Principles of Marketing Online

Chapter 6, Learning Module 6

Business-to-Business Marketing

Test 6

Test 6 is in two parts—Multiple Choice and Matching. You must use the ANSWER SHEET at
the end of the test—do a cut and paste and email to instructor). The due date is Wednesday
(10/24/10) by 12 mid-night. This is not a group test—you are to do your own work.

MULTIPLE CHOICE

1. The purchase of goods or services for use by an organization in producing other goods and services
or to support the daily operations of the organization or for resale is called
a. wholesale marketing.
b. business-to-business marketing.
c. corporate marketing.
d. distribution marketing.

2. The business market is also known as the

a. organizational market.
b. corporate market.
c. wholesale market.
d. distribution market.

3. By comparison with consumer products,

a. distribution channels for business products are significantly longer.
b. customer relationships for business products tend to be short-term and transactions-
based.
c. personal selling plays a much larger role in business products markets.
d. customer service plays a smaller role in the distribution of business products.

4. When they enter the marketplace to buy goods and services, businesses expect
a. to find standard items that will fill their needs exactly.
b. to examine advertising appeals quite closely for deals.
c. a high level of customer service.
d. to allow a single individual to make most decisions.

5. The biggest segment of the business market is the

a. trade industries which include retailers and wholesalers, called resellers.
b. commercial market, which includes everyone that acquires products to support, directly or
indirectly, the production of other goods and services.
c. government organizations like the military, state, and federal governments.
d. institutions like schools, hospitals, and churches.

6. The component of the business market that consists of individuals and firms that acquire goods and
services to be used, directly or indirectly, in producing other goods and services is called
a. wholesaling and retailing.
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b. the commercial market.

c. government.
d. an institution.

7. The trade industries consist of

a. manufacturers.
b. wholesalers and retailers.
c. farmers.
d. transportation.

8. A reseller is a member of the

a. trade industries.
b. commercial market.
c. government segment of the business market.
d. institutional market.

9. Institutions, as a component of the business-to-business market,

a. tend to have greater financial resources than industrial customers.
b. provide business services to the other members of the market.
c. may have rigid purchasing procedures.
d. are accountable to their clients and stockholders.

10. Providing some form of public benefit is the primary motivation for purchasing by the members of the
a. industrial market.
b. global market.
c. government market.
d. trade industries.

11. Which of the following is not an area of e-commerce serving the business market?
a. private portals that allow customers to buy needed items
b. service pages accessed using passwords provided by the B2B marketers
c. online auctions where business goods may be bought
d. chat rooms dedicated to discussions of interesting topics

12. Which of the following is not a commonly used basis for segmenting the business market?
a. demographics using the firms' sizes
b. customer type
c. the educational attainments of buyers
d. product end-use application

13. When the business-to-business market is segmented on the basis of precise product specifications
issued by organizational buyers, it is known as
a. customer-based segmentation.
b. profit-generating segmentation.
c. benefits segmentation.
d. engineering and design segmentation.

14. Zardoz divides its customers into the following categories: small business, large business,
government, and not-for-profit institutions. Which type of segmentation is Zardoz practicing?
a. End-user segmentation.
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b. Customer type segmentation.

c. Demographic segmentation.
d. Purchase category segmentation.

15. The system for grouping businesses that grew out of the NAFTA accord is known as the
a. Standard Industrial Classification System.
b. Industrial Data Recording System.
c. Standard Industrial Census System.
d. North American Industry Classification System.

16. In the business market, segmentation on the basis of the precise way in which the business purchaser
is going to use the product is called
a. segmentation by purchasing situation.
b. segmentation by customer type.
c. end-use application segmentation.
d. segmentation by demographic characteristics.

17. Making glass with different characteristics that depend on whether it is to be used for microwave oven
doors, shower enclosures, or patio table tops is indicative of segmenting the market on the basis of
a. cost-plus considerations.
b. end-use application.
c. benefits offered.
d. psychographic factors.

18. The implementation of the North American Free Trade Agreement required a change in the system
used for almost 70 years to categorize U.S. business firms. The change resulted in
a. the abandonment of the Standard Industry Classification Codes (SICC) for the North
American Industrial Classification System (NAICS).
b. the abandonment of any attempt at categorization until a totally new scheme can be devised.
c. a new system called the RIAA plan that closely parallels the ISO system of industrial coding
used in Europe.
d. the MILSPEC system that assigns code numbers to products rather than firms.

