Deck 5: Business-To-Business Behavior

Question 1

Top management is almost always included in the decision and selection process in the purchase of buildings, land, and major equipment.

Answer 1

True

Question 2

In the purchase of major equipment, buildings, and land, financing is almost always a consideration and often the decision is part of the corporation's strategic plans.

Answer 2

True

Question 3

Top management is not usually involved in the selection process for accessory equipment, but would definitely be involved in any approval process because of the cost of the equipment.

Answer 3

False

Question 4

Because fabricated and component parts become part of the finished product, quality and dependability are important issues in the purchase decision.

Question 5

Because process materials are used in the building of other products, specifications are an important issue in the purchase decision.

Question 6

Because fabricated parts lose their identity when they become part of another product in the manufacturing process, they achieve a commodity status with buyers.

Question 7

As with process materials, fabricated and component parts are often commodity products with no or little brand-name recognition.

Question 8

Fabricated and component parts must go through some type of manufacturing process before they can be used in building another product.

Question 9

Because of the commodity nature of raw materials, the Internet has gained in popularity as a mode of purchasing.

Question 10

Wholesalers and distributors are middlemen who purchase goods from manufacturers for resale to consumers.

Question 11

Marketing of a service to another business is a greater challenge than marketing a good because the business cannot see the service prior to making the purchase decision.

Question 12

Because of the risk involved in not knowing how well a new service will perform, most companies do not switch service providers unless they are dissatisfied with the current vendor.

Question 13

It is very common for businesses in the same industry to cluster in close proximity to each other in specific geographic areas.

Question 14

The demand for tires to build lawn mowers is directly related to the supply and demand of spark plugs used in the lawn mower engines. This illustrates the concept of derived demand.

Question 15

New buys are occasional purchases or purchases for which the members of the buying center have limited experience.

Question 16

Modified rebuys are purchases made by a business for the first time or purchases for products with which no one in the organization has had previous experience.

Question 17

Straight rebuys are routine purchases from a vendor without modifying specifications or without negotiating new terms.

Question 18

Modified rebuys are not as complex as new buy situations primarily because they involve a lower dollar purchase with less impact on the strategic direction of the firm.

Question 19

The buying center can involve as few as one individual in a family-owned business or as many as 20 or more individuals in a large corporation.

Question 20

The roles within the buying center can change over time and from one purchase situation to another.

Question 21

Since buying centers involve multiple people making a decision, the personalities of individual members will not have much of an impact on the decision being made.

Question 22

Recommendations and comments made by an individual with informal power will carry considerably more weight than comments by others within a buying center.

Question 23

Personal objectives such as seeking a promotion, building a good reputation with the boss, or making a rival look bad can influence how a person acts within a buying center.

Question 24

The more an individual has at stake in a purchase decision, the higher will be his or her involvement in the decision and the more forceful he or she will be during the decision-making deliberations.

Question 25

Factors determining who will be involved in the actual decision include such things as the type of purchase situation, the buying center composition, social norms, the relative cost of the product, and past experiences of the members of the buying center.

Question 26

In terms of the buying decision, the purchase decision in straight-rebuy and modified-rebuy situations will tend to be made by one person while the new-task buy decision will be made by the group or by at least several members of the buying center.

Question 27

If company executives or high-ranking personnel are members of the buying center, joint decisions are more likely.

Question 28

For a new-buy situation, all seven steps in the business-to-business buying process are followed, while, for the modified rebuy situation, only 2 or 3 steps are followed.

Question 29

The involvement of members of the buying center in the b-to-b purchasing process will vary depending on the purchase situation and the makeup of the company.

Question 30

In situations where the specifications of a product need a greater level of modification before an order can be placed with a current vendor, a firm will usually enter into the new-buy situation, which involves examining other alternatives and vendors.

Question 31

To ensure that a bias towards a particular vendor does not adversely impact a purchase decision, all vendors who are bidding should be asked to participate in setting the specifications.

Question 32

Reciprocity is the practice of one business making a purchase from another business, that, in turn, patronizes the first business.

Question 33

Evaluation of vendors normally occurs at three levels: the initial evaluation screening, vendor analysis, and vendor audit.

Question 34

The initial screening evaluation of vendors during the evaluation of vendor stage is normally done by the entire buying center.

Question 35

The purpose of the initial screening evaluation during the evaluation of vendors is to reduce the list of potential vendors to a smaller, more manageable set of vendors.

Question 36

There are three levels of evaluation during the evaluation of vendors stage of the b-to-b business process. The formal evaluation of each vendor takes places in the last level of this evaluation, the vendor analysis level.

Question 37

The advantage of choosing one vendor as a supplier is that it offers lower prices through quantity discounts, but the disadvantage is the greater risk incurred if, for some reason, the vendor cannot fill all of the orders needed or is late with a shipment.

