Test Bank for ch10 PDF

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s

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CHAPTER1 0

Understanding and Negotiating with Organizational Buyers

MULTIPLE-CHOICE QUESTIONS Ans: a Page: 322 KeyWord: organizational buyers

1.

Organizations that buy goods and services for the production of other products and services that are sold, rented, or supplied to other organizations and final consumers are referred to as a(n) a. b. c. d.

industrial market. reseller market. government market. nonprofit market.

Ans: b Page: 322 KeyWord: organizational buyers

2.

Individuals and organizations that buy goods to sell or rent to other organizations and ultimate consumers are referred to as a(n) a. industrial market. b. reseller market. c. government market. d. nonprofit market.

Ans: d Page: 322 KeyWord: organizational buyers

3.

Universities, colleges, hospitals, museums, libraries, and charitable institutions that buy goods and services for carrying out their functions are referred to as a(n) a. industrial market. b. reseller market. c. government market. d. nonprofit market.

Ans: a Page: 323 KeyWord: industrial markets

4.

The largest and most diverse of all the organizational markets is the

Ans: a Page: 323 KeyWord: industrial markets

5.

Ans: d Page: 323-324 KeyWord: industrial markets

6.

a. b. c. d.

industrial market. reseller market. government market. nonprofit market.

The _______ is one of the best basic sources for identifying new business prospects and their general requirements. a. b. c. d.

North American Industry Classification System U.S. Manufacturer Classification System Management and Budget Office Survey of Manufacturers National Manufacturers Association

The North American Industry Classification System (NAICS) a. replaces the old Standard Industrial Classification (SIC) System. b. is more detailed than the SIC and provides better coverage of services such as health care, entertainment, and financial institutions.

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s c. d.

provides for standardization in reporting economic data between Mexico, Canada, and the United States. does all of the above.

Ans: c Page: 328 KeyWord: industrial markets

7.

Industrial buyers’ success depends largely on their ability to do all of the following except a. negotiate favorable prices and terms. b. assure reliable, long-run sources of supply. c. continue doing business with one supplier as long as possible. d. maintain good supplier relationships.

Ans: a Page: 329 KeyWord: foundation goods

8.

Products that are used in the production process but do not become a part of the finished product are referred to as a. foundation goods. b. entering goods. c. facilitating goods. d. shopping goods.

Ans: b Page: 329 KeyWord: entering goods

9.

Products that are components that become part of the finished product are referred to as a. foundation goods. b. entering goods. c. facilitating goods. d. shopping goods.

Ans: c Page: 329 KeyWord: facilitating goods

10.

Products and services that are consumed in the production process are referred to as a. foundation goods. b. entering goods. c. facilitating goods. d. shopping goods.

Ans: a Page: 329 KeyWord: foundation goods

11.

An example of a foundation good is a. equipment. b. raw materials. c. contract manufacturing services. d. operating supplies.

Ans: b Page: 329 KeyWord: entering goods

12.

An example of an entering good is

Ans: d Page: 329 KeyWord: facilitating goods

13.

An example of a facilitating good is a. equipment. b. raw materials. c. contract manufacturing services. d. operating supplies.

Ans: b Page: 329 KeyWord: buying center

14.

All people in the organization who participate in or influence the purchase decision process are referred to as the buying a. team. b. center. c. group.

a. b. c. d.

equipment. raw materials. maintenance and repair items. operating supplies.

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s d.

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facilitators.

Ans: c Page: 330 KeyWord: buying center

15.

People who control information or access to decision makers in the buying center are referred to as a. influencers. b. buyers. c. gatekeepers. d. initiators.

Ans: d Page: 330 KeyWord: buying center

16.

Normally higher-level managers who have power to select or approve suppliers and final purchase decisions are referred to as a. influencers. b. buyers. c. gatekeepers. d. deciders.

Ans: b Page: 330 KeyWord: buying center

17.

People with formal authority to order supplies and negotiate purchase terms within organizational constraints are referred to as a. influencers. b. buyers. c. gatekeepers. d. deciders.

Ans: c Page: 330 KeyWord: buying center

18.

People who first recognize or anticipate a problem that may be solved by buying a good or service are referred to as

Ans: a Page: 331 KeyWord: straight rebuy

19.

A type of buying decision where a routine, programmable decision is made whereby the buyer reorders something from a supplier on the approved list is referred to as a a. straight rebuy. b. modified rebuy. c. new task. d. new task rebuy.

Ans: b Page: 331 KeyWord: modified rebuy

20.

A type of buying decision where a fairly complex decision process requires enhanced information and involves a larger number of decision participants is referred to as a

a. b. c. d.

a. b. c. d.

influencers. buyers. initiators. deciders.

straight rebuy. modified rebuy. new task. new task rebuy.

Ans: c Page: 331 KeyWord: new task

21.

A type of buying decision where the buyer considers purchasing a product or service for the first time is referred to as a a. straight rebuy. b. modified rebuy. c. new task. d. new task rebuy.

