Deck 7: Business Markets and Buying Behavior

Question 1

The distribution channels in consumer markets are relatively shorter compared to those in business markets.

Answer 1

False

Question 2

B2B relationships tend to last longer than those in the consumer market.

Answer 2

True

Question 3

The business market features a limited number of buyers compared to consumer markets.

Answer 3

True

Question 4

End-use application segmentation focuses on the ultimate way in which a business purchaser will use a product.

Question 5

The commercial market consists of wholesalers and retailers who purchase goods primarily to sell it to the final consumers.

Question 6

Relationships in consumer markets are often more complex than those in business-to-business markets.

Question 7

Governmental organizations represent the largest segment of the B2B marketplace.

Question 8

Technological change is an environmental factor influencing business buying decisions.

Question 9

Both consumer and business purchase decisions begin when the recognition of problems, needs, or opportunities triggers the buying process.

Question 10

When Cannondale purchases aluminum for use in its bicycle frames, the company is participating in the commercial market.

Question 11

As compared to business-to-business marketing, consumer marketing puts greater emphasis on advertising.

Question 12

Personal selling plays a much bigger role in consumer markets than in business markets.

Question 13

Competitive bidding is common when the product is nonstandard, complex, or custom-made.

Question 14

The primary motivation of government purchasing is to provide some form of public benefit such as national defense or pollution control.

Question 15

The term "reseller" is synonymous with "retailer," as this is the only type of participant in this market category.

Question 16

In the automobile industry, suppliers of components and assemblies frequently build plants close to their customers.

Question 17

A firm deciding to purchase more energy-efficient machines in response to rising fuel prices illustrates the first step in the business buying process.

Question 18

Geographic location is one of the criteria considered during demographic segmentation of the business market.

Question 19

Not-for-profit organizations are considered to be a part of the business market.

Question 20

Marketers must be well versed in the technical features of their products, to effectively address the concerns of all the people involved in the buying decision.

Question 21

When firms in business markets are grouped based on their sales revenues, they are said to be segmented by:

A) customer type.
B) purchase category.
C) end-use application.
D) demographic characteristics.

Question 22

Abel Building Solutions, a steel manufacturing company that supplies steel to various construction companies, segments its customers based on the number of employees in the company and the sales revenue generated by it. This strategy is used by Abel to develop specific marketing plans for their customers. Abel is segmenting its customers on the basis of:

A) demographic characteristics.
B) service provided.
C) buyer specifications.
D) end-use application.

Question 23

Business market customers may require different levels of product customization, which can have an impact on how an organization segments these customers.

Question 24

Which of the following is the largest segment of the business market?

A) Trade industries, which include retailers, wholesalers, and resellers
B) The commercial market, which includes anyone who acquires products to support production of other goods and services
C) Government organizations, including the military and state and federal governments
D) Institutions such as hospitals and churches

Question 25

Which of the following components of the B2B market includes all individuals and firms that acquire goods and services to support the production of other goods and services?

A) Stock exchanges
B) Commercial markets
C) Governmental organizations
D) Financial institutions

Question 26

Which of the following is one of the four major categories that define the business market?

A) Stock exchanges
B) Governmental organizations
C) Labor unions
D) Lobbying groups

Question 27

A company's buying center encompasses everyone who is involved in any aspect of its buying activity.

Question 28

Institutions are a major component of the business market that:

A) tend to have greater financial resources than industrial customers.
B) consist of wholesalers and retailers, who sell the products they buy to final consumers.
C) include a wide variety of organizations that often have diverse buying practices.
D) acquire products mainly to indirectly support the production of other goods and services.

Question 29

Marketers need to be thoroughly familiar with the organizational buying process, which always follows a sequence of seven steps.

Question 30

The government category of the B2B market primarily buys products:

A) to sell it to the final consumers.
B) to provide some form of public benefit.
C) to export them to other countries.
D) to improve its resale value.

Question 31

The buying center is an informal group whose size and composition vary among purchase situations and firms.

