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Chapter 06
Understanding Organizations as Customers
Multiple Choice Questions
1. According to the textbook, JCPenney buys paper for which of the following media?
A. in-store signage
B. special advertising inserts in magazines such as Cosmopolitan
C. newspaper inserts and direct mail pieces
D. annual and 10-K reports
E. point-of-purchase displays
2. Purchasing paper for JCPMedia is one example of
A. organizational buying.
B. online buying.
C. on-time delivery.
D. derived demand.
E. cooperative selling.
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Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3. When JCPMedia buys paper for JCPenney newspaper inserts, it considers suppliers' forest
management and other sustainability practices. JCPMedia buyers consider these as part of the
process to
A. fulfill profit responsibilities.

B. formally evaluate paper supplier capabilities.
C. eliminate the need for online purchasing.
D. shorten the value chain.
E. fulfill the auditing role.
4. "The choice of paper and suppliers is ____________ given the sizable revenue and expense
consequences," notes Tom Cassidy, vice president-marketing production at JCPMedia, Inc.
A. a limited purchase decision

B. a significant marketing decision
C. a challenge for storage and shipping
D. a routine decision
E. a reciprocity practice
5. JCPMedia, Inc. paper buyers are thoroughly trained in
A. shopping center management.

B. break-even analysis.
C. retail management.
D. consumer decision practices.
E. many facets of purchasing.
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6. The marketing of goods and services to companies, governments, or not-for-profit organizations
for use in the creation of goods and services that they can produce and market to others is
referred to as
A. integrated marketing.
B. institutional marketing.
C. business-to-business marketing.
D. reseller marketing.
E. organizational marketing.
7. Business-to-business marketing refers to
A. the marketing of goods to companies, governments, or ultimate consumers for use in the
creation of goods and services.
B. the marketing of products to not-for-profit organizations at a reduced fee or nominal cost for
use in the creation of goods and services that they can produce and market to others.
C. the marketing of products and services to companies, governments, or not-for-profit
organizations for use in the creation of products that they can produce and market to others.
D. the marketing of services in the area of intellectual property such as legal, financial, or creative
consulting.
E. the marketing of an idea to create interest or generate goodwill, not just for an individual brand
but also for an entire industry or product class.
8. ______________ in some way reprocess a product or service they buy before selling it again to the
next buyer.
A. Transactional markets
B. Corporate markets
C. Government marketers
D. Reseller marketers
E. Industrial firms
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9. Manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and
government agencies that buy goods and services for their own use or for resale are referred to
as
A. multinational buyers.
B. resellers.
C. organizational buyers.
D. ultimate consumers.
E. institutional buyers.
10. Organizational buyers are
A. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and

government agencies that buy goods and services exclusively for resale.
B. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and
government agencies that buy products and services for their own use or for resale.
C. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and
government agencies that buy goods and services exclusively for their own use.
D. firms that typically buy physical goods and resell them again without any reprocessing.
E. all buyers in a nation including ultimate consumers.
11. Organizational buyers include manufacturers, wholesalers, retailers, service companies, not-for-
profit organizations, and government agencies that
A. purchase exclusively from one supplier.

B. are exempt from state and local taxes.
C. sell directly to ultimate consumers.
D. sell goods and services for their own use.
E. buy products and services for their own use or for resale.
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12. Which of the following organizational buyers purchases raw materials and parts to reprocess into
the finished goods they sell?
A. retailers
B. wholesalers
C. agents
D. manufacturers
E. ultimate consumers
13. Which of these statements regarding organizational buyers is most accurate?
A. Wholesalers and retailers resell the goods they buy without reprocessing them.
B. Wholesalers and retailers alter the goods they sell to meet the specific needs of their customers
prior to resale.
C. Manufacturers purchase processed goods and resell them to suppliers who in turn resell them
to ultimate consumers.
D. Ultimate consumers can be considered organizational buyers when they purchase in large
quantities.
E. Government agency purchases are more similar to ultimate consumer purchases than they are
to wholesalers and retailers.
14. All of the following are organizational buyers except
A. industrial firms.
B. government units.
C. ultimate consumers.
D. resellers.
E. wholesalers.
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15. Organizational buyers are divided into three markets, which are
A. industrial, wholesaler, and retailer.

B. industrial, retailer, and government.
C. retailer, manufacturer, and government.
D. industrial, government, and ultimate consumer.
E. industrial, reseller, and government.
16. Which of the following represents an organizational buyer?
A. A local baker buys sugar at the grocery store to make cookies with his children at home.
B. A dentist buys a new LG Smart TV 55-inch 3D OLED HDTV for her den.
C. Mr. Langley hires a housecleaning service to clean his apartment.
D. The owner of a sushi restaurant hires a window-washing service to clean exterior windows.
E. The mayor rents a tuxedo to wear to his daughter's wedding.
17. An industrial firm
A. is one that is independently owned and takes title to the merchandise it sells.
B. buys physical goods and resells them again without any reprocessing.
C. deals exclusively with federal, state, and local governments.
D. in some way reprocesses a product or service it buys before selling it again to the next buyer.
E. only produces a product, not a service.
18. A firm that reprocesses a product or service it buys before selling the product again to the next
buyer is referred to as
A. an industrial firm.
B. a reseller firm.
C. a government agency.
D. a wholesaler.
E. a retailer.
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19. Manufacturers, farms, financial services, and fisheries are all examples of companies in the
A. consumer market.
B. cooperative market.
C. reseller market.
D. industrial market.
E. government market.
20. Which of the following types of firms are in the industrial market?
A. retailing
B. construction
C. wholesaling
D. state governments
E. federal regulatory agencies
21. Which of the following is a service business within the industrial market?
A. construction
B. mining
C. insurance
D. government
E. farming
22. __________ comprise the highest percentage of firms in industrial markets.
A. Manufacturing firms
B. Construction firms
C. Agricultural firms
D. Mining companies
E. Service companies
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23. The services market sells diverse services such as legal advice, auto repair, and dry cleaning. Along
with __________, insurance, and real estate businesses, transportation, communication and public
utility firms, and not-for-profit organizations, these firms represent 75 percent of all industrial
firms.
A. finance
B. wholesalers
C. retailers
D. government units
E. educational institutions
with finance, insurance, and real estate businesses, __________, communication, and public utility
firms, as well as not-for-profit organizations, these firms represent about 75 percent of all
industrial firms.
A. wholesalers
B. transportation
C. retailers
D. government units
with finance, insurance, and real estate businesses; transportation, __________ and public utility
firms; and not-for-profit organizations, these firms represent about 75 percent of all industrial
firms.
A. wholesaling
B. retailing
C. government units
D. communication
E. manufacturing
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26. Corning, Inc., which transforms an exotic blend of materials to create optical fiber capable of
carrying much of the telephone traffic in the United States on a single strand, is operating in
__________ market.
A. a consumer
B. a government
C. a service
D. a reseller
E. an industrial
27. A bank takes money from its depositors, reprocesses it, and "sells" it as loans to borrowers. The
bank is operating in the ___________ market.
A. consumer
B. government
C. industrial
D. service
E. reseller
28. The National Aeronautics and Space Administration (NASA) will pay Lockheed Martin Corp. $11.4
billion for Orion's development, test flights, and its first manned mission in 2021. NASA is a
government unit operating in __________ market.
A. a heavy goods
B. a government
C. a service
D. an industrial
E. a reseller
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29. Graham-Field Health Products makes hospital beds and wheelchairs from the component parts
and materials it buys. It sells these manufactured products to hospitals, nursing homes, and
retailers of health care products. Graham-Field Health Products operates in __________ market.
A. a consumer
B. a government
C. a service
D. an industrial
E. a reseller
30. Wholesalers and retailers that buy physical products and resell them without any reprocessing are
referred to as
B. reseller firms.
C. government agencies.
D. consumer product firms.
E. nonprofit firms.
31. The reseller market includes
A. manufacturers.
B. logistics and supply chain providers.
D. end-user service providers.
E. retailers and wholesalers.
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32. European Style Furniture (ESF), headquartered in New York, acquires fine furniture from several
high quality manufacturers in Europe and enjoys exclusive distribution rights from them to sell to
furniture stores throughout the United States. In this context, ESF is most likely classified as
A. a producer.
B. a reseller.
C. a service provider.
D. a government agency.
E. an industrial firm.
33. A firm that markets photocopy products used in the graphic arts field, buys sensitized paper from
Eastman Kodak Co., packages it with the Photostat brand name, and sells it directly to amateur
photographers. In this context, the marketer is most likely classified as
A. a manufacturer.
B. a reseller.
34. 1-800 Contacts is based in Draper, Utah, and sells contact lenses manufactured by other well-
known companies, including Johnson & Johnson Vision Care, Ciba Vision, Bausch & Lomb, and
CooperVision. It would most likely be classified as
A. an industrial service provider.

B. a health care provider.
C. a reseller.
D. an industrial firm.
E. a government agency.
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35. Liberty Medical Supply is a home delivery service that sells diabetes testing supplies, prescription
drugs, and other supplies directly to consumers to assist them in the management of their health-
related conditions. Since Liberty Medical does not make any changes to the supplies that it obtains
from manufacturers, it would most likely be classified as

B. a health care manufacturer.
C. an industrial firm.
D. a reseller.
36. In terms of organizational buying, Amazon.com, Lands' End, and JCPenney would most likely be
classified as
A. government units.
B. resellers.
C. manufacturers.
D. wholesalers.
E. industrial firms.
37. Federal, state, and local agencies that buy products and services for the constituents they serve are
referred to as
A. industrial markets.
B. reseller markets.
C. consumer markets.
D. government units.
E. global markets.
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38. When Georgia State University buys new laptops for its faculty, it is operating as
A. an industrial market.
B. a business market.
C. a government unit.
D. a consumer market.
E. a service provider.
39. When the Federal Aviation Administration (FAA) purchases radar systems for 22 major air traffic
control centers in the United States, it is operating as
A. a government unit.
B. an industrial market.
C. a business market.
40. When the General Services Administration (GSA), an agency of the federal government, purchased
116 Chevy Volts from General Motors for its vehicle fleet, it was operating as
C. a consumer market.
D. a government unit.
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41. The City of Denver contracts with Solid Waste Management to provide trash collection services for
its citizens. The city is operating as
42. The system that provides common industry definitions for Canada, Mexico, and the United States,
which makes it easier to measure economic activity in the three member countries of the North
American Free Trade Agreement (NAFTA), is referred to as the
A. Standard Industrial Code System (SICS).

B. United Nations Central Product Classification System (UNCPCS).
C. National Codes of Industry System (NCIS).
D. North American Industry Classification System (NAICS).
E. Federal System of International Organizations (FSIO).
43. The North American Industry Classification System (NAICS)
A. provides common industry definitions for North America, Central America, and South America
to measure economic activity in the Western Hemisphere.
B. provides common industry definitions between Canada and the United States to measure
economic activity and reduce barriers of trade for cross-border firms.
C. provides a classification system for products and services that is consistent worldwide.
D. provides a classification system for products and services that is consistent across North
America, Central America, and South America to measure economic activity in the Western
Hemisphere.
E. provides common industry definitions for Canada, Mexico, and the United States to measure
economic activity in the three member countries.
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44. The North American Industry Classification System (NAICS) provides common industry definitions
to facilitate the measurement of economic activity for the member countries of the
A. European Union (EU).

B. United Nations (UN).
C. North American Free Trade Agreement (NAFTA).
D. North Atlantic Treaty Organization (NATO).
E. World Trade Organization (WTO).
45. The acronym NAICS stands for
A. National Association of Industrial Compliance Standards.

B. National Association of Industrial Communication Systems.
C. North American Industrial Communication Standards.
D. North American Industry Classification System.
E. North Atlantic Industrial Classification System.
46. The NAICS provides common industry definitions for
A. Canada, England, and the United States.

B. North America, Asia, and Europe.
C. North America, Central America, and South America.
D. Canada, England, Australia.
E. Canada, Mexico, and the United States.
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47. The North American Industry Classification System (NAICS) designates industries with a numerical
code in a defined structure. A six-digit coding system is used. The first two digits designate
A. a country of origin.
B. an industry group.
C. a specific industry.
D. an individual country-level national industry.
E. a sector of the economy.
code in a defined structure. A six-digit coding system is used. The third digit designates
A. an industry subsector.
code in a defined structure. A six-digit coding system is used. The fourth digit designates
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code in a defined structure. A six-digit coding system is used. The fifth digit designates
code in a defined structure. A six-digit coding system is used. The sixth digit designates
52. Important market characteristics in organizational buying behavior include which of the following?
A. unlimited markets but orders become progressively smaller over time

B. diminishing international opportunities as more firms enter the market
C. many customers placing progressively larger orders over time
D. fewer customers but with larger orders
E. a market that functions independently of consumer demand
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53. Important market characteristics in organizational buying behavior include which of the following?
A. Organizational buying behavior is similar to consumer buying behavior since individuals are
involved in both processes.
B. Demand for industrial products is elastic instead of inelastic.
C. Demand for industrial products and services is derived.
D. Purchase orders are much more frequent and they are usually small.
E. Forecasting is not as important in organizational buying as in consumer buying.
54. Important product or service characteristics in organizational buying include which of the
following?
A. A heavy emphasis is placed on loyalty programs and rebates.

B. Direct selling to organizational buyers is rare.
C. A fixed, nonnegotiable price is the norm.
D. Many of the goods purchased are raw and semifinished.
E. Personal relationships are preferred to online buying over the Internet.
following?
A. Products or services are intangible in nature and purchased on the basis of specifications.
B. A heavy emphasis is placed on delivery time, technical assistance, and post-sale service.
C. Direct selling to organizational buyers is rare.
D. A fixed, nonnegotiable price is the norm.
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56. In the organizational buying process, important product or service characteristics include
A. delivery time, technical assistance, and post-sale service.

B. low price, buyer incentives, and extended contracts.
C. buyer incentives, technical assistance, and exclusive contracts.
D. quantity discounts, delivery time, and exclusive contracts.
E. low price, buyer incentives, and post-sale service.
57. Important buying process characteristics in organizational buying behavior include which of the
following?
A. Few large transactions are made over the Internet due to concerns of industrial espionage.
B. Negotiations, purchases, and delivery occur in real time at an accelerated rate.
C. There are often reciprocal arrangements and negotiations between buyers and sellers.
D. Most purchases are made through government-licensed negotiators.
E. Direct selling to organizational buyers is rare because it is cost-prohibitive.
58. Which of the following statements about marketing mix characteristics in organizational buying
behavior is most accurate?
A. Few large transactions are made over the Internet.

B. The actual buyer retains all of the influence in the buying decision.
C. Advertising is very simplistic in nature.
D. Direct selling to organizational buyers is the rule.
E. Only finished goods are sold in this way.
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59. The demand for industrial products and services that is driven by demand for consumer products
and services is referred to as
A. secondary marketing.
B. derived demand.
C. reciprocal supply.
D. demand elasticity.
E. sequential demand.
60. Derived demand refers to
A. a graph relating the quantity sold and price, which shows the maximum number of units that
will be sold at a given price.
B. the demand for industrial products and services that is driven by the demand for consumer
products and services.
C. the relationship between total revenue and total cost to determine profitability at various levels
of output.
D. the point on a demand curve where supply and demand intersect.
E. the percentage change in quantity demanded relative to a percentage change in price.
61. Derived demand means the demand for industrial products and services is driven by, or derived
from, the
A. NAICS statistical models.

B. gross national product.
C. demand for consumer products and services.
D. demand for other industrial products and services.
E. demand for government products and services.
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62. During late summer and early fall, there is a large demand for containers in Asia that are used to
ship consumer products from Asia to the United States in time for the holiday selling season. The
demand for these containers is referred to as __________ demand.
A. unitized
B. derived
C. reseller
D. applied
E. implied
63. Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still, demand
for its products often depends on rates of air travel among consumers. Demand for Airbus
products is referred to as __________ demand.
A. unitized
B. reseller
C. applied
D. implied
E. derived
64. Spruceland Millworks in Canada makes wood pallets for transporting and storing new appliances
such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would be classified
as
A. reactive demand, which is tied to the sales of appliances, not the sale of the pallets.
B. unitary demand, which is tied to the sales of appliances.
C. derived demand, which is tied to the sales of appliances.
D. inelastic demand, which is tied to the cost of the components of the pallets.
E. elastic demand, which is tied to the cost of the components of the pallets.
6-21
65. Concert Staging Co. provides the stage, roof system, lighting, and sound for outdoor concerts and
theatrical events. The number of concert and theater events sponsored by various organizations
determines how many times the company is hired to provide its services, which often depends on
consumer willingness to buy event tickets. Demand for the services provided by Concert Staging
Co. is considered
A. derived.
B. unitized.
C. industrial.
D. applied.
E. reseller.
66. Purchases of sodium fluoride by Procter & Gamble for use in the manufacture of Crest toothpaste
would be an example of __________ demand.
A. applied
B. unitized
C. industrial
D. derived
E. consumer
67. South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to
manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT's
leather is a result of consumer interest in products such as Via La Moda handbags made from this
exotic and expensive leather. SCOT has __________ demand for its product.
A. derived
B. unitized
C. industrial
D. applied
E. reseller
6-22
68. Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan, the
antibacterial agent in many household products such as liquid soap. Consumers may have heard
about research suggesting environmental and health risks associated with the cumulative effects of
antibacterial agents. Changing consumer purchases provide an example of __________ demand for
Ciba's triclosan product.
A. applied
B. unitized
C. industrial
D. derived
E. consumer
69. Because orders in organizational buying are typically much larger than in consumer buying, buyers
must often __________ when the order is above a specific amount, such as $5,000.
A. pay estimated sales taxes in advance

B. move up the time required to execute a purchase agreement
C. get competitive bids from at least three prospective suppliers
D. forgo the purchase because senior management is unlikely to approve it
E. forgo identifying the members of the supplying center and their roles in the selling process
70. All of the following statements about the purchase involved in organizational buying are true
except
A. the length of time required to arrive at a purchase agreement can vary with size of purchase.
B. the dollar value of a single purchase made by an organization often runs into thousands or
millions of dollars.
C. the size of purchase impacts who participates in the purchase decision.
D. the size of purchase impacts who makes the final decision.
E. the size of the purchase involved in organizational buying is typically smaller than that in
consumer buying but it is done more frequently.
6-23
71. Firms marketing consumer products or services often try to reach thousands or millions of
individuals or households. Firms selling to organizations
A. try to reach tens of millions of wholesalers, retailers, and government units.

B. are restricted to far fewer buyers.
C. hope to obtain similar numbers of business customers, or even more.
D. do not have customers, per se.
E. simultaneously purchase from organizational buyers and ultimate consumers.
72. An organization buys products and services for one main reason, which is to
A. achieve its own objectives.

B. beat its competitors.
C. satisfy the needs of its suppliers.
D. employ people.
E. maintain inventory.
73. The primary organizational buying objective for business firms is to
A. create an atmosphere of inclusiveness.

B. help smaller companies stay in business.
C. increase the proficiency of its buyers.
D. help the firm achieve its objectives.
E. balance inventory.
74. The primary buying objective for business firms is usually to
A. increase profits through increasing costs and increasing revenues.

B. increase profits through reducing costs and decreasing revenues.
C. increase profits through reducing costs or increasing revenues.
D. maintain profits through reducing costs and increasing revenues.
E. reduce profits through reducing costs and reducing revenues.
6-24
75. The buying objective for nonprofit firms and government agencies is usually to
A. meet the needs of the groups they serve.

B. increase profits through reducing costs.
C. increase profits through increasing revenues.
76. The American Red Cross provides disaster relief, among many other services. As a nonprofit
organization, its primary buying objective is to
A. increase profits through reducing costs.

B. increase profits through increasing donations.
C. diversify its services mix to survive the continued economic downturn.
D. meet the needs of the groups it serves.
E. maintain profits through reducing costs and increasing donations.
77. Many companies have broadened their buying objectives to include an emphasis on
A. purchasing from as many vendors as possible to avoid component shortfalls.

