MKTG 3650 Chapter 8 Practice Exam
For routine purchases, such as purchases of office supplies and cleaning supplies, lists of approved buyers may exist based on prior experience with these sellers. Government agencies may directly purchase from firms on these lists without soliciting additional bids. However, the size of the order is generally limited to under __________ for the federal government.
$2,500
Individual firms in an industry usually cannot successfully raise prices for their products if other firms in the industry do not follow suit. If only one firm raised its prices it probably would result in buyers of the firm's products shifting their purchases to competing sellers. Any single firm that raises price will suffer a decline in sales. This scenario reflects the fact that:
Demand at the industry level tends to be price inelastic while demand for the products made by individual firms in that industry is price elastic
Monsanto targeted NutraSweet advertising directly at consumers when it first introduced the product in the early 1980s, even though the product was not available in consumer markets. Monsanto understood that if consumers were convinced of NutraSweet's benefits as a substitute for sugar, they would demand NutraSweet in other products. This example illustrates which characteristic of organizational markets and supply chains?
Demand for organization products is "derived demand"
Procter & Gamble targeted Olean advertising directly at consumers when it first introduced its brand of olestra, even though the product was not available in consumer markets. P&G understood that if consumers were convinced of Olean's benefits as a substitute low fat cooking oil that could actually lower the fat content in foods, they would demand that Olean be incorporated into other products, such as chips and other snacks. This example illustrates which characteristic of organizational markets and supply chains?
Demand for organization products is "derived demand"
Which of the following is not considered a type of organizational market?
Employees of non-profit organizations who buy products for personal consumption.
Which of the following is not true about leasing arrangements made by organizational buyers for products?
Lease agreements typically cover a longer timeframe than purchases of equivalently products.
Decisions in organizations for complex, high-risk, first-time purchases of major equipment and production installations fall into which buy class?
New task
Acquiring information about alternative vendors and products during the organizational decision process is probably is most difficult for:
New task decisions
Lumber companies, such as Weyerhaeuser, that buy trucks, bulldozers, and other equipment for forest harvesting and milling are engaged in the production of lumber products that will be sold commercially. Such companies are categorized as _______________ .
Other producers or business users
____________ measures how much the demand for a product changes (up or down) as the price for that product increases or decreases.
Price elasticity of demand
The demand for goods and services produced by an entire industry tends to be _______________ ; while the demand for goods and services produced by individual firms within that same industry tends to more ____________.
Price inelastic; price elastic
Organizational products
Products purchased for use in business operations, or for resale to other organizations, or as a part employed in the production or another product are referred to as:
Which of the following would not be considered as an example of an organizational market?
The CEO of Home Depot buys appliances for his personal residence
Which of the following is least characteristic of the purchasing decisions classified as new task?
The decision process is generally quick and often dominated by purchasing agents
Which of the following is not true of the NAICS coding system?
The system was established by states to allow each individual state to classify businesses within its borders
Which of the following is least likely true of straight rebuy decisions in organizations?
Top management directs the decision process
With respect to the buying center in a firm, personnel who actually operate equipment that may be purchased probably perform which role in the buying center?
a and c above
Bill works at Peterbuilt on the assembly line producing truck frames. Bill is exceptionally knowledgeable about the equipment needed to do his job and often makes recommendations to management on the specifications for and alternative suppliers of needed equipment. Given Bill's position on the assembly line as an operator, he probably functions in the buying center at Peterbuilt as a(n):
a, b, and c above
Best Buy provides its "Geek Squad" service to support sales of its computers and software. Providing such "value- added" to customers helps accomplish which of the following?
all of the above
The fact that both SIC and NAICS codes group similar companies together allows marketers to use these codes to:
all of the above
Which of the following is characteristic of the modified rebuy in organizational purchasing?
all of the above
Which of the following should be done by marketers wishing to become suppliers of goods and services to organizational buyers?
all of the above
The stage of the organizational decision process in which proposals are compared against one another and against the specifications is the __________ stage.
analyzing proposals
The role in the buying center that typically arranges the specific details of the purchase, potentially negotiates specific terms of the contract, processes the paper work, monitors progress on delivery, and engages in any expediting that may be required is a(n):
buyer
The ____________ in organizations consists of all people involved in the decision making process, formally or informally, for products and services that may be purchased by the firm.
