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Chapter 05 - Business-to-Business Marketing

Chapter 05 Business-to-Business Marketing

Multiple Choice Questions 1. Business-to-business marketing involves transactions between: A. firms that market goods and services and the ultimate consumers. B. local and federal governments and the consumers. C. firms that market goods and services and other businesses. D. firms that provide products and services and their employees. E. firms that market goods and services and their union members. Business-to-business (B2B) marketing refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers. Therefore, B2B marketing involves manufacturers, wholesalers, retailers, and service firms that market goods and services to other businesses but not to the ultimate consumer.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-01 B2B Markets

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Chapter 05 - Business-to-Business Marketing

2. Which of the following is an example of business-to-business marketing? A. A travel agency offering services such as booking tickets and hotel accommodations to the ultimate consumers B. eBay offering various online auction and other services to consumers C. An Internet services company that offers access to software applications and other services and charges on a usage basis D. Intel selling microprocessors to Dell E. A neighbourhood store that sells newspapers, magazines, and other items of interest to the locals In this case, Intel selling microprocessors to Dell is an example of business-to-business (B2B) marketing. B2B marketing refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers. Therefore, B2B marketing involves manufacturers, wholesalers, retailers, and service firms that market goods and services to other businesses but not to the ultimate consumer.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-01 B2B Markets

3. All the following companies are always operating in B2B markets, EXCEPT: A. A marketing consulting firm B. A point of sales service provider C. An oil refinery D. A wholesaler E. A travel agency Travel agency could sell packages to both consumers and businesses. The other statements always sell products/services to other businesses.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Difficult Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-01 B2B Markets

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Chapter 05 - Business-to-Business Marketing

4. A typical marketing channel consists of manufacturers, wholesalers, and retailers. In a typical marketing channel what type(s) of transaction occurs? A. B2B transactions B. B2C transactions C. C2C transactions D. B2B and B2C transactions E. B2C and C2C transactions Manufacturers and wholesalers involve in B2B transactions whereas retailers are engaged in B2C transactions.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-02 Manufacturers or Producers

5. Which of the following statements is true about business-to-business (B2B) markets? A. Institutions such as hospitals and prisons are excluded from conducting B2B transactions. B. Distributors in a B2B market are those which usually buy raw materials, components, and parts that allow them to manufacture their own goods. C. Usually, information about government buying can be obtained from Business Access Canada or from MERX. D. In a B2B market, resellers completely alter the form of the product before selling it. E. In most countries, the central government tends to be one of the smallest contributors to the purchase of goods and services. Information about government buying can be obtained from Business Access Canada or from MERX. MERX is the most complete source of Canadian public tenders, private tenders, U.S. tenders, and private-sector construction news available in Canada.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-05 Government

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Chapter 05 - Business-to-Business Marketing

6. Which of the following makes it possible for businesses of any size to have easy and affordable access to billions of dollars in contracting opportunities with the Government of Canada, the U.S. Government, and the private sector? A. GPO B. SIC C. NAICS D. NAFTA E. MERX MERX makes it possible for businesses of any size to have easy and affordable access to billions of dollars in contracting opportunities with the Government of Canada, participating provincial and municipal governments, the U.S. Government, state and local governments, and the private sector.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-05 Government

7. Which of the following statements is NOT true of manufacturers? A. They are marketing intermediaries that produce the product B. They are usually producers of their own good and services. C. Wholesalers, and retailers, are their classic customers. D. They are usually engaged in B2B transactions. E. They are the only marketing intermediaries that do not buy any product. Manufacturers buy raw materials, components, and parts that allow them to manufacture their own goods.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-02 Manufacturers or Producers

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Chapter 05 - Business-to-Business Marketing

8. Which of the following marketing intermediaries resell manufactured products without significantly altering their form? A. Gatekeepers B. Producers C. Buyers D. Wholesalers E. Users Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. For instance, wholesalers and distributors buy jeans from 7 For All Mankind and sell them to retailers (a B2B transaction), and retailers in turn resell those same jeans to the ultimate consumer (a B2C transaction). Wholesalers, distributors, and retailers are all resellers.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-03 Resellers

