Chapter 03

Linking Strategies and the Sales Role in the Era of

Customer Relationship Management
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
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
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
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
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
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
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
E. None of the above
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)
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
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
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
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
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
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
E. None of the above
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
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
A. Customer exchange
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 to when selling to these customers.
A. Customer exchange
B. Transactional partnership
C. Upgrading
D. Customer delight
E. Full-line selling
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
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
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
Essay 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.

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.

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.
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 highvalue 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?
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