Deck 2: The Character of Business Marketing

Question 1

The relationship development process between business firms is similar in many ways to the courtship and marriage process.

Answer 1

True

Question 2

The use of power has no place in negotiations between members of a distribution channel.

Answer 2

False

Question 3

Dependence balancing strategies indicate a lack of trust and/or commitment to a supplier.

Answer 3

False

Question 4

Safeguarded relationships exist when technical ties bond the parties to the ongoing exchange.

Question 5

Firms that have enjoyed a long-term committed relationship should avoid any consideration to the costs and/or alternatives that would attend dissolution.

Question 6

Vertical integration implies bringing a function or technology within the boundary of a firm.

Question 7

While trust may be initially extended as a result of expectation and/or reputation,it must be finally earned through direct experience over time.

Question 8

External standards provided by trade associations and/or consulting groups may prove useful in measuring the relative effectiveness of various channel members.

Question 9

"Supplier verification" visits indicate a lack of trust and should be avoided.

Question 10

While buyers are highly selective with regard to the sellers they deal with,sellers typically seek only long-term relationships with as many buyers as possible.

Question 11

Initial purchases take place only after the buyer and seller have reached the commitment stage of the relationship development process.

Question 12

Relational contracts are voluminous documents that seek to anticipate and provide for any and all contingencies that may arise between the parties.

Question 13

Reciprocation is typically an important tool for developing the trust required for effective communication and negotiation.

Question 14

The value of any system depends on the depth and quality of ongoing support given by the users.

Question 15

Relationship building is simplified by the fact that buyers and sellers typically share the same interests and preferences.

Question 16

Since integrity,fairness,loyalty,flexibility and other "ethical intangibles" cannot be accurately measured,they are rarely considered in evaluating business relationships.

Question 17

The factors selected for tracking and/or measurement in internal assessments are especially significant since "what gets measured is what gets done".

Question 18

A strategic partnership results when both buyers and sellers have strong interests in maintaining an ongoing exchange.

Question 19

A successful JIT relationship requires the supplier to produce and deliver to the OEM PRECISELY the right quality and quantity of the right goods at PRECISELY the right time.

Question 20

Often the profit impact from purchasing and logistical efficiencies outweighs that from market penetration.

Question 21

All of the following statements about transactional relationships are true EXCEPT:

A) The identity of the parties is hardly relevant
B) Performance is practically immediate
C) Trading terms are simple and clear
D) They require lengthy, comprehensive communications between parties
E) Money is traded for easily measured commodities

Question 22

Some business marketers choose not to sell to government agencies because:

A) Government agencies do not have enough challenging work
B) The paperwork is too thick and the margins too thin
C) Agencies simply use their purchasing muscle to push inventories up the supply chain
D) Contracts or technical ties bond the parties to the ongoing exchange and large penalties are involved
E) The expected follow-up business may be large

Question 23

Transactional exchange,also called _____,is severely limited by technical complexity,exacting buyer standards and a variety of dependencies between buyer and seller that arise from the exchange.

A) Discrete markets
B) Bond markets
C) Stock markets
D) Derivative markets
E) OTC markets

Question 24

In the _____ stage of the relationship development process,buyer and seller independently consider the other as an exchange partner.

A) Awareness
B) Commitment
C) Exploration
D) Expansion
E) Contractual

Question 25

Which of the following statements about transactional exchange is FALSE?

A) Presently, the prevalence of transactional exchange is severely limited by exacting buyer standards
B) Many products have a level of complexity and significance in the creation of value that are poorly served by transactional exchange
C) The benefits of transactional exchange might be improved on by using additional means to coordinate activities between customers and suppliers
D) Transactional exchange has a limited range of effectiveness
E) In a transactional exchange, buyers are at a disadvantage due to low-cost inputs

Question 26

Global competition has created all of the following except a(n):

A) Greater focus on accountability in marketing efforts
B) Insistence for greater effectiveness in marketing efforts
C) Invigorated quest for operational efficiency
D) Drive to eliminate any waste
E) Greater isolation between firms culturally separated

Question 27

These software suites assist marketer efforts to collect and store accessible data on each account; evaluate customer,program and product performance; and support the development of customized services to maximize the long-run profitability of each account.

