Chap 003

Chapter 03 - Linking Strategies and the Sales Role in the Era of Customer Relationship Management
Chapter 03
Linking Strategies and the Sales Role in the Era of Customer Relationship
Management
True / False Questions
1. Personal selling fits into the marketing mix as part of a firm's product strategy.
True False
2. Research suggests that firms with a higher level of customer orientation are more
successful.
True False
3. CRM is any application or initiative that optimizes interactions with customers, vendors or
prospects via one or more tops-to-tops.
True False
4. CRM is both a philosophy and a pragmatic system.

True False
5. The major cause of growth in CRM is technology.

True False
6. CRM has facilitated the shift from one-to-one to mass marketing.

True False
7. The lifetime value of a customer concept emphasizes cost savings, revenue growth, profits
and referrals from loyal customers.
True False
3-1
8. To The process cycle for CRM may be broken down into the following four elements:
(1) Knowledge discovery, (2) market planning, (3) customer interaction and (4) analysis and
refinement.
True False
9. Many companies have abandoned CRM because of no change in management initiative.

True False
10. Market-driven companies do a better job of market sensing.

True False
11. Both market sensing and relationship building can develop without the presence of
adequate spanning processes.
True False
12. Finance-driven companies do a better job of market sensing.

True False
13. Convincing the accounting department to change its procedures to meet the needs of
important customers is an example of external partnering.
True False
14. The most appropriate way for a firm to define its mission is in terms of the broad human
needs it will try to satisfy.
True False
3-2
15. Generally, good objectives should be specific, measurable and realistically attainable.
True False
16. According to Michael Porter, competitive strategies can be based on cost, differentiation
and niche.
True False
17. Prospector, Defender and Analyzer are three strategies to develop functional
competencies.
True False
18. The first step in developing and implementing market strategies is programming the
appropriate marketing mix.
True False
19. The order from weakest to strongest market relationships is market exchanges, strategic
partnerships and functional relationships.
True False
20. Strategic partnerships can be created with every customer.

True False
21. The goal in developing customer relationships is gaining customer loyalty.

True False
22. Many companies attempt full line selling as a means of getting their "foot in the door".
True False
3-3
23. TQM is often a requirement in order to gain preferred provider status.

True False
24. The advantage of personal selling as a marketing communications tool stems largely from
its face-to-face communication with a potential customer.
True False
25. Personal selling is always a more expensive marketing communications tool than either
advertising or sales promotion.
True False
26. Commitment in a relationship need only exist between the salesperson and the customer
contact.
True False
27. The manufacturers' sales forces typically play a greater role in the sale of automobiles,
boats, refrigerators and swimming pools than in the sale of chewing gum, fingernail clippers
and light bulbs.
True False
28. The relative importance of advertising in marketing communications is higher for

products that require no post-purchase service, that use a push strategy and that have a preset
price.
True False
29. Just-in-time delivery systems are one effort by marketers to build reseller support.
True False
3-4
30. Supply chain alliances and efficient consumer response systems are examples of
marketing relationships.
True False
31. In marketing strategy, personal selling is relatively important when there are many
potential customers.
True False
32. Maintaining customer loyalty is one outcome of a market orientation.

True False
Multiple Choice Questions
33. Personal selling is part of a firm's

A. Product mix
B. Pricing mix
C. Marketing communication mix
D. Distribution mix
E. Personal selling is an integral part of all parts of a firm's marketing mix
34. Assume your school or university begins assessing students' needs and wants, consulting
with students regarding problems and solutions and develops a formal customer analysis
process. Your school could be developing a
A. Touchpoint data entry system
B. Customer-centric culture
C. Strategic business unit
D. Efficient consumer response
E. Functional relationship
3-5
35. Call centers, sales reps, distributors, Web and e-mail are all examples of possible
A. Strategic directions
B. Cross-selling teaming
C. Supply chain alliances
D. Touchpoints
E. Goals
36. The increasing use of customer relationship management is partly attributable to:
A. Technology
B. Mission-driven statements
C. Pull strategies
D. Preferred supplier relationships
E. Formalization
37. The evolution of customer relationship marketing has progressed from:

A. Mass, target, one-to-one, to customer marketing
B. One-to-one, mass, target, to customer marketing
C. Customer, mass, target, to one-to-one marketing
D. Mass, target, customer, to one-to-one marketing
E. Customer relationship marketing has always existed
38. Which of the following is not one of the advantages of CRM?

A. Increases advertising costs
B. Makes it easier to target specific customers
C. Allows greater competition based on service rather than price
D. Prevents overspending on low-value customers
E. Makes it easier to track effectiveness
3-6
39. Archway furniture is projecting their expected financial returns from different groups of
customers. Archway is estimating the
A. Data warehousing ROI
B. Supply chain cost and revenues
C. Lifetime value of customers
D. Marketing mix profitability
E. Generic strategy returns
40. Alex studies the projected financial returns from his customers including the money,
resources, time and information involved in managing each account. Based on this analysis he
may decide to
A. Formalize customer loyalty
B. Fire some customers
C. Utilize a push and pull financial information strategy
D. Develop strategic, sustainable functional trusts
E. None of the above
41. A ___________ environment affords the opportunity to combine large amounts of

