e.
supply for a given product cannot keep pace with the demand for it.
81. Christoff’s Lawn & Lot is a small business that provides landscaping and grass cutting services in the
spring and summer. Christoff’s usually contracts with customers on an annual basis, with the terms set
out at the beginning of the season. This year, the area experienced a significant amount of rain,
causing the grass to grow more quickly. Christoff’s was required to cut the grass every time it grew 2
inches, and no matter how many times it needed cutting, the customer paid the same monthly amount
based on the original contract. The price of gas has now grown by 35% causing Christoff’s to pay
more for their supplies. The demand for gas despite its price represents ________ demand for
Christoff’s Lawn & Lot.
a.
elastic
b.
inelastic
c.
derived
d.
joint
e.
separate
82. In placing a tire order with Michelin, South Side Industrial Supply finds that the truck tires it is
ordering have increased $37.50 in price since the last order. South Side proceeds with the order,
confident that it can pass on the price increase to future customers. This is an example of business
products having ____ demand.
a.
derived
b.
inelastic
c.
joint
d.
fluctuating
e.
higher
83. Demand for a business product is ____ when two or more items are used in combination to produce a
product.
a.
inelastic
b.
joint
c.
fluctuating
d.
derived
e.
partnered
84. King Auto Supply sells car and truck parts, as well as tire replacement and balancing services. As
King places its order for truck tires with Michelin, it must also place an order for valve stems and
balancing weights for the tires. Such business products are characterized as having ____ demand.
a.
derived
b.
inelastic
c.
joint
d.
fluctuating
e.
higher
85. When certain consumer products are in high demand, producers might buy extra materials and
equipment and when demand subsides, producers will cut back on their material purchases. This
describes ____ demand.
a.
joint
b.
inelastic
c.
consumer
d.
fluctuating
e.
derived
86. Most business buying decisions are made by
a.
one person.
b.
a team of purchasing agents.
c.
a firm’s buying center.
d.
inventory control personnel.
e.
the sales force.
87. In a buying center, purchasing agents or purchasing managers are also known as
a.
gatekeepers.
b.
deciders.
c.
buyers.
d.
users.
e.
influencers.
88. The group of people within a business who are involved in making business buying decisions is
referred to as
a.
the new-task team.
b.
negotiators.
c.
purchasing agents.
d.
deciders.
e.
the buying center.
89. Your university has decided to purchase new computers for all of the computer labs on campus.
Typically, the purchasing agent negotiates with manufacturers and makes the decision on what to buy.
However, for this purchase he as asked members of the student senate to give input on the purchase
decision. In this instance, the student senate would be acting as a(n) ____, while the purchasing agent
is a(an) ______.
a.
user; buyer.
b.
user; gatekeeper.
c.
user; decider.
d.
influencer; decider.
e.
influencer; gatekeeper.
90. Barry Gluckman of WP International, a major marketer of word-processing software, calls the
secretary of Renee Dorchette, director of purchasing for MMK, Inc. He sets up an appointment to
discuss an upcoming purchase of software. The secretary plays the role of ____ in this purchase
decision.
a.
gatekeeper
b.
buyer
c.
decider
d.
buying center captain
e.
order giver
91. As the new sales representative for H & L Electronics, Sophie is responsible for calling on hospital
management and selling electronic hospital equipment such as blood pressure cuffs, scales, and heart
monitors. Sophie knows that she needs to be friendly with the administrative assistants in the
management offices in order to make sure that H & L’s information brochures and new product
diagrams actually get to the management staff. In this situation, Sophie is exhibiting her knowledge
that administrative assistants are often ________ in the buying decision process.
a.
gatekeepers
b.
users
c.
influencers
d.
buyers
e.
controllers
92. The stages of the business buying decision process, in order, are
a.
recognizing the problem, establishing product specifications, searching for products and
evaluating possible suppliers, selecting suppliers and products, and evaluating
performance.
b.
recognizing the problem, searching for products and evaluating possible suppliers,
selecting suppliers and products, establishing product specifications, and evaluating
performance.
c.
recognizing the problem, selecting suppliers and products, evaluating performance,
establishing product specifications, and searching for substitute products.
d.
establishing product specifications, recognizing the problem, searching for products,
evaluating possible products and suppliers, selecting suppliers and products, and
evaluating performance.
e.
establishing product specifications, searching for products, selecting suppliers and
products, evaluating performance, recognizing the problem, and evaluating possible
products and suppliers.
