Deck 4: Business, Government, and Institutional Buying

Question 1

Intermediaries or resellers purchase products to

A) resell at a profit.
B) modify and sell it at a better rate.
C) increase the value of products.
D) help the companies advertise their products.

Answer 1

A
Explanation: Marketing intermediaries or resellers purchase products to resell at a profit.

Question 2

Which is/are the world's biggest consumer(s)?

A) State governments
B) Federal government
C) Hospitals
D) Universities

Answer 2

B
Explanation: Government agencies account for trillions of dollars worth of buying, and over half of this amount represents purchases by the federal government, making it the world's largest customer.

Question 3

The complexity of the purchase that is to be made is a major consideration that affects the

A) consumer's buying process.
B) organizational portfolio.
C) organizational buying process.
D) company's profit margin.

Answer 3

C
Explanation: A major consideration that affects the organizational buying process is the complexity of the purchase that is to be made.

Question 4

Why do organizations that use just-in-time inventory favor reliable suppliers?

A) If the supplier delivers products that are late or of unacceptable quality, the buyers do not have a reserve inventory to draw on.
B) In the event of some modification to an existing requirement, the buyer has to consider the new information and decide what changes to make.
C) Since this type of purchase involves the consideration of a limited number of alternatives before making a selection, any delays can hamper the buying process.
D) Since this type of purchase involves an extensive search for information and a formal decision process.

Question 5

Marketing to producers and intermediaries is called

A) business-to-business marketing.
B) affiliate marketing.
C) marketing channel.
D) marketing management.

Question 6

What is the full form of NAICS?

A) National American Industrial Computer Services
B) North American Industry Classification System
C) North American Institutional Career Services
D) North American Industrial Control Systems

Question 7

All of the following influence the organizational buying process except

A) purchase-type influences.
B) structural influences.
C) political influences.
D) behavioral influences.

Question 8

_____ or resellers purchase to resell at a profit.

A) Producers
B) Intermediaries
C) Government agencies
D) Influencers

Question 9

Marketing to _____ can be complex since they often have strict purchasing policies and regulations.

A) end users
B) retailers
C) government agencies
D) wholesalers

Question 10

_____ tend to be larger and more geographically concentrated than producers of services.

A) Distributors of services
B) Wholesalers
C) Producers of goods
D) Resellers

Question 11

Organizations use this simple approach to purchasing because it is fast and requires relatively few employees. Identify the purchase type.

A) Modified purchase
B) Straight rebuy
C) New task purchase
D) Modified rebuy

Question 12

Identify the type of purchase which routinely involves reordering from the same supplier a product that has been purchased in the past.

A) Modified purchase
B) New task purchase
C) Modified rebuy
D) Straight rebuy

Question 13

Identify the organization type that purchases products and services to maintain their operations and serve their clientele.

A) Producers
B) Government agencies
C) Resellers
D) Nonprofit organizations

Question 14

Identify the group which includes various types of resellers such as wholesalers and retailers that buy products from manufacturers and distribute them to consumers and other organizational buyers at a profit.

A) Producers
B) Intermediaries
C) Other Institutions
D) State governments

Question 15

Metromedia Technologies, Inc. is one of the leading computer imaging companies in the nation. It makes computer painted vinyl signs that are seen stretched across billboards and truck bodies. It purchases rolls of sheet plastic vinyl to make the signs. Metromedia is an example of which type of business-to-business market?

A) Producer
B) Intermediaries
C) Government
D) Institution

Question 16

Dell Computer buys computer chips from Intel for the purpose of making computers to be sold to consumers and other organizations. Dell is an example of which type of organizational buyer?

A) Intermediary
B) Producer
C) Wholesaler
D) Institution

Question 17

Which of the following constitute the largest group of organizational buyers?

A) Intermediaries
B) Government agencies
C) Producers
D) Other institutions

Question 18

The stages involved in the organizational buying process include all of the following except

A) vendor analysis.
B) purchase activities.
C) design evaluation.
D) postpurchase evaluation.

