Marketing 4th Canadian Edition By Grewal - Test Bank

Marketing 4th Canadian Edition By Grewal – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

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

 

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 agencies could sell packages to both consumers and businesses. The other listed businesses 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

 

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 are involved 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

 

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

 

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

 

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

 

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

 

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

The governmental business category consists of federal, provincial, regional, and municipal governments.

 

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

 

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

 

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

 

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

 

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

 

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

 

24. Verdun Windows is the Canadian supplier of high-quality, energy-efficient windows for homes and offices. The housing boom in Canada in the late 1990s through the early 2000s resulted in a 500 percent increase in the amount of windows Verdun sold when compared to the period from 1990 to 1993, when the housing market was sluggish. This is an example of:
    A.derived demand.
    B. competitive demand.
    C. latent demand.
    D. composite demand.
    E. negative demand.

This is an example of 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

25. Which of the following statements does NOT describe a market characteristic of B2B buying?
    A.More people are usually involved in B2B buying decisions.
    B. The number of business buyers is higher than the number of buyers in B2C markets.
    C. In B2B markets, buyers and sellers strive to develop close relationships with each other and find a win-win situation for both parties.
    D. Demand in many business markets is inelastic.
    E. The size of the orders is substantially larger than consumer purchases.

    A characteristic of B2B markets is that the number of business buyers is substantially fewer than in B2C markets, and the business buyers are more concentrated in big cities, towns, and industrial areas. Also, the sizes of the orders are substantially larger than consumer purchases.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Difficult
Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying.
Topic: 05-09 The B2B Buying Process

 

26. Which of the following statements describes the nature of products in business-to-business (B2B) markets?
    A.The products sold in these markets are mainly finished goods assembled by firms.
    B. The products are sophisticated and must conform to technical standards of the buyer.
    C. There is no time-bound delivery of products in B2B markets.
    D. Consumers buy the products from B2B markets for their own personal consumption.
    E. Technical assistance and after-sale service is not mandatory for products in B2B markets.

In certain business-to-business (B2B) markets (e.g., aerospace, medical, pharmaceutical, shipping, defence), the products are very technical and sophisticated in nature and must conform to technical standards specified by the buyer.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying.
Topic: 05-09 The B2B Buying Process

27. Which of the following statements is NOT true about the nature of the buying process in B2B markets?
    A.Reciprocal arrangements exist between the buyers and sellers.
    B. The buying process involves qualified, and professionals buyers.
    C. Online buying over the Internet is very common.
    D. The buying efforts in these markets are less structured and formalized.
    E. The buying process in these markets involves competitive bidding, negotiated pricing, and complex financial arrangements.

Most companies have formal policies and procedures to guide buying decisions that must be closely followed by the people involved in the buying decisions. The buying process in more complex, more structured and formal.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Difficult
Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying.
Topic: 05-06 Key Challenges of Reaching B2B Clients

 

28. In business-to-business (B2B) markets, which of the following is a buying practice arrangement where two firms agree to buy each other’s products and services?
    A.Impulsive buying
    B. Erratic buying
    C. Dissonance buying
    D. Reciprocal buying
    E. Variety-seeking buying

In a B2B environment, some firms may engage in reciprocal buying arrangements—a practice where two firms agree to buy each other’s products and services.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying.
Topic: 05-06 Key Challenges of Reaching B2B Clients

29. In most B2B marketing, which of the following is an integral component of the transaction?
    A.The government
    B. Personal consumption
    C. Brand reputation
    D. The salesperson
    E. Personal tastes

In most B2B sales, the salesperson is an integral component of the transaction. Pharmaceutical manufacturers rely primarily on sales representatives to promote their drugs to doctors.

 

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

 

30. Rafael works as a sales representative for a firm that processes leather that can be further used to make bags, shoes, and seat covers. Rafael promotes these products to various car companies and bag manufacturers. In this context, what type of sales activity is practised by Rafael?
    A.C2B
    B. Modified rebuy
    C. B2B
    D. B2C
    E. New buy

In this case, Rafael is practising a B2B sales activity. In B2B markets, the products ordered are primarily raw materials and semifinished goods that are processed or assembled into finished goods for the ultimate consumers.

 

Accessibility: Keyboard Navigation
Blooms: Apply
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

31. The third digit in an NAICS code represents:
    A.the industry group.
    B. the subsector.
    C. a specific subgroup within the industry.
    D. the sector in the economy.
    E. the country-level industry.

Statistics Canada collects data about business activity in Canada through its classification scheme, which categorizes all firms into a hierarchical set of six-digit North American Industry Classification System (NAICS) codes. The first two digits represents the sector in the economy (e.g., 51 is the information sector); the third digit represents the subsector (e.g., 515 is “Broadcasting except Internet”).

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 05-03 Explain the ways B2B firms classify and segment their markets.
Topic: 05-08 B2B Classification System and Segmentation

 

32. Which of the following classification systems can be quite useful to B2B marketers for segmenting and targeting markets?
    A.GPO
    B. SIC
    C. NAICS
    D. NAFTA
    E. MERX

The NAICS classification system can be quite useful to B2B marketers for segmenting and targeting markets. Statistics Canada collects data about business activity in Canada through its classification scheme, which categorizes all firms into a hierarchical set of six-digit North American Industry Classification System (NAICS) codes.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-03 Explain the ways B2B firms classify and segment their markets.
Topic: 05-08 B2B Classification System and Segmentation

33. A manufacturing firm that has developed a new product can use the NAICS codes to:
    A.identify the type of firms that constitute its target market.
    B. establish the potential banking partners.
    C. foster long-term relations with buyers.
    D. create mergers and joint ventures.
    E. test the quality of its new product.

Using the NAICS data collected by Statistics Canada or the U.S. Census Bureau, the manufacturer could assess the number, size, and geographical dispersion of firms within each type, which might indicate both the product’s potential and the types of firms that constitute the target market.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-03 Explain the ways B2B firms classify and segment their markets.
Topic: 05-08 B2B Classification System and Segmentation

 

34. The buying processes in both B2B and B2C markets begin with:
    A.central planning.
    B. need recognition.
    C. postpurchase dissonance.
    D. alternative evaluation.
    E. order specification.

