Chapter 7

C.) Strategic alliance (This is the definition of a strategic alliance.)

A cooperative agreement between business firms is called a: A.) Shared capital contract B.) Global partner developments strategy C.) Strategic alliance D.) Joint contract E.) Comarketing effort

B.) Joint (When two or more items are used in combination in the final product, they have a joint demand.)

A decline in the availability of bicycle handle bars will decrease Huffy Bicycle Company's production of bicycles. Decreased production in turn reduces Huffy's demand for bicycle seats. This is because the products in this situation have _____ demand. A.) Inelastic B.) Joint C.) Elastic D.) Congruent E.) Derived

A.) Type of strategic alliance commonly found in Japan (A keiretsu is a network of interlocking corporate affiliates in Japan.)

A keiretsu is a(n): A.) Type of strategic alliance commonly found in Japan B.) Method of business e-commerce found in Asia C.) Internet site that offers its customers access to various languages that they can use to conduct their business D.) Form of relationship marketing that is illegal in the United States E.) Bribe

D.) Producer (This describes the producer segment of business customers.)

A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a profit. They achieve this goal by using purchased goods and services to make other goods, to become part of other goods, or to facilitate the daily operations of the organization. This group is called the _____ segment of the business market. A.) Institution B.) Reseller C.) Wholesaler D.) Producer E.) Government

A.) Intended use (The key characteristic distinguishing business products from consumer products is intended use, not physical characteristics.)

A product is defined as a business product rather than a consumer good on the basis of its: A.) Intended use B.) Physical characteristics C.) Price D.) Distribution method E.) Tangible attributes

C.) Original equipment manufacturers (Original equipment manufacturers, or OEMs, include all individuals and businesses that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers.)

According to the text, another commonly used name for producers is: A.) Fabricators B.) Installers C.) Original equipment manufacturers D.) Product providers E.) Component networks

B.) Eliminate distributors

All of the following are current roles of the Internet in business marketing EXCEPT: A.) Reduce costs B.) Eliminate distributors C.) Build channel partnerships and trust D.) Brand building and development E.) Integrate online and traditional media

D.) Stable demand (Business markets are characterized by derived demand, inelastic demand, joint demand, and fluctuating demand.)

All of the following are demand characteristics of business markets EXCEPT: A.) Inelastic demand b.) Fluctuating demand C.) Joint demand D.) Stable demand E.) Derived demand

E.) Joint (Joint demand occurs when two or more items are used together in a final product.)

Apple iTunes has sold over five billion downloads. Without iTunes, the demand for the Apple iPod line of products would be small. Without the musicians, there would be no iTunes. In this situation, a condition of _____ demand exists. A.) Bundled B.) Incremental C.) Functional D.) Developmental E.) Joint

C. Disintermediation (Disintermediation is the elimination of intermediaries from a marketing channel-- in this case, travel agents.)

Before toll-free telephone numbers and the Internet were used as commercial tools, passengers usually purchased airline tickets from travel agents. Travel agents no longer receive a commission from the airlines for selling tickets to consumers. This is an example of: A.) Reintermediation B.) Disassociation C.) Disintermediation D.) Discrimination E.) Transference

C.) Are used for personal consumption (Intended use is the key factor in the classification of a business versus a personal good. Use for personal consumption classifies the good or service as a consumer product.)

Business marketing does NOT include goods and services that: A.) Become part of another product B.) Are used to manufacture other products C.) Are used for personal consumption D.) Facilitate the normal operations of an organization E.) Are acquired for resale

D.) Resellers (The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit.)

Businesses that buy finished goods and sell them for a profit are called: A.) Inventory carriers B.) Producers C.) Distribution networks D.) Resellers E.) Business facilitators

A.) Derived (Demand for hens is derived from consumers' demands for eggs, which has declined.)

Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to produce uniform brown eggs with strong shells. It breeds and sells young chicks to farmers all over Europe who want to sell eggs in local markets. When consumers began to worry about cholesterol content and stopped eating as many eggs, the demand for the Tetra hen also declined. This would be an example of _____ demand. A.) Derived B.) Elastic C.) Multiplying D.) Bundled E.) Inelastic

C.) Original equipment manufacturer (An original equipment manufacturer (OEM) is an organization that buys business goods and incorporates them into the products it produces and sells.)

