Question 1

The whale curve of cumulative probability demonstrates that the most profitable 20 percent of customers generate between 150 and 300 percent of total profits.

Accepted Answer

The whale curve illustrates that a small percentage of customers can generate a disproportionately large share of profits, often exceeding 100% due to losses from less profitable customers.

Question 2

Buyers seek a close relationship for strategic purchases and employ a more distant arms-length approach in procuring non- strategic items.

Accepted Answer

Strategic purchases often require collaboration and long-term partnerships to ensure quality and reliability, while non-strategic items can be sourced with less interaction and commitment.

Question 3

The contribution of a firm's customer-relating capability to the firm's position of advantage depends on the degree to which the market offers an attractive opportunity.

Accepted Answer

The firm's customer-relating capability is more valuable when the market presents attractive opportunities, as it allows the firm to better capitalize on these opportunities and gain a competitive advantage.

Question 4

Customized, high-technology products-like semiconductor test equipment-fit the transactional exchange category.

Accepted Answer

Customized, high-technology products like semiconductor test equipment typically fit the relational exchange category due to their complexity, high value, and the need for ongoing support and collaboration between buyer and seller.

Question 5

All customers hold similar amounts of growth potential.

Accepted Answer

Customers vary in their growth potential due to differences in factors such as purchasing power, needs, preferences, and engagement levels.

Question 6

Having a relationship orientation is critical to developing a customer-relating capability.

Accepted Answer

A relationship orientation focuses on building long-term connections with customers, which is essential for developing a strong customer-relating capability.

Question 7

For collaborative customers, the salesperson not only works with the purchasing staff, but also with a wide array of managers throughout the organization.

Accepted Answer

In collaborative customer relationships, salespeople engage with various stakeholders across the organization to tailor solutions and build stronger partnerships.

Question 8

While loyal customers are likely to be satisfied, all satisfied customers will not remain loyal.

Accepted Answer

Not all satisfied customers will remain loyal because loyalty involves a deeper commitment beyond satisfaction, influenced by factors like competition, personal preferences, and changing needs.

Question 9

Operational linkages and information-sharing mechanisms are common features of collaborative relationships.

Accepted Answer

Collaborative relationships often involve operational linkages and information-sharing mechanisms to enhance coordination and efficiency between parties.

Question 10

Relationship commitment exists when one party has confidence in a partner's reliability and integrity.

Accepted Answer

The answer of Relationship commitment exists when one party has...

Question 11

Firing a customer may be appropriate if the customer is not profitable, not new, and shows little or no opportunity for learning.

Accepted Answer

Firing a customer can be appropriate if they consistently cost more than they bring in, are not new (hence unlikely to change behavior), and offer no strategic value or learning opportunities.

Question 12

Transactional exchange centers on the timely delivery of basic products for highly competitive market prices.

Accepted Answer

Transactional exchange focuses on the efficient and timely delivery of goods at competitive prices, emphasizing short-term interactions and immediate needs.

Question 13

The cost of serving a long-standing customer is often more than the cost of acquiring a new customer.

Accepted Answer

The cost of serving a long-standing customer is typically less than acquiring a new customer due to established relationships and lower marketing expenses.

Question 14

Buying firms prefer a transactional relationship when there are few alternatives and the complexity of purchase is high.

Accepted Answer

In situations where there are few alternatives and the complexity of purchase is high, buying firms typically prefer a collaborative or strategic relationship to ensure reliability and quality, rather than a transactional one.

Question 15

Buyer-seller relationships that arise for important purchases are the ones that are more likely to involve operational linkages and high levels of information exchange.

Accepted Answer

Important purchases often require coordination and collaboration, leading to operational linkages and extensive information exchange to ensure mutual understanding and successful outcomes.

Question 16

Total cost of ownership illuminates exactly what activities are associated with serving a particular customer and how these activities are linked to revenues and the consumption of resources.

Accepted Answer

The answer of Total cost of ownership illuminates exactly what...

Question 17

Collaborative exchange features very close information, social, and operational linkages as well as mutual commitments made in expectation of long-run benefits.

Accepted Answer

Collaborative exchange involves close relationships and mutual commitments between parties, aiming for long-term benefits through shared information and operations.

Question 18

When supply needs are complex, the buying firm is less likely to opt for a close relationship with a supplier.

Accepted Answer

When supply needs are complex, the buying firm is more likely to opt for a close relationship with a supplier to ensure better coordination, communication, and problem-solving.

Question 19

Buying firms prefer a more collaborative relationship when the supply market is dynamic.

Accepted Answer

In a dynamic supply market, buying firms benefit from collaborative relationships as they can lead to better communication, flexibility, and innovation, helping firms adapt to changes and uncertainties.

Question 20

Relationship commitment involves a partner's belief than an ongoing relationship is so important that it deserves maximum efforts to maintain it.

Accepted Answer

Relationship commitment is characterized by the belief that the relationship is valuable and worth the effort to sustain and nurture it.

Quiz 3: Customer Relationship Management Strategies for Business Markets