Deck 6: Understanding Organizations As Customers

Question 1

Campus Living Centres offer colleges and universities student life programs and services including:

A)student outreach and support services.
B)student training in cleaning residences.
C)university loyalty programs.
D)academic advising on careers and programs.

Answer 1

A

Question 2

Because Campus Living Centres compete in the B2B marketplace, it recognizes that demand for its products is often contingent on:

A)the end customer
B)its suppliers
C)marketing intermediaries
D)government policies

Answer 2

A

Question 3

Which of the following statements represents an organizational buying decision?

A)Mr. Langley hires a housecleaning service to clean his apartment.
B)A dentist buys a new Blu-ray player for her den.
C)Mr. Crowe buys a Toyota minivan to commute to work.
D)The owner of a fried chicken restaurant hires a snow removal service to keep the parking lot clear.

Answer 3

D

Question 4

The industries that are growing in Canada, currently make the greatest contribution to Canada's gross domestic product, are known as industries.

A)transportation and public utilities
B)construction
C)manufacturer
D)service

Question 5

College and universities that offer residences to their students have better ________ rates and student safety/security.

A)tuition
B)accommodation
C)retention
D)academic

Question 6

A manufacturer of consumer food products for the Chinese market in Canada buys several tons of camellia nuts annually. It converts those nuts into cooking oil that is popular among the Chinese population because it has a milder taste than olive oil and a higher burning point. The oil is sold to supermarkets. The pulp from which the oil is
Extracted is sold to beef cattle farmers who use it to fatten their cattle. These transactions occur in the market.

A)industrial
B)reseller
C)institutional
D)government

Question 7

Campus Living Centres offer college and universities all of the following except:

A)managing existing residences
B)building and financing new residences
C)academic guidance on student life and living programs
D)property management services

Question 8

Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale are examples of:

A)cooperatives.
B)organizational buyers.
C)ultimate consumers.
D)multinationals.

Question 9

Two manufacturers were discussing the upcoming trends in the business market. One kept referring to the market as the 'business market,' while the other interrupted him and said: "when you refer to the business market, you are referring to the _."

A)transactional market
B)industrial market
C)relational enterprise
D)ultimate market

Question 10

Jackson Steel produces sheet metal that is then sold to Ford, Toyota, and GM for use in producing their vehicles. Jackson Steel competes with other sheet metal companies for the car company's business. Jackson Steel is in which segment?

A)Relational enterprise
B)Institutional marketing
C)Reseller marketing
D)Business marketing

Question 11

All of the following are considered resellers, except:

A)Costco
B)Canadian Tire
C)Walmart
D)U)S. Steel

Question 12

Honeywell's Micro Switch Division sells its fibre-optic technology and products to manufacturers of data communication systems worldwide. Data communications system manufacturers are operating in market.

A)industrial
B)governmental
C)reseller
D)psychographic

Question 13

Campus Living Centres are considered a Canadian leader in which industry?

A)owners and operators of student spiritual centres
B)owners and operators of student housing
C)owners and operators of seniors housing
D)owners and operators of student recreation facilities

Question 14

Which market in Canada has approximately 50,000 businesses and ship an estimated value of $600 billion?

A)real estate businesses
B)wholesalers
C)manufacturers
D)retailers

Question 15

Colleges and universities across Canada contract Campus Living Centres to:

A)manage student literacy.
B)maintain the residences.
C)manage student loans.
D)operate library facilities.

Question 16

Which of the following is not considered a market for organizational buyers?

A)retailer
B)government agencies
C)industrial
D)reseller

Question 17

Organizational buyers include all the following EXCEPT:

A)retailers.
B)manufacturers.
C)ultimate consumers.
D)government.

Question 18

A steel mill converts iron ore into sheet metal that they then sell to the next buyer. The steel mill would be considered a(n)

A)reseller firm
B)producer
C)industrial firm
D)middleman

Question 19

An industrial firm is a firm that:

A)is distinguished by the amount of energy it uses and potential for pollution to the environment.
B)deals exclusively with federal, state, and local governments, and often mediates governmental agency disputes.
C)in some way reprocesses a good or service it buys before selling the product again to the next buyer.
D)employs more than 500 people, who are paid minimum wage with few or no benefits.

Question 20

Graham-Field Health Products makes hospital beds and wheelchairs from component parts and materials it buys. It sells its products to hospitals, nursing homes, and retailers of health care products. Graham-Field Health Products operates in a(n) ________ market.

