Deck 3: Buying Behavior and the Buying Process

Question 1

The ultimate goal of just-in-time (JIT)inventory control is to eventually eliminate all inventory except products in production and transit.

Answer 1

True

Question 2

Your supervisor directs you to investigate alternatives to regular postal service delivery.Your supervisor is acting as the gatekeeper in the buying process.

Answer 2

False

Question 3

The needs of both the organization and the individuals making the decisions affect the evaluation and selection of products and suppliers.

Answer 3

True

Question 4

Sales to original equipment manufacturers (OEMs)and resellers are based on direct demand rather than derived demand.

Question 5

A buying center is an informal,cross-department group of people involved in a purchase decision.

Question 6

Automatic replenishment is a form of supplier relationship management (SRM).

Question 7

"Always a share" is a strategy for risk reduction employed by buying centers.

Question 8

Resellers consider two elements when making decisions about what products to sell: customer profiles and targeted return.

Question 9

When the office manager of an established dentist orders a new case of the same brand of dental floss that the dentist's office has been using for years from the same source,it is considered a straight rebuy.

Question 10

Effective JIT requires that customers inform suppliers only when their current stocks have been completely depleted.

Question 11

Members of the purchasing department and technical experts from engineering,production,and quality control departments perform value analysis.

Question 12

"Always a share" means the buyer will always allocate all shares to only one vendor.

Question 13

Salespeople often trigger the buying process by demonstrating how their products can improve the efficiency of the customer's operation.

Question 14

Creeping commitment means that a customer becomes increasingly committed to a particular course of action while going through the steps in the buying process.

Question 15

Value analysis begins with the examination of the product's function.

Question 16

From the salesperson's point of view,the initial steps in the buying process are critical in straight rebuy situations.

Question 17

Derived demand means demand is derived from the increase in GDP.

Question 18

Salespeople selling original equipment manufacturer (OEM)products need to demonstrate that their products help customers produce products which will offer superior value.

Question 19

Life-cycle costing is also known as quality-based costing.

Question 20

Global sourcing is a key factor in achieving a sustainable competitive advantage.

Question 21

Eva is considering adding new products to her store and is concerned about her profit margin.She is concerned about:

A) how much she will make on each sale.
B) the marginal turnover rate and the expected delivery time.
C) how to address the servicing requirements and the cost of repairs.
D) the need for MRO services and supplies.
E) the derived demand for the product.

Question 22

The primary objective of supplier relationship management (SRM)is the improvement of profits.

Question 23

Salespeople need to understand that purchases made by their customers' customers are based on:

A) derived demand.
B) a competitive advantage for the seller.
C) economies of scale in production.
D) just-in-time (JIT) inventory control.
E) direct demand.

Question 24

During performance evaluations of various vendors,the importance weights of all characteristics are considered equal.

Question 25

The chief executive of Norell,an agency that supplies businesses with temporary workers,realizes that the health care industry necessitated temporary workers as much,if not more,than goods-oriented businesses.Which of the following stages of the buying process does this illustrate?

A) Preparation of the salesperson's presentation
B) Evaluation of alternatives
C) Development of specifications
D) Recognition of a need
E) Evaluation of the result of sales calls

Question 26

Before developing a sales strategy,salespeople must be aware of the suppliers or brands the customer is considering.

Question 27

Effective selling to government agencies requires:

A) advertising in The New York Times.
B) effective internal controls designed to maximize just-in-time delivery of requests for proposals.
C) advanced knowledge of 80-20 ordering procedures.
D) thorough knowledge of their unique procurement procedures and rules.
E) active listening centered on the gatekeeper's internal satisfaction requirements.

Question 28

The first step in supplier relationship management is to determine the end-user spending patterns.

Question 29

The purchase of maintenance,repair,and overhaul (MRO)supplies:

A) is usually overseen by the department placing the order.
B) includes the services offered by accountants and advertising agencies.
C) is treated as a new-task buying situation.
D) is considered as important as the purchase of capital equipment.
E) is typically done without an evaluation of the supplier.

