Marketing The Core 7th Edition Kerin Test Bank 1

Marketing The Core 7th Edition
Kerin Test Bank

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Chapter 05
Test Bank
1. 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
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Learning Objective: 05-01 Distinguish among industrial, reseller, and government organizational markets.
Level of Difficulty: 1 Easy
Topic: B2B Buying Process
Feedback: JCPenney buys paper for use in its newspaper inserts and direct-mail pieces.
2. Purchasing paper for JCPMedia is one example of

A. organizational buying.
B. online buying.
C. on-time delivery.
D. derived demand.
E. cooperative selling.

Blooms: Understand
Learning Objective: 05-02 Describe the key characteristics of organizational buying that make it different from consumer buying.
Level of Difficulty: 2 Medium
Feedback: Purchasing paper for JCPMedia is one example of organizational buying.
3. 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.

Blooms: Understand
Feedback: In addition to paper appearance, quality, quantity, and price, JCPMedia paper buyers formally evaluate paper supplier capabilities, often
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by extended visits to supplier facilities in the United States, Canada, and Europe. Supplier capabilities include the capacity to deliver on-time selected
grades of paper from specialty items to magazine papers, the availability of specific types of paper to meet printing deadlines, and formal programs
focused on the life cycle of paper products. For example, a supplier's forestry management and sustainability practices are considered in the paper
buying process.
4. Kim Nagele, senior sourcing manager at JCPenney, purchases tons of publication paper annually at a cost of hundreds of millions of dollars. As
described and inferred in the text, Mr. Nagele performs all of the following roles in the JCPenney buying center except which?
A. user
B. gatekeeper
C. influencer
D. buyer
E. decider

Blooms: Understand
Topic: Buying Center
Feedback: As senior sourcing manager at JCPenney, Kim Nagele assumes (1) the influencer role, helping to define the specifications for the paper;
(2) the buyer role, having the formal authority and responsibility to select the supplier and negotiate contract terms; (3) the decider role, having the
formal power to select the supplier that receives the contract; and (4) the gatekeeper role, controlling the flow of information within the buying
center—purchasing, marketing production and support, and senior JCPenney marketing personnel. Kim Nagele would not assume the user role for
the paper.
5. JCPenney looks at several capabilities when selecting a paper supplier. These organizational buying criteria include on-time delivery, the
availability, quality and quantity of selected grades of paper, forestry management and sustainable practices, and price. This examination would be
done during the __________ stage of the organizational buying decision process.
A. procurement analysis
B. break-even analysis
C. purchase decision
D. information search
E. alternative evaluation

Blooms: Understand
Learning Objective: 05-03 Explain how buying centers and buying situations influence organizational purchasing.
Feedback: These assessments are typical of the alternative evaluation stage of the decision process.
6. 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.

Blooms: Remember
Topic: Organizational Markets
Feedback: Key term definition—business-to-business marketing.
7. 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.

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Blooms: Remember
Feedback: Key term definition—business-to-business marketing.
8. 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.

Blooms: Remember
Feedback: Key term definition—organizational buyers.
9. Organizational buyers are

A. wholesalers, retailers, and service companies that buy goods and services exclusively for resale.
B. any organization that buys products and services for their own use or for resale.
C. not-for-profit organizations that buy goods and services 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.

Blooms: Remember
Feedback: Key term definition—organizational buyers.
10. 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.

Blooms: Understand
Feedback: Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their
own use or for resale.
11. Which of the following organizational buyers purchases raw materials and parts to reprocess into the finished goods they sell?
A. retailers
B. wholesalers
C. agents
D. manufacturers
E. ultimate consumers

Blooms: Understand
Feedback: Manufacturers buy raw materials and parts that they reprocess into the finished goods they sell.
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12. 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.

Blooms: Understand
Feedback: Manufacturers buy raw materials and parts that they reprocess into the finished goods they sell. Wholesalers and retailers resell finished
goods without reprocessing them.
13. All of the following are organizational buyers except which?

A. industrial firms
B. government units
C. ultimate consumers
D. resellers
E. wholesalers

Blooms: Understand
Feedback: Organizational buyers consist of manufacturers, wholesalers, retailers, and government agencies that buy products and services for their
own use or for resale.
14. 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.

Blooms: Understand
Feedback: Organizational buyers are divided into three markets: (1) industrial, (2) reseller, and (3) government.
15. Which of the following exemplifies 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. An architect 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.
AACSB: Knowledge Application

Blooms: Apply
Level of Difficulty: 3 Hard
Feedback: Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their
own use or for resale. Organizational buyers include all buyers in a nation except ultimate consumers. Only the owner of a restaurant is an
organizational buyer; all other alternatives involve purchases by ultimate consumers for their personal use.
16. 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.
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E. only produces a product, not a service.

Blooms: Remember
Feedback: Text term definition—industrial firms.
17. 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.

Blooms: Remember
Feedback: Text term definition—industrial firms.
18. Insurance companies, farms, auto repair, and fisheries are all examples of companies in the
A. consumer market.
B. cooperative market.
C. reseller market.
D. industrial market.
E. government market.

Blooms: Understand
Feedback: There are about 7.5 million firms in the industrial, or business, market. Companies that primarily sell physical goods (manufacturers;
mining; construction; and farms, timber, and fisheries) represent 25 percent of all the industrial firms. The services market sells diverse services such
as legal advice, auto repair, and dry cleaning. Service companies—finance, insurance, and real estate businesses; transportation, communication, and
public utility firms; and not-for-profit organizations—represent 75 percent of all industrial firms.
19. Which of the following types of firms are in the industrial market?
A. retailing
B. construction
C. wholesaling
D. state governments
E. federal regulatory agencies

Blooms: Understand
Feedback: There are about 7.5 million firms in the industrial, or business, market. These industrial firms in some way reprocess a product or service
they buy before selling it again to the next buyer. Companies that primarily sell physical goods (manufacturers; mining; construction; and farms,
timber, and fisheries) represent 25 percent of all the industrial firms.
20. Which of the following is a service business within the industrial market?
A. construction
B. mining
C. transportation
D. government
E. farming

Blooms: Understand
5-5
Feedback: The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Service companies—finance, insurance, and
real estate businesses; transportation, communication, and public utility firms; and not-for-profit organizations—represent 75 percent of all industrial
firms.
21. __________ comprise the highest percentage of firms in industrial markets.

