Contemporary Marketing 14th Edition by Gene Boone Test Bank

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Contemporary Marketing 14th Edition by Gene Boone Test Bank

Description

Chapter 6Business-to-Business (B2B) Marketing

TRUE/FALSE

1. Business marketers advertise primarily to announce new products, to enhance their company image and presence, and to attract potential customers who would then deal directly with a salesperson.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of technology, design, & production TYP: KN

2. Organizational buyers tend to purchase standardized products, unlike the consumer market where customization is more prevalent.

ANS: F PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

3. B2B relationships tend to last longer than those in the consumer market.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

4. Due to the complexity of the buying process and potential need for technical assistance, the distribution channels in the B2B marketplace tend to be longer than those in the consumer market.

ANS: F PTS: 1 DIF: 2 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Distribution | R&D Knowledge of general business functions TYP: AP

5. Personal selling and customer service are more important in business markets than in consumer markets.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

6. Purchasing decisions in the B2B sectors are more complex, take longer to negotiate, and often include many levels of decision making.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

7. Business marketers advertise primarily to announce new products.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

8. The biggest distinction between B2B marketing and consumer marketing is the lack of advertising and visibility in the marketplace the company services.

ANS: F PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Promotion | R&D Knowledge of general business functions
TYP: KN

9. Personal selling is less important in business markets than in consumer markets because of the longer distribution channels involved.

ANS: F PTS: 1 DIF: 2 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

10. The primary purchasing need of an organization is meeting the demands of its own customers.

ANS: T PTS: 1 DIF: 1 REF: 167
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

11. An organizations goals must also be considered in the B2B buying process.

ANS: T PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

12. The four categories that define the business market are the commercial market, producers, institutions and government agencies.

ANS: F PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

13. The commercial market purchases products for use directly and indirectly in the manufacturing of other products.

ANS: T PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

14. When Cannondale purchases aluminum for use in its bicycle frames, the company is participating in the commercial market.

ANS: T PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

15. The commercial market consists of retailers and wholesalers who purchase goods primarily for resale to other businesses and to the consumer.

ANS: F PTS: 1 DIF: 1 REF: 168-169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

16. Members of the trade industries acquire goods and services primarily for use in production.

ANS: F PTS: 1 DIF: 1 REF: 169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

17. The term reseller is often used to describe wholesalers and retailers that comprise membership in the trade industries.

ANS: T PTS: 1 DIF: 1 REF: 169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Distribution | R&D Knowledge of general business functions
TYP: KN

18. The trade industries include manufacturers, wholesalers, and individual consumers.

ANS: F PTS: 1 DIF: 1 REF: 169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

19. Because of its size, the government represents the largest segment of the B2B marketplace.

ANS: F PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

20. Organizations such as hospitals, universities and museums comprise the commercial segment of the business market.

ANS: F PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

21. Not-for-profit organizations are considered part of B2B marketplace.

ANS: F PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

22. The Internet is intended to replace, not just enhance, personal selling and the traditional relationships between businesses.

ANS: F PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

23. In general, the consumer has more at stake in purchasing decisions because the money they are spending is actually theirs. Business customers have less at stake and are less concerned with value and utility of the materials purchased.

ANS: F PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

24. Geographic location is considered a demographic basis for segmenting the business market.

ANS: F PTS: 1 DIF: 1 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

25. Organizational size is regarded as a demographic basis for segmenting business customers.

ANS: T PTS: 1 DIF: 1 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

26. Compared to the old SIC system of classification, the NAICS not only standardizes classifications among nations, but also provides flexibility for each country to measure its own business activity.

ANS: T PTS: 1 DIF: 2 REF: 171-172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

27. The NAICS codes provide information about businesses that allows users to compare business sectors among the member nations of NAFTA.

ANS: T PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

28. The NAICS classification system provides a useful tool for segmenting B2B markets by customer type.

ANS: T PTS: 1 DIF: 1 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

29. With the implementation of the NAFTA accord, the SIC system replaced the NAICS system to subdivide the business marketplace into detailed segments.

ANS: F PTS: 1 DIF: 1 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

30. Some companies segment markets into categories such as small business, large business, consumers, educational institutions and government. This is an example of end-use segmentation.

ANS: F PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

31. End-use application segmentation focuses on the precise way in which a business purchaser will use a product.

ANS: T PTS: 1 DIF: 1 REF: 172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

32. Geographic concentration of an industry has no effect on the location decisions of the industrys suppliers.

ANS: F PTS: 1 DIF: 1 REF: 174
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

33. Ford recently established a first-of-its-kind campus for suppliers near its Chicago
assembly plant, which enabled them to reduce costs, control parts inventories, and increase flexibility.

