Marketing 351 Chapter 8

All of the following describe the demand for business products except a) elastic. b) derived. c) joint. d) inelastic. e) fluctuating.

A

Churches, charitable organizations, and private colleges are considered _____ buyers. a) corporate b) government c) institutional d) producer e) nonprofit

c

Compared with the SIC system, the North American Industry Classification System (NAICS) will a) look at many industries at one time. b) be used throughout the world. c) contain the most up-to-date information for the NAFTA partners. d) provide less information about service industries. e) generate statistics that will not be useful in comparing countries.

c

Demand for business products is characterized as derived. From what is the demand derived? a) Industrial demand b) Modified demand c) Demand for consumer products d) Future product demand e) The business cycle

c

Goodyear is a manufacturer and marketer of tires for new passenger cars. In recent years, the company's business has declined because of the overall decrease in consumer demand for new cars. In this case, the demand for Goodyear's tire products is said to be _______since it depends on the demand for new cars. a) inelastic b) fluctuating c) derived d) elastic e) nonderived

c

In a buying center, purchasing agents or purchasing managers are also known as a) gatekeepers. b) deciders. c) buyers. d) users. e) influencers.

c

Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to produce other products or by using them in their operations are classified as ___________ markets. a) consumer b) institutional c) producer d) government e) reseller

c

Inelastic demand simply means that a) buyers will not make a modified rebuy purchase. b) demand depends on how many items are purchased. c) a price increase or decrease will not significantly change the demand for an item. d) when price goes up, demand goes down. e) when supply is reduced, the price will increase.

c

The three purposes for which individuals or groups can use products in order for it to be considered a business market are a) use in daily operations, end consumption, and resale. b) direct use in producing other products, company travel, and end consumption. c) resale, use in daily operations, and direct use in producing other products. d) governmental, institutional, and reseller purposes. e) making other products, selling to other businesses, making component parts.

c

When a business routinely purchases the same product with similar terms of sale, the purchase is called a a) new-task. b) repetitive purchase. c) straight rebuy. d) modified rebuy. e) standard order.

c

When buying materials, the purchasing agent for Alco Pillow Manufacturing Company considers a variety of factors. Which one of the following is least likely to concern this buyer? a) Does the quality of the goods meet company specifications? b) Does the supplier consistently deliver on time? c) Does the supplier also sell to my competitors? d) Does the supplier offer the services required? e) Does the price meet company budget requirements?

c

Which method of business buying is most likely to be used when the products being purchased are standardized based on certain characteristics? a) Homogeneous selection b) Inspection c) Description d) Sampling e) Negotiation

c

Which of the following is true with respect to buyers in business markets? a) Business buyers always act rationally when making purchases for their company. b) Business customers tend to be less informed about the products they purchase than consumer buyers. c) Business customers demand detailed information about a product's quality, features, or technical specifications. d) Business customers are no different than buyers in consumer markets. e) Business customers tend to buy products from their friends and contacts with business suppliers.

c

Administrative assistants that control the flow of information to other people in the organization often play the _____ role in the buying center. a) gatekeeper b) user c) influencer d) buyer e) controller

a

Barry Gluckman of WP International, a major marketer of word-processing software, calls the secretary of Renee Dorchette, director of purchasing for MMK, Inc. He sets up an appointment to discuss an upcoming purchase of software. The secretary plays the role of ___________ in this purchase decision. a) gatekeeper b) buyer c) decider d) buying center captain e) order giver

a

Johnson's Industrial Pest Control Service wants to meet its customers' expectations with regard to the quality of service it provides. How should Johnson's identify these expectations? a) Conduct market research. b) Use management judgment. c) Trace existing service levels. d) Stress quality service with employees. e) Train employees better.

a

Retailers like Target and Kmart are considered to be members of which business market? a) Reseller b) Customer c) Producer d) Institutional e) Services

a

___________ analysis is a systematic evaluation of current and potential suppliers that focuses on many dimensions including price, product quality, delivery service, product dependability, and overall company reliability. a) Value b) Vendor c) Buying center d) Strategic e) Cost

b

A Pillsbury mill in Utah buys grain from growers in the western region. The purchasing agent for Pillsbury will most likely use which buying method? a) Description b) Inspection c) Sampling d) Negotiation e) Selection

