Deck 6: Organizational Markets and Buyer Behaviour

Question 1

Because Bombardier competes in the B2B marketplace,it recognizes that demand for its products is often contingent on:

A)the end customer
B)marketing intermediaries
C)its suppliers
D)government policies

Answer 1

A

Question 2

Headquartered in Montreal and with a presence in more than 60 countries,Bombardier operates two industry-leading businesses:

A)computer hardware and graphics processing
B)rail transportation and aerospace
C)software development and data storage
D)trucking and logistics

Answer 2

B

Question 3

The industries that are growing in Canada,currently make the greatest contribution to Canada's gross domestic product,are known as ____________ industries.

A)construction
B)transportation and public utilities
C)manufacturer
D)service

Answer 3

D

Question 4

A manufacturer of consumer food products for the Chinese market in Canada buys several tons of camellia nuts annually.It converts those nuts into cooking oil that is popular among the Chinese population because it has a milder taste than olive oil and a higher burning point.The oil is sold to supermarkets.The pulp from which the oil is extracted is sold to beef cattle farmers who use it to fatten their cattle.These transactions occur in the _____ market.

A)reseller
B)government
C)institutional
D)industrial

Question 5

All of the following are considered resellers,except:

A)Costco
B)Walmart
C)Canadian Tire
D)U.S.Steel

Question 6

Bombardier is considered a global leader in which industry?

A)business aircraft
B)ships
C)hydroelectric power dams
D)data storage servers

Question 7

Which market in Canada has approximately 50,000 businesses and ship an estimated value of $575 billion?

A)real estate businesses
B)wholesalers
C)retailers
D)manufacturers

Question 8

A steel mill converts iron ore into sheet metal that they then sell to the next buyer.The steel mill would be considered a(n)

A)industrial firm
B)reseller firm
C)middleman
D)producer

Question 9

Bombardier competes globally and forecasts that over the next 20 years there will be growth in demand for its products in ___________.

A)China and India
B)Russia and India
C)China and Russia
D)Russia and Brazil

Question 10

Honeywell's Micro Switch Division sells its fibre-optic technology and products to manufacturers of data communication systems worldwide.Data communications system manufacturers are operating in _____ market.

A)reseller
B)governmental
C)psychographic
D)industrial

Question 11

Which of the following is not considered a market for organizational buyers?

A)industrial
B)reseller
C)government agencies
D)retailer

Question 12

Graham-Field Health Products makes hospital beds and wheelchairs from component parts and materials it buys.It sells its products to hospitals,nursing homes,and retailers of health care products.Graham-Field Health Products operates in a(n)_____ market.

A)consumer
B)psychographic
C)industrial
D)cultural

Question 13

Which of the following statements represents an organizational buying decision?

A)Mr.Crowe buys a Toyota minivan to commute to work.
B)A dentist buys a new Blu-ray player for her den.
C)Mr.Langley hires a housecleaning service to clean his apartment.
D)The owner of a fried chicken restaurant hires a snow removal service to keep the parking lot clear.

Question 14

A reseller purchases products from a manufacturer and then ______________ before selling them to the end customer.

A)puts their logo on them
B)processes them no further
C)builds them into a larger product
D)strips them down to their parts

Question 15

Manufacturers,wholesalers,retailers,and government agencies that buy goods and services for their own use or for resale are examples of:

A)multinationals.
B)cooperatives.
C)organizational buyers.
D)ultimate consumers.

Question 16

Organizational buyers include all the following EXCEPT:

A)retailers.
B)government.
C)manufacturers.
D)ultimate consumers.

Question 17

Jackson Steel produces sheet metal that is then sold to Ford,Toyota,and GM for use in producing their vehicles.Jackson Steel competes with other sheet metal companies for the car company's business.Jackson Steel is in which segment?

A)Relational enterprise
B)Institutional marketing
C)Business marketing
D)Reseller marketing

Question 18

An industrial firm is a firm that:

A)is distinguished by the amount of energy it uses and potential for pollution to the environment.
B)employs more than 500 people, who are paid minimum wage with few or no benefits.
C)deals exclusively with federal, state, and local governments, and often mediates governmental agency disputes.
D)in some way reprocesses a good or service it buys before selling the product again to the next buyer.

Question 19

Two manufacturers were discussing the upcoming trends in the business market.One kept referring to the market as the 'business market,' while the other interrupted him and said: "when you refer to the business market,you are referring to the _________."

