Question 1

The ________ approach to consumer research asks customers to attach a monetary value to alternative levels of a given attribute. The value of a given configuration is determined by adding the average values of each of the given attributes.

Accepted Answer

The answer of The ________ approach to consumer research asks...

Question 2

A supplier signs an agreement with a customer that states that $350,000 in savings will be earned by the customer over the next 18 months in exchange for a tenfold increase in the customer's share of supplies ordered by the customer. If the supplier achieves less than this promised savings, it will make up the difference. If the supplier achieves substantially more than promised, it participates in the extra savings. This is an example of ________.

Accepted Answer

This is an example of risk and gain sharing, as the supplier and customer have agreed to share the risk of not achieving the promised savings, and the gain if the savings are exceeded.

Question 3

In the ________ method for assessing customer value, customers are asked how costs of using a new product compare to those of using an incumbent.

Accepted Answer

The field value-in-use assessment method involves asking customers about the costs of using a new product in comparison to those of using an incumbent. This helps in assessing customer value by measuring the benefits of using a new product and comparing them with the costs, in order to determine its value to the customer. Direct survey, importance ratings, benchmarking, and conjoint analysis methods do not specifically focus on comparing the costs of using a new product with those of using an incumbent.

Question 4

In reordering office supplies, the only stages that the buyer passes through are the product specification stage and the ________ stage.

Accepted Answer

The answer of In reordering office supplies, the only stages...

Question 5

Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers?

Accepted Answer

Buyers often assess supplier performance by calculating the cost of poor performance, which includes additional costs incurred due to issues like delays or defects, to adjust the overall cost of purchase.

Question 6

Business marketers can stimulate problem recognition by ________.

Accepted Answer

Direct mail, telemarketing, and calling on prospects are all tactics that can be used to reach out to potential customers and create awareness of their problems or issues that the business can solve. Other options such as ensuring a presence in trade directories or conducting surveys of existing customers may help with overall marketing efforts, but may not directly stimulate problem recognition. Encouraging the Better Business Bureau to release statistics or using consumer advertising may be more suitable for consumer-oriented businesses.

Question 7

Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in the U.S. Its customers have shifted their ordering responsibilities to Praxair and the company regularly monitors its customer's inventory levels and has taken responsibility for replenishing the supplies automatically through continuous replenishment programs. Which of the following systems do Praxair and its customers follow with respect to order-routine specification?

Accepted Answer

Praxair and its customers follow Vendor Managed Inventory (VMI) system, in which the supplier takes responsibility for monitoring and replenishing inventory levels.

Question 8

With respect to e-procurement, which of the two types of e-hubs are Web sites organized around?

Accepted Answer

The answer of With respect to e-procurement, which of the...

Question 9

A ________ establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time.

Accepted Answer

A stockless purchase plan is where the supplier promises to resupply the buyer as needed. The other options (B-E) are all related to financial plans and investments, and not applicable to this scenario.

Question 10

The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________.

Accepted Answer

The approach described is product value analysis (PVA), which focuses on finding ways to reduce costs without sacrificing product performance or quality. MRO, VMI, SPM, and SAVE are all supply chain management concepts that do not directly relate to this approach.

Question 11

A new-task buyclass decision begins with which of the following steps?

Accepted Answer

The first step in a new-task buying decision is problem recognition, which is the identification of a need or a problem that can be solved through a purchase. The other steps follow problem recognition and involve identifying the general need, detailing product specifications, searching for suppliers, and soliciting proposals.

Question 12

Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier. These situations spur the ________ stage.

Accepted Answer

The situation described in the question prompts the buyer to recognize a problem or need, which is the first stage in the buying process known as problem recognition. Options B, C, D, and E occur later in the process.

Question 13

With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, P&G, and several other companies joined forces to form a ________ called Transora to use their combined leverage to obtain lower prices for raw materials.

Accepted Answer

The given scenario represents the concept of a buying alliance, which is an e-procurement strategy in which two or more companies join forces to increase their purchasing power and obtain lower prices from suppliers. Transora is an example of a buying alliance formed by Coca-Cola, Sara Lee, Kraft, PepsiCo, P&G, and other companies to leverage their collective buying power for raw materials. Option A is incorrect because a manufacturer's co-op is a group of manufacturers who join together to achieve common goals, such as marketing or research, but not necessarily to purchase raw materials. Option B is also incorrect because a supplier's co-op represents a group of suppliers who come together to achieve economies of scale, but not necessarily to negotiate prices with buyers. Option C, middleman group, is incorrect because there is no mention of any middlemen involved in the procurement process. Option E, buying cabal, is a wrong term as a cabal is a secret political clique or faction that operates outside of traditional or lawful channels, which is not the case in this scenario.

Question 14

On an online ________ , prices change by the minute.

Accepted Answer

A spot market is a market where prices are set in real-time based on supply and demand. This means that prices can change rapidly and frequently, sometimes even by the minute, making it the best choice for this description. Buying alliance, barter market, system seller, and catalog site do not necessarily imply quick price changes.

Question 15

In the ________ category of buyer-supplier relationships, competition rather than cooperation is the dominant form of governance.

Accepted Answer

The answer of In the ________ category of buyer-supplier relationships,...

Question 16

Which of the following is an example of a functional hub?

Accepted Answer

The answer of Which of the following is an example...

Question 17

Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. Plastics.com is an example of a(n)________.

Accepted Answer

Plastics.com is a vertical market, which is an online marketplace that connects buyers and sellers in a specific industry or sector. In this case, Plastics.com connects plastics buyers with plastics sellers.

Question 18

Robert Jennings consultants help farmers deliver an incremental animal weight gain of 8% to 12% over competitors. This is an example of ________.

Accepted Answer

The statement indicates that the consulting firm's solutions help farmers achieve higher animal weight gain than their competitors, which can ultimately enhance customer revenues. This aligns with the definition of solutions selling to enhance customer revenues.

Question 19

Through its dedicated research team, CISCO Systems Inc. has developed new value-added business solutions which enable its variant class-II capacitors to provide incremental productivity of 10 to 20 percent over its competitors. This is an example of the ________ form of solution selling.

Accepted Answer

The given example relates to solutions that enhance customer revenues as the new value-added business solutions developed by CISCO Systems Inc. enable its class-II capacitors to provide incremental productivity of 10 to 20 percent over its competitors. This can result in increased revenues for customers who use these capacitors.

Question 20

GM employees work at large customer facilities to reduce materials-management spending. This is an example of the ________ form of solution selling.

Accepted Answer

The given scenario where GM employees work at large customer facilities to reduce materials-management spending is an example of a solution that helps to reduce customer costs, which makes option E the correct choice.

Quiz 7: Analyzing Business Markets