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Sample Test
Chapter 03
Buying Behavior and the Buying Process
 
True / False Questions

Salespeople selling original equipment manufacturer (OEM) products

1 need to demonstrate that their products help customers produce products
. that will offer superior value.
True    False

Resellers consider two elements when making decisions about what

2 products to sell: customer profiles and targeted return.
.
True    False

 
 End-user buying situations exclude the purchase of capital equipment
3 and services.
.
True    False

Global sourcing is a key factor in achieving a sustainable competitive

4 advantage.
.
True    False

5 Derived demand means demand is derived from an increase in GDP.

. True    False

Salespeople often trigger the buying process by demonstrating how their

6 products can improve the efficiency of the customer’s operation.
.
True    False

Creeping commitment means that a customer becomes increasingly

7 committed to a particular course of action while going through the steps
. in the buying process.
True    False

From a salesperson’s point of view, the initial steps in the buying process
8 are critical in straight rebuy situations.
.
True    False

9 When the office manager of an established dentist orders a case of the

. same brand of dental floss that the dentist’s office has been using for
years from the same source, it is considered a straight rebuy.
 True    False

A buying center is an informal, cross-department group of people

10 involved in a purchase decision.
.
True    False

11 Gatekeepers are usually the ones who start the buying process.
. True    False

In general, senior executives get more involved in important purchase

12 decisions that have a greater effect on the performance of their
. organization.
True    False

13 Life-cycle costing is also known as quality-based costing.

. True    False

Emotional needs are directly related to the performance of a product

14 rather the personal gratification an individual gets from the product.
.
True    False

Service level agreements (SLAs) are standards for minimum service

15 delivery for specific measures of how a vendor will perform services,
. and are written into a contract.
True    False

 
 “Always a share” is a strategy for risk reduction employed by buying
16 centers.
.
True    False

Customers usually view information from independent sources to be

17 less credible than company advertising.
.
True    False

Automatic replenishment is a form of supplier relationship management

18 (SRM).
.
True    False

The ultimate goal of just-in-time (JIT) inventory control is to eventually

19 eliminate all inventory except products in production and transit.
.
True    False

In the context of developing the close coordination needed for just-in-

20 time (JIT) inventory control systems, the selection criterion for
. manufacturers is the lowest cost, not the ability to be flexible.
True    False

The first step in supplier relationship management is to determine end-

21 user spending patterns.
.
True    False

22 One outcome of supplier relationship management (SRM) is the ability

. to consolidate purchases and negotiate better terms.
 True    False

The primary objective of supplier relationship management (SRM) is to

23 increase the profits.
.
True    False

The multiattribute model is usually not used in complex decisions

24 involving several vendors.
.
True    False

In the context of the multiattribute model of product evaluation and

choice, a company’s final decision to select a product from among its
25 alternatives is based on the relationship between the performance
. evaluations of the product’s characteristics and the company’s needs.
True    False

During performance evaluations of various vendors, the importance

26 weights of all characteristics are considered equal.
.
True    False

A person’s overall evaluation of a product can be quantified by

27 multiplying the sum of the performance ratings of the product by the
. importance weight of each characteristic.
True    False

28 By increasing the rating of a competitive product, salespeople can

. improve customers’ perception of their product.
 True    False

Salespeople should not focus on the areas of superior product

29 performance that are not important to their customer.
.
True    False

Using the multiattribute model, salespeople decide how to alter the

30 content of their presentation based on customer beliefs and needs.
.
True    False

 
 
Multiple Choice Questions

When P.C. Logic, a fax machine manufacturer, purchases ceramic

printing heads from Kyocera to install in its fax machines, it is acting as
a(n):

A. reseller.

 
B. original equipment manufacturer.
3
1  
.
C. “out” supplier.

 
D. end user.

 
E. acquisition expert.

 
 Which of the following is usually considered a major financial commitment
for manufacturers?
A. Maintenance supplies

 
B. Services
3
2  
. C. Replacement parts

 
D. Repair and overhaul supplies

 
E. Capital equipment items

Clara is the head of the sales department of a firm. She wants to know
the volume of sales generated by her sales department and how quickly
the firm’s products are sold in the regional market. In this case, Clara is
most likely calculating the:

A. buyer’s profit.

 
3 B. durability of the products.
3
.  
C. turnover of the products.

 
D. depreciation of the products.

 
E. quality of the products.
 

Eva is considering adding new products to her store and is concerned

about her profit margin. She is concerned about:

A. how much she will make on each sale.

 
B. the marginal turnover rate and the expected delivery time.
3
4  
. C. how to address servicing requirements and the cost of repairs.