ANS: T PTS: 1 DIF: 1 REF: 174
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

34. The Internet is changing the buying process of many customers, including the federal government, making it less likely that suppliers will need to be geographically close to their customers.

ANS: T PTS: 1 DIF: 1 REF: 174
OBJ: 6-3
NAT: AACSB Technology | CB&E Model Customer | R&D Knowledge of general business functions TYP: KN

35. Purchase decision making in B2B is more formal and professional than in the consumer market.

ANS: T PTS: 1 DIF: 1 REF: 174
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

36. Evaluating foreign market opportunities is a complex and somewhat difficult task for businesses.

ANS: T PTS: 1 DIF: 1 REF: 175
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Strategy | R&D Managing decision-making processes
TYP: KN

37. Global sourcing involves contracting to purchase goods and services from suppliers worldwide.

ANS: T PTS: 1 DIF: 1 REF: 175
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model International Perspective | R&D Knowledge of general business functions TYP: KN

38. If Product A is used primarily to manufacture Product B, then the demand for product A is derived from the demand for Product B.

ANS: T PTS: 1 DIF: 2 REF: 176
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

39. As demand for personal computers increases the demand for computer microprocessor chips will also increase. This is an example of derived demand.

ANS: T PTS: 1 DIF: 2 REF: 176
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

40. Companies that sell products affected by derived demand can avoid the negative affects of downturns by diversifying the markets in which they sell their products.

ANS: T PTS: 1 DIF: 3 REF: 176-177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

41. Organizational buyers basically purchase two categories of products: capital items and expense items.

ANS: T PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

42. Capital purchases are expended quickly, whereas expense items are more expensive and last longer.

ANS: F PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

43. The difference between capital and expense items is not only the size and length of use, but also the way the accounting department handles production costs.

ANS: T PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

44. Volatile demand means that even slight shifts or variations in the market can have an affect on sales.

ANS: T PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

45. If consumer demand for dishwashers increases, dishwasher manufacturers will buy more raw materials, components and supplies as a result of the link between the consumer market and the industrial market. This linkage is called coordinated demand.

ANS: F PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

46. Business markets tend to have more buyers and suppliers than found in the consumer marketplace.

ANS: F PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

47. Assume the price of jet fuel rises, but airlines continue to purchase the same amount of fuel in order to meet operational needs. As a result, the demand for jet fuel is said to be inelastic.

ANS: T PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

48. JIT II inventory systems may require suppliers to have on-site representatives at their customers production facility.

ANS: T PTS: 1 DIF: 1 REF: 178
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

49. When a firm can manufacture the product it needs, it may experience a significant cost savings because it will not have to pay the overhead costs and profit to an outside supplier.

ANS: T PTS: 1 DIF: 1 REF: 178
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

50. Offshoring and nearshoring refer to the method of acquiring natural resources.

ANS: F PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

51. India has become a major supplier of customer service labor, while China offers inexpensive manufacturing labor.

ANS: T PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

52. Turning to outsiders to provide products or services that were formerly provided in-house is referred to as external acquisition.

ANS: F PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

53. If a company wants to concentrate its resources on its core business, it may be wise to outsource support departments.

ANS: T PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

54. Lower-than-anticipated cost savings is one potential downside to offshoring.

ANS: T PTS: 1 DIF: 1 REF: 179
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

55. To understand organizational buying behavior, business marketers require knowledge of influences on the purchase decision process, the stages in the organizational buying model, types of business buying situations, and techniques for purchase decision analysis.

ANS: T PTS: 1 DIF: 1 REF: 180
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

56. Successful organizational marketers understand their customers organizational structures, policies and purchasing systems.

ANS: T PTS: 1 DIF: 1 REF: 181
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

57. Personal and interpersonal influences affect consumer purchasing decisions, not B2B decisions.

ANS: F PTS: 1 DIF: 1 REF: 181
OBJ: 6-5
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

58. Centralized purchasing units may contract with only a few suppliers to service multiple locations because they lack interest in long-term relationship building and place greater reliance on immediate results.

ANS: F PTS: 1 DIF: 3 REF: 181
OBJ: 6-5
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

59. A sales representative can waste valuable time creating a sales relationship with decision makers in a decentralized purchasing office of a Fortune 500 company.

ANS: F PTS: 1 DIF: 1 REF: 181
OBJ: 6-5
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

60. When selling to organizational customers, sales representatives need to be able to interact effectively with employees of the various departments involved in the purchase decision.

ANS: T PTS: 1 DIF: 1 REF: 181
OBJ: 6-5
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

61. Organizational purchasing decisions tend to be standardized, resulting in the same procedures being used for both capital and expense items.

