Deck 8: Business-To-Business Behaviour

Question 1

When a business seeks to solve its problems by purchasing a packaged solution from a single seller, this is known as:

A) systems buying.
B) business partnering.
C) strategic alliance.
D) joint venture.
E) none of the above

Answer 1

A

Question 2

Demand for goods and services as business markets is more likely to be:

A) subject to minimal fluctuations over time.
B) geographically dispersed.
C) derived.
D) elastic.
E) all of the above

Answer 2

C

Question 3

The business or industrial market is BEST described as the market consisting of:

A) all the individuals and organisations acquiring goods and services used in the production of other goods and services.
B) all the individuals and organisations that acquire goods for the purpose of reselling or renting them to others, usually at a profit.
C) government units at all levels-federal, state and local government-that purchase or rent goods used in carrying out their functions.
D) schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.
E) all the individuals and organisations acquiring goods and services for use in not- for- profit activities.

Answer 3

A

Question 4

The reseller market is BEST described as the market consisting of:

A) all the individuals and organisations acquiring goods and services used in the production of other goods and services.
B) all the individuals and organisations that acquire goods for the purpose of reselling or renting them to others, usually at a profit.
C) government units at all levels-federal, state and local government-that purchase or rent goods used in carrying out their functions.
D) schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.
E) all the individuals and organisations acquiring goods and services for use in not- for- profit activities.

Question 5

Colonial Antiques specialises in handling merchandise from deceased estates and derelict colonial homesteads. The company purchases entire lots of household contents which it subsequently breaks up into smaller units and which are sold to suburban antique dealers, second hand furniture stores and markets. Colonial Antiques is an example of a(n):

A) not- for- profit market.
B) reseller market.
C) government market.
D) institutional market.
E) business or industrial market.

Question 6

A relatively routine type of purchase occurs when a buyer re- orders an item that was previously purchased without asking for any product modifications. This is known as:

A) customised order.
B) systems rebuy.
C) new task.
D) straight rebuy.
E) modified rebuy.

Question 7

The Head Gardener at Slitrig Gardens was strolling through his work domain looking at the flowers and bushes from a guest's perspective when he noticed some Japanese beetles flying around. He made a mental note to himself that he had to order some Japanese beetle traps when he got back to the office. This is an example of which of the steps in the purchase/procurement process?

A) Problem recognition
B) General need description
C) Information/ supplier search
D) Product specification
E) Proposal solicitation

Question 8

Colleen sells art and decorative supplies to small motels and boarding houses. She often talks to several different people before she locates someone who can give her a purchase order or a refusal. In terms of the buying centre, she has the most trouble identifying the _ for her merchandise.

A) decider
B) buyer
C) influencer
D) gatekeeper
E) user

Question 9

At which stage of the procurement process would a buyer be MOST likely to invite potential suppliers to provide a formal written presentation?

A) Problem recognition
B) General need description
C) Information/supplier search
D) Product specification
E) Proposal solicitation

Question 10

Beatrice runs a small gardening supplies retail outlet. She is looking for store fixtures that are durable, easy to clean and portable. She attended the 2003 Store Fixtures Trade Show and asked several of her colleagues for recommendations. She is MOST likely to be in which stage of business buying?

A) Problem recognition
B) Product specification
C) General need description
D) Information/supplier search
E) Order routine specification

Question 11

The business market differs from the consumer market in that:

A) the business market is substantially larger, with more numerous buyers, than the consumer market.
B) more customisation occurs in the consumer market.
C) businesses acquire goods and services for personal consumption, while consumers acquire them for other purposes.
D) the business market is substantially smaller, in dollar terms, than the consumer market.
E) businesses acquire goods and services in order to use them for another purpose, while consumers acquire goods and services for personal consumption.

Question 12

Kate is the purchasing assistant at her firm. Her duties involve assisting the firm's purchasing manager. In addition, Kate is expected to "protect" her superiors and technical staff from "pushy" salespeople. Kate is performing which of the decision roles?

