Deck 6: Business-To-Business Marketing and Organizational Buying Behaviour

Question 1

The B2B market comprises these three groups: business, industry, and institutions.

Answer 1

False

Question 2

Collectively, the federal, provincial, and municipal governments form Canada's largest buying group.

Answer 2

True

Question 3

Budgets in institutional markets have increased significantly in the last 10 years.

Answer 3

False

Question 4

Government buyers have flexible buying procedures.

Question 5

In the B2B market there are many more buyers than in consumer markets.

Question 6

Purchasing a computer mainframe for a company involves a more formal decision-making process than would the purchase of a personal home computer.

Question 7

A B2B buying decision process usually involves only the highest-ranking company officials.

Question 8

Joint demand occurs when an industrial product can only be used in conjunction with another product.

Question 9

The purpose of a vendor analysis is to screen potential suppliers on a variety of factors, such as their ability to provide consistent products in quantities that are needed.

Question 10

Location of supplier is a significant criterion in the B2B buying decision process.

Question 11

Buying committees follow a formal process; buying centres tend to use a more informal process.

Question 12

Those who assist in defining specifications for products that are needed are called gatekeepers.

Question 13

The gatekeeper controls the flow of information to others in a buying centre.

Question 14

When a manufacturer of consumer goods decides to enter the B2B market and market its goods to other businesses, its communications strategy should include a greater emphasis on personal selling.

Question 15

The purchasing manager decided he needed to conduct a vendor analysis. The most important question he needs to answer is which supplier can offer the best price.

Question 16

To manufacture Maxwell House coffee, Kraft Canada needs coffee beans, plastic lids, glass or plastic jars, paper labels, and a cardboard shipping case. These requirements are an example of derived demand.

Question 17

The new purchasing assistant turned to the coordinator and asked him to set up a buying committee or buying centre. These terms are interchangeable.

Question 18

Government contracting opportunities are advertised online through MERX, the government electronic public tendering service.

Question 19

Organizational buying is defined as the decision-making process firms follow to establish what products they need to purchase and then identify, evaluate, and select a brand and supplier for those products.

Question 20

Cassie, the lead industrial sales rep to a major heavy equipment manufacturer, is more likely to be part of a project team than to make a proposal to deal with customers' needs on her own.

Question 21

A manufacturer needed to buy new high-speed filling equipment for its automatic production of sauerkraut. This is a complex purchase decision and the organization should follow a formal buying process.

Question 22

A purchase of computer equipment as part of systematic upgrading throughout a company would be a complex purchase decision requiring a formal vendor analysis and a lengthy decision-making process by the buyer.

Question 23

A reorder routine would be established for expensive items that are purchased infrequently.

Question 24

A desire to increase overall efficiencies has lead to an increase in partnership marketing.

Question 25

Partnership marketing requires businesses to have ownership interests in organizations throughout the supply chain for a given product.

Question 26

Partnership marketing is part of supply chain management.

Question 27

An essential ingredient in the partnership marketing model is electronic data exchange between all partners to enhance decision making.

Question 28

In a partnership marketing environment, the production and marketing decisions of manufacturers, suppliers, and distributors can be directly influenced by derived demand.

Question 29

The increasing level of competition between similar products has contributed to the partnership concept.

Question 30

In Canada, the federal government creates and moderates online procurement practices.

Question 31

Companies have banded together to establish an online marketplace to buy and sell equipment. This activity is an example of an electronic buying exchange.

Question 32

E-procurement is an Internet-based marketplace to supply products to end users.

Question 33

A supplier of cartons has recently obtained a new client. The salesperson telephoned the client to determine the procedure for accepting orders, delivery times, and return policies. She is inquiring about their reorder routine.

Question 34

The purchasing manager designs a system for getting input from users of recently purchased new office equipment. She is doing this to assist in conducting a meaningful supplier performance review.

Question 35

Identifying the characteristics and qualities of a needed item is the first step in an organization's buying decision process.

Question 36

A quotation consists of a written document, usually from a sales representative, that states the terms of the price quoted.

Question 37

Which of the following is not a distinct buying group of the B2B market?

A) professions
B) governments
C) institutions
D) e-procurement
E) wholesalers and retailers

Question 38

The B2B market comprises

A) individuals and organizations.
B) only organizations.
C) all public and private organizations.
D) only individuals.
E) only resellers of goods.

Question 39

The process by which firms establish what products they need to purchase, then identify, evaluate, and select a brand and supplier is called

A) a buying group.
B) vendor analysis.
C) organizational buying.
D) professional buying.
E) outsourcing.

Question 40

Which of the following statements is true of the B2B market when compared to the consumer market?

A) The number of buyers is smaller in the B2B market.
B) The frequency of purchases is greater in the B2B market.
C) Personal selling is less important in the B2B market.
D) Products sold tend to be less complex in the B2B market.
E) Channels tend to be less direct in the B2B market.

Question 41

The difference in marketing communications between the B2B and consumer market is the B2B market

A) uses more intermediaries.
B) uses more standardized products.
C) relies more on personal selling and online communications.
D) focuses primarily on channel promotions.
E) relies heavily on public relations.

