MKTG 351 Chapter 8

A formal, systematic evaluation of current and potential vendors

vendor analysis

Vendor analysis takes place during the development of the product specifications stage of the business buying decision process. a. True b. False

b

When a business buyer invites vendors to bid to supply a specified good or service in competition with each other, with the lowest bidder winning the right to sell to the buyer, this is best described as _______. a. B2B exchange b. reverse auction c. B2B e-commerce site d. buying center e. online auction

b

Demand involving the use of two or more items in combination to produce a product

joint demand

Intermediaries that buy finished goods and resell them for a profit

reseller markets

Online marketplaces where business buyers and sellers from around the world can exchange information, goods, services, ideas, and payments

B2B e-commerce sites

An industry classification system that generates comparable statistics among the United States, Canada, and Mexico

North American Industry Classification System (NAICS)

ACME Corp. has ordered widgets from Wiley Widgets several times before, but now it would like Wiley Widgets to offer a lower per-unit price in exchange for a larger order. ACME is using which of the following types of business purchases? a. Modified rebuy purchase b. Modified-task purchase c. New-rebuy purchase d. New-task purchase e. Straight rebuy purchase

a

Christina manages the accounting department of a consumer electronics firm. She recently sent in a request to purchase 50 new computers for her accounting staff because the computers they are working on are outdated. Michael was given the task of choosing the supplier and purchasing the products. Since Michael is not as knowledgeable about computers, he turns to Phillip, who works in IT, for advice. Phillip knows all about the latest computers, systems, and software. With Phillip's help, Michael looks at the alternatives and selects Dell as their supplier. In this example of a buying center, Michael occupies both the buyer and the decider roles. a. True b. False

a

FedBid is a reverse online auction site for government agencies. A reverse auction is initiated by the buyer, who invites businesses to bid to supply the specified good or service in competition with each other. a. True b. False

a

Buyers of industrial equipment would most likely use sampling as their purchase method. a. True b. False

b

Examining quality, design, materials, and possibly item reduction or deletion to acquire the product in the most cost-effective way is best described as _______. a. multiple sourcing b. value analysis c. vendor analysis d. specification analysis e. sole sourcing

b

Gorton's Seafood buys large amounts of fish to use in its frozen dinners and dinner components. Gorton's Seafood belongs in which of the following business markets? a. Reseller market b. Producer market c. Government market d. Institutional market e. B2C market

b

NAICS is the industrial classification system used by the majority of countries across the world. a. True b. False

b

Online marketplaces where buyers and sellers can exchange information, goods, services, ideas, and payments are best described as _______. a. online auction sites b. B2B e-commerce sites c. buying centers d. corporate websites e. B2C e-commerce sites

b

Purchasing agents at ACME Corp. are looking in company files and trade directories, contacting suppliers for information, soliciting proposals from known vendors, and examining various online and print publications. They are in which of the following stages of the buying decision process? a. Evaluating the supplier's and product's performance by comparing it with specifications b. Searching for and evaluating potential products and suppliers c. Developing product specifications d. Selecting the product to be purchased and the supplier e. Recognizing the problem

b

Which of the following is most likely to be a benefit of reciprocity? a. Optimal purchasing b. Strong relationships c. More government subsidies d. Increased competition e. More purchasing options

b

Which of the following markets includes wholesalers or retailers? a. Producer markets b. Reseller markets c. Institutional markets d. Buying centers e. Government markets

b

The people within an organization who make business purchase decisions

buying center

Christina manages the accounting department of a consumer electronics firm. She recently sent in a request to purchase 50 new computers for her accounting staff because the computers they are working on are outdated. Michael was given the task of choosing the supplier and purchasing the products. Since Michael is not as knowledgeable about computers, he turns to Phillip, who works in IT, for advice. Phillip knows all about the latest computers, systems, and software. With Phillip's help, Michael looks at the alternatives and selects Dell as their supplier. Michael is the _______ in the buying center, while Phillip acts as a _______. a. buyer; decider b. gatekeeper; influencer c. buyer; influencer d. user; buyer e. decider; gatekeeper

c

A price increase or decrease does not significantly alter demand for a product with _______. a. elastic demand b. joint demand c. derived demand d. inelastic demand e. reciprocity