information and then use __________ techniques to learn more about current and potential
customers.
A. One-to-one; strategic partnerships
B. Customer loyalty; delivery
C. Data warehouse; data mining
D. Just-in-time data; efficient customer response (ECR)
E. Preferred supplier; Total quality management (TQM)
42. Which of the following is not a part of the process cycle for CRM?
A. Marketing planning
B. Knowledge discovery
C. Customer interaction
D. Touchpoint targeting
E. Analysis and refinement
3-7
43. Some key reasons for CRM system flops in sales organizations include:
A. Lack of focus
B. Complicated procedures
C. Minimal buy-in
D. Business units are silos
E. All of the above
44. Your school is implementing a new CRM initiative. Which of the following questions
should they ask?
A. What do our investors want and expect?
B. How do we centralize control?
C. Who are we?
D. How do we increase our control for change?
E. All of the above
45. The School of Business at a regional university was the first part of the institution to adopt
CRM. Two years later, the initiative was quietly dropped. One possible cause for the failure
was:
A. Total buy-in by the staff and administrators
B. Simplification of procedures as a result of CRM
C. Training
D. Focus on software that met the goals
E. Lack of management initiative
46. Alexandra, the sales manager for a regional hotel chain, knows her salespeople identify
customer needs, tailor products and services to meet those needs, negotiate prices and a
variety of other activities. She decides to redefine their jobs and call her salespeople
A. Category management specialists
B. Data mining marketers
C. Marketing representatives
D. Customer loyalty partners
E. Preferred providers
3-8
47. Justine is frustrated with her company's inability to link production, customer service and
other internal processes with her customers. Justine believes her company's __________ are
inadequate.
A. Spanning processes
B. Customer value measures
C. Strategic business units
D. Mission statements
E. Top-to-top selling teams
48. As part of a sales organization, you are responsible for alerting the company to changes in
external environment. Which of the following would most likely be your responsibility?
A. Cost control
B. Market sensing
C. Purchasing management
D. Strategy development
E. Environmental health and safety
49. You are the new sales manager for automobile retailer. You attempt to improve the
customer focus of the organization but are resisted by the _____________ department.
A. Parts
B. Accounting
C. Finance
D. Human resources
E. Every department other than sales
50. Tyler takes over as CEO of a failing software company. He asks to see the company's
mission statement and finds there isn't one. Without clarity in its mission and goals, Tyler
knows the company will lack
A. Integrated supply chain alliances
B. Strategic direction
C. Generic strategies
D. Functional, strategic partnerships
E. Customer delight
3-9
51. Which of the following statements about a company's mission and goals is true?
A. A firm should define its mission in terms of the broad human needs it attempts to satisfy
B. The company's product or service defines the mission of the company and the scope of its
activities
C. The best way for management to avoid opportunities that are inconsistent with the firm's
purpose is to state the mission in broad terms
D. Strategies are easier to develop for a company that has a narrowly defined mission,
especially if it is operating in a dynamic environment
E. A narrowly defined mission makes it easier to identify attractive market opportunities
52. Which of the following statements describes a major advantage of having a clearly
defined mission?
A. A clearly defined mission prevents interdepartmental conflict
B. A clearly defined mission helps management evaluate available market opportunities and
avoid those that are inconsistent
C. Market planning and implementation can be done easily with a clearly defined mission
D. A clearly defined mission eliminates the need for specific functional objectives
E. A clearly defined mission defines the company's competitive advantage in terms of product
and/or service
53. The most appropriate way for a plant nursery owner to define her business's mission is in
terms of:
A. A target market or markets
B. Distribution and pricing strategies
C. How it will improve the quality of life of its customers
D. The plants, bulbs, seeds and other gardening supplies it sells
E. Its marketing communications
54. The question of what business a firm is in is addressed in its:

A. Organization-wide strategic plan
B. Opportunity analysis
C. Tactical plans
D. Mission statement
E. Market segmentation strategy
3-10
55. After developing a mission statement for his company, Tyler knows ________ and
____________, representing specific targets the firm wishes to meet will be addressed.
A. Touchpoints; concepts
B. Push; pull strategies
C. Advantage; disadvantages
D. Goals; objectives
E. Distinctive corollaries; formalized value concepts
56. Low cost, differentiation and niche are examples of __________ pursued by business
units across a variety of industries.
A. Market exchanges
B. Generic strategies
C. Sustainable competitive advantages
D. Customer orientations
E. Category management systems
57. Which of the following statements about market opportunity analysis is true?
A. One of the tasks of market opportunity analysis is to determine whether a mission
statement is feasible
B. A market opportunity would be viable and attractive to a firm even if the opportunity is
inconsistent with the company's mission and objectives
C. The steps involved in a market opportunity analysis begin with the generation of strategies,
followed by the determination of marketing objectives and ends with the reviewing and
revising of plans
D. Market opportunities must be defined for the whole marketplace, not for specific target
markets
E. None of the above statements about market opportunity analysis is true
58. A Cleveland, Ohio, men's clothing manufacturer has a low industry market share, but it
has a high market share with its target market, which is men shorter than 5'8" tall. Which of
Michael Porter's competitive strategy is this manufacturer using?
A. Niche
B. Differentiation
C. Defender
D. Analyzer
E. Prospector
3-11
59. According to Michael Porter, a firm practicing a niche strategy:

A. Has relative market share and emphasizes efficient-scale facilities
B. Dominates a particular target market although its overall market share may be low
C. Chooses high-growth markets while holding onto substantial mature markets
D. Attempts to pioneer in product/market development
E. Insulates itself from competitive rivalry by creating brand loyalty and the resulting lower
sensitivity to price
60. Evanscon manufactures refrigerator units that are sold to retailers that handle perishable
products. It is a pioneer in product and market development. It offers a frequently changing
product line and has been known to sacrifice short-term profits to gain a long-term stronghold
in their market. According to Miles and Snow's Typology, Evanscon uses which of the
following competitive strategies?
A. Niche
B. Differentiation
C. Defender
D. Analyzer
E. Prospector
61. According to Miles and Snow, a firm using a defender strategy:

A. Strives to be a pioneer in product/market development
B. Emphasizes high volume sales
C. Sells to high-growth markets while holding onto substantial mature markets
D. Offers a limited stable product line to a predictable market
E. Aggressively constructs efficient-scale facilities
62. A market opportunity is viable and attractive if:

A. The firm has the marketing communications skills needed to reach that market
B. There are enough potential customers in that market for the needed product so that the total
potential sales volume will be substantial
C. The opportunity is consistent with the mission and objectives of the company
D. The firm has the financial and human resources needed to reach that market
E. All of the above conditions are met
3-12
63. The key factor in the generation of strategies is:

A. Creativity
B. Consistency with the organizational culture
C. Costs
D. Feasibility of success
E. Acceptance by organizational stakeholders
64. Which of the following statements about the generation and selection of organizational
strategies is true?
A. It would be a waste of resources for a company to use brainstorming to generate strategic
ideas
B. Sometimes many different strategies may achieve the same objective
C. A firm must review many strategies to find the optimal strategy
D. The organizational objectives should be set once the organizational strategy has been
determined
E. All of the above statements about the generation and selection of organizational strategies
are true
65. Which of the following represents a continuum from low to high trust?
A. Market exchange, strategic partnership, functional relationship
B. Functional relationship, market exchange, strategic partnership
C. Market exchange, functional relationship, strategic partnership
D. Strategic partnership, functional relationship, market exchange
66. Which of the following is the BEST example of a market exchange?

A. Andre renews his membership at his health club
B. After an unsuccessful job interview, Melanie buys a hamburger from a Dulles Airport
vendor while on her way home to Tulsa, Oklahoma
C. Handelmann Florist buys two cases of flower vases from its regional gardening supplies
distributor
D. A consumer products company hires a Minnesota company to oversee another promotional
contest and to determine the winners of the prizes
E. Susan and Alan buy life insurance from the same insurance agent from whom they
purchased car and home insurance
3-13
67. A strategic partnership between buyer and seller is identified by a:

A. Short-time horizon
B. Low concern for the other party
C. Collaborative relationship between the participants
D. Bargaining relationship between the participants
E. Cooperative relationship between the participants
68. _____ relationships are relationships between buyer and seller based upon close personal
friendships and a medium level of concern for the other party.
A. Strategic
B. Partnering
C. Transactional
D. Functional
E. Transformational
69. In return for the endorsement of its products, FTD Florists gives the AARP (Association
of American Retired People) a reduced rate on all flower deliveries. FTD also gives the AARP
back a percentage of sales it makes as a result of using the AARP name in its ads. AARP
members have provided information to FTD about the types of flowers they like to give and
receive and on the types of occasions when they believe flowers should be sent. This is an
example of a ______ between a buyer and a seller.
A. Market exchange
B. Strategic partnership
C. Transactional relationship
D. Functional relationship
E. Transformational relationship
70. Relationships that result in strategic partnerships go through four stages including:
A. Awareness, exploration, expansion and commitment
B. Awareness, integration, designation and expansion
C. Exploration, change, dynamics, restoration
D. Suggestion, response, communication, concurrence
E. Beginning, adjustment, middle, end
3-14
71. Marvin almost always tells customers it will be three days before he can service their boat,
knowing he usually will be able to come in one or two days. He uses this strategy to create
A. Customer exchange
B. Transactional partnerships
C. Relationship approval
D. Customer delight
E. Transformational restructuring
72. Hillary knows several of her customers' copier machines are old and likely to need
frequent repair. Knowing this, she uses a/an __________ strategy when selling to these
customers.
B. Transactional partnership
C. Upgrading
D. Customer delight
E. Full-line selling
73. Full-line selling is a sales strategy that

A. Sells only the full-line or nothing
B. Leverages marketing relationships to sell the full-line
C. Induces full-line sellers to reorder more rapidly
D. Defines the line over which market intermediaries must extend themselves to effectively
manage CRM
E. Upgrades low-level relationships to full-line intermediaries
74. Bianca sells a wide variety of products. Once she has established a relationship with a
customer, she often tries to sell whatever products she thinks the customer might be interested
in. Bianca practices
A. Customer value selling
B. Cross-selling
C. Return on customer investment selling
D. Efficient consumer selling
E. Integrated marketing
3-15
75. Preferred supplier status represents

A. Attainment of market share dominance
B. Successful TQM marketing strategy
C. Functional relationship superiority
D. Increased commitment
E. Transformational security
76. Which of the following is NOT an advantage inherent in the use of personal selling as the
primary marketing communications tool?
A. The large number of customers that can be reached
B. The amount of information that can be conveyed
C. The two-way communication flow
D. The ability to tailor messages to the needs of interests of specific customers
E. The type of information that can be transmitted to a customer
77. The primary disadvantage inherent in the use of personal selling as the primary marketing
communications tool is its:
A. Lack of flexibility
B. Ability to communicate with only a small number of customers
C. Two-way communication flow
D. Inconsistency from customer to customer
E. Ability to be used successfully with other marketing communications tools
78. Which promotional tool should be used if a company's target market consists of relatively
few customers who are geographically clustered together and who are likely to place
relatively large orders?
A. Consumer sales promotions
B. Advertising
C. Personal selling
D. Consumer sales promotions
E. Publicity and public relations
3-16
79. A manufacturer of window air conditioning units that wanted to use a pull strategy could:
A. Create point-of-purchase displays to show how quiet a unit is
B. Develop a sales contest for retail salespeople of its units
C. Teach the retail salespeople how to offer advice on correctly installing the unit
D. Develop a just-in-time reordering system
E. Run a $25-off coupon in a New England regional magazine
80. When a firm uses a push strategy, it:

