Sophisticated Firms Have Learned the Marketing Lesson That

question 27

Multiple Choice

Sophisticated firms have learned the marketing lesson that

• A)it is a lot easier to find new customers than to keep existing ones.
• B)the buying experience, customer satisfaction, and retention can increase firm profits.
• C)it is not clear whether it is easier to find new customers or to keep existing ones.
• D)existing customers do not usually spend as much as new customers since the initial novelty of the product declines over time.
• E)unless a marketing promotion to retain customer loyalty can increase market share by at least 5% it is not worth the expenditure.

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Definitions:

Acquirer

The entity that obtains control of another entity (acquiree) in a business combination, typically through the purchase of its equity interests or assets.

Negative Goodwill

Occurs when the price paid for an acquisition is less than the fair market value of its net tangible assets, often recognized as a gain in the acquirer's financial statements.

Consolidated SFP

Consolidated Statement of Financial Position; a financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as one single entity.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.