62) The partners in ________ systems are united in operational ways, but neither demonstrates
structural commitment through legal means or adaptation.
A) mutually adaptive
B) collaborative
C) basic buying and selling
D) customer supply
E) cooperative
63) Value Central has a partnership of high trust and commitment with certain suppliers and
gives them access to its sophisticated and detailed daily, individual store-based sales data. In
exchange, those suppliers are responsible for managing Value Central’s inventory of their
products. This relationship is best described as ________.
A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king
64) The relationship between a company and its office supplies vendor where competition rather
than cooperation is the dominant form of governance is probably best described as ________.
A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king
65) In the ________ category of buyer-supplier relationship, although bonded by a close,
cooperative relationship, the seller adapts to meet the customer’s needs without expecting much
adaptation or change on the part of the customer in exchange.
A) contractual transaction
B) cooperative system
C) collaborative
D) mutually adaptive
E) customer is king
66) According to research studies, the closest relationships between customers and suppliers
arise when ________.
A) supply is important to the customer and there were procurement obstacles
B) procurement is simple
C) there are many undifferentiated vendors in the marketplace
D) the customer is highly price sensitive
E) the suppliers charge a premium for their products
67) The type of buyer-supplier relationship in which buyers and sellers make many relationship-
specific adaptations, but without necessarily achieving strong trust or cooperation is termed as
________.
A) customer is king
B) mutually adaptive
C) collaborative
D) contractual transaction
E) customer supply
68) ________ investments are those expenditures tailored to a particular company and value
chain partner.
A) Diversified
B) Pooled
C) Specific
D) Umbrella
E) General
69) Which of the following is a form of cheating or undersupply relative to an implicit or explicit
contract which usually takes place when buyers cannot easily monitor supplier performance?
A) Institutional sale
B) Business buying
C) Opportunism
D) Vertical integration
E) Contractual transactionism
70) The ________ market consists of schools, hospitals, nursing homes, prisons, and other
institutions that must provide goods and services to people in their care.
A) vertical
B) nonprofit
C) spot
D) secondary business
E) institutional
71) In most countries, ________ are the major buyers of goods and services. They typically
require suppliers to submit bids and often award the contract to the lowest bidder.
A) consumer packaged-goods companies
B) government organizations
C) health services vendors
D) educational institutions
E) households
72) Organizational buying is the decision-making process by which formal organizations
establish the need for purchased products and services and identify, evaluate, and choose among
alternative brands and suppliers.
73) The business market consists of all the organizations that acquire goods and services used in
the production of other products or services that are sold, rented, or supplied to others.
74) Commoditization strengthens customer loyalty.
75) The business market is essentially the same market as the consumer market.
76) Business buyers often select suppliers who also buy from them.
77) The business marketer normally deals with far fewer, much larger buyers than the consumer
marketer does.
78) An increase in the demand for plant and equipment can lead to a much larger increase in
consumer demand. This is known as the acceleration effect.
79) The demand for business goods is ultimately derived from the demand for raw materials.
80) The total demand for many business goods and services is inelastic that is, not much
affected by price changes.
81) In the straight rebuy, “out-suppliers” try to get a small order and then enlarge their purchase
share over time.
82) The buyer in a straight rebuy usually changes product specifications, prices, delivery
requirements, or other terms.
83) The business buyer makes the fewest decisions in the straight rebuy situation and the most in
the new-task situation.
84) Most business buyers reject what is called systems buying from one seller.
85) Systems selling is a key industrial marketing strategy in bidding to build large-scale
industrial projects such as dams or pipelines.
86) Sellers benefit from systems contracting through lower operating costs as a result of steady
demand and reduced paperwork.
87) The buying center is where consumers go to purchase their goods and services.
88) With respect to the buying center, approvers are people who have the power to prevent
sellers or information from reaching members of the buying center.
89) Initiators are those who authorize the proposed action of deciders or buyers.
90) Influencers influence the buying decision by helping define specifications and providing
information for evaluating alternatives.
91) In the buying center, several people can occupy a given role such as user or influencer, and
one person may play multiple roles.
92) Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying
influencers.
93) In the business market, small sellers concentrate on reaching as many participants as possible
because their chances of success are slim.
94) Framing occurs when customers are given a perspective or point of view that allows the firm
to “put its best foot forward.”
95) A performance review is the first step in the buygrid framework.
96) The buying process begins when someone places an order with a sales representative.
97) Product value analysis is an approach to efficiency that studies whether components can be
redesigned or made by more efficient methods of production without adversely impacting
product performance.
98) On spot electronic markets, prices of products or commodities change by the minute.
99) In buying alliances, participants offer to trade goods or services.
100) With respect to assessing customer value, in conjoint analysis customers are asked to rank
their preference for alternative market offerings or concepts.