Caterpillar, Inc., a manufacturer of earthmoving equipment, uses completed drivetrains (engines/transmissions/axles), drivetrain components, electronic controls, hydraulic and electrohydraulic components and systems, cooling systems, and undercarriage track systems produced by other organizations in its manufacturing process. Caterpillar is an example of a(n): A.) Fabricator B.) Installer C.) Original equipment manufacturer D.) Product provider E.) component network

C.) Producer (Producers use purchased goods and services to produce other products, to incorporate into other products, or to facilitate the daily operations of the organization.)

Corn refiners buy shelled corn and convert it into a variety of products, including high-fructose corn syrup. The refiners then sell the syrup to soda and food product companies for use in foods and beverages. The corn refiners represent the _____ sector of the business market. A.) Channel B.) Reseller C.) Producer D.) Government E.) Distributor

A.) Trust (Trust is the condition that exists when one partner has confidence in an exchange partner's reliability and integrity.)

DHL maintains a strategic alliance with UPS because it has confidence in UPS's reliability and integrity. This condition is referred to as: A.) Trust B.) Tomo C.) Commitment D.) Amae E.) Reciprocity

B.) Inelastic (A good is price inelastic if a change in price causes little or no change in demand. Paper used between hamburger patties is a fairly insignificant cost item and might even be considered a necessity item.)

Due to rapidly rising overhead costs and increases in raw material prices, Framarx Corporation was forced to raise the price of its waxed and coated paper by 35 percent. (The paper is used between frozen hamburger patties to keep the patties from freezing together.) Framarx is the leading manufacturer in this industry, and its competitors will follow suit. While the sales force for Framarx believes the price increase will result in a drop in sales, its marketing manager disagrees because the demand for the waxed and coated paper is more than likely: A.) Resistant B.) Inelastic C.) Derived D.) Elastic E.) Bundled

E.) Reseller (The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit.)

Hensley Poultry is a wholesaler that buys poultry food and health products from Provini, Inc., feeding systems from Big Dutchman, Inc., and incubation systems from Copca Corp. Hensley then sells those products to poultry producers and farmers' cooperatives in Iowa. Hensley Poultry could be best classified as a(n): A.) Producer B.) Distribution network C.) Inventory carrier D.) Specialty retailer E.) Reseller

D.) Strategic alliance (A strategic alliance is a cooperative agreement between business firms.)

IBM and Cisco work together to provide banks with the products and services they need to manage their multiple locations. In other words, the two companies have joined in a: A.) Retail cooperative B.) Direct investment venture C.) Transactional relationship D.) Strategic alliance E.) Synergistic relationship

A.) 7432 (The more digits in a code, the more homogeneous the group will be. The alternatives presented in this question are to illustrate the point that more digits results in a more homogeneous grouping. They may or may not be actual NAICS codes.)

Imagine that you are the research director of a major industrial marketing firm. You need to select an NAICS code that defines the most homogeneous group of companies in a particular group of highly competitive companies. Which of the following codes might you use? A.) 7432 B.) 532 C.) 19 D.) 7 E.) 999

B.) Amae (Amae is the feeling of nurturing concern for, and dependence upon, another. Reciprocity and personal relationships contribute to amae. Keiretsu is a network of interlocking corporate affiliates.)

In Japan, reciprocity and personal relationships contribute to the development of: A.) Global ventures B.) Amae C.) Agricola D.) Keiretsu E.) An independent network of small retailers

A.) Reseller (Mothers Work purchases finished goods and resells them; it does not produce the goods or change their form.)

In the past 24 years, Mothers Work has grown from a small, mail-order catalog business headquartered inside the founder's home to the world's largest seller of maternity apparel, with nearly 1,600 locations. In terms of the business market, Mothers Work would be best classified as a(n): A.) Reseller B.) Producer C.) Distribution network D.) Inventory carrier E.) Business facilitator

E.) Derived (Derived demand for a business product comes from the original consumer demand.)