Question 19

Which type of purchasing do organizations use when they are experienced at buying the product, have an ongoing need for it, and have regular suppliers of it?

A) Straight rebuy
B) Modified purchase
C) New task purchase
D) Modified rebuy

Question 20

Identify the reason why marketing to government agencies can be complex.

A) They have strict purchasing policies and regulations.
B) They purchase products to resell at a profit.
C) They don't require products which the marketers want to advertise.
D) They have a very high profit margin and do not prefer private brands.

Question 21

St. Paul's Hospital was one of the first hospitals to purchase endoscopes to check for lung and colon abnormalities. To clean endoscopes, the hospital technicians use a chemical called glutaraldehyde, which is ordered routinely from the same supplier. From this information, you would expect the purchase of glutaraldehyde to be a

A) modified rebuy.
B) initiative purchase.
C) new task purchase.
D) straight rebuy.

Question 22

Which of the following is the best example of a modified rebuy?

A) A contractor buying shingles from the same supplier for the roof of the fifteenth house he is building in Tara Woods.
B) The production manager of a meat processing plant is buying a $90,000 high-tech meat slicing machine that will save the company an estimated $20,000 annually in wastage.
C) A supermarket manager reordering 24 replacement plastic pallets for storing food.
D) The purchasing department at a university making a buying decision about its long distance telephone service provider.

Question 23

In which of the following situations would you most likely expect to find the purchase requiring joint decision making?

A) A German-based company decided to spend $30 million on a new manufacturing facility in Georgia.
B) A dentist who has been in practice for 10 years buys a replacement dental chair.
C) The supplies manager for a large law firm reorders stationary for the firm.
D) A small regional department store upgrades its security system and sends one of its employees to a seminar on "safety first".

Question 24

CDS Cold Storage Public Warehouse needs to buy a new compressor for one of its refrigeration units. The compressor that is to be replaced is a Frick screw compressor, but the purchasing agent wants to consider other brand options before making a final decision. The purchasing agent is engaged in a

A) modified rebuy.
B) straight task buy.
C) straight rebuy.
D) new task purchase.

Question 25

_____ is the most common type of organizational purchasing.

A) Straight rebuy
B) Modified rebuy
C) New task purchase
D) Marketing rebuy

Question 26

Hebel AG is a manufacturer of self-insulating building material that is fireproof, and impervious to insects. In making a decision about building a plant in the U.S., it had to consider the $30 million cost of the manufacturing facility. This building decision is an example of a(n)

A) new task purchase.
B) modified rebuy.
C) international rebuy.
D) straight purchase.

Question 27

_____ is time consuming and involves a relatively large number of decision makers, and is mostly used when buying big-ticket items.

A) New task purchase
B) Modified rebuy
C) Brand extension
D) Dual branding

Question 28

Which of the following examples would most likely use straight rebuy?

A) A company looking to buy suitable premises for its new branch office.
B) A physicians' office planning to buy a $35,000 endoscope.
C) A manufacturer lawn mowers ordering spare parts regularly from the same supplier.
D) A cold storage warehouse planning to buy a $100,000 generator to keep its 200,000 square feet of storage area cold in the event of an electric outage.

Question 29

What does a marketer need to do in order to retain customers who use straight rebuys?

A) Compromise on the quality of products but provide reliable service.
B) Maintain high-quality products and service which is passable.
C) Maintain high-quality products and highly reliable service.
D) Compromise on the quality of products and maintain passable service.

Question 30

The purchasing agent for an automobile manufacturer that practices just-in-time inventory routinely orders a shipment of component parts from the same supplier. What kind of a purchase would this be?

A) Straight rebuy
B) Modified rebuy
C) New task purchase
D) Straight task buy

Question 31

When does an organization use modified rebuy?

A) When some aspects of the buying behavior are unfamiliar.
B) When aspects of buying become routine.
C) When practicing just-in-time inventory management.
D) When purchasing policies and procedures do not change.

Question 32

Which of the following is the best example of a new task purchase?

