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Chapter 7—Business Marketing
TRUE/FALSE
1. Shimano sells the fishing and golfing equipment it manufactures to sporting goods stores, which in
turn sell the equipment to anglers and golfers. Shimano is engaged in business marketing.
ANS: T
Business marketing is the marketing of goods and services to individuals and organizations for
purposes other than personal consumption. Shimano sells to a reseller that is not purchasing for its
personal consumption.
PTS: 1 REF: 231 OBJ: 07-1 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy
2. For a product to be called a business product, it must be used to manufacture other products, become
part of another product, or facilitate the normal operations of a firm.
ANS: T PTS: 1 REF: 231 OBJ: 07-1 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Product
3. The emergence of the Internet has made buying and selling in the business market a process that is
only efficient for the largest producer to pursue.
ANS: F
Even the smallest businesses are finding they are able to compete successfully with their largest
competitors as a result of the Internet. See Exhibit 7.1.
PTS: 1 REF: 232 OBJ: 07-2 TYPE: Comp

TOP: AACSB Technology | TB&E Model Online/Computer
4. The Internet has eliminated the need for distributors.
ANS: F
This has not occurred although many experts thought it would. Relationships with knowledgeable
distributors have remained important.

TOP: AACSB Technology | TB&E Model Distribution
5. A keiretsu is an example of how companies can develop into a network of interlocking corporate
affiliates.

TOP: AACSB Reflective Thinking | TB&E Model International Perspective | TB&E Model Strategy
6. Any firm that purchases goods and services to make a profit by using them to produce other goods is
part of the producer segment of the business market.

TOP: AACSB Reflective Thinking | TB&E Model Customer
7. OEM stands for operationally efficient marketing.
ANS: F
OEM stands for original equipment manufacturer.

8. The reseller market is the same as the retailer market.
ANS: F
The reseller market includes both retailers and wholesalers.

TOP: AACSB Reflective Thinking | TB&E Model Distribution
9. The government sector (federal, state and local) is a minor segment of the business market
ANS: F
The government is a major segment of the business market.

10. The single largest customer in the world is the U.S. federal government.

11. NAICS is an industry classification system used by most nations of the world.
ANS: F
As its name indicates, NAICS (North American Industry Classification System) has been adopted only
by Mexico, Canada, and the United States.
PTS: 1 REF: 239 OBJ: 07-5 TYPE: Def

12. The first two digits of a NAICS code designate an industry group, such as fiber, yarn, and thread mills.
ANS: F
The first two digits designate a major economic sector such as agriculture or manufacturing.

13. If DuPont runs advertisements encouraging people to buy clothing that contains Lycra (a DuPont
product), this would be an attempt to influence secondary demand.
ANS: F
This is an attempt to influence derived demand.

14. A decline in the availability of tungsten will slow production of light filaments, which will in turn
reduce the demand for light bulbs. This is an example of fluctuating demand.
ANS: F
This question describes joint demand. Joint demand occurs when two or more items are used together
in a final product.

15. While consumer and business markets differ in many ways, the volatility of demand for products is
about the same for each type of market.
ANS: F
The demand for business products tends to be more unstable than the demand for consumer products.

16. Unlike consumer product channels of distribution, which usually have one or more intermediaries,
channels of distribution for business products are often direct.
ANS: T PTS: 1 REF: 242 OBJ: 07-6 TYPE: Comp

17. Most business marketers emphasize personal selling as their primary communications tool.

TOP: AACSB Reflective Thinking | TB&E Model Promotion
18. Another commonly used term for accessory equipment is installations.
ANS: F
Another commonly used term for major equipment is installations.

19. Individual producers of raw materials have great flexibility in pricing their products.
ANS: F
Prices of raw materials are set by the market, and individual producers have little pricing flexibility.

TOP: AACSB Reflective Thinking | TB&E Model Pricing
20. Items that are ready for assembly and that retain their identities when incorporated into another
product are called component parts.

21. Consumable items that do not become part of the final product are called supplies.
22. Because formal committees are often established to purchase business products, members of buying
centers can be readily identified on formal organizational charts.
ANS: F
Buying centers do not appear on formal organizational charts.

23. The role of gatekeeper may be filled by a receptionist.

24. Although customer service has in the past been an important factor in business buyer-seller
relationships, its importance has been waning in the last decade.
ANS: F
Business marketers are increasingly recognizing the importance of customer service.

25. If Ford purchased the same number of brakes from NUCAP on a regular basis, it would be
participating in a straight rebuy.
ANS: T PTS: 1 REF: 249 OBJ: 07-8 TYPE: App

MULTIPLE CHOICE
1. _____ is the marketing of goods and services to individuals and organizations for purposes other than
personal consumption.
a. Secondary marketing
b. Interactive marketing
c. Business marketing
d. High-level marketing
e. Industrial marketing
ANS: C
This is the definition of business marketing.

2. A product is defined as a business product rather than a consumer good on the basis of its:
a. intended use
b. physical characteristics
c. price
d. distribution method
e. tangible attributes
ANS: A
The key characteristic distinguishing business products from consumer products is intended use, not
physical characteristics.

3. Business marketing does NOT include goods and services that:

a. become part of another product
b. are used to manufacture other products
c. are used for personal consumption
d. facilitate the normal operations of an organization
e. are acquired for resale
ANS: C
Intended use is the key factor in the classification of a business versus a personal good. Use for
personal consumption classifies the good or service as a consumer product.

4. Which of the following is the best example of a sale that could only take place in the business market?
a. A professor is purchasing a Mac to use at home
b. A music store owner is ordering the newest Elvis Ultimate Live collection DVD for her
mother
c. A teen is purchasing ring tones to use on her phone
d. A librarian is purchasing new books for the school’s library
e. All of these are examples of business sales
ANS: D
When professionals buy items for their own personal use, these purchases are part of the consumer
market.

5. The Solar Group, a Mississippi-based mailbox manufacturer, sells mailboxes to contractors who are
building mega-subdivisions, to hardware stores, and directly to new homeowners. What kind of
products is the Solar Group selling?
a. business products only
b. both business and consumer goods
c. installations
d. consumer goods only
e. supplies
ANS: B
Products are classified as either business or consumer goods, based on the intended use of the product.
Obviously, some of the mailboxes are sold for business use and some for personal use.

6. Since GE began accepting bids via the Internet, the length of the bidding process in GE's lighting
division has been reduced from 21 days to 10. Since requesting the bids is easier, purchasing agents
approach more potential vendors. The ability to locate more vendors has lowered the cost of goods by
5 to 15 percent. GE's experience illustrates:
a. how using the Internet decreases competition
b. how business marketing is becoming global
c. how business marketing is using the Internet to become more efficient
d. how the use of the Internet has influenced consumer markets to become larger and more
powerful than business markets
e. how the Internet increases efficiency in data exchange
ANS: C
Business markets will continue to be larger and more powerful than consumer markets with the use of
the Internet. It will increase competition by allowing for more vendors.

TOP: AACSB Technology | TB&E Model Online/Computer
7. _____ is a measure of a Web site’s effectiveness and is calculated by multiplying the frequency of
visits times the duration of a visit times the number of pages viewed during each visit.
a. Effective reach
b. Effective frequency
c. Gross rating points
d. Interactiveness
e. Stickiness
ANS: E
By measuring the stickiness factor of a Web site before and after a design or function change, the
marketer can quickly determine whether visitors embraced the change.

8. All of the following are current roles of the Internet in business marketing EXCEPT:
a. reduce costs
b. eliminate distributors
c. build partnerships and alliances
d. build and support branding
e. integrate online and traditional media
ANS: B
The Internet has not eliminated the need for distributors. Disintermediation has occurred less
frequently than was expected.

9. The elimination of intermediaries such as wholesalers or distributors from a marketing channel is

referred to as:
a. disintermediation
b. disassociation
c. unencumberance
d. demarketing
e. selective retention
ANS: A
This is the definition of disintermediation.

10. Before toll-free telephone numbers and the Internet were used as commercial tools, fliers usually
purchased airline tickets from travel agents. Travel agents no longer receive a commission from the
airlines for selling tickets to consumers. This is an example of:
a. reintermediation
b. disassociation
c. disintermediation
d. discrimination
e. transference
ANS: C
Disintermediation is the elimination of intermediaries, travel agents in this example, from a marketing
channel.

11. The reintroduction of an intermediary between producers and users is called:

a. disintermediation
b. reinstatement
c. selective retention
d. reestablishment
e. reintermediation
ANS: E
This is the definition of reintermediation.

12. A cooperative agreement between business firms is a:

a. shared capital contract
b. global partner development strategy
c. strategic alliance
d. joint contract
e. comarketing effort
ANS: C
This is the definition of a strategic alliance.

13. IBM and Cisco work together to provide banks with the products and services they need to manage
their multiple locations. In other words, the two companies have joined in a:
a. retail cooperative
b. direct investment venture
c. transactional relationship
d. strategic alliance
e. synergistic relationship
ANS: D
A strategic alliance is a cooperative agreement between business firms.

14. Sometimes a _____ is created for the purpose of sharing resources. This was why the Donnelly
Corporation, a company that designs, manufactures, and markets automotive parts, joined with
Applied Films Laboratory, Inc. to manufacture and supply the world market with display coated glass
for liquid crystal displays (LCDs).
a. shared capital contract
b. global partner development strategy
c. strategic alliance
d. cobranding effort
e. market cooperative
ANS: C
A strategic alliance is a cooperative agreement between business firms.

15. Which of the following means that a firm believes that an ongoing relationship with some other firm is
so important that it warrants maximum efforts at maintaining it indefinitely?
a. amae
b. trust
c. relationship quality
d. strategic alliance
e. relationship commitment
ANS: E
Relationship commitment is a firm’s belief that an ongoing relationship with another firm is so
important that the relationship warrants maximum efforts at maintaining it indefinitely.

16. DHL maintains a strategic alliance with UPS because it has confidence in UPS’s reliability and
integrity. This condition is referred to as:
a. trust
b. tomo
c. commitment
d. amae
e. reciprocity
ANS: A
Trust is the condition that exists when one partner has confidence in an exchange partner’s reliability
and integrity.

17. In Japan, reciprocity and personal relationships contribute to the development of:
a. global ventures
b. amae
c. agricola
d. keiretsu
e. an independent network of small retailers
ANS: B
Amae is the feeling of nurturing concern for, and dependence on, another, and reciprocity and personal
relationships contribute to amae. Keiretsu is a network of interlocking corporate affiliates.

TOP: AACSB Diversity | TB&E Model International Perspective
18. A keiretsu is a(n):

a. type of strategic alliance commonly found in Japan
b. method of business e-commerce found in Asia
c. Internet site that offers its customers access to various languages that they can use to
conduct their business
d. form of relationship marketing that is illegal in the United States
e. bribe
ANS: A
A keiretsu is a network of interlocking corporate affiliates in Japan.

TOP: AACSB Reflective Thinking | TB&E Model International Perspective
19. Ed Rodney works for the state of Minnesota as a advocate of state growth and development. He
devises ways to encourage businesses to relocate to the state. In other words, Rodney is involved in
business marketing. He is compiling a list of potential businesses that might be willing to move their
operations to Minnesota. Which of the following possible clients should he include in his list?
a. any family that takes an annual vacation
b. newlyweds
c. families that enjoy hiking
d. companies that have growing sales
e. students on spring break
ANS: D
The other "clients" are end-user consumers, not business customers.

