Deck 6: Understanding Organizations As Customers

Question 1

According to the textbook, JCPenney buys paper for which of the following media?

A)in-store signage
B)special advertising inserts in magazines such as Cosmopolitan
C)newspaper inserts and direct mail pieces
D)annual and 10-K reports
E)point-of-purchase displays

Answer 1

C

Question 2

When JCPMedia buys paper for JCPenney newspaper inserts, it considers suppliers' forest management and other sustainability practices. JCPMedia buyers consider these as part of the process to

A)fulfill profit responsibilities.
B)formally evaluate paper supplier capabilities.
C)eliminate the need for online purchasing.
D)shorten the value chain.
E)fulfill the auditing role.

Answer 2

B

Question 3

"The choice of paper and suppliers is ____________ given the sizable revenue and expense consequences," notes Tom Cassidy, vice president-marketing production at JCPMedia, Inc.

A)a limited purchase decision
B)a significant marketing decision
C)a challenge for storage and shipping
D)a routine decision
E)a reciprocity practice

Answer 3

B

Question 4

JCPMedia, Inc. paper buyers are thoroughly trained in

A)shopping center management.
B)break-even analysis.
C)retail management.
D)consumer decision practices.
E)many facets of purchasing.

Question 5

A firm that reprocesses a product or service it buys before selling the product again to the next buyer is referred to as

A)an industrial firm.
B)a reseller firm.
C)a government agency.
D)a wholesaler.
E)a retailer.

Question 6

All of the following are organizational buyers except

A)industrial firms.
B)government units.
C)ultimate consumers.
D)resellers.
E)wholesalers.

Question 7

Business-to-business marketing refers to

A)the marketing of goods to companies, governments, or ultimate consumers for use in the creation of goods and services.
B)the marketing of products to not-for-profit organizations at a reduced fee or nominal cost for use in the creation of goods and services that they can produce and market to others.
C)the marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of products that they can produce and market to others.
D)the marketing of services in the area of intellectual property such as legal, financial, or creative consulting.
E)the marketing of an idea to create interest or generate goodwill, not just for an individual brand but also for an entire industry or product class.

Question 8

Organizational buyers are divided into three markets, which are

A)industrial, wholesaler, and retailer.
B)industrial, retailer, and government.
C)retailer, manufacturer, and government.
D)industrial, government, and ultimate consumer.
E)industrial, reseller, and government.

Question 9

Organizational buyers are

A)manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services exclusively for resale.
B)manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy products and services for their own use or for resale.
C)manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services exclusively for their own use.
D)firms that typically buy physical goods and resell them again without any reprocessing.
E)all buyers in a nation including ultimate consumers.

Question 10

The marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others is referred to as

A)integrated marketing.
B)institutional marketing.
C)business-to-business marketing.
D)reseller marketing.
E)organizational marketing.

Question 11

Which of these statements regarding organizational buyers is most accurate?

A)Wholesalers and retailers resell the goods they buy without reprocessing them.
B)Wholesalers and retailers alter the goods they sell to meet the specific needs of their customers prior to resale.
C)Manufacturers purchase processed goods and resell them to suppliers who in turn resell them to ultimate consumers.
D)Ultimate consumers can be considered organizational buyers when they purchase in large quantities.
E)Government agency purchases are more similar to ultimate consumer purchases than they are to wholesalers and retailers.

Question 12

An industrial firm

A)is one that is independently owned and takes title to the merchandise it sells.
B)buys physical goods and resells them again without any reprocessing.
C)deals exclusively with federal, state, and local governments.
D)in some way reprocesses a product or service it buys before selling it again to the next buyer.
E)only produces a product, not a service.

Question 13

Which of the following organizational buyers purchases raw materials and parts to reprocess into the finished goods they sell?

A)retailers
B)wholesalers
C)agents
D)manufacturers
E)ultimate consumers

Question 14

Manufacturers, farms, financial services, and fisheries are all examples of companies in the

A)consumer market.
B)cooperative market.
C)reseller market.
D)industrial market.
E)government market.

Question 15

Which of the following types of firms are in the industrial market?

A)retailing
B)construction
C)wholesaling
D)state governments
E)federal regulatory agencies

Question 16

Purchasing paper for JCPMedia is one example of

A)organizational buying.
B)online buying.
C)on-time delivery.
D)derived demand.
E)cooperative selling.

