Deck 7: Business Markets and Buying Behavior

Question 1

Areo Ceiling Fans buys electrical wire for use in producing its ceiling fans. Which of the following types of markets does Areo fall in?

A) Resale
B) Wholesale
C) Customer
D) Consumer
E) Business

Answer 1

E

Question 2

Explain how purchase decisions for business products may be influenced by persons in a buying center.

Answer 2

Purchase decisions are made by a single person. Often they are made through a buying center. The buying center is the group of people within the organization who make business purchase decisions. They include users, influencers, buyers, deciders, and gatekeepers. One person may perform several roles within the buying center and participants share goals and risks associated with their decisions. Users are the organizational members who will actually use the product. They frequently initiate the purchase process and/or generate purchase specifications. Influencers are often technical personnel, such as engineers, who help develop product specifications and evaluate alternatives. Buyers select suppliers and negotiate terms of purchase. They may also be involved in developing specifications. Finally, gatekeepers, such as secretaries and technical personnel, control the flow of information to and among the different roles in the buying center.

Question 3

List the environmental factors that affect the business buying decision process.

Answer 3

Environmental factors include competitive and economic factors, political forces, legal and regulatory forces, technological changes, and sociocultural issues. These factors can generate considerable uncertainty for an organization, including in buying decisions. Changes in one or more environmental forces, such as new government regulations or increased competition, can create opportunities and threats that affect purchasing decisions.

Question 4

What is derived demand?

Question 5

Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to manufacture other products or by using them in their operations are classified as markets.

A) consumer
B) institutional
C) producer
D) government
E) reseller

Question 6

Mike's Roadside Market buys produce from farmers, marks the merchandise at a price that includes some profit, and then sells the fruit and vegetables to the people in and around Centerville. Mike's would be classified as part of a market.

A) consumer
B) producer
C) government
D) reseller
E) wholesaler

Question 7

Describe the various stages of the business buying decision process.

Question 8

How do individual factors affect the business buying decision process?

Question 9

buy products from manufacturers and then resell the products to other firms in the distribution system.

A) Retailers
B) Producers
C) Distributors
D) Warehouses
E) Wholesalers

Question 10

What are the major advantages of the North American Industry Classification System (NAICS) compared to the Standard Industrial Classification (SIC) system?

Question 11

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

A) retailer, wholesaler, service, and nonprofit firm.
B) producer, manufacturer, reseller, and government.
C) producer, reseller, government, and institutional.
D) manufacturer, wholesaler, retailer, and services.
E) reseller, end users, government, and institutional.

Question 12

Compare and contrast the three major types of purchases made by business customers.

Question 13

Jason Puentes is an accountant who purchases software for maintaining clients' books for a fee. Jason is an example of a buyer in a market.

A) consumer
B) producer
C) reseller
D) government
E) institutional

Question 14

Individuals and business organizations that buy finished goods and trade them to make a profit without changing the physical characteristics of the product are classified as markets.

A) consumer
B) institutional
C) producer
D) government
E) reseller

Question 15

Discuss the differences between business and consumer transactions.

Question 16

What are the four major types of business markets? Define each type.

Question 17

The three purposes for which individuals, organizations, or groups can use products in order for it to be considered a business market are:

A) use in daily operations, end consumption, and resale.
B) direct use in producing other products, company travel, and end consumption.
C) resale, use in daily operations, and direct use in producing other products.
D) governmental and institutional purposes, and for analyzing target markets.
E) making other products, selling directly to consumers, making component parts.

Question 18

In what ways can an industrial classification system be used by business marketers to analyze target markets?

Question 19

List the various organizational factors that affect the business buying decision process.

Question 20

Discuss how interpersonal factors influence the business buying decision process.

Question 21

Pi Delta Mu is a sorority that purchases food in bulk for its members living in the house. Hence, Pi Delta Mu is a part of a(n) market.

A) producer
B) consumer
C) reseller
D) institutional
E) government

Question 22

Which of the following is a primary difference between business and consumer buyers?

A) Consumer buyers require more product information than business buyers.
B) Business purchases are made by one individual, whereas families make consumer purchases together.
C) Repeat sales are more common with consumer buyers than with business buyers.
D) Consumers primarily buy inexpensive items; businesses only buy expensive items.
E) Business buyers generally make larger orders than consumer buyers.

