Marketing Strategy Ch 5
All of the following are examples of business service providers EXCEPT: A. ad agencies. B. equipment manufacturers. C. marketing research firms. D. accounting agencies.
B
If Wal-Mart agrees to share sales information with Coca-Cola for the purpose of keeping stocks replenished, they would be creating a(n): A. just in time system. B. supply chain management alliance. C. annual requirements contract. D. reciprocity arrangement.
B
A miner working for a mining company requests the purchasing agent of the company to buy a particular brand of high powered LED mining helmets as it would help him to work more efficiently. The miner belongs to the category of _____ in the organizational purchasing process. A. deciders B. gatekeepers C. users D. buyers
C
A sales report from a top salesperson points out that a major competitor has added a new, more expensive feature to one of its products and that several of his top customers have stopped buying their products as they lack in this new feature. Which stage of the purchase decision-making process does this situation most accurately represent? A. Value analysis B. Vendor analysis C. Problem recognition D. Purchase decision
C
Comparing market demographics, organizational buyers, when compared with buyers of consumer goods, are: A. more in number. B. less likely to use buying spcialists. C. geographically concentrated. D. less likely to buy goods on specifications.
C
In the context of organizational market, technical experts from various departments of a firm who help determine which specifications and criteria to use in making the purchase decisions are known as: A. deciders. B. ultimate consumers. C. influencers. D. gatekeepers.
C
Ocean Co. is a manufacturer of electronic goods that always purchases its raw materials from Edge Suppliers. Ocean Co's demand for Edge's metals and glasses increases with the increase in the demand of television sets from its clients and decreases with its decrease. This shows that _____ tends to be relatively erratic and cyclical. A. new-task buying B. modified rebuying C. derived demand D. direct selling
C
The _____ system eliminates inventories at the customer's manufacturing site, which requires the timely delivery of 100 percent quality (zero-defect) products. A. customer relationship management B. total quality management C. just-in-time management D. requirements chain management
C
Which of the following is the last step of the purchase decision-making process? A. Purchase decision B. Evaluation and selection of suppliers C. Postpurchase evaluation and feedback D. Make-or-buy decisions
C
Buildings and major capital equipment that manufacturers use to conduct their operations are examples of: A. component parts. B. accessory equipments. C. business services. D. installations.
D
Chrysler Corporation purchases plastic that is to be used ro make dashboards for its vehicles. This plastic is an example of a(n) _____. A. accessory equipment B. installation C. business service D. component material
D
A crucial factor that distinguishes organizational markets from consumer markets is the method in which products are purchased.
True
A straight rebuy involves purchasing a common product or service the organization has bought many times before.
True
High-caliber, well-trained salespeople are critically important in the marketing of installations.
True
Operating supplies do not become a part of the buyer's product or service, nor are they used directly in producing it.
True
The demand for industrial goods and services is derived from the demand for consumer goods and services.
True
The supplier's qualifications, past performance, and reputation become critical determinants of the success of the marketing effort in case of services.
True
The way specific organizational purchase decisions are made vary with the firm's level of past experience and other aspects of the buying situation.
True
Government organizations tend to require less documentation and paperwork from their suppliers compared to the business organizations.
False
Most standard marketing strategies and tools are equally effective for both business organizations and governmental purchasing processes.
False
Personal selling, either by the producer's or a distributor's salesforce, is the only important promotional method for accessory equipment.
False
The relative influence of the purchasing manager is lesser when reordering items the firm has purchased in the past than when buying a new product.
False
Trucks and hand tools fall under the category of operating supplies.
False
Component materials differ from raw materials in that component materials are considered as: A. processed goods in the final product. B. not being part of the final product. C. finished goods. D. major capital goods.
A
Value analysis refers to the: A. systematic appraisal of an item's design, quality, and performance requirements. B. assessment of the value of the product compared to comparable products on the market. C. appraisal of the value of the business unit in terms of its contribution to the corporation. D. comparison of the worth of publicly traded company stock to the book value of the company.
A
Swansa, a garment manufacturing company, was not satisfied with the cotton provided by a particular supplier. Their material did not meet the company's quality standards. Eventually they terminated their contract with the former supplier and started buying cotton from a new supplier. This is an example of a_____. A. straight rebuy B. modified rebuy C. new-task buy D. direct buy
B
The difference between installations and accessory equipments is that: A. installations include industrial machines and tools that manufacturers use to carry out their operations. B. installations cannot determine the scale of operations of the firms that buy and use them. C. installations are finished goods that facilitate production of a final product. D. installations are finished goods that facilitate repair, maintenance, and ongoing operations.
B
A firm is more likely to trust and develop a long-term commitment to a supplier when that supplier makes dedicated, customer-specific investments.
False
A modified rebuy occurs when buying centers are forced to look for alternative products because the organization's needs have changed.
False
Buyers' auctions are most akin to a _____ situation. A. straight rebuy B. modified rebuy C. new-task buying D. reciprocity
B
An appropriate example of reciprocity would be: A. an agreement by a personal computer manufacturer to buy components from a source that agrees, in turn, to buy the manufacturer's computers. B. an agreement by a forest products firm to buy chemical products in bulk, if the price of the products are reduced. C. the equal commitment by two firms to a joint venture, in which the profits are equally divided. D. the lowering of trade barriers in equal amounts by two countries trading together.
A
Compared to markets for consumer goods, organizational markets: A. are subject to multiple buying influences and have a close buyer-seller relationship. B. have weaker buyer-seller relationships as they are subject to multiple buying influences. C. compensate for lack of buying specialization with close buyer-seller relationships. D. are less apt to buy on specification given the multiple buying influences.
A
In markets characterized by complex and uncertain technical environments, such as where competing technologies are emerging simultaneously, as in the networking software industry, customers are: A. more likely to keep their options open by spreading their purchases across multiple suppliers. B. more likely to develop a long-term orientation toward a single supplier. C. more likely to continue with their original supplier, even if their product is losing ground as the industry standard. D. more likely to buy goods and services only for their own personal use and consumption.
A
In the context of organizational market, the buyer is usually referred to as the: A. purchasing agent. B. ultimate consumer. C. purchasing influencer. D. gatekeeper.
A
In the context of organizational market, which of the following statements best describes influencers? A. They provide information for evaluating alternative products and suppliers. B. They have the authority to contact suppliers and negotiate the purchase transaction in most organizations. C. They control the flow of information to other people in the purchasing process. D. They are the people in the organization who must use or work with the product or service purchased.
A
Lavenderin, a garment manufacturing company, purchases all its cotton and other raw materials from various suppliers. Lavender is an example of an _____. A. organizational customer B. ultimate consumer C. intermediary D. individual customer
A
Organizational buyers purchase goods and services for: A. further production, for use in operations and for resale. B. further production, but not for operations or resale. C. production and operations, but not for resale. D. production and for resale, but not for operations.
A
The buying center: A. comprises of several people from different departments who participate in the organizational purchasing process. B. comprises of only those people in the firm who would be using the goods or services purchased by the firm. C. is a separately staffed department in large organizations involved only in the purchase of goods and services for the company. D. is a platform where buyers and sellers congregate and take decisions regarding their future transactions.
A
Value analysis is the first step in the organizational decision-making process for new-task purchases.
False
Value analysis maximizes procurement costs.
False
At the most basic level, marketers need to answer the same set of questions about organizational markets as about consumer markets in order to develop a solid foundation for their marketing plans.
True
Business services provide special expertise to facilitate ongoing operations.
True
Compared to consumer markets, organizational markets are characterized by closer buyer-seller relationships.
True
High level of mutual interdependence encourages the development and maintenance of long-term relationships and alliances between buyers and sellers.
True
Organizational buyers evaluate alternative suppliers and their offerings by using a set of choice criteria reflecting the desired benefits.
True
Reciprocity occurs when an organization favors a supplier that is also a customer or potential customer for the organization's own products or services.
True
Requirements planning governs the purchase of raw materials and fabricating components as well as supplies and major installations.
True
Technology has changed organizational purchasing over the past decade by facilitating logistical alliances involving the sharing of sales and inventory data and computerized reordering.
True
Component parts and materials are regarded as: A. finished goods that facilitate production of a final product. B. processed goods that become a portion of a final product. C. finished goods that facilitate repair, maintenance, and ongoing operations. D. major capital goods that are used to produce the final product, but not being part of the final product.
B
Due to the lack of experience of the buying center in case of ________, the buying center tends to view the supplier's reputation as a critical factor, and generally choose a well-known and respected supplier to reduce the risk of making a poor decision. A. dealing with an ultimate consumer B. new-task buying C. straight rebuy D. buying a common service
B
In the context of industrial goods, lumber and iron ore are examples of _____ . A. operating supplies B. raw materials C. business services D. accessory equipment
B
In the context of industrial goods, which of the following is true for installations? A. It refers to relatively unprocessed goods that become a portion of the final product. B. They are capital goods used to produce final products, but are not part of the final products. C. Farm products and lumber are examples of installations. D. They are processed goods that are used to produce final products and they become a portion of the products.
B
The situation in which a company favors a supplier that is also a customer for that company is termed as _____. A. cross-purchasing B. reciprocity C. computing D. direct selling
B
Which of the following is true in the context of operating supplies? A. They become a part of the buyer's product or service, B. They are not used directly in manufacturing a product. C. They are usually high-priced items purchased once in a while. D. A lot of emphasis is placed on brand loyalty while taking marketing decisions.
B
________ accurately exemplifies the derived nature of industrial demand. A. Decline in beef consumption because of the movement of health-conscious consumers toward poultry products. B. A reduction in demand for feed grains because of a decline in beef consumption. C. Increase in industrial demand throughout the economy because of advanced production technology. D. Decrease in paper prices because of excess timber production in the Northwest.
B
A modified rebuy typically involves: A. an organization realizing a new and unique need or problem. B. purchasing a common product or service the organization has bought many times before. C. comparison of alternative products and services with the current product and vendor. D. controlling of the flow of information to other people in the purchasing process.
C
A straight rebuy: A. occurs when an organization faces a new and unique need or problem, one in which buying center members have little or no experience. B. occurs when purchased goods have to be returned or exchanged because the organization's needs have changed. C. involves purchasing a common product or service the organization has bought many times before. D. involves purchasing products that are somewhat different from, but extensions of, products previously purchased.
C
An annual requirements contract: A. is an inventory check of an organization's supplies at the end of the fiscal year. B. is an individual spot contract on the open market. C. is a buyer's obligation to fill a buyer's need for a product consistently over a year D. is a buyer's responsibility to list out the requirements that a buyer should provide over an year.
C
In the context of organizational market, "users" are the people in the organization who: A. provide information for evaluating alternative products and suppliers. B. control the flow of information to other people in the purchasing process. C. often utilize or work with the product or service purchased. D. have the authority to make a final purchase decision.
C
In the context of the purchase decision-making process, requirements planning consists of: A. performing a value analysis on suppliers. B. engaging in an in-depth investigation before qualifying a firm as a potential supplier. C. attempting to forecast future requirements of the firm so as to plan their purchases in advance. D. determining how best to advertise a company's product.
C
In the context of organizational market, individuals who controls the flow of information to other people in the purchasing process is referred to as: A. deciders. B. buyers. C. users. D. gatekeepers.
D
The demand for industrial goods and services is: A. less cyclical than consumer goods and services. B. more likely to be affected by price changes in the short run than consumer goods. C. less erratic than consumer goods and services. D. derived from the demand for consumer goods and services.
D
Which of the following statements is NOT true regarding purchasing process in government markets? A. It requires more documentation and paperwork from suppliers because their spending decisions are subject to public review. B. Suppliers complain about excessive bureaucracy, costly paperwork, and red tape in this process. C. Requires suppliers to submit bids, and contracts are usually awarded to the lowest bidder who meets the minimum standards specified in the contract. D. Comparative advertising or personal sales demonstrations have great impact on purchase decisions.
D
Component parts and materials are major capital goods used to produce final product, but are not part of the final product.
False
Distribution channels for natural materials tend to have many middlemen.
False
Gatekeepers provide information for evaluating alternative products and suppliers.
False
In the organizational purchasing process, the people who must use or work with the product or service purchased are referred to as the buyers.
False
Industrial buyers respond only to economic arguments.
False
Organizational buyers, when compared with buyers of consumer goods, are greater in number.
False
Price is rarely the critical decision variable for operating supplies purchases.
False
Short-term purchasing contracts enables an organization to concentrate on its purchases with one or a few suppliers, reduce transaction costs, and gain scale economies through quantity discounts and the like.
False