Marketing chapter 8

Most business buying decisions are made by

a firm's buying center.

Inelastic demand simply means that

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

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

derived.

The second stage in the business buying decision process is to

develop product specifications.

When charitable organizations such as the American Cancer Society, Second Harvest Foodbank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers.

institutional

King Auto Supply sells car and truck parts, as well as tire replacement and balancing services. As King places its order for truck tires with Michelin, it must also place an order for valve stems and balancing weights for the tires. Such business products are characterized as having ____ demand.

joint

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

Safeway Supermarkets recently placed an order with the Kahn Corporation for hotdogs. The typical weekly order is for 10 cases; however, since the upcoming weekend includes a holiday, this time Safeway is ordering 100 cases of hotdogs. Safeway orders this product on a regular basis. What type of purchase does this week's purchase represent?

modified rebuy

Most business purchases can be classified as belonging to one of three types:

modified rebuy, new-task, or straight rebuy.

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.

new-task

Institutional markets are

organizations that seek nonbusiness goals.

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.

producer

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

producer, reseller, government, and institutional.

The stages of the business buying decision process, in order, are

recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance.

In business markets, individuals or groups purchase products for one of three purposes. These purposes are

resale, direct use in producing other products, and use in general daily operations.

Retailers like Target and Kmart are considered to be members of which business market?

reseller

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?

reseller

An organization that decides to buy all of a certain part from the same company is using

sole sourcing.

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?

straight rebuy

The United States Navy purchases uniforms from a single supplier. For the last twenty-five years, the trousers purchased from this supplier have not changed and have been bought every six months, in seven different sizes. This example is called a

straight rebuy.