Question 23

Which of the following statements about business buying is false?

A) Business marketers prefer not to sell to customers who place small orders.
B) Business marketers must often sell their products in large quantities to make profits.
C) Most business purchasing decisions are made by committee.
D) Business purchases are usually made on the basis of contracts.
E) Reciprocity influences purchasing agents to deal with all suppliers of a product.

Question 24

A disadvantage of reciprocity is that it can lead to:

A) a price war.
B) higher promotional costs.
C) more competitive firms entering the industry.
D) less-than-optimal purchases.
E) longer periods of negotiation.

Question 25

Retailers like Costco and Walmart are considered to be members of the market.

A) reseller
B) customer
C) producer
D) institutional
E) services

Question 26

The two ways governments make purchases are:

A) cash or credit.
B) contracting previous suppliers and bids.
C) bids and negotiated contracts.
D) lottery system and contract negotiations.
E) request for new purchases and recurring orders.

Question 27

Which of the following is true with respect to buyers in business markets?

A) Business buyers give little value to services.
B) Business customers tend to be less informed about the products they purchase than consumer buyers.
C) Business customers demand detailed information about a product's quality, features, or technical specifications.
D) Business customers are no different than buyers in consumer markets.
E) Business customers tend to buy products from their friends and contacts with business suppliers.

Question 28

Which of the following statements about reseller markets is false?

A) Resellers are concerned with the level of demand for the product.
B) Resellers are least concerned with the amount of space a product takes up as long as the product has a minimal customer base.
C) Resellers want producers to be able to supply adequate quantities of a product.
D) Resellers are concerned with the availability of technical assistance and training programs from the producer.
E) Resellers are concerned with the markup percentage they can get on the product.

Question 29

Tech Silicon buys silicon which is used in its chip-making process. Tech Silicon produces microchips for use within a wide variety of products for other firms. Tech Silicon is a buyer in a(n) market.

A) producer
B) government
C) reseller
D) construction
E) institutional

Question 30

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.

A) corporate
B) government
C) institutional
D) producer
E) nonprofit

Question 31

Many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships which are known as:

A) partnerships.
B) co-ops.
C) monopolies.
D) reciprocities.
E) resellers.

Question 32

Which of the following types of business market tends to have the most complex buying procedures?

A) Reseller
B) Institutional
C) Retailer
D) Government
E) Producer

Question 33

The state of Montana is preparing to buy a large quantity of frozen orange juice for providing it in a large school district. Citrus Fill Inc. is in the citrus juice business but has never sold its products to the government market. To have a chance at getting this contract, Citrus Fill's first step must be to:

A) make a presentation appointment with the state.
B) quote prices to the purchasing department.
C) advertise in the capital city.
D) negotiate with the state.
E) secure a slot on the list of qualified bidders.

Question 34

Institutional markets are:

A) intermediaries who resell goods to make a profit.
B) federal and state government units.
C) state or local government units.
D) consumers who buy products for their own use.
E) organizations that seek nonbusiness goals.

Question 35

Jason owns a small landscaping business called Green Scopes. When buying a new pickup truck for his landscaping business, Jason negotiated with Michael Keith, a dealer, with the agreement that Green Scopes would be the service company Michael Keith uses for all of its landscaping needs. This is an example of:

A) a new task purchase.
B) a straight rebuy.
C) a modified rebuy.
D) reciprocity.
E) a straight purchase.

Question 36

Bob Denton of Denton Pest Control buys equipment from Allied Tools because Allied Tools employs him for pest control services in its warehouses periodically. This practice is an example of:

A) cost-benefit trading.
B) cooperative selling.
C) reciprocity.
D) supplier agreement.
E) modified rebuy purchase.

Question 37

The government decides to purchase a new fleet of fighter jets for the U.S. Air Force. Which of the following types of buying procedure is the government most likely to use?

A) The government will request bids from all companies on its qualified bidder list.
B) It will contact whatever company made the last jets and have them develop the new ones.
C) Ads will be placed in the top five circulated U.S. newspapers for a company to produce the jets.
D) The government will select a few firms and enter into negotiations with them until the contract is awarded.
E) The contract will go to the first company that submits a reasonable bid for the desired jets.