Question 38

For most purchase situations, the last step, negotiation of purchase terms, is a formality.

Question 39

The purchase of _____ is often the result of strategic decisions by top management and normally involves some type of financing beyond the company's current funds.

A) major equipment, buildings, and land
B) accessory equipment
C) fabricated and component parts
D) process materials

Question 40

Scallon Distributors needs to purchase two new forklifts for their distribution center. This would be an example of a(n) _____ purchase.

A) major equipment, buildings, and land
B) accessory equipment
C) fabricated and component parts
D) process materials

Question 41

Scallon Distributors needs to purchase two new forklifts for their distribution center. In terms of top management involvement in the purchase process, top management

A) would be involved in the purchase process as well as the purchase approval
B) would not be involved in the purchase process, nor in the purchase approval
C) would not be involved in the purchase process, but may be involved in the purchase approval
D) would not be involved in the purchase process, but would definitely be involved in the purchase approval

Question 42

The Firestone tires on Ford vehicles are an example of

A) accessory equipment
B) a fabricated part
C) a component part
D) process materials

Question 43

The Intel Pentium processor placed in Dell Computers is an example of

A) accessory equipment
B) a fabricated part
C) a component part
D) process materials

Question 44

Because _____ lose their identity when they become part of another product in the manufacturing process, they usually achieve a commodity status with buyers.

A) major equipment, buildings, and land
B) accessory equipment
C) fabricated and component parts
D) process materials

Question 45

Because the quality of _____ is often the same for the various vendors, factors such as price, deals, and dependability become more important.

A) major equipment, buildings, and land
B) accessory equipment
C) fabricated and component parts
D) process materials

Question 46

With process materials, _____ is often the deciding variable used in making the purchase decision because of the commodity status of the process materials.

A) price
B) on time delivery record
C) quality
D) dependability

Question 47

Items such as oil, grease, filters, gears, switches, and motors are examples of

A) maintenance and repair parts
B) operating supplies
C) raw materials
D) process materials

Question 48

Low-cost items such as light bulbs, paper, pencils, paper clips, and cleaning chemicals are examples of

A) maintenance and repair parts
B) operating supplies
C) raw materials
D) process materials

Question 49

In purchasing operating supplies, _____ are usually the most important criteria in the purchase.

A) price and quality
B) price and convenience
C) quality and dependability
D) price, quality, and special deals

Question 50

Items supplied by the agriculture, fishing, mining, and timber industries are

A) maintenance and repair parts
B) operating supplies
C) raw materials
D) process materials

Question 51

Because _____ have no brand identity, brokers, agents, and distributors are often used to sell the products to manufacturers.

A) maintenance and repair parts
B) operating supplies
C) raw materials
D) process materials

Question 52

Wholesalers and distributors tend to push the brand that

A) is sold for the highest price
B) is purchased at the lowest price
C) generates the highest profit margin and sales for them
D) is of the highest quality and can be delivered without any interruptions

Question 53

To a buyer, the primary advantage of having one supplier to provide a component part is

A) the quantity discount for having a larger order
B) lower risk of the supplier not meeting the demand for the component part
C) an exclusive contract that ensures a steady supply of the product being purchased
D) the ability to order extra component parts anytime they are needed

Question 54

Because of the rise of large retail chains, many manufacturers are selling their goods directly to the retailer. The advantage of bypassing middlemen include all of the following except

A) reduced cost of goods sold for the retailer
B) retailers having fewer suppliers to deal with
C) goods are received faster since they do not have to pass through any middlemen
D) goods can be offered to consumers at a lower price

Question 55

In terms of the concept of derived demand, the demand for retail orders of jeans is determined by

A) the supply of raw materials such as denim, buttons, zippers, and snaps used in the manufacturing of jeans
B) the supply of raw materials that are used to make denim, buttons, zippers, and snaps
C) the demand for jeans by consumers
D) the economy and fashion interests

Question 56

In terms of the concept of derived demand, the demand for denim, buttons, snaps, and zippers to make jeans is determined by

A) orders for jeans by retail outlets
B) the supply of raw materials that are used to make denim, buttons, zippers, and snaps
C) the demand for jeans by consumers
D) both a and c

Question 57

Because of the concept of derived demand in the business-to-business sector, it is more difficult to predict demand and to control production the

A) higher the price of the product being sold
B) more component parts a product has
C) further the business is from the end user, in terms of the number of middlemen
D) closer the business is from the end user

Question 58

Because of the concept of _____, businesses that sell to other businesses face a much more volatile sales situation than consumer markets.