The B2B buying process parallels the B2C process, though it differs in many ways. Both start with need recognition, but the information search and alternative evaluation stages are more formal and structured in the B2B process.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-10 Stage 1: Need Recognition

35. Which stages in the B2B buying process are more formal and structured compared to the B2C buying process?
    A.Sales strategy and postpurchase evaluation
    B. Customer value creation and government regulation
    C. Information search and alternative evaluation
    D. Need recognition and alternative evaluation
    E. Order specification and performance analysis

The B2B buying process parallels the B2C process, though it differs in many ways. Both start with need recognition, but the information search and alternative evaluation stages are more formal and structured in the B2B process.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-07 Differences Between B2B and B2C Markets

 

36. The first stage of the B2B buying process involves:
    A.consideration of alternative solutions to derive potential specifications.
    B. posting of RFP needs on the company website to invite alternative suppliers.
    C. analysis of RFP proposals.
    D. vendor negotiation and selection.
    E. need recognition through either internal or external sources.

In the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-10 Stage 1: Need Recognition

37. A construction firm realizes that suppliers have increased the prices of steel after doing a market analysis for the prices quoted by various suppliers for the same type of steel. Also, the firm is not satisfied with the performance of the supplier and decides to replace it. In the context of the business-to-business (B2B) buying process, the firm is currently in the stage of:
    A.proposal analysis.
    B. RFP process.
    C. need recognition.
    D. supplier selection.
    E. product specification.

The firm is currently in the need recognition stage of the B2B buying process. In the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Difficult
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-10 Stage 1: Need Recognition

 

38. CAMO Inc. is a firm that assembles desktop computers and buys components from various suppliers. The firm is not happy with the quality of one of the components and decides to replace it with a component that can improve the quality of its final product. The R&D department formulates the requirements for the desired component and posts it on the firm’s website. In the context of the B2B buying process, CAMO Inc. is currently in the stage of:
    A.order specification.
    B. product specification.
    C. RFP process.
    D. need recognition.
    E. proposal analysis.

CAMO Inc. is currently in the product specification stage of the B2B buying process.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Difficult
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-11 Stage 2: Product Specification

39. Observing the after-effects of Hurricane Katrina, many states re-evaluated the requirements for construction materials used in coastal area building projects. Which of the following should vendors pay attention to regarding construction material requirements?
    A.Derived demand
    B. Reciprocal buying
    C. Autocratic buying
    D. Product specifications
    E. Straight rebuys

The vendors of construction materials will have to familiarize themselves with the changes in construction material requirements and use product specifications when they develop new products.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-11 Stage 2: Product Specification

 

40. The stage of the business-to-business buying process in which companies invite alternative suppliers to bid on supplying their required components is referred to as:
    A.product specification.
    B. proposal analysis.
    C. supplier selection.
    D. order specification.
    E. the request-for-proposals process.

The request for proposals (RFP) is a common process through which buying organizations invite alternative suppliers to bid on supplying their required components. The purchasing company may simply post its RFP needs on its website, work through various B2B web portals, or contact potential suppliers directly.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-12 Stage 3: RFP Process

41. After need recognition and product specification, many firms using the business-to-business buying process:
    A.identify product specification assessed through cultural determinism.
    B. issue a request for proposals from invited suppliers.
    C. proceed to proposal analysis.
    D. enter vendor negotiation and selection.
    E. revise need recognition through either internal or external sources.

The third step in a business-to-business (B2B) buying process is the request for proposal (RFP) process. The RFP is a common process through which buying organizations invite alternative suppliers to bid on supplying their required components. The purchasing company may simply post its RFP needs on its website, work through various B2B web portals, or contact potential suppliers directly.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-12 Stage 3: RFP Process

 

42. A mining corporation is negotiating the terms of sale with one of the vendors that has responded to its request for proposal (RFP). In which of the following stages of the business-to-business (B2B) buying process is this negotiation activity found?
    A.Purchase
    B. Need recognition
    C. RFP process
    D. Proposal analysis and supplier selection
    E. Vendor performance assessment

The buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-13 Stage 4: Proposal Analysis and Supplier Selection

43. After posting a request for proposal (RFP) for telecommunication equipment, the Department of National Defence received six proposals from qualified vendors. With reference to the B2B buying process, in the next step, the Department of National Defence will most likely:
    A.recognize proposal obstacles that the firm must comply with.
    B. revise need recognition through external sources.
    C. invite alternative suppliers to bid on supplying what is requested.
    D. proceed to vendor performance assessment.
    E. evaluate the proposals and likely narrow the choice to a few suppliers.

According to the B2B buying process, the department of National Defence will most likely evaluate the proposals and likely narrow the choice to a few suppliers. In the fourth stage of the B2B buying process, a buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-13 Stage 4: Proposal Analysis and Supplier Selection

 

44. What is the stage after proposal analysis and supplier selection?
    A.Product specification
    B. RFP process
    C. Order specification
    D. Vendor performance assessment
    E. Need recognition

After proposal analysis and supplier selection, the firm places its order with its preferred supplier. The order includes a detailed description of goods, prices, delivery dates etc.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-14 Stage 5: Order Specification (Purchase)

45. A group of people typically responsible for the purchasing decisions in large organizations is called a(n):
    A.sales team.
    B. expert committee.
    C. buying centre.
    D. group of business experts.
    E. core committee.

In most large organizations, several people typically are responsible for the buying decisions. These buying centre participants can range from employees who have a formal role in purchasing decisions (e.g., the purchasing or procurement department), to members of the design team that is specifying the particular equipment or raw material needed, to employees who will be using a new machine that is being ordered.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

46. An automobile firm has received its order placed with a supplier firm. The company associates are assessing the quality of the product and the other issues associated with the deal. In the context of the business-to-business (B2B) buying process, the automobile company is in the stage of:
    A.need recognition.
    B. order specification.
    C. vendor performance analysis.
    D. product specification.
    E. RFP process.

