Deck 6: Analyzing Business Markets

Question 1

The total demand for many business goods and services is not much affected by price changes.Thus,this demand is ________.

A) derived
B) fluctuating
C) accelerated
D) multiple
E) inelastic

Answer 1

E

Question 2

Sometimes a rise of only 10% in consumer demand can cause as much as a 200% rise in business demand for products for the next period.This is an example of ________.

A) inelastic demand
B) direct purchasing
C) fluctuating demand
D) derived demand
E) a straight rebuy

Answer 2

C

Question 3

The demand for business goods is ultimately derived from the demand for ________.

A) raw materials
B) consumer goods
C) services
D) business solutions
E) e-commerce

Answer 3

B

Question 4

Ultimately,the amount of steel sold to General Motors depends on the consumers' demand for GM cars and trucks.From the standpoint of the steel manufacturer,which of the following demand forms is most pertinent?

A) derived demand
B) inelastic demand
C) geographic demand
D) relational demand
E) static demand

Question 5

Many business buyers prefer to buy a total solution to a problem from one seller.This process is also known as ________.

A) channel consolidation
B) systems buying
C) vertical buying
D) horizontal buying
E) supply buying

Question 6

________ refer(s)to the decision-making process by which formal organizations establish the need for purchased products and services and identify,evaluate,and choose among alternative brands and suppliers.

A) Marketing channels
B) Organizational buying
C) Corporate retailing
D) Brand auditing
E) Inventory control

Question 7

If you decided to go into the systems contracting business,which of the following categories would constitute your main area of expertise,the service you provide for customers?

A) computer applications
B) database management
C) manufacturing
D) promotion management
E) MRO (maintenance, repair, operating) supplies

Question 8

In the purchasing decision process,the ________ are those who request that something be purchased.They may be users or others in the organization.

A) users
B) initiators
C) influencers
D) deciders
E) approvers

Question 9

The ________ consists of all the organizations that acquire goods and services used in the production of other products or services that are sold,rented,or supplied to others.

A) business market
B) consumer market
C) e-commerce market
D) global market
E) domestic market

Question 10

Kenilworth Inc.is shifting from its rented four-room office to a standalone office building owned by the company itself.This can be classified as a ________.

A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task

Question 11

Which of the following is true for business marketers?

A) They deal with more and larger buyers than consumer marketers.
B) They deal with more and smaller buyers than consumer marketers.
C) They deal with fewer and larger buyers than consumer marketers.
D) They deal with fewer and smaller buyers than consumer marketers.
E) They deal with the same kind of buyers as consumer marketers.

Question 12

The business buyer has to make the fewest decisions when involved in a ________.

A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task

Question 13

If Ampex Support Systems is the single supplier for a local manufacturing company's MRO (maintenance,repair,operating)supplies and needs,Ampex Support Systems is considered as providing ________ for the manufacturer.

A) guided selling
B) purchasing support
C) turnkey logistics
D) decision support
E) systems contracting

Question 14

Which of the following is a challenge in which business marketers differ from the consumer marketers?

A) understanding deep customer needs in new ways
B) identifying new opportunities for organic business growth
C) geographically concentrated buyers
D) calculating better marketing performance and accountability metrics
E) competing and growing in global markets, particularly China

Question 15

________ is a key industrial marketing strategy in bidding to build large-scale industrial products such as dams,pipelines,etc.

A) Systems contracting
B) Systems buying
C) Systems selling
D) Solutions buying
E) Turnkey logistics

Question 16

Xerox offers a ________ approach to prospective clients when it offers a complete turnkey solution,including the operation and management of the client's information and communication need.

A) guided selling
B) fair trading
C) systems buying
D) cross-selling
E) local purchasing

Question 17

Orica Inc.competes in the market for commercial explosives.The company recently changed its business model from just selling explosives to managing an entire blast in a quarry.This customer-solution-based approach to the sale of explosives is an example of ________.

A) systems selling
B) straight rebuying
C) customer referencing
D) derived demand
E) channel consolidation

Question 18

In the purchasing decision process,the ________ are those who have the power to prevent sellers or information from reaching members of the buying center.

A) approvers
B) buyers
C) initiators
D) gatekeepers
E) deciders

Question 19

In a ________ purchasing situation,the buyer wants to make some change to existing product specifications,prices,delivery requirements,or other terms.

A) new rebuy
B) regular buy
C) straight rebuy
D) modified rebuy
E) new task

Question 20

Shoe manufacturers are not going to buy much more leather if the price of leather falls,nor will they buy much less leather if the price rises,unless they can find satisfactory substitutes.This is an example of ________.

A) inelastic demand
B) direct purchasing
C) the acceleration effect
D) a modified rebuy
E) a straight rebuy

Question 21

In reordering office supplies,the only stages that the buyer passes through are the product specification stage and the ________ stage.

A) problem recognition
B) general need description
C) order-routine specification
D) supplier search
E) performance review

Question 22

If you were an upper-level marketing executive of a large seller of trucks,which of the following strategies would be most appropriate in reaching buying center targets?

