Deck 6: Business-To-Business Markets: How and Why Organisations Buy

Question 1

When Amnesty International and the Cancer Society purchase photocopier paper and pens,these purchases occur in the ________ market.

A)B2C
B)consumer
C)organisational
D)facilitator
E)producer

Answer 1

C

Question 2

Springfield,a rifle manufacturer needs muzzles,trigger mechanisms and wooden gunstocks to produce rifles.

A)reciprocal
B)joint
C)elastic
D)inelastic
E)synergistic

Answer 2

B

Question 3

The major classes of business-to-business customers are ________.

A)organisations,semi-private firms and producers
B)producers,onsellers and resellers
C)resellers,onsellers and organisations
D)producers,resellers,and organisations
E)None of the above

Answer 3

D

Question 4

Business-to-business or organisational markets include ________.

A)government agencies
B)retailers
C)manufacturers
D)wholesalers
E)All of the above

Question 5

An outdoor sign company uses full-size vinyl sheets for their signs so that they can be easily changed.

A)fixed
B)elastic
C)inelastic
D)immovable
E)economic

Question 6

A restaurant chain's demand for beef is derived from consumer demand for hamburgers.

Question 7

Which of the following statements about business markets is true?

A)The average purchase size in business markets is much smaller than the average purchase size in the consumer market.
B)Demand for products in business markets is derived from demand for consumer products.
C)Most demand in business markets is fixed.
D)Salespeople in business markets only have to satisfy the person actually making the purchase.
E)Business markets have a broad customer base and a large number of buyers.

Question 8

Which of the following statements about business markets are true?

A)Business markets have a narrow customer base and a small number of buyers.
B)Most demand for business products is derived and inelastic.
C)The size of purchases made in business markets is much larger than those made in consumer markets.
D)Business markets are geographically concentrated.
E)All of the above

Question 9

Hotels fulfil the role of producer when they buy linens,furniture and food for the accommodation and meals of their guests.

Question 10

________ occurs when two or more goods are necessary to create a product.

A)Joint demand
B)Fluctuating demand
C)Inelastic demand
D)Government demand
E)Consumer demand

Question 11

The fluctuating demand for business products is due to ________.

A)the desire to reduce fixed costs
B)the product's life expectancies
C)the 80/20 rule
D)an absence of demand synergy
E)All of the above

Question 12

The success of one company in one industry may depend on another company in a different industry.

A)value-added demand
B)elastic demand
C)inelastic demand
D)micro-dependent demand
E)derived demand

Question 13

A seafood products manufacturer designs an advertising campaign promoting its seafood as a healthy food choice and encouraging consumers to consider seafood more often.

A)price elasticity
B)price inelasticity
C)derived demand
D)micro-dependent demand
E)value-added demand

Question 14

Inelastic demand for a product means that if the product's price goes up,demand for it declines,but if the products price goes down,demand increases.

Question 15

Business markets have a broad customer base and a large number of buyers.

Question 16

Discuss the characteristics of business markets that make them different to consumer markets.

Question 17

________ is the marketing of goods and services that businesses and other organisations buy for purposes other than personal consumption.

A)Outsourcing
B)Business-to-business
C)Single source
D)Buying class
E)Just in time (JIT)

Question 18

With ________,it usually does not matter if the price of a business-to-business product goes up or down- the business customer will still buy the same quantity.

A)elastic demand
B)economic demand
C)inelastic demand
D)derived demand
E)fixed demand

Question 19

________ do not actually produce goods but rather provide their customers with the time,place,and possession utility by making goods available to consumers when and where they want them.

A)Resuppliers
B)Resellers
C)Distributors
D)Not-for-profit markets
E)Producers

Question 20

________ are customers for a vast number of products from raw materials to goods manufactured by others.

A)Resuppliers
B)Not-for-profit markets
C)Distributors
D)Resellers
E)Producers

Question 21

Although many of the supplies used by dentists are disposed of after one use,dental instruments made of steel such as drills must be sterilised before they can be reused.

A)value purchase
B)simple-task purchase
C)modified rebuy
D)utility buy
E)straight rebuy

Question 22

When a dentist's office manager orders latex gloves,disposable masks,file folders,and complementary toothbrushes to give to patients,s/he is most likely making a ________.

A)value purchase
B)straight rebuy
C)simple-task purchase
D)modified rebuy
E)utility buy

Question 23

A new-task buy ________.

A)does not occur when the buyer uses single sourcing
B)is similar to routine decision making in the consumer market
C)is characterised by uncertainty and high risk
D)begins with a SWOT analysis
E)requires less time and effort than a modified rebuy

Question 24

The group of people in the organisation who participate in the purchase decision-making process is referred to as the ________.

A)purchasing office
B)buyer institution
C)buying centre
D)resource centre
E)purchasing hierarchy

Question 25

The person who has responsibility for executing the purchase decision is called the ________.

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

Question 26

Professional buyers are responsible for ________.

A)making sure all accessory goods and services are available at a reasonable cost
B)negotiating transportation and delivery charges
C)ensuring products are delivered in a timely fashion
D)selecting quality products
E)All of the above

Question 27

The person who recognises that a purchase needs to be made is called the ________.

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

Question 28

The ________ is the member of the buying centre who controls the flow of information to other members.

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

Question 29

How are consumer and business-to-business demand of goods and services ultimately based upon the same demand?

Question 30

The person who affects decisions by giving advice and sharing expertise is called the ________.

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

Question 31

A modified rebuy ________.