Inland Eastex manufactures a heavy paper stock that is used for printing covers for many different types and sizes of consumer magazines. Consumer magazine sales determine how much paper Inland Eastex sells. This is an example of _____ demand. A.) Joint B.) Inelastic C.) Elastic D.) Congruent E.) Derived

A.) Inelastic (A change in price has not really made a change in quantity demanded; therefore, the good is price inelastic.)

Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford. A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to double the price of the blades. This increase in price has not affected sales volume for wiper blades. The price change did not change demand for the blades because demand for this product by business customers is: A.) Inelastic B.) Secure C.) Bundled D.) Elastic E.) Resistant

D.) Identify potential new customers (NAICS data can be converted to market potential estimates, market share estimates, and sales forecasts. It can also be used for identifying potential new customers.)

Managers can use the NAICS data to: A.) Create a more focused mission statement B.) Eliminate risk C.) Classify consumer behavior D.) Identify potential new customers E.) Determine purchase motives

B.) The North American Free (Trade Agreement partners NAICS is an industry classification system that replaced the standard industrial classification (SIC) system in 1997 for the North American Free Trade Agreement partners. The partners include the United States, Canada, and Mexico.)

NAICS data are helpful for analyzing, segmenting, and targeting markets. The system was developed by: A.) Large manufacturers in United States and Mexico that produce similar goods B.) The North American Free Trade Agreement partners C.) Brazil, Chile, Argentina, Canada, and the United States working together in a joint venture D.) The SIC committee E.) The U.S. government

A.) Institutions (Institutions such as schools, churches, and hospitals have service or activity goals but not profit goals and are an important business market.)

One segment of the business market has primary goals that differ from the ordinary business goals such as profit, market share, or return on investment. This segment includes many schools, churches, and civic clubs. Which business market is this? A.) Institutions B.) OEMs C.) Services D.) Providers E.) Resellers

C.) A chain of Mexican restaurants (The only example of a for-profit organization in the list is the restaurants, and they would not be a customer of an institution-only food supplier. To answer this question, students will have to remember that institutions are not operated for profit.)

Organon Teknina sells inexpensive equipment to detect Escherichia coli, listeria, or salmonella bacteria in food. The company serves not-for-profit institutions that need to regularly check food quality. Organon Teknina would be LEAST likely to sell to: A.) The Montgomery County school system B.) A large pediatric hospital C.) A chain of Mexican restaurants D.) A chain of church-sponsored retirement homes E.) American Red Cross emergency shelter kitchens

C.) Strategic alliance (A strategic alliance is a cooperative agreement between business firms.)

Sometimes a _____ is created for the purpose of sharing resources. This was why the Donnelly Corporation, a company that designs, manufactures, and markets automotive parts, joined with Applied Films Laboratory, Inc. to manufacture and supply the world market with coated glass for liquid crystal displays (LCDs). A.) Shared capital contract B.) Global partner development strategy C.) Strategic alliance D.) Cobranding effort E.) Market cooperative

E.) OEM (An original equipment manufacturer (OEM) is an organization that buys business goods and incorporates them into the products it produces and sells.)

Southern Fireworks Manufacture Company in Liuyang, China, provides fireworks for companies in America such as Premier Pyrotechnics in Richland, Missouri. This means that Southern is a(n): A.) Installer of original materials B.) Demand company C.) Reseller D.) Government buyer E.) OEM

B.) Both business and consumer goods (Products are classified as either business or consumer goods, based on the intended use of the product. Obviously, some of the mailboxes are sold for business use and some for personal use.)

The Solar Group, a Mississippi-based mailbox manufacturer, sells mailboxes to contractors who are building mega-subdivisions, to hardware stores, and directly to new homeowners. What kind of products is Solar Group selling? A.) Business products only B.) Both business and consumer goods C.) Installations D.) Consumer goods only E.) Supplies

B.) The world's largest single customer (The U.S. federal government is the world's largest customer. The other alternatives do not apply because various branches of the government have separate purchasing departments, and billions of dollars are spent on food, clothing, desks, and other standard supply items (not just military hardware).)

The U.S. government is: A.) Not a business market segment B.) The world's largest single customer C.) An organization accounting for over 50 percent of the U.S. gross national product D.) Mainly a military equipment purchaser E.) Using one centralized purchasing office for the entire government

D.) Derived (The demand for business products is called derived demand because organizations buy products to be used in producing their customers' products.)