Ans: Page:

22.

In the industrial buying process, which of the following is likely to occur in the “describing the basic need” stage?

c 332-333

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s

KeyWord: industrial buying process

a. b. c. d.

Detailed technical specifications are developed by the buying organization. The buyer tries to identify qualified potential suppliers. The buyer organization usually runs a feasibility study. Industrial buyers will usually invite qualified suppliers to submit proposals.

Ans: a Page: 333 KeyWord: industrial buying process

23.

In the industrial buying process, which of the following is likely to occur in the “evaluating proposals and selecting suppliers” stage? a. Industrial buying organizations assess the potential supplier on various criteria. b. The buyer tries to identify qualified potential suppliers. c. The buyer organization usually runs a feasibility study. d. Industrial buyers will usually invite qualified suppliers to submit proposals.

Ans: c Page: 333 KeyWord: industrial buying process

24.

In the industrial buying process, which of the following is likely to occur in the “searching for suppliers” stage? a. b. c. d.

Industrial buying organizations assess the potential supplier on various criteria. The buyer tries to identify qualified potential suppliers. Using product specifications as the guide, the buyer tries to identify qualified potential suppliers. Industrial buyers will usually invite qualified suppliers to submit proposals.

Ans: d Page: 334 KeyWord: industrial buying criteria

25.

Which of the following is not one of the five basic decision criteria used by most organizational buyers? a. Economic b. Legalistic c. Adaptive d. Control

Ans: b Page: 334 KeyWord: industrial buying process

26.

Instead of preparing a new contract for each periodic purchase order, most industrial buyers prefer to establish a(n) a. agreement whereby the price fluctuates within a narrow range over a certain time period. b. open purchase arrangement over a stated period at a certain price. c. closed purchase arrangement over a period of time that does not specify the price. d. closed purchase arrangement over a period of time that specifies the price within a given range.

Ans: d Page: 335 KeyWord: reseller categories

27.

All of the following are categories of resellers except a. industrial distributors. b. wholesalers. c. retailers. d. manufacturers.

Ans: a Page: 335 KeyWord: industrial distributors

28.

All of the following are kinds of industrial distributors except a. multiline house. b. general line distributors. c. specialist firms. d. combination house.

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s

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Ans: d Page: 335 KeyWord: industrial distributors

29.

The type of industrial distributor that operates like a wholesaler by selling to retailers and institutions in addition to manufacturers and construction firms is referred to as a a. multiline house. b. general line distributor. c. specialist firm. d. combination house.

Ans: d Page: 336-337 KeyWord: reseller buying situations

30.

Which of the following is not one of the types of reseller buying situations? a. New product buying situation b. Selection of the best supplier c. Better set of terms from current suppliers d. Improved vertical market conditions

Ans: a Page: 336-337 KeyWord: reseller buying criteria

31.

Resellers typically consider such factors as profit margins, product uniqueness, the seller’s intended positioning and marketing plan, test market results, promotional support, and the seller’s reputation when determining whether to a. purchase a new product. b. seek better terms from the current supplier. c. achieve enhanced vertical market conditions. d. reduce a product assortment.

Ans: c Page: 337 KeyWord: checkout scanners

32.

Installation of checkout scanners has a. been of questionable value for most resellers who use them. b. overwhelmed resellers with so much daily data that they have been unable to make efficient use of scanning equipment. c. generated an abundance of timely and specific data about consumer response. d. resulted in customers complaining about the use of high-tech equipment.

Ans: b Page: 338 KeyWord: just-in-time purchasing

33.

One special incentive that is often provided to resellers to get their business is where inventory is carried by the selling firm, which delivers goods to the buyer on short notice. This practice is referred to as a. b. c. d.

Ans: c Page: 338 KeyWord: slotting allowances

34.

A special incentive that is often provided to resellers to get their business is where the selling firm pays money to rent shelf space from the reseller and provides an incentive to push its products. This practice is referred to as a. b. c. d.

Ans: b Page: 338 KeyWord: cooperative advertising

35.

an automatic reordering system. just-in-time purchasing. generous allowances. supplier sponsorship.

an automatic reordering system. just-in-time purchasing. slotting allowances. supplier sponsorship.

One special incentive that is often provided to resellers to get their business is where a seller pays part of the reseller’s costs when advertising the seller’s products. This practice is referred to as a.

Co p y r i g h t©Ho u g h t o nMi ffli nCo mp a n y .Al l r i g h t sr e s e r v e d .

special allowances.

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s b. c. d.

cooperative advertising. trade advertising. advertising aids.

Ans: c Page: 338 KeyWord: government purchases

36.

The total dollar value of all government purchases in the United States is approximately a. $1 billion. b. $50 billion. c. $1 trillion. d. $50 trillion.

Ans: b Page: 339 KeyWord: government purchasing

37.

Government purchasing agents typically must purchase goods and services from the a. most conveniently located supplier. b. lowest-cost, qualified supplier. c. most qualified supplier irrespective of costs. d. most qualified, most conveniently located supplier.