ANS: F PTS: 1 DIF: 2 REF: 182
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

62. Purchase decisions for capital items vary significantly from those of expense items.

ANS: T PTS: 1 DIF: 1 REF: 182
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

63. Merchandiser is the common designation for a purchasing agent in wholesale and retail trades.

ANS: T PTS: 1 DIF: 1 REF: 182
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

64. Lockheed Martin wins a contract to produce 14 state-of-the-art helicopters for the U.S. Navy. Coordination of labor, purchasing, and manufacturing is a tremendous undertaking, so Lockheed would have the option of streamlining the purchasing process through systems integration.

ANS: F PTS: 1 DIF: 3 REF: 182
OBJ: 6-5
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of technology, design, & production TYP: AP

65. Business purchase decisions begin when the recognition of problems, needs, or opportunities activates the buying process.

ANS: T PTS: 1 DIF: 1 REF: 182
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

66. A firm deciding to purchase more energy-efficient machines in response to rising fuel prices illustrates the first step in the business buying process.

ANS: T PTS: 1 DIF: 2 REF: 182
OBJ: 6-6
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

67. After determining the characteristics and quantity of needed products, B2B buyers must translate these ideas into detailed specifications

ANS: T PTS: 1 DIF: 1 REF: 183
OBJ: 6-6
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

68. When government agencies seek to acquire proposals from potential suppliers, they participate in a process called competitive bidding.

ANS: T PTS: 1 DIF: 1 REF: 183
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

69. Once a supplier has been chosen, buyer and vendor must work out the best way to process future purchases.

ANS: T PTS: 1 DIF: 1 REF: 184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

70. Although order procedures vary from supplier to supplier, the one constant in all transactions is the inclusion of the terms of sales including price, quantity, delivery and payment terms.

ANS: T PTS: 1 DIF: 2 REF: 184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

71. A straight rebuy is to the business market what a routinized purchase is to the consumer market.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

72. A company that believes in quality, service and reliability will have a better chance of experiencing straight rebuys from their customers.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Managing decision-making processes TYP: AP

73. Straight rebuys resemble limited problem solving in consumer markets.

ANS: F PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

74. The purchasing decision can move to a modified rebuy status with either the introduction of new products or poor performance by the original supplier.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

75. When a business purchases a new product that requires considerable effort on the decision makers part, it is called new-task buying.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

76. Marketers who want to encourage modified rebuy behavior by their customers should focus on providing excellent service and delivery performance.

ANS: F PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

77. New-task buying for businesses is comparable to the extended problem solving that takes place in consumer markets.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

78. In the B2B market, the practice of buying from suppliers who are also customers is called reverse reciprocity.

ANS: F PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

79. Reciprocal arrangements are common in industries where products are homogeneous and prices are similar, such as the chemical, paint, rubber and steel industries.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

80. On an international level, attitudes toward reciprocity vary from country to country.

ANS: T PTS: 1 DIF: 2 REF: 185
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

81. Value analysis is a continuous process of evaluating the cost of doing business with a particular buying unit. Suppliers must ensure they are receiving adequate benefits from the time invested in a customer.

ANS: F PTS: 1 DIF: 2 REF: 185-186
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

82. The ongoing evaluation of a suppliers performance on such criteria as price, EDI capability, delivery times, and attention to special requests is called vendor analysis.

ANS: T PTS: 1 DIF: 2 REF: 186
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

83. A companys buying center encompasses everyone who is involved in any aspect of its buying activity.

ANS: T PTS: 1 DIF: 2 REF: 186
OBJ: 6-8
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

84. A buying center is a part of a firms formal organization structure.

ANS: F PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

85. Gatekeepers in the buying center affect the buying decision by determining which individuals within the organization will be part of the buying process.

ANS: F PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

86. Influencers in the purchasing decision can be both internal and external to the organization.

ANS: T PTS: 1 DIF: 2 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Managing decision-making processes
TYP: KN

87. While many individuals participate in the buying process, it is the buyers role to make the final decision and confirmation of the sale.

ANS: F PTS: 1 DIF: 2 REF: 186-187
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

88. In the B2B purchasing process, the user, the influencer, and the decider might all be the same individual.

ANS: T PTS: 1 DIF: 2 REF: 186-187
OBJ: 6-8
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

89. The participants in international buying centers are generally easier to identify than those in domestic buying centers.

ANS: F PTS: 1 DIF: 1 REF: 187
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model International Perspective | R&D Knowledge of technology, design, & production TYP: KN

90. The structure of the buying center varies from culture to culture. For example, 50 individuals might be involved in the purchasing process in some countries.

ANS: T PTS: 1 DIF: 2 REF: 187
OBJ: 6-8
NAT: AACSB Reflective Thinking | CB&E Model International Perspective | R&D Knowledge of technology, design, & production TYP: AP

91. Identifying the decision maker is so important that foreign companies will retain original sales and marketing personnel after a buyout to ensure that cultural, language, and management styles do not affect relationships between the supplier and their customers.

