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. 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. Cici's Pizza will punch a paper card every time a customer makes a buffet purchase. When all of the spaces on the card are punched, the customer gets a free buffet visit. This is an example of:
   • A. a pulsing strategy. INCORRECT Pulsing has to do with an advertising flighting schedule  whereby there periodic short periods of intensive  advertising.
   • B. a trade promotion. INCORRECT Trade promotion has to do with sales promotions made to  channel intermediaries, not to final consumers in  a retail setting.
   • C. a channel push strategy. INCORRECT Channel push has to do with promoting to channel members,  not to final consumers in a retail setting.
   • D. a loyalty program. CORRECT Cici's expectation is that the card causes customers to  periodically return rather than try a competitor.