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Marketing Management, 15e (Kotler)
Chapter 7 Analyzing Business Markets
1) ________ refers to 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.
A) Marketing channels
B) Organizational buying
C) Corporate retailing
D) Brand auditing
E) Inventory control
2) The ________ 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.
A) business
B) consumer
C) e-commerce
D) global
E) domestic
3) How can a marketer overcome the negative effects of commoditization?
A) convince target consumers that the firm's products are as good as those of competitors
B) convince target consumers that price is irrelevant in determining quality
C) convince target consumers that the firm's products are different from those of competitors
D) convince target customers that buying the highest-priced product is no guarantee of quality
E) convince target customers that all the products in the market are equivalent
4) Which of the following is true for business marketers?
A) They deal with more and larger buyers than consumer marketers.
B) They deal with more and smaller buyers than consumer marketers.
C) They deal with fewer and larger buyers than consumer marketers.
D) They deal with fewer and smaller buyers than consumer marketers.
E) They deal with the same kind of buyers as consumer marketers.
5) Which of the following is a challenge in which business marketers differ from consumer
marketers?
A) understanding deep customer needs in new ways
B) identifying new opportunities for organic business growth
C) geographically concentrated buyers
D) calculating better marketing performance and accountability metrics
E) competing and growing in global markets, particularly China
6) Pittsburgh-based Consol Energy's coal business largely depends on orders from utilities and
steel companies which, in turn, depend on broader economic demand from consumers for
electricity and steel-based products like automobiles and appliances because of ________.
A) fluctuating demand
B) derived demand
C) professional purchasing
D) multiple buying influences
E) multiple sales calls
7) Sometimes a rise of only 10 percent in consumer demand can cause as much as a 200 percent
rise in business demand for products for the next period. This is an example of ________.
A) inelastic demand
B) direct purchasing
C) fluctuating demand
D) derived demand
E) a straight rebuy
8) Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor
will they buy much less leather if the price rises, unless they can find satisfactory substitutes.
This is an example of ________.
A) inelastic demand
B) direct purchasing
C) the acceleration effect
D) a modified rebuy
E) a straight rebuy
9) 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.
10) 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.
11) Commoditization strengthens customer loyalty.
12) The business market is essentially the same market as the consumer market.
13) Business buyers often select suppliers who also buy from them.
14) Given the highly competitive nature of business-to-business markets, the biggest enemy to
marketers here is commoditization.
15) The business marketer normally deals with far fewer, large buyers than does the consumer
marketer.
16) 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.
17) The demand for business goods is ultimately derived from the demand for raw materials.
18) The total demand for many business goods and services is inelastic; that is, not greatly
affected by price changes.
19) Business markets have several characteristics that contrast sharply with those of consumer
markets. Name and briefly characterize five of those characteristics.
20) Explain how fluctuating demand impacts business markets differently from consumer
markets.
21) 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.
22) Define organizational buying.
23) Explain the concept of derived demand.
24) Ultimately, the amount of steel sold to General Motors depends on the consumers' demand
for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following
demand forms is most pertinent?
A) derived demand
B) inelastic demand
C) geographic demand
D) relational demand
E) static demand
25) The demand for business goods is ultimately derived from the demand for ________.
A) raw materials
B) consumer goods
C) services
D) business solutions
E) e-commerce
26) A given percentage increase in consumer demand can lead to a larger percentage increase in
the demand for plant and equipment necessary to produce the additional output. Economists refer
to this as ________.
A) derived demand
B) inelastic demand
C) the acceleration effect
D) a straight rebuy
E) the sales cycle
27) The total demand for many business goods and services is only minimally affected by price
changes. Thus, this demand is ________.
A) derived
B) fluctuating
C) accelerated
D) multiple
E) inelastic
28) The purchasing department buys office supplies on a routine basis from a pre-approved list
of suppliers. This type of purchase is classified as a ________.
A) straight rebuy
B) modified rebuy
C) new task
D) secondary purchase
E) procure-to-pay
29) Kenilworth Inc. is shifting from its rented four-room office to a standalone office building
owned by the company itself. This can be classified as a ________.
A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task
30) In a ________ purchasing situation, the buyer wants to make some change to existing
product specifications, prices, delivery requirements, or other terms.
A) new rebuy
B) regular buy
C) straight rebuy
D) modified rebuy
E) new task
31) The business buyer has to make the fewest decisions when involved in a ________.
A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task
32) Jason Riggs' company is considered to be an in-supplier for a lawn mower manufacturer.
However, recently the lawn mower company has put out a memo to in- and out-suppliers
indicating that it would like to change product specifications and delivery schedules. Which of
the following buying situations is most likely to be in operation given this data?
A) straight rebuy
B) single rebuy
C) rakeback rebuy
D) system buy
E) modified rebuy
33) If you decided to go into the systems contracting business, which of the following categories
would constitute your main area of expertise?
A) computer applications
B) database management
C) manufacturing
D) promotion management
E) MRO (maintenance, repair, operating) supplies
34) According to Webster and Wind, businesspeople are buying ________.
A) products
B) solutions to the organization's economic and strategic problem
C) solutions to their own need for achievement and reward
D) A & C
E) B & C
35) In the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase
share over time.
36) The buyer in a straight rebuy usually changes product specifications, prices, delivery
requirements, or other terms.
37) The business buyer makes the fewest decisions in the straight rebuy situation and the most in
the new-task situation.
38) Most business buyers reject what is called systems buying from one seller.
39) Systems selling is a key industrial marketing strategy in bidding to build large-scale
industrial projects such as dams or pipelines.
40) Sellers benefit from systems contracting through lower operating costs as a result of steady
demand and reduced paperwork.
41) A prime contractor provides a turnkey solution, so-called because the buyer only has to turn
one key to get the job done.
42) Illustrate the differences between a straight rebuy, a modified rebuy, and a new-task
purchase.
43) What are the three different types of buying situations faced by a typical business buyer?
44) Describe the practices of systems buying and systems contracting.
45) If you were a purchasing agent facing a modified rebuy situation, how would you describe
that situation?
46) Which type of buying situation would be preferred if the management wants to minimize
decision-making time and effort.
47) In systems buying, the US government often solicits bids from prime contractors. What do
prime contractors do?
48) 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?
49) Which of the following is true about buying centers?
A) One person may play multiple roles.
B) Several people can occupy the same role.
C) A buying center typically has five or six members.
D) A buying center can have dozens of members.
E) All of the above are true.
50) Which of the following is true about industrial buying decisions?
A) They are purely rational.
B) They are purely emotional.
C) They service both the organization's and the individual's needs.
D) Top executives are never insecure about buying products.
E) Individual needs legitimate the buying process and its outcomes.
51) Timken achieved record revenue despite a recession by ________.
A) shifting attention into heavy processing, aerospace and defense industries
B) shifting attention into the auto industry
C) lowering prices on bearings for a tractor manufacturer's medium-sized tractors
D) avoiding sales of high priced bearings for large tractors
E) all of the above
52) ________ is composed of all parties who participate in the purchasing decision-making
process and share common goals and risks associated with their decisions.
A) The buying center
B) The marketing sales team
C) Strategic management
D) Engineering support
E) The logistics center
53) In the purchasing decision process, the ________ are those who request that something be
purchased. They may be users or others in the organization.
A) users
B) initiators
C) influencers
D) deciders
E) approvers
54) In the purchasing decision process, the ________ are those who have the power to prevent
sellers or information from reaching members of the buying center.
A) approvers
B) buyers
C) initiators
D) gatekeepers
E) deciders
55) In the purchasing decision process, the major role of ________ is in selecting vendors and
negotiating.
A) gatekeepers
B) buyers
C) initiators
D) approvers
E) deciders
56) If you performed the role of the ________ in a buying center, you would be the person that
has the power to prevent sellers or information from reaching other members of the buying
center.
A) initiator
B) influencer
C) decider
D) gatekeeper
E) approver
57) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing
analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings
favor disposable gowns, then the operating-room administrator compares various competitors'
products and prices and makes a choice. Surgeons influence the decision retroactively by
reporting their satisfaction with the particular brand. In this situation, the operating-room
administrator performs the role of the ________.
A) gatekeeper
B) initiator
C) user
D) decider
E) influencer
58) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing
analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings
favor disposable gowns, then the operating-room administrator compares various competitors'
products and prices and makes a choice. Surgeons influence the decision retroactively by
reporting their satisfaction with the particular brand. In this situation, the surgeons perform the
role of the ________.
A) decider
B) initiator
C) user
D) gatekeeper
E) buyer
59) In which of the following is a person performing the role of an influencer?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.
60) In which of the following is a person performing the role of an approver?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.
61) In which of the following is a person performing the role of a gatekeeper?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.
62) Which of the following is true about the buying center?
A) In a buying center, one person cannot play more than one role.
B) A typical buying center has a maximum of five or six members.
C) A buying center consists of only mid-level managers and below.
D) It is the decision-making unit of a buying organization.
E) Gatekeepers in a buying center are people who authorize the proposed actions of deciders or
buyers.
63) People who authorize the proposed actions of deciders or buyers are initiators.
64) "Toughies" are old school buyers who pit sellers against one another.
65) The buying center is where consumers go to purchase their goods and services.
66) 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.
67) Initiators are those who authorize the proposed action of deciders or buyers.
68) Influencers influence the buying decision by helping define specifications and providing
information for evaluating alternatives.
69) In the buying center, several people can occupy a given role such as user or influencer, and
one person may play multiple roles.
70) Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying
influencers.
71) What is the composition of the buying center?
72) List the seven roles of people in a buying center.
73) List the seven roles played by members of a buying center.
74) Small sellers should first concentrate their marketing efforts on reaching ________.
A) approvers
B) initiators
C) influencers
D) users
E) initiators
75) If you were an upper-level marketing executive of a large seller of trucks, which of the
following strategies would be most appropriate in reaching buying center targets?
A) Concentrate on key buying influencers.
B) Use multilevel in-depth selling.
C) Use trade-based promotions.
D) Concentrate sales efforts on the support staff.
E) Move all operations to the Internet.
76) ________ occurs when customers are given a perspective or point of view that allows the
firm to "put its best foot forward."
A) Gatekeeping
B) Commoditization
C) Framing
D) Rebuying
E) Bartering
77) Newer, more strategically oriented purchasing departments have a mission. Which of the
following most accurately describes that mission?
A) Make the most profit possible and remain independent of entanglements.
B) Approach every purchasing opportunity as means to create interdependency.
C) Seek the best value from fewer and better suppliers.
D) Outsource the supply function.
E) Abandon all strategies except for systems selling and buying.
78) Patrick J. Robinson and his associates have identified eight stages in the business buying-
decision process. This model is called the ________ framework.
A) buygrid
B) buying/selling
C) seller-centered
D) commercial
E) buy-analysis
79) According to Patrick J. Robinson, the eight stages in the business buying-decision process
are known as ________.
A) buyphases
B) buybacks
C) buyouts
D) buyables
E) buyoffs
80) Which of the following is a step in the straight rebuy buyclass?
A) problem recognition
B) general need description
C) product specification
D) supplier search
E) proposal solicitation
81) A new-task buyclass decision begins with which of the following steps?
A) supplier search
B) general need description
C) product specification
D) problem recognition
E) proposal solicitation
82) In reordering office supplies, the only stages that the buyer passes through are the product
specification stage and the ________ stage.
A) problem recognition
B) general need description
C) order-routine specification
D) supplier search
E) performance review
83) The approach to cost reduction that studies whether components can be redesigned or
standardized or made by cheaper methods of production without adversely impacting product
performance is termed as ________.
A) maintenance, repair, and operating (MRO)
B) product value analysis (PVA)
C) vendor managed inventories (VMI)
D) supplier performance management (SPM)
E) supplier added value effort (SAVE)
84) Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales
representative who offers a better product or a lower price compared to the current in-supplier.
These situations motivate the ________ stage.
A) problem recognition
B) general need description
C) order-routine specification
D) supplier search
E) performance review