c

A representative from Coca-Cola stops by at a local fast-food restaurant once a month to inquire how much soft drink syrup the store will need. The restaurant's orders are an example of which type of business purchase? a) New-task b) Modified rebuy c) Straight rebuy d) Bid e) Negotiated

c

About what percentage of the annual U.S. gross domestic product is government spending? a) 2 percent b) 10 percent c) 20 percent d) 30 percent e) 50 percent

c

After deciding to order replacement parts for aging machinery, the buyer for a construction company examines catalogs and trade publications looking for these parts. The buyer is at which stage in the business buying decision process? a) Problem recognition b) Product specification c) Product-supplier search and evaluation d) Product-supplier selection e) Product-supplier post-evaluation

c

Management at Readyfresh Dry Cleaners is concerned that it maintains a high level of service for its business accounts. How should the firm monitor the level of service these customers receive? a) Develop a code of service. b) Set service objectives. c) Formally survey customers. d) Specify service uniformity. e) Stress truthfulness with employees.

c

Most business buying decisions are made by a) one person. b) a team of purchasing agents. c) a firm's buying center. d) inventory control personnel. e) the sales force.

c

Most business purchases can be classified as belonging to one of three types: a) delinquent, repetitive, or delivered. b) repetitive, new-task, or modified rebuy. c) modified rebuy, new-task, or straight rebuy. d) delinquent, new-task, or reciprocal. e) rebuy, reciprocal, or delayed.

c

Perry Supply's sales and sales force have continued to expand. Now, the firm plans to add a fleet of company cars as part of its sales compensation package. For Perry Supply, these vehicles would represent a ____________ purchase. a) modified rebuy b) straight rebuy c) new-task d) reevaluated e) repetitive

c

The fact that business customers purchase products to be used directly or indirectly in the production of goods and services to satisfy customers' needs means that demand for business products is a) joint. b) economically stable. c) derived. d) inelastic. e) more fluctuating.

c

The recently created Department of Homeland Defense is a member of the _____ market. a) regulatory b) reseller c) government d) producer e) institutional

c

The second stage in the business buying decision process is to a) search for products and suppliers. b) select the most appropriate product. c) develop product specifications. d) evaluate product and supplier performance. e) recognize the problem.

c

What are the two ways governments make purchases? a) Cash or credit b) Contracting previous suppliers and bids c) Bids and negotiated contracts d) Lottery system and contract negotiations e) Request for new purchases and recurring orders

c

The group of people within a business who are involved in making business buying decisions is referred to as a) the new-task team. b) negotiators. c) purchasing agents. d) deciders. e) the buying center.

e

A disadvantage of reciprocity is that it can lead to a) a price war. b) higher promotional costs. c) more competitive firms entering the industry. d) less-than-optimal purchases for the buyer. e) longer periods of negotiation.

d

A practice in which two businesses agree to buy from each other is a) a new task purchase. b) a straight rebuy. c) a modified rebuy. d) reciprocity. e) a straight purchase.

d

Analysis of business input-output data by the federal government allows the government to have a better understanding of the a) cash flows that exist among industries. b) raw materials and labor required to produce a given product. c) amount of reinvestment that different industries use. d) types of industries that purchase particular products. e) growth projections for a given industry.

d

Christy Bridgman is considering the purchase of a new fax machine for her real estate office. She is considering a machine that doesn't have as many functions but is available at a considerably lower price than her current machine. She is engaged in ___________ analysis. a) vendor b) downsizing c) strategic d) value e) profit

d

In business markets, individuals or groups purchase products for one of three purposes. These purposes are a) resale, wholesale, and direct use. b) wholesale, direct use, and use in producing other products. c) resale, wholesale, and use in producing other products. d) resale, direct use in producing other products, and use in general daily operations. e) use in general daily operations, wholesale, and resale.

d

Individual influencing factors refer to a) relationships among those in the firm's buying center. b) uncontrollable environmental forces. c) the power an individual controls in the buying center. d) personal characteristics of individuals in the buying center. e) activities of suppliers.

d

Mike's Roadside Market buys produce from area farmers, marks the merchandise at a price that includes some profit, and then sells the fruit and vegetables to the people in and around Centerville. Mike's would be classified as part of a ___________ market. a) consumer b) producer c) government d) reseller e) wholesaler

d

Most businesses try to control the level of quality in the parts they buy from suppliers. Most firms develop standards for _____ in order to achieve their quality goals. a) how many different suppliers they use b) how many parts can fail c) controlling when shipments will arrive d) the percentage of defects allowed e) how long the parts should last

d

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him a) that he's absolutely right, the government doesn't deal with small businesses. b) although the government will deal with small businesses, he will never make a profit off a government contract. c) that any government, federal, state, or local would laugh at the size of his business. d) the government rarely considers new suppliers when making purchasing decisions. e) the government buys products from all sizes of business, but there is some red tape.