A. Manufacturing firms
B. Construction firms
C. Agricultural firms
D. Mining companies
E. Service companies

Blooms: Understand
Feedback: Service companies represent 75 percent of all industrial firms.
22. The services market sells diverse services such as legal advice, auto repair, and dry cleaning, and this market represents 75 percent of all
industrial firms. Which of the following is another such service firm?
A. finance
B. wholesalers
C. retailers
D. government units
E. educational institutions

Blooms: Understand
Feedback: Service companies, such as legal advice, auto repair, and dry cleaning services; finance, insurance and real estate businesses;
transportation, communication, public utility firms; and not-for-profit organizations, represent 75 percent of all industrial firms.
23. 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
C. a service
D. a reseller
E. an industrial

Blooms: Understand
Feedback: There are about 7.5 million firms in the industrial, or business, market. These industrial firms in some way reprocess a product or service
they buy before selling it again to the next buyer. This is true of 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.
24. Archer Daniels Midland Co. (ADM) is the world's largest cocoa-bean processor. It buys cocoa beans and converts them into cocoa powder and
cocoa butter, which it then sells to companies like Hershey's that manufacture consumer products containing chocolate. ADM is operating in
__________ market.
A. a consumer
B. a government
C. an industrial
D. a manufacturing
E. a reseller

Blooms: Apply
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Feedback: Business marketing organizations operating in an industrial market buy a good or service, reprocess it, and then sell it to another buyer. In
this instance, ADM buys cocoa beans, reprocesses them, and then resells them to consumer package goods manufacturers like Hershey's.
25. Keystone Foods, which invented the individual quick freeze process for beef, provides McDonald's with millions of pounds of chicken, beef, and
fish annually for use in its restaurants. The firm sources the animal proteins from farms and processes them in a variety of ways, such as breading or
freezing, before selling them to McDonald's. Keystone is operating in __________ market.
A. a heavy goods
B. a government
C. a service
D. an industrial
E. a reseller

Blooms: Apply
Feedback: Marketing organizations operating in an industrial market buy a product or service, reprocess it, and then sell it to another buyer. In this
case, the company acquires animal proteins from farms, processes them, and sells them to McDonald's.
26. 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
C. a service
D. an industrial
E. a reseller

Blooms: Apply
Feedback: Marketing organizations operating in an industrial market buy a product or service, reprocess it, and then sell it to another buyer. In this
case, the firm buys the mattresses, wheels, metal component parts, etc., makes wheelchairs and hospital beds, and then sells them to hospitals,
nursing homes, and retailers of health care products certainly true of Graham-Field Health Products, which takes the component parts and materials it
buys and makes hospital beds and wheelchairs it sells to hospitals, nursing homes, and retailers.
27. 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.

Blooms: Remember
Feedback: Text term definition—resellers.
28. Among organizational markets, the reseller market includes

A. manufacturers.
B. logistics and supply chain providers.
C. government agencies.
D. end-user service providers.
E. retailers and wholesalers.

Blooms: Remember
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Feedback: Text term definition—resellers.
29. 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.

Blooms: Apply
Feedback: Resellers are wholesalers and retailers that buy physical products and resell them without any reprocessing. Here, ESF is a wholesaler
because it sells to other stores that will sell to retailers, which in turn sell to consumers.
30. 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.

Blooms: Apply
Feedback: Resellers are wholesalers and retailers that buy physical products and resell them without any reprocessing. In this case, 1-800 Contacts
resells contacts manufactured by others.
31. 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.

Blooms: Apply
Feedback: Resellers are wholesalers and retailers who buy physical products and resell them again without any reprocessing. In this case, when
Liberty Medical sells directly to diabetics and other ultimate consumers, the firm is acting as a reseller, and in particular a retailer.
32. In terms of organizational markets, Amazon.com, Lands' End, and JCPenney would most likely be classified as
A. government units.
B. resellers.
C. manufacturers.
D. wholesalers.
E. industrial firms.

Blooms: Apply
5-8
Feedback: Resellers are wholesalers and retailers that buy physical products and resell them without any reprocessing. These firms are examples of
retailers that purchase merchandise as resellers.
33. 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.

Blooms: Remember
Feedback: Text term definition—government units.
34. 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.

Blooms: Apply
Feedback: Government units are federal, state (such as a state university), and local agencies that buy products and services for the constituents they
serve.
35. 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.

Blooms: Apply
Feedback: Government units are federal, state, and local agencies that buy products and services for the constituents they serve.
36. 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.

Blooms: Apply
Feedback: Government units are federal, state, and local (like the City of Denver) agencies that buy products and services for the constituents they
serve.
37. 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).
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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).

Blooms: Remember
Feedback: Key term definition—North American Industry Classification System (NAICS).
38. 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 that is consistent worldwide.
D. provides a classification system for products 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.

Blooms: Remember
Feedback: Key term definition—North American Industry Classification System (NAICS).
39. 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).

Blooms: Remember
Feedback: The North American Industry Classification System (NAICS) 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).
40. 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.

Blooms: Remember
Feedback: The acronym NAICS stands for the North American Industry Classification System (NAICS).
41. The NAICS provides common industry definitions for

A. Canada, the United Kingdom, and the United States.
B. North America, Asia, and Europe.
C. North America, Central America, and South America.
D. Canada, England, and Australia.
E. Canada, Mexico, and the United States.
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Blooms: Remember
Feedback: The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United
States.
42. The NAICS groups economic activity to permit studies of

A. multi-language advertising.
B. market share, demand, or import competition.
C. growth potential in emerging markets.
D. best practices for manufacturers.
E. job outsourcing and trade flow impacts.

Blooms: Understand
Feedback: The NAICS groups economic activity to permit studies of market share, demand for products and services, import competition in domestic
markets, and similar studies.
43. 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.

Blooms: Understand
Feedback: The NAICS code designates industries with a numerical code in a defined structure. A six-digit coding system is used. The first two digits
designate a sector of the economy, the third digit designates a subsector, and the fourth digit represents an industry group. The fifth digit designates a
specific industry and is the most detailed level at which comparable data are available for Canada, Mexico, and the United States. The sixth digit
designates individual country-level national industries.
coding system is used. The third digit designates
A. an industry subsector.

Blooms: Understand
Feedback: The NAICS designates industries with a numerical code in a defined structure. A six-digit coding system is used. The first two digits
coding system is used. The fifth digit designates
A. an industry subsector.
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Blooms: Understand
Feedback: The NAICS designates industries with a numerical code in a defined structure. A six-digit coding system is used. The first two digits
46. Important market characteristics in organizational buying behavior include which of the following?
A. large 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

Blooms: Understand
Feedback: The market characteristics for organizational buying include derived demand for industrial products and services, typically few customers,
and their purchase orders are large. See Figure 5-1.
47. 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.

Blooms: Understand
Feedback: The market characteristics for organizational buying include derived demand for industrial products and services, typically few customers,
and their purchase orders are large. See Figure 5-1.
48. 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.

Blooms: Understand
Feedback: Key characteristics or dimensions of product and service characteristics in organizational buying include: (1) products or services that are
technical in nature and purchased on the basis of specifications; (2) many of the goods purchased are raw and semifinished; and (3) heavy emphasis
is placed on delivery time, technical assistance, and post-sale service. See Figure 5-1.
49. Important characteristics in organizational buying include which of the following?

A. products that are technical in nature and purchased on the basis of specifications
B. a heavy emphasis is placed on maintaining standardization to keep costs down
C. coupons and contests are the most frequent forms of promotion
D. a fixed, nonnegotiable price is the norm
E. personal relationships are preferred to online buying over the Internet
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Blooms: Understand
50. 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.

Blooms: Understand
51. 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.

Blooms: Understand
Feedback: Key features of the buying process include: (1) technically qualified and professional buyers follow established purchasing policies and
procedures; (2) buying objectives and criteria are typically spelled out, as are procedures for evaluating sellers and their products or services; (3)
multiple buying influences, and multiple parties participating the purchase decisions; (4) reciprocal arrangements, and negotiations between buyers
and sellers; and (5) frequent online buying. See Figure 5-1.
52. 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 need a developed marketing mix; resellers need worry just about the transaction.

