TRUE/FALSE QUESTIONS Answer whether the following statements are true or false
1 Describe business marketing
2 Describe the role of the Internet in business marketing
2. Because of the Internet, General Electric's consumer sales far exceed those of its business markets since consumers are becoming savvier on the Internet. true false
3 Discuss the role of relationship marketing and strategic alliances in business marketing
3. A strategic alliance allows two companies to share resources and penetrate global markets. true false
4 Identify the four major categories of business-market customers
4. One way that business organizations differ from consumer organizations is in their primary goals; business firms typically do not have profit, market share, or return on investment as primary goals. true false
5 Explain the North American Industry Classification System
5. NAICS is an industry classification system used by most nations of the world. true false
6 Explain the major differences between business and consumer markets
6. If the Sugar Association showed advertisements that encouraged people to bake more desserts, this would be an attempt to influence derived demand. true false 7. Roxanne's company manufactures ball bearings for the aerospace industry. Roxanne noticed that a dramatic increase in the price of ball bearings only slightly reduced demand. This is an example of fluctuating demand. true false 8. Channels of distribution for business products are often direct, unlike consumer product channels of distribution, which usually have several intermediaries. true false 9. In the business purchase process, unlike in consumer purchase processes, advertising plays one of the most important roles. true false
6. If the Sugar Association showed advertisements that encouraged people to bake more desserts, this would be an attempt to influence derived demand. true false
7. Roxanne's company manufactures ball bearings for the aerospace industry. Roxanne noticed that a dramatic increase in the price of ball bearings only slightly reduced demand. This is an example of fluctuating demand. true false
8. Channels of distribution for business products are often direct, unlike consumer product channels of distribution, which usually have several intermediaries. true false
9. In the business purchase process, unlike in consumer purchase processes, advertising plays one of the most important roles. true false
8 Discuss the unique aspects of business buying behaviour
10. Kendall is the secretary for the buyer of an aircraft equipment firm. As secretary, Kendall determines which vendors are seen by the firm's buyer. Kendall is acting as a gatekeeper. true false 11. For the last five years, the Nova Scotia Jams company has bought its birch bark gift baskets from Woodside, Inc. Nova Scotia Jams wants a new kind of handle and decorative ribbons added to the largest type of basket. This is an example of a new buy. true false
10. Kendall is the secretary for the buyer of an aircraft equipment firm. As secretary, Kendall determines which vendors are seen by the firm's buyer. Kendall is acting as a gatekeeper. true false
11. For the last five years, the Nova Scotia Jams company has bought its birch bark gift baskets from Woodside, Inc. Nova Scotia Jams wants a new kind of handle and decorative ribbons added to the largest type of basket. This is an example of a new buy. true false
MULTIPLE-CHOICE QUESTIONS Select the response that best answers the question, and write the corresponding letter in the space provided.
13. Which of the following is NOT likely to happen with the emergence of the Internet? a. increase in competition b. target markets become global c. increase in the number of vendors evaluated d. consumer markets become larger and more powerful than business markets e. efficiency in data exchange
14. Benefits of strategic alliances could include all of the following EXCEPT: a. allowing companies to share research and development ideas and costs b. reducing the threat of competition, and providing capital c. guaranteeing a technologically sophisticated partner in the long-term d. allowing firms to share production expertise or capacity e. increasing quality and service levels
15. Aztec Industries owns and operates a metal ore mining operation, a trucking company, and an insurance firm. For classification purposes, Aztec Industries would be which type of business customer? a. government b. wholesaler c. reseller d. institution e. producer 16. Sysco Foods purchases truckload quantities of consumer products such as frozen foods, cereals, and paper towels from manufacturers. Sysco then breaks down the items into case quantities and distributes them to restaurants and grocery stores. Sysco would be best classified as a(n): a. inventory carrier b. producer c. institution d. reseller e. transportation company 17. A manager has decided that her company should sell to the government market. What is one common procedure for trying to get a government contract? a. The government offers a publication of what it is willing to pay for certain goods, and companies offer to supply them for that price. b. The company submits a sealed bid that states price and delivery terms. c. The company advertises the availability of its product and has the government contact it. d. It is difficult to get a government contract because once a business is a supplier for the government, it will have that contract for the life of the company. e. The company submits a quotation, and if the quoted price is in the midrange of all quotes received, it will probably be selected as the fairest and most average supplier. 18. Phil's Paper Company specializes in serving institutions. Phil would probably have all of the following as customers EXCEPT: a. restaurants b. hospitals c. public grade schools d. universities e. Red Cross emergency shelter kitchens
15. Aztec Industries owns and operates a metal ore mining operation, a trucking company, and an insurance firm. For classification purposes, Aztec Industries would be which type of business customer? a. government b. wholesaler c. reseller d. institution e. producer
16. Sysco Foods purchases truckload quantities of consumer products such as frozen foods, cereals, and paper towels from manufacturers. Sysco then breaks down the items into case quantities and distributes them to restaurants and grocery stores. Sysco would be best classified as a(n): a. inventory carrier b. producer c. institution d. reseller e. transportation company
17. A manager has decided that her company should sell to the government market. What is one common procedure for trying to get a government contract? a. The government offers a publication of what it is willing to pay for certain goods, and companies offer to supply them for that price. b. The company submits a sealed bid that states price and delivery terms. c. The company advertises the availability of its product and has the government contact it. d. It is difficult to get a government contract because once a business is a supplier for the government, it will have that contract for the life of the company. e. The company submits a quotation, and if the quoted price is in the midrange of all quotes received, it will probably be selected as the fairest and most average supplier.
