision tree technique?

In market-basket terminology,________ is the term used to represent the probability that two items will be purchased together.

________ shows how much the base probability increases or decreases when other products are purchased.

In RFM analysis,an F score of 1 shows that ________.

In marketing transactions,the fact that customers who buy product X also buy product Y creates a(n) ________ opportunity.

Data-mining techniques are essential for database marketing.

Which of the following is a way of analyzing and ranking customers according to their purchasing patterns?

Which of the following marketing techniques refers to the application of business intelligence systems to the planning and execution of marketing programs?

Which of the following is a data mining technique for determining sales patterns?

In RFM analysis,an R score of 5 shows that ________.