Blooms: Understand
Feedback: Key characteristics of the marketing mix in terms of organizational buying include: (1) direct selling to organizational buyers, and
distribution is very important; (2) advertising and other forms of promotion are technical in nature; and (3) price is often negotiated, evaluated as part
of broader seller and product/service qualities, and frequently affected by quantity discounts. See Figure 5-1.
53. 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.
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Blooms: Remember
Feedback: Key term definition—derived demand.
54. 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.

Blooms: Remember
Feedback: Key term definition—derived demand.
55. 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 industrial products in other categories or markets.
E. demand for government products and services.

Blooms: Remember
Feedback: Derived demand is the demand for industrial products and services that is driven by, or derived from, demand for consumer products and
services.
56. 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.
A. unitized
B. derived
C. reseller
D. applied
E. implied

Blooms: Apply
Feedback: Derived demand means that the demand for industrial products and services is driven by, or derived from, the demand for consumer
products and services. The demand for containers is driven by consumer demand in the United States for products manufactured in Asia.
57. 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.
A. unitized
B. reseller
C. applied
D. implied
E. derived

Blooms: Apply
5-14
products and services. The demand for aircraft is driven by consumer (e.g., business and vacation travelers) demand for air travel worldwide.
58. 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 primary economic drivers like the construction industry.
B. unitary demand, which is tied to the average income level for Spruceland and its competitors.
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.

Blooms: Apply
products and services. The demand for the pallets is driven by the sales of (the demand for) appliances.
59. 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
A. derived.
B. unitized.
C. industrial.
D. applied.
E. reseller.

Blooms: Apply
products and services. The demand for Concert Staging Co. services is driven by the demand for outdoor concerts and theatrical events, which in turn
is derived from the ticket sales for these entertainment activities.
60. 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.
A. derived
B. unitized
C. industrial
D. applied
E. reseller

Blooms: Apply
products and services. The demand for SCOT ostrich leathers depends on the demand for shoes, car interiors, handbags, among other products.
61. 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.
A. applied
B. unitized
C. industrial
D. derived
E. consumer

5-15
Blooms: Apply
Feedback: Derived demand means that the demand for industrial products and services is driven by, or derived from, demand for consumer products
and services. Demand for triclosan would be directly related to the consumer demand for antibacterial products.
62. 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. create separate orders in amounts less than that the threshold

Blooms: Understand
Feedback: With so much money at stake, most organizations place constraints on their buyers in the form of purchasing policies or procedures, such
as obtaining competitive bids from at least three prospective suppliers.
63. All of the following statements about the purchase involved in organizational buying are true except which?
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 is typically smaller than that in consumer buying but it is done more frequently.

Blooms: Understand
Feedback: The size of the purchase involved in organizational buying is typically much larger than that in consumer buying, with the dollar value of
a single purchase often running into thousands or millions of dollars. With so much money at stake, buyers must often get competitive bids from at
least three prospective suppliers when the order is above a specific amount. Order size affects buying practices in determining who participates in the
purchase decision and makes the final decision, and the length of time required to arrive at a purchase agreement.
64. 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. also must sell to ultimate consumers because of the market potential.

Blooms: Understand
Feedback: The number of potential buyers is much smaller in organizational buying situations.
65. 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.

Blooms: Understand
5-16
Feedback: Organizations buy products and services for one main reason, which is to help them achieve their own objectives.
66. 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 increase profitability.
E. balance inventory.

Blooms: Understand
Feedback: Organizations buy products and services for one main reason: to help them achieve their objectives. For business firms, the buying
objective is usually to increase profits through reducing costs or increasing revenues.
67. 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 an economic downturn.
D. meet the needs of the groups it serves.
E. maintain purchase levels to support its suppliers.

Blooms: Apply
Feedback: The buying objectives of nonprofit firms are usually to meet the needs of the groups they serve.
68. 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.

Blooms: Understand
Feedback: Many companies today have broadened their buying objectives to include an emphasis on supplier diversity—buying from minority- and
women-owned suppliers and vendors.
69. 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 action expected of leading organizations.
D. it can attract new target markets.
E. these companies will work harder for less money.

Blooms: Understand
Feedback: Many companies today have broadened their buying objectives to include an emphasis on buying from minority- and women-owned
suppliers and vendors because it has led to increases in sales, profits, and customer satisfaction.
70. 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.
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C. evaluative criteria.
D. performance metrics.
E. organizational buying criteria.

Blooms: Remember
Feedback: Text term definition—organizational buying criteria.
71. 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 qualifications of the supplier's products and services based on recommendations from competitors.
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.

Blooms: Remember
Feedback: Key term definition—organizational buying criteria.
72. Organizational buying criteria serve the same purpose as __________ criteria used by consumers.
A. consideration
B. evaluative
C. decision
D. alternative
E. prepurchase

Blooms: Understand
Feedback: Organizational buying criteria serve the same purpose as evaluative criteria used by consumers.
73. There are seven commonly used organizational buying criteria. One of them is
A. production capacity.
B. loyalty.
C. flexibility.
D. adaptability.
E. quick and efficient communication.

Blooms: Understand
Feedback: Organizational buying criteria include (1) price, (2) ability to meet the quality specifications required for the item, (3) ability to meet
required delivery schedules, (4) technical capability, (5) warranties and claim policies in the event of poor performance, (6) past performance on
previous contracts, and (7) production facilities and capacity.
74. There are seven commonly used organizational buying criteria. One of them is
A. flexibility.
B. past performance on contracts.
C. adherence to government regulation.
D. senior management directives.
E. consumer demand.
5-18
Blooms: Understand
Feedback: Organizational buying criteria include (1) price, (2) ability to meet the quality specifications required for the item, (3) ability to meet
required delivery schedules, (4) technical capability, (5) warranties and claim policies in the event of poor performance, (6) past performance on
previous contracts, and (7) production facilities and capacity.
75. 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.

Blooms: Apply
Feedback: The ability to meet required delivery schedules is an example of an organizational buying criterion, which includes the capabilities of the
supplier, such as its ability to provide on-time delivery.
76. 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.

Blooms: Remember
Feedback: Text term definition—supplier development.
77. 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.

Blooms: Remember
Feedback: Text term definition—supplier development.
78. 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.
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Blooms: Understand
Feedback: 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 supplier development. The engineers are even called supplier-development engineers.
79. 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.

Blooms: Understand
Topic: Buyer-Seller Relationships
Feedback: Organizational buying is likely to involve complex negotiations concerning delivery schedules, price, technical specifications, warranties,
and claim policies. Negotiations can last for an extended period of time. Reciprocal arrangements also exist in organizational buying, and long-term
contracts are prevalent. In some cases, buyer-seller relationships evolve into supply partnerships.

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.

Blooms: Understand

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.

Blooms: Understand
82. 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.
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Blooms: Understand
83. 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.

Blooms: Apply
Feedback: A distinction between organizational and consumer buying behavior lies in the nature of the relationship between organizational buyers
and suppliers. Specifically, organizational buying is more likely to involve complex and lengthy negotiation concerning delivery schedules, price,
technical specifications, warranties, and claim policies. Long-term relationships are also prevalent.
84. 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.

