1. What are the four major types of business markets? Define each type.
2. Discuss the differences between business and consumer transactions.
Chapter 7 – Business Markets and Buying Behavior
3. Compare and contrast the three major types of purchases made by business customers.
4. What is derived demand?
Chapter 7 – Business Markets and Buying Behavior
5. Explain how purchase decisions for business products may be influenced by persons in a buying center.
6. Describe the various stages of the business buying decision process.
Chapter 7 – Business Markets and Buying Behavior
7. List the environmental factors that affect the business buying decision process.
8. List the various organizational factors that affect the business buying decision process.
Chapter 7 – Business Markets and Buying Behavior
9. Discuss how interpersonal factors influence the business buying decision process.
10. How do individual factors affect the business buying decision process?
Chapter 7 – Business Markets and Buying Behavior
11. In what ways can an industrial classification system be used by business marketers to analyze target markets?
12. What are the major advantages of the North American Industry Classification System (NAICS) compared to the
Standard Industrial Classification (SIC) system?
Chapter 7 – Business Markets and Buying Behavior
13. The three purposes for which individuals, organizations, or groups can use products in order for it to be considered a
business market are:
a. use in daily operations, end consumption, and resale.
b. direct use in producing other products, company travel, and end consumption.
c. resale, use in daily operations, and direct use in producing other products.
d. governmental and institutional purposes, and for analyzing target markets.
e. making other products, selling directly to consumers, making component parts.
14. Areo Ceiling Fans buys electrical wire for use in producing its ceiling fans. Which of the following types of markets
does Areo fall in?
a. Resale
b. Wholesale
c. Customer
d. Consumer
e. Business
Chapter 7 – Business Markets and Buying Behavior
15. Business markets are typically divided into four categories. These categories are:
a. retailer, wholesaler, service, and nonprofit firm.
b. producer, manufacturer, reseller, and government.
c. producer, reseller, government, and institutional.
d. manufacturer, wholesaler, retailer, and services.
e. reseller, end users, government, and institutional.
16. Individuals and business organizations that purchase products for the purpose of making a profit either by using the
products to manufacture other products or by using them in their operations are classified as _____ markets.
a. consumer
b. institutional
c. producer
d. government
e. reseller
Chapter 7 – Business Markets and Buying Behavior
17. JasonPuentesisanaccountantwhopurchasessoftwareformaintainingclients’booksforafee.Jasonisan
example of a buyer in a _____ market.
a. consumer
b. producer
c. reseller
d. government
e. institutional
18. Individuals and business organizations that buy finished goods and trade them to make a profit without changing the
physical characteristics of the product are classified as _____ markets.
a. consumer
b. institutional
c. producer
d. government
e. reseller
Chapter 7 – Business Markets and Buying Behavior
19. _____ buy products from manufacturers and then resell the products to other firms in the distribution system.
a. Retailers
b. Producers
c. Distributors
d. Warehouses
e. Wholesalers
20. Mike’sRoadsideMarketbuysproducefromfarmers,marksthemerchandiseatapricethatincludessomeprofit,
andthensellsthefruitandvegetablestothepeopleinandaroundCenterville.Mike’swouldbeclassifiedaspartof
a _____ market.
a. consumer
b. producer
c. government
d. reseller
e. wholesaler
Chapter 7 – Business Markets and Buying Behavior
21. Fast Tools Inc. purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells
them to hardware stores at a price that includes a profit for Fast Tools Inc. The company would be part of a _____
market.
a. reseller
b. producer
c. consumer
d. government
e. supply
22. Tech Silicon buys silicon which is used in its chip-making process. Tech Silicon produces microchips for use within
a wide variety of products for other firms. Tech Silicon is a buyer in a(n) _____ market.
a. producer
b. government
c. reseller
d. construction
e. institutional
Chapter 7 – Business Markets and Buying Behavior
23. Retailers like Costco and Walmart are considered to be members of the _____ market.
a. reseller
b. customer
c. producer
d. institutional
e. services
24. Which of the following statements about reseller markets is false?
a. Resellers are concerned with the level of demand for the product.
b. Resellers are least concerned with the amount of space a product takes up as long as the product has a
minimal customer base.
c. Resellers want producers to be able to supply adequate quantities of a product.
d. Resellers are concerned with the availability of technical assistance and training programs from the
producer.
e. Resellers are concerned with the markup percentage they can get on the product.
Chapter 7 – Business Markets and Buying Behavior
25. Which of the following types of business market tends to have the most complex buying procedures?
a. Reseller
b. Institutional
c. Retailer
d. Government
e. Producer
26. The state of Montana is preparing to buy a large quantity of frozen orange juice for providing it in a large school
district. Citrus Fill Inc. is in the citrus juice business but has never sold its products to the government market. To
haveachanceatgettingthiscontract,CitrusFill’sfirststepmustbeto:
a. make a presentation appointment with the state.
b. quote prices to the purchasing department.
c. advertise in the capital city.
d. negotiate with the state.
e. secure a slot on the list of qualified bidders.
