Test Bank Chapter 6 Understanding Organizations As Customers

Chapter 06

Understanding Organizations as Customers

Multiple Choice Questions

According to the textbook, JCPenney buys paper for which of the following media?

A.	in-store signage

B.	special advertising inserts in magazines such as Cosmopolitan

C.	newspaper inserts and direct mail pieces

D.	annual and 10-K reports

E.	point-of-purchase displays

Purchasing paper for JCPMedia is one example of

A.	organizational buying.

B.	online buying.

C.	on-time delivery.

D.	derived demand.

E.	cooperative selling.

When JCPMedia buys paper for JCPenney newspaper inserts, it considers suppliers' forest management and other sustainability practices. JCPMedia buyers consider these as part of the process to

A.	fulfill profit responsibilities.

B.	formally evaluate paper supplier capabilities.

C.	eliminate the need for online purchasing.

D.	shorten the value chain.

E.	fulfill the auditing role.

"The choice of paper and suppliers is ____________ given the sizable revenue and expense consequences," notes Tom Cassidy, vice president-marketing production at JCPMedia, Inc.

A.	a limited purchase decision

B.	a significant marketing decision

C.	a challenge for storage and shipping

D.	a routine decision

E.	a reciprocity practice

JCPMedia, Inc. paper buyers are thoroughly trained in

A.	shopping center management.

B.	break-even analysis.

C.	retail management.

D.	consumer decision practices.

E.	many facets of purchasing.

The marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others is referred to as

A.	integrated marketing.

B.	institutional marketing.

C.	business-to-business marketing.

D.	reseller marketing.

E.	organizational marketing.

Business-to-business marketing refers to

A.	the marketing of goods to companies, governments, or ultimate consumers for use in the creation of goods and services.

B.	the marketing of products to not-for-profit organizations at a reduced fee or nominal cost for use in the creation of goods and services that they can produce and market to others.

C.	the marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of products that they can produce and market to others.

D.	the marketing of services in the area of intellectual property such as legal, financial, or creative consulting.

E.	the marketing of an idea to create interest or generate goodwill, not just for an individual brand but also for an entire industry or product class.

______________ in some way reprocess a product or service they buy before selling it again to the next buyer.

A.	Transactional markets

B.	Corporate markets

C.	Government marketers

D.	Reseller marketers

E.	Industrial firms

Manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services for their own use or for resale are referred to as

A.	multinational buyers.

B.	resellers.

C.	organizational buyers.

D.	ultimate consumers.

E.	institutional buyers.

10.

Organizational buyers are

A.	manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services exclusively for resale.

B.	manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy products and services for their own use or for resale.

C.	manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy goods and services exclusively for their own use.

D.	firms that typically buy physical goods and resell them again without any reprocessing.

E.	all buyers in a nation including ultimate consumers.

11.

Organizational buyers include manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that

A.	purchase exclusively from one supplier.

B.	are exempt from state and local taxes.

C.	sell directly to ultimate consumers.

D.	sell goods and services for their own use.

E.	buy products and services for their own use or for resale.

12.

Which of the following organizational buyers purchases raw materials and parts to reprocess into the finished goods they sell?

retailers

B.	wholesalers

agents

D.	manufacturers

E.	ultimate consumers

13.

Which of these statements regarding organizational buyers is most accurate?

A.	Wholesalers and retailers resell the goods they buy without reprocessing them.

B.	Wholesalers and retailers alter the goods they sell to meet the specific needs of their customers prior to resale.

C.	Manufacturers purchase processed goods and resell them to suppliers who in turn resell them to ultimate consumers.

D.	Ultimate consumers can be considered organizational buyers when they purchase in large quantities.

E.	Government agency purchases are more similar to ultimate consumer purchases than they are to wholesalers and retailers.

14.

All of the following are organizational buyers except

A.	industrial firms.

B.	government units.

C.	ultimate consumers.

D.	resellers.

E.	wholesalers.

15.

Organizational buyers are divided into three markets, which are

A.	industrial, wholesaler, and retailer.

B.	industrial, retailer, and government.

C.	retailer, manufacturer, and government.

D.	industrial, government, and ultimate consumer.

E.	industrial, reseller, and government.

16.

Which of the following represents an organizational buyer?

A.	A local baker buys sugar at the grocery store to make cookies with his children at home.

B.	A dentist buys a new LG Smart TV 55-inch 3D OLED HDTV for her den.

C.	Mr. Langley hires a housecleaning service to clean his apartment.

D.	The owner of a sushi restaurant hires a window-washing service to clean exterior windows.

E.	The mayor rents a tuxedo to wear to his daughter's wedding.

17.

An industrial firm

A.	is one that is independently owned and takes title to the merchandise it sells.

B.	buys physical goods and resells them again without any reprocessing.

C.	deals exclusively with federal, state, and local governments.

D.	in some way reprocesses a product or service it buys before selling it again to the next buyer.

E.	only produces a product, not a service.

18.

A firm that reprocesses a product or service it buys before selling the product again to the next buyer is referred to as

A.	an industrial firm.

B.	a reseller firm.

C.	a government agency.

D.	a wholesaler.

E.	a retailer.

19.

Manufacturers, farms, financial services, and fisheries are all examples of companies in the

A.	consumer market.

B.	cooperative market.

C.	reseller market.

D.	industrial market.

E.	government market.

20.

Which of the following types of firms are in the industrial market?

retailing

B.	construction

C.	wholesaling

D.	state governments

E.	federal regulatory agencies

21.

Which of the following is a service business within the industrial market?

A.	construction

mining

insurance

D.	government

farming

22.

__________ comprise the highest percentage of firms in industrial markets.

A.	Manufacturing firms

B.	Construction firms

C.	Agricultural firms

D.	Mining companies

E.	Service companies

23.

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with __________, insurance, and real estate businesses, transportation, communication and public utility firms, and not-for-profit organizations, these firms represent 75 percent of all industrial firms.

finance

B.	wholesalers

retailers

D.	government units

E.	educational institutions

24.

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with finance, insurance, and real estate businesses, __________, communication, and public utility firms, as well as not-for-profit organizations, these firms represent about 75 percent of all industrial firms.

A.	wholesalers

B.	transportation

retailers

D.	government units

E.	educational institutions

25.

The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along with finance, insurance, and real estate businesses; transportation, __________ and public utility firms; and not-for-profit organizations, these firms represent about 75 percent of all industrial firms.

A.	wholesaling

retailing

C.	government units

D.	communication

E.	manufacturing

26.

Corning, Inc., which transforms an exotic blend of materials to create optical fiber capable of carrying much of the telephone traffic in the United States on a single strand, is operating in __________ market.

A.	a consumer

B.	a government

a service

D.	a reseller

E.	an industrial

27.

A bank takes money from its depositors, reprocesses it, and "sells" it as loans to borrowers. The bank is operating in the ___________ market.

consumer

B.	government

C.	industrial

service

reseller

28.

The National Aeronautics and Space Administration (NASA) will pay Lockheed Martin Corp. $11.4 billion for Orion's development, test flights, and its first manned mission in 2021. NASA is a government unit operating in __________ market.

A.	a heavy goods

B.	a government

a service

D.	an industrial

E.	a reseller

29.

Graham-Field Health Products makes hospital beds and wheelchairs from the component parts and materials it buys. It sells these manufactured products to hospitals, nursing homes, and retailers of health care products. Graham-Field Health Products operates in __________ market.

A.	a consumer

B.	a government

a service

D.	an industrial

E.	a reseller

30.

Wholesalers and retailers that buy physical products and resell them without any reprocessing are referred to as

A.	industrial firms.

B.	reseller firms.

C.	government agencies.

D.	consumer product firms.

E.	nonprofit firms.

31.

The reseller market includes

A.	manufacturers.

B.	logistics and supply chain providers.

C.	government agencies.

D.	end-user service providers.

E.	retailers and wholesalers.

32.