Question 30

In a performance evaluation,no single product will perform best on all characteristics.

Question 31

Weston makes uniforms and overalls for employees in any industry where there is a potential for fire injury.It uses fabric from Indie Fabric Co.for all of the uniforms it manufactures.If there is a decrease in the demand for products in the chemical industry,then there will be a decrease in employment in that industry.This will lead to a decrease in the demand for such uniforms.Since fewer uniforms will be needed,the sales for Indie fabric will decrease.This is an example of:

A) derived demand.
B) a competitive advantage for the seller.
C) economies of scale in marketing.
D) just-in-time (JIT) inventory control.
E) a direct demand.

Question 32

Reginald is a reseller who is deciding which new products he will add to his gift and card store.Which of the following elements must he consider while making this decision?

A) Emotional needs, new task ordering, and creeping commitment
B) Annual spend, buying center dynamics, and influencers
C) Profit margin, turnover, and effort
D) JIT, automatic replenishment, and MRO
E) Gatekeepers, life-cycle costing, and lost-for-good

Question 33

Using the multiattribute model,salespeople decide how to alter the content of their presentation based on customer beliefs and needs.

Question 34

Salespeople should not focus on the areas of superior product performance that are not important to the customer.

Question 35

The multiattribute model is usually not used in complex decisions involving several vendors.

Question 36

By increasing the rating of a competitive product,salespeople can improve the customers' perception of their product.

Question 37

Almac Aluminum is a large manufacturer of can sheets that are used to manufacture drink cans.Its ability to sell to Pearl Brewing Company is directly related to how many people buy Pearl beer.This is an example of:

A) derived demand.
B) a competitive advantage for the seller.
C) economies of scale in marketing.
D) just-in-time (JIT) inventory control.
E) a direct demand.

Question 38

When P.C.Logic,a fax machine manufacturer,purchases ceramic printing heads from Kyocera to install in its fax machines,it is acting as a(n):

A) reseller.
B) original equipment manufacturer.
C) "out" supplier.
D) end user.
E) acquisition expert.

Question 39

Compared to consumer purchase decisions,organizational purchase decisions:

A) are more complex.
B) involve fewer people.
C) seldom require negotiations.
D) require less coordination.
E) take a shorter period of time.

Question 40

One outcome of supplier relationship management (SRM)is the ability to consolidate purchases and negotiate better terms.

Question 41

A hospital is considering changing its supplier of replacement joints.While surgeons make the final decision,the hospital's purchasing department is promoting Kyocera because it manufactures one of the cheapest and most durable hip joints on the market.In terms of the buying center,the purchasing department is a(n):

A) decider.
B) influencer.
C) judge.
D) user.
E) demand deriver.

Question 42

Plasto is a Spanish company that manufactures stadium seating for sports venues.It is one of many such manufacturers.The city of Marsia,which is going to host the next Olympic games,forms a committee to make purchases of equipment that would be required at its venues.The committee has limited knowledge of the products,but eventually decides to purchase Plasto stadium seating for the venues.This purchase by the recently formed committee would be an example of a _____ situation.

A) derived demand
B) just-in-time delivery
C) modified rebuy
D) straight rebuy
E) new-task

Question 43

In which of the following buying situations is creeping commitment most likely to occur?

A) The purchase of a replacement hydraulic motor for a forklift
B) The purchase of a new goldfish to replace the dead one
C) The purchase of the annual Christmas tree from Farmer Gregson
D) The purchase of a case of paper towels for a service station
E) None of the above

Question 44

Using the life-cycle costing approach,salespeople can demonstrate that:

A) a product in the decline stage of its product life cycle will have little, if any, service.
B) a product with a higher initial cost will have lower overall costs.
C) operational costs do not change over the life time of capital equipment.
D) a product in the introductory stage of its product life cycle will have more problems than one in a later stage.
E) operational costs actually decrease over the life time of capital equipment due to increased familiarity.