The automobile company is in the stage of vendor performance analysis of its B2B buying process. In this stage firms analyze their vendors’ performance so they can make decisions about their future purchases. In a B2B setting, this analysis is typically more formal and objective.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-15 Stage 6: Vendor Performance Assessment Using Metrics

47. The buying centre participant who first suggests buying the particular product or service is called a(n):
    A.influencer.
    B. decider.
    C. initiator.
    D. gatekeeper.
    E. buyer.

The buying centre participant who first suggests buying the particular product or service is the initiator.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

48. The University of Ontario had obtained grants from the government to improve the facilities for students. The faculty members at the university recommended the purchase of books of some authors to be stored in the library. The faculty members are playing the role of:
    A.decider.
    B. influencer.
    C. gatekeeper.
    D. initiator.
    E. user.

The faculty members are playing the role of an initiator. The buying centre participant who first suggests buying the particular product or service is the initiator.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

49. A car sales showroom specifies a particular brand of mag wheels to be used for the car it sells. The company considers the request made by the showroom and decides to use the wheels in its cars. The role played by the showroom is similar to that of a(n):
    A.decider.
    B. gatekeeper.
    C. moderator.
    D. buyer.
    E. initiator.

The role played by the showroom is similar to that of an initiator. The buying centre participant who first suggests buying the particular product or service is the initiator.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

50. An influencer is a buying centre participant who:
    A.handles the paperwork of the actual purchase.
    B. ultimately determines the entire buying process.
    C. controls information or access, or both, to decision makers.
    D. consumes or uses the product or service.
    E. persuades other members in making the final decision with his or her views.

An influencer is the person whose views influence other members of the buying centre in making the final decision.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

51. A construction firm decides to buy heavy-duty equipment to install a new pipeline in the city. The engineers of the firm specify the equipment requirements and recommend a particular supplier whose product meets these requirements. In this buying centre context, the role played by the engineers is that of a(n):
    A.influencer.
    B. decider.
    C. buyer.
    D. gatekeeper.
    E. moderator.

In this case, the role played by an engineer is that of an influencer. An influencer is the person whose views influence other members of the buying centre in making the final decision.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

52. A corporate office decides to replace the windows in its building after an employee explains to the authorities that high-end custom windows block excess sunlight and heat. In this buying centre context, the role played by the employee is that of a(n):
    A.moderator.
    B. decider.
    C. buyer.
    D. gatekeeper.
    E. influencer.

In this case, the role played by the employee is that of an influencer. An influencer is the person whose views influence other members of the buying centre in making the final decision.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

53. One of the roles of the decider in a buying centre is to:
    A.consume the product or service purchased by the gatekeeper.
    B. determine how to buy a product.
    C. suggest buying a particular product.
    D. control information or access to influencers.
    E. handle the paperwork of the purchase.

The decider is the person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

54. Arthur, an executive who works for a pizza chain, determines that the cheese used in the company’s pizzas should be bought from a particular vendor, White Cubes Inc. He believes that White Cubes produces cheese that has a great taste and texture and that it suits the recipes that consumers enjoy at his outlets. The role played by Arthur is that of a(n):
    A.influencer.
    B. buyer.
    C. mediator.
    D. decider.
    E. user.

In this case, the role played by Arthur is that of a decider. The decider is the person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

55. A car company invites bids from suppliers for leather to make seat covers. The company receives several proposals, out of which three of the bids comply with its requirements. Kim, who heads the selection panel, finalizes a particular supplier after the negotiations. Kim is a(n):
    A.initiator.
    B. decider.
    C. buyer.
    D. influencer.
    E. mediator.

In this case, Kim is a decider. The decider is the person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

56. Which of the following phrases defines the role of a buyer in a buying centre?
    A.A person who utilizes the product or service purchased by the buying centre
    B. A person who controls information or access to decision makers and influencers
    C. A person who handles the paperwork of the actual purchase
    D. A person who suggests buying a particular product
    E. A person who ultimately determines what product to buy

The buyer is the person who handles the paperwork of the actual purchase.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

57. Mary is admitted to a hospital, and the nurse administers a dextrose solution bought from a particular pharmaceutical supplier to improve Mary’s blood glucose level. Mary is the:
    A.buyer.
    B. decider.
    C. user.
    D. initiator.
    E. influencer.

In this case, Mary is the user—the person who consumes or uses the product or service. The nurse is the buyer—the person who handles the paperwork of the actual purchase.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

58. A visitor to an ice cream parlour is interested in the choco-sundae that the parlour specializes in, which contains nuts and honey procured from the best suppliers in town. However, the visitor does not like nuts in ice cream and decides to try another ice cream. With reference to the roles in a buying centre, the visitor can be considered the:
    A.gatekeeper.
    B. buyer.
    C. user.
    D. initiator.
    E. influencer.

The user is the person(s) who consumes or uses the product or service.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

59. Michael works in an insurance firm. He handles all the formalities and documentation of the insurance policies purchased by the clients. Michael’s role is similar to that of a(n):
    A.buyer.
    B. user.
    C. decider.
    D. influencer.
    E. agent.

In this case Michael’s role is similar to that of a buyer. A buyer is the person who handles the paperwork of the actual purchase.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

60. A technical firm that assembles computers decides to buy LCD monitors from a supplier that specializes in LCD monitors and batteries. The materials manager at the firm suggests to the top management to place an order for both monitors and batteries at the same time so that he can save on transportation costs and also get a discount for bulk purchase. The role played by the manager is that of a(n):
    A.influencer.
    B. user.
    C. decider.
    D. buyer.
    E. gatekeeper.

In this case the manger’s role is similar to that of a buyer. A buyer is the person who handles the paperwork of the actual purchase.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

61. In a buying centre, the role of controlling information or access to decision makers is called the:
    A.decider.
    B. initiator.
    C. influencer.
    D. gatekeeper.
    E. buyer.

