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File: Ch05, Chapter 4: Account Relationship Management

True/False

1. One of the most productive use of a salesperson's time is usually to call on existing
customers, rather than prospects.

Ans: True
Response: See page 112

2. The first stage of the typical purchasing process in organizations is the evaluation of
purchasing options.

Ans: False
Response: See page 113

3. In many consultative type of sales situations, the customer may not be aware that a
need or opportunity exists.

Ans: True
Response: See page 113

4. In the U.S., the first step in organizational purchasing is for the buyer to develop a
personal relationship with the seller.

Ans: False
Response: See page 113

5. The first stage of the typical purchasing process in organizations is to recognize that
a need exists.

Ans: True
Response: See page 113
6. Derived demand refers to the opportunity to sell additional products and services
once a supplier has established a good customer relationship.

Ans: False
Response: See page 113

7. The concept of “derived demand” refers to the close relationship between a supplier’s
sales to a customer and the customer’s sales to their customers.

Ans: True
Response: See page 113

8. Developing product specifications involves developing a precise statement of a


product's requirements and tolerances.

Ans: True
Response: See page 114

9. The submission of a sales proposal in a typical purchasing process precedes the


purchase decision itself and follows the supplier selection phase.

Ans: False
Response: See page 114

10. Extranets are most likely to be involved in business-to-business transactions


involving inventory replenishment.

Ans: True
Response: See page 114

11. Value analysis focuses on the relative costs of providing a necessary function or
service.

Ans: True
Response: See page 115

12. The purchasing practice of utilizing supplier tiers is becoming a less popular
practice.

Ans: False
Response: See page 116

13. The purchasing practice of utilizing supplier tiers is analogous to the marketing
practice of customer segmentation.

Ans: True
Response: See page 116, 117

14. An Tier C or Extended Supplier Relationship is usually established with


standardized, non-strategic products.

Ans: False
Response: See page 116

15. It is possible for one person in an organization to occupy the role of both a technical
and an economic buyer.

Ans: True
Response: See page 118- 119

16. Salespeople should be prepared to discuss interest rates and financing terms with
the Economic Buying Influence.

Ans: True
Response: See page 118

17. The Economic Buyer controls the money to make a purchase.


Ans: True
Response: See page 118

18. Selling to organizations is somewhat easier than selling to an individual consumer


because organizational buying centers are staffed with professionals.

Ans: False
Response: See page 118

19. It is possible for one person to function in the roles of being the user, economic, and
technical buyer for a particular purchase.

Ans: True
Response: See page 118

20. It is generally good advice for salespeople to concentrate all their efforts on the
purchasing agent when selling to organizations.

Ans: False
Response: See page 118

21. The term "Buying Center" is used to refer to centralized buying, typically performed
at an organization’s headquarters.

Ans: False
Response: See page 117

22. The "Economic Buying Influence" is identified as the person with the authority to
spend the money necessary to purchase the product or service.

Ans: True
Response: See page 118

23. With a buying center, salespeople can usually ignore either the purchasing agent or
the user of the product, as long as they can influence the economic buyer.

Ans: False
Response: See page 118

24. The Technical Buyer’s role is to act as a gatekeeper, they can say "yes" to a product
purchase decision.

Ans: False
Response: See page 119

25. The person in the User Buyer role generally has a much broader product focus than
does the Economic Buyer.

Ans: False
Response: See page 118

26. The role of the user buyer is to determine the impact of the purchase on the job in
which the product is used.

Ans: True
Response: See page 118

27. A Technical buyer influence’s primary focus in the purchasing process is on product
or service specifications.

Ans: True
Response: See page 119

28. People who are not employees of the buying organization, may be a part of an
organization's buying center.

Ans: True
Response: See page 118-119
29. Most buying organizations assign an "advocate" to new salespeople for the purpose
of educating them about their operations.

Ans: False
Response: See page 119-120

30. Successful salespeople are usually able to identify an “advocate” who will take over
the selling task for the salesperson.

Ans: False
Response: See page 119-120

31. An advocate is usually needed in complex business-to-business sales situations


because the salesperson is not seen as being trustworthy.

