Marketing Chapter 6 Definitions

36 The demand for many business goods and services tends to change more, and more quickly, than the demand for consumer goods and services does. This is referred to as ________ demand.

36 fluctuating

37 Large business purchasers usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. These are all examples of how the business buying decision process is more ________ than the consumer buying decision process is.

37 formalized

38 The owners of the company you work for have developed a core network of suppliers they are working closely with to ensure an appropriate and dependable supply of products. This is an example of ________ management.

38 supplier development

39 Although there are many differences between business buying behavior and consumer buying behavior, both respond to the same four stimuli: product, price, promotion, and ________.

39 place

4 Supplier development

4 Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.

40 In a typical organization, buying activity consists of two major parts: the buying ________ and the buying ________.

40 center; decision process

41 The buying center and the buying decision process are affected by all of the following factors EXCEPT ________.

41 self-concept factors

42 Which business buying situation is the marketer's greatest opportunity and challenge?

42 new task

43 In which type of buying situation would a supplier most likely focus on maintaining product and service quality?

43 straight rebuy

44 You just lost a major account because a competitor provided the most complete system to meet the customer's needs and solve the customer's problems, and made the sale. In other words, the competition beat you with ________.

44 solutions selling

45 Another name for systems selling is ________ selling.

45 solutions

46 The decision-making unit of a buying organization is called the ________.

46 buying center

47 A ________ consists of the actual users of products, those who control buying information, those who influence the decisions, those who do the actual buying, and those who make the buying decisions.

47 buying center

48 In routine buying situations, which members of the buying center have formal or informal power to select or approve the final suppliers?

48 deciders

49 A(n) ________ controls the flow of information to others in the buying center.

49 gatekeeper

5 Straight rebuy

5 A business buying situation in which the buyer routinely reorders something without any modifications.

50 Don Amspacher, in his role on the buying committee, provides information for evaluating the alternative purchase decisions and helps define and set specifications for evaluating alternatives for purchasing. Don is a(n) ________.

50 influencer

51 Gretchen Kabor has formal authority to select the suppliers and arrange terms of purchase for many of the items her firm uses. Her role in the buying center is that of ________.

51 buyer

52 A buying center is not a fixed, formally identified, unit within an organization, but rather a set of ________ assumed by different people for different purchases.

52 buying roles

53 Which of the following is NOT included in the decision-making unit of a buying organization?

53 individuals who supply the product

54 Which of the following statements about buying centers is true?

54 The buying center may involve informal participants who are not obvious to sellers.

55 When suppliers' offers are very similar, business buyers have little basis for strictly ________.

55 rational choice

56 When competing products differ greatly, business buyers are more accountable for their purchase choices and tend to pay more attention to ________.

56 economic factors

57 Buyers are heavily influenced by the current and expected economic environment. That includes which of the following buyer influences?

57 A) level of primary demand B) economic outlook C) the cost of money

58 To ensure an adequate and available supply of key scarce materials, many companies are now willing to ________.

58 buy and hold large inventories of the materials

87 The Bentley department store chain makes extensive use of e-procurement. As a buyer, the store should expect to enjoy all of these benefits of e-procurement EXCEPT ________.

87 reduced payroll

88 B-to-B e-procurement yields many benefits. These include all of the following EXCEPT ________.

88 elimination of inventory problems

89 A problem with the rapidly expanding use of e-purchasing is that it ________.

89 can erode established customer-supplier relationships

9 Buying Center

9 All the individuals and units that play a role in the purchase decision-making process.

90 The leading barrier to expanding electronic links with customers and partners online is ________.

90 concern over security

91 Firewalls and encryption are ________.

91 two commonly used techniques to safeguard Internet and extranet transactions

92 Which of the following statements about e-procurement security issues is true?

92 Providing e-procurement security can involve a substantial financial investment from a company.

93 Sage, Inc., provides food services to schools, hospitals, and nursing homes in the Midwest. Management at Sage is involved in the ________ market.

