Chapter 6: Business and Organizational Customers and Their Buying Behavior

A firm wants to get its product on the shelf of a large retailer. Which of the following would make achieving the firm's objective most likely? A. Provide the buying committee with data about how its marketing mix will attract and keep customers. B. Send its most persuasive salesperson to make personal relationships with members of the buying committee. C. Present the product's "story" to store managers. D. All of these answers are correct. E. Request shelf space on a standard form submitted to the buyer.

A. Provide the buying committee with data about how its marketing mix will attract and keep customers. - Decisions to add or drop lines or change buying policies may be handled by a buying committee. The seller still calls on and gives a pitch to the buyer, but the buyer does not have final responsibility. The buyer prepares forms and passes them on to a committee, which makes the decision. The process favors a firm that has hard data on how its whole marketing mix will help the retailer attract and keep customers.

What are the three steps in the business and organizational purchasing process? A. defining the problem, engaging in the decision-making process, managing the buyer-seller relationship B. negotiating the terms of the sale, arranging for product or service delivery, reviewing the purchase C. contacting a sales person, negotiating the sale, accepting product delivery D. understanding the unmet need, satisfying the need, selecting alternative products E. defining the problem, understanding the problem, seeking solutions to the problem

A. defining the problem, engaging in the decision-making process, managing the buyer-seller relationship

Among the many factors that influence purchasing decisions are _____, who control the flow of information within an organization. A. gatekeepers B. deciders C. end users D. buyers E. influencers

A. gatekeepers

Which of the following do new-task buying, modified rebuys, and straight rebuys have in common? A. the ability to meet needs B. the information needed C. the level of supplier review D. the time required E. the level of multiple buying influence

A. the ability to meet needs

Which of the following is not a reason why close relationships between suppliers and organizational buyers have become common? A. Closely tied firms often share tasks at lower total cost. B. Buyer-seller partnerships encourage frequent competitive bidding to keep prices low. C. Business customers can expect greater service from close partners. D. Collaboration enables two partners to perform many functions that would be impossible if they were each working separately. E. Buyers and sellers can work together to achieve both mutual and individual objectives.

B. Buyer-seller partnerships encourage frequent competitive bidding to keep prices low. - While close buyer-seller relationships have many benefits, they also have the negative result of shutting down healthy competition among suppliers. Since competition drives down prices and spurs innovation, business customers may be better off letting suppliers compete for their business instead of establishing exclusive relationships.

Marketers who primarily sell to museums and charities are focused on which of the following types of organizational customers? A. final consumers B. nonprofit organizations C. limited liability organizations D. producers E. intermediaries

B. nonprofit organizations

Which of the following see themselves as purchasing agents for their target customers? A. advertisers B. retail buyers C. opinion leaders D. category captains E. gatekeepers

B. retail buyers

Which of the following statements about bidding for government business is true? A. Government buying needs are hard to identify and they are the smallest customer group in the United States. B. Government buyers avoid using competitive bids since they must purchase at a previously set price. C. Government buyers must often accept the lowest bid that meets the specifications. D. The biggest job of government buyers is to locate enough potential suppliers so the bidding procedure works effectively. E. All of these statements about bidding for government business are true.

C. Government buyers must often accept the lowest bid that meets the specifications. - To avoid charges of favoritism, most government customers buy by specification using a competitive bidding procedure. Often the government buyer must accept the lowest bid that meets the specifications.

Which of the following is true of the supplier-buyer relationship? A. Close supplier-buyer relationships have the ability to drive down prices and spur innovation in ways that the competitive bidding process cannot match. B. Suppliers and buyers are inflexible with regard to purchase terms in negotiated contract buying. C. Powerful buyers negotiate lower prices from suppliers. D. Buyers usually do business with a single supplier to reduce their risk. E. Relationship-specific adaptations can be avoided when a buying organization chooses to outsource.

C. Powerful buyers negotiate lower prices from suppliers.

A buying center refers to A. all the customers present at an auction bid. B. a marketplace that has more buyers than sellers. C. all the people who participate in or influence a purchase. D. a marketplace where buyers have no bargaining power. E. all the salespeople who participate in promoting a product or service.

C. all the people who participate in or influence a purchase.

Negotiated contract buying A. requires the terms of a contract to be fixed, regardless of volatile business conditions. B. gives buyers, but not sellers, the power to change the terms of contracts. C. allows for changes in purchase arrangements. D. allows sellers to reduce product prices but not increase them. E. occurs when buyers and sellers are inflexible about the specifications in the contract.

C. allows for changes in purchase arrangements.

Manuel is a manager at a company that makes office furniture. After reviewing products that the company currently makes, he determines which ones are selling best and where gaps exist in the product line. Using this information, he draws up a list of features he would like to see included in new products and gives the list to the design team. In this case, Manuel is a(n) A. gatekeeper. B. decider. C. influencer. D. buyer. E. user.

C. influencer.

In contrast to manufacturers, producers of services A. are more geographically concentrated. B. have stagnant domestic and international growth. C. need to be closer to customers. D. are only growing in the United States. E. are much larger in size.

C. need to be closer to customers. - When compared to manufacturers, producers of services are smaller, more spread out, and growing fast both domestically and internationally. Unlike manufacturers of goods, they do not need to be located where transportation facilities are good and raw materials are available. Instead, they need to be close to their customers.