A)transactional market
B)ultimate market
C)relational enterprise
D)industrial market

Question 20

Itex Corporation,marketer of Photostat products used in the graphic arts field,buys sensitized paper from Eastman Kodak Company,packages it with the Photostat brand name on it,and sells it directly to amateur photographers.In this context,Itex Corporation should be classified as a(n):

A)service provider.
B)monopoly.
C)reseller.
D)industrialist.

Question 21

Many of Canada's top exporters,including Bombardier and Maple Leaf Foods,focus on ___,not ___.

A)organizational customers; ultimate consumers
B)ultimate consumers; organizational consumers
C)governmental agencies; ultimate consumers
D)governmental agencies; organizational consumers

Question 22

Which of the following statements about the North American Industry Classification System (NAICS)is false?

A)the first two digits represent sectors
B)the third digit designates subsectors
C)the fourth digit designates industry groups
D)in Canada, there are 25 sectors

Question 23

As a market research analyst for Bain & Co.,your Senior Partner asks you to determine the NIACS code for the manufacturing industry.This will be used to help facilitate the measurement of economy activity for the:

A)European Economic Community (EEC).
B)Fiscal Development International Coalition (FDIC).
C)North American Free Trade Agreement (NAFTA).
D)North Atlantic Treaty Organization (NATO).

Question 24

As an organizational buyer,if you worked directly with your suppliers to improve their efficiency and product quality to enhance your business,you would be focused on:

A)supplier development
B)upstream development
C)partner development
D)supplier partnerships

Question 25

A disadvantage of the North American Industry Classification System (NAICS)is that:

A)it only lists the top ten firms in any particular industry.
B)it is too difficult and confusing to read.
C)it assigns one code to each organization based on its major economic activity, so large firms that engage in many different activities are given only one code.
D)it only covers organizations with sales in excess of (US) $1 million.

Question 26

When the Canadian Broadcasting Corporation buys new computers,monitors,and printers for its various newsrooms,it is operating as a(n):

A)industrial market.
B)business market.
C)government unit.
D)facilitating agent.

Question 27

You are the research director of a major marketing research consulting firm.You need to select an NAICS (North American Industry Classification System)code that gives you the most detail about the competitors in a client's industry.Which of the following levels of classification would provide the greatest detail?

A)Code 260
B)Code 423531
C)Code 91
D)Code 6575

Question 28

NAICS is an acronym for:

A)North American Industry Competition Standings.
B)North American Industry Competition System.
C)North American Industry Classification System.
D)North American Industry Classification Standards

Question 29

Which of the following statements about the North American Industry Classification System (NAICS)is false?

A)the first two digits represent sectors
B)the third digit designates subsectors
C)the fourth digit designates industry groups
D)the fifth digit designates company name.

Question 30

The system that provides common industry definitions for Canada,Mexico,and the United States to facilitate the measurement of economic activity in the three member countries of the North American Free Trade Agreement (NAFTA)is called:

A)Strategic International Classification (SIC).
B)Federated Domestic and International Classification (FDIC).
C)Federated Trade Codification (FTC).
D)the North American Industry Classification System (NAICS).

Question 31

The NAICS divides the economy into sectors using a ______ coded system.

A)seven-digit
B)six-digit
C)five-digit
D)four-digit

Question 32

Canadian Crown corporations,such as CBC,VIA Rail,and the Royal Canadian Mint are examples of:

A)Industrial markets
B)Reseller markets
C)Cooperative markets
D)Government units

Question 33

Federal,provincial,and local agencies that buy goods and services for the constituents they serve are known as:

A)Industrial markets
B)Reseller markets
C)Cooperative markets
D)Government units

Question 34

John Deere employees almost 100 supplier-development engineers that focus on working with suppliers to:

A)improve efficiency
B)provide feedback on product development
C)demonstrate how important that supplier is to John Deere
D)act as a bridge between the supplier and John Deere's customers

Question 35

Europe's Airbus Industrie,the world's largest aircraft manufacturer,sells its passenger airplanes to Air Canada,which flies Canadian businesspeople to Asia.This is an example of:

A)the circular flow of products.
B)market dynamics.
C)global organizational markets.
D)organizational clusters.

Question 36

How might a marketing manager for a manufacturer of turboprop engines used in private jet planes use the North American Industry Classification System (NAICS)to help with his marketing planning to find prospective customers?

A)He could record the NAICS numbers for each of his firm's best customers, and then obtain lists of companies with the same NAICS numbers.
B)He could go to a library to find the NAICS numbers for all government units, federal, state, and local.
C)He could identify all NAICS numbers that do not reflect the classifications of his firm's customers.
D)He could poll his field sales organization to see if his company's sales representatives know what NAICS numbers mean.