Ans: d Page: 339 KeyWord: government purchasing

38.

If government purchasing agents do not buy from the lowest-cost, qualified supplier, they can buy from all of the following suppliers except a. small businesses. b. minority-owned companies. c. suppliers from depressed areas. d. large, multinational companies.

Ans: d Page: 340 KeyWord: nonbusiness organizations

39.

Which of the following is not one of the distinct characteristics separating nonbusiness organizations from business organizations?

Ans: a Page: 341 KeyWord: organizational buyers

40.

All of the following are negotiating styles of organizational buyers except a. inconsiderates. b. hard bargainers. c. facilitators. d. persuaders.

Ans: b Page: 341 KeyWord: organizational buyers

41.

________ enjoy the camaraderie in interpersonal relationships and don’t want to be rushed through the sales presentation and close. a. Considerates b. Socializers c. Facilitators d. Persuaders

Ans: d Page: 341 KeyWord: organizational buyers

42.

________ try to make their own sales presentations about the reputation and quality of their companies. a. Considerates b. Socializers c. Facilitators d. Persuaders

a. b. c. d.

They have multiple nonfinancial objectives. They are under public scrutiny. They focus on offering services and social change. They use only professional managers as executives and leaders.

Co p y r i g h t©Ho u g h t o nMi ffli nCo mp a n y .Al l r i g h t sr e s e r v e d .

Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s Ans: d Page: 342 KeyWord: organizational buyers

43.

Ans: c Page: 342 KeyWord: organizational buyers

44.

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Which of the following is not one of the three types of customers that have been identified with respect to their preferred relationship? a. b. c. d.

Customer coworker Commercial friend Business acquaintance Opinion leader

________ maintain a formal relationship with salespeople and are reliant on them for economic gain; although the association is cordial, it lacks intimacy and does not entail interaction beyond the business context. a. b. c. d.

Customer coworkers Commercial friends Business acquaintances Opinion leaders

Ans: a Page: 344 KeyWord: international selling

45.

From foreign perspectives, U.S. salespeople are often seen as a. negotiating with a “winner-take-all” attitude. b. using a level playing field that is fair to all parties. c. placing the interests of the customer ahead of the seller. d. fostering “win-win” agreements.

Ans: b Page: 344 KeyWord: sales concessions

46.

Salespeople’s timing and willingness to make concessions tends to vary most across a. industries. b. cultures. c. companies. d. corporate philosophies.

Ans: c Page: 344 KeyWord: international selling

47.

When doing business in foreign countries, which of the following is least important? a. Speed of the negotiating process b. Importance of silence c. Weather of the foreign country d. Importance of time

Ans: c Page: 347-348 KeyWord: business etiquette

48.

A salesperson’s use of business cards, eye contact, kind of posture, and use of voice are a. behaviors that are similar across cultures. b. of little practical concern in today’s high-tech selling arena. c. aspects of business etiquette that must be considered across cultures. d. of issue chiefly in Western societies.

Ans: a Page: 345 KeyWord: international selling

49.

In foreign negotiations, being aware of local customers, traditions, customs, habits, and sensitivities a. b. c. d.

Co p y r i g h t©Ho u g h t o nMi ffli nCo mp a n y .Al l r i g h t sr e s e r v e d .

is a matter of practicality to avoid misunderstandings, enhance mutual respect, and increase the chances for success in the negotiations. is simply a courteous way of doing business but will have minimal impact on selling success. is time consuming and therefore may not be worth the time invested. can quickly be determined after a brief interaction with a foreign buyer.

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Cha pt e r1 0 :Unde r s t a ndi nga ndNe got i a t i ngwi t hOr ga ni z a t i ona l Buy e r s

Ans: c Page: 347-348 KeyWord: international selling

50.

In selling internationally, which of the following would probably be the best advice? a.

Always make sure that any gift to the prospect conveys no negative cultural meaning. Always carefully read the prospect’s title aloud and treat the business card with respect. Use first names when meeting prospects from another country to establish rapport quickly. Avoid excessive eye contact as it can come across as too aggressive in many countries

b. c. d.

TRUE-FALSE QUESTIONS Ans: T Page: 322 KeyWord: industrial markets

51.

T

F

Organizations that buy goods and services for the production of other products and services that are sold, rented, or supplied to other organizations and final consumers are referred to as producer or manufacturer markets.

Ans: T Page: 323 KeyWord: organizational buyers

52.

T

F

You do not succeed over the long run by beating customers in negotiations.

Ans: F Page: 323 KeyWord: industrial markets

53.

T

F

The dollar volume of consumer marketing transactions far exceeds that in industrial markets.

Ans: F Page: 323 KeyWord: industrial markets

54.

T

F

The NAICS categorizes nearly all industries into ten major divisions according to their industry market potential.

Ans: T Page: 328 KeyWord: entering goods

55.

T

F

Entering goods are com...