Many firms use ______, who may specialize by product area in large companies, to help cut costs and coordinate relationships with suppliers. A. product managers B. customer liasons C. purchasing managers D. advertising specialists E. salespeople

C. purchasing managers

Which of the following may be a business or organizational customer? A. a producer of goods and services B. a retailer C. a wholesaler D. All of these examples may be business and organizational customers. E. a federal government agency

D. All of these examples may be business and organizational customers.

In a competitive bid, A. long-term suppliers of a firm compete to do business with the firm to increase flexibility and spur innovation. B. if different suppliers' quality, dependability, and delivery schedules all meet the buyer's specifications, the buyer will select the high-price bid. C. the terms of sale are offered by a buyer after product specifications are posted by the seller. D. the terms of sale are offered by the supplier in response to the purchase specifications posted by a buyer. E. as the number of suppliers competing for the business increases, the ability to drive down prices or provide beneficial terms of sale is lost.

D. the terms of sale are offered by the supplier in response to the purchase specifications posted by a buyer. - Sometimes buyers will ask suppliers to submit a competitive bid—the terms of sale offered by the supplier in response to the purchase specifications posted by a buyer. If different suppliers' quality, dependability, and delivery schedules all meet the specs, the buyer will select the low-price bid.

Which of the following is true of the Foreign Corrupt Practices Act? A. It prohibits U.S. firms from paying bribes to foreign officials. B. It levies stiff penalties against people who pay bribes. C. It applies to foreign firms or individuals who accept payments while in the United States. D. It was amended to allow small grease money payments if they are customary in a country. E. All of these answers are correct.

E. All of these answers are correct.

Which of the following is true of manufacturers? A. Most manufacturers are quite large with more than 1,000 employees. B. Most manufacturers, both small and large, have formal buyers who purchase raw materials. C. All manufacturers share the same buying needs. D. Manufacturers are typically concentrated in rural areas. E. There are far fewer manufacturers than final consumers.

E. There are far fewer manufacturers than final consumers.

In the context of the North American Industry Classification System (NAICS) codes, what is a three-digit industry? A. a subindustry of a four-digit industry that has only three buying companies B. an industry with lower number of employees than a four-digit industry C. an industry with larger sales volume than a two-digit industry D. an industry that has only three intermediaries in its distribution channel E. a subindustry of a two-digit industry

E. a subindustry of a two-digit industry - In the context of the NAICS code, a three-digit industry is a subindustry of a two-digit industry. Each three-digit group of firms is further subdivided into four-, five-, and six-digit classifications.

What are targeted white papers? A. websites assembled by industry governing boards with the purpose of educating the public about a product class B. recommendations written by buyers who have engaged in business with an organization C. website pages that appear blank but contain hidden code that raises a company's online search ranking D. extensive, blank order forms used by first-time buyers E. authoritative reports that address important industry issues and provide solutions

E. authoritative reports that address important industry issues and provide solutions

A seller of software sends a direct mailer to dentists telling them about a medical office management software package. This is an example of a seller A. tracking the purchasing behavior of their clients. B. conducting a pilot test for the software. C. drafting a product requirement chart. D. using social media to drive consumer purchase. E. helping buyers realize that they have a problem.

E. helping buyers realize that they have a problem.

The process that falls between buying for a new need and making a routine repurchase, where some review of the buying situation is done, though not as much as in new-task buying, is referred to as the A. first-time buying. B. straight rebuy. C. one-time purchase. D. direct rebuy. E. modified rebuy.

E. modified rebuy.

In comparison to the buying pattern of final consumers, the purchasing behavior of organizational buyers is A. dependent on advertising appeals. B. never influenced by noneconomic factors. C. strictly based on emotional appeals. D. even less predictable. E. primarily influenced by economic needs like quality and reliability.

E. primarily influenced by economic needs like quality and reliability

Just-in-time-delivery is important for customers because A. most supply purchases are spur-of-the-moment and require instant delivery. B. inventory is difficult to monitor. C. manufacturers are usually unable to supply more than the currently needed materials. D. most industries require the freshest supplies. E. storing too much inventory is expensive.

E. storing too much inventory is expensive.

Which of the following situations would most likely involve negotiated contract buying? A. when the seller wants to receive the same price, even if competition lowers the market price for its goods B. when the buyer is unaware that a problem exists and needs to be fixed C. when the buyer plans on making a single, simple purchase from a seller D. when the buyer wants to lock in a low price for the term of the contract E. when the buyer knows approximately what they want, but lacks certain details

E. when the buyer knows approximately what they want, but lacks certain details - Negotiated contract buying involves contracts that allow for changes in the purchase arrangements. This makes them ideal for situations when the buyer and seller know approximately what they want but are unable to decide on all of the details in advance.

Three step approach to buying

Step 1: Defining the Problem - problem recognition - describing the need - specifying the product Step 2: Decision-Making Process - establish buying process - gather information - solicit proposals/bids - select the supplier Step 3: Managing the Buyer-Seller Relationship - structure the relationship - monitor supplier relationship

vendor analysis

a formal rating of suppliers on all relevant areas of performance

requisition

a request to buy something - buying organizations often establish formal procedures governing how purchases are made

straight rebuy

a routine repurchase that may have been made many times before

purchasing specification

a written description of what the firm wants to buy

negotiated contract buying

agreeing to contracts that allow for changes in the purchase arrangements

buying center

all the people who participate in or influence a purchase - buyers, users, influencers, gatekeepers, deciders

white paper

an authoritative report or guide that addresses important issues in an industry and offers solutions

business and organizational customers

any buyers who buy for resale or to produce other goods and services

purchasing managers

buying specialists for their employers

outsource

contract with an outside firm to produce goods or services rather than to produce them internally

just-in-time delivery

reliably getting products there just before the customer needs them

multiple buying influence

several people share in making a purchase decision-perhaps even top management

competitive bid

terms of sale offered by different suppliers in response to the buyer's purchase specifications

modified rebuy

the in-between process where some review of the buying situation is done - though not as much as in new-task buying or as little as in straight rebuys

new-task buying

when an organization has a new need and the buyer wants a great deal of information