Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 1
Indicate whether the statement is true or false.
1. Ethics refers to a firm’s belief that an ongoing relationship with another firm is so important that it warrants maximum
efforts at maintaining it indefinitely.
a. True
b. False
2. Many companies offer ethics training to employees and have codes of ethics that help guide buyers and sellers in
business.
a. True
b. False
3. A practice whereby business purchasers choose to buy from customers of their competitors is called reciprocity.
a. True
b. False
4. A product can be sold both as a consumer good and business product.
a. True
b. False
5. Derived demand means that an increase or decrease in the price of the product will significantly affect demand for the
product.
a. True
b. False
6. By pressurizing a supplier to sell products at very low prices, a buyer may, in effect, force the supplier to compromise
on the quality of the product.
a. True
b. False
7. Fluctuating demand is the demand for two or more items used together in a final product.
a. True
b. False
8. In a buying center, the decider is the person who actually negotiates a purchase.
a. True
b. False
9. Items such as forklifts are more commonly sold as consumer goods than as business products.
a. True
b. False
10. Federal, state, and local buying units account for the greatest volume of purchases of any customer category in the
United States.
a. True
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 2
b. False
11. The more digits in a North American Industry Classification System code, the less homogeneous a group will be.
a. True
b. False
12. The use of direct channels in business marketing has increased dramatically in the past decade with the introduction of
various Internet buying and selling schemes.
a. True
b. False
13. Price is one of the criteria against which business buyers evaluate products and suppliers.
a. True
b. False
14. The goal of business-to–business exchanges is to simplify business purchasing and to make it more efficient.
a. True
b. False
15. Processed materials include capital goods such as large or expensive machines, mainframe computers, blast furnaces,
generators, airplanes, and buildings.
a. True
b. False
16. Businesses contract outside providers to perform janitorial, advertising, and legal services as their costs are less than
hiring an employee to perform the particular task.
a. True
b. False
17. Providing superior service to a firm’s most valuable customers is likely to result in a maximization of the total business
value generated over time.
a. True
b. False
18. In social media marketing, awareness occurs when action is taken and includes everything from downloading a piece
of content (like a white paper) to actually making a purchase.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
19. The logistics manager at Hare and Berry, an investment firm, purchased office stationery from a local vendor. He
wassatisfied with the quality of the products and entered into a purchasing contract with the vendor. Henow places a
reorder with the same vendor whenever the need arises. This is most likely an example of a(n) ___________.
a. initiation buy
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 3
b. straight rebuy
c. new buy
d. modified rebuy
20. In the context of business products, major equipment:
a. is marketed by local industrial distributors.
b. is sold through a longer distribution channel than accessory equipment.
c. is often custom designed for each customer according to requirements.
d. is less expensive and shorter-lived than accessory equipment.
21. _____ refers to the phenomenon in which a small increase or decrease in consumer demand can produce a much larger
change in demand for the facilities and equipment needed to make the consumer product.
a. The multiplier effect
b. Reciprocity
c. The conversion rate
d. Frequency
22. Quick Fix Communications, a software development firm, purchased a high-end external data storage machine for two
million dollars from a computer manufacturer. Which of the following statements is most likely to be true about the data
storage machine?
a. It will depreciate over time.
b. It will be charged as an expense in the year it was bought.
c. It was bought from a retailer.
d. It was bought through an indirect distribution channel.
23. Nutrimax Cookies Inc. buys around three tons of raw materials every year. If the demand for its cookies increases next
year, the company might need to buy more raw materials to meet the demand. This illustrates _____.
a. inelastic demand
b. joint demand
c. elastic demand
d. fluctuating demand
24. Crumble, a chocolatemanufacturing company, purchased three tons of wheat and half a ton of rice last year to produce
diet chocolate. In this scenario, wheat and riceare examples of __________.
a. raw materials
b. component parts
c. processed materials
d. business services
25. Which of the following is a difference between supplies and business services?
a. Supplies are consumable items, whereas business services are expense items.
b. Supplies are more expensive compared to other business goods, whereas business services are economical.
c. Supplies are part of a final product, whereas business services do not become part of a final product.
d. Supplies are custom designed for each customer, whereas business services are normally standardized.