A) user
B) influencer
C) decider
D) gatekeeper
E) buyer

Question 13

Due to rapidly rising overhead costs and prices of raw materials, Screw Manufacturing Pty Ltd was forced to raise the prices of its nails, which Ruckles sells to timberyards and hardware stores, by 35 per cent. Other nail manufacturers have raised their prices for similar reasons. The sales force at Ruckles believes the price increase will result in a drop in sales. You are the marketing manager and you disagree, because the nails are:

A) derived demand.
B) price inelastic.
C) price elastic.
D) J- curve demand.
E) fluctuating demand.

Question 14

Which of the following is the BEST example of a modified rebuy?

A) the annual purchase of desk calendar refills
B) the monthly updating of computer virus protection
C) purchasing large screen computer monitors to replace small ones
D) the purchase of a replacement goldfish for the school aquarium
E) bidding on a new high school gymnasium to replace one built in 1963

Question 15

To obtain some order and provide industry projections, the government statistician classifies business markets into nineteen broad divisions. This classification is known as the ANZSIC, an acronym, which stands for which of the following?

A) Australia and New Zealand Sectional Industry Code
B) Actuarial and Normal Zenith Scheme of Industry Classification
C) Australia and New Zealand Stock Instrument of Classification
D) Advanced and Natural Scheme of Industry Classification
E) Australian and New Zealand Standard Industrial Classification

Question 16

Which of the following is NOT an advantage of e- procurement?

A) It enables faster transactions.
B) It eliminates paperwork.
C) It cuts transaction costs.
D) It improves data security.
E) none of the above

Question 17

The office manager at Morwell Manufacturing sent the following email to the oompany's purchasing agent: Tom,
Please order another six cases of the laser- cut computer paper and twelve dozen more rolls of standard adding- machine tape from our usual paper products supplier. We need this by next Thursday.
Thank you. Terry.
This situation should be described as a:

A) systems rebuy.
B) straight rebuy.
C) new task.
D) modified rebuy.
E) customised order.

Question 18

The institutional market is BEST described as the market consisting of:

A) all the individuals and organisations acquiring goods and services used in the production of other goods and services.
B) all the individuals and organisations that acquire goods for the purpose of reselling or renting them to others, usually at a profit.
C) government units at all levels-federal, state and local government-that purchase or rent goods used in carrying out their functions.
D) schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care.
E) all the individuals and organisations acquiring goods and services for use in not- for- profit activities.

Question 19

In the business buying decision process, the decider is the member of the organisation who:

A) has formal authority to select the supplier and arrange terms of purchase.
B) controls the flow of information to others.
C) affects the buying decision by helping to define specifications and providing criteria for evaluating alternatives.
D) uses the product or service.
E) has formal or informal power to select and approve the final suppliers.

Question 20

Which of the following trends have been identified in the business buying market?

A) the advent of e- procurement
B) a shift towards centralised buying systems
C) increased use of professional purchasers
D) all of the above
E) none of the above

Question 21

At which step of the procurement process would a company be MOST likely to carry out a value analysis?

A) Problem recognition
B) General need description
C) Information/supplier search
D) Product specification
E) Proposal solicitation

Question 22

The market that consists of all the individuals and organisations acquiring goods and services used in the production of other goods and services is known as a(n):

A) business or industrial market.
B) not- for- profit market.
C) institutional market.
D) government market.
E) reseller market.

Question 23

In terms of geographic dispersal, which of the following statements about business buyers is true?

A) Business buyers are relatively evenly dispersed throughout the country.
B) Business buyers tend to be concentrated in mining districts such as Western Australia, Northern Territory and far north Queensland.
C) More than two- thirds of Australian business buyers are concentrated in Sydney and Melbourne.
D) More than half of business buyers are concentrated in farming communities and regional centres.
E) Business buyers are geographically concentrated along Australia's coastal districts.