A)consumer
B)cultural
C)industrial
D)psychographic

Question 21

Apex Therapeutic buys medical supplies and services for people with hemophilia and other related blood diseases from a multitude of sources. It then sells these products to anyone who needs them. When it sells directly to a person who is a hemophiliac, it would be classified as a(n):

A)reseller.
B)monopoly.
C)industrialist .
D)change agent.

Question 22

The system that provides common industry definitions for Canada, Mexico, and the United States to facilitate the measurement of economic activity in the three member countries of the North American Free Trade Agreement (NAFTA)is called:

A)Federated Trade Codification (FTC).
B)the North American Industry Classification System (NAICS).
C)Federated Domestic and International Classification (FDIC).
D)Strategic International Classification (SIC).

Question 23

Itex Corporation, marketer of Photostat products used in the graphic arts field, buys sensitized paper from Eastman Kodak Company, packages it with the Photostat brand name on it, and sells it directly to amateur photographers. In this context, Itex
Corporation should be classified as a(n):

A)reseller.
B)industrialist.
C)service provider.
D)monopoly.

Question 24

Concern about terrorists using biological warfare has caused the U.S. government to create stockpiles of specific drugs. The federal government has purchased Cipro, the only drug specifically approved by the FDA to treat inhaled anthrax from Bayer, the German drug and chemical company. The U.S. government has also purchased smallpox vaccine from Acambis, a British drug company. These transactions are examples of:

A)organizational clusters.
B)the circular flow of products.
C)market dynamics.
D)global organizational markets.

Question 25

Which of the following statements about the North American Industry Classification System (NAICS)is false?

A)the fourth digit designates industry groups
B)the fifth digit designates company name.
C)the third digit designates subsectors
D)the first two digits represent sectors

Question 26

As a market research analyst for Bain & Co., your Senior Partner asks you to determine the NIACS code for the manufacturing industry. This will be used to help facilitate the measurement of economy activity for the:

A)North Atlantic Treaty Organization (NATO).
B)European Economic Community (EEC).
C)North American Free Trade Agreement (NAFTA).
D)Fiscal Development International Coalition (FDIC).

Question 27

As an organizational buyer, if you worked directly with your suppliers to improve their efficiency and product quality to enhance your business, you would be focused on:

A)supplier development
B)supplier partnerships
C)partner development
D)upstream development

Question 28

When the Canadian Broadcasting Corporation buys new computers, monitors, and printers for its various newsrooms, it is operating as a(n):

A)government unit.
B)industrial market.
C)business market.
D)facilitating agent.

Question 29

Pratt & Whitney sells aircraft engines to Europe's Airbus Industries, which sells passenger airplanes to Japan Airlines, which flies businesspeople around the world. This is an example of:

A)market dynamics.
B)organizational clusters.
C)global organizational markets.
D)the circular flow of products.

Question 30

A disadvantage of the North American Industry Classification System (NAICS)is that:

A)it assigns one code to each organization based on its major economic activity, so large firms that engage in many different activities are given only one code.
B)it is too difficult and confusing to read.
C)it only covers organizations with sales in excess of (US)$1 million.
D)it only lists the top ten firms in any particular industry.

Question 31

Europe's Airbus Industrie, the world's largest aircraft manufacturer, sells its passenger airplanes to Air Canada, which flies Canadian businesspeople to Asia. This is an example of:

A)market dynamics.
B)global organizational markets.
C)the circular flow of products.
D)organizational clusters.

Question 32

Canadian Crown corporations, such as CBC, VIA Rail, and the Royal Canadian Mint are examples of:

A)Industrial markets
B)Government units
C)Cooperative markets
D)Reseller markets

Question 33

Which of the following statements about the North American Industry Classification System (NAICS)is false?

A)the fourth digit designates industry groups
B)in Canada, there are 25 sectors
C)the third digit designates subsectors
D)the first two digits represent sectors

Question 34

A reseller purchases products from a manufacturer and then before selling them to the end customer.

A)strips them down to their parts
B)processes them no further
C)puts their logo on them
D)builds them into a larger product

Question 35

The NAICS divides the economy into sectors using a coded system.

A)four-digit
B)six-digit
C)five-digit
D)seven-digit

Question 36

NAICS is an acronym for:

A)North American Industry Classification System.
B)North American Industry Competition System.
C)North American Industry Classification Standards
D)North American Industry Competition Standings.