European Style Furniture (ESF), headquartered in New York, acquires fine furniture from several high quality manufacturers in Europe and enjoys exclusive distribution rights from them to sell to furniture stores throughout the United States. In this context, ESF is most likely classified as

A.	a producer.

B.	a reseller.

C.	a service provider.

D.	a government agency.

E.	an industrial firm.

33.

A firm that markets photocopy products used in the graphic arts field, buys sensitized paper from Eastman Kodak Co., packages it with the Photostat brand name, and sells it directly to amateur photographers. In this context, the marketer is most likely classified as

A.	a manufacturer.

B.	a reseller.

C.	a service provider.

D.	a government agency.

E.	an industrial firm.

34.

1-800 Contacts is based in Draper, Utah, and sells contact lenses manufactured by other well-known companies, including Johnson & Johnson Vision Care, Ciba Vision, Bausch & Lomb, and CooperVision. It would most likely be classified as

A.	an industrial service provider.

B.	a health care provider.

C.	a reseller.

D.	an industrial firm.

E.	a government agency.

35.

Liberty Medical Supply is a home delivery service that sells diabetes testing supplies, prescription drugs, and other supplies directly to consumers to assist them in the management of their health-related conditions. Since Liberty Medical does not make any changes to the supplies that it obtains from manufacturers, it would most likely be classified as

A.	an industrial service provider.

B.	a health care manufacturer.

C.	an industrial firm.

D.	a reseller.

E.	a government agency.

36.

In terms of organizational buying, Amazon.com, Lands' End, and JCPenney would most likely be classified as

A.	government units.

B.	resellers.

C.	manufacturers.

D.	wholesalers.

E.	industrial firms.

37.

Federal, state, and local agencies that buy products and services for the constituents they serve are referred to as

A.	industrial markets.

B.	reseller markets.

C.	consumer markets.

D.	government units.

E.	global markets.

38.

When Georgia State University buys new laptops for its faculty, it is operating as

A.	an industrial market.

B.	a business market.

C.	a government unit.

D.	a consumer market.

E.	a service provider.

39.

When the Federal Aviation Administration (FAA) purchases radar systems for 22 major air traffic control centers in the United States, it is operating as

A.	a government unit.

B.	an industrial market.

C.	a business market.

D.	a consumer market.

E.	a service provider.

40.

When the General Services Administration (GSA), an agency of the federal government, purchased 116 Chevy Volts from General Motors for its vehicle fleet, it was operating as

A.	an industrial market.

B.	a business market.

C.	a consumer market.

D.	a government unit.

E.	a service provider.

41.

The City of Denver contracts with Solid Waste Management to provide trash collection services for its citizens. The city is operating as

A.	a government unit.

B.	an industrial market.

C.	a business market.

D.	a consumer market.

E.	a service provider.

42.

The system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA), is referred to as the

A.	Standard Industrial Code System (SICS).

B.	United Nations Central Product Classification System (UNCPCS).

C.	National Codes of Industry System (NCIS).

D.	North American Industry Classification System (NAICS).

E.	Federal System of International Organizations (FSIO).

43.

The North American Industry Classification System (NAICS)

A.	provides common industry definitions for North America, Central America, and South America to measure economic activity in the Western Hemisphere.

B.	provides common industry definitions between Canada and the United States to measure economic activity and reduce barriers of trade for cross-border firms.

C.	provides a classification system for products and services that is consistent worldwide.

D.	provides a classification system for products and services that is consistent across North America, Central America, and South America to measure economic activity in the Western Hemisphere.

E.	provides common industry definitions for Canada, Mexico, and the United States to measure economic activity in the three member countries.

44.

The North American Industry Classification System (NAICS) provides common industry definitions to facilitate the measurement of economic activity for the member countries of the

A.	European Union (EU).

B.	United Nations (UN).

C.	North American Free Trade Agreement (NAFTA).

D.	North Atlantic Treaty Organization (NATO).

E.	World Trade Organization (WTO).

45.

The acronym NAICS stands for

A.	National Association of Industrial Compliance Standards.

B.	National Association of Industrial Communication Systems.

C.	North American Industrial Communication Standards.

D.	North American Industry Classification System.

E.	North Atlantic Industrial Classification System.

46.

The NAICS provides common industry definitions for

A.	Canada, England, and the United States.

B.	North America, Asia, and Europe.

C.	North America, Central America, and South America.

D.	Canada, England, Australia.

E.	Canada, Mexico, and the United States.

47.

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The first two digits designate

A.	a country of origin.

B.	an industry group.

C.	a specific industry.

D.	an individual country-level national industry.

E.	a sector of the economy.

48.

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The third digit designates

A.	an industry subsector.

B.	an industry group.

C.	a specific industry.

D.	an individual country-level national industry.

E.	a sector of the economy.

49.

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The fourth digit designates

A.	an industry subsector.

B.	an industry group.

C.	a specific industry.

D.	an individual country-level national industry.

E.	a sector of the economy.

50.

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The fifth digit designates

A.	an industry subsector.

B.	an industry group.

C.	a specific industry.

D.	an individual country-level national industry.

E.	a sector of the economy.

51.

The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The sixth digit designates

A.	an industry subsector.

B.	an industry group.

C.	a specific industry.

D.	an individual country-level national industry.

E.	a sector of the economy.

52.

Important market characteristics in organizational buying behavior include which of the following?

A.	unlimited markets but orders become progressively smaller over time

B.	diminishing international opportunities as more firms enter the market

C.	many customers placing progressively larger orders over time

D.	fewer customers but with larger orders

E.	a market that functions independently of consumer demand

53.

Important market characteristics in organizational buying behavior include which of the following?

A.	Organizational buying behavior is similar to consumer buying behavior since individuals are involved in both processes.

B.	Demand for industrial products is elastic instead of inelastic.

C.	Demand for industrial products and services is derived.

D.	Purchase orders are much more frequent and they are usually small.

E.	Forecasting is not as important in organizational buying as in consumer buying.

54.

Important product or service characteristics in organizational buying include which of the following?

A.	A heavy emphasis is placed on loyalty programs and rebates.

B.	Direct selling to organizational buyers is rare.

C.	A fixed, nonnegotiable price is the norm.

D.	Many of the goods purchased are raw and semifinished.

E.	Personal relationships are preferred to online buying over the Internet.

55.

Important product or service characteristics in organizational buying include which of the following?

A.	Products or services are intangible in nature and purchased on the basis of specifications.

B.	A heavy emphasis is placed on delivery time, technical assistance, and post-sale service.

C.	Direct selling to organizational buyers is rare.

D.	A fixed, nonnegotiable price is the norm.

E.	Personal relationships are preferred to online buying over the Internet.

56.

In the organizational buying process, important product or service characteristics include

A.	delivery time, technical assistance, and post-sale service.

B.	low price, buyer incentives, and extended contracts.

C.	buyer incentives, technical assistance, and exclusive contracts.

D.	quantity discounts, delivery time, and exclusive contracts.

E.	low price, buyer incentives, and post-sale service.

57.

Important buying process characteristics in organizational buying behavior include which of the following?

A.	Few large transactions are made over the Internet due to concerns of industrial espionage.

B.	Negotiations, purchases, and delivery occur in real time at an accelerated rate.

C.	There are often reciprocal arrangements and negotiations between buyers and sellers.

D.	Most purchases are made through government-licensed negotiators.

E.	Direct selling to organizational buyers is rare because it is cost-prohibitive.

58.

Which of the following statements about marketing mix characteristics in organizational buying behavior is most accurate?

A.	Few large transactions are made over the Internet.

B.	The actual buyer retains all of the influence in the buying decision.

C.	Advertising is very simplistic in nature.

D.	Direct selling to organizational buyers is the rule.

E.	Only finished goods are sold in this way.

59.

The demand for industrial products and services that is driven by demand for consumer products and services is referred to as

A.	secondary marketing.

B.	derived demand.

C.	reciprocal supply.

D.	demand elasticity.

E.	sequential demand.

60.