e

A representative product taken from a lot or batch, evaluated, and purchased refers to a) homogeneous selection. b) description. c) trust. d) negotiated inspection. e) sampling.

e

An organization that decides to buy all of a certain part from the same company is using a) single-supplier purchasing. b) multiple sourcing. c) same vendor analysis. d) straight rebuy. e) sole sourcing.

e

Demand for business products is also known as ______ demand. a) derived b) corporate c) business buying d) manufacturing e) industrial

e

The state of Montana is preparing to buy a large quantity of frozen orange juice for use in a large school district. Citrus Sweet, Inc. is in the citrus juice business but has never sold to the government market. To have a chance at getting this order, Citrus Sweet's first step must be to get her firm to a) make a presentation appointment with the state. b) quote prices to the purchasing department. c) advertise in the capital city. d) negotiate with the state. e) secure a slot on the list of qualified bidders.

e

The third stage in the business buying decision process is to a) evaluate product specifications to solve the problem. b) evaluate products relative to specifications. c) select and order the most appropriate product. d) evaluate product and supplier performance. e) search for products and suppliers.

e

Volkswagen purchases upholstery for the interiors of its vehicles from various suppliers. This upholstery must have a set of characteristics that is expressed by Volkswagen. This set is called a) descriptions. b) product features. c) criterion. d) purchase requests. e) specifications.

e

What is a primary difference between business and consumer buyers? a) Consumer buyers require more product information than business buyers. b) Business purchases are made by one individual whereas families make consumer purchases together. c) Repeat sales are more common with consumer buyers than business buyers. d) Consumers primarily buy inexpensive items; businesses only buy expensive items. e) Business buyers generally make larger orders than consumer buyers.

e

When Hunter Ceiling Fans buys electrical wire for use in producing its ceiling fans, Hunter is part of what type of market for electrical wire? a) Resale b) Wholesale c) Customer d) Consumer e) Business

e

Which of the following statements about business buying is false? a) Business marketers prefer not to sell to customers who place small orders. b) Business marketers must often sell their products in large quantities to make profits. c) Most business purchases are made by committee. d) Business purchases are usually made on the basis of contracts. e) Orders in business markets tend to be smaller than those placed in consumer markets.

e

______ buy products from manufacturers and then resell the products to other firms in the distribution system. a) Retailers b) Producers c) Distributors d) Warehouses e) Wholesalers

e

Many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships which are often called a) partnerships. b) co-ops. c) monopolies. d) reciprocity. e) alliances.

a

Motorola buys silicone which is used in its chip-making process. Motorola produces microchips for use within a wide variety of products for other firms, such as Ford, GM and Samsung. Motorola is a buyer in a _____ market. a) producer b) government c) reseller d) construction e) institutional

a

Product specifications are a) physical characteristics and level of quality. b) types of services that are provided with the product. c) financing available for the product. d) types of competitors offering similar products. e) product return policies.

a

Snappy Tools, Inc., purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Snappy Tools, Inc. The company would be part of what type of business market? a) Reseller b) Producer c) Consumer d) Government e) Supply

a

The stages of the business buying decision process, in order, are a) recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance. b) recognizing the problem, searching for products and evaluating possible suppliers, selecting suppliers and products, establishing product specifications, and evaluating performance. c) recognizing the problem, selecting suppliers and products, evaluating performance, establishing product specifications, and searching for substitute products. d) establishing product specifications, recognizing the problem, searching for products, evaluating possible products and suppliers, selecting suppliers and products, and evaluating performance. e) establishing product specifications, searching for products, selecting suppliers and products, evaluating performance, recognizing the problem, and evaluating possible products and suppliers.