Question 37

In terms of organizational buyers, Amazon.com, Lands' End, and J.C. Penney would all be classified as:

A)capitalists.
B)monopolies.
C)facilitating agents.
D)resellers.

Question 38

Federal, provincial, and local agencies that buy goods and services for the constituents they serve are known as:

A)Industrial markets
B)Cooperative markets
C)Government units
D)Reseller markets

Question 39

John Deere employees almost 100 supplier-development engineers that focus on working with suppliers to:

A)demonstrate how important that supplier is to John Deere
B)act as a bridge between the supplier and John Deere's customers
C)provide feedback on product development
D)improve efficiency

Question 40

Many of Canada's top exporters, including Bombardier and Maple Leaf Foods, focus on ________, not _.

A)governmental agencies; organizational consumers
B)ultimate consumers; organizational consumers
C)governmental agencies; ultimate consumers
D)organizational customers; ultimate consumers

Question 41

Which of the following is NOT a characteristic of products and services purchased within an organizational context?

A)Raw and semi-finished goods are predominantly purchased.
B)The focus is on delivery time and postsale service.
C)The sizes of orders are typically much smaller than in consumer buying.
D)Goods and services are purchased on the basis of specifications that are technical in nature.

Question 42

Which of the following statements accurately characterizes buying behaviour in organizational markets?

A)Organizational buying behaviour is similar to consumer buying behaviour since individuals are involved in both processes.
B)Purchase orders are usually small.
C)Demand for industrial products is elastic instead of inelastic or derived because companies, not ultimate consumers, determine the quantity of goods produced.
D)Fewer customers typically exist in organizational markets than in consumer markets.

Question 43

Consumer demand has dramatically increased for home-based solar panels. As a result, manufacturers are seeing increased demand for the raw materials and components to construct the solar panels. This type of demand is known as:

A)eco-friendly
B)derived
C)direct
D)indirect

Question 44

Each of the following statements accurately characterizes the organizational buying process EXCEPT:

A)The purchase of goods or services is usually handled by expert buyers.
B)Reciprocal arrangements are uncommon
C)Multiple buying influences exist because many people may be involved in the purchase decision process.
D)Negotiations between buyers and sellers regarding price is common.

Question 45

The amount of pulp and paper products that MacMillan Bloedel manufactures is influenced by consumer demand for newspapers, Pizza Pizza's "keep warm" pizza-to-go boxes, Federal Express packages, and disposable diapers. This is an example of:

A)the price-quality relationship.
B)price elasticity.
C)the acceleration principle.
D)derived demand.

Question 46

How might a marketing manager for a manufacturer of turboprop engines used in private jet planes use the North American Industry Classification System (NAICS)to help with his marketing planning to find prospective customers?

A)He could identify all NAICS numbers that do not reflect the classifications of his firm's customers.
B)He could poll his field sales organization to see if his company's sales representatives know what NAICS numbers mean.
C)He could go to a library to find the NAICS numbers for all government units, federal, state, and local.
D)He could record the NAICS numbers for each of his firm's best customers, and then obtain lists of companies with the same NAICS numbers.

Question 47

Because orders in organizational buying are typically much larger than in consumer buying, such as when the order is above a specific amount, such as $5,000, the buyers often must

A)pay taxes out of their own pockets
B)get competitive bids from at least three prospective suppliers
C)carry personal insurance to cover possible losses
D)lie to their superiors about how much things really cost

Question 48

BP drills and refines crude oil into petroleum for vehicles, which it sells through its retail gas stations. What kind of demand is there for BP's gasoline?

A)derived
B)unitized
C)consumer
D)applied

Question 49

Which of the following statements is true regarding organizational versus consumer buying decisions?

A)Reciprocal arrangements exist.
B)More organizational buying decisions are lower in involvement.
C)Organizational buyers are more influenced by lifestyle factors.
D)Perceived risk is lower in organizational buying.

Question 50

Spruceland Millworks in Canada makes wooden pallets for transporting and storing new appliances such as stoves, freezers, and refrigerators. What kind of demand is there for Spruceland pallets?

A)There is creative demand, which is tied to the sales of appliances, not the sale of the pallets.
B)There is derived demand, which is tied to the sales of appliances, but independent of the sales of pallets.
C)There is inelastic demand tied to the cost of the components of the pallets.
D)There is derived demand, which is tied to the sales of pallets, which in turn, is tied to the sales of appliances.