A. Attempts to build strong customer demand for a product which it hopes will, in turn,
encourage wholesalers and retailers to carry the product
B. Must expect to have a larger promotional budget than if it followed a pull strategy
C. Understands that advertising is the key to successful market development
D. Offers direct inducements to potential wholesalers and retailers to encourage them to carry
a product
E. Must immediately follow it by implementing a pull strategy
81. Many retailers employ a restocking system where sales information automatically leads to
an order to replenish the store's inventory. This is known as a/an
A. Automatic delivery system
B. Efficient consumer response system
C. Customer satisfaction guarantee system
D. Quantity control system
E. Emergency response shelving system
82. The improvement of post-sale customer service and loyalty:

A. Creates positive word-of-mouth for the seller and its product(s)
B. Allows a company to avoid the high costs associated with acquiring a new customer
C. Increases the number of customer referrals
D. Produces larger volume sales with lower selling and distribution costs
E. Does all of the above
3-17
83. A company that wanted to measure its customers' levels of satisfaction should:
A. Not bother with determining why some customers are no longer buying its products
B. Rely solely on customer satisfaction measures as determined through survey and personal
interview techniques
C. Not be concerned with how much a customer is buying from distributors of similar
products
D. Look at customer satisfaction measures, annual retention rates as well as the frequency and
size of customer purchases to determine customer satisfaction
E. Use an external market research company to determine customer satisfaction in order to
make sure that the collected data are not biased
Short Answer Questions
84. What are touchpoints? Where do they most often take place?
85. What is customer relationship management?
86. To build a relationship-based enterprise and to improve the effectiveness of CRM,

managers need to address questions in what three areas?
3-18
87. When developing selling objectives, what factors should be considered?
88. What is the basis of a sustainable competitive advantage?
89. What is Michael Porter's typology of generic business strategies?
90. How do personal selling activities change in the different stages of developing a business
relationship?
3-19
91. What is the difference between a push and pull strategy?
92. In what situations is personal selling likely to be more appropriate than advertising?
93. Describe how a customer-centric or CRM philosophy influences the selling function in an
organization.
94. What are the advantages of CRM?
3-20
95. What is the lifetime value of a customer concept? How does it influence sellers?
96. What questions does an organization need to address in order to improve the effectiveness
of CRM initiatives?
97. Why do CRM initiatives fail?
3-21
Chapter 03 Linking Strategies and the Sales Role in the Era of Customer
Relationship Management Answer Key
True / False Questions
1. (p. 66) Personal selling fits into the marketing mix as part of a firm's product strategy.
FALSE
2. (p. 66) Research suggests that firms with a higher level of customer orientation are more
successful.
TRUE
3. (p. 67) CRM is any application or initiative that optimizes interactions with customers,
vendors or prospects via one or more tops-to-tops.
FALSE
4. (p. 67) CRM is both a philosophy and a pragmatic system.

TRUE
5. (p. 68) The major cause of growth in CRM is technology.

TRUE
6. (p. 68) CRM has facilitated the shift from one-to-one to mass marketing.
FALSE
3-22
7. (p. 69) The lifetime value of a customer concept emphasizes cost savings, revenue growth,
profits and referrals from loyal customers.
TRUE
8. (p. 70) To The process cycle for CRM may be broken down into the following four elements:
(1) Knowledge discovery, (2) market planning, (3) customer interaction and (4) analysis and
refinement.
TRUE
9. (p. 72) Many companies have abandoned CRM because of no change in management
initiative.
TRUE
10. (p. 73) Market-driven companies do a better job of market sensing.

TRUE
11. (p. 73) Both market sensing and relationship building can develop without the presence of
adequate spanning processes.
FALSE
12. (p. 73) Finance-driven companies do a better job of market sensing.

FALSE
13. (p. 74) Convincing the accounting department to change its procedures to meet the needs of
important customers is an example of external partnering.
FALSE
3-23
14. (p. 75) The most appropriate way for a firm to define its mission is in terms of the broad
human needs it will try to satisfy.
TRUE
15. (p. 75) Generally, good objectives should be specific, measurable and realistically
attainable.
TRUE
16. (p. 76) According to Michael Porter, competitive strategies can be based on cost,
differentiation and niche.
TRUE
17. (p. 76) Prospector, Defender and Analyzer are three strategies to develop functional
competencies.
FALSE
18. (p. 76) The first step in developing and implementing market strategies is programming the
appropriate marketing mix.
FALSE
19. (p. 80) The order from weakest to strongest market relationships is market exchanges,
strategic partnerships and functional relationships.
FALSE
20. (p. 82) Strategic partnerships can be created with every customer.
FALSE
3-24
21. (p. 82) The goal in developing customer relationships is gaining customer loyalty.
TRUE
22. (p. 84) Many companies attempt full line selling as a means of getting their "foot in the
door".
FALSE
23. (p. 85) TQM is often a requirement in order to gain preferred provider status.
TRUE
24. (p. 86) The advantage of personal selling as a marketing communications tool stems largely
from its face-to-face communication with a potential customer.
TRUE
25. (p. 87) Personal selling is always a more expensive marketing communications tool than
either advertising or sales promotion.
FALSE
26. (p. 85) Commitment in a relationship need only exist between the salesperson and the
customer contact.
FALSE
27. (p. 89) The manufacturers' sales forces typically play a greater role in the sale of
automobiles, boats, refrigerators and swimming pools than in the sale of chewing gum,
fingernail clippers and light bulbs.
TRUE
3-25
28. (p. 90) The relative importance of advertising in marketing communications is higher for
products that require no post-purchase service, that use a push strategy and that have a preset
price.
FALSE
29. (p. 89) Just-in-time delivery systems are one effort by marketers to build reseller support.
TRUE
30. (p. 89) Supply chain alliances and efficient consumer response systems are examples of
marketing relationships.
TRUE
31. (p. 88) In marketing strategy, personal selling is relatively important when there are many
potential customers.
FALSE
32. (p. 90) Maintaining customer loyalty is one outcome of a market orientation.
TRUE
Multiple Choice Questions
33. (p. 66) Personal selling is part of a firm's

