ch 7

Question 1

A product is defined as a business product rather than a consumer good on the basis of

its:

a. intended use.

b. physical characteristics.

c. price.

d. distribution method.

e. tangible attributes.

Answer 1

A

Question 1

1. _____ is the marketing of goods and services to individuals and organizations for

purposes other than personal consumption.

a. Secondary marketing

b. Interactive marketing

c. Business marketing

d. Highlevel marketing

e. Industrial marketing

Answer 1

C

Question 2

3. Business marketing does NOT include goods and services that:

a. become part of another product.

b. are used to manufacture other products.

c. are used for personal consumption.

d. facilitate the normal operations of an organization.

e. are acquired for resale.

Answer 2

C

Question 3

4. Which of the following is the best example of a sale that could only take place in the

business market?

a. A professor is purchasing a Mac to use at home

b. A music store owner is ordering the newest Elvis Ultimate Live collection DVD for her

mother

c. A teen is purchasing ringtones to use on her phone

d. A librarian is purchasing new books for the school’s library

e. All of these are examples of business sales

Answer 3

D

Question 4

5. The Solar Group, a Mississippibased mailbox manufacturer, sells mailboxes to

contractors who are building megasubdivisions, to hardware stores, and directly to new

homeowners. What kind of products is Solar Group selling?

a. Business products only

b. Both business and consumer goods

c. Installations

d. Consumer goods only

e. Supplies

Answer 4

B

Question 5

A particular segment of the business market includes those individuals and

organizations that purchase goods and services for the purpose of making a profit. They achieve this

goal by using purchased goods and services to make other goods, to become part of other goods, or

to facilitate the daily operations of the organization. This group is called the _____ segment of the

business market.

a. institution

b. reseller

c. wholesaler

d. producer

e. government

Answer 5

D

Question 6

another commonly used name for producers is:

a. fabricators.

b. installers.

c. original equipment manufacturers.

d. product providers.

e. component networks.

Answer 6

C

Question 7

Corn refiners buy shelled corn and convert it into a variety of products, including high-
fructose corn syrup. The refiners then sell the syrup to soda and food product companies for use in

foods and beverages. The corn refiners represent the _____ sector of the business market.

a. channel

b. reseller

c. producer

d. government

e. distributor

Answer 7

C

Question 8

Southern Fireworks Manufacture Company in Liuyang, China, provides fireworks for

companies in America such as Premier Pyrotechnics in Richland, Missouri. This means that

Southern is a(n):

a. installer of original materials.

b. demand company.

c. reseller.

d. government buyer.

e. OEM.

Answer 8

E

Question 9

Caterpillar, Inc., a manufacturer of earthmoving equipment, uses completed drivetrains

(engines/transmissions/axles), drivetrain components, electronic controls, hydraulic and

electrohydraulic components and systems, cooling systems, and undercarriage track systems

produced by other organizations in its manufacturing process. Caterpillar is an example of a(n):

a. fabricator.

b. installer.

c. original equipment manufacturer.

d. product provider.

e. component network.

Answer 9

C

Question 10

Businesses that buy finished goods and sell them for a profit are called:

a. inventory carriers.

b. producers.

c. distribution networks.

d. resellers.

e. business facilitators.

Answer 10

D

Question 11

In the past 24 years, Mothers Work has grown from a small, mailorder catalog

business headquartered inside the founder’s home to the world’s largest seller of maternity apparel,

with nearly 1,600 locations. In terms of the business market, Mothers Work would be best classified

as a(n):

a. reseller.

b. producer.

c. distribution network.

d. inventory carrier.

e. business facilitator.

Answer 11

A

Question 12

Hensley Poultry is a wholesaler that buys poultry food and health products from

Provini, Inc., feeding systems from Big Dutchman, Inc., and incubation systems from Copca Corp.

Hensley then sells those products to poultry producers and farmers’ cooperatives in Iowa. Hensley

Poultry could be best classified as a(n):

a. producer.

b. distribution network.

c. inventory carrier.

d. specialty retailer.

e. reseller.

Answer 12

E

Question 13

The U.S. government is:

a. not a business market segment.

b. the world’s largest single customer.

c. an organization accounting for over 50 percent of the U.S. gross national product.

d. mainly a military equipment purchaser.

e. using one centralized purchasing office for the entire government.