Question 37

Pratt & Whitney sells aircraft engines to Europe's Airbus Industries,which sells passenger airplanes to Japan Airlines,which flies businesspeople around the world.This is an example of:

A)the circular flow of products.
B)market dynamics.
C)global organizational markets.
D)organizational clusters.

Question 38

In terms of organizational buyers,Amazon.com,Lands' End,and J.C.Penney would all be classified as:

A)capitalists.
B)resellers.
C)monopolies.
D)facilitating agents.

Question 39

Concern about terrorists using biological warfare has caused the U.S.government to create stockpiles of specific drugs.The federal government has purchased Cipro,the only drug specifically approved by the FDA to treat inhaled anthrax from Bayer,the German drug and chemical company.The U.S.government has also purchased smallpox vaccine from Acambis,a British drug company.These transactions are examples of:

A)the circular flow of products.
B)market dynamics.
C)global organizational markets.
D)organizational clusters.

Question 40

Apex Therapeutic buys medical supplies and services for people with hemophilia and other related blood diseases from a multitude of sources.It then sells these products to anyone who needs them.When it sells directly to a person who is a hemophiliac,it would be classified as a(n):

A)change agent.
B)monopoly.
C)reseller.
D)industrialist.

Question 41

The amount of pulp and paper products that MacMillan Bloedel manufactures is influenced by consumer demand for newspapers,Pizza Pizza's "keep warm" pizza-to-go boxes,Federal Express packages,and disposable diapers.This is an example of:

A)derived demand.
B)the price-quality relationship.
C)the acceleration principle.
D)price elasticity.

Question 42

BP drills and refines crude oil into petroleum for vehicles,which it sells through its retail gas stations.What kind of demand is there for BP's gasoline?

A)unitized
B)derived
C)consumer
D)applied

Question 43

Spruceland Millworks in Canada makes wooden pallets for transporting and storing new appliances such as stoves,freezers,and refrigerators.What kind of demand is there for Spruceland pallets?

A)There is creative demand, which is tied to the sales of appliances, not the sale of the pallets.
B)There is derived demand, which is tied to the sales of appliances, but independent of the sales of pallets.
C)There is derived demand, which is tied to the sales of pallets, which in turn, is tied to the sales of appliances.
D)There is inelastic demand tied to the cost of the components of the pallets.

Question 44

The NAICS will allow marketing managers to gather and study all of the following information EXCEPT:

A)market share.
B)demand for goods and services.
C)competition in domestic markets.
D)every industry in which a conglomerate engages in business.

Question 45

All of the following are characteristics of the organizational buying behaviour except:

A)Market characteristics
B)Product or service characteristics
C)Marketing mix characteristics
D)Supplier characteristics

Question 46

Because orders in organizational buying are typically much larger than in consumer buying,such as when the order is above a specific amount,such as $5,000,the buyers often must

A)lie to their superiors about how much things really cost
B)get competitive bids from at least three prospective suppliers
C)carry personal insurance to cover possible losses
D)pay taxes out of their own pockets

Question 47

Which of the following is NOT a characteristic of products and services purchased within an organizational context?

A)The focus is on delivery time and postsale service.
B)Raw and semi-finished goods are predominantly purchased.
C)The sizes of orders are typically much smaller than in consumer buying.
D)Goods and services are purchased on the basis of specifications that are technical in nature.

Question 48

Ultimately,most demand is derived from consumer demand,the exception being demand derived from:

A)resellers.
B)original equipment manufacturers.
C)wholesalers.
D)government purchases.

Question 49

The demand for industrial products and services that is driven by demand for consumer products and services is called:

A)Gross National Product.
B)derived demand.
C)the Consumer Price Index.
D)break-even deman

Question 50

When compared to consumer marketing,industrial marketing is simpler because:

A)firms have buying centres.
B)it is easy to forecast derived demand.
C)the buying objectives of industrial buyers are easily identifiable.
D)industrial orders are smaller.

Question 51

Each of the following statements accurately characterizes the organizational buying process EXCEPT:

A)Multiple buying influences exist because many people may be involved in the purchase decision process.
B)Reciprocal arrangements are uncommon
C)Negotiations between buyers and sellers regarding price is common.
D)The purchase of goods or services is usually handled by expert buyers.

Question 52

Which of the following is NOT a characteristic of the organizational buying process?

