Marketing Principles Asia Pacific 2nd Edition Pride Test Bank

Marketing Principles Asia Pacific 2nd
Edition Pride Test Bank

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CHAPTER 6
Business markets and buying behaviour
SHORT ANSWER
1. What are the four major types of business markets, and what are the characteristics of each?
AACSB Outcomes: Communication
DF: E LO: 1 Topic Heading: Business markets
Type: KN
2. Discuss the differences between business and consumer transactions.

DF: E LO: 2 Topic Heading: Dimensions of marketing to business customers
Type: KN
3. What are some of the major concerns of business customers in making purchase decisions?
DF: M LO: 2 Topic Heading: Dimensions of marketing to business customers
Type: KN
4. What factors affect the purchase method that business customers choose?
Type: KN
5. Compare and contrast the three major types of purchases made by business customers.
AACSB Outcomes: Analytical; Communication
Type: KN
6. Discuss how demand for business products differs from demand for consumer products.
Type: KN
7. What is derived demand?

Type: KN
8. Explain how purchase decisions for business products may be influenced by persons in a buying centre.
DF: M LO: 4 Topic Heading: Business buying decisions
Type: KN
9. Draw and label the framework that represents the business buying decision process and the factors that
influence it.
Type: KN
10. In what ways do environmental factors affect the business buying decision process?
DF: E LO: 4 Topic Heading: Business buying decisions
Type: KN
11. How do a firm’s objectives affect the business buying decision process?
Type: KN
12. Discuss how interpersonal factors influence the business buying decision process.
Type: KN
13. How do individual factors affect the business buying decision process?
Type: KN
14. Describe producer markets.

Type: KN
15. Describe reseller markets.

Type: KN
16. Compare and contrast the consumer buying decision process and the business buying decision process.
AACSB Outcomes: Analytical
DF: M LO: 1 Topic Heading: Business markets
Type: KN
17. In what ways can a classification system be used by business marketers to analyse target markets?
AACSB Outcomes: Analytical
DF: D LO: 1 Topic Heading: Business markets
Type: KN
MULTIPLE CHOICE
18. Individuals and business organisations that purchase products for the purpose of making a profit either by
using the products to produce other products or by using them in their operations are classified as
__________ markets.
A) consumer
B) institutional
C) producer
D) government
E) reseller
Ans: C AACSB Outcomes: Communication
Type: KN
19. A(n) __________ market consists of individuals or groups that purchase products for resale, use in
production, or use in daily operations.
A) producer
B) government
C) institutional
D) business
E) reseller
Ans: D AACSB Outcomes: Communication
Type: KN
20. The three purposes for which individuals or groups can use products in order to be considered a business
market are:
A) use in daily operations, end consumption and resale.
B) direct use in producing other products, company travel and end consumption.
C) resale, use in daily operations and direct use in producing other products.
D) governmental, institutional and reseller purposes.
E) making other products, selling to other businesses and making component parts.
DF: M LO: 1 Business markets
Type: KN
21. When Hunter Fans buys electrical wire for use in producing its ceiling fans, Hunter is part of what type of
market for electrical wire?
A) Resale
B) Wholesale
C) Customer
D) Consumer
E) Business
Ans: E AACSB Outcomes: Communication; Customer
Type: AP
22. An accountant who purchases software for maintaining clients’ books is an example of a buyer in a(n)
__________ market.
A) consumer
B) producer
C) reseller
D) government
E) institutional
Ans: B AACSB Outcomes: Analytical; Communication
Type: AP
23. Business markets are typically divided into the following four categories:
A) retailers, wholesalers, services and non-profit firms.
B) producer, manufacturer, reseller and government.
C) producer, reseller, government and institutional.
D) manufacturer, wholesaler, retailer and services.
E) reseller, retailer, government and institutional.
Type: KN
24. There are many different types of customers for producers. Which of the following would not be considered
a member of a producer market?
A) Buyers of raw materials used in production
B) Buyers of component parts used in production
C) Buyers of consumer goods in grocery stores
D) Buyers of scanners for use at grocery store checkouts
E) Buyers of farm machinery for use on family farms
Type: KN
25. In business markets, wholesalers and retailers are classified as:

A) reseller markets.
B) producer markets.
C) government markets.
D) institutional markets.
E) organisation markets.
Ans: A AACSB Outcomes: Communication
Type: KN
26. __________ buy products from manufacturers and then resell the products to other firms in the distribution
system.
A) Retailers
B) Producers
C) Distributors
D) Warehouses
E) Wholesalers
Ans: E AACSB Outcomes: Communication
Type: KN
27. Mike’s Roadside Market buys produce from area farmers, marks the merchandise at a price that includes
some profit and then sells the fruit and vegetables to the people in and around Centreville. Mike’s would be
classified as part of a __________ market.
A) consumer
B) producer
C) government
D) reseller
E) wholesaler
Ans: D AACSB Outcomes: Analytical; Communication
Type: KN
28. Snappy Tools, Inc., purchases hammers, bolts and other hardware items from a variety of manufacturers and
sells them to hardware stores at a price that includes a profit for Snappy Tools, Inc. The company is part of
what type of business market?
A) Reseller
B) Producer
C) Consumer
D) Government
E) Supply
Ans: A AACSB Outcomes: Analytical; Communication
Type: KN
29. Reseller markets consist mainly of:
A) consumers.
B) retailers.
C) wholesalers and retailers.
D) manufacturers.
E) industrial users.
Type: KN
30. Motorola buys silicone which is used in its chip-making process. Motorola produces microchips for use
within a wide variety of products for other companies, such as Ford and Samsung. Motorola is a buyer in
a(n) __________ market.
A) producer
B) government
C) reseller
D) construction
E) institutional
Ans: A AACSB Outcomes: Analytical
Type: KN
31. Retailers like Target and Kmart are considered to be members of which business market?
A) Reseller
B) Retailer
C) Producer
D) Institutional
E) Services
Type: KN
32. Which of the following factors concerning reseller purchase decisions is false?
A) Resellers are concerned with the level of demand for a product.
B) Resellers are not concerned with how much space a product takes up as long as it has a high price.
C) Resellers want producers to be able to supply adequate quantities of a product.
D) Resellers are concerned with the availability of technical and promotional assistance from producers.
E) Resellers are concerned with the mark-up percentage they can get on ae product.
Type: KN
33. Because retailers are concerned with product selection, price and space, they often evaluate products on the
basis of:
A) their mark-up.
B) sales per square metre of the selling area.
C) how much of the product they can fit in a certain amount of space.
D) profit per dollar of selling price.
E) the reliability of the supplier.
Ans: B AACSB Outcomes: Communication
Type: KN
34. Which type of business market tends to have the most complex buying procedures?
A) Reseller
B) Institutional
C) Retailer
D) Government
E) Producer
Type: KN
35. When the Melbourne City Council buys iPads for its restaurant inspectors to use during their visits, the
purchase from Apple would be considered:
A) a regulatory sale.
B) a reseller purchase.
C) a government purchase.
D) a producer purchase.
E) an institutional sale.
Ans: C AACSB Outcomes: Reflective thinking
Type: AP
36. The Department of Defence is a member of the __________ market.

A) regulatory
B) reseller
C) government
D) producer
E) institutional
Ans: C AACSB Outcomes: Analytical; Communication
Type: AP
37. Organisations with charitable, educational, community or other non-business goals constitute which
market?
A) Reseller
B) Government
C) Institutional
D) Producer
E) Non-profit
Type: KN
38. A friend of yours starts his own business. He would like to expand his client base to include the
government, but he believes his small business would be ignored. Based on your knowledge, you tell him:
A) that he is absolutely right, the government does not deal with small businesses.
B) that, although the government deals with small businesses, he will never make a profit off a
government contract.
C) that any government – federal, state or local – would laugh at his size of business.
D) the government rarely considers new suppliers when making purchasing decisions.
E) the government buys products from all sizes of businesses, but there is some red tape.
Type: AP
39. The government decides to purchase a new fleet of fighter jets for the Royal Australian Air Force. What
type of buying procedure is the government most likely to use?
A) The government will request bids from all companies on its qualified bidder list.
B) It will contact whatever company made the last jets and have them develop the new ones.
C) Ads will be placed in the top-five circulated Australian newspapers for a company to produce the jets.
D) The government will select a few firms and enter into negotiations with them until the contract is
awarded.
E) The contract will go to the first company that submits a reasonable bid for the desired jets.
Ans: D AACSB Outcomes: Communication; Strategy
Type: AP
40. Campus accommodation at a university purchases food in bulk to feed its residents. This means it is part of
a(n) __________ market.
A) producer
B) consumer
C) reseller
D) institutional
E) government
Ans: D AACSB Outcomes: Analytical
Type: AP
41. Churches, charitable organisations and private schools are considered __________ buyers.
A) corporate
B) government
C) institutional
D) producer
E) non-profit
Type: KN
42. Institutional markets are:

A) intermediaries who resell goods to make a profit.
B) federal and state government units.
C) state or local government units.
D) consumers who buy products for their own use.
E) organisations that seek non-business goals.
Type: KN
43. Which of the following types of markets most often has fewer resources available than other types of
organisations?
A) Reseller markets
B) Producer markets
C) Government markets
D) Institutional markets
E) Organisation markets
Type: KN
44. Abbott’s Office Supplies buys furniture and filing cabinets from Craine Furniture. Craine buys paper, pens
and folders from Abbott’s. The two firms are engaged in:
A) cross-selling.
B) tying agreements.
C) producer marketing.
D) reciprocity.
E) competitive bidding.
Type: AP
45. Which of the following would be considered an institutional buyer?

A) The University of Sydney
B) The Department of Environment
C) Apple Inc.
D) The Red Cross
E) The City of Geelong
Ans: D AACSB Outcomes: Communication; Customer
Type: AP
46. What is a primary difference between business and consumer buyers?