B. purchasing from start-up firms to grow the economy.
C. diversifying their product lines and brand extensions to reduce the risk of failure for any one
item.
D. pricing freezes to maintain consistent quantities demanded from consumers.
E. proactively purchasing from minority-owned suppliers and vendors.
6-25
78. The primary reason companies have placed an emphasis on buying from minority- and women-
owned suppliers and vendors is
A. new federal government regulations require it.

B. they can help a firm meet or exceed its objectives in sales, profits, or customer satisfaction.
C. it is the socially responsible thing to do.
D. it can attract new target markets.
E. these companies will work harder for less money.
79. The objective attributes of the supplier's products and services and the capabilities of the supplier
itself are collectively referred to as
A. the supplier consideration set.

B. derived demand factors.
C. evaluative criteria.
D. performance metrics.
E. organizational buying criteria.
80. Organizational buying criteria refer to
A. the restrictions placed on potential solutions to a problem in a purchase decision.

B. the specific qualifications of a potential customer based upon past performance, reliability, and
consistency regarding the purchase of an organization's offerings.
C. the subjective attributes of the supplier's products and services and the capabilities of the
supplier itself.
D. the objective attributes of the supplier's products and services and the capabilities of the
supplier itself.
E. the factors that an ultimate consumer would consider that represent both the objective
attributes of a brand and the subjective ones to compare different products and brands.
6-26
81. Organizational buying criteria serve the same purpose as __________ criteria used by consumers.
A. consideration
B. evaluative
C. decision
D. alternative
E. prepurchase
82. There are seven commonly used organizational buying criteria. One of them is
A. price.
B. loyalty.
C. flexibility.
D. adaptability.
E. consumer demand.
A. flexibility.
B. ability to meet the quality specifications required for the item.
C. adherence to government regulation.
D. senior management directives.
E. consumer demand.
A. adaptability.
B. consumer demand.
C. ability to meet required delivery schedules.
E. adherence to corporate social responsibility policies.
6-27
A. consumer demand.
B. longevity.
C. promotional incentives.
D. technical capability.
E. senior management directives.
A. consumer demand.
B. promotional incentives.
C. longevity.
E. warranties and claim policies.
A. adherence to governmental policies.

B. regulatory support.
C. past performance on previous contracts.
D. consumer demand.
A. production facilities and capacity.

B. consumer demand.
C. flexibility.
D. adherence to government policies.
6-28
89. To be a Walmart supplier, a firm must be able to deliver its products to Walmart's distribution
centers within a 16-minute window. If the driver arrives before or after the scheduled window, the
supplier will be turned away and fined. Walmart's insistence on choosing a supplier based upon its
ability to provide on-time delivery is an example of
A. a supplier value dimension.

B. a derived demand factor.
C. an evaluative criterion.
D. an external performance measure.
E. an organizational buying criterion.
90. The deliberate effort by organizational buyers to build relationships that shape suppliers' products,
services, and capabilities to fit a buyer's needs and those of its customers is referred to as
A. buyer development.
B. a supply partnership.
C. a make-buy decision.
D. supplier development.
E. buyer-seller reciprocity.
91. Supplier development refers to
A. the deliberate effort by suppliers to build relationships that shape buyers' needs, as well as the
needs of ultimate consumers.
B. the practice of dividing large orders among several suppliers rather than a single one to avoid
possible manufacturing delays due to bad weather, plant mishaps, union issues, etc.
C. the deliberate effort by organizational buyers to build relationships that shape suppliers'
products, services, and capabilities to fit a buyer's needs and those of its customers.
D. the practice of establishing a close relationship with one supplier rather than many to ensure
loyalty and preferential treatment when filling exceptionally large orders.
E. the shift of a firm from supplier to manufacturer when repeated experience with a product and
excellent buyer/seller relationships make the change both feasible and profitable.
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92. When the John Deere Co. employs engineers who work full-time with the company's suppliers to
improve their efficiency and quality and reduce their costs, it is practicing
B. make-buy decisions.
C. supply partnerships.
E. directive purchasing.
93. Which of the following characterizes organizational buyer-seller relationships?
A. Purchases are often made after lengthy or complex negotiations.

B. Purchases are usually of small dollar values.
C. Short-term contracts are often prevalent.
D. Reciprocal arrangements are illegal.
E. Delivery schedules are less important than production capacity.
A. Purchases are often made after brief negotiations.

C. Long-term contracts are often prevalent.
D. Reciprocal arrangements are prohibited by the federal government.
E. Delivery schedules are largely irrelevant.
A. Purchases are often made after brief negotiations if any.

B. Supply partnerships may eventually develop.
D. Reciprocal arrangements provide the most flexibility to buyer and seller.
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96. The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller
relationships that can evolve into supply partnerships, are all examples of
A. illegal activities that are a common weakness of organizational buying.

B. illegal activities that result from collusion between buyers and sellers.
C. activities that are strictly governed by the NAICS.
D. the nature of relationships between buyers and sellers in organizational buying.
E. activities that result from extreme competition between manufacturers when there are too few
suppliers.
97. Merrill Lynch and Thompson Financial had a three-year, $1 billion project that put workstations on
the desks of 25,000 of Merrill Lynch's brokers. These machines put the world of investing
information at brokers' fingertips. Thompson, the supplier, was obliged to not only deliver
technology and services on time and on budget, but also constantly improve customer-satisfaction
levels among Merrill's brokers and customers. This is an example of
A. a reciprocity agreement.
B. exclusive dealing.
C. supplier alliance.
D. a buyer-seller relationship.
E. a tying arrangement.
98. An industrial buying practice in which two organizations agree to purchase each other's products
and services is referred to as
A. a tying arrangement.
C. reciprocity.
D. a supply partnership.
E. noncompetitive bidding.
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99. In a buyer-seller relationship, reciprocity refers to
A. the practice whereby a seller requires the purchaser of one product to buy another item in the
line.
B. an industrial buying practice in which two organizations, in this case a manufacturer and a
supplier, agree to purchase each other's products and services.
C. an arrangement a manufacturer makes with a reseller to only handle its products and not those
of competitors.
D. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to
purchase that product or any similar products from any other buyer.
E. when a supplier requires a buyer purchasing some of its products to also buy others.
100. The practice of __________, which can affect the normal operation of the free market and limit the
flexibility of buyers, is disapproved of by the U.S. Justice Department.
A. tying agreements
B. just-in-time procurement
C. quid pro quo
D. supply partnerships
E. reciprocity
101. Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because the practice
A. gives an unfair advantage to smaller companies.

B. gives an unfair advantage to larger corporations.
C. reduces the amount of taxes paid by the parties involved.
D. restricts the normal operation of the free market.
E. encourages free trade.
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102. Although the U.S. Justice Department frowns on __________ because it restricts the normal
operation of a free market, it is still legal for two companies to buy one another's products.
A. reciprocity
B. tying agreements
C. just-in-time procurement
D. quid pro quo
E. supply partnerships
103. A study on ethical practices in purchasing found that smaller firms frequently make agreements
with other organizations to purchase one another's products. This practice is referred to as
A. exclusive dealing.
B. supply partnerships.
C. reciprocity.
D. strategic alliances.
E. tying arrangements.
104.If General Motors (GM) purchases Borg-Warner transmissions, and Borg-Warner buys trucks and
cars from GM, they would be demonstrating which type of buyer-seller interaction?
A. exclusive dealing
B. supply partnerships
C. tying arrangements
D. noncompetitive bidding
E. reciprocity
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105. A __________ exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and
procedures for the purpose of lowering the cost or increasing the value of products and services
delivered to the ultimate consumer.
A. supplier development agreement

B. reciprocal arrangement
C. shareholder relationship
D. supply partnership
E. strategic alliance
106. A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost or increasing the value of products
and services delivered to the ultimate consumer is referred to as a
A. supply partnership.
B. supplier development agreement.
C. reciprocal arrangement.
D. shareholder relationship.
E. strategic alliance.
107. A supply partnership refers to
A. an arrangement a manufacturer makes with a reseller to handle only its products and not those
of competitors.
B. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to
C. when a supplier requires a buyer purchasing some products from it to also buy others.
D. a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost of or increasing the value of
products and services delivered to the ultimate consumer.
E. the practice whereby a seller requires the purchaser of one product to also buy another item in
the line.
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108. A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of
A. putting competitors of both buyers and sellers out of business.

B. lowering costs and increasing profits for the supplier.
C. lowering costs or increasing value of products or services to the ultimate consumer.
D. creating a single channel of distribution.
E. creating an exclusionary relationship from all other buyers and sellers.
109. Milsco Manufacturing markets __________ in partnership with its customers.
A. motors
B. braking systems
C. transmissions
D. seats
E. customized wheels
110. Milsco Manufacturing emphasizes
A. signing lifetime contracts with suppliers to demonstrate its loyalty to them.

B. supplier partnerships when designing products for its customers.
C. reciprocity arrangements with its customers so that each can maximize profit.
D. co-branding as a form of supply partnerships with customers.
E. extending health care benefits to its suppliers' employees as a result of the Affordable Care Act.
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111. Apple Inc. custom-orders the microprocessors for its iMac, iPhone, and iPad. Intel makes chips for
the iMac and Samsung produces Apple-designed chips for the iPhone and iPad. Intel and
Samsung work with Apple to minimize costs for each of them while maximizing quality, ultimately
giving customers good value for their money. This is an example of
A. a symbiotic partnership.
B. a make-buy decision.
C. a reciprocal agreement.
E. an exclusive dealing.
112. Walmart asked that Procter & Gamble (P&G) electronically link to its computerized cash register
scanning system, allowing for direct electronic ordering and replenishing for all of its stores. This
way, Walmart can tell P&G what merchandise it needs, along with how much, when, and to which
store to deliver on a daily basis. Walmart is engaged in
A. ISO 9000 certification.

B. ISO 14000 certification.
C. a supply partnership.
D. sustainable development.
E. cause marketing.
113. Purchasing that aims to integrate environmental considerations into all stages of an organization's
buying process with the goal of reducing the impact on human health and the physical
environment is referred to as
A. ecological procurement.
B. sustainable procurement.
C. green marketing.
D. supplier partnership.
E. stakeholder procurement.
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114. Because many companies are concerned with the depletion of natural resources, supply
partnerships often include provisions for
A. green marketing.
B. regulatory exemptions.
C. stakeholder procurement.
D. ecological procurement.
E. sustainable procurement.
115. Starbucks purchases from coffee growers located in more than 20 countries. It pays the coffee
farmers a fair price for the beans, the coffee is grown in an ecologically sound manner, and
Starbucks invests in the farming communities where the coffees are produced. This is an example
of
A. green marketing.
C. sustainable procurement.
E. cause marketing.
116. Starbucks is using its purchasing power to continue its quest to reduce its energy usage. Recently,
the company announced plans to replace all of the traditional incandescent and halogen bulbs in
its stores worldwide with more efficient light-emitting diode (LED) bulbs—a move the company
claims will enable it to cut energy consumption in its stores by up to 7 percent. Starbucks would be
considered a leader in

C. cause marketing.
E. sustainable development.
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117. Recently, Matt Kistler, a senior vice president at Walmart, claimed the company was making
progress on achieving three major goals: (1) to be supplied by 100 percent renewable energy, (2)
to create zero-waste, and (3) to increase the sale of renewably produced products. Walmart is
focusing on
A. using ecological buying centers.

B. complying with government regulations.
C. engaging in cause marketing.
D. using sustainable procurement.
E. meeting ISO 9000 standards.
118. The decision making process that organizations use to establish the need for products and services
and identify, evaluate, and choose among alternative brands and suppliers is referred to as
A. the consumer purchase decision process.

B. the industrial purchase procedure.
C. organizational buying behavior.
D. the offering purchase framework.
E. the sustainable procurement process.
119. Organizational buying behavior is
A. the action a person takes in purchasing and using products and services, including the mental
and social process that come before and after the action.
B. the decision making process that organizations use to establish the need for products and
services and identify, evaluate, and choose among alternative brands and suppliers.
C. purchase behavior based upon derived demand.
D. determining what to purchase and the quantity to purchase based upon the derived supply.
E. the process that organizations use to purchase the raw materials and tools used in the
manufacturing of a product.
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120. Organizational buying behavior is similar to consumer behavior in some ways and different in
others. Common to both is that they
A. use the same five stages in the buying decision process.

B. use formal vendor rating when choosing among alternative brands.
C. are affected by derived demand.
D. have virtually unlimited options for suppliers.
E. rely on gatekeepers to control product information.
121. Which of the following possible characteristics of consumer buying is least likely to enter into an
organizational buying decision?
A. comparison of product performance with expectations

B. purchase decisions based on the highest overall evaluation
C. alternatives evaluated on important criteria
D. information gathered from internal and external searches
E. problem recognition triggered by self-actualization motives
others. One key difference is that in the organizational buying process,
A. only four stages are used.

B. fewer individuals are involved.
C. firms are not affected by derived demand.
D. the post-purchase evaluation behavior is more formalized.
E. there is less reliance on gatekeepers to control product information.
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123. The first stage in the organizational buying decision process is
A. information search.
B. antecedent states.
C. alternative evaluation.
D. purchase decision.
E. problem recognition.
124.The sales department's identification of an improvement made to a competitor's product would

occur during which stage of the organizational buying decision process?
A. supplier search
B. alternative evaluation
C. problem recognition
D. purchase decision
125. Once an organization passes through the problem recognition stage of the organizational buying
decision process, it reaches the __________ stage.
A. information search
B. value analysis
C. alternative evaluation
E. behavioral learning
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126. At which stage of the organizational buying decision process would design and production
engineers draft specifications?
A. problem recognition
B. information search
E. value analysis
127. During the third stage of the organizational buying decision process, the organization engages in
B. post-purchase behavior.
128. At which stage of the organizational buying decision process would purchasing and engineering
personnel visit potential suppliers to assess their facilities?
C. purchase decision
D. post-purchase behavior
E. alternative evaluation
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personnel visit potential suppliers to assess their production capacity?
D. alternative evaluation
E. post-purchase behavior
personnel visit potential suppliers to assess their quality control?
A. alternative evaluation
B. problem recognition
C. information search
131. At which stage of the organizational buying decision process would purchasing assess the financial
status of potential suppliers?
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132. At which stage of the organizational buying decision process would a firm use key organizational
buying criteria such as price, quality, delivery time, and technical capability to select a supplier?
D. purchase review
133. During the next-to-last stage of the organizational buying decision process, the organization
A. drafts specifications.
B. formally rates suppliers that were used.
C. evaluates supplier facilities.
D. awards the contract.
E. recognizes a need for change.
134.Which of the following is indicative of the purchase decision stage of the organizational buying
decision process?
A. The purchase decision is usually quick once the information search has been completed.
B. Even after the bid is submitted and even accepted, further negotiation is likely.
C. Even if several vendors make it onto the bidder's list, ultimately only one supplier is chosen.
D. If a supplier on the bidder's list is not selected, it is rarely told the reason it was rejected.
E. Once an agreement has been formally reached, neither the buyer nor the seller is permitted to
make changes to the terms of the contract.
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135. What is the last stage of the organizational buying decision process?
B. post-purchase behavior
E. purveyor review
136. Comparing the stages in a consumer and organizational purchase decision process reveals key
differences. When a smartphone manufacturer buys an earbud headset for its units from a
supplier, more individuals are involved, supplier capability becomes more important, and the
______________ behavior is more formal.
A. problem outcome
D. post-purchase evaluation
E. performance review
supplier, more individuals are involved, _____________ becomes more important, and the post-
purchase evaluation behavior is more formal.
A. choice variety
B. supplier audit
D. supplier capability
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138. General Electric manufactures electric motors for its clothes dryers. The firm uses a formal vendor
rating system to evaluate suppliers and notify those whose parts did not meet quality standards. If
a supplier fails to correct the problem, GE will drop it as a future supplier. Which stage in the
organizational buying decision process would GE make this evaluation?
A. purchase decision stage

B. information search stage
C. post-purchase behavior stage
D. alternative evaluation stage
E. problem recognition stage
139. The group of people within an organization who participate in the buying process and share
common goals, risks, and knowledge important to a purchase decision is referred to as the
A. gatekeeper.
B. buying center.
C. purchasing department.
D. procurement committee.
E. acquisition office.
140.A buying center refers to
A. an online trading community that brings together buyers and supplier organizations to make
possible the real time exchange of information, money, products, and services.
B. the department within a firm responsible for the logistics of placing, tracking, and delivering
orders to other departments within the firm.
C. the department within a firm responsible for the logistics of placing, tracking, and delivering
orders to ultimate consumers.
D. the group of people within an organization who participate in the buying process and share
common goals, risks, and knowledge important to a purchase decision.
E. the department within a firm that allows purchases to be made from a centralized location from
multiple vendors at the same time.
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141. The term __________ is used to identify a group of people within an organization who participate in
the buying process and share common goals, risks, and knowledge important to a purchase
decision.
A. procurement committee
B. purchasing department
C. buying center
D. gatekeepers
E. acquisition office
142.Several people often participate in the organizational buying process. Called a __________, these
people share common goals, risks, and knowledge important to a purchase decision.
A. buying center
B. buying cohort
C. sustainable procurement committee
D. stakeholder group
E. purchasing department
143.Large multistore chain retailers such as 7-Eleven convenience stores, Safeway, and Target use a
highly formalized buying center that is referred to as
A. an ad hoc committee.
B. a buying committee.
C. a merchandise procurement center.
D. a purchasing department.
E. a purchasing control system.
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144.Most large multistore chain resellers use __________ that are highly formalized to arrive at buying
decisions.
A. buying committees
B. merchandise procurement centers
C. sustainable procurement committees
D. stakeholder groups
E. purchasing divisions
145.Marketers need to understand their firms' buying centers. A series of questions can be used to
facilitate this process. Which of the following questions would be the least useful when trying to
understand the operations of a buying center?
A. Which individuals are in the buying center for the product or service?
B. What is the relative influence of each member of the group?
C. What are the buying criteria of each member?
D. How does each member of the group perceive our company, our products and services, and
our salespeople?
E. What criteria were used to select the members of the buying center?
146.Which of the following statements most closely describes the people in the buying center of a
medium-sized manufacturing plant?
A. The composition of the buying center remains constant over long periods of time.
B. The buying center avoids cross-functional teams whenever possible.
C. The composition of the buying center depends on the specific item being purchased.
D. The purchasing manager is an occasional member of the buying center.
E. Most government units use a formal buying center to arrive at buying decisions.
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147. In an effort to make better and more efficient purchase decisions, the Ford Motor Co. includes
various people, depending on the purchase situation. Individuals may include key personnel from
various departments, including research and development, finance, marketing, shipping, and sales.
This is a description of Ford's
A. selling committee.
B. sustainable procurement department.
C. purchasing unit.
D. buying center.
E. buying committee.
148.To lower costs and reduce manufacturing time, Michelin has people work together on important
purchases. These people include individuals in the roles of buyers, deciders, gatekeepers, and
others, as needed. This type of cross-functional group is known as a
A. purchasing committee.
B. sustainable procurement panel.
C. buying center.
D. supply partnership.
E. purchasing task force.
149.All of the following are roles in a buying center except
A. specifiers.
B. deciders.
C. buyers.
D. influencers.
E. users.
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150. An organization's buying center includes individuals who can play one or more of the following
roles except
A. gatekeepers.
B. deciders.
C. buyers.
D. product champions.
E. influencers.
151. The people in the organization who actually consumer the product or service are referred to as
__________, which is one role in the buying center.
A. consumers
B. deciders
C. buyers
D. influencers
E. users
152. On a visit to Conner Industries, a West Plains Band Saw salesperson heard a production employee
saying, "This band saw has a 36-inch wheel that could really save us time, and with its adjustable
height, it can be operated by someone tall like me as well as by our shorter workers. I bet this
would speed up my production time by 30 percent. Why don't we order this band saw?" The
person the salesperson heard giving input has which buying center role?
A. purchasing agent
B. decider
C. buyer
D. user
E. motivator
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153. Becca, an office manager for a small construction company, met with representatives from Xerox
and Minolta, along with the president and the accountant, to compare options for a new copier for
the office. Since she made most of the copies, Becca wanted to see the features of the machines,
though her boss would have to approve the final purchase. Becca has what role in the buying
center?
A. purchasing agent
B. decider
C. buyer
D. user
E. motivator
154.In a buying center, __________ affect the buying decision, usually by helping define the
specifications for what is bought.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users
155. Within the buying center, influencers are people who
A. have the formal authority and responsibility to select the supplier and negotiate the terms of the
contract.
B. control the flow of information in the buying center.
C. affect the buying decision usually by helping define the specifications for what is bought.
D. have the formal or informal power to select or approve the supplier that receives the contract.
E. actually use and evaluate the product or service.
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156. A computer company salesperson invites the IT managers of its top 10 customers (in terms of
dollar sales) to view a demonstration of the firm's new product line, so the salesperson can obtain
their opinions regarding various options and configurations that could be offered. These IT
managers are most likely to be the __________ of their organizations' buying centers.
A. gatekeepers
B. influencers
C. reciprocity arrangers
D. buyers
E. users
157. In a buying center, __________ have formal authority and responsibility to select the supplier and
negotiate the terms of a contract.
A. buyers
B. gatekeepers
C. adopters
D. influencers
E. users
158. The purchasing manager of Ingram Printing has selected HP as the supplier of its new high-speed
printer and negotiated the terms of the contract. The purchasing manager is the __________ for
Ingram.
A. user
B. gatekeeper
C. influencer
D. buyer
E. decider
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159. Lara assumed the __________ role in the buying center when she shook the salesperson's hand and
said, "Ms. Hron, we would like to accept your bid. I'll expect 48 boxes of ring shank nails to be
delivered by November 8, and we will pay the agreed-upon price of $21.74 per box."
A. gatekeeper
B. broker
C. buyer
D. influencer
E. user
160. In a buying center, __________ have the formal or informal power to select or approve the supplier
that receives the contract.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users
161. Within the buying center, deciders are people who
A. have the formal authority and responsibility to select the supplier and negotiate the terms of the
contract.
C. have the formal or informal power to select or approve the supplier that receives the contract.
D. affect the buying decision usually by helping define the specifications for what is bought.
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162. For routine orders, the decider is usually
A. the buyer or purchasing manager.