Question 32

Located in countless cities across the United States, SalonCentric is part of the reseller business market, providing wholesale hair and beauty products exclusively for licensed cosmeticians.

Question 33

Which of the following statements is true regarding the nature of the business market?

A) Distribution channels for business products are significantly longer than those for consumer products.
B) As compared to business markets, customer relationships in consumer markets tend to last for longer duration.
C) Personal selling plays a bigger role in business markets than in consumer markets.
D) As compared to consumer markets, purchase decisions in business markets are relatively simple because of relatively less number of decision makers.

Question 34

Procurement takes place within a formalized framework consisting of budgets, cost projections, and profit considerations.

Question 35

Business markets differ from consumer markets in that, in business markets:

A) the products sold are mostly standardized and fit broader market segments compared to consumer products.
B) the distribution channels are longer as the product passes through a number of intermediate links.
C) the buying process is less complex and involves fewer decision makers.
D) advertising plays a much smaller role when compared to the consumer market.

Question 36

The buyer has the formal authority to select a supplier and to implement the procedures for securing the good or service.

Question 37

Gatekeepers in the buying center affect the buying decision by determining which individuals within the organization will be part of the buying process.

Question 38

Praga is an automobile manufacturing company that makes cars. Praga buys steel, aluminum, paints, car engines, and other necessary components from various suppliers around the world and assembles them together to make a final product. Praga belongs to the _____ component of the business-to-business market.

A) commercial market
B) trade industries
C) institutions
D) governmental organizations

Question 39

A buying center is a basic component of a firm's formal organizational structure.

Question 40

Buying practices can differ among institutions of the same type.

Question 41

The role of an influencer in a buying center is to:

A) inform potential suppliers about the required specifications of the product.
B) select the supplier and implement the procedures for securing the good.
C) supply information to guide the evaluation of alternatives.
D) make the actual buying decision.

Question 42

The organizational buying process differs from the consumer purchase process as the organizational buying process:

A) involves few decision makers in making purchase decisions.
B) is informal and less professional.
C) requires a longer time frame because of complexity of the decisions.
D) generally involves purchase of highly standardized products.

Question 43

When the B2B market is segmented on the basis of product specifications issued by buyers, it is known as _____ segmentation.

A) customer-based
B) end-use application
C) demographic
D) purchase category

Question 44

A manufacturer who produces glass for microwave oven doors, shower enclosures, and patio tabletops is likely to segment his business customers on the basis of:

A) geographic locations.
B) end-use application.
C) demographic characteristics.
D) psychographic characteristics.

Question 45

Which of the following is the final step in the business buying process?

A) Selecting an order routine
B) Evaluating proposals and selecting suppliers
C) Obtaining feedback and evaluating performance
D) Acquiring and analyzing proposals

Question 46

Janelle works in the purchasing department of an apparel manufacturing company and has the formal authority to select a supplier. Janelle is a(n):

A) buyer.
B) influencer.
C) gatekeeper.
D) decider.

Question 47

Delhaise, a leading service provider in the hospitality industry, segments its business clients based on the services required by them, in order to meet their specific requirements. They modify their services based on the needs of the clients. Which of the following segmentation approach is being employed by Delhaise?

A) End-use application segmentation
B) Customer-based segmentation
C) Geographic segmentation
D) Demographic segmentation

Question 48

Which of the following stages of the organizational buying process involves comparing vendors' proposals?

A) Searching for potential sources
B) Acquiring and analyzing proposals
C) Recognizing and determining the characteristics of a need
D) Evaluating proposals and selecting suppliers

Question 49

A negotiation process wherein each marketer develops its offer, including a price that will satisfy the criteria determined by the customer's problem, need, or opportunity, is known as:

A) competitive bidding.
B) decentralized buying.
C) collective underwriting.
D) systems integration.

Question 50

The segmentation of the B2B marketplace based on how business purchasers will use the product is called:

A) segmentation by purchasing category.
B) segmentation by customer type.
C) segmentation by end-use application.
D) segmentation by demographic characteristics.