18. Phil's Paper Company specializes in serving institutions. Phil would probably have all of the following as customers EXCEPT: a. restaurants b. hospitals c. public grade schools d. universities e. Red Cross emergency shelter kitchens
19. Which of the following is false regarding the North American Industry Classification System (NAICS)? a. In spite of its name, NAICS is also used to classify firms in other regions, such as Europe or Asia. b. A code can identify whether a firm is based in the Canada, US, or Mexico. c. The more digits in a NAICS code, the more homogenous the group is. d. NAICS facilitates trade among firms in NAFTA countries. e. NAICS can help firms identify the number, size, and geographic dispersion of potential business customers. 20. The North American Industry Classification System is currently used for ______ economic sectors. a. 10 b. 13 c. 20 d. 34 e. 50
19. Which of the following is false regarding the North American Industry Classification System (NAICS)? a. In spite of its name, NAICS is also used to classify firms in other regions, such as Europe or Asia. b. A code can identify whether a firm is based in the Canada, US, or Mexico. c. The more digits in a NAICS code, the more homogenous the group is. d. NAICS facilitates trade among firms in NAFTA countries. e. NAICS can help firms identify the number, size, and geographic dispersion of potential business customers.
20. The North American Industry Classification System is currently used for ______ economic sectors. a. 10 b. 13 c. 20 d. 34 e. 50
21. When the demand for soft drinks grew by 12 percent in one year, the demand for aluminum cans and glass bottles grew also. The aluminum and glass industries are enjoying the effects of: a. joint demand b. inelastic demand c. derived demand d. fluctuating demand e. elastic demand 22. The Edison Electric Company increased its rates to business customers by 10 percent. Though customers complained, the company saw very little change in the volume of electricity used. The demand for electricity can be described as a. inelastic b. derived c. joint d. elastic e. resistant 23. 3M manufactures 3.5-inch computer diskettes. Each disk is made from four components: the magnetic media, the plastic casing, a metal hub, and a metal slide. The supplies purchaser at 3M has noticed that each time the case order for magnetic media increases, so does the case order for plastic casings, metal hubs, and metal slides. This is because the products in this situation have: a. inelastic demand b. derived demand c. elastic demand d. fluctuating demand e. joint demand 24. The Winnipeg Wild Rice Company has slowly changed its customer base. They used to sell small bags of rice to retail walk-in consumers, but now they deliver rice to grocery stores and restaurants. The company should expect: a. more customers b. a greater reliance on advertising to gain new customers c. a smaller order size d. a more formal purchasing process e. less use of reciprocity 25. Gary owns his own typewriter repair firm. He decided that he needed a photocopier for his business, and he checked his customer list first for copier dealers. He found three copier dealers that were regular customers, and he shopped only at those dealers. Gary's actions are: a. a normal business practice called reciprocity b. an example of illegal influence c. an example of nested demand d. unethical because of competitive discouragement e. a business practice called circular buying
21. When the demand for soft drinks grew by 12 percent in one year, the demand for aluminum cans and glass bottles grew also. The aluminum and glass industries are enjoying the effects of: a. joint demand b. inelastic demand c. derived demand d. fluctuating demand e. elastic demand
22. The Edison Electric Company increased its rates to business customers by 10 percent. Though customers complained, the company saw very little change in the volume of electricity used. The demand for electricity can be described as a. inelastic b. derived c. joint d. elastic e. resistant 23. 3M manufactures 3.5-inch computer diskettes. Each disk is made from four components: the magnetic media, the plastic casing, a metal hub, and a metal slide. The supplies purchaser at 3M has noticed that each time the case order for magnetic media increases, so does the case order for plastic casings, metal hubs, and metal slides. This is because the products in this situation have: a. inelastic demand b. derived demand c. elastic demand d. fluctuating demand e. joint demand
24. The Winnipeg Wild Rice Company has slowly changed its customer base. They used to sell small bags of rice to retail walk-in consumers, but now they deliver rice to grocery stores and restaurants. The company should expect: a. more customers b. a greater reliance on advertising to gain new customers c. a smaller order size d. a more formal purchasing process e. less use of reciprocity
25. Gary owns his own typewriter repair firm. He decided that he needed a photocopier for his business, and he checked his customer list first for copier dealers. He found three copier dealers that were regular customers, and he shopped only at those dealers. Gary's actions are: a. a normal business practice called reciprocity b. an example of illegal influence c. an example of nested demand d. unethical because of competitive discouragement e. a business practice called circular buying
7 Describe the seven types of business goods and services