20. A particular segment of the business market includes those individuals and organizations that purchase
goods and services for the purpose of making a profit. They achieve this goal by using purchased
goods and services to make other goods, to become part of other goods, or to facilitate the daily
operations of the organization. This group is called the _____ segment of the business market.
a. institution
b. reseller
c. wholesaler
d. producer
e. government
ANS: D
This describes the producer segment of business customers.
21. According to the text, another commonly used name for producers is:
a. fabricators
b. installers
c. original equipment manufacturers
d. product providers
e. component networks
ANS: C
Original equipment manufacturers (OEMs) include all individuals and businesses that buy business
goods and incorporate them into the products that they produce for eventual sale to other producers or
to consumers.

22. Corn refiners buy shelled corn and convert it into a variety of products, including high fructose corn
syrup. The refiners then sell the syrup to soda and food product companies for use in foods and
beverages. The corn refiners represent the _____ sector of the business market.
a. channel
b. reseller
c. producer
d. government
e. distributor
ANS: C
Producers use purchased goods and services to produce other products, to incorporate into other
products, or to facilitate the daily operations of the organization.

23. Southern Fireworks Manufacture Company in Liuyang, China provides fireworks for companies in
America such as Premier Pyrotechnics in Richland, Missouri. This means that Southern is a (n):
a. installer of original materials
b. demand company
c. a reseller
d. government buyer
e. OEM
ANS: E
An original equipment manufacturer (OEM) is an organization that buys business goods and
incorporates them into the products it produces and sells.

24. Caterpillar, the manufacturer of earthmoving equipment, uses completed drivetrains (engines-
transmissions-axles), drivetrain components, electronic controls, hydraulic and electrohydraulic
components and systems, cooling systems, and undercarriage track systems produced by other
organizations in its manufacturing process. Caterpillar is an example of a(n):
a. fabricator
b. installer
c. original equipment manufacturer
d. product provider
e. component network
ANS: C
An original equipment manufacturer (OEM) is an organization that buys business goods and
incorporates them into the products it produces and sells.

25. Businesses that buy finished goods and sell and distribute them for a profit are called:
a. inventory carriers
b. producers
c. distribution networks
d. resellers
e. business facilitators
ANS: D
The reseller market includes retail and wholesale businesses that buy finished goods and resell them
for a profit.
PTS: 1 REF: 237-238 OBJ: 07-4 TYPE: Def

26. In the past 24 years, Mothers Work has grown from a small, mail-order catalog business headquartered
inside the founder's home, to the world's largest seller of maternity apparel, with nearly 1,600
locations. In terms of the business market, Mothers Work would be best classified as a(n):
a. reseller
b. producer
c. distribution network
d. inventory carrier
e. business facilitator
ANS: A
Mothers Work purchases finished goods and resells them; it does not produce the goods or change
their form.
PTS: 1 REF: 237-238 OBJ: 07-4 TYPE: App

27. Hensley Poultry is a wholesaler that buys poultry food and health products from Provini, Inc., feeding
systems from Big Dutchman, Inc. and incubation systems from Copca Corp. Hensley then sells those
products to poultry producers and farmers' cooperatives in Iowa. Hensley Poultry could be best
classified as a(n):
a. producer
b. distribution network
c. inventory carrier
d. specialty retailer
e. reseller
ANS: E
for a profit.
28. The U.S. government is:

a. not a business market segment
b. the world's largest single customer
c. an organization accounting for over 50 percent of the U.S. gross national product
d. mainly a military equipment purchaser
e. using one centralized purchasing office for the entire government
ANS: B
The U.S. federal government is the world's largest customer. The other alternatives are false because
various branches of the government have separate purchasing departments, and billions of dollars are
spent on food, clothing, desks, and other standard supply items (not just military hardware).

29. One segment of the business market has primary goals that differ from the ordinary business goals
such as profit, market share, or return on investment. This segment includes many schools, churches,
and civic clubs and is often called the _____ market.
a. institution
b. OEM
c. service
d. provider
e. reseller
ANS: A
Institutions such as schools, churches, and hospitals have service or activity goals, but not profit goals,
yet are an important business market.

30. Which of the following is the BEST example of an institution market?

a. The Government
b. eBay
c. Claire’s Boutique
d. United Methodist church
e. Starbucks
ANS: D
Examples of institutions include schools, churches, and hospitals that have service or activity goals,
but not profit goals.

31. Organon Teknina sells inexpensive equipment to detect E.coli, listeria, or salmonella bacteria in food.
The company serves not-for-profit institutions that need to regularly check food quality. Organon
Teknina would be LEAST likely to sell to:
a. Montgomery County school system
b. a large pediatric hospital
c. a chain of Mexican restaurants
d. a chain of church-sponsored retirement homes
e. American Red Cross emergency shelter kitchens
ANS: C
The only example of a for-profit organization in the list is the restaurants, and they would not be a
customer of an institutional-only food supplier. To answer this question, students will have to
remember that institutions are not operated for profit.

32. What would a U.S. company that manufactures the lighted signs used in amusement parks, at outdoor
sports arenas, for restaurant promotion, and by state departments of transportation on the sides of roads
use to facilitate its market segmentation and targeting if it wanted data that were readily available and
usable?
a. a large amount of marketing research, including scanner data and focus groups
b. other competing firms as a strategic alliance referral service
c. government bidding processes
d. the North American Industry Classification System
e. derived demand
ANS: D
NAICS codes enhance companies' marketing efforts.

TOP: AACSB Reflective Thinking | TB&E Model Research
33. The government uses a system called NAICS to classify North American business establishments.
NAICS stands for:
a. Non-American Industry Classification System
b. North and South American Institutional Coding Services
c. Non-American Industrial Corporation System
d. North American Institution Code System
e. North American Industry Classification System
ANS: E
The North American Industry Classification System (NAICS) is an industry classification system for
classifying North American business establishments.

34. Imagine you are the research director of a major industrial marketing firm. You need to select an
NAICS code that defines the most homogeneous group of companies in a particular group of highly
competitive companies . Which of the following codes might you use?
a. 7432
b. 532
c. 19
d. 7
e. 999
ANS: A
The more digits in a code, the more homogeneous the group will be. The alternatives presented in this
question are to illustrate the point that more digits results in a more homogeneous grouping. They may
or may not be actual NAICS codes.
35. NAICS data are helpful for analyzing, segmenting, and targeting markets. The system was developed
by:
a. large manufacturers in United States and Mexico that produce similar goods
b. the North American Free Trade Agreement partners
c. Brazil, Chile, Argentina, Canada, and the United States working together in a joint venture
d. the SIC committee
e. the U.S. government
ANS: B
NAICS is an industry classification system that replaced the standard industrial classification (SIC)
system in 1997 for the North American Free Trade Agreement partners. The partners include the
United States, Canada, and Mexico.

36. Managers can use the NAICS data to:

a. create a more focused mission statement
b. eliminate risk
c. classify consumer behavior
d. identify potential new customers
e. determine purchase motives
ANS: D
NAICS data, when compared from year to year, can pinpoint which industries are growing and,
hopefully, identify market opportunities.

37. All of the following are demand characteristics of business markets EXCEPT:
a. inelastic demand
b. fluctuating demand
c. joint demand
d. stable demand
e. derived demand
ANS: D
Business markets are characterized by derived demand, inelastic demand, joint demand, and
fluctuating demand.

38. The demand for consumer goods often affects the demand for business products. This characteristic of
business markets is called _____ demand.
a. elastic
b. inelastic
c. fluctuating
d. derived
e. joint
ANS: D
The demand for business products is called derived demand because organizations buy products to be
used in producing their customers’ products.

39. Inland Eastex manufactures a heavy paper stock that is used for printing covers for many different
types and sizes of consumer magazines. Consumer magazine sales determine how much paper Inland
Eastex sells. This is an example of:
a. joint demand
b. inelastic demand
c. elastic demand
d. congruent demand
e. derived demand
ANS: E
Derived demand for a business product comes from the original consumer demand.

40. When the demand for packaged beer fell by 8 percent in one year, the demand for aluminum beer cans
and glass beer bottles fell also because the demand for beer containers is an example of a(n) _____
demand.
a. joint
b. inelastic
c. elastic
d. fluctuating
e. derived
ANS: E
The demand for beer containers is driven by the consumer demand for beer; therefore, the containers
have a derived demand.

41. Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to
produce uniform brown eggs with strong shells. It breeds and sells young chicks to farmers all over
Europe who want to sell eggs in local markets. When consumers began to worry about cholesterol
content and stopped eating as many eggs, the demand for the Tetra hen also declined. This would be
an example of _____ demand.
a. derived
b. elastic
c. multiplying
d. bundled
e. inelastic
ANS: A
Demand for hens is derived from consumers' demands for eggs, which has declined.

42. When two or more items are used in combination to produce a final product, they are said to have
_____ demand.
a. derived
b. inelastic
c. joint
d. fluctuating
e. elastic
ANS: C
This is the definition of joint demand.

43. Apple iTunes has sold over five billion downloads. Without iTunes the demand for the Apple iPod line
of products would be small. Without the musicians there would be no iTunes. A condition of _____
demand exists.
a. bundled
b. incremental
c. functional
d. developmental
e. joint
ANS: E
Joint demand occurs when two or more items are used together in a final product.

44. A decline in the availability of bicycle handle bars will decrease Huffy Bicycle Company's production
of bicycles. Decreased production in turn reduces Huffy's demand for bicycle seats. This is because the
products in this situation have _____ demand.
a. inelastic
b. joint
c. elastic
d. congruent
e. derived
ANS: B
When two or more items are used in combination in the final product, they have a joint demand.

45. When demand for a product is _____, an increase or decrease in the price of the product will not
significantly affect demand for the product.
a. responsive
b. elastic
c. inelastic
d. derived
e. bundled
ANS: C
This is the definition of inelastic demand.
46. An acute shortage of heavy-duty tires is threatening to disrupt operations in mining and construction
sites around the world. According to one mine operator, "I've got the coal and market, and I have the
trucks to haul the coal, but I don't have the tires. I’d be willing to pay double the price if I could get the
tires I need." The demand for heavy-duty tires is:
a. joint
b. inelastic
c. elastic
d. congruent
e. derived
ANS: B
When demand for a product is inelastic, an increase or decrease in the price of the product will not

47. Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford. A sudden jump
in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to
double the price of the wiper blades. This increase in price has not affected sales volume for wiper
blades. The price change did not change demand for windshield wiper blades because demand for this
product by business customers is:
a. inelastic
b. secure
c. bundled
d. elastic
e. resistant
ANS: A
A change in price has not really made a change in quantity demanded; therefore, the good is price
inelastic.