A) A dentist who has been in practice for 10 years buys a replacement dental chair just like the old one.
B) A supermarket manager reordering 24 replacement plastic pallets for storing food.
C) A Dallas-based hotel chain with 120 hotels and resorts buying new software of $1.6 million to secure its networks.
D) A department store upgrades its security system by installing a second video camera at the employee's entrance to the store.

Question 33

In which of the following scenarios is new task purchase most likely to be used?

A) For the purchase of a pair of shoes.
B) For the purchase of household furniture.
C) For the purchase of a mattress.
D) For the purchase of real estate.

Question 34

Organizational buyers follow this approach when a routine purchase changes in some way.

A) Modified purchase
B) Straight rebuy
C) Modified rebuy
D) New task purchase

Question 35

A central computer system at the Saturn car manufacturing plant in Spring Hill, Tennessee, orders pre-inspected parts, from a single supplier at a specific time, to be delivered at one of the plant's 56 receiving docks. From this information, you know that the Saturn plant relies primarily on

A) modified rebuy.
B) straight task buy.
C) new task buy.
D) straight rebuy.

Question 36

A manufacturer of plastic, Tiffany-like light shades uses four cases of 3M Jet-melt Adhesives weekly. The adhesive can bond plastic just as well as hot melt adhesives without damaging the plastic. 3M holds the patent on this type of adhesive. The light shade manufacturer's purchasing agent would most likely treat the purchase of the 3M adhesive as a

A) modified rebuy.
B) influencer purchase.
C) new task purchase.
D) straight rebuy.

Question 37

_____ involves extensive search for information and a formal decision process.

A) Modified rebuy
B) Straight rebuy
C) New task purchase
D) Initiator purchase

Question 38

What kind of purchase decision would most likely require joint decision making because many kinds of expertise are required to make the best decision?

A) Straight rebuy
B) Modified rebuy
C) New task rebuy
D) Straight task buy

Question 39

_____ is the type of organizational purchase associated with just-in-time inventory.

A) Modified rebuy
B) Marketing rebuy
C) New task purchase
D) Straight rebuy

Question 40

Diversified Neon Inc. makes neon signs. Its CEO recently attended a trade show where she examined the new Neon Wizard 5.0, a machine that allows you to create three-dimensional computer-generated designs, feed the designs into a machine with neon tubing, and have the neon extruded in almost any shape imaginable. He believes this machine will increase his company's output by at least 30 percent and reduce its wastage by at least 50 percent. If the company was formerly doing most of this work by hand, then the purchase of a Neon Wizard 5.0 would be an example of a

A) modified rebuy.
B) influencer purchase.
C) straight rebuy.
D) new task purchase.

Question 41

An organization's routine purchase changes when a supplier discontinues a product. In such a situation, which purchasing approach would the organizational buyer be most likely to use?

A) Straight rebuy
B) Modified rebuy
C) New task rebuy
D) Straight task buy

Question 42

Which of the following observations about the types of organizational purchases is true?

A) There are more suppliers to deal with in a modified rebuy than any other type of purchase.
B) New task purchases and modified rebuys are equally complex.
C) The time frame for a straight rebuy is much shorter than for a modified rebuy.
D) Modified rebuys are commonly made for products that are frequently purchased, such as computer disks.

Question 43

A _____ is an opportunity for the marketer to learn about the needs of the organization in its target market and to discuss ways to meet organizational needs.

A) gatekeeper purchase
B) straight purchase
C) straight rebuy
D) new task purchase

Question 44

Identify the type of purchase common among organizations practicing just-in-time inventory, and where buyers do not have time to search for potential suppliers and solicit bids.

A) Straight purchase
B) Modified rebuy
C) New task purchase
D) Straight rebuy

Question 45

They have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

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

Question 46

This is a system of replenishing parts or goods for resale just before they are needed.