ANS: T PTS: 1 DIF: 2 REF: 187
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model International Perspective | R&D Knowledge of general business functions TYP: KN

92. Contracts with the government fall into two categories: fixed-cost, where the government reimburses the business for its costs, and inflationary protected pricing, where the original price quote is adjusted to account for inflation.

ANS: F PTS: 1 DIF: 3 REF: 188
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

93. All contracts awarded by the federal government to suppliers must be conducted through the bid process as mandated by law.

ANS: T PTS: 1 DIF: 1 REF: 188
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

94. The federal government essentially has two purchasing centers: the GSA, which handles general procurement, property management and resource management, and the DLA, which serves the exact same functions for the Department of Defense.

ANS: T PTS: 1 DIF: 3 REF: 188
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

95. The federal government has attempted to increase the speed and flexibility of its purchases through the use of pre-negotiated contracts, elimination of detailed specifications for readily available commercial products, and use of online product catalogs.

ANS: T PTS: 1 DIF: 2 REF: 189
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

96. Institutional markets are characterized by widely diverse buying practices.

ANS: T PTS: 1 DIF: 1 REF: 190
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

97. International vendors must consider local economic conditions, geographic characteristics, and legal restrictions in their assessment of marketing opportunities.

ANS: T PTS: 1 DIF: 2 REF: 191
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

98. Restoring worn-out products to like-new condition is known as remanufacturing.

ANS: T PTS: 1 DIF: 1 REF: 191
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

99. Institutions often join buying cooperatives to pool purchases for the primary purpose of streamlining and expediting product deliveries.

ANS: F PTS: 1 DIF: 2 REF: 190-191
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

MULTIPLE CHOICE

1. Compared to the purchasing process for consumer products:
a. distribution channels for business products are significantly longer.
b. customer relationships for business products tend to be short-term and transactions-based.
c. personal selling plays a much larger role in business products markets.
d. customer service plays a smaller role in the distribution of business products.

ANS: C PTS: 1 DIF: 2 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

2. Which of the following is not a characteristic that distinguishes B2B markets from consumer markets?
a. Organizational markets are more geographically concentrated.
b. More people exert influence on the organizational buying decision.
c. The organizational market tends to have a greater number of buyers.
d. Organizations often engage in multiple sourcing and vendor analysis.

ANS: C PTS: 1 DIF: 2 REF: 167
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

3. Comparing the business to the consumer market, all of the following statements are correct except:
a. business products tend to be more complex.
b. negotiations are often longer and include more decision makers.
c. distribution channels are longer and more complex in the business market.
d. customer relations are relatively enduring and complex in the business market.

ANS: C PTS: 1 DIF: 2 REF: 167
OBJ: 6-1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

4. The four segments of the B2B marketplace include all of the following except:
a. government.
b. entertainment industry.
c. commercial market.
d. trade industries.

ANS: B PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

5. The largest segments of the business market are:
a. trade industries, which include retailers and wholesalers.
b. commercial markets, which include everyone that acquires products to support, directly or indirectly, the production of other goods and services.
c. government organizations, including the military, state and federal governments.
d. institutions such as schools, hospitals and churches.

ANS: B PTS: 1 DIF: 2 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

6. The largest segment of the business market that consists of individuals and firms that acquire goods and services to be used, directly or indirectly, in producing other goods and services is called:
a. wholesaling and retailing.
b. the commercial market.
c. government.
d. an institution.

ANS: B PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

7. The trade industries consist of:
a. manufacturers.
b. wholesalers and retailers.
c. farmers.
d. transportation.

ANS: B PTS: 1 DIF: 1 REF: 169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

8. Institutions, as a component of the B2B market:
a. tend to have greater financial resources than industrial customers.
b. provide business services to the other members of the market.
c. may have rigid purchasing procedures.
d. are accountable to their clients and stockholders.

ANS: C PTS: 1 DIF: 2 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

9. The government segment of the B2B market commonly buys products:
a. for resale to the public.
b. to provide public benefits.
c. that are customized and not commonly available.
d. from domestic sources only.

ANS: B PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

10. Providing some form of public benefit is the primary motivation for purchasing by members of the:
a. industrial market.
b. global market.
c. government market.
d. trade industries.