The demand for consumer goods often affects the demand for business products. This characteristic of business markets is called _____ demand. A.) Elastic B.) Inelastic C.) Fluctuating D.) Derived E.) Joint

A.) Disintermediation (This is the definition of disintermediation.)

The elimination of intermediaries such as wholesalers or distributors from a marketing channel is referred to as: A.) Disintermediation B.) Disassociation C.) Unemcumbrance D.) Demarketing E.) Selective retention

E.) North American Industry Classification System (The North American Industry Classification System (NAICS) is an industry classification system for classifying North American business establishments.)

The government uses a system called NAICS to classify North American business establishments. NAICS stands for: A.) Non-American Industry Classification System B.) North and South American Institutional Coding Services C.) Non-American Industrial Corporation System D.) North American Institution Code System E.) North American Industry Classification System

E.) Reintermediation (This is the definition of reintermediation.)

The reintroduction of an intermediary between producers and users is called: A.) Disintermediation B.) Reinstatement C.) Selective retention D.) Re-establishment E.) Reintermediation

D.) The North American Industry Classification System (NAICS codes enhance companies' marketing efforts.)

What would a U.S. company that manufactures the lighted signs used in amusement parks, at outdoor sports arenas, for restaurant promotion, and by state departments of transportation on the sides of roads use to facilitate its market segmentation and targeting if it wanted data that were readily available and usable? A.) A large amount of marketing research, including scanner data and focus groups B.) Other competing firms as a strategic alliance referral service C.) Government bidding processes D.) The North American Industry Classification System E.) Derived demand

C.) Inelastic (This is the definition of inelastic demand.)

When demand for a product is _____, an increase or decrease in the price of the product will not significantly affect demand for the product. A.) Responsive B.) Elastic C.) Inelastic D.) Derived E.) Bundled

E.) Derived (The demand for beer containers is driven by the consumer demand for beer; therefore, the containers have a derived demand.)

When the demand for packaged beer fell by 8 percent in one year, the demand for aluminum beer cans and glass beer bottles also fell because the demand for beer containers is an example of a(n) _____ demand. A.) Joint B.) Inelastic C.) Elastic D.) Fluctuating E.) Derived

C.) Joint (This is the definition of joint demand.)

When two or more items are used in combination to produce a final product, they are said to have _____ demand. A.) Derived B.) Inelastic C.) Joint D.) Fluctuating E.) Elastic

D.) United Methodist Churches (Examples of institutions include schools, churches, and hospitals that have service or activity goals but not profit goals.)

Which of the following is the BEST example of an institution market? A.)The government B.) eBay C.) Claire's Boutique D.) United Methodist churches E.) Starbucks

D. A librarian is purchasing books for the school's library (When a product is bought for use in a business, it is a business product. All other choices reflect purchases for personal use, which would be part of the consumer market.)

Which of the following is the best example of a sale that could only take place in the business market? A.) A professor is purchasing a Mac to use at home B.) A music store owner is ordering the newest Elvis Ultimate Live collection DVD for her mother C.) A teen is purchasing ringtones to use on her phone D.) A librarian is purchasing new books for the school's library E.) All of these are examples of business sales

E.) Relationship commitment (Relationship commitment is a firm's belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it indefinitely.)

Which of the following means that a firm believes an ongoing relationship with some other firm is so important that it warrants maximum efforts at maintaining it indefinitely? A.) Amae B.) Trust C.) Relationship quality D.) Strategic alliance E.) Relationship commitment

E.) Stickiness (By measuring the stickiness factor of a Web site before and after a design or function change, the marketer can quickly determine whether visitors embraced the change.)

_____ is a measure of a Web site's effectiveness and is calculated by multiplying the frequency of visits times the duration of visit times the number of pages viewed during each visit. A.) Effective reach B.) Effective frequency C.) Gross rating points D.) Interactiveness E.) Stickiness

C.) Business marketing (This is the definition of business marketing.)

_____ is the marketing of goods and services to individuals and organizations for purposes other than personal consumption. A.) Secondary marketing B.) Interactive marketing C.) Business marketing D.) High-level marketing E.) Industrial marketing