A) Just-in-time inventory
B) Vendor managed inventory
C) Process flow
D) Inventory evaluation

Question 47

Marge and Louellen Price own a cleaning service. Marge and her office manager Phyllis want to install a time clock and require each employee to sign in and sign out using the clock. Louellen thinks the clock is a waste of time. She believes it is more efficient for their employees to go directly to their first work site rather than waste time coming to the central office. Two employees, Kari and Alicia, responded when asked what they thought of a time clock. Kari brought in research information showing how employees in various industries reacted to a time clock. Alicia, who is one of the company's best workers, said she would be happy to sign in and sign out by means of the time clock. In terms of the buying center, Alicia probably

A) was a gatekeeper.
B) was a user.
C) was a decider.
D) was an initiator.

Question 48

It is common in organizational buying for purchases to be made cross functionally with representatives from different functional departments playing various roles in the process. Taken collectively, these are called the

A) buying centers.
B) intermediaries.
C) new task processes.
D) gatekeeper facilities.

Question 49

Brad is an information systems manager working for Company X. His job entails him to determine the specifications in the purchase of a new computer system for the company. Identify which of the following best describes Brad's purchase role in this scenario.

A) Influencer
B) Initiator
C) Decider
D) Gatekeeper

Question 50

Waddell Engineering manufactures molded plastic components for a leading toy manufacturer. Roy supervises the production line; he would like to see the company use an injection molding machine that has a faster cycle time. Petra and Robin, quality control managers for the company, have just returned from a trade show with information on the new Logic Devices molding machines. They hand this information to Mike Waddell, the CEO of the company, who is concerned about the high cost of the product. Roy, Robin, and Petra meet with Mike and Ailene, the company's purchasing agent, to discuss why the company needs to buy the new machine. Robin does not tell anyone that the same machine can be purchased for 30 percent less from another company. Which of the following statements about the purchasing roles of these individuals are true?

A) Petra and Robin are both deciders.
B) Roy is an influencer, Robin is a user, and Mike is a decider.
C) Mike and Ailene are both deciders, and Robin is a gatekeeper.
D) Ailene is a buyer, and Roy is a gatekeeper.

Question 51

Organizational buyers who regularly place their orders with a supplier whose quality and timely delivery can be counted on are using which type of purchase?

A) Modified rebuy
B) New task purchase
C) Straight task buy
D) Straight rebuy

Question 52

Waddell Engineering manufactures molded plastic components for a leading toy manufacturer. Roy supervises the production line; he would like to see the company use an injection molding machine that has a faster cycle time. Petra and Robin are quality control managers in the company, and have just returned from a trade show with information on the new Logic Devices molding machines. This information is handed to Mike Waddell, the CEO of the company, who is concerned about the $400,000 cost. Roy, Robin, and Petra meet with Mike and Ailene, the company's purchasing agent, to discuss why the company needs to buy the new machine. Who among the following have the purchasing role of "decider" here?

A) Mike and Aileen
B) Robin and Roy
C) Roy and Petra
D) Petra and Mike

Question 53

Organizations that use just-in-time inventory tend to favor suppliers with a strong commitment to

A) profit.
B) quality.
C) yield.
D) revenue.

Question 54

Who in an organization has the formal or informal power to select or approve the supplier that receives the contract in an organization?

A) Initiators
B) Buyers
C) Users
D) Deciders

Question 55

All of the following, when taken collectively, are known as the buying center except

A) initiators.
B) suppliers.
C) buyers.
D) influencers.

Question 56

Which of the following observations about the types of organizational purchases is true?

A) Straight rebuys and modified rebuys take an equal amount of time to transact.
B) More suppliers are involved in a modified rebuy than in a new task purchase.
C) Modified rebuys are always made for significantly more expensive items than are straight rebuys.
D) The time frame for a new task purchase is much longer than for a modified rebuy.

Question 57

Frequently purchased, routine products such as office material are examples of this type of organizational purchase.