Blooms: Remember
Feedback: Text term definition—reciprocity.
85. 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.

Blooms: Remember
Feedback: Text term definition—reciprocity.
86. 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
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Blooms: Understand
Feedback: Reciprocity is an industrial buying practice in which two organizations agree to purchase each other's products and services. It is frowned
upon by the U.S. Justice Department because it restricts the normal operation of the free market.
87. 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.

Blooms: Understand
Feedback: Reciprocity is an industrial buying practice in which two organizations agree to purchase each other's products and services. Though it
exists, it is frowned upon by the U.S. Justice Department because it restricts the normal operation of the free market.
88. 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 have an agreement to buy one another's products.
A. reciprocity
B. tying agreements
C. just-in-time procurement
D. quid pro quo
E. supply partnerships

Blooms: Understand
Feedback: Reciprocity is an industrial buying practice in which two organizations agree to purchase each other's products and services. Though it
exists, it is frowned upon by the U.S. Justice Department because it restricts the normal operation of the free market.
89. 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

Blooms: Apply
Feedback: Reciprocity is an industrial buying practice in which two organizations agree to purchase each other's products and services.
90. 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

Blooms: Remember
5-22
Feedback: Text term definition—supply partnership.
91. 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. a supplier that 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.

Blooms: Remember
92. 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.

Blooms: Understand
93. Milsco Manufacturing markets __________ in partnership with its customers like Harley-Davidson.
A. motors
B. braking systems
C. transmissions
D. seats
E. customized wheels

Blooms: Remember
Feedback: Milsco Manufacturing markets seating solutions in partnership with its customers. See Marketing Matters in the textbook.
94. 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.

Blooms: Understand
Feedback: Milsco Manufacturing involves its customers such as Harley-Davidson in the new-product development process to build mutually
beneficial, long-term, supply partnership relationships. See Marketing Matters in the textbook.
95. Apple Inc. custom-orders the microprocessors for its iMac, iPhone, and iPad. Intel makes chips for the iMac and Samsung produces Apple-
5-23
designed chips for the iPhone and iPad. Intel and Samsung work with Apple to minimize costs for each type of chip while maximizing quality,
ultimately giving customers good value for their money. These are examples of
A. symbiotic partnerships.
B. make-buy decisions.
C. reciprocal agreements.
D. supply partnerships.
E. exclusive dealing.

Blooms: Apply
Feedback: A supply partnership 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.
96. 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.

Blooms: Apply
Feedback: A supply partnership 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.
97. 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.
AACSB: Ethics
Blooms: Remember
Feedback: Text term definition—sustainable procurement.
98. 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.
AACSB: Ethics
Blooms: Understand
Feedback: Sustainable procurement 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.
99. 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
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A. green marketing.
B. ISO 14000 certification.
C. sustainable procurement.
E. cause marketing.
AACSB: Ethics
Blooms: Understand
Topic: Corporate Social Responsibility
Feedback: Starbucks is a pioneer and worldwide leader in sustainable procurement.
100. 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.
E. sustainable development.
AACSB: Ethics
Blooms: Understand
Feedback: Starbucks is a pioneer and worldwide leader in sustainable procurement.
101. 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.
AACSB: Ethics
Blooms: Apply
Feedback: Walmart is focusing on sustainable procurement with the goal to be supplied by 100 percent renewable energy.
102. 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.

Blooms: Remember
Feedback: Key term definition—organizational buying behavior.
103. Organizational buying behavior is

A. the actions consumers take 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.
5-25
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.

Blooms: Remember
Feedback: Key term definition—organizational buying behavior.
104. In organizations, the buying function involves gathering and screening information about products and services, prices, and suppliers, which are
known as
A. agents.
B. procurement sources.
C. shops.
D. vendors.
E. resellers.

Blooms: Remember
Feedback: Text term definition—vendors.
105. 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.

Blooms: Understand
Feedback: The five stages of the organizational buying process also apply to consumer buying. More individuals are involved, supplier capability
becomes more important, and the post-purchase evaluation behavior is more formalized when organizations buy. See Figure 5-3.
106. 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

Blooms: Understand
Feedback: Organizations buy products and services for one main reason, which is to help them achieve their objectives. For business firms, the
buying objective is usually to increase profits through reducing costs or increasing revenues. Self-actualization is a personal, not organizational,
motivator.
107. 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.
5-26
Blooms: Understand
Feedback: There are important similarities and differences between consumer and organizational buying behavior. In the latter, more individuals are
involved, supplier capability becomes more important, and the post-purchase evaluation behavior is more formalized. See Figure 5-3.
108. 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.

Blooms: Understand
Feedback: The first stage of the organizational buying decision process is problem recognition. See Figure 5-3.
109. 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. information search
B. supplier search
C. alternative evaluation
D. problem recognition
E. purchase decision

Blooms: Understand
Feedback: During the problem recognition stage, marketing research or employees such as salespeople may identify problems.
110. At which stage of the organizational buying decision process would design and production engineers draft specifications?
A. problem recognition
B. information search
D. purchase decision
E. value analysis

Blooms: Understand
Feedback: Design and production engineers draft specifications for the product in the information search stage of the organizational buying decision
process. See Figure 5-3.
111. At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential suppliers to assess their
facilities, production capability, and quality control?
D. post-purchase behavior

Blooms: Understand
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Feedback: In the alternative evaluation stage of the organizational buying decision process, purchasing and engineering personnel visit with suppliers
and assess facilities, capacity, quality control, and financial status. See Figure 5-3.
112. At which stage of the organizational buying decision process would purchasing assess the financial status of potential suppliers?
E. post-purchase behavior

Blooms: Understand
Feedback: In the alternative evaluation stage of the organizational buying decision process, purchasing and engineering personnel visit with suppliers
and assess facilities, capacity, quality control, and financial status. See Figure 5-3.
113. 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?
D. purchase review

Blooms: Remember
Feedback: At the purchase decision stage of the organizational buying decision process, the firm selects its organizational buying criteria such as
price, quality, delivery time, and technical capability to select a supplier. Then they negotiate terms and award a contract. See Figure 5-3.
114. 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.

Blooms: Understand
Feedback: The fourth stage of the organizational buying decision process is the purchase decision, during which a contract is awarded. See Figure 5-
3.
115. 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 once accepted, terms must still be negotiated.
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.

Blooms: Understand
Feedback: After a supplier has been selected, further negotiation concerning price, performance, and delivery terms is likely. See Figure 5-3.
116. What is the last stage of the organizational buying decision process?
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A. information search
B. post-purchase behavior
E. purveyor review

Blooms: Remember
Feedback: The final stage of the organizational buying decision process is post-purchase behavior. See Figure 5-3.
117. Comparing the stages in a consumer and organizational purchase decision process reveals key differences. In organizations, the
______________ stage is more formal, often involving a vendor rating system.
D. post-purchase evaluation
E. performance review

Blooms: Understand
Feedback: Comparing the stages in a consumer and organizational purchase decision process reveals key differences. For example, when a
manufacturer buys an earbud headset for its units from a supplier, more individuals are involved, supplier capability becomes more important, and
the post-purchase evaluation behavior is more formal. See Figure 5-3.
118. Comparing the stages in a consumer and organizational purchase decision process reveals key differences. In organizations, _____________
becomes more important for deadlines and quality control, and since a long-term relationship is anticipated.
A. choice variety
B. supplier audit
D. supplier capability
E. performance review

Blooms: Understand
Feedback: Comparing the stages in a consumer and organizational purchase decision process reveals key differences. For example, when a
manufacturer buys an earbud headset for its units from a supplier, more individuals are involved, supplier capability becomes more important, and
the post-purchase evaluation behavior is more formal. See Figure 5-3.
119. 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

Blooms: Apply
Feedback: A formal vendor rating system would be used in the post-purchase behavior stage of the organizational buying decision process.
120. 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
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A. gatekeeper.
B. buying center.
C. purchasing department.
D. procurement committee.
E. acquisition office.