Derived demand refers to

A.	a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price.

B.	the demand for industrial products and services that is driven by the demand for consumer products and services.

C.	the relationship between total revenue and total cost to determine profitability at various levels of output.

D.	the point on a demand curve where supply and demand intersect.

E.	the percentage change in quantity demanded relative to a percentage change in price.

61.

Derived demand means the demand for industrial products and services is driven by, or derived from, the

A.	NAICS statistical models.

B.	gross national product.

C.	demand for consumer products and services.

D.	demand for other industrial products and services.

E.	demand for government products and services.

62.

During late summer and early fall, there is a large demand for containers in Asia that are used to ship consumer products from Asia to the United States in time for the holiday selling season. The demand for these containers is referred to as __________ demand.

unitized

derived

reseller

applied

implied

63.

Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still, demand for its products often depends on rates of air travel among consumers. Demand for Airbus products is referred to as __________ demand.

unitized

reseller

applied

implied

derived

64.

Spruceland Millworks in Canada makes wood pallets for transporting and storing new appliances such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would be classified as

A.	reactive demand, which is tied to the sales of appliances, not the sale of the pallets.

B.	unitary demand, which is tied to the sales of appliances.

C.	derived demand, which is tied to the sales of appliances.

D.	inelastic demand, which is tied to the cost of the components of the pallets.

E.	elastic demand, which is tied to the cost of the components of the pallets.

65.

Concert Staging Co. provides the stage, roof system, lighting, and sound for outdoor concerts and theatrical events. The number of concert and theater events sponsored by various organizations determines how many times the company is hired to provide its services, which often depends on consumer willingness to buy event tickets. Demand for the services provided by Concert Staging Co. is considered

derived.

unitized.

C.	industrial.

applied.

reseller.

66.

Purchases of sodium fluoride by Procter & Gamble for use in the manufacture of Crest toothpaste would be an example of __________ demand.

applied

unitized

C.	industrial

derived

consumer

67.

South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT's leather is a result of consumer interest in products such as Via La Moda handbags made from this exotic and expensive leather. SCOT has __________ demand for its product.

derived

unitized

C.	industrial

applied

reseller

68.

Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan, the antibacterial agent in many household products such as liquid soap. Consumers may have heard about research suggesting environmental and health risks associated with the cumulative effects of antibacterial agents. Changing consumer purchases provide an example of __________ demand for Ciba's triclosan product.

applied

unitized

C.	industrial

derived

consumer

69.

Because orders in organizational buying are typically much larger than in consumer buying, buyers must often __________ when the order is above a specific amount, such as $5,000.

A.	pay estimated sales taxes in advance

B.	move up the time required to execute a purchase agreement

C.	get competitive bids from at least three prospective suppliers

D.	forgo the purchase because senior management is unlikely to approve it

E.	forgo identifying the members of the supplying center and their roles in the selling process

70.

All of the following statements about the purchase involved in organizational buying are true except

A.	the length of time required to arrive at a purchase agreement can vary with size of purchase.

B.	the dollar value of a single purchase made by an organization often runs into thousands or millions of dollars.

C.	the size of purchase impacts who participates in the purchase decision.

D.	the size of purchase impacts who makes the final decision.

E.	the size of the purchase involved in organizational buying is typically smaller than that in consumer buying but it is done more frequently.

71.

Firms marketing consumer products or services often try to reach thousands or millions of individuals or households. Firms selling to organizations

A.	try to reach tens of millions of wholesalers, retailers, and government units.

B.	are restricted to far fewer buyers.

C.	hope to obtain similar numbers of business customers, or even more.

D.	do not have customers, per se.

E.	simultaneously purchase from organizational buyers and ultimate consumers.

72.

An organization buys products and services for one main reason, which is to

A.	achieve its own objectives.

B.	beat its competitors.

C.	satisfy the needs of its suppliers.

D.	employ people.

E.	maintain inventory.

73.

The primary organizational buying objective for business firms is to

A.	create an atmosphere of inclusiveness.

B.	help smaller companies stay in business.

C.	increase the proficiency of its buyers.

D.	help the firm achieve its objectives.

E.	balance inventory.

74.

The primary buying objective for business firms is usually to

A.	increase profits through increasing costs and increasing revenues.

B.	increase profits through reducing costs and decreasing revenues.

C.	increase profits through reducing costs or increasing revenues.

D.	maintain profits through reducing costs and increasing revenues.

E.	reduce profits through reducing costs and reducing revenues.

75.

The buying objective for nonprofit firms and government agencies is usually to

A.	meet the needs of the groups they serve.

B.	increase profits through reducing costs.

C.	increase profits through increasing revenues.

D.	maintain profits through reducing costs and increasing revenues.

E.	reduce profits through reducing costs and reducing revenues.

76.

The American Red Cross provides disaster relief, among many other services. As a nonprofit organization, its primary buying objective is to

A.	increase profits through reducing costs.

B.	increase profits through increasing donations.

C.	diversify its services mix to survive the continued economic downturn.

D.	meet the needs of the groups it serves.

E.	maintain profits through reducing costs and increasing donations.

77.

Many companies have broadened their buying objectives to include an emphasis on

A.	purchasing from as many vendors as possible to avoid component shortfalls.

B.	purchasing from start-up firms to grow the economy.

C.	diversifying their product lines and brand extensions to reduce the risk of failure for any one item.

D.	pricing freezes to maintain consistent quantities demanded from consumers.

E.	proactively purchasing from minority-owned suppliers and vendors.

78.

The primary reason companies have placed an emphasis on buying from minority- and women-owned suppliers and vendors is

A.	new federal government regulations require it.

B.	they can help a firm meet or exceed its objectives in sales, profits, or customer satisfaction.

C.	it is the socially responsible thing to do.

D.	it can attract new target markets.

E.	these companies will work harder for less money.

79.

The objective attributes of the supplier's products and services and the capabilities of the supplier itself are collectively referred to as

A.	the supplier consideration set.

B.	derived demand factors.

C.	evaluative criteria.

D.	performance metrics.

E.	organizational buying criteria.

80.

Organizational buying criteria refer to

A.	the restrictions placed on potential solutions to a problem in a purchase decision.

B.	the specific qualifications of a potential customer based upon past performance, reliability, and consistency regarding the purchase of an organization's offerings.

C.	the subjective attributes of the supplier's products and services and the capabilities of the supplier itself.

D.	the objective attributes of the supplier's products and services and the capabilities of the supplier itself.

E.	the factors that an ultimate consumer would consider that represent both the objective attributes of a brand and the subjective ones to compare different products and brands.

81.

Organizational buying criteria serve the same purpose as __________ criteria used by consumers.

A.	consideration

B.	evaluative

decision

D.	alternative

E.	prepurchase

82.

There are seven commonly used organizational buying criteria. One of them is

price.

loyalty.

C.	flexibility.

D.	adaptability.

E.	consumer demand.

83.

There are seven commonly used organizational buying criteria. One of them is

A.	flexibility.

B.	ability to meet the quality specifications required for the item.

C.	adherence to government regulation.

D.	senior management directives.

E.	consumer demand.

84.

There are seven commonly used organizational buying criteria. One of them is

A.	adaptability.

B.	consumer demand.

C.	ability to meet required delivery schedules.

D.	senior management directives.

E.	adherence to corporate social responsibility policies.

85.

There are seven commonly used organizational buying criteria. One of them is

A.	consumer demand.

B.	longevity.

C.	promotional incentives.

D.	technical capability.

E.	senior management directives.

86.

There are seven commonly used organizational buying criteria. One of them is

A.	consumer demand.

B.	promotional incentives.

C.	longevity.

D.	senior management directives.

E.	warranties and claim policies.

87.

There are seven commonly used organizational buying criteria. One of them is

A.	adherence to governmental policies.

B.	regulatory support.

C.	past performance on previous contracts.

D.	consumer demand.

E.	senior management directives.

88.

There are seven commonly used organizational buying criteria. One of them is

A.	production facilities and capacity.

B.	consumer demand.

C.	flexibility.

D.	adherence to government policies.

E.	senior management directives.

89.