A gatekeeper is a person who controls information or access, or both, to decision makers and influencers.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

62. Frank is an administrative assistant at a university. He has access to all the records and information pertaining to students, such as race, social class, family connections, and athletic ability. He restricts administrators from accessing this information, so that the admission process is not affected by these factors and is fair to students. In a buying centre context, Frank’s role is similar to the role of a(n):
    A.influencer.
    B. decider.
    C. initiator.
    D. user.
    E. gatekeeper.

In this case, Frank’s role is similar to that of a gatekeeper. A gatekeeper is a person who controls information or access, or both, to decision makers and influencers.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

63. Reassure Inc. is an insurance firm that focuses on health insurance. Customers must submit all personal details related to their health when taking out an insurance policy. The firm marks all these details as confidential and only a few people within the firm have access to them. In a buying centre context, this role played by the insurance firm in restricting access to client information is similar to the role of a(n):
    A.decider.
    B. gatekeeper.
    C. influencer.
    D. initiator.
    E. user.

In this case, the role played by the insurance firm is similar to that of a gatekeeper. A gatekeeper is a person who controls information or access, or both, to decision makers and influencers.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

64. A buying centre in which one person makes the decision alone though there may be multiple participants is known as a(n):
    A.democratic buying centre.
    B. consensus buying centre.
    C. autocratic buying centre.
    D. modified buying centre.
    E. consultative buying centre.

In an autocratic buying centre, though there may be multiple participants, one person makes the decision alone.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

65. Which of the following best defines a buying centre in which the majority rules while making decisions?
    A.Autocratic
    B. Consensus
    C. Modified
    D. Consultative
    E. Democratic

In an autocratic buying centre, though there may be multiple participants, one person makes the decision alone, whereas the majority rules in a democratic buying centre.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

 

66. In a consultative buying centre, there are multiple participants:
    A.but one person makes the decision alone without taking inputs from others.
    B. and all the participants must reach a collective agreement in making the final decision.
    C. but the majority rules in making the final decision.
    D. but one person makes the decision after receiving valuable input from others.
    E. and one person influences the views of other participants in making the final decision.

Consultative buying centres use one person to make a decision, but he or she solicits input from others before doing so.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

67. In which of the following buying centre cultures must all members of the team reach a collective agreement that they can support a particular purchase?
    A.Consultative buying centre
    B. Consensus buying centre
    C. Autocratic buying centre
    D. Modified buying centre
    E. Democratic buying centre

In a consensus buying centre, all members of the team must reach a collective agreement that they can support a particular purchase.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

 

68. All the members of the expert committee at an automobile firm reached a collective agreement and supported the proposal submitted by a vendor. This is an example of a(n):
    A.autocratic buying centre.
    B. consensus buying centre.
    C. consultative buying centre.
    D. democratic buying centre.
    E. modified buying centre.

In a consensus buying centre, all members of the team must reach a collective agreement that they can support a particular purchase.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

69. Which of the following social networking sites is mainly used for professional networking in the business-to-business (B2B) marketplace?
    A.Facebook
    B. Orkut
    C. LinkedIn
    D. Flickr
    E. Myspace

The LinkedIn social network is mainly used for professional networking in the B2B marketplace.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

70. The goal of white papers used by marketers in a business-to-business (B2B) marketplace is to:
    A.promote a product or solution from a specific company in the market.
    B. help companies manage their followers, track analytics, and update their posts.
    C. encourage companies to set up goals and put up their own money to increase their accountability.
    D. provide valuable information that will help the company address its problems with new solutions.
    E. control information or access to decision makers and influencers.

The goal of white papers is to provide valuable information that a businessperson can easily understand and that will help the company address its problems with new solutions.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

71. Which of the following buying situations requires the buying centre to proceed through all the steps of a buying process and involve many people in the buying decision?
    A.A modified rebuy
    B. A straight rebuy
    C. A specific rebuy
    D. A new buy
    E. A discount buy

In a new buy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

72. A modified rebuy refers to a buying situation in which:
    A.a product is being purchased for the first time at a desired price level.
    B. a similar product has been purchased in the past but some specifications have been changed.
    C. the buying decision is likely to be quite involved and lengthy.
    D. the buying centre does not have any previous experience with the product.
    E. the buying centre buys additional units of a product that had previously been purchased.

In a modified rebuy, the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, and options.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

73. The buying situation that occurs most commonly in business-to-business (B2B) markets is a:
    A.new buy.
    B. discount buy.
    C. specific buy.
    D. straight rebuy.
    E. modified rebuy.

A straight rebuy occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased. A tremendous amount of B2B purchases are likely to fall in the straight rebuy category.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

74. The buyer is often the only member of the buying centre involved in the process in a:
    A.modified rebuy.
    B. supplier buy.
    C. straight rebuy.
    D. new buy.
    E. discount buy.

A straight rebuy occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased. A tremendous amount of B2B purchases are likely to fall in the straight rebuy category.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

75. Which of the following is true about a straight buy?
    A.The buyer orders a previously purchased product with some modifications.
    B. The buyer is often the only member of the buying centre involved in the process.
    C. The buying centre is likely to proceed through all six steps of the buying process.
    D. The buying organization does not have any experience with the ordered product.
    E. The buying process involves many people in the buying decision.

A straight rebuy occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased. In straight rebuys, however, the buyer is often the only member of the buying centre involved in the process.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

76. Which of the following statements is true about white papers in a business-to-business (B2B) environment?
    A.About fewer than 5 percent of B2B buyers regularly read white papers before making a purchase.
    B. White papers are usually directed specifically at household consumers.
    C. The goal of white papers is to guarantee profits from sale of goods and services.
    D. A good white paper usually provides information about the industry in a promotional sense.
    E. A significant majority of B2B marketers use white papers for their marketing efforts.

The majority of B2B marketers use white papers for their marketing efforts, and 71 percent of B2B buyers regularly read them prior to making a purchase.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

77. A cloth manufacturing company requires raw materials such as cotton and jute for its range of products. To gain more knowledge about its needs, the company is guided by a set of documents that provides valuable information about the current trends in the industry. The document also gives various inputs on arriving at the solution for the problem at hand. This type of document is most likely to be in the nature of a:
    A.mission statement.
    B. débenture.
    C. reverse auction.
    D. bond.
    E. white paper.