ANS: C PTS: 1 DIF: 2 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

11. Which of the following is not found in e-commerce serving the business market?
a. Private portals that allow customers access to products and vendors
b. Service pages accessed using passwords provided by B2B marketers
c. Online auctions where business goods may be purchased
d. Chat rooms dedicated to opinions of new products

ANS: D PTS: 1 DIF: 1 REF: 170
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of technology, design, & production TYP: KN

12. Which of the following is not a commonly used basis for segmenting the business market?
a. Demographics using the size of the firm
b. Customer type
c. Educational attainments of buyers
d. Product end-use application

ANS: C PTS: 1 DIF: 2 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

13. When the B2B market is segmented on the basis of precise product specifications issued by organizational buyers, it is known as _____ segmentation.
a. customer-based
b. profit-generating
c. benefits
d. engineering and design

ANS: A PTS: 1 DIF: 2 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

14. Zardo, Inc. divides its customers into the following categories: small business, large business, government, and not-for-profit institutions. Which type of segmentation is Zardo practicing?
a. End-use
b. Customer type
c. Demographic
d. Purchase category

ANS: B PTS: 1 DIF: 2 REF: 171
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

15. The system for grouping businesses that grew out of the NAFTA accord is known as the:
a. Standard Industrial Classification System.
b. Industrial Data Recording System.
c. Standard Industrial Census System.
d. North American Industry Classification System.

ANS: D PTS: 1 DIF: 3 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

16. The implementation of the North American Free Trade Agreement required a change in the system used for almost 70 years to categorize U.S. business firms. The change resulted in:
a. the abandonment of the Standard Industry Classification (SIC) for the North American Industrial Classification System (NAICS).
b. the abandonment of any attempt at categorization until a new plan can be devised.
c. a new system called the RIAA plan, which closely parallels the ISO system of industrial coding used in Europe.
d. the MILSPEC system that assigns code numbers to products rather than firms.

ANS: A PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

17. In the B2B marketplace, segmentation based on the precise way in which the business will use the product is called:
a. segmentation by purchasing situation.
b. segmentation by customer type.
c. end-use application segmentation.
d. segmentation by demographic characteristics.

ANS: C PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

18. Texas Instruments produces chips used in a variety of devices, from cell phones to hand calculators. Which type of segmentation would make the most business sense for a company like Texas Instruments?
a. End-use
b. Purchase category
c. Customer type
d. Demographic

ANS: A PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

19. A manufacturer that produces glass for microwave oven doors, shower enclosures, and patio tabletops is segmenting the market on the basis of:
a. cost-plus considerations.
b. end-use application.
c. benefits offered.
d. design factors.

ANS: B PTS: 1 DIF: 2 REF: 172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

20. Customer relationship management systems are most useful in which type of segmentation?
a. End-use
b. Demographic
c. Customer type
d. Purchase category

ANS: D PTS: 1 DIF: 1 REF: 172
OBJ: 6-2
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Managing administration & control TYP: AP

21. Where can some of the best statistical information for companies seeking opportunities in the B2B marketplace be found?
a. Internet
b. Dun & Bradstreet reports
c. Trade and business publications
d. Census of Manufacturers and Census of Retailing and Wholesaling

ANS: D PTS: 1 DIF: 1 REF: 174
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

22. Dell Computer purchases parts and resources for its computers from suppliers worldwide. This practice is known as:
a. offshoring.
b. global sourcing.
c. joint demand.
d. derived demand.

ANS: B PTS: 1 DIF: 1 REF: 175
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model International Perspective | R&D Managing administration & control TYP: AP

23. The demand for automated teller machines (ATMs) is based on consumer demand for banking convenience. This is an example of:
a. joint demand.
b. derived demand.
c. volatile demand.
d. demand variability.

ANS: B PTS: 1 DIF: 1 REF: 176
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

24. After Hurricane Katrina, roadways needed to be repaired and rebuilt, resulting in an increase in the demand for concrete, stone, and steel reinforcement. The price of these materials began to rise due to _____ demand.
a. linked
b. derived
c. coordinated
d. joint

ANS: D PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

25. Cotton and polyester are used in the production of permanent press clothing. If the supply of cotton is reduced, there will be an immediate effect on the demand for polyester. This relationship represents:
a. derived demand.
b. demand variability.
c. inventory adjustments.
d. joint demand.

ANS: D PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

26. If the demand for product A stays constant regardless of the increase or decrease in demand for product B, it can be said that product A is experiencing _____ demand.
a. derived
b. joint
c. volatile
d. inelastic

ANS: D PTS: 1 DIF: 3 REF: 177
OBJ: 6-3
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

27. Reducing inventories to absolute minimum levels and requiring vendors to deliver the items as they are needed in the production process is known as:
a. in real time (IRT).
b. just-in-time (JIT).
c. on time delivery (OTD).
d. next-time in (NTI).

ANS: B PTS: 1 DIF: 2 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product |R&D Managing logistics & technology
TYP: KN

28. Which of the following statements does not describe the advantage of leasing?
a. Requires a high level of capital commitment.
b. Provides the ability to easily upgrade equipment as needs change.
c. Provides flexibility for a growing business.
d. Allows quick adaptation to changes in demand.

