Deck 5: Business Markets and Buying Behavior

Question 1

A buying center includes people who act in the roles of decider, motivator, influencer, communicator, user, and gatekeeper.

Answer 1

False

Question 2

Sellers of business products place less emphasis on personal selling than firms that market consumer products.

Answer 2

False

Question 3

The purchase of a replacement refrigeration unit for storing fresh cut flowers at a florist's shop is probably an example of a modified rebuy purchase.

Answer 3

True

Question 4

The demand for plastic grommets used to make belts is inelastic because if the price of the grommets were to suddenly increase, it would have no effect on the price of the belts.

Question 5

The North American Industry Classification System (NAICS) is superior to the Standard Industrial Classification Code because it not only has a method of indicating a multiproduct company, but the system also identifies geographic locations.

Question 6

Since the demand for rubber is in part based on the demand for new automobiles, the demand for rubber is derived.

Question 7

Fire extinguishers, file cabinets, and forklifts are all examples of products sold on the horizontal business market.

Question 8

Leasing allows the lessee to retain its capital for other purposes.

Question 9

Resellers create time, place, possession, and form utility.

Question 10

In a typical consumer market, consumers do not buy directly from the producer.

Question 11

The drop cloth the painter brought to cover the statues outside the museum while he painted the museum's columns is an example of a consumer product.

Question 12

A supply chain approach to marketing views the activity as a series of links between buyers and sellers.

Question 13

From an economic point of view, reciprocity is highly practical.

Question 14

Straight-rebuy purchases are typically low-involvement situations for the buyer.

Question 15

For a manufacturer of mannequins, a good activity indicator of buying power would be the total number of retailers in its market area that use mannequins in store displays.

Question 16

Electronic commerce is particularly useful for straight rebuys.

Question 17

The term disintermediation refers to the ability of resellers to create form, time, place, possession, and knowledge utility.

Question 18

Many companies make no effort to sell to the government because they are intimidated by the red tape.

Question 19

The purchase of a new box of dry erase markers for a high school classroom teacher is essentially a straight rebuy.

Question 20

Baylor University, Balk's department store, General Electric, and Dell are all part of the business market.

Question 21

The average business order is considerably smaller than its counterpart in the consumer market.

Question 22

Value added refers to the profit a manufacturer earns on a product once it has subtracted the costs of the inputs it used to make the product.

Question 23

When a school custodian buys a case of paper towels to restock the school's supply, it is an example of business marketing.

Question 24

The acceleration principle describes the techniques used by some companies to shorten the negotiation periods for business products.

Question 25

One way for a business marketer to identify potential target markets is to consult the Newly-Automated Industrial Coding System (NAICS).

Question 26

Eighty percent of the metals in an airplane are aluminum. This would indicate that airplanes if the price of aluminum increased by 200 percent, airplane manufacturers would either look for another lightweight metal with which to build or increase their prices to the airlines. The demand for aluminum with which to make airplanes is:

A) synergistic.
B) inflexible.
C) elastic.
D) cumulative.
E) accelerated.

Question 27

Which of the following products is most likely to feel the impact of the acceleration principle?

A) lettuce
B) yeast
C) milk
D) plastic
E) chicken

Question 28

If the price of cadmium were to increase by 25 percent, it would have little effect on demand for personal computers because the cost of the cadmium is a very small portion of the total cost of the personal computer. This is an example of _____ demand.

A) inelastic
B) negotiated
C) fluctuating
D) reciprocal
E) elastic

Question 29

Which of the following describes activities that take place in the business market?

A) Harvard University buys new lawn mowers for its grounds maintenance crew.
B) The manager of a theater buys a case of sunglasses to give to the first people who buy tickets to see the play Hedda Gabler.
C) A specialist in stained glass repair buys solder to fix the window in the Zion Baptist Church.
D) A kindergarten teacher buys software to introduce her students to the San Diego Zoo.
E) All of the above describe activities that take place in the business. F. market.

Question 30

The business market:

A) is significantly smaller than the consumer market in terms of total sales volume.
B) is significantly smaller than the consumer market in terms of number of firms involved.
C) does not exist as a separate entity from the consumer market.
D) caters to the ultimate consumer.
E) is accurately described by none of the above.

Question 31

Which of the following statements about electronic commerce is True?

A) Electronic commerce will require all businesses change the way they conduct marketing activities.
B) Electronic commerce is inappropriate for straight rebuys.
C) Reverse auctions are not a type of electronic commerce.
D) FreeMarkets is an example of a company that engages in electronic commerce.
E) All of the above statements about electronic commerce are True.

Question 32

Because demand in the business market for fabricating parts and materials is _____, a small increase in the price of wood screws will have relatively little effect on the price of reclining furniture that use the wood screws.