This document is most likely to be in the nature of a white paper. A good white paper provides information about the industry and its challenges in an educational context, rather than a promotional sense, to avoid seeming like simply propaganda. That is, the goal of white papers is to provide valuable information that a businessperson can easily understand, and that will help the company address its problems with new solutions.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

78. A shoe manufacturing company requires high-quality leather to make shoes that can be used for trekking. It conducts extensive research on the various alternatives available in the market and evaluates thoroughly the pros and cons of it. It spends vast amount of time at every stage of its decision-making process, and draws in heavy participation from each of its members in the buying process. The shoe manufacturing firm is most likely to be involved in a(n):
    A.modified rebuy.
    B. repeat buy.
    C. new buy.
    D. straight rebuy.
    E. impulsive buy.

In this case, the shoe manufacturing firm is most likely to be involved in a new buy. The most complex and difficult is the new buy because it requires the buying organization to make changes in its current practices and purchases. As a result, several members of the buying centre will likely become involved, and the level of their involvement will be more intense than in the case of modified and straight rebuys. In new buying situations, buying centre members also typically spend more time at each stage of the B2B buying process, similar to the extended decision making process that consumers use in the B2C process.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

79. Which of the following is the most complex and difficult of buying situations?
    A.A modified rebuy
    B. A new buy
    C. A straight rebuy
    D. An impulsive buy
    E. A repeat buy

The most complex and difficult is the new buy because it requires the buying organization to make changes in its current practices and purchases.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

The expert committee at Kid’s World, a toy company, is evaluating the proposals it has received from suppliers in response to its RFP. Wright, a member of the committee, is in favour of a particular vendor whose proposal meets the requirements of the company. He points out the advantages of purchasing from this vendor. All the other members of the committee are convinced by Wright’s view and agree to purchase the materials from that particular vendor.

 

80. At which stage of business-to-business buying process is the evaluation and decision-making activity carried out by the committee at Kid’s World?
    A.Order specification
    B. Vendor performance assessment
    C. Proposal analysis and supplier selection
    D. Product specification
    E. RFP process

This evaluation and decision-making activity is at the proposal analysis and supplier selection stage of the B2B process. Usually in this stage, the buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-13 Stage 4: Proposal Analysis and Supplier Selection

 

81. In the context of a buying centre, the role played by Wright in the buying process is similar to that of a(n):
    A.decider.
    B. influencer.
    C. user.
    D. gatekeeper.
    E. buyer.

In this case, the role played by Wright in the buying process is similar to that of an influencer. An influencer is a person whose views influence other members of the buying centre in making the final decision.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

82. The decision-making process by the expert committee is indicative of a(n):
    A.autocratic buying centre.
    B. democratic buying centre.
    C. consultative buying centre.
    D. consensus buying centre.
    E. modified buying centre.

The decision-making process by the expert committee is indicative of a consensus buying centre. In a consensus buying centre, all members of the team must reach a collective agreement that they can support a particular purchase.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

Claystone Homes is a construction company that buys floor tiles from a certain vendor in California. The design team at Claystone is working on a plan for building new apartments. After seeking advice from the other members of the team, Arthur, the head of the design team, is of the opinion that they should continue using the same floor tiles but in a bigger size and in white. The procurement team at Claystone then places an order for big white tiles of the same quality with the vendor.

 

83. The role played by Arthur in the decision-making process is that of a(n):
    A.influencer.
    B. initiator.
    C. buyer.
    D. decider.
    E. user.

In this case, the role played by Arthur in the decision-making process is that of a decider. A decider is a person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

84. The decision taken by the design team is similar to the decision-making process of a(n):
    A.autocratic buying centre.
    B. democratic buying centre.
    C. autonomous buying centre.
    D. consensus buying centre.
    E. consultative buying centre.

The decision taken by the design team is similar to the decision-making process of a consultative buying centre. Consultative buying centres use one person to make a decision, but he or she solicits input from others before doing so.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

85. The decision made by the design team and the order placed by the procurement team indicate that the type of buy made by Claystone is a:
    A.new buy.
    B. supplier buy.
    C. modified rebuy.
    D. discount buy.
    E. straight rebuy.

The decision made by the design team and the order placed by the procurement team indicate that the type of buy made by Claystone is a modified rebuy. In a modified rebuy, the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, and options.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-18 Building B2B Relationships

 

A chart representing the components of organizational buying culture

 

86. In an autocratic buying centre, there are multiple participants:
    A.but the decision of the majority will be the final decision.
    B. but one person makes the final decision without receiving input from others.
    C. and one person influences the views of the other participants in making the final decision.
    D. and all the participants must reach a collective agreement to make a final decision.
    E. but one person makes the final decision after receiving input from others.

In an autocratic buying centre, though there may be multiple participants, one person makes the decision alone.

 

Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

87. Which of the following examples is similar to the decision-making process in a consultative buying centre?
    A.James, the head of the core committee of a manufacturing firm, decides on the final value of the bid in a proposal without consulting the committee members.
    B. Charles, a member of the expert committee consisting of 12 members, decides on a particular advertisement to be used in a marketing campaign, as the ad has been approved by 4 members of the committee.
    C. Mark, who heads a team of qualified professionals, decides on a particular design for a product, after receiving input from the other members of the team.
    D. David, the chief editor of a magazine, has the complete authority to make the final decision about which articles will be published in the magazine without informing the writers.
    E. Kenneth, the head of an expert committee in a construction company, decides to buy raw materials from a particular supplier after all the experts agree that the firm will benefit from a deal with this particular supplier.

In this case, the scenario where Mark decides on a design after receiving inputs from other members of his team is an example of a consultative buying centre. Consultative buying centres use one person to make a decision, but he or she solicits input from others before doing so.

