Deck 5: Understanding Organizations As Customers

Question 1

Which of the following represents an organizational buyer?

A)A local baker buys sugar at the grocery store to make cookies with his children at home.
B)A dentist buys a new Samsung SmartTV 65-inch 3D LED HDTV for her den.
C)Mr.Langley hires a housecleaning service to clean his apartment.
D)The owner of a fried chicken restaurant hires a snow removal service to keep the parking lot clear.
E)The city mayor rents a tuxedo to wear to his daughter's wedding.

Answer 1

D

Question 2

When JCPMedia buys paper,it considers suppliers' forest management and other sustainability practices.For JCPMedia,these are important

A)profit responsibilities.
B)organizational buying criteria.
C)ecological mandates.
D)legal authorities.
E)buying center roles.

Answer 2

B

Question 3

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

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

Answer 3

D

Question 4

Manufacturers,wholesalers,retailers,and government agencies that buy products and services for their own use or for resale are referred to as

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

Question 5

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

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

Question 6

The size and number of JCPenney catalogs designed and mailed to consumers would determine how much paper JCPMedia would need to buy.This is an example of __________.

A)derived demand
B)reciprocity
C)a tying agreement
D)a transactional sale
E)elastic supply

Question 7

Which of these statements regarding organizational buyers is most accurate?

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

Question 8

A business market is also referred to as

A)a transactional market.
B)a corporate market.
C)organizational buyers.
D)a reseller market.
E)an industrial market.

Question 9

Mining companies,farms,financial services,and fisheries are all examples of

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

Question 10

Organizational buyers include manufacturers,wholesalers,retailers,and government agencies that

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

Question 11

Organizational buyers can be divided into three different markets,which are

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

Question 12

Business marketing refers to

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

Question 13

To select a paper supplier,JCPMedia looks at its capabilities: to deliver on-time,quality and quantity of selected grades of paper,and price.This examination would be done during JCPMedia's __________ stage of the buying decision process.

A)procurement analysis
B)break-even analysis
C)purchase decision
D)information search
E)alternative audit

Question 14

Which of the following types of firms comprises an industrial market?

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

Question 15

An industrial firm

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

Question 16

All of the following are organizational buyers EXCEPT:

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

Question 17

Kim Nagele,the senior procurement agent at JCPMedia,purchases tons of publication paper annually at a cost of hundreds of millions of dollars.Which role in the JCPenney buying center does Ms.Nagele perform?

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

Question 18

Organizational buyers refer to

A)manufacturers,wholesalers,retailers,and government agencies that buy products and services exclusively for resale.
B)manufacturers,wholesalers,retailers,and government agencies that buy products and services for their own use or for resale.
C)manufacturers,wholesalers,retailers,and government agencies that buy products and services exclusively for their own use.
D)firms that buy physical products and resell them again without any reprocessing.
E)firms that in some way reprocess a product or service they buy before selling it again to the next buyer.

Question 19

JCPMedia

A)creates the in-store signage,point-of-purchase displays,and store atmospherics for JCPenney.
B)is an in-house advertising agency for JCPenney.
C)is the print and paper purchasing arm of JCPenney.
D)is the website developer who created JCPenney's Facebook presence.
E)buys the media space to run TV ads and print ads for JCPenney.

Question 20

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

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

Question 21

Apex Therapeutic buys medical supplies and services from a variety of suppliers for people with hemophilia and other related blood diseases.When Apex sells directly to a person who is a hemophiliac,it would most accurately be classified as a(n)__________.

A)industrial service provider
B)healthcare manufacturer.
C)reseller
D)industrial firm
E)government agency

Question 22

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

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

Question 23

Keystone Foods,which invented the individual quick freeze process for beef,provides McDonald's with millions of pounds of chicken,beef,and fish annually for use in its restaurants.The firm sources the animal proteins from farms and processes them in a variety of ways,such as breading or freezing,before selling them.Keystone is operating in a(n)__________ market.

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

Question 24

Itex Corporation,a marketer of Photostat products used in the graphic arts field,buys photo sensitized paper from Eastman Kodak Company,packages it with the Photostat brand name,and sells it directly to amateur photographers.In this context,Itex Corporation is most accurately classified as a

A)manufacturer.
B)reseller.
C)service provider.
D)wholesaler.
E)industrial firm.

Question 25

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

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

Question 26

When Louisiana State University buys new laptops for its faculty,it is operating as a(n)

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

Question 27

Archer Daniels Midland Co.(ADM)is the world's largest cocoa-bean processor.It buys cocoa beans and converts them into cocoa powder and cocoa butter,which it then sells to companies like Hershey's that manufacture consumer products containing chocolate.ADM is operating in a(n)__________ market.

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

Question 28

When the Federal Aviation Administration (FAA)purchases radars for 22 major air traffic control centers in the U.S.,it is operating as a(n)

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

Question 29

The reseller market includes

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

Question 30

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

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

Question 31

Mile High Frozen Foods is a distributor for McDonalds.It also bakes the buns used by McDonalds in several states.It purchases flour,yeast,and sesame seeds,manufactures the buns,and then ships them to McDonalds' stores.Mile High Frozen Foods is operating in a(n)__________ market.

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

Question 32

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

A)producer.
B)reseller.
C)service provider.
D)retailer.
E)industrial firm.