A)is similar to an impulse purchase in the consumer market
B)requires more time and effort than straight rebuys
C)occurs whenever a company reorders a product from an original supplier
D)requires more time and effort than new-task buying
E)All of the above

Question 32

Which of the following statements about buying centres is true?

A)The buying centre is like a standing committee.
B)The members of a buying centre typically participate in a cross-functional team.
C)The most commonly found buying centre has six employees-one to assume each of the buying centre's roles.
D)An individual's role in the buying centre does not change.
E)The buying centre roles are specified on the organisational chart.

Question 33

What are the three main classes of business-to-business customers?

Question 34

A trucking company is considering purchasing new trucks powered by ethanol instead of diesel fuel.

A)agents
B)users
C)initiators
D)influencers
E)gatekeepers

Question 35

Why is the demand in business-to-business markets mostly inelastic?

Question 36

Explain how business-to-business demand differs from consumer demand.Illustrate using examples.

Question 37

Resellers purchase goods and services that they use to produce their own goods and services.

Question 38

A touring carnival company decides to pay $700,000 for a new ride called 'The Spewinator' in the hopes it will become its most popular ride.

A)modified rebuy
B)complex-task purchase
C)simplified rebuy
D)utility buy
E)new-task buy

Question 39

Straight rebuys ________.

A)occur when a buyer wants to shop around for the best deal
B)are more complex than new-task buys
C)are comparable to comparison shopping in the consumer market
D)are usually made from a list of approved vendors
E)are the most complex of purchase types because they require customer relationship management

Question 40

What functions does a reseller of consumer goods fulfil? Illustrate using a specific reseller.

Question 41

Explain which of the three business-to-business buying situations is illustrated in the following scenario.Although companies have purchased printers and copiers before,Xerox now offers them a multitasking machine that prints,copies,emails,scans,and faxes-and makes a great cup of coffee.

Question 42

Which of the following statements is true about the product and supplier selection stage of the business buying decision process?

A)Before making a purchase decision,many businesses consider quality,reliability,durability,after-the-sale service,as well as price.
B)Price and warranty are the only two factors businesses consider before making a purchase decision.
C)Because after-the-sale service is a negotiation point,it is not considered at this stage of the business buying decision process.
D)Even companies that have adopted a total quality management approach consider price to be the most important determinant of supplier selection.
E)Price is the only factor businesses consider before making a purchase decision.

Question 43

McDonald's has decided to offer pizza in Australia but knows that to be competitive with pizza chains and acceptable to its customers it must be able to cook the pizzas in less than 5 minutes.Explain how McDonald's would make the purchase decision for the high-speed pizza ovens.

Question 44

________ occurs when firms obtain outside vendors to provide goods or services that might otherwise be supplied in-house.

A)Resource contracting
B)Multiple sourcing
C)External human resources management
D)Outsourcing
E)Cross-functionalisation

Question 45

Business buyers often develop ________ -written descriptions of the quality,size,weight,colour,features,quantity,training,warranty,service terms,and delivery requirements for the purchase.

A)product specifications
B)FAB lists
C)value analyses
D)product maps
E)vendor analyses

Question 46

During the ________ stage of the business buying decisions process,the buying centre assesses the proposals.

A)problem recognition
B)product specification
C)information search
D)value analysis
E)evaluation of alternatives

Question 47

Organisational buyers only engage in limited postpurchase evaluation,as the products are not for their own use.

Question 48

What are the three types of business-to-business buying situations?

Question 49

A supplier's ability to make on-time deliveries is the critical factor in the selection process for firms that have adopted an inventory management system called ________.

A)a just-in-time (JIT)system
B)direct distribution
C)electronic data exchange (EDE)
D)quick warehousing
E)computer-assisted manufacturing (CAM)

Question 50

Explain the different roles at play in the buying centre.Illustrate using the example of a long distance hauling company purchasing a computerised dispatch system.

Question 51

After business buyers write product specifications they ________.

A)do an information search
B)engage in a value analysis
C)set price ceilings
D)obtain written or verbal bids
E)evaluate alternatives

Question 52

Suppliers are more likely to stay price competitive when the purchasing company uses single-source rather than multiple sourcing.

Question 53

Explain the advantages and disadvantage of the practice of multiple sourcing in business-to-business purchasing.

Question 54

Identify the roles being played in the following scenario.
When Brian goes to make his first cup of coffee for the day he notices the steamer on the company's industrial strength coffee machine isn't working and can't be fixed.He lets John know who in turn goes to Brenda for advice-she's the office expert in all things coffee and John is not a coffee drinker.Brenda suggests Ernie gather some information about the different machines on offer but does state her personal recommendation for the MegaJava450.When Ernie,a coffee lover,gives John information on seventeen different models,John goes with Brenda's personal recommendation and instructs Brian to make the purchase.

Question 55

The first step in the business buying decision process is the ________.

A)information evaluation
B)prepurchase evaluation
C)vendor analysis
D)information search
E)problem recognition

Question 56

What are the responsibilities of a business-to-business professional buyer?

Question 57

A buy class framework identifies the degree of effort required of the firm's personnel to collect information and to make a purchase decision.

Question 58

Explain the three different buying situations and illustrate using McDonald's as an example.

Question 59

A participant in a buying centre can only assume one role for any single purchase.

Question 60

One of the advantages of a just-in-time (JIT)inventory system is ________.

A)increased ordering and handling costs
B)reduced contribution margin
C)disintermediation
D)pure transactional exchanges
E)reduced warehousing costs