B. the CEO.
C. the COO.
D. the head of R&D.
E. the customer.
163. An IT engineer specifies the type of electronic shopping cart to be used on the company's new
website. The engineer also chooses the supplier that receives the contract to provide the software.
In the buying center, this person is the
A. gatekeeper.
B. decider.
C. broker.
D. influencer.
E. user.
164.People who control the flow of information in the buying center, such as technical experts and
secretaries, can keep salespeople and information from reaching others in the buying center and
are referred to as
A. deciders.
B. obstructionists.
C. gatekeepers.
D. power brokers.
E. influencers.
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165. A sales representative for a pharmaceutical company visits the doctor's office, hoping to explain a
new drug to the doctor. However, the office receptionist explains that the doctor is with patients
and will not be able to see the sales rep. The receptionist is acting as
A. a user.
B. an influencer.
C. a buyer.
D. a decider.
E. a gatekeeper.
166. Cassidy is part of the buying center for a large manufacturer. Her field of expertise is logistics and
she is responsible for choosing transportation providers for the company. A sales representative
for Yellow Roadway, a successful trucking firm, regularly buys Cassidy's secretary lunch. The
representative does this because she views the secretary as __________ and wants to be sure that
information about her company reaches Cassidy.
A. a gatekeeper
B. a decider
C. an influencer
D. an obstructionist
E. a power broker
167. Beth is part owner of a chain of auto repair shops. Her company was considering adding tire sales
in some of its facilities, and several people were slated to meet to discuss the idea. Beth gathered
information about possible distributors. Her son had been laid off from a job with one of them, so
she removed this company from the group she was preparing to present to the others. Here, Beth
was acting in what role in the buying center?
A. gatekeeper
B. decider
C. user
D. obstructionist
E. power broker
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168. Mark manages a small family-owned amusement park. He believes the park can increase its profits
if its owners will buy three food concession trailers. Mark has contacted three dealers of such
trailers, which come fully customized to user specifications. After receiving three bids, Mark
concluded that Century Industries has the best offer. He will present only the Century Industries
information to the family tomorrow. What buying center roles does Mark perform?
A. gatekeeper and buyer

B. decider and user
C. buyer and decider
D. influencer and buyer
E. influencer, gatekeeper, and decider
169. Researchers who have studied organizational buying identify three types of buying situations,
called __________, which include new buy, modified rebuy, and straight rebuy.
A. purchase criteria
B. buy classes
C. buying centers
D. consideration sets
E. purchase hierarchies
170. Organizations face three specific kinds of buying situations. They are new buy, straight rebuy, and
modified rebuy. Collectively, these situations are referred to as
A. industrial buying behavior.

B. reseller buying behavior.
C. buy classes.
D. purchase criteria.
E. consideration sets.
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171. The three types of organizational buy classes are
A. industrial, reseller, and government.

B. consumer products, industrial goods, and services.
C. users, influencers, and deciders.
D. straight purchase, barter, and countertrade.
E. new buy, straight rebuy, and modified rebuy.
172. Buy classes refer to the three types of organizational buying situations:
A. buy, lease, and rent.

B. new buy, make, and reprocess.
C. manufacturing contracts, consulting contracts, service contracts.
D. new buy, straight rebuy, and modified rebuy.
E. new buy, refurbish, and used buy.
173. The buying situation where an organization is a first-time buyer of the product or service is
referred to as
A. an initial buy.
B. a new buy.
C. a preliminary buy.
D. a straight rebuy.
E. a modified rebuy.
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174. A buy class situation affects buying center tendencies in different ways. If there are many people
involved, the problem definition is uncertain, and the time required for a decision is long, the buy
class situation is most likely a
A. standard buy.
B. straight rebuy.
C. conditional rebuy.
D. modified rebuy.
E. new buy.
175. A buy class situation affects buying center tendencies in different ways. If there is one person
involved, the problem is well-defined, and the buying objective is to find a low-priced supplier, the
buy class situation is most likely a
A. modified buy.
B. straight rebuy.
D. new buy.
E. standard buy.
176. A buy class situation affects buying center tendencies in different ways. If there are two or three
people involved, the problem is minor modification, and the suppliers considered are the present,
the buy class situation is most likely a
A. conditional buy.
B. straight rebuy.
C. new buy.
D. modified rebuy.
E. standard buy.
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177. A buy class situation affects buying center tendencies in different ways. If the buying objective is to
find a good solution, the suppliers considered are both new and present, and the buying influence
includes technical and operating personnel, the buy class situation is most likely a
A. modified buy.
B. new buy.
C. straight rebuy.
D. make-buy.
E. standard buy.
178. If a purchase is a new buy for a manufacturer, the seller should expect
A. specifications to be changed many times before the buy is completed.

B. a lot of conflict.
C. many people to be involved in the purchase decision.
D. to have to do some favors for the decision makers.
E. to avoid making concessions or compromises.
179. If a purchase is a new buy for a manufacturer, the seller should
A. expect a long time for a buying decision to be reached.

B. neutralize the typically high levels of conflict.
C. maintain flexibility, since specifications are likely to be changed several times before the buy is
completed.
D. be prepared to do some favors for the decision makers.
E. avoid making concessions or compromises.
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180. If a purchase is a new buy for a manufacturer, the seller should expect to
A. have to do some favors for the decision makers.

B. anticipate a great deal of conflict.
C. accommodate unlimited specification change before the buy is completed.
D. work with the buyer's technical personnel.
181. At the weekly meeting for Choice Hotels, the marketing manager said, "We need an inexpensive
creative way to increase awareness of our hotels among people who travel by automobile. To do
that, I want to find some new media that the other hotel chains are not using." The purchase of
this new media for the hotel chains' advertising would be an example of a
A. new buy.
B. straight rebuy.
C. converted rebuy.
D. modified rebuy.
E. initial buy.
182. A reorder of an existing product or service from a list of acceptable suppliers is referred to as a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. standard reorder.
E. make-buy.
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involved, the problem definition is well-defined, and the buying objective is to find the low-priced
supplier, the buy class situation is most likely a
A. new buy.
B. modified rebuy.
D. straight rebuy.
E. standard reorder.
184.An assistant heard his supervisor in the supply room yell, "Call Crate & Barrel. We need another
case of its coffee mugs for the conference next week." The supervisor was asking the assistant to
make a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.
185. The department secretary orders pens, copy paper, and printer ink cartridges for the department
from the Corporate Express catalog nearly every month. This is an example of a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.
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186. The buying situation where users, influencers, or deciders want to change product specifications,
price, delivery schedule, or supplier for an item that is largely the same as what was previously
purchased is referred to as a
A. secondary buy.
B. straight rebuy.
C. modified rebuy.
D. adapted buy.
E. remake buy.
187. In a __________ situation, users, influencers, or deciders in the buying center want to change
product specifications, price, delivery schedule, or suppliers, though the product is largely the
same.
A. derived buy
B. straight rebuy
C. make-buy
D. rebuy class
E. modified rebuy
people involved, the time required for a decision is moderate, and the problem definition has only
minor modifications, the buy class situation is most likely a
A. new buy.
B. straight rebuy.
D. modified rebuy.
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people involved, the problem definition has only minor modifications, and the buying objective is
the low-priced supplier, the buy class situation is most likely a
A. new buy.
B. modified rebuy.
D. straight rebuy.
people involved, the time required for a decision is moderate, and only present suppliers are
considered, the buy class situation is most likely a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. conditional rebuy.
191. The office of SFX Entertainment, a talent promoter, needs a new fax machine that will print at three
seconds a page (instead of five seconds per page like the one it is using now) and has both local
and network printing capabilities. The purchase of a replacement fax machine would be an
example of a
A. new buy.
B. straight rebuy.
C. make-buy.
D. modified rebuy.
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192. A university's marketing department typically purchases backpacks with its logo embroidered on
them for all incoming freshmen. This year, because they've heard complaints, the marketing chair
wants to buy similar backpacks but find one that is a little more durable. This is an example of a
A. new buy.
B. straight rebuy.
C. make-buy.
D. modified rebuy.
193. A software company has updated its logo. It now needs to order new letterhead and business
cards. This purchase would be a
A. modified rebuy.
B. straight rebuy.
C. new buy.
E. class buy.
194.A straight rebuy is __________ while a modified rebuy is __________.
A. an exchange; a resale
B. a routine reorder; an exchange
C. a first-time order; a routine reorder
D. a changed order; a first-time order
E. a routine reorder; a changed order
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195. Business-to-business electronic commerce over the Internet
A. is nearly equivalent to consumer electronic commerce when measured by the total dollar value
of all online transactions.
B. is at least four times greater than consumer electronic commerce when measured by the total
dollar value of all online transactions.
C. has dramatically decreased since face-to-face communication between a firm's sales force and
its potential customers is so important.
D. is impossible to estimate since companies will not share information.
E. has never been popular since timely information is unavailable or deemed to be proprietary.
196. Online buying in organizational markets is prominent because Internet technology
A. allows companies to increase their innovation cycles.

B. substantially increases brand loyalty.
C. can convey timely information quickly.
D. narrows the potential customer base for many products.
E. eliminates marketing costs.
197. Online trading communities that bring together buyers and supplier organizations to make
possible the real time exchange of information, money, products, and services are referred to as
A. Webfronts.
B. iCommerce.
C. e-commerce marketspaces.
D. e-marketplaces.
E. X-changes.
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198. E-marketplaces refer to
A. virtual or holographic purchasing marketspaces that allow manufacturers to estimate demand

based upon different changes in environmental forces.
B. websites that allow consumers to make direct purchases from a manufacturer rather than
through a traditional retail outlet.
C. online trading communities that bring together buyers and supplier organizations to make
D. computer simulations that allow manufacturers to estimate how much inventory to keep on
hand based upon different purchasing scenarios.
E. a computer database co-sponsored by the U.S. Department of Commerce and the World Trade
Organization (WTO) that houses all public access records for the purpose of aiding American
and global businesses.
199. Another name for an e-marketplace is
A. an e-hub.
B. an E-place.
C. an e-trade.
D. an E-xchange.
E. a 4NXchange.
200.Another name for an e-marketplace is a
A. WebXChange.
B. WebMart.
C. 2B1 marketplace.
D. C2C market forum.
E. B2B exchange.
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201. E-marketplace can take two different formats, which are
A. bricks-and-mortar exchanges and clicks-and-mortar exchanges.

B. privately owned trading communities and open-to-the-public trading communities.
C. networked exchanges or public trading communities.
D. independent trading communities or private exchanges.
E. public exchanges and networked exchanges.
202.Small businesses benefit from independent __________ like PlasticsNet, Hospital Network.com, and
TextileWeb.
A. Webfronts
B. clicks-and-mortar
C. e-marketplaces
D. iMarkets
E. integrated markets
203.For e-marketplaces, large companies tend to favor __________ that link them with their network of
qualified suppliers and customers.
A. centralized markets
B. decentralized markets
C. private exchanges
D. segregated markets
E. independent trading communities
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204.Independent e-marketplaces act as a neutral third party, provide an Internet technology trading
platform, and provide __________ market that enable exchanges between buyers and sellers.
A. a centralized
B. a deconsolidated
C. a segregated
D. an integrated
E. a noncompetitive
205.Which of the following statements about e-marketplaces that act as independent trading
communities is false?
A. These trading communities allow buyers to easily compare offerings from various sellers.
B. Independent trading communities charge a fee for their service.
C. Independent trading communities often consist of thousands of geographically dispersed
buyers and sellers.
D. This independent type of trading community is favored by large companies.
E. Independent trading communities often operate in an environment where demand and supply
fluctuations cause volatile prices.
206.PlasticsNet, Hospital Network.com, TextileWeb, and eBay Business are all examples of
A. Webfront operations.
B. clicks-and-mortar stores.
C. e-marketplaces.
D. integrated markets.
E. iMarkets.
6-67
207.In the construction industry, an independent trading community such as Buzzsaw.com or
Cephren.com enables a general contractor to manage and coordinate the many suppliers,
subcontractors, architects, and engineers necessary to complete a project. Buzzsaw.com and
Cephren.com are examples of
A. Webfronts.
B. web chains.
C. X-changes.
D. e-syndicates.
E. e-marketplaces.
208.The predominant person-to-person trading community in the world is
A. Facebook.
B. Amazon.
C. NASDAQ.
D. Craigslist.
E. eBay.
209.eBay is the predominant person-to-person trading community in the world. eBay is an example of
A. a Webfront operation.
B. a clicks-and-mortar store.
C. an e-marketplace.
D. a noncompetitive market.
E. an integrated market.
6-68
210. When a seller puts an item up for sale and would-be buyers are invited to bid in competition with
each other, it is referred to as
A. a reverse auction.
B. a traditional auction.
C. a bidder's war.
D. an e-auction.
E. a Webfront auction.
211. When prospective buyers observe the bids of others and decide whether or not to increase the bid
price, it is called a
A. forward auction.
B. reverse auction.
C. Webfront auction.
D. traditional auction.
E. bidder's war.
212. Dell, Inc., sells surplus, refurbished, or closeout computer merchandise at its dellauction.com
website to many buyers who bid competitively against one another. This is an example of a(n)
A. traditional auction.
B. reverse auction.
C. bidder's war.
D. I-auction.
E. Webfront auction.
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213. What type of online auction does one seller and many buyers typify?
A. forward auction
B. reverse auction
C. traditional auction
D. vertical auction
E. bidder's war
214.In which type of auction is there an upward pressure on bid prices as more would-be buyers
become involved?
A. reverse auction
B. horizontal auction
C. vertical auction
D. diagonal auction
E. traditional auction
215. In which type of auction does the price increase as the number of buyers increases?
A. reverse auction
C. vertical auction
D. diagonal auction
6-70
216. In an e-marketplace, an online auction in which a buyer communicates a need for a product or
service and would-be suppliers are invited to bid in competition with each other is referred to as a
A. vertical auction.
B. reverse auction.
C. horizontal auction.
E. reciprocal auction.
217. A reverse auction refers to an online auction
A. where firms may sell their overstock—unused raw materials, packaging, and tools—to the
highest bidder.
B. in which a manufacturer offers to share its facilities, inventory, or services with other smaller
firms that are invited to bid in competition with each other.
C. in which a smaller manufacturer seeks to share the facilities, inventory, or services of a larger
firm, and invites those firms to bid in competition with each other.
D. in which a buyer communicates a need for a product or service and would-be suppliers are
invited to bid in competition with each other.
E. where firms seek to purchase other firms' overstock—unused raw materials, packaging, and
tools—while trying to find the lowest price possible.
218. Reverse auctions
A. are seller-initiated.
B. benefit the sellers significantly more than the buyers.
C. have an increasing number of buyers as the auction progresses.
D. put downward pressure on prices.
E. have many buyers.
6-71
A. are buyer-initiated.
D. do not allow sequential bidding.
E. have many buyers at the start of the auction.
220.What type of online auction does one buyer and many sellers typify?
A. forward auction
B. reverse auction
D. vertical auction
E. bidder's war
221. In which type of auction is there a downward pressure on bid prices for the buyer's business as
more would-be suppliers become involved?
A. traditional auction
B. vertical auction
C. reverse auction
D. horizontal auction
E. reciprocal auction
222.In a reverse auction, as the number of sellers increases, the price
A. increases.
B. stays the same.
C. has no relation to the number of sellers.
D. decreases.
E. fluctuates depending on economic conditions.
6-72
223.Which of the following statements about Trek Bicycles is false?
A. Trek's Eco Design initiative is an example of sustainable procurement.

B. Trek has an extensive product line of bicycles.
C. Trek has always been on the cutting edge, using the latest innovations in its designs.
D. Trek views the bicycle as an important form of alternative transportation, not just as recreation.
E. Trek's business model has evolved from manufacturing bicycles to marketing other two- and
four-wheeled vehicles, such as motorcycles and all-terrain vehicles (ATVs).
224.All of the following people are part of the Trek buying center except
A. Trek executives.
B. production workers.
C. representatives from research and development.
D. quality control employees.
E. a purchasing manager.
225.Trek uses several organizational buying criteria to evaluate potential suppliers. These include all of
the following except
A. price.
B. environmental impact.
C. warranties and claim policies.
D. quality.
E. delivery capabilities.
6-73
226.When Trek orders a seat or saddle for one of its models that has a slightly different material for the
cover only but the other components are the same as existing saddles used on other bikes, this
purchase situation is known as a
A. new buy.
B. straight rebuy.
C. standard reorder.
D. modified rebuy.
E. make-buy.
Short Answer Questions
227.Describe the three types of organizational markets and give examples of each.
228.What is the North American Industry Classification System (NAICS)?
6-74
229.What are the characteristics of organizational buying behavior?
230.List seven organizational buying criteria.
231. What are the five stages of the organizational buying process? Describe at least three differences
from the consumer buying process.
6-75
232.What is a buying center? In what type of business would a buying center most likely be found?
233.Identify and describe the five roles an individual can play in a buying center.
234.Consider how buy classes affect buying center tendencies in different ways. Describe the buy-class
situations, and discuss the implications for the organization of each type of buy class.
6-76
235.What are the three types of organizational buying situations or buy classes? Give an example of
each.
236.Explain the differences between independent e-marketplaces and private exchanges.
237.Differentiate between traditional and reverse auctions.
6-77
Chapter 06 Understanding Organizations as Customers Answer Key
Multiple Choice Questions
1. According to the textbook, JCPenney buys paper for which of the following media?
A. in-store signage
B. special advertising inserts in magazines such as Cosmopolitan
C. newspaper inserts and direct mail pieces
D. annual and 10-K reports
E. point-of-purchase displays
JCPenney buys paper for use in its newspaper inserts and direct-mail pieces. See Chapter
Opener Example: BUYING IS MARKETING, TOO! PURCHASING PUBLICATION PAPER FOR
JCPENNEY.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Learning Objective: 06-01 Distinguish among industrial, reseller, and government organizational markets.
Level of Difficulty: 1 Easy
Topic: Buying Situations
6-78
2. Purchasing paper for JCPMedia is one example of
A. organizational buying.
B. online buying.
C. on-time delivery.
D. derived demand.
E. cooperative selling.
Purchasing paper for JCPMedia is one example of organizational buying. See Chapter Opener
Example: BUYING IS MARKETING, TOO! PURCHASING PUBLICATION PAPER FOR JCPENNEY.