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 4
26. Pro LifeRaces, a company that organizes marathons across the city, announces a workshop for beginners on its
Facebook page. To increase interactions with the audience, it posts a short video on its page.This is followed up with
another post asking people what social cause they would like to run for and why. The post receives over a hundred
comments, is liked by over 9,000 people, and shared by over 2,000. As a result, the company receives more than 500
registrations for the workshop. In the context of social media marketing, which of the following marketing metrics most
likely helped Pro Life Races get high registrations?
a. Product adaptation
b. Engagement
c. Conversion
d. Segmentation
27. Which of the following scenarios illustrates the use of processed materials in manufacturing?
a. No-Glut Inc. uses rice flour in the manufacture of its gluten-free products.
b. Zintec Hardware uses nails to hold its ladders together.
c. Pace Corp., an automobile company, uses magnesium alloy wheels for its high-end cars.
d. Reldex Steel Corp. uses blast furnaces in its manufacturing process.
28. Dotol Inc., a furnituremanufacturing company, buys a stock of wood and uses it to manufacture various products such
as chairs, tables, desks, and beds. The company then sells these products to furniture stores and retailers. In this scenario,
Dotol Inc. represents the ________ segment of the business market.
a. reseller
b. producer
c. distributor
d. broker
29. Rex & Gwen Co.,an investment firm, is facing a shortage of data storage space. Finn, the assistant manager, suggests
that the company purchase a high-end data storage machine. David, the branch manager, approves the suggestion and
assigns Betty, his secretary, the task of making a list of vendors. In the context of the roles in the buying center, Finn is
most likely the _________.
a. gatekeeper
b. evaluator
c. influencer
d. initiator
30. Which of the following is a difference between component parts and supplies?
a. Component parts require extensive processing before they become part of another product, whereas supplies do
not.
b. Component parts are consumable items, whereas supplies are finished items.
c. Component parts become part of a final product, whereas supplies do not.
d. Component parts are inexpensive when compared to other business products, whereas supplies are expensive.
31. The manager of TruColor Printers Inc. has purchased a sophisticated printing press for $1 million. Which of the
following statements is most likely to be true about the printing press?
a. It will be depreciated over its useful life.
b. It will be charged as an expense in the year it is bought.
c. It will undergo processing before it is used.
d. It will be bought through retailers.
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 5
32. Zeeka, a supermarket chain, enters into a partnership with a logistics company called Senzo. The idea behind this
partnership is to allow Zeeka’s customers to order groceries online and have them delivered to their doorstepby Senzo’s
delivery service. This is an example of a __________.
a. straight rebuy
b. golden handshake
c. foreign direct investment
d. strategic alliance
33. C-Through, an optics-manufacturing company, wants to focus on relationship marketing. In this case, which of the
following strategies can be adopted by C-Through?
a. It can use social networking sites to advertise itself to businesses.
b. It can market its products through dealers.
c. It can set the price and other conditions of sale without negotiation.
d. It can use accessory equipment and major equipment.
34. Drew&Sons Co. manufactures and sells notepads, calendars, diaries, and other office stationery to corporates. This is
an example of _________.
a. lean manufacturing
b. business marketing
c. licensing
d. franchising
35. Carly’s is a popular company that manufactures windshields for automobilemanufacturing companies. Even when
Carly’s increased the prices of the windshields last year, the sales of its own products and those of its customers remained
unaffected. This is most likely an example of ___________.