 

Blooms: Analyze
Difficulty: Difficult
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

88. Which of the following firms is an example of a consensus buying centre?
    A.A manufacturing firm in which the head of the finance team decides on the value of the bid after a detailed discussion with top management
    B. A construction firm that will finalize a particular plan only if it is approved by most of the qualified engineers who are part of the designing team
    C. A mining firm in which the head of the buying centre decides to buy equipment from a particular supplier, as most of the participants are satisfied with the proposal of this supplier
    D. A car company that decides on a particular tire supplier after receiving the approval of all the experts who were part of the decision-making committee
    E. A consulting firm in which the head of the recruitment team makes the final decision on recruiting a candidate, irrespective of the decision made by other interviewers

In this case, the scenario where a car company makes its decision after receiving the approval of all the experts of the decision-making committee is an example of a consensus buying centre. In a consensus buying centre, all members of the team must reach a collective agreement that they can support a particular purchase.

 

Blooms: Analyze
Difficulty: Difficult
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

89. Which of the following examples is similar to the decision-making process in a democratic buying centre?
    A.Richard, the head of an expert committee in a construction company, decides to buy raw materials from a particular supplier after all the experts agree that the firm will benefit from the deal with this particular supplier.
    B. Annie, who heads a team of qualified professionals, decides on a particular design for a product after receiving input from other members of the team.
    C. Darren, the chief editor of a magazine, has the complete authority to make the final decision about which articles will be published in the magazine without informing the writers.
    D. John, the head of the core committee of a manufacturing firm, decides on the final value of the bid in a proposal without consulting the committee members.
    E. Julia, a member of an expert committee consisting of six members, decides on a particular advertisement to be used in the marketing campaign, as the ad has been approved by four members of the committee.

In this case, the scenario where Julia decides on a particular advertisement when it has been approved by four members of the committee is an example of a democratic buying centre. The majority rules in a democratic buying centre.

 

Blooms: Analyze
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

A flow chart representing business-to-business buying situations

 

90. A business-to-business purchase made by Smithsons, where Smithsons has purchased a similar product in the past but has now decided on a price change, is referred to as a(n):
    A.straight rebuy.
    B. autocratic buy.
    C. new buy.
    D. consensus rebuy.
    E. modified rebuy.

In a modified rebuy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item.

 

Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

91. A paint company conducted a market survey to find products that could improve the shelf-life of its products. It chose a solution from a particular vendor after it did a detailed evaluation of the vendor’s product. This is an example of a:
    A.straight rebuy.
    B. supplier buy.
    C. modified rebuy.
    D. new buy.
    E. discount buy.

This is an example of a new buy. In a new buy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item.

 

Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

92. Which of the following buying situations requires the buying organization to change its current practices and involves a lot of people in the decision making?
    A.A new buy
    B. A supplier buy
    C. A modified rebuy
    D. A straight rebuy
    E. A discount buy

In a new buy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item. In the B2B context, the buying centre is likely to proceed through all six steps in the buying process and involve many people in the buying decision.

 

Blooms: Understand
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

93. An automobile firm buys exhaust pipes from a certain supplier in the city. The firm finds that the pipes are reliable and in accordance with its specifications. The firm places a repeat order for the exhaust pipes with the same supplier. This is an example of a:
    A.modified rebuy.
    B. specific buy.
    C. straight rebuy.
    D. new buy.
    E. discount rebuy.

This is an example of a straight rebuy. A straight rebuy occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased. A tremendous amount of business-to-business purchases are likely to fall in the straight rebuy category.

 

Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

True / False Questions

 

94. Business-to-business marketing refers to buying and selling goods or services to be used by final consumers.
    FALSE

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

95. The organizations involved in business-to-business transactions include manufacturers, producers, resellers, institutions, and governments.
    TRUE

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

 

96. Wholesalers are marketing intermediaries that resell manufactured products without significantly altering their form.
    TRUE

Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. 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

97. In business-to-business markets, buyers are heavily influenced by price, personal tastes, brand reputation, or personal recommendations of friends and family.
    FALSE

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: 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

 

98. The buying effort in business-to-business markets is structured, and involves technically trained and qualified professionals.
    TRUE

Generally, for routine purchases or small dollar-value purchases, only one or a few individuals within a department or the company may be responsible for the buying decision. However, for purchases of highly technical or complex products involving thousands or millions of dollars, the buying effort is much more structured, formalized, and professional.

 

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

99. The salesperson is an integral component of all types of B2C transactions, particularly the fast-moving consumer goods.
    FALSE

In most B2B sales, the salesperson is an integral component of the transaction. On the other hand, while salespeople are an important component of the communications mix for B2C transactions such as sales of real estate, insurance, jewellery, consumer electronics, and high-end apparel, most fast-moving consumer goods (FMCG) found in grocery and discount stores are not sold with the aid of salespeople.

 

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

 

100. The third digit of an North American Industry Classification System code represents the industry group.
     FALSE

The first two digits of North American Industry Classification System codes represent the sector in the economy; the third digit represents the subsector; the fourth digit represents the industry group; the fifth digit represents a specific subgroup within the industry; and the full six digits refer to the country-level or national industry.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-03 Explain the ways B2B firms classify and segment their markets.
Topic: 05-08 B2B Classification System and Segmentation

101. Account size is one of the criteria for segmentation of markets in business-to-business marketing.
     TRUE

In addition to NAICS, marketers may segment B2B markets in several other ways, including geographic location (e.g., by country, province, region, city), firm size (e.g., by the number of employees in the firm or by sales volume), account size (by small, medium, and large accounts or purchase size), and types of products purchased.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-03 Explain the ways B2B firms classify and segment their markets.
Topic: 05-08 B2B Classification System and Segmentation

 

102. The information search in the business-to-business process is more informal and less structured when compared to the business-to-consumer process.
     FALSE

The B2B buying process parallels the B2C process, though it differs in many ways. Both start with need recognition, but the information search and alternative evaluation stages are more formal and structured in the B2B process.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-09 The B2B Buying Process