Question 51

The NAICS will allow marketing managers to gather and study all of the following information EXCEPT:

A)every industry in which a conglomerate engages in business.
B)market share.
C)demand for goods and services.
D)competition in domestic markets.

Question 52

Purchases of sodium fluoride by Pfizer for its Listerine mouthwash would be an example of demand.

A)derived
B)binary
C)unitized
D)applied

Question 53

Ultimately, most demand is derived from consumer demand, the exception being demand derived from:

A)original equipment manufacturers.
B)resellers.
C)wholesalers.
D)government purchases.

Question 54

The demand for industrial products and services that is driven by demand for consumer products and services is called:

A)derived demand.
B)Gross National Product.
C)the Consumer Price Index.
D)break-even demand.

Question 55

Concert Staging Company provides the stage, the roof system, and lighting and sound for outdoor concerts and theaters. It is typically hired by the organization sponsoring the event. When the economy slows down, consumers are more likely to save their money for a rainy day than buy a concert or theatre ticket. The number of concert and theatre events determines how many times the company gets to provide its services. Demand for the services provided by Concert Staging Company is demand.

A)holistic
B)unitized
C)derived
D)applied

Question 56

You are the research director of a major marketing research consulting firm. You need to select an NAICS (North American Industry Classification System)code that gives you the most detail about the competitors in a client's industry. Which of the following levels of classification would provide the greatest detail?

A)Code 6575
B)Code 91
C)Code 423531
D)Code 260

Question 57

Which of the following is NOT a characteristic of the organizational buying process?

A)Multiple parties participate in purchase decisions.
B)Negotiation between buyers and sellers is commonplace.
C)Online buying over the Internet is uncommon.
D)Online buying over the Internet is widespread.

Question 58

Which of the following possible aspects of consumer buying decisions is LEAST likely to enter into an organizational buying decision?

A)decision based on highest overall evaluation
B)comparison of product performance with expectations
C)alternatives evaluated on important criteria
D)problem recognition triggered by self-actualization motives

Question 59

When compared to consumer marketing, industrial marketing is simpler because:

A)firms have buying centres.
B)industrial orders are smaller.
C)the buying objectives of industrial buyers are easily identifiable.
D)it is easy to forecast derived demand.

Question 60

All of the following are characteristics of the organizational buying behaviour except:

A)Supplier characteristics
B)Marketing mix characteristics
C)Product or service characteristics
D)Market characteristics

Question 61

Which of the following is NOT one of the seven most common organizational buying criteria?

A)price
B)technical capability
C)past performance
D)effectiveness of sales representative

Question 62

An international company that wants indisputable proof that its supplier maintains a high level of quality management could ask the company to:

A)allow its engineers to study all of the supplier's proprietary information before establishing any formal relationship.
B)show how it is listed in the NAICS to prove its quality focus.
C)enter a tying agreement in which it only sells to one customer-the international one.
D)apply for an ISO 9000 certification.

Question 63

Many industrial buyers for manufacturing firms place great importance on delivery time because they often rely on a just-in-time inventory system. This system has increased the importance of which organizational buying criterion?

A)customer service and follow-up
B)low prices
C)high quality
D)on-time delivery

Question 64

Canada manufacturers export over _ _ percent of all goods manufactured.

A)40
B)60
C)50
D)30

Question 65

A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost and/or increasing the value of products and services delivered to the ultimate consumers is known as:

A)supply partnership.
B)a reciprocal arrangement.
C)exclusive dealing.
D)review marketing.

Question 66

Communications service providers Global One primarily is a worldwide long-distance carrier located in France. Focal Communications is located in Chicago and provides Internet services to businesses in the United States. Focal Communications has agreed to buy international capabilities from Global One, and Global One will buy its Internet connections from Focal. Their relationship is an example of:

A)review marketing.
B)transactional relationship.
C)exclusive dealing.
D)reciprocity.

Question 67

The primary reason organizations buy products and services is to help them achieve their objectives. Which of the following statements does NOT illustrate a typical organizational buying objective?

A)Sears launches the Anthony Mark Hankins Signature Collection of clothing for women, forging a link with minority- and women-owned suppliers and vendors.
B)Nissan Motor Company switches its ad agency because it expects the new agency to develop a more effective ad campaign to sell more cars and increase revenues.
C)Southland Corporation buys automated inventory systems to increase the number of products sold in its 7-Eleven outlets and to keep them fresh.
D)Caroline buys a new dress because she wants to reward herself for achieving a bonus at work.