A) Concentrate on key buying influencers.
B) Use multilevel in-depth selling.
C) Use trade-based promotions.
D) Concentrate sales efforts on the support staff.
E) Move all operations to the Internet.

Question 23

The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________.

A) maintenance, repair, and operating (MRO)
B) product value analysis (PVA)
C) vendor managed inventories (VMI)
D) supplier performance management (SPM)
E) supplier added value effort (SAVE)

Question 24

Business marketers can stimulate problem recognition by ________.

A) ensuring a presence in trade directories
B) direct mail, telemarketing, and calling on prospects
C) encouraging the Better Business Bureau to release statistics
D) using consumer advertising
E) conducting surveys of existing customers

Question 25

In which of the following is a person performing the role of a gatekeeper?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 26

A new-task buyclass decision begins with which of the following steps?

A) supplier search
B) general need description
C) product specification
D) problem recognition
E) proposal solicitation

Question 27

Small sellers should first concentrate their marketing efforts on reaching ________.

A) approvers
B) initiators
C) influencers
D) users
E) initiators

Question 28

With respect to e-procurement,Coca-Cola,Sara Lee,Kraft,PepsiCo,P&G,and several other companies joined forces to form a ________ called Transora to use their combined leverage to obtain lower prices for raw materials.

A) manufacturer's co-op
B) supplier's co-op
C) middleman group
D) buying alliance
E) buying cabal

Question 29

When purchasing disposable surgical gowns,Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns.If the findings favor disposable gowns,then the operating-room administrator compares various competitors' products and prices and makes a choice.Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand.In this situation,the surgeons perform the role of the ________.

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

Question 30

Which of the following is a step in the straight rebuy buyclass?

A) problem recognition
B) general need description
C) product specification
D) supplier search
E) proposal solicitation

Question 31

Which of the following is true about the buying centre?

A) In a buying centre, one person cannot play more than one role.
B) A typical buying centre has a maximum of five or six members.
C) A buying centre consists of only mid-level managers and below.
D) It is the decision-making unit of a buying organization.
E) Gatekeepers in a buying centre are people who authorize the proposed actions of deciders or buyers.

Question 32

If you performed the role of the ________ in a buying center,you would be the person that has the power to prevent sellers or information from reaching other members of the buying center.

A) initiator
B) influencer
C) decider
D) gatekeeper
E) approver

Question 33

When purchasing disposable surgical gowns,Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns.If the findings favor disposable gowns,then the operating-room administrator compares various competitors' products and prices and makes a choice.Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand.In this situation,the operating-room administrator performs the role of the ________.

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

Question 34

Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers.Plastics.com is an example of a(n)________.

A) buying alliance
B) barter market
C) systems seller
D) vertical market
E) auction site

Question 35

In the purchasing decision process,the major role of ________ is in selecting vendors and negotiating.

A) gatekeepers
B) buyers
C) initiators
D) approvers
E) deciders

Question 36

Patrick J.Robinson and his associates have identified eight stages in the business buying-decision process.This model is called the ________ framework.

A) buygrid
B) buying/selling
C) seller-centered
D) commercial
E) buy-analysis

Question 37

In which of the following is a person performing the role of an influencer?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 38

According to Patrick J.Robinson,the eight stages in the business buying-decision process are known as ________.

A) buyphases
B) buybacks
C) buyouts
D) buyables
E) buyoffs

Question 39

Business buyers may get new ideas at a trade show,see an ad,or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier.These situations spur the ________ stage.

A) problem recognition
B) general need description
C) order-routine specification
D) supplier search
E) performance review

Question 40

In which of the following is a person performing the role of an approver?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 41

According to research studies,the closest relationships between customers and suppliers arise when ________.

A) supply is important to the customer and there were procurement obstacles
B) procurement is simple
C) there are many undifferentiated vendors in the marketplace
D) the customer is highly price sensitive
E) the suppliers charge a premium for their products

Question 42

The ________ market consists of schools,hospitals,nursing homes,prisons,and other institutions that must provide goods and services to people in their care.

A) vertical
B) nonprofit
C) spot
D) secondary business
E) institutional

Question 43

On an online ________,prices change by the minute.

A) buying alliance
B) barter market
C) systems seller
D) spot market
E) catalog site

Question 44

In the ________ category of buyer-supplier relationship,although bonded by a close,cooperative relationship,the seller adapts to meet the customer's needs without expecting much adaptation or change on the part of the customer in exchange.

A) contractual transaction
B) cooperative system
C) collaborative
D) mutually adaptive
E) customer is king

Question 45

In most countries,________ are the major buyers of goods and services.They typically require suppliers to submit bids and often award the contract to the lowest bidder.

A) consumer packaged-goods companies
B) government organizations
C) health services vendors
D) educational institutions
E) households

Question 46

In the ________ category of buyer-supplier relationships,competition rather than cooperation is the dominant form of governance.