ANS: A PTS: 1 DIF: 2 REF: 178
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

29. A business paying for the use of equipment owned by an outside supplier for a specified period of time is known as:
a. external acquisition.
b. supply chain management.
c. leasing.
d. supplier research.

ANS: C PTS: 1 DIF: 2 REF: 178
OBJ: 6-4
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

30. Outsourcing has the advantage of:
a. leading to lower-than-anticipated cost savings.
b. raising concerns over proprietary technology.
c. improving the quality and speed of software maintenance and development.
d. increasing the risk of losing touch with customers.

ANS: C PTS: 1 DIF: 2 REF: 179
OBJ: 6-4
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

31. Outsourcing is often chosen as an alternative to making goods in-house or providing in-house services because:
a. savings often exceed 40 percent on an average.
b. savings often rise, as the contract firm (the outsource) becomes familiar with the job.
c. outsourcing solves security problems when proprietary technology is involved.
d. outsourcing allows firms to concentrate their resources on their core businesses.

ANS: D PTS: 1 DIF: 2 REF: 179
OBJ: 6-4
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

32. Turning to outsiders to provide goods and services that were formerly produced or handled internally is known as:
a. outsourcing.
b. nearshoring.
c. supply chain management.
d. external buying.

ANS: A PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

33. Unions generally view outsourcing as a(n):
a. good idea to stay competitive and preserve jobs.
b. bargaining tool for higher wages.
c. threat to union jobs.
d. means of saving money and putting the savings into wages and benefits.

ANS: C PTS: 1 DIF: 1 REF: 180
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

34. Product factors important to the buying decision include all of the following except:
a. replacement cost.
b. purchase price.
c. operating and maintenance costs.
d. service.

ANS: A PTS: 1 DIF: 2 REF: 180
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

35. When a firm undertakes systems integration and designates a major trade industry supplier as the systems integrator, that supplier is known as the:
a. category captain.
b. purchasing coordinator.
c. division leader.
d. supply chain manager.

ANS: A PTS: 1 DIF: 2 REF: 182
OBJ: 6-5
NAT: AACSB Analytic | CB&E Model Customer | R&D Managing administration & control
TYP: KN

36. An employee who recognizes that the use of a new product can potentially improve the companys market performance is participating in:
a. need or opportunity recognition.
b. identification of suppliers.
c. word-of-mouth exploration.
d. information search.

ANS: A PTS: 1 DIF: 2 REF: 182
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation
TYP: KN

37. A firm has decided to purchase hybrid delivery vehicles in response to rising gasoline prices. Which step in the business buying process does this illustrate?
a. Determining the characteristics of the needed product
b. Recognizing a problem or opportunity
c. Searching for qualified sources
d. Evaluating proposals and selecting suppliers

ANS: B PTS: 1 DIF: 2 REF: 182
OBJ: 6-6
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Managing decision-making processes TYP: AP

38. Adam, a purchasing agent for the American Heart Association, has made a list of potential suppliers for payroll services. Adam is currently at which step in the organizational buying process?
a. Recognizing a problem or opportunity.
b. Determining the characteristics and quantity of the needed product.
c. Describing the characteristics of the needed product.
d. Searching for and qualifying potential sources.

ANS: D PTS: 1 DIF: 2 REF: 183
OBJ: 6-6
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Managing decision-making processes TYP: AP

39. The price negotiation process commonly experienced by government and institutional entities is known as:
a. competitive bidding.
b. decentralized buying.
c. collective bargaining.
d. systems integration.

ANS: A PTS: 1 DIF: 2 REF: 183
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Pricing | R&D Managing decision-making processes
TYP: KN

40. Establishing specifications for a needed product is part of which step in the business buying process?
a. Recognizing a need.
b. Describing characteristics of a needed good.
c. Qualifying potential vendors.
d. Selecting an order routine.

ANS: B PTS: 1 DIF: 2 REF: 183
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

41. Once a search for suppliers is completed and the company makes the supplier aware of their needs, the company will begin:
a. searching for needs to fill.
b. notifying the distribution channels of the new product introduction.
c. acquiring and analyzing proposals.
d. selecting an order routine.

ANS: C PTS: 1 DIF: 2 REF: 183-184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

42. Procedures that measure characteristics, such as a suppliers reliability, price, and order accuracy would be part of which step in the organizational buying process?
a. Searching for potential sources
b. Analyzing proposals
c. Recognizing a need
d. Evaluating proposals and selecting suppliers

ANS: D PTS: 1 DIF: 2 REF: 184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

43. The organizational buying process has more steps than the consumer buying process, which can be attributed to:
a. the limited number of suppliers in the B2B marketplace.
b. the importance of integrating the responsibilities of the wholesalers or retailers.
c. interpersonal and environmental influences not seen in consumer buying decisions.
d. business purchasing that introduces new complexities that do not affect consumers.