a. latent demand
b. inelastic demand
c. negative demand
d. joint demand
36. Which of the following characteristics distinguishes business products from consumer products?
a. Physical form
b. Intended use
c. Distribution method
d. Price
37. Seth, an administrative manager at Seal Inc., is asked to purchase ten printers for the firm’s office. He contacts a sales
representative at Myro Distributors and places an order for ten printers. Myro Distributors purchases the printers from Ink
Corp., a wholesaler, and delivers them to Seth at his office. In this scenario, Myro Distributors is most likely to be a(n)
_____.
a. producer
b. retailer
c. institution
d. manufacturer
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 6
38. Fresnas Inc., an oil refinery, buys crude oil and converts it into various products such as gasoline, kerosene, and diesel
fuel. Fresnas Inc., then, sells these products to other companies or retailers. Based on this information, which segment of
the business market is most likely represented by Fresnas Inc.?
a. Resellers
b. Producers
c. Distributors
d. Governments
39. Leo buys 500 sheets of paper from a vendor for his printing firm. He is satisfied with the product, and he orders the
same quantity from the same vendor every week. This is most likely an example of a(n) _____.
a. initiation buy
b. straight rebuy
c. new buy
d. modified rebuy
40. The North American Industry Classification System data can be used to:
a. identify scope for new product lines.
b. classify firms according to their heterogeneity.
c. classify business establishments all over the world.
d. identify potential new customers.
41. Which of the following is true of a firm that acts as a consumer marketer?
a. The firm can also be a business marketer.
b. It has fewer customers than a business marketer.
c. The firm excludes the sale of goods that are sold in business markets.
d. Its customers are less geographically concentrated than business markets.
42. In the business market, _____.
a. products or services are sold for personal consumption
b. goods that are sold in consumer markets are not sold
c. a single customer can account for a huge volume of purchases
d. relationship marketing is given least importance
43. Ben, an administrative manager at Wanger Corporations, is asked to purchase 20 sets of floor lights for the new
conference room in his office. He gets in touch with a sales representative at Gene Distributors, a lighting products
supplier, and places an order. The representative at Gene Distributors then buys the lights from Litt-Up Lightings, a
wholesaler, and delivers them to Ben at his office. In this scenario, Gene Distributors most likely represents the
___________ segment of the business market.
a. producer
b. retailer
c. institution
d. manufacturer
44. At Magnira Corp., a company that manufactures fruit preserves, fruits of excellent quality are used to make jams,
jellies, and marmalades. In this scenario, the fruits are examples of _____.
a. raw materials
b. component parts
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 7
c. MRO items
d. business services
45. Which of the following statements is true of the North American Industry Classification System (NAICS)?
a. Each classification group in NAICS is heterogeneous in terms of the components used.
b. The geographic dispersion of firms cannot be identified with the help of NAICS.
c. The more the digits in a NAICS code, the more homogeneous the group.
d. Goods- or service-producing firms grouped under NAICS use different production processes.
46. In a buying center, the person who has the formal or informal power to choose or approve the selection of a supplier or
brand is known as the _____.
a. decider
b. purchaser
c. gatekeeper
d. initiator
47. Unlike buyers in business markets, buyers in consumer markets tend to:
a. be insensitive to price.
b. generate less stable demand trends.
c. approach purchasing more informally.
d. involve more people in a single purchase decision.
48. Which of the following statements is true of raw materials used as business products?
a. Promotion of raw materials is almost always promoted via mass advertising.
b. They are usually sold in large quantities.
c. Individual producers have great flexibility in the pricing of raw materials.
d. They are finished items ready for assembly.