Blooms: Remember
Feedback: Key term definition—buying center.
121. 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.

Blooms: Remember
Feedback: Key term definition—buying center.
122. 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.

Blooms: Remember
Feedback: Text term definition—buying committee.
123. 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?

Blooms: Understand
Feedback: The importance of the buying center requires that a firm marketing to many industrial firms and government units understand the
structure, technical and business functions represented, and behavior of these groups. One researcher suggests that the other four questions provide
guidance in understanding the buying center.
124. 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.
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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.

Blooms: Understand
Feedback: The composition of the buying center changes as the item that is to be purchased changes. Although a buyer or purchasing manager is
almost always a member of the buying center, individuals from other functional areas are included, depending on what is to be purchased. Cross-
functional teams are often used when the purchased item is to become part of a manufactured product.
125. 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.

Blooms: Apply
Feedback: For complex purchase decisions, many organizations include a variety of people from various departments within the organization in the
buying decision. The members of the group change depending on the purchase situation, and so the buying center is loosely organized. Members of
the buying center share common goals, risks, and knowledge or experiences relevant to the purchase decision.
126. 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.

Blooms: Apply
Feedback: A buying center consists of a group of people in an organization who participate in the buying process and share common goals, risks, and
knowledge important to a purchase decision. Buying centers may include a cross-functional group, especially if the items are key components to be
included in a final manufactured product. And this group may consist of people with varying roles in the purchase decision process.
127. All of the following are roles in a buying center except which?
A. specifiers
B. deciders
C. buyers
D. influencers
E. users

Blooms: Remember
Feedback: Five specific roles that an individual in a buying center can play are users, influencers, buyers, deciders, and gatekeepers.
128. The people in the organization who actually consumer the product or service are referred to as __________, which is one role in the buying
center.
A. consumers
B. deciders
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C. buyers
D. influencers
E. users

Blooms: Remember
Feedback: Text term definition—users.
129. 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
B. decider
C. buyer
D. user
E. motivator

Blooms: Apply
Feedback: Users are the people in the organization who would actually use the band saw and can appreciate its features.
130. 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
B. decider
C. buyer
D. user
E. motivator

Blooms: Apply
Feedback: Users are the people in the organization who would actually use the copier and can appreciate its features.
131. In a buying center, __________ affect the buying decision, usually by helping define the specifications for what is bought.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users

Blooms: Remember
Feedback: Text term definition—influencers.
132. 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.
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Blooms: Remember
Feedback: Text term definition—influencers.
133. 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
D. buyers
E. users

Blooms: Apply
Feedback: Influencers affect the buying decision, usually by helping define the specifications for what is to be bought.
134. In a buying center, __________ have formal authority and responsibility to select the supplier and negotiate the terms of a contract.
A. buyers
B. gatekeepers
C. adopters
D. influencers
E. users

Blooms: Remember
Feedback: Buyers have formal authority and responsibility to select the supplier and negotiate the terms of the contract.
135. 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.
A. user
B. gatekeeper
C. influencer
D. buyer
E. decider

Blooms: Apply
136. 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
B. broker
C. buyer
D. influencer
E. user

Blooms: Apply
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137. In a buying center, __________ have the formal or informal power to select or approve the supplier that receives the contract.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users

Blooms: Remember
Feedback: Text term definition—deciders.
138. 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.

Blooms: Remember
Feedback: Text term definition—deciders.
139. For routine orders, the decider is usually

A. the buyer or purchasing manager.
B. the CEO.
C. the COO.
D. the head of R&D.
E. the customer.

Blooms: Understand
Feedback: For routine orders, the decider is usually the buyer or purchasing manager.
140. 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.
B. decider.
C. broker.
D. influencer.
E. user.

Blooms: Apply
Feedback: Deciders have the formal or informal power to select or approve the supplier who receives the contract.
141. 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
A. deciders.
B. obstructionists.
C. gatekeepers.
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D. filters.
E. influencers.

Blooms: Remember
Feedback: Text term definition—gatekeepers.
142. 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. a user.
B. an influencer.
C. a buyer.
D. a decider.
E. a gatekeeper.

Blooms: Apply
Feedback: A gatekeeper controls the flow of information in the buying center. Purchasing personnel, technical experts, and secretaries can all keep
salespeople or information from reaching people performing the other four roles. The receptionist could facilitate or hinder the flow of information to
and from the doctor and would not otherwise be involved in selecting drugs to prescribe to patients.
143. 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
B. a decider
C. an influencer
D. an obstructionist
E. a power broker

Blooms: Apply
Feedback: Gatekeepers control the flow of information to others in the buying center. Purchasing personnel, technical experts, and secretaries can all
keep salespeople or information from reaching people performing the other four roles. Cassidy's secretary is a potential gatekeeper.
144. 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
B. decider
C. user
D. obstructionist
E. power broker

Blooms: Apply
Feedback: Gatekeepers control the flow of information to others in the buying center. Purchasing personnel, technical experts, and secretaries can all
keep salespeople or information from reaching people performing the other four roles. Beth played the role of gatekeeper.
145. 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?
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A. gatekeeper and buyer
B. decider and user
C. buyer and decider
D. influencer and buyer
E. influencer, gatekeeper, and decider

Blooms: Apply
Feedback: The family is the buyer, otherwise Mark would not need to present his research to them. This is not a routine buying decision, so Mark has
informally chosen the supplier (decider) as well as trying to convince (influencer) the family to approve his selection. Because he is presenting bids
from no other companies, Mark is also assuming the role of gatekeeper.
146. 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

Blooms: Remember
Feedback: Key term definition—buy classes.
147. 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.

Blooms: Remember
148. 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.

Blooms: Remember
149. 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.
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Blooms: Remember
150. 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.

Blooms: Remember
Topic: Buying Situations
Feedback: Text term definition—new buy.
151. 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.
E. new buy.

Blooms: Understand
Feedback: In a new buy situation, the people involved are many, the decision time is long, the problem definition is uncertain, 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. See
Figure 5-4.
152. 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.
D. new buy.
E. standard buy.

Blooms: Understand
Feedback: In a straight rebuy situation, there is one person involved, the decision time is short, the problem is well-defined, the buying objective is to
find a low-priced supplier, present suppliers are considered, and the buying influence is through a purchasing agent. See Figure 5-4.
153. A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the problem is a minor
modification, and the suppliers considered are the present ones, the buy class situation is most likely a
A. conditional buy.
B. straight rebuy.
C. new buy.
D. modified rebuy.
E. standard buy.