ANS: D PTS: 1 DIF: 3 REF: 184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation
TYP: KN

44. Which of the following is the final step in the business buying process?
a. Selecting an order routine
b. Evaluating proposals and selecting suppliers
c. Obtaining feedback and evaluating performance
d. Acquiring and analyzing proposals

ANS: C PTS: 1 DIF: 2 REF: 184
OBJ: 6-6
NAT: AACSB Analytic | CB&E Model Product | R&D Managing decision-making processes
TYP: KN

45. When a business purchaser accepts the terms of sale of an item that has performed satisfactorily in the past and requires no new information to decide to purchase it again, the buying situation is a(n):
a. straight rebuy.
b. service purchase.
c. contract purchase.
d. modified rebuy.

ANS: A PTS: 1 DIF: 1 REF: 184-185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

46. Which product might an ink manufacturer purchase on a straight rebuy?
a. Warehouse storage tanks
b. Manufacturing equipment
c. Process oils that are refined to the exact specifications required to produce ink
d. New computer network

ANS: C PTS: 1 DIF: 3 REF: 184-185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

47. When business purchasers shift from straight rebuy to modified rebuy behavior, it is often due to:
a. a change in the accelerator principle.
b. the routine buying format being outdated.
c. corporate expansion.
d. a deterioration in supplier service or delivery.

ANS: D PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

48. A buying situation in which business purchasers are willing to re-evaluate their available options is known as:
a. a straight rebuy.
b. a modified rebuy.
c. new-task buying.
d. routinized response behavior.

ANS: B PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

49. ________ refers to the business buying situation where a company buys component parts never before purchased.
a. Complex rebuying
b. New-task buying
c. Technical buying
d. Modified rebuying

ANS: B PTS: 1 DIF: 2 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

50. A unique purchase situation in the business market that requires considerable effort on the decision makers part is called:
a. a straight rebuy.
b. a modified rebuy.
c. new-task buying.
d. a selective rebuy.

ANS: C PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Technology | CB&E Model Customer | R&D Knowledge of general business functions TYP: KN

51. Reciprocity has been most common in industries featuring _____ products with _____ prices.
a. homogeneous; different
b. diverse; different
c. homogeneous; similar
d. diverse; similar

ANS: C PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Reflective Thinking | CB&E Model Product | R&D Knowledge of general business functions TYP: AP

52. An ongoing evaluation of a suppliers performance in categories such as price, EDI capability, delivery times, and attention to special requests is known as:
a. product substitution analysis.
b. component redesign.
c. vendor analysis.
d. costs-benefits analysis.

ANS: C PTS: 1 DIF: 2 REF: 186
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

53. A companys buying center encompasses:
a. a representative from each department within an organization.
b. only a gatekeeper and a buyer.
c. everyone who is involved in any aspect of the buying process.
d. an exclusive top-notch buying department.

ANS: C PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: KN

54. In a business buying center situation, the people who sometimes initially request the product, use the purchased product, and may assist in developing the product specifications are called:
a. users.
b. consumers.
c. influencers.
d. gatekeepers.

ANS: A PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

55. One type of buying center role is that of a(n):
a. influencer, who supplies information to guide evaluation of alternatives.
b. contractor, who has the formal authority to select a supplier.
c. distributor, who controls the information that all buying center members will review.
d. technician, who presents technical requirements.

ANS: A PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

56. The function performed by the gatekeeper in the company buying center is to:
a. supply information to guide evaluation of alternatives.
b. select a supplier and implement the procedures for securing the goods and services.
c. choose which goods and services will actually be bought.
d. control the information that all buying center members will review.

ANS: D PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

57. A(n) _____ controls the information that enters the companys buying center.
a. buyer
b. influencer
c. gatekeeper
d. user

ANS: C PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

58. Janelle works in distribution management at a Fortune 500 company and has formal authority to select a supplier. Janelle is a(n):
a. buyer.
b. influencer.
c. gatekeeper.
d. user.

ANS: C PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

59. Which of the following is not a challenge ordinarily encountered in marketing to government entities?
a. Handling retail sales contracts using Visa, MasterCard or Discover.
b. Fixed-price contracts based on a bid process.
c. Cost-reimbursement contracts providing for allowable costs and profits.
d. Minority subcontracting programs.

ANS: A PTS: 1 DIF: 2 REF: 188
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

60. Some of the challenges faced by government purchasers include all of the following except:
a. assuring that minority groups are fairly represented in the buying process.
b. meeting the needs of users who do not work in their organization.
c. inflexible and slow purchasing procedures that were written nearly 50 years ago.
d. coordinating the purchasing between the federal, state and local agencies.