Question 17

Organizational buyers include manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that

A)purchase exclusively from one supplier.
B)are exempt from state and local taxes.
C)sell directly to ultimate consumers.
D)sell goods and services for their own use.
E)buy products and services for their own use or for resale.

Question 18

______________ in some way reprocess a product or service they buy before selling it again to the next buyer.

A)Transactional markets
B)Corporate markets
C)Government marketers
D)Reseller marketers
E)Industrial firms

Question 19

Which of the following represents an organizational buyer?

A)A local baker buys sugar at the grocery store to make cookies with his children at home.
B)A dentist buys a new LG Smart TV 55-inch 3D OLED HDTV for her den.
C)Mr. Langley hires a housecleaning service to clean his apartment.
D)The owner of a sushi restaurant hires a window-washing service to clean exterior windows.
E)The mayor rents a tuxedo to wear to his daughter's wedding.

Question 20

Manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services for their own use or for resale are referred to as

A)multinational buyers.
B)resellers.
C)organizational buyers.
D)ultimate consumers.
E)institutional buyers.

Question 21

In terms of organizational buying, Amazon.com, Lands' End, and JCPenney would most likely be classified as

A)government units.
B)resellers.
C)manufacturers.
D)wholesalers.
E)industrial firms.

Question 22

The City of Denver contracts with Solid Waste Management to provide trash collection services for its citizens. The city is operating as

A)a government unit.
B)an industrial market.
C)a business market.
D)a consumer market.
E)a service provider.

Question 23

A firm that markets photocopy products used in the graphic arts field, buys sensitized paper from Eastman Kodak Co., packages it with the Photostat brand name, and sells it directly to amateur photographers. In this context, the marketer is most likely classified as
A.a manufacturer.
B.a reseller.
C.a service provider.
D.a government agency.
E.an industrial firm.

Question 24

The National Aeronautics and Space Administration (NASA) will pay Lockheed Martin Corp. $11.4 billion for Orion's development, test flights, and its first manned mission in 2021. NASA is a government unit operating in __________ market.

A)a heavy goods
B)a government
C)a service
D)an industrial
E)a reseller

Question 25

When the Federal Aviation Administration (FAA) purchases radar systems for 22 major air traffic control centers in the United States, it is operating as

A)a government unit.
B)an industrial market.
C)a business market.
D)a consumer market.
E)a service provider.

Question 26

Liberty Medical Supply is a home delivery service that sells diabetes testing supplies, prescription drugs, and other supplies directly to consumers to assist them in the management of their health-related conditions. Since Liberty Medical does not make any changes to the supplies that it obtains from manufacturers, it would most likely be classified as

A)an industrial service provider.
B)a health care manufacturer.
C)an industrial firm.
D)a reseller.
E)a government agency.

Question 27

__________ comprise the highest percentage of firms in industrial markets.

A)Manufacturing firms
B)Construction firms
C)Agricultural firms
D)Mining companies
E)Service companies

Question 28

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with __________, insurance, and real estate businesses, transportation, communication and public utility firms, and not-for-profit organizations, these firms represent 75 percent of all industrial firms.

A)finance
B)wholesalers
C)retailers
D)government units
E)educational institutions

Question 29

Graham-Field Health Products makes hospital beds and wheelchairs from the component parts and materials it buys. It sells these manufactured products to hospitals, nursing homes, and retailers of health care products. Graham-Field Health Products operates in __________ market.

A)a consumer
B)a government
C)a service
D)an industrial
E)a reseller

Question 30

When Georgia State University buys new laptops for its faculty, it is operating as

A)an industrial market.
B)a business market.
C)a government unit.
D)a consumer market.
E)a service provider.

Question 31

The reseller market includes

A)manufacturers.
B)logistics and supply chain providers.
C)government agencies.
D)end-user service providers.
E)retailers and wholesalers.

Question 32

Wholesalers and retailers that buy physical products and resell them without any reprocessing are referred to as

A)industrial firms.
B)reseller firms.
C)government agencies.
D)consumer product firms.
E)nonprofit firms.

Question 33

European Style Furniture (ESF), headquartered in New York, acquires fine furniture from several high quality manufacturers in Europe and enjoys exclusive distribution rights from them to sell to furniture stores throughout the United States. In this context, ESF is most likely classified as

A)a producer.
B)a reseller.
C)a service provider.
D)a government agency.
E)an industrial firm.