48. Due to rapidly rising overhead costs and increases in raw material prices, Framarx Corporation was
forced to raise the price of its waxed and coated paper by 35 percent. (The paper is used between
frozen hamburger patties to keep the patties from freezing together.) Framarx is the leading
manufacturer in this industry, and its competitors will follow suit. While the sales force for Framarx
believes the price increase will result in a drop in sales, its marketing manager disagrees because the
demand for the waxed and coated paper is more than likely:
a. resistant
b. inelastic
c. derived
d. elastic
e. bundled
ANS: B
A good is price inelastic if a change in price causes little or no change in demand. Paper used between
hamburger patties is a fairly insignificant cost item in the production of hamburger and might even be
considered a necessity item.
49. During the first years of this century, the number of packages arriving at households has more than
doubled. An increase in the price of the cardboard boxes in which these packages are shipped will
have little effect on the amount of shipping done; the demand for the boxes will continue to increase.
Therefore, you know the demand for the cardboard boxes is:
a. resistant
b. inelastic
c. derived
d. elastic
e. bundled
ANS: B
A product is price inelastic if a change in price causes little or no change in demand. Boxes are a fairly
insignificant cost item in the overall costs of a product and might even be considered a necessity item.

50. Although the price of a chemical added to paint to protect surfaces from mold and mildew has almost
doubled, the price of paint only rose an average of 5 percent, and the demand for both paint and the
chemical that eliminates mold and mildew remained stable. The demand for this chemical is:
a. elastic
b. derived
c. bundled
d. inelastic
e. change-resistant
ANS: D
A good is price inelastic if a change in price leads to a small change in quantity demanded or does not

51. As a result of the _____, a small increase or decrease in consumer demand can produce a much larger
change in demand for the facilities and equipment needed to manufacture the consumer product.
a. demand fluctuation principle
b. joint demand principle or division effect
c. inelastic demand effect
d. multiplier effect
e. derived force effect
ANS: D
The multiplier effect (accelerator principle) is a phenomenon in which a small increase or decrease in
consumer demand can produce a much larger change in demand for the facilities and equipment
needed to make the consumer product.

52. Electric cars will increase the demand for electricity, which will then dramatically increase demand for
the equipment needed to provide consumers with the electricity. This dramatic increase is due to the:
a. demand fluctuator principle
b. joint demand principle or division effect
c. inelastic demand effect
d. circumlocution effect
e. accelerator principle
ANS: E
Increased consumer demand leading to a larger increase in demand for manufacturing equipment to
make the consumer product is known as the multiplier effect of demand or as the accelerator principle.

53. Jif is the best-selling brand of peanut butter in the country. The manufacturer purchases large
quantities of peanuts every year to manufacturer its product. This order size is an example of _____
and would give Jif an advantage over other buyers of peanuts.
a. purchase volume
b. joint demand
c. fluctuating demand
d. sales volume
e. multiplier effect
ANS: A
Business buyers buy in much larger quantities than consumers.

54. Buyers in the business market tend to _____ than buyers in the consumer market.
a. use reciprocity less
b. purchase in much smaller quantities
c. buy more products that have a reduced probability of being affected by derived demand
d. generate more stable demand trends
e. be much more geographically concentrated
ANS: E
Over one-half of all U.S. business consumers are concentrated in just seven of the fifty states.

55. The distribution structure in business marketing typically:

a. includes at least one wholesaler
b. is direct
c. is complex and multistage
d. uses a three-step channel
e. uses retail distributors
ANS: B
Direct channels, where manufacturers market directly to users, are much more common in business
markets than in consumer markets.

56. _____ is the bargaining between buyers and sellers on product specifications, delivery dates, payment
terms, and other pricing matters and is commonplace in business marketing.
a. Negotiation
b. Need mediation
c. Customerization
d. Purchase arbitration
e. Disintermediation
ANS: A
Negotiating is common in business marketing.

57. If a business needs a particular good or service and decides to look among its own customers for a
provider of that good or service, the business is:
a. working to create purchase arbitration
b. opening itself up to prosecution for illegal activities
c. acting unethically
d. trying to eliminate derived demand barriers
e. practicing reciprocity
ANS: E
Reciprocity is the practice of business purchasers choosing to buy form their own customers.

58. A industrial cleaning products distributor needed to hire a janitorial service to keep his establishment
clean so he chose one of his customers for the job. This is an example of _____.
a. nested demand
b. derived demand
c. reciprocity
d. elastic demand
e. circular buying
ANS: C
Reciprocity is the normal business practice of using customers as suppliers of goods or services.

59. _____ occurs when a deli decides to buy its office supplies from a company that regularly buys
sandwiches for its employees.
a. Reciprocity
b. Joint demand
c. Elastic demand
d. Derived demand
e. Bidding conformity
ANS: A
Reciprocity is the normal business practice of using customers as suppliers of goods or services.

60. Which of the following statements does NOT describe the business market?
a. Organizational buying decisions are usually made independently by a purchasing agent
while consumer buying decisions are made jointly.
b. Business customers tend to be more geographically concentrated, and customers in
consumer markets tend to be more geographically dispersed.
c. The channel of distribution is more often direct for business markets than for consumer
markets.
d. Purchasing by businesses is a more formal process than it is in consumer markets.
e. Business marketers tend to have far fewer customers than consumer marketers.
ANS: A
Organizational buying decisions usually involve many more people than a consumer purchase. Review
Learning Outcome 6.

61. _____ is the primary promotional method for the sale of all business products.
a. Direct mail
b. Advertising
c. Personal selling
d. Public relations
e. Trade promotions
ANS: C
Business sales tend to be large in dollar amounts and quantities and may require negotiation and thus
may rely heavily on the salesperson's ability to communicate and work with the customer.

62. Personal selling is pervasive in organizational markets because:

a. most of the situations involve fairly low cost items
b. there are few avenues for effective advertising of organizational goods
c. organizational salespeople seldom speak the language of their customers
d. it is the most inexpensive method of promotion
e. many organizational products are complex and require expertise on the salesperson's part
ANS: E
While it is true that personal selling is expensive, and many specialized technical publications and
other advertising vehicles are available, other forms of promotion are not as effective as personal
selling.

63. All of the following are considered types of business products EXCEPT:
a. raw materials.
b. convenience goods
c. major equipment
d. accessory equipment
e. component parts
ANS: B
The types of business products are major equipment, accessory equipment, raw materials, component
parts, processed materials, supplies, and business services.

64. Which type of business product includes such capital goods as large or expensive machines,
mainframe computers, blast furnaces, generators, airplanes, and buildings?
a. major equipment
b. raw materials
c. component parts
e. investment goods
ANS: A
This describes major equipment, which is also called installations.

65. Major equipment goods, such as machines, mainframe computers, and buildings are also referred to as:
a. investment goods
b. necessity goods
c. capital components
d. strategic goods
e. installations
ANS: E
Major equipment goods are also known as installations.

66. Which of the following is the BEST example of an installation?

a. a baseball stadium
b. a checkout counter
c. a lifeguard stand
d. a file cabinet
e. original artwork
ANS: A
An installation, also called major equipment, is expensive and large.

67. Products such as parking garages, mainframe computers, privately owned office buildings, and street-
cleaning equipment are depreciated over time rather than expensed in the year they are purchased.
These are classified as:
a. processed materials
b. accessory equipment
c. major equipment
d. supplies
e. component parts
ANS: C
Major equipment, also called an installation, is expensive and large.

68. Claas is Europe’s largest manufacturer of combine harvesters. As farming becomes more professional
and more intensive, farmers are buying more sophisticated machines, which Claas can supply. The
expensive machines sold by Claas would be examples of:
a. installations
b. component parts
c. accessory equipment
d. processed materials
e. minor equipment
ANS: A

69. Southeastern Concrete Company has 15 concrete trucks. The company's accountant depreciated the
value of the vehicles over several years. What type of business product is the concrete truck?
a. major equipment
b. component part
c. processed material
d. fabricating item
e. accessory equipment
ANS: A

70. Which type of business product represents goods, such as portable tools and office equipment, that are
less expensive and shorter-lived than major equipment?
a. accessory equipment
b. component parts
c. processed goods
d. supplies
e. intermediate goods
ANS: A
This is the definition of accessory equipment.

71. Copying machines, personal computers, and fax machines are typically classified as _____ because
they are not expensive, have short useful lives, and are frequently purchased from local distributors.
b. mobile equipment
c. component parts
e. supplies
ANS: A
Accessory equipment is generally less expensive and short-lived compared to major equipment and is
used in the conducting of business. Accessory equipment also tends to be purchased by a widely
dispersed market.

72. For a police department, firearms, computers, printers, fax machines, and patrol vehicles are all
examples of _____ because they are shown as expenses on the yearly accounting statements.
a. mobile installation
b. component part
c. processed material
d. supply
ANS: E
Accessory equipment is generally less expensive and shorter-lived than major equipment and are often
charged as an expense in the year it is bought rather than depreciated over its useful life.

73. Which of the following is the BEST example of accessory equipment?

a. a parking lot
b. a store display rack
c. accounting services
d. a river barge
e. light bulbs
ANS: B
Accessory equipment is generally less expensive and short-lived compared to major equipment and is
used in the conducting of business. Accessory equipment also tends to be purchased by a widely
dispersed market. Light bulbs are supplies. Accounting services represent a business service.

74. Unprocessed extractive or agricultural products, such as copper, peanuts, soybean, bauxite, fruits, ore,
etc., that become part of finished products are examples of:
a. supplies
b. OEM parts
c. component parts
e. raw materials
ANS: E
Raw materials are unprocessed extractive or agricultural products.

75. One brand of tomato sauce advertises that the tomatoes it uses are processed within 24 hours of being
picked to ensure product freshness. The fresh tomatoes it buys from growers are examples of:
a. OEM parts
b. raw materials
c. component parts
e. supplies
ANS: B
Tomatoes are an agricultural product. Agricultural products are a type of raw material.

76. Farmer Pat Stein provides local restaurants with organic fruits and vegetables that have been grown
without the use of pesticides or chemical fertilizers. Pat Stein is a supplier of:
a. accessory parts
b. supplies
c. raw materials
d. unprocessed extractive products
e. processed materials
ANS: C
Raw materials are unprocessed extractive or agricultural products.

77. Finished items ready for assembly or products that need very little processing before they become a
part of some other product are called:
a. supplies
b. raw materials
e. component parts
ANS: E
This is the definition of component parts.

78. Within the business market, roller belts that are purchased by vacuum manufacturers are examples of:
a. supplies
b. raw materials
e. component parts
ANS: E
Component parts are either finished items ready for assembly or products that need very little
processing before becoming a part of some other product.

79. PAS Systems has developed an unobtrusive flashlight-alcohol detector. The flashlight readings are
inadmissible in court but are used by police officers to decide whether to hold someone for a sobriety
test. Each one costs $600. The manufacturer assembles a breathalyzer from one supplier with a slightly
modified flashlight case from another supplier to make the new product. The breathalyzer and the
flashlight case are examples of:
a. major equipment
b. component parts
c. processed materials
d. integrated parts
ANS: B
Component parts are either finished items ready for assembly or products that need very little
processing before becoming part of some other product.

80. Products that have had some processing, are used directly in the production of other products, and do
not retain their identity in the final product are called:
a. raw materials
b. supplies
d. component parts
e. replacement parts
ANS: C
This is describes processed materials.

81. No-Glut is a small company that manufactures several gluten-free products for consumers who cannot
digest this substance. For this manufacturer, rice flour, which will be used in its manufacturing
process, is a(n)
b. fabricating material
c. component part
d. integrated material
e. processed material
ANS: E
Processed materials are products used directly in manufacturing other products.

