41) The NAICS groups economic activity to permit studies of
A) multilanguage advertising.
B) market share, demand, or import competition.
C) growth potential in emerging markets.
D) best practices for manufacturers.
E) job outsourcing and trade flow impacts.
42) The North American Industry Classification System (NAICS) designates industries with a
numerical code in a defined structure. A six-digit coding system is used. The first two digits
designate
A) a country of origin.
B) an industry group.
C) a specific industry.
D) an individual country-level national industry.
E) a sector of the economy.
43) The North American Industry Classification System (NAICS) designates industries with a
numerical code in a defined structure. A six-digit coding system is used. The third digit
designates
A) an industry subsector.
B) an industry group.
C) a specific industry.
D) an individual country-level national industry.
E) a sector of the economy.
44) The North American Industry Classification System (NAICS) designates industries with a
numerical code in a defined structure. A six-digit coding system is used. The fifth digit
designates
A) an industry subsector.
B) an industry group.
C) a specific industry.
D) an individual country-level national industry.
E) a sector of the economy.
45) Important market characteristics in organizational buying behavior include which of the
following?
A) large markets but orders become progressively smaller over time
B) diminishing international opportunities as more firms enter the market
C) many customers placing progressively larger orders over time
D) fewer customers but with larger orders
E) a market that functions independently of consumer demand
46) Important market characteristics in organizational buying behavior include which of the
following?
A) Organizational buying behavior is the same as consumer buying behavior because individuals
are involved in both processes.
B) Demand for industrial products is elastic instead of inelastic.
C) Demand for industrial products and services is derived.
D) Purchase orders are much more frequent and they are usually small.
E) Forecasting is not as important in organizational buying as in consumer buying.
47) Important product or service characteristics in organizational buying include which of the
following?
A) A heavy emphasis is placed on loyalty programs and rebates.
B) Direct selling to organizational buyers is rare.
C) A fixed, nonnegotiable price is the norm.
D) Many of the products and services are technical in nature.
E) Personal relationships are preferred to online buying over the Internet.
48) Important characteristics in organizational buying include which of the following?
A) Many of the goods purchased are raw and semifinished.
B) A heavy emphasis is placed on maintaining standardization to keep costs down.
C) Coupons and contests are the most frequent forms of promotion.
D) A fixed, nonnegotiable price is the norm.
E) Personal relationships are preferred to online buying over the Internet.
49) In the organizational buying process, heavy emphasis is placed on which product or service
characteristics?
A) delivery time, technical assistance, and post-sale service
B) low price, buyer incentives, and extended contracts
C) buyer incentives, technical assistance, and exclusive contracts
D) quantity discounts, delivery time, and exclusive contracts
E) low price, buyer incentives, and post-sale service
50) Important buying process characteristics in organizational buying behavior include which of
the following?
A) Few large transactions are made over the Internet due to concerns of industrial espionage.
B) Negotiations, purchases, and delivery occur in real time at an accelerated rate.
C) There are often reciprocal arrangements and negotiations between buyers and sellers.
D) Most purchases are made through government-licensed negotiators.
E) Direct selling to organizational buyers is rare because it is cost-prohibitive.
51) Which of the following statements about marketing mix characteristics in organizational
buying behavior is most accurate?
A) Few large transactions are made over the Internet.
B) The actual buyer retains all of the influence in the buying decision.
C) Advertising is very simplistic in nature.
D) Direct selling to organizational buyers is the rule.
E) Only finished goods need a developed marketing mix; resellers need worry just about the
transaction.
52) The demand for industrial products and services that is driven by demand for consumer
products and services is referred to as
A) secondary marketing.
B) derived demand.
C) reciprocal supply.
D) demand elasticity.
E) sequential demand.
53) Derived demand refers to
A) a graph relating the quantity sold and price, which shows the maximum number of units that
will be sold at a given price.
B) the demand for industrial products and services that is driven by the demand for consumer
products and services.
C) the relationship between total revenue and total cost to determine profitability at various
levels of output.
D) the point on a demand curve where supply and demand intersect.
E) the percentage change in quantity demanded relative to a percentage change in price.
54) Derived demand means the demand for industrial products and services is driven by, or
derived from, the
A) NAICS statistical models.
B) gross national product.
C) demand for consumer products and services.
D) demand for industrial products in other categories or markets.
E) demand for government products and services.
55) During late summer and early fall, there is a large demand for containers in Asia that are
used to ship consumer products from Asia to the United States in time for the holiday selling
season. The demand for these containers is referred to as ________ demand.
A) unitized
B) derived
C) reseller
D) applied
E) implied
56) Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still,
demand for its products often depends on rates of air travel among consumers. Demand for
Airbus products is referred to as ________ demand.
A) unitized
B) reseller
C) applied
D) implied
E) derived
57) Spruceland Millworks in Canada makes wood pallets for transporting and storing new
appliances such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would
be classified as
A) reactive demand, which is tied to primary economic drivers like the construction industry.
B) unitary demand, which is tied to the average income level for Spruceland and its competitors.
C) derived demand, which is tied to the sales of appliances.
D) inelastic demand, which is tied to the cost of the components of the pallets.
E) elastic demand, which is tied to the cost of the components of the pallets.
58) Concert Staging Co. provides the stage, roof system, lighting, and sound for outdoor concerts
and theatrical events. The number of concert and theater events sponsored by various
organizations determines how many times the company is hired to provide its services, which
often depends on consumer willingness to buy event tickets. Demand for the services provided
by Concert Staging Co. is considered
A) derived.
B) unitized.
C) industrial.
D) applied.
E) reseller.
59) South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to
manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT’s
leather is a result of consumer interest in products such as Via La Moda handbags made from
this exotic and expensive leather. SCOT has demand for its product.
A) derived
B) unitized
C) industrial
D) applied
E) reseller
60) Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan,
the antibacterial agent in many household products such as liquid soap. Consumers may have
heard about research suggesting environmental and health risks associated with the cumulative
effects of antibacterial agents. Changing consumer purchases provide an example of ________
demand for Ciba’s triclosan product.
A) applied
B) unitized
C) industrial
D) derived
E) consumer
61) Because orders in organizational buying are typically much larger than in consumer buying,
buyers must often ________ when the order is above a specific amount, such as $5,000.
A) pay estimated sales taxes in advance
B) move up the time required to execute a purchase agreement
C) get competitive bids from at least three prospective suppliers
D) forgo the purchase because senior management is unlikely to approve it
E) create separate orders in amounts less than that the threshold
62) All of the following statements about the purchase involved in organizational buying are true
except which?
A) The length of time required to arrive at a purchase agreement can vary with size of purchase.
B) The dollar value of a single purchase made by an organization often runs into thousands or
millions of dollars.
C) The size of purchase impacts who participates in the purchase decision.
D) The size of purchase impacts who makes the final decision.
E) The size of the purchase is typically smaller than it is in consumer buying but it is done more
frequently.
63) Firms marketing consumer products or services often try to reach thousands or millions of
individuals or households. Firms selling to organizations
A) try to reach tens of millions of wholesalers, retailers, and government units.
B) are restricted to far fewer buyers.
C) hope to obtain similar numbers of business customers, or even more.
D) do not have customers, per se.
E) also must sell to ultimate consumers because of the market potential.
64) A business firm buys products and services for one main reason, which is to
A) increase profitability.
B) beat its competitors.
C) satisfy the needs of its suppliers.
D) employ people.
E) maintain inventory.
65) The primary organizational buying objective for business firms is to
A) create an atmosphere of inclusiveness.
B) help smaller companies stay in business.
C) increase the efficiency of its buyers.
D) help the firm increase profitability.
E) turn inventory.
66) The American Red Cross provides disaster relief, among many other services. As a nonprofit
organization, its primary buying objective is to
A) increase profits through reducing costs.
B) increase profits through increasing donations.
C) diversify its services mix to survive an economic downturn.
D) meet the needs of those affected by disasters.
E) maintain purchase levels to support its suppliers.
67) Many companies have broadened their buying objectives to include an emphasis on
A) purchasing from as many vendors as possible to avoid component shortfalls.
B) purchasing from start-up firms to grow the economy.
C) diversifying their product lines and brand extensions to reduce the risk of failure for any one
item.
D) pricing freezes to maintain consistent quantities demanded from consumers.
E) proactively purchasing from women-owned and minority-owned suppliers and vendors.
68) The primary reason companies have placed an emphasis on buying from minority- and
women-owned suppliers and vendors is
A) new federal government regulations require it.
B) they can help a firm meet or exceed its objectives in sales, profits, or customer satisfaction.
C) it is the socially responsible action expected of leading organizations.
D) it can attract new target markets.
E) these companies will work harder for less money.
69) The objective attributes of the supplier’s products and services and the capabilities of the
supplier itself are collectively referred to as
A) the supplier consideration set.
B) derived demand factors.
C) evaluative criteria.
D) performance metrics.
E) organizational buying criteria.
70) Organizational buying criteria refer to
A) the restrictions placed on potential solutions to a problem in a purchase decision.
B) the specific qualifications of a potential customer based upon past performance, reliability,
and consistency regarding the purchase of an organization’s offerings.
C) the qualifications of the supplier’s products and services based on recommendations from
competitors.
D) the objective attributes of the supplier’s products and services and the capabilities of the
supplier itself.
E) the factors that an ultimate consumer would consider that represent both the objective
attributes of a brand and the subjective ones to compare different products and brands.
71) Organizational buying criteria serve the same purpose as ________ criteria used by
consumers.
A) consideration
B) evaluative
C) decision
D) alternative
E) prepurchase
72) There are seven commonly used organizational buying criteria. One of them is
A) warranty and claim policies.
B) loyalty.
C) longevity.
D) adaptability.
E) quick and efficient communication.
73) There are seven commonly used organizational buying criteria. One of them is
A) flexibility.
B) technical capability.
C) adherence to government regulation.
D) senior management directives.
E) consumer awareness.
74) To be a Walmart supplier, a firm must be able to deliver its products to Walmart’s
distribution centers within a 16-minute window. If the driver arrives before or after the scheduled
window, the supplier will be turned away and fined. Walmart’s insistence on choosing a supplier
based upon its ability to provide on-time delivery is an example of
A) a supplier value dimension.
B) a derived demand factor.
C) an evaluative criterion.
D) an external performance measure.
E) an organizational buying criterion.
75) The deliberate effort by organizational buyers to build relationships that shape suppliers’
products, services, and capabilities to fit a buyer’s needs and those of its customers is referred to
as
A) buyer development.
B) a supply partnership.
C) a make-buy decision.
D) supplier development.
E) buyer-seller reciprocity.
76) Supplier development refers to
A) the effort of suppliers to shape buyers’ needs and stimulate demand among ultimate
consumers.
B) the practice of dividing large orders among several suppliers rather than a single one to avoid
possible manufacturing delays due to bad weather, plant mishaps, union issues, etc.
C) the deliberate effort by organizational buyers to build relationships that shape suppliers’
products, services, and capabilities to fit a buyer’s needs and those of its customers.
D) the practice of establishing a close relationship with one supplier rather than many to ensure
loyalty and preferential treatment when filling exceptionally large orders.
E) the shift of a firm from supplier to manufacturer when repeated experience with a product and
excellent buyer/seller relationships make the change both feasible and profitable.
77) When the John Deere Co. employs engineers who work full-time with the company’s
suppliers to improve their efficiency and quality and reduce their costs, it is practicing
A) buyer development.
B) make-buy decisions.
C) supply partnerships.
D) supplier development.
E) directive purchasing.
78) Which of the following characterizes organizational buyer-seller relationships?
A) Purchases are often made after lengthy or complex negotiations.
B) Purchases are usually of small dollar values.
C) Short-term contracts are often prevalent.
D) Reciprocal arrangements are illegal.
E) Delivery schedules are less important than production capacity.
79) Which of the following characterizes organizational buyer-seller relationships?
A) Purchases are typically made with few to no negotiations.
B) Purchases are usually of small dollar values.
C) Long-term contracts are often prevalent.
D) Reciprocal arrangements are prohibited by the federal government.
E) Delivery schedules are largely irrelevant.
80) The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller
relationships that evolve into supply partnerships, are all examples of
A) illegal activities that are a common weakness of organizational buying.
B) illegal activities that result from collusion between buyers and sellers.
C) activities that are strictly governed by the NAICS.
D) the nature of relationships between buyers and sellers in organizational buying.
E) activities that result from extreme competition between manufacturers when there are too few
suppliers.