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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.
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
110. 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.
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
111. Buyers in producer markets purchase either raw materials or semifinished products.
a.
True
b.
False
112. The four categories of consumer markets are producer, reseller, government, and institutional.
a.
True
b.
False
113. 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.
a.
True
b.
False
114. The term business markets refers only to producer markets.
a.
True
b.
False
115. An example of a business market would be farmers.
a.
True
b.
False
116. Grocery stores and supermarkets are a part of producer markets.
a.
True
b.
False
117. Reseller markets consist of intermediaries that buy finished goods and resell them for profit.
a.
True
b.
False
118. Wholesalers sell primarily to ultimate consumers.
a.
True
b.
False
119. There is little or no difference between wholesalers' customers and retailers' customers.
a.
True
b.
False
120. Retailers purchase products and resell them to final consumers.
a.
True
b.
False
121. The increase in government purchases has resulted partly from the increase in the number of services provided by the
government.
a.
True
b.
False
122. Government markets, although complicated in their requirements, can be very lucrative.
a.
True
b.
False
123. Institutional markets include state prisons.
a.
True
b.
False
124. Orders placed by business customers are usually smaller and more numerous than consumer sales.
a.
True
b.
False
125. It is customary for contracts for raw materials and components to be negotiated semiannually.
a.
True
b.
False
126. Reciprocal dealing is widespread because it is one of the few avenues not regulated by the FTC, and it facilitates
optimal purchases.
a.
True
b.
False
127. Ultimate consumers are generally more rational than business customers.
a.
True
b.
False
128. Business customers generally seek to obtain detailed information about a product before purchasing it.
a.
True
b.
False
129. Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs.
a.
True
b.
False
130. Business purchasing agents may indirectly contribute to the satisfaction of their own personal needs by helping their
firms achieve organizational objectives.
a.
True
b.
False
131. When purchasing products, business customers are especially concerned about quality, service, price, and supplier
relationships.
a.
True
b.
False
132. One very important consideration for business purchases is the type of packaging used.
a.
True
b.
False
133. Price is of concern to a business marketer primarily because of its psychological impact on purchasing agents.
a.
True
b.
False
134. If a business product exceeds specifications, so much the better; the customer can then be assured of obtaining a
minimum level of acceptability.
a.
True
b.
False
135. In some cases, the types of services offered by a supplier may constitute a competitive advantage over suppliers of
similar products.
a.
True
b.
False
136. 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.
a.
True
b.
False
137. 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.
a.
True
b.
False
138. A new-task purchase is one in which the business makes an initial purchase of a new item.
a.
True
b.
False
139. Of the three types of business purchases, the straight rebuy purchase usually requires the most information.
a.
True
b.
False
140. Industrial demand derives from consumer demand.
a.
True
b.
False
141. In the long run, business demand becomes totally unrelated to consumer demand.
a.
True
b.
False
142. The demand for many business products is inelastic at the industry level.
a.
True
b.
False
143. For business products, the concept of inelasticity of demand applies equally to industry demand for the product and
to demand for an individual supplier.
a.
True
b.
False
144. Raw materials are especially affected by joint demand.
a.
True
b.
False
145. When the major component of an item experiences a price increase, the demand for the item may become more
elastic.
a.
True
b.
False
146. Sometimes initial demand for a business product will drop following a price cut if buyers believe that further price
reductions are forthcoming.
a.
True
b.
False
147. 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.
a.
True
b.
False
148. 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.
a.
True
b.
False
149. The factors that influence business buying behavior are the same as those that influence consumer buying behavior.
a.
True
b.
False
150. All companies, no matter what their size or market position, maintain only one buying center.
a.
True
b.
False
151. In the buying decision process, one of the activities included in the search for products and suppliers is examining
various online and print publications.
a.
True
b.
False
152. Specific details regarding terms, credit arrangements, and technical assistance are worked out during the product
specification stage of the buying decision process.
a.
True
b.
False
153. Value analysis focuses primarily on the examination of the cost of products relative to design, quality, and materials
used.
a.
True
b.
False
154. 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.
a.
True
b.
False
155. The fourth stage in the business buying decision process is that of searching for products and suppliers.
a.
True
b.
False
156. 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.
a.
True
b.
False
157. The five-stage business buying decision process is used primarily for routine, straight rebuy purchases.
a.
True
b.
False
158. Interpersonal dynamics are easy to observe and simple for the marketer to assess.
a.
True
b.
False
159. The North American Industry Classification System includes all three NAFTA partners.
a.
True
b.
