Module 7 - Understanding Organisational Markets and Buying Behaviour Flashcards
1 The quantitative, multiattribute, supplier-rating systems discussed in the text most closely resemble which type of consumer decision-making approach?
A.JND.
B.Compensatory.
C.Lexicographic.
D.Conjunctive.
E.Disjunctive.
B
See section Evaluation and Selection of Suppliers.
2 When an organisation favours a supplier who is, in turn, a customer or potential customer for the organisation’s own products or services, this is termed:
A.cross-purchasing.
B.reciprocity.
C.a joint purchasing agreement.
D.countertrade.
E.a mutual purchase agreement
B
See section Evaluation and Selection of Suppliers.
3 Requirements planning is when an organisation:
A.analyses products and vendors during new-task buying.
B.determines if a product meets specific technical requirements.
C.engages in an in-depth investigation before qualifying a firm as a potential supplier.
D.attempts to forecast future inventory needs for advance purchase.
E.determines how best to market its product.
D
See section The Purchase.
4 Buyers auctions are like:
A.a straight rebuy.
B.a modified rebuy.
C.new-task buying.
D.a purchasing contract.
E.reciprocity
B
See section Types of Buying Situations.
5 For an unregulated electric utility company, which type of product is it likely to be better off ‘making’ than ‘buying’?
A.Raw materials.
B.Component parts.
C.Component materials.
D.Accessory equipment.
E.Operating supplies.
A
See section Selling Different Kinds of Goods and Services.
6 When buying raw materials, organisational buyers are least concerned with:
A.the supplier’s business practices.
B.the product’s brand name.
C.governmental regulations.
D.advances in technology.
E.All of the above factors are equally important
B
See section Raw Materials.
7 A parts management system for windscreens for the Ford Taurus which is designed so that the parts arrive within two hours of when they are needed on the production line is an example of what type of inventory management system?
A.MBO.
B.PERT.
C.CAD/CAM.
D.JIT.
E.GANTT.
D
See section Component Materials and Parts.
8 For producers of accessory equipment, like new office equipment, the key marketing activity is:
A.beating competitors’ offers.
B.media advertising.
C.an indirect sales channel.
D.face-to-face contact with potential customers.
E There is insufficient information to make a judgement
D
See section Accessory Equipment.
9 Which is the most important promotional method to use in the selling of accessory equipment for businesses?
A.Direct mail.
B.Advertising.
C.Brand-name promotion.
D.Personal selling.
E.Publicity
D
See section Accessory Equipment.
10 Plastic which is purchased by Chrysler Corporation for use in its automobiles represents which type of product?
A.Natural product.
B.Farm product.
C.Component parts.
D.Component materials.
E.Installations.
D
See section Component Materials and Parts.
Industrial goods producers are more likely than producers of most consumer goods to try to diversify because they face:
A. a larger number of smaller niches that they must try to fill.
B. lower returns on investments in traditional areas of their capital investments.
C. more of a classical BCG-type portfolio where one set of businesses must finance the activities of others.
D. countercyclical returns, such that when sales are going up in consumer markets overall, they tend to go down in industrial markets.
E. substantial fluctuation in sales and a highly cyclical pattern of demand.
E
See section Purchase Motives – Derived Demand.
2 The demand for industry goods and services is:
A. relatively elastic and stable, compared to that for consumer goods.
B. relatively inelastic compared to that for consumer goods, but more stable.
C. relatively inelastic and more erratic, compared to that for consumer goods.
D. somewhat more elastic, but also more erratic, than that for consumer goods.
E. of about the same price elasticity and demand stability as that for consumer goods.
C
See Exhibit 7.1.
3 Compared to markets for consumer goods, organisational markets:
A. use buying specialists, have closer buyer–seller relationships and are subject to multiple buying influences.
B. use buying specialists, who rely on weaker buyer–seller relationships and focus on fewer buying influences to reduce costs.
C. rely on close buyer–seller relationships, together with a focus on fewer buying influences, to control for lack of buying specialisation.
D. avoid close buyer–seller relationships, in part because of multiple buying influences and the use of buying specialists.
E. compensate for lack of buying specialisation with close buyer–seller relationships.
A
See Exhibit 7.1.
4 In an organisational market the customer relies on the marketer for:
A. product and service information.
B. coordinated delivery schedules.
C. spare parts availability.
D. efficient order handling.
E. all of the above.
E
See section What Do the Unique Characteristics of Organisational Markets Imply for Marketing Programs?
5 The individual who controls the flow of information to other people in the purchasing process is termed the:
A. decider.
B. buyer.
C. influencer.
D. user.
E. gatekeeper.
E
See section Participants in the Organisational Purchasing Process.
6 The buying centre is:
A. several people from different departments who participate in the buying decision process.
B. a wholesale geographic centre (like the World Trade Mart) where numerous sellers of goods and services are available at one time.
C. a separately staffed department in many large organisations with the full-time function of making purchases.
D. a retail geographic centre where buyers and sellers tend to congregate.
E. a conference during which buyers confer and pool their orders.
A
See section The Organisational Buying Centre.
7 A straight rebuy involves:
A. definition of specifications and collection of information about alternative products.
B. comparison of alternative products and suppliers with the current product and vendor.
C. purchasing a common product or service the organisation has bought many times before.
D. purchasing products that are somewhat different from, but extensions of, products previously purchased.
E. vertical (top-down) decisions to purchase a product for the organisation.
C
See section Types of Buying Situations.
8 The derived nature of industrial demand is exemplified by:
A. increases in paper prices because of shortages of timber in the Northwest.
B. decline in beef consumption because of the movement of health-conscious consumers toward poultry products.
C. a reduction in demand for feed grains because of a decline in beef consumption.
D. an increase in industrial demand throughout the economy because of advanced production technology.
E. decreases in paper prices because of excess timber production in the Northwest.
D
See section A Comparison of Organisational vs Consumer Markets.
9 Each stage of the decision process is likely to be more extensive and involve many technical experts and administrators, in the:
A. modified rebuy situation.
B. new-task buying situation.
C. straight rebuy situation.
D. collateral purchase arrangement.
E. intermediated purchase.
B
See section Types of Buying Situations.
10 Value analysis refers to the:
A. systematic reappraisal of an item’s design, quality and performance requirements.
B. assessment of the value of the product compared to that of comparable products on the market.
C. appraisal of the value of the business unit in terms of its contribution to the corporation and the resource requirements from the corporation.
D. appraisal of each functional department within the business unit in terms of its contribution to the superordinate goals of the organisation.
E. comparison of the worth of publicly traded company stock to the book value of the company.
A
See section Search for Information about Products and Suppliers.
What are the major differences between organisational and consumer markets?
What groups of people are the participants in the buying process?
users
influencers
gatekeepers
buyers
deciders
Describe briefly the organisational purchase decision-making process.
What are the marketing implications of the following categories of industrial goods and services?
Raw materials.
Component materials and parts.
Accessory equipment.
Installations.
Operating supplies.
Business services.
Raw materials
- most raw natural materials are marketed directly to processors and manufacturers
- distribution channels for agricultural products usually involve many middlemen
- branding is not important in agricultural goods – little promotional activity
Component materials and parts
- component materials are processed in some way before they are sold
- component parts are manufactured items assembled as part of another product without further changes in form
- component materials are usually sold direct
- Use JIT and involve close relationships between buyers and sellers
Installations
- buildings and major capital equipment
- few potential customers and high value
- post sale service usually involved
- distribution is usually direct
- promotion is usual personal selling rather than advertising
Accessory equipment
- industrial machines and tools that manufacturers, service producers and govts use to carry out their operations e.g. pc’s, desks, hand tools
- if the dollar value is high enough, direct selling is appropriate
- if the market is geographically spread and dollar amount low, distributors are used
- personal selling is important, but advertising and web is also used
Operating supplies
- these do not become part of the buyers product or service, nor are they used in producing it
- examples: paper clips, typing paper
- wholesale middlemen – price is critical with little brand loyalty
Business services
- businesses that have special areas of expertise used and paid for by other organizations e.g. security, ad agencies
- suppliers qualifications, past performance, and reputation become critical determinants of the success of the marketing effort
- personal selling and negotiation
- relationships can last a long time