 
D. the need for MRO services and supplies.

 
E. the derived demand for the products.

Effective selling to government agencies requires:

A. advertising in TheNewYorkTimes.

 
B. effective internal controls designed to maximize just-in-time delivery of requests for proposals.

3  
5
. C. an advanced knowledge of 80-20 ordering procedures.

 
D. a thorough knowledge of their unique procurement procedures and rules.

 
E. active listening centered on gatekeepers’ internal satisfaction requirements.

 
 Which of the following types of purchase situations requires a longer time
compared with others to arrive at a purchase decision in an
organizational buying decision process?

A. A new-task situation

 
B. A straight rebuy situation
3
6  
.
C. A customized rebuy situation

 
D. A modified rebuy situation

 
E. A computerized purchase situation

Salespeople need to understand that purchases made by their

customers’ customers are based on:
A. derived demand.

 
B. the competitive advantage offered by other sellers.
3
7  
. C. economies of scale in production.

 
D. just-in-time (JIT) inventory control.

 
E. direct demand.

 
 Weston makes uniforms and overalls for employees in any industry
where there is a risk of fire injury. It uses fabric from Indie Fabric Co. for
all of the uniforms it manufactures. If there is a decrease in the demand
for products in the chemical industry, then there will be a decrease in
employment in that industry. This will lead to a decrease in the demand
for Weston’s uniforms. Since fewer uniforms will be needed, the sales for
Indie Fabric will decrease. This is an example of:

A. derived demand.

3  
8
B. a competitive advantage for the seller.
.
 
C. economies of scale in marketing.

 
D. just-in-time (JIT) inventory control.

 
E. a direct demand.

Almac Aluminum is a large manufacturer of can sheets that are used to

manufacture beverage cans. Its ability to sell to Pearl Brewing Company
is directly related to how many people buy Pearl Beer. This is an example
of:
A. derived demand.
3
9  
.
B. a competitive advantage for the seller.

 
C. economies of scale in marketing.

 
 D. just-in-time (JIT) inventory control.

 
E. a direct demand.

The chief executive of Norell, an agency that supplies businesses with

temporary workers, realizes that the health care industry requires
temporary workers as much, if not more, as goods-oriented businesses.
Which of the following stages of the buying process does this illustrate?

A. Preparation of a presentation

 
4 B. Evaluation of alternatives
0
.  
C. Development of specifications

 
D. Recognition of a need

 
E. Evaluation of the result of sales calls

Alia is the logistics manager of a firm. She has recognized that her firm’s
poor performance is because of the faulty supply chain management
software that the firm is currently using. According to the organizational
4 buying process, which of the following should Alia do next?
1
A. Alia should search for qualified suppliers of a management software.
.
 
B. Alia should define the type of management software needed.
  
C. Alia should evaluate proposals from different software firms.

 
D. Alia should immediately place an order for any new management software available in the market.

 
E. Alia should develop detailed specifications for a new management software.

The last step in the organizational buying process is the:

A. establishment of a long-term relationship with the seller.

 
B. receipt of the product.

4  
2
. C. analysis of the vendor.

 
D. evaluation of product performance.

 
E. placement of the order.

Regan wants to develop a long-term relationship with his customers. To

accomplish this objective, Regan will need to pay close attention to:
4
A. the acquisition and analysis of proposals.
3
.  