82. A dog food manufacturer purchases processed meat by-products that it uses in the manufacture of a
dry dog food. These processed meat by-products are examples of:
a. raw materials
b. OEM products
d. component parts
ANS: C
Processed materials are used in the manufacture of another product and usually lose their original
identity.

83. Metalcrafter Enterprise manufactures stamped brass door plates, brass numbers, and other decorative
brass trim for homes. Every month Metalcrafter purchases sheets of brass, which are classified as:
b. fabricating supplies
c. raw materials
d. component parts
ANS: A
Processed materials are used in the manufacture of another product and usually lose their original
identity.

84. _____ are consumable, inexpensive, and often standardized items that do not become part of the final
product.
a. Processed materials
b. Supplies
c. Provisions
d. Accessory equipment
e. Replacement parts
ANS: B
This is the definition of supplies.

85. Another name for business supplies like pens, paper, and file folders is:
a. processing goods
b. components
c. OEM parts
d. MRO items
e. accessories
ANS: D
MRO stands for maintenance, repair, or operating supplies.

86. At an accounting firm, the secretary orders printer cartridges, cases of paper, paper clips, and other
small items. These items would be classified as:
a. replacement parts
b. provisions
c. OEM parts
e. supplies
ANS: E
Supplies are consumable, inexpensive items that do not become part of the final product and are
routinely bought.

87. Business services:

a. are capital items
b. are never outsourced
c. are not used in reciprocity arrangements
d. typically become part of the finished product
e. are expense items
ANS: E
Business services are expense items that do not become part of a final product, such as janitorial,
advertising, or legal services.

88. A small retailer hired an accountant to run its payroll and pay its taxes. The accountant provided the
retailer with:
a. OEMs
b. processed services
c. business services
d. accessory services
e. service supplies
ANS: C
Business services functions performed by outside providers.

89. The Barter Company (TBC) located in Kennesaw, Georgia acts as a broker between companies that
want to trade products or services. Companies must be a TBC member, and there is a one-time fee to
join. The Barter Company charges a brokerage fee on each transaction facilitated. The Barter
Company is an example of a (n):
a. service integrator
b. job source
c. business service
d. extended service
e. component service
ANS: C
Business services are functions performed by outside providers.

90. The _____ is the set of all persons in an organization who become involved in the purchasing process.
a. buying center
b. stakeholder committee
c. ad hoc purchasing staff
d. board of directors
e. comptroller's staff
ANS: A
This is the definition of buying center.

91. The buying center:

a. will be composed of the same decision makers as long as the purchasing process lasts
b. is typically on the formal organizational chart under the vice-president for operations
c. requires all purchasing participants to be employed by the purchasing department
d. refers to all those organizational members who become involved in the purchasing process
e. regularly generates formal announcements of who is in the buying center
ANS: D
The buying center is not a formal, well-defined group. It is simply all the people who become involved
in the purchasing process within the company, no matter what their department or position.

92. Which of the following statements about buying centers is true?

a. The most efficient buying centers have no more than five members.
b. No one individual should assume more than two buying center roles.
c. Buying centers are clearly labeled on all organizational charts.
d. Complex purchase situations usually have fewer people involved in the buying center than
less complex purchases.
e. Membership and influence in a buying center vary from company to company.
ANS: E
Buying centers can have more than five members. They are not shown on organizational charts. One
person may assume all of the buying center roles. The number of people involved in a buying center
varies with the complexity and importance of a purchase decision. Buying centers vary from company
to company.

93. You have started raising your first litter of AKC registered Chihuahuas. You want to sell your puppies
to the locally owned and operated pet store, Pets and People. How do you find the buyer?
a. Look at the formal organization chart of the company.
b. Get a copy of Pets and People’s phone directory, where all buying center members are
listed.
c. Contact the store and probe to see who is in charge of buying
d. Locate the decider at Pet and People
e. Wait for Pets and People to call you when they will hear about your new breeding
program
ANS: C
There is no formal buying center structure. It changes from decision to decision, as well as at different
stages of the decision-making process.

94. All of the following are roles found within a buying center EXCEPT:
a. influencers
b. gatekeepers
c. suppliers
d. users
e. initiators
ANS: C
The roles in the buying center include initiator, influencers/evaluators, gatekeepers, decider, purchaser,
and users.

95. Harold works as a new business manager for a manufacturer of marine lubricants. He often talks to
several different people before he locates someone who can give him a purchase order or a refusal. In
terms of the buying center, he has the most trouble identifying the _____ for his services.
a. decider
b. influencer
c. purchaser
d. gatekeeper
e. user
ANS: A
The person who has the formal or informal power to approve the buying decision is often difficult to
locate.

96. The _____ is the member of the buying center who regulates the flow of information.
a. decider
b. influencer
c. purchaser
d. gatekeeper
e. user
ANS: D
Gatekeepers can regulate who gets an appointment to meet with the other members of the buying
center.

97. PAS Systems has developed a new product--an unobtrusive flashlight-alcohol detector. The flashlight
readings are inadmissible in court but are used by police officers to decide whether to hold someone
for a sobriety test. Each one costs $600. After seeing a prototype brought back by one of its employees
from a highway safety convention, the Georgia Governor's Office of Highway Safety decided to equip
every DUI officer with one. In this example, the individual who attended the convention had the roles
of _____ in the buying center.
a. buyer and decider
b. decider and user
c. gatekeeper and influencer
d. initiator and decider
e. purchaser and gatekeeper
ANS: C
As an influencer, the person brought the flashlight to the attention of his or her office. As a gatekeeper,
the person determined whether to show the flashlight or keep the information private.

98. The three most important evaluative criteria for business-to-business purchases are quality, price, and:
a. competitive offers
b. service
c. reliability
d. assurance
e. existing relationships
ANS: B
Quality is the most important criterion, followed by service and price.

99. In terms of how business buyers evaluate products and suppliers, the most important criterion is:
a. price
b. behavior
c. quality
d. personal relationships
e. reciprocity
ANS: C
Quality is the most important criterion, followed by service and price.

100. Business buyers use a variety of criteria to evaluate alternative products and suppliers. The three most
important criteria, in order of importance, are usually:
a. price, sales support, and service
b. quality, service, and price
c. reputation, price, and capability
d. price, delivery time, and product reliability
e. service, quality, and reputation
ANS: B
The three criteria, in order of importance, are quality, service, and price.
101. The Beaumont Homeowner’s Association had to replace its pool pump. They asked two local
companies—Thompson Pools and Southern Pool and Spa Company—for quotes on replacing the
pump. Beaumont negotiated with both companies and quickly decided to buy from the Thompson Pool
because its quote was $200 cheaper in its labor estimate. Which evaluative criterion appears to have
been most important in making this purchase decision?
a. price
b. familiarity with the product
c. reliability
d. the availability of replacement parts
e. buyer/seller relationship
ANS: A
The two other evaluative criteria discussed in the text are quality and service.

102. A _____ is a situation requiring the purchase of a product for the first time.
a. straight rebuy
b. value buy
c. modified rebuy
d. new buy
e. make-or-buy
ANS: D
This is the definition of a new buy situation.

103. A new-buy situation refers to the:

a. setting of new standards for current vendors
b. establishment of a new buying center
c. resolution of new conflict between buyer and seller
d. search for replacement vendors for standard, currently used parts
e. purchase of a product or service when a new demand arises
ANS: E
A new need (new demand) signifies that this is a new-buy situation.

104. A university is considering the purchase of a Web-based course delivery system due to increased
demand for online courses and degrees. Since the school has not offered online courses before, what
type of buying situation does this represent for the school?
a. value engineering task
b. modified rebuy
c. straight rebuy
d. new buy
e. derived rebuy
ANS: D
New buy is a situation requiring the purchase of a product for the first time.

105. A small police department wants to buy a machine with which it can perform alcohol breath tests. It
has never had this capability before but feels it is an essential tool as the community grows. The
machine costs about $5,000, which is almost 75 percent of the department's entire supply budget. This
purchase would be an example of a(n) _____ situation.
a. extensive buying
b. low-involvement buying
c. new-buy
d. modified-rebuy
e. straight-rebuy
ANS: C
New buy represents a situation requiring the purchase of a product for the first time.

106. A _____ buying situation is normally less critical and less time-consuming than a new-buy situation
but does require some change in the original good or service.
a. synergistic rebuy
b. value buy
c. negotiated rebuy
d. modified rebuy
e. make-or-buy
ANS: D
A modified rebuy is a situation where the purchaser wants some change in the original good or service.

107. Apple Inc. wanted a faster microprocessor for its new Macs. Apple Inc. most likely engaged in a:
a. value engineering task
b. modified rebuy
c. straight rebuy
d. new process
e. new buy
ANS: B
When a previously purchased item needs to be reordered, but with changes or additions, it is a
modified-rebuy task.

108. The Dallas Morning News needed a new printing press comparable to the one that needed to be
replaced. The firm’s familiarity with the product and its manufacturer caused it to approach two
companies--one in the United States and one in Japan--to see which could offer the better deal. It
negotiated with both companies and quickly decided to buy from the Japanese manufacturer when it
offered to sell a press for $2.2 million less than its U.S. competitor. This purchase was an example of
a:
a. contingency buy
b. modified rebuy
c. negotiated buying system
d. straight rebuy
e. new buying situation
ANS: B
Familiarity with the product and its manufacturers made it a modified rebuy.

109. Axel Spring AG, one of Europe’s largest newspaper publishers, with 10,000 employees and more than
150 papers in 30 countries, announced it would switch its entire operation from PCs to Macs. Axel
decided to make a switch to Apple because the company’s layout work was already being done by
Macs, the Macs were more user friendly, more elegant, and cheaper to maintain than they had been in
the past. This is an example of a _____.
a. new buy
b. value buy
c. straight rebuy
d. modified rebuy
e. make-or-buy
ANS: D
Axel already had PCs, they just decided to make a switch to Apple, which is an example of a modified
rebuy.

110. Which of the following is the best example of a modified-rebuy situation?

a. the purchase of a replacement hamster as the class mascot
b. bidding on a new high school multi-purpose gymnasium to replace one built in 1963
c. the purchase of three large screen computer monitors to replace smaller monitors
d. the annual purchase of calendar refills for the desks of all company executives
e. the monthly updating of computer virus protection
ANS: C
When a previously purchased item needs to be reordered, but with changes or additions, it is a
modified-rebuy task.

111. A routine purchasing situation in which the purchaser is not looking for new information or at other
suppliers is called a:
a. modified rebuy
b. value buy
c. synergistic buy
d. straight rebuy
e. make-or-buy
ANS: D
This is the definition of straight rebuy.

112. Elizabeth buys flour weekly for her bakery. This purchase is most likely an example of a(n) _____
situation.
a. need-related buy
b. limited rebuy
c. straight rebuy
d. rebuy sourcing
e. institution buy
ANS: C
A straight rebuy is a situation in which the purchaser reorders the same goods or services without
looking for new information or investigating other suppliers.

113. A professor sent the following memo to his department chair for his authorization:
Glen:
I need to purchase a camera, Mac computer, and microphone for the selling center lab #2 just like we
did for lab #1.
This buying situation should be described as a:

a. make-or-buy
b. value buy
c. new buy
d. modified rebuy
e. straight rebuy
ANS: E
A straight rebuy is a simple repurchase of items (no changes) without seeking a new supplier.

