Ted is a potato farmer from Devon. He sells his potatoes to many local customers including restaurants, wholesalers and manufacturers. For one customer, Ted is keen to drive a premium price for his potatoes as he is confident the customer can afford to pay more. What type of customer is this to Ted?

This question refers to a customer portfolio analysis model used by suppliers to segment their customers. An 'Exploitable' customer is one that provides high value (profitability) but has low strategic attractiveness or a weak relationship. The supplier's strategy for this segment is to maximize profit from transactions without investing heavily in relationship development. Ted's approach of driving a premium price because he knows the customer can afford it, focusing purely on maximizing his margin on the sale, aligns perfectly with the strategy for an 'Exploitable' customer. The relationship is transactional and focused on short-term financial gain.

A. Development: This customer has high strategic potential but currently offers low value. The supplier would invest in the relationship to grow future business, not extract maximum profit now.
C. Nuisance: This customer offers low value and is costly to serve. The strategy would be to manage them efficiently, increase prices to reflect costs, or even cease business with them.
D. Core: This is a highly valued strategic partner. The relationship is collaborative, focusing on long-term mutual benefit and value creation, not unilateral price maximization.

1. CIPS (Chartered Institute of Procurement & Supply). (2019). L5M6 Managing Contractual Risk: Study Guide. Profex Publishing. The customer portfolio matrix is a key concept within this module, typically explained in chapters on supplier and customer relationship management. The 'Exploitable' quadrant is defined by high profitability and low relationship attractiveness, with a corresponding strategy of profit maximization. (Note: Specific page numbers vary by edition, but this is a core concept in the official CIPS curriculum for this module).

2. Lysons, K., & Farrington, B. (2020). Procurement and Supply Chain Management (10th ed.). Pearson. Chapter 11, "Supplier Relationship Management," discusses portfolio analysis models, including the customer perception matrix, which categorizes customers into segments such as Core, Development, Exploitable, and Nuisance/Nuisance based on their value and relationship attractiveness.

3. O'Brien, J. (2020). Category Management in Purchasing: A Strategic Approach to Maximize Business Profitability (5th ed.). Kogan Page. Chapter 6, "Supplier Relationship Management (SRM)," details portfolio analysis techniques. It describes the supplier's view of its customers, where 'Exploitable' customers are those from whom maximum profit should be taken due to their high spend but low potential for a strategic partnership.