B. the definition of the type of product needed.

  
C. the evaluation of product performance.

 
D. the receipt of an order.

 
E. the recognition of a need or problem.

Neil wants to buy raw materials for his automobile firm. After identifying
the type of raw materials needed and their specifications, he compiles a
list of new vendors. During the buying process, he becomes more
involved with a specific vendor and focuses his attention more on buying
from that vendor than from other vendors. This is an example of:

A. a straight rebuy.

 
4
B. collusion.
4
.  

C. an ambush negotiation strategy.

 
D. browbeating.

 
E. a creeping commitment.

4 Handell has established a small company that manufactures decorative

5 items for homes. One of the company’s latest items is a line of
. thermometers reproduced from ones that were given away for free before
World War II. Since quality is essential to the company’s success, it has
 spent a great deal of time and effort locating the best suppliers for the
metal, wood, paint, and mercury for its first round of production. The
purchase of these components would be an example of a _____ buying
situation.
A. new-task

 
B. straight rebuy

 
C. derived-demand

 
D. value-added

 
E. modified rebuy

Kevin works for Irish Pub Company, a design and construction outfit that
sells completely finished, made-in-Ireland pubs—with everything from
beer taps to mosaic floors to decorative pieces like antique whiskey
bottles—to American entrepreneurs. Kevin is trying to sell the Irish pub
concept to a retired New York City business executive who wants to run
his own business, but he is not an experienced pub owner and is
reluctant to invest $300,000 in the project. Kevin should consider this a
4 _____ buying situation.
6
. A. new-task

 
B. straight rebuy

 
C. derived-demand
  
D. value-added

 
E. modified rebuy

Which of the following types of purchase situations requires the least

number of people in the organizational buying decision process?
A. A new-task situation

 
B. A straight rebuy situation
4
7  
. C. A modified rebuy situation

 
D. A first-time purchase situation

 
E. A customized rebuy situation

Plasto is a Spanish company that manufactures stadium seating for

sports venues. It is one of many such manufacturers. The city of Marsia,
which is going to host the next Olympic Games, forms a committee to
make purchases of equipment that would be required at its venues. The
4
committee has limited knowledge of the available products, but eventually
8
decides to purchase Plasto stadium seating for the venues. This
.
purchase by the recently formed committee is an example of a _____
situation.

A. derived demand
  
B. just-in-time delivery

 
C. modified rebuy

 
D. straight rebuy

 
E. new-task

A manufacturer of aquariums for consumers’ homes is most likely to go

through all eight steps of the organizational buying process when it is:
A. renewing subscriptions to trade journals.

 
B. purchasing a new computerized inventory system.
4
9  
. C. ordering glass sheets from its usual supplier.

 
D. restocking the glue needed to make tanks leak-proof.

 
E. buying cleaning supplies listed by the maintenance staff.

5 A salesperson for the Big Apple Sign Corporation was trying to get the
0 owner of a hardware store to buy a new kind of advertising tool called
. floor graphics—an opaque vinyl film that applies directly to the floor, is
easy to remove, and can be used to promote in-store specials. Since the
 store owner has purchased advertising before—just not this particular
kind of advertising tool—this is an example of a _____ situation.
A. derived rebuy

 
B. straight rebuy

 
C. derived-demand

 
D. value-added

 
E. modified rebuy

The supervisor of an automated teller machine (ATM) facility learns that

the machine is not functioning efficiently because it uses an old software.
According to the organizational decision buying process, which of the
following should the supervisor do next?

A. The supervisor should look for a new software.

 
5 B. The supervisor should place an order for an alternative software.
1
.  
C. The supervisor should evaluate the performance of the existing software.

 
D. The supervisor should immediately buy a new machine.

 
E. The supervisor should identify and define the type of update needed.
 

Maynard, the head of the research and development department of a

pharmaceutical firm, rejects a new drug manufactured by the firm
because the drug does not meet the required quality standards.
According to Miller and Heiman, Maynard is most likely a(n):

A. technical influencer.

 
5 B. economic influencer.
2
.  
C. coach.

 
D. user.

 
E. purchasing agent.

Kenneth, the operations manager of a cosmetic firm, rejects a particular

promotional strategy for use by the firm because he estimates that the
financial costs of conducting such a campaign would be extremely high
and the strategy would yield no return. According to Miller and Heiman,
Kenneth is most likely a(n):

5 A. economic influencer.
3
 
.
B. buyer.

 
C. user.

 
 D. technical influencer.

 
E. gatekeeper.

A hospital is considering changing its supplier of replacement joints.

While surgeons make the final decision, the hospital’s purchasing
department is promoting Kyocera because it manufactures one of the
cheapest and most durable hip joints on the market. In terms of the
buying center, the purchasing department is a(n):
A. decider.

