Kotler-Chapter-7-MCQ PDF

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Chapter 7 Analyzing Business Markets 1) ________ refers to 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. B) Organizational buying 2) The ________ consists of ...

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Chapter 7 Analyzing Business Markets 1) ________ refers to 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. B) Organizational buying 2) The ________ consists of 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. A) business market 3) How can a marketer overcome the negative effects of commoditization? C) convince target consumers that the firm's products are different from those of competitors 4) Which of the following is true for business marketers? C) They deal with fewer and larger buyers than consumer marketers. 5) Which of the following is a challenge in which business marketers differ from the consumer marketers? C) geographically concentrated buyers 6) Ultimately, the amount of steel sold to General Motors depends on the consumers' demand for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following demand forms is most pertinent? A) derived demand 7) The demand for business goods is ultimately derived from the demand for ________. B) consumer goods 8) A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Economists refer to this as ________. C) the acceleration effect 9) The total demand for many business goods and services is not much affected by price changes. Thus, this demand is ________. E) inelastic 10) The purchasing department buys office supplies on a routine basis from a pre-approved list of suppliers. This type of purchase is classified as a ________. A) straight rebuy 11) Sometimes a rise of only 10% in consumer demand can cause as much as a 200% rise in business demand for products for the next period. This is an example of ________. C) fluctuating demand 12) Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor will they buy much less leather if the price rises, unless they can find satisfactory substitutes. This is an example of ________. A) inelastic demand 13) Kenilworth Inc. is shifting from its rented four-room office to a standalone office building owned by the company itself. This can be classified as a ________. E) new task 14) In a ________ purchasing situation, the buyer wants to make some change to existing product specifications, prices, delivery requirements, or other terms. D) modified rebuy 15) The business buyer has to make the fewest decisions when involved in a ________. C) straight rebuy

16) Jason Riggs' company is considered to be an in-supplier for a lawn mower manufacturer. However, recently the lawn mower company has put out a memo to in- and out-suppliers indicating that it would like to change product specifications and delivery schedules. Which of the following buying situations is most likely to be in operation given this data? E) modified rebuy 17) Orica Inc. competes in the market for commercial explosives. The company recently changed its business model from just selling explosives to managing an entire blast in a quarry. This customersolution-based approach to the sale of explosives is an example of ________. A) systems selling 18) If you decided to go into the systems contracting business, which of the following categories would constitute your main area of expertise, the service you provide for customers? E) MRO (maintenance, repair, operating) supplies 19) Many business buyers prefer to buy a total solution to a problem from one seller. This process is also known as ________. B) systems buying 20) Xerox offers a ________ approach to prospective clients when it offers a complete turnkey solution, including the operation and management of the client's information and communication need. C) systems buying 21) If Ampex Support Systems is the single supplier for a local manufacturing company's MRO (maintenance, repair, operating) supplies and needs, Ampex Support Systems is considered as providing ________ for the manufacturer. E) systems contracting 22) ________ is a key industrial marketing strategy in bidding to build large-scale industrial products such as dams, pipelines, etc. C) Systems selling 23) ________ is composed of all parties who participate in the purchasing decision-making process and share common goals and risks associated with their decisions. A) The buying center 24) In the purchasing decision process, the ________ are those who request that something be purchased. They may be users or others in the organization. B) initiators 25) In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching members of the buying center. D) gatekeepers 26) In the purchasing decision process, the major role of ________ is in selecting vendors and negotiating. B) buyers 27) If you performed the role of the ________ in a buying center, you would be the person that has the power to prevent sellers or information from reaching other members of the buying center. D) gatekeeper 28) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the operating-room administrator performs the role of the ________. D) decider

29) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the surgeons perform the role of the ________. C) user 30) In which of the following is a person performing the role of an influencer? C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives. 31) In which of the following is a person performing the role of an approver? E) Dana authorizes the actions of the deciders and buyers in LKG. 32) In which of the following is a person performing the role of a gatekeeper? D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG. 33) Which of the following is true about the buying center? D) It is the decision-making unit of a buying organization. 34) Small sellers should first concentrate their marketing efforts on reaching ________. C) influencers 35) If you were an upper-level marketing executive of a large seller of trucks, which of the following strategies would be most appropriate in reaching buying center targets? B) Use multilevel in-depth selling. 36) ________ occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward." C) Framing 37) The new, more strategically oriented purchasing departments have a mission. Which of the following most accurately describes that mission? C) Seek the best value from fewer and better suppliers. 38) Patrick J. Robinson and his associates have identified eight stages in the business buying-decision process. This model is called the ________ framework. A) buygrid 39) According to Patrick J. Robinson, the eight stages in the business buying-decision process are known as ________. A) buyphases 40) Which of the following is a step in the straight rebuy buyclass? C) product specification 41) A new-task buyclass decision begins with which of the following steps? D) problem recognition 42) In reordering office supplies, the only stages that the buyer passes through are the product specification stage and the ________ stage. E) performance review 43) The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________. B) product value analysis (PVA) 44) Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier. These situations spur the ________ stage. A) problem recognition

45) Business marketers can stimulate problem recognition by ________. B) direct mail, telemarketing, and calling on prospects 46) With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, P&G, and several other companies joined forces to form a ________ called Transora to use their combined leverage to obtain lower prices for raw materials. D) buying alliance 47) Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. Plastics.com is an example of a(n) ________. D) vertical market 48) On an online ________ , prices change by the minute. D) spot market 49) With respect to e-procurement, which of the two types of e-hubs are Web sites organized around? B) vertical and functional hubs 50) Which of the following is an example of a functional hub? D) SupplyLink.com offers manufacturers information on ensuring workplace safety. 51) The ________ approach to consumer research asks customers to attach a monetary value to alternative levels of a given attribute. The value of a given configuration is determined by adding the average values of each of the given attributes. B) compositional 52) In the ________ method for assessing customer value, customers are asked how costs of using a new product compare to those of using an incumbent. C) field value-in-use assessment 53) Robert Jennings consultants help farmers deliver an incremental animal weight gain of 8% to 12% over competitors. This is an example of ________. A) solutions selling to enhance customer revenues 54) A supplier signs an agreement with a customer that states that $350,000 in savings will be earned by the customer over the next 18 months in exchange for a tenfold increase in the customer's share of supplies ordered by the customer. If the supplier achieves less than this promised savings, it will make up the difference. If the supplier achieves substantially more than promised, it participates in the extra savings. This is an example of ________. E) risk and gain sharing 55) GM employees work at large customer facilities to reduce materials-management spending. This is an example of the ________ form of solution selling. E) solutions to reduce customer costs 56) Through its dedicated research team, CISCO Systems Inc. has developed new value-added business solutions which enable its variant class-II capacitors to provide incremental productivity of 10 to 20 percent over its competitors. This is an example of the ________ form of solution selling. D) solutions to enhance customer revenues 57) Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in the U.S. Its customers have shifted their ordering responsibilities to Praxair and the company regularly monitors its customer's inventory levels and has taken responsibility for replenishing the supplies automatically through continuous replenishment programs. Which of the following systems do Praxair and its customers follow with respect to order-routine specification? B) Vendor Managed Inventory (VMI)

58) Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers? C) the buyer might aggregate the cost of poor performance to come up with adjusted costs of purchase, including price 59) A ________ establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time. A) stockless purchase plan 60) In the ________ category of buyer-supplier relationships, competition rather than cooperation is the dominant form of governance. D) customer supply 61) Which of the following relationships is characterized by much trust and commitment leading to a true partnership? B) collaborative 62) The partners in ________ systems are united in operational ways, but neither demonstrates structural commitment through legal means or adaptation. B) collaborative 63) Value Central has a partnership of high trust and commitment with certain suppliers and gives them access to its sophisticated and detailed daily, individual store-based sales data. In exchange, those suppliers are responsible for managing Value Central's inventory of their products. This relationship is best described as ________. C) collaborative 64) The relationship between a company and its office supplies vendor where competition rather than cooperation is the dominant form of governance is probably best described as ________. D) customer supply 65) In the ________ category of buyer-supplier relationship, although bonded by a close, cooperative relationship, the seller adapts to meet the customer's needs without expecting much adaptation or change on the part of the customer in exchange. E) customer is king 66) According to research studies, the closest relationships between customers and suppliers arise when ________. A) supply is important to the customer and there were procurement obstacles 67) The type of buyer-supplier relationship in which buyers and sellers make many relationship-specific adaptations, but without necessarily achieving strong trust or cooperation is termed as ________. B) mutually adaptive 68) ________ investments are those expenditures tailored to a particular company and value chain partner. C) Specific 69) Which of the following is a form of cheating or undersupply relative to an implicit or explicit contract which usually takes place when buyers cannot easily monitor supplier performance? C) Opportunism 70) The ________ market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care. E) institutional 71) In most countries, ________ are the major buyers of goods and services. They typically require suppliers to submit bids and often award the contract to the lowest bidder. B) government organizations

