Mod 2 Section B Master Quiz
For which of the following companies would implementing supplier relationship management (SRM) probably be most critical? An internet banking company seeking to expand use among high-value customers A company that uses raw materials and prefabricated components to create consumer goods A company competing in a commodity market with little opportunity for adding value A gift catalog company that offers a large number of items from a wide variety of suppliers
A company that uses raw materials and prefabricated components to create consumer goods SRM focuses on identifying opportunities for strategic relationships between supply chain partners and on developing and managing those relationships. The internet banking company is concerned primarily with customers rather than suppliers. The commodity-driven company may have some benefit, but it will be limited by the opportunities to add value. Similarly, the gift catalog company requires adequate supply at the right times but may rely on so many suppliers that strategic partnerships are not practical. The manufacturer of consumer goods will benefit from developing strategic relationships with suppliers that add value and make its products more competitive.
In the supplier certification process, before evaluating alternative suppliers and selecting suppliers, which of the following should already have been done? Define the formal certification commitment agreement. Decide who should be carrying out testing or auditing. Create supplier quality ratings. Conduct quality improvement programs.
Decide who should be carrying out testing or auditing. Before the certification process begins, it is important to decide who will be carrying out each role. Third parties performing the testing or auditing should be identified. If the organization is performing some or all of the testing, the key players on the team must be identified and their tasks documented.
Which of the following statements about customer segmentation is true? Customer segmentation may help increase revenue but is not a tool for increasing profitability. Demographic segmentation is not based on data about actual customer buying behaviors. Customer segmentation is a concept new to customer relationship management (CRM). Customer segmentation does not apply well to business-to-business (B2B) customers.
Demographic segmentation is not based on data about actual customer buying behaviors. Customer segmentation predates CRM, but in the past it relied heavily on demographic segmentation, which does not use actual customer buying behavior as CRM segmentation methods do. Customer segmentation can increase both revenue and profitability for retail and B2B customers.
When developing a partnership with a customer service supplier, an effective customer service management strategy would include which of the following? Delivering consistent and identical customer service for all customer segments Restricting customer interactions to a limited set of defined scenarios that may be performed within the existing infrastructure Developing a general system but allowing flexibility for customer service personnel to develop specific procedures Developing an annualized contract or trading partner agreement
Developing an annualized contract or trading partner agreement Once the decision to develop a strategic supplier relationship has been made, the management strategy must be developed and implemented throughout the partnership. Development of the annualized contract or trading partner agreement, procedures to handle all customer interactions, infrastructure (people and information) to perform the procedures, and metrics to measure success are all parts of a successful customer service management strategy. Annualized contracts or trading partner agreements can formalize more in-depth relationships with suppliers. Customer interaction scenarios are determined by customer needs, not by existing infrastructure. Specific responses should be developed and followed. Service levels may be customized for different customer segments.
Which of the following stages of the product life cycle is an ideal opportunity in which to create a sense of customer ownership of a product or service? Development Introduction Growth Maturity
Development In some business types, the development stage offers an opportunity to create customer ownership. By involving key customers in the product- or service-crafting phase, the business creates a sense of partnership and mutual investment that will translate into greater potential for lifetime customers.
Which of the following is true of portals? Portals gather external information, but transactional systems gather internal data. External portals can provide company- and role-based access and authentication. Most portals allow users to update data on remote databases and send secure messages. A portal is another name for an online marketplace.
External portals can provide company- and role-based access and authentication. Portals are a common method of collaboration with external parties, and they customize what can be viewed and accessed based on company and role.
What type of supplier segmentation would help develop an apples-to-apples benchmarking system for delivery consistency? Grouping suppliers by custom versus standard solutions Grouping suppliers by similar lead time Grouping suppliers by capabilities Grouping suppliers by level of innovation
Grouping suppliers by similar lead time Grouping suppliers by similar lead times might help organizations when scheduling orders for goods, when tracking supplier performance (it will highlight lead time consistency since suppliers can be tracked against their peers in terms of average lead times), and possibly by allowing certain shipments to be grouped together (if feasible).
Which of the following levels of technology integration is described as various systems that feed into each other, creating some capacity for integration of the data? Interfacing technology Internally integrated technology Multi-enterprise integrated technology Disconnected technology
Interfacing technology Interfacing technology is characterized by various systems feeding into each other. Disconnected technology involves using a variety of noninterfacing databases, internally integrated technology involves one main system storing all data, and multi-enterprise integrated technology involves multiple business lines sharing stored data internally.
