Deck 7: Business Markets and Buying Behavior

Question 1

Retailers purchase products and resell them to final consumers.

Answer 1

True

Question 2

Orders placed by business customers are usually smaller and more numerous than consumer sales.

Answer 2

False

Question 3

Reseller markets consist of intermediaries that buy finished goods and resell them for profit.

Answer 3

True

Question 4

Industrial classification systems arebest used in conjunction with other types of data to determine exactly how many and which customers a marketer can reach.

Question 5

Industrial classification systems allow marketers to divide business customers into groups based mainly on the types of goods and services provided.

Question 6

There is little or no difference between wholesalers' customers and retailers' customers.

Question 7

The North American Industry Classification System includes all three NAFTA partners.

Question 8

Buyers in producer markets purchase either raw materials or semifinished products.

Question 9

An example of a business market would be farmers.

Question 10

After locating potential customers using industrial classification systems such as NAICS, the next step for the business marketer is to make the purchase.

Question 11

NAICS provides little information about service industries and high-tech products.

Question 12

Grocery stores and supermarkets are a part of producer markets.

Question 13

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.

Question 14

The University of Texas is an institutional market.

Question 15

The term business markets refers only to producer markets.

Question 16

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.

Question 17

Wholesalers sell primarily to ultimate consumers.

Question 18

The four categories of consumer markets are producer, reseller, government, and institutional.

Question 19

The increase in government purchases has resulted partly from the increase in the number of services provided by the government.

Question 20

Government markets, although complicated in their requirements, can be very lucrative.

Question 21

It is customary for contracts for raw materials and components to be negotiated semiannually.

Question 22

Business purchasing agents may indirectly contribute to the satisfaction of their own personal needs by helping their firms achieve organizational objectives.

Question 23

Ultimate consumers are generally more rational than business customers.

Question 24

In the long run, business demand becomes totally unrelated to consumer demand.

Question 25

The demand for many business products is inelastic at the industry level.

Question 26

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.

Question 27

For business products, the concept of inelasticity of demand applies equally to industry demand for the product and to demand for an individual supplier.

Question 28

Of the three types of business purchases, the straight rebuy purchase usually requires the most information.

Question 29

In some cases, the types of services offered by a supplier may constitute a competitive advantage over suppliers of similar products.

Question 30

A new-task purchase is one in which the business makes an initial purchase of a new item.

Question 31

Price is of concern to a business marketer primarily because of its psychological impact on purchasing agents.

Question 32

Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs.

Question 33

Business customers generally seek to obtain detailed information about a product before purchasing it.

Question 34

Raw materials are especially affected by joint demand.

Question 35

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.

Question 36

When purchasing products, business customers are especially concerned about quality, service, price, and supplier relationships.

Question 37

One very important consideration for business purchases is the type of packaging used.

Question 38

If a business product exceeds specifications, so much the better; the customer can then be assured of obtaining a minimum level of acceptability.

Question 39

Industrial demand derives from consumer demand.

Question 40

When the major component of an item experiences a price increase, the demand for the item may become more elastic.

Question 41

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.

Question 42

Marketers should post informative content on digital sites describing how their products can solve customers' problems or address their needs.

Question 43

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.

Question 44

The fourth stage in the business buying decision process is that of searching for products and suppliers.

Question 45

The five-stage business buying decision process is used primarily for routine, straight rebuy purchases.

Question 46

Private B2B exchanges connect member firms through a secure system that permits all the organizations to share significant information as well as facilitate exchanges.

Question 47

The three purposes for which individuals or groups can use products in order for it to be considered a business market are

A)use in daily operations, end consumption, and resale.
B)direct use in producing other products, company travel, and end consumption.
C)resale, use in daily operations, and direct use in producing other products.
D)governmental, institutional, and reseller purposes.
E)making other products, selling to other businesses, making component parts.

Question 48

Value analysis examines quality, design, and materials as well as current and potential vendors.

Question 49

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.

Question 50

Online B2B auctions are especially popular for selling new products.

Question 51

All companies, no matter what their size or market position, maintain only one buying center.

Question 52

Specific details regarding terms, credit arrangements, and technical assistance are worked out during the product specification stage of the buying decision process.

Question 53

In the buying decision process, one of the activities included in the search for products and suppliers is examining various online and print publications.

Question 54

In business markets, individuals or groups purchase products for one of three purposes. These purposes are

A)resale, wholesale, and direct use.
B)wholesale, direct use, and use in producing other products.
C)resale, wholesale, and use in producing other products.
D)resale, direct use in producing other products, and use in general daily operations.
E)use in general daily operations, wholesale, and resale.

Question 55

The factors that influence business buying behavior are the same as those that influence consumer buying behavior.

Question 56

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.

Question 57

Interpersonal dynamics are easy to observe and simple for the marketer to assess.

Question 58

When Hunter Ceiling Fans buys electrical wire for use in producing its ceiling fans, Hunter is part of what type of market for electrical wire?