A) inelastic
B) contrived
C) negotiated
D) reciprocal
E) elastic

Question 33

The objective of _____ is to provide mechanisms for customers to interact with the firm.

A) analytical CRM
B) customerization
C) functionalization
D) collaborative CRM
E) operational CRM

Question 34

_____ is the dollar value of a firm's output minus the value of the inputs it purchased from other firms.

A) Marginal revenue
B) Value added
C) Net value
D) Residual value
E) Net profit

Question 35

The North American Industry Classification System:

A) enables a company to identify relatively small segments of its business market.
B) is unaffected by the government's nondisclosure rules.
C) places all U.S. businesses into five categories.
D) codes multiproduct companies in a variety of ways within the classification system.
E) was developed by the Standard Industrial Association.

Question 36

Which of the following organizations is part of the "nonbusiness" business market?

A) the Democratic party
B) American Cancer Society
C) St Luke's Catholic Church
D) Polk County Middle School
E) all of the above

Question 37

Just as in the consumer market, the first step in the buying-decision process for a business buyer is the _____ stage.

A) purchase decision
B) need recognition
C) alternative evaluation
D) alternative identification
E) prepurchase patronage

Question 38

When Dr. Zane Greene's staff complained about how slow his autoclave is when they use it to sterilize dental equipment, he made a couple of phone calls and then ordered the new Vela autoclave because it is the fastest and safest on the market. In terms of the buying-decision process, Dr. Greene assumed the roles of:

A) gatekeeper, decider, and buyer.
B) user, influencer, decider, and buyer.
C) influencer and gatekeeper.
D) decider, and buyer.
E) influencer, decider, and gatekeeper.

Question 39

By definition, bourbon cannot be aged in used oak barrels. Therefore, purchases of another load of oak barrels needed by a distillery with a long history of producing fine bourbon would be an example of a:

A) straight rebuy.
B) specialty.
C) reciprocity.
D) modified rebuy.
E) new-task buying.

Question 40

The key ingredient in artificial vanilla is vanillin, which is a byproduct for wood pulp manufacturing. Recent problems with the production of pure vanilla has led to increased sales of artificial sales, which is term has led to increased sales of the wood pulp by-product. This would be an example of:

A) reciprocity
B) derived demand
C) fluctuating demand
D) elastic demand
E) multiple buying influence

Question 41

_____ is the term used to describe how certain traditional intermediaries are being replaced in Internet-based selling.

A) ISP distribution
B) Disintermediation
C) Network-based channel control
D) Internet marketing integration system (IMIS)
E) Internet marketing distribution (IMD)

Question 42

Which of the following products will probably reach a vertical business market rather than a horizontal business market?

A) acid-resistant protective rubber boots
B) laser color printers
C) VISA stain resistant fabric
D) wooden horses used in amusement park carousels
E) portable display shelves

Question 43

The two dimensions of the buyer-seller relationship are loyalty and:

A) reciprocity.
B) the acceleration principle.
C) the supply chain.
D) synergy.
E) personalization.

Question 44

How does the business market differ from the consumer market?

A) Participants in the consumer market are much better informed than those in the business market.
B) Demand in the consumer market is derived.
C) Demand in the consumer market is widely fluctuating.
D) Demand in the business market tends to be inelastic.
E) None of the above describe ways in which the business market differs from the consumer market.

Question 45

When Dr. Zane Greene's staff complained about how slow his autoclave is when they use it to sterilize dental equipment, he made a couple of phone calls and then ordered the new Vela autoclave because it is the fastest and safest on the market. In terms of the buying-decision process, Dr. Greene's staff assumed the roles of:

A) user and influencer.
B) influencer, gatekeeper, user, and decider.
C) gatekeeper, buyer, and decider.
D) influences, user, decider, and buyer.
E) gatekeeper, user, and decider.

Question 46

State Farm Insurance sells security. Disneyland provides entertainment. Brake-O repairs brakes and sells safety. All three of these organizations are part of the _____ market.

A) services
B) reseller
C) retail
D) SIC
E) nonbusiness

Question 47

Oak barrels are used for distilling bourbon, by home decorators, by garden landscapers, and by environmentalists who reuse the oak in construction. Oak barrels have a _____ market.

A) vertical
B) direct
C) indirect
D) horizontal
E) regulated

Question 48

_____ is the process of moving a seller toward long-term, cost-effective, mutually beneficial trust with selected customers.

A) Customerization
B) Mass optimization
C) Mass aggregation
D) Undifferentiated distribution management
E) Customer relationship management

Question 49

A mid-sized manufacturing company wants to buy computer equipment to network its operation with that of its distributors. After looking at the products and prices of several technology companies, the CEO of the firm settled on Asset Recovery Center, one of the largest sellers of used computer equipment, because it offered the same equipment and service at significantly lower prices. The CEO has just completed the _____ stage of the buying decision process.