A) basic buying and selling
B) bare bones
C) contractual transaction
D) customer supply
E) collaborative

Question 47

Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify,evaluate,and choose among alternative brands and suppliers.

Question 48

The relationship between a company and its office supplies vendor where competition rather than cooperation is the dominant form of governance is probably best described as ________.

A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king

Question 49

Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in the U.S.Its customers have shifted their ordering responsibilities to Praxair and the company regularly monitors its customer's inventory levels and has taken responsibility for replenishing the supplies automatically through continuous replenishment programs.Which of the following systems do Praxair and its customers follow with respect to order-routine specification?

A) Supplier Added Value Effort ($AVE)
B) Vendor Managed Inventory (VMI)
C) Direct Concentrated Buying (DCB)
D) Supplier Performance Management (SPM)
E) Product Value Analysis (PVA)

Question 50

A ________ establishes a long-term relationship in which the supplier promises to resupply the buyer as needed,at agreed-upon prices,over a specified period of time.

A) stockless purchase plan
B) direct stock purchase plan
C) defined contribution plan
D) stock purchase plan
E) share purchase plan

Question 51

Value Central has a partnership of high trust and commitment with certain suppliers and gives them access to its sophisticated and detailed daily,individual store-based sales data.In exchange,those suppliers are responsible for managing Value Central's inventory of their products.This relationship is best described as ________.

A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king

Question 52

The total demand for many business goods and services is inelastic?that is,not much affected by price changes.

Question 53

The buyer in a straight rebuy usually changes product specifications,prices,delivery requirements,or other terms.

Question 54

The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold,rented,or supplied to others.

Question 55

The business marketer normally deals with far fewer,much larger buyers than the consumer marketer does.

Question 56

With respect to e-procurement,which of the two types of e-hubs are Web sites organized around?

A) vertical and horizontal hubs
B) vertical and functional hubs
C) functional hubs and organizational hubs
D) supplier and user hubs
E) manufacturer and supplier hubs

Question 57

Which of the following is a form of cheating or undersupply relative to an implicit or explicit contract which usually takes place when buyers cannot easily monitor supplier performance?

A) Institutional sale
B) Business buying
C) Opportunism
D) Vertical integration
E) Contractual transactionism

Question 58

________ investments are those expenditures tailored to a particular company and value chain partner.

A) Diversified
B) Pooled
C) Specific
D) Umbrella
E) General

Question 59

Which of the following relationships is characterized by much trust and commitment leading to a true partnership?

A) mutually adaptive
B) collaborative
C) basic buying and selling
D) customer supply
E) cooperative systems

Question 60

Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers?

A) the buyer may contact different suppliers and ask for their evaluations
B) the buyers may rate the end-users on several criteria using a weighted-score method
C) the buyer might aggregate the cost of poor performance to come up with adjusted costs of purchase, including price
D) the buyers may aggregate the opinions of various competitors and come up with the adjusted cost of supply
E) the buyers might adopt the Supplier Added Value Effort technique to calculate supplier efficiency

Question 61

What are the methods available to the buyer to review the performance of the chosen supplier? What advantage does performance review offer to the buyer?

Question 62

In the buying center,several people can occupy a given role such as user or influencer,and one person may play multiple roles.

Question 63

Explain the term opportunism with respect to business relationships.

Question 64

In buying alliances,participants offer to trade goods or services.

Question 65

A performance review is the first step in the buygrid framework.

Question 66

What is the composition of the buying center?

Question 67

The buying process begins when someone places an order with a sales representative.

Question 68

Influencers influence the buying decision by helping define specifications and providing information for evaluating alternatives.

Question 69

A good illustration of a member of the institutional market would be Boeing because it is a member of the aviation institution structure.

Question 70

Business markets have several characteristics that contrast sharply with those of consumer markets.Name and briefly characterize five of those characteristics.

Question 71

Researchers have found that buyer-supplier relationships differed according to four factors: availability of alternatives;importance of supply;complexity of supply;and supply market dynamism.Based on these four factors,they classified buyer-supplier relationships into eight different categories.What are those categories?

Question 72

Contracts are always sufficient to govern supplier transactions and prevent supplier opportunism.

Question 73

Product value analysis is an approach to efficiency that studies whether components can be redesigned or made by more efficient methods of production without adversely impacting product performance.

Question 74

Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying influencers.

Question 75

Sellers benefit from systems contracting through lower operating costs as a result of steady demand and reduced paperwork.

Question 76

Corporate credibility depends on corporate expertise,corporate trustworthiness,and corporate likability.

Question 77

Most business buyers reject what is called systems buying from one seller.

Question 78

With respect to the buying center,approvers are people who have the power to prevent sellers or information from reaching members of the buying center.

Question 79

Companies are increasingly reducing the number of suppliers they utilize,and there is a trend toward single sourcing.

Question 80

The "customer is king" category of buyer-seller relationship is relatively simple,and one in which routine exchanges with moderately high levels of cooperation and information exchange occur.