To be a Walmart supplier, a firm must be able to deliver its products to Walmart's distribution centers within a 16-minute window. If the driver arrives before or after the scheduled window, the supplier will be turned away and fined. Walmart's insistence on choosing a supplier based upon its ability to provide on-time delivery is an example of

A.	a supplier value dimension.

B.	a derived demand factor.

C.	an evaluative criterion.

D.	an external performance measure.

E.	an organizational buying criterion.

90.

The deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers is referred to as

A.	buyer development.

B.	a supply partnership.

C.	a make-buy decision.

D.	supplier development.

E.	buyer-seller reciprocity.

91.

Supplier development refers to

A.	the deliberate effort by suppliers to build relationships that shape buyers' needs, as well as the needs of ultimate consumers.

B.	the practice of dividing large orders among several suppliers rather than a single one to avoid possible manufacturing delays due to bad weather, plant mishaps, union issues, etc.

C.	the deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers.

D.	the practice of establishing a close relationship with one supplier rather than many to ensure loyalty and preferential treatment when filling exceptionally large orders.

E.	the shift of a firm from supplier to manufacturer when repeated experience with a product and excellent buyer/seller relationships make the change both feasible and profitable.

92.

When the John Deere Co. employs engineers who work full-time with the company's suppliers to improve their efficiency and quality and reduce their costs, it is practicing

A.	buyer development.

B.	make-buy decisions.

C.	supply partnerships.

D.	supplier development.

E.	directive purchasing.

93.

Which of the following characterizes organizational buyer-seller relationships?

A.	Purchases are often made after lengthy or complex negotiations.

B.	Purchases are usually of small dollar values.

C.	Short-term contracts are often prevalent.

D.	Reciprocal arrangements are illegal.

E.	Delivery schedules are less important than production capacity.

94.

Which of the following characterizes organizational buyer-seller relationships?

A.	Purchases are often made after brief negotiations.

B.	Purchases are usually of small dollar values.

C.	Long-term contracts are often prevalent.

D.	Reciprocal arrangements are prohibited by the federal government.

E.	Delivery schedules are largely irrelevant.

95.

Which of the following characterizes organizational buyer-seller relationships?

A.	Purchases are often made after brief negotiations if any.

B.	Supply partnerships may eventually develop.

C.	Short-term contracts are often prevalent.

D.	Reciprocal arrangements provide the most flexibility to buyer and seller.

E.	Delivery schedules are less important than production capacity.

96.

The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller relationships that can evolve into supply partnerships, are all examples of

A.	illegal activities that are a common weakness of organizational buying.

B.	illegal activities that result from collusion between buyers and sellers.

C.	activities that are strictly governed by the NAICS.

D.	the nature of relationships between buyers and sellers in organizational buying.

E.	activities that result from extreme competition between manufacturers when there are too few suppliers.

97.

Merrill Lynch and Thompson Financial had a three-year, $1 billion project that put workstations on the desks of 25,000 of Merrill Lynch's brokers. These machines put the world of investing information at brokers' fingertips. Thompson, the supplier, was obliged to not only deliver technology and services on time and on budget, but also constantly improve customer-satisfaction levels among Merrill's brokers and customers. This is an example of

A.	a reciprocity agreement.

B.	exclusive dealing.

C.	supplier alliance.

D.	a buyer-seller relationship.

E.	a tying arrangement.

98.

An industrial buying practice in which two organizations agree to purchase each other's products and services is referred to as

A.	a tying arrangement.

B.	exclusive dealing.

C.	reciprocity.

D.	a supply partnership.

E.	noncompetitive bidding.

99.

In a buyer-seller relationship, reciprocity refers to

A.	the practice whereby a seller requires the purchaser of one product to buy another item in the line.

B.	an industrial buying practice in which two organizations, in this case a manufacturer and a supplier, agree to purchase each other's products and services.

C.	an arrangement a manufacturer makes with a reseller to only handle its products and not those of competitors.

D.	the illegal practice of refusing to purchase a seller's products unless the seller agrees not to purchase that product or any similar products from any other buyer.

E.	when a supplier requires a buyer purchasing some of its products to also buy others.

100.

The practice of __________, which can affect the normal operation of the free market and limit the flexibility of buyers, is disapproved of by the U.S. Justice Department.

A.	tying agreements

B.	just-in-time procurement

C.	quid pro quo

D.	supply partnerships

E.	reciprocity

101.

Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because the practice

A.	gives an unfair advantage to smaller companies.

B.	gives an unfair advantage to larger corporations.

C.	reduces the amount of taxes paid by the parties involved.

D.	restricts the normal operation of the free market.

E.	encourages free trade.

102.

Although the U.S. Justice Department frowns on __________ because it restricts the normal operation of a free market, it is still legal for two companies to buy one another's products.

A.	reciprocity

B.	tying agreements

C.	just-in-time procurement

D.	quid pro quo

E.	supply partnerships

103.

A study on ethical practices in purchasing found that smaller firms frequently make agreements with other organizations to purchase one another's products. This practice is referred to as

A.	exclusive dealing.

B.	supply partnerships.

C.	reciprocity.

D.	strategic alliances.

E.	tying arrangements.

104.

If General Motors (GM) purchases Borg-Warner transmissions, and Borg-Warner buys trucks and cars from GM, they would be demonstrating which type of buyer-seller interaction?

A.	exclusive dealing

B.	supply partnerships

C.	tying arrangements

D.	noncompetitive bidding

E.	reciprocity

105.

A __________ exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer.

A.	supplier development agreement

B.	reciprocal arrangement

C.	shareholder relationship

D.	supply partnership

E.	strategic alliance

106.

A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer is referred to as a

A.	supply partnership.

B.	supplier development agreement.

C.	reciprocal arrangement.

D.	shareholder relationship.

E.	strategic alliance.

107.

A supply partnership refers to

A.	an arrangement a manufacturer makes with a reseller to handle only its products and not those of competitors.

B.	the illegal practice of refusing to purchase a seller's products unless the seller agrees not to purchase that product or any similar products from any other buyer.

C.	when a supplier requires a buyer purchasing some products from it to also buy others.

D.	a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost of or increasing the value of products and services delivered to the ultimate consumer.

E.	the practice whereby a seller requires the purchaser of one product to also buy another item in the line.

108.

A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of

A.	putting competitors of both buyers and sellers out of business.

B.	lowering costs and increasing profits for the supplier.

C.	lowering costs or increasing value of products or services to the ultimate consumer.

D.	creating a single channel of distribution.

E.	creating an exclusionary relationship from all other buyers and sellers.

109.

Milsco Manufacturing markets __________ in partnership with its customers.

motors

B.	braking systems

C.	transmissions

seats

E.	customized wheels

110.

Milsco Manufacturing emphasizes

A.	signing lifetime contracts with suppliers to demonstrate its loyalty to them.

B.	supplier partnerships when designing products for its customers.

C.	reciprocity arrangements with its customers so that each can maximize profit.

D.	co-branding as a form of supply partnerships with customers.

E.	extending health care benefits to its suppliers' employees as a result of the Affordable Care Act.

111.

Apple Inc. custom-orders the microprocessors for its iMac, iPhone, and iPad. Intel makes chips for the iMac and Samsung produces Apple-designed chips for the iPhone and iPad. Intel and Samsung work with Apple to minimize costs for each of them while maximizing quality, ultimately giving customers good value for their money. This is an example of

A.	a symbiotic partnership.

B.	a make-buy decision.

C.	a reciprocal agreement.

D.	a supply partnership.

E.	an exclusive dealing.

112.

Walmart asked that Procter & Gamble (P&G) electronically link to its computerized cash register scanning system, allowing for direct electronic ordering and replenishing for all of its stores. This way, Walmart can tell P&G what merchandise it needs, along with how much, when, and to which store to deliver on a daily basis. Walmart is engaged in

A.	ISO 9000 certification.

B.	ISO 14000 certification.

C.	a supply partnership.

D.	sustainable development.

E.	cause marketing.

113.