A) Relational database systems
B) JIT systems
C) Supply chain management systems
D) CRM systems
E) Delivery systems

Question 28

OEM buyers have worked with suppliers of component parts and materials to eliminate costly inventories and frequent handling costs by establishing:

A) Transaction costs
B) Relational contracts
C) Social relationships
D) Safeguarded relationships
E) JIT relationships

Question 29

Many of the strategic partnerships that characterize business markets have been sparked by _____,a management process of renewed dedication to customer satisfaction and efficiency.

A) "The quality revolution"
B) "Complexity management"
C) "Decision-making units"
D) "The value chain"
E) "Environmental engineering"

Question 30

According to the text,the value of any system depends:

A) On the creation of long-running relationships with all comers
B) Only on the communication content between transacting parties
C) On the identity of the vendors and users
D) Only on the user's personal expertise and deft problem solving
E) On the depth and quality of ongoing support given by the vendor

Question 31

According to the text,an auction implies that the buyer is primarily concerned with:

A) Quality
B) Price
C) Delivery
D) Technology
E) Reputation

Question 32

The BEST analogy for a good strategic relationship is a(n):

A) Social group
B) Courtship and marriage
C) Association of convenience
D) Economic arrangement
E) Union of opposites

Question 33

Which of these phases is typically the first phase of the relationship development process?

A) Commitment
B) Exploration
C) Contractual
D) Expansion
E) Awareness

Question 34

All the following are reasons for buyers frequently turning to supply partnerships EXCEPT:

A) Costly safety stocks
B) High return rates
C) Numerous reorders
D) Inefficiencies in the production process
E) Short lead times

Question 35

This results only when BOTH parties have mutual interests in maintaining an ongoing exchange.

A) A standard assessment
B) A safeguarded relationship
C) A strategic partnership
D) A transactional partnership
E) Dependence balancing

Question 36

Proactively planning and coordinating the flows of products,services and information among firms cooperating to create and deliver value to end users is the focus of:

A) Relational contracts
B) Strategic partnerships
C) Corporate relationships
D) Supply chain management
E) Vertical integration

Question 37

In terms of external measures,which of the following statements is TRUE?

A) A company can evaluate relationships on a relative basis against external norms provided by consulting companies
B) Comparing sales and market penetration rates between agents in similar creates dissonance in agency relationships
C) Although agencies are autonomous businesses and are paid a standard commission on sales, most do not participate in manufacturer training programs
D) They cannot be used to critically evaluate the direction of sustained business relationships
E) They are unable to compare relationships based on an external standard or profile derived from other relationships

Question 38

Which of the following is a limitation of online auctions?

A) Many products and services cannot be fully specified
B) Products and services do not meet standards of delivery and quality
C) Low savings for purchasers
D) Inability to send business to the most-efficient suppliers
E) They are usually held for sub quality and old products

Question 39

In this stage of the relationship development process,there is no interaction between the buyer and seller,but unilateral considerations of potential partners.

A) Exploration
B) Commitment
C) Awareness
D) Expansion
E) Contractual

Question 40

Using _____,a company can evaluate relationships on a relative basis against outside norms provided by trade associations or consulting companies.

A) Internal assessment
B) External measures
C) Trade unions
D) Internal reviews
E) White papers

Question 41

Account development,cross-selling and up-selling are manifestations of the:

A) Expansion phase
B) Awareness stage
C) Exploration stage
D) Commitment phase
E) Contractual stage

Question 42

As a firm _____,it spins off internal functions to an outside provider.

A) Negotiates
B) Cooperates
C) Outsources
D) Explores
E) Diversifies

Question 43

This phase of the relationship development process is characterized by the parties' exchanging of significant resources.