False
160. The old Standard Industrial Classification system is more comprehensive than NAICS.
a.
True
b.
False
161. NAICS provides less information about service industries and high-tech products than did the SIC system.
a.
True
b.
False
162. After finding out which industries purchase the major portion of an industry's output, the next step is to begin
production.
a.
True
b.
False
163. 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.
a.
True
b.
False
164. Industrial classification systems allow marketers to divide business customers into groups based mainly on the types
of goods and services provided.
a.
True
b.
False
165. 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.
a.
True
b.
False
166. You are manager of a clothing manufacturing firm that has operations in different countries. Your Indonesian
manufacturing facility is dedicated solely to producing elementary school uniforms for the U.S. market. Most of your
product output is sold to a larger school uniform company in the U.S. called School Uniforms, Inc. School Uniforms, Inc.
has major contracts with school districts like the Los Angeles Unified School District. In this scenario, the Los Angeles
Unified School District is part of which of the following business markets?
a.
Reseller market
b.
Government market
c.
Institutional market
d.
Distributor market
e.
Wholesaler market
167. When marketing to business customers, marketers have to understand the key characteristics of the business
customer, and alter their marketing mix accordingly. For example, a business customer views _________ as the amount of
investment necessary to obtain a desired level of return or savings. Moreover, the business customer demand
______________ before buying to be sure their needs are being met with the product.
a.
price; good service
b.
product; price discounts
c.
place; product samples
d.
distribution; product guarantees
e.
price; detailed information
168. You recently raised your prices on the products you sell to your business customers. To your surprise, these
customers did not change the amount of units they purchase from you. It was as if the price increase did not matter to
these customers. Which of the following types of business demand most accurately describes this situation?
a.
Constant demand
b.
Inelastic demand
c.
Joint demand
d.
Elastic demand
e.
Derived demand
169. Which of the following entities is part of the buying center?
a.
Marketers
b.
Users
c.
Vendors
d.
Distributors
e.
Wholesalers
170. Marketers can take advantage of a wealth of public and private data about business customers using various
industrial classification systems. However, as with any data, there are limitations associated with industrial classification
systems’ data. Which of the following is a limitation of industrial classification systems’ data?
a.
Some industries are included in multiple classifications in the systems.
b.
Double counting of sales data may occur when products are shipped between two divisions within the same
organization.
c.
Only businesses with more than 1000 employees are included.
d.
Only service businesses are included in the classifications.
e.
The data is only available on a quarterly basis.
171. Resellers are business intermediaries who buy finished goods and resell them for a profit. Their business model
dictates that they consider several factors when deciding which products to buy. Which of the following is a factor the
reseller considers when making purchase decisions?
a.
The sales tax that must be charged on the product.
b.
The number of substitutes for the product.
c.
The availability of financing programs for purchasing the product.
d.
How the product fits within the product mix of the reseller’s other products.
e.
The perishability of the product.
172. A marketer who starts selling to the business market, after having spent most of his career selling directly to
consumers, will quickly come to realize that business customers are very demanding. Business customers place a high
value on which of the following aspects of a buying relationship?
a.
The geographical location of the selling firm
b.
The long-term business strategy of the selling firm
c.
The size of the selling firm
d.
The mix of services offered by the selling firm
e.
The packaging of the product
173. Your firm manufactures motorcycles for the consumer market. You purchase raw materials to build the motorcycles
from a variety of suppliers in the U.S. and abroad. The volume of your raw materials purchases is a function of the
customer demand for your firm’s motorcycles. Which of the following best describes the type of demand your firm has
for these raw materials?
a.
Forecasted demand
b.
Elastic demand
c.
Customer-driven demand
d.
Joint demand
e.
Derived demand
174. Businesses follow a defined buying decision process in order to ensure the goods and services they purchase will
meet their organization’s needs. The process has multiple stages, and in one of the stages the business will evaluate each
component of potential purchase. This includes evaluating the quality, design, materials and any other relevant aspect of
the purchase. This evaluation takes place in which of the following stages of the business buying decision process?
a.
First stage – The business recognizes a problem or need exists
b.
Second stage – Product specifications are developed
c.
Third stage – Search for potential products
d.
Fourth stage – Product for purchase is selected
e.
Fifth stage – Product quality and supplier performance is evaluated
175. The North American Industry Classification System (NAICS) is based on the types of ______________ performed.
It divides industrial activity into _______ sectors.
a.
services; 30
b.
production activities; 20
c.
services and production activities; 50
d.
manufacturing; 40
e.
distribution; 25