A) Modified rebuy
B) Straight rebuy
C) New task purchase
D) Straight task rebuy

Question 58

Waddell Engineering manufactures molded plastic components for a leading toy manufacturer. Roy supervises the production line; he would like to see the company use an injection molding machine that has a faster cycle time. Petra and Robin are quality control managers for the company, and have just returned from a trade show with information on the new Logic Devices molding machines. They hand this information to Mike Waddell, CEO of the company, who is concerned about the $400,000 cost. Roy, Robin, and Petra meet with Mike and Ailene, the company's purchasing agent, to discuss why the company needs to buy the new machine. Robin does not think the company needs to invest in the machine and does not tell anyone that the same machine can be purchased for 30 percent less from another company. Who typifies the role of gatekeeper?

A) Petra
B) Robin
C) Roy
D) Mike

Question 59

Marge and Louellen Price own a cleaning service. Marge and her office manager Phyllis want to install a time clock and require each employee to sign in and sign out using the clock. Louellen thinks the clock is a waste of time. She believes it is more efficient for their employees to go directly to their first work site rather than waste time coming to the central office. Two employees, Kari and Alicia, responded when asked what they thought of a time clock. Kari brought in research information showing how employees in various industries reacted to a time clock. Alicia, one of the company's best workers, vehemently opposes the idea. In terms of the buying center, Kari is a

A) influencer.
B) decider.
C) gatekeeper.
D) buyer.

Question 60

All of the following are reasons why an organization using a straight rebuy may shift to modified rebuy for making organizational purchases, except

A) a supplier discontinues a product.
B) the price of a usual product rises.
C) a new product becomes available to meet the same need.
D) a one time, big-ticket item needs to be purchased.

Question 61

Which of the following is most likely true of marketing to organizational buyers?

A) Less variation in buyer-seller relationships.
B) Larger distribution channels.
C) Standard promotional strategies.
D) Greater Web integration.

Question 62

An executive might recognize a need for faster computers and starts the purchasing process. This is an example of a(n)

A) initiator.
B) decider.
C) gatekeeper.
D) influencer.

Question 63

Organizations that are highly _____ are less likely to have joint decision-making.

A) decentralized
B) cost-centered
C) centralized
D) profitable

Question 64

Sole sourcing is advantageous to suppliers because it provides them with predictable and profitable demand and allows them to

A) market their products predominantly to large organizations.
B) build long-term relationship with organizational buyers.
C) assimilate the advantages and disadvantages of the organization.
D) identify organizations based on their geographical proximity.

Question 65

Which of the following statements about the types of organizational purchases is false?

A) There are more suppliers to deal with in a new task purchase than any other type of purchase.
B) The time frame for a straight rebuy is much shorter than for a modified rebuy.
C) New task purchases are more complex than straight rebuys.
D) The time frame for a new task purchase is much shorter than for a modified rebuy.

Question 66

Steve, the purchasing agent for a carpet manufacturer received a memo indicating that an upcoming financial review would determine which employees were most successful at reducing costs within their departments. The review would also assess which employees would continue working for the company as a result of their cost-cutting efforts. A salesperson trying to sell a new weave-pattern machine to Steve claims that the machine would save costs for the company in the long-run. Steve, however, is faced with the risk of termination made by any false moves. In this case, _____ would influence the organizational buying decision.

A) personal motivation
B) structural factors
C) external competition
D) purchase-type factors

Question 67

Which of the following statements about the types of organizational purchases is true?

A) Straight rebuys have a long time frame.
B) Modified rebuys have a very short time frame.
C) New task purchases involve many suppliers.
D) Straight rebuys involve many suppliers.

Question 68

Organizational buyers are engaging in sole sourcing because they are more concerned with _____ than buying only on the factor of price.

A) geographical proximity
B) branded products
C) quality and timely deliveries
D) horizontal markets

Question 69

BASF, a chemicals company, has their salespeople work directly with private-run fire departments to sell the latest fire-fighting chemicals and ensure that they are used properly. This is an example of _____ in marketing to organizational buyers.

A) a greater emphasis on personal selling
B) using shorter distribution channels
C) application of unique promotional strategies
D) more variation in buyer-seller relationships

Question 70

Which of the following contentions about organization-specific factors affecting purchases is true?