Blooms: Understand
Learning Objective: 06-02 Describe the key characteristics of organizational buying that make it different from consumer buying.
Level of Difficulty: 2 Medium
Topic: B2B Buying Process
6-79
3. When JCPMedia buys paper for JCPenney newspaper inserts, it considers suppliers' forest
management and other sustainability practices. JCPMedia buyers consider these as part of the
process to
A. fulfill profit responsibilities.

B. formally evaluate paper supplier capabilities.
C. eliminate the need for online purchasing.
D. shorten the value chain.
E. fulfill the auditing role.
In addition to paper appearance, quality, quantity, and price, JCPMedia paper buyers formally
evaluate paper supplier capabilities, often by extended visits to supplier facilities in the United
States, Canada, and Europe. Supplier capabilities include the capacity to deliver on-time
selected grades of paper from specialty items to magazine papers, the availability of specific
types of paper to meet printing deadlines, and formal programs focused on the life cycle of
paper products. For example, a supplier's forestry management and sustainability practices are
considered in the paper buying process. See Chapter Opener Example: BUYING IS MARKETING,
TOO! PURCHASING PUBLICATION PAPER FOR JCPENNEY.

Blooms: Understand
6-80
4. "The choice of paper and suppliers is ____________ given the sizable revenue and expense
consequences," notes Tom Cassidy, vice president-marketing production at JCPMedia, Inc.
A. a limited purchase decision

B. a significant marketing decision
C. a challenge for storage and shipping
D. a routine decision
E. a reciprocity practice
"The choice of paper and suppliers is a significant marketing decision given the sizable revenue
and expense consequences," notes Tom Cassidy, vice president-marketing production at
JCPMedia, Inc. JCPMedia paper buyers work closely with senior JCPenney marketing executives
and within budget constraints to assure that the right appearance, quality, and quantity of
publication paper is purchased at the right price point for merchandise featured in the millions
of JCPenney newspaper inserts and direct-mail pieces distributed every year in the United
States. See Chapter Opener Example: BUYING IS MARKETING, TOO! PURCHASING
PUBLICATION PAPER FOR JCPENNEY.

Blooms: Understand
6-81
5. JCPMedia, Inc. paper buyers are thoroughly trained in
A. shopping center management.

B. break-even analysis.
C. retail management.
D. consumer decision practices.
E. many facets of purchasing.
JCPMedia paper buyers are thoroughly trained in many facets of purchasing. For example, Kim
Nagele is a certified professional in supply management (CPSM). The CPSM designation is
awarded to those individuals who have demonstrated competence in such areas as contracting
and negotiation, cost management, forecasting, and materials and inventory management
through a rigorous examination process. See Chapter Opener Example: BUYING IS MARKETING,
TOO! PURCHASING PUBLICATION PAPER FOR JCPENNEY.

Blooms: Understand
Learning Objective: 06-03 Explain how buying centers and buying situations influence organizational purchasing.
Topic: Buying Center
6. The marketing of goods and services to companies, governments, or not-for-profit

organizations for use in the creation of goods and services that they can produce and market
to others is referred to as
A. integrated marketing.
B. institutional marketing.
C. business-to-business marketing.
D. reseller marketing.
E. organizational marketing.
Key term definition—business-to-business marketing.

6-82
Blooms: Remember
Topic: Organizational Markets
7. Business-to-business marketing refers to
A. the marketing of goods to companies, governments, or ultimate consumers for use in the
creation of goods and services.
B. the marketing of products to not-for-profit organizations at a reduced fee or nominal cost
for use in the creation of goods and services that they can produce and market to others.
C. the marketing of products and services to companies, governments, or not-for-profit
organizations for use in the creation of products that they can produce and market to
others.
D. the marketing of services in the area of intellectual property such as legal, financial, or
creative consulting.
E. the marketing of an idea to create interest or generate goodwill, not just for an individual
brand but also for an entire industry or product class.
Key term definition—business-to-business marketing.

Blooms: Remember
6-83
8. ______________ in some way reprocess a product or service they buy before selling it again to the
next buyer.
A. Transactional markets
B. Corporate markets
C. Government marketers
D. Reseller marketers
E. Industrial firms
Text term definition—industrial firms.

Blooms: Remember
9. Manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and

government agencies that buy goods and services for their own use or for resale are referred to
as
A. multinational buyers.
B. resellers.
C. organizational buyers.
D. ultimate consumers.
E. institutional buyers.
Key term definition—organizational buyers.

Blooms: Remember
6-84
10. Organizational buyers are
A. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and

government agencies that buy goods and services exclusively for resale.
B. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and
government agencies that buy products and services for their own use or for resale.
C. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and
government agencies that buy goods and services exclusively for their own use.
D. firms that typically buy physical goods and resell them again without any reprocessing.
E. all buyers in a nation including ultimate consumers.
Key term definition—organizational buyers.

Blooms: Remember
11. Organizational buyers include manufacturers, wholesalers, retailers, service companies, not-for-
profit organizations, and government agencies that
A. purchase exclusively from one supplier.

B. are exempt from state and local taxes.
C. sell directly to ultimate consumers.
D. sell goods and services for their own use.
E. buy products and services for their own use or for resale.
Organizational buyers are those manufacturers, wholesalers, retailers, and government

agencies that buy products and services for their own use or for resale.

Blooms: Understand
6-85
12. Which of the following organizational buyers purchases raw materials and parts to reprocess
into the finished goods they sell?
A. retailers
B. wholesalers
C. agents
D. manufacturers
E. ultimate consumers
Manufacturers buy raw materials and parts that they reprocess into the finished goods they sell.

Blooms: Understand
6-86
13. Which of these statements regarding organizational buyers is most accurate?
A. Wholesalers and retailers resell the goods they buy without reprocessing them.
B. Wholesalers and retailers alter the goods they sell to meet the specific needs of their
customers prior to resale.
C. Manufacturers purchase processed goods and resell them to suppliers who in turn resell
them to ultimate consumers.
D. Ultimate consumers can be considered organizational buyers when they purchase in large
quantities.
E. Government agency purchases are more similar to ultimate consumer purchases than they
are to wholesalers and retailers.
Manufacturers buy raw materials and parts that they reprocess into the finished goods they sell.
Wholesalers and retailers resell finished goods without reprocessing them.

Blooms: Understand
14. All of the following are organizational buyers except
B. government units.
C. ultimate consumers.
D. resellers.
E. wholesalers.
Organizational buyers consist of manufacturers, wholesalers, retailers, and government

agencies that buy products and services for their own use or for resale.

Blooms: Understand
6-87
15. Organizational buyers are divided into three markets, which are
A. industrial, wholesaler, and retailer.

B. industrial, retailer, and government.
C. retailer, manufacturer, and government.
D. industrial, government, and ultimate consumer.
E. industrial, reseller, and government.
Organizational buyers are divided into three markets: (1) industrial, (2) reseller, and (3)
government.

Blooms: Understand
6-88
16. Which of the following represents an organizational buyer?
A. A local baker buys sugar at the grocery store to make cookies with his children at home.
B. A dentist buys a new LG Smart TV 55-inch 3D OLED HDTV for her den.
C. Mr. Langley hires a housecleaning service to clean his apartment.
D. The owner of a sushi restaurant hires a window-washing service to clean exterior windows.
E. The mayor rents a tuxedo to wear to his daughter's wedding.
Organizational buyers are those manufacturers, wholesalers, retailers, and government

agencies that buy products and services for their own use or for resale. Organizational buyers
include all buyers in a nation except ultimate consumers. Only the owner of a restaurant is an
organizational buyer; all other alternatives involve purchases by ultimate consumers for their
personal use.
AACSB: Knowledge Application

Blooms: Apply
Level of Difficulty: 3 Hard
17. An industrial firm
A. is one that is independently owned and takes title to the merchandise it sells.
B. buys physical goods and resells them again without any reprocessing.
C. deals exclusively with federal, state, and local governments.
D. in some way reprocesses a product or service it buys before selling it again to the next
buyer.
E. only produces a product, not a service.

Blooms: Remember
6-89
18. A firm that reprocesses a product or service it buys before selling the product again to the next
buyer is referred to as
A. an industrial firm.
B. a reseller firm.
C. a government agency.
D. a wholesaler.
E. a retailer.

Blooms: Remember
6-90
19. Manufacturers, farms, financial services, and fisheries are all examples of companies in the
A. consumer market.
B. cooperative market.
C. reseller market.
D. industrial market.
E. government market.
There are about 7.5 million firms in the industrial, or business, market. Companies that primarily
sell physical goods (manufacturers; mining; construction; and farms, timber, and fisheries)
represent 25 percent of all the industrial firms. The services market sells diverse services such as
legal advice, auto repair, and dry cleaning. Service companies—finance, insurance, and real
estate businesses; transportation, communication, and public utility firms; and not-for-profit
organizations—represent 75 percent of all industrial firms.

Blooms: Understand
6-91
20. Which of the following types of firms are in the industrial market?
A. retailing
B. construction
C. wholesaling
D. state governments
E. federal regulatory agencies
There are about 7.5 million firms in the industrial, or business, market. These industrial firms in
some way reprocess a product or service they buy before selling it again to the next buyer.
Companies that primarily sell physical goods (manufacturers; mining; construction; and farms,
timber, and fisheries) represent 25 percent of all the industrial firms.

Blooms: Understand
21. Which of the following is a service business within the industrial market?
A. construction
B. mining
C. insurance
D. government
E. farming
The services market sells diverse services such as legal advice, auto repair, and dry cleaning.
Service companies—finance, insurance, and real estate businesses; transportation,
communication, and public utility firms; and not-for-profit organizations—represent 75 percent
of all industrial firms.

Blooms: Understand
6-92
22. __________ comprise the highest percentage of firms in industrial markets.
A. Manufacturing firms
B. Construction firms
C. Agricultural firms
D. Mining companies
E. Service companies
Service companies represent 75 percent of all industrial firms.

Blooms: Understand
6-93
23. The services market sells diverse services such as legal advice, auto repair, and dry cleaning.
Along with __________, insurance, and real estate businesses, transportation, communication and
public utility firms, and not-for-profit organizations, these firms represent 75 percent of all
industrial firms.
A. finance
B. wholesalers
C. retailers
D. government units
Service companies, such as legal advice, auto repair, and dry cleaning services; finance,
insurance and real estate businesses; transportation, communication, public utility firms; and
not-for-profit organizations, represent 75 percent of all industrial firms.

Blooms: Understand
6-94
Along with finance, insurance, and real estate businesses, __________, communication, and public
utility firms, as well as not-for-profit organizations, these firms represent about 75 percent of all
industrial firms.
A. wholesalers
B. transportation
C. retailers
D. government units
insurance, and real estate businesses; transportation, communication, public utility firms; and
not-for-profit organizations, represent 75 percent of all industrial firms.

Blooms: Understand
6-95
Along with finance, insurance, and real estate businesses; transportation, __________ and public
utility firms; and not-for-profit organizations, these firms represent about 75 percent of all
industrial firms.
A. wholesaling
B. retailing
C. government units
D. communication
E. manufacturing
insurance, and real estate businesses; transportation, communication, and public utility firms;
and not-for-profit organizations, represent about 75 percent of all industrial firms.

Blooms: Understand
6-96
26. Corning, Inc., which transforms an exotic blend of materials to create optical fiber capable of
carrying much of the telephone traffic in the United States on a single strand, is operating in
__________ market.
A. a consumer
B. a government
C. a service
D. a reseller
E. an industrial
some way reprocess a product or service they buy before selling it again to the next buyer. This
is certainly true of Corning, Inc., which transforms an exotic blend of materials to create optical
fiber capable of carrying much of the telephone traffic in the United States on a single strand.

Blooms: Apply
6-97
27. A bank takes money from its depositors, reprocesses it, and "sells" it as loans to borrowers. The
bank is operating in the ___________ market.
A. consumer
B. government
C. industrial
D. service
E. reseller
some way reprocess a product or service they buy before selling it again to the next buyer. It is
true (if you stretch your imagination) of a firm selling services, such as a bank that takes money
from its depositors, reprocesses it, and "sells" it as loans to borrowers.

Blooms: Apply
6-98
28. The National Aeronautics and Space Administration (NASA) will pay Lockheed Martin Corp.
$11.4 billion for Orion's development, test flights, and its first manned mission in 2021. NASA is a
government unit operating in __________ market.
A. a heavy goods
B. a government
C. a service
D. an industrial
E. a reseller
Organizational buyers are divided into three markets: (1) industrial, (2) reseller, and (3)
government. Government units are the federal, state, and local agencies that buy goods and
services for the constituents they serve. There are about 89,500 of these government units in
the United States. These purchases include the $11.4 billion the National Aeronautics and Space
Administration (NASA) will pay Lockheed Martin Corp. for Orion's development, test flights, and
its first manned mission in 2021.

Blooms: Apply
6-99
29. Graham-Field Health Products makes hospital beds and wheelchairs from the component parts
and materials it buys. It sells these manufactured products to hospitals, nursing homes, and
retailers of health care products. Graham-Field Health Products operates in __________ market.
A. a consumer
B. a government
C. a service
D. an industrial
E. a reseller
some way reprocess a product or service they buy before selling it again to the next buyer. This
is certainly true of Graham-Field Health Products, which takes the component parts and
materials it buys and makes hospital beds and wheelchairs it sells to hospitals, nursing homes,
and retailers.

Blooms: Apply
30. Wholesalers and retailers that buy physical products and resell them without any reprocessing
are referred to as
B. reseller firms.
D. consumer product firms.
E. nonprofit firms.
Text term definition—resellers.

6-100
Blooms: Remember
31. The reseller market includes
A. manufacturers.
B. logistics and supply chain providers.
D. end-user service providers.
E. retailers and wholesalers.
Text term definition—resellers.

Blooms: Remember
6-101
32. European Style Furniture (ESF), headquartered in New York, acquires fine furniture from several
high quality manufacturers in Europe and enjoys exclusive distribution rights from them to sell
to furniture stores throughout the United States. In this context, ESF is most likely classified as
A. a producer.
B. a reseller.
Resellers are wholesalers and retailers that buy physical products and resell them without any
reprocessing. Here, ESF is a wholesaler because it sells to other stores that will sell to retailers,
which in turn sell to consumers.

Blooms: Apply
6-102
33. A firm that markets photocopy products used in the graphic arts field, buys sensitized paper
from Eastman Kodak Co., packages it with the Photostat brand name, and sells it directly to
amateur photographers. In this context, the marketer is most likely classified as
A. a manufacturer.
B. a reseller.
reprocessing. The repackaging carried out at the firm does not constitute reprocessing.
Technically, the firm is a retailer, not a wholesaler since it sells the paper directly to ultimate
consumers, not to other retail outlets.

Blooms: Apply
6-103
34. 1-800 Contacts is based in Draper, Utah, and sells contact lenses manufactured by other well-
known companies, including Johnson & Johnson Vision Care, Ciba Vision, Bausch & Lomb, and
CooperVision. It would most likely be classified as

B. a health care provider.
C. a reseller.
D. an industrial firm.
reprocessing. In this case, 1-800 Contacts resells contacts manufactured by others.

Blooms: Apply
6-104
35. Liberty Medical Supply is a home delivery service that sells diabetes testing supplies,
prescription drugs, and other supplies directly to consumers to assist them in the management
of their health-related conditions. Since Liberty Medical does not make any changes to the
supplies that it obtains from manufacturers, it would most likely be classified as

B. a health care manufacturer.
C. an industrial firm.
D. a reseller.
Resellers are wholesalers and retailers who buy physical products and resell them again without
any reprocessing. In this case, when Liberty Medical sells directly to diabetics and other ultimate
consumers, the firm is acting as a reseller, and in particular a retailer.

Blooms: Apply
36. In terms of organizational buying, Amazon.com, Lands' End, and JCPenney would most likely
be classified as
A. government units.
B. resellers.
C. manufacturers.
D. wholesalers.
E. industrial firms.
reprocessing. These firms are examples of retailers that purchase merchandise as resellers.

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Blooms: Apply
37. Federal, state, and local agencies that buy products and services for the constituents they serve
are referred to as
A. industrial markets.
B. reseller markets.
C. consumer markets.
D. government units.
E. global markets.
Text term definition—government units.

Blooms: Remember
38. When Georgia State University buys new laptops for its faculty, it is operating as
C. a government unit.
Government units are federal, state (such as a state university), and local agencies that buy
products and services for the constituents they serve.

Blooms: Apply
6-106
39. When the Federal Aviation Administration (FAA) purchases radar systems for 22 major air traffic
control centers in the United States, it is operating as
Government units are federal, state, and local agencies that buy products and services for the
constituents they serve.

Blooms: Apply
40. When the General Services Administration (GSA), an agency of the federal government,
purchased 116 Chevy Volts from General Motors for its vehicle fleet, it was operating as
C. a consumer market.
D. a government unit.
Government units are federal, state, and local agencies that buy products and services for the
constituents they serve.
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Blooms: Apply
41. The City of Denver contracts with Solid Waste Management to provide trash collection services
for its citizens. The city is operating as
Government units are federal, state, and local (like the City of Denver) agencies that buy
products and services for the constituents they serve.

Blooms: Apply
6-108
42. The system that provides common industry definitions for Canada, Mexico, and the United
States, which makes it easier to measure economic activity in the three member countries of the
North American Free Trade Agreement (NAFTA), is referred to as the
A. Standard Industrial Code System (SICS).

B. United Nations Central Product Classification System (UNCPCS).
C. National Codes of Industry System (NCIS).
D. North American Industry Classification System (NAICS).
E. Federal System of International Organizations (FSIO).
Key term definition—North American Industry Classification System (NAICS).

Blooms: Remember
43. The North American Industry Classification System (NAICS)
A. provides common industry definitions for North America, Central America, and South
America to measure economic activity in the Western Hemisphere.
B. provides common industry definitions between Canada and the United States to measure
economic activity and reduce barriers of trade for cross-border firms.
C. provides a classification system for products and services that is consistent worldwide.
D. provides a classification system for products and services that is consistent across North
America, Central America, and South America to measure economic activity in the Western
Hemisphere.
E. provides common industry definitions for Canada, Mexico, and the United States to
measure economic activity in the three member countries.
Key term definition—North American Industry Classification System (NAICS).

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Blooms: Remember
44. The North American Industry Classification System (NAICS) provides common industry
definitions to facilitate the measurement of economic activity for the member countries of the
A. European Union (EU).

B. United Nations (UN).
C. North American Free Trade Agreement (NAFTA).
D. North Atlantic Treaty Organization (NATO).
E. World Trade Organization (WTO).
The North American Industry Classification System (NAICS) provides common industry
definitions for Canada, Mexico, and the United States, which makes it easier to measure
economic activity in the three member countries of the North American Free Trade Agreement
(NAFTA).

Blooms: Remember
6-110
45. The acronym NAICS stands for
A. National Association of Industrial Compliance Standards.

B. National Association of Industrial Communication Systems.
C. North American Industrial Communication Standards.
D. North American Industry Classification System.
E. North Atlantic Industrial Classification System.
The acronym NAICS stands for the North American Industry Classification System (NAICS).