A) Consumer buyers require more product information than business buyers.
B) Business purchases are made by one individual whereas families make consumer purchases together.
C) Repeat sales are more common with consumer buyers than business buyers.
D) Consumers primarily buy inexpensive items; businesses buy only expensive items.
E) Business buyers generally make larger orders than consumer buyers.
Type: KN
47. Maurice Denton of Denton Pest Control buys equipment from a supplier because that supplier hires him to
spray the warehouse for insects periodically. This practice is known as:
A) cost-benefit analysis.
B) cooperative selling.
C) reciprocity.
D) supplier agreement.
E) modified-rebuy purchase
Type: AP
48. __________ is a practice in which two businesses agree to buy from each other.
A) A new-task purchase
B) A straight rebuy
C) A modified-rebuy purchase
D) Reciprocity
E) A straight purchase
Type: KN
49. Sometimes business purchasing agents are influenced to deal with a certain supplier and may make less-
than-optimal purchase decisions. Which business market practice is most likely to cause this?
A) New-task purchases
B) Modified-rebuy purchases
C) Straight-rebuy purchases
D) Reciprocity purchases
E) Derived demand purchases
Type: KN
50. A disadvantage of reciprocity is that it can lead to:

A) a price war.
B) higher promotional costs.
C) more competitive firms entering the industry.
D) less-than-optimal purchases for the buyer.
E) longer periods of negotiation.
DF: D LO: 2 Topic Heading: Dimensions of marketing to business customers
Type: KN
51. Henry owns a small landscaping company called GreenScapes. When buying a new ute for his business,
Henry negotiated an agreement with Nunawading Holden that GreenScapes would service the grounds of
the car dealer. This is an example of:
A) a new-task purpose.
B) a straight rebuy.
C) a modified rebuy.
D) reciprocity.
E) a straight purchase.
Ans: D AACSB Outcomes: Reflective thinking
Type: AP
52. Which of the following statements about business buying is false?

A) Business marketers prefer not to sell to customers who place small orders.
B) Business marketers must often sell their products in large quantities to make profits.
C) Most business purchases are made by committee.
D) Business purchases are usually made on the basis of contracts.
E) Orders in business markets tend to be smaller than those placed in consumer markets.
Type: KN
53. Many suppliers and their customers invest time and resources to build and maintain mutually beneficial
relationships, which are often called:
A) partnerships.
B) co-ops.
C) monopolies.
D) reciprocity.
E) alliances.
Type: KN
54. Which of the following is true with respect to buyers in business markets?
A) Business buyers always act rationally when making purchases for their companies.
B) Business customers tend to be less informed about the products they purchase than consumer buyers.
C) Business customers demand detailed information about a product’s quality, features and technical
specifications.
D) Business customers are no different than buyers in consumer markets.
E) Business customers tend to buy products from their friends and contacts with business suppliers.
Type: KN
55. When buying materials, the purchasing agent for Alco Pillow Manufacturing Company considers a variety
of factors. Which issue is least likely to concern this buyer?
A) Does the quality of the goods meet company specifications?
B) Does the supplier consistently deliver on time?
C) Does the supplier also sell to my competitors?
D) Does the supplier offer the services required?
E) Does the price meet company budget requirements?
Type: AP
56. Product specifications include:

A) physical characteristics and level of quality.
B) types of services that are provided with the product.
C) financing available for the product.
D) product return policies.
Type: KN
57. Most businesses try to control the level of quality in the parts they buy from suppliers. Most firms develop
standards for __________ in order to achieve their quality goals.
A) how many different suppliers they use
B) how many parts can fail
C) the percentage of defects allowed
D) how long the parts should last
Type: KN
58. Volkswagen purchases upholstery for the interiors of its vehicles from various suppliers. This upholstery
must have a set of characteristics, or __________, that is expressed by Volkswagen.
A) descriptions
B) product features
C) criteria
D) purchase requests
E) specifications
Ans: E AACSB Outcomes: Analytical; Communication
Type: AP
59. All of the following are important concerns of business customers except:
A) achieving a specific level of quality in the products offered to target markets.
B) obtaining a level of quality that meets specifications.
C) obtaining products that exceed specifications to ensure the best possible product performance.
D) obtaining products for which the quality level is consistent.
E) supporting customers with services they expect.
Type: CH
60. Management at Spotless Dry Cleaners is concerned that it maintains a high level of service for its business
accounts. How should the firm monitor the level of service these customers receive?
A) Develop a code of service.
B) Set service objectives.
C) Formally survey customers.
D) Specify service uniformity.
E) Stress truthfulness with employees.
Ans: C AACSB Outcomes: Analytical
Type: AP
61. Johnson’s Industrial Pest Control Service wants to meet its customers’ expectations with regard to the
quality of service it provides. How should Johnson’s ensure it is meeting these expectations?
A) Monitor service by formally surveying customers.
B) Use management judgement.
C) Trace existing service levels.
D) Stress quality service with employees.
E) Train employees better.
Type: AP
62. Samuel Roberts of Roberts Construction is planning to buy a piece of used earthmoving equipment. He
would most likely base his purchase decision on __________ of the alternative machines.
A) descriptions
B) inspections
C) a sampling
D) specifications
E) reputations
Type: AP
63. Which method of business buying is most likely to be used when the products being purchased are
standardised based on certain characteristics?
A) Homogeneous selection
B) Inspection
C) Description
D) Sampling
E) Negotiation
Type: KN
64. A mill in Wagga buys grain from growers in the western region. The mill’s purchasing agent will most
likely use which buying method?
A) Description
B) Inspection
C) Sampling
D) Negotiation
E) Selection
Type: AP
65. A representative product taken from a lot or batch, evaluated and purchased refers to:
A) homogeneous selection.
B) inspection.
C) description.
D) sampling.
E) negotiation
Type: KN
66. Mitcham Private Hospital decides to redo its kitchen with new flooring, cabinets, counters and appliances.
The hospital compiles a description of the project and then asks sellers to submit bids. After determining the
most attractive bids, the hospital will then work with two or three companies to determine which will get the
contract. This is an example of using __________ for a purchase decision.
A) sampling
B) negotiation
C) inspection
D) elimination
E) description
Type: AP
67. Which method of business buying is necessary when products are highly homogeneous and examination of
each item is not feasible?
A) Negotiation
B) Sampling
C) Description
D) Inspection
E) Homogeneous selection
Type: KN
68. Which of the following products is most likely to be purchased on the basis of contract negotiation?
A) Eggs
B) Office supplies
C) Used cars
D) A custom-made bulldozer
E) Wheat
Type: KN
69. Most business purchases can be classified as belonging to one of three types:
A) delinquent, repetitive or delivered.
B) repetitive, new task or modified rebuy.
C) modified rebuy, new task or straight rebuy.
D) delinquent, new task or reciprocal.
E) rebuy, reciprocal or delayed.
Type: KN
70. When a business routinely purchases the same product with similar terms of sale, the purchase is called a:
A) new task.
B) repetitive purchase.
C) straight rebuy.
D) modified rebuy.
E) standard order.
Type: KN
71. Mike, a purchasing agent, recently placed an order with the Kahn Corporation. Mike’s company has ordered
the same products before under the same terms of sale. What type of purchase does this situation represent?
A) New task
B) Repetitive
C) Institutional
D) Straight rebuy
E) Modified rebuy
Type: AP
72. Which method of business buying is most likely to be used when the products being purchased are
standardised based on certain characteristics?
A) Homogeneous selection
B) Inspection
C) Description
D) Sampling
E) Negotiation
Ans: C AACSB Outcomes: Analytic; Customer
Type: KN
73. The Royal Australian Air Force purchases uniforms from a single supplier. Uniforms are purchased every
six months in seven different sizes. This is an example of a:
A) new product purchase.
B) repetitive purchase.
C) straight rebuy.
D) modified rebuy.
E) standard order.
Ans: C AACSB Outcomes: Analytical; Reflective thinking
Type: AP
74. If a business owner buys parts by specifying the quantity, grade and other attributes, which buying method
is being used?
A) Description
B) Sampling
C) Negotiation
D) Ordering
E) Inspection
Ans: A AACSB Outcomes: Analytic; Customer
Type: KN
75. When a business is making its initial purchase of an item to be used to perform a new job, it is known as a
__________ purchase.
A) straight-rebuy
B) reciprocal
C) delayed
D) new-task
E) modified-rebuy
Type: KN
76. Aunt Kathy’s sales and sales force have continued to expand. Now, the firm plans to add a fleet of company
cars as part of its sales compensation package. For Aunt Kathy’s, these vehicles would represent a
__________ purchase.
A) modified-rebuy
B) straight-rebuy
C) new-task
D) re-evaluated
E) repetitive
Type: AP
77. Which of the following business purchasing scenarios is most likely to require a business market buyer to
develop product specifications?
A) New-task purchases
B) Modified-rebuy purchases
C) Straight-rebuy purchases
D) Reciprocity purchases
E) Derived-demand purchases
Type: KN
78. Linfox Distribution Company has purchased 15 forklifts over the past two years. As it plans to place its next
order for another five machines, management wonders if additional features may be needed to handle
changes in the product lines it carries. For Linfox, these new forklifts represent a __________ purchase.
A) new-task
B) repetitive
C) straight-rebuy
D) repetitive-order
E) modified-rebuy
Ans: E AACSB Outcomes: Analytical; Communication
Type: AP
79. A representative from Coca-Cola stops at a local fast-food restaurant once a month to inquire how much
soft-drink syrup will be needed. The restaurant’s orders are an example of which type of business purchase?
A) New task
B) Modified rebuy
C) Straight rebuy
D) Bid
E) Negotiated
Type: AP
80. When the requirements associated with a new-task purchase are changed on the second or third order, this is
called a __________ purchase.
A) modified-rebuy
B) continued new-task
C) contractual
D) straight-rebuy
E) negotiated-rebuy
Type: KN
81. Demand for business products is also known as __________ demand.

A) derived
B) corporate
C) business buying
D) manufacturing
E) industrial
DF: M LO: 3 Topic Heading: Demand for business products
Type: KN
82. All of the following describe the demand for business products except:
A) elastic.
B) derived.
C) joint.
D) inelastic.
E) fluctuating.
Type: CH
83. The fact that business customers purchase products to be used directly or indirectly in the production of
goods and services to satisfy customers’ needs means that demand for business products is:
A) joint.
B) economically stable.
C) derived.
D) inelastic.
E) more fluctuating.
Type: CH
84. When consumer demand for a product changes, a wave is set in motion that affects demand for all firms
involved in the production and marketing of that product. Which of the following terms describes this
phenomenon?
A) Industrial demand
B) Derived demand
C) Inelastic demand
D) Joint demand
E) Fluctuating demand
Type: KN
85. Goodyear is a manufacturer and marketer of tyres for new passenger cars. In recent years, the company’s
business has declined because of the overall decrease in consumer demand for new cars. In this case, the
demand for Goodyear’s products is said to be __________ since it depends on the demand for new cars.
A) inelastic
B) fluctuating
C) derived
D) elastic
E) non-derived
Type: KN
86. Demand for business products is characterised as derived. From what is the demand derived?
A) Industrial demand
B) Modified demand
C) Demand for consumer products
D) Future product demand
E) The business cycle
DF: E LO: 3 Topic Heading: Demand for business products
Type: KN
87. __________ a major threat to the sales success of jointly demanded products.
A) Price changes are
B) Shortages are
C) Economic instability is
D) Inventory buildup is
E) Proliferation of brands is
Type: KN
88. Inelastic demand simply means that:

A) buyers will not make a modified-rebuy purchase.
B) demand depends on how many items are purchased.
C) a price increase or decrease will not significantly change the demand for an item.
D) when price goes up, demand goes down.
E) when supply is reduced, the price will increase.
Type: KN
89. Inelastic demand in business markets refers to a situation where:
A) demand for a given product fluctuates very little over time.
B) price increases or decreases will not significantly change demand for a given product.
C) demand for a given product fluctuates significantly over time.
D) demand for one product depends heavily on the demand for another product.
E) supply for a given product cannot keep pace with the demand for it.
Type: KN
90. Demand for a business product is __________ if a price increase or decrease will not significantly affect
that demand.
A) elastic
B) inelastic
C) derived
D) joint
E) separate
Type: KN
91. In placing a tyre order with Michelin, South Side Industrial Supply finds that the truck tyres it is ordering
have increased $37.50 in price since the last order. South Side proceeds with the order, confident that it can
pass on the price increase to future customers. This is an example of business products having __________
demand.
A) derived
B) inelastic
C) joint
D) fluctuating
E) higher
DF: D LO: 3 Topic Heading: Demand for business products
Type: AP
92. Petrol prices keep increasing in Australia, resulting in companies’ costs increasing. The demand for petrol
despite its price represents __________demand.
A) elastic
B) inelastic
C) derived
D) joint
E) separate
Ans: B AACSB Outcomes: Analytical; Reflective thinking
Type: AP
93. When certain consumer products are in high demand, producers might buy extra materials and equipment,
and when demand subsides, producers will cut back on their material purchases. This describes __________
demand.
A) joint
B) inelastic
C) consumer
D) fluctuating
E) derived
Type: KN
94. __________ demand involves the use of two or more items in combination to produce a product.
A) Inelastic
B) Joint
C) Fluctuating
D) Derived
E) Partnered
Type: KN
95. As it places its order for truck tyres with Michelin, South Side Industrial Supply realises that it must also
place an order for valve stems and balancing weights for the truck tyres. Such business products are
characterised as having __________ demand.
A) derived
B) inelastic
C) joint
D) fluctuating
E) higher
Type: AP
96. Most business buying decisions are made by:

A) one person.
B) a team of purchasing agents.
C) a firm’s buying centre.
D) inventory control personnel.
E) the sales force.
DF: D LO: 4 Topic Heading: Business buying decisions
Type: KN
97. In a buying centre, purchasing agents or purchasing managers are also known as:
A) gatekeepers.
B) deciders.
C) buyers.
D) users.
E) influencers.
Type: KN
98. Brett Harvey is a mechanical engineer at Shaw Machine Parts. He develops the specifications for
component parts so that his company knows what it needs from suppliers. Brett’s role is as a(n)
__________ in the business buying process.
A) buyer
B) gatekeeper
C) user
D) influencer
E) decider
Type: AP
99. __________ the group of people within a business who are involved in making business buying decisions.
A) The new-task team is
B) Negotiators are
C) Purchasing agents are
D) Deciders are
E) The buying centre is
Type: KN
100. Adelaide University decided to purchase new computers for all of the computer labs on campus. For this
purchase, students were asked to give their input. In this instance, the students would be acting as
a(n)__________, while the purchasing agent is a(n) __________.
A) user; buyer
B) user; gatekeeper
C) user; decider
D) influencer; decider
E) influencer; gatekeeper
Ans: D AACSB Outcomes: Reflective thinking
Type: AP
101. Administrative assistants that control the flow of information to other people in an organisation often play
the __________ role in the buying centre.
A) gatekeeper
B) user
C) influencer
D) buyer
E) controller
Type: KN
102. Calvin Gluckman of WP International, a major marketer of word-processing software, calls the director of
purchasing for MMK, Inc., and speaks with the director’s assistant. He sets up an appointment to discuss an
upcoming purchase of software. The assistant plays the role of __________ in this purchase decision.
A) gatekeeper
B) buyer
C) decider
D) buying centre captain
E) order giver
Type: AP
103. In the process of buying routinely purchased items, buyers are sometimes also the:
A) deciders.
B) gatekeepers.
C) users.
D) influencers.
E) informers.
Type: KN
104. There are four groups of factors that may influence the business buying decision process. Which of the
following is not one of those four groups of factors?
A) Conceptual
B) Environmental
C) Organisational
D) Interpersonal
E) Individual
Type: KN
105. The second stage in the business buying decision process is to:
A) search for products and suppliers.
B) select the most appropriate product.
C) develop product specifications.
D) evaluate product and supplier performance.
E) recognise the problem.
Type: KN
106. The stages of the business buying decision process, in order, are:
A) recognising the problem, establishing product specifications, searching for products and evaluating
possible suppliers, selecting suppliers and products and evaluating performance.
B) recognising the problem, searching for products and evaluating possible suppliers, selecting suppliers
and products, establishing product specifications and evaluating performance.
C) recognising the problem, selecting suppliers and products, evaluating performance, establishing
product specifications and searching for substitute products.
D) establishing product specifications, recognising the problem, searching for products, evaluating
possible products and suppliers, selecting suppliers and products, and evaluating performance.
E) establishing product specifications, searching for products, selecting suppliers and products,
evaluating performance, recognising the problem and evaluating possible products and suppliers.
Type: KN
107. In its purchase of desktop business computers, Albertson’s asked that potential suppliers provide
information only on units with at least 4 gigabytes of memory. As Albertson’s management evaluates this
purchase, it finds that 4 gigabytes are inadequate for many of the software programs used at Albertson’s. In
this instance, the firm would need to modify which aspect of the purchase process?
A) Searching
B) Specification development
C) Alternative evaluation
D) Selection
E) Performance evaluation
Type: AP
108. After deciding to order replacement parts for ageing machinery, the buyer for a construction company
examines catalogues and trade publications looking for these parts. The buyer is at which stage in the
business buying decision process?
A) Problem recognition
B) Product specification
C) Product and supplier search and evaluation
D) Product and supplier selection
E) Performance evaluation
Type: AP
109. The third stage in the business buying decision process is to:
A) evaluate product specifications to solve the problem.
B) evaluate products relative to specifications.
C) select and order the most appropriate product.
D) evaluate product and supplier performance.
E) search for products and suppliers.
Type: KN
110. An organisation that decides to buy all of a certain part from the same company is using:
A) single-supplier purchasing.
B) multiple sourcing.
C) same vendor analysis.
D) straight rebuy.
E) sole sourcing.
Type: KN
111. Linda Linmeirs is considering the purchase of a new fax machine for her real estate office. She is
considering a machine that does not have as many functions as her current machine but is available at a
considerably lower price. She is engaged in __________ analysis.
A) vendor
B) downsizing
C) strategic
D) value
E) profit
Type: AP
112. During the search for and evaluation of possible products and suppliers, marketers sometimes use
__________ analysis to examine quality, design and materials, and item reduction in order to acquire the
product in the most cost-effective way.
A) cost
B) value
C) profit
D) strategic
E) SWOT
Type: KN
113. __________ analysis is a systematic evaluation of current and potential suppliers that focuses on many
dimensions including price, product quality, delivery service, product dependability and overall company
reliability.
A) Value
B) Vendor
C) Buying centre
D) Strategic
E) Cost
Type: KN
114. What are the four major categories of factors that influence business buying decisions?
A) Environmental, organisational, interpersonal and individual
B) Environmental, organisational, psychological and individual
C) Environmental, psychological, individual and technological
D) Technological, organisational, environmental and interpersonal
E) Environmental, organisational, technological and individual
Type: KN
115. A buyer for Myer orders handbags from a supplier because that supplier allows the buyer to maintain Myer
company policy of 30-day advance purchase notice. This is an example of __________ influence on the
business buying decision process.
A) environmental
B) organisational
C) interpersonal
D) individual
E) demographic
Ans: B AACSB Outcomes: Analytical
Type: AP
116. Individual influencing factors refer to:

A) relationships among those in the firm’s buying centre.
B) uncontrollable environmental forces.
C) the power an individual has within the buying centre.
D) personal characteristics of individuals in the buying centre.
E) supplier activities.
Type: KN
117. Compared with consumer goods, marketers aiming at business customers:

A) do not need to select target markets.
B) have an enormous amount of information available concerning potential customers.
C) have more difficulty determining where their customers are located.
D) are restricted in the types of promotion they can use.
E) have more difficulty estimating customers’ purchase potentials.
Type: KN
118. A formal, systematic evaluation of current and potential vendors is known as:
A) multiple sourcing.
B) value analysis.
C) vendor analysis.
D) sole sourcing.
E) secondary sourcing.
Ans: C AACSB Outcomes: Communication; Customer; International perspective
Type: KN
119. An organisation’s decision to use only one supplier is known as __________ sourcing.
A) solitary
B) multiple
C) single
D) sole
E) secondary
Ans: D AACSB Outcomes: Communication; Customer; International perspective
Type: KN
120. An evaluation of each component of a potential purchase is known as __________ analysis.

A) component
B) vendor
C) value
D) potential
E) sales
Type: KN
121. Use of __________ and level of conflict among buying centre participants influence business buying
decisions.
A) money
B) time
C) power
D) resources
E) personality
Type: KN
122. According to the text, which type of factor does not influence the decision process?
A) Environmental
B) Organisational
C) Interpersonal
D) Individual
E) Competitor
Ans: E AACSB Outcomes: Analytical
Type: AP
123. Possible influencers on the buying decision process are?
A) Environmental, organizational, interpersonal and individual
B) Legal, social, economic and spatial
C) Products, suppliers, power and money
D) Sales representatives only
E) Service, modification, advertisements and personal selling
DF: M LO: 5 Topic Heading: Stages of the business buying decision process
Type: KN
124. Vendor analysis involves:

A) choosing unacceptable vendors.
B) choosing new vendors when a product is unavailable.
C) formally and systematically evaluating current and potential vendors focusing on characteristics such
as price, product quality, delivery service, product availability and overall reliability.
D) choosing several suppliers at the same time.
Type: AP
125. What individual characteristics are important when dealing with people in a buying centre?
A) Age, education, personality and tenure
B) Sex, age and marital status
C) Culture, parental status and sex
D) Country of origin, age and personality
E) Financial and marital status
Type: AP
Narrbegin: Samsung
Use the following to answer questions 126–9:
Samsung is entering the home appliance market with its new French-door refrigerator. In designing the
production facility, it has a need for various pieces of equipment, including a perpetual assembly belt-drive,
quasi-assembly pods and finishing stations. The purchasing agent for the appliance division is inquiring
about who will be needed for input on the purchasing decision. Samsung has already contacted several
producers of the quasi-assembly pods and has begun negotiations with their sales representatives.
Narrend
126. What type of business purchase is Samsung undertaking?

A) Modified rebuy
B) Straight rebuy
C) New task
D) Straight purchase
E) New rebuy
Ans: C AACSB Outcomes: Analytical; Customer
Type: AP
NAR: Samsung
127. Which group should Samsung not include in its buying centre for the new equipment?
A) Purchasing agents at Samsung
B) Eventual users within Samsung
C) Potential future Samsung customers
D) Gatekeepers within Samsung
E) Senior managers at Samsung
Type: AP
NAR: Samsung
128. What was the first step of the buying decision process that Samsung went through when it was looking for
the quasi-assembly pods?
A) Searching for products and suppliers
B) Selecting and ordering the most appropriate product
C) Recognising the problem or need
D) Establishing product specifications
E) Evaluating the product relative to specifications
Type: AP
NAR: Samsung
129. Which type of factor would not influence Samsung’s business buying decisions?
A) Environmental
B) Organisational
C) Interpersonal
D) Demographic
E) Individual
Ans: D AACSB Outcomes: Analytical; Strategy
Type: AP
NAR: Samsung
Narrbegin: Precision Break Company

Use the following to answer questions 130–3:
Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and four-
wheel ATVs. It also sells its products to independent repair centres, dealers and other wholesalers in the
Victoria. Precision Brake has done research on the demand for lawn tractors and found that most
manufacturers are in New South Wales. Research has also shown that most of the dealers who sell directly to
individual consumers are in Queensland, while dealers who sell to small business landscaping companies
tend to be located in South Australia. Company executives are considering expansion of its distribution to
markets in Western Australia.
Narrend
130. When Precision Brake sells to the individual dealers, it would be considered which of the following
business types?
A) Producer
B) Reseller
C) Government
D) Institutional
Ans: B AACSB Outcomes: Analytical; Customer
Type: AP
NAR: Precision Break Company
131. Given the type of business market in which Precision Brake is currently operating, it would be least likely to
sell to
A) producers.
B) governments.
C) retailers.
D) consumers.
E) institutions.
Ans: D AACSB Outcomes: Analytical; Customer
Type: AP
132. When Precision Brake’s sales team calls on tractor manufacturing companies, the first person they usually
talk to is the receptionist. In this example, receptionists would be considered to be __________, part of the
buying centre.
A) gatekeepers
B) influencers
C) users
D) buyers
E) controllers
Ans: A AACSB Outcomes: Communication; Customer
Type: AP
133. Last year, Precision Brake’s sales to the manufacturers of lawn tractors declined, partly due to the fact that
more consumers were hiring small landscaping businesses to cut their grass. This decline in sales for
Precision Brake is an example of:
A) product scarcity.
B) joint demand.
C) derived demand.
D) reciprocity demand.
E) inelastic demand.
Type: AP
TRUE OR FALSE
134. T F Buyers in producer markets purchase either raw materials or semi-finished products.
Ans: False AACSB Outcomes: Communication
Type: KN
135. T F The term business markets refers only to producer markets.

Type: KN
136. T F An example of a business market would be farmers.

Ans: True AACSB Outcomes: Analytical; Communication
Type: KN
137. T F The owner of a trucking business who buys diesel fuel from a nearby Shell service station for the
company’s trucks is a part of a business model.
Ans: True AACSB Outcomes: Analytical
Type: KN
138. T F The four categories of business markets are producer, reseller, government and institutional.
Ans: True AACSB Outcomes: Communication
Type: KN
139. T F Grocery stores and supermarkets are a part of producer markets.

Type: KN
140. T F Reseller markets consist of intermediaries that buy finished goods and resell them for profit.
Type: KN
141. T F Wholesalers sell primarily to ultimate consumers.

Type: KN
142. T F There is little or no difference between wholesalers’ customers and retailers’ customers.
Type: KN
143. T F Retailers purchase products and resell them to final consumers.

Type: KN
144. T F An increase in government purchases results partly from the increase in the number of services
provided by the government.
Type: KN
145. T F Government markets, although complicated in their requirements, can be very lucrative.
Ans: True AACSB Outcomes: Analytical
Type: KN
146. T F Institutional markets include maximum security prisons.

Ans: False AACSB Outcomes: Analytical
Type: KN
147. T F Orders placed by business customers are usually smaller and more numerous than consumer sales.
Type: KN
148. T F It is customary for contracts for raw materials and components to be negotiated semiannually.
Type: KN
149. T F Reciprocal agreements that threaten competition are illegal.