Question 45

A manufacturer of aquariums for consumers' homes is most likely to go through all eight steps of the buying process when she is:

A) renewing subscriptions to trade journals.
B) purchasing a new computerized inventory system.
C) ordering glass sheets from the firm's usual supplier.
D) restocking the glue needed to make the tanks leak-proof.
E) buying cleaning supplies from the list left by the maintenance staff.

Question 46

The salesperson for the Big Apple Sign Corporation was trying to get a hardware storeowner to buy a new kind of advertising tool called floor graphics-an opaque vinyl film that applies directly to the floor,is easy to remove,and can be used to promote in-store specials.Since the storeowner has purchased advertising before-just not this particular kind of advertising-this is an example of a _____ situation.

A) derived rebuy
B) straight-rebuy
C) derived-demand
D) value-added
E) modified rebuy

Question 47

Which of the following members of the buying center would typically be involved in a value analysis?

A) A representative from the engineering department
B) Members of the purchasing department
C) Technical experts from the production department
D) Technical experts from the quality control department
E) All of the above

Question 48

The human resource director at a commercial laundry is having trouble providing the labor needed for the business.In a trade journal,he read about a VAC Soil Counting System that is a computerized system for sorting and counting incoming soiled clothes.The system can reduce labor costs by up to 50 percent.He called the toll-free number in the ad and spoke to the salesperson.The VAC salesperson had been trying to get an appointment with the owner of the laundry for over a year,so he was pleased when the HR director showed interest in the product and expressed willingness to take the information to the owner.In terms of the buying center,the HR director is acting as a(n):

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

Question 49

The evaluation and selection of products and suppliers are affected by the needs of both the organization and the individuals making the decision.These needs are categorized as:

A) emotional and rational.
B) formal and informal.
C) verbal and nonverbal.
D) external and internal.
E) behavioral and attitudinal.

Question 50

Ruth markets rock concerts.She is looking for a company that will handle all of the various mailings needed to promote the purchase of concert tickets.She wants to use Graham Mail House because she is a very good friend of the mailing house's operations manager,but others involved in the decision making want to take bids from other mailing houses.In this example Ruth is expressing a(n)_____ need in the buying process.

A) emotional
B) formal
C) external
D) impersonal
E) rational

Question 51

Regan wants to develop a long-term relationship with his customers.To accomplish this objective,Regan will pay close attention to:

A) the acquisition and analysis of proposals.
B) the definition of the type of product needed.
C) the evaluation of product performance.
D) the receipt of an order.
E) the recognition of a need or problem.

Question 52

The last step in the buying process is the:

A) establishment of a long-term relationship with the seller.
B) receipt of the product.
C) vendor analysis.
D) evaluation of product performance.
E) placement of the order.

Question 53

The manufacturer of Fancy Feast cat food has purchased "can sheets" for making its cans from Altum Aluminum for years,but it has recently decided to become more environmentally friendly.In doing so,it plans to talk to Reynolds Aluminum about its recycling project.In this instance,the purchase of can sheets from Reynolds would be an example of a _____ situation.

A) new-task
B) straight-rebuy
C) direct demand
D) value-added
E) modified rebuy

Question 54

Mark's supervisor introduces a new product in the market.Mark's supervisor is acting as the _____ in the buying process.

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

Question 55

Most purchase decisions involving capital equipment or the initial purchase of original equipment manufacturer (OEM)products are _____.

A) irrational purchases
B) new tasks
C) end user emotional needs
D) straight rebuys
E) modified MROs

Question 56

Kevin works for Irish Pub Company,a design and construction outfit that sells completely finished,made-in-Ireland pubs-complete with everything from beer taps to mosaic floors to decorative pieces like antique whiskey bottles-to American entrepreneurs.Kevin is trying to sell the Irish pub concept to a retired New York City business executive who wants to run his own business,but is not an experienced pub owner and is reluctant to invest $300,000 in the project.Kevin should consider this to be a _____ buying situation.