19. Which of the following is not a characteristic that distinguishes organizational (B2B) markets from
consumer markets?
a. Organizational markets are more geographically concentrated.
b. More people exert influence on the organizational buying decision.
c. The organizational market tends to have a greater number of buyers.
d. Organizations often engage in multiple sourcing and vendor analysis.

20. The location of a business supplier near its customers will ordinarily have no effect on which of the
following?
a. the supplier's costs
b. the ability of the supplier to render better service
c. end-use applications of products
d. supplier parts inventories
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21. A company such as Dell Computer purchases products from suppliers worldwide. This practice is
known as
a. outsourcing.
b. global sourcing.
c. joint demand.
d. derived demand.

22. The aggregate demand for automated teller machines (ATMs) is based on consumer demand for
banking convenience. This is an example of
a. joint demand.
b. derived demand.
c. volatile demand.
d. demand variability.

23. If demand for new automobiles declines, perhaps because there is a recession and people decide to
keep their old cars for the time being, demand for tires, batteries, and spark plugs will also decline.
This relationship between the demand for cars and for the other products is known as
a. linked demand.
b. derived demand.
c. coordinated demand.
d. joint demand.

24. The practice of cutting inventories to absolute minimum levels and requiring vendors to deliver the
items as they are needed in the production process is known as
a. it's about time. (IAT)
b. just-in-time. (JIT)
c. one-more-time. (OMT)
d. next-time in. (NTI)

25. Which of the following questions would probably not be considered when deciding whether to
manufacture needed parts and equipment in-house?
a. Do we have the needed capability?
b. Can someone else do this job better than we can?
c. Can someone else do this work cheaper than we can?
d. By manufacturing this equipment, do we create new distribution systems?

26. Which of the following is not one of the advantages of leasing?

a. It forces a high level of capital commitment.
b. It provides the ability to easily upgrade equipment as needs change.
c. It provides flexibility for a growing business.
d. It allows quick adaptation to changes in demand.

27. When a business pays for the use of equipment owned by an outside supplier for a specified period of
time it is known as
a. external acquisition.
b. supply chain management.
c. leasing.
d. supplier research.
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28. Outsourcing is often chosen as an alternative to making goods in-house or providing in-house services
because
a. the savings often exceed 40 percent on average.
b. savings often rise as the contract firm (the outsource) becomes familiar with the job.
c. outsourcing solves security problems when proprietary technology is involved.
d. outsourcing allows firms to concentrate their resources on their core businesses.

29. Turning to outsiders to provide goods and services that were formerly produced or handled internally is
known as
a. outsourcing.
b. supplier sourcing.
c. supply chain management.
d. external buying.

30. All of the following are drawbacks of outsourcing except

a. lower than anticipated cost savings.
b. concerns over proprietary technology.
c. consistently poorer quality products.
d. higher risk of losin touch with customers.

31. Unions generally view outsourcing

a. as a good idea to stay competitive and preserve jobs.
b. as a bargaining tool for higher wages.
c. as a threat to union jobs.
d. as a means of saving money and putting the savings into wages and benefits.

32. All of the following statements are correct except

a. the business buying process is more complicated that the consumer decision process.
b. environmental factors play only a small role on the business buying process.
c. successful B2B marketers must understand their customer’s organizational structures.
d. typically more people influence B2B purchases than consumer purchases.

33. Assume an airline decides to purchase all of its aircraft from Airbus equipped with engines made by
GE. The airline has adopted
a. single sourcing.
b. multiple sourcing.
c. a systems integration approach.
d. a category captain.

34. Al works for a firm that is a major supplier to Wal-Mart. He has been designated by Wal-Mart as a
systems integrator. What would Al be called?
a. a merchandiser
b. a professional buyer
c. a single source vendor
d. a category captain
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35. When a firm undertakes systems integration, centralizing its procurement function, and designates a
major trade industry supplier as the systems integrator, that supplier is known as the
a. category captain.
b. purchasing coordinator.
c. division leader.
d. supply chain manager.

36. In the industrial buying process, a triggering event such as the recognition by company personnel that
a new product has become available whose use could improve the company's market performance is
referred to as
a. need or opportunity recognition.
b. identification of suppliers.
c. word-of-mouth exploration.
d. information search.

