Deck 7: Analyzing Business Markets

Question 1

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

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

Answer 1

B

Question 2

The business buyer makes the fewest decisions in the ________.

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

Answer 2

C

Question 3

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

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

Answer 3

E

Question 4

All of the following would be among the major industries that make up the business market EXCEPT ________.

A)agriculture,forestry,and fisheries
B)manufacturing
C)construction
D)banking,finance,and insurance
E)the Internet

Question 5

The business buyer faces many decisions in making a purchase.The number of decisions depends on the buying situation.All of the following contribute to the number of decisions required EXCEPT the ________.

A)complexity of the problem being solved
B)newness of the buying requirement
C)number of people involved
D)applicability of situation to mission statement
E)time required

Question 6

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 the ________.

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

Question 7

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)supplier market

Question 8

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

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

Question 9

In order to successfully develop customer reference stories,firms should ________.

A)state the customer's needs in compelling terms
B)use very few direct customer quotes
C)avoid referencing the barriers to satisfying customer needs
D)describe the company's solution in terms of products and services
E)focus on qualitative results

Question 10

There are a series of guidelines for selling to small businesses.Which of the following should NOT be among those guidelines?

A)Don't waste their time.
B)Do keep it simple.
C)Do use the Internet.
D)Don't forget about direct contact.
E)Do lump small and midsize businesses together for efficiency sake.

Question 11

Webster and Wind define ________ as 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)demand-oriented buying
D)purchasing
E)inventory control

Question 12

Trained purchasing agents,who must follow their organization's ________,often purchase business goods.

A)culture
B)past purchasing history
C)purchasing policies,constraints,and requirements
D)needs
E)financial budgets

Question 13

The business marketer normally deals with ________ buyers than the consumer marketer does.

A)more and larger
B)more and smaller
C)fewer and larger
D)fewer and smaller
E)the same number of

Question 14

Business markets differ significantly consumer markets in that business markets possess all of the following characteristics EXCEPT ________.

A)fewer,larger buyers
B)close supplier-customer relationship
C)professional purchasing
D)inverted demand
E)multiple sales calls

Question 15

To create and capture value,sellers need to understand business organizations' needs,resources,policies,and ________.

A)demands
B)protocols
C)strategies
D)buying procedures
E)personnel policies

Question 16

The purchasing department buys office supplies on a routine basis.This type of purchase is classified as a ________.

A)straight rebuy
B)modified rebuy
C)new task
D)secondary purchase
E)preordained purchase

Question 17

Purchasing a new security system or renting a new office building is best characterized as a ________.

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

Question 18

Many business buyers prefer to buy a total solution to a problem from one seller.________ is the correct term for this process.

A)Channel consolidation
B)Systems buying
C)Vertical buying
D)Horizontal buying
E)Supply buying

Question 19

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)supply buying
B)primary buying
C)systems buying
D)co-op buying system
E)direct buying

Question 20

Ultimately,the amount of steel sold to General Motors depends on the consumer's 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

Question 21

Identifying good leads and converting them to sales requires the whole marketing and sales organization to work in a coordinated,multichannel approach in the role of ________ to prospective customers .

A)product specification
B)price de-escalation
C)systems selling
D)trusted advisor
E)strategic alliance

Question 22

The typical buying center has a minimum of ________ members.

A)2-3
B)3-4
C)4-5
D)5-6
E)10

Question 23

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 24

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)cabal

Question 25

Robinson and his associates have identified eight stages and called them buyphases.This model is called the ________ framework.

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

Question 26

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

Question 27

In the past,what position did purchasing departments hold in the management hierarchy of most organizations?

A)A high level because of their role in managing the company's costs
B)A moderate level because of their spotty record on controlling costs
C)A low level despite managing more than half of the company's costs
D)A secretive position
E)There has been no determination of this position.

Question 28

The first step (buyphase)in the straight rebuy buyclass is ________.

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

Question 29

Small sellers should concentrate their marketing efforts on reaching ________.

A)approvers
B)initiators
C)key buying influencers
D)users
E)the purchasing staff

Question 30

________ 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 31

________ is a key industrial marketing strategy in bidding to build large-scale industrial products (e.g. ,dams,pipelines,et cetera).

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

Question 32

Webster cautions that ultimately,________ make purchasing decisions.

A)only senior managers
B)individuals,not organizations,
C)organizations,not individuals,
D)third parties
E)systems contractors

Question 33

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)systems buying
B)purchasing support
C)turnkey logistics
D)decision support
E)systems contracting

Question 34

Business buyers are ultimately purchasing solutions to two problems: the organization's economic and strategic problem and ________.

A)their own personal need for individual achievement and reward
B)the community's continued health and well-being
C)the fulfillment of the company's social impact goals
D)to maximize overall firm performance
E)none of the above

Question 35

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 36

Most purchasing professionals describe their jobs as more ________,technical,team oriented,and involving more responsibility than ever before.

A)risky
B)strategic
C)ethically difficult
D)Web based
E)human based

Question 37

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

A)Problem recognition
B)General need description
C)Product specification
D)Supplier search
E)Proposal solicitation

Question 38

In principle,business buyers seek to ________ in relation a market offering's costs.

A)spread risks
B)obtain the highest benefit package
C)maintain everyday low prices
D)outsource as much as is possible
E)eliminate partners' shares in profits as much as possible

Question 39

Business marketers can stimulate problem recognition by ________.