Question 42

Distribution channels in B2B marketing tend to be

A) very complex because of the complexity of products and services.
B) long in design because of the large size of business products.
C) short and direct because of the need for personal selling.
D) short and direct because of the need for a quick turnaround time from order to delivery.
E) a mixture of direct and traditional designs.

Question 43

Demand created in the B2B market but that is ultimately created by what the final consumer wants is called

A) consumer demand.
B) derived demand.
C) joint demand.
D) supply and demand.
E) modified demand.

Question 44

A situation where the production and marketing of one product is dependent upon another product is called

A) reciprocity.
B) derived demand.
C) negotiated demand.
D) bilateral demand.
E) joint demand.

Question 45

"An evaluation of a potential supplier on the basis of technological ability, consistency in meeting product specifications, overall quality, on-time delivery, and the ability to provide needed quantity"is a description of a

A) purchasing proposal.
B) buyer-seller agreement.
C) performance evaluation.
D) source supplier strategy.
E) vendor analysis.

Question 46

The group of individuals representing key personnel from many areas of a business operation that formally make buying decisions is referred to as a

A) decision-making unit.
B) buying committee.
C) gatekeeping process.
D) buying centre.
E) joint decision process.

Question 47

An informal gathering of several informed individuals throughout the company to make purchasing decisions is referred to as a

A) decision-making unit.
B) buying centre.
C) gatekeeping process.
D) joint decision process.
E) buying committee.

Question 48

The member of a buying centre who controls the flow of information to others in the centre is called the

A) gatekeeper.
B) referee.
C) decider.
D) influencer.
E) user.

Question 49

The member of a buying centre who has formal or informal power to select the supplier is the

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

Question 50

National food suppliers such as Metro, Sobeys, and Loblaws dominate the retail grocery industry in Canada, purchasing huge quantities of fresh, frozen, and packaged food products for their grocery stores. This example illustrates

A) there are a few buyers with immense buying power in the B2B market.
B) the need for self-regulation.
C) the impact of the global food shortage on North America.
D) the need for government intervention.
E) the weakness of the grocery industry.

Question 51

The system that allows a supplier to identify and locate potential target markets by providing statistical information about business activity is called

A) Standard & Poor's Industrial Index.
B) Findex.
C) the Federal Government Classification Index.
D) the Industrial Equipment Manufacturers' Classification.
E) the North American Industry Classification System.

Question 52

A producer of frozen soups was out of stock for two months on its Wild Mushroom soup because its supplier of wild mushrooms could not always meet their product specifications. Which of the following factors did the soup producer fail to evaluate when selecting a supplier of mushrooms?

A) service and services offered
B) price
C) reputation
D) continuity of supply
E) quality

Question 53

A manufacturer needs a package delivered to its head office tomorrow morning at any cost. It contacted a number of couriers and chose Purolator. Purolator offered a 9 a.m. Day Starter rate guaranteeing delivery by 9 a.m. the next morning for a surcharge of $10.00 over their regular price. The manufacturer made its decision based on which of the following buying criteria?

A) service and services offered
B) quality
C) reputation
D) continuity of supply
E) price

Question 54

There was a shortage of manzanilla olives from Spain this year. Consequently, a Canadian olive packer had to find another supplier to ensure adequate supply. The procurement manager of the olive packing company called an informal meeting with the marketing department, asking them to taste olives from different parts of the world and to comment on which olives met their needs. This is an example of

A) a quality committee.
B) a buying committee.
C) relationship buying.
D) a buying centre.
E) a modified rebuy.

Question 55

To satisfy consumer want of aluminum containers for soft drinks, manufacturers have moved to widespread use of the aluminum can. Soft drink manufacturers' demand for aluminum increased dramatically. This situation is an example of

A) derived demand.
B) inelastic demand.
C) manufacturers' demand.
D) joint demand.
E) elastic demand.

Question 56

A rise in mortgage rates has resulted in a lower demand for new housing. Consequently, there is a lower demand for building materials such as lumber, steel, and window glass. This effect is called

A) derived demand.
B) demand loan.
C) joint demand.
D) chain of demand.
E) shared demand.

Question 57

The Nestle Company needs coffee beans, plastic lids, glass jars, paper labels, and so on to produce Taster's Choice coffee. These needs are examples of

A) joint demand.
B) variable demand.
C) derived demand.
D) sequenced demand.
E) accessories demand.

Question 58

When Daimler Chrysler AG is evaluating potential suppliers of car seats based on quality, timeliness, and overall service, it is conducting a

A) vendor analysis.
B) supplier examination.
C) supplier reliability study.
D) criteria analysis.
E) supplier analysis.

Question 59

Darlene has the authority to select company suppliers and negotiate price with them. She is a(n)

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

Question 60

Jeff controls the flow of information to his colleagues in the buying centre. He is a(n)

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

Question 61

What is MERX?