A) Exploration
B) Attraction
C) Commitment
D) Expansion
E) Reciprocation

Question 44

The formation of a development team representing key members of all firms involved in the value chain is covered in the:

A) Release to tool
B) Distribution channel
C) Distribution contract
D) Presource agreement
E) Source agreement

Question 45

The lasting desire to maintain or preserve a valuable,important relationship is a:

A) Contract
B) Norm
C) Behavior
D) Distribution pledge
E) Commitment

Question 46

Which term refers to the degree to which the interaction between buyer and seller yields them net payoffs in excess of some minimum level?

A) Commitment
B) Attraction
C) Elasticity
D) Expansion
E) Reciprocity

Question 47

The belief that a party's word or promise is reliable and a party will fulfill his/her obligations in an exchange relationship is termed:

A) Power
B) Trust
C) Value
D) Hope
E) Honesty

Question 48

Interaction between the parties occurs for the first time during which stage of the relationship development process?

A) Exploration
B) Contractual
C) Commitment
D) Expansion
E) Awareness

Question 49

The most important expectation underlying the creation and maintenance of ongoing exchange relationships is:

A) Profit
B) Sales results
C) Effort
D) Communication
E) Trust

Question 50

The "Release to Tool" agreement is:

A) A formal, legal contract to purchase a definite volume within a specified time
B) Evidenced by a contract to purchase a specified quantity over a period of time at an agreed-upon price
C) The last phase of the commitment stage
D) Unique to manufacturing firms
E) The formation of a development team consisting of representatives from various areas such as technical centers

Question 51

Standards of behavior for the parties,the guidelines by which the parties interact,are called:

A) Values
B) Norms
C) Attitudes
D) Habits
E) Mores

Question 52

Which of these observations is TRUE of the exploration stage of the relationship development process?

A) Unilateral considerations of potential partners
B) Buyer and seller independently consider the other as an exchange partner
C) A fragile relationship
D) Interaction yields net payoffs in excess of some minimum level
E) Association moves to enlarging rewards and the scope of exchange

Question 53

The _____ stage of the relationship development process is marked by partners adapting and resolving disputes internally in order to sustain the relationship.

A) Awareness
B) Exploration
C) Expansion
D) Contractual
E) Commitment

Question 54

In the _____ stage of the relationship development process,one party has made a successful request for adjustment and starts to seek more from current rather than alternative partners.

A) Exploration
B) Commitment
C) Awareness
D) Expansion
E) Contractual

Question 55

The termination of an advanced relationship is accomplished through:

A) Dissolution
B) Arbitration
C) Dissemination
D) Outsourcing
E) Internal review

Question 56

In the commitment phase,

A) Buyer and seller may exchange employees in order to fully identify with the trading partner
B) The association moves from one of testing and probing to one of enlarging rewards and the scope of exchange
C) The supplier may collect information about product specifications, buying process and the like at the prospective customer
D) The parties probe and test each other and initial purchases can take place
E) The interaction between buyer and seller yields them net payoffs in excess of some minimum level

Question 57

The rendering of what is merited or due is the anticipated outcome of:

A) Justice
B) Power
C) Norms
D) Negotiation
E) Pressure

Question 58

The essence of the expansion phase is:

A) Increasing dependence between exchange partners
B) A decrease in the need for communication
C) An increase in the need for communication
D) The final establishment of a permanent relationship
E) The creation of norms

Question 59

The ability of one organization,Alpha,to get another organization,Beta,to do what it would not do otherwise,which is derived from Beta's dependence on Alpha for valued resources like status and economic rewards that are not easily obtained elsewhere is called:

A) Attraction
B) Concession
C) Adjustment
D) Power
E) Justice

Question 60

As partners communicate and begin to bargain over the distribution of their obligations,rewards and costs,any concession made by one party is expected to be met by some form of _____ by the other.

A) Reciprocation
B) Unilateral concession
C) Demand
D) Payment
E) Association

Question 61

Contracts may have large penalties for termination and detailed procedures for resolving conflicts and adjusting to new working environments in:

A) Social relationships
B) Safeguarded relationships
C) Corporate relationships
D) Strategic partnerships
E) Transactional relationships

Question 62

What is a strategic partnership and what is the essence of the partnership?