A)Multiple parties participate in purchase decisions.
B)Negotiation between buyers and sellers is commonplace.
C)Online buying over the Internet is widespread.
D)Online buying over the Internet is uncommon.

Question 53

Firms selling consumer goods or services often try to reach thousands or millions of individuals or households.Firms selling to organizations are often:

A)inclined to try to reach tens of millions.
B)restricted to far fewer buyers.
C)hoping to obtain similar numbers of nonconsumer customers.
D)restricted by government regulations to only a few industrial categories.

Question 54

Which of the following statements is true regarding organizational versus consumer buying decisions?

A)Perceived risk is lower in organizational buying.
B)Reciprocal arrangements exist.
C)More organizational buying decisions are lower in involvement.
D)Organizational buyers are more influenced by lifestyle factors.

Question 55

As a new business,you are trying to find the right manufacturing partner to be your supplier of widgets.You come across one that maintains ISO 9000 standards,why do you decide to choose this supplier?

A)the manufacturer has a quality and assurance process
B)the manufacturer will be the least expensive on the market
C)the manufacturer will form an exclusive relationship with you
D)the manufacturer passes on guarantees to your end consumers

Question 56

Which of the following possible aspects of consumer buying decisions is LEAST likely to enter into an organizational buying decision?

A)comparison of product performance with expectations
B)decision based on highest overall evaluation
C)alternatives evaluated on important criteria
D)problem recognition triggered by self-actualization motives

Question 57

Which of the following statements accurately characterizes buying behaviour in organizational markets?

A)Organizational buying behaviour is similar to consumer buying behaviour since individuals are involved in both processes.
B)Demand for industrial products is elastic instead of inelastic or derived because companies, not ultimate consumers, determine the quantity of goods produced.
C)Fewer customers typically exist in organizational markets than in consumer markets.
D)Purchase orders are usually small.

Question 58

Concert Staging Company provides the stage,the roof system,and lighting and sound for outdoor concerts and theaters.It is typically hired by the organization sponsoring the event.When the economy slows down,consumers are more likely to save their money for a rainy day than buy a concert or theatre ticket.The number of concert and theatre events determines how many times the company gets to provide its services.Demand for the services provided by Concert Staging Company is _____ demand.

A)derived
B)unitized
C)holistic
D)applied

Question 59

Purchases of sodium fluoride by Pfizer for its Listerine mouthwash would be an example of ____ demand.

A)derived
B)unitized
C)binary
D)applied

Question 60

Consumer demand has dramatically increased for home-based solar panels.As a result,manufacturers are seeing increased demand for the raw materials and components to construct the solar panels.This type of demand is known as:

A)indirect
B)direct
C)derived
D)eco-friendly

Question 61

A company that runs its trucks on a mixture of petroleum and ethanol buys its ethanol from Archer Daniels Midland (ADM)Company because it is the only large supplier of ethanol that has an ethanol manufacturing facility in Illinois and is able to meet the trucking company's delivery schedules.The selection of ADM to provide the ethanol was based on a(n):

A)supplier value dimension.
B)derived demand factor.
C)evaluative criterion.
D)organizational buying criterion.

Question 62

A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,policies,and procedures for the purpose of lowering the cost and/or increasing the value of products and services delivered to the ultimate consumers is known as:

A)a reciprocal arrangement.
B)exclusive dealing.
C)review marketing.
D)supply partnership.

Question 63

The primary reason organizations buy products and services is to help them achieve their objectives.Which of the following statements does NOT illustrate a typical organizational buying objective?

A)Southland Corporation buys automated inventory systems to increase the number of products sold in its 7-Eleven outlets and to keep them fresh.
B)Sears launches the Anthony Mark Hankins Signature Collection of clothing for women, forging a link with minority- and women-owned suppliers and vendors.
C)Caroline buys a new dress because she wants to reward herself for achieving a bonus at work.
D)Nissan Motor Company switches its ad agency because it expects the new agency to develop a more effective ad campaign to sell more cars and increase revenues.

Question 64

Scandinavian Airlines recently announced the purchase of 35 Boeing 737-600 airliners,with the option to buy another 35 for a total of $2.4 billion.SAS called Boeing "a professional and solid supplier." Deliveries began in late 1998 and will continue for some years to come.This arrangement between Boeing and SAS is an example of:

A)reciprocity.
B)exclusive dealing.
C)review marketing.
D)supply partnership.