Question 34

A bank takes money from its depositors, reprocesses it, and "sells" it as loans to borrowers. The bank is operating in the ___________ market.

A)consumer
B)government
C)industrial
D)service
E)reseller

Question 35

When the General Services Administration (GSA), an agency of the federal government, purchased 116 Chevy Volts from General Motors for its vehicle fleet, it was operating as

A)an industrial market.
B)a business market.
C)a consumer market.
D)a government unit.
E)a service provider.

Question 36

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with finance, insurance, and real estate businesses; transportation, __________ and public utility firms; and not-for-profit organizations, these firms represent about 75 percent of all industrial firms.

A)wholesaling
B)retailing
C)government units
D)communication
E)manufacturing

Question 37

Corning, Inc., which transforms an exotic blend of materials to create optical fiber capable of carrying much of the telephone traffic in the United States on a single strand, is operating in __________ market.

A)a consumer
B)a government
C)a service
D)a reseller
E)an industrial

Question 38

Which of the following is a service business within the industrial market?

A)construction
B)mining
C)insurance
D)government
E)farming

Question 39

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with finance, insurance, and real estate businesses, __________, communication, and public utility firms, as well as not-for-profit organizations, these firms represent about 75 percent of all industrial firms.

A)wholesalers
B)transportation
C)retailers
D)government units
E)educational institutions

Question 40

Federal, state, and local agencies that buy products and services for the constituents they serve are referred to as

A)industrial markets.
B)reseller markets.
C)consumer markets.
D)government units.
E)global markets.

Question 41

The acronym NAICS stands for

A)National Association of Industrial Compliance Standards.
B)National Association of Industrial Communication Systems.
C)North American Industrial Communication Standards.
D)North American Industry Classification System.
E)North Atlantic Industrial Classification System.

Question 42

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The sixth digit designates

A)an industry subsector.
B)an industry group.
C)a specific industry.
D)an individual country-level national industry.
E)a sector of the economy.

Question 43

The system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA), is referred to as the

A)Standard Industrial Code System (SICS).
B)United Nations Central Product Classification System (UNCPCS).
C)National Codes of Industry System (NCIS).
D)North American Industry Classification System (NAICS).
E)Federal System of International Organizations (FSIO).

Question 44

Important product or service characteristics in organizational buying include which of the following?

A)A heavy emphasis is placed on loyalty programs and rebates.
B)Direct selling to organizational buyers is rare.
C)A fixed, nonnegotiable price is the norm.
D)Many of the goods purchased are raw and semifinished.
E)Personal relationships are preferred to online buying over the Internet.

Question 45

Derived demand means the demand for industrial products and services is driven by, or derived from, the

A)NAICS statistical models.
B)gross national product.
C)demand for consumer products and services.
D)demand for other industrial products and services.
E)demand for government products and services.

Question 46

Which of the following statements about marketing mix characteristics in organizational buying behavior is most accurate?

A)Few large transactions are made over the Internet.
B)The actual buyer retains all of the influence in the buying decision.
C)Advertising is very simplistic in nature.
D)Direct selling to organizational buyers is the rule.
E)Only finished goods are sold in this way.

Question 47

The demand for industrial products and services that is driven by demand for consumer products and services is referred to as

A)secondary marketing.
B)derived demand.
C)reciprocal supply.
D)demand elasticity.
E)sequential demand.

Question 48

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The fourth digit designates

A)an industry subsector.
B)an industry group.
C)a specific industry.
D)an individual country-level national industry.
E)a sector of the economy.

Question 49

Important buying process characteristics in organizational buying behavior include which of the following?

A)Few large transactions are made over the Internet due to concerns of industrial espionage.
B)Negotiations, purchases, and delivery occur in real time at an accelerated rate.
C)There are often reciprocal arrangements and negotiations between buyers and sellers.
D)Most purchases are made through government-licensed negotiators.
E)Direct selling to organizational buyers is rare because it is cost-prohibitive.

Question 50

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The fifth digit designates

A)an industry subsector.
B)an industry group.
C)a specific industry.
D)an individual country-level national industry.
E)a sector of the economy.

Question 51

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The third digit designates

A)an industry subsector.
B)an industry group.
C)a specific industry.
D)an individual country-level national industry.
E)a sector of the economy.