Question 63

A trading association supported principally by social bonds and habit is a:

A) Transactional relationship
B) Safeguarded relationship
C) Corporate relationship
D) Strategic partnership
E) Social relationship

Question 64

Safeguard relationships may be based on any/all of the following except:

A) Social bonds
B) Formal contracts
C) Structural ties
D) Technical ties
E) Financial "penalties" for nonperformance

Question 65

_____ encompasses all formal efforts to obtain evidence of supplier capabilities and commitment.

A) Presourcing agreements
B) Supplier verification
C) Outsourcing notification
D) Release to Tool
E) Vertical integration

Question 66

Bringing a function or technology within the boundary of the firm is:

A) Valence
B) Vertical integration
C) Supply chain management
D) Company orientation
E) Formalization

Question 67

_____ involves cultivating relationships with other exchange partners in order to reduce the risks associated with relying on a single supplier.

A) Outsourcing
B) Vertical integration
C) Reciprocation
D) Dependence balancing
E) A relational contract

Question 68

Most business marketers agree that the MOST significant development in network thinking has been in the area of:

A) Relational contracts
B) Vertical integration
C) Supply chain management
D) Social contracts
E) Structural relationships

Question 69

_____ relationships are exchanges safeguarded by ownership or vertical integration.

A) Safeguarded
B) Social
C) Corporate
D) Strategic
E) Transactional

Question 70

Firms make a strategic choice to use distributors or their own sales force,outside research agencies or their own research department,third-party logistical services or their own traffic department,contract suppliers or inhouse manufacturing and much more in:

A) Horizontal integration
B) Safeguarded relationships
C) Corporate relationships
D) Vertical integration
E) Dependence balancing

Question 71

What is the downside of vertical integration?

A) Many products have a level of complexity and significance in the creation of value that are poorly served by vertical integration
B) There is technical complexity, exacting buyer standards and a variety of dependencies between buyer and seller
C) It swells fixed costs and may not well duplicate the motivation of owners of independent businesses
D) Many products and services, like complex components, engineering services or system installations, cannot be fully specified
E) It does not recognize the dynamics of decision making by the cross-functional work teams, which are becoming common at large firms

Question 72

In vertical integration,

A) Employees work in an environment of formal rules, authority, reporting structures and special responsibilities
B) A buyer reduces its dependence on the supplier by cultivating relationships with other exchange partners
C) There is variation in delivery and parts performance
D) Entails stretching the supplier coordination and management resources across two partners
E) Formal efforts are made to obtain evidence of supplier capabilities and commitment

Question 73

In what ways do CRM systems assist marketer efforts?

Question 74

According to the text,which of the following business relationships is MOST like a marriage?

A) Corporations
B) Associations
C) Sole proprietorships
D) Partnerships
E) Networks

Question 75

Write a short note on transactional exchange and its advantages and limitations?

Question 76

Which of the following provides the "strongest bond" and ensures continuity in buyer/seller relationships?

A) Relational contracts
B) Rolling contracts
C) Vertical integration
D) Presource Agreements
E) Release-to-Tool Agreements

Question 77

Relational contracts

A) Ensures continuity in a relationship because suppliers are now hierarchically connected employees
B) Can establish procedures or structures for planning to ensure ongoing effective exchange
C) Are formal efforts to obtain evidence of supplier capabilities and commitment
D) Are contracts to purchase a specified quantity over a period of time at an agreed-upon price
E) Precipitates the formation of a development team consisting of representatives from various areas such as manufacturing, purchasing and technical centers

Question 78

Write a brief note on relational contracts and its advantages?

Question 79

_____ do not try to bring every future contingency up for consideration in the present,but establish means of continuous planning,adjusting and resolving conflicts.

A) Relational contracts
B) JIT systems
C) Safeguarded relationships
D) Strategic partnerships
E) Transactional relationships

Question 80

What is a JIT relationship? Write a note on its drawbacks?