A. Product mix
B. Pricing mix
C. Marketing communication mix
D. Distribution mix
E. Personal selling is an integral part of all parts of a firm's marketing mix
3-26
34. (p. 66-67) Assume your school or university begins assessing students' needs and wants,
consulting with students regarding problems and solutions and develops a formal customer
analysis process. Your school could be developing a
A. Touchpoint data entry system
B. Customer-centric culture
C. Strategic business unit
D. Efficient consumer response
E. Functional relationship
35. (p. 67) Call centers, sales reps, distributors, Web and e-mail are all examples of possible
A. Strategic directions
B. Cross-selling teaming
C. Supply chain alliances
D. Touchpoints
E. Goals
36. (p. 68) The increasing use of customer relationship management is partly attributable to:
A. Technology
B. Mission-driven statements
C. Pull strategies
D. Preferred supplier relationships
E. Formalization
37. (p. 68) The evolution of customer relationship marketing has progressed from:
A. Mass, target, one-to-one, to customer marketing
B. One-to-one, mass, target, to customer marketing
C. Customer, mass, target, to one-to-one marketing
D. Mass, target, customer, to one-to-one marketing
E. Customer relationship marketing has always existed
3-27
38. (p. 69) Which of the following is not one of the advantages of CRM?
A. Increases advertising costs
B. Makes it easier to target specific customers
C. Allows greater competition based on service rather than price
D. Prevents overspending on low-value customers
E. Makes it easier to track effectiveness
39. (p. 69) Archway furniture is projecting their expected financial returns from different groups
of customers. Archway is estimating the
A. Data warehousing ROI
B. Supply chain cost and revenues
C. Lifetime value of customers
D. Marketing mix profitability
E. Generic strategy returns
40. (p. 69) Alex studies the projected financial returns from his customers including the money,
resources, time and information involved in managing each account. Based on this analysis he
may decide to
A. Formalize customer loyalty
B. Fire some customers
C. Utilize a push and pull financial information strategy
D. Develop strategic, sustainable functional trusts
41. (p. 70) A ___________ environment affords the opportunity to combine large amounts of
information and then use __________ techniques to learn more about current and potential
customers.
A. One-to-one; strategic partnerships
B. Customer loyalty; delivery
C. Data warehouse; data mining
D. Just-in-time data; efficient customer response (ECR)
E. Preferred supplier; Total quality management (TQM)
3-28
42. (p. 70) Which of the following is not a part of the process cycle for CRM?
A. Marketing planning
B. Knowledge discovery
C. Customer interaction
D. Touchpoint targeting
E. Analysis and refinement
43. (p. 72) Some key reasons for CRM system flops in sales organizations include:
A. Lack of focus
B. Complicated procedures
C. Minimal buy-in
D. Business units are silos
E. All of the above
44. (p. 71) Your school is implementing a new CRM initiative. Which of the following questions
should they ask?
A. What do our investors want and expect?
B. How do we centralize control?
C. Who are we?
D. How do we increase our control for change?
E. All of the above
45. (p. 72) The School of Business at a regional university was the first part of the institution to
adopt CRM. Two years later, the initiative was quietly dropped. One possible cause for the
failure was:
A. Total buy-in by the staff and administrators
B. Simplification of procedures as a result of CRM
C. Training
D. Focus on software that met the goals
E. Lack of management initiative
3-29
46. (p. 72) Alexandra, the sales manager for a regional hotel chain, knows her salespeople
identify customer needs, tailor products and services to meet those needs, negotiate prices and
a variety of other activities. She decides to redefine their jobs and call her salespeople
A. Category management specialists
B. Data mining marketers
C. Marketing representatives
D. Customer loyalty partners
E. Preferred providers
47. (p. 73) Justine is frustrated with her company's inability to link production, customer service
and other internal processes with her customers. Justine believes her company's __________
are inadequate.
A. Spanning processes
B. Customer value measures
C. Strategic business units
D. Mission statements
E. Top-to-top selling teams
48. (p. 73) As part of a sales organization, you are responsible for alerting the company to
changes in external environment. Which of the following would most likely be your
responsibility?
A. Cost control
B. Market sensing
C. Purchasing management
D. Strategy development
E. Environmental health and safety
49. (p. 73) You are the new sales manager for automobile retailer. You attempt to improve the
customer focus of the organization but are resisted by the _____________ department.
A. Parts
B. Accounting
C. Finance
D. Human resources
E. Every department other than sales
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50. (p. 74) Tyler takes over as CEO of a failing software company. He asks to see the company's
mission statement and finds there isn't one. Without clarity in its mission and goals, Tyler
knows the company will lack
A. Integrated supply chain alliances
B. Strategic direction
C. Generic strategies
D. Functional, strategic partnerships
E. Customer delight
51. (p. 75) Which of the following statements about a company's mission and goals is true?
A. A firm should define its mission in terms of the broad human needs it attempts to satisfy
B. The company's product or service defines the mission of the company and the scope of its
activities
C. The best way for management to avoid opportunities that are inconsistent with the firm's
purpose is to state the mission in broad terms
D. Strategies are easier to develop for a company that has a narrowly defined mission,
especially if it is operating in a dynamic environment
E. A narrowly defined mission makes it easier to identify attractive market opportunities
52. (p. 75) Which of the following statements describes a major advantage of having a clearly
defined mission?
A. A clearly defined mission prevents interdepartmental conflict
B. A clearly defined mission helps management evaluate available market opportunities and
avoid those that are inconsistent
C. Market planning and implementation can be done easily with a clearly defined mission
D. A clearly defined mission eliminates the need for specific functional objectives
E. A clearly defined mission defines the company's competitive advantage in terms of product
and/or service
53. (p. 75) The most appropriate way for a plant nursery owner to define her business's mission
is in terms of:
A. A target market or markets
B. Distribution and pricing strategies
C. How it will improve the quality of life of its customers
D. The plants, bulbs, seeds and other gardening supplies it sells
E. Its marketing communications
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54. (p. 74) The question of what business a firm is in is addressed in its:
A. Organization-wide strategic plan
B. Opportunity analysis
C. Tactical plans
D. Mission statement
E. Market segmentation strategy
55. (p. 75) After developing a mission statement for his company, Tyler knows ________ and
____________, representing specific targets the firm wishes to meet will be addressed.
A. Touchpoints; concepts
B. Push; pull strategies
C. Advantage; disadvantages
D. Goals; objectives
E. Distinctive corollaries; formalized value concepts
56. (p. 76) Low cost, differentiation and niche are examples of __________ pursued by business
units across a variety of industries.
A. Market exchanges
B. Generic strategies
C. Sustainable competitive advantages
D. Customer orientations
E. Category management systems
57. (p. 76-77) Which of the following statements about market opportunity analysis is true?
A. One of the tasks of market opportunity analysis is to determine whether a mission
statement is feasible
B. A market opportunity would be viable and attractive to a firm even if the opportunity is
inconsistent with the company's mission and objectives
C. The steps involved in a market opportunity analysis begin with the generation of strategies,
followed by the determination of marketing objectives and ends with the reviewing and
revising of plans
D. Market opportunities must be defined for the whole marketplace, not for specific target
markets
E. None of the above statements about market opportunity analysis is true
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58. (p. 77) A Cleveland, Ohio, men's clothing manufacturer has a low industry market share, but
it has a high market share with its target market, which is men shorter than 5'8" tall. Which of
Michael Porter's competitive strategy is this manufacturer using?
A. Niche
B. Differentiation
C. Defender
D. Analyzer
E. Prospector
59. (p. 77) According to Michael Porter, a firm practicing a niche strategy:
A. Has relative market share and emphasizes efficient-scale facilities
B. Dominates a particular target market although its overall market share may be low
C. Chooses high-growth markets while holding onto substantial mature markets
D. Attempts to pioneer in product/market development
E. Insulates itself from competitive rivalry by creating brand loyalty and the resulting lower
sensitivity to price
60. (p. 77) Evanscon manufactures refrigerator units that are sold to retailers that handle
perishable products. It is a pioneer in product and market development. It offers a frequently
changing product line and has been known to sacrifice short-term profits to gain a long-term
stronghold in their market. According to Miles and Snow's Typology, Evanscon uses which of
the following competitive strategies?
A. Niche
B. Differentiation
C. Defender
D. Analyzer
E. Prospector
61. (p. 77) According to Miles and Snow, a firm using a defender strategy:
A. Strives to be a pioneer in product/market development
B. Emphasizes high volume sales
C. Sells to high-growth markets while holding onto substantial mature markets
D. Offers a limited stable product line to a predictable market
E. Aggressively constructs efficient-scale facilities
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62. (p. 76) A market opportunity is viable and attractive if:

A. The firm has the marketing communications skills needed to reach that market
B. There are enough potential customers in that market for the needed product so that the total
potential sales volume will be substantial
C. The opportunity is consistent with the mission and objectives of the company
D. The firm has the financial and human resources needed to reach that market
E. All of the above conditions are met
63. (p. 79) The key factor in the generation of strategies is:
A. Creativity
B. Consistency with the organizational culture
C. Costs
D. Feasibility of success
E. Acceptance by organizational stakeholders
64. (p. 79) Which of the following statements about the generation and selection of
organizational strategies is true?
A. It would be a waste of resources for a company to use brainstorming to generate strategic
ideas
B. Sometimes many different strategies may achieve the same objective
C. A firm must review many strategies to find the optimal strategy
D. The organizational objectives should be set once the organizational strategy has been
determined
E. All of the above statements about the generation and selection of organizational strategies
are true
65. (p. 80) Which of the following represents a continuum from low to high trust?
A. Market exchange, strategic partnership, functional relationship
B. Functional relationship, market exchange, strategic partnership
C. Market exchange, functional relationship, strategic partnership
D. Strategic partnership, functional relationship, market exchange
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66. (p. 80) Which of the following is the BEST example of a market exchange?
A. Andre renews his membership at his health club
B. After an unsuccessful job interview, Melanie buys a hamburger from a Dulles Airport
vendor while on her way home to Tulsa, Oklahoma
C. Handelmann Florist buys two cases of flower vases from its regional gardening supplies
distributor
D. A consumer products company hires a Minnesota company to oversee another promotional
contest and to determine the winners of the prizes
E. Susan and Alan buy life insurance from the same insurance agent from whom they
purchased car and home insurance
67. (p. 80) A strategic partnership between buyer and seller is identified by a:
A. Short-time horizon
B. Low concern for the other party
C. Collaborative relationship between the participants
D. Bargaining relationship between the participants
E. Cooperative relationship between the participants
68. (p. 81) _____ relationships are relationships between buyer and seller based upon close
personal friendships and a medium level of concern for the other party.
A. Strategic
B. Partnering
C. Transactional
D. Functional
E. Transformational
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69. (p. 81-82) In return for the endorsement of its products, FTD Florists gives the AARP
(Association of American Retired People) a reduced rate on all flower deliveries. FTD also
gives the AARP back a percentage of sales it makes as a result of using the AARP name in its
ads. AARP members have provided information to FTD about the types of flowers they like to
give and receive and on the types of occasions when they believe flowers should be sent. This
is an example of a ______ between a buyer and a seller.
A. Market exchange
B. Strategic partnership
C. Transactional relationship
D. Functional relationship
E. Transformational relationship
70. (p. 82) Relationships that result in strategic partnerships go through four stages including:
A. Awareness, exploration, expansion and commitment
B. Awareness, integration, designation and expansion
C. Exploration, change, dynamics, restoration
D. Suggestion, response, communication, concurrence
E. Beginning, adjustment, middle, end
71. (p. 83) Marvin almost always tells customers it will be three days before he can service their
boat, knowing he usually will be able to come in one or two days. He uses this strategy to
create
B. Transactional partnerships
C. Relationship approval
D. Customer delight
E. Transformational restructuring
72. (p. 84) Hillary knows several of her customers' copier machines are old and likely to need
frequent repair. Knowing this, she uses a/an __________ strategy when selling to these
customers.
B. Transactional partnership
C. Upgrading
D. Customer delight
E. Full-line selling
3-36
73. (p. 84) Full-line selling is a sales strategy that

