ANALYZING BUSINESS MARKETS

Question 1

What is organizational buying?

Answer 1

The decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Question 2

Define business markets.

Answer 2

All the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

Question 3

What are the three types of buying situations?

Answer 3

• Straight rebuy
• Modified rebuy
• New task

Question 4

What characterizes a straight rebuy?

Answer 4

The purchasing department reorders items on a routine basis from suppliers on an approved list.

Question 5

In a modified rebuy, what does the buyer want to change?

Answer 5

Product specifications, prices, delivery requirements, or other terms.

Question 6

What is a new task in purchasing?

Answer 6

A purchase of a product or service for the first time.

Question 7

What is the buy center?

Answer 7

All those individuals and groups who participate in the purchasing decision-making process, sharing some common goals and risks.

Question 8

Who are the initiators in the buying process?

Answer 8

Users or others in the organization who request that something be purchased.

Question 9

What role do influencers play in the buying process?

Answer 9

People who influence the buying decision by helping define specifications and providing information for evaluating alternatives.

Question 10

Who are the deciders in a buying center?

Answer 10

People who decide on product requirements or on suppliers.

Question 11

What is the role of approvers in the buying process?

Answer 11

People who authorize the proposed action of deciders or buyers.

Question 12

Define buyers in the context of a buying center.

Answer 12

People who have formal authority to select the supplier and arrange the purchase terms.

Question 13

What are gatekeepers in the buying process?

Answer 13

People who have the power to prevent sellers or information from reaching members of the buying center.

Question 14

What is the purchasing/procurement process focused on?

Answer 14

Seeking the highest benefit package in relation to a market offering’s costs.

Question 15

What is framing in the context of selling?

Answer 15

When customers are given a perspective that allows the seller to ‘put its best foot forward.’

Question 16

What begins the buying process?

Answer 16

Problem recognition when someone in the company recognizes a problem or need.

Question 17

What are internal stimuli in the buying process?

Answer 17

Decisions or events within the company that trigger the need for a purchase.

Question 18

What are external stimuli in the buying process?

Answer 18

Ideas or offers that come from outside the company, such as ads or trade shows.

Question 19

What is involved in the general need description stage?

Answer 19

Determining the needed item’s general characteristics and required quantity.

Question 20

What does product specification entail?

Answer 20

Defining characteristics such as reliability, durability, or price with input from engineers and users.

Question 21

What is the supplier search process?

Answer 21

Identifying appropriate suppliers through various means like trade directories and the Internet.

Question 22

What are catalog sites in e-procurement?

Answer 22

Websites where companies can order thousands of items through electronic catalogs.

Question 23

Define vertical markets in the context of e-procurement.

Answer 23

Specialized websites for buying industrial products or services.

Question 24

What is a ‘pure play’ auction company?

Answer 24

A company that operates solely in the online auction space.

Question 25

What are spot markets?

Answer 25

Electronic markets where prices change frequently, often by the minute.

Question 26

What are private exchanges?

Answer 26

Platforms operated by companies like Hewlett-Packard and Walmart to connect with selected suppliers.

Question 27

What are barter markets?

Answer 27

Markets where participants trade goods or services instead of using money.

Question 28

Define buying alliances.

Answer 28

Consortia formed by companies to gain deeper discounts on volume purchases.

Question 29

What does the proposal solicitation stage involve?

Answer 29

Inviting qualified suppliers to submit written proposals for evaluation.

Question 30

What happens during the supplier selection stage?

Answer 30

Specifying and ranking desired supplier attributes using a supplier-evaluation model.

Question 31

What is included in order routine specification?

Answer 31

Negotiating final order details like technical specifications, quantity, and delivery time.

Question 32

What is the purpose of performance review in procurement?

Answer 32

To periodically assess the performance of chosen suppliers.

Question 33

What is systems buying?

Answer 33

A practice where buyers prefer to obtain a total problem solution from one seller.

Question 34

What is systems contracting?

Answer 34

When a single supplier provides the entire requirement of maintenance, repair, and operations supplies.

Question 35

What is systems selling?

Answer 35

An industrial marketing strategy to build large-scale projects by providing comprehensive solutions.

Question 36

What is the role of services in business-to-business marketing?

Answer 36

Services play an increasing strategic and financial role for firms primarily selling products.

Question 37

How are business-to-business marketers changing their approach?

Answer 37

Shifting from ‘spray and pray’ methods to targeted one-to-one marketing.

Question 38

What are the eight categories of buyer-supplier relationships?

Answer 38

• Basic buying and selling
• Bare bones
• Contractual transaction
• Customer supply
• Cooperative systems
• Collaborative
• Mutually adaptive
• Customer is king

Question 39

What is opportunism in business relationships?

Answer 39

Some form of cheating or undersupply relative to an implicit or explicit contract.

Question 40

What are specific investments?

Answer 40

Expenditures tailored to a particular company and value chain partner, aiding profit growth.

Question 41

What constitutes institutional and government markets?

Answer 41

Schools, hospitals, nursing homes, prisons, and other institutions providing goods and services.