Deck 7: Analyzing Business Markets

Question 1

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.

Answer 1

C

Question 2

One guideline for selling to small business recommends assigning one point of contact for all service problems. This relates to the suggestion to

A) provide support after the sale.
B) not lump small and midsize business together.
C) keep it simple.
D) do your homework.
E) use the Internet

Answer 2

C

Question 3

When the DeWitt Company purchased a large piece of machinery from Moeller, the company's president paid a personal visit and stayed until the machine was up and running properly. This is an example of which guideline for selling to small business?

A) do provide after-sale support
B) do keep it simple
C) don't lump small and midsize businesses together
D) don't forget about direct contact
E) don't waste their time

Answer 3

A

Question 4

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

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

Question 5

Trained purchasing agents must follow their organization's

A) culture.
B) purchasing policies, constraints, and requirements.
C) past purchasing history.
D) needs.
E) financial budgets.

Question 6

To create and capture value, sellers need to understand business organizations' needs, resources, policies, and

A) strategies.
B) demands protocols.
C) personnel policies.
D) buying procedures.

Question 7

The business buyer faces many decisions in making a purchase. The number of decisions depends on

A) the end consumer.
B) the size of the company.
C) the buying situation.
D) geographic restraints.
E) upper management.

Question 8

Many business buyers prefer to buy a total solution to a problem from one seller. ________ is the correct term for this process.

A) Vertical buying
B) Channel consolidation
C) Horizontal buying
D) Systems buying
E) Supply buying

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

Question 10

Webster and Wind define ________ as 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) inventory control
B) organizational buying
C) marketing channels
D) demand-oriented buying
E) purchasing

Question 11

How can a marketer overcome the negative effects of commoditization?

A) convince target consumers that the firm's products are as good as those of competitors
B) convince target consumers that price is irrelevant in determining quality
C) convince target customers that all the products in the market are equivalent
D) convince target consumers that the firm's products are different from those of competitors
E) convince target customers that buying the highest-priced product is no guarantee of quality

Question 12

Jason Riggs's company is considered to be an in-supplier for a lawn mower manufacturer. However, recently the lawn mower company has put out a memo to in- and out-suppliers indicating that it would like to modify product specifications and delivery schedules. Which of the following buying situations is most likely to be in operation given the data above?

A) elastic rebuy
B) flatten rebuy
C) modified rebuy
D) straight rebuy
E) fluctuating rebuy

Question 13

In new task buying, a purchaser buys a product or service

A) with automatic reordering systems.
B) for the first time.
C) on a routine basis from approved suppliers.
D) based on existing satisfaction.
E) with modified specifications.

Question 14

The purchasing department buys office supplies on a routine basis. This type of purchase is classified as a

A) straight rebuy.
B) new task.
C) preordained purchase.
D) modified rebuy.
E) secondary purchase.

Question 15

The fate of Goodyear Tire Company depends on getting contracts from a few major automakers. This illustrates which characteristic of the business market?

A) fewer larger buyers
B) geographically concentrated buyers
C) multiple sales calls
D) close supplier-customer relationship
E) professional purchasing

Question 16

Aging of the Canadian population has been leading to an increased demand for condominiums. From the standpoint of the construction material suppliers, which of the following demand forms is most pertinent?

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

Question 17

Business markets have several characteristics that contrast sharply with those of consumer markets. Which of the following characteristics describes a scenario where suppliers are expected to customize their offerings to individual business customer needs?

A) professional purchasing
B) fluctuating demand
C) fewer, larger buyers
D) multiple sales calls
E) close supplier-customer relationship

Question 18

The business buyer makes the fewest decisions in the ________ buying situation.

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

Question 19

When Magna International developed an automated after-market roof rack for the Hummer H2, they had to buy some of the materials for the first time and seek an appropriate supplier. This represents a ________ buying situation.

A) new task
B) modified rebuy
C) straight rebuy
D) pioneering purchase
E) direct purchase

Question 20

Shoe manufacturers are not going to buy much more leather if the price falls, nor will they buy much less leather if the price rises. This illustrates the business market characteristic of

A) several buying influences.
B) derived demand.
C) inelastic demand.
D) direct purchasing.
E) fluctuating demand.

Question 21

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

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

Question 22

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) inelastic
D) accelerated
E) multiple

Question 23

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

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

Question 24

Consider yourself as an upper-level marketing executive for a large seller of fleet trucks. Which of the following strategies would be most appropriate in reaching buying centre targets?

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

Question 25

The typical buying centre has a minimum of ________ members.

A) 5-6
B) 2-3
C) 3-4
D) 4-5
E) 10

Question 26

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

Question 27

Think about what you have learned about a buying centre. If you performed the role of the ________, you would be the person that has the power to prevent sellers or information from them in reaching other members of the buying centre.