114. Purchasing contracts are commonly used in which type of buying situations?
a. reciprocal
b. straight-rebuy
c. new-buy
d. extended-rebuy
e. modified-rebuy
ANS: B
Purchasing contracts are used with products that are bought often and in high volume.

115. Texas Instruments has developed a detailed Values and Ethics Statement and Code of Business
Conduct. Why did they choose to create this?
a. Because it makes TI look good
b. TI’s suppliers will only buy from them if they have this statement
c. U. S. law requires a code of ethics
d. Consumers demand ethical practices
e. A Code of Ethics helps guide buyers and sellers and overall helps the company to follow
ethical practices
ANS: E
Ethics can be the standard of behavior in which a company is judged. Having a Code of Ethics can
help guide a Company. See Ethics in Marketing box.

116. Which of the following is becoming increasingly more important in business marketing strategies?
a. customer service
b. price collusion
c. ethnocentrism
d. the divider effect
e. competitive advertising
ANS: A
Customer service has become the focus, rather than products or other aspects of the marketing mix, for
successful marketing strategies.

NARRBEGIN: Etruscan Railing

Etruscan Railing Company
Etruscan Railing Company makes railing that is used in sports arenas, nursing home corridors,
queue houses at amusement parks, and many other places that are not as obvious. Its railing is molded
into bicycle racks. You may also see city governments using the railing to make walkways over
ravines and creek banks safer for pedestrian traffic. Hospitals also use the railing in their physical
therapy departments, to keep the lines straight in the hospital cafeteria, and to prevent patients from
falling out of hospital beds.
NARREND
117. Refer to Etruscan Railing Company. Etruscan Railing sells:

a. consumer products
b. business products
c. supplies
d. consumer and business products
e. major equipment
ANS: B
Each market discussed in the scenario is a business market, based on the intended use of the product.
PTS: 1 REF: 231 OBJ: 07-1

118. Refer to Etruscan Railing Company. When Etruscan sells railing to contractors to use in building
loading docks in accordance with federal government regulations, it is selling to:
a. government
b. institutions
c. resellers
d. producers
e. consumers
ANS: D
Producers are individuals or organizations that buy business goods and incorporate them into the
products that they produce for eventual sale to other producers or to consumers.
PTS: 1 REF: 237 OBJ: 07-4

119. Refer to Etruscan Railing Company. When Etruscan sells railings to refurbish a private university's
football stadium, it is selling to a(n):
a. intermediary
b. institution
c. reseller
d. producer
e. consumer
ANS: B
Institutions are nonprofit organizations like state-operated universities.
PTS: 1 REF: 239 OBJ: 07-4

120. Refer to Etruscan Railing Company. Etruscan has experienced a strong increase in railing sales as a
result of the growth of college football. This increase in the demand for railings as a result of the
demand for new football stadiums is called _____ demand.
a. joint
b. derived
c. inelastic
d. fluctuating
e. elastic
ANS: B
Demand for railing is driven by the growth of college football.
PTS: 1 REF: 241 OBJ: 07-6

121. Refer to Etruscan Railing Company. Companies that make bicycle racks for bike safekeeping in public
places receive the railing as 30-foot lengths of pipe. For these companies, Etruscan railing is:
a. supplies
c. an installation
d. processed material
e. raw material
ANS: D
Processed materials are products used directly in manufacturing other products. They have had some
processing.
PTS: 1 REF: 245 OBJ: 07-7
NARRBEGIN: FAA
FAA
The Federal Aviation Administration has been struggling for several years with antiquated systems,
and all it takes is a single failure on one piece of the system to shut down the entire air-traffic control
system for several hours, resulting in significant snarls at major airports. The most recent failure
occurred in the FAA’s core telecommunications network, called the Federal Telecommunications
Infrastructure (FTI), which is managed by Harris Corporation. Marc Raimondi, a spokesperson for
Harris Corporation, said, “The FTI system has proven to be one of the most reliable and secure
communications networks operating within the civilian government.” Snafus like this have been
happening with alarming frequency, prompting Congress to demand the FAA and its contractors to do
more to prevent these malfunctions. The problem is that the FAA has been using a patchwork
approach by updating with modern hardware and software on old systems instead of a complete
overhaul of the system. The FAA’s next generation of modernization will rely on satellite-based
networks instead of phone lines and data cables. The FAA is waiting for White House approval on
whether it will have the funds to take this next step.
NARREND
122. Refer to FAA. The FAA is what type of business buyer?

a. producer
b. reseller
c. government
d. institution
e. unbiased
ANS: C
Government organizations include federal, state, and local buying units. The FAA is a federal agency.
PTS: 1 REF: 238 OBJ: 07-4

123. Refer to FAA. The company that wins the contract to develop the satellite-based system for the FAA
will have to purchase satellites and mainframe computers for this system. These types of products are
best described as which type of business product?
a. raw materials
b. processed materials
d. business equipment
e. major equipment
ANS: E
Major equipment includes such capital goods as large or expensive machines, mainframe computers,
buildings, etc.
PTS: 1 REF: 244 OBJ: 07-7

124. Refer to FAA. Harris Corporation provides which type of business product to the FAA?
a. major equipment
c. raw materials
d. business services
e. component parts
ANS: D
Businesses often retain outside provides to provide essential services, such as keeping the FTI
operational.
PTS: 1 REF: 246 OBJ: 07-7

125. Refer to FAA. Ultimately, The FAA must get authority from the President to spend the billions of
dollars necessary to upgrade the system because Congress must authorize the funds and the President
must approve that authorization. In terms of the buying center, the President is the:
a. initiator
b. gatekeeper
c. purchaser
d. decider
e. user
ANS: D
The decider is the person who has the formal or informal power to approve the purchase.
PTS: 1 REF: 247 OBJ: 07-8

126. Refer to FAA. When the FAA purchases a satellite-based system, this will be a situation in which it is
purchasing an entire system, not just a modified part or new vendor for existing parts. Basically, this
is a situation in which the FAA will be purchasing a system for the first time and is referred to as a(n):
a. straight rebuy
b. modified rebuy
c. new buy
d. original equipment purchase
e. primary purchase
ANS: C
A new buy is a situation requiring the purchase of a product for the first time.
PTS: 1 REF: 248 OBJ: 07-8

NARRBEGIN: Lucent Technologies

Lucent Technologies
Because AT&T Corporation wanted to become a big player in the booming market for outsourcing
computer services, it set up Lucent Technologies to manage corporate clients' worldwide computer
networks. Lucent Technologies assists corporations in global network and computer management by
drawing on AT&T's worldwide digital network and its computer hardware and software businesses. It
also relies on the expertise of technicians at Bell Laboratories.
NARREND
127. Refer to Lucent Technologies. Lucent Technologies sells:

a. consumer products
b. business products
c. supplies
d. consumer and business products
e. installations
ANS: B
Based on the intended use of the product, the market is a business market.
PTS: 1 REF: 231 OBJ: 07-1

128. Refer to Lucent Technologies. Lucent Technologies depends on AT&T but also has found it necessary
to form cooperative partnerships with other technology, telecommunications, and software firms.
Lucent has found it necessary to form:
a. strategic alliances
b. relationship contracts
c. outsourcing vendor liaisons
d. bargaining positioning grids
e. market groupings
ANS: A
Cooperative relationships are strategic alliances.
PTS: 1 REF: 235 OBJ: 07-3

129. Refer to Lucent Technologies. First National Bank of Chicago, one of AT&T's customers, claims the
new network helped the bank win a huge contract from the U.S. Treasury. For classification purposes,
First National Bank would be which type of customer?
a. producer
b. reseller
c. government
d. institution
e. wholesaler
ANS: A
Businesses that purchase goods and services for the purpose of making a profit are producers.
PTS: 1 REF: 237 OBJ: 07-4

130. Refer to Lucent Technologies. Consumers utilizing the First National Bank of Chicago to purchase
U.S. Treasury bonds will affect the demand for and use of the AT&T network computer system
capabilities. This is called:
a. joint demand
b. inelastic demand
c. derived demand
d. fluctuating demand
e. elastic demand
ANS: C
The demand for consumer goods often affects the demand for business products.
PTS: 1 REF: 241 OBJ: 07-6

131. Refer to Lucent Technologies. AT&T requires its customers to purchase all the necessary technology
to run the network. This requires expensive machinery that will be purchased and then depreciated
over time. The machinery is classified as:
c. installations
d. supplies
e. component parts
ANS: C
Installations (major equipment) are expensive and depreciated over a long period of time.
PTS: 1 REF: 244 OBJ: 07-7

NARRBEGIN: Baseball Dirt

Baseball Dirt
Dirt is not dirt when it comes to baseball fields. About two-thirds of the pro baseball fields got their
dirt from a dirt farm in New Jersey called Partac Peat. The company markets a secret mix for the
infield (resilient), the warning track (extra crunchy), and the pitcher's mounds (firm). Mounds come in
red, brown, orange, and gray colors. Roger Bossard, the White Sox head groundskeeper, scouted
nationwide for dirt before settling on the mix provided by Partac Peat. (He uses sand under the grassy
areas of the playing field.)
NARREND
132. Refer to Baseball Dirt. Some of the dirt sold by Partac Peat is used to make clay tennis court surfaces.
As the number of people playing tennis increases so does the demand for new clay courts and,
therefore, the demand for Partac Peat. This occurs because the demand for Partac Peat is:
a. inelastic
b. intangible
c. heterogeneous
d. derived
e. elastic
ANS: D
As consumers demand more space to play tennis, the demand for the materials to make new tennis
courts increase.
PTS: 1 REF: 241 OBJ: 07-6

133. Refer to Baseball Dirt. An increase in the price of Partac Peat will not affect the demand for the
product because many groundskeepers believe there is no substitute for the product. Thus, demand for
Partac Peat is:
a. inelastic
b. intangible
c. heterogeneous
d. synergistic
e. elastic
ANS: A
Inelastic demand means an increase or a decrease in price will not significantly affect product demand.
PTS: 1 REF: 241 OBJ: 07-6

134. Refer to Baseball Dirt. Because Partac Peat is a business product, the primary promotional method
used for its sale is:
a. trade promotions
b. slotting allowances
c. personal selling
d. advertising in consumer magazines
e. publicity
ANS: C
The sale of many business products requires a great deal of personal contact, so personal selling is the
primary promotion tool.
PTS: 1 REF: 244 OBJ: 07-6

135. Refer to Baseball Dirt. What type of business product would Partac Peat be since it is used in the
making of baseball fields?
a. equipment
c. capital item
e. component parts
ANS: E
The dirt is purchased from Partac Peat because it needs to be used in the construction of the baseball
fields. The dirt receives no further processing.
PTS: 1 REF: 244 OBJ: 07-7

136. Refer to Baseball Dirt. Roger Bossard, the White Sox head groundskeeper, most likely did NOT
assume which of the following buying center roles since he has the authority to buy whatever is
needed to make the baseball field the best playing surface possible?
a. gatekeeper
b. decider
c. evaluator
d. influencer
e. initiator
ANS: A
Since he occupies most of the roles himself, he would not be restricting the flow of information to
himself.
PTS: 1 REF: 247 OBJ: 07-8