A. Sells only the full-line or nothing
B. Leverages marketing relationships to sell the full-line
C. Induces full-line sellers to reorder more rapidly
D. Defines the line over which market intermediaries must extend themselves to effectively
manage CRM
E. Upgrades low-level relationships to full-line intermediaries
74. (p. 85-86) Bianca sells a wide variety of products. Once she has established a relationship
with a customer, she often tries to sell whatever products she thinks the customer might be
interested in. Bianca practices
A. Customer value selling
B. Cross-selling
C. Return on customer investment selling
D. Efficient consumer selling
E. Integrated marketing
75. (p. 85) Preferred supplier status represents

A. Attainment of market share dominance
B. Successful TQM marketing strategy
C. Functional relationship superiority
D. Increased commitment
E. Transformational security
76. (p. 86) Which of the following is NOT an advantage inherent in the use of personal selling
as the primary marketing communications tool?
A. The large number of customers that can be reached
B. The amount of information that can be conveyed
C. The two-way communication flow
D. The ability to tailor messages to the needs of interests of specific customers
E. The type of information that can be transmitted to a customer
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77. (p. 86) The primary disadvantage inherent in the use of personal selling as the primary
marketing communications tool is its:
A. Lack of flexibility
B. Ability to communicate with only a small number of customers
C. Two-way communication flow
D. Inconsistency from customer to customer
E. Ability to be used successfully with other marketing communications tools
78. (p. 88) Which promotional tool should be used if a company's target market consists of
relatively few customers who are geographically clustered together and who are likely to
place relatively large orders?
A. Consumer sales promotions
B. Advertising
C. Personal selling
D. Consumer sales promotions
E. Publicity and public relations
79. (p. 89) A manufacturer of window air conditioning units that wanted to use a pull strategy
could:
A. Create point-of-purchase displays to show how quiet a unit is
B. Develop a sales contest for retail salespeople of its units
C. Teach the retail salespeople how to offer advice on correctly installing the unit
D. Develop a just-in-time reordering system
E. Run a $25-off coupon in a New England regional magazine
80. (p. 89) When a firm uses a push strategy, it:

A. Attempts to build strong customer demand for a product which it hopes will, in turn,
encourage wholesalers and retailers to carry the product
B. Must expect to have a larger promotional budget than if it followed a pull strategy
C. Understands that advertising is the key to successful market development
D. Offers direct inducements to potential wholesalers and retailers to encourage them to carry
a product
E. Must immediately follow it by implementing a pull strategy
3-38
81. (p. 89) Many retailers employ a restocking system where sales information automatically
leads to an order to replenish the store's inventory. This is known as a/an
A. Automatic delivery system
B. Efficient consumer response system
C. Customer satisfaction guarantee system
D. Quantity control system
E. Emergency response shelving system
82. (p. 90) The improvement of post-sale customer service and loyalty:
A. Creates positive word-of-mouth for the seller and its product(s)
B. Allows a company to avoid the high costs associated with acquiring a new customer
C. Increases the number of customer referrals
D. Produces larger volume sales with lower selling and distribution costs
E. Does all of the above
83. (p. 90) A company that wanted to measure its customers' levels of satisfaction should:
A. Not bother with determining why some customers are no longer buying its products
B. Rely solely on customer satisfaction measures as determined through survey and personal
interview techniques
C. Not be concerned with how much a customer is buying from distributors of similar
products
D. Look at customer satisfaction measures, annual retention rates as well as the frequency and
size of customer purchases to determine customer satisfaction
E. Use an external market research company to determine customer satisfaction in order to
make sure that the collected data are not biased
Short Answer Questions
84. (p. 67) What are touchpoints? Where do they most often take place?
Touchpoints are the intersection of the selling firm and the customer, allowing for information
about the customer to be collected. They can take place through call centers, salesperson,
distributor, store, branch office, Web or e-mail.
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85. (p. 67) What is customer relationship management?

Any application or initiative designed to help a company optimize interactions with
customers, suppliers, or prospects via one or more touchpoints for the purpose of acquiring,
retaining or cross-selling customers. It is both a business philosophy and a programmatic,
integrated implementation system.
86. (p. 71) To build a relationship-based enterprise and to improve the effectiveness of CRM,
managers need to address questions in what three areas?
Customers, relationships and managerial decision making.
87. (p. 75) When developing selling objectives, what factors should be considered?
They should be specific, measurable and realistically attainable.
88. (p. 76) What is the basis of a sustainable competitive advantage?