A)Resale
B)Wholesale
C)Customer
D)Consumer
E)Business

Question 59

Sometimes initial demand for a business product will drop following a price cut if buyers believe that further price reductions are forthcoming.

Question 60

Reciprocal arrangements are legal as long as they do not threaten competition.

Question 61

When the city of Dallas buys iPads for its restaurant inspectors to use during their visits, the purchase from Apple would be considered

A)a regulatory sale.
B)a reseller purchase.
C)a government purchase.
D)a producer purchase.
E)an institutional sale.

Question 62

Which of the following would be considered an institutional buyer?

A)Walmart
B)The Environmental Protection Agency
C)Apple Inc.
D)The United Way
E)City of Greenville

Question 63

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of

A)their markup.
B)sales per square foot of selling area.
C)how many of the product they can fit in a certain amount of space.
D)profit per dollar of selling price.
E)the reliability of the supplier.

Question 64

Martin's Produce Stand buys produce from area farmers, marks the merchandise up to a price that includes some profit, and then sells the fruit and vegetables to the people in and around Townsville. Martin's would be classified as part of a ____ market.

A)consumer
B)producer
C)government
D)reseller
E)wholesaler

Question 65

Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to produce other products or by using them in their operations are classified as ____ markets.

A)consumer
B)institutional
C)producer
D)government
E)reseller

Question 66

Motorola buys silicone, which is used in its chip-making process. Motorola produces microchips for use within a wide variety of products for other firms, such as Ford, GM, and Samsung. Motorola is a buyer in a(n) ____ market.

A)producer
B)government
C)reseller
D)construction
E)institutional

Question 67

Quick Tools, Inc., purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Quick Tools, Inc. The company would be part of what type of business market?

A)Reseller
B)Producer
C)Consumer
D)Government
E)Supply

Question 68

Which of the following is not an example of a producer market member?

A)Buyers of raw materials
B)Buyers of semifinished items used to make other products
C)Buyers of finished items used to make other products
D)Buyers of services used for their operations of their organizations
E)Buyers of finished products that intend to resell them for a profit

Question 69

Retailers like Target and Kmart are considered to be members of which business market?

A)Reseller
B)Customer
C)Producer
D)Institutional
E)Services

Question 70

Which of the following statements about reseller markets is false?

A)Resellers are concerned with the level of demand for the product.
B)Resellers are not concerned with how much space the product takes up as long as it has a high price.
C)Resellers want producers to be able to supply adequate quantities of the product.
D)Resellers are concerned with the availability of technical and promotional assistance from the producer.
E)Resellers are concerned with the markup percentage they can get on the product.

Question 71

Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ____ markets.

A)consumer
B)institutional
C)producer
D)government
E)reseller

Question 72

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him

A)that he's absolutely right, the government doesn't deal with small businesses.
B)although the government will deal with small businesses, he will never make a profit off a government contract.
C)that any government, federal, state, or local would laugh at the size of his business.
D)the government rarely considers new suppliers when making purchasing decisions.
E)the government buys products from all sizes of business, but there is some red tape.

Question 73

About what percentage of the annual U.S. gross domestic product is government spending?

A)2 percent
B)10 percent
C)20 percent
D)40 percent
E)50 percent

Question 74

When charitable organizations such as the American Cancer Society, Second Harvest Food Bank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers.

A)corporate
B)government
C)institutional
D)producer
E)nonprofit

Question 75

Institutional markets are

A)intermediaries who resell goods to make a profit.
B)federal and state government units.
C)state or local government units.
D)consumers who buy products for their own use.
E)organizations that seek nonbusiness goals.

Question 76

Which type of business market tends to have the most complex buying procedures?

A)Reseller
B)Institutional
C)Retailer
D)Government
E)Producer

Question 77

Business markets are typically divided into four categories. These categories are

A)retailers, wholesalers, services, and nonprofit firms.
B)producer, manufacturer, reseller, and government.
C)producer, reseller, government, and institutional.
D)manufacturer, wholesaler, retailer, and services.
E)reseller, retailer, government, and institutional.

Question 78

What are the two ways governments make purchases?

A)Cash or credit
B)Contacting previous suppliers and bids
C)Bids and negotiated contracts
D)Lottery system and contract negotiations
E)Request for new purchases and recurring orders

Question 79

____ buy products from manufacturers and then resell the products to other firms in the distribution system.

A)Retailers
B)Producers
C)Distributors
D)Warehouses
E)Wholesalers

Question 80

The state of Colorado is preparing to buy a large quantity of frozen orange juice for use in a large school district. Fresh Squeeze, Inc. is in the citrus juice business but has never sold to the government market. To have a chance at getting this order, Fresh Squeeze's first step must be to

A)make a presentation appointment with the state.
B)quote prices to the purchasing department.
C)advertise in the capital city.
D)negotiate with the state.
E)secure a slot on the list of qualified bidders.