Purchasing that aims to integrate environmental considerations into all stages of an organization's buying process with the goal of reducing the impact on human health and the physical environment is referred to as

A.	ecological procurement.

B.	sustainable procurement.

C.	green marketing.

D.	supplier partnership.

E.	stakeholder procurement.

114.

Because many companies are concerned with the depletion of natural resources, supply partnerships often include provisions for

A.	green marketing.

B.	regulatory exemptions.

C.	stakeholder procurement.

D.	ecological procurement.

E.	sustainable procurement.

115.

Starbucks purchases from coffee growers located in more than 20 countries. It pays the coffee farmers a fair price for the beans, the coffee is grown in an ecologically sound manner, and Starbucks invests in the farming communities where the coffees are produced. This is an example of

A.	green marketing.

B.	ISO 14000 certification.

C.	sustainable procurement.

D.	ecological procurement.

E.	cause marketing.

116.

Starbucks is using its purchasing power to continue its quest to reduce its energy usage. Recently, the company announced plans to replace all of the traditional incandescent and halogen bulbs in its stores worldwide with more efficient light-emitting diode (LED) bulbs—a move the company claims will enable it to cut energy consumption in its stores by up to 7 percent. Starbucks would be considered a leader in

A.	ISO 9000 certification.

B.	sustainable procurement.

C.	cause marketing.

D.	ecological procurement.

E.	sustainable development.

117.

Recently, Matt Kistler, a senior vice president at Walmart, claimed the company was making progress on achieving three major goals: (1) to be supplied by 100 percent renewable energy, (2) to create zero-waste, and (3) to increase the sale of renewably produced products. Walmart is focusing on

A.	using ecological buying centers.

B.	complying with government regulations.

C.	engaging in cause marketing.

D.	using sustainable procurement.

E.	meeting ISO 9000 standards.

118.

The decision making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers is referred to as

A.	the consumer purchase decision process.

B.	the industrial purchase procedure.

C.	organizational buying behavior.

D.	the offering purchase framework.

E.	the sustainable procurement process.

119.

Organizational buying behavior is

A.	the action a person takes in purchasing and using products and services, including the mental and social process that come before and after the action.

B.	the decision making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers.

C.	purchase behavior based upon derived demand.

D.	determining what to purchase and the quantity to purchase based upon the derived supply.

E.	the process that organizations use to purchase the raw materials and tools used in the manufacturing of a product.

120.

Organizational buying behavior is similar to consumer behavior in some ways and different in others. Common to both is that they

A.	use the same five stages in the buying decision process.

B.	use formal vendor rating when choosing among alternative brands.

C.	are affected by derived demand.

D.	have virtually unlimited options for suppliers.

E.	rely on gatekeepers to control product information.

121.

Which of the following possible characteristics of consumer buying is least likely to enter into an organizational buying decision?

A.	comparison of product performance with expectations

B.	purchase decisions based on the highest overall evaluation

C.	alternatives evaluated on important criteria

D.	information gathered from internal and external searches

E.	problem recognition triggered by self-actualization motives

122.

Organizational buying behavior is similar to consumer behavior in some ways and different in others. One key difference is that in the organizational buying process,

A.	only four stages are used.

B.	fewer individuals are involved.

C.	firms are not affected by derived demand.

D.	the post-purchase evaluation behavior is more formalized.

E.	there is less reliance on gatekeepers to control product information.

123.

The first stage in the organizational buying decision process is

A.	information search.

B.	antecedent states.

C.	alternative evaluation.

D.	purchase decision.

E.	problem recognition.

124.

The sales department's identification of an improvement made to a competitor's product would occur during which stage of the organizational buying decision process?

A.	supplier search

B.	alternative evaluation

C.	problem recognition

D.	purchase decision

125.

Once an organization passes through the problem recognition stage of the organizational buying decision process, it reaches the __________ stage.

A.	information search

B.	value analysis

C.	alternative evaluation

D.	purchase decision

E.	behavioral learning

126.

At which stage of the organizational buying decision process would design and production engineers draft specifications?

A.	problem recognition

B.	information search

C.	alternative evaluation

D.	purchase decision

E.	value analysis

127.

During the third stage of the organizational buying decision process, the organization engages in

A.	information search.

B.	post-purchase behavior.

C.	alternative evaluation.

D.	purchase decision.

E.	problem recognition.

128.

At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential suppliers to assess their facilities?

A.	problem recognition

B.	information search

C.	purchase decision

D.	post-purchase behavior

E.	alternative evaluation

129.

At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential suppliers to assess their production capacity?

A.	problem recognition

B.	information search

C.	purchase decision

D.	alternative evaluation

E.	post-purchase behavior

130.

At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential suppliers to assess their quality control?

A.	alternative evaluation

B.	problem recognition

C.	information search

D.	purchase decision

E.	post-purchase behavior

131.

At which stage of the organizational buying decision process would purchasing assess the financial status of potential suppliers?

A.	problem recognition

B.	information search

C.	alternative evaluation

D.	purchase decision

E.	post-purchase behavior

132.

At which stage of the organizational buying decision process would a firm use key organizational buying criteria such as price, quality, delivery time, and technical capability to select a supplier?

A.	problem recognition

B.	information search

C.	purchase decision

D.	purchase review

E.	alternative evaluation

133.

During the next-to-last stage of the organizational buying decision process, the organization

A.	drafts specifications.

B.	formally rates suppliers that were used.

C.	evaluates supplier facilities.

D.	awards the contract.

E.	recognizes a need for change.

134.

Which of the following is indicative of the purchase decision stage of the organizational buying decision process?

A.	The purchase decision is usually quick once the information search has been completed.

B.	Even after the bid is submitted and even accepted, further negotiation is likely.

C.	Even if several vendors make it onto the bidder's list, ultimately only one supplier is chosen.

D.	If a supplier on the bidder's list is not selected, it is rarely told the reason it was rejected.

E.	Once an agreement has been formally reached, neither the buyer nor the seller is permitted to make changes to the terms of the contract.

135.

What is the last stage of the organizational buying decision process?

A.	information search

B.	post-purchase behavior

C.	alternative evaluation

D.	purchase decision

E.	purveyor review

136.

Comparing the stages in a consumer and organizational purchase decision process reveals key differences. When a smartphone manufacturer buys an earbud headset for its units from a supplier, more individuals are involved, supplier capability becomes more important, and the ______________ behavior is more formal.

A.	problem outcome

B.	information search

C.	purchase decision

D.	post-purchase evaluation

E.	performance review

137.

Comparing the stages in a consumer and organizational purchase decision process reveals key differences. When a smartphone manufacturer buys an earbud headset for its units from a supplier, more individuals are involved, _____________ becomes more important, and the post-purchase evaluation behavior is more formal.

A.	choice variety

B.	supplier audit

C.	purchase decision

D.	supplier capability

E.	performance review

138.

General Electric manufactures electric motors for its clothes dryers. The firm uses a formal vendor rating system to evaluate suppliers and notify those whose parts did not meet quality standards. If a supplier fails to correct the problem, GE will drop it as a future supplier. Which stage in the organizational buying decision process would GE make this evaluation?

A.	purchase decision stage

B.	information search stage

C.	post-purchase behavior stage

D.	alternative evaluation stage

E.	problem recognition stage

139.

The group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision is referred to as the

A.	gatekeeper.

B.	buying center.

C.	purchasing department.

D.	procurement committee.

E.	acquisition office.

140.

A buying center refers to

A.	an online trading community that brings together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services.

B.	the department within a firm responsible for the logistics of placing, tracking, and delivering orders to other departments within the firm.

C.	the department within a firm responsible for the logistics of placing, tracking, and delivering orders to ultimate consumers.

D.	the group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

E.	the department within a firm that allows purchases to be made from a centralized location from multiple vendors at the same time.

141.