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

Question 28

Small sellers concentrate their marketing efforts on reaching

A) users.
B) approvers.
C) key buying influencers.
D) the purchasing staff.
E) initiators.

Question 29

As the sales manger for a mid-size landscaping company seeking corporate contracts, Jasmine knows she must deal with every member of a buying centre. According to Webster, with respect to buying centre influences, Jasmine should remember that people are

A) buying surrogates that must appreciate that role.
B) not buying products they are buying solutions to problems.
C) buying products that they personally will not use.
D) are human shopping bots.
E) limited in their scope of overall business operations.

Question 30

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 31

If you decided to go into the systems contracting business, which of the following categories would constitute your main area of expertise in that this area would be what service you provide for customers.

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

Question 32

VIA Rail relies primarily on a few major ________ to supply major systems and components.

A) second tier contractors
B) systems suppliers
C) MROs
D) competitors
E) Japanese firms

Question 33

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) deciders
C) approvers
D) influencers
E) initiators

Question 34

________ is a key industrial marketing strategy in bidding to build large-scale industrial products (e.g., dams, pipelines, et cetera).

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

Question 35

________ is composed of all those individuals and groups who participate in the purchasing decision-making process, who share some common goals and the risks arising from their decisions.

A) Engineering support
B) Strategic management
C) The marketing sales team
D) The logistics centre
E) The buying centre

Question 36

Webster cautions that ultimately, ________ make purchasing decisions.

A) systems contractors
B) individuals, not organizations
C) third parties
D) organizations, not individuals
E) only senior managers

Question 37

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

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

Question 38

When ICI Explosives formulated a safer way to ship explosives for quarries, which form of solution selling was the company performing?

A) solutions for price-oriented customers
B) solutions for risk and gain sharing
C) solutions to reduce customer costs
D) solutions to enhance customer revenues
E) solutions to decrease customer risk

Question 39

If a supplier signs an agreement with a customer that states $350 000 in savings will be earned by the customer over the next 18 months in an exchange for a ten-fold increase in the customer's share of supplies ordered by the customer, the two parties will have participated in what is called

A) consultative selling.
B) risk and gain sharing.
C) solution selling.
D) demand shifting.
E) strategic alignment.

Question 40

Some customers are willing to handle price-oriented buyers by setting a lower price, but establishing restrictive conditions. One of these could be

A) customizing services.
B) increasing customer risks.
C) providing additional training.
D) compromising product quality.
E) limiting the quantity that can be purchased.

Question 41

In the past, what position did purchasing departments hold in the management hierarchy of most organizations?

A) a high level because of their role in managing the company's costs
B) a secretive position so that no-one would know exact level of spending
C) a low level despite the fact that they manage more than half of the company's costs
D) a moderate level because of their spotty record on controlling costs
E) there had been no determination or understanding of importance of position

Question 42

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) vertical buying
C) horizontal buying
D) systems buying
E) supply buying

Question 43

Most purchasing professionals describe their jobs as more ________, technical, team-oriented, and involving more responsibility than ever before.

A) risky
B) human-based
C) ethically difficult
D) strategic
E) Web-based

Question 44

HP has worked for many years to design products that are easier to recycle. Which buyphase of the buying process are they focus on?

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

Question 45

Since Federal Lighting consistently purchases MROs from a trusted supplier, they use the least number of buyphases (stages) in the industrial buying process. Which buyclass does this represent?

A) modified rebuy
B) straight rebuy
C) relational rebuy
D) new task
E) global task

Question 46

The first step (buyphase) in the straight rebuy buyclass is

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

Question 47

In principle, business buyers seek to ________ in relation to a market offering's costs.

A) spread risks
B) eliminate partners' shares in profits as much as possible
C) outsource as much as is possible
D) maintain everyday-low-prices
E) obtain the highest benefit package

Question 48

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 49

On an online ________ , prices change by the minute.

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

Question 50

Robinson and Associates have identified eight stages and called them buyphases. This model is called the ________ framework.

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

Question 51

Business marketers can stimulate problem recognition by

A) direct mail, telemarketing, and calling on prospects.
B) requesting testimonials from existing customers.
C) encouraging the Better Business Bureau to release statistics.
D) consumer advertising.
E) trade directories.

Question 52

W.W. Grainger employees work at large customer facilities to reduce materials-management costs. Which of the following forms of solution selling is W.W. Grainger using?

A) solutions to reduce customer costs.
B) solutions to alter corporate culture.
C) solutions to enhance customer revenues.
D) solutions to decrease customer risks.
E) solutions to partnerships.

Question 53

Specialized website (called e-hub) like 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) vertical market
C) barter market
D) systems seller
E) auction site

Question 54

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 55

In which approach to cost reduction are components studied to determine if they can be redesigned or standardized or made by cheaper methods of production?