93. The second stage in the business buying decision process is to
a.
search for products and suppliers.
b.
select the most appropriate product.
c.
develop product specifications.
d.
evaluate product and supplier performance.
e.
recognize the problem.
94. In its purchase of desktop business computers, Albertson’s asked that potential suppliers provide
information only on units with 8GB of memory. As Albertson’s management evaluates this purchase, it
finds that 8GB is inadequate for many of the software programs used at Albertson’s. In this instance,
the firm would need to modify which aspect of the purchase process?
a.
Searching
b.
Specification development
c.
Alternative evaluation
d.
Selection
e.
Performance evaluation
95. After deciding to order replacement parts for aging machinery, the buyer for a construction company
examines catalogs and trade publications looking for these parts. The buyer is at which stage in the
business buying decision process?
a.
Problem recognition
b.
Product specification
c.
Product-supplier search and evaluation
d.
Product-supplier selection
e.
Product-supplier post-evaluation
96. The third stage in the business buying decision process is to
a.
evaluate product specifications to solve the problem.
b.
evaluate products relative to specifications.
c.
select and order the most appropriate product.
d.
evaluate product and supplier performance.
e.
search for products and suppliers.
97. Christy Bridgman is considering the purchase of a new fax machine for her real estate office. She is
considering a machine that doesn’t have as many functions but is available at a considerably lower
price than her current machine. She is engaged in ____ analysis.
a.
vendor
b.
downsizing
c.
strategic
d.
value
e.
profit
98. During the search for products and evaluating possible suppliers stage of the business buying decision
process, marketers sometimes use ____ analysis to examine the quality, design, materials, and possibly
item reduction in order to acquire the product in the most cost-effective way.
a.
cost
b.
value
c.
profit
d.
strategic
e.
SWOT
99. ____ analysis is a systematic evaluation of current and potential suppliers that focuses on many
dimensions including price, product quality, delivery service, product dependability, and overall
company reliability.
a.
Value
b.
Vendor
c.
Buying center
d.
Strategic
e.
Cost
100. An organization that decides to buy all of a certain part from the same company is using
a.
single-supplier purchasing.
b.
multiple sourcing.
c.
same vendor analysis.
d.
straight rebuy.
e.
sole sourcing.
101. What are the four major categories of factors that influence business buying decisions?
a.
Environmental, organizational, interpersonal, and individual
b.
Environmental, organizational, psychological, and individual
c.
Environmental, psychological, individual, and technological
d.
Technological, organizational, environmental, and interpersonal
e.
Environmental, organizational, technological, and individual
102. Individual influencing factors refer to
a.
relationships among those in the firm’s buying center.
b.
uncontrollable environmental forces.
c.
the power an individual controls in the buying center.
d.
personal characteristics of individuals in the buying center.
e.
activities of suppliers.
103. A buyer for Macy’s Department Stores orders handbags from a supplier because that supplier allows
the buyer to maintain Macy’s company policy of 30-day advance purchase notice. This is an example
of ____ influence on the business buying decision process.
a.
environmental
b.
organizational
c.
interpersonal
d.
individual
e.
demographic
104. Compared with consumer goods, marketers aiming at business customers
a.
do not need to select target markets.
b.
have an enormous amount of information available concerning potential customers.
c.
have more difficulty in determining where their customers are located.
d.
are restricted in the types of promotion they can use.
e.
have more difficulty in estimating customers’ purchase potentials.
105. Compared with the SIC system, the North American Industry Classification System (NAICS) will
a.
look at many industries at one time.
b.
be used throughout the world.
c.
contain the most up-to-date information for the NAFTA partners.
d.
provide less information about service industries.
e.
generate statistics that will not be useful in comparing countries.
106. Which one of the following countries will not be included in the data presented in the new industry
classification system that is replacing the SIC?
a.
Mexico
b.
Canada
c.
United States
d.
Japan
e.
All but one NAFTA country
107. Analysis of business input-output data by the federal government allows the government to have a
better understanding of the
a.
cash flows that exist among industries.
b.
raw materials and labor required to produce a given product.
c.
amount of reinvestment that different industries use.
d.
types of industries that purchase particular products.
e.
growth projections for a given industry.
108. Input-output analysis is most likely to yield what type of information?
a.
Number of employees that a firm has
b.
Industries that purchase the major portion of an industry’s output
c.
Kinds of returns a firm is getting on its equipment investments
d.
Type of inventory turnover that is characteristic of a firm
e.
Kinds of variables that would be used to segment the target market
109. Ben Davideau is assigned by his sales manager to come up with the names and addresses of twenty
firms in his territory that have some potential for using sizable quantities of his firm’s products.
Wanting to be as efficient as possible, Ben looks in
a.
Sales & Marketing Management.
b.
an SIC listing.
c.
the Census of Business.
d.
the Census of Manufacturers.
e.
Standard & Poor’s Register.
Scenario 8.1
Use the following to answer the questions.
Samsung is entering the home appliance market with its new French Door Refrigerator. In designing
the production facility, it has a need for various pieces of equipment, including the perpetual assembly
belt-drive, quasi-assembly pods, and finishing stations. The purchasing agent for the appliance division
is inquiring about who will be needed for input on the purchasing decision. Samsung has already
contacted several producers of the quasi-assembly pods, and has begun negotiations with their sales
representatives.
110. Refer to Scenario 8.1. What type of business purchase is Samsung undertaking?
a.
Modified rebuy
b.
Straight rebuy
c.
New-task
d.
Straight purchase
e.
New rebuy
111. Refer to Scenario 8.1. Which of the following groups should Samsung not include in its buying center
for the new equipment?
a.
Purchasing agents at Samsung
b.
Eventual users within Samsung
c.
Potential future Samsung customers
d.
Gatekeepers within Samsung
e.
Senior managers at Samsung
112. Refer to Scenario 8.1. What was the first step of the buying decision process that Samsung went
through when looking for the quasi-assembly pods?
a.
Searching for products and suppliers
b.
Selecting and ordering the most appropriate product
c.
Recognizing the problem or need
d.
Establishing product specifications
e.
Evaluating the product relative to specifications
113. Refer to Scenario 8.1. There are many factors that would influence Samsung’s business buying
decisions. Which one of the following would not?
a.
Environmental
b.
Organizational
c.
Interpersonal
d.
Demographic
e.
Individual
Scenario 8.2
Use the following to answer the questions.
Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and
4-wheel ATV’s. It also sells its products to independent repair centers, dealers, and other wholesalers
in the northeast and southern states. Precision Brake has done research on the demand for lawn tractors
and found that most manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research
also shows that most of the dealers who sell directly to individual consumers are in the midwestern
states, while dealers who sell to small business landscaping companies tend to be located in the
northeastern states. Company executives are considering expansion of its distribution to markets in the
Midwest.
114. Refer to Scenario 8.2. When Precision Brake sells to the individual dealers, they would be considered
which of the following business types?
a.
Producer
b.
Reseller
c.
Government
d.
Institutional
e.
Covert
115. Refer to Scenario 8.2. Given the type of business market in which Precision Brake is currently
operating, which group would it be least likely to sell to?
a.
Producers
b.
Governments
c.
Retailers
d.
Consumers
e.
Institutions
116. Refer to Scenario 8.2. When Precision Brake’s sales team calls on tractor manufacturing companies,
the meetings typically include the engineers who design the tractors. In this situation, the engineers
would most likely be considered to be ____, part of the buying center.
a.
gatekeepers
b.
influencers
c.
users
d.
buyers
e.
controllers
117. Refer to Scenario 8.2. Last year, Precision Brake’s sales to the manufacturers of lawn tractors declined,
partially due to the fact that more consumers were hiring small landscaping businesses to cut their
grass. This decline in sales for Precision Brake is an example of
a.
Product scarcity
b.
Joint demand
c.
Derived demand
d.
Reciprocity demand
e.
Inelastic demand
TRUE/FALSE
118. Buyers in producer markets purchase either raw materials or semifinished products.
119. The four categories of consumer markets are producer, reseller, government, and institutional.
120. The owner of a trucking business, who buys gasoline from the nearby service station for the company
trucks, is a part of a business market.
121. The term business markets refers only to producer markets.
122. An example of a business market would be farmers.
123. Grocery stores and supermarkets are a part of producer markets.
124. Reseller markets consist of intermediaries that buy finished goods and resell them for profit.
125. Wholesalers sell primarily to ultimate consumers.
126. There is little or no difference between wholesalers’ customers and retailers’ customers.
127. Retailers purchase products and resell them to final consumers.
128. The increase in government purchases has resulted partly from the increase in the number of services
provided by the government.