Distinctive competencies, qualities or attributes that set it aside from its competitors.
89. (p. 76) What is Michael Porter's typology of generic business strategies?
Low-cost supplier, differentiation and niche or focus.
3-40
90. (p. 82-85) How do personal selling activities change in the different stages of developing a
business relationship?
During the exploration stage, the goal is building trust. This can be facilitated by setting
proper expectations, monitoring order processing and delivery, ensuring proper use and
assisting in servicing. During the expansion stage the goal is to sell new products or increase
sales of existing products. Selling changes to efforts to get customers to upgrade, purchase the
full-line of products and cross-selling. During the third stage the goal is gaining commitment.
This can result in preferred provider status. Often TQM initiatives, placement of sales
personnel in the customer's facility or gaining access to customers' production and sales data
increase commitment.
91. (p. 89) What is the difference between a push and pull strategy?
A push strategy focuses on building reseller support, offering incentives to potential
wholesalers and retailers. A pull strategy attempts to build strong customer demand.
92. (p. 90) In what situations is personal selling likely to be more appropriate than advertising?
When there are only a few customers buyers need information, major purchase decisions post
purchase service is needed products are complex products need to be pushed through the
distribution channels price is negotiated.
93. (p. 67) Describe how a customer-centric or CRM philosophy influences the selling function
in an organization.
With a customer-centric focus the selling function will include:
A partnership business model, with mutually shared rewards and risk management.
Defining the selling role in terms of the provision of customer business consultation and
solutions
Increased formalization of customer analysis processes and agreements
Taking a proactive leadership role in educating customers about value chain and cost
reduction opportunities
Focusing on continuous improvement principles stressing customer satisfaction.
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94. (p. 69) What are the advantages of CRM?

Reduces advertising costs
Makes it easier to target specific customers by focusing on their needs
Makes it easier to track the effectiveness of a given promotional campaign
Allows organization to compete for customers based on service not price
Prevents overspending on low-value customers or underspending on high-value customers
Speeds the time it takes to develop and market a product
Improves use of the customer channel.
95. (p. 69) What is the lifetime value of a customer concept? How does it influence sellers?
The lifetime value of a customer measures the returns from CRM including cost savings,
revenue growth, profits, referrals and other business success factors. The concept influences
the CRM process where sellers continually go through a four-step process: knowledge
discovery, market planning, customer interaction, analysis and refinement. It can also lead to
situations where a marketer may fire a customer who will likely not create lifetime value.
96. (p. 71) What questions does an organization need to address in order to improve the
effectiveness of CRM initiatives?
Customers
Who are the customers? What do they want and expect? What is their potential value?
Relationships
What kind of relationship do we want to build with our customers? How do we foster
exchange? Who do we work together and share control?
Managerial decision making
Who are we? How do we organize to move value closer to our customers, measure and
manage our performance and increase our capacity for change?
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97. (p. 72) Why do CRM initiatives fail?

There are many reasons including:
Lack of focus
No change management in place
Minimal buy-in
Business units are silos (isolated, not thinking or acting as cross-functional teams)
Complicated procedures
Poor training.
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Chapter 03 - Linking Strategies and the Sales Role in the Era of Customer Relationship Management

4. CRM is both a philosophy and a pragmatic system.

5. The major cause of growth in CRM is technology.

6. CRM has facilitated the shift from one-to-one to mass marketing.

9. Many companies have abandoned CRM because of no change in management initiative.

10. Market-driven companies do a better job of market sensing.

12. Finance-driven companies do a better job of market sensing.

20. Strategic partnerships can be created with every customer.

21. The goal in developing customer relationships is gaining customer loyalty.

23. TQM is often a requirement in order to gain preferred provider status.

28. The relative importance of advertising in marketing communications is higher for

32. Maintaining customer loyalty is one outcome of a market orientation.

Multiple Choice Questions

33. Personal selling is part of a firm's

37. The evolution of customer relationship marketing has progressed from:

38. Which of the following is not one of the advantages of CRM?

41. A ___________ environment affords the opportunity to combine large amounts of

54. The question of what business a firm is in is addressed in its:

59. According to Michael Porter, a firm practicing a niche strategy:

61. According to Miles and Snow, a firm using a defender strategy:

62. A market opportunity is viable and attractive if:

63. The key factor in the generation of strategies is:

66. Which of the following is the BEST example of a market exchange?

67. A strategic partnership between buyer and seller is identified by a:

73. Full-line selling is a sales strategy that

75. Preferred supplier status represents

80. When a firm uses a push strategy, it:

82. The improvement of post-sale customer service and loyalty:

Short Answer Questions

85. What is customer relationship management?

86. To build a relationship-based enterprise and to improve the effectiveness of CRM,

87. When developing selling objectives, what factors should be considered?

88. What is the basis of a sustainable competitive advantage?

89. What is Michael Porter's typology of generic business strategies?

91. What is the difference between a push and pull strategy?

94. What are the advantages of CRM?

97. Why do CRM initiatives fail?

True / False Questions

4. (p. 67) CRM is both a philosophy and a pragmatic system.

5. (p. 68) The major cause of growth in CRM is technology.

10. (p. 73) Market-driven companies do a better job of market sensing.

12. (p. 73) Finance-driven companies do a better job of market sensing.

Multiple Choice Questions

33. (p. 66) Personal selling is part of a firm's

62. (p. 76) A market opportunity is viable and attractive if:

73. (p. 84) Full-line selling is a sales strategy that

75. (p. 85) Preferred supplier status represents

80. (p. 89) When a firm uses a push strategy, it:

Short Answer Questions

85. (p. 67) What is customer relationship management?

88. (p. 76) What is the basis of a sustainable competitive advantage?

94. (p. 69) What are the advantages of CRM?

97. (p. 72) Why do CRM initiatives fail?

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