Question 38

Raython Hardware and Thames Industrial Supplier have worked closely for many years and have a mutually beneficial relationship in which Raython provides all of Thames's hardware needs in a timely manner. Raython and Thames's relationship could be best characterized as a(n):

A) buying center.
B) partnership.
C) intra-organizational group.
D) reselling.
E) tying arrangement.

Question 39

Fast 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 Fast Tools Inc. The company would be part of a market.

A) reseller
B) producer
C) consumer
D) government
E) supply

Question 40

Which of the following would be considered an institutional buyer?

A) Aramark
B) City of Greenville
C) Apple Computers
D) The University of Illinois
E) The Environmental Protection Agency

Question 41

When a business is making its initial purchase of an item to be used to perform a fresh job, it is known as a purchase.

A) straight rebuy
B) reciprocal
C) delayed
D) new-task
E) modified rebuy

Question 42

Anderson Distribution Company has purchased 15 forklifts over the past two years. As it plans to place its next order for five more machines, the management adds additional features in order to handle changes in the product lines it carries. For Anderson, these modified forklifts represent a purchase.

A) new-task
B) reciprocal task
C) straight rebuy
D) repetitive order
E) modified rebuy

Question 43

Supermart, a megastore, recently placed an order with the Kahn Corporation for hotdogs. Their usual weekly order is for 10 cases. However, since the upcoming weekend includes a holiday, this time Supermart places an order for 100 cases of hotdogs. Which of the following types of purchase does this particular holiday week's purchase represent?

A) New-task buying
B) Repetitive buying
C) Institutional buying
D) Straight rebuy
E) Modified rebuy

Question 44

Perry Supply & Co. experiences an increase in its sales, and accordingly, its sales force has continued to expand. Now, the firm plans to add a fleet of company vans as part of its sales expansion. For Perry Supply & Co., these vehicles would represent a purchase.

A) modified rebuy
B) straight rebuy
C) new-task
D) reevaluated
E) repetitive

Question 45

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

A) delinquent, repetitive, or delivered.
B) repetitive, new-task, or modified rebuy.
C) new-task, straight rebuy, or modified rebuy.
D) delinquent, new-task, or reciprocal.
E) rebuy, reciprocal, or delayed.

Question 46

All of the following are important concerns of business customers except:

A) achieving a specific level of quality in the products offered to target markets.
B) striking a balance between quality and price when making purchasing decisions.
C) obtaining products that exceed specifications to ensure the best possible product performance.
D) obtaining products for which the quality level is consistent.
E) supporting customers with services they expect.

Question 47

Under one of the methods of business buying, products are standardized and graded according to characteristics such as size, shape, weight, and color, and a business buyer purchases these products simply by specifying their attributes such as quantity and grade. This describes the method of business buying known as .

A) reciprocation
B) inspection
C) description
D) sampling
E) negotiation

Question 48

Demand for business products is also known as demand.

A) derived
B) corporate
C) business buying
D) manufacturing
E) industrial

Question 49

The Eagle Pawn Company is a regional business that owns seven pawn stores in the Houston area. The company had acquired a new software system designed to track their inventory better. Now that they have had the system for a couple of months, they have decided to upgrade to a newer version. The original purchase is an example of a purchase, while the current purchase will be a modified rebuy purchase.

A) new-task
B) reevaluated
C) contract
D) straight rebuy
E) negotiated

Question 50

St. Jude's Hospital decides to redo its kitchen with new flooring, cabinets, counters, and appliances. The hospital compiles a description of the project and then asks sellers to submit bids. After determining the most attractive bids, the hospital will then work with two or three companies to determine who will get the contract. This is an example of using for a purchase decision.

A) sampling
B) negotiation
C) inspection
D) elimination
E) description

Question 51

Which of the following is a method of business buying that is necessary when products are highly homogeneous and examination of each item is not feasible?

A) Negotiation
B) Sampling
C) Description
D) Inspection
E) Reciprocation

Question 52

The United States Navy purchases uniforms from a single supplier. For the last five years, the trousers purchased from this supplier have not changed and have been bought in seven different sizes every six months under approximately the same terms of sale. This is an example of .