103. All business-to-business purchases go through each stage of the buying process with the same intensity.
     FALSE

The B2B buying process parallels the B2C process, though it differs in many ways. Both start with need recognition, but the information search and alternative evaluation stages are more formal and structured in the B2B process.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-09 The B2B Buying Process

104. In the first stage of the business-to-business (B2B) buying process, organizations come up with potential specifications that suppliers might use to develop their proposals.
     FALSE

In the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-09 The B2B Buying Process

 

105. A gatekeeper is a buying centre participant who controls information or access to decision makers and influencers.
     TRUE

A gatekeeper is a person who controls information or access, or both, to decision makers and influencers.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

106. In a consensus buying centre, one person makes the decision, but he or she solicits input from others before doing so.
     FALSE

In a consensus buying centre, all members of the team must reach a collective agreement that they can support a particular purchase.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

107. In a modified rebuy, the buying organization buys additional units of the products that had previously been purchased.
     FALSE

In a modified rebuy, the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, and options.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

 

108. In the context of building business-to-business (B2B) relationships, a good white paper is one that provides information about the industry solely for promotional purposes.
     FALSE

A good white paper provides information about the industry and its challenges in an educational context, rather than a promotional sense, to avoid seeming like simply propaganda.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

109. The postpurchase stage in the consumer purchase decision is similar to vendor performance assessment in the business buying process in that both customers evaluate the supplier for the future purchases.
     TRUE

Both business customers and consumers evaluate the products they purchase. Satisfied customers (both business and consumers) will be more likely to re-purchase the product.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

Short Answer Questions

 

110. What is business-to-business (B2B) marketing?

Business-to-business 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.

 

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

111. Compare B2B and B2C markets on market, product, buying process, and marketing mix characteristics. Provide examples to support your answer.

Student examples will vary.

Market characteristics: in B2C markets, end consumers buy products to satisfy their individual or household needs. In B2B markets, demand for products is derived from B2C sales.

Product characteristics: in B2B markets, the products ordered are primarily raw materials and semi-finished goods. In some B2B markets, the products are very technical and sophisticated in nature. Customization is also very common in B2B markets. Whereas in B2C markets, the products sold are mostly finished.

Buying process characteristics: purchasing process is more complex in B2B markets and more people are involved compared to B2C markets. More negotiation happens in B2B markets compared to B2C and reciprocal buying arrangement is not uncommon in B2B markets.

Marketing mix characteristics: in B2C markets, the majority of consumer goods are sold at retailers without the aid of salespeople. In most B2B sales, the salesperson is an integral component of the transaction.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Difficult
Learning Objective: 05-01 Describe the nature and composition of B2B markets.
Topic: 05-07 Differences Between B2B and B2C Markets

 

112. What are the key challenges faced by marketers in business-to-business (B2B) markets?

The first challenge is to identify the right persons or decision makers within the organizations who can authorize or influence purchases. Second, marketers must understand the buying process of each of their company’s potential clients. The third challenge is to identify the factors that influence the buying process of potential clients.

 

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

113. What is derived demand? Provide one example.

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. For instance, the demand for raw denim used to make 7 For All Mankind jeans is derived from the sale of the jeans to consumers.

 

Accessibility: Keyboard Navigation
Blooms: Understand
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

114. What are the typical characteristics of products available in business-to-business (B2B) markets?

In B2B markets, the products ordered are primarily raw materials and semifinished goods. In certain B2B markets, the products are very technical and sophisticated in nature and must conform to technical standards specified by the buyer. Thus, the raw materials, components, and semifinished goods undergo rigorous testing before shipping. Heavy emphasis is placed on delivery time, technical assistance, after-sale service, and financing assistance.

 

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

 

115. How does business-to-business (B2B) buying behaviour differ from B2C buying behaviour in marketing? Support your answer with examples.

In B2B markets:

· direct selling is the primary form of selling and physical distribution is often essential.
· advertising is technical in nature, and promotions emphasize personal selling.
· price is often negotiated, inelastic, frequently affected by trade and quantity discounts, and usually includes a service or maintenance component.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-02 Explain the key differences between B2B buying and B2C buying.
Topic: 05-09 The B2B Buying Process

116. Your educational institution is planning to purchase 2000 new computers to equip the labs. Discuss the buying process it would go through to make such a purchase.

Student answers will vary. The 6 steps of B2B buying process should be discussed:

1) Need recognition: labs do not have computers (or computers are too old).

2) Product specification: after the need recognition, the institution would write a list of specifications on computer capabilities (screen size, processor speed, software required, warranty, etc.).

3) RFP: The institution invites computer companies to bid on supplying the required computers.

4) Each proposal would be evaluated based on decision criteria. Some institutions only consider a few vendors (e.g. Apple, Dell, and Lenovo) due to existing relationships.

5) Order specification (purchase): the institution selects the supplier and makes the order with a detailed description of required computers.

6) Vendor performance assessment using metrics: the institution analyzes the vendor’s performance for future purchases.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Difficult
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-09 The B2B Buying Process

 

117. Graelona Stores receives a number of responses to its request for proposal (RFP). On what basis will Graelona Stores choose a particular supplier from all the proposals it receives in response to its RFP?

Graelona Stores, in conjunction with its critical decision makers, will evaluate all the proposals it receives in response to its RFP. It is likely to narrow the process to a few suppliers, often those with which it has existing relationships, and discuss key terms of the sale, such as price, quality, delivery, and financing. If Graelona stores has a policy that requires it to negotiate with several suppliers, particularly if the product or service represents a critical component or aspect of its business, the company will do that.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-13 Stage 4: Proposal Analysis and Supplier Selection

118. What is a buying centre?

The group of people typically responsible for the buying decisions in large organizations.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

119. What is organizational culture? How does it influence purchasing decisions in business-to-business (B2B) markets?

A firm’s organizational culture reflects the set of values, traditions, and customs that guides its managers’ and employees’ behaviour. Organizational culture can have a profound influence on purchasing decisions. Knowing which buying centre culture is prevalent in a given organization helps the seller decide how to approach that particular client, how and to whom to deliver pertinent information, and to whom to make the sales presentations.