9. Which of the following is NOT true of retailers? A. They are business customers for wholesalers and manufacturers. B. They are a form of resellers. C. They resell manufactured products without significantly altering their form. D. They are one of the largest purchasers of goods and services in most countries. E. They are selling products to end consumers. Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. For instance, wholesalers and distributors buy jeans from 7 For All Mankind and sell them to retailers (a B2B transaction), and retailers in turn resell those same jeans to the ultimate consumer (a B2C transaction). Wholesalers, distributors, and retailers are all resellers.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Difficult Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-03 Resellers

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Chapter 05 - Business-to-Business Marketing

10. Which of the following is a marketing intermediary that deals with reselling a product without changing or modifying it notably? A. Producer B. Consumer C. Distributor D. Initiator E. Gatekeeper Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. For instance, wholesalers and distributors buy jeans from 7 For All Mankind and sell them to retailers (a B2B transaction), and retailers in turn resell those same jeans to the ultimate consumer (a B2C transaction). Wholesalers, distributors, and retailers are all resellers.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-03 Resellers

11. Terrance buys defective clothes that are stockpiled in warehouses of factories and sells them to retailers for a discount. Terrance is a(n): A. manufacturer. B. initiator. C. consumer. D. gatekeeper. E. reseller. Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. In this case, Terrance is a reseller. Wholesalers, distributors, and retailers are all resellers.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-03 Resellers

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Chapter 05 - Business-to-Business Marketing

12. Perry Inc. is a global digital education firm that sources its content from multiple authors and publishers, and packages its products attractively to capture the target audience. Which of the following best describes Perry's role? A. Consensus buying centre B. Gatekeeper C. User D. Producer E. Reseller Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. For instance, wholesalers and distributors buy jeans from 7 For All Mankind and sell them to retailers (a B2B transaction), and retailers in turn resell those same jeans to the ultimate consumer (a B2C transaction). Wholesalers, distributors, and retailers are all resellers.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-03 Resellers

13. In B2B transactions, hospitals, schools, and religious organizations are usually examples of: A. manufacturers. B. users. C. institutions. D. gatekeepers. E. resellers. Hospitals, educational organizations, prisons, religious organizations and other non-profit organizations are examples of institutions.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-04 Institutions

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Chapter 05 - Business-to-Business Marketing

14. In comparison with purchases made by government organizations, which of the following statements is true of institutional buyers? A. They rarely disclose their purchase decisions and practices. B. They are subject to heavy public scrutiny. C. They are less likely to engage in reciprocal buying. D. They usually opt for a supplier that quotes the highest price. E. They traditionally make much larger purchases. Institutional buyers, such as nursing homes and universities, tend to have relatively small budgets and therefore seek the best value when buying products and services for their organizations. Governments consider a wide range of factors in their purchases and may not always purchase from the vendor with the lowest price. Institutional organizations are not under such public scrutiny and rarely disclose their purchase decisions and practices, although they may try to make their buying processes transparent.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-04 Institutions

15. Which of the following is NOT an example of an institution buyer? A. University of Lethbridge B. York Region District School Board C. Hospital for Sick Children D. St. Peter's Roman Catholic Church E. Regional Municipality of Waterloo Government category consists of federal government, provincial, regional and municipal governments. Regional municipality of Waterloo is an example of government business customer.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-04 Institutions

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Chapter 05 - Business-to-Business Marketing

16. Which of the following tends to be the largest group of purchasers of goods and services in most countries? A. Central governments B. Manufacturers C. Wholesalers D. Gatekeepers E. Retailers In most countries, the central government tends to be one of the largest purchasers of goods and services.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-05 Government

17. Which of the following is the most complete source of Canadian public tenders, private tenders, U.S. tenders, and private sector construction news available in Canada? A. Statistics Canada B. Business Exchange Magazine C. NAFTA D. MERX E. Business Access Canada Information about government buying can be obtained from Business Access Canada or from MERX. MERX is the most complete source of Canadian public tenders, private tenders, U.S. tenders, and private-sector construction news available in Canada.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-05 Government

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Chapter 05 - Business-to-Business Marketing