Blooms: Understand
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Feedback: In a modified rebuy situation, there are two or three people involved, the decision time is moderate, the problem definition is minor
modification, the buying objective is to find a low-priced supplier, the suppliers considered are present, and the buying influence includes a
purchasing agent and others. See Figure 5-4.
154. 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.
B. new buy.
C. straight rebuy.
D. make-buy.
E. standard buy.

Blooms: Understand
Feedback: In a new buy situation, there are many people involved, the decision time is long, the problem definition is uncertain, 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.
See Figure 5-4.
155. 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 receive confirmation of a contract quickly.

Blooms: Understand
See Figure 5-4.
156. 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. expect to be the only supplier being considered.

Blooms: Understand
See Figure 5-4.
157. 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. a new buy.
B. a straight rebuy.
C. a converted rebuy.
D. a modified rebuy.
E. an initial buy.
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Blooms: Apply
Feedback: In a new buy situation the organization is a first-time buyer of the product or service—in this case, a new and different advertising
medium. This involves greater potential risk in purchase.
158. A reorder of an existing product or service from a list of acceptable suppliers is referred to as a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. standard reorder.
E. make-buy.

Blooms: Remember
Feedback: Text term definition—straight rebuy.
159. An assistant heard his supervisor in the supply room yell, "Call Crate & Barrel. We need another case of its large coffee mugs for the conference
next week." The supervisor was asking the assistant to make a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.
E. standard reorder.

Blooms: Apply
Feedback: In a straight rebuy situation, the buyer or purchasing manager reorders an existing product or service from the list of acceptable suppliers.
Office supplies and maintenance services are often straight rebuys.
160. 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
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.

Blooms: Apply
Feedback: In a straight rebuy situation, the buyer or purchasing manager reorders an existing product or service from the list of acceptable suppliers.
Office supplies and maintenance services are often straight rebuys.
161. 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.

Blooms: Remember
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Feedback: Text term definition—modified rebuy.
162. 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
C. make-buy
D. rebuy class
E. modified rebuy

Blooms: Remember
Feedback: Text term definition—modified rebuy.
163. A university's marketing department typically purchases backpacks with its logo embroidered on them for all incoming freshmen. This year,
because faculty have 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
A. new buy.
B. straight rebuy.
C. make-buy.
D. modified rebuy.

Blooms: Apply
Feedback: In a modified rebuy situation, the users, influencers, or deciders want to change the product specifications, price, delivery schedule, or
supplier. This is a modified rebuy as the same item is being purchased (backpacks) but they are looking for greater durability.
164. 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.
C. new buy.
E. class buy.

Blooms: Apply
Feedback: In a modified rebuy situation, members of the organization's buying center seek to change some element of the purchase—product, price,
delivery schedule, or supplier. This would be a modified rebuy because the university is purchasing the same stationery and business cards but with a
new logo.
Figure 5-4
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Figure 5-4
165. Figure 5-4 shows the three buy classes encountered by organizational buyers. A is referred to as a
A. modified rebuy.
B. straight rebuy.
C. new buy.
E. class buy.

Blooms: Remember
Feedback: The figure summarizes how buy classes affect buying center tendencies in different ways. A is considered a new buy, B is a straight rebuy,
and C is a modified rebuy.
166. Figure 5-4 shows the three buy classes encountered by organizational buyers. B is referred to as a
A. modified rebuy.
B. straight rebuy.
C. new buy.
E. typical buy.

Blooms: Remember
167. Figure 5-4 shows the three buy classes encountered by organizational buyers. C is referred to as a
A. modified rebuy.
B. straight rebuy.
C. new buy.
E. altered buy.

Blooms: Remember
168. 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
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Blooms: Understand
Feedback: A straight rebuy involves a buyer or purchasing manager reordering an existing product or service. A modified rebuy involves the users,
influencers, or deciders in the buying center changing the product specifications, price, delivery schedule, or supplier.
169. 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.

Blooms: Understand
Learning Objective: 05-04 Recognize the importance and nature of online buying in industrial, reseller, and government organizational markets.
Topic: Electronic Commerce
Feedback: Organizational buyers account for 80 percent of the global dollar value of all online or online transactions. So, consumer electronic
commerce accounts for the other 20 percent. Thus, organizational buying is four times greater than consumer e-commerce.
170. Online buying in organizational markets is prominent because Internet technology

A. allows companies to increase their innovation cycles.
B. substantially increases brand loyalty.
C. conveys timely information quickly.
D. narrows the potential customer base for many products.
E. eliminates marketing costs.

Blooms: Understand
Feedback: Online buying in organizational markets is prominent for three major reasons: (1) organizational buyers depend heavily on timely supplier
information that describes product availability, technical specifications, application uses, price, and delivery schedules; (2) this technology
substantially reduces buyer order processing costs; and (3) business marketers have found that Internet technology can reduce marketing costs,
particularly sales and advertising expense, and broaden their potential customer base for many types of products and services.
171. 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.

Blooms: Remember
Feedback: Key term definition—e-marketplaces.
172. 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.
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Blooms: Remember
Feedback: Key term definition—e-marketplaces.
173. Another name for an e-marketplace is

A. an e-hub.
B. an E-place.
C. an e-trade.
D. an E-xchange.
E. a 4NXchange.

Blooms: Remember
Feedback: E-marketplaces go by a variety of names, including business-to-business (B2B) exchanges and e-hubs, and make possible the real-time
exchange of information, money, products, and services.
174. 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.

Blooms: Understand
Feedback: E-marketplaces can be independent trading communities or private exchanges.
175. Small businesses benefit from independent __________ like PlasticsNet, Hospital Network.com, and TextileWeb.
A. Webfronts
B. clicks-and-mortar
C. e-marketplaces
D. iMarkets
E. integrated markets

Blooms: Understand
Feedback: Independent e-marketplaces act as a neutral third party and provide an Internet technology trading platform and a centralized market that
enable exchanges between buyers and sellers. All of the examples here are independent e-marketplaces.
176. 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

Blooms: Understand
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Feedback: Large companies tend to favor private exchanges that link them with their network of qualified suppliers and customers. Private exchanges
focus on streamlining a company's purchase transactions with its suppliers and customers.
177. 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

Blooms: Understand
Feedback: Independent e-marketplaces act as a neutral third party and provide an Internet technology trading platform and a centralized market
enabling buyer and seller exchanges.
178. 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.

Blooms: Understand
Feedback: Independent trading communities provide an Internet technology trading platform and a centralized market that enable buyer and seller
exchanges. They charge a fee for their service and exist in settings like these: (1) thousands of geographically dispersed buyers and sellers, (2)
volatile prices caused by demand and supply fluctuations, (3) time sensitivity due to perishable offerings and changing technologies, and (4) easily
comparable offerings between a variety of sellers. Large companies tend to favor private exchanges.
179. PlasticsNet, Hospital Network.com, TextileWeb, and eBay are all examples of
A. Webfront operations.
B. clicks-and-mortar stores.
C. e-marketplaces.
D. integrated markets.
E. iMarkets.