a

What are the four major categories of factors that influence business buying decisions? a) Environmental, organizational, interpersonal, and individual b) Environmental, organizational, psychological, and individual c) Environmental, psychological, individual, and technological d) Technological, organizational, environmental, and interpersonal e) Environmental, organizational, technological, and individual

a

When the requirements associated with a new-task purchase are changed the second or third time, this is called a ___________ purchase. a) modified rebuy b) continued new-task c) contractual d) straight rebuy e) negotiated rebuy

a

A buyer for Macy's Department Stores orders handbags from a supplier because that supplier allows the buyer to maintain Macy's company policy of 30-day advance purchase notice. This is an example of ___________ influence on the business buying decision process. a) environmental b) organizational c) interpersonal d) individual e) demographic

b

An accountant who purchases software for maintaining clients' books is an example of a buyer in a(n) ___________ market. a) consumer b) producer c) reseller d) government e) institutional

b

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of a) their markup. b) sales per square foot of selling area. c) how many of the product they can fit in a certain amount of space. d) profit per dollar of selling price. e) the reliability of the supplier.

b

Collin Roberts of Roberts Construction is planning to buy a piece of used earth-moving equipment. He would most likely base his purchase decision on ___________ of the alternative machines. a) descriptions b) inspections c) a sampling d) specifications e) reputations

b

Compared with consumer goods, marketers aiming at business customers a) do not need to select target markets. b) have an enormous amount of information available concerning potential customers. c) have more difficulty in determining where their customers are located. d) are restricted in the types of promotion they can use. e) have more difficulty in estimating customers' purchase potentials.

b

Demand for a business product is _____ when two or more items are used in combination to produce a product. a) inelastic b) joint c) fluctuating d) derived e) partnered

b

Demand for a business product is ___________ if a price increase or decrease will not significantly affect that demand. a) elastic b) inelastic c) derived d) joint e) separate

b

During the search for products and evaluating possible suppliers stage of the business buying decision process, marketers sometimes use _________ analysis to examine the quality, design, materials, and possibly item reduction in order to acquire the product in the most cost-effective way. a) cost b) value c) profit d) strategic e) SWOT

b

In its purchase of desktop business computers, Albertson's asked that potential suppliers provide information only on units with 4.0 gigabytes of memory. As Albertson's management evaluates this purchase, it finds that 4.0 gigabytes are inadequate for many of the software programs used at Albertson's. In this instance, the firm would need to modify which aspect of the purchase process? a) Searching b) Specification development c) Alternative evaluation d) Selection e) Performance evaluation

b

In placing a tire order with Michelin, South Side Industrial Supply finds that the truck tires it is ordering have increased $37.50 in price since the last order. South Side proceeds with the order, confident that it can pass on the price increase to future customers. This is an example of business products having ___________ demand. a) derived b) inelastic c) joint d) fluctuating e) higher

b

Inelastic demand in business markets refers to a situation where a) demand for a given product fluctuates very little over time. b) price increases or decreases will not significantly change demand for a given product. c) demand for a given product fluctuates significantly over time. d) demand for one product depends heavily on the demand for another product. e) supply for a given product cannot keep pace with the demand for it.

b

Input-output analysis is most likely to yield what type of information? a) Number of employees that a firm has b) Industries that purchase the major portion of an industry's output c) Kinds of returns a firm is getting on its equipment investments d) Type of inventory turnover that is characteristic of a firm e) Kinds of variables that would be used to segment the target market

b

Kroger Grocery Store is an example of a reseller. Which of the following factors concerning reseller purchase decisions is false? a) Resellers are concerned with the level of demand for the product. b) Resellers are not concerned with how much space the product takes up as long as it has a high price. c) Resellers want producers to be able to supply adequate quantities of the product. d) Resellers are concerned with the availability of technical and promotional assistance from the producer. e) Resellers are concerned with the markup percentage they can get on the product.

b

Raython Hardware and Thames Industrial Supplier have worked closely for many years and have a mutually beneficial relationship in which Raython provides all of Thames's hardware needs in a timely manner. Raython and Thames's relationship could be best characterized as a(n) a) reciprocity agreement. b) partnership. c) intra-organizational group. d) alliance. e) tying arrangement.

b

St. Jude's Hospital decides to redo its kitchen with new flooring, cabinets, counters, and appliances. The hospital compiles a description of the project and then asks sellers to submit bids. After determining the most attractive bids, the hospital will then work with two or three companies to determine who will get the contract. This is an example of using ______ for a purchase decision. a) sampling b) negotiation c) inspection d) elimination e) description

b

Which method of business buying is necessary when products are highly homogeneous and examination of each item is not feasible? a) Negotiation b) Sampling c) Description d) Inspection e) Homogeneous selection

b

_________ is(are) a major threat to the sales success of jointly demanded products. a) Price changes b) Shortages c) Economic instability d) Inventory buildup e) Proliferation of brands

b

Bob Denton of Denton Pest Control buys equipment from a supplier because that supplier hires him to spray the warehouse for insects periodically. This practice is known as a) cost-benefit analysis. b) cooperative selling. c) reciprocity. d) supplier agreement. e) modified rebuy purchase.