Question 51

Which of the following buying center participants chooses a good or service, although another person may have the formal authority to complete the sale?

A) Decider
B) Gatekeeper
C) Boundary spanner
D) Influencer

Question 52

The first stage in the seven-stage model of an organizational buying process involves:

A) determining the characteristics and quantity of a needed good or service.
B) searching for and qualifying potential sources.
C) anticipating a problem, need, or opportunity and a general solution.
D) establishing specifications for a needed good or service.

Question 53

Zardo, Inc. divides its customers into the following categories: manufacturers, retailers, government agencies, and not-for-profit institutions. Which of the following type of segmentations is being used by Zardo?

A) Segmentation by end-use application
B) Segmentation by customer type
C) Segmentation by demographic characteristics
D) Segmentation by purchase categories

Question 54

Adam, a purchasing agent for an automobile manufacturer, is making a list of payroll services suppliers available in the market. In which stage of the organizational buying process is Adam?

A) Recognizing a problem or opportunity
B) Determining the characteristics and quantity of the needed service
C) Describing the characteristics of the needed service
D) Searching for and qualifying potential sources

Question 55

A firm has decided to purchase hybrid delivery vehicles in response to rising gasoline prices. Which step in the business buying process does this illustrate?

A) Determining the characteristics of the needed product
B) Recognizing a problem or opportunity
C) Searching for qualified sources
D) Evaluating proposals and selecting suppliers

Question 56

Once a search for suppliers is completed and the company makes the suppliers aware of its needs, the company will begin:

A) obtaining feedback from its customers.
B) notifying the distribution channels of the new product introduction.
C) acquiring and analyzing proposals.
D) selecting an order routine.

Question 57

The function performed by the gatekeeper in the company buying center is to:

A) inform potential suppliers about the required specifications of the product.
B) select a supplier and implement the procedures for securing the goods and services.
C) choose which goods and services will actually be bought.
D) control the information that all buying center members will review.

Question 58

Which of the following is true of a buying center in an organization?

A) The buying center is an integral part of a firm's formal organizational structure.
B) The composition of the buying center remains the same for all purchase situations.
C) The buying center includes everyone involved in any aspect of the buying process.
D) It is a group of people in an organization who are responsible for developing new product concepts.

Question 59

Texas Instruments produces electronic chips used in a variety of devices, from cell phones to hand calculators. The specifications of the chips change depending on the final product in which they are utilized. The company is most likely to segment its customers based on:

A) end-use application.
B) purchase category.
C) psychographic characteristics.
D) demographic characteristics.

Question 60

Which stage of the organizational buying process involves establishing specifications for a needed product?

A) Recognizing a need
B) Describing characteristics of a needed product
C) Qualifying potential vendors
D) Selecting an order routine

Question 61

Brooke is a pastry chef in a fine dining restaurant and enjoys creating one-of-a-kind desserts for the customers. She recently graduated from pastry school, and this is her first full-time job in a restaurant. Brooke reports to the head chef, Brandon who oversees the kitchen and is responsible for creating the menu, managing and hiring staff, and placing orders for supplies. Brooke mentioned to Brandon that she would like to have gluten-free flour on stock so she can create desserts that would meet the dietary needs of customers who have gluten allergies. Brandon thought that was a great idea and appreciated Brooke's recommendation. What role in the buying center did Brooke play regarding her discussion with Brandon about flour?

A) Influencer
B) Decider
C) Gatekeeper
D) Buyer

Question 62

You are the manager of a clothing manufacturing firm with operations in different countries. Your Vietnamese 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 United States called School Uniforms, Inc. School Uniforms, Inc. has major contracts with (and sells its uniforms to) school districts such as the San Diego Unified School District. In this scenario, the San Diego 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

Question 63

Kobe is an account executive with Stryker, a medical device company. He and his team have prepared a document to submit to a regional hospital to become their primary vendor for medical devices within the hospital system. The document will be reviewed by the hospital purchasing department and Stryker will be compared to other suppliers vying for the opportunity to assist with the hospital with their medical device needs. What stage in the buying process does this reflect?