A) new-product purchase
B) demand purchase
C) straight rebuy purchase
D) modified rebuy purchase
E) standard order purchase

Question 53

A representative from Coca-Cola stops by at a local megastore once a month to inquire the amount of soft drink that the store will need. The restaurant's orders are an example of purchase.

A) new-task
B) modified rebuy
C) straight rebuy
D) bid
E) negotiated

Question 54

Collin Roberts, Purchasing Manager of Roberts Constructions, is planning to buy a used excavator. Collin should make his purchasing decision based on the .

A) equipment's description
B) equipment's inspection
C) samples provided by the seller
D) specifications mentioned by the seller
E) reputation of the seller

Question 55

Most businesses try to control the level of quality in the parts they buy from suppliers. Most firms develop standards for in order to achieve their quality goals.

A) how many different suppliers they use
B) the number of inelastic demands made
C) controlling when shipments will arrive
D) the percentage of defects allowed
E) how long the parts should last

Question 56

The management of ReadyFresh Dry Cleaners is concerned about maintaining a high level of service for its customers. How should the firm monitor the level of service these customers receive?

A) It should develop a code of service.
B) It should set service quality standards based only on accounting systems.
C) It should formally survey customers.
D) It should specify service uniformity.
E) It should stress the importance of truthfulness to its employees.

Question 57

Evaluating a portion of the product on the assumption that its characteristics represent the entire lot is known as:

A) heterogeneous selection.
B) description.
C) trust.
D) negotiated inspection.
E) sampling.

Question 58

Luxus Auto, an automobile manufacturer, purchases upholstery for the interiors of its vehicles from various suppliers. This upholstery must have technical standards expressed by Luxus Auto. This set of characteristics is known as _.

A) descriptions
B) product features
C) criterion
D) purchase requests
E) specifications

Question 59

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:

A) joint.
B) economically instable.
C) derived.
D) inelastic.
E) more fluctuating.

Question 60

A mill in Utah buys grains from cultivators in the western region. Which of the following is a buying method that should be used by the purchasing agent of the mill?

A) Description
B) Inspection
C) Sampling
D) Negotiation
E) Selection

Question 61

Demand for a business product is when two or more items are used in combination to produce a product.

A) inelastic
B) joint
C) fluctuating
D) derived
E) partnered

Question 62

In a buying center, purchasing agents or purchasing managers are also known as the:

A) gatekeepers.
B) purchase deciders.
C) buyers.
D) users.
E) influencers.

Question 63

Inelastic demand in business markets refers to a situation where:

A) supply for a given product fluctuates very little over time.
B) price increases or decreases will not significantly change demand for a given product.
C) demand for a given product fluctuates significantly over time.
D) demand for one product depends heavily on the demand for another product.
E) supply for a given product cannot keep pace with the demand for it.

Question 64

A university decides to purchase new computers for the computer labs on campus. Usually, the purchasing agent negotiates with manufacturers and makes the decision on what to buy. However, for this purchase he has asked the university's IT technicians to give input on the purchase decision. In this instance, the IT technicians would be acting as influencers, while the purchasing agent is a(n) .

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

Question 65

Which of the following is a major threat to the sales success of jointly demanded products?

A) Price changes
B) Shortages
C) Economic instability
D) Inventory buildup
E) Proliferation of brands

Question 66

When certain consumer products are in high demand, producers might buy extra materials and equipment and when demand subsides, producers will cut back on their material purchases. This describes a(n) demand.

A) joint
B) inelastic
C) consumer
D) fluctuating
E) derived

Question 67

The group of people within a business who are involved in making business purchasing decisions is referred to as the:

A) new-task team.
B) negotiators.
C) purchasing agents.
D) assessment group.
E) buying center.

Question 68

Christoff's Lawn & Lot is a small business that provides landscaping and grass cutting services during spring and summer. Christoff's usually sign contracts with customers on an annual basis, with the terms set out at the beginning of the season. This year, the area experienced a significant amount of rain, causing the grass to grow more quickly. Christoff's was required to cut the grass every time it grew 2 inches, and no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract. The price of gas has now increased by 35% causing Christoff's to pay more for their supplies. The demand for gas despite its price represents demand for Christoff's Lawn & Lot.