37. A firm has decided to purchase hybrid delivery vehicles in response to soaring gasoline prices. Which
step in the business buying process does this illustrate?
a. Determining the characteristics of the needed product.
b. Recognizing a problem or opportunity.
c. Searching for qualified sources.
d. Evaluating proposals and selecting suppliers.

38. This process for arriving at the price of a product is more commonly used in the buying process by
government entities than private businesses. It is
a. competitive bidding.
b. decentralized buying.
c. value analysis.
d. reverse reciprocity.

39. If the buyer is a government or public agency, this stage of the purchase process might require
competitive bidding. The stage of the buying process involved is
a. searching for and qualifying potential sources.
b. evaluating proposals and selecting suppliers.
c. acquiring and analyzing proposals.
d. selecting an order routine.

40. Establishing specifications for a needed product is part of which step in the business buying process?
a. recognizing a need
b. describing characteristics of a needed good
c. qualifying potential vendors
d. selecting an order routine

41. Procedures that measure such characteristics as a supplier's reliability, delivery record, quality, price,
and order accuracy would be part of what step in the organizational buying process?
a. searching for potential sources
b. analyzing proposals
c. recognizing a need
d. evaluating proposals and selecting suppliers

42. Which is the final step in the business buying process?

a. Selecting an order routine.
b. Evaluating proposals and selecting suppliers.
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c. Obtaining feedback and evaluating performance.

d. Acquiring and analyzing proposals.

43. A unique purchase situation in the business market that requires considerable effort on the decision
maker's part is called
a. a straight rebuy.
b. a modified rebuy.
c. new-task buying.
d. a selective rebuy.

44. When a business purchaser likes the characteristics and terms of sale of an item that has performed
satisfactorily in the past and requires no new information to decide to purchase it again, the buying
situation is
a. a straight rebuy.
b. a service purchase.
c. a contract purchase.
d. a modified rebuy.

45. When business purchasers shift from straight rebuy to modified rebuy behavior, it is often due to
a. a change in the accelerator principle.
b. the routine buying format being outdated.
c. corporate expansion.
d. a deterioration in supplier service or delivery.

46. A buying situation in which business purchasers are willing to reevaluate their available options is
known as
a. a straight rebuy.
b. a modified rebuy.
c. new-task buying.
d. routinized response behavior.

47. This type of business buying situation involves such endeavors as purchasing component parts never
before bought by the company. It is
a. complex rebuying.
b. new-task buying.
c. technical buying.
d. modified rebuying.

48. An ongoing evaluation of a supplier's performance in categories such as price, EDI capability, back
orders, delivery times, and attention to special requests is known as
a. product substitution analysis.
b. component redesign.
c. vendor analysis.
d. costs-benefits analysis.

49. Sean is assessing suppliers in terms of price, quality, and timely delivery. Sean is conducting a(n)
a. vector analysis.
b. value analysis.
c. reciprocity.
d. straight rebuying.
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50. A company's buying center encompasses

a. a group of people formally assigned to participate in the buying process.
b. formally designated gatekeepers, deciders, and buyers.
c. everyone who is involved in any aspect of its buying action.
d. a designated buying team that oversees the entire process of procurement.

51. One type of buying center role is that of the

a. influencer who supplies information to guide evaluation of alternatives.
b. decider that has the formal authority to select a supplier.
c. distributor who controls the information that all buying center members will review.
d. technician who presents technical requirements for argument.

52. The buying center concept explains how groups of people participate informally in business purchase
decisions and
a. outlines methods to break through their group perceptions.
b. the roles the group members play in making the decisions.
c. all about formation dynamics of new groups of decision makers.
d. how family units operate as buying centers.

53. When a group is involved in business buying decisions and group members perform certain functions
and play certain roles, the applicable model is the
a. purchasing team idea.
b. buying center concept.
c. buying team proposal.
d. purchasing center.

54. In a buying center in a business firm, the purchasing manager is often delegated the role of
a. gatekeeper.
b. buyer.
c. user.
d. influencer.

55. Maria controls the information that enters her firm’s buying center. She is a(n)
a. user.
b. buyer.
c. gatekeeper.
d. decider.