d

Commodities and raw materials are typically purchased using which method of business buying? a. Reciprocity b. Sampling c. Negotiation d. Description e. Inspection

d

Suppose the government wants to hire a firm to build a new road. What method of business buying will it most likely use? a. Sole sourcing b. Sampling c. Inspection d. Negotiation e. Description

d

Which of the following companies is the best example of a reseller? a. John Deere b. JPMorgan Chase & Co. c. Apple d. Priceline e. Staples

d

Which of the following is NOT one of the ways that business transactions differ from consumer transactions? a. Discussions and negotiations associated with business purchases can require considerable marketing time and selling effort. b. Suppliers of large, expensive, or complex goods often must sell products in large quantities to make profits. c. Orders by business customers tend to be much larger than individual consumer sales. d. Orders by businesses are frequently small and inexpensive. e. Purchasing decisions are often made by a committee.

d

Demand for business products that stems from demand for consumer products

derived demand

Walmart developed an infrastructure for its supply chain called SupplierLink that it placed on the internet. SupplierLink combines information on purchasing, inventory, negotiating, and more. It also allows its suppliers to get information on inventory levels and sales from different Walmart stores. This is an example of a(n) _______. a. independent B2B exchange b. public B2B exchange c. online auction d. electronic supply chain e. private B2B exchange

e

Federal, state, county, or local governments that buy goods and services to support their internal operations and provide products to their constituencies

government markets

Demand that is not significantly altered by a price increase or decrease

inelastic demand

Organizations with charitable, educational, community, or other nonbusiness goals

institutional markets

A new-task purchase that is changed on subsequent orders or when the requirements of a straight rebuy purchase are modified

modified rebuy purchase

An organization's decision to use several suppliers

multiple sourcing

An organization's initial purchase of an item to be used to perform a new job or solve a new problem

new-task purchase

Individuals and business organizations that purchase products to make profits by using them to produce other products or using them in their operations

producer markets

Written statements describing a product's necessary characteristics, standards of quality, and other information essential to identifying the best supplier for the needed product

product specifications

An arrangement unique to business marketing in which two organizations agree to buy from each other

reciprocity

An organization's decision to use only one supplier

sole sourcing

A routine purchase by a business buyer of the same products under approximately the same terms of sale

straight rebuy purchase

Online marketing efforts make the buying process far more efficient because it _______ and _______. a. saves time; reduces costs b. saves time; is more professional c. saves time; increases costs d. removes emotion, reduces costs e. takes more time; reduces costs

a

The North American Industry Classification System (NAICS) is a(n) _______. a. single industry classification system used by the United States, Canada, and Mexico to generate comparable statistics b. commercial database c. single industry classification system used globally to generate comparable statistics d. state directory of businesses e. single industry classification system used in Europe to generate comparable statistics

a

What do industry classification systems do for the marketer? a. Categorize organizations into groups based on such factors as the types of goods and services provided b. Provide an automatic guide that will allow marketers to determine the profit potential of customers with a high degree of accuracy c. Separate various businesses into different categories based on whether they offer business or consumer goods and services d. Manage databases of business customers with high profit potential e. Help marketers locate the buying center and the major influencers in organizations with high profit potential

a

The group of people within an organization who make business buying decisions are best described as _______. a. vendors b. the buying center c. influencers d. gatekeepers e. the purchasing unit

b

The purchase behavior of producers, government units, institutions, and resellers

business (organizational) buying behavior

In the business buying decision process, what comes after problem recognition? a. Select the product to be purchased and the supplier b. Search for and evaluating potential suppliers c. Develop product specifications d. Evaluate the supplier's and product's performance by comparing it with specifications e. Contact the buying center

c

To estimate the purchase potential of business customers, a marketer must find a relationship between a variable available in industrial classification data, such as number of employees, and the size of _______. a. potential customers' products b. current customers' sales c. potential customers' purchases d. potential customers e. potential customers' sales

c

Which of the following markets may have complex buying procedures due in part to their public accountability? a. Institutional markets b. Reseller markets c. Government markets d. College markets e. Producer markets

c

_______ and _______ are part of the reseller market. a. Producers; wholesalers b. Retailers; manufacturing firms c. Retailers; wholesalers d. Warehouses; technology firms e. Retailers; nonprofits

c

An evaluation of each component of a potential purchase

value analysis