49. Vactin Corp., a construction company, buys ten truckloads of cement for its new construction project.
Given this information, the cement bought is an example of a(n) _____.
a. consumer product
b. service product
c. industrial product
d. unsought product
50. Theron Motors, an automobilemanufacturing firm, manufactures all automobile parts in-house, except engines. It
purchases diesel engines in large quantities from another company. Once it finishes manufacturing all parts, Theron
Motors assembles the engine with the other automobile parts without much processing. In this scenario, the diesel engines
are examples of _________.
a. component parts
b. raw materials
c. processed materials
d. business services
51. A _____ is a situation requiring the purchase of a product for the first time.
a. modified rebuy
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 8
b. straight rebuy
c. conditional buy
d. new buy
52. _____ exists when one party has confidence in an exchange partner’s reliability and integrity.
a. Obeya
b. Trust
c. Keiretsu
d. Commitment
53. A _____ is used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other
customers.
a. consumer product
b. shopping product
c. business product
d. convenience product
54. In the context of consumer markets, which of the following is true of consumers?
a. They often follow the practice of reciprocity.
b. They tend to buy in larger quantities than business consumers.
c. They approach purchasing more formally than business buyers.
d. They normally buy products rather than lease them.
55. Bright Side Motors, an automobile manufacturing company, purchases ten thousand sheets of toughened glass for the
construction of cars. In this scenario, the sheets of toughened glass are an example of a _________.
a. consumer product
b. service product
c. business product
d. convenience product
56. Items such as sheet metal, treated lumber, corn syrup, and plastics are examples of _____.
a. raw materials
b. processed materials
c. major equipment
d. MRO supplies
57. E-books are an example of:
a. content marketing.
b. inbound marketing.
c. relationship marketing.
d. database marketing.
58. Which of the following companies uses processed materials in manufacturing?
a. Jim Jam Confectioners, a food company that uses sugar-free corn syrup in its products
b. TimothyCorp., a construction company that uses rope to hold its metal antennas together
c. KewlGadgets, a cell phone manufacturing company that uses microcomputers in its smartphones
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 9
d. Swatch Laboratories, a printing pressthat uses tripods to produce clean prints
59. Goods, such as portable drills and computer software, which are less expensive and shorter-lived than installations are
examples of ______.
a. component parts
b. major equipment
c. raw materials
d. accessory equipment
60. According to the categories of business products, _____ are expense items that do not become part of a final product.
a. raw materials
b. MRO supplies
c. component parts
d. business services
61. In the context of business relationships in Japan, which of the following best defines the term amae?
a. It is the feeling of nurturing concern for, and dependence upon, another.
b. It is the lack of motivation among employees in businesses.
c. It is a legal consolidation and collaboration of companies into a single entity.
d. It is the lack of economic competition in the market.
62. In the context of business products, which of the following is a difference between major equipment and accessory
equipment?
a. Major equipment is often standardized, whereas accessory equipment is often custom designed for each customer.
b. Major equipment is depreciated over time, whereas accessory equipment is charged as an expense in the year it is
purchased.
c. Major equipment has a short life, whereas accessory equipment has a long life.
d. Major equipment is marketed more through advertising, whereas accessory equipment is marketed and distributed
via personal selling.
63. Having fewer customers in business markets in comparison with consumer markets:
a. reduces the attention required to be given to customers.
b. makes it easy to identify prospective buyers.
c. reduces the dependency on distributors for product delivery.
d. increases product diversity.
64. Identify a true statement about MRO (maintenance, repair, or operating) supplies.
a. They become part of a final product.
b. They are intangible business products.
c. They are relatively expensive when compared to other business products.
d. They are normally standardized items that purchasing agents routinely buy.
65. Tamery Corp. is engaged in marketing various goods and services. It buys goods from various manufacturers and sells
them to businesses and end consumers. Given this information, Tamery Corp. is said to be selling consumer products if:
a. it sells books to students.
b. it sells spare parts to automobile manufacturers.
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 10
c. it sells laptops to a hotel.
d. it sells printers to a partnership firm.
66. Which of the following is a similarity between raw materials and component parts?
a. Both fail to retain their identity in final products.
b. Both become part of a final product.
c. Both are unprocessed extractive products.
d. Both are more expensive than major equipment.