Question 52

In the organizational buying process, important product or service characteristics include

A)delivery time, technical assistance, and post-sale service.
B)low price, buyer incentives, and extended contracts.
C)buyer incentives, technical assistance, and exclusive contracts.
D)quantity discounts, delivery time, and exclusive contracts.
E)low price, buyer incentives, and post-sale service.

Question 53

The North American Industry Classification System (NAICS)

A)provides common industry definitions for North America, Central America, and South America to measure economic activity in the Western Hemisphere.
B)provides common industry definitions between Canada and the United States to measure economic activity and reduce barriers of trade for cross-border firms.
C)provides a classification system for products and services that is consistent worldwide.
D)provides a classification system for products and services that is consistent across North America, Central America, and South America to measure economic activity in the Western Hemisphere.
E)provides common industry definitions for Canada, Mexico, and the United States to measure economic activity in the three member countries.

Question 54

The NAICS provides common industry definitions for

A)Canada, England, and the United States.
B)North America, Asia, and Europe.
C)North America, Central America, and South America.
D)Canada, England, Australia.
E)Canada, Mexico, and the United States.

Question 55

The North American Industry Classification System (NAICS) provides common industry definitions to facilitate the measurement of economic activity for the member countries of the

A)European Union (EU).
B)United Nations (UN).
C)North American Free Trade Agreement (NAFTA).
D)North Atlantic Treaty Organization (NATO).
E)World Trade Organization (WTO).

Question 56

Derived demand refers to

A)a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price.
B)the demand for industrial products and services that is driven by the demand for consumer products and services.
C)the relationship between total revenue and total cost to determine profitability at various levels of output.
D)the point on a demand curve where supply and demand intersect.
E)the percentage change in quantity demanded relative to a percentage change in price.

Question 57

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The first two digits designate

A)a country of origin.
B)an industry group.
C)a specific industry.
D)an individual country-level national industry.
E)a sector of the economy.

Question 58

Important market characteristics in organizational buying behavior include which of the following?

A)unlimited markets but orders become progressively smaller over time
B)diminishing international opportunities as more firms enter the market
C)many customers placing progressively larger orders over time
D)fewer customers but with larger orders
E)a market that functions independently of consumer demand

Question 59

Important product or service characteristics in organizational buying include which of the following?

A)Products or services are intangible in nature and purchased on the basis of specifications.
B)A heavy emphasis is placed on delivery time, technical assistance, and post-sale service.
C)Direct selling to organizational buyers is rare.
D)A fixed, nonnegotiable price is the norm.
E)Personal relationships are preferred to online buying over the Internet.

Question 60

Important market characteristics in organizational buying behavior include which of the following?

A)Organizational buying behavior is similar to consumer buying behavior since individuals are involved in both processes.
B)Demand for industrial products is elastic instead of inelastic.
C)Demand for industrial products and services is derived.
D)Purchase orders are much more frequent and they are usually small.
E)Forecasting is not as important in organizational buying as in consumer buying.

Question 61

Purchases of sodium fluoride by Procter & Gamble for use in the manufacture of Crest toothpaste would be an example of __________ demand.

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

Question 62

Many companies have broadened their buying objectives to include an emphasis on

A)purchasing from as many vendors as possible to avoid component shortfalls.
B)purchasing from start-up firms to grow the economy.
C)diversifying their product lines and brand extensions to reduce the risk of failure for any one item.
D)pricing freezes to maintain consistent quantities demanded from consumers.
E)proactively purchasing from minority-owned suppliers and vendors.

Question 63

Organizational buying criteria refer to

A)the restrictions placed on potential solutions to a problem in a purchase decision.
B)the specific qualifications of a potential customer based upon past performance, reliability, and consistency regarding the purchase of an organization's offerings.
C)the subjective attributes of the supplier's products and services and the capabilities of the supplier itself.
D)the objective attributes of the supplier's products and services and the capabilities of the supplier itself.
E)the factors that an ultimate consumer would consider that represent both the objective attributes of a brand and the subjective ones to compare different products and brands.

Question 64

Organizational buying criteria serve the same purpose as __________ criteria used by consumers.

A)consideration
B)evaluative
C)decision
D)alternative
E)prepurchase

Question 65

The American Red Cross provides disaster relief, among many other services. As a nonprofit organization, its primary buying objective is to

A)increase profits through reducing costs.
B)increase profits through increasing donations.
C)diversify its services mix to survive the continued economic downturn.
D)meet the needs of the groups it serves.
E)maintain profits through reducing costs and increasing donations.