A) Acquire and analyze proposals
B) Recognize problem and general solution
C) Describe characteristics and quantity
D) Select order routine

Question 64

​Paul is the quality-control specialist for a furniture manufacturer. His job is to develop specifications for every potential purchase of wood and fabric. Within the buying center, Paul plays the role of a(n):

A) ​Gatekeeper
B) ​Decider
C) ​Influencer
D) ​Specialist
E) ​Spec supervisor

Question 65

You work for a uniform manufacturer that sells to police departments, supermarkets, and airlines. For segmentation purposes, its customers are grouped into three categories: government agencies (police), retailers (supermarkets), and service providers (airlines). This is segmentation by _______.

A) end-use application
B) purchase categories
C) customer type
D) North American Industry Classification
E) geographic characteristics

Question 66

The identity of the _____ is the most difficult role for salespeople to pinpoint.

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

Question 67

​A new employee in your company is confused. She was hired to help with purchasing, but she's been told that she will be busiest after purchases have been concluded -- in other words, after vendors have been chosen and their goods have been supplied. Will this employee be involved in the organizational buying process?

A) ​Yes, by obtaining feedback and evaluating performance.
B) ​Yes, by evaluating proposals.
C) ​Yes, by qualifying vendors.
D) ​No, because the process will be over when she gets involved.
E) ​No, because she will not have a say in vendor selection.

Question 68

Susan works for Fashion Supply, a women's clothing wholesaler. Her husband is employed by Target, the popular retailer. Their older son has a job with a gourmet butcher, which supplies top-quality cuts of meat to fancy restaurants. Their younger son was just hired by Lumber Liquidators, the discount flooring seller. Despite the diversity of their employers, all of Sue's family members work in the ____ segment of the business market.

A) commercial
B) institutions
C) consumer
D) reseller

Question 69

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; in one of the stages, the business will consider a proposal usually given to them in writing by a supplier. This stage may include competitive bidding depending on the company. This proposal consideration takes place in which of the following stages of the business buying decision process?

A) First stage
B) Seventh stage
C) Third stage
D) Fourth stage

Question 70

An organization's purchasing decisions can be influenced by ______________ such as a tornado destroying a factory that produces supplies necessary for the organization's operations.

A) environmental factors
B) interpersonal influences
C) organizational factors
D) merchandisers and category advisors
E) impulse factors

Question 71

Carlita works for Dell Computers in their outbound call center as an inside sales representative. She primarily focuses on small businesses - those with fewer than 10 employees. Based on Carlita's customers, what type of segmentation is Dell using?

A) Demographic
B) Customer-based
C) End-use application
D) Purchase category

Question 72

Many companies purchase from several vendors, and require bids from each before choosing one among them. A skilled marketer understands the client's ____________ like this, and considers these processes when formulating a marketing proposal.

A) interpersonal influences
B) systems factors
C) organizational factors
D) environmental factors

Question 73

Which of the following is a distinction between business (B2B) and consumer (B2C) markets? ​

A) Business markets are more complex.
B) Consumer markets involve more decision makers.
C) Customer service is more important for B2C purchasers.
D) Advertising plays a larger role in business markets.

Question 74

Connor is a sales representative with Sherwin Williams. He typically calls on facility managers in hospitals, office buildings, apartment complexes, and schools to discuss their paint and specialty coating needs. He's talking with his aunt at Thanksgiving and trying to explain the difference between his role as a sales representative and the counter or inside sales representative that his aunt might encounter within the Sherwin Williams retail store. Which of the following characteristics might be true for Connor in his role as a B2B sales representative with Sherwin Williams?

A) Connor's relationships with customers would last longer.
B) Connor's customers can quickly make decisions.
C) The purchasing decision for Connor's customers is very simple.
D) Connor typically works with only one person or decision maker within the buying organization.