A) purchase decision
B) need recognition
C) alternative evaluation
D) alternative identification
E) prepurchase patronage

Question 50

The BrokerForum.com is a Web site, which allows brokers and distributors of electronic components parts to buy and sell parts. The BrokerForum.com is an example of:

A) electronic commerce.
B) an ISP system.
C) customer relationship management.
D) customerization.
E) computer-oriented marketing.

Question 51

Elasticity of demand for a business product is likely to increase:

A) as the product becomes a greater part of the total cost of the finished good.
B) if the product will be sold in both the consumer and business markets.
C) when the product is relatively small and inexpensive.
D) if there is no derived demand for the business product.
E) if monopolistic competition exists in the market.

Question 52

Which of the following products will probably reach a vertical business market rather than a horizontal business market?

A) eye goggles
B) fax machines
C) packaging material
D) office furniture
E) replacement hip joints

Question 53

An oil-drilling company purchased a Dyna-Drill that allowed it to bore both vertically and horizontally to reach into narrow pockets of crude oil. This new drill replaced its less sophisticated drill, which could drill only in a vertical path. This purchase was an example of a _____ purchase.

A) specialty
B) straight rebuy
C) reciprocity
D) modified rebuy
E) new-task buying

Question 54

CTS Industries provides laser engraved rollers for photogravure printers that print everything from posters to newspapers to potato chip bags to drink cans. The engraved roller is responsible for making sure the exact amount of ink needed is inked onto the surface being printed. If the consumer market dips, then the demand for the rollers declines also. There is ______ for the CTS rollers.

A) reciprocity
B) derived demand
C) static demand
D) elastic demand
E) multiple buying influence

Question 55

Which of the following is an example of a potential business user?

A) Wal-Mart
B) the American Cancer Society
C) the U.S. Marine Corps
D) Dell Computer Corporation
E) all of the above

Question 56

Which of the following pieces of information would be most likely to be used as an activity indicator to estimate the demand for equipment to pick cotton in Georgia?

A) the total number of farm equipment retailers in Georgia
B) the total number of acres of cotton planted during the past 12 months in Georgia
C) the total number of farmers in Georgia
D) the total number of cotton picking equipment manufacturers in the South
E) the total expenditure for cotton picking equipment in Georgia for the past 12 months

Question 57

A buyer of exotic lumber used to make expensive bedroom furniture is most likely to have a problem with:

A) federal legislation governing the use of raw materials.
B) derived reciprocity.
C) the length of the negotiation period.
D) getting adequate quantity and quality of products.
E) finding efficient middlemen.

Question 58

Resellers create all of the following types of utility EXCEPT:

A) possession utility.
B) time utility.
C) place utility.
D) information utility.
E) form utility.

Question 59

Which of the following products will probably reach a horizontal business market rather than a vertical business market?

A) Tuf Stuff, an abrasion and flame resistant fabric
B) three-week course in floral designing and shop management at South Florida School of Floral Design
C) a plastics recycling system that cuts, compacts, and extrudes
D) a dentistry kit for making crowns and bridges
E) a lift for working underneath a vehicle

Question 60

A multiple buying influence:

A) creates form, time, possession, and place utility.
B) exists only in medium- and large-sized organizations.
C) refers to the geographic proximity of manufacturing firms.
D) describes the participation of various individuals in the buying decision.
E) refers to the number of sales people that compete for a buyer's attention.

Question 61

Many marketers approach marketing as a series of links between buyers and sellers. This is called the _____ approach.

A) disintermediation
B) reciprocal
C) linked distribution
D) value mix
E) supply chain

Question 62

Peachtree Doors & Windows advertises in consumer magazines to encourage people who are building a new home or remodeling an existing one to ask their contractors to use Peachtree products. This shows how consumer demand can trigger _____ in the business market.

A) reciprocity
B) derived demand
C) fluctuating demand
D) elastic demand
E) multiple buying influence

Question 63

Which of the following is NOT one of the roles people assume in the buying center?

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

Question 64

Which of the following pieces of information would be most likely to be used as an activity indicator to estimate the demand for shower enclosures in New Mexico?

A) the total amount spent on new housing in the area for the past 12 months
B) the total number of New Mexico establishments that sell shower enclosures
C) the total number of building permits issued in New Mexico during the past 12 months
D) the total number of bathroom fixture manufacturers in New Mexico
E) the total number of shower enclosures currently in use in New Mexico

Question 65

A(n) _____ business market exists if the business product is usable by many industries.

A) vertical
B) direct
C) indirect
D) horizontal
E) regulated

Question 66

Food processing companies and commercial cooks recently had to decide whether to use pure vanilla or artificial vanilla. A cyclone in Madagascar, the number one producer of vanilla, destroyed most of the vanilla plants. (It takes three years to grow a plant.) The cooks and the food processors require vanilla to prepare many of their products. Some thought was given to whether to pay the exorbitant price for real vanilla or substitute artificial vanilla and hope no one noticed. In this instance, the purchase of vanilla would have been an example of a _____ purchase for many cooks and processors.

