Deck 6: Business Marketing

Question 1

NAICS is an industry classification system used by most nations of the world.

Answer 1

False

Question 2

Another commonly used term for accessory equipment is installations.

Answer 2

False

Question 3

One useful aspect of the North American Industry Classification System (NAICS)data is that it helps organizations identify potential new customers.

Answer 3

True

Question 4

South-Western Publishing sells its business textbooks to college bookstores,which in turn sell the books to students.South-Western is engaged in business marketing.

Question 5

Most business marketers emphasize personal selling as their primary communications tool.

Question 6

The government sector (federal,state and local)is not considered a business segment.

Question 7

While consumer and business markets differ in many ways,the volatility of demand for products is about the same for each type of market.

Question 8

Several of the world's largest telecommunications equipment manufacturers are working together to build devices that will speed global Internet communications.This is an example of a strategic alliance.

Question 9

The Internet has eliminated the need for distributors.

Question 10

The reseller market is the same as the retailer market.

Question 11

Unlike consumer product channels of distribution,which usually have one or more intermediaries,channels of distribution for business products are often direct.

Question 12

Any firm that purchases goods and services to make a profit by using them to produce other goods is part of the producer segment of the business market.

Question 13

The Internet provides a powerful tool for conveying information,conducting transactions,delivering innovative services,building customer and supplier relationships,gathering marketing data,and reducing costs and prices.

Question 14

A decline in the availability of tungsten will slow production of light filaments which will in turn reduce the demand for light bulbs.This is an example of fluctuating demand.

Question 15

A keiretsu is an example of how strategic alliances can make efficient use of relationship marketing.

Question 16

The single largest customer in the world is the U.S.federal government.

Question 17

If DuPont runs advertisements encouraging people to buy shoes that contain Lycra (a DuPont product),this would be an attempt to influence derived demand.

Question 18

The emergence of the Internet has made buying and selling in the business market a process that is only efficient for the largest producer to pursue.

Question 19

More business buying and selling is done on the Internet than off-line.

Question 20

For a product to be called a business product,it must be used to manufacture other products,become part of another product,facilitate the normal operations of a firm,or be acquired for resale with no substantial change in form.

Question 21

Which of the following is the best example of a sale that could only take place in the business market?

A) A park ranger is purchasing an azalea bush for her garden.
B) A music store owner is ordering the newest Faith Hill CD for her mother.
C) A dentist is buying postage stamps to mail invitations to his son's birthday party.
D) A university controller is ordering more computers for classroom labs.
E) All of these are examples of business sales.

Question 22

Businesses typically enter into strategic alliances to:

A) gain access to markets or technology
B) facilitate faster entry of new products to market
C) share financial risks
D) achieve economies of scale
E) do all of these

Question 23

A keiretsu is a(n):

A) type of strategic alliance commonly found in Japan
B) method of business e-commerce found in the Orient
C) Internet site that offers its customers access to various languages which they can use to conduct their business
D) form of relationship marketing that is illegal in the United States
E) bribe

Question 24

Although customer service has in the past been an important factor in business buyer-seller relationships,its importance has been waning in the last decade.

Question 25

Which of the following is NOT a benefit businesses experience from buying and selling their goods and services on the Internet?

A) access to around-the-clock ordering
B) less customer service
C) a greater selection of products and vendors
D) lower prices due to increased competition
E) the ability to buy products customized to their needs

Question 26

Since GE began accepting bids via the Internet,the length of the bidding process in GE's lighting division has been reduced from 21 days to 10.Since requesting the bids is easier,purchasing agents approach more potential vendors.The ability to locate more vendors has lowered the cost of goods by 5 to 15 percent.GE's experience illustrates:

A) how using the Internet increases competition
B) how business marketing is becoming global
C) how business marketing is using the Internet to become more efficient
D) how the use of the Internet has influenced consumer markets to become larger and more powerful than business markets
E) how the Internet increases efficiency in data exchange

Question 27

A cooperative agreement between business firms is a:

A) shared capital contract
B) global partner development strategy
C) strategic alliance
D) joint contract
E) comarketing effort

Question 28

Sheetal is the receptionist for a law firm.As receptionist,Sheetal determines which vendors are seen by the lawyers for which she works.Sheetal is acting as a gatekeeper.

Question 29

Laminators,Inc.manufactures outdoor signs for business customers in less than one hour using SpecTar equipment and supplies.Laminators is an example of a(n):

A) fabricator
B) installer
C) original equipment manufacturer
D) product provider
E) component network

Question 30

Business marketing does NOT include goods and services that:

A) become part of another product
B) are used to manufacture other products
C) are used for personal consumption
D) facilitate the normal operations of an organization
E) are acquired for resale

Question 31

Items that are ready for assembly and that retain their identities when incorporated into another product are called component parts.