Ans: False
Response: See page 119-120

32. A excellent way to identify a good sales advocate is to listen for the name of the
person that other people in the buying center frequently mention.

Ans: True
Response: See page 119-120

33. The buyer and seller committing to an exclusive relationship characterize the
expansion stage of a buyer-seller relationship.

Ans: False
Response: See page 121

34. Value to a buyer generally means paying the lowest possible list price for a product
or service.

Ans: False
Response: See page 122
35. Customer value creation in a consultative type customer relationship is usually
greatest during the first stage of the purchasing process, which is the recognition of
needs.

Ans: True
Response: See page 122

36. One danger of using price discounts to close a sale is that the customer may seek
further discounts in the future.

Ans: True
Response: See page 123

37. Studies have shown that veteran salespeople are more likely to accurately identify a
buyer's performance expectations than are new salespeople.

Ans: False
Response: See page 124

Multiple Choice

38. Which of the following is the first step in the typical purchasing process by
organizations?

a. a vendor analysis
b. a Request for Proposal (RFP)
c. recognitions of needs
d. evaluation of alternatives
e. none of the above

Ans: c
Response: See page 112

39. Derived demand is an important idea in business-to-business sales because:

a. it usually determines how much can be sold.


b. it is the only factor determining a product's price.
c. it determines what arguments are included in the sales presentation.
d. it is an indicator of the state of the economy.
e. all of the above

Ans: a
Response: See page 113

40. Which of the following is likely to be associated with a request for proposal (RFP)?

a. a set of product specifications


b. an extensive amount of client information
c. an extensive search for qualified suppliers
d. a fixed price the customer wants all suppliers to charge
e. none of the above

Ans: a
Response: See page 114

41. Value analysis focuses on the cost of providing a necessary


function or service.

a. total
b. direct
c. indirect
d. variable
e. fixed

Ans: a
Response: See page 115

42. Which of the following questions is not likely to be asked during a value analysis?

a. whether an item can be eliminated entirely


b. whether an item is purchased individually or in bulk
c. whether a part has excess capacity for the intended application
d. whether a part is a standard item or specially ordered
e. both b and c above

Ans: a
Response: See page 115

43. A vendor analysis may examine all of the following performance criteria except:

a. delivery reliability.
b. price.
c. gross margin.
d. after sales service.
e. none of the above.

Ans: c
Response: See page 116

44. When a customer views the supplier as a critical to the customer’s competitive
position, then the supplier would most likely be considered a ___________ supplier?

a. In
b. Preferred
c. Partner
d. Extended
e. Either c or d above

Ans: c
Response: See page 116

45. Which of the following would be typical of the buyer-seller relationship of a Preferred
Supplier?

a. Usually involves product design collaborations.


b. Usually involves inventory management collaborations.
c. Usually involves a relationship focused on products.
d. Usually involves an “exclusive” sourcing relationship.
e. Usually is considered critical to the customer’s competitive success.

Ans: c
Response: See page 116

46. According to the at least one senior manager which stage of the purchasing process
do customers feel is the “Achilles heel” for most suppliers

a. The recognition of needs phase


b. The evaluation of options phase.
c. The purchasing decision phase.
d. The implementation phase.
e. none of the above.

Ans: d
Response: See page 115

47. The factor(s) which influence the number of people who are likely to be involved in
the decision making process are:

a. how many departments use the product.


b. the dollar value of the purchase.
c. the degree of technical sophistication of the product.
d. both b and c above.
e. all of the above.

Ans: e
Response: See page 116

48. When selling to an economic buying influence such as a chief executive officer,
salespeople are likely to do which of the following?

a. emphasize the contract’s financial consequences for the organization


b. discuss how the deal would improve the firm’s competitive position
c. discuss how corporate wide contracts can reduce costs per unit to the buyer
d. both a and b above
e. all of the above

Ans: e
Response: See page 117

49. Which of the following is most likely to be an economic buying influence?

a. an engineer
b. a senior officer
c. a purchasing agent
d. a production supervisor
e. a financial analyst

Ans: b
Response: See page 118

50. General, the industrial buying process can be characterized by:

a. the presence of multiple buying influences.


b. the need to work with buying committees.
c. the involvement of purchasing agents throughout the purchasing process.
d. only a and b above.
e. all of the above.

