Marketing CH 8

Business markets are typically divided into four categories. These categories are _________.

producer, reseller, government, and institutional.

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of ____________.

sales per square foot of selling area.

About what percentage of the annual U.S. gross domestic product is government spending?

40%

Most business buying decisions are made by ____________.

A firm's buying center

What are the two ways governments make purchases?

Bids and negotiated contracts

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.

Derived

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?

Does the supplier also sell to my competitors?

What are the four major factors that influence business buying decisions?

Environmental, organizational, interpersonal, and individual

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.

Gatekeeper

Which type of business market tends to have the most complex buying procedures?

Government

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.

Modified Rebuy

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.

Negotiation

The industry classification system that generates comparable statistics among the United States, Canada, and Mexico is best known as ________________.

North American Industry Classification System (NAICS)

Product specifications are best described as ____________

Physical characteristics and level of quality

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(n) ____________ market.

Producer

Bob Denton of Denton Pest Control buys equipment from Allied Tools because Allied hires him to spray its warehouse for insects periodically. This practice is an example of ____________.

Reciprocity

The three purposes for which individuals or groups can use products in order for it to be considered a business market are __________.

Resale, use in daily operations, and direct use in producing other products.

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.

Reseller

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?

Sampling

The group of people within a business who are involved in making business buying decisions is referred to as _________.

The buying center

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.

Value

____________ buy products from manufacturers and then resell the products to other firms in the distribution system.

Wholesellers

Inelastic demand simply means that ____________

a price increase or decrease will not significantly change the demand for an item.

The second stage in the business buying decision process is to ____________.

develop product specifications

Institutional markets are ____________

organizations that seek non-business goals.

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 ____________.

the government buys products from all sizes of business, but there is some red tape.