Chapter 8

160. T F Specific details regarding terms, credit arrangements, and technical assistance are worked out during the product specification stage of the buying decision process.

False

23. 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

139. T F One very important consideration for business purchases is the type of packaging used.

False

140. T F Price is of concern to a business marketer primarily because of its psychological impact on purchasing agents.

False

166. T F Interpersonal dynamics are easy to observe and simple for the marketer to assess.

False

168. T F The old Standard Industrial Classification system is more comprehensive than NAICS.

False

170. T F NAICS provides less information about service industries and high-tech products than did the SIC system.

False

146. T F Of the three types of business purchases, the straight rebuy purchase usually requires the most information.

False

148. T F In the long run, business demand becomes totally unrelated to consumer demand.

False

167. T F The North American Industry Classification System includes all three NAFTA partners.

True

165. T F The five-stage business buying decision process is used primarily for routine, straight rebuy purchases.

False

133. T F Reciprocal dealing is widespread because it is one of the few avenues not regulated by the FTC, and it facilitates optimal purchases.

False

134. T F Ultimate consumers are generally more rational than business customers.

False

141. T F If a business product exceeds specifications, so much the better; the customer can then be assured of obtaining a minimum level of acceptability.

False

144. T F Inspection refers to a purchasing method in which a representative unit is taken from a lot and evaluated, and the buying decision is based on the conclusions.

False

150. T F For business products, the concept of inelasticity of demand applies equally to industry demand for the product and to demand for an individual supplier.

False

154. T F In industries in which price changes occur frequently, demand fluctuations have practically been eliminated since buyers have become used to these changes and have learned to ignore them.

False

164. T F Feedback acquired during the fifth stage of the business buying decision process is kept on file but not used as a reference for future business purchase decisions.

False

172. T F To obtain the names of specific potential customers, the business marketer is well advised to employ the services of a commercial data company, since this is both cheaper and faster than any other method.

False

152. T F When the major component of an item experiences a price increase, the demand for the item may become more elastic.

True

153. T F Sometimes initial demand for a business product will drop following a price cut if buyers believe that further price reductions are forthcoming.

True

158. T F Problem recognition can be stimulated by external sources, such as trade shows or sales representatives.

True

159. T F In the buying decision process, one of the activities included in the search for products and suppliers is examining catalogs and trade publications.

True

161. T F Value analysis focuses primarily on the examination of the cost of products relative to design, quality, and materials used.

True

162. T F Vendor analysis is a formal, systematic evaluation of current and potential vendors that focuses on a variety of dimensions including price, product quality, delivery service, product availability, and overall company reliability.

True

169. T F All three NAFTA countries will convert to the NAICS over the next few years.

True

173. T F Industrial classification systems allow marketers to divide business customers into groups based mainly on the types of goods and services provided.

True

175. T F When trying to estimate the purchases of a potential business customer, it is reasonable to suppose that there is a relationship between the size of the potential customer's purchases and a variable such as the number of personnel employed by the customer.

True

57. 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

72. 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

90. 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

91. 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

50. 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

51. 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

54. 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

56. 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

58. 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

60. 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

65. 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

66. 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

71. 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

85. 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

89. 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

97. 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

43. 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

125. T F Wholesalers sell primarily to ultimate consumers.

False

155. T F A fall in consumer demand for a product is likely to result in increased buying from suppliers as consumer goods producers replenish depleted inventories and gear up for the next surge in consumer demand.

False

156. T F The factors that influence business buying behavior are the same as those that influence consumer buying behavior.

False

157. T F All companies, no matter what their size or market position, maintain only one buying center.

False

163. T F The fourth stage in the business buying decision process is that of searching for products and suppliers.

False

105. 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

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

c

120. T F The owner of a trucking business, who buys gasoline from the nearby service station for the company trucks, is a part of a business market.

True

122. T F An example of a business market would be farmers.

True

124. T F Reseller markets consist of intermediaries that buy finished goods and resell them for profit.

True

127. T F Retailers purchase products and resell them to final consumers.

True

128. T F The increase in government purchases has resulted partly from the increase in the number of services provided by the government.

True

129. T F Government markets, although complicated in their requirements, can be very lucrative.

True

135. T F Business customers generally seek to obtain detailed information about a product before purchasing it.

True

137. T F Business purchasing agents may indirectly contribute to the satisfaction of their own personal needs by helping their firms achieve organizational objectives.

True

138. T F When purchasing products, business customers are especially concerned about quality, service, price, and supplier relationships.

True

142. T F In some cases, the types of services offered by a supplier may constitute a primary advantage over suppliers of similar products.

True

143. T F On-time delivery is crucial to a business customer, since a late delivery may hold up a production line or cause the firm to lose sales.

True

145. T F A new-task purchase is one in which the business makes an initial purchase of a new item.

True

147. T F Industrial demand derives from consumer demand.

True

101. 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

27. 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

28. 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

29. 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

48. 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

52. 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

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

a

103. 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

104. 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

63. 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

78. _________ 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

80. 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

81. 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

82. 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

83. 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

94. 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

98. 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

99. ___________ 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

18. 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

21. 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.

c

22. 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

68. 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

70. 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

74. 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

75. 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

76. 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

79. 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

84. 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

86. 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

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

c

93. 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

95. 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

102. 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

106. 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

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

d

37. 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

100. 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

109. 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

20. 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

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

e

174. T F A major source of input-output data is the Survey of Current Business.

True

136. T F Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs.

False

149. T F The demand for many business products is inelastic at the industry level.

True

151. T F Raw materials are especially affected by joint demand.

True

92. 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

108. 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

30. 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

31. 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

49. 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

59. 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

62. 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

35. 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

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

c

41. 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

44. 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

107. 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

19. 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

26. 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

38. 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

41. 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

45. 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

46. 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

53. 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

64. 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

67. 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

24. 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

25. ______ 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

34. 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

36. 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

40. 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

47. 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

55. 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

61. 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

69. 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

88. 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

96. 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

171. T F After finding out which industries purchase the major portion of an industry's output, the next step is to begin production.

False

126. T F There is little or no difference between wholesalers' customers and retailers' customers.

False

130. T F Institutional markets include state prisons.

False

131. T F Orders placed by business customers are usually smaller and more numerous than consumer sales.

False

132. T F It is customary for contracts for raw materials and components to be negotiated semiannually.

False

119. T F The four categories of consumer markets are producer, reseller, government, and institutional.

False

121. T F The term business markets refers only to producer markets.

False

123. T F Grocery stores and supermarkets are a part of producer markets.

False

118. T F Buyers in producer markets purchase either raw materials or semifinished products.

False