Question 1

Motorola buys silicone which is used in its chip-making process. Motorola produces microchips for use within a wide variety of products for other firms, such as Ford, GM and Samsung. Motorola is a buyer in a(n) ____ market.

Accepted Answer

Motorola is purchasing silicone to produce microchips, which are components used in the manufacturing of products for other companies. This activity places Motorola in the producer market, as it is buying raw materials (silicone) to produce goods (microchips) for other businesses.

Question 2

Pi Delta Mu sorority purchases food in bulk to feed its members living in the house. This means it is part of a(n) ____ market.

Accepted Answer

Pi Delta Mu sorority is part of an institutional market because it is a non-profit organization purchasing goods for its members' use, not for resale or production.

Question 3

Mike's Roadside Market buys produce from area farmers, marks the merchandise at a price that includes some profit, and then sells the fruit and vegetables to the people in and around Centerville. Mike's would be classified as part of a ____ market.

Accepted Answer

Mike's Roadside Market is buying produce from farmers and selling it to consumers, which makes them a reseller in the market.

Question 4

Which of the following statements about reseller markets is false?

Accepted Answer

Resellers are concerned with how much space the product takes up, as it impacts their inventory management and storage costs. Therefore, option B is false.

Question 5

Which of the following would be considered an institutional buyer?

Accepted Answer

The answer of Which of the following would be considered...

Question 6

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

Accepted Answer

Retailers often evaluate products based on their performance in terms of sales per square foot of selling area. This metric helps them determine the productivity of the space used to sell the product and identify which products are worth stocking in their stores. By focusing on sales per square foot, retailers can optimize their product selection and merchandising strategies to drive sales and profitability.

Question 7

What are the two ways governments make purchases?

Accepted Answer

Governments typically make purchases through bids and negotiated contracts. Bids involve requesting proposals from various suppliers and selecting the best offer, while negotiated contracts involve selecting a supplier and negotiating the terms and price of the purchase. This process ensures fairness and transparency in government procurement.

Question 8

Institutional markets are

Accepted Answer

The answer of Institutional markets are
...

Question 9

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him

Accepted Answer

The government buys products from all sizes of business, but there is often some bureaucratic red tape involved. Small businesses can also benefit from certain set-aside programs and federal contracting preferences designed for small businesses. Thus, it is possible for a small business to win a government contract, but it may take more effort and patience than dealing with private clients.

Question 10

The government decides to purchase a new fleet of fighter jets for the U.S. Air Force. What type of buying procedure is the government most likely to use?

Accepted Answer

The government is most likely to use a negotiated procurement procedure in which they will select a few firms and enter into negotiations with them until the contract is awarded. This is because the purchase of fighter jets involves a high level of complexity and requires customization based on specific requirements of the Air Force. Therefore, negotiations with a few firms will help the government to get the best possible deal while ensuring that the exact needs of the Air Force are met. This approach would likely result in the procurement of the best possible fighter jets for the U.S. Air Force.

Question 11

When the city of Chicago buys iPads for its restaurant inspectors to use during their visits, the purchase from Apple would be considered​

Accepted Answer

The purchase from Apple by the city of Chicago is a government purchase, since it is being made by a governmental entity for its own use.

Question 12

When charitable organizations such as the American Cancer Society, Second Harvest Foodbank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers.

Accepted Answer

Charitable organizations such as the American Cancer Society, Second Harvest Foodbank, and the Red Cross are examples of institutional buyers because they are non-profit organizations that purchase goods and services to support their operations and achieve their mission rather than for direct monetary gain.

Question 13

Snappy Tools, Inc., purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Snappy Tools, Inc. The company would be part of what type of business market?

Accepted Answer

Snappy Tools, Inc. purchases products from manufacturers and resells them to hardware stores, which makes them a reseller in the business market.

Question 14

The state of Montana is preparing to buy a large quantity of frozen orange juice for use in a large school district. Citrus Sweet, Inc. is in the citrus juice business but has never sold to the government market. To have a chance at getting this order, Citrus Sweet's first step must be to get her firm to

Accepted Answer

The best choice would be to secure a slot on the list of qualified bidders. This is because the state of Montana is a government entity and typically requires vendors to be on an approved list of qualified bidders before they can submit a bid or be considered for a contract. Once Citrus Sweet is on the list, they can then make a presentation appointment, quote prices, negotiate with the state, and advertise if necessary.

Question 15

Retailers like Target and Kmart are considered to be members of which business market?

Accepted Answer

Retailers like Target and Kmart are considered to be members of the reseller market since they purchase goods from producers or wholesalers and sell them to end customers.

Question 16

____ buy products from manufacturers and then resell the products to other firms in the distribution system.

Accepted Answer

Wholesalers are intermediary entities that purchase products in bulk from manufacturers and then resell them to retailers or other distribution channels. They provide a variety of services, such as warehousing, transportation, and inventory management, which help to increase the efficiency and effectiveness of the distribution system. While retailers also resell products to consumers, they typically purchase them directly from wholesalers or other intermediaries, rather than from manufacturers. Producers are the companies that actually create and manufacture the products, while distributors and warehouses can refer to various entities involved in the movement and storage of goods within the distribution system.

Question 17

About what percentage of the annual U.S. gross domestic product is government spending?

Accepted Answer

Government spending typically accounts for around 35-40% of the U.S. gross domestic product (GDP) when combining federal, state, and local government expenditures. This percentage can fluctuate based on various factors, including economic conditions and policy changes.

Question 18

Which type of business market tends to have the most complex buying procedures?

Accepted Answer

Government markets tend to have the most complex buying procedures due to regulations, laws, and bureaucracy. Government buyers must adhere to strict procurement regulations and deal with multiple layers of decision-making and approval processes.

Question 19

What is a primary difference between business and consumer buyers?

Accepted Answer

Business buyers generally make larger orders than consumer buyers. While both business and consumer buyers require product information, repeat sales can vary depending on the product, and both groups may purchase items at different price levels. However, the primary difference between the two groups is that business buyers make larger orders due to their need for bulk purchasing.

Question 20

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.

Accepted Answer

Reseller markets refer to individuals and businesses that buy finished goods and resell them without changing their physical characteristics. Consumer markets refer to buyers who purchase goods and services for their own personal use. Institutional markets refer to organizations that purchase goods and services for the operation of their own organizations. Producer markets refer to individuals and organizations that purchase goods and services to produce other goods and services. Government markets refer to federal, state, and local governments that purchase goods and services to carry out public services. Therefore, the best choice for the given scenario is option E, reseller.

Quiz 8: Business Markets and Buying Behavior