A French organization that is working with an Italian organization should be mindful of the differences between which of the following when performing supplier relationship management (SRM)? Legal systems Virtual organization models Incompatible versions of the same SaaS (software as a service) SRM system Currency fluctuations
Legal systems Even in the European Union, whose member-states have harmonized their legal systems to some degree, an organization must be mindful of differences. Different countries may have different expectations and legal remedies for contracts. Legal counsel is needed to navigate these laws.
After selecting the proper partner, what is the next step in creating a successful alliance? Appoint an alliance manager. Establish ground rules. Engage in a collaborative corporate mindset. Negotiate a win/win deal.
Negotiate a win/win deal. Before the rules, supervision, and improvement of the relationship can be pursued, a win-win deal must be negotiated. This sets the tone for the future alliance.
Which of the following statements about a customer data warehouse (CDW) is correct? CDWs are maintained as separate entities from a company's customer databases. CDWs are primarily used as measurement tools. One-to-one marketing cannot be achieved without using a CDW. Customers are encouraged to access and update their profiles for accuracy.
One-to-one marketing cannot be achieved without using a CDW. Because it allows a high degree of customization, one-to-one marketing programs cannot be implemented without using a CDW. CDWs are used for a variety of purposes, including segmentation, implementing different offers to customers, analyzing buying behaviors to detect preferences, and supporting strategic decisions, such as the allocation of human resources. They are usually used in conjunction with information from a company's other databases.
An organization's product is in decline and losing market share. Which of the following is most likely to generate innovative ideas on how to develop the next-generation product? Ideas from distribution point managers Marketing research on purchased customer data Ongoing use of unstructured voice of the customer (VOC) initiatives Fast multiple-choice questionnaires sent to customers
Ongoing use of unstructured voice of the customer (VOC) initiatives VOC initiatives should give voice to things that a business would not normally hear. It should allow the business to hear, straight from its customers, insightful things that do not surface through conventional marketing research. While all of the answers can produce meaningful information for marketing and product development, the VOC initiative is most likely to generate new ideas.
What is the term for a customer relationship management (CRM) tactic described as "an analytical model to identify vulnerable customers"? Win-back programs Loyalty programs Predictive churn Data mining
Predictive churn Predictive churn uses data about individual customer transactions and histories to identify trends that indicate that a customer may switch to a competitor or cease being a customer. As a result, the vulnerable customer may be offered incentives, such as loyalty programs. The data used in the model may be gathered through data mining.
Which of the following is available from an internal interface to a supplier relationship management (SRM) system? Procurement history Managing EDI with suppliers Product cataloging Managing online bidding sessions
Procurement history Internal interfaces could refer to an enterprise resources planning (ERP) system and its data warehouse. Internal interfaces collect and provide a repository for internal information in order to guide the purchasing processes, such as data on procurement history and accounting and information about suppliers and their performance.
Which will help an organization and its trading partner better manage currency exchange risks between each other? Rate sampling clauses as part of contractual payment terms Transfer of ownership contract clauses to delay transfer until rates are favorable Performance criteria clauses to reject bad quality before payment is made Pricing contract clauses based on absolute value rather than one currency
Rate sampling clauses as part of contractual payment terms Payment terms should address not only timing and form of payment but special issues such as currency exchange. To manage risk, it may be possible to stipulate the exchange rate to be used in the contract with the supplier or a period of time during which a sampling of exchange rates will be used as a basis for currency exchange.
Which of the following aspects of a customer relationship management technology system would be used for channel partner management and pipeline management? Marketing automation Account management Sales force automation Business intelligence
Sales force automation Sales force automation features include sales force management, channel partner management, lead tracking, and pipeline management.
When considering methods of sharing their performance ratings with suppliers, which of the following provides quantitative feedback? Surveys Liquidity ratio Scorecards Voice of the customer
Scorecards Scorecards capture quantitative and qualitative data and provide historical, plan (current), and predictive views of supplier performance. Suppliers have access to their own scorecard and can address specific areas of concern immediately.