The term __________ is used to identify a group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

A.	procurement committee

B.	purchasing department

C.	buying center

D.	gatekeepers

E.	acquisition office

142.

Several people often participate in the organizational buying process. Called a __________, these people share common goals, risks, and knowledge important to a purchase decision.

A.	buying center

B.	buying cohort

C.	sustainable procurement committee

D.	stakeholder group

E.	purchasing department

143.

Large multistore chain retailers such as 7-Eleven convenience stores, Safeway, and Target use a highly formalized buying center that is referred to as

A.	an ad hoc committee.

B.	a buying committee.

C.	a merchandise procurement center.

D.	a purchasing department.

E.	a purchasing control system.

144.

Most large multistore chain resellers use __________ that are highly formalized to arrive at buying decisions.

A.	buying committees

B.	merchandise procurement centers

C.	sustainable procurement committees

D.	stakeholder groups

E.	purchasing divisions

145.

Marketers need to understand their firms' buying centers. A series of questions can be used to facilitate this process. Which of the following questions would be the least useful when trying to understand the operations of a buying center?

A.	Which individuals are in the buying center for the product or service?

B.	What is the relative influence of each member of the group?

C.	What are the buying criteria of each member?

D.	How does each member of the group perceive our company, our products and services, and our salespeople?

E.	What criteria were used to select the members of the buying center?

146.

Which of the following statements most closely describes the people in the buying center of a medium-sized manufacturing plant?

A.	The composition of the buying center remains constant over long periods of time.

B.	The buying center avoids cross-functional teams whenever possible.

C.	The composition of the buying center depends on the specific item being purchased.

D.	The purchasing manager is an occasional member of the buying center.

E.	Most government units use a formal buying center to arrive at buying decisions.

147.

In an effort to make better and more efficient purchase decisions, the Ford Motor Co. includes various people, depending on the purchase situation. Individuals may include key personnel from various departments, including research and development, finance, marketing, shipping, and sales. This is a description of Ford's

A.	selling committee.

B.	sustainable procurement department.

C.	purchasing unit.

D.	buying center.

E.	buying committee.

148.

To lower costs and reduce manufacturing time, Michelin has people work together on important purchases. These people include individuals in the roles of buyers, deciders, gatekeepers, and others, as needed. This type of cross-functional group is known as a

A.	purchasing committee.

B.	sustainable procurement panel.

C.	buying center.

D.	supply partnership.

E.	purchasing task force.

149.

All of the following are roles in a buying center except

A.	specifiers.

deciders.

buyers.

D.	influencers.

users.

150.

An organization's buying center includes individuals who can play one or more of the following roles except

A.	gatekeepers.

deciders.

buyers.

D.	product champions.

E.	influencers.

151.

The people in the organization who actually consumer the product or service are referred to as __________, which is one role in the buying center.

consumers

deciders

buyers

D.	influencers

users

152.

On a visit to Conner Industries, a West Plains Band Saw salesperson heard a production employee saying, "This band saw has a 36-inch wheel that could really save us time, and with its adjustable height, it can be operated by someone tall like me as well as by our shorter workers. I bet this would speed up my production time by 30 percent. Why don't we order this band saw?" The person the salesperson heard giving input has which buying center role?

A.	purchasing agent

decider

buyer

user

motivator

153.

Becca, an office manager for a small construction company, met with representatives from Xerox and Minolta, along with the president and the accountant, to compare options for a new copier for the office. Since she made most of the copies, Becca wanted to see the features of the machines, though her boss would have to approve the final purchase. Becca has what role in the buying center?

A.	purchasing agent

decider

buyer

user

motivator

154.

In a buying center, __________ affect the buying decision, usually by helping define the specifications for what is bought.

A.	gatekeepers

deciders

buyers

D.	influencers

users

155.

Within the buying center, influencers are people who

A.	have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

B.	control the flow of information in the buying center.

C.	affect the buying decision usually by helping define the specifications for what is bought.

D.	have the formal or informal power to select or approve the supplier that receives the contract.

E.	actually use and evaluate the product or service.

156.

A computer company salesperson invites the IT managers of its top 10 customers (in terms of dollar sales) to view a demonstration of the firm's new product line, so the salesperson can obtain their opinions regarding various options and configurations that could be offered. These IT managers are most likely to be the __________ of their organizations' buying centers.

A.	gatekeepers

B.	influencers

C.	reciprocity arrangers

buyers

users

157.

In a buying center, __________ have formal authority and responsibility to select the supplier and negotiate the terms of a contract.

buyers

B.	gatekeepers

adopters

D.	influencers

users

158.

The purchasing manager of Ingram Printing has selected HP as the supplier of its new high-speed printer and negotiated the terms of the contract. The purchasing manager is the __________ for Ingram.

user

B.	gatekeeper

C.	influencer

buyer

decider

159.

Lara assumed the __________ role in the buying center when she shook the salesperson's hand and said, "Ms. Hron, we would like to accept your bid. I'll expect 48 boxes of ring shank nails to be delivered by November 8, and we will pay the agreed-upon price of $21.74 per box."

A.	gatekeeper

broker

buyer

D.	influencer

user

160.

In a buying center, __________ have the formal or informal power to select or approve the supplier that receives the contract.

A.	gatekeepers

deciders

buyers

D.	influencers

users

161.

Within the buying center, deciders are people who

A.	have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

B.	control the flow of information in the buying center.

C.	have the formal or informal power to select or approve the supplier that receives the contract.

D.	affect the buying decision usually by helping define the specifications for what is bought.

E.	actually use and evaluate the product or service.

162.

For routine orders, the decider is usually

A.	the buyer or purchasing manager.

the CEO.

the COO.

D.	the head of R&D.

E.	the customer.

163.

An IT engineer specifies the type of electronic shopping cart to be used on the company's new website. The engineer also chooses the supplier that receives the contract to provide the software. In the buying center, this person is the

A.	gatekeeper.

decider.

broker.

D.	influencer.

user.

164.

People who control the flow of information in the buying center, such as technical experts and secretaries, can keep salespeople and information from reaching others in the buying center and are referred to as

deciders.

B.	obstructionists.

C.	gatekeepers.

D.	power brokers.

E.	influencers.

165.

A sales representative for a pharmaceutical company visits the doctor's office, hoping to explain a new drug to the doctor. However, the office receptionist explains that the doctor is with patients and will not be able to see the sales rep. The receptionist is acting as

a user.

B.	an influencer.

a buyer.

D.	a decider.

E.	a gatekeeper.

166.

Cassidy is part of the buying center for a large manufacturer. Her field of expertise is logistics and she is responsible for choosing transportation providers for the company. A sales representative for Yellow Roadway, a successful trucking firm, regularly buys Cassidy's secretary lunch. The representative does this because she views the secretary as __________ and wants to be sure that information about her company reaches Cassidy.

A.	a gatekeeper

a decider

C.	an influencer

D.	an obstructionist

E.	a power broker

167.

Beth is part owner of a chain of auto repair shops. Her company was considering adding tire sales in some of its facilities, and several people were slated to meet to discuss the idea. Beth gathered information about possible distributors. Her son had been laid off from a job with one of them, so she removed this company from the group she was preparing to present to the others. Here, Beth was acting in what role in the buying center?

A.	gatekeeper

decider

user

D.	obstructionist

E.	power broker

168.

Mark manages a small family-owned amusement park. He believes the park can increase its profits if its owners will buy three food concession trailers. Mark has contacted three dealers of such trailers, which come fully customized to user specifications. After receiving three bids, Mark concluded that Century Industries has the best offer. He will present only the Century Industries information to the family tomorrow. What buying center roles does Mark perform?

A.	gatekeeper and buyer

B.	decider and user

C.	buyer and decider

D.	influencer and buyer

E.	influencer, gatekeeper, and decider

169.

Researchers who have studied organizational buying identify three types of buying situations, called __________, which include new buy, modified rebuy, and straight rebuy.

A.	purchase criteria

B.	buy classes

C.	buying centers

D.	consideration sets

E.	purchase hierarchies

170.