Question 33

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

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

Question 34

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

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

Question 35

__________ comprise the highest percentage of firms in industrial markets.

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

Question 36

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

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

Question 37

In terms of organizational buyers,Amazon.com,Lands' End,and JCPenney would all be generally classified as __________.

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

Question 38

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

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

Question 39

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

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

Question 40

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

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

Question 41

Which of the following statements about the North American Industry Classification System (NAICS)is most accurate?

A)After being used for more than 50 years,the NAICS was replaced by the Standard Industrial Classification (SIC)system.
B)The NAICS permits comparability across countries but does not accurately measure new or emerging industries.
C)One drawback to the NAICS is that its industry classifications are inconsistent with the International Standards Organization.
D)The NAICS groups economic activity to permit studies of market share,demand for products and services,import competition in domestic markets,and similar studies.
E)The NAICS is a five-digit code that allows comparison of industries even when information is limited.

Question 42

The North American Industry Classification System (NAICS)

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

Question 43

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

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

Question 44

The North American Industry Classification System (NAICS)permits a firm to

A)find the NAICS codes of its present customers and then obtain NAICS-coded lists for similar firms.
B)learn the names of the purchasing agents of all prospective customers.
C)sell to any company within North America as long as it is not a monopoly.
D)engage in benchmarking with companies manufacturing and/or marketing similar products.
E)conduct an industry-wide SWOT analysis to determine internal strengths and weaknesses of current and prospective competitors.

Question 45

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

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

Question 46

The NAICS is consistent with the International Standard Industrial Classification of All Economic Activities,which is published by the __________ to facilitate measurement of global economic activity.

A)United Nations (UN)
B)European Union (EU)
C)International Standards Organization (ISO)
D)North American Free Trade Agreement (NAFTA)
E)North American Product Classification System (NAPCS)

Question 47

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

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

Question 48

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

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

Question 49

A disadvantage of the North American Industry Classification System (NAICS)is that

A)it only lists the top ten firms in any particular industry.
B)it is too difficult and confusing to read.
C)it only covers organizations with sales in excess of (US)$1 million.
D)it makes it possible to find how the firm's customers are coded.
E)five-digit national industry codes are not always available for all three countries.

Question 50

In the organizational buying process,important product or service characteristics include purchases based on specifications,a predominance of raw and semi-finished goods,and heavy emphasis placed on

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

Question 51

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

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

Question 52

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

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

Question 53

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

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

Question 54

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

A)A heavy emphasis is placed on loyalty programs and rebates.
B)A heavy emphasis is placed on delivery time,technical assistance,and postsale service.
C)Direct selling to organizational buyers is rare.
D)A fixed,nonnegotiable price is the norm.
E)Personal relationships are preferred to online buying over the Internet.

Question 55

The acronym of the NAICS logo above stands for

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

Question 56

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

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

Question 57

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

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

Question 58

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

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

Question 59

How might a marketing manager for a manufacturer of turboprop engines,used in private jet planes,use the NAICS to help her with marketing planning?

A)Record the NAICS numbers for each of her firm's best customers and then obtain lists of companies with the same NAICS numbers.
B)Go to a library and find the NAICS numbers for all government units-federal,state,and local.
C)Identify all NAICS numbers that reflect the classifications of her firm's customers and compare them to previous SIC codes.
D)Poll her field sales organization to see if her company's sales representatives know what NAICS numbers mean.
E)Forgo using the NAICS system because it has recently been replaced by the SIC system,which is more useful in this scenario.

Question 60

Consider the NAICS logo above,which provides common industry definitions for

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

Question 61

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

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

Question 62

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

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

Question 63

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

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

Question 64

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

A)increase profits through reducing costs
B)increase profits through increasing donations.
C)diversifying their services mix to survive the continued economic downturn.
D)meet the needs of the groups they serve.
E)maintain profits through reducing costs and increasing donations.

Question 65

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

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

Question 66

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

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

Question 67

The primary organizational buying objective for business firms is to

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

Question 68

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

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

Question 69

Concert Staging Company provides the stage,the roof system,and the lighting and sound for outdoor concerts and theaters.It is typically hired by the organization sponsoring the event.When the economy slows down,consumers are more likely to save their money for a rainy day rather than buy a concert or theater ticket.The number of concert and theater events determines how many times the company gets to provide its services.Demand for the services provided by Concert Staging Company is a result of __________ demand.

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

Question 70

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

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

Question 71

The primary buying objective for business firms is usually to

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

Question 72

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

A)Few large transactions are made over the Internet due to concerns of industrial espionage.
B)The actual buyer retains all of the influence in the buying decision.
C)Advertising is simplistic and more concise than that used for consumers.
D)Direct selling to organizational buyers is the rule,and distribution is very important.
E)Only finished goods are sold in this way.

Question 73

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

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

Question 74

All of the following statements about the size of the purchase involved in organizational buying EXCEPT:

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

Question 75

Derived demand refers to

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

Question 76

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

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

Question 77

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

A)purchasing from as many vendors as possible to avoid product shortfalls.
B)purchasing from inexperienced producers to grow the economy.
C)diversifying their product lines to include seemingly noncompatible items.
D)permanent pricing structures for consistent quantities.
E)proactively purchasing from minority-owned suppliers and vendors.

Question 78

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

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

Question 79

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

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

Question 80

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

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