 
5
B. influencer.
4
.  

C. judge.

 
D. user.

 
E. demand deriver.

_____ control the flow of information and limit the alternatives considered
in the organizational buying decision process.

5 A. Deciders
5
 
.
B. Influencers

 
 C. Buyers

 
D. Users

 
E. Gatekeepers

The evaluation and selection of products and suppliers are affected by

the needs of both the organization and the individuals making the
decision. These needs are categorized as:
A. emotional and rational.

 
B. formal and informal.
5
6  
.
C. verbal and nonverbal.

 
D. external and internal.

 
E. behavioral and attitudinal.

Ruth markets rock concerts. She is looking for a company that will handle
all of the various mailing needed to promote the purchase of concert
5 tickets. She wants to use Graham Mail House because she is a good
7 friend of the mailing house’s operations manager, but others involved in
. the decision making want to take bids from other mailing houses. In this
example, Ruth is expressing a(n) _____ need in the buying process.

A. emotional
  
B. formal

 
C. external

 
D. impersonal

 
E. rational

Using the life-cycle costing approach, salespeople can demonstrate that:

A. a product in the decline stage of its life cycle will have little, if any, service.

 
B. a product with a higher initial cost will have lower overall costs.

5  
8
. C. operational costs do not change over the lifetime of capital equipment.

 
D. a product in the introductory stage of its life cycle will have more problems than one in a later stage.

 
E. operational costs actually decrease over the lifetime of capital equipment due to increased familiarity.

5 An automobile firm wants to purchase either machine A or machine B.

9 The initial cost of machines A and B are $40,000 and $50,000,
. respectively. The power consumption per year of machines A and B are
 120 MWh and 100 MWh, respectively. The power cost is $40/MWh. The
estimated life of both machines is 10 years. The estimated operating and
maintenance cost over 10 years is $30,000 for machine A and $20,000
for machine B. According to the life-cycle costing approach, the overall
cost of machines A and B are:

A. $74,800 and $79,000, respectively.

 
B. $110,000 and $120,000, respectively.

 
C. $75,000 and $70,000, respectively.

 
D. $88,000 and $98,000, respectively.

 
E. $118,000 and $110,000, respectively.

6 Which of the following members of the buying center would typically be

0 involved in a value analysis?
.
A. A representative from the engineering department

 
B. Members of the purchasing department

 
C. Technical experts from the production department

 
D. Technical experts from the quality control department

 
 E. All of these

Which of the following sources of information would customers usually

view to be less credible than the others?

A. Trade publications

 
B. Colleagues
6
1  
. C. Outside consultants

 
D. Review sites on the Internet

 
E. Sales literature

LifeStream Industries has used BrightLight light bulbs for years. When it
needs new light bulbs, it uses a straight rebuy. The distributor of
Tungsram LED light bulbs would like an opportunity to get his product
considered by LifeStream. A(n) _____ would be particularly useful for
Tungsram, the out-supplier.

6 A. JIT analysis
2
 
.
B. organizational audit

 
C. environmental assessment

 
 D. value analysis

 
E. multiattribute model

To reduce the uncertainty and risk involved in buying raw materials from
multiple vendors, Miguel always buys the raw materials for his firm from a
preferred vendor. From the perspective of an out-supplier, Miguel’s
account would be treated as:

A. a bad debt account.

 
6 B. a contra account.
3
.  
C. an uncollectible account.

 
D. an “always a share” account.

 
E. a “lost for good” account.

The need for risk reduction is one of the factors affecting an individual
making an organizational buying decision. What can a salesperson do to
help reduce the risk?
6 A. Turn a straight rebuy situation into a modified rebuy situation
4
.  
B. Provide the buyer with product information from independent sources not connected with the company for w

 
 C. Send the buyer the complete portfolio of all collateral sales materials and follow it up with a phone call

 
D. Make the buyer understand that every buy should be a new-task buy situation

 
E. Persuade the buyer to not perform vendor analysis

Foster has decided to buy all his maintenance, repair, and overhaul
(MRO) supplies from Alexia’s Supply House. For competitors, Foster’s
account is:
A. always a share.