A) specialty
B) straight rebuy
C) reciprocity
D) modified rebuy
E) new-task buying

Question 67

The business market includes:

A) the Mayo Clinic.
B) Target superstores.
C) Federal Express.
D) Boston College.
E) all of the above.

Question 68

How does a purchase in the business market differ from a purchase made in the consumer market?

A) Reciprocity exists in both the business market and the consumer market.
B) Fewer businesses use leasing today than did two decades ago.
C) There is a longer negotiating period for the purchase of most consumer products.
D) The average order in the business market is considerably larger than its counterpart in the consumer market.
E) The purchase in the business market is more likely to be indirect.

Question 69

Which of the following statements about reciprocal arrangements in business buying is True?

A) They no longer exist in business marketing.
B) They can hurt morale among a company's sales force.
C) Recently, many large firms have established special departments to handle reciprocal arrangements.
D) They increase advertising and personal selling expenses.
E) They can lead to price wars between the two firms engaged in reciprocity.

Question 70

What do Sears, Rhodes furniture stores, Walgreen drugstores, Payless shoe stores, and Lands' End catalog retailer have in common?

A) They all cater to the lower-middle class.
B) They all stock generic products.
C) They all use direct channels of distribution exclusively.
D) They are all part of the reseller market.
E) They are all part of the services market.

Question 71

A _____ would exist if a chain of dry cleaning establishments agreed to use a specific security company's services if the security company had its employees' uniforms laundered by the cleaners.

A) leasing agreement
B) new-task buy
C) modified rebuy situation
D) tying contract
E) reciprocity arrangement

Question 72

Which of the following products is LEAST likely to feel the impact of the acceleration principle?

A) concrete
B) beef
C) asphalt
D) aluminum
E) fork lifts

Question 73

If a manufacturer of wooden pallets, buys a truckload of lumber for $200 and sells the pallets for $450, what is the value added by the wood pallet manufacturer?

A) $200
B) $250
C) $400
D) $650
E) cannot be determined without knowing all fixed and variable costs

Question 74

The demand in the business market for fabricating parts and materials is inelastic because:

A) as prices increase, demand increase only slightly.
B) most business users operate in an oligopolistic market.
C) ordinarily the cost of a single part or material is a small portion of the total cost of the finished product.
D) as prices decrease, demand also decreases.
E) demand changes only when there is a price increase and is unaffected by a price decrease.

Question 75

The staff at St. Paul's Hospital considered updating its radiology equipment and buying an ultrasound machine (sonogram) so it could offer sonography as a diagnostic tool. The staff has decided they want a sonogram that does color imaging and can make precise tissue measurements. Once these specifications were established, the hospital entered the _____ stage of the buying decision process.

A) purchase decision
B) need recognition
C) alternative evaluation
D) alternative identification
E) prepurchase patronage

Question 76

A policy of "I'll buy from you if you'll buy from me" is known as a:

A) deal involving multiple buying centers.
B) reciprocity arrangement.
C) new-task buying situation.
D) heterogeneous product transaction.
E) leasing arrangement.

Question 77

The Potato Board advertises to get people to eat more potatoes. If as a result of the ad consumers eat more potatoes, then farmers must grow more potatoes. The producers of fertilizers, irrigation systems, and storage bins for potatoes must also manufacture more to satisfy the increased demand. This shows how consumer demand can trigger _____ in the business market.

A) reciprocity
B) derived demand
C) fluctuating demand
D) elastic demand
E) multiple buying influence

Question 78

Which of the following statements about vertical business markets is True?

A) In a vertical business market, a product must be developed as an all-purpose item.
B) Middlemen are more likely to be used in vertical business markets.
C) Advertising and personal selling efforts can be directed more effectively in vertical business markets.
D) In a vertical business market, products cannot be profitably tailor-made.
E) Vertical business markets are more common for consumer products than for business products.

Question 79

When the Huntsville Police Department replaced its photo developing equipment with new equipment guaranteed to take the fuzz out of photos, the purchase was an example of a _____ buy class.

A) specialty
B) straight rebuy
C) reciprocal
D) modified rebuy
E) new-task buying

Question 80

CTS Industries provides laser engraved rollers for photogravure printers that print everything from posters to newspapers to potato chip bags to drink cans. The engraved roller is responsible for making sure the exact amount of ink needed is inked onto the surface being printed. An 8 percent increase in the price of the rollers will have no effect on demand for the rollers because advertising and packaging materials will still need to be printed. Demand for the CTS rollers is:

A) inelastic.
B) contrived.
C) negotiated.
D) reciprocal.
E) elastic.