Question 32

A product is defined as a business product rather than consumer good on the basis of its:

A) intended use
B) physical characteristics
C) price
D) distribution method
E) tangible attributes

Question 33

Layton Bay,Inc.sells playground equipment to private schools and daycare centers,state and city governments,and families with pre-teen children.Layton Bay's marketing task is to sell products that are classified as:

A) business products only
B) both business and consumer goods
C) installations
D) consumer goods only
E) supplies

Question 34

Individual producers of raw materials have great flexibility in pricing their products.

Question 35

Producers are often called:

A) fabricators
B) installers
C) original equipment manufacturers
D) product providers
E) component networks

Question 36

Consumable items that do not become part of the final product are called supplies.

Question 37

Because formal committees are often established to purchase business products,members of buying centers can be readily identified on formal organizational charts.

Question 38

Subaru and GM have been working together on the design for the new Chevy Borrego,a sporty combination of a truck and a car.Subaru allowed Chevy to use its all-wheel drive platform to build the vehicle,and the two car manufacturers worked together to develop the car's turbo-charged,four-cylinder engine.In this example,Subaru and GM working together is an example of a:

A) shared capital contract
B) global partner development strategy
C) strategic alliance
D) comarketing effort
E) market cooperative

Question 39

In Japan,reciprocity and personal relationships contribute to the development of:

A) global ventures
B) amae
C) agricola
D) keiretsu
E) an independent network of small retailers

Question 40

For several years,the California Association of Pistachio Growers (CAPG)has purchased decorative tins for shipping its products from Decorative Arts,Inc.CAPG likes the attractiveness of the Decorative Arts tins but wants to have metal dividers added to the tins it buys.This would be an example of a new buy

Question 41

The government uses a system called NAICS to classify North American business establishments.NAICS stands for:

A) Non-American Industry Classification System
B) North and South American Institutional Coding Services
C) Non-American Industrial Corporation System
D) North American Institution Code System
E) North American Industry Classification System

Question 42

What is an OEM?

A) an installer of original materials
B) an e-commerce marketing channel
C) an originator of electronic merchandise
D) an organizational system used for inventory control
E) a producer

Question 43

Which of the following is the BEST example of an institution market?

A) the National Park Service
B) a company that sells exclusively on the Internet
C) Dillard's department store
D) Delta Delta sorority
E) a company that does not trade its stock on an international stock exchange

Question 44

Hensley Poultry is a wholesaler that buys poultry food and health products from Provini,Inc.,feeding systems from Big Dutchman,Inc,and incubation systems from Copca Corp,which it then sells to poultry producers and farmers' cooperatives in Iowa.Hensley Poultry could be best classified as a(n):

A) producer
B) distribution network
C) inventory carrier
D) specialty retailer
E) reseller

Question 45

One segment of the business market has primary goals that differ from the ordinary business goals such as profit,market share,or return on investment.This segment includes many schools,churches,and civic clubs and is often called the _____ market.

A) institution
B) OEM
C) service
D) provider
E) reseller

Question 46

Rice Epicurean in Houston is an exclusive outlet for Honey Baked brand hams and See brand candies.In the spring,it markets Easter baskets and all the makings for personalized Easter baskets.Rice Epicurean would be best classified as a(n):

A) reseller
B) producer
C) distribution network
D) inventory carrier
E) business facilitator

Question 47

Which type of customer do business marketers NOT serve?

A) institutions and nonprofits
B) producers
C) resellers and wholesalers
D) governments
E) private consumers

Question 48

The U.S.government is:

A) not a business market segment
B) the world's largest single customer
C) an organization accounting for over 50 percent of the U.S.gross national product
D) mainly a military equipment purchaser
E) using one centralized purchasing office for the entire government

Question 49

NAICS data are helpful for analyzing,segmenting,and targeting markets.The system was developed by:

A) large manufacturers in United States and Mexico that produce similar goods
B) the North American Free Trade Association partners
C) Brazil,Chile,Argentina,Canada,and the United States working together in a joint venture
D) the SIC committee
E) the U.S.government

Question 50

Laminators,Inc.manufactures outdoor signs for business customers in less than one hour using SpecTar equipment and supplies.Laminator would be part of the _____ sector of the business market.

A) channel
B) reseller
C) producer
D) government
E) distributor

Question 51

Which of the following statements does NOT describe the business market?