buying centers
In contrast to the buying center in a firm which tends to operate more on an informal basis, _____________ are formally tasked by management to engage in the decision process for risky and expensive products or services that may be purchased by the firm.
buying committees
Organizational buyers are more likely to buy direct from the manufacturers of products when:
c and d above
What publication produced by the federal government is used to provide information to prospective suppliers on potential upcoming contracts for which they can bid?
commerce business daily
Products purchased by individuals for their own personal or household use are called:
consumer products
Melissa is a member of management with Peterbuilt and regularly participates with others to evaluate and choose among alternative vendors being considered as suppliers of equipment, parts, and materials. Melissa' role in the buying center at Peterbuilt is that of a(an):
decider
Consumer demand for personal computers or smart devices ultimately determines the demand for the parts and materials involved in the manufacture of each product. This is an example of ________ .
derived demand
__________ means that the demand for organizational goods and services is ultimately a function of the demand for consumer goods and services.
derived demand
Which of the following is not among the types of buying decisions made within organizations?
dynamic rebuy
Sellers of organizational products generally try to ultimately target key decision makers with their sales presentations. However, they must first get through the various clerks, administrative assistants, and lower-level purchasing personnel who are performing which role in the buying center?
gatekeeper
The role in the buying center that tends to control the flow of information between personnel in the buying center is:
gatekeeper
Value analysis is most likely to occur at which stage in the organizational decision process for products?
identification of specifications
With respect to straight rebuy decision for office or janitorial supplies, all that may be required is identification of quantities needed. Which stage of the purchasing decision process is implied?
identification of specifications
Melissa is an engineer with Peterbuilt and regularly participates with others to determine specifications for parts and materials that will be used in Peterbuilt's production processes. Melissa' role in the buying center at Peterbuilt is that of a(an):
influencer
Supervisory personnel, research and design specialists, and engineers who assist in determining specifications and defining other criteria for use during the purchase decision-making process usually perform which role in the buying center?
influencer
In some cases, governmental agencies may use mailing lists of firms that have previously contacted governmental buying offices and indicated their desire to be included in future solicitations. Based on these mailing lists, ______________ are sent directly to interested firms.
invitations to bid
Which of the following is least relevant to marketers wishing to become suppliers of goods and services to organizational buyers?
maintaining a strong presence on social media, such as facebook
in which type of market do firms purchase a wide range of parts, raw materials and, often, services that are used to produce new products,
manufacturer market
___________ is the upper limit of the demand for specific goods or services that exists within a particular industry. It represents the amount of a product that potentially could be sold by all firms (taken together) in an entire industry.
market potential
A manufacturer has upgraded its assembly line to one that uses automated, robotic equipment. The decision was time consuming and complex. However, given the valuable experience decision makers compiled from this decision, future decisions to upgrade the line should not be so extensive. These future decisions probably will fall into which buy class?
modified rebuy decision
James is a purchasing agent for Peterbuilt and has responsibility for purchasing and stocking MRO items employed to maintain Peterbuilt's office facilities. James normally automatically reorders from the same vendors when supplies run low. However, the current vendor has not been performing as expected. Deliveries have been delayed and quality of some items has not been up to speed. James probably will initiate a(n):
modified rebuy decision
The US Navy when it buys new ships or other weapons systems will most likely employ which form of governmental buying?
negotiated contracting
____________ are used by the federal government for the purchase of complex products that must be custom designed for specialized government applications. These products often require extensive research, development, and custom tailoring to satisfy government needs.
negotiated contracts
he Central Intelligence Agency wishes to improve the security of its global communications in light of the recent extensive hacking of supposedly secure systems. There are only a few firms that are qualified to build such systems. The CIA probably will employ which form of government buying?
negotiated contracts
Organizations such as churches, universities, hospitals, charities, and political parties are generally classified in which organizational market?
non-business
When products are purchased that will be used to operate an organization or will be made into products, these products are called ______________ .
organizational products
When BP buys drilling equipment and ships for the exploration, extraction, and shipment of oil it is in which type of organizational market?