Ans: d
Response: See page 118-119

51. An economic buying influence is likely to be further up the organizational ladder


under what conditions?

a. the more depressed the organization's business condition


b. the more experience they have with you and your firm
c. the less expensive the product
d. both b and c above
e. none of the above

Ans: a
Response: See page 117

52. Which of the following buying center people is implementation oriented, takes a
tactical view to the decision, and whose daily life is most affected by the seller’s product
or service?

a. Economic Buyer
b. User Buyer
c. Technical Buying Influence
d. Outside Expert Buying Influence
e. The Advocate

Ans: b
Response: See page 118-119

53. User buyers are most likely to be concerned with which of the following issues?

a. the operational advantages of the purchase


b. dollar amount of the purchase
c. the purchasing organization's business condition
d. the potential organizational impact of the purchase
e. the impact on the final consumer

Ans: a
Response: See page 118

54. Technical buyers are most likely to be concerned with which of the following issues?

a. the organizational impact of the purchase


b. the dollar amount of the purchase
c. screening out suppliers, not meeting specifications
d. the operational advantages of the purchase.
e. none of the above

Ans: c
Response: See page 119

55. Which of the following buying center people is concerned with the product’s specs,
is focused on the present, is most likely to ask what a product does?”

a. Economic Buyer
b. User Buyer
c. Technical Buying Influence
d. Outside Expert Buying Influence
e. The Advocate

Ans: c
Response: See page 119

56. Which of the following is true regarding the role the advocate may be expected to
play in the complex business-to-business sales situation?
a. Provides key information.
b. Sell for you when you cannot be there.
c. Recommend selling strategies.
d. Help you gain access to key decision makers.
e. All of the above are roles the advocate may be expected to play.

Ans: e
Response: See page 119

57. The most likely sequence of stages in a fully developed buyer-seller relationship is:

a. Expansion, Exploration, Dissolution, Commitment, Awareness.


b. Exploration, Awareness, Commitment, Expansion, Dissolution.
c. Exploration, Commitment, Awareness, Expansion, Dissolution.
d. Awareness, Expansion, Exploration, Commitment, Dissolution.
e. Awareness, Exploration, Expansion, Commitment, Dissolution.

Ans: e
Response: See page 121

58. Which of the following stages of the buyer-seller relationship focuses on a trial
relationship?

a. awareness
b. commitment
c. expansion
d. all of the above
e. none of the above

Ans: e
Response: See page 121

59. Which of the following selling objectives is likely to be associated with the
awareness stage of the supplier-customer relationship?

a. consummating an initial sale


b. demonstrating how the product can satisfy an identified customer need
c. getting involved in the early stages of a customer’s new product development
process
d. both a and b above
e. all of the above

Ans: b
Response: See page 121

60. Which of the following encourages parties to progress into a fully committed buyer-
seller relationship?

a. the creation of value


b. building trust in your partner
c. meeting each partner’s expectations
d. both a and b above
e. all of the above

Ans: e
Response: See page 121-122

61. Attempting to create the highest level of customer value during the evaluation of
alternatives stage of the purchasing process is typical of which type of customer
relationship?

a. Transactional customer relationship


b. Consultative customer relationship
c. Enterprise customer relationship
d. Only b and c above
e. All of the above

Ans: c
Response: See page 122

62. In a transactional type of relationship, the sales force provides the greatest
customer value during which stage(s) of the purchasing process?

a. recognition of needs
b. evaluation of alternatives
c. purchase decisions
d. both a and b above
e. both a and c above
Ans: c
Response: See page 122

63. According to buyer survey results which of the following personal attributes
generally has the least effect on perceptions of a salesperson's trustworthiness?

a. dependability
b. competency
c. intelligence
d. honesty
e. all of the above are equally important

Ans: e
Response: See page 124