137. Refer to Baseball Dirt. The first time Roger Bossard purchased Partac Peat, it was most likely an
example of which type of buying situation?
a. modified rebuy
b. new buy
c. habitual buying decision
d. buying heuristics
e. straight rebuy
ANS: B
New buy is a situation requiring the purchase of a product for the first time.
PTS: 1 REF: 248 OBJ: 07-8

NARRBEGIN: Claxton Fruitcakes

Claxton Fruitcakes
One common Christmas tradition in many households is the Claxton fruitcake. The fruitcake bakery in
Claxton, Georgia, makes about 6 million pounds of fruitcake annually and has $12 million in sales.
One fruitcake batch weighs 375 pounds. About 70 percent of that weight is fruits and nuts. A single
batch is divided into 34 loaf pans that hold 11 pounds each. Loaves are cooked for 100 minutes at 375
degrees. The bakery can cook 6,000 pounds at a time. During the baking season (August-December),
the bakery uses a tractor-trailer load of raisins each day. The suggested retail price of a one-pound
Claxton fruitcake is $3.69.
NARREND
138. Refer to Claxton Fruitcakes. Because demand for raisins to bake into the fruitcakes does not change on
the basis of the price fluctuations of dried fruits, Claxton's demand for raisins is an example of _____
demand.
a. inelastic
b. derived
c. fluctuating
d. elastic
e. joint
ANS: A
Inelastic demand means that an increase or decrease in the price of the product will not significantly
affect demand for the product, and the demand for many business products is inelastic.
PTS: 1 REF: 241 OBJ: 07-6

139. Refer to Claxton Fruitcakes. In terms of business-to-business products, the large ovens in which the
cakes are baked are examples of:
a. component parts
b. MRO equipment
c. specialty equipment
d. processed supplies
e. major equipment
ANS: E
The ovens would be examples of installations just like an assembly line.
PTS: 1 REF: 244 OBJ: 07-7

140. Refer to Claxton Fruitcakes. In terms of business-to-business products, the flour used in fruitcakes is
an example of:
a. OEM supplies
b. installations
c. MRO supplies
e. accessory supplies
ANS: D
Processed materials are products used directly in manufacturing other products.
PTS: 1 REF: 245 OBJ: 07-7

141. Refer to Claxton Fruitcakes. Any company that purchased Claxton fruitcakes to give to its customers
would treat this purchase like any other purchase and evaluate the cake and the company in terms of:
a. demand, value, and promotion
b. quality, service, and price
c. order time and delivery time
d. customer relationships, costs, and ethical behavior
e. time requirements, order speed, and customer reactions
ANS: B
Business buyers evaluate products and suppliers against three important criteria: quality, service, and
price - in that order.
PTS: 1 REF: 248 OBJ: 07-8

142. Refer to Claxton Fruitcakes. For a corporation that has been giving its key customers Claxton
fruitcakes since 1950, placing the order for cakes to be delivered this year would be an example of a
_____ because some negotiation about price and quantity must occur each year.
a. new buy
b. contingency buy
c. modified rebuy
d. situational buy
e. straight rebuy
ANS: C
Modified rebuy require some changes in the purchase order.
PTS: 1 REF: 249 OBJ: 07-8

NARRBEGIN: Rock-Tenn
Rock-Tenn
Rock-Tenn produces packaging products. They make cartons that will hold a dozen Dunkin’ Donuts,
waffle fries for Chik-fil-A, Gillette razors, Haagen -Daz ice cream, express mail envelopes for FedEx
and much more. Rock-Tenn business fluctuates depending on consumer demand. As plastic products
become more expensive companies turn to cardboard and paper to package their products.
NARREND
143. Refer to Rock-Tenn. Rock-Tenn makes paper products for companies to use in their product and
service offerings. This is an example of _____.
a. business marketing
b. consumer marketing
c. Internet marketing
d. retail marketing
e. complex marketing
ANS: A
Rock-Tenn produces a product that will be used in business rather than personal for consumption.

service offerings. The business market consists of four categories of business customers. Rock-Tenn’s
customers are an example of a _____.
a. producers
b. resellers
c. governments
d. institutions
e. all of the above
ANS: A
Rock-Tenn produces a product that will be used in businesses’ daily operations.

service offerings. Rock-Tenn buys paper, wood chips, and supplies from companies to make its
cartons. Rock-Tenn would be considered a(n) _____.
a. FAQ
b. NAICS
c. OEM
d. NP
e. LOL
ANS: C
Rock-Tenn is a producer, which are often called original equipment manufacturers (OEMs). OEMS
buy business goods and incorporate them into the products that they produce for eventual sale to other
producers or to consumers.

service offerings. As long as there is a demand for Dunkin’ Donuts, there will be demand for their
dozen-donut cartons, which will ensure demand for paper to manufacture into cartons. This is an
example of _____ demand.
a. derived
b. inelastic
c. joint
d. consumer
e. upward
ANS: C
Joint demand is the demand for two or more items used together in a final product.

147. The demand for Rock-Tenn’s cardboard cartons depends on how many Dunkin’ Donuts, Chick-fil-A
waffle fries and Chinese take-out meals consumers order. This is an example of _____ demand.
a. inelastic
b. derived
c. joint
d. fluctuating
e. elastic
ANS: B
Derived demand for a business product comes from the original consumer demand.

service offerings. As demand for their products increased due to rising plastic prices, Rock-Tenn had
to acquire other plants and equipment to help in its business. This is an example of the _____.
a. customer accelerator
b. volume principle
c. growing principle
d. marketing effect
e. multiplier effect
ANS: E
The multiplier effect is a phenomenon where an increase in demand can cause a smaller or larger
change in demand for equipment used to produce consumer goods.

149. Refer to Rock-Tenn. Power tools used to maintain the machinery that produces cartons would be an
example of _____.
a. major equipment
c. raw materials
d. component parts
ANS: B
Accessory equipment examples include power tools, which are less expensive and shorter-lived than
major equipment.

150. Refer to Rock-Tenn. Lubricants used to maintain the machinery that produces cartons would be an
example of _____.
a. major equipment
c. raw materials
d. supplies
ANS: D
Supplies are consumable items tat do not become part of the final product, and lubricants would be an
example of supplies.

151. Refer to Rock-Tenn. A paper producing company sales representative wants to do business with Rock-
Tenn. He/She needs to locate the person who actually negotiates the purchase, in other words, the
_____ in the buying center.
a. influencer
b. gatekeeper
c. decider
d. purchaser
e. user
ANS: D
The purchaser is the who negotiates the purchase.

152. Refer to Rock-Tenn. A sales representative from a paper producing company calls on Rock-Tenn
routinely every month to review their ordering needs. The monthly sale of paper to Rock-Tenn would
constitute a:
a. new buy
b. modified rebuy
c. straight rebuy
d. modified new buy
e. straight new buy
ANS: C
As this is a regular purchase it would be an example of a straight rebuy.

ESSAY
1. What is business marketing, and what is the key characteristic distinguishing business products from
consumer products.
ANS:
Business marketing is the marketing of goods and services to individuals and organizations for
purposes other than personal consumption. Business products include those that are used to
manufacture other products, become part of another product, or aid the normal operations of an
organization. The key characteristic distinguishing business products from consumer products is
intended use, not physical characteristics. A product that is purchased for personal or family
consumption or as a gift is a consumer good. If that same product was bought for use in a business, it
is a business product.
PTS: 1 REF: 231 OBJ: 07-1

TOP: AACSB Communication | TB&E Model Strategy
2. The use of the Internet to facilitate activities between organizations has evolved and grown rapidly
throughout its short history. Define B2B e-commerce and discuss the evolution of e-business
initiatives.
ANS:
B2B e-commerce is business-to-business e-commerce and is the use of the Internet to facilitate the
exchange of goods, services, and information between organizations. Past initiatives included revenue
generation, aggressive disintermediation initiative, and basic marketing communication strategies.
Present initiatives, however, include reduce costs, build channel partnerships and trust, customer-
focused technology and systems, brand building and development, and integration of online and
traditional media.
PTS: 1 REF: 232-233 OBJ: 07-2

3. Discuss how businesses measure online success.
ANS:
Three of the most important measures of online success are recency, frequency, and monetary value.
Recency relates to the fact that customers who have made a purchase recently are more likely to
purchase again in the near future than customers who haven’t purchased for a while. Frequency data
help marketers identify frequent purchasers who are definitely more likely to repeat their purchasing
behavior in the future. The monetary value of sales is important because big spenders can be the most
profitable customers for a business. Another measure of success is a site’s stickiness factor, which is a
measure determined by multiplying the frequency of visits times the duration of a visit times the
number of pages viewed during each visit (site reach). By measuring the stickiness factor of a Web
site before and after a design or function change, the marketer can quickly determine whether visitors
embraced the change.
PTS: 1 REF: 232 OBJ: 07-2

4. Discuss the difference between disintermediation and reintermediation. Give an example of a company
you are aware of that used these strategies.
ANS:
Disintermediation is eliminating intermediaries such as wholesalers or distributors from a marketing
channel.
Reintermediation is reintroducing an intermediary between producers and users.
Examples may vary. One example would be Apple computers, which once sold their products through
companies like Comp USA. Then Apple decided to sell directly to consumers via their web site and
own retail stores. With the Apple iPhone it can be purchased through AT&T stores. This would be an
example of Apple using an intermediary or reintermediation.
Students may use text examples of Dell for or Wal-Mart for disintermediation.
PTS: 1 REF: 234 OBJ: 07-2

5. What is a strategic alliance? How is it linked to relationship marketing?
ANS:
A strategic alliance, sometimes called a strategic partnership, is a cooperative agreement between
business firms--often in the business market, between supplier and customer. Frequently, strategic
alliances take the form of licensing or distribution agreements, joint ventures, research and
development consortia, or partnerships involving multinational partnerships. The two key features that
characterize most successful strategic alliances are carefully chosen partners and a situation in which
both parties benefit from the relationship. Strategic alliances are therefore connected to relationship
marketing, which is defined as a strategy that entails seeking and establishing long-term partnerships
with customers.
PTS: 1 REF: 234-236 OBJ: 07-3

6. Briefly describe the four major categories of customers in business marketing. Give examples of
companies or organizations in each category.
ANS:
PRODUCERS include individuals and organizations that purchase goods and services for the purpose
of making a profit by using them to produce other goods, to become part of other goods, or to facilitate
the daily operations of a firm. Examples include General Motors, Coca-Cola, and IBM.
RESELLERS include those wholesale and retail businesses that buy finished goods and resell them for
a profit. Examples could include any grocery store, furniture store, or retail clothing store.
GOVERNMENT organizations include a large number of buying units that purchase goods and
services. The federal government as well as state, county, and city governments are all examples.
INSTITUTIONS are nonprofit organizations that have different primary goals from ordinary
businesses. This category includes schools, churches, hospitals, clubs, foundations, and labor unions.
PTS: 1 REF: 237-239 OBJ: 07-4