 

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-17 Organizational Culture

120. What is the significance of white papers in B2B markets?

The majority of business-to-business (B2B) marketers use white papers for their marketing efforts, and 71 percent of B2B buyers regularly read them prior to making a purchase. When executives confront an unfulfilled business need, they normally turn to white papers. Their B2B partner may have a technologically advanced solution, but buyers have to understand the solution before they can consider a purchase. A good white paper provides information about the industry and its challenges in an educational context, rather than a promotional sense, to avoid seeming like simply propaganda. That is, the goal of white papers is to provide valuable information that a businessperson can easily understand and that will help the company address its problems with new solutions.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-18 Building B2B Relationships

 

121. What are differences between a new buy, a straight rebuy, and a modified rebuy?

The varied types of buying situations call for very different marketing and selling strategies. The most complex and difficult is the new buy because it requires the buying organization to make changes in its current practices and purchases. As a result, several members of the buying centre will likely become involved, and the level of their involvement will be more intense than in the case of modified and straight rebuys. In new buying situations, buying centre members also typically spend more time at each stage of the business-to-business (B2B) buying process, similar to the extended decision-making process that consumers use in the B2C process. In comparison, in modified rebuys, the buyers spend less time at each stage of the B2B buying process, similar to limited decision making in the B2C process.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations

122. How do government purchases differ from the purchases made by institutional organizations in business-to-business (B2B) markets?

Governments make much larger purchases, and their buying processes must not only satisfy strict policy guidelines and directives set by the government, but also meet international trade rules set by the World Trade Organization (WTO) or the North American Free Trade Agreement (NAFTA). Additionally, government purchases are subject to public scrutiny and can be subjected to legal challenges or be cancelled or modified. Governments consider a wide range of factors in their purchases and may not always purchase from the vendor with the lowest price.
Institutional buyers, on the other hand, tend to have relatively small budgets and therefore seek the best value when buying products and services for their organizations. That is, if two suppliers are offering roughly similar products, they may opt for the supplier with the lower price. Institutional organizations are not under 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: 05-05 Government

 

123. Differentiate between business-to-business (B2B) and business-to-consumer (B2C) buying in terms of the nature of the buying process.

In B2B markets, generally, for routine purchases or small-dollar-value purchases, only one or a few individuals within a department or the company may be responsible for the buying decision. However, for purchases of highly technical or complex products involving thousands or millions of dollars, the buying effort is much more structured, formalized, and professional. More people are usually involved in complex buying decisions. They are usually technically trained and qualified professionals, and they represent different interests within the organization. The group of people involved in the buying decision is often referred to as the buying centre. Most companies have formal policies and procedures to guide buying decisions that must be closely followed by the people involved in the buying decisions. Examples of such procedures include rules governing competitive bidding, negotiated pricing, complex financial arrangements, buying criteria, and objectives, as well as procedures for evaluating competitive bids.
Another major difference between B2B and B2C buying lies in the nature of the relationship between the firm and its suppliers. Generally, the buying decision is based on negotiations, which for complex purchases could be quite extended. The negotiated contract normally covers a range of concerns, including price, delivery, warranty, technical specifications, and claim policies. In B2B markets, buyers and sellers strive to develop close relationships with each other and so will often provide help or advice to ensure a win-win situation for both parties.

 

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

 

124. Annie is asked to do a performance analysis for a vendor who supplies raw materials to her construction company. What are the steps that Annie is likely to adopt while doing the performance analysis?

Annie is likely to use the following steps in performance analysis:

1. She will develop a list of issues that the company believes are important to consider in the evaluation of the vendor.
2. To determine how important each of these issues is, she will assign an importance score to each. The more important the issue, the higher a score it will receive, but the importance scores must add up to 1. For example, Annie might feel that product quality and price are most important, whereas meeting the delivery dates and the ease of ordering are less important.
3. Then Annie will assign numbers that reflect her judgments about how well the vendor performs. Using a 5-point scale, where 1 equals “Poor Performance” and 5 equals “Excellent Performance,” she might decide that the vendor has fairly high performance on all issues except ease of ordering.
4. To get the overall performance of the vendor, Annie will combine the importance of each issue and the vendor’s performance scores by multiplying them together. The sum of all these values will indicate the performance of the vendor on a 5-point scale.

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Difficult
Learning Objective: 05-04 Describe the B2B buying process.
Topic: 05-15 Stage 6: Vendor Performance Assessment Using Metrics

 

125. John is an initiator, Harry is an influencer, Mary is the buyer, Cecilia is the decider, Sara is a user, and Smith is the gatekeeper. Describe their buying roles in a typical buying centre.

Buying roles are categorized into six different types in a typical buying centre:

1. John the initiator: A person who first suggests buying the particular product or service
2. Harry the influencer: A person whose views influence other members of the buying centre in making the final decision
3. Mary the buyer: A person who handles the paperwork of the actual purchase
4. Cecilia the decider: A person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy
5. Sara the user: The person who consumes or uses the product or service purchased by the buying centre
6. Smith the gatekeeper: A person who controls information or access to decision makers and influencers

 

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Moderate
Learning Objective: 05-05 Identify the roles within the buying centre.
Topic: 05-16 The Buying Centre

 

126. Explain the different types of buying situations. Provide one example for each situation.

Most business-to-business (B2B) buying situations can be categorized into three types: new buys, modified rebuys, and straight rebuys.
In a new buy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item. In the B2B context, the buying centre is likely to proceed through all six steps in the buying process and involve many people in the buying decision. Typical new buys might range from capital equipment to components that the firm previously made itself but now has decided to purchase instead.
In a modified rebuy, the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, and options. Current vendors are likely to have an advantage in acquiring the sale in a modified rebuy situation, as long as the reason for the modification is not dissatisfaction with the vendor or its products.
A straight rebuy occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased. A tremendous amount of B2B purchases are likely to fall in the straight rebuy category.

 

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Moderate
Learning Objective: 05-06 Detail different buying situations.
Topic: 05-19 Buying Situations