A) elastic
B) inelastic
C) derived
D) joint
E) separate

Question 69

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

A) recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance.
B) recognizing the problem, searching for products and evaluating possible suppliers, selecting suppliers and products, establishing product specifications, and evaluating performance.
C) recognizing the problem, selecting suppliers and products, evaluating performance, establishing product specifications, and searching for substitute products.
D) establishing product specifications, recognizing the problem, searching for products, evaluating possible products and suppliers, selecting suppliers and products, and evaluating performance.
E) establishing product specifications, searching for products, selecting suppliers and products, evaluating performance, recognizing the problem, and evaluating possible products and suppliers.

Question 70

While planning a purchase of business desktop computers, Albertson Inc. asked potential suppliers to provide information only on units with 8GB memory. As the firm's management evaluates this purchase, it finds that 8GB is inadequate for the software programs used at the firm. In this instance, which of the following aspects of the buying decision process does the firm needs to modify?

A) Searching
B) Specification development
C) Alternative evaluation
D) Selection
E) Performance evaluation

Question 71

After deciding to order replacement parts for their aging machinery, a buyer from a construction company examines catalogs and trade publications looking for these parts. The buyer is in the stage of the business buying decision process.

A) problem recognition
B) product specification
C) product-supplier search and evaluation
D) product-supplier selection
E) product-supplier post-evaluation

Question 72

analysis is a systematic evaluation of current and potential suppliers that focuses on many dimensions including price, product quality, delivery service, product dependability, and overall reliability.

A) Value
B) Vendor
C) Buying center
D) Strategic
E) Cost

Question 73

Everglide is a manufacturer and marketer of tires for new passenger cars. In recent years, the company's business has declined because of the overall decrease in consumer demand for new cars. In this case, the demand for Everglide's tire products is said to be , since it depends on the demand for new cars.

A) inelastic
B) fluctuating
C) derived
D) elastic
E) non-derived

Question 74

As the new sales representative for Livsafe Healthcare, Sophie is responsible for calling hospital management and selling medical equipment, such as blood pressure monitors, scales, and heart rate monitors. Sophie knows that she needs to communicate effectively with the administrative assistants in the management offices in order to make sure that Livsafe Healthcare's information brochures and new product diagrams reach the management staff. In this situation, the administrative assistants are the in the buying decision process.

A) gatekeepers
B) users
C) influencers
D) buyers
E) deviators

Question 75

Inelastic demand simply means that:

A) buyers will not make a modified rebuy purchase for an item.
B) demand depends on how many items are purchased.
C) a price increase or decrease will not significantly change the demand for an item.
D) when the price of an item goes up, demand for that item goes down.
E) when the supply of an item is reduced, the price of the item will increase.

Question 76

In placing an order with the tire manufacturing company Cratus, South Side Industrial Supply finds that the price for the truck tires it is ordering has increased by $37.50, since its last order. South Side places the order with the confident that it can pass on the price increase to its future customers. This is an example of business products having a(n) demand.

A) derived
B) inelastic
C) joint
D) fluctuating
E) higher

Question 77

Apollo Auto Supply sells car and truck parts, as well as tire replacement and balancing services. As Apollo Auto Supply places its order for truck tires with the tire manufacturing company Cratus, it must also place an order for valve stems and balancing weights for the tires. Such business products are characterized as having a(n) demand.

A) derived
B) inelastic
C) joint
D) fluctuating
E) higher

Question 78

Barry Gluckman of WP International, a major marketer of word-processing software, calls the secretary of Renee Dorchette, director of purchasing for MMK Inc to fix an appointment. The secretary sets up the appointment to discuss the upcoming purchase of software from WP International. The secretary plays the role of a in this purchase decision.

A) gatekeeper
B) buyer
C) decider
D) litigator
E) negotiator

Question 79

Christy Bridgman is planning to buy a new fax machine for her real estate office. She is considering to buy a machine that does not have as many functions but is available at a considerably lower price than her current machine. She is engaging in analysis.

A) vendor
B) demand
C) straight rebuy
D) value
E) profit

Question 80

During the search for products and evaluating possible suppliers stage of the business buying decision process, marketers sometimes use analysis to examine the quality, design, materials, and possibly item reduction in order to acquire the product in the most cost-effective way.

A) cost
B) value
C) profit
D) demand
E) SWOT