Answer 13

B

Question 14

One segment of the business market has primary goals that differ from the ordinary

business goals such as profit, market share, or return on investment. This segment includes many schools, churches, and civic clubs. Which business market is this?

a. Institutions

b. OEMs

c. Services

d. Providers

e. Resellers

Answer 14

A

Question 15

Which of the following is the BEST example of an institution market?

a. The federal government

b. eBay

c. Claire’s Boutique

d. Hillsdale United Methodist Church

e. Starbucks

Answer 15

D

Question 16

What would a U.S. company that manufactures the lighted signs used in amusement

parks, at outdoor sports arenas, for restaurant promotion, and by state departments of transportation

on the sides of roads use to facilitate its market segmentation and targeting if it wanted data that

were readily available and usable?

a. A large amount of marketing research, including scanner data and focus groups

b. Other competing firms as a strategic alliance referral service

c. Government bidding processes

d. The North American Industry Classification System

e. Derived demand

Answer 16

D

Question 17

The government uses a system called NAICS to classify North American business

establishments. NAICS stands for:

a. NonAmerican Industry Classification System.

b. North and South American Institutional Coding Services.

c. NonAmerican Industrial Corporation System.

d. North American Institution Code System.

e. North American Industry Classification System.

Answer 17

E

Question 18

All of the following are demand characteristics of business markets EXCEPT:

a. inelastic demand.

b. fluctuating demand.

d. stable demand.

e. derived demand.

Answer 18

D

Question 19

42. The demand for consumer goods often affects the demand for business products. This

characteristic of business markets is called _____ demand.

a. elastic

b. inelastic

c. fluctuating

d. derived

e. joint

Answer 19

D

Question 20

nland Eastex manufactures a heavy paper stock that is used for printing covers for

many different types and sizes of consumer magazines. Consumer magazine sales determine how

much paper Inland Eastex sells. This is an example of _____ demand.

a. joint

b. inelastic

c. elastic

d. congruent

e. derived

Answer 20

E

Question 21

As the demand for VCR players has fallen, so has the demand for blank VHS tapes

because the demand for VHS tapes is an example of a(n) _____ demand.

a. joint

b. inelastic

c. elastic

d. fluctuating

e. derived

Answer 21

E

Question 22

45. Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is

guaranteed to produce uniform brown eggs with strong shells. It breeds and sells young chicks to

farmers all over Europe who want to sell eggs in local markets. When consumers began to worry

about cholesterol content and stopped eating as many eggs, the demand for the Tetra hen also

declined. This would be an example of _____ demand.

a. derived

b. elastic

c. multiplying

d. bundled

e. inelastic

Answer 22

A

Question 23

Buyers in the business market tend to _____ than buyers in the consumer market.

a. use reciprocity less

b. purchase in much smaller quantities

c. buy more products that have a reduced probability of being affected by derived demand

d. generate more stable demand trends

e. be much more geographically concentrated

Answer 23

E

Question 24

64. Which of the following statements does NOT describe the business market?

a. Business buying decisions are usually made independently by a purchasing agent, while

consumer buying decisions are made jointly.

b. Business customers tend to be more geographically concentrated, and customers in

consumer markets tend to be more geographically dispersed.

c. The channel of distribution is more often direct for business markets than for consumer markets.

e. Business marketers tend to have far fewer customers than consumer marketers

Answer 24

A

Question 25

When demand for a product is _____, an increase or decrease in the price of the

product will not significantly affect demand for the product.

a. responsive

b. elastic

c. inelastic

d. derived

e. bundled

Answer 25

C

Question 26

Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford.

A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades

manufacturers to double the price of the blades. This increase in price has not affected sales volume

for wiper blades. The price change did not change demand for the blades because demand for this

product by business customers is:

a. inelastic.

b. secure.

c. bundled.

d. elastic.

e. resistant.

Answer 26

A

Question 27

Due to rapidly rising overhead costs and increases in raw material prices, Framarx

Corporation was forced to raise the price of its waxed and coated paper by 35 percent. (The paper is

used between frozen hamburger patties to keep the patties from freezing together.) Framarx is the

leading manufacturer in this industry, and its competitors will follow suit. While the sales force for

Framarx believes the price increase will result in a drop in sales, its marketing manager disagrees

because the demand for the waxed and coated paper is more than likely:

a. resistant.

b. inelastic.

c. derived.

d. elastic.

e. bundled.

Answer 27

B

Question 28

Salt is an important ingredient in many soups produced by Campbell’s. If the price of

salt rises, Campbell’s will not likely reduce the amount of salt it purchases from salt suppliers,

because salt is such a crucial ingredient. Therefore, you know the demand for salt is:

a. resistant.

b. inelastic.

c. derived.

d. elastic.

e. bundled.