101) One of the forms of solution selling is to provide solutions to enhance customer revenues.
102) Risk and gain sharing can offset price reductions that customers request.
103) Companies are increasingly reducing the number of suppliers they utilize, and there is a
trend toward single sourcing.
104) Most performance reviews are conducted by outside auditing agencies to avoid bias and
internal discrepancies.
105) In buyer-seller relationships, the contractual transaction generally shows low levels of trust,
cooperation, and interaction.
106) Corporate credibility depends on corporate expertise, corporate trustworthiness, and
corporate likability.
107) One of the problems facing B2B on the Web is that many firms often impose more stringent
requirements on their online business partners than they do on non-online partners.
108) The “customer is king” category of buyer-seller relationship is relatively simple, and one in
which routine exchanges with moderately high levels of cooperation and information exchange
occur.
109) Contracts are always sufficient to govern supplier transactions and prevent supplier
opportunism.
110) A good illustration of a member of the institutional market would be Boeing because it is a
member of the aviation institution structure.
111) The U.S. government is the largest customer in the world.
112) Business markets have several characteristics that contrast sharply with those of consumer
markets. Name and briefly characterize five of those characteristics.
113) Explain how fluctuating demand impacts business markets differently from consumer
markets.
114) Illustrate the differences between a straight rebuy, modified rebuy, and a new-task
purchase.
115) What are the three different types of buying situations faced by a typical business buyer?
116) Describe the practices of systems buying and systems contracting.
117) What is the composition of the buying center?
118) List the seven roles of people in a buying center.
119) Explain with examples, the concept of solution selling.
120) What are the methods available to the buyer to review the performance of the chosen
supplier? What advantage does performance review offer to the buyer?
121) Vertical coordination can facilitate stronger customer-seller ties but at the same time may
increase the risk to the customer’s and supplier’s specific investments. What are specific
investments and why are they risky?
122) The business market consists of all the organizations that acquire goods and services used
in the production of other products or services that are sold, rented, or supplied to others. List the
major industries that make up the business market.
123) Define organizational buying.
124) Explain the concept of derived demand.
125) If you were a purchasing agent facing a modified rebuy situation, how would you describe
that situation?
126) Which type of buying situation would be preferred if the management wants to minimize
decision-making time and effort.
127) In systems buying, the U.S. government often solicits bids from prime contractors. What do
prime contractors do?
128) Systems selling is a key industrial marketing strategy in bidding to build large-scale
industrial projects. Competition for these projects is fierce. What are the main areas of
competition for these project engineering firms?
129) List the seven roles played by members of a buying center.
130) Mason’s is a supplier of specialty chemicals to a number of companies. The company
previously supplied just three big clients, but the CEO is considering targeting the small business
market. Selling to small businesses presents a huge opportunity, he says, but some board
members disagree, saying it also presents huge challenges. Explain the challenges the firm might
face in targeting small businesses.
131) BEL is a small seller of specialized auto parts, while MES is a large seller of auto parts.
Both firms want to approach the same car company with a view to supplying parts to it. How
will their approaches differ?
132) With reference to online buying, what are vertical markets? Give an example of a vertical
market.
133) E-procurement Web sites are organized around two types of e-hubs. If you were in the
advertising business and were seeking to take advantage of e-procurement, what type of e-hub
should be constructed by your company?
134) KEK is a supplier of paper and paper products to several businesses. Name some contract
restrictions that KEK can use to protect its margins when dealing with price-oriented buyers.
135) Explain risk and gain sharing with the help of an example.
136) What do you understand by vendor-managed inventory (VMI)?
137) As part of the buyer selection process, buying centers must decide how many suppliers to
use. What might motivate a buyer to use multiple sources?
138) In the buygrid framework model, where the major stages of the industrial buying process
are listed and characterized, supplier selection is an important process. What follows supplier
selection and what occurs in this phase?
139) Researchers have found that buyer-supplier relationships differed according to four factors:
availability of alternatives; importance of supply; complexity of supply; and supply market
dynamism. Based on these four factors, they classified buyer-supplier relationships into eight
different categories. What are those categories?
140) As a seller in the business market, you have promised your customers that you have
corporate credibility as one of your corporate goals. What three factors will have some bearing
on whether you will be able to meet your goal and promise?
141) Researchers have found that buyer-supplier relationships could be classified into eight
different categories. What category would be appropriate for a relationship where, although
bonded by a close, cooperative relationship, the seller adapts to meet the customer’s needs
without expecting much adaptation or change on the part of the customer in exchange?
142) Explain the term opportunism with respect to business relationships.
143) Your organization is considering selling its products to the institutional market. What type
of customers will you be making your appeals to?