c

All of the following are important concerns of business customers except a) achieving a specific level of quality in the products offered to target markets. b) obtaining a level of quality that meets specifications. c) obtaining products that exceed specifications to ensure the best possible product performance. d) obtaining products for which the quality level is consistent. e) supporting customers with services they expect.

c

As it places its order for truck tires with Michelin, South Side Industrial Supply realizes that it must also place an order for valve stems and balancing weights for the truck tires. Such business products are characterized as having ____________ demand. a) derived b) inelastic c) joint d) fluctuating e) higher

c

Business markets are typically divided into four categories. These categories are a) retailers, wholesalers, services, and nonprofit firms. b) producer, manufacturer, reseller, and government. c) producer, reseller, government, and institutional. d) manufacturer, wholesaler, retailer, and services. e) reseller, retailer, government, and institutional.

d

Pi Delta Mu sorority purchases food in bulk to feed its members living in the house. This means it is part of a(n) ___________ market. a) producer b) consumer c) reseller d) institutional e) government

d

Safeway Supermarkets recently placed an order with the Kahn Corporation. Safeway has ordered these same products before under the same terms of sale. What type of purchase does this situation represent? a) New-task b) Repetitive c) Institutional d) Straight rebuy e) Modified rebuy

d

The government decides to purchase a new fleet of fighter jets for the U.S. Air Force. What type of buying procedure is the government most likely to use? a) The government will request bids from all companies on its qualified bidder list. b) It will contact whatever company made the last jets and have them develop the new ones. c) Ads will be placed in the top five circulated U.S. newspapers for a company to produce the jets. d) The government will select a few firms and enter into negotiations with them until the contract is awarded. e) The contract will go to the first company that submits a reasonable bid for the desired jets.

d

The student senate at your university has been asked to give input on the purchase of new computers for campus computer labs. In this instance, the student senate would be acting as a(n) ______. a) buyer. b) gatekeeper. c) user. d) influencer. e) decider.

d

When a business is making its initial purchase of an item to be used to perform a new job, it is known as a _________ purchase. a) straight rebuy b) reciprocal c) delayed d) new-task e) modified rebuy

d

When certain consumer products are in high demand, producers might buy extra materials and equipment and when demand subsides, producers will cut back on their material purchases. This describes _____ demand. a) joint b) inelastic c) consumer d) fluctuating e) derived

d

Which of the following products is most likely to be purchased on the basis of contract negotiation? a) Eggs b) Office supplies c) Used cars d) A custom-made bulldozer e) Wheat

d

Which of the following would be considered an institutional buyer? a) The University of Illinois b) The Environmental Protection Agency c) Apple Computers d) The United Way e) City of Greenville

d

Which one of the following countries will not be included in the data presented in the new industry classification system that is replacing the SIC? a) Mexico b) Canada c) United States d) Japan e) All but one NAFTA country

d

Which type of business market tends to have the most complex buying procedures? a) Reseller b) Institutional c) Retailer d) Government e) Producer

d

Anderson Distribution Company has purchased 15 forklifts over the past two years. As it plans to place its next order for another five machines, management wonders if additional features may be needed in order to handle changes in the product lines it carries. For Anderson, these new forklifts represent a ___________ purchase. a) new-task b) repetitive c) straight rebuy d) repetitive order e) modified rebuy

e

Ben Davideau is assigned by his sales manager to come up with the names and addresses of twenty firms in his territory that have some potential for using sizable quantities of his firm's products. Wanting to be as efficient as possible, Ben looks in a) Sales & Marketing Management. b) an SIC listing. c) the Census of Business. d) the Census of Manufacturers. e) Standard & Poor's Register.

e

Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ___________ markets. a) consumer b) institutional c) producer d) government e) reseller

e

Institutional markets are a) intermediaries who resell goods to make a profit. b) federal and state government units. c) state or local government units. d) consumers who buy products for their own use. e) organizations that seek nonbusiness goals.

e