Question 65

ISO 9000 standards:

A)are used to determine if a company can be classified as a green marketer.
B)are used to certify that a company's quality management and assurance system meets predetermined high standards of excellence.
C)govern what constitutes legal economic espionage.
D)set the communication interfaces between computer networks for the sharing of data.

Question 66

Mac's buys automated inventory systems in order to increase the number of products that can be sold through its convenience stores and to keep them fresh is an example of:

A)an organizational buying criterion
B)an organizational buying objective
C)derived demand
D)reselling

Question 67

Which of the following is NOT one of the seven most common organizational buying criteria?

A)price
B)effectiveness of sales representative
C)technical capability
D)past performance

Question 68

Communications service providers Global One primarily is a worldwide long-distance carrier located in France.Focal Communications is located in Chicago and provides Internet services to businesses in the United States.Focal Communications has agreed to buy international capabilities from Global One,and Global One will buy its Internet connections from Focal.Their relationship is an example of:

A)reciprocity.
B)exclusive dealing.
C)review marketing.
D)transactional relationship.

Question 69

Which of the following situations is MOST likely to use reciprocity?

A)a steel manufacturer and a car manufacturer
B)a local banking establishment and a frequent customer
C)a McDonalds and a frequent customer
D)Walmart and a Sunday morning church group

Question 70

Jackson Steel sells its sheet metal to Ford,who,in turn,sells its finished product back to Jackson Steel so they can be a Ford vehicle dealer to the end consumer.Which term best accurately describes the relationship between Jackson Steel and Ford?

A)Relationship marketing
B)Reciprocity
C)Cooperative marketing
D)Vertical integration

Question 71

All of the following are commonly used organizational buying criteria EXCEPT:

A)past performance on previous purchases.
B)price and other financing assistance.
C)the number and distribution of retail outlets likely to carry the product.
D)the technical expertise of the salespeople.

Question 72

Canada manufacturers export over __________ percent of all goods manufactured.

A)30
B)40
C)50
D)60

Question 73

All of the following are commonly used organizational buying criteria except

A)price
B)technical capabilities
C)warranties
D)personal relationships

Question 74

Bell Canada has decided to sign a 'code sharing agreement' with Telus and Rogers which allows them to grow their market while avoiding costs by having to build more cell transmission towers.The focus of Bell Canada's actions is to:

A)increase profits through increasing costs and increasing revenues.
B)increase profits through reducing costs and decreasing revenues.
C)increase profits through reducing costs or increasing revenues.
D)maintain profits through reducing costs and increasing revenues.

Question 75

An international company that wants indisputable proof that its supplier maintains a high level of quality management could ask the company to:

A)apply for an ISO 9000 certification.
B)allow its engineers to study all of the supplier's proprietary information before establishing any formal relationship.
C)enter a tying agreement in which it only sells to one customer-the international one.
D)show how it is listed in the NAICS to prove its quality focus.

Question 76

Every $1 of manufacturing in Canada generates ______ in total economic activity.

A)$2
B)$3
C)$4
D)$5

Question 77

The Danish Carsten Maersk is an ocean-going container ship that is longer and only a bit narrower than three football fields laid out end zone to end zone.If you were to set the ship's load of containers end to end,they would stretch 27 miles.To handle this ship and her sister ships,Los Angeles is building Maersk a completely new facility at a cost that could top $800 million.The terminal is rising in the middle of the harbour on dredged material and ten million tons of rock that will form a 685-acre island connected to the rest of California by rail line and highway.When the initial phase opened in 2002,Maersk,which has an exclusive 25-year lease,had room to dock three of these huge ships.Every city on the West Coast wanted to be selected by Maersk as a terminal city,but only the Port Authority of Los Angeles was able to build the relationships needed to convince Maersk that it could handle the load.This is an example of:

A)demarketing.
B)inverse marketing.
C)supplier development.
D)inside-out marketing.

Question 78

Many industrial buyers for manufacturing firms place great importance on delivery time because they often rely on a just-in-time inventory system.This system has increased the importance of which organizational buying criterion?

A)low prices
B)high quality
C)on-time delivery
D)customer service and follow-up

Question 79

Many organizational buyers today are making deliberate efforts to build relationships that shape suppliers' products,services,and capabilities to their needs and those of their customers.This is known as:

A)demarketing
B)inverse marketing
C)supplier development
D)inside-out marketing

Question 80

The objective attributes of the supplier's goods and services and the capabilities of the supplier itself are collectively called:

A)supplier evaluative dimensions.
B)derived demand factors.
C)evaluative criteria.
D)organizational buying criteria.