A)trade directories
B)direct mail,telemarketing,and calling on prospects
C)encouraging the Better Business Bureau to release statistics
D)consumer advertising
E)requesting testimonials from existing customers

Question 40

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 41

In the proposal solicitation process,________ should be marketing documents that describe value and benefits in customer terms.

A)written proposals
B)oral proposals
C)e-proposals
D)alliance proposals
E)global proposals

Question 42

With respect to e-procurement,Web sites are organized around two types of e-hubs: ________.

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 43

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 44

As an alternative to reducing price,sellers may handle price-oriented buyers by establishing any of the following purchasing conditions EXCEPT ________.

A)limiting the quantity that can be purchased
B)no refunds
C)no adjustments
D)no services
E)no customer advertising

Question 45

Vertical coordination may increase the risk to consumer's and supplier's ________ (e.g. ,those expenditures tailored to a particular company and value chain partner).

A)logistics channel
B)independent operations
C)specific investments
D)leverage ability
E)liquidity situation

Question 46

Several major companies regard ________ as a major responsibility of their purchasing managers.

A)forming networks for future business
B)assuring quality conformance
C)being fair with all parties
D)using a team approach in negotiations
E)long-term supply planning

Question 47

All of the following are methods of assessing customer value EXCEPT ________.

A)direct survey questions
B)exit interviewing
C)focus-group value assessment
D)conjoint analysis
E)benchmarks

Question 48

Which of the following would NOT be among those advantages gained through leasing heavy equipment such as machinery and trucks,rather than purchasing it?

A)Higher-quality products
B)Conserving capital
C)Getting the latest products
D)Receiving better service
E)Some tax advantages

Question 49

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 50

When buyers cannot easily monitor supplier performance,the supplier might shirk or cheat and not deliver the expected value.________ is "some form of cheating or undersupply relative to an implicit or explicit contract."

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

Question 51

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 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

Which of the following relationships is characterized as being one that has 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 54

In most countries,________ are the major buyers of goods and services.

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

Question 55

Research has found that buyer-suppler relationships differed according to four factors.Which of the following would NOT be among those factors?

A)Importance of supply
B)Complexity of supply
C)Availability of alternatives
D)Supply market dynamism
E)Demand market conservatism

Question 56

Which of the following methods may be used by buyers to review the performance of chosen suppliers?

A)The buyer may contact the end users and ask for their evaluations.
B)The buyer may rate the supplier 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)All of the above
E)None of the above

Question 57

A supplier signs an agreement with a customer that states $350,000 in savings will be earned by the customer over the next 18 months in an exchange for a tenfold increase in the customer's share of supplies ordered by the customer.This is an example of ________.

A)solution selling
B)consultative selling
C)risk and gain sharing
D)strategic alignment
E)demand shifting

Question 58

Moving into e-procurement has many benefits.Which of the following would not be among those benefits?

A)Aggregating purchasing across departments gains larger volume discounts.
B)Aggregating purchasing gains centrally negotiated volume discounts.
C)There is less buying of substandard goods from suppliers not on the approved list.
D)A smaller purchasing staff is required.
E)Purchasing gains a significant leverage with top management because of its management team.

Question 59

Using the ________ form of solution selling,W.W.Grainger employees work at large customer facilities to reduce materials-management costs.

A)solutions to partnerships
B)solutions to alter corporate culture
C)solutions to enhance customer revenues
D)solutions to decrease customer risks
E)solutions to reduce customer costs

Question 60

Which of the following reflects high trust between business sellers and buyers?

A)Distorted and hidden information
B)Incentive alignment for seller,not customer gains
C)Limited or biased product comparisons and advice
D)Minimal customer education and support
E)Customers help design products individually and through committees

Question 61

The buying center is where consumers go to purchase their goods and services.

Question 62

Initiators are those who authorize the proposed action of deciders or buyers.

Question 63

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

Question 64

Users perform all seven roles in the buying center because of their direct tie to the product and what it is supposed to do.

Question 65

Small business owners typically engage in long-range planning in order to effectively budget for purchases over the upcoming three to five years.

Question 66

More dollars and items change hands in sales to business buyers than to consumers.

Question 67

In the business market,small sellers concentrate on reaching as many participants as possible because their chances of success are slim.

Question 68

Webster and Wind define organizational buying as 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 69

Business buyers often select suppliers who also buy from them.

Question 70

Over time,new-buy situations become straight rebuys and routine purchase behavior.

Question 71

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

Question 72

Sellers benefit from systems contracting through lower operating costs as a result of steady demand and reduced paperwork.

Question 73

Failure to quantify a customer's results in customer references can be a detriment to the effectiveness of those references.

Question 74

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

Question 75

Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams or pipelines.

Question 76

Business buyers often buy directly from manufacturers rather than through intermediaries,especially items that are technically complex or expensive.

Question 77

Most business buyers,preferring to spread their risk,reject what is called systems buying from one seller.

Question 78

Personal needs motivate the behavior of individuals,but organizational needs legitimate the buying-decision process and its outcomes.

Question 79

In the straight rebuy,"out-suppliers" try to get a small order and then enlarge their purchase share over time.

Question 80

The best way to generate leads among small businesses is for business suppliers to cold call them.