93 institutional

94 Many institutional markets are characterized by ________ and ________.

94 low budgets; captive patrons

95 Government organizations tend to favor ________ suppliers over ________ suppliers.

95 domestic; foreign

96 All of the following are difficulties associated with selling to government buyers EXCEPT ________.

96 low sales volume

97 U.S. Government Purchasing, Specifications, and Sales Directory is a(n) ________ publication.

97 government

98 There are many factors considered in government buying, but ________ is, above all, the most important.

98 price

99 Total government spending is determined by ________ rather than by any ________ to develop this market.

99 elected officials; marketing effort

1 Business Buyer Behavior

1 The buying behavior of the organizations that buy goods and services for use in the production of other products and services or to resell or rent them to others at a profit.

10 Users

10 Members of the buying organization who will actually use the purchased product or service.

100 The world's largest buyer of products and services is ________.

100 the U.S. government

101 Which of the following is NOT part of the business market?

101 Sue buys a gift for her mother.

102 ) Giant Food Stores buy a lot of frozen turkey products at Thanksgiving and Christmas due to high consumer demand. This is an example of ________ demand.

102 derived

103 Demand for outboard motors depends on consumers purchasing fishing boats. This is an example of ________ demand.

103 derived

104 ABC Enterprises sold 9,000 units @ $2.99/unit in July. The firm sold 9,000 units @ $4.29/unit in August. This illustrates ________ demand.

104 inelastic

105 UPS serves both consumer and business markets, but most of its revenues come from its business customers. UPS has become a strategic logistics ally for many of its business customers, going far beyond offering delivery services to offering inventory management, international trade management, and even financing to its commercial customers. This is an example of which of the following differences between the consumer and business markets?

105 Buyers and sellers in the business market build close, long-term relationships.

106 You call in a department manager to assist in a purchase of industrial equipment. You are considering a change in product specifications, terms, and possibly suppliers. This is most likely a ________ situation.

106 modified rebuy

107 Which of the following is most likely true about a straight rebuy?

107 It often involves products with low risks.

108 You regularly purchase cleaning supplies for your custodial staff, using the same vendor and ordering relatively consistent amounts of the same products with each purchase. This is an example of a ________ situation.

108 straight rebuy

109 Worthington Farm raises chickens. For years, it has used wooden coops for hauling its poultry to market. The owner of the farm needs to buy some replacement coops and is considering buying plastic coops that are slightly more expensive than wooden ones but much easier to clean after use. This purchase of coops is an example of a ________.

109 modified rebuy

11 Influencers

11 People in an organization's buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.

110 The EPA has mandated that, in order to reduce local pollution, your printing plant switch from oil-based to water-based inks. This will require entirely new printing presses and a new printing plate technology. After carefully searching through numerous manufacturers' equipment descriptions and gathering opinions from all relevant parties related to the work, the printing plant's buying center will be ready to make this ________ purchase.

110 new task

111 Don Brady is responsible for obtaining price quotations from various vendors. After reviewing them, Don then determines whether or not to include the vendor on the approved vendor list. Don apparently plays two roles, that of ________ and ________.

111 decider; buyer

112 One of Dr. Albrecht's dental assistants told the dentist he should buy a machine that would sterilize his tools without using any water because water tends to cause the tools to rust or corrode over time. In terms of the buying center, the dental assistant had the role of ________.

112 influencer

113 One of Dr. Albrecht's dental assistants told the dentist he should buy a machine that would sterilize his tools without using any water because water tends to cause the tools to rust or corrode over time. Dr. Albrecht, who runs a solo practice in a small rural town, located some articles on the chemical sterilizer and read about how the machine works. After gathering more information and talking to salespeople, Dr. Albrecht placed his order for the machine. In terms of the buying center, Dr. Albrecht had the role of ________.

