Deck 5: Business Markets and Business Buying Behaviour

Question 1

Compared with consumers discuss how business buyers seek information.

Answer 1

Business buyers, also have personal goals that may influence their buying behaviour. Most buyers seek the psychological satisfaction that comes with promotion and financial rewards. In general, managers are most likely to achieve these personal goals when they consistently exhibit rational buying behaviour and perform their jobs in ways that help their companies achieve their organizational objectives. Suppose, though, that a business buyer develops a close friendship with a certain supplier. If the buyer values the friendship more than organizational promotion or financial rewards, s/he may behave irrationally from the company's point of view. Dealing exclusively with that supplier regardless of better prices, quality or service from competitors may indicate an unhealthy or unethical alliance between the buyer and seller. Companies have different ways of dealing with such problems. Some require more than one person to be involved in buying products, while others periodically review their use of suppliers.

Question 2

A practice in which two businesses agree to buy from each other is ________

A) a new task purchase.
B) a straight rebuy.
C) a modified rebuy.
D) reciprocity.
E) a straight purchase.

Answer 2

D

Question 3

Explain how purchase decisions for business products may be influenced by persons in a buying center.

Answer 3

Most business-to-business purchase decisions are made by more than one person. The group of people within an organization who are involved in making business purchase decisions are usually referred to as the buying centre. These individuals include users, influencers, buyers, deciders and gatekeepers, although one person may perform several of these roles. Participants in the buying process share the goals and risks associated with their decisions. Effective marketers strive to understand the constituents of risk, as perceived by their target customer personnel, so that they may tailor their messages and marketing propositions to reassure members of the buying centre. In this way, marketers hope to gain an advantage over those rivals that fail to understand these customer concerns and issues. Buyers are sometimes called purchasing agents or purchasing managers and in retailers, merchandisers. Their choices of suppliers and products, especially for new task purchases, are heavily influenced by individuals occupying other roles in the buying centre.

Question 4

Compare and contrast the three major types of purchases made by business customers.

Question 5

Institutional markets are:

A) intermediaries who resell goods to make a profit.
B) federal and state government units.
C) state or local government units.
D) consumers who buy products for their own use.
E) organizations that seek non-business goals.

Question 6

Compare the consumer buying decision process and the business buying decision process.

Question 7

In what ways do environmental factors affect the business buying decision process?

Question 8

Give examples from each of the 10 industrial classification systems used by business marketers to analyze target markets.

Question 9

What is a primary difference between business and consumer buyers?

A) Consumer buyers require more product information than business buyers.
B) Business purchases are made by one individual whereas families make consumer purchases together.
C) Repeat sales are more common with consumer buyers than business buyers.
D) Consumers primarily buy inexpensive items; businesses only buy expensive items.
E) Business buyers generally make larger orders than consumer buyers.

Question 10

The three purposes for which individuals or groups can use products in order for it to be considered a business market are:

A) use in daily operations, end consumption, and resale.
B) direct use in producing other products, company travel, and end consumption.
C) resale, use in daily operations, and direct use in producing other products.
D) governmental, institutional, and reseller purposes.
E) making other products, selling to other businesses, making component parts.

Question 11

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of:

A) their markup.
B) sales per square foot of selling area.
C) how many of the product they can fit in a certain amount of space.
D) profit per dollar of selling price.
E) the reliability of the supplier.

Question 12

What impact does fluctuating demand have?

Question 13

When the requirements associated with a new-task purchase are changed the second or third time, this is called a ____ purchase.

A) modified rebuy
B) continued new-task
C) contractual
D) straight rebuy
E) negotiated rebuy

Question 14

Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ____ markets.

A) consumer
B) institutional
C) producer
D) government
E) reseller

Question 15

What are the four major types of business markets, and what are the characteristics of each?

Question 16

Which method of business buying is most likely to be used when the products being purchased are standardized based on certain characteristics?

A) Homogeneous selection
B) Inspection
C) Description
D) Sampling
E) Negotiation

Question 17

Demand for business products is also known as ____ demand.

A) derived
B) corporate
C) business buying
D) manufacturing
E) industrial

Question 18

What is joint demand and how can marketers take advantage of it to affect business buying decisions?

Question 19

Give an example of inelastic demand for a business product.

Question 20

Business markets are typically divided into four categories. These categories are:

A) retailers, wholesalers, services, and nonprofit firms.
B) producer, manufacturer, reseller, and government.
C) producer, reseller, government, and institutional.
D) manufacturer, wholesaler, retailer, and services.
E) reseller, retailer, government, and institutional.

Question 21

Business customers generally seek to obtain detailed information about a product before purchasing it.

Question 22

What are the four major categories of factors that influence business buying decisions?

A) Environmental, organizational, interpersonal, and individual
B) Environmental, organizational, psychological, and individual
C) Environmental, psychological, individual, and technological
D) Technological, organizational, environmental, and interpersonal
E) Environmental, organizational, technological, and individual

Question 23

Analysis of business input-output data by the government allows the government to have a better understanding of the:

A) cash flows that exist among industries.
B) raw materials and labor required to produce a given product.
C) amount of reinvestment that different industries use.
D) types of industries that purchase particular products.
E) growth projections for a given industry.