Blooms: Understand
Feedback: Independent e-marketplaces act as a neutral third party and provide an Internet technology trading platform and a centralized market that
enable exchanges between buyers and sellers. All of the examples cited in the question are independent e-marketplaces.
180. 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.

Blooms: Apply
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Feedback: E-marketplaces bring together buyers and supplier organizations to make possible the real-time exchange of information, money, products,
and services. Buzzsaw.com and Cephren.com bring together buyers and suppliers online.
181. The predominant person-to-person trading community in the world is

A. Facebook.
B. Amazon.
C. NASDAQ.
D. Craigslist.
E. eBay.

Blooms: Remember
Feedback: eBay is the predominant person-to-person trading community in the world. See Marketing Matters in the textbook.
182. 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.

Blooms: Understand
Feedback: An e-marketplace brings together buyers and supplier organizations that make possible the real-time exchange of information, money,
products, and services. eBay offers a trading platform for millions of small businesses in the United States and even greater numbers around the
world. See Marketing Matters in the textbook.
183. When a seller puts an item up for sale and would-be buyers are invited to bid in competition with one another, 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.

Blooms: Remember
Feedback: Key term definition—traditional auction.
184. 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.

Blooms: Remember
Feedback: In a traditional auction, a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other. Bidding is
sequential, with prospective buyers deciding whether or not to increase the bid price.
185. 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
A. traditional auction.
5-45
B. reverse auction.
C. bidder's war.
D. I-auction.
E. Webfront auction.

Blooms: Understand
Feedback: In a traditional auction, a seller (Dell) puts items up for sale (computers) and would-be buyers are invited to bid in competition with each
other.
Figure 5-5a
Figure 5-5a
186. Which type of auction does Figure 5-5a represent?

A. reverse auction
B. horizontal auction
C. vertical auction
D. diagonal auction
E. traditional auction

Blooms: Understand
Feedback: In a traditional auction, a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other. As more
would-be buyers become involved, there is an upward pressure on bid prices. The auction ends when a single bidder remains and "wins" the item
with its highest price. See Figure 5-5.
187. What type of online auction includes one seller and many buyers?
A. forward auction
B. reverse auction
C. traditional auction
D. vertical auction
E. bidder's war

Blooms: Understand
188. 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
5-46
Blooms: Understand
189. 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.

Blooms: Remember
Feedback: Key term definition—reverse auction.
190. 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.

Blooms: Remember
Feedback: Key term definition—reverse auction.
191. 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.

Blooms: Understand
Feedback: Like traditional auctions, bidding is sequential and prospective suppliers observe the bids of others, but they decide whether or not to
decrease the bid price. This puts downward pressure on bid prices.
192. 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.

Blooms: Understand
5-47
Feedback: A reverse auction works in the opposite direction from a traditional auction. In a reverse auction, a buyer communicates a need for a
product or service and would-be suppliers are invited to bid in competition with each other. As more would-be suppliers become involved, there is a
downward pressure on bid prices for the buyer's business. See Figure 5-5.
Figure5-5b
Figure5-5b
193. Which type of auction does Figure 5-5b represent?

A. traditional auction
B. inverse auction
C. reverse auction
D. horizontal auction
E. reciprocal auction

Blooms: Understand
194. What type of online auction includes one buyer and many sellers?
A. forward auction
B. reverse auction
C. traditional auction
D. vertical auction
E. bidder's war

Blooms: Understand
195. 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

Blooms: Understand
196. Which of the following statements about Trek Bicycles is false?

5-48
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).

Blooms: Understand
Feedback: Trek's mission has evolved, and today it is to "help the world use the bicycle as a simple solution to complex problems." In fact, its motto
is "We believe in bikes." See Video Case 6: Trek: Building Better Bikes through Organizational Buying.
197. All of the following people are part of the Trek buying center except which?
A. Trek executives
B. production workers
C. representatives from research and development
D. quality control employees
E. a purchasing manager

Blooms: Understand
Feedback: The buying center is the group responsible for finding the best suppliers and vendors for the organization's purchases. At Trek the buying
center consists of a purchasing manager, buyers who identify domestic and international sources of materials and components, and representatives
from research and development, production, and quality control. See Video Case 6: Trek: Building Better Bikes through Organizational Buying.
198. Trek uses several organizational buying criteria to evaluate potential suppliers. These include all of the following except which?
A. price
B. environmental impact
C. warranties and claim policies
D. quality
E. delivery capabilities

Blooms: Understand
Feedback: When potential suppliers are identified, Trek evaluates them based on four criteria—quality, delivery capabilities, price, and
environmental impact of their production process. Warranties and claim policies are one of the seven organizational buying criteria cited in the
textbook, but this criterion is not used by Trek. See Video Case 6: Trek: Building Better Bikes through Organizational Buying.
199. 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
A. new buy.
B. straight rebuy.
C. standard reorder.
D. modified rebuy.
E. make-buy.

Blooms: Understand
Feedback: The purchase of a saddle that has a little bit of different material for the cover but the components are the same is a modified rebuy
decision. See Video Case 6: Trek: Building Better Bikes through Organizational Buying.
200. Describe the three types of organizational markets and give examples of each.
5-49
There are three types of organizational markets: (1) Industrial markets consist of industrial firms that reprocess a product or service they buy before
selling it again to the next buyer (examples: mining, construction, insurance companies, and public utility firms). (2) Reseller markets are composed
of wholesalers and retailers that buy physical products and resell them again without any reprocessing (examples: Walmart and Target). (3)
Government markets are comprised of federal, state, and local agencies that buy goods and services for the constituents they serve (examples: NASA,
City of San Francisco, and New York City Police Department).

Blooms: Understand
201. What is the North American Industry Classification System (NAICS)?
The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. The first two digits
of the NAICS code designate an industry sector of the economy. The third digit code signifies an industry subsector. Subsectors are further divided
into industry groups (fourth digit), industries (fifth digit), and country-specific or national industries (sixth digit). The system provides common
industry definitions for Canada, Mexico, and the United States to facilitate the measurement of economic activity in the three member countries of
the North American Free Trade Agreement (NAFTA).

Blooms: Remember
202. What are the characteristics of organizational buying behavior?
Understanding the characteristics of organizational buying is essential in designing effective marketing programs to reach these buyers. According to
Figure 5-1 in the textbook, key characteristics of organizational buying are: (1) Market characteristics, such as (a) derived demand for industrial
offerings, (b) few customers typically exist, and (c) the purchase orders are large. (2) Product or service characteristics, such as (a) products or
services are technical in nature and purchased on the basis of specifications, (b) many of the goods purchased are raw and semifinished, and (c) a
heavy emphasis placed on delivery time, technical assistance, and post-sale service. (3) Buying process characteristics, such as (a) technically
qualified and professional buyers follow established purchasing policies and procedures, (b) buying objectives and criteria are typically spelled out,
as are procedures for evaluating sellers and their products or services, (c) there are multiple buying influences and multiple parties participate in
purchase decisions, (d) there are reciprocal arrangements, and negotiation between buyers and sellers is common, and (e) online buying over the
Internet is widespread. (4) Marketing mix characteristics, such as (a) direct selling to organizational buyers is the rule and distribution is very
important, (b) advertising and other forms of promotion are technical in nature, and (c) price is often negotiated, evaluated as part of broader seller
and product or service qualities, and frequently affected by quantity discounts.