A) For manufacturing companies, the production department always controls purchasing decisions.
B) Privately owned organizations that are highly centralized are more likely to use joint decision making for all purchases other than straight rebuys.
C) The size of an organization does not affect its purchase decisions.
D) A large-scale public decentralized corporation will tend to have greater joint decision making.

Question 71

In differentiating organizational buyers, which of the following interpretations is false?

A) Web integration while marketing to organizational buyer is comparatively limited.
B) Marketing to organizational buyers requires more unique promotional strategies than to final consumers.
C) Marketing to organizational buyer has no variation in buyer-seller relationships.
D) The distribution channel for organizational buyers is longer than for final consumers.

Question 72

A current trend in many organizations is _____, in which all of a particular type of product is purchased from a single supplier.

A) sole sourcing
B) dual branding
C) multi branding
D) franchise extension

Question 73

Numann Manufacturing is a private company that makes thermometers for monitoring the temperature of meat when it is in storage. It employs 23 people, and 15 of them have degrees in engineering or some other technical field. What can you surmise about how organization-specific factors affect its buying decisions?

A) Because of its size, Numann Manufacturing will tend to use joint decision making.
B) The technical orientation of its employees will have little effect on decision making and will, in fact, encourage joint decision making.
C) In spite of its technical orientation, the marketing department will control most purchase decisions for the company.
D) Because of its size, Numann Manufacturing will tend to use autonomous decision making.

Question 74

A large organization that is highly decentralized is more likely to _____ for other than straight rebuys.

A) use joint decision making
B) employ longer distribution channels
C) rely on less personal selling
D) use autonomous decision making

Question 75

Once billboard signs are printed, most still need to be trimmed to a standard size. Western Graphtec is a company that makes machines used for trimming signs quickly and accurately. The company's management is made up almost completely of engineers. If a salesperson calling on the company described Western Graphtec as technology-oriented, he or she would be referring to the _____ that influence the organization buying process.

A) purchasing policies and procedures
B) purchasing roles
C) organization-specific factors
D) manufacturing processes

Question 76

Eastlake Furniture Company, a manufacturer of Victorian furniture reproductions, will only use 3M Jet-melt Adhesives for its finely crafted products. The adhesive can bond wood just as well as hot melt adhesives without damaging heat-sensitive areas, so it satisfies the needs of the company's craftspeople. Even though 3M adhesive is slightly more expensive than the hot-melt glues made by competitors, 3M retains its clientele as it guarantees delivery just two days after an order is placed. This best illustrates that Eastlake Manufacturing is using

A) sole sourcing.
B) outsourcing.
C) industry-specific sourcing.
D) organization-wide sourcing.

Question 77

Orientation, size, and _____ are the three primary organization-specific factors influencing the purchasing process in organizations.

A) purchasing policies
B) purchasing roles
C) degree of centralization
D) organizational procedures

Question 78

A privately owned, small company with a technology or production orientation will usually have

A) autonomous decision making.
B) joint decision making.
C) multiparty decision making.
D) decentralized decision making.

Question 79

Which of the following observations correctly describes the one of the key differences in marketing to organizational buyers?

A) Marketing to organizational buyers requires more unique promotional strategies than to final consumers.
B) Organizational buyers are more geographically dispersed than final consumers.
C) The buyer-seller relationships have more variations in the consumer market than in business-to-business marketing.
D) The distribution channel for final consumers is shorter than for organizational buyers.

Question 80

Three college friends, Alan, Thomas, and Will, have turned their interest in backpacking and wilderness exploration into a profitable business partnership. They conduct exploration camps lasting anywhere from two days to six weeks. They hire Alan's girlfriend Rosalyn, who assists Alan in the operational activities of the business. Thomas interacts with various vendors to procure the supplies needed for the business and Will looks after the company's finances. Who would most probably be the buyer in this business?

A) Will
B) Alan
C) Thomas
D) Rosalynn