Click on the box next to each answer. Keep track of your own score.

1. CRM is another name for:
   • A. cause related marketing. INCORRECT Well, incorrect for this chapter, but correct in some  some contexts.
   • B. customer relationship management. CORRECT But see Answer A.  
   • C. cost reduction management. INCORRECT  
   • D. customs regulation machine. INCORRECT  
2. Back in Chapter 1, page 21-22, we can see that a transaction selling relationship is concerned with:
   • A. getting the sale whether or not a need exists. INCORRECT Transaction based selling does not imply that customer  satisfaction is unimportant!
   • B. ensuring that payment is made prior to product delivery. INCORRECT
   • C. establishing long term relationships with buyers. INCORRECT Although the establishment and maintenance of long-term  relationships is often necessary in B-B markets,  it is often not necessary. Longer term relationships  are more important when the product is complex,  relatively expensive, or purchased on a routine  repeat basis.
   • D. issues of the present sale and little more after the sale. CORRECT There's not necessarily anything wrong with this  short-term kind of relationship. An organization  or final consumer might be making a purchase for  goods or services that are not especially expensive  or complex and that will not be needed again for a   very long time.
3. Mary just bought a two year old car through eBay. On the first day that she tried to drive it to work, it developed a small leak in a hose. She stopped at the mechanic that she and her family regularly use for maintenance and inspections, Johnson's Neighborhood Auto Repair. When she asked to use the phone to call a friend at work to pick her up, John Johnson, the owner, asked one of his mechanics to take her to work and to pick her up at the end of the day. The labor to pay a mechanic to drive Mary to and from work was actually more than what would be needed to replace the hose, but John Johnson knew that losing a little money on this job was worthwhile if Mary remained a happy customer. John Johnson was actually calculating
   • A. acquisition cost. INCORRECT Mary is already a customer. This situation illustrates  a cost of keeping her.
   • B. the price premium. INCORRECT This scenario makes no mention of higher prices, although  Mary might be willing to pay more at Johnson's shop  than at others because of the trust that she has  developed in the relationship.
   • C. lifetime customer value. CORRECT LTV = purchase size x frequency x duration. John  recognized that there would be several car  inspections and routine visits per year (frequency)  across many years (duration) for the cars owned in  Mary's household. A small loss to keep a happy  customer would result in future profits.
   • D. the cost of a lost customer. INCORRECT Mary is not likely to immediately quit doing business  with Johnson's if not offered a ride; offering a  ride instead helps to ensure that she is never  tempted to switch to another repair shop. Note  that the cost of a lost customer is indeed  something that is calculated in logistics models -  it's just not an apparent issue in this scenario.
4. LTV and the "80/20 rule" suggest that:
   • A. sometimes some customers aren't worth keeping. CORRECT Some customers consume more resources, taking, for   example, attention that could be given to more   deserving customers.  See Answer C.
   • B. every customer should be equally valued. INCORRECT Some customers consume more resources, taking, for   example, attention that could be given to more   deserving customers.  See Answer C.
   • C. less profitable customers should get extra attention. INCORRECT Some customers are simply too expensive to keep.    They should either be "fired" or be   charged extra fees to compensate for the additional   costs that they generate from the extra attention   that they require.
   • D. competitors' castoffs are our future customers. INCORRECT If these customers are too costly for a competitor, then   they might also be for us -- unless we   specifically target these unwanted customers and   set our prices according to the costs to service   them.  See Answer C.
5. A "product offering" consists of the core product and:
   • A. the augmented product. CORRECT The textbook uses Answer C, but this is a term that some   marketers use.  See all other answers.
   • B. the extended product. CORRECT The textbook uses Answer C, but this is a term that some   marketers use.  See all other answers.
   • C. supplemental products and symbolic/experiential attributes. CORRECT The text uses these terms, but marketers often use other   terms. See all other answers.
   • D. all of the above. CORRECT The textbook uses Answer C, but the other terms are used   by other marketers.  The idea is that people   buy more than just the core product; they buy the   ministrations of a salesperson, the seller's   reputation for post-sale servicing, etc.
6. Product "quality" has to do with:
   • A. the degree of superiority of a firm's products. INCORRECT This is the textbook definition." This is a lousy definition   because it doesn't define what is meant by "superiority."
   • B. conformance to the customer's expectations. CORRECT If a customer wants a particular shade of red, adding   more pigment doesn't create better quality; it   just creates the wrong color.  Adding a more   expensive kind of pigment doesn't create better   quality; it just creates the wrong color.    Quality can also have to do with issues of   consistency - but here, I'm just trying to   correct the textbook's sloppy definition.