ANS: D PTS: 1 DIF: 2 REF: 188
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Managing administration & control
TYP: KN

61. The General Services Administration (GSA) of the U.S. federal government:
a. buys goods and services strictly only for its own internal use.
b. buys goods and services strictly for use by other government agencies including the departments of Defense and Transportation.
c. is a central management agency involved in procurement, property management, and information resources management.
d. oversees state and local purchasing guidelines for those products not usually bought by the federal government.

ANS: C PTS: 1 DIF: 2 REF: 188
OBJ: 6-9
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: KN

62. Institutional markets are characterized by:
a. similar buying practices.
b. multiple-buying influences, even within the same institution.
c. few group purchasing arrangements.
d. little negotiation to secure volume discounts.

ANS: B PTS: 1 DIF: 1 REF: 190
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

63. Which of the following types of organizations would not ordinarily be considered to be a part of the institutional market?
a. Public libraries
b. Department stores
c. Educational foundations
d. Churches

ANS: B PTS: 1 DIF: 1 REF: 190-191
OBJ: 6-9
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Knowledge of general business functions TYP: AP

64. In order to receive quantity discounts on needed purchases, many institutions:
a. tend to purchase products they do not need.
b. insist on equal treatment under the Robinson-Patman Act.
c. join cooperative associations to pool purchases.
d. rely on their independence and future growth.

ANS: C PTS: 1 DIF: 1 REF: 191
OBJ: 6-9
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Managing strategy & innovation
TYP: AP

65. Efforts to restore worn-out products to like-new condition is called:
a. outsourcing.
b. making the product out-house.
c. remanufacturing.
d. indirect acquisition.

ANS: C PTS: 1 DIF: 1 REF: 191
OBJ: 6-9
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

MATCHING

Match each item with the correct statement below.
a. commercial market i. outsourcing
b. trade industries j. value analysis
c. market segmentation k. vendor analysis
d. customer-based segmentation l. buying center
e. end-use application segmentation m. reciprocity
f. global sourcing n. gatekeeper
g. joint demand o. systems integration
h. inelastic demand p. modified rebuy

1. The person who controls the information all members of a buying center will review is a(n) _____.

2. The _____ consists of individuals and firms that acquire products used to support the production of other products.

3. _____ is the practice of buying from suppliers who are also customers.

4. _____ consists of retailers and wholesalers who purchase products for resale to others.

5. A(n) _____ is comprised of participants in an organizational buying action.

6. By applying _____ concepts to groups of business customers, marketers can develop a strategy that best suits the needs of those customers.

7. The assessment of supplier performance is called _____.

8. _____ is the process of dividing a B2B market into homogeneous groups based on buyers products specifications.

9. _____ is the systematic study of the components of a purchase to determine the most cost-effective approach.

10. Dividing a B2B market based on how customers will use a product is called _____.

11. _____ is the use of outside vendors to produce products that were formerly produced in-house.

12. Purchasing products from suppliers worldwide is called _____.

13. If the demand for a product remains constant, even if its price changes, then this product is said to exhibit _____.

14. _____ indicates that the demand for one product depends on the demand for another product.

15. A(n) _____ occurs when a purchaser is willing to consider new products or re-evaluate available alternatives.

16. A company can streamline purchasing operations through a process of centralization called _____.

1. ANS: N PTS: 1 DIF: 1 REF: 186
OBJ: 6-8
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

2. ANS: A PTS: 1 DIF: 1 REF: 168
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

3. ANS: M PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

4. ANS: B PTS: 1 DIF: 1 REF: 169
OBJ: 6-1
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

5. ANS: L PTS: 1 DIF: 1 REF: 186
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

6. ANS: C PTS: 1 DIF: 1 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

7. ANS: K PTS: 1 DIF: 1 REF: 186
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

8. ANS: D PTS: 1 DIF: 1 REF: 171
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

9. ANS: J PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

10. ANS: E PTS: 1 DIF: 1 REF: 172
OBJ: 6-2
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business functions
TYP: KN

11. ANS: I PTS: 1 DIF: 1 REF: 179
OBJ: 6-4
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

12. ANS: F PTS: 1 DIF: 1 REF: 175
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model International Perspective | R&D Knowledge of general business functions TYP: KN

13. ANS: H PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

14. ANS: G PTS: 1 DIF: 1 REF: 177
OBJ: 6-3
NAT: AACSB Analytic | CB&E Model Product | R&D Knowledge of general business functions
TYP: KN

15. ANS: P PTS: 1 DIF: 1 REF: 185
OBJ: 6-7
NAT: AACSB Analytic | CB&E Model Customer | R&D Knowledge of general business

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