Blooms: Remember
46. The NAICS provides common industry definitions for
A. Canada, England, and the United States.

B. North America, Asia, and Europe.
C. North America, Central America, and South America.
D. Canada, England, Australia.
E. Canada, Mexico, and the United States.
The North American Industry Classification System (NAICS) provides common industry
definitions for Canada, Mexico, and the United States.

Blooms: Remember
6-111
47. The North American Industry Classification System (NAICS) designates industries with a
numerical code in a defined structure. A six-digit coding system is used. The first two digits
designate
A. a country of origin.
The NAICS groups economic activity to permit studies of market share, demand for products
and services, import competition in domestic markets, and similar studies. It designates
industries with a numerical code in a defined structure. A six-digit coding system is used. The
first two digits designate a sector of the economy, the third digit designates a subsector, and
the fourth digit represents an industry group. The fifth digit designates a specific industry and is
the most detailed level at which comparable data are available for Canada, Mexico, and the
United States. The sixth digit designates individual country-level national industries.

Blooms: Understand
6-112
numerical code in a defined structure. A six-digit coding system is used. The third digit
designates

Blooms: Understand
6-113
numerical code in a defined structure. A six-digit coding system is used. The fourth digit
designates

Blooms: Understand
6-114
numerical code in a defined structure. A six-digit coding system is used. The fifth digit
designates

Blooms: Understand
6-115
numerical code in a defined structure. A six-digit coding system is used. The sixth digit
designates

Blooms: Understand
6-116
52. Important market characteristics in organizational buying behavior include which of the
following?
A. unlimited markets but orders become progressively smaller over time

B. diminishing international opportunities as more firms enter the market
C. many customers placing progressively larger orders over time
D. fewer customers but with larger orders
E. a market that functions independently of consumer demand
The market characteristics for organizational buying include derived demand for industrial
products and services, typically few customers, and their purchase orders are large. See Figure
6-1.

Blooms: Understand
53. Important market characteristics in organizational buying behavior include which of the
following?
A. Organizational buying behavior is similar to consumer buying behavior since individuals are
involved in both processes.
B. Demand for industrial products is elastic instead of inelastic.
C. Demand for industrial products and services is derived.
D. Purchase orders are much more frequent and they are usually small.
E. Forecasting is not as important in organizational buying as in consumer buying.
The market characteristics for organizational buying include derived demand for industrial
products and services, typically few customers, and their purchase orders are large. See Figure
6-1.

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Blooms: Understand
following?
A. A heavy emphasis is placed on loyalty programs and rebates.

B. Direct selling to organizational buyers is rare.
C. A fixed, nonnegotiable price is the norm.
D. Many of the goods purchased are raw and semifinished.
Key characteristics or dimensions of product and service characteristics in organizational buying

include: (1) products or services that are technical in nature and purchased on the basis of
specifications; (2) many of the goods purchased are raw and semifinished; and (3) heavy
emphasis is placed on delivery time, technical assistance, and post-sale service. See Figure 6-1.

Blooms: Understand
6-118
following?
A. Products or services are intangible in nature and purchased on the basis of specifications.
B. A heavy emphasis is placed on delivery time, technical assistance, and post-sale service.
C. Direct selling to organizational buyers is rare.
D. A fixed, nonnegotiable price is the norm.


Blooms: Understand
56. In the organizational buying process, important product or service characteristics include
A. delivery time, technical assistance, and post-sale service.

B. low price, buyer incentives, and extended contracts.
C. buyer incentives, technical assistance, and exclusive contracts.
D. quantity discounts, delivery time, and exclusive contracts.
E. low price, buyer incentives, and post-sale service.


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Blooms: Understand
57. Important buying process characteristics in organizational buying behavior include which of the
following?
A. Few large transactions are made over the Internet due to concerns of industrial espionage.
B. Negotiations, purchases, and delivery occur in real time at an accelerated rate.
C. There are often reciprocal arrangements and negotiations between buyers and sellers.
D. Most purchases are made through government-licensed negotiators.
E. Direct selling to organizational buyers is rare because it is cost-prohibitive.
Key features of the buying process include: (1) technically qualified and professional buyers
follow established purchasing policies and procedures; (2) buying objectives and criteria are
typically spelled out, as are procedures for evaluating sellers and their products or services; (3)
multiple buying influences, and multiple parties participating the purchase decisions; (4)
reciprocal arrangements, and negotiations between buyers and sellers; and (5) frequent online
buying. See Figure 6-1.

Blooms: Understand
6-120
58. Which of the following statements about marketing mix characteristics in organizational buying
behavior is most accurate?
A. Few large transactions are made over the Internet.

B. The actual buyer retains all of the influence in the buying decision.
C. Advertising is very simplistic in nature.
D. Direct selling to organizational buyers is the rule.
E. Only finished goods are sold in this way.
Key characteristics of the marketing mix in terms of organizational buying include: (1) direct
selling to organizational buyers, and distribution is very important; (2) advertising and other
forms of promotion are technical in nature; and (3) price is often negotiated, evaluated as part
of broader seller and product/service qualities, and frequently affected by quantity discounts.
See Figure 6-1.

Blooms: Understand
59. The demand for industrial products and services that is driven by demand for consumer
products and services is referred to as
A. secondary marketing.
B. derived demand.
C. reciprocal supply.
D. demand elasticity.
E. sequential demand.
Key term definition—derived demand.

Blooms: Remember
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60. Derived demand refers to
A. a graph relating the quantity sold and price, which shows the maximum number of units
that will be sold at a given price.
B. the demand for industrial products and services that is driven by the demand for consumer
products and services.
C. the relationship between total revenue and total cost to determine profitability at various
levels of output.
D. the point on a demand curve where supply and demand intersect.
E. the percentage change in quantity demanded relative to a percentage change in price.
Key term definition—derived demand.

Blooms: Remember
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61. Derived demand means the demand for industrial products and services is driven by, or derived
from, the
A. NAICS statistical models.

B. gross national product.
C. demand for consumer products and services.
D. demand for other industrial products and services.
E. demand for government products and services.
Derived demand is the demand for industrial products and services that is driven by, or derived
from, demand for consumer products and services.

Blooms: Remember
62. During late summer and early fall, there is a large demand for containers in Asia that are used
to ship consumer products from Asia to the United States in time for the holiday selling season.
The demand for these containers is referred to as __________ demand.
A. unitized
B. derived
C. reseller
D. applied
E. implied
Derived demand means that the demand for industrial products and services is driven by, or
derived from, the demand for consumer products and services. The demand for containers is
driven by consumer demand in the United States for products manufactured in Asia.

Blooms: Apply
6-123
63. Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still,
demand for its products often depends on rates of air travel among consumers. Demand for
Airbus products is referred to as __________ demand.
A. unitized
B. reseller
C. applied
D. implied
E. derived
derived from, the demand for consumer products and services. The demand for aircraft is
driven by consumer (e.g., business and vacation travelers) demand for air travel worldwide.

Blooms: Apply
6-124
64. Spruceland Millworks in Canada makes wood pallets for transporting and storing new
appliances such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would
be classified as
A. reactive demand, which is tied to the sales of appliances, not the sale of the pallets.
B. unitary demand, which is tied to the sales of appliances.
C. derived demand, which is tied to the sales of appliances.
D. inelastic demand, which is tied to the cost of the components of the pallets.
E. elastic demand, which is tied to the cost of the components of the pallets.
derived from, the demand for consumer products and services. The demand for the pallets is
driven by the sales of (the demand for) appliances.

Blooms: Apply
6-125
65. Concert Staging Co. provides the stage, roof system, lighting, and sound for outdoor concerts
and theatrical events. The number of concert and theater events sponsored by various
organizations determines how many times the company is hired to provide its services, which
often depends on consumer willingness to buy event tickets. Demand for the services provided
by Concert Staging Co. is considered
A. derived.
B. unitized.
C. industrial.
D. applied.
E. reseller.
derived from, the demand for consumer products and services. The demand for Concert
Staging Co. services is driven by the demand for outdoor concerts and theatrical events, which
in turn is derived from the ticket sales for these entertainment activities.

Blooms: Apply
6-126
66. Purchases of sodium fluoride by Procter & Gamble for use in the manufacture of Crest
toothpaste would be an example of __________ demand.
A. applied
B. unitized
C. industrial
D. derived
E. consumer
derived from, demand for consumer products and services. Demand for the sodium fluoride
would be directly related to the consumer demand for Crest toothpaste.

Blooms: Apply
6-127
67. South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to
manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT's
leather is a result of consumer interest in products such as Via La Moda handbags made from
this exotic and expensive leather. SCOT has __________ demand for its product.
A. derived
B. unitized
C. industrial
D. applied
E. reseller
derived from, the demand for consumer products and services. The demand for SCOT ostrich
leathers depends on the demand for shoes, car interiors, handbags, among other products.

Blooms: Apply
6-128
68. Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan, the
antibacterial agent in many household products such as liquid soap. Consumers may have
heard about research suggesting environmental and health risks associated with the cumulative
effects of antibacterial agents. Changing consumer purchases provide an example of __________
demand for Ciba's triclosan product.
A. applied
B. unitized
C. industrial
D. derived
E. consumer
derived from, demand for consumer products and services. Demand for triclosan would be
directly related to the consumer demand for antibacterial soaps.

Blooms: Apply
6-129
69. Because orders in organizational buying are typically much larger than in consumer buying,
buyers must often __________ when the order is above a specific amount, such as $5,000.
A. pay estimated sales taxes in advance

B. move up the time required to execute a purchase agreement
C. get competitive bids from at least three prospective suppliers
D. forgo the purchase because senior management is unlikely to approve it
E. forgo identifying the members of the supplying center and their roles in the selling process
With so much money at stake, most organizations place constraints on their buyers in the form
of purchasing policies or procedures, such as obtaining competitive bids from at least three
prospective suppliers.

Blooms: Understand
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70. All of the following statements about the purchase involved in organizational buying are true
except
A. the length of time required to arrive at a purchase agreement can vary with size of
purchase.
B. the dollar value of a single purchase made by an organization often runs into thousands or
millions of dollars.
C. the size of purchase impacts who participates in the purchase decision.
D. the size of purchase impacts who makes the final decision.
E. the size of the purchase involved in organizational buying is typically smaller than that in
consumer buying but it is done more frequently.
The size of the purchase involved in organizational buying is typically much larger than that in
consumer buying, with the dollar value of a single purchase often running into thousands or
millions of dollars. With so much money at stake, buyers must often get competitive bids from
at least three prospective suppliers when the order is above a specific amount. Order size
affects buying practices in determining who participates in the purchase decision and makes
the final decision, and the length of time required to arrive at a purchase agreement.

Blooms: Understand
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71. Firms marketing consumer products or services often try to reach thousands or millions of
individuals or households. Firms selling to organizations
A. try to reach tens of millions of wholesalers, retailers, and government units.

B. are restricted to far fewer buyers.
C. hope to obtain similar numbers of business customers, or even more.
D. do not have customers, per se.
E. simultaneously purchase from organizational buyers and ultimate consumers.
The number of potential buyers is much smaller in organizational buying situations.

Blooms: Understand
72. An organization buys products and services for one main reason, which is to
A. achieve its own objectives.

B. beat its competitors.
C. satisfy the needs of its suppliers.
D. employ people.
E. maintain inventory.
Organizations buy products and services for one main reason, which is to help them achieve
their own objectives.

Blooms: Understand
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73. The primary organizational buying objective for business firms is to
A. create an atmosphere of inclusiveness.

B. help smaller companies stay in business.
C. increase the proficiency of its buyers.
D. help the firm achieve its objectives.
E. balance inventory.
Organizations buy products and services for one main reason: to help them achieve their
objectives. For business firms, the buying objective is usually to increase profits through
reducing costs or increasing revenues.

Blooms: Understand
74. The primary buying objective for business firms is usually to
A. increase profits through increasing costs and increasing revenues.

B. increase profits through reducing costs and decreasing revenues.
C. increase profits through reducing costs or increasing revenues.
For business firms, the buying objective is usually to increase profits through reducing costs or
increasing revenues.

Blooms: Understand
6-133
75. The buying objective for nonprofit firms and government agencies is usually to
A. meet the needs of the groups they serve.

B. increase profits through reducing costs.
C. increase profits through increasing revenues.
For nonprofit firms and government agencies, the buying objective is usually to meet the needs
of the groups they serve.

Blooms: Understand
76. The American Red Cross provides disaster relief, among many other services. As a nonprofit
organization, its primary buying objective is to
A. increase profits through reducing costs.

B. increase profits through increasing donations.
C. diversify its services mix to survive the continued economic downturn.
D. meet the needs of the groups it serves.
E. maintain profits through reducing costs and increasing donations.
The buying objectives of nonprofit firms are usually to meet the needs of the groups they serve.

Blooms: Apply
6-134
77. Many companies have broadened their buying objectives to include an emphasis on
A. purchasing from as many vendors as possible to avoid component shortfalls.

B. purchasing from start-up firms to grow the economy.
C. diversifying their product lines and brand extensions to reduce the risk of failure for any one
item.
D. pricing freezes to maintain consistent quantities demanded from consumers.
E. proactively purchasing from minority-owned suppliers and vendors.
Many companies today have broadened their buying objectives to include an emphasis on
supplier diversity—buying from minority- and women-owned suppliers and vendors.

Blooms: Understand
78. The primary reason companies have placed an emphasis on buying from minority- and
women-owned suppliers and vendors is
A. new federal government regulations require it.

B. they can help a firm meet or exceed its objectives in sales, profits, or customer satisfaction.
C. it is the socially responsible thing to do.
D. it can attract new target markets.
E. these companies will work harder for less money.
Many companies today have broadened their buying objectives to include an emphasis on
buying from minority- and women-owned suppliers and vendors because it has led to
increases in sales, profits, and/or customer satisfaction.

Blooms: Understand
6-135
79. The objective attributes of the supplier's products and services and the capabilities of the
supplier itself are collectively referred to as
A. the supplier consideration set.

B. derived demand factors.
C. evaluative criteria.
D. performance metrics.
E. organizational buying criteria.
Text term definition—organizational buying criteria.

Blooms: Remember
80. Organizational buying criteria refer to
A. the restrictions placed on potential solutions to a problem in a purchase decision.

B. the specific qualifications of a potential customer based upon past performance, reliability,
and consistency regarding the purchase of an organization's offerings.
C. the subjective attributes of the supplier's products and services and the capabilities of the
supplier itself.
D. the objective attributes of the supplier's products and services and the capabilities of the
supplier itself.
E. the factors that an ultimate consumer would consider that represent both the objective
attributes of a brand and the subjective ones to compare different products and brands.
Key term definition—organizational buying criteria.
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Blooms: Remember
81. Organizational buying criteria serve the same purpose as __________ criteria used by consumers.
A. consideration
B. evaluative
C. decision
D. alternative
E. prepurchase
Organizational buying criteria serve the same purpose as evaluative criteria used by consumers.

Blooms: Understand
A. price.
B. loyalty.
C. flexibility.
D. adaptability.
E. consumer demand.
Organizational buying criteria include (1) price, (2) ability to meet the quality specifications
required for the item, (3) ability to meet required delivery schedules, (4) technical capability, (5)
warranties and claim policies in the event of poor performance, (6) past performance on
previous contracts, and (7) production facilities and capacity.
6-137
Blooms: Understand
A. flexibility.
B. ability to meet the quality specifications required for the item.
C. adherence to government regulation.
E. consumer demand.

Blooms: Understand
6-138
A. adaptability.
B. consumer demand.
C. ability to meet required delivery schedules.
E. adherence to corporate social responsibility policies.

Blooms: Understand
A. consumer demand.
B. longevity.
C. promotional incentives.
D. technical capability.

Blooms: Understand
6-139
A. consumer demand.
B. promotional incentives.
C. longevity.
E. warranties and claim policies.

Blooms: Understand
6-140
A. adherence to governmental policies.

B. regulatory support.
C. past performance on previous contracts.
D. consumer demand.

Blooms: Understand
A. production facilities and capacity.

B. consumer demand.
C. flexibility.
D. adherence to government policies.

Blooms: Understand
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89. To be a Walmart supplier, a firm must be able to deliver its products to Walmart's distribution
centers within a 16-minute window. If the driver arrives before or after the scheduled window,
the supplier will be turned away and fined. Walmart's insistence on choosing a supplier based
upon its ability to provide on-time delivery is an example of
A. a supplier value dimension.

B. a derived demand factor.
C. an evaluative criterion.
D. an external performance measure.
E. an organizational buying criterion.
The ability to meet required delivery schedules is an example of an organizational buying

criterion, which includes the capabilities of the supplier, such as its ability to provide on-time
delivery.

Blooms: Apply
6-142
90. The deliberate effort by organizational buyers to build relationships that shape suppliers'
products, services, and capabilities to fit a buyer's needs and those of its customers is referred
to as
B. a supply partnership.
C. a make-buy decision.
E. buyer-seller reciprocity.
Text term definition—supplier development.

Blooms: Remember
91. Supplier development refers to
A. the deliberate effort by suppliers to build relationships that shape buyers' needs, as well as
the needs of ultimate consumers.
B. the practice of dividing large orders among several suppliers rather than a single one to
avoid possible manufacturing delays due to bad weather, plant mishaps, union issues, etc.
C. the deliberate effort by organizational buyers to build relationships that shape suppliers'
products, services, and capabilities to fit a buyer's needs and those of its customers.
D. the practice of establishing a close relationship with one supplier rather than many to
ensure loyalty and preferential treatment when filling exceptionally large orders.
E. the shift of a firm from supplier to manufacturer when repeated experience with a product
and excellent buyer/seller relationships make the change both feasible and profitable.
Text term definition—supplier development.

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Blooms: Remember
92. When the John Deere Co. employs engineers who work full-time with the company's suppliers
to improve their efficiency and quality and reduce their costs, it is practicing
B. make-buy decisions.
C. supply partnerships.
E. directive purchasing.
When the John Deere Co. employs engineers who work full-time with the company's suppliers
to improve their efficiency and quality and reduce their costs, it is practicing supplier
development. The engineers are even called supplier-development engineers.

Blooms: Understand
6-144
A. Purchases are often made after lengthy or complex negotiations.

D. Reciprocal arrangements are illegal.
Organizational buying is likely to involve complex negotiations concerning delivery schedules,

price, technical specifications, warranties, and claim policies. Negotiations can last for an
extended period of time. Reciprocal arrangements also exist in organizational buying, and long-
term contracts are prevalent. In some cases, buyer-seller relationships evolve into supply
partnerships.

Blooms: Understand
Topic: Buyer-Seller Relationships
6-145
A. Purchases are often made after brief negotiations.

C. Long-term contracts are often prevalent.
D. Reciprocal arrangements are prohibited by the federal government.
E. Delivery schedules are largely irrelevant.

partnerships.

Blooms: Understand
6-146
A. Purchases are often made after brief negotiations if any.

B. Supply partnerships may eventually develop.
D. Reciprocal arrangements provide the most flexibility to buyer and seller.

partnerships.

Blooms: Understand
6-147
96. The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller
relationships that can evolve into supply partnerships, are all examples of
A. illegal activities that are a common weakness of organizational buying.

B. illegal activities that result from collusion between buyers and sellers.
C. activities that are strictly governed by the NAICS.
D. the nature of relationships between buyers and sellers in organizational buying.
E. activities that result from extreme competition between manufacturers when there are too
few suppliers.

partnerships.

Blooms: Understand
6-148
97. Merrill Lynch and Thompson Financial had a three-year, $1 billion project that put workstations
on the desks of 25,000 of Merrill Lynch's brokers. These machines put the world of investing
information at brokers' fingertips. Thompson, the supplier, was obliged to not only deliver
technology and services on time and on budget, but also constantly improve customer-
satisfaction levels among Merrill's brokers and customers. This is an example of
A. a reciprocity agreement.
C. supplier alliance.
D. a buyer-seller relationship.
E. a tying arrangement.
A distinction between organizational and consumer buying behavior lies in the nature of the
relationship between organizational buyers and suppliers. Specifically, organizational buying is
more likely to involve complex and lengthy negotiation concerning delivery schedules, price,
technical specifications, warranties, and claim policies. Long-term relationships are also
prevalent.