 
B. JIT.
6
5  
.
C. a modified rebuy.

 
D. lost for good.

 
E. a tying agreement.

Vincent has been purchasing goods for his firm from a single supplier for
many years. On every purchase, the supplier gives him reasonable
6 discounts. Even though other vendors sell the same goods at lower rates,
6 Vincent states that he has never considered an alternate supplier
. because the quality of goods provided by his existing supplier has always
been exceptional. This is an example of:

A. collusion.
  
B. insider selling.

 
C. a spiff.

 
D. reseller price maintenance.

 
E. vendor loyalty.

Jackson likes his major parts supplier for his automobile repair business
but always buys some of the parts from another competitor. Jackson is
using a(n) _____ strategy.
A. value loyalty

 
B. always a share
6
7  
.
C. supplier devotion

 
D. straight rebuy

 
E. tying agreement

6 The business environment is changing dramatically, and organizational

 buying is also changing. As organizations are pressured to improve
product quality, control costs, and minimize inventory, they are:
A. elevating their purchasing directors to reflect the increasing importance of this function.

 
B. replacing just-in-time inventory control with a more practical technique.

8  
.
C. using less global sourcing to reduce transportation costs.

 
D. using reduced value analysis.

 
E. all of these.

Ryan wants a vendor who will provide ingredients for his restaurant each
day according to the number of reservations he has for that evening.
Ryan is looking for a vendor who will provide:
A. collusion pricing.

 
B. just-in-time inventory control.
6
9  
.
C. material requirements planning.

 
D. a tying agreement.

 
E. none of these.

 
 Mike’s Autos uses a supply chain management system to schedule the
delivery of auto parts to arrive at its plants exactly thirty minutes before
the parts are to be used in the assembly process. The company uses
a(n) _____ system.
A. efficient consumer response

 
7 B. total quality management
0
.  
C. just-in-time inventory control

 
D. zero-defect management

 
E. material requirements planning

7 To develop the close coordination needed for just-in-time (JIT) inventory

1 control systems, manufacturers tend to rely on one supplier. Based on
. which criterion is the supplier selected?
A. Lowest item-by-item cost

 
B. The ability to be flexible

 
C. Product quality

 
D. Size of operation

 
 E. Lowest overall cost

Hammond Inc. supplies its retailers with handheld Crownlink electronic

data interchange terminals. All of its retailers use these terminals to
transmit merchandise orders to Hammond in Kansas City. Their
inventories are always stocked as needed. Shipments are made daily as
required by individual retailers. This is an example of a(n) _____ system.
A. efficient consumer response

 
7
B. total quality management
2
.  

C. marketing information

 
D. zero-defect management

 
E. material requirements planning

TMV Auto uses a computer-to-computer linkage, called HarpLink, to

manage its annual export of 65,000 vehicles. HarpLink provides
worldwide control, invoicing, and information about ports, carriers, and
custom documentation. HarpLink exemplifies _____.
7 A. a local area network
3
.  
B. material requirements planning

 
C. a spreadsheet program
  
D. electronic data interchange

 
E. database marketing

Which of the following statements is true about automatic replenishment

(AR) management?
A. It is a form of zero defects management program used by small-scale distributors.

 
B. It is an inventory system where retailers rather than distributors manage inventory levels for customers.
7
4  
. C. It allows suppliers to handle inventory in industrial settings.

 
D. It is the least used type of consumer response system.

 
E. It is a digital collateral management system used by salespeople to generate sales for a firm’s products.

Rock-Tenn Corporation continually receives data on production

schedules from its customers. It uses the information to determine the
quantity of boxes to be shipped to them. Rock-Tenn has established a(n)
7 _____ relationship with its customers.
5
. A. creeping commitment

 
B. tying agreement
  
C. reciprocal

 
D. automatic replenishment (AR)

 
E. life-cycle costing

Automatic replenishment (AR) and electronic data interchange (EDI) are

elements of:

A. just-in-time inventory control.

 
B. value analysis.
7
6  
. C. total quality management.

 
D. vendor analysis.

 
E. life-cycle costing.

In the context of changing the perceived value of a product, which of the

7 following could be considered a dangerous strategy if employed by a
7 salesperson?
.
A. Decreasing the rating of a competitive product
  
B. Increasing the price of the product

 
C. Decreasing the price of the product

 
D. Adding a new dimension to the product

 
E. Increasing the performance rating of the product

When firms want to influence the perceived value of one of its products
among customers, which of the following strategies is typically used as a
last resort?

