Question 1

High mutual interdependence encourages the development and maintenance of long-term relationships and alliances between buyers and sellers.

Accepted Answer

High mutual interdependence means that both parties (buyers and sellers) rely heavily on each other. This encourages them to work together to ensure a successful business relationship, which can lead to the development and maintenance of long-term relationships and alliances.

Question 2

The demand for industrial goods and services is derived from the demand for consumer goods and services.

Accepted Answer

The demand for industrial goods and services is usually linked to the demand for consumer goods and services, as businesses need these resources to produce or provide goods and services for consumers. For example, if there is an increase in demand for cars, this will lead to an increase in demand for steel, rubber, and various other raw materials needed to produce cars. Similarly, the demand for construction materials such as cement, lumber, and steel is derived from the demand for new homes, commercial buildings and infrastructure projects.

Question 3

A crucial factor that distinguishes organizational markets from consumer markets is the method in which products are purchased.

Accepted Answer

Organizational markets involve business-to-business transactions where products are typically purchased through a more complex decision-making process with multiple individuals involved in the decision. On the other hand, consumer markets involve selling directly to individual consumers who make purchasing decisions based on personal needs and preferences. Therefore, the method of purchasing is distinct between these two markets.

Question 4

Short-term purchasing contracts enables an organization to concentrate on its purchases with one or a few suppliers,reduce transaction costs,and gain scale economies through quantity discounts and the like.

Accepted Answer

Short-term purchasing contracts typically do not allow an organization to concentrate its purchases with one or a few suppliers to gain scale economies through quantity discounts, as they are often used for immediate needs and do not foster long-term relationships or bulk purchasing benefits.

Question 5

Organizational buyers evaluate alternative suppliers and their offerings by using a set of choice criteria reflecting the desired benefits.

Accepted Answer

Organizational buyers do evaluate alternative suppliers and their offerings by using a set of choice criteria reflecting the desired benefits.

Question 6

Gatekeepers provide information for evaluating alternative products and suppliers.

Accepted Answer

The answer of Gatekeepers provide information for evaluating alternative products...

Question 7

A straight rebuy involves purchasing a common product or service the organization has bought many times before.

Accepted Answer

A straight rebuy refers to the routine and straightforward purchase of a product or service that an organization has bought before without any significant changes or modifications in its specifications or requirements. It involves repeating the ordering process from the same suppliers or vendors with whom the company has had satisfactory relations previously.

Question 8

Value analysis is the first step in the organizational decision-making process for new-task purchases.

Accepted Answer

Value analysis typically occurs later in the decision-making process, often after a need has been identified and potential solutions are being evaluated for cost-effectiveness and value, rather than being the first step.

Question 9

The way specific organizational purchase decisions are made vary with the firm's past experience and other aspects of the buying situation.

Accepted Answer

Yes, the way specific organizational purchase decisions are made depend on various factors such as the firm's past experience, procurement policies, budget, supplier relations, and the nature of the product or service being purchased. This implies that there is no one-size-fits-all approach to organizational buying, and managers need to adapt their decision-making process to suit the specific requirements of each transaction.

Question 10

Value analysis maximizes procurement costs.

Accepted Answer

Value analysis is a systematic process of evaluating the value of goods or services to identify opportunities to reduce costs without compromising quality or performance. It helps in identifying unnecessary expenses and finding alternatives that can save money. Therefore, the main goal of value analysis is to reduce procurement costs and maximize the value obtained from resources.

Question 11

The relative influence of the purchasing manager is lesser when reordering items the firm has purchased in the past than when buying a new product.

Accepted Answer

The answer of The relative influence of the purchasing manager...

Question 12

Industrial buyers respond only to economic arguments.

Accepted Answer

Industrial buyers may also respond to non-economic factors such as product quality, reliability, customer service, and brand reputation.

Question 13

In the organizational purchasing process,the people who must use or work with the product or service purchased are referred to as the buyers.

Accepted Answer

The people who must use or work with the product or service purchased are referred to as users. Buyers are typically individuals within the organization who are responsible for making purchasing decisions.

Question 14

Reciprocity occurs when an organization favors a supplier that is also a customer or potential customer for the organization's own products or services.

Accepted Answer

Reciprocity refers to a mutual exchange of benefits or privileges between individuals, organizations or countries. In business, this can occur when a company favors a supplier who is also a customer or potential customer of the company's products or services. This practice has both ethical and legal implications and is often frowned upon as it can lead to unfair competition and limit options for other suppliers.

Question 15

Compared to consumer markets,organizational markets are characterized by closer buyer-seller relationships.

Accepted Answer

Organizational markets involve B2B transactions and typically involve closer relationships between buyers and sellers as they work together to meet the unique needs of the business. Consumer markets, on the other hand, involve B2C transactions and generally have more transactional relationships between buyers and sellers.

Question 16

Technology has changed organizational purchasing over the past decade by facilitating logistical alliances involving the sharing of sales and inventory data and computerized reordering.

Accepted Answer

Technology has indeed facilitated logistical alliances in organizational purchasing by allowing for the sharing of sales and inventory data and the automation of reordering processes. This has led to greater efficiency and cost savings for businesses.

Question 17

Organizational buyers,when compared with buyers of consumer goods,are greater in number.

Accepted Answer

Organizational buyers are a smaller group compared to buyers of consumer goods, as they consist of businesses, government agencies, and institutions, while buyers of consumer goods include individuals and households.

Question 18

At the most basic level,marketers need to answer the same set of questions about organizational markets as about consumer markets in order to develop a solid foundation for their marketing plans.

Accepted Answer

Marketers need to answer the same fundamental questions about organizational markets as about consumer markets. This includes questions about target market, product or service offerings, pricing, promotion, and distribution. By understanding these factors, marketers can develop effective strategies for reaching and engaging their target audience in both consumer and organizational markets.

Question 19

A modified rebuy occurs when buying centers are forced to look for alternative products because the organization's needs have changed.

Accepted Answer

The answer of A modified rebuy occurs when buying centers...

Question 20

Requirements planning governs the purchase of raw materials and fabricating components as well as supplies and major installations.

Accepted Answer

Requirements planning involves forecasting and planning for the materials, components, and supplies needed for production or service delivery. This includes purchasing raw materials and fabricating components. It also includes major installations and equipment needed for service delivery or manufacturing. Therefore, the statement is true.

Quiz 5: Understanding Organizational Markets and Buying Behavior