Blooms: Apply
6-149
98. An industrial buying practice in which two organizations agree to purchase each other's
products and services is referred to as
A. a tying arrangement.
C. reciprocity.
E. noncompetitive bidding.
Text term definition—reciprocity.

Blooms: Remember
99. In a buyer-seller relationship, reciprocity refers to
A. the practice whereby a seller requires the purchaser of one product to buy another item in
the line.
B. an industrial buying practice in which two organizations, in this case a manufacturer and a
supplier, agree to purchase each other's products and services.
C. an arrangement a manufacturer makes with a reseller to only handle its products and not
those of competitors.
D. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to
E. when a supplier requires a buyer purchasing some of its products to also buy others.
Text term definition—reciprocity.

Blooms: Remember
6-150
100. The practice of __________, which can affect the normal operation of the free market and limit
the flexibility of buyers, is disapproved of by the U.S. Justice Department.
A. tying agreements
B. just-in-time procurement
C. quid pro quo
D. supply partnerships
E. reciprocity
Reciprocity is an industrial buying practice in which two organizations agree to purchase each
other's products and services. It is frowned upon by the U.S. Justice Department because it
restricts the normal operation of the free market.

Blooms: Understand
6-151
101. Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because the
practice
A. gives an unfair advantage to smaller companies.

B. gives an unfair advantage to larger corporations.
C. reduces the amount of taxes paid by the parties involved.
D. restricts the normal operation of the free market.
E. encourages free trade.
other's products and services. Though it exists, it is frowned upon by the U.S. Justice
Department because it restricts the normal operation of the free market.

Blooms: Understand
102. Although the U.S. Justice Department frowns on __________ because it restricts the normal
operation of a free market, it is still legal for two companies to buy one another's products.
A. reciprocity
B. tying agreements
C. just-in-time procurement
D. quid pro quo
E. supply partnerships
other's products and services. Though it exists, it is frowned upon by the U.S. Justice
Department because it restricts the normal operation of the free market.

Blooms: Understand
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103. A study on ethical practices in purchasing found that smaller firms frequently make agreements
with other organizations to purchase one another's products. This practice is referred to as
A. exclusive dealing.
B. supply partnerships.
C. reciprocity.
D. strategic alliances.
E. tying arrangements.
other's products and services.

Blooms: Understand
104. If General Motors (GM) purchases Borg-Warner transmissions, and Borg-Warner buys trucks
and cars from GM, they would be demonstrating which type of buyer-seller interaction?
A. exclusive dealing
B. supply partnerships
C. tying arrangements
D. noncompetitive bidding
E. reciprocity
other's products and services.
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Blooms: Apply
105. A __________ exists when a buyer and its supplier adopt mutually beneficial objectives, policies,
and procedures for the purpose of lowering the cost or increasing the value of products and
services delivered to the ultimate consumer.
A. supplier development agreement

B. reciprocal arrangement
C. shareholder relationship
D. supply partnership
E. strategic alliance
Text term definition—supply partnership.

Blooms: Remember
6-154
106. A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost or increasing the value of
products and services delivered to the ultimate consumer is referred to as a
A. supply partnership.
B. supplier development agreement.
C. reciprocal arrangement.
D. shareholder relationship.
E. strategic alliance.

Blooms: Remember
107. A supply partnership refers to
A. an arrangement a manufacturer makes with a reseller to handle only its products and not
those of competitors.
B. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to
C. when a supplier requires a buyer purchasing some products from it to also buy others.
D. a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost of or increasing the value of
E. the practice whereby a seller requires the purchaser of one product to also buy another
item in the line.

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Blooms: Remember
108. A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of
A. putting competitors of both buyers and sellers out of business.

B. lowering costs and increasing profits for the supplier.
C. lowering costs or increasing value of products or services to the ultimate consumer.
D. creating a single channel of distribution.
E. creating an exclusionary relationship from all other buyers and sellers.

Blooms: Understand
109. Milsco Manufacturing markets __________ in partnership with its customers.
A. motors
B. braking systems
C. transmissions
D. seats
E. customized wheels
Milsco Manufacturing markets seating solutions in partnership with its customers. See
Marketing Matters in the textbook.

Blooms: Remember
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110. Milsco Manufacturing emphasizes
A. signing lifetime contracts with suppliers to demonstrate its loyalty to them.

B. supplier partnerships when designing products for its customers.
C. reciprocity arrangements with its customers so that each can maximize profit.
D. co-branding as a form of supply partnerships with customers.
E. extending health care benefits to its suppliers' employees as a result of the Affordable Care
Act.
Milsco Manufacturing involves its customers such as Harley-Davidson in the new-product

development process to build mutually beneficial, long-term, supply partnership relationships.
See Marketing Matters in the textbook.

Blooms: Understand
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111. Apple Inc. custom-orders the microprocessors for its iMac, iPhone, and iPad. Intel makes chips
for the iMac and Samsung produces Apple-designed chips for the iPhone and iPad. Intel and
Samsung work with Apple to minimize costs for each of them while maximizing quality,
ultimately giving customers good value for their money. This is an example of
A. a symbiotic partnership.
B. a make-buy decision.
C. a reciprocal agreement.
E. an exclusive dealing.
A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives,

Blooms: Apply
6-158
112. Walmart asked that Procter & Gamble (P&G) electronically link to its computerized cash register
scanning system, allowing for direct electronic ordering and replenishing for all of its stores.
This way, Walmart can tell P&G what merchandise it needs, along with how much, when, and to
which store to deliver on a daily basis. Walmart is engaged in

C. a supply partnership.
D. sustainable development.
E. cause marketing.
A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives,

Blooms: Apply
113. Purchasing that aims to integrate environmental considerations into all stages of an
organization's buying process with the goal of reducing the impact on human health and the
physical environment is referred to as
A. ecological procurement.
C. green marketing.
D. supplier partnership.
E. stakeholder procurement.
Text term definition—sustainable procurement.
AACSB: Ethics
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Blooms: Remember
114. Because many companies are concerned with the depletion of natural resources, supply
partnerships often include provisions for
A. green marketing.
B. regulatory exemptions.
C. stakeholder procurement.
E. sustainable procurement.
Sustainable procurement aims to integrate environmental considerations into all stages of an

organization's buying process with the goal of reducing the impact on human health and the
physical environment.
AACSB: Ethics
Blooms: Understand
6-160
115. Starbucks purchases from coffee growers located in more than 20 countries. It pays the coffee
farmers a fair price for the beans, the coffee is grown in an ecologically sound manner, and
Starbucks invests in the farming communities where the coffees are produced. This is an
example of
A. green marketing.
C. sustainable procurement.
E. cause marketing.
Starbucks is a pioneer and worldwide leader in sustainable procurement.
AACSB: Ethics
Blooms: Understand
Topic: Corporate Social Responsibility
116. Starbucks is using its purchasing power to continue its quest to reduce its energy usage.
Recently, the company announced plans to replace all of the traditional incandescent and
halogen bulbs in its stores worldwide with more efficient light-emitting diode (LED) bulbs—a
move the company claims will enable it to cut energy consumption in its stores by up to 7
percent. Starbucks would be considered a leader in

C. cause marketing.
E. sustainable development.
Starbucks is a pioneer and worldwide leader in sustainable procurement.
AACSB: Ethics
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Blooms: Understand
117. Recently, Matt Kistler, a senior vice president at Walmart, claimed the company was making
progress on achieving three major goals: (1) to be supplied by 100 percent renewable energy,
(2) to create zero-waste, and (3) to increase the sale of renewably produced products. Walmart
is focusing on
A. using ecological buying centers.

B. complying with government regulations.
C. engaging in cause marketing.
D. using sustainable procurement.
E. meeting ISO 9000 standards.
Walmart is focusing on sustainable procurement with the goal to be supplied by 100 percent
renewable energy.
AACSB: Ethics
Blooms: Apply
6-162
118. The decision making process that organizations use to establish the need for products and
services and identify, evaluate, and choose among alternative brands and suppliers is referred
to as
A. the consumer purchase decision process.

B. the industrial purchase procedure.
C. organizational buying behavior.
D. the offering purchase framework.
E. the sustainable procurement process.
Key term definition—organizational buying behavior.

Blooms: Remember
119. Organizational buying behavior is
A. the action a person takes in purchasing and using products and services, including the
mental and social process that come before and after the action.
B. the decision making process that organizations use to establish the need for products and
services and identify, evaluate, and choose among alternative brands and suppliers.
C. purchase behavior based upon derived demand.
D. determining what to purchase and the quantity to purchase based upon the derived supply.
E. the process that organizations use to purchase the raw materials and tools used in the
manufacturing of a product.
Key term definition—organizational buying behavior.

Blooms: Remember
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others. Common to both is that they
A. use the same five stages in the buying decision process.

B. use formal vendor rating when choosing among alternative brands.
C. are affected by derived demand.
D. have virtually unlimited options for suppliers.
E. rely on gatekeepers to control product information.
The five stages of the organizational buying process also apply to consumer buying. More
individuals are involved, supplier capability becomes more important, and the post-purchase
evaluation behavior is more formalized when organizations buy. See Figure 6-3.

Blooms: Understand
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121. Which of the following possible characteristics of consumer buying is least likely to enter into an
organizational buying decision?
A. comparison of product performance with expectations

B. purchase decisions based on the highest overall evaluation
C. alternatives evaluated on important criteria
D. information gathered from internal and external searches
E. problem recognition triggered by self-actualization motives
Organizations buy products and services for one main reason, which is to help them achieve
their objectives. For business firms, the buying objective is usually to increase profits through
reducing costs or increasing revenues. Self-actualization is a personal, not organizational,
motivator.

Blooms: Understand
others. One key difference is that in the organizational buying process,
A. only four stages are used.

B. fewer individuals are involved.
C. firms are not affected by derived demand.
D. the post-purchase evaluation behavior is more formalized.
E. there is less reliance on gatekeepers to control product information.
There are important similarities and differences between consumer and organizational buying
behavior. In the latter, more individuals are involved, supplier capability becomes more
important, and the post-purchase evaluation behavior is more formalized. See Figure 6-3.

6-165
Blooms: Understand
123. The first stage in the organizational buying decision process is
B. antecedent states.
The first stage of the organizational buying decision process is problem recognition. See Figure
6-3.

Blooms: Understand
124. The sales department's identification of an improvement made to a competitor's product would
occur during which stage of the organizational buying decision process?
A. supplier search
B. alternative evaluation
C. problem recognition
During the problem recognition stage, marketing research or employees such as salespeople
may identify problems.

Blooms: Understand
6-166
125. Once an organization passes through the problem recognition stage of the organizational
buying decision process, it reaches the __________ stage.
B. value analysis
E. behavioral learning
The second stage of the organizational buying decision process is information search. See
Figure 6-3.

Blooms: Remember
126. At which stage of the organizational buying decision process would design and production
engineers draft specifications?
E. value analysis
Design and production engineers draft specifications for the product in the information search
stage of the organizational buying decision process. See Figure 6-3.
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Blooms: Understand
127. During the third stage of the organizational buying decision process, the organization engages
in
B. post-purchase behavior.
The third stage of the organizational buying decision process is alternative evaluation. See
Figure 6-3.

Blooms: Remember
6-168
128. At which stage of the organizational buying decision process would purchasing and
engineering personnel visit potential suppliers to assess their facilities?
D. post-purchase behavior
In the alternative evaluation stage of the organizational buying decision process, purchasing
and engineering personnel visit with suppliers and assess facilities, capacity, quality control, and
financial status. See Figure 6-3.

Blooms: Understand
engineering personnel visit potential suppliers to assess their production capacity?
D. alternative evaluation

Blooms: Understand
6-169
engineering personnel visit potential suppliers to assess their quality control?
A. alternative evaluation
B. problem recognition
C. information search

Blooms: Understand
6-170
131. At which stage of the organizational buying decision process would purchasing assess the
financial status of potential suppliers?

Blooms: Understand
132. At which stage of the organizational buying decision process would a firm use key
organizational buying criteria such as price, quality, delivery time, and technical capability to
select a supplier?
D. purchase review
At the purchase decision stage of the organizational buying decision process, the firm selects its
organizational buying criteria such as price, quality, delivery time, and technical capability to
select a supplier. Then they negotiate terms and award a contract. See Figure 6-3.

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Blooms: Remember
133. During the next-to-last stage of the organizational buying decision process, the organization
A. drafts specifications.
B. formally rates suppliers that were used.
C. evaluates supplier facilities.
D. awards the contract.
E. recognizes a need for change.
The fourth stage of the organizational buying decision process is the purchase decision, during
which a contract is awarded. See Figure 6-3.

Blooms: Understand
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134. Which of the following is indicative of the purchase decision stage of the organizational buying
decision process?
A. The purchase decision is usually quick once the information search has been completed.
B. Even after the bid is submitted and even accepted, further negotiation is likely.
C. Even if several vendors make it onto the bidder's list, ultimately only one supplier is chosen.
D. If a supplier on the bidder's list is not selected, it is rarely told the reason it was rejected.
E. Once an agreement has been formally reached, neither the buyer nor the seller is permitted
to make changes to the terms of the contract.
After a supplier has been selected, further negotiation concerning price, performance, and
delivery terms is likely. See Figure 6-3.

Blooms: Understand
135. What is the last stage of the organizational buying decision process?
B. post-purchase behavior
E. purveyor review
The final stage of the organizational buying decision process is post-purchase behavior. See
Figure 6-3.

Blooms: Remember
6-173
______________ behavior is more formal.
A. problem outcome
D. post-purchase evaluation
Comparing the stages in a consumer and organizational purchase decision process reveals key
differences. For example, when a manufacturer buys an earbud headset for its units from a
post-purchase evaluation behavior is more formal. See Figure 6-3.

Blooms: Understand
6-174
supplier, more individuals are involved, _____________ becomes more important, and the post-
purchase evaluation behavior is more formal.
A. choice variety
B. supplier audit
D. supplier capability
Comparing the stages in a consumer and organizational purchase decision process reveals key
differences. For example, when a manufacturer buys an earbud headset for its units from a
post-purchase evaluation behavior is more formal. See Figure 6-3.

Blooms: Understand
6-175
138. General Electric manufactures electric motors for its clothes dryers. The firm uses a formal
vendor rating system to evaluate suppliers and notify those whose parts did not meet quality
standards. If a supplier fails to correct the problem, GE will drop it as a future supplier. Which
stage in the organizational buying decision process would GE make this evaluation?
A. purchase decision stage

B. information search stage
C. post-purchase behavior stage
D. alternative evaluation stage
E. problem recognition stage
A formal vendor rating system would be used in the post-purchase behavior stage of the
organizational buying decision process.

Blooms: Apply
139. The group of people within an organization who participate in the buying process and share
common goals, risks, and knowledge important to a purchase decision is referred to as the
A. gatekeeper.
B. buying center.
C. purchasing department.
D. procurement committee.
E. acquisition office.
Key term definition—buying center.

Blooms: Remember
6-176
140. A buying center refers to
A. an online trading community that brings together buyers and supplier organizations to
make possible the real time exchange of information, money, products, and services.
B. the department within a firm responsible for the logistics of placing, tracking, and delivering
orders to other departments within the firm.
C. the department within a firm responsible for the logistics of placing, tracking, and delivering
orders to ultimate consumers.
D. the group of people within an organization who participate in the buying process and share
common goals, risks, and knowledge important to a purchase decision.
E. the department within a firm that allows purchases to be made from a centralized location
from multiple vendors at the same time.

Blooms: Remember
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141. The term __________ is used to identify a group of people within an organization who participate
in the buying process and share common goals, risks, and knowledge important to a purchase
decision.
A. procurement committee
B. purchasing department
C. buying center
D. gatekeepers
E. acquisition office

Blooms: Remember
142. Several people often participate in the organizational buying process. Called a __________, these
people share common goals, risks, and knowledge important to a purchase decision.
A. buying center
B. buying cohort
C. sustainable procurement committee
D. stakeholder group
E. purchasing department

Blooms: Remember
6-178
143. Large multistore chain retailers such as 7-Eleven convenience stores, Safeway, and Target use a
highly formalized buying center that is referred to as
A. an ad hoc committee.
B. a buying committee.
C. a merchandise procurement center.
D. a purchasing department.
E. a purchasing control system.
Text term definition—buying committee.

Blooms: Remember
144. Most large multistore chain resellers use __________ that are highly formalized to arrive at buying
decisions.
A. buying committees
B. merchandise procurement centers
C. sustainable procurement committees
D. stakeholder groups
E. purchasing divisions
For most large multistore chain resellers, such as Target, 7-Eleven convenience stores, or
Safeway, the buying center is highly formalized and is called a buying committee.

Blooms: Understand
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145. Marketers need to understand their firms' buying centers. A series of questions can be used to
facilitate this process. Which of the following questions would be the least useful when trying to
understand the operations of a buying center?
A. Which individuals are in the buying center for the product or service?
B. What is the relative influence of each member of the group?
C. What are the buying criteria of each member?
D. How does each member of the group perceive our company, our products and services,
and our salespeople?
E. What criteria were used to select the members of the buying center?
The importance of the buying center requires that a firm marketing to many industrial firms and
government units understand the structure, technical and business functions represented, and
behavior of these groups. One researcher suggests that the other four questions provide
guidance in understanding the buying center.

Blooms: Understand
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146. Which of the following statements most closely describes the people in the buying center of a
medium-sized manufacturing plant?
A. The composition of the buying center remains constant over long periods of time.
B. The buying center avoids cross-functional teams whenever possible.
C. The composition of the buying center depends on the specific item being purchased.
D. The purchasing manager is an occasional member of the buying center.
E. Most government units use a formal buying center to arrive at buying decisions.
The composition of the buying center changes as the item that is to be purchased changes.
Although a buyer or purchasing manager is almost always a member of the buying center,
individuals from other functional areas are included, depending on what is to be purchased.
Cross-functional teams are often used when the purchased item is to become part of a
manufactured product.

Blooms: Understand
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147. In an effort to make better and more efficient purchase decisions, the Ford Motor Co. includes
various people, depending on the purchase situation. Individuals may include key personnel
from various departments, including research and development, finance, marketing, shipping,
and sales. This is a description of Ford's
A. selling committee.
B. sustainable procurement department.
C. purchasing unit.
D. buying center.
E. buying committee.
For complex purchase decisions, many organizations include a variety of people from various
departments within the organization in the buying decision. The members of the group change
depending on the purchase situation, and so the buying center is loosely organized. Members
of the buying center share common goals, risks, and knowledge or experiences relevant to the
purchase decision.

Blooms: Apply
6-182
148. To lower costs and reduce manufacturing time, Michelin has people work together on
important purchases. These people include individuals in the roles of buyers, deciders,
gatekeepers, and others, as needed. This type of cross-functional group is known as a
A. purchasing committee.
B. sustainable procurement panel.
C. buying center.
D. supply partnership.
E. purchasing task force.
A buying center consists of a group of people in an organization who participate in the buying
process and share common goals, risks, and knowledge important to a purchase decision.
Buying centers may include a cross-functional group, especially if the items are key
components to be included in a final manufactured product. And this group may consist of
people with varying roles in the purchase decision process.

Blooms: Apply
149. All of the following are roles in a buying center except
A. specifiers.
B. deciders.
C. buyers.
D. influencers.
E. users.
Five specific roles that an individual in a buying center can play are users, influencers, buyers,
deciders, and gatekeepers.

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Blooms: Remember
150. An organization's buying center includes individuals who can play one or more of the following
roles except
A. gatekeepers.
B. deciders.
C. buyers.
D. product champions.
E. influencers.
Five specific roles that an individual in a buying center can play are users, influencers, buyers,
deciders, and gatekeepers.