A) new-task
B) straight-rebuy
C) derived-demand
D) value-added
E) modified rebuy

Question 57

By showing a paper products manufacturer that the C.G.Bretting napkin-folding machine could fold 2,000 paper napkins per minute,twice the rate of the manufacturer's current machine,the Bretting salesperson:

A)forced the manufacturer to perform a vendor analysis.
B)showed the manufacturer that it needed this product to improve its efficiency.
C)created derived demand.
D)created a need for more MRO equipment.
E)all of the above.

Question 58

_____ control the flow of information and limit the alternatives considered.

A) Deciders
B) Influencers
C) Buyers
D) Users
E) Gatekeepers

Question 59

Handell has established a small company that manufactures decorative items for homes.One of the company's latest items is a line of thermometers reproduced from ones that were given away for free before World War II.Since quality is essential to the company's success,it spent a great deal of time and effort locating the best suppliers for the metal,wood,paint,and mercury that went into its first round of production.The purchase of these components would be an example of a _____ buying situation.

A) new-task
B) straight-rebuy
C) derived-demand
D) value-added
E) modified-rebuy

Question 60

When using life-cycle costing as one of the criteria for evaluating and selecting a supplier for a new oil well drilling platform,a purchasing agent should look at:

A) the initial cost of the platform.
B) the estimated maintenance cost for the platform over a ten-year period.
C) how soon the platform will need to be replaced.
D) the cost of installing the platform at a drilling site.
E) all of the above

Question 61

The business environment is changing dramatically,and organizational buying is also changing.As organizations are pressured to improve product quality,control costs,and minimize inventory,they are:

A) elevating their purchasing directors to reflect the increasing importance of this function.
B) replacing just-in-time inventory control with a more practical technique.
C) using less global sourcing to reduce transportation costs.
D) using less value analysis.
E) all of the above.

Question 62

Ryan wants a vendor who will provide ingredients for his restaurant each day according to the number of reservations he has for that evening.Ryan is looking for a vendor who will provide:

A) collusion pricing.
B) just-in-time inventory control.
C) material requirements planning.
D) a tying agreement.
E) none of the above.

Question 63

_____ is a strategy by which organizational buyers evaluate the relative importance of suppliers and use that information to determine with whom they want to develop partnerships.

A) Customer relationship management
B) Total quality management
C) Just-in-time inventory control
D) Supplier relationship management
E) Efficient consumer response system

Question 64

Rock-Tenn Corporation continually receives data on production schedules from its customers.It uses the information to determine the quantity of boxes to ship to the manufacturers.Rock-Tenn has established a(n)_____ relationship with the customers.

A) creeping commitment
B) tying agreement
C) reciprocal
D) automatic replenishment
E) life-cycle costing

Question 65

To make its world famous barbecue,the Smoking Steak restaurant needs a steady supply of good quality hickory wood.Because the Old Smoke House's owner believes in _____,she has used the same wood supplier who has proved satisfactory in the past,for almost fifteen years.

A) value loyalty
B) reciprocity
C) a tying agreement
D) price discrimination
E) vendor loyalty

Question 66

Material requirements planning (MRP)systems:

A) are an important element in JIT programs.
B) can be used to forecast sales.
C) can be used to develop production schedules.
D) minimize costs by scheduling delivery dates that minimize the amount of inventory needed.
E) all of the above

Question 67

Jackson likes his major parts supplier for his automobile repair business but always buys some of the parts from another competitor.Jackson is using a(n)_____ strategy.

A) value loyalty
B) always a share
C) supplier devotion
D) straight rebuy
E) tying agreement

Question 68

The need for risk reduction is one of the factors affecting the individual making the organizational buying decision.What can a salesperson do to help reduce the risk?