Answer 28

B

Question 29

Although the price of a chemical added to paint to protect surfaces from mold and

mildew has almost doubled, the price of paint has risen an average of only 5 percent, and the demand

for both paint and the chemical that eliminates mold and mildew has remained stable. The demand

for this chemical is:

a. elastic.

b. derived.

c. bundled.

d. inelastic.

e. change resistant.

Answer 29

D

Question 30

Which type of business product includes such capital goods as large or expensive

machines, mainframe computers, blast furnaces, generators, airplanes, and buildings?

a. Major equipment

b. Raw materials

c. Component parts

d. Accessory equipment

e. Investment goods

Answer 30

A

Question 31

Products such as parking garages, mainframe computers, privately owned office

buildings, and streetcleaning equipment are depreciated over time rather than expensed in the year

they are purchased. These are classified as:

a. processed materials.

b. accessory equipment.

c. major equipment.

d. supplies.

e. component parts.

Answer 31

C

Question 32

TruColor Printers has purchased a Heidelberg printing press with autoblanket wash

and chilled rollers for $2.2 million. The company will depreciate the value of the printing press over

several years. The printing press would be considered:

a. major equipment.

b. a component part.

c. processed material.

d. a fabricating item.

e. accessory equipment.

Answer 32

A

Question 33

Which type of business product represents goods, such as portable tools and office

equipment that are less expensive and shorterlived than major equipment?

a. Accessory equipment

b. Component parts

c. Processed goods

d. Supplies

e. Intermediate goods

Answer 33

A

Question 34

Within the business market, roller belts that are purchased by vacuum manufacturers

are examples of:

a. supplies.

b. raw materials.

c. accessory equipment.

d. processed materials.

e. component parts.

Answer 34

E

Question 35

PAS Systems has developed an unobtrusive flashlightalcohol detector. The flashlight

readings are inadmissible in court but are used by police officers to decide whether to hold someone

for a sobriety test. Each one costs $600. The manufacturer assembles a breathalyzer from one

supplier with a slightly modified flashlight case from another supplier to make the new product. The

breathalyzer and the flashlight case are examples of:

a. major equipment.

b. component parts.

c. processed materials.

d. integrated parts.

e. accessory equipment.

Answer 35

B

Question 36

Products that have had some processing are used directly in the production of other

products, and do not retain their identity in the final product are called:

a. raw materials.

b. supplies.

c. processed materials.

d. component parts.

e. replacement parts.

Answer 36

C

Question 37

A dog food manufacturer purchases processed meat byproducts that it uses in the

manufacture of a dry dog food. These processed meat byproducts are examples of:

a. raw materials.

b. OEM products.

c. processed materials.

d. component parts.

e. replacement parts.

Answer 37

C

Question 38

Hazelwood Farms provides local restaurants with organic fruits and vegetables that

have been grown without the use of pesticides or chemical fertilizers. Hazelfield Farms is a supplier

of:

a. accessory parts.

b. supplies.

c. raw materials.

d. unprocessed extractive products.

e. processed materials.

Answer 38

C

Question 39

All of the following are roles found within a buying center EXCEPT:

a. influencers.

b. gatekeepers.

c. suppliers.

d. users.

e. initiators.

Answer 39

C

Question 40

In terms of how business buyers evaluate products and suppliers, the most important

criterion is:

a. price.

b. behavior.

c. quality.

d. personal relationships.

e. reciprocity

Answer 40

C

Question 41

Business buyers use a variety of criteria to evaluate alternative products and suppliers.

The three most important criteria, in order of importance, are:

a. price, sales support, and service.

b. quality, service, and price.

c. reputation, price, and capability.

d. price, delivery time, and product reliability.

e. service, quality, and reputation

Answer 41

B

Question 42

A routine purchasing situation in which the purchaser is not looking for new

information or other suppliers is called a:

a. modified rebuy.

b. value buy.

c. synergistic buy.

d. straight rebuy.

e. makeorbuy.

Answer 42

D

Question 43

Business services:

a. are capital items.

b. are never outsourced.

c. are not used in reciprocity arrangements.

d. typically become part of the finished product.

e. are expense items.

Answer 43

E

Question 44

A dentist hired a janitorial service to clean her office every evening. The janitorial

service provided the dentist with:

a. OEMs.

b. processed services.

c. business services.

d. accessory services.

e. service supplies.

Answer 44

C

Question 45

The Barter Company, (TBC), located in Kennesaw, Georgia, acts as a broker between

companies that want to trade products or services. Companies must be a TBC member, and there is a

onetime fee to join. TBC charges a brokerage fee on each transaction facilitated. This company is

an example of a(n):

a. service integrator.

b. job source.

c. business service.

d. extended service.

e. component service.

Answer 45

C

Question 46

A _____ is a situation requiring the purchase of a product for the first time.

a. straight rebuy

b. value buy

c. modified rebuy

d. new buy

e. makeorbuy

Answer 46

D

Question 47

A new buy situation refers to the:

a. setting of new standards for current vendors.

b. establishment of a new buying center.

c. resolution of new conflict between buyer and seller.

d. search for replacement vendors for standard, currently used parts.

e. purchase of a product or service when a new demand arises.

Answer 47

E

Question 48

A university is considering the purchase of a Webbased course delivery system due

to increased demand for online courses and degrees. Since the school has not offered online courses

before, what type of buying situation does this represent for the school?

a. Value engineering task

b. Modified rebuy

c. Straight rebuy

d. New buy

e. Derived rebuy

Answer 48

D

Question 49

A small police department wants to buy a machine with which it can perform alcohol

breath tests. It has never had this capability before but feels it is an essential tool as the community

grows. The machine costs about $5,000, which is almost 75 percent of the department’s entire

supply budget. This purchase would be an example of a(n) _____ situation.

a. extensive buying

b. lowinvolvement buying

c. new buy

d. modified rebuy

e. straight rebuy

Answer 49

C

Question 50

A _____ situation is normally less critical and less timeconsuming than a new buy

situation but does require some change in the original good or service.

a. synergistic rebuy

b. value buy

c. negotiated rebuy

d. modified rebuy

e. makeorbuy

Answer 50

D

Question 51

Apple, Inc. wants a faster microprocessor for its new Macs. Apple most likely

engaged in a:

a. value engineering task.

b. modified rebuy.

c. straight rebuy.

d. new process.

e. new buy.

Answer 51

B

Question 52

A dentist hired a janitorial service to clean her office every evening. The original

contract called for the janitorial service to dust, mop all floors, and vacuum the rugs. After six

months, the dentist decided to renegotiate the contract with the janitorial service to include cleaning

the office bathroom and washing the office windows as well as the original tasks. The renegotiated

contract is an example of a:

a. contingency buy.

b. modified rebuy.

c. negotiated buying system.

d. straight rebuy.

e. newbuy situation.

Answer 52

B

Question 53

Axel Spring AG, one of Europe’s largest newspaper publishers, with 10,000

employees and more than 150 papers in 30 countries, announced it would switch its entire operation

from PCs to Macs. Axel decided to make a switch to Apple because the company’s layout work was

already being done by Macs and the Macs were more userfriendly, more elegant, and cheaper to

maintain than they had been in the past. This is an example of a:

a. new buy.

b. value buy.

c. straight rebuy.

d. modified rebuy.

e. makeorbuy.

Answer 53

F

Question 54

Which of the following is the best example of a modified rebuy situation?

a. The purchase of a replacement hamster as the class mascot

b. Bidding on a new high school multipurpose gymnasium to replace one built in 1963

c. The purchase of three largescreen computer monitors to replace smaller monitors

d. The annual purchase of calendar refills for the desks of all company executives

e. The monthly updating of computer virus protection

Answer 54

C

Question 55

A routine purchasing situation in which the purchaser is not looking for new

information or other suppliers is called a:

a. modified rebuy.

b. value buy.

c. synergistic buy.

d. straight rebuy.

e. makeorbuy.

Answer 55

D

Question 56

Leo buys coffee weekly for his espresso shop. This purchase is most likely an

example of a(n) _____ situation.

a. needrelated buy

b. limited rebuy

c. straight rebuy

d. rebuy sourcing

e. institution buy

Answer 56

C

Question 57

Purchasing contracts are commonly used in which type of buying situations?

a. Reciprocal

b. Straight rebuy

c. New buy

d. Extended rebuy

e. Modified rebuy

Answer 57

B

Question 58

A professor sent the following memo to his department chair for his authorization:

Glen: I need to purchase a camera, Mac computer, and microphone for the selling center lab #2 just like we

did for lab #1. This buying situation should be described as a:

a. makeorbuy.

b. value buy.

c. new buy.

d. modified rebuy.

e. straight rebuy.

Answer 58

E