Question 24

With the help of the operations manager, Geelong Rail Distributors is planning to buy a hydraulic roto- dumper for loading merchandise from hoppers into rail cars. It will be replacing an obsolete piece of equipment which the operations manager describes as hard to operate and potentially dangerous. In terms of the buying centre, the operations manager who will be responsible for overseeing the employee who operates and maintains the dumper has which decision role?

A) buyer, influencer, gatekeeper and initiator
B) decider, user and buyer
C) initiator, influencer and decider
D) gatekeeper and decider
E) influencer, user and buyer

Question 25

When an organisation engages a repair and maintenance company to provide services for a fixed period of time and at an agreed price, this is known as:

A) blanket contracting.
B) periodic orders.
C) strategic alliance.
D) vendor managed partnership.
E) carpet contracting.

Question 26

The type of purchasing decision that carries the greatest cost and risk is known as:

A) systems rebuy.
B) new task.
C) modified rebuy.
D) straight rebuy.
E) functional order.

Question 27

Wholesalers and retailers are primary customers of those firms to serve which market?

A) Reseller
B) Industrial
C) Consumer
D) Organisational
E) Institutional

Question 28

As Rick and the supplier's sales representative talked, they agreed that Rick would purchase ten hanging baskets, six two- metre sections of metal shelving, and two rolls of polyfilm for Rick's gardening supply store. In addition, the salesperson agreed to have the items delivered in two weeks and give Rick a 10 per cent discount. Rick and the salesperson are engaged in which phase of the procurement process?

A) Order- routine specification
B) Product specification
C) Supplier selection
D) General need description
E) Proposal solicitation

Question 29

Which of the following statements about the business market purchasing decision process is true?

A) Buyers and sellers build close long- term relationships.
B) The business buying process is more formalised.
C) Business buyers usually face more complex buying decisions.
D) A major issue is whether to purchase outright or to lease.
E) all of the above

Question 30

A new supplier is least likely to make which of the following types of purchase?

A) straight rebuy
B) systems rebuy
C) modified rebuy
D) customised order
E) new task

Question 31

When a company puts its purchasing requests online and invites suppliers to bid for the business, this is known as:

A) periodic orders.
B) reverse auction.
C) carpet contracting.
D) blanket contracting.
E) vendor managed partnership.

Question 32

Harriet Jones is the buyer for Otway Meats. She is ordering casings for sausages and other meat products. She orders the same number and quality of casings as in previous orders, but notices that her supplier's prices have increased slightly. What type of purchase is Harriet making?

A) straight rebuy
B) new task
C) modified rebuy
D) customised order
E) systems rebuy

Question 33

Select the word that BEST completes the following sentence. Government organisations typically require suppliers to submit:

A) price schedules.
B) specifications.
C) contracts.
D) tenders.
E) all of the above

Question 34

When total demand is not much affected by price changes, this is known as:

A) J- curve demand.
B) non- fluctuating demand.
C) derived demand.
D) price inelasticity.
E) price elasticity.

Question 35

Interest rates, trends in demand and technological change are all examples of influences on business buyers.

A) organisational
B) entrepreneurial
C) environmental
D) political
E) social

Question 36

After getting advice from the company mechanic on how to obtain improved petrol mileage for the fleet of cabs, the owner of Sunshine Cabs decided to have the mechanic install Cherry Bomb glass- pack mufflers in all of his cabs to increase the cars' fuel efficiency. In terms of the buying centre, the mechanic filled the role of:

A) decider.
B) gatekeeper.
C) buyer.
D) influencer.
E) user.

Question 37

A school has been awarded a grant to purchase computers for its visually handicapped students. The computers will convert students' spoken language to words on the computer monitor that can be saved to a disk. With a tap on the mouse, the computer will read to the student whatever is on its screen. Since this is new, cutting- edge technology and the school has never had such a system before, the purchase of these computers will be a:

A) straight rebuy.
B) modified rebuy.
C) systems rebuy.
D) customised order.
E) new task.