Question 68

A company that runs its trucks on a mixture of petroleum and ethanol buys its ethanol from Archer Daniels Midland (ADM)Company because it is the only large supplier of ethanol that has an ethanol manufacturing facility in Illinois and is able to meet the trucking company's delivery schedules. The selection of ADM to provide the ethanol was based on a(n):

A)organizational buying criterion.
B)derived demand factor.
C)supplier value dimension.
D)evaluative criterion.

Question 69

Jackson Steel sells its sheet metal to Ford, who, in turn, sells its finished product back to Jackson Steel so they can be a Ford vehicle dealer to the end consumer. Which term best accurately describes the relationship between Jackson Steel and Ford?

A)Vertical integration
B)Relationship marketing
C)Cooperative marketing
D)Reciprocity

Question 70

Bell Canada has decided to sign a 'code sharing agreement' with Telus and Rogers which allows them to grow their market while avoiding costs by having to build more cell transmission towers. The focus of Bell Canada's actions is to:

A)increase profits through reducing costs or increasing revenues.
B)maintain profits through reducing costs and increasing revenues.
C)increase profits through reducing costs and decreasing revenues.
D)increase profits through increasing costs and increasing revenues.

Question 71

The Danish Carsten Maersk is an ocean-going container ship that is longer and only a bit narrower than three football fields laid out end zone to end zone. If you were to set the ship's load of containers end to end, they would stretch 27 miles. To handle this ship and her sister ships, Los Angeles is building Maersk a completely new facility at a cost that could top $800 million. The terminal is rising in the middle of the harbour on dredged material and ten million tons of rock that will form a 685-acre island connected to the rest of California by rail line and highway. When the initial phase
Opened in 2002, Maersk, which has an exclusive 25-year lease, had room to dock three of these huge ships. Every city on the West Coast wanted to be selected by Maersk as a terminal city, but only the Port Authority of Los Angeles was able to build the
Relationships needed to convince Maersk that it could handle the load. This is an example of:

A)inverse marketing.
B)supplier development.
C)inside-out marketing.
D)demarketing.

Question 72

All of the following are commonly used organizational buying criteria EXCEPT:

A)price and other financing assistance.
B)the technical expertise of the salespeople.
C)past performance on previous purchases.
D)the number and distribution of retail outlets likely to carry the product.

Question 73

All of the following are commonly used organizational buying criteria except

A)warranties
B)technical capabilities
C)price
D)personal relationships

Question 74

Every $1 of manufacturing in Canada generates in total economic activity.

A)$5
B)$4
C)$3
D)$2

Question 75

ISO 9000 standards:

A)are used to determine if a company can be classified as a green marketer.
B)set the communication interfaces between computer networks for the sharing of data.
C)govern what constitutes legal economic espionage.
D)are used to certify that a company's quality management and assurance system meets predetermined high standards of excellence.

Question 76

The objective attributes of the supplier's goods and services and the capabilities of the supplier itself are collectively called:

A)supplier evaluative dimensions.
B)derived demand factors.
C)organizational buying criteria.
D)evaluative criteria.

Question 77

Mac's buys automated inventory systems in order to increase the number of products that can be sold through its convenience stores and to keep them fresh is an example of:

A)reselling
B)derived demand
C)an organizational buying objective
D)an organizational buying criterion

Question 78

Many organizational buyers today are making deliberate efforts to build relationships that shape suppliers' products, services, and capabilities to their needs and those of their customers. This is known as:

A)inverse marketing
B)inside-out marketing
C)demarketing
D)supplier development

Question 79

Firms selling consumer goods or services often try to reach thousands or millions of individuals or households. Firms selling to organizations are often:

A)hoping to obtain similar numbers of nonconsumer customers.
B)restricted by government regulations to only a few industrial categories.
C)restricted to far fewer buyers.
D)inclined to try to reach tens of millions.

Question 80

Scandinavian Airlines recently announced the purchase of 35 Boeing 737-600 airliners, with the option to buy another 35 for a total of $2.4 billion. SAS called Boeing "a professional and solid supplier." Deliveries began in late 1998 and will continue for some years to come. This arrangement between Boeing and SAS is an example of:

A)reciprocity.
B)review marketing.
C)supply partnership.
D)exclusive dealing.