Question 75

Kendra is the office manager for a large legal firm and performs a variety of functions for the office. She manages purchases of copying machines and printers and is responsible for placing orders for supplies such as toner cartridges and paper. In general, Kendra is solely responsible for making decisions about the brand of paper and toner used in printers and copying machines. What is her role as part of the buying center? ​

A) Buyer
B) Gatekeeper
C) User
D) Influencer

Question 76

Amy works for a small business firm that specializes in the home furnishing design business. She is the head of the textiles department and coordinates with 25 textile manufacturers around the world to ensure that her firm has the best supplies on the market. Each quarter, Amy meets with each of the manufacturers and then brings back her top picks to share with the rest of her team at her company. The company's owner values Amy's opinions, especially since the company's profits have continually increased for 10 years. This year, however, the company's overhead costs have increased, and Amy and her team need to figure out why. Which of the following can be said is a drawback of having Amy to serve in the role described above?

A) Amy controls all of the information about which types of textiles the firm should purchase.
B) Amy lacks formal authority when it comes to making decisions about the company's budget.
C) Amy is inexperienced and makes poor choices that impact the firm's bottom line negatively.
D) Amy's decision to work with international buying centers has led to an increase in the firm's overhead costs.
E) Amy has to surrender her power to more influential team members when it comes to making purchase decisions.

Question 77

Tiffany is the purchasing manager for electronic components that are kept in inventory for a large electrical contracting company. Tiffany sources most of these items from Fastenal and is thrilled with their ability to help her maintain the appropriate level of inventory for the various items. Fastenal has a computer system to assist Tiffany with her forecasting and can identify items that are "slow moving" or "fast moving" meaning that there are some items that are used more frequently than others. Fastenal has also helped Tiffany to identify the inventory levels when reorders should be placed so that she's never out-of-stock in any items. Which stage of the purchasing process is Fastenal providing assistance?

A) Select an order routine
B) Obtain feedback and evaluate performance
C) Evaluate proposals and select suppliers
D) Describe characteristics and the quantity of a needed good or service

Question 78

Institutions constitute another important market. Institutional buyers include a wide variety of organizations, such as schools, hospitals, libraries, foundations, clinics, churches, and not-for-profit agencies. A small software company develops computer programs for different business institutions. Which of the following challenges can this company anticipate?​

A) ​Institutions do not have buying centers.
B) ​Different institutions have varying buying practices.
C) ​Some institutions employ a purchasing manager to make decisions.
D) ​Social media and marketing make institutional buying more complex.
E) ​Institutional businesses sometimes join cooperative associations to pool their purchases.

Question 79

You are a sales representative for a major computer products company in Nashville, Tennessee. Lowe's Home Improvement is one of your major clients, and you like to entertain the company's employees regularly to maintain good business relationships. Because you do not have an unlimited entertainment budget, you must be selective in regard to the company employees whom you entertain. You want to make sure you are getting the greatest benefit for your entertainment dollars. You have found that the most influential people in the company are those who control the flow of information to everyone else in the organization. These are the people you want to spend your time and money entertaining. Based on this finding, you should:

A) spend your money and time entertaining the users in the company.
B) spend your money and time entertaining the influencers in the company.
C) spend your money and time entertaining the buyers in the company.
D) spend your money and time entertaining the gatekeepers in the company.
E) spend your money and time entertaining the deciders in the company.

Question 80

Chris works for Aon, a large commercial brokerage company that serves as the intermediary between customers who need risk or insurance coverage and firms that provide the coverage - insurance carriers. Since Aon is one of the largest brokerage firms in the world, they utilize ______ segmentation where they divide the business buyers into groups according to their needs. For example, manufacturing firms would have specific requirements for insurance that might be distinct from a public school or university. A municipality such as the city of Chicago would also have a different set of needs that would result in a different mix of insurance coverage.

A) customer-based
B) demographic
C) end-use application
D) purchasing function