Organizations face three specific kinds of buying situations. They are new buy, straight rebuy, and modified rebuy. Collectively, these situations are referred to as

A.	industrial buying behavior.

B.	reseller buying behavior.

C.	buy classes.

D.	purchase criteria.

E.	consideration sets.

171.

The three types of organizational buy classes are

A.	industrial, reseller, and government.

B.	consumer products, industrial goods, and services.

C.	users, influencers, and deciders.

D.	straight purchase, barter, and countertrade.

E.	new buy, straight rebuy, and modified rebuy.

172.

Buy classes refer to the three types of organizational buying situations:

A.	buy, lease, and rent.

B.	new buy, make, and reprocess.

C.	manufacturing contracts, consulting contracts, service contracts.

D.	new buy, straight rebuy, and modified rebuy.

E.	new buy, refurbish, and used buy.

173.

The buying situation where an organization is a first-time buyer of the product or service is referred to as

A.	an initial buy.

B.	a new buy.

C.	a preliminary buy.

D.	a straight rebuy.

E.	a modified rebuy.

174.

A buy class situation affects buying center tendencies in different ways. If there are many people involved, the problem definition is uncertain, and the time required for a decision is long, the buy class situation is most likely a

A.	standard buy.

B.	straight rebuy.

C.	conditional rebuy.

D.	modified rebuy.

new buy.

175.

A buy class situation affects buying center tendencies in different ways. If there is one person involved, the problem is well-defined, and the buying objective is to find a low-priced supplier, the buy class situation is most likely a

A.	modified buy.

B.	straight rebuy.

C.	conditional rebuy.

new buy.

E.	standard buy.

176.

A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the problem is minor modification, and the suppliers considered are the present, the buy class situation is most likely a

A.	conditional buy.

B.	straight rebuy.

new buy.

D.	modified rebuy.

E.	standard buy.

177.

A buy class situation affects buying center tendencies in different ways. If the buying objective is to find a good solution, the suppliers considered are both new and present, and the buying influence includes technical and operating personnel, the buy class situation is most likely a

A.	modified buy.

new buy.

C.	straight rebuy.

make-buy.

E.	standard buy.

178.

If a purchase is a new buy for a manufacturer, the seller should expect

A.	specifications to be changed many times before the buy is completed.

B.	a lot of conflict.

C.	many people to be involved in the purchase decision.

D.	to have to do some favors for the decision makers.

E.	to avoid making concessions or compromises.

179.

If a purchase is a new buy for a manufacturer, the seller should

A.	expect a long time for a buying decision to be reached.

B.	neutralize the typically high levels of conflict.

C.	maintain flexibility, since specifications are likely to be changed several times before the buy is completed.

D.	be prepared to do some favors for the decision makers.

E.	avoid making concessions or compromises.

180.

If a purchase is a new buy for a manufacturer, the seller should expect to

A.	have to do some favors for the decision makers.

B.	anticipate a great deal of conflict.

C.	accommodate unlimited specification change before the buy is completed.

D.	work with the buyer's technical personnel.

E.	avoid making concessions or compromises.

181.

At the weekly meeting for Choice Hotels, the marketing manager said, "We need an inexpensive creative way to increase awareness of our hotels among people who travel by automobile. To do that, I want to find some new media that the other hotel chains are not using." The purchase of this new media for the hotel chains' advertising would be an example of a

new buy.

B.	straight rebuy.

C.	converted rebuy.

D.	modified rebuy.

E.	initial buy.

182.

A reorder of an existing product or service from a list of acceptable suppliers is referred to as a

new buy.

B.	straight rebuy.

C.	modified rebuy.

D.	standard reorder.

make-buy.

183.

A buy class situation affects buying center tendencies in different ways. If there is one person involved, the problem definition is well-defined, and the buying objective is to find the low-priced supplier, the buy class situation is most likely a

new buy.

B.	modified rebuy.

C.	conditional rebuy.

D.	straight rebuy.

E.	standard reorder.

184.

An assistant heard his supervisor in the supply room yell, "Call Crate & Barrel. We need another case of its coffee mugs for the conference next week." The supervisor was asking the assistant to make a

new buy.

B.	straight rebuy.

C.	modified rebuy.

make-buy.

E.	standard reorder.

185.

The department secretary orders pens, copy paper, and printer ink cartridges for the department from the Corporate Express catalog nearly every month. This is an example of a

new buy.

B.	straight rebuy.

C.	modified rebuy.

make-buy.

E.	standard reorder.

186.

The buying situation where users, influencers, or deciders want to change product specifications, price, delivery schedule, or supplier for an item that is largely the same as what was previously purchased is referred to as a

A.	secondary buy.

B.	straight rebuy.

C.	modified rebuy.

D.	adapted buy.

E.	remake buy.

187.

In a __________ situation, users, influencers, or deciders in the buying center want to change product specifications, price, delivery schedule, or suppliers, though the product is largely the same.

A.	derived buy

B.	straight rebuy

make-buy

D.	rebuy class

E.	modified rebuy

188.

A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the time required for a decision is moderate, and the problem definition has only minor modifications, the buy class situation is most likely a

new buy.

B.	straight rebuy.

C.	conditional rebuy.

D.	modified rebuy.

E.	standard reorder.

189.

A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the problem definition has only minor modifications, and the buying objective is the low-priced supplier, the buy class situation is most likely a

new buy.

B.	modified rebuy.

C.	conditional rebuy.

D.	straight rebuy.

E.	standard reorder.

190.

A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the time required for a decision is moderate, and only present suppliers are considered, the buy class situation is most likely a

new buy.

B.	straight rebuy.

C.	modified rebuy.

D.	conditional rebuy.

E.	standard reorder.

191.

The office of SFX Entertainment, a talent promoter, needs a new fax machine that will print at three seconds a page (instead of five seconds per page like the one it is using now) and has both local and network printing capabilities. The purchase of a replacement fax machine would be an example of a

new buy.

B.	straight rebuy.

make-buy.

D.	modified rebuy.

E.	standard reorder.

192.

A university's marketing department typically purchases backpacks with its logo embroidered on them for all incoming freshmen. This year, because they've heard complaints, the marketing chair wants to buy similar backpacks but find one that is a little more durable. This is an example of a

new buy.

B.	straight rebuy.

make-buy.

D.	modified rebuy.

E.	standard reorder.

193.

A software company has updated its logo. It now needs to order new letterhead and business cards. This purchase would be a

A.	modified rebuy.

B.	straight rebuy.

new buy.

D.	standard reorder.

E.	class buy.

194.

A straight rebuy is __________ while a modified rebuy is __________.

A.	an exchange; a resale

B.	a routine reorder; an exchange

C.	a first-time order; a routine reorder

D.	a changed order; a first-time order

E.	a routine reorder; a changed order

195.

Business-to-business electronic commerce over the Internet

A.	is nearly equivalent to consumer electronic commerce when measured by the total dollar value of all online transactions.

B.	is at least four times greater than consumer electronic commerce when measured by the total dollar value of all online transactions.

C.	has dramatically decreased since face-to-face communication between a firm's sales force and its potential customers is so important.

D.	is impossible to estimate since companies will not share information.

E.	has never been popular since timely information is unavailable or deemed to be proprietary.

196.

Online buying in organizational markets is prominent because Internet technology

A.	allows companies to increase their innovation cycles.

B.	substantially increases brand loyalty.

C.	can convey timely information quickly.

D.	narrows the potential customer base for many products.

E.	eliminates marketing costs.

197.

Online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services are referred to as

A.	Webfronts.

B.	iCommerce.

C.	e-commerce marketspaces.

D.	e-marketplaces.

E.	X-changes.

198.

E-marketplaces refer to

A.	virtual or holographic purchasing marketspaces that allow manufacturers to estimate demand based upon different changes in environmental forces.

B.	websites that allow consumers to make direct purchases from a manufacturer rather than through a traditional retail outlet.

