Deck 7: Analyzing Business Markets

Question 1

Sometimes a rise of only 10% in consumer demand can cause as much as a 200% rise in business demand for products for the next period. This is an example of ________.

A) inelastic demand
B) direct purchasing
C) fluctuating demand
D) derived demand
E) a straight rebuy

Answer 1

C

Question 2

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

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

Answer 2

B

Question 3

Ultimately, the amount of steel sold to General Motors depends on the consumers' demand for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following demand forms is most pertinent?

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

Answer 3

A

Question 4

The total demand for many business goods and services is not much affected by price changes. Thus, this demand is ________.

A) derived
B) fluctuating
C) accelerated
D) multiple
E) inelastic

Question 5

The purchasing department buys office supplies on a routine basis from a pre-approved list of suppliers. This type of purchase is classified as a ________.

A) straight rebuy
B) modified rebuy
C) new task
D) secondary purchase
E) procure-to-pay

Question 6

Asiaworth Pte Ltd is shifting from its rented four-room office to a standalone office building owned by the company itself. This can be classified as a ________.

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

Question 7

Xerox offers a ________ approach to prospective clients when it offers a complete turnkey solution, including the operation and management of the client's information and communication need.

A) guided selling
B) fair trading
C) systems buying
D) cross-selling
E) local purchasing

Question 8

________ refers to the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

A) Marketing channels
B) Organizational buying
C) Corporate retailing
D) Brand auditing
E) Inventory control

Question 9

Orica Pte Ltd competes in the market for commercial explosives. The company recently changed its business model from just selling explosives to managing an entire blast in a quarry. This customer-solution-based approach to the sale of explosives is an example of ________.

A) systems selling
B) straight rebuying
C) customer referencing
D) derived demand
E) channel consolidation

Question 10

Many business buyers prefer to buy a total solution to a problem from one seller. This process is also known as ________.

A) channel consolidation
B) systems buying
C) vertical buying
D) horizontal buying
E) supply buying

Question 11

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

A) straight rebuy
B) single rebuy
C) rakeback rebuy
D) system buy
E) modified rebuy

Question 12

Which of the following is true for business marketers?

A) They deal with more and larger buyers than consumer marketers.
B) They deal with more and smaller buyers than consumer marketers.
C) They deal with fewer and larger buyers than consumer marketers.
D) They deal with fewer and smaller buyers than consumer marketers.
E) They deal with the same kind of buyers as consumer marketers.

Question 13

The business buyer has to make the fewest decisions when involved in a ________.

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

Question 14

Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor will they buy much less leather if the price rises, unless they can find satisfactory substitutes. This is an example of ________.

A) inelastic demand
B) direct purchasing
C) the acceleration effect
D) a modified rebuy
E) a straight rebuy

Question 15

Which of the following is a challenge in which business marketers differ from the consumer marketers?

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

Question 16

In a ________ purchasing situation, the buyer wants to make some change to existing product specifications, prices, delivery requirements, or other terms.

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

Question 17

If you decided to go into the systems contracting business, which of the following categories would constitute your main area of expertise, the service you provide for customers?

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

Question 18

The ________ consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

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

Question 19

A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Economists refer to this as ________.

A) derived demand
B) inelastic demand
C) the acceleration effect
D) a straight rebuy
E) the sales cycle

Question 20

The ___________ normally deals with far fewer, much larger buyers than the consumer marketer does.

A) savvy marketer
B) retail marketer
C) business marketer
D) global marketer
E) regional marketer

Question 21

In the purchasing decision process, the major role of ________ is in selecting vendors and negotiating.

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

Question 22

In which of the following is a person performing the role of an approver?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Leo has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 23

Which of the following is a step in the straight rebuy buyclass?

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

Question 24

When purchasing disposable surgical gowns, Changi Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the surgeons perform the role of the ________.

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

Question 25

Patrick Jung and his associates have identified eight stages in the business buying-decision process. This model is called the ________ framework.

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

Question 26

In which of the following is a person performing the role of an influencer?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Leo has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 27

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

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

Question 28

In the purchasing decision process, the ________ are those who request that something be purchased. They may be users or others in the organization.