A) the chemical industries electronic transaction service
B) the municipal electronic tendering service
C) the multinational electronic pharmaceutical exchange
D) the online government electronic tendering service
E) the multinational electronic transactions services

Question 62

Which type of industries currently represent approximately 70% of Canadian economic production?

A) not-for-profit sector
B) wholesalers
C) goods producers
D) service producers
E) government institutions

Question 63

Which of the following is an example of outsourcing?

A) hiring a company to process the organization's payroll
B) establishing an internal department to process e-business transaction services
C) hiring a staff of lawyers to protect the interests of the company
D) purchasing equipment to manufacture parts normally provided by an outside supplier
E) sending a mass mailing to wholesalers to source new business

Question 64

To identify and locate potential target markets, marketing firms use what industry classification service?

A) NASA, the North American System of Assignment
B) ACMIC, the American/Canadian/Mexico Industry Classification
C) NABD, the North American Business Directory
D) USDA, the United States Definition Assessment
E) NAICS, the North American Industry Classification System

Question 65

The largest buying group in Canada is

A) institutions.
B) professions.
C) wholesalers.
D) retailers.
E) government.

Question 66

Centralized purchasing is used primarily to

A) increase the number of buyers who work with suppliers.
B) improve quality of purchases.
C) secure better price discounts based on volume purchases.
D) increase the number of suppliers to drive price discounts.
E) locate purchasing close to retail outlets.

Question 67

Customers who are concerned with long-term availability of a product or service are focused on which buying criterion?

A) continuity of supply
B) assortment
C) price
D) service and services offered
E) quality

Question 68

Which of the following best describes joint demand, otherwise known as shared demand?

A) More than one company demands the same input.
B) Demand for products is derived by the final user.
C) Demand is based on a fad or trend.
D) An industry partnership buying group makes purchasing decisions.
E) Demand for one product is dependent on another.

Question 69

A hotel chain is looking to purchase a new keyless entry system for its guest rooms. Employees from the various departments will be impacted by this unusual and very expensive buying decision. What would be a likely way for the hotel chain to approach this decision?

A) hire an expert consultant in this area
B) set up a buying committee of key personnel
C) set up a buying centre
D) inform the purchasing manager of the necessary specifications
E) develop a vendor criteria list

Question 70

Grand & Toy moved from a being a supplier of goods to being a strategic partner with its customers. This is called

A) reverse marketing.
B) restructuring.
C) teaming.
D) partnership marketing.
E) complex relationship.

Question 71

During proposal solicitation, a buying organization may seek to receive a written, sealed tender from prospective suppliers. This is called a(n)

A) open bid.
B) bid.
C) closed bid.
D) sealed written tender.
E) quotation.

Question 72

The janitorial staff at the local secondary school reported that they were low on several cleaning products. New supplies would be required in the next couple of weeks. What kind of process will likely be in place for this situation?

A) a routine purchase process
B) a supplier review
C) a modified rebuy routine
D) an order and reorder routine
E) a new-task purchase

Question 73

What is the best way to describe e-procurement in the B2B market?

A) It is starting to catch on.
B) It is integral to the B2B market.
C) It works mainly for technology firms.
D) It works best for government.
E) It is following in the footsteps of consumer e-business.

Question 74

What best describes the B2B buying decision process?

A) It is the same as the consumer buying process.
B) The B2B buying process has six steps.
C) Personal selling is absolutely necessary.
D) Most B2B buying starts with a supplier search.
E) It usually includes a proposal solicitation.

Question 75

Which of the following is an example of reverse marketing?

A) when purchases are automated online
B) when the buyer gives incentives to the supplier
C) when suppliers solicit proposals
D) when buyers influence the specifications of the suppliers' goods
E) when buyers make the final selection of a supplier

Question 76

A company decided to change its supplier of photocopiers because the current photocopier was constantly being repaired. What stage of the B2B buying process is the company in?

A) supplier selection
B) supplier search
C) routine order specification
D) quotation
E) problem recognition

Question 77

Movement toward partnership marketing in B2B relationships has been motivated by the organizational goal of

A) greater efficiency.
B) globalization.
C) adherence to anti-trust legislation.
D) protectionism.
E) technological development.

Question 78

IKEA sources its goods from all over the world. In order to ensure consistency across suppliers, and to effectively compare bids, IKEA generates product specifications and then sends them to manufacturers around the world. The manufacturers return samples to demonstrate they can meet the specs and submit a price for IKEA's review. Given this situation, in what stage of the buying process is IKEA?

A) open bid evaluation
B) proposal solicitation
C) supplier selection
D) quotation evaluation
E) e-procurement evaluation

Question 79

The trend toward cooperative partnerships among suppliers, manufacturers, and distributors to the benefit of all participants is known as

A) mutual benefits marketing.
B) the cooperatives movement.
C) golden rule marketing.
D) multi-level linking.
E) partnership marketing.

Question 80

Organizational buyers build relationships that shape suppliers' goods and services to fit the buyers' and their customers' needs. This is called

A) supplier search.
B) bilateral marketing.
C) reverse marketing.
D) multi-purpose marketing.
E) derived demand.