Question 24

An organization that decides to buy all of a certain part from the same company is using:

A) single-supplier purchasing.
B) multiple sourcing.
C) same vendor analysis.
D) straight rebuy.
E) sole sourcing.

Question 25

The fact that business customers purchase products to be used directly or indirectly in the production of goods and services to satisfy customers' needs means that demand for business products is _______

A) joint.
B) economically stable.
C) derived.
D) inelastic.
E) more fluctuating.

Question 26

The second stage in the business buying decision process is to:

A) search for products and suppliers.
B) select the most appropriate product.
C) develop product specifications.
D) evaluate product and supplier performance.
E) recognize the problem.

Question 27

The term business markets refers only to producer markets.

Question 28

All of the following describe the demand for business products except _______

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

Question 29

There is little or no difference between wholesalers' customers and retailers' customers.

Question 30

Input-output analysis is most likely to yield what type of information?

A) Number of employees that a firm has
B) Industries that purchase the major portion of an industry's output
C) Kinds of returns a firm is getting on its equipment investments
D) Type of inventory turnover that is characteristic of a firm
E) Kinds of variables that would be used to segment the target market

Question 31

The stages of the business buying decision process, in order, are:

A) recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance.
B) recognizing the problem, searching for products and evaluating possible suppliers, selecting suppliers and products, establishing product specifications, and evaluating performance.
C) recognizing the problem, selecting suppliers and products, evaluating performance, establishing product specifications, and searching for substitute products.
D) establishing product specifications, recognizing the problem, searching for products, evaluating possible products and suppliers, selecting suppliers and products, and evaluating performance.
E) establishing product specifications, searching for products, selecting suppliers and products, evaluating performance, recognizing the problem, and evaluating possible products and suppliers.

Question 32

Demand for a business product is ____ if a price increase or decrease will not significantly affect that demand.

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

Question 33

One very important consideration for retail purchases is the type of packaging used.

Question 34

Which of the following products is most likely to be purchased on the basis of contract negotiation?

A) Eggs
B) Office supplies
C) Used cars
D) A custom-made bulldozer
E) Wheat

Question 35

During the search for products and evaluating possible suppliers stage of the business buying decision process, marketers sometimes use ____ analysis to examine the quality, design, materials, and possibly item reduction in order to acquire the product in the most cost-effective way.

A) cost
B) value
C) profit
D) strategic
E) SWOT

Question 36

Which method of business buying is necessary when products are highly homogeneous and examination of each item is not feasible?

A) Negotiation
B) Sampling
C) Description
D) Inspection
E) Homogeneous selection

Question 37

Reseller markets consist of intermediaries that buy finished goods and resell them for profit.

Question 38

The third stage in the business buying decision process is to

A) evaluate product specifications to solve the problem.
B) evaluate products relative to specifications.
C) select and order the most appropriate product.
D) evaluate product and supplier performance.
E) search for products and suppliers.

Question 39

The four categories of consumer markets are producer, reseller, government, and institutional.

Question 40

Grocery stores and supermarkets are a part of producer markets.

Question 41

Raw materials are especially affected by joint demand.

Question 42

The demand for many business products is inelastic at the industry level.

Question 43

When trying to estimate the purchases of a potential business customer, it is reasonable to suppose that there is a relationship between the size of the potential customer's purchases and a variable such as the number of personnel employed by the customer.

Question 44

The fourth stage in the business buying decision process is that of searching for products and suppliers.

Question 45

Orders placed by business customers are usually smaller and more numerous than consumer sales.

Question 46

Government markets, although complicated in their requirements, can be very lucrative.

Question 47

Problem recognition can be stimulated by external sources, such as trade shows or sales representatives.

Question 48

In the long run, business demand becomes totally unrelated to consumer demand.

Question 49

The factors that influence business buying behavior are the same as those that influence consumer buying behavior.

Question 50

Retailers purchase products and resell them to final consumers.

Question 51

If a business product exceeds specifications, so much the better; the customer can then be assured of obtaining a minimum level of acceptability.

Question 52

When purchasing products, business customers are especially concerned about quality, service, price, and supplier relationships.

Question 53

In the buying decision process, one of the activities included in the search for products and suppliers is examining catalogs and trade publications.

Question 54

Value analysis focuses primarily on the examination of the cost of products relative to design, quality, and materials used.

Question 55

The five-stage business buying decision process is used primarily for routine, straight rebuy purchases.

Question 56

Interpersonal influences are easy to observe and simple for the marketer to assess.

Question 57

Price is of concern to a business marketer primarily because of its psychological impact on purchasing agents.

Question 58

Feedback acquired during the fifth stage of the business buying decision process is kept on file but not used as a reference for future business purchase decisions.