A) Turn a straight rebuy situation into a modified rebuy situation
B) Provide the buyer with product information from independent sources not connected with the company for which the salesperson works
C) Send the buyer the complete portfolio of all collateral sales materials and follow it up with a phone call
D) Make the buyer understand that every buy should be a new-task buy situation
E) Persuade the buyer to not perform vendor analysis

Question 69

To develop the close coordination needed for just-in-time (JIT)inventory control systems,manufacturers tend to rely on one supplier.Based on which criterion is the supplier selected?

A) Lowest item-by-item cost
B) The ability to be flexible
C) Product quality
D) Size of operation
E) Lowest overall cost

Question 70

LifeStream Industries has used BrightLight light bulbs for years.When it needs new light bulbs,it uses a straight rebuy.The distributor of Tungstram LED light bulbs would like an opportunity to get his product considered by LifeStream.A(n)_____ would be particularly useful for Tungstram,the out-supplier.

A) JIT analysis
B) organizational audit
C) environmental assessment
D) value analysis
E) multi-attribute model

Question 71

Material requirements planning and electronic data interchange are elements of:

A) just-in-time inventory control.
B) value analysis.
C) total quality management.
D) vendor analysis.
E) life-cycle costing.

Question 72

Foster has decided to buy all his maintenance,repair,and overhaul (MRO)supplies from Alexia's Supply House.For competitors,Foster's account is:

A) always a share.
B) JIT.
C) a modified rebuy.
D) lost for good.
E) a tying agreement.

Question 73

Automatic replenishment is a form of JIT where the supplier manages _____.

A) demand for the customer
B) price for the customer
C) inventory for the customer
D) accounting for the customer
E) all of the above

Question 74

TMV Auto uses a computer-to-computer linkage,called HarpLink,to manage its annual export of 65,000 vehicles.HarpLink provides worldwide control,invoicing,and information about ports,carriers,and custom documentation.HarpLink exemplifies _____.

A) a local area network
B) material requirements planning
C) a spreadsheet program
D) electronic data interchange
E) database marketing

Question 75

Hammond Inc.supplies its retailers with handheld Crownlink electronic data interchange terminals.All of its retailers use these terminals to transmit merchandise orders to Hammond in Kansas City.Their inventory is always stocked as needed.Shipments are made daily as required by individual retailers.This is an example of a _____ system.

A) efficient consumer response
B) total quality management
C) marketing information
D) zero-defect management
E) material requirements planning

Question 76

Violet is developing a supplier relationship management strategy (SRM)for her company.The first step she will take is to determine the _____ with each vendor.

A) efficient consumer response procedure
B) electronic data interchange protocol
C) gatekeeper structure
D) annual spend
E) material requirements

Question 77

Which of the following statements about a material requirements planning (MRP)system is true?

A) The MRP system can be used to forecast sales.
B) An MRP system cannot be used in JIT programs.
C) The MRP system is most often used to uncover needs or problem areas within an organization's various functional departments.
D) AN MRP system cannot be used to develop a production schedule or to reduce costs.
E) None of the above.

Question 78

The organizational buyer for McArthur Gardens frequently uses _____ to make sure that all important factors are considered,such as bulb size,delivery speed,bulb sprouting time,and level of sales support,before selecting a supplier.

A) vendor analysis
B) marketing audit
C) tying agreement
D) needs assessment
E) value analysis

Question 79

Mike's Autos uses a supply chain management system to schedule the delivery of auto parts to arrive at its plants exactly thirty minutes before the parts are to be used in the assembly process.The company use a(n)_____ system.

A) efficient consumer response
B) total quality management
C) just-in-time inventory control
D) zero-defect management
E) material requirements planning

Question 80

_____ systems are used to forecast sales,develop production schedules,and select delivery dates that minimize costs.

A) Efficient consumer response
B) Total quality management
C) Supplier relationship management
D) Zero-defect management
E) Material requirements planning