C.	online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services.

D.	computer simulations that allow manufacturers to estimate how much inventory to keep on hand based upon different purchasing scenarios.

E.	a computer database co-sponsored by the U.S. Department of Commerce and the World Trade Organization (WTO) that houses all public access records for the purpose of aiding American and global businesses.

199.

Another name for an e-marketplace is

an e-hub.

B.	an E-place.

C.	an e-trade.

D.	an E-xchange.

E.	a 4NXchange.

200.

Another name for an e-marketplace is a

A.	WebXChange.

WebMart.

C.	2B1 marketplace.

D.	C2C market forum.

E.	B2B exchange.

201.

E-marketplace can take two different formats, which are

A.	bricks-and-mortar exchanges and clicks-and-mortar exchanges.

B.	privately owned trading communities and open-to-the-public trading communities.

C.	networked exchanges or public trading communities.

D.	independent trading communities or private exchanges.

E.	public exchanges and networked exchanges.

202.

Small businesses benefit from independent __________ like PlasticsNet, Hospital Network.com, and TextileWeb.

Webfronts

B.	clicks-and-mortar

C.	e-marketplaces

iMarkets

E.	integrated markets

203.

For e-marketplaces, large companies tend to favor __________ that link them with their network of qualified suppliers and customers.

A.	centralized markets

B.	decentralized markets

C.	private exchanges

D.	segregated markets

E.	independent trading communities

204.

Independent e-marketplaces act as a neutral third party, provide an Internet technology trading platform, and provide __________ market that enable exchanges between buyers and sellers.

A.	a centralized

B.	a deconsolidated

C.	a segregated

D.	an integrated

E.	a noncompetitive

205.

Which of the following statements about e-marketplaces that act as independent trading communities is false?

A.	These trading communities allow buyers to easily compare offerings from various sellers.

B.	Independent trading communities charge a fee for their service.

C.	Independent trading communities often consist of thousands of geographically dispersed buyers and sellers.

D.	This independent type of trading community is favored by large companies.

E.	Independent trading communities often operate in an environment where demand and supply fluctuations cause volatile prices.

206.

PlasticsNet, Hospital Network.com, TextileWeb, and eBay Business are all examples of

A.	Webfront operations.

B.	clicks-and-mortar stores.

C.	e-marketplaces.

D.	integrated markets.

iMarkets.

207.

In the construction industry, an independent trading community such as Buzzsaw.com or Cephren.com enables a general contractor to manage and coordinate the many suppliers, subcontractors, architects, and engineers necessary to complete a project. Buzzsaw.com and Cephren.com are examples of

A.	Webfronts.

B.	web chains.

C.	X-changes.

D.	e-syndicates.

E.	e-marketplaces.

208.

The predominant person-to-person trading community in the world is

Facebook.

Amazon.

NASDAQ.

D.	Craigslist.

eBay.

209.

eBay is the predominant person-to-person trading community in the world. eBay is an example of

A.	a Webfront operation.

B.	a clicks-and-mortar store.

C.	an e-marketplace.

D.	a noncompetitive market.

E.	an integrated market.

210.

When a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other, it is referred to as

A.	a reverse auction.

B.	a traditional auction.

C.	a bidder's war.

D.	an e-auction.

E.	a Webfront auction.

211.

When prospective buyers observe the bids of others and decide whether or not to increase the bid price, it is called a

A.	forward auction.

B.	reverse auction.

C.	Webfront auction.

D.	traditional auction.

E.	bidder's war.

212.

Dell, Inc., sells surplus, refurbished, or closeout computer merchandise at its dellauction.com website to many buyers who bid competitively against one another. This is an example of a(n)

A.	traditional auction.

B.	reverse auction.

C.	bidder's war.

D.	I-auction.

E.	Webfront auction.

213.

What type of online auction does one seller and many buyers typify?

A.	forward auction

B.	reverse auction

C.	traditional auction

D.	vertical auction

E.	bidder's war

214.

In which type of auction is there an upward pressure on bid prices as more would-be buyers become involved?

A.	reverse auction

B.	horizontal auction

C.	vertical auction

D.	diagonal auction

E.	traditional auction

215.

In which type of auction does the price increase as the number of buyers increases?

A.	reverse auction

B.	horizontal auction

C.	vertical auction

D.	diagonal auction

E.	traditional auction

216.

In an e-marketplace, an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other is referred to as a

A.	vertical auction.

B.	reverse auction.

C.	horizontal auction.

D.	traditional auction.

E.	reciprocal auction.

217.

A reverse auction refers to an online auction

A.	where firms may sell their overstock—unused raw materials, packaging, and tools—to the highest bidder.

B.	in which a manufacturer offers to share its facilities, inventory, or services with other smaller firms that are invited to bid in competition with each other.

C.	in which a smaller manufacturer seeks to share the facilities, inventory, or services of a larger firm, and invites those firms to bid in competition with each other.

D.	in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other.

E.	where firms seek to purchase other firms' overstock—unused raw materials, packaging, and tools—while trying to find the lowest price possible.

218.

Reverse auctions

A.	are seller-initiated.

B.	benefit the sellers significantly more than the buyers.

C.	have an increasing number of buyers as the auction progresses.

D.	put downward pressure on prices.

E.	have many buyers.

219.

Reverse auctions

A.	are buyer-initiated.

B.	benefit the sellers significantly more than the buyers.

C.	have an increasing number of buyers as the auction progresses.

D.	do not allow sequential bidding.

E.	have many buyers at the start of the auction.

220.

What type of online auction does one buyer and many sellers typify?

A.	forward auction

B.	reverse auction

C.	traditional auction

D.	vertical auction

E.	bidder's war

221.

In which type of auction is there a downward pressure on bid prices for the buyer's business as more would-be suppliers become involved?

A.	traditional auction

B.	vertical auction

C.	reverse auction

D.	horizontal auction

E.	reciprocal auction

222.

In a reverse auction, as the number of sellers increases, the price

A.	increases.

B.	stays the same.

C.	has no relation to the number of sellers.

D.	decreases.

E.	fluctuates depending on economic conditions.

223.

Which of the following statements about Trek Bicycles is false?

A.	Trek's Eco Design initiative is an example of sustainable procurement.

B.	Trek has an extensive product line of bicycles.

C.	Trek has always been on the cutting edge, using the latest innovations in its designs.

D.	Trek views the bicycle as an important form of alternative transportation, not just as recreation.

E.	Trek's business model has evolved from manufacturing bicycles to marketing other two- and four-wheeled vehicles, such as motorcycles and all-terrain vehicles (ATVs).

224.

All of the following people are part of the Trek buying center except

A.	Trek executives.

B.	production workers.

C.	representatives from research and development.

D.	quality control employees.

E.	a purchasing manager.

225.

Trek uses several organizational buying criteria to evaluate potential suppliers. These include all of the following except

price.

B.	environmental impact.

C.	warranties and claim policies.

quality.

E.	delivery capabilities.

226.

When Trek orders a seat or saddle for one of its models that has a slightly different material for the cover only but the other components are the same as existing saddles used on other bikes, this purchase situation is known as a

new buy.

B.	straight rebuy.

C.	standard reorder.

D.	modified rebuy.

make-buy.

Short Answer Questions

227.	Describe the three types of organizational markets and give examples of each.

228.	What is the North American Industry Classification System (NAICS)?

229.	What are the characteristics of organizational buying behavior?

230.	List seven organizational buying criteria.

231.	What are the five stages of the organizational buying process? Describe at least three differences from the consumer buying process.

232.	What is a buying center? In what type of business would a buying center most likely be found?

233.	Identify and describe the five roles an individual can play in a buying center.

234.	Consider how buy classes affect buying center tendencies in different ways. Describe the buy-class situations, and discuss the implications for the organization of each type of buy class.

235.	What are the three types of organizational buying situations or buy classes? Give an example of each.

236.	Explain the differences between independent e-marketplaces and private exchanges.

237.	Differentiate between traditional and reverse auctions.

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Chapter 6 Understanding Organizations As Customers

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