A) acceleration principle
B) derived demand
C) joint demand
D) economies-of-scale

Question 59

Business purchase decisions tend to vary from consumer decisions in all of the following ways except

A) the amount of time spent in making the decision
B) the dollar value involved
C) the number of people involved in the decision
D) all of the above

Question 60

New buys are

A) occasional purchases or purchases with which the members of the buying center have limited experience
B) purchases made by a business for the first time or purchases with which no one in the organization has had previous experience
C) routine purchases from a vendor without modifying specifications or without negotiating new terms
D) purchases of new equipment or machines rather than leasing the equipment or machines

Question 61

Modified rebuys are

A) occasional purchases or purchases with which the members of the buying center have limited experience
B) purchases made by a business for the first time or purchases with which no one in the organization has had previous experience
C) routine purchases from a vendor without modifying specifications or without negotiating new terms
D) purchases of new equipment or machines rather than leasing the equipment or machines

Question 62

Straight rebuys are

A) occasional purchases or purchases with which the members of the buying center have limited experience
B) purchases made by a business for the first time or purchases with which no one in the organization has had previous experience
C) routine purchases from a vendor without modifying specifications or without negotiating new terms
D) purchases of new equipment or machines rather than leasing the equipment or machines

Question 63

Complex decisions that impact the strategic direction of the business and often require substantial research before a decision can be made are typical of a _____ situation.

A) new buy
B) modified
C) straight rebuy

Question 64

Because they sign a one-year contract for janitorial services, every year the Baxtor Corporation accepts bids from other vendors as well as their current janitorial service. This is an example of a _____ situation.

A) new buy
B) modified rebuy
C) straight rebuy

Question 65

For the selling firm, the best buying situation to be in is the _____ situation.

A) new buy
B) modified rebuy
C) straight rebuy

Question 66

In the _____ situation the buyer does not consider other firms and, as long as the buyer is pleased with the service, purchases continue on a routine basis.

A) new buy
B) modified rebuy
C) straight rebuy

Question 67

Purchasing fabricated and component parts, process materials, maintenance and repair parts, operating supplies, and raw materials is typical of a _____ situation.

A) new buy
B) modified rebuy
C) straight rebuy

Question 68

It is difficult for a new vendor to receive an order or to even be considered in the _____ situation.

A) new buy
B) modified rebuy
C) straight rebuy

Question 69

Business services tend to be purchased using

A) new buy situation
B) modified rebuy situation
C) straight rebuy situation
D) all three types of situations

Question 70

For accessory equipment, whether a purchase is a new buy situation or modified rebuy situation typically depends on

A) top management involvement and on the impact on the strategic direction of the company
B) the price of the equipment
C) the experience the firm has in purchasing it
D) the price of the equipment and the experience the firm has in purchasing it

Question 71

The size of the buying center and the roles of its members are determined by all of the following factors except

A) the company from which the product is purchased
B) the dollar value of the purchase relative to the buying company's size
C) the impact of the purchase on the buying company's operation
D) the type of purchase situation, such as straight, modified, or a new buy

Question 72

Within the buying center, the gatekeeper is the individual who

A) actually uses the product or is responsible for the product being used
B) makes the final decision
C) influences the decision, but may not necessarily use the product
D) is responsible for the flow of information to the members of the buying center

Question 73

Within the buying center, the user is the individual who

A) actually uses the product or is responsible for the product being used
B) makes the final decision
C) influences the decision, but may not necessarily use the product
D) is responsible for the flow of information to the members of the buying center

Question 74

Within the buying center, the influencer is the individual who

A) actually uses the product or is responsible for the product being used
B) makes the final decision
C) influences the decision, but may not necessarily use the product
D) is responsible for the flow of information to the members of the buying center

Question 75

Within the buying center, the decider is the individual who

A) actually uses the product or is responsible for the product being used
B) makes the final decision
C) influences the decision, but may not necessarily use the product
D) makes the actual purchase

Question 76

Within the buying center, the purchaser is the individual who

A) actually uses the product or is responsible for the product being used
B) makes the final decision
C) influences the decision, but may not necessarily use the product
D) makes the actual purchase

Question 77

Gary has been asked by the buying center members to locate possible vendors for a product and to provide a list of five feasible vendors by next week. Gary is serving in the role of

A) gatekeeper
B) user
C) influencer
D) decider

Question 78

Jeannie is the supervisor of the 3rd shift at Westin Electronics and is responsible for ensuring that the company's assembly line continues to operate efficiently. Since she is familiar with the plastic being used, she has been asked to be in the buying center for selecting a new vendor for the plastic. Jeannie is serving in the role of

A) gatekeeper
B) user
C) influencer
D) decider

Question 79

Jerry is an engineer for Westin Electronics. To ensure that the new vendor for plastic meets the company's standards, Jerry has been asked to be part of the buying process for selecting a new vendor. Jerry is serving in the role of

A) gatekeeper
B) user
C) influencer
D) decider

Question 80

Westin Electronics has been selected as the new vendor for some of the parts needed by a manufacturer. Jerry has been asked to work out the details of the purchase and the delivery schedule that will be needed. Jerry is serving in the role of

A) purchaser
B) user
C) influencer
D) decider