MKTG 336 Exam 1 - FLASHCARDS - Chapter 2 Flashcards by Stu Diaz

What is the most important impetus to buy?

Advocacy

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What is the organizational buying process?

Problem recognition
General description of need
Product specification
Supplier search
Acquisition and analysis of proposals
Supplier selection
Selection of order routine
Performance review

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What is the customer driven pull system?

A production or operational strategy where goods are only manufactured or delivered when there is an actual customer order, meaning the customer demand directly “pulls” the product through the production process, rather than relying on forecasts or pre-determined production schedules.

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True or false: the customer driven pull system includes websites, user communities, and Internet search engines?

TRUE

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True or false: the customer driven pull system includes expanded and enhanced electronic word-of-mouth methodologies, including new technologies?

TRUE

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What are the three types of buying situations?

New task
Modified rebuy
Straight rebuy

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What is modified rebuy?

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What is an in and out supplier?

A supplier that provides goods or services on a very short-term basis, meaning they deliver the product quickly and with minimal interaction, often just “in” and “out” of the supply chain, without needing extensive ongoing management or communication.

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What must an in supplier do?

Reinforce the buyer-seller relationship
Meet the buying organization’s expectations
Be responsive to the changing needs of the organization

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What must an out supplier do?

Convince the organization that it can derive significant benefits from breaking the routine
Have an understanding of the basic buying needs of the organization
Persuade decision makers to re-examine alternative solutions
Revise the preferred list to include the new supplier

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True or false: the out supplier looks for weaknesses of in supplier?

TRUE

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True or false: we cannot control environmental forces?

TRUE

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What type of forces are pace of technological change, global trade relations, and domestic and global economic outlook?

Environmental forces

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What type of forces are goals, objectives, and strategies, and the organizational position of purchasing?

Organizational forces

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What type of forces are roles, relative influence, and patterns of interaction of buying decision participants?

Group forces

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What type of forces are job function, past experiences, and buying motives of individual decision participants?

Individual forces

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What includes tools and resources to help with sourcing, buying, and managing products and services?

Procurement manager’s toolkit

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What is a separate organizational unit that has authority for purchases at a regional, divisional, or headquarters level?

Centralized purchasing

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In ________ purchasing, the purchasing department handles all purchasing for the entire organization?

Entirely centralized

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In _______ purchasing, the purchasing department is located in the home office or headquarters?

Entirely centralized

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In ________ purchasing, each department or division maintains their daily purchasing responsibilities?

Center led

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In ________, the purchasing department develops policies and standard operating procedures?

Center led

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What consists of individuals who participate in the purchasing decision and share the goals and risks arising from the decision?

Buying center

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How does a buying center play a vital bridging role in the firm?

Connecting key personnel across departments who have a stake in a particular buying decision
Facilitating the flow of information and knowledge across units

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What is the role of a user in a buying center?

Personnel who use the product in question and can be inconsequential or major players in the process.

What do gatekeepers do in a buying center?

Control information to be reviewed by members of the buying group.

What do influencers do in a buying center?

Affect the purchasing decision by providing information for the evaluation of alternatives or by setting buying specifications.

What do deciders do in a buying center?

Make the buying decision, whether or not they have formal authority to do so.

In a buying center, who has formal authority to select a supplier and implement all procedures connected with securing the product?

Buyer

What are specifications that organizational buyers use to compare alternative industrial products and services?

Evaluative criteria

What is prepared by a marketer who is sensitive to differences in product perceptions and evaluative criteria of individual buying center members?

Responsive marketing strategy

What is it called when the problem or need is different from previous experiences?

New task buying situation

What requires extensive information to explore alternative ways of solving the problem?

New task buying situation

What is a stage of decision-making that buyers operate in because they lack information?

Extensive problem solving

What do buyers lack which makes engage in extensive problem solving?

Well-defined criteria for comparing alternative products and suppliers Strong predispositions toward a particular solution

True or false: the greatest level of uncertainty exists as there is little information or experience to support a decision?

TRUE

What involves long-range planning, larger investments, and increased risk if they are wrong?

Strategic new task decisions

What is a business purchase where a company reorders the same product in the same quantity from the same supplier?

Straight rebuy

True or false: straight rebuy requires little or no new information?

TRUE

What is it called where organizational buyers apply well-developed choice criteria to the purchase decision?

Routine problem solving

True or false: casual purchases involve no information search or analysis?

TRUE

True or false: with casual purchases, the product or service is of major importance?

False. Product or service is of minor importance.

True or false: with routine low priority approach, decisions are more important?

TRUE

Does the routine low priority approach involve a moderate amount of analysis?

Yes

True or false: In modified rebuy, decision makers feel significant benefits can be derived by reevaluating alternatives?

TRUE

What are the factors that affect reevaluation?

1. Internal forces 2. External forces

What are internal forces that affect reevaluation?

Search for quality improvement and cost reductions.

What are external forces that affect reevaluation?

Cost, quality, or service improvements offered by the marketer.

True or false: reevaluation occurs when the firm is displeased with the performance of present suppliers?

TRUE

What involves a narrow set of choice alternatives and a moderate amount of both information search and analysis?

Simple modified rebuy

What involves a large set of choice alternatives and poses little uncertainty?

Complex modified rebuy

What are types of environmental forces?

Economic influences and technological influences.

True or false: Marketers must be sensitive to the strength of demand in the ultimate consumer market?

TRUE

What approach evaluates trade barriers and the inherent risks of longer supply chains?

Best cost approach

True or false: fast pace of change implies that distinct benefits are associated with search effort and the acquired information is time sensitive?

TRUE

What does TCO stand for?

Total cost of ownership

What considers the full range of costs associated with the purchase and use of a product or service over its complete life cycle?

Total cost of ownership

What type of costs are selling price and transportation costs, administrative costs of evaluating suppliers, expediting orders, and correcting errors in shipments?

Acquisition costs

What type of costs are financing, storage, inspection, taxes, insurance, and other internal handling costs?

Possession costs

What type of costs are associated with ongoing use of the purchased product?

Usage costs

What are examples of usage costs?

Installation, employee training, user labor, field repair, and product replacement and disposal costs.

What is an enterprise-wide initiative to develop strategic relationships with a limited number of customers?

Key account management

What is the goal of key account management?

To achieve long-term, sustained, significant, and measurable business value for both the customer and the provider.

What treats a customer’s worldwide operations as one integrated account?

Global account management program

Is a buying center an example of a group force?

Yes

What are the steps of group forces?

1. Defining the buying situation 2. Determining whether the firm is in the early or later stages of the procurement decision-making process.

What is an individual force where we accept communication messages consistent with existing attitudes and beliefs?

Selective exposure

What is an individual force where we filter or screen incoming stimuli to admit only certain ones to cognition?

Selective attention

What is an individual force where we interpret stimuli in terms of existing attitudes and beliefs?

Selective perception

What is an individual force where we recall information pertinent to our own needs and dispositions?

Selective retention

True or false: individual decision making occurs in organizational buying for straight rebuys and for modified rebuys when the perceived risk is low?

TRUE

Which organizational members take part in the buying process?

A buying center

What is the relative influence of users in the buying center?

Their influence depends on the situation. If they have strong preferences or technical expertise, they may play a major role in defining product specifications and pushing for certain choices.

What is the relative influence of gatekeepers in the buying center?

They have moderate to high influence by controlling the flow of information. By deciding which vendors get access to decision-makers and what information reaches them, they can shape the available choices and alternatives.

What is the relative influence of influencers in the buying center?

They have significant influence, especially in technical or high-value purchases. Their role in setting specifications, evaluating options, and providing recommendations often sways the final decision.

What is the relative influence of deciders in the buying center?

They hold the highest influence because they make the final decision.

What is the relative influence of buyers in the buying center?

Their influence is strongest in procurement and supplier selection but can be overridden by deciders or upper management. They handle the administrative aspects, negotiate contracts, and ensure compliance, but their decision may be limited to executing choices made by others.