113 decider

114 A trucking company is considering purchasing new trucks that are powered by ethanol instead of diesel fuel. In terms of the buying center, the truck drivers who must make sure that the trucks do not run out of fuel are the ________.

114 users

115 Worthington Farm raises chickens. For years, it has used wooden coops for hauling its poultry to market. When Bob Worthington went to reuse some of his coops, he noticed many of them could not be sufficiently cleaned for reuse and needed to be replaced. Worthington was at which stage of the business buying process when he decided to replace his old coops?

115 problem recognition

116 John Herr's company has standardized the size of its paper bags so that each bag can be used in five to seven different store departments. This approach to cost reduction likely took place in the ________ stage of the business buying process.

116 product specification

117 In what type of buying situation would a seller most likely send only a catalog to the buyer during the proposal solicitation stage of the business buying process?

117 straight rebuy

118 Most newspapers rely on ________ so they do not need to rely on only one supplier to provide the tons of paper that they use annually.

118 multiple sourcing

119 Pace Hardware uses Learningnow.com to improve sales force effectiveness and facilitate sharing of expertise. It allows Pace retailers to link with other Pace retailers to ask for managerial and marketing advice. It also allows Pace retailers to ask their suppliers about product usage, deliveries, and warranties, and it allows suppliers to send new-product information directly to Pace retailers. In this scenario, Pace Hardware is using a(n) ________.

119 extranet

12 Buyers

12 The people in the organization's buying center who make an actual purchase.

120 Which of the following was most likely being used when Boeing received orders for $100 million in spare parts in the first year its Web site was in operation?

120 e-procurement

121 All of the following organizations are likely considered to be a part of the institutional market EXCEPT ________.

121 Lancaster Township

13 Deciders

13 People in the organization's buying center who have formal or informal power to select or approve the final suppliers.

14 Gatekeepers

14 People in the organization's buying center who control the flow of information to others.

15 Problem recognition

15 The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.

16 General need description

16 The stage in the business buying process in which the company describes the general characteristics and quantity of a needed item.

17 Product specification

17 The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.

18 Supplier search

18 The stage of the business buying process in which the buyer tries to find the best vendors.

19 Proposal solicitation

19 The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.

2 Business buying process

2 The decision process by which business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.

20 Supplier selection

20 The stage of the business buying process in which the buyer reviews proposals an selects a supper or suppliers.

21 Order-routine specification

21 The stage of the business buying process in which the buyer writes the final order with the chosen suppliers, listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

22 Performance review

22 The stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement.

23 E-procurement

23 Purchasing through electronic connections between buyers and sellers--usually online.

24 Institutional market

24 Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.

25 Government market

25 Governmental units-federal, state, and local- that purchase or rent goods and services for carrying out the main functions of the government.

26 In which of the following ways is GE like most other large companies?

26 Most of its business comes from commercial and industrial customers.

27 As a purchasing agent, Benni Lopez buys goods and services for use in the production of products that are sold and supplied to others. Benni is involved in ________.

27 business buyer behavior

28 Business buying behavior refers to the buying behavior of organizations that buy all of the following EXCEPT ________.

28 products purchased for personal consumption

29 In one way or another, most large companies sell to ________.

29 other organizations

3 Derived Demand

3 Business demand that ultimately comes from (derives from) the demand from consumer goods.

30 When compared to consumer markets, business markets are ________.

30 huge

31 Which of the following is NOT a way that business and consumer markets differ?

31 satisfaction of needs through purchases

32 There are many sets of ________ purchases made for each set of ________ purchases.

32 business; consumer

33 Which of the following is true about business marketers in comparison to consumer marketers?

33 They deal with far fewer but far larger buyers.

34 Hewlett-Packard and Dell buy Intel microprocessor chips because consumers buy personal computers. This demonstrates an economic principle called ________.

34 derived demand

35 The Pure Drug Company produces insulin, a product with a very stable demand, even though the price has changed several times in the past two years. Insulin is a product with ________ demand.