Question 66

South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT's leather is a result of consumer interest in products such as Via La Moda handbags made from this exotic and expensive leather. SCOT has __________ demand for its product.

A)derived
B)unitized
C)industrial
D)applied
E)reseller

Question 67

The primary buying objective for business firms is usually to

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

Question 68

Concert Staging Co. provides the stage, roof system, lighting, and sound for outdoor concerts and theatrical events. The number of concert and theater events sponsored by various organizations determines how many times the company is hired to provide its services, which often depends on consumer willingness to buy event tickets. Demand for the services provided by Concert Staging Co. is considered

A)derived.
B)unitized.
C)industrial.
D)applied.
E)reseller.

Question 69

Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan, the antibacterial agent in many household products such as liquid soap. Consumers may have heard about research suggesting environmental and health risks associated with the cumulative effects of antibacterial agents. Changing consumer purchases provide an example of __________ demand for Ciba's triclosan product.

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

Question 70

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

A)pay estimated sales taxes in advance
B)move up the time required to execute a purchase agreement
C)get competitive bids from at least three prospective suppliers
D)forgo the purchase because senior management is unlikely to approve it
E)forgo identifying the members of the supplying center and their roles in the selling process

Question 71

During late summer and early fall, there is a large demand for containers in Asia that are used to ship consumer products from Asia to the United States in time for the holiday selling season. The demand for these containers is referred to as __________ demand.

A)unitized
B)derived
C)reseller
D)applied
E)implied

Question 72

Firms marketing consumer products or services often try to reach thousands or millions of individuals or households. Firms selling to organizations

A)try to reach tens of millions of wholesalers, retailers, and government units.
B)are restricted to far fewer buyers.
C)hope to obtain similar numbers of business customers, or even more.
D)do not have customers, per se.
E)simultaneously purchase from organizational buyers and ultimate consumers.

Question 73

Spruceland Millworks in Canada makes wood pallets for transporting and storing new appliances such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would be classified as

A)reactive demand, which is tied to the sales of appliances, not the sale of the pallets.
B)unitary demand, which is tied to the sales of appliances.
C)derived demand, which is tied to the sales of appliances.
D)inelastic demand, which is tied to the cost of the components of the pallets.
E)elastic demand, which is tied to the cost of the components of the pallets.

Question 74

Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still, demand for its products often depends on rates of air travel among consumers. Demand for Airbus products is referred to as __________ demand.

A)unitized
B)reseller
C)applied
D)implied
E)derived

Question 75

All of the following statements about the purchase involved in organizational buying are true except

A)the length of time required to arrive at a purchase agreement can vary with size of purchase.
B)the dollar value of a single purchase made by an organization often runs into thousands or millions of dollars.
C)the size of purchase impacts who participates in the purchase decision.
D)the size of purchase impacts who makes the final decision.
E)the size of the purchase involved in organizational buying is typically smaller than that in consumer buying but it is done more frequently.

Question 76

An organization buys products and services for one main reason, which is to

A)achieve its own objectives.
B)beat its competitors.
C)satisfy the needs of its suppliers.
D)employ people.
E)maintain inventory.

Question 77

The primary organizational buying objective for business firms is to

A)create an atmosphere of inclusiveness.
B)help smaller companies stay in business.
C)increase the proficiency of its buyers.
D)help the firm achieve its objectives.
E)balance inventory.

Question 78

The objective attributes of the supplier's products and services and the capabilities of the supplier itself are collectively referred to as

A)the supplier consideration set.
B)derived demand factors.
C)evaluative criteria.
D)performance metrics.
E)organizational buying criteria.

Question 79

The buying objective for nonprofit firms and government agencies is usually to

A)meet the needs of the groups they serve.
B)increase profits through reducing costs.
C)increase profits through increasing revenues.
D)maintain profits through reducing costs and increasing revenues.
E)reduce profits through reducing costs and reducing revenues.

Question 80

The primary reason companies have placed an emphasis on buying from minority- and women-owned suppliers and vendors is

A)new federal government regulations require it.
B)they can help a firm meet or exceed its objectives in sales, profits, or customer satisfaction.
C)it is the socially responsible thing to do.
D)it can attract new target markets.
E)these companies will work harder for less money.