Type: KN
150. T F Ultimate consumers are generally more rational than business customers.
Type: KN
151. T F Business customers generally seek to obtain detailed information about a product before
purchasing it.
Type: KN
152. T F Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs.
Type: KN
153. T F Business purchasing agents may indirectly contribute to the satisfaction of their own personal
needs by helping their firms achieve organisational objectives.
Type: KN
154. T F When purchasing products, business customers are especially concerned about quality, service,
price and supplier relationships.
Type: KN
155. T F One very important consideration for business purchases is the type of packaging used.
Type: KN
156. T F Price is of concern to business marketers primarily because of its psychological impact on
purchasing agents.
Type: KN
157. T F If a business product exceeds specifications, so much the better; the customer can then be assured
of obtaining a minimum level of acceptability.
Type: KN
158. T F In some cases, the types of services offered by a supplier may constitute a primary advantage over
suppliers of similar products.
Type: KN
159. T F On-time delivery is crucial to a business customer because a late delivery may hold up a
production line or cause the firm to lose sales.
Type: KN
160. T F Inspection refers to a purchasing method in which a representative unit is taken from a lot and
evaluated and the buying decision is then based on the conclusions.
Type: KN
161. T F A new-task purchase is one in which a business makes an initial purchase of a new item.
Type: KN
162. T F Of the three types of business purchases, the straight-rebuy purchase usually requires the most
information.
Type: KN
163. T F Industrial demand derives from consumer demand.

Type: KN
164. T F In the long run, business demand becomes totally unrelated to consumer demand.
Type: KN
165. T F The demand for many business products is inelastic at the industry level.
Type: KN
166. T F For business products, the concept of inelasticity of demand applies equally to industry demand
for the product and to demand for an individual supplier.
Type: KN
167. T F Raw materials are especially affected by joint demand.

Type: KN
168. T F When the major component of an item increases in price, the demand for the item may become
more elastic.
Type: KN
169. T F Sometimes initial demand for a business product will drop following a price cut if buyers believe
that further price reductions are forthcoming.
Type: KN
170. T F In industries in which price changes occur frequently, demand fluctuations have practically been
eliminated because buyers have become used to these changes and have learned to ignore them.
Type: KN
171. T F A decrease in consumer demand for a product will result in increased buying from a supplier in
order to gear up for the next surge in consumer demand.
Ans: False AACSB Outcomes: Analytical
Type: KN
172. T F All companies, no matter their size or market position, maintain only one buying centre.
Type: KN
173. T F Within a buying centre, each individual plays just one role.
Type: KN
174. T F For routinely purchased items, buyers are commonly deciders.

Type: KN
175. T F The factors that influence business buying behaviour are the same as those that influence
consumer buying behaviour.
Type: KN
176. T F Problem recognition can be stimulated by external sources, such as trade shows or sales
representatives.
Type: KN
177. T F In the buying decision process, one of the activities included in the search for products and
suppliers is examining catalogues and trade publications.
Type: KN
178. T F Specific details regarding terms, credit arrangements and technical assistance are worked out
during the product specification stage of the buying decision process.
Type: KN
179. T F Value analysis focuses primarily on the examination of the cost of products relative to design,
quality and materials used.
Type: KN
180. T F Vendor analysis is a formal, systematic evaluation of current and potential suppliers that focuses
on a variety of dimensions including price, product quality, delivery service, product availability and overall
company reliability.
Type: KN
181. T F The fourth stage in the business buying decision process is searching for products and suppliers.
Type: KN
182. T F Feedback acquired during the fifth stage of the business buying decision process is kept on file but
not used as a reference for future business purchase decisions.
Type: KN
183. T F Interpersonal dynamics are easy to observe and simple for the marketer to assess.
Type: KN

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Edition Pride Test Bank

2. Discuss the differences between business and consumer transactions.

7. What is derived demand?

14. Describe producer markets.

15. Describe reseller markets.

25. In business markets, wholesalers and retailers are classified as:

36. The Department of Defence is a member of the __________ market.

42. Institutional markets are:

45. Which of the following would be considered an institutional buyer?

46. What is a primary difference between business and consumer buyers?

50. A disadvantage of reciprocity is that it can lead to:

52. Which of the following statements about business buying is false?

56. Product specifications include:

81. Demand for business products is also known as __________ demand.

88. Inelastic demand simply means that:

96. Most business buying decisions are made by:

116. Individual influencing factors refer to:

117. Compared with consumer goods, marketers aiming at business customers:

120. An evaluation of each component of a potential purchase is known as __________ analysis.

124. Vendor analysis involves:

126. What type of business purchase is Samsung undertaking?

Narrbegin: Precision Break Company

135. T F The term business markets refers only to producer markets.

136. T F An example of a business market would be farmers.

139. T F Grocery stores and supermarkets are a part of producer markets.

141. T F Wholesalers sell primarily to ultimate consumers.

143. T F Retailers purchase products and resell them to final consumers.

146. T F Institutional markets include maximum security prisons.

149. T F Reciprocal agreements that threaten competition are illegal.

163. T F Industrial demand derives from consumer demand.

167. T F Raw materials are especially affected by joint demand.

174. T F For routinely purchased items, buyers are commonly deciders.

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