TOP: AACSB Communication | TB&E Model Customer
7. Describe the reseller market. Why do businesses use the services of business product distributors?
ANS:
for a profit. Retailers sell to final consumers, and wholesalers sell to retailers and other organizational
customers.
Business product distributors are wholesalers who buy business products and resell them to business
customers. These distributors often carry much stock and have sales forces that call on business
customers. Businesses that wish to purchase items typically buy from these local distributors rather
than from large manufacturers.
PTS: 1 REF: 237-238 OBJ: 07-4

TOP: AACSB Communication | TB&E Model Customer | TB&E Model Distribution
8. Discuss how institutional customers differ from other types of business customers such as producers or
resellers. Give two points of differentiation.
ANS:
Institutions seek to achieve goals that differ from ordinary business goals such as profit, market share,
or return on investment. The institutional market also is characterized by great diversity. Institutional
organizations include schools, hospitals, colleges and universities, churches, labor unions, civic clubs,
foundations, and so on. These diverse organizations have vastly different needs and buying behaviors.
PTS: 1 REF: 239 OBJ: 07-4

9. A Brazilian manufacturer of solar cells used as a renewable source of energy in all types of structures
would like to begin distribution and sales in the United States, Canada, and Mexico. The manufacturer
has hired you to investigate NAICS data for such products in North America. What is the NAICS
system? What other helpful kinds of information can be found in this source?
ANS:
The North American Industry Classification System (NAICS) is a set of numerical codes assigned by
the U.S., Mexican, and Canadian governments to classify business and government organizations
according to primary economic activity. The system assigns numbers to economic divisions, industry
groups, and product classifications. This system replaced the previously used standard industry code
(SIC) system when the North American Free Trade Agreement was signed. Businesses and individuals
could use (NAICS) data for market analysis, segmentation, and targeting.
The NAICS system will provide the requested sales volume information at an industry level as well as
information on the number of firms, number of employees, and geographic breakdowns of the
industry.
PTS: 1 REF: 239-240 OBJ: 07-5

TOP: AACSB Communication | TB&E Model Research
10. Explain the four ways demand in business markets differs from demand in consumer markets.
ANS:
DERIVED DEMAND. The demand for business-to-business products is derived from the demand for
consumer products. This is because organizations buy products to be used directly or indirectly in the
production of consumer products. Therefore, firms must carefully monitor demand patterns in final
consumer markets.
INELASTIC DEMAND. The demand for business-to-business products tends to be price inelastic.
This means changes in price will not significantly affect demand for the product (unlike consumer
markets).
JOINT DEMAND. Most business products involve the combination of many components into a final
product. Joint demand occurs when two or more items are used in combination in a final product. The
text provides an example of microcomputer disk drives and memory chips. Joint demand is much more
common in business markets.
FLUCTUATING DEMAND. The demand for business products tends to be more unstable than the
demand for consumer products. The multiplier effect explains how a slight change in consumer
demand can result in a significant change in demand for business products.
PTS: 1 REF: 241 OBJ: 07-6

11. Name and briefly describe five of the major differences between business and consumer markets.
ANS:
There were several points of differentiation discussed in the chapter, and students can discuss any five:
DEMAND. There are several differences between organizational and consumer demand.
Organizational demand is derived from the demand of consumer products, tends to be price inelastic,
has joint demand with related products used in combination with the final product, and tends to
fluctuate more than consumer demand.
PURCHASE VOLUME. Business customers buy in much larger quantities (both in single orders and
in total annual volume) than do consumers.
NUMBER OF CUSTOMERS. Business marketers tend to have far fewer customers than consumer
marketers.
LOCATION OF BUYERS. Unlike consumer markets, business customers tend to be geographically

concentrated.
DISTRIBUTION STRUCTURE. Channels of distribution tend to be much shorter in business

marketing. Direct channels are also more common.
NATURE OF BUYING. Business buying is usually more formalized with responsibility assigned to
buying centers or purchasing agents.
NATURE OF BUYING INFLUENCE. More people are involved in business purchasing decisions
than in consumer purchases, because many levels and departments of the firm are involved in the
purchase.
TYPE OF NEGOTIATIONS. Negotiating is common, and buyers and sellers negotiate product
specifications, delivery dates, payment terms, and other pricing matters.
USE OF RECIPROCITY. Business purchasers often buy from their customers, and vice versa.
USE OF LEASING. Businesses often lease equipment, unlike consumers who more often purchase
products.
PRIMARY PROMOTIONAL METHOD. Personal selling is often emphasized in business marketing,

while advertising is emphasized in consumer marketing.
PTS: 1 REF: 241-244 OBJ: 07-6

12. What is reciprocity? Is it illegal or unethical? Why or why not?
ANS:
Reciprocity is when business purchasers choose to buy from their customers. The practice is neither
unethical nor illegal unless one party coerces the other into the reciprocal purchasing arrangement and
the result is unfair competition. Reciprocity is generally considered to be a reasonable business
practice, because it makes sense to patronize firms that help your organization achieve its sales and
profit goals.
PTS: 1 REF: 243 OBJ: 07-6

13. Briefly define and describe each of the categories of business goods and services. Give two specific
examples of goods or services that fit into each category.
ANS:
MAJOR EQUIPMENT (or installations) consists of capital goods that are depreciated over time.
These goods are often custom designed and therefore often sold by personal selling and distributed
directly. Text examples include large machinery, mainframe computers, blast furnaces, generators,
airplanes, and buildings.
ACCESSORY EQUIPMENT is shorter-lived than major equipment and is often charged as an expense
in the year it is purchased. Advertising and local distributors play a role in the sale of accessory
equipment. Text examples include portable power tools, word processors, and fax machines.
RAW MATERIALS are unprocessed extractive or agricultural products that are used as "ingredients"
in other finished goods. Personal selling, direct channels, and price inflexibility characterize the
marketing of raw materials. Text examples include mineral ore, timber, wheat, and fish.
COMPONENT PARTS are either finished items ready for assembly or products that need little
processing to become part of another product. Component parts sometimes retain their identity, often
need replacement in the final product, and are marketed through OEM and replacement markets. Text
examples include spark plugs, motors, and automobile tires.
PROCESSED MATERIALS are used directly in the manufacturing of other products and do not retain
their identity in the final product. Text examples include sheet metal, plastics, corn syrup, lumber, and
specialty steel. The materials may be custom-processed, so price and service are important in vendor
selection.
SUPPLIES (or MRO items) are consumable items that are not part of the final product. They are
relatively inexpensive and have a short life. Text examples include lubricants, cleaning supplies,
pencils, and paper.
BUSINESS SERVICES are expense items that are not part of the final product. When it is cost-
effective, firms often retain outside companies to provide services. Text examples include janitorial,
advertising, legal, consulting, research, and maintenance services.
PTS: 1 REF: 244-246 OBJ: 07-7

TOP: AACSB Communication | TB&E Model Product
14. What is a buying center? What are some implications of buying centers to the marketing manager?
ANS:
The buying center is NOT a place. A buying center includes all those persons in an organization who
become involved in the purchasing process. Membership varies from company to company.
Marketers must identify the players in the decision-making unit so that interaction can take place.
Once the members of the buying center are identified, the marketer should identify the role(s) played
by each member and their relative influence. This determines where sales efforts should be
concentrated. Finally, a marketer should identify each member's evaluative criteria to focus on correct
attributes in a sales presentation.
PTS: 1 REF: 246-247 OBJ: 07-8

15. Assume you are the vice-president of marketing in a medium-sized company that includes the
following departments: marketing, finance, purchasing, data processing, and production. The sales
force manager has mentioned to you that one of the salespersons thought a Web-based salesforce
automation service would help the sales force become more efficient. The sales manager requests that
this service be purchased. Illustrate the six buying decision roles that would take place for the purchase
of this service.
ANS:
The INITIATOR of the buying decision could be identified as the salesperson who identified the need
but more likely would be the sales force manager who suggested the purchase be made.
INFLUENCERS/EVALUATORS might include the finance office (which would control the amount
of dollars available for spending), members of the sales force (who might provide information about
the services competitors are using), and the data-processing department (which would have a good
knowledge of alternative services).
GATEKEEPERS could include the data-processing department (which would approve of only certain
services that are compatible with existing systems) and the purchasing department (which would
recommend matches with likely service providers).
The DECIDER might be the president of the company, the vice-president of marketing, or the sales
force manager; the decider is the person with the power to approve the service provider.
The PURCHASER will be the purchasing agent in the purchasing department who will negotiate the
terms of the sale.
USERS will include all sales force members who will use the service.
PTS: 1 REF: 247 OBJ: 07-8

16. Business buyers use a variety of criteria to evaluate alternative products and suppliers. Name and
define specific aspects of the three most important criteria.
ANS:
The three criteria, in order of importance, are quality, service, and price.
QUALITY. Quality refers to technical suitability. Evaluation of quality also applies to the salesperson
and the company: The salesperson should be reputable and the company should be financially
responsible.
SERVICE. Buyers seek to buy satisfactory service as well as satisfactory products. Services may
include needs assessment analyses, installation, training, maintenance, and repair. Service also entails
delivering exactly what was ordered when it is scheduled to be delivered. Buyers also welcome
services that help them sell their finished products.
PRICE. Business buyers usually want to buy at the lowest prices, as long as the product quality and
service requirements are met.
PTS: 1 REF: 248 OBJ: 07-8

17. Cascade Landscaping Service (CLS) has decided to purchase computer-assisted-design (CAD)
software for landscape design. Describe the conditions under which each of the three business buying
situations would take place.
ANS:
NEW BUY. A new buy is a situation requiring the purchase of a product or service for the first time.
In this case, CLS has no experience buying such software or has not established any relationship with
a vendor of the CAD software. CLS may be a new or small company that currently does not have any
type of CAD software. Alternatively, CLS may be value engineering and finding a less expensive
alternative than drawing the designs by hand or simply attempting to work them out as the project
progresses.
MODIFIED REBUY. In this case, CLS would have experience with CAD software in general and an
established relationship with software vendors. The focus would be on the new need of more
structured plans to show customers.
STRAIGHT REBUY. In this case, the purchase of CAD software would be a routine purchase
decision or a reorder of previously ordered software from the same vendor. Perhaps, CLS is a reseller
of supplies for landscaping including software.
PTS: 1 REF: 248-249 OBJ: 07-8

18. Why is customer service an important factor in business marketing?
ANS:
Business marketers are increasingly recognizing the importance of customer service as a major
component of successful marketing strategies. Customer service is often a critical factor used in
vendor analysis and can be a key differentiating factor in vendor choice. Core service skills offered
with a product can be more important than the product itself.
PTS: 1 REF: 249 OBJ: 07-8

19. You overhear a salesperson saying, "I don't do anything with my straight-rebuy customers because
they don't expect any service." Comment on his statement.
ANS:
Suppliers and their sales staff must remember not to take straight-rebuy relationships for granted.
Retaining existing customers is much easier than attracting new ones. The salesperson's statements
indicates that unless he changes his attitude, his buyers may purchase from another source.
PTS: 1 REF: 249-250 OBJ: 07-8