Blooms: Understand
151. The people in the organization who actually consumer the product or service are referred to as
__________, which is one role in the buying center.
A. consumers
B. deciders
C. buyers
D. influencers
E. users
Text term definition—users.

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Blooms: Remember
152. On a visit to Conner Industries, a West Plains Band Saw salesperson heard a production
employee saying, "This band saw has a 36-inch wheel that could really save us time, and with its
adjustable height, it can be operated by someone tall like me as well as by our shorter workers.
I bet this would speed up my production time by 30 percent. Why don't we order this band
saw?" The person the salesperson heard giving input has which buying center role?
A. purchasing agent
B. decider
C. buyer
D. user
E. motivator
Users are the people in the organization who would actually use the band saw and can
appreciate its features.

Blooms: Apply
6-185
153. Becca, an office manager for a small construction company, met with representatives from
Xerox and Minolta, along with the president and the accountant, to compare options for a new
copier for the office. Since she made most of the copies, Becca wanted to see the features of
the machines, though her boss would have to approve the final purchase. Becca has what role
in the buying center?
A. purchasing agent
B. decider
C. buyer
D. user
E. motivator
Users are the people in the organization who would actually use the copier and can appreciate
its features.

Blooms: Apply
154. In a buying center, __________ affect the buying decision, usually by helping define the
specifications for what is bought.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users
Text term definition—influencers.

Blooms: Remember
6-186
155. Within the buying center, influencers are people who
A. have the formal authority and responsibility to select the supplier and negotiate the terms
of the contract.
C. affect the buying decision usually by helping define the specifications for what is bought.
D. have the formal or informal power to select or approve the supplier that receives the
contract.
Text term definition—influencers.

Blooms: Remember
6-187
156. A computer company salesperson invites the IT managers of its top 10 customers (in terms of
dollar sales) to view a demonstration of the firm's new product line, so the salesperson can
obtain their opinions regarding various options and configurations that could be offered. These
IT managers are most likely to be the __________ of their organizations' buying centers.
A. gatekeepers
B. influencers
C. reciprocity arrangers
D. buyers
E. users
Influencers affect the buying decision, usually by helping define the specifications for what is to
be bought.

Blooms: Apply
157. In a buying center, __________ have formal authority and responsibility to select the supplier and
negotiate the terms of a contract.
A. buyers
B. gatekeepers
C. adopters
D. influencers
E. users
Buyers have formal authority and responsibility to select the supplier and negotiate the terms of
the contract.

Blooms: Remember
6-188
158. The purchasing manager of Ingram Printing has selected HP as the supplier of its new high-
speed printer and negotiated the terms of the contract. The purchasing manager is the
__________ for Ingram.
A. user
B. gatekeeper
C. influencer
D. buyer
E. decider
the contract.

Blooms: Apply
6-189
159. Lara assumed the __________ role in the buying center when she shook the salesperson's hand
and said, "Ms. Hron, we would like to accept your bid. I'll expect 48 boxes of ring shank nails to
be delivered by November 8, and we will pay the agreed-upon price of $21.74 per box."
A. gatekeeper
B. broker
C. buyer
D. influencer
E. user
the contract.

Blooms: Apply
160. In a buying center, __________ have the formal or informal power to select or approve the
supplier that receives the contract.
A. gatekeepers
B. deciders
C. buyers
D. influencers
E. users
Text term definition—deciders.

Blooms: Remember
6-190
161. Within the buying center, deciders are people who
A. have the formal authority and responsibility to select the supplier and negotiate the terms
of the contract.
C. have the formal or informal power to select or approve the supplier that receives the
contract.
D. affect the buying decision usually by helping define the specifications for what is bought.
Text term definition—deciders.

Blooms: Remember
162. For routine orders, the decider is usually
A. the buyer or purchasing manager.

B. the CEO.
C. the COO.
D. the head of R&D.
E. the customer.
For routine orders, the decider is usually the buyer or purchasing manager.

Blooms: Understand
6-191
163. An IT engineer specifies the type of electronic shopping cart to be used on the company's new
website. The engineer also chooses the supplier that receives the contract to provide the
software. In the buying center, this person is the
A. gatekeeper.
B. decider.
C. broker.
D. influencer.
E. user.
Deciders have the formal or informal power to select or approve the supplier who receives the
contract.

Blooms: Apply
164. People who control the flow of information in the buying center, such as technical experts and
secretaries, can keep salespeople and information from reaching others in the buying center
and are referred to as
A. deciders.
B. obstructionists.
C. gatekeepers.
D. power brokers.
E. influencers.
Text term definition—gatekeepers.

Blooms: Remember
6-192
165. A sales representative for a pharmaceutical company visits the doctor's office, hoping to explain
a new drug to the doctor. However, the office receptionist explains that the doctor is with
patients and will not be able to see the sales rep. The receptionist is acting as
A. a user.
B. an influencer.
C. a buyer.
D. a decider.
E. a gatekeeper.
A gatekeeper controls the flow of information in the buying center. Purchasing personnel,
technical experts, and secretaries can all keep salespeople or information from reaching people
performing the other four roles. The receptionist could facilitate or hinder the flow of
information to and from the doctor and would not otherwise be involved in selecting drugs to
prescribe to patients.

Blooms: Apply
6-193
166. Cassidy is part of the buying center for a large manufacturer. Her field of expertise is logistics
and she is responsible for choosing transportation providers for the company. A sales
representative for Yellow Roadway, a successful trucking firm, regularly buys Cassidy's secretary
lunch. The representative does this because she views the secretary as __________ and wants to
be sure that information about her company reaches Cassidy.
A. a gatekeeper
B. a decider
C. an influencer
D. an obstructionist
E. a power broker
Gatekeepers control the flow of information to others in the buying center. Purchasing
personnel, technical experts, and secretaries can all keep salespeople or information from
reaching people performing the other four roles. Cassidy's secretary is a potential gatekeeper.

Blooms: Apply
6-194
167. Beth is part owner of a chain of auto repair shops. Her company was considering adding tire
sales in some of its facilities, and several people were slated to meet to discuss the idea. Beth
gathered information about possible distributors. Her son had been laid off from a job with one
of them, so she removed this company from the group she was preparing to present to the
others. Here, Beth was acting in what role in the buying center?
A. gatekeeper
B. decider
C. user
D. obstructionist
E. power broker
Gatekeepers control the flow of information to others in the buying center. Purchasing
personnel, technical experts, and secretaries can all keep salespeople or information from
reaching people performing the other four roles. Beth played the role of gatekeeper.

Blooms: Apply
6-195
168. Mark manages a small family-owned amusement park. He believes the park can increase its
profits if its owners will buy three food concession trailers. Mark has contacted three dealers of
such trailers, which come fully customized to user specifications. After receiving three bids,
Mark concluded that Century Industries has the best offer. He will present only the Century
Industries information to the family tomorrow. What buying center roles does Mark perform?
A. gatekeeper and buyer

B. decider and user
C. buyer and decider
D. influencer and buyer
E. influencer, gatekeeper, and decider
The family is the buyer, otherwise Mark would not need to present his research to them. This is
not a routine buying decision, so Mark has informally chosen the supplier (decider) as well as
trying to convince (influencer) the family to approve his selection. Because he is presenting bids
from no other companies, Mark is also assuming the role of gatekeeper.

Blooms: Apply
6-196
169. Researchers who have studied organizational buying identify three types of buying situations,
called __________, which include new buy, modified rebuy, and straight rebuy.
A. purchase criteria
B. buy classes
C. buying centers
D. consideration sets
E. purchase hierarchies
Key term definition—buy classes.

Blooms: Remember
170. Organizations face three specific kinds of buying situations. They are new buy, straight rebuy,
and modified rebuy. Collectively, these situations are referred to as
A. industrial buying behavior.

B. reseller buying behavior.
C. buy classes.
D. purchase criteria.
E. consideration sets.

Blooms: Remember
6-197
171. The three types of organizational buy classes are
A. industrial, reseller, and government.

B. consumer products, industrial goods, and services.
C. users, influencers, and deciders.
D. straight purchase, barter, and countertrade.
E. new buy, straight rebuy, and modified rebuy.

Blooms: Remember
172. Buy classes refer to the three types of organizational buying situations:
A. buy, lease, and rent.

B. new buy, make, and reprocess.
C. manufacturing contracts, consulting contracts, service contracts.
D. new buy, straight rebuy, and modified rebuy.
E. new buy, refurbish, and used buy.

Blooms: Remember
6-198
173. The buying situation where an organization is a first-time buyer of the product or service is
referred to as
A. an initial buy.
B. a new buy.
C. a preliminary buy.
D. a straight rebuy.
E. a modified rebuy.
Text term definition—new buy.

Blooms: Remember
174. A buy class situation affects buying center tendencies in different ways. If there are many
people involved, the problem definition is uncertain, and the time required for a decision is
long, the buy class situation is most likely a
A. standard buy.
B. straight rebuy.
D. modified rebuy.
E. new buy.
In a new buy situation, the people involved are many, the decision time is long, the problem
definition is uncertain, the buying objective is to find a good solution, the suppliers considered
are both new and present, and the buying influence includes technical and operating
personnel. See Figure 6-4.

Blooms: Understand
6-199
involved, the problem is well-defined, and the buying objective is to find a low-priced supplier,
the buy class situation is most likely a
A. modified buy.
B. straight rebuy.
D. new buy.
E. standard buy.
In a straight rebuy situation, there is one person involved, the decision time is short, the
problem is well-defined, the buying objective is to find a low-priced supplier, present suppliers
are considered, and the buying influence is through a purchasing agent. See Figure 6-4.

Blooms: Understand
6-200
people involved, the problem is minor modification, and the suppliers considered are the
present, the buy class situation is most likely a
A. conditional buy.
B. straight rebuy.
C. new buy.
D. modified rebuy.
E. standard buy.
In a modified rebuy situation, there are two or three people involved, the decision time is
moderate, the problem definition is minor modification, the buying objective is to find a low-
priced supplier, the suppliers considered are present, and the buying influence includes a
purchasing agent and others. See Figure 6-4.

Blooms: Understand
6-201
177. A buy class situation affects buying center tendencies in different ways. If the buying objective is
to find a good solution, the suppliers considered are both new and present, and the buying
influence includes technical and operating personnel, the buy class situation is most likely a
A. modified buy.
B. new buy.
C. straight rebuy.
D. make-buy.
E. standard buy.
In a new buy situation, there are many people involved, the decision time is long, the problem
definition is uncertain, the buying objective is to find a good solution, the suppliers considered
are both new and present, and the buying influence includes technical and operating
personnel. See Figure 6-4.

Blooms: Understand
178. If a purchase is a new buy for a manufacturer, the seller should expect
A. specifications to be changed many times before the buy is completed.

B. a lot of conflict.
C. many people to be involved in the purchase decision.
D. to have to do some favors for the decision makers.
E. to avoid making concessions or compromises.
If the purchase is a new buy for the manufacturer, you should expect many people to be
involved in the purchase decision. See Figure 6-4.

Blooms: Understand
6-202
179. If a purchase is a new buy for a manufacturer, the seller should
A. expect a long time for a buying decision to be reached.

B. neutralize the typically high levels of conflict.
C. maintain flexibility, since specifications are likely to be changed several times before the buy
is completed.
D. be prepared to do some favors for the decision makers.
If the purchase is a new buy for the manufacturer, you should expect many people to be
involved in the purchase decision. See Figure 6-4.

Blooms: Understand
180. If a purchase is a new buy for a manufacturer, the seller should expect to
A. have to do some favors for the decision makers.

B. anticipate a great deal of conflict.
C. accommodate unlimited specification change before the buy is completed.
D. work with the buyer's technical personnel.
If the purchase is a new buy for the manufacturer, sellers are likely to work with the buyer's
technical personnel. See Figure 6-4.

Blooms: Understand
6-203
181. At the weekly meeting for Choice Hotels, the marketing manager said, "We need an
inexpensive creative way to increase awareness of our hotels among people who travel by
automobile. To do that, I want to find some new media that the other hotel chains are not
using." The purchase of this new media for the hotel chains' advertising would be an example
of a
A. new buy.
B. straight rebuy.
C. converted rebuy.
D. modified rebuy.
E. initial buy.
In a new buy situation the organization is a first-time buyer of the product or service—in this
case, a new and different advertising medium. This involves greater potential risk in purchase.

Blooms: Apply
6-204
182. A reorder of an existing product or service from a list of acceptable suppliers is referred to as a
A. new buy.
B. straight rebuy.
C. modified rebuy.
E. make-buy.
Text term definition—straight rebuy.

Blooms: Remember
involved, the problem definition is well-defined, and the buying objective is to find the low-
priced supplier, the buy class situation is most likely a
A. new buy.
B. modified rebuy.
D. straight rebuy.
A straight rebuy has one person involved, the decision time is short, the problem definition is
well-defined, the buying objective is a low-priced supplier, present suppliers are the ones
considered, and the purchasing agent has the buying influence. See Figure 6-4.

Blooms: Understand
6-205
184. An assistant heard his supervisor in the supply room yell, "Call Crate & Barrel. We need another
case of its coffee mugs for the conference next week." The supervisor was asking the assistant
to make a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.
In a straight rebuy situation, the buyer or purchasing manager reorders an existing product or
service from the list of acceptable suppliers. Office supplies and maintenance services are often
straight rebuys.

Blooms: Apply
6-206
185. The department secretary orders pens, copy paper, and printer ink cartridges for the
department from the Corporate Express catalog nearly every month. This is an example of a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. make-buy.
In a straight rebuy situation, the buyer or purchasing manager reorders an existing product or
service from the list of acceptable suppliers. Office supplies and maintenance services are often
straight rebuys.

Blooms: Apply
186. The buying situation where users, influencers, or deciders want to change product
specifications, price, delivery schedule, or supplier for an item that is largely the same as what
was previously purchased is referred to as a
A. secondary buy.
B. straight rebuy.
C. modified rebuy.
D. adapted buy.
E. remake buy.
Text term definition—modified rebuy.

Blooms: Remember
6-207
187. In a __________ situation, users, influencers, or deciders in the buying center want to change
product specifications, price, delivery schedule, or suppliers, though the product is largely the
same.
A. derived buy
B. straight rebuy
C. make-buy
D. rebuy class
E. modified rebuy
Text term definition—modified rebuy.

Blooms: Remember
6-208
people involved, the time required for a decision is moderate, and the problem definition has
only minor modifications, the buy class situation is most likely a
A. new buy.
B. straight rebuy.
D. modified rebuy.
In a modified rebuy, two or three people are involved, the decision time is moderate, the
problem definition is one with minor modifications, the buying objective is the low-priced
supplier, the present suppliers are those considered, and the buying influence is the purchasing
agent and others. See Figure 6-4.

Blooms: Understand
6-209
people involved, the problem definition has only minor modifications, and the buying objective
is the low-priced supplier, the buy class situation is most likely a
A. new buy.
B. modified rebuy.
D. straight rebuy.

Blooms: Understand
6-210
people involved, the time required for a decision is moderate, and only present suppliers are
considered, the buy class situation is most likely a
A. new buy.
B. straight rebuy.
C. modified rebuy.
D. conditional rebuy.

Blooms: Understand
6-211
191. The office of SFX Entertainment, a talent promoter, needs a new fax machine that will print at
three seconds a page (instead of five seconds per page like the one it is using now) and has
both local and network printing capabilities. The purchase of a replacement fax machine would
be an example of a
A. new buy.
B. straight rebuy.
C. make-buy.
D. modified rebuy.
In a modified rebuy situation, the users, influencers, or deciders want to change the product
specifications, price, delivery schedule, or supplier.

Blooms: Apply
6-212
192. A university's marketing department typically purchases backpacks with its logo embroidered
on them for all incoming freshmen. This year, because they've heard complaints, the marketing
chair wants to buy similar backpacks but find one that is a little more durable. This is an
example of a
A. new buy.
B. straight rebuy.
C. make-buy.
D. modified rebuy.
In a modified rebuy situation, the users, influencers, or deciders want to change the product
specifications, price, delivery schedule, or supplier. This is a modified rebuy as the same item is
being purchased (backpacks) but they are looking for greater durability.

Blooms: Apply
6-213
193. A software company has updated its logo. It now needs to order new letterhead and business
cards. This purchase would be a
A. modified rebuy.
B. straight rebuy.
C. new buy.
E. class buy.
In a modified rebuy situation, members of the organization's buying center seek to change
some element of the purchase—product, price, delivery schedule, or supplier. This would be a
modified rebuy because the university is purchasing the same stationery and business cards but
with a new logo.

Blooms: Apply
194. A straight rebuy is __________ while a modified rebuy is __________.
A. an exchange; a resale
B. a routine reorder; an exchange
C. a first-time order; a routine reorder
D. a changed order; a first-time order
E. a routine reorder; a changed order
A straight rebuy involves a buyer or purchasing manager reordering an existing product or

service. A modified rebuy involves the users, influencers, or deciders in the buying center
changing the product specifications, price, delivery schedule, or supplier.

Blooms: Understand
6-214
195. Business-to-business electronic commerce over the Internet
A. is nearly equivalent to consumer electronic commerce when measured by the total dollar
value of all online transactions.
B. is at least four times greater than consumer electronic commerce when measured by the
total dollar value of all online transactions.
C. has dramatically decreased since face-to-face communication between a firm's sales force
and its potential customers is so important.
D. is impossible to estimate since companies will not share information.
E. has never been popular since timely information is unavailable or deemed to be proprietary.
Organizational buyers account for 80 percent of the global dollar value of all online or online
transactions. So, consumer electronic commerce accounts for the other 20 percent. Thus,
organizational buying is four times greater than consumer e-commerce.

Blooms: Understand
Learning Objective: 06-04 Recognize the importance and nature of online buying in industrial, reseller, and government
organizational markets.
Topic: Electronic Commerce
6-215
196. Online buying in organizational markets is prominent because Internet technology
A. allows companies to increase their innovation cycles.

B. substantially increases brand loyalty.
C. can convey timely information quickly.
D. narrows the potential customer base for many products.
E. eliminates marketing costs.
Online buying in organizational markets is prominent for three major reasons: (1) organizational
buyers depend heavily on timely supplier information that describes product availability,
technical specifications, application uses, price, and delivery schedules; (2) this technology has
been shown to substantially reduce buyer order processing costs; and (3) business marketers
have found that Internet technology can reduce marketing costs, particularly sales and
advertising expense, and broaden their potential customer base for many types of products
and services.

Blooms: Understand
6-216
197. Online trading communities that bring together buyers and supplier organizations to make
possible the real time exchange of information, money, products, and services are referred to
as
A. Webfronts.
B. iCommerce.
C. e-commerce marketspaces.
D. e-marketplaces.
E. X-changes.
Key term definition—e-marketplaces.

Blooms: Remember
6-217
198. E-marketplaces refer to
A. virtual or holographic purchasing marketspaces that allow manufacturers to estimate

demand based upon different changes in environmental forces.
B. websites that allow consumers to make direct purchases from a manufacturer rather than
through a traditional retail outlet.
C. online trading communities that bring together buyers and supplier organizations to make
D. computer simulations that allow manufacturers to estimate how much inventory to keep on
hand based upon different purchasing scenarios.
E. a computer database co-sponsored by the U.S. Department of Commerce and the World
Trade Organization (WTO) that houses all public access records for the purpose of aiding
American and global businesses.
Key term definition—e-marketplaces.

Blooms: Remember
6-218
199. Another name for an e-marketplace is
A. an e-hub.
B. an E-place.
C. an e-trade.
D. an E-xchange.
E. a 4NXchange.
E-marketplaces go by a variety of names, including business-to-business (B2B) exchanges and

e-hubs, and make possible the real-time exchange of information, money, products, and
services.

Blooms: Remember
200. Another name for an e-marketplace is a
A. WebXChange.
B. WebMart.
C. 2B1 marketplace.
D. C2C market forum.
E. B2B exchange.
E-marketplaces go by a variety of names, including business-to-business (B2B) exchanges and

e-hubs, and make possible the real-time exchange of information, money, products, and
services.