A) users
B) initiators
C) influencers
D) deciders
E) approvers

Question 29

According to Patrick Jung, the eight stages in the business buying-decision process are known as ________.

A) buyphases
B) buybacks
C) buyouts
D) buyables
E) buyoffs

Question 30

Which of the following is true about the buying center?

A) In a buying center, one person cannot play more than one role.
B) A typical buying center has a maximum of five or six members.
C) A buying center consists of only mid-level managers and below.
D) It is the decision-making unit of a buying organization.
E) Gatekeepers in a buying center are people who authorize the proposed actions of deciders or buyers.

Question 31

________ is a key industrial marketing strategy in bidding to build large-scale industrial products such as dams, pipelines, etc.

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

Question 32

In which of the following is a person performing the role of a gatekeeper?

A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Leo has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.

Question 33

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

A) Make the most profit possible and remain independent of entanglements.
B) Approach every purchasing opportunity as means to create interdependency.
C) Seek the best value from fewer and better suppliers.
D) Outsource the supply function.
E) Abandon all strategies except for systems selling and buying.

Question 34

If you were an upper-level marketing executive of a large seller of trucks, which of the following strategies would be most appropriate in reaching buying center targets?

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

Question 35

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

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

Question 36

When purchasing disposable surgical gowns, Changi Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the operating-room administrator performs the role of the ________.

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

Question 37

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

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

Question 38

If you performed the role of the ________ in a buying center, you would be the person that has the power to prevent sellers or information from reaching other members of the buying center.

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

Question 39

Small sellers should first concentrate their marketing efforts on reaching ________.

A) approvers
B) initiators
C) influencers
D) users
E) initiators

Question 40

________ is composed of all parties who participate in the purchasing decision-making process and share common goals and risks associated with their decisions.

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

Question 41

Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier. These situations spur the ________ stage.

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

Question 42

The ________ approach to consumer research asks customers to attach a monetary value to alternative levels of a given attribute. The value of a given configuration is determined by adding the average values of each of the given attributes.

A) benchmarking
B) compositional
C) importance rating
D) focus-group
E) conjoint analysis

Question 43

In the ________ method for assessing customer value, customers are asked how costs of using a new product compare to those of using an incumbent.

A) direct survey
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis

Question 44

In the ________ method for assessing customer value, customers are shown a "benchmark" offering and then a new market offering. They are asked how much more they would pay for the new offering or how much less they would pay if certain features were removed from the benchmark offering.

A) internal engineering assessment
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis

Question 45

With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, P&G, and several other companies joined forces to form a ________ called Transora to use their combined leverage to obtain lower prices for raw materials.

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

Question 46

Which of the following is an example of a vertical hub?

A) Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers.
B) ChemConnect.com is an online exchange for buyers and sellers of bulk chemicals.
C) SteelMart.com concentrates on steel buyers from the United States.
D) Garments & Textiles Online was launched to help international buyers trade more effectively with apparel manufacturers in China, India, and other supply markets.
E) PaperTiger.com offers paper buyers a comprehensive look at the prices and quality in the paper market.

Question 47

In the ________ method for assessing customer value, customers are asked to place a direct dollar value on one or more changes in the market offering.

A) internal engineering assessment
B) direct survey
C) importance ratings
D) field value-in-use assessment
E) benchmarking

Question 48

Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. Plastics.com is an example of a(n) ________.

A) buying alliance
B) barter market
C) systems seller
D) vertical market
E) auction site

Question 49

A ________ establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time.

A) stockless purchase plan
B) direct stock purchase plan
C) defined contribution plan
D) stock purchase plan
E) share purchase plan

Question 50

Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers?

A) the buyer may contact different suppliers and ask for their evaluations
B) the buyers may rate the end-users on several criteria using a weighted-score method
C) the buyer might aggregate the cost of poor performance to come up with adjusted costs of purchase, including price
D) the buyers may aggregate the opinions of various competitors and come up with the adjusted cost of supply
E) the buyers might adopt the Supplier Added Value Effort technique to calculate supplier efficiency

Question 51

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

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

Question 52

In the ________ category of buyer-supplier relationships, competition rather than cooperation is the dominant form of governance.