A) Organizational buying decisions are usually made by independently by the purchasing agent while consumer buying decisions are made jointly.
B) Business customers tend to be more geographically concentrated,and customers in consumer markets tend to be more geographically dispersed.
C) The channel of distribution tends to be shorter for business markets than for consumer markets.
D) Purchasing by businesses is a more formal process than it is in consumer markets.
E) Business marketers tend to have far fewer customers than consumer marketers.

Question 52

The demand for consumer goods often affects the demand for business products.This characteristic of business markets is called _____ demand.

A) elastic
B) inelastic
C) fluctuating
D) derived
E) joint

Question 53

What would a U.S.company that manufactures the lighted signs that are used by state departments of transportation on the sides of roads,at outdoor sports arenas,for restaurant promotion,and in amusement parks use to facilitate its market segmentation and targeting if it wanted data that was readily available and usable?

A) a large amount of marketing research,including scanner data and focus groups
B) other competing firms as a strategic alliance referral service
C) government bidding processes
D) the North American Industry Classification System
E) derived demand

Question 54

Businesses that buy finished goods and sell and distribute them for a profit are called:

A) inventory carriers
B) producers
C) distribution networks
D) resellers
E) business facilitators

Question 55

Ben works for the State of Mississippi as a advocate of state growth and development.He devises ways to encourage businesses to relocate in the state.In other words,Ben is involved in business marketing.He has compiled a list of potential businesses that might be willing to relocate in Mississippi.Which of the following possible clients should he include in his list?

A) any family that takes an annual vacation
B) newlyweds
C) families that enjoy hiking
D) companies that have growing sales
E) students on spring break

Question 56

A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a profit.They achieve this goal by using purchased goods and services to make other goods,to become part of other goods,or to facilitate the daily operations of the organization.This group is called the _____ segment of the business market.

A) institution
B) reseller
C) wholesaler
D) producer
E) government

Question 57

Organon Teknina sells inexpensive equipment to detect E.coli,listeria,or salmonella bacteria in food.The company serves not-for-profit institutions that need to regularly check food quality.Organon Teknina would be LEAST likely to sell to:

A) Montgomery County school system
B) a large pediatric hospital
C) a chain of Mexican restaurants
D) a chain of church-sponsored retirement homes
E) American Red Cross emergency shelter kitchens

Question 58

Imagine you are the research director of a major industrial marketing firm.You need to select an NAICS code that defines the most homogenous group of companies in a particular group of highly competitive companies .Which of the following codes might you use?

A) 7432
B) 532
C) 19
D) 7
E) 999

Question 59

The demand for polyethylene film used to wrap meat ready for sale is dependent on consumers' demand for meat.This is an example of _____ demand.

A) inelastic
B) derived
C) joint
D) fluctuating
E) elastic

Question 60

Managers can use the NAICS data to:

A) create a more focused mission statement
B) eliminate risk
C) classify consumer behavior
D) identify potential new customers
E) determine purchase motives

Question 61

Bábolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to produce uniform brown eggs with strong shells.It breeds and sells young chicks to farmers all over Europe who want to sell eggs in local markets.When consumers began to worry about cholesterol content and stopped eating as many eggs,the demand for the Tetra hen also declined.This would be an example of _____ demand.

A) derived
B) elastic
C) multiplying
D) bundled
E) inelastic

Question 62

Which of the following pairs of products BEST illustrates the concept of joint demand?

A) a pumpkin and the set of tools used to carve it
B) a thermometer and a barometer
C) a grandfather clock pendulum and a grandfather clock case
D) canola oil and sunflower oil
E) chocolate and vanilla ice cream

Question 63

Due to rapidly rising overhead costs and increases in raw material prices,Framarx Corporation was forced to raise the price of its waxed and coated paper by 35 percent.(The paper is used between frozen hamburger patties to keep the patties from freezing together.)Framarx is the leading manufacturer in this industry,and its competitors will follow suit.While the sales force for Framarx believes the price increase will result in a drop in sales,its marketing manager disagrees because the demand for the waxed and coated paper is more than likely:

A) resistant
B) inelastic
C) derived
D) elastic
E) bundled

Question 64

As a result of the _____,a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to manufacture the consumer product.

A) demand fluctuation principle
B) joint demand principle or division effect
C) inelastic demand effect
D) multiplier effect
E) derived force effect

Question 65

Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford.A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to double the price of the wiper blades.Sales volume for wiper blades has not been affected by this increase in price.The price did not change because demand for windshield wiper blades is:

A) inelastic
B) secure
C) bundled
D) elastic
E) resistant

Question 66

Buyers in the business market tend to _____ than buyers in the consumer market.