A) e-procurement
B) product-value analysis
C) strategic alliances
D) buygrid framework
E) problem recognition

Question 56

The new, more strategically-oriented purchasing departments have a mission. Which of the following most accurately describes that mission?

A) approach every purchasing opportunity as means to create interdependency
B) abandon all strategies except for systems selling and buying
C) outsource the supply function
D) seek the best value from fewer and better suppliers
E) make the most profit possible and remain independent of entanglements

Question 57

Companies that fear a shortage of key materials are willing to buy and hold large inventories. As a customer you would want a supplier who can guarantee

A) the lowest price and routine ordering.
B) minimization of total cost.
C) co-development programs.
D) a steady supply of materials..
E) strategic alliances.

Question 58

________ occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward."

A) Framing
B) Gatekeeping
C) Commoditization
D) Rebuying
E) Bartering

Question 59

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

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

Question 60

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

Question 61

Which of the following methods of assessing customer value asks consumers to rank their preference for alternative market offerings?

A) benchmarks
B) conjoint analysis
C) internal engineering assessment
D) focus-group value assessment
E) direct survey questions

Question 62

Which of the following methods for assessing customer value would you consider to be appropriate if you asked your customers to attach a monetary value to each of three alternative levels of a given attribute? Those values would then be added together for any offer configuration.

A) conjoint analysis
B) importance ratings
C) direct survey questions
D) benchmarks
E) compositional approach

Question 63

Corporate credibility depends on three factors: corporate expertise, corporate trustworthiness, and

A) corporate management structure.
B) corporate governance.
C) corporate manpower.
D) corporate mission statement.
E) corporate likability.

Question 64

On its ________ General Electric posts requests for proposals, negotiates terms, and places orders.

A) direct e-procurement page
B) company buying site
C) consumer web site
D) direct extranet links to major suppliers
E) buying alliances

Question 65

Buyer-supplier relationships fall into eight different categories. Which of the following relationships is characterized as being one that has much trust and commitment leading to a true partnership?

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

Question 66

Moving into e-procurement has many benefits. Which of the following is a benefit directly related to e-procurement?

A) Aggregating purchasing across multiple departments gains larger volume discounts.
B) changing the purchasing strategy and structure
C) A larger purchasing staff is required.
D) more buying of substandard goods from outside the approved list of suppliers
E) Purchasing gains a significant leverage with top management.

Question 67

If an industrial buyer leases heavy equipment like machinery and trucks rather than purchasing them, the lessor gains some advantages. Which of the following is one of them?

A) receiving better service
B) getting the latest products
C) a larger net income
D) conserving capital
E) some tax advantages

Question 68

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

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

Question 69

In the ________ category of buyer-supplier relationship categorization, 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) collaborative
C) cooperative system
D) mutually adaptive
E) customer is king

Question 70

In the case of ________, buyers are moving toward blanket contracts rather than periodic purchase orders.

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

Question 71

Which of the following companies carried out e-procurement by becoming part of a buying alliance called Covisint that uses combined leverage to lower prices for raw materials?

A) GM
B) Hewlett-Packard
C) Dell Computers
D) Cadillac
E) Boeing

Question 72

In the proposal solicitation process, ________ should be marketing documents that describe value and benefits in customer terms.

A) global proposals
B) written proposals
C) oral proposals
D) e-proposals
E) alliance proposals

Question 73

With respect to buyer-seller relationships, which of the following categories would you believe to be the most appropriate description of a situation where there was a traditional custom supply situation where competition rather than cooperation was the dominant form of governance?

A) customer is king
B) contractual transaction
C) customer supply
D) collaborative
E) bare bones

Question 74

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

Question 75

With purchases of approximately $14 billion annually in goods and services from thousands of suppliers, ________ is the largest business customer in this country.

A) Dell Canada
B) Canadian Tire
C) the Canadian government
D) Walmart
E) E.B. Eddy

Question 76

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

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

Question 77

Cannon and Perreault found that buyer-suppler relationships differed according to four factors, then classified buyer-supplier relationships into eight categories. Which category is similar to basic buying and selling but involves more adaptation by the seller and less cooperation and information exchange?

A) bare bones
B) mutually adaptive
C) contractual transaction
D) customer supply
E) cooperative systems

Question 78

With respect to e-procurement, Acosta, Ahold, Best Buy, Carrefour, Safeway, Sears, and several other companies joined forces to form a ________ called ISYNC to use their combined leverage to obtain lower prices from suppliers.

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

Question 79

Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to consumer's and supplier's ________ (e.g., those expenditures tailored to a particular company and value chain partner).

A) leverage ability
B) logistics channel
C) liquidity situation
D) specific investments
E) independent operations

Question 80

According to purchasing professionals, which of the following is considered to be the major responsibility of the purchasing agent in supplier negotiations?

A) using a team approach
B) assuring quality conformance
C) negotiating price
D) being fair with all parties
E) forming networks for future business