Another random document with
no related content on Scribd:
In addition to the above resolution, the General Assembly of
Virginia “appealed to the other states, in the confidence that they
would concur with that commonwealth, that the acts aforesaid [the
alien and sedition laws] are unconstitutional, and that the necessary
and proper measures would be taken by each for co-operating with
Virginia in maintaining unimpaired the authorities, rights, and
liberties reserved to the states respectively, or to the people.”
The legislatures of several of the New England States, having,
contrary to the expectation of the legislature of Virginia, expressed
their dissent from these doctrines, the subject came up again for
consideration during the session of 1799, 1800, when it was referred
to a select committee, by whom was made that celebrated report
which is familiarly known as “Madison’s Report,” and which deserves
to last as long as the constitution itself. In that report, which was
subsequently adopted by the legislature, the whole subject was
deliberately re-examined, and the objections urged against the
Virginia doctrines carefully considered. The result was, that the
legislature of Virginia reaffirmed all the principles laid down in the
resolutions of 1798, and issued to the world that admirable report
which has stamped the character of Mr. Madison as the preserver of
that constitution which he had contributed so largely to create and
establish. I will here quote from Mr. Madison’s report one or two
passages which bear more immediately on the point in controversy.
“The resolutions, having taken this view of the federal compact,
proceed to infer ‘that in case of a deliberate, palpable, and dangerous
exercise of other powers the states who are parties thereto have the
right, and are in duty bound, to interpose for arresting the progress
of the evil, and for maintaining, within their respective limits, the
authorities, rights, and liberties appertaining to them.’”
“It appears to your committee to be a plain principle, founded in common sense,
illustrated by common practice, and essential to the nature of compacts, that,
where resort can be had to no tribunal superior to the authority of the parties, the
parties themselves must be the rightful judges in the last resort, whether the
bargain made has been pursued or violated. The constitution of the United States
was formed by the sanction of the states, given by each in its sovereign capacity. It
adds to the stability and dignity, as well as to the authority, of the constitution, that
it rests upon this legitimate and solid foundation. The states, then, being the
parties to the constitutional compact, and in their sovereign capacity, it follows of
necessity that there can be no tribunal above their authority, to decide, in the last
resort, whether the compact made by them be violated, and consequently that, as
the parties to it, they must decide, in the last resort, such questions as may be of
sufficient magnitude to require their interposition.”
“The resolution has guarded against any misapprehension of its object by
expressly requiring for such an interposition ‘the case of a deliberate, palpable, and
dangerous breach of the constitution, by the exercise of powers not granted by it.’
It must be a case, not of a light and transient nature, but of a nature dangerous to
the great purposes for which the constitution was established.
“But the resolution has done more than guard against misconstructions, by
expressly referring to cases of a deliberate, palpable, and dangerous nature. It
specifies the object of the interposition, which it contemplates, to be solely that of
arresting the progress of the evil of usurpation, and of maintaining the authorities,
rights, and liberties appertaining to the states, as parties to the constitution.
“From this view of the resolution, it would seem inconceivable that it can incur
any just disapprobation from those who, laying aside all momentary impressions,
and recollecting the genuine source and object of the federal constitution, shall
candidly and accurately interpret the meaning of the General Assembly. If the
deliberate exercise of dangerous powers, palpably withheld by the constitution,
could not justify the parties to it in interposing even so far as to arrest the progress
of the evil, and thereby to preserve the constitution itself, as well as to provide for
the safety of the parties to it, there would be an end to all relief from usurped
power, and a direct subversion of the rights specified or recognized under all the
state constitutions, as well as a plain denial of the fundamental principles on which
our independence itself was declared.”
But, sir, our authorities do not stop here. The state of Kentucky
responded to Virginia, and on the 10th of November, 1798, adopted
those celebrated resolutions, well known to have been penned by the
author of the Declaration of American Independence. In those
resolutions, the legislature of Kentucky declare, “that the
government created by this compact was not made the exclusive or
final judge of the extent of the powers delegated to itself, since that
would have made its discretion, and not the constitution, the
measure of its powers; but that, as in all other cases of compact
among parties having no common judge, each party has an equal
right to judge, for itself, as well of infractions as of the mode and
measure of redress.”
At the ensuing session of the legislature, the subject was re-
examined, and on the 14th of November, 1799, the resolutions of the
preceding year were deliberately reaffirmed, and it was, among other
things, solemnly declared,—
“That, if those who administer the general government be permitted to
transgress the limits fixed by that compact, by a total disregard to the special
delegations of power therein contained, an annihilation of the state governments,
and the erection upon their ruins of a general consolidated government, will be the
inevitable consequence. That the principles of construction contended for by
sundry of the state legislatures, that the general government is the exclusive judge
of the extent of the powers delegated to it, stop nothing short of despotism; since
the discretion of those who administer the government, and not the constitution,
would be the measure of their powers. That the several states who formed that
instrument, being sovereign and independent, have the unquestionable right to
judge of its infraction, and that a nullification, by those sovereignties, of all
unauthorized acts done under color of that instrument, is the rightful remedy.”
Time and experience confirmed Mr. Jefferson’s opinion on this all
important point. In the year 1821, he expressed himself in this
emphatic manner: “It is a fatal heresy to suppose that either our state
governments are superior to the federal, or the federal to the state;
neither is authorized literally to decide which belongs to itself or its
copartner in government; in differences of opinion, between their
different sets of public servants, the appeal is to neither, but to their
employers peaceably assembled by their representatives in
convention.” The opinion of Mr. Jefferson on this subject has been so
repeatedly and so solemnly expressed, that they may be said to have
been the most fixed and settled convictions of his mind.
In the protest prepared by him for the legislature of Virginia, in
December, 1825, in respect to the powers exercised by the federal
government in relation to the tariff and internal improvements,
which he declares to be “usurpations of the powers retained by the
states, mere interpolations into the compact, and direct infractions of
it,” he solemnly reasserts all the principles of the Virginia
Resolutions of ’98, protests against “these acts of the federal branch
of the government as null and void, and declares that, although
Virginia would consider a dissolution of the Union as among the
greatest calamities that could befall them, yet it is not the greatest.
There is one yet greater—submission to a government of unlimited
powers. It is only when the hope of this shall become absolutely
desperate, that further forbearance could not be indulged.”
In his letter to Mr. Giles, written about the same time, he says,—
“I see as you do, and with the deepest affliction, the rapid strides with which the
federal branch of our government is advancing towards the usurpation of all the
rights reserved to the states, and the consolidation in itself of all powers, foreign
and domestic, and that too by constructions which leave no limits to their powers,
&c. Under the power to regulate commerce, they assume, indefinitely, that also
over agriculture and manufactures, &c. Under the authority to establish post roads,
they claim that of cutting down mountains for the construction of roads, and
digging canals, &c. And what is our resource for the preservation of the
constitution? Reason and argument? You might as well reason and argue with the
marble columns encircling them, &c. Are we then to stand to our arms with the
hot-headed Georgian? No; [and I say no, and South Carolina has said no;] that
must be the last resource. We must have patience and long endurance with our
brethren, &c., and separate from our companions only when the sole alternatives
left are a dissolution of our Union with them, or submission. Between these two
evils, when we must make a choice, there can be no hesitation.”
Such, sir, are the high and imposing authorities in support of “The
Carolina doctrine,” which is, in fact, the doctrine of the Virginia
Resolutions of 1798.
Sir, at that day the whole country was divided on this very
question. It formed the line of demarcation between the federal and
republican parties; and the great political revolution which then took
place turned upon the very questions involved in these resolutions.
That question was decided by the people, and by that decision the
constitution was, in the emphatic language of Mr. Jefferson, “saved
at its last gasp.” I should suppose, sir, it would require more self-
respect than any gentleman here would be willing to assume, to treat
lightly doctrines derived from such high resources. Resting on
authority like this, I will ask gentlemen whether South Carolina has
not manifested a high regard for the Union, when, under a tyranny
ten times more grievous than the alien and sedition laws, she has
hitherto gone no further than to petition, remonstrate, and to
solemnly protest against a series of measures which she believes to
be wholly unconstitutional and utterly destructive of her interests.
Sir, South Carolina has not gone one step further than Mr. Jefferson
himself was disposed to go, in relation to the present subject of our
present complaints—not a step further than the statesman from New
England was disposed to go, under similar circumstances; no further
than the senator from Massachusetts himself once considered as
within “the limits of a constitutional opposition.” The doctrine that it
is the right of a state to judge of the violations of the constitution on
the part of the federal government, and to protect her citizens from
the operations of unconstitutional laws, was held by the enlightened
citizens of Boston, who assembled in Faneuil Hall, on the 25th of
January, 1809. They state, in that celebrated memorial, that “they
looked only to the state legislature, who were competent to devise
relief against the unconstitutional acts of the general government.
That your power (say they) is adequate to that object, is evident from
the organization of the confederacy.”
A distinguished senator from one of the New England States, (Mr.
Hillhouse,) in a speech delivered here, on a bill for enforcing the
embargo, declared, “I feel myself bound in conscience to declare,
(lest the blood of those who shall fall in the execution of this measure
shall be on my head,) that I consider this to be an act which directs a
mortal blow at the liberties of my country—an act containing
unconstitutional provisions, to which the people are not bound to
submit, and to which, in my opinion, they will not submit.”
And the senator from Massachusetts himself, in a speech delivered
on the same subject in the other house, said, “This opposition is
constitutional and legal; it is also conscientious. It rests on settled
and sober conviction, that such policy is destructive to the interests
of the people, and dangerous to the being of government. The
experience of every day confirms these sentiments. Men who act
from such motives are not to be discouraged by trifling obstacles, nor
awed by any dangers. They know the limit of constitutional
opposition; up to that limit, at their own discretion, they will walk,
and walk fearlessly.” How “the being of the government” was to be
endangered by “constitutional opposition” to the embargo, I leave
the gentleman to explain.
Thus it will be seen, Mr. President, that the South Carolina
doctrine is the republican doctrine of ’98—that it was promulgated
by the fathers of the faith—that it was maintained by Virginia and
Kentucky in the worst of times—that it constituted the very pivot on
which the political revolution of that day turned—that it embraces
the very principles, the triumph of which, at that time, saved the
constitution at its last gasp, and which New England statesmen were
not unwilling to adopt, when they believed themselves to be the
victims of unconstitutional legislation. Sir, as to the doctrine that the
federal government is the exclusive judge of the extent as well as the
limitations of its powers, it seems to me to be utterly subversive of
the sovereignty and independence of the states. It makes but little
difference, in my estimation, whether Congress or the Supreme
Court are invested with this power. If the federal government, in all,
or any, of its departments, is to prescribe the limits of its own
authority, and the states are bound to submit to the decision, and are
not to be allowed to examine and decide for themselves, when the
barriers of the constitution shall be overleaped, this is practically “a
government without limitation of powers.” The states are at once
reduced to mere petty corporations, and the people are entirely at
your mercy. I have but one word more to add. In all the efforts that
have been made by South Carolina to resist the unconstitutional laws
which Congress has extended over them, she has kept steadily in
view the preservation of the Union, by the only means by which she
believes it can be long preserved—a firm, manly, and steady
resistance against usurpation. The measures of the federal
government have, it is true, prostrated her interests, and will soon
involve the whole south in irretrievable ruin. But even this evil, great
as it is, is not the chief ground of our complaints. It is the principle
involved in the contest—a principle which, substituting the discretion
of Congress for the limitations of the constitution, brings the states
and the people to the feet of the federal government, and leaves them
nothing they can call their own. Sir, if the measures of the federal
government were less oppressive, we should still strive against this
usurