Chapter 7—Business Marketing
TRUE/FALSE
1. Shimano sells the fishing and golfing equipment it manufactures to sporting goods stores, which in
turn sell the equipment to anglers and golfers. Shimano is engaged in business marketing.
2. For a product to be called a business product, it must be used to manufacture other products, become
part of another product, or aid the normal operations of an organization.
3. The emergence of the Internet has made buying and selling in the business market a process that is
only efficient for the largest producer to pursue.
4. B-to-B marketers have found that they can use tools such as LinkedIn and YouTube to boost brand
awareness.
5. Stickiness is a measure of a Web site’s effectiveness.
6. A strategic alliance exists when one party has confidence in another firm’s reliability and integrity.
7. A keiretsu is a network of interlocking corporate affiliates.
8. Any firm that purchases goods and services to make a profit by using them to produce other goods is
part of the producer segment of the business market.
9. OEM stands for operationally efficient marketing.
10. The reseller market is the same as the retailer market.
11. The government sector (federal, state and local) is a minor segment of the business market
12. The single largest business customer in the world is the U.S. retailer Walmart.
13. NAICS is an industry classification system used by most nations of the world.
14. The first two digits of a NAICS code designate a major economic sector, such as agriculture or
manufacturing.
15. If DuPont runs advertisements encouraging people to buy clothing that contains Lycra (a DuPont
product), this would be an attempt to influence secondary demand.
16. A decline in the availability of tungsten will slow production of light filaments, which will in turn
reduce the demand for light bulbs. This is an example of fluctuating demand.
17. While consumer and business markets differ in many ways, the volatility of demand for products is
about the same for each type of market.
18. Business marketers usually have far fewer customers than consumer marketers.
19. Most business marketers emphasize personal selling in their promotion efforts.
20. Another commonly used term for accessory equipment is installations.
21. Individual producers of raw materials have great flexibility in pricing their products.
22. Items that are ready for assembly and retain their identities when incorporated into another product are
called component parts.
23. Consumable items that do not become part of the final product are called supplies.
24. Because formal committees are often established to purchase business products, members of buying
centers can be readily identified on formal organizational charts.
25. The role of gatekeeper may be filled by a secretary.
26. Although customer service has in the past been an important factor in business buyer-seller
relationships, its importance has been waning in the last decade.
27. If Ford purchased the same number of brakes from NUCAP on a regular basis, it would be
participating in a straight rebuy.
MULTIPLE CHOICE
1. _____ is the marketing of goods and services to individuals and organizations for purposes other than
personal consumption.
a.
Secondary marketing
b.
Interactive marketing
c.
Business marketing
d.
High-level marketing
e.
Industrial marketing
2. A product is defined as a business product rather than a consumer good on the basis of its:
a.
intended use
b.
physical characteristics
c.
price
d.
distribution method
e.
tangible attributes
3. Business marketing does NOT include goods and services that:
a.
become part of another product
b.
are used to manufacture other products
c.
are used for personal consumption
d.
facilitate the normal operations of an organization
e.
are acquired for resale
4. Which of the following is the best example of a sale that could only take place in the business market?
a.
A professor is purchasing a Mac to use at home
b.
A music store owner is ordering the newest Elvis Ultimate Live collection DVD for her
mother
c.
A teen is purchasing ring tones to use on her phone
d.
A librarian is purchasing new books for the school’s library
e.
All of these are examples of business sales
5. The Solar Group, a Mississippi-based mailbox manufacturer, sells mailboxes to contractors who are
building mega-subdivisions, to hardware stores, and directly to new homeowners. What kind of
products is the Solar Group selling?
a.
Business products only
b.
Both business and consumer goods
c.
Installations
d.
Consumer goods only
e.
Supplies
6. Since GE began accepting bids via the Internet, the length of the bidding process in GE’s lighting
division has been reduced from 21 days to 10. Since requesting the bids is easier, purchasing agents
approach more potential vendors. The ability to locate more vendors has lowered the cost of goods by
5 to 15 percent. GE’s experience illustrates:
a.
how using the Internet decreases competition
b.
how business marketing is becoming global
c.
how business marketing is using the Internet to become more efficient
d.
how the use of the Internet has influenced consumer markets to become larger and more
powerful than business markets
e.
how the Internet increases efficiency in data exchange
7. The largest percentage of B-to-B social media spending goes toward creating:
a.
viral videos
b.
customer community
c.
podcasts
d.
blogs
e.
webinars
8. Which of the following tools is particularly effective for B-to-B marketers to use for product
demonstration?
a.
text messaging
b.
social networking sites
c.
blogs
d.
mobile marketing
e.
video
9. _____ relates to the fact that customers who have made a purchase lately are more likely to purchase
again in the near future than customers who haven’t purchased for a while.
a.
External search traffic
b.
Effective reach
c.
Stickiness
d.
Recency
e.
Effective frequency
10. _____ is a measure of a Web site’s effectiveness and is calculated by multiplying the frequency of
visits times the duration of a visit times the number of pages viewed during each visit.
a.
Effective reach
b.
Effective frequency
c.
Gross rating points
d.
Interactiveness
e.
Stickiness
11. All of the following are current roles of the Internet in business marketing EXCEPT:
a.
reduce costs
b.
eliminate distributors
c.
build partnerships and alliances
d.
build and support branding
e.
integrate online and traditional media
12. The elimination of intermediaries such as wholesalers or distributors from a marketing channel is
referred to as:
a.
disintermediation
b.
disassociation
c.
unencumberance
d.
demarketing
e.
selective retention
13. Before toll-free telephone numbers and the Internet were used as commercial tools, fliers usually
purchased airline tickets from travel agents. Travel agents no longer receive a commission from the
airlines for selling tickets to consumers. This is an example of:
a.
reintermediation
b.
disassociation
c.
disintermediation
d.
discrimination
e.
transference
14. The reintroduction of an intermediary between producers and users is called:
a.
disintermediation
b.
reinstatement
c.
selective retention
d.
reestablishment
e.
reintermediation
15. In the early 2000s, Levi Strauss invested millions of dollars to develop a website on which they could
sell jeans directly to consumers. However, the effort was unsuccessful and the company switched
course, announcing that jeans would be sold only through its retailer partners. This is an example of:
a.
recency
b.
reintermediation
c.
keiretsu
d.
disintermediation
e.
reinstatement
16. A cooperative agreement between business firms is a:
a.
shared capital contract
b.
global partner development strategy
c.
strategic alliance
d.
joint contract
e.
comarketing effort
17. IBM and Cisco work together to provide banks with the products and services they need to manage
their multiple locations. In other words, the two companies have joined in a:
a.
retail cooperative
b.
direct investment venture
c.
transactional relationship
d.
strategic alliance
e.
synergistic relationship
18. Sometimes a _____ is created for the purpose of sharing resources. This was why the Donnelly
Corporation, a company that designs, manufactures, and markets automotive parts, joined with
Applied Films Laboratory, Inc. to manufacture and supply the world market with display coated glass
for liquid crystal displays (LCDs).
a.
shared capital contract
b.
global partner development strategy
c.
strategic alliance
d.
cobranding effort
e.
market cooperative
19. Which of the following means that a firm believes that an ongoing relationship with some other firm is
so important that it warrants maximum efforts at maintaining it indefinitely?
a.
Amae
b.
Trust
c.
Relationship quality
d.
Strategic alliance
e.
Relationship commitment
20. DHL maintains a strategic alliance with UPS because it has confidence in UPS’s reliability and
integrity. This condition is referred to as:
a.
trust
b.
tomo
c.
commitment
d.
amae
e.
reciprocity
21. In Japan, reciprocity and personal relationships contribute to the development of:
a.
global ventures
b.
amae
c.
agricola
d.
keiretsu
e.
an independent network of small retailers
22. A keiretsu is a(n):
a.
type of strategic alliance commonly found in Japan
b.
method of business e-commerce found in Asia
c.
Internet site that offers its customers access to various languages that they can use to
conduct their business
d.
form of relationship marketing that is illegal in the United States
e.
bribe
23. Ed Rodney works for the state of Minnesota as a advocate of state growth and development. He
devises ways to encourage businesses to relocate to the state. In other words, Rodney is involved in
business marketing. He is compiling a list of potential businesses that might be willing to move their
operations to Minnesota. Which of the following possible clients should he include in his list?
a.
Any family that takes an annual vacation
b.
Newlyweds
c.
Families that enjoy hiking
d.
Companies that have growing sales
e.
Students on spring break
24. A particular segment of the business market includes those individuals and organizations that purchase
goods and services for the purpose of making a profit. They achieve this goal by using purchased
goods and services to make other goods, to become part of other goods, or to facilitate the daily
operations of the organization. This group is called the _____ segment of the business market.
a.
institution
b.
reseller
c.
wholesaler
d.
producer
e.
government
25. According to the text, another commonly used name for producers is:
a.
fabricators
b.
installers
c.
original equipment manufacturers
d.
product providers
e.
component networks
26. Corn refiners buy shelled corn and convert it into a variety of products, including high fructose corn
syrup. The refiners then sell the syrup to soda and food product companies for use in foods and
beverages. The corn refiners represent the _____ sector of the business market.
a.
channel
b.
reseller
c.
producer
d.
government
e.
distributor
27. Southern Fireworks Manufacture Company in Liuyang, China provides fireworks for companies in
America such as Premier Pyrotechnics in Richland, Missouri. This means that Southern is a(n):
a.
installer of original materials
b.
demand company
c.
reseller
d.
government buyer
e.
OEM
28. Caterpillar, Inc., a manufacturer of earthmoving equipment, uses completed drivetrains
(engines/transmissions/axles), drivetrain components, electronic controls, hydraulic and
electrohydraulic components and systems, cooling systems, and undercarriage track systems produced
by other organizations in its manufacturing process. Caterpillar is an example of a(n):
a.
fabricator
b.
installer
c.
original equipment manufacturer
d.
product provider
e.
component network
29. Businesses that buy finished goods and sell them for a profit are called:
a.
inventory carriers
b.
producers
c.
distribution networks
d.
resellers
e.
business facilitators
30. In the past 24 years, Mothers Work has grown from a small, mail-order catalog business headquartered
inside the founder’s home, to the world’s largest seller of maternity apparel, with nearly 1,600
locations. In terms of the business market, Mothers Work would be best classified as a(n):
a.
reseller
b.
producer
c.
distribution network
d.
inventory carrier
e.
business facilitator
31. Hensley Poultry is a wholesaler that buys poultry food and health products from Provini, Inc., feeding
systems from Big Dutchman, Inc. and incubation systems from Copca Corp. Hensley then sells those
products to poultry producers and farmers’ cooperatives in Iowa. Hensley Poultry could be best
classified as a(n):
a.
producer
b.
distribution network
c.
inventory carrier
d.
specialty retailer
e.
reseller
32. The U.S. government is:
a.
not a business market segment
b.
the world’s largest single customer
c.
an organization accounting for over 50 percent of the U.S. gross national product
d.
mainly a military equipment purchaser
e.
using one centralized purchasing office for the entire government
33. Which of the following statements about the government business market is CORRECT?
a.
Only large vendors with annual sales of more than $20 million are authorized to sell to the
federal government; small vendors are restricted to the state and local government market.
b.
The Office of Management and Budget is the federal agency that contracts for all the U.S.
government’s buying requirements.
c.
Selling to states, counties, and cities can be less frustrating for both small and large
vendors than selling to the federal government.
d.
The president of the United States must personally authorize all federal government
purchases.
e.
Contracts for government purchases are rarely put out for bid.
34. One segment of the business market has primary goals that differ from the ordinary business goals
such as profit, market share, or return on investment. This segment includes many schools, churches,
and civic clubs. Which business market is this?
a.
Institutions
b.
OEMs
c.
Services
d.
Providers
e.
Resellers
35. Which of the following is the BEST example of an institution market?
a.
The federal government
b.
eBay
c.
Claire’s Boutique
d.
Hillsdale United Methodist Church
e.
Starbucks
36. Organon Teknina sells inexpensive equipment to detect Escherichia coli, listeria, or salmonella
bacteria in food. The company serves not-for-profit institutions that need to regularly check food
quality. Organon Teknina would be LEAST likely to sell to:
a.
The Montgomery County school system
b.
Cincinnati Children’s Hospital
c.
Taco Bell
d.
A chain of church-sponsored retirement homes
e.
American Red Cross emergency shelter kitchens
37. A U.S. manufacturer of lighted signs used in amusement parks, at outdoor sports arenas, and for
restaurant promotion wants to facilitate its market segmentation and targeting so data about the
company are readily available and usable. The best resource for this company to use would be:
a.
a large amount of marketing research, including scanner data and focus groups
b.
other competing firms as a strategic alliance referral service
c.
the government bidding processes
d.
the North American Industry Classification System
e.
derived demand
38. The government uses a system called NAICS to classify North American business establishments.
NAICS stands for:
a.
Non-American Industry Classification System
b.
North and South American Institutional Coding Services
c.
Non-American Industrial Corporation System
d.
North American Institution Code System
e.
North American Industry Classification System
39. NAICS data are helpful for analyzing, segmenting, and targeting markets. The system was developed
by:
a.
large manufacturers in United States and Mexico that produce similar goods
b.
the North American Free Trade Agreement partners
c.
Brazil, Chile, Argentina, Canada, and the United States working together in a joint venture
d.
the SIC committee
e.
the U.S. government
40. Managers can use the NAICS data to:
a.
create a more focused mission statement
b.
eliminate risk
c.
classify consumer behavior
d.
identify potential new customers
e.
determine purchase motives
41. Imagine you are the research director of a major industrial marketing firm. You need to select a
NAICS code that defines the most homogeneous group of companies in a particular group of highly
competitive companies . Which of the following codes might you use?
a.