56. When comparing international buying centers to domestic buying centers, participants are __________
to identify and the size of the buying center is __________.
a. easier; smaller.
b. more difficult; smaller.
c. easier; larger.
d. more difficult; larger.
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57. One of the differences between buying centers in the United States and abroad is that
a. it is easier to identify members of the buying center in foreign countries.
b. there are few cultural differences involved in the way decisions are made.
c. in less developed countries, line managers may make most purchase decisions.
d. foreign buying centers are usually smaller than is the case in the U.S.

58. Which of the following is NOT a challenge ordinarily encountered in marketing to government entities?
a. handling retail sales contracts using Visa, MasterCard, or Discover
b. fixed-price contracts based on a bid process
c. cost-reimbursement contracts providing for allowable costs
d. minority subcontracting programs

59. The General Services Administration (GSA) of the U.S. federal government
a. buys goods and services strictly for its own internal use.
b. buys goods and services strictly for use by other government agencies including the
Departments of Defense and Transportation.
c. is a central management agency involved in procurement, property management, and
information resources management.
d. oversees state and local purchasing guidelines for those products not usually bought by
the federal government.

60. Cost-reimbursement contracts to provide products to government entities offer the following
advantages:
a. a predetermined firm price.
b. greater profit potential than fixed-price contracts.
c. greater risk from unforeseen expenses.
d. protected profits.

61. Institutional markets are characterized by

a. generally similar buying practices.
b. multiple-buying influences even within the same institution.
c. few group purchasing arrangements.
d. little negotiation to secure volume discounts.

62. Which of the following types of organization would not ordinarily be considered to be a part of the
institutional market?
a. public libraries
b. department stores
c. educational foundations
d. churches

63. In order to get quantity discounts on needed purchases, many institutions

a. tend to purchase products they do not need.
b. insist on equal treatment under the Robinson-Patman Act.
c. join cooperative associations to pool purchases.
d. rely on their independence and future growth.
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SCROLL DOWN FOR MATCHING

MATCHING

a. commercial market h. inelastic demand

b. trade industries i. outsourcing
c. market segmentation j. value analysis
d. customer-based segmentation k. vendor analysis
e. end-use segmentation l. buying center
f. global sourcing m. reciprocity
g. joint demand n. gatekeeper
64. The person who controls the information that all members of a buying center will review is a(n)
____________.
65. The ___________ consists of individuals and firms that acquire products used to support the
production of other products.
66. __________ is the practice of buying from suppliers who are also customers.
67. __________ consist of retailers and wholesalers who purchase products for resale to others.
68. A(n) ___________ consists of participants in an organizational buying action.
69. By applying _________ concepts to groups of business customers, marketers can develop a strategy
that best suits the needs of particular customers.
70. Assessment of supplier performance is _________.
71. __________ means dividing a B2B market into homogeneous groups based on products
specifications.
72. __________ is the systematic study of the components of a purhase to determine the most cost-
effective approach.
73. Dividing a B2B market based on customers will use a product is called ________.
74. ___________ is the use of outside vendors to to produce products that wre formely produced in-
house.
75. ___________ mean purchasing products from suppliers worldwide.
76. If the demand for a product changes very little even if its price changes, then this product is said to
exhibit ________.
77. ____________ means that the demand for one product is depends on the demand for another
product.

THE END
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Principles of Marketing Name:

Test 6, Chapter 6
Fall 2010 Due Date: October 24, 2010 by 12 midnight

ANSWER SHEET

Test 6 is worth 10 total points (with 81 actual points which includes 6 bonus points). All your
answers must be in the upper case, e.g., A, B, C, D. Read each question carefully before
entering your answer. KEY IN YOUR NAME ABOVE.

CORRECT: /75 = .00 = /10

1. 17. 33. 49. 65.

2. 18. 34. 50. 66.

3. 19. 35. 51. 67.

4. 20. 36. 52. 68.

5. 21. 37. 53. 69.

6. 22. 38. 54. 70.

7. 23. 39. 55. 71.

8. 24. 40. 56. 72.

9. 25. 41. 57. 73.

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10. 26. 42. 58. 74.

11. 27. 43. 59. 75.

12. 28. 44. 60. 76.

Bonus
13. 29. 45. 61. 77.
Bonus Bonus
14. 30. 46. 62.
Bonus
15. 31. 47. 63.
Bonus
16. 32. 48. 64.