67. The segment of the business market that seeks to achieve goals other than the standard business goals of profit, market
share, and return on investment consists of _____.
a. institutions
b. resellers
c. producers
d. manufacturers
68. Line Twists Inc. is a start-up dance company. On its Web site, it conducts an online competition for amateur dancers.
It asks people to post one sentence on why they love to dance. Thousands of people participate and comment on the Web
site. In the context of business-to-business social media marketing, this step taken by Line Twists Inc. is an example of the
marketing metric of _____.
a. product adaptation
b. engagement
c. conversion
d. review
69. Larry, the inventory manager at a production plant, buys one ton of crude oil from a local vendor for the production of
kerosene. He is satisfied with the quality of the product and places a reorder with the same vendor every three weeks. This
is most likely an example of a(n) _________.
a. initiation buy
b. modified rebuy
c. new buy
d. straight rebuy
70. Casca Paints Inc., a manufacturer of paints and emulsions, owns a user-friendly Web site. The Web site allows
customers to upload pictures of their house and select the colors that best match their expectations. Donnel Designs Inc.,
an interior decoration firm, enters into a partnership with Casca Paints Inc. As a result, customers can now get a complete
interior design solution for their houses. This is an example of a _____.
a. straight rebuy
b. golden handshake
c. negative inventory
d. strategic alliance
71. In a(n) _____ situation, a purchaser wants some change in the original good or service.
a. initiation buy
b. straight rebuy
c. new buy
d. modified rebuy
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 11
72. Sweet Tooth Candy has ten candy manufacturing plants. However, the demand for its candy increased by a small
margin this year, and the company installed another plant to increase its production. This is most likely an example of
___________.
a. inelastic demand
b. joint demand
c. latent demand
d. fluctuating demand
73. Which of the following statements is true of business marketing?
a. It refers to the sale of goods and services for the purpose of personal consumption.
b. It deals with products that are used to facilitate an organization’s operations.
c. It has long and indirect channels of distribution.
d. It sets the price and other conditions of sale without chances for negotiations.
74. Unlike wholesalers, retailers:
a. sell mainly to final consumers at the end of the distribution channel.
b. sell mostly to other retailers and other organizational customers.
c. buy business goods and incorporate them into the products they produce.
d. seek to achieve goals other than the standard business goals of profit.
75. In a buying center, gatekeepers are the people who:
a. initiate the buying process.
b. have the formal power to approve a brand.
c. regulate the flow of information.
d. negotiate a purchase.
76. Fournotts Printing Inc. manufactures and sells photocopiers, printers, and scanners to various corporate offices. This is
an example of _____.
a. contract manufacturing
b. business marketing
c. licensing
d. franchising
77. Inland Eastex Inc. manufactures toothpastes. Even when the company increased the price of its toothpastes last year,
the sales did not drop. This is an example of _____.
a. elastic demand
b. inelastic demand
c. derived demand
d. joint demand
78. Which of the following statements is true of relationship marketing?
a. For many suppliers, retaining their current customers has become a secondary focus in relationship marketing.
b. Business suppliers use social networking sites sparingly as these sites discourage businesses from shopping for all
their needs.
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 12
c. Loyal customers are less profitable than those who are price sensitive and perceive no difference among brands or
suppliers.
d. Relationship marketing has become more important than before because competition is becoming more intense.
79. Explain how business establishments are classified under the North American Industry Classification System
(NAICS.)
80. Explain the distribution structure followed in business markets.
81. In the context of categories of business customers, describe the role of resellers.
82. Differentiate between major equipment and accessory equipment.
83. Discuss the ways in which business-to-business (B–to–B) companies use the Internet for business marketing.
84. Explain strategic alliance and the factors that contribute to its long-term survival.
85. Discuss the importance of customer service in business marketing.
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 13
Answer Key
1. False
2. True
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 14
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 15
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 16
Name:
Class:
Date:
chapter 7
Copyright Cengage Learning. Powered by Cognero.
Page 17