18. Government purchases differ from the purchases made by institutional organizations in that institutional organizations: A. make relatively large purchases and consider a wide range of factors in their purchases. B. may not always purchase from the vendor with the lowest price. C. need to make purchases that comply with the policy guidelines and trade rules set by the World Trade Organization. D. have relatively small budgets and therefore seek the best value when buying products and services. E. have to disclose their purchase decisions and practices to the public. Institutional buyers, such as nursing homes and universities, tend to have relatively small budgets and therefore seek the best value when buying products and services for their organizations.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-05 Government

19. The buying process of private-sector companies, such as manufacturers and resellers, differs from the buying process of governments in that private companies: A. have relatively big budgets and seek the best value when buying products. B. are more likely to engage in reciprocal buying. C. always opt for a supplier with a strong brand equity regardless of the price they quote. D. must disclose their buying criteria and buying process to the public. E. make purchases that comply with the policy guidelines set by the WTO. Private sector companies such as manufacturers, producers, and resellers are likely to engage in reciprocal buying, a situation where two companies agree to buy each other's products as appropriate.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-01 Describe the nature and composition of B2B markets. Topic: 05-06 Key Challenges of Reaching B2B Clients

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Chapter 05 - Business-to-Business Marketing

20. Which of the following is NOT true of B2C markets? A. In B2C markets, consumers buy goods to satisfy their own individual or household needs. B. In B2C markets, consumers are heavily influenced by price and personal tastes. C. In B2C markets, the number of business buyers is substantially higher than in B2B markets. D. Buying decisions in B2C markets are usually made by individuals or families and sometimes are unplanned or impulsive. E. The demand for goods and services for B2C markets is often derived from B2B sales. In B2C markets, consumers buy goods to satisfy their own individual or household needs and are heavily influenced by price, personal tastes, brand reputation, or personal recommendations of friends and family. In B2B markets, demand for goods and services is often derived from B2C sales in the same supply chain.

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying. Topic: 05-07 Differences Between B2B and B2C Markets

21. Which of the following best defines the linkage between consumers' demand for a company's output and its purchase of necessary inputs to manufacture or assemble that particular output? A. Competitive demand B. Derived demand C. Latent demand D. Composite demand E. Negative demand In B2B markets, demand for goods and services is often derived from B2C sales in the same supply chain. More specifically, derived demand is the linkage between consumers' demand for a company's output and its purchase of necessary inputs to manufacture or assemble that particular output.

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying. Topic: 05-07 Differences Between B2B and B2C Markets

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Chapter 05 - Business-to-Business Marketing

22. AutoParts Inc. is a firm involved in producing various electrical components used in the production of cars. The demand for its products is dependent on the demand for new cars. Which of the following best explains the demand for AutoParts' products? A. Latent demand B. Composite demand C. Negative demand D. Competitive demand E. Derived demand In this case, the type of demand that AutoParts Inc. deals with is derived demand. In B2B markets, demand for goods and services is often derived from B2C sales in the same supply chain. More specifically, derived demand is the linkage between consumers' demand for a company's output and its purchase of necessary inputs to manufacture or assemble that particular output.

Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Difficult Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying. Topic: 05-07 Differences Between B2B and B2C Markets

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Chapter 05 - Business-to-Business Marketing

23. Jeans are very popular among North American teenagers. To meet the increasing demand for jeans, VogueJeans Inc., a popular jeans manufacturer, decides to purchase more raw materials from its suppliers to manufacture its jeans. This increased demand for raw materials caused by an increased demand for jeans is referred to as: A. competitive demand. B. negative demand. C. derived demand. D. latent demand. E. composite demand. In this case, the type of demand that VogueJeans Inc. is dealing with is derived demand. In B2B markets, demand for goods and services is often derived from B2C sales in the same supply chain. More specifically, derived demand is the linkage between consumers' demand for a company's output and its purchase of necessary inputs to manufacture or assemble that particular output.

Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Difficult Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying. Topic: 05-07 Differences Between B2B and B2C Markets

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Chapter 05 - Business-to-Business Marketing

24. Verdun Windows is the Canadian supplier of high-quality, energy-efficient wind...