A) basic buying and selling
B) bare bones
C) contractual transaction
D) customer supply
E) collaborative

Question 53

In the ________ method for assessing customer value, company engineers use laboratory tests to estimate the product's performance characteristics. However, this ignores the fact that in different applications, the product will have different economic value.

A) internal engineering assessment
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis

Question 54

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

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

Question 55

In the ________ method for assessing customer value, customers are asked to rank their preference for alternative market offerings or concepts. Statistical analysis is used to estimate the implicit value placed on each attribute.

A) internal engineering assessment
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis

Question 56

Business marketers can stimulate problem recognition by ________.

A) ensuring a presence in trade directories
B) direct mail, telemarketing, and calling on prospects
C) encouraging the Better Business Bureau to release statistics
D) using consumer advertising
E) conducting surveys of existing customers

Question 57

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

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

Question 58

The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________.

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

Question 59

On an online ________ , prices change by the minute.

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

Question 60

In the ________ method for assessing customer value, customers are asked to rate the importance of different attributes and their suppliers' performance on these attributes.

A) internal engineering assessment
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis

Question 61

The type of buyer-supplier relationship in which buyers and sellers make many relationship-specific adaptations, but without necessarily achieving strong trust or cooperation is termed as ________.

A) customer is king
B) mutually adaptive
C) collaborative
D) contractual transaction
E) customer supply

Question 62

Business markets have several characteristics that contrast sharply with those of consumer markets.

Question 63

The business marketer normally deals with far fewer, much larger buyers than the consumer marketer does.

Question 64

The total demand for many business goods and services is inelastic, that is, not much affected by price changes.

Question 65

According to research studies, the closest relationships between customers and suppliers arise when ________.

A) supply is important to the customer and there were procurement obstacles
B) procurement is simple
C) there are many undifferentiated vendors in the marketplace
D) the customer is highly price sensitive
E) the suppliers charge a premium for their products

Question 66

Value Central has a partnership of high trust and commitment with certain suppliers and gives them access to its sophisticated and detailed daily, individual store-based sales data. In exchange, those suppliers are responsible for managing Value Central's inventory of their products. This relationship is best described as ________.

A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king

Question 67

The business market is essentially the same market as the consumer market.

Question 68

The relationship between a company and its office supplies vendor where competition rather than cooperation is the dominant form of governance is probably best described as ________.

A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king

Question 69

The demand for business goods is ultimately derived from the demand for raw materials.

Question 70

Which of the following relationships is characterized by much trust and commitment leading to a true partnership?

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

Question 71

Which of the following is a form of cheating or undersupply relative to an implicit or explicit contract which usually takes place when buyers cannot easily monitor supplier performance?

A) Institutional sale
B) Business buying
C) Opportunism
D) Vertical integration
E) Contractual transactionism

Question 72

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

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

Question 73

________ investments are those expenditures tailored to a particular company and value chain partner.

A) Diversified
B) Pooled
C) Specific
D) Umbrella
E) General

Question 74

In the ________ category of buyer-supplier relationship, although bonded by a close, cooperative relationship, the seller adapts to meet the customer's needs without expecting much adaptation or change on the part of the customer in exchange.

A) contractual transaction
B) cooperative system
C) collaborative
D) mutually adaptive
E) customer is king

Question 75

Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Question 76

In most countries, ________ are the major buyers of goods and services. They typically require suppliers to submit bids and often award the contract to the lowest bidder.

A) consumer packaged-goods companies
B) government organizations
C) health services vendors
D) educational institutions
E) households

Question 77

An increase in the demand for plant and equipment can lead to a much larger increase in consumer demand. This is known as the acceleration effect.

Question 78

The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

Question 79

The partners in ________ systems are united in operational ways, but neither demonstrates structural commitment through legal means or adaptation.

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

Question 80

Business buyers often select suppliers who also buy from them.