other producer
When total revenue (price x quantity sold) increases as price decreases, demand is said to be ____________ .
price elastic
Due to shortages in raw materials, all firms in the micro-chip industry increased their prices to their customers. Yet demand for chips did not change. This suggests that the demand for micro-chips is _____________ under these conditions.
price inelastic
When total revenue (price x quantity sold) decreases as price decreases, demand is said to be ____________ .
price inelastic
Which of the following is not a role performed in a firm's buying center?
purchasing agent
In a firm's buying center, the deciders for products purchased on straight rebuy bases generally are _________ .
purchasing agents
A furniture manufacturer may choose to buy wood and other materials from a producer who, in turn, agrees to furnish its office with furniture produced by the manufacturer. This situation is an example of ___________ .
reciprocity
Governmental agencies normally use ___________to solicit qualified suppliers to submit bids for needed products and services. The request typically contains all purchasing requirements, specifications, and deadlines that must be satisfied.
requests for proposals
The Department of the Navy in its efforts to better equip its SEAL teams to fight the global war on terrorism want to design a silent, maneuverable, defensible underwater delivery system. There are only a few firms that are qualified to build such systems. The Navy will probably employ negotiated contracting for the purchase and will initiate the process using:
requests for quote
Wholesaling middlemen and retailers are considered to be part of the _____________ organizational market.
reseller
__________ normally do not transform products in any way. Usually, products are sold to the next supply chain member without any modification.
resellers
During which stage of the organization decision process for products is a supplier most likely to deliver a formal presentation to the organization?
soliciting proposals
Decisions for organizational products that are usually made by purchasing agents and for which the purchase order may simply be placed with existing vendors that usually supplies these products is the:
straight rebuy
James is a purchasing agent for Peterbuilt and has responsibility for purchasing and stocking MRO items employed to maintain Peterbuilt's office facilities. James normally automatically reorders from the same vendors when supplies run low. This is an example of what type of organization purchase decision?
straight rebuy decision
With the searching for and qualifying vendors stage of the organizational decision process, vendors are often selected from pre-approved vendor lists. This probably is most often encountered with:
straight rebuy decisions
___________ are comprised of linked organizations through which products are sourced, manufactured or assembled, and finally, transported, inventoried, delivered and ultimately sold to end-use consumers.
supply chains
Organizational buyers often seek to purchase "total solutions" to their procurement problems by contracting with a single vendor who, may in turn, subcontract aspects of the contract to other vendors. This trend is called __________ .
system buying
When the US Navy contracts with a single weapons system manufacturer for a new complex carrier defense system and that manufacturer subcontracts production of some components of the system to other manufacturers, the Navy is engaging in ________________ .
system buying
Organizational buyers benefit from __________ because it substantially reduces the cost of maintaining inventory of MRO items, reduces the time spent on supplier selection decisions, and offers price protection over the term of the contract.
systems contracting
UNT typically procures its entire supply of Maintenance, Repair, and Operating (MRO) items, requiring that the supplier track inventory and automatically restock items as required. UNT has engaged in:
systems contracting
_______________ applies to marketing supplies of Maintenance, Repair, and Operating (MRO) items. Firms contract with suppliers of these items to provide for their entire MRO needs.
systems contracting
Assume the US Navy contracts with a single weapons system manufacture for a new complex carrier defense system and that manufacturer subcontracts production of some components of the system to other manufacturers. Manufacturers that provide these contracting services to the Navy are said to be engaged in:
systems selling
Organizational buyers often seek to purchase "total solutions" to their procurement problems by contracting with a single vendor who, may in turn, subcontract aspects of the contract to other vendors. Vendors who provide such services are said to be engaged in:
systems selling
During the Identify Specifications stage of the organizational decision process products and their component parts may be critically evaluated by both the firm and its suppliers with respect to function and design in order to improve quality and, at the same time, lower production and parts/ material costs. This process is known as:
value analysis
___________ is employed by manufacturers and their suppliers to reduce or control the costs of component parts and other materials via a careful study of how processes, procedures, and parts might be redesigned and/or standardized across a range of products the manufacturer may produce.
value analysis