35 inelastic

59 The major influences on the buying process at General Aeronautics include company policies and systems, technological change, and economic developments. The types of influences on the buying process in this scenario are most accurately categorized as ________ and ________.

59 organizational; environmental

6 Modified rebuy

6 A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.

60 Which of the following types of factors influencing members of a buying center are typically the most difficult for marketers to assess?

60 interpersonal

61 Policies, procedures, and systems are all examples of ________ influences on business buyer behavior.

61 organizational

62 Status, empathy, and persuasiveness are all examples of ________ influences on business buyer behavior.

62 interpersonal

63 Charlie Van Dusen, executive vice president of National Central Bank, is going through all of the stages of the buying process to purchase a computer system for the bank. Charlie is facing a(n) ________ situation.

63 new-task buying

64 Which of the following is an example of an internal stimulus that might lead to the business buying process stage of problem recognition?

64 A buyer is unhappy with a current supplier's price.

65 The first step of the business buying process is ________.

65 problem recognition

66 Business marketers often alert customers to potential problems and then show how their products provide solutions. These marketers are hoping to influence which stage of the business buying process?

66 problem recognition

67 The purchasing agent at your company is working with engineers and users to define the items to purchase by describing general characteristics and quantities needed. He is also ranking the importance of reliability, durability, and price. The buyer is preparing a(n) ________.

67 general need description

68 In which stage of the business buying process is a supplier most likely to provide a buyer with information about the values of different product characteristics?

68 general need description

69 Which of the following is the process of the buying center deciding on the best product characteristics?

69 product specification

7 New task

7 A business buying situation in which the buyer purchases a product or service for the first time.

70 During which stage of the business buying process is a buyer most likely to conduct a value analysis, carefully studying components to determine if they can be redesigned, standardized, or made less expensively?

70 product specification

71 Empire Products has begun a process to find the best suppliers. Empire Products is actively engaged in ________.

71 supplier search

72 A buyer would be most likely to review trade directories in which stage of the business buying process?

72 supplier search

73 In the generally accepted stages of the business buying process, the step following product specification is ________.

73 supplier search

74 In the generally accepted stages of the business buying process, the step following problem recognition is ________.

74 general need description

75 Members of the buying center at ABC Kid's World are drawing up a list of desired toy supplier attributes and their relative importance. Next, they intend to compare several suppliers to these attributes. In which step of the business buying process is the buying center at ABC Kid's World engaged?

75 supplier selection

76 Which of the following statements about the supplier selection stage of the business buying decision process is true?

76 Before selecting a supplier, many companies consider the supplier's reputation, ethical corporate behavior, and honest communication.

77 During the ________ stage of the business buying decision process, the buying center assesses the proposals.

77 supplier selection

78 In the case of maintenance, repair, and operating items, buyers may use a ________ rather than periodic purchase orders.

78 blanket contract

79 In which stage of the business buying process is a supplier's task to make sure that the supplier is giving the buyer the expected satisfaction?

79 performance review

8 Systems selling (or solutions selling)

8 Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

80 Following a purchase, the buyer and seller would both monitor which phase of the new-task buying situation?

80 performance review

81 Under a ________, a supplier monitors and replenishes a buyer's stock automatically as needed.

81 vendor-managed inventory

82 Which of the following accurately describes a cultural difference international marketers should be aware of?

82 Japanese people tend to put a high value on rank.

83 Which of the following is the best advice for an international marketer planning to interact with businesspeople from many different cultures?

83 Cultures really are different, so do your best to learn about those differences.

84 Instead of focusing on managing individual purchases, a seller should focus on managing the ________.

84 total customer relationship

85 Which of the following can be especially useful for a company that needs to conduct secure and frequent communications and transactions with key suppliers?

85 an extranet

86 Reverse auctions, trading exchanges, and company buying sites are all ways that companies can participate in ________.

86 e-procurement