129. Government markets, although complicated in their requirements, can be very lucrative.
130. Institutional markets include state prisons.
131. Orders placed by business customers are usually smaller and more numerous than consumer sales.
132. It is customary for contracts for raw materials and components to be negotiated semiannually.
133. Reciprocal dealing is widespread because it is one of the few avenues not regulated by the FTC, and it
facilitates optimal purchases.
134. Ultimate consumers are generally more rational than business customers.
135. Business customers generally seek to obtain detailed information about a product before purchasing it.
136. Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs.
137. Business purchasing agents may indirectly contribute to the satisfaction of their own personal needs by
helping their firms achieve organizational objectives.
138. When purchasing products, business customers are especially concerned about quality, service, price,
and supplier relationships.
139. One very important consideration for business purchases is the type of packaging used.
140. Price is of concern to a business marketer primarily because of its psychological impact on purchasing
agents.
141. If a business product exceeds specifications, so much the better; the customer can then be assured of
obtaining a minimum level of acceptability.
142. In some cases, the types of services offered by a supplier may constitute a primary advantage over
suppliers of similar products.
143. On-time delivery is crucial to a business customer, since a late delivery may hold up a production line
or cause the firm to lose sales.
144. Inspection refers to a purchasing method in which a representative unit is taken from a lot and
evaluated, and the buying decision is based on the conclusions.
145. A new-task purchase is one in which the business makes an initial purchase of a new item.
146. Of the three types of business purchases, the straight rebuy purchase usually requires the most
information.
147. Industrial demand derives from consumer demand.
148. In the long run, business demand becomes totally unrelated to consumer demand.
149. The demand for many business products is inelastic at the industry level.
150. For business products, the concept of inelasticity of demand applies equally to industry demand for the
product and to demand for an individual supplier.
151. Raw materials are especially affected by joint demand.
152. When the major component of an item experiences a price increase, the demand for the item may
become more elastic.
153. Sometimes initial demand for a business product will drop following a price cut if buyers believe that
further price reductions are forthcoming.
154. In industries in which price changes occur frequently, demand fluctuations have practically been
eliminated since buyers have become used to these changes and have learned to ignore them.
155. A fall in consumer demand for a product is likely to result in increased buying from suppliers as
consumer goods producers replenish depleted inventories and gear up for the next surge in consumer
demand.
156. The factors that influence business buying behavior are the same as those that influence consumer
buying behavior.
157. All companies, no matter what their size or market position, maintain only one buying center.
158. Problem recognition can be stimulated by external sources, such as trade shows or sales
representatives.
159. In the buying decision process, one of the activities included in the search for products and suppliers is
examining catalogs and trade publications.
160. Specific details regarding terms, credit arrangements, and technical assistance are worked out during
the product specification stage of the buying decision process.
161. Value analysis focuses primarily on the examination of the cost of products relative to design, quality,
and materials used.
162. Vendor analysis is a formal, systematic evaluation of current and potential vendors that focuses on a
variety of dimensions including price, product quality, delivery service, product availability, and
overall company reliability.
163. The fourth stage in the business buying decision process is that of searching for products and suppliers.
164. Feedback acquired during the fifth stage of the business buying decision process is kept on file but not
used as a reference for future business purchase decisions.
165. The five-stage business buying decision process is used primarily for routine, straight rebuy purchases.
166. Interpersonal dynamics are easy to observe and simple for the marketer to assess.
167. The North American Industry Classification System includes all three NAFTA partners.
168. The old Standard Industrial Classification system is more comprehensive than NAICS.
169. All three NAFTA countries will convert to the NAICS over the next few years.
170. NAICS provides less information about service industries and high-tech products than did the SIC
system.
171. After finding out which industries purchase the major portion of an industry’s output, the next step is to
begin production.
172. To obtain the names of specific potential customers, the business marketer is well advised to employ
the services of a commercial data company, since this is both cheaper and faster than any other
method.
173. Industrial classification systems allow marketers to divide business customers into groups based
mainly on the types of goods and services provided.
174. A major source of input-output data is the Survey of Current Business.
175. When trying to estimate the purchases of a potential business customer, it is reasonable to suppose that
there is a relationship between the size of the potential customer’s purchases and a variable such as the
number of personnel employed by the customer.