A. Increasing the existing dimensions of the product

 
B. Decreasing the rating for a competitive product
7
8  
.
C. Adding a new dimension to the product

 
D. Increasing the performance of the product

 
E. Decreasing the price of the product

7 _____ is a strategy by which organizational buyers evaluate the relative

9 importance of suppliers and use that information to determine with whom
. they want to develop partnerships.
 A. Customer relationship management

 
B. Total quality management

 
C. Just-in-time inventory control

 
D. Supplier relationship management

 
E. Efficient consumer response system

Vincent is trying to analyze how important his suppliers are to his

business. He wants to know which supplier is best for a long-term
relationship. If he has to apply the supplier relationship management
(SRM) strategy, Vincent should most likely begin the analysis by first:

A. conducting a life-cycle costing of all the capital equipment used by his business.

 
8 B. determining the competition for his business’s vendors in the market.
0
.  
C. determining the benchmarking standards of his business against other businesses in the market.

 
D. calculating how much amount is spent with each vendor and for which products.

 
E. conducting a bottom-up forecasting of his business’s products.

 
 
Short Answer Questions

Who are resellers?

81  
.  
 

Who are end users?

82  
.  
 

What do resellers consider when making decisions about which

products to sell?
83  
.
 
 

Jack is a salesperson for a window and door distributor. Why should he

pay close attention to the demand for new housing and the number of
new high-rises getting building permits?
84
.  
 
 

85 In the context of purchasing components or materials, what is early

. procurement involvement?
 
  
 

What is creeping commitment?

86  
.  
 

What is a new-task buying situation?

87  
.  
 

What is a straight rebuy situation?

88  
.  
 

How can salespeople use the concept of life-cycle costing?

89  
.  
 

90 What is automatic replenishment?

.
 
  
 

 
 
Essay Questions

How does the organizational buying process differ from the consumer
buying process?
91  
.
 
 

When does a modified rebuy situation occur?

92  
.  
 

Samantha is the office manager for a dentist. Give an example of how

she might experience a modified rebuy situation, a straight rebuy
situation, and a new-task situation.
93
.  
 
 

94 Explain the role an initiator plays in the organizational buying process.

.
 
 
  

The city of Marowa is considering contractors to build a new sports

complex. What factors will likely influence the university’s buying
decision?
95
.  
 
 

Discuss the economic and quality criteria that may influence buying
decisions.
96  
.
 
 

Brian is attempting to get a marketing professor to include his

company’s textbook into the professor’s classroom teaching syllabus.
Brian knows that the professor has been using a competing textbook
and would have to spend considerable time adjusting her syllabus and
classroom strategies if she adopts Brian’s textbook. He points out that
97 his textbook is newly revised, which means that the professor can use it
. for several years without having to make adjustments. What sales
technique is Brian using?
 
 
 

98 Describe a method that buying centers use to reduce risks.

.
  
 
 

What is supply chain management (SCM), and what is a salesperson’s

role in supply chain management?
99  
.
 
 

What is the multiattribute model of product evaluation and choice?

100  
.  
 

 
Chapter 03 Buying Behavior and the Buying Process Answer Key
True / False Questions

Salespeople selling original equipment manufacturer (OEM) products

need to demonstrate that their products help customers produce
1. products that will offer superior value.
TRUE

Accessibility: Keyboard Navigation

Difficulty: 1 Easy
Learning Objective: 03-01 What are the different types of customers?

2. Resellers consider two elements when making decisions about what

 products to sell: customer profiles and targeted return.
FALSE

Accessibility: Keyboard Navigation

Difficulty: 1 Easy
Learning Objective: 03-01 What are the different types of customers?

End-user buying situations exclude the purchase of capital equipment

3. and services.
FALSE

Accessibility: Keyboard Navigation

Difficulty: 1 Easy
Learning Objective: 03-01 What are the different types of customers?

Global sourcing is a key factor in achieving a sustainable competitive

4. advantage.
TRUE

Accessibility: Keyboard Navigation

Difficulty: 1 Easy
Learning Objective: 03-01 What are the different types of customers?

Derived demand means demand is derived from an increase in GDP.

5.
FALSE

Accessibility: Keyboard Navigation

 Difficulty: 1 Easy
Learning Objective: 03-01 What are the different types of customers?