Blooms: Remember
6-219
201. E-marketplace can take two different formats, which are
A. bricks-and-mortar exchanges and clicks-and-mortar exchanges.

B. privately owned trading communities and open-to-the-public trading communities.
C. networked exchanges or public trading communities.
D. independent trading communities or private exchanges.
E. public exchanges and networked exchanges.
E-marketplaces can be independent trading communities or private exchanges.

Blooms: Understand
202. Small businesses benefit from independent __________ like PlasticsNet, Hospital Network.com,
and TextileWeb.
A. Webfronts
B. clicks-and-mortar
C. e-marketplaces
D. iMarkets
E. integrated markets
Independent e-marketplaces act as a neutral third party and provide an Internet technology
trading platform and a centralized market that enable exchanges between buyers and sellers.
All of the examples cited in the question are independent e-marketplaces.

6-220
Blooms: Understand
203. For e-marketplaces, large companies tend to favor __________ that link them with their network
of qualified suppliers and customers.
A. centralized markets
B. decentralized markets
C. private exchanges
D. segregated markets
E. independent trading communities
Large companies tend to favor private exchanges that link them with their network of qualified
suppliers and customers. Private exchanges focus on streamlining a company's purchase
transactions with its suppliers and customers.

Blooms: Understand
6-221
204. Independent e-marketplaces act as a neutral third party, provide an Internet technology trading
platform, and provide __________ market that enable exchanges between buyers and sellers.
A. a centralized
B. a deconsolidated
C. a segregated
D. an integrated
E. a noncompetitive
trading platform and a centralized market enabling buyer and seller exchanges.

Blooms: Understand
6-222
205. Which of the following statements about e-marketplaces that act as independent trading
communities is false?
A. These trading communities allow buyers to easily compare offerings from various sellers.
B. Independent trading communities charge a fee for their service.
C. Independent trading communities often consist of thousands of geographically dispersed
buyers and sellers.
D. This independent type of trading community is favored by large companies.
E. Independent trading communities often operate in an environment where demand and
supply fluctuations cause volatile prices.
Independent trading communities provide an Internet technology trading platform and a

centralized market that enable buyer and seller exchanges. They charge a fee for their service
and exist in settings like these: (1) thousands of geographically dispersed buyers and sellers, (2)
volatile prices caused by demand and supply fluctuations, (3) time sensitivity due to perishable
offerings and changing technologies, and (4) easily comparable offerings between a variety of
sellers. Large companies tend to favor private exchanges.

Blooms: Understand
6-223
206. PlasticsNet, Hospital Network.com, TextileWeb, and eBay Business are all examples of
A. Webfront operations.
B. clicks-and-mortar stores.
C. e-marketplaces.
D. integrated markets.
E. iMarkets.
trading platform and a centralized market that enable exchanges between buyers and sellers.
All of the examples cited in the question are independent e-marketplaces.

Blooms: Understand
207. In the construction industry, an independent trading community such as Buzzsaw.com or

Cephren.com enables a general contractor to manage and coordinate the many suppliers,
subcontractors, architects, and engineers necessary to complete a project. Buzzsaw.com and
Cephren.com are examples of
A. Webfronts.
B. web chains.
C. X-changes.
D. e-syndicates.
E. e-marketplaces.
E-marketplaces bring together buyers and supplier organizations to make possible the real-
time exchange of information, money, products, and services. Buzzsaw.com and Cephren.com
bring together buyers and suppliers online.
6-224
Blooms: Apply
208. The predominant person-to-person trading community in the world is
A. Facebook.
B. Amazon.
C. NASDAQ.
D. Craigslist.
E. eBay.
eBay is the predominant person-to-person trading community in the world. See Marketing
Matters in the textbook.

Blooms: Remember
6-225
209. eBay is the predominant person-to-person trading community in the world. eBay is an example
of
A. a Webfront operation.
B. a clicks-and-mortar store.
C. an e-marketplace.
D. a noncompetitive market.
E. an integrated market.
An e-marketplace brings together buyers and supplier organizations that make possible the
real-time exchange of information, money, products, and services. eBay offers a trading
platform for millions of small businesses in the United States and even greater numbers around
the world. See Marketing Matters in the textbook.

Blooms: Understand
210. When a seller puts an item up for sale and would-be buyers are invited to bid in competition
with each other, it is referred to as
A. a reverse auction.
B. a traditional auction.
C. a bidder's war.
D. an e-auction.
E. a Webfront auction.
Key term definition—traditional auction.

Blooms: Remember
6-226
211. When prospective buyers observe the bids of others and decide whether or not to increase the
bid price, it is called a
A. forward auction.
B. reverse auction.
C. Webfront auction.
E. bidder's war.
In a traditional auction, a seller puts an item up for sale and would-be buyers are invited to bid
in competition with each other. Bidding is sequential, with prospective buyers deciding whether
or not to increase the bid price.

Blooms: Remember
6-227
212. Dell, Inc., sells surplus, refurbished, or closeout computer merchandise at its dellauction.com
website to many buyers who bid competitively against one another. This is an example of a(n)
A. traditional auction.
B. reverse auction.
C. bidder's war.
D. I-auction.
E. Webfront auction.
In a traditional auction, a seller (Dell) puts items up for sale (computers) and would-be buyers
are invited to bid in competition with each other.

Blooms: Understand
213. What type of online auction does one seller and many buyers typify?
A. forward auction
B. reverse auction
D. vertical auction
E. bidder's war
in competition with each other. As more would-be buyers become involved, there is an upward
pressure on bid prices. The auction ends when a single bidder remains and "wins" the item with
its highest price. See Figure 6-5.

Blooms: Understand
6-228
214. In which type of auction is there an upward pressure on bid prices as more would-be buyers
become involved?
A. reverse auction
C. vertical auction
D. diagonal auction
pressure on bid prices. The auction ends when a single bidder remains and "wins" the item with
its highest price. See Figure 6-5.

Blooms: Understand
6-229
215. In which type of auction does the price increase as the number of buyers increases?
A. reverse auction
C. vertical auction
D. diagonal auction
pressure on bid prices because bidding is sequential. The auction ends when a single bidder
remains and "wins" the item with its highest price. See Figure 6-5.

Blooms: Understand
216. In an e-marketplace, an online auction in which a buyer communicates a need for a product or
service and would-be suppliers are invited to bid in competition with each other is referred to
as a
A. vertical auction.
B. reverse auction.
C. horizontal auction.
E. reciprocal auction.
Key term definition—reverse auction.

Blooms: Remember
6-230
217. A reverse auction refers to an online auction
A. where firms may sell their overstock—unused raw materials, packaging, and tools—to the
highest bidder.
B. in which a manufacturer offers to share its facilities, inventory, or services with other smaller
firms that are invited to bid in competition with each other.
C. in which a smaller manufacturer seeks to share the facilities, inventory, or services of a larger
firm, and invites those firms to bid in competition with each other.
D. in which a buyer communicates a need for a product or service and would-be suppliers are
invited to bid in competition with each other.
E. where firms seek to purchase other firms' overstock—unused raw materials, packaging, and
tools—while trying to find the lowest price possible.
Key term definition—reverse auction.

Blooms: Remember
6-231
A. are seller-initiated.
D. put downward pressure on prices.
E. have many buyers.
Like traditional auctions, bidding is sequential and prospective suppliers observe the bids of
others, but they decide whether or not to decrease the bid price. This puts downward pressure
on bid prices.

Blooms: Understand
A. are buyer-initiated.
D. do not allow sequential bidding.
E. have many buyers at the start of the auction.
A reverse auction works in the opposite direction from a traditional auction. In a reverse
auction, a buyer communicates a need for a product or service and would-be suppliers are
invited to bid in competition with each other. As more would-be suppliers become involved,
there is a downward pressure on bid prices for the buyer's business. See Figure 6-5.

Blooms: Understand
6-232
220. What type of online auction does one buyer and many sellers typify?
A. forward auction
B. reverse auction
D. vertical auction
E. bidder's war

Blooms: Understand
6-233
221. In which type of auction is there a downward pressure on bid prices for the buyer's business as
more would-be suppliers become involved?
A. traditional auction
B. vertical auction
C. reverse auction
D. horizontal auction
E. reciprocal auction

Blooms: Understand
222. In a reverse auction, as the number of sellers increases, the price
A. increases.
B. stays the same.
C. has no relation to the number of sellers.
D. decreases.
E. fluctuates depending on economic conditions.
6-234
Blooms: Understand
223. Which of the following statements about Trek Bicycles is false?
A. Trek's Eco Design initiative is an example of sustainable procurement.

B. Trek has an extensive product line of bicycles.
C. Trek has always been on the cutting edge, using the latest innovations in its designs.
D. Trek views the bicycle as an important form of alternative transportation, not just as
recreation.
E. Trek's business model has evolved from manufacturing bicycles to marketing other two-
and four-wheeled vehicles, such as motorcycles and all-terrain vehicles (ATVs).
Trek's mission has evolved, and today it is to "help the world use the bicycle as a simple
solution to complex problems." In fact, its motto is "We believe in bikes." See Video Case 6:
TREK: BUILDING BETTER BIKES THROUGH ORGANIZATIONAL BUYING.

Blooms: Understand
6-235
224. All of the following people are part of the Trek buying center except
A. Trek executives.
B. production workers.
C. representatives from research and development.
D. quality control employees.
E. a purchasing manager.
The buying center is the group responsible for finding the best suppliers and vendors for the
organization's purchases. At Trek the buying center consists of a purchasing manager, buyers
who identify domestic and international sources of materials and components, and
representatives from research and development, production, and quality control. See Video
Case 6: TREK: BUILDING BETTER BIKES THROUGH ORGANIZATIONAL BUYING.

Blooms: Understand
6-236
225. Trek uses several organizational buying criteria to evaluate potential suppliers. These include all
of the following except
A. price.
B. environmental impact.
C. warranties and claim policies.
D. quality.
E. delivery capabilities.
When potential suppliers are identified, Trek evaluates them based on four criteria—quality,
delivery capabilities, price, and environmental impact of their production process. Warranties
and claim policies are one of the seven organizational buying criteria cited in the textbook, but
this criterion is not used by Trek. See Video Case 6: TREK: BUILDING BETTER BIKES THROUGH
ORGANIZATIONAL BUYING.

Blooms: Understand
6-237
226. When Trek orders a seat or saddle for one of its models that has a slightly different material for
the cover only but the other components are the same as existing saddles used on other bikes,
this purchase situation is known as a
A. new buy.
B. straight rebuy.
C. standard reorder.
D. modified rebuy.
E. make-buy.
The purchase of a saddle that has a little bit of different material for the cover but the
components are the same is a modified rebuy decision. See Video Case 6: TREK: BUILDING
BETTER BIKES THROUGH ORGANIZATIONAL BUYING.

Blooms: Understand
Short Answer Questions
6-238
227. Describe the three types of organizational markets and give examples of each.
There are three types of organizational markets: (1) Industrial markets consist of industrial firms
that reprocess a product or service they buy before selling it again to the next buyer (examples:
mining, construction, insurance companies, and public utility firms). (2) Reseller markets are
composed of wholesalers and retailers that buy physical products and resell them again without
any reprocessing (examples: Walmart and Target). (3) Government markets are comprised of
federal, state, and local agencies that buy goods and services for the constituents they serve
(examples: NASA, City of San Francisco, and New York City Police Department).

Blooms: Understand
228. What is the North American Industry Classification System (NAICS)?
The North American Industry Classification System (NAICS) designates industries with a
numerical code in a defined structure. The first two digits of the NAICS code designate an
industry sector of the economy. The third digit code signifies an industry subsector. Subsectors
are further divided into industry groups (fourth digit), industries (fifth digit), and country-specific
or national industries (sixth digit). The system provides common industry definitions for Canada,
Mexico, and the United States to facilitate the measurement of economic activity in the three
member countries of the North American Free Trade Agreement (NAFTA).

Blooms: Remember
6-239
229. What are the characteristics of organizational buying behavior?
Understanding the characteristics of organizational buying is essential in designing effective

marketing programs to reach these buyers. According to Figure 6-1 in the textbook, key
characteristics of organizational buying are: (1) Market characteristics, such as (a) derived
demand for industrial offerings, (b) few customers typically exist, and (c) the purchase orders
are large. (2) Product or service characteristics, such as (a) products or services are technical in
nature and purchased on the basis of specifications, (b) many of the goods purchased are raw
and semifinished, and (c) a heavy emphasis placed on delivery time, technical assistance, and
post-sale service. (3) Buying process characteristics, such as (a) technically qualified and
professional buyers follow established purchasing policies and procedures, (b) buying
objectives and criteria are typically spelled out, as are procedures for evaluating sellers and their
products or services, (c) there are multiple buying influences and multiple parties participate in
purchase decisions, (d) there are reciprocal arrangements, and negotiation between buyers and
sellers is common, and (e) online buying over the Internet is widespread. (4) Marketing mix
characteristics, such as (a) direct selling to organizational buyers is the rule and distribution is
very important, (b) advertising and other forms of promotion are technical in nature, and (c)
price is often negotiated, evaluated as part of broader seller and product or service qualities,
and frequently affected by quantity discounts.

Blooms: Understand
230. List seven organizational buying criteria.
Key organizational buying criteria: (1) price, (2) quality specifications, (3) delivery schedule, (4)
technical capability, (5) warranties and claim policies, (6) past performance, and (7) production
facilities and capacity.

Blooms: Understand
6-240
231. What are the five stages of the organizational buying process? Describe at least three
differences from the consumer buying process.
The five stages of the organizational buying process are: problem recognition, information
search, alternative evaluation, purchase decision, and post-purchase behavior. Figure 6-3
reveals key differences. Specifically, more individuals are involved, supplier capability becomes
more important, and the post-purchase evaluation behavior is more formal.

Blooms: Understand
232. What is a buying center? In what type of business would a buying center most likely be found?
A buying center is a group of individuals within an organization who participate in the buying
process. They share common goals, risks, and knowledge important to a purchase decision.
One would most likely see a highly formalized buying center, known as a buying committee, in
larger, multistore chain retailers such as Target, 7-Eleven convenience stores, and Safeway. In
addition, most industrial firms or government units use groups to arrive at buying decisions.

Blooms: Understand
6-241
233. Identify and describe the five roles an individual can play in a buying center.
There are five roles an individual can play in a buying center: (1) users, who actually use the
product or service, (2) influencers, who help define the specifications for what is bought, (3)
buyers, who have the formal authority and responsibility to select the supplier and negotiate
the terms of the contract, (4) deciders, who have the formal or informal power to select or
approve the supplier, and (5) gatekeepers, who control the flow of information in the buying
center.

Blooms: Remember
234. Consider how buy classes affect buying center tendencies in different ways. Describe the buy-
class situations, and discuss the implications for the organization of each type of buy class.
New buy. Here the organization is a first-time buyer of the product or service. This involves
greater potential risks in the purchase, so the buying center is enlarged to include all those who
have a stake in the new buy. Straight rebuy. Here the buyer or purchasing manager reorders an
existing product or service from the list of acceptable suppliers, probably without even checking
with users or influencers from the engineering, production, or quality control departments.
Modified rebuy. In this buying situation the users, influencers, or deciders in the buying center
want to change the product specifications, price, delivery schedule, or supplier. Although the
item purchased is largely the same as with the straight rebuy, the changes usually necessitate
enlarging the buying center to include people outside the purchasing department. See Figure
6-4.

Blooms: Remember
6-242
235. What are the three types of organizational buying situations or buy classes? Give an example of
each.
There are three types of buying situations: (1) straight rebuy, simply reordering an existing
product of service from the list of acceptable suppliers (e.g., printer ink cartridges for an office);
(2) modified rebuy, when the users, influencers, or deciders in the buying center want to change
the product's specifications, price, delivery, schedule, or supplier (e.g., Ford wants a smaller
steering wheel for its new cars); (3) new buy, when the organization is a first time buyer of the
product of service (e.g., a computer company must purchase a new type of chip for its new line
of computers).

Blooms: Apply
236. Explain the differences between independent e-marketplaces and private exchanges.
Both are forms of e-marketplaces. Independent e-marketplaces act as a neutral third party and
provide an Internet technology trading platform and a centralized market that enable
exchanges between buyers and sellers. They charge a fee for their service and exist in settings
that have one or more of the following features: (1) thousands of geographically dispersed
buyers and sellers, (2) volatile prices caused by demand and supply fluctuation, (3) time
sensitivity due to perishable offerings and changing technologies, and (4) easily comparable
offerings between a variety of sellers. Independent e-marketplaces typically focus on a product
or serve a particular industry and offer small-business buyers and sellers an economical way to
expand their customer base and reduce the cost of purchased products. Private exchanges
focus on streamlining a company's purchase transactions with its suppliers and customers. Like
independent marketplaces, private exchanges provide a technology trading platform and
central market for buyer-seller interactions. They are not a neutral third party, however, but
represent the interests of their owners. Large companies tend to favor private exchanges.
6-243
Blooms: Understand
237. Differentiate between traditional and reverse auctions.
In a traditional auction, there is one seller and many prospective buyers. A seller puts an item
up for sale and would-be buyers are invited to bid in competition with each other. As more
would-be buyers become involved, there is an upward pressure on bid prices because bidding
is sequential. Prospective buyers observe the bidding process and decide whether to increase
the bid price. The auction ends when a single buyer who is willing to pay the highest price
remains. In a reverse auction, there is one buyer and many sellers. A buyer communicates a
need for a product and invites potential suppliers to bid in competition with each other. As
more prospective suppliers become involved, there is a downward pressure on price. The
auction ends when a single supplier willing to offer the lowest price remains. See Figure 6-5.

Blooms: Remember
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Understanding Organizations as Customers

Multiple Choice Questions

2. Purchasing paper for JCPMedia is one example of

A. fulfill profit responsibilities.

A. a limited purchase decision

5. JCPMedia, Inc. paper buyers are thoroughly trained in

A. shopping center management.

7. Business-to-business marketing refers to

10. Organizational buyers are

A. manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and

A. purchase exclusively from one supplier.

13. Which of these statements regarding organizational buyers is most accurate?

14. All of the following are organizational buyers except

A. industrial, wholesaler, and retailer.

16. Which of the following represents an organizational buyer?

17. An industrial firm

22. __________ comprise the highest percentage of firms in industrial markets.

31. The reseller market includes

A. an industrial service provider.

A. an industrial service provider.

A. Standard Industrial Code System (SICS).

43. The North American Industry Classification System (NAICS)

A. European Union (EU).

45. The acronym NAICS stands for

A. National Association of Industrial Compliance Standards.

46. The NAICS provides common industry definitions for

A. Canada, England, and the United States.

A. unlimited markets but orders become progressively smaller over time

A. A heavy emphasis is placed on loyalty programs and rebates.

A. delivery time, technical assistance, and post-sale service.

A. Few large transactions are made over the Internet.

60. Derived demand refers to

A. NAICS statistical models.

A. pay estimated sales taxes in advance

A. try to reach tens of millions of wholesalers, retailers, and government units.

A. achieve its own objectives.

73. The primary organizational buying objective for business firms is to

A. create an atmosphere of inclusiveness.

74. The primary buying objective for business firms is usually to

A. increase profits through increasing costs and increasing revenues.

A. meet the needs of the groups they serve.

A. increase profits through reducing costs.

A. purchasing from as many vendors as possible to avoid component shortfalls.

A. new federal government regulations require it.

A. the supplier consideration set.

80. Organizational buying criteria refer to

A. the restrictions placed on potential solutions to a problem in a purchase decision.

A. adherence to governmental policies.

A. production facilities and capacity.

A. a supplier value dimension.

91. Supplier development refers to

93. Which of the following characterizes organizational buyer-seller relationships?

A. Purchases are often made after lengthy or complex negotiations.

94. Which of the following characterizes organizational buyer-seller relationships?

194.A straight rebuy is while a modified rebuy is .