Question 38

The purchasing officer for a major hospital has been informed that the price of hypodermic needles has increased by almost 20 per cent. He orders a new supply anyway because he knows he can pass the increase on to his patients. This is an example of business products having which type of demand?

A) inelastic demand
B) elastic demand
C) fluctuating demand
D) routine demand
E) derived demand

Question 39

The market consisting of all the individuals and organisations that acquire goods for the purpose of reselling or renting them to others, usually at a profit, is known as the:

A) not- for- profit market.
B) business or industrial market.
C) institutional market.
D) reseller market.
E) government market.

Question 40

Metallocene is an innovative plastic used in making films, liners and pipes. It is more durable than any other form of sheet plastic on the market. The first year after the product was introduced its sales totalled $880 million. Analysts have predicted an annual growth of 30 per cent as businesses like food producers discover how well Metallocene wraps and protects their products. Since the demand for Metallocene is dependent on the demand for the products wrapped in it, the demand for Metallocene is:

A) elastic demand.
B) derived demand.
C) J- curve demand.
D) fluctuating demand.
E) inelastic demand.

Question 41

Which of the following markets is MOST likely to have its purchasing decisions subject to high levels of public scrutiny and use very transparent purchasing routines?

A) Reseller
B) Institutional
C) Government
D) Consumer
E) Industrial

Question 42

Which of the following statements about the structure of the business market is true?

A) Business buyer demand is derived from final consumer demand.
B) Demand in business markets fluctuates more and more quickly.
C) Business markets contain fewer but larger buyers/customers.
D) Demand in many business markets is more inelastic.
E) all of the above

Question 43

When a company turns over ordering and inventory responsibilities to its suppliers, this is known as:

A) carpet contracting.
B) reverse contracting.
C) strategic alliance.
D) periodic orders.
E) blanket contracting.

Question 44

A company is MOST likely to use an automated re- ordering system with which of the following types of business purchase?

A) modified rebuy
B) customised order
C) straight rebuy
D) systems rebuy
E) new task

Question 45

Joe is currently searching through trade directories, doing a computer search of potential suppliers and phoning around other companies asking for recommendations. Which stage of the business buying process is Joe MOST likely to be engaged?

A) Problem recognition
B) General need description
C) Information/supplier search
D) Product specification
E) Proposal solicitation

Question 46

All business- to- business customers are large.

Question 47

In selling to the government, the contract is always awarded to the lowest bidder.

Question 48

As the buyer for his firm, John Adams makes the final decision in all purchase situations.

Question 49

Farmer Jack grows organic cotton which he sells primarily to a local company specialising in the manufacture of bedding and bath linen. The demand for Farmer Jack's yarn is highly dependent on consumer demand for new household linen. This is an example of demand.

A) elastic
B) fluctuating
C) inelastic
D) J- curve
E) derived

Question 50

Which type of organisational purchasing approaches gives the buyer greater purchasing power?

A) Professional purchasers
B) Centralised purchasing
C) Individual purchasers
D) Regional sales purchasing
E) Online procurement systems

Question 51

The Knoll Textile Company has drawn up a list of the desired attributes for suppliers of zippers and fasteners to be used in a line of children's fashion. To date the list includes the following criteria: delivery reliability, price and supplier reputation. Knoll is MOST likely to be in which stage of the business buying process?

A) Supplier selection
B) Information/ supplier search
C) Product specification
D) General need description
E) Order- routine specification

Question 52

Select the words that BEST complete the following sentence. Many institutional markets are characterised by budgets and _ patrons.

A) high; demanding
B) low; captive
C) high; captive
D) moderate; captive
E) low; demanding

Question 53

When a company lists items such as technical specifications, quantity needed, expected time of delivery, return policies and warranties, it is MOST likely engaged in which stage of the business procurement process?

