In Which of the Following Situations Has a Company Most

question 74

Multiple Choice

In which of the following situations has a company most actively embraced customer-managed relationships?

• A) American Airlines awards frequent flyer points to returning customers.
• B) Paige Premium Denim jeans provide superior quality and perfect fit.
• C) iRobot invites enthusiastic Roomba owners to develop and share their own uses for the company's robotic vacuum cleaner.
• D) Best Buy distinguishes between its best customers and its less profitable customers, stocking merchandise to appeal to each group.
• E) Toyota develops a marketing presence on social networks and other online communities.

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Definitions:

Cash Flow Hedge

A hedge of the exposure to the variability in cash flows that is attributable to a particular risk that is associated with all, or some component of, a recognized asset or liability or a highly probable forecast transaction and could affect profit or loss.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date.

Recognised Borrowings

Loans and other forms of financial debt that are acknowledged on a company's balance sheet as liabilities.

Forward Exchange Contract

An agreement between two parties to exchange a specified quantity of one currency for another at a specified exchange rate on a specified future date.