Indicate which level of measurement is being used in the given scenario. The owner of a restaurant uses a Net Promoter Score to determine how likely their customers are to recommend the restaurant to their friends.
Question
Indicate which level of measurement is being used in the given scenario. The owner of a restaurant uses a Net Promoter Score to determine how likely their customers are to recommend the restaurant to their friends.
Solution
The level of measurement used in this scenario is Ordinal. The Net Promoter Score (NPS) is a tool that measures customer experience and predicts business growth. Customers are asked to rate on a scale (usually 0-10) how likely they are to recommend the restaurant to their friends. This scale represents an ordered series of relationships or rank order, which is characteristic of ordinal level of measurement.
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Which statement is CORRECT about the Net Promoter Score (NPS)?The NPS is presented as a number between -100 and 100Passives are those who score between 0 and 6 on the NPS rating scaleThe NPS is a good overall indicator of the brand performance dimension of the customer-based brand equity (CBBE) modelIt is usually measured on a 7-point rating scale
The Net Promoter Score (NPS) is a metric used to measure how likely customers will recommend the organization and its products or services and the Customer Effort Score (CES) is a metric used to measure the ease with which customers interact with our prodOPTION ACTIONTRUE FALSE
Which of the following is a common metric for tracking customer experience?Answer choicesSelect only one optionREVISITNet Promoter Score (NPS)Gross Profit MarginOperating Expense RatioReturn on Investment (ROI)
Indicative content guidanceAnswers must be credited by using the level descriptors (below) in line withthe general marking guidance. The indicative content below exemplifies someof the points that candidates may make but this does not imply that any ofthese must be included. Other relevant points must also be credited.Quantitative skills assessed:QS9: Interpret, apply and analyse information in written, graphical andnumerical formsKnowledge, Application, Analysis, Evaluation – indicative content• Market share is the percentage of an industry/market's total salesearned by a particular company over a specified time period• Increasing global market share from 6% is important to Realmebecause it is a measure of the consumers' preference over otherbrands such as Apple and Samsung. Increased market share is likelyto mean more sales/profit for Realme• Realme’s market share is an indicator of how well it is performing inrelation to its competitors. An increase in its share will attract newcustomers who may become loyal to its business• Higher market share may give Realme a competitive advantage.Companies with higher market share have increased buying powerand may benefit from economies of scale which may allow them topossibly reduce its prices/or increase profitability• However, it may be very difficult and unrealistic to take market sharefrom leaders such as Apple and Samsung who have been establishedin the market for many years, unlike Realme that was only foundedin 2018• Realme may have to spend considerably more than establishedbrands in order to compete for market share. This could increase itscosts and reduce its profitability• Other objectives may be more important to Realme such as profitmaximisation or the innovation of its phones• It depends on the growth of the global smartphone market as towhether Realme should pursue this objective
Which metric measures the ease with which customers can access products and channels?OPTION ACTIONCustomer Effort score Customer satisfaction score Net Promoter Score Service Review
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