7432
b.
532
c.
19
d.
7
e.
999
42. Which of the following NAICS codes designates an economic subsector?
a.
33
b.
334
c.
3346
d.
33461
e.
334611
43. All of the following are demand characteristics of business markets EXCEPT:
a.
inelastic demand
b.
fluctuating demand
c.
joint demand
d.
stable demand
e.
derived demand
44. The demand for consumer goods often affects the demand for business products. This characteristic of
business markets is called _____ demand.
a.
elastic
b.
inelastic
c.
fluctuating
d.
derived
e.
joint
45. Inland Eastex manufactures a heavy paper stock that is used for printing covers for many different
types and sizes of consumer magazines. Consumer magazine sales determine how much paper Inland
Eastex sells. This is an example of ________ demand.
a.
joint
b.
inelastic
c.
elastic
d.
congruent
e.
derived
46. As the demand for VCR players has fallen, so has the demand for blank VHS tapes because the
demand for VHS tapes is an example of a(n) _____ demand.
a.
joint
b.
inelastic
c.
elastic
d.
fluctuating
e.
derived
47. Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to
produce uniform brown eggs with strong shells. It breeds and sells young chicks to farmers all over
Europe who want to sell eggs in local markets. When consumers began to worry about cholesterol
content and stopped eating as many eggs, the demand for the Tetra hen also declined. This would be
an example of _____ demand.
a.
derived
b.
elastic
c.
multiplying
d.
bundled
e.
inelastic
48. When two or more items are used in combination to produce a final product, they are said to have
_____ demand.
a.
derived
b.
inelastic
c.
joint
d.
fluctuating
e.
elastic
49. Apple iTunes has sold over five billion downloads. Without iTunes the demand for the Apple iPod line
of products would be small. Without the musicians there would be no iTunes. A condition of _____
demand exists.
a.
bundled
b.
incremental
c.
functional
d.
developmental
e.
joint
50. A decline in the availability of bicycle handle bars will decrease Huffy Bicycle Company’s production
of bicycles. Decreased production in turn reduces Huffy’s demand for bicycle seats. This is because the
products in this situation have _____ demand.
a.
inelastic
b.
joint
c.
elastic
d.
congruent
e.
derived
51. When demand for a product is _____, an increase or decrease in the price of the product will not
significantly affect demand for the product.
a.
responsive
b.
elastic
c.
inelastic
d.
derived
e.
bundled
52. An acute shortage of heavy-duty tires is threatening to disrupt operations in mining and construction
sites around the world. According to one mine operator, “I’ve got the coal and market, and I have the
trucks to haul the coal, but I don’t have the tires. I’d be willing to pay double the price if I could get the
tires I need.” The demand for heavy-duty tires is:
a.
joint
b.
inelastic
c.
elastic
d.
congruent
e.
derived
53. Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford. A sudden jump
in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to
double the price of the wiper blades. This increase in price has not affected sales volume for wiper
blades. The price change did not change demand for windshield wiper blades because demand for this
product by business customers is:
a.
inelastic
b.
secure
c.
bundled
d.
elastic
e.
resistant
54. Due to rapidly rising overhead costs and increases in raw material prices, Framarx Corporation was
forced to raise the price of its waxed and coated paper by 35 percent. (The paper is used between
frozen hamburger patties to keep the patties from freezing together.) Framarx is the leading
manufacturer in this industry, and its competitors will follow suit. While the sales force for Framarx
believes the price increase will result in a drop in sales, its marketing manager disagrees because the
demand for the waxed and coated paper is more than likely:
a.
resistant
b.
inelastic
c.
derived
d.
elastic
e.
bundled
55. Salt is an important ingredient in many soups produced by Campbell’s. If the price of salt rises,
Campbell’s will not likely reduce the amount of salt it purchases from salt suppliers, because salt is
such a crucial ingredient. Therefore, you know the demand for the alt is:
a.
resistant
b.
inelastic
c.
derived
d.
elastic
e.
bundled
56. Although the price of a chemical added to paint to protect surfaces from mold and mildew has almost
doubled, the price of paint only rose an average of 5 percent, and the demand for both paint and the
chemical that eliminates mold and mildew remained stable. The demand for this chemical is:
a.
elastic
b.
derived
c.
bundled
d.
inelastic
e.
change-resistant
57. As a result of the _____, a small increase or decrease in consumer demand can produce a much larger
change in demand for the facilities and equipment needed to manufacture the consumer product.
a.
demand fluctuation principle
b.
joint demand principle or division effect
c.
inelastic demand effect
d.
multiplier effect
e.
derived force effect