A) Proposal solicitation
B) Supplier selection
C) Order- routine specification
D) General need description
E) Product specification

Question 54

At which stage of the procurement process would a buyer be MOST likely to draw up a list of the desired supplier attributes and their relative importance?

A) Supplier selection
B) Order- routine specification
C) Information/supplier search
D) Product specification
E) General need description

Question 55

When Lani was calling on a client firm, she found that the design engineer she wanted to see was too busy to meet with her. The engineer's secretary offered to look through Lani's product brochures and pass them on to the engineer if Lani's product was potentially useful. Which role in the buying centre does the secretary have?

A) buyer
B) gatekeeper
C) user
D) decider
E) influencer

Question 56

Government agencies tend to favour domestic suppliers over foreign suppliers.

Question 57

The most routine type of purchase that a company can make is known as:

A) straight rebuy.
B) customised order.
C) new task.
D) systems rebuy.
E) modified rebuy.

Question 58

The purchasing decision- making unit of business is known as the:

A) buying centre.
B) centralised purchasing unit.
C) purchasing department.
D) acquisitions centre.
E) purchasing officer.

Question 59

Ned and John, owners of a chicken processing plant, recently attended a trade show where they saw a breast deboning machine that operates at a capacity of 900 birds per hour and requires only one employee. Until the show, the brothers had no idea such a product existed. As far as they have learned, only one company is manufacturing such a machine. They have calculated that such a machine could save them up to $200 a day in labour costs. They have contacted the company to learn more about the $67,000 deboning machine. The Rogers brothers are engaged in which type of purchase?

A) systems rebuy
B) straight rebuy
C) new task
D) customised order
E) modified rebuy

Question 60

Before a company is permitted to supply government departments, it is required to undergo a variety of checks on the company's financial position, the quality of its products or services and the integrity of its key personnel. These checks are known as:

A) vetting.
B) pre- qualification.
C) supplier specification.
D) supplier selection.
E) none of the above

Question 61

A firm's buying centre is typically located in, and limited to, its purchasing department.

Question 62

ANZSIC is part of the institutional market.

Question 63

The growth of centralised purchasing has encouraged the use of a national account sales force.

Question 64

Value analysis is an approach to cost reduction in which components are carefully studied to determine if they can be redesigned or standardised or made by cheaper methods of production.

Question 65

When responding to a request for a written proposal, a business marketer should remember the document is primarily a technical document explaining the features of the product.

Question 66

The business buying process begins with a description of the general need and a product specification sheet.

Question 67

A secretary who prevents salespersons from contacting users or deciders is playing an influencer role.

Question 68

Centralised purchasing gives a company greater purchasing power.

Question 69

Government buyers differ from business buyers in that government buyers are monitored more closely by outside publics.

Question 70

The decider possesses only informal power and is the key member of the buying centre.

Question 71

Interpersonal factors have almost no influence in business purchasing decisions.

Question 72

In a straight rebuy, the buyer reorders something without any modifications.

Question 73

Inelastic demand is +characteristic of goods which form a small percentage of an items total cost.

Question 74

The Acme Corporation has notified its suppliers that it will continue to purchase the same products, in the same quantities, if they will accept a lower per unit price. Acme is seeking a modified rebuy.

Question 75

Derived demand occurs when marketers contrive or collude to create demand for products and services.

Question 76

The Simms Corporation desires to create and maintain long- term relationships with its customers. The firm is likely to prefer blanket contracts for this purpose.

Question 77

Industrial markets are typically a heavy industry.

Question 78

The performance review stage of the organisational buying model is similar to the post purchase evaluation stage of the consumer buying model.

Question 79

Buying a packaged solution to a problem is called systems buying.

Question 80

Systems buying allows a purchaser to buy a whole solution to his or her problem while avoiding the necessity of making a series of separate decisions over time.