Blooms: Understand
203. List seven organizational buying criteria.
Key organizational buying criteria: (1) price, (2) quality specifications, (3) delivery schedule, (4) technical capability, (5) warranties and claim
policies, (6) past performance, and (7) production facilities and capacity.

Blooms: Understand
204. What are the five stages of the organizational buying process? Describe at least three differences from the consumer buying process.
The five stages of the organizational buying process are: problem recognition, information search, alternative evaluation, purchase decision, and post-
purchase behavior. Figure 5-3 reveals key differences. Specifically, more individuals are involved, supplier capability becomes more important, and
the post-purchase evaluation behavior is more formal.

Blooms: Understand
205. What is a buying center? In what type of business would a buying center most likely be found?
A buying center is a group of individuals within an organization who participate in the buying process. They share common goals, risks, and
5-50
knowledge important to a purchase decision. One would most likely see a highly formalized buying center, known as a buying committee, in larger,
multistore chain retailers such as Target, 7-Eleven convenience stores, and Safeway. In addition, most industrial firms or government units use
groups to arrive at buying decisions.

Blooms: Understand
206. Identify and describe the five roles an individual can play in a buying center.
There are five roles an individual can play in a buying center: (1) users, who actually use the product or service, (2) influencers, who help define the
specifications for what is bought, (3) buyers, who have the formal authority and responsibility to select the supplier and negotiate the terms of the
contract, (4) deciders, who have the formal or informal power to select or approve the supplier, and (5) gatekeepers, who control the flow of
information in the buying center.

Blooms: Remember
207. 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.
New buy. Here the organization is a first-time buyer of the product or service. This involves greater potential risks in the purchase, so the buying
center is enlarged to include all those who have a stake in the new buy. Straight rebuy. Here the buyer or purchasing manager reorders an existing
product or service from the list of acceptable suppliers, probably without even checking with users or influencers from the engineering, production,
or quality control departments. Modified rebuy. In this buying situation the users, influencers, or deciders in the buying center want to change the
product specifications, price, delivery schedule, or supplier. Although the item purchased is largely the same as with the straight rebuy, the changes
usually necessitate enlarging the buying center to include people outside the purchasing department. See Figure 5-4.

Blooms: Remember
208. What are the three types of organizational buying situations or buy classes? Give an example of each.
There are three types of buying situations: (1) straight rebuy, simply reordering an existing product of service from the list of acceptable suppliers
(e.g., printer ink cartridges for an office); (2) modified rebuy, when the users, influencers, or deciders in the buying center want to change the
product's specifications, price, delivery, schedule, or supplier (e.g., Ford wants a smaller steering wheel for its new cars); (3) new buy, when the
organization is a first time buyer of the product of service (e.g., a computer company must purchase a new type of chip for its new line of computers).

Blooms: Apply
209. Explain the differences between independent e-marketplaces and private exchanges.
Both are forms of e-marketplaces. Independent e-marketplaces act as a neutral third party and provide an Internet technology trading platform and a
centralized market that enable exchanges between buyers and sellers. They charge a fee for their service and exist in settings that have one or more of
the following features: (1) thousands of geographically dispersed buyers and sellers, (2) volatile prices caused by demand and supply fluctuation, (3)
time sensitivity due to perishable offerings and changing technologies, and (4) easily comparable offerings between a variety of sellers. Independent
e-marketplaces typically focus on a product or serve a particular industry and offer small-business buyers and sellers an economical way to expand
their customer base and reduce the cost of purchased products. Private exchanges focus on streamlining a company's purchase transactions with its
suppliers and customers. Like independent marketplaces, private exchanges provide a technology trading platform and central market for buyer-seller
interactions. They are not a neutral third party, however, but represent the interests of their owners. Large companies tend to favor private exchanges.

Blooms: Understand
210. Differentiate between traditional and reverse auctions.
In a traditional auction, there is one seller and many prospective buyers. A seller puts an item up for sale and would-be buyers are invited to bid in
5-51
competition with each other. As more would-be buyers become involved, there is an upward pressure on bid prices because bidding is sequential.
Prospective buyers observe the bidding process and decide whether to increase the bid price. The auction ends when a single buyer who is willing to
pay the highest price remains. In a reverse auction, there is one buyer and many sellers. A buyer communicates a need for a product and invites
potential suppliers to bid in competition with each other. As more prospective suppliers become involved, there is a downward pressure on price. The
auction ends when a single supplier willing to offer the lowest price remains. See Figure 5-5.

Blooms: Remember
Category # of Questions
AACSB: Analytical Thinking 161
AACSB: Ethics 5
AACSB: Knowledge Application 44
Accessibility: Keyboard Navigation 190
Blooms: Apply 44
Blooms: Remember 67
Blooms: Understand 99
Learning Objective: 05-01 Distinguish among industrial, reseller, and government organizational markets. 44
Learning Objective: 05-02 Describe the key characteristics of organizational buying that make it different from consumer buying. 62
Learning Objective: 05-03 Explain how buying centers and buying situations influence organizational purchasing. 75
29
Level of Difficulty: 1 Easy 67
Level of Difficulty: 2 Medium 99
Level of Difficulty: 3 Hard 44
Topic: B2B Buying Process 63
Topic: Buyer-Seller Relationships 19
Topic: Buying Center 29
Topic: Buying Situations 29
Topic: Corporate Social Responsibility 3
Topic: Electronic Commerce 20
Topic: Organizational Markets 47
5-52

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AACSB: Analytical Thinking

2. Purchasing paper for JCPMedia is one example of

AACSB: Analytical Thinking

Feedback: Purchasing paper for JCPMedia is one example of organizational buying.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

Feedback: Key term definition—business-to-business marketing.

7. Business-to-business marketing refers to

AACSB: Analytical Thinking

Feedback: Key term definition—business-to-business marketing.

AACSB: Analytical Thinking

Feedback: Key term definition—organizational buyers.

9. Organizational buyers are

AACSB: Analytical Thinking

Feedback: Key term definition—organizational buyers.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

13. All of the following are organizational buyers except which?

AACSB: Analytical Thinking

AACSB: Analytical Thinking

15. Which of the following exemplifies an organizational buyer?

AACSB: Knowledge Application

16. An industrial firm

AACSB: Analytical Thinking

Feedback: Text term definition—industrial firms.

AACSB: Analytical Thinking

Feedback: Text term definition—industrial firms.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

21. __________ comprise the highest percentage of firms in industrial markets.

AACSB: Analytical Thinking

Feedback: Service companies represent 75 percent of all industrial firms.

AACSB: Analytical Thinking

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Analytical Thinking

Feedback: Text term definition—resellers.

28. Among organizational markets, the reseller market includes

AACSB: Analytical Thinking

Feedback: Text term definition—resellers.

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Analytical Thinking

Feedback: Text term definition—government units.

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Knowledge Application

AACSB: Analytical Thinking

Feedback: Key term definition—North American Industry Classification System (NAICS).

38. The North American Industry Classification System (NAICS)

AACSB: Analytical Thinking

Feedback: Key term definition—North American Industry Classification System (NAICS).

AACSB: Analytical Thinking