A manager declines a partnership because the information requested for greater visibility between the extended supply chain is closely connected to data that produce a competitive advantage for the firm. This is an example of the failure of which of the following to be established? Dependability Dependence Security Commitment
Security Security is the issue. If the manager could be assured that sharing one type of data would not endanger the more proprietary data, then this manager may decide to establish the partnership.
Which of the following is the best example of a promotion activity in a customer-driven marketing strategy? Charging less if a customer orders through the internet Deciding where to distribute one's products Creating a product and service agreement (PSA) Segmenting customers according to their value to the business
Segmenting customers according to their value to the business Segmenting customers is an essential part of creating a promotional strategy, one of the four Ps of traditional marketing and customer-driven strategies such as those using customer relationship management (CRM). The other choices relate more to other components of the four Ps of marketing.
What are the top three factors, in order of importance, that influence most retail customers' decisions to purchase products? Price, design, quality Quality, price, service Service, quality, price Price, service, quality
Service, quality, price According to research, retail customers' decisions to purchase products are influenced most by the bundle of services surrounding the products, followed by the quality of the product and, finally, price.
Which of the following supplier relationship management (SRM) analytical applications would quantify how much it is costing the organization when buyers resist using national agreements for some categories of purchases? Value analysis Strategic sourcing/RFQ (request for quote) analysis Operations synchronization Spend analysis
Spend analysis The spend analysis application allows the organization to identify who they are buying from, what they are purchasing from each supplier, and when and how it was purchased. These comparative data can assist in sourcing and developing strategic relationships and consolidating purchasing.
When conducting a supplier certification process for an ISO (International Organization for Standardization) standard, which of the following is necessary when asking a supplier to commit to a process defined in a formal agreement? Trust that the information will not be used to their competitive disadvantage Supplier audit conducted by the ISO Commitment in return that the supplier will be the supplier of choice Requirement to commit to incoming inspections
Trust that the information will not be used to their competitive disadvantage To create a partnership with suppliers, an atmosphere of trust and commitment must be established. It must be made clear to suppliers that information arising from the certification process will be used for mutual benefits, not to place the supplier at a competitive disadvantage.
A partner organization that restructures some of its internal methods to align with the supply chain network before automating has asked which of the following key business questions? What application is optimal for all supply chain partners? What business processes must change? What type of information is to be shared? How will the supply chain partners collaborate?
What business processes must change? Automating business practices is typically expected to improve performance by eliminating manual processes. However, an organization will realize substantially more benefit if it first restructures its processes to align with the supply chain network before automating.
An example of a proactive benefit driving a strategic alliance would be a concern about: the strategic importance of the component being purchased. a sourcing relationship's potential to jeopardize attaining business objectives. the complexity of the component's interface with the final product. improving time to market or increasing quality.
improving time to market or increasing quality. Proactive reasons an organization should consider a strategic alliance are the alliance's ability to add value to products, enable strategic growth, increase market access, strengthen operations, increase organizational expertise, build organizational skills, and enhance financial strength.
A company invites key business customers to participate in the performance evaluations of its account managers. This is an example of: extrinsic data information gathering. supply chain integration. collaborative management practices. measuring customer satisfaction.
measuring customer satisfaction. Measurement of customer satisfaction is a key element of customer relationship management (CRM). Business-to-business (B2B) companies may measure the customer-driven effectiveness of their account managers by inviting the business customers' managers to participate in their performance evaluations.
If an organization with limited staff has a customer relationship management (CRM) system that allows customers to customize a product-service package, the organization should: provide equal access to all free service offerings for each customer segment. reserve some fee-based software downloads for their more profitable segments. reserve some fee-based service representative help for their more profitable segments. ensure that future segmentation analysis of unique packages does not result in segments of just one person.
reserve some fee-based service representative help for their more profitable segments. When services are either offered for free (but still have an associated cost) or are in finite supply (such as a limited amount of service representative help), the organization may need to offer them only to their more profitable customers to ensure that the product-service package remains profitable and serves to retain profitable, long-term customers.
Successful implementation of customer relationship management (CRM) and supplier relationship management (SRM) philosophies usually requires: outsourcing to companies with special expertise. redefinition of core competencies. common business goals and mission statements for all supply chain members. revision of decision-making processes.
revision of decision-making processes. Implementing CRM and SRM does not require that companies change their core competencies, although employees may need to acquire new skills. Nor do organizations need to form common goals or mission statements. They will need, however, to revisit work processes, job definitions, and decision-making structures.