A) use reciprocity less
B) purchase in much smaller quantities
C) buy products that have a reduced probability of being affected by derived demand
D) generate more stable demand trends
E) be much more geographically concentrated

Question 67

The distribution structure in business marketing typically:

A) includes at least one wholesaler
B) is direct
C) is complex and multistage
D) uses a three-step channel
E) uses retail distributors

Question 68

Which of the following information can be used by a manufacturers searching for the location for a new factory?

A) Just like individual consumers,business consumers are dispersed proportionally across the United States,and location does not matter.
B) The company's best location will be in the geographic center of the United States.
C) Its salespeople will have to travel throughout all of the fifty states because business consumers are widely dispersed.
D) More than half of U.S.industrial buyers operate in seven states.
E) The new facility should be located in New York or California because over half of the nation's industrial buyers are in those two states.

Question 69

When the demand for packaged beer fell by 8 percent in one year,the demand for aluminum beer cans and glass beer bottles fell also because the demand for beer containers is an example of a(n)_____ demand.

A) joint
B) inelastic
C) elastic
D) fluctuating
E) derived

Question 70

Which of the following is NOT an example of an advantage business marketers have because they usually have fewer customers than consumer marketers?

A) ease of identifying prospective buyers
B) the ability to monitor customers needs
C) the ability to personally attend to existing customers
D) the fact the majority of sales can come from one customer
E) the ability to keep track of customer satisfaction levels

Question 71

Grote manufactures a slicing machine for any boneless food.The machine will cut up to 1,200 slices per minute and is portable in that it can be rolled out of the work area when it is not in use.The wheels are especially made to meet federal safety requirements.A decline in the availability of the specialized wheels will slow down the production of the slicing machines and in turn reduce the sales of the blades that fit in the machine.A condition of _____ demand exists.

A) bundled
B) incremental
C) functional
D) developmental
E) joint

Question 72

When two or more items are used in combination to produce a final product,they are said to have _____ demand.

A) derived
B) inelastic
C) joint
D) fluctuating
E) elastic

Question 73

Kate Lui developed bread mixes that she could use to make bread for her diabetic daughter.She initially sold the bread mixes to friends and friends of friends,but she has gradually changed her customer base.Her bread mixes are now sold to a catalog retailer that markets her mixes nationwide.With this change in customers,Lui should expect:

A) derived demand issues to emerge
B) a more formal purchase process
C) a smaller order size
D) a greater reliance on advertising to gain new customers
E) less use of reciprocity

Question 74

A decline in the availability of bicycle handle bars will decrease Huffy Bicycle Company's production of bicycles.Decreased production in turn reduces Huffy's demand for bicycle seats.This is because the products in this situation have _____ demand.

A) inelastic
B) joint
C) elastic
D) fluctuating
E) derived

Question 75

During the first years of this century,the number of packages arriving at households has more than doubled.An increase in the price of the cardboard boxes in which these packages are shipped will have little effect on the amount of shipping done; the demand for the boxes will continue to increase.Therefore,you know the demand for the cardboard boxes is:

A) resistant
B) inelastic
C) derived
D) elastic
E) bundled

Question 76

In the six months following the September 11 tragedy,consumer demand for large American flags saw a 200 percent increase,but the Eagle Manufacturing Company had a 500 percent increase in orders for the special machine that mass produces the larger flags.This dramatic increase is due to the:

A) demand fluctuator principle
B) joint demand principle or division effect
C) inelastic demand effect
D) derived force effect
E) accelerator principle

Question 77

When demand for a product is_____,an increase or decrease in the price of a product will not significantly affect demand for the product.

A) responsive
B) elastic
C) inelastic
D) derived
E) bundled

Question 78

_____ is the bargaining between buyers and sellers on product specification,delivery dates,payment terms,and other pricing matters and is commonplace in business marketing.

A) Negotiation
B) Need mediation
C) Customerization
D) Purchase arbitration
E) Disintermediation

Question 79

Although the price of a chemical added to paint to protect surfaces from mold and mildew has almost doubled,the price of paint only rose an average of 5 percent,and the demand for both paint and the chemical that eliminates mold and mildew remained stable.The demand for this chemical is:

A) elastic
B) derived
C) bundled
D) inelastic
E) change-resistant

Question 80

White Wave is a small company that manufactures several flavors of soy milk coffee creamers for people who are lactose-intolerant.White Wave typically places large orders for soy to manufacture its creamer.This order size is an example of _____ and would give White Wave an advantage over other buyers of soy.

A) purchase volume
B) joint demand
C) fluctuating demand
D) sales volume
E) multiplier effect