Chapter 7 – Business Markets and Buying Behavior
27. The government decides to purchase a new fleet of fighter jets for the U.S. Air Force. Which of the following
types of buying procedure is the government most likely to use?
a. The government will request bids from all companies on its qualified bidder list.
b. It will contact whatever company made the last jets and have them develop the new ones.
c. Ads will be placed in the top five circulated U.S. newspapers for a company to produce the jets.
d. The government will select a few firms and enter into negotiations with them until the contract is awarded.
e. The contract will go to the first company that submits a reasonable bid for the desired jets.
28. Pi Delta Mu is a sorority that purchases food in bulk for its members living in the house. Hence, Pi Delta Mu is a
part of a(n) _____ market.
a. producer
b. consumer
c. reseller
d. institutional
e. government
Chapter 7 – Business Markets and Buying Behavior
29. When charitable organizations such as the American Cancer Society, Second Harvest Foodbank, and the Red
Cross make purchases for goods and services to use in their daily operations, they would be considered to be
_____ buyers.
a. corporate
b. government
c. institutional
d. producer
e. nonprofit
30. Institutional markets are:
a. intermediaries who resell goods to make a profit.
b. federal and state government units.
c. state or local government units.
d. consumers who buy products for their own use.
e. organizations that seek nonbusiness goals.
Chapter 7 – Business Markets and Buying Behavior
31. Which of the following would be considered an institutional buyer?
a. Aramark
b. City of Greenville
c. Apple Computers
d. The University of Illinois
e. The Environmental Protection Agency
32. The two ways governments make purchases are:
a. cash or credit.
b. contracting previous suppliers and bids.
c. bids and negotiated contracts.
d. lottery system and contract negotiations.
e. request for new purchases and recurring orders.
Chapter 7 – Business Markets and Buying Behavior
33. Which of the following is a primary difference between business and consumer buyers?
a. Consumer buyers require more product information than business buyers.
b. Business purchases are made by one individual, whereas families make consumer purchases together.
c. Repeat sales are more common with consumer buyers than with business buyers.
d. Consumers primarily buy inexpensive items; businesses only buy expensive items.
e. Business buyers generally make larger orders than consumer buyers.
34. Bob Denton of Denton Pest Control buys equipment from Allied Tools because Allied Tools employs him for pest
control services in its warehouses periodically. This practice is an example of:
a. cost-benefit trading.
b. cooperative selling.
c. reciprocity.
d. supplier agreement.
e. modified rebuy purchase.
Chapter 7 – Business Markets and Buying Behavior
35. A disadvantage of reciprocity is that it can lead to:
a. a price war.
b. higher promotional costs.
c. more competitive firms entering the industry.
d. less-than-optimal purchases.
e. longer periods of negotiation.
36. Jason owns a small landscaping business called Green Scopes. When buying a new pickup truck for his landscaping
business, Jason negotiated with Michael Keith, a dealer, with the agreement that Green Scopes would be the
service company Michael Keith uses for all of its landscaping needs. This is an example of:
a. a new task purchase.
b. a straight rebuy.
c. a modified rebuy.
d. reciprocity.
e. a straight purchase.
Chapter 7 – Business Markets and Buying Behavior
37. Which of the following statements about business buying is false?
a. Business marketers prefer not to sell to customers who place small orders.
b. Business marketers must often sell their products in large quantities to make profits.
c. Most business purchasing decisions are made by committee.
d. Business purchases are usually made on the basis of contracts.
e. Reciprocity influences purchasing agents to deal with all suppliers of a product.
38. Many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships
which are known as:
a. partnerships.
b. co-ops.
c. monopolies.
d. reciprocities.
e. resellers.
Chapter 7 – Business Markets and Buying Behavior
39. Raython Hardware and Thames Industrial Supplier have worked closely for many years and have a mutually
beneficialrelationshipinwhichRaythonprovidesallofThames’shardwareneedsinatimelymanner.Raythonand
Thames’srelationshipcouldbebestcharacterizedasa(n):
a. buying center.
b. partnership.
c. intra-organizational group.
d. reselling.
e. tying arrangement.
40. Which of the following is true with respect to buyers in business markets?
a. Business buyers give little value to services.
b. Business customers tend to be less informed about the products they purchase than consumer buyers.
c. Businesscustomersdemanddetailedinformationaboutaproduct’squality,features,ortechnical
specifications.
d. Business customers are no different than buyers in consumer markets.
e. Business customers tend to buy products from their friends and contacts with business suppliers.
Chapter 7 – Business Markets and Buying Behavior