26. Star-Kist purchases tuna fish directly from fishing fleets daily and then processes and cans the tuna. The fish are an example of: a. OEM parts b. supplies c. component parts d. processed materials e. raw materials 27. Flyair uses preassembled engines in its radio-controlled model airplanes. These engines are classified as: a. raw materials b. component parts c. accessory equipment d. processed materials e. supplies 28. Manufacturers of computers diskettes such as 3M or Sony sell their products to software developers, such as Microsoft, to be used to store software programs. Microsoft would be considered a(n): a. replacement part market b. processed materials market c. finished goods market d. accessory equipment market e. OEM market
26. Star-Kist purchases tuna fish directly from fishing fleets daily and then processes and cans the tuna. The fish are an example of: a. OEM parts b. supplies c. component parts d. processed materials e. raw materials
27. Flyair uses preassembled engines in its radio-controlled model airplanes. These engines are classified as: a. raw materials b. component parts c. accessory equipment d. processed materials e. supplies
28. Manufacturers of computers diskettes such as 3M or Sony sell their products to software developers, such as Microsoft, to be used to store software programs. Microsoft would be considered a(n): a. replacement part market b. processed materials market c. finished goods market d. accessory equipment market e. OEM market
29. When Mike visited a potential customer, he found that the manager was too busy to meet with him. The secretary offered to look through Mike's brochures and pass them on to the manager if it was a product that the firm could use. Which role in the buying centre does the secretary have? a. gatekeeper b. influencer c. purchaser d. decider e. user 30. The Western Printing Press Company has been purchasing all of its small machined shafts and gears from a machine shop for $130,000 annually. If Western buy two lathes, a drill press, and a milling machine it could produce these parts itself. The equipment, materials and two machinists would cost the company $450,000 over five years, a savings of $200,000. Should Western pursue this option? a. no, because the best solution would be to spend the money on research and development to find more advanced parts to go into the computers b. yes, because it is cheaper to make rather than to buy c. no, because it is not a large enough savings to justify the change d. yes, but only if this is the best use of the company's resources and the money cannot be used to increase profit even more with some other project e. no, because it is cheaper to buy these parts than make them 31. Hitec Corp is interested in selecting a supplier for unusual parts used in its recently developed highly technical machine tooling equipment. Which of the following buying processes will most likely be employed? a. extensive buying process b. low-involvement buying process c. new-buy process d. modified-rebuy process e. straight-rebuy process 32. The local university buys many desk calculators each year and has an ongoing relationship with a local supplier. The accounting department secretary finds that he needs a calculator with more functions than his current one has, and the university buyer discusses the specifications with the supplier. This is an example of a: a. modified rebuy b. value engineering task c. straight rebuy d. new task e. derived rebuy 33. A new edition of a marketing textbook has just been released.The Business Department of the University of Saskatchewan has always liked the textbook and authorizes the purchase of the new edition without even looking at other textbooks. This is an example of a: a. modified rebuy b. value engineering task c. straight rebuy d. new task e. derived rebuy
29. When Mike visited a potential customer, he found that the manager was too busy to meet with him. The secretary offered to look through Mike's brochures and pass them on to the manager if it was a product that the firm could use. Which role in the buying centre does the secretary have? a. gatekeeper b. influencer c. purchaser d. decider e. user
30. The Western Printing Press Company has been purchasing all of its small machined shafts and gears from a machine shop for $130,000 annually. If Western buy two lathes, a drill press, and a milling machine it could produce these parts itself. The equipment, materials and two machinists would cost the company $450,000 over five years, a savings of $200,000. Should Western pursue this option? a. no, because the best solution would be to spend the money on research and development to find more advanced parts to go into the computers b. yes, because it is cheaper to make rather than to buy c. no, because it is not a large enough savings to justify the change d. yes, but only if this is the best use of the company's resources and the money cannot be used to increase profit even more with some other project e. no, because it is cheaper to buy these parts than make them
31. Hitec Corp is interested in selecting a supplier for unusual parts used in its recently developed highly technical machine tooling equipment. Which of the following buying processes will most likely be employed? a. extensive buying process b. low-involvement buying process c. new-buy process d. modified-rebuy process e. straight-rebuy process
32. The local university buys many desk calculators each year and has an ongoing relationship with a local supplier. The accounting department secretary finds that he needs a calculator with more functions than his current one has, and the university buyer discusses the specifications with the supplier. This is an example of a: a. modified rebuy b. value engineering task c. straight rebuy d. new task e. derived rebuy
33. A new edition of a marketing textbook has just been released.The Business Department of the University of Saskatchewan has always liked the textbook and authorizes the purchase of the new edition without even looking at other textbooks. This is an example of a: a. modified rebuy b. value engineering task c. straight rebuy d. new task e. derived rebuy