72) Organizational buying is 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. TRUE Page Ref: 183 Objective: 1 Difficulty: Easy

73) The business market consists of 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. TRUE Page Ref: 183 Objective: 1 Difficulty: Easy

74) Commoditization strengthens customer loyalty. FALSE Page Ref: 184 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

75) The business market is essentially the same market as the consumer market. FALSE Page Ref: 184 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

76) Business buyers often select suppliers who also buy from them.

TRUE Page Ref: 184 Objective: 1 Difficulty: Easy

77) The business marketer normally deals with far fewer, much larger buyers than the consumer marketer does. TRUE Page Ref: 184 Objective: 1 Difficulty: Easy

78) An increase in the demand for plant and equipment can lead to a much larger increase in consumer demand. This is known as the acceleration effect. FALSE Page Ref: 185 Objective: 1 Difficulty: Easy

79) The demand for business goods is ultimately derived from the demand for raw materials. FALSE Page Ref: 185 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

80) The total demand for many business goods and services is inelasticthat is, not much affected by price changes. TRUE Page Ref: 185

Objective: 1 Difficulty: Easy

81) In the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase share over time. TRUE Page Ref: 185 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

82) The buyer in a straight rebuy usually changes product specifications, prices, delivery requirements, or other terms. FALSE Page Ref: 186 Objective: 2 AACSB: Reflective thinking Difficulty: Moderate

83) The business buyer makes the fewest decisions in the straight rebuy situation and the most in the new-task situation. TRUE Page Ref: 186 Objective: 2 AACSB: Reflective thinking Difficulty: Moderate

84) Most business buyers reject what is called systems buying from one seller. FALSE

Page Ref: 187 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

85) Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams or pipelines. TRUE Page Ref: 187 Objective: 2 AACSB: Analytic skills Difficulty: Easy

86) Sellers benefit from systems contracting through lower operating costs as a result of steady demand and reduced paperwork. TRUE Page Ref: 187 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

87) The buying center is where consumers go to purchase their goods and services. FALSE Page Ref: 188 Objective: 3 AACSB: Analytic skills Difficulty: Easy

88) With respect to the buying center, approvers are people who have the power to prevent sellers or information from reaching members of the buying center.

FALSE Page Ref: 188 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

89) Initiators are those who authorize the proposed action of deciders or buyers. FALSE Page Ref: 188 Objective: 3 AACSB: Analytic skills Difficulty: Easy

90) Influencers influence the buying decision by helping define specifications and providing information for evaluating alternatives. TRUE Page Ref: 188 Objective: 3 AACSB: Analytic skills Difficulty: Easy

91) In the buying center, several people can occupy a given role such as user or influencer, and one person may play multiple roles. TRUE Page Ref: 188 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

92) Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying influencers. FALSE Page Ref: 193 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

93) In the business market, small sellers concentrate on reaching as many participants as possible because their chances of success are slim. FALSE Page Ref: 193 Objective: 4 AACSB: Reflective thinking Difficulty: Easy

94) Framing occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward." TRUE Page Ref: 194 Objective: 4 AACSB: Reflective thinking Difficulty: Easy

95) A performance review is the first step in the buygrid framework. FALSE Page Ref: 195 Objective: 4 Difficulty: Moderate

96) The buying process begins when someone places an order with a sales representative. FALSE Page Ref: 196 Objective: 4 AACSB: Analytic skills Difficulty: Easy

97) Product value analysis is an approach to efficiency that studies whether components can be redesigned or made by more efficient methods of production without adversely impacting product performance. FALSE Page Ref: 196 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

98) On spot electronic markets, prices of products or commodities change by the minute. TRUE Page Ref: 197 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

99) In buying alliances, participants offer to trade goods or services. FALSE Page Ref: 197 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

100) With respect to assessing customer value, in conjoint analysis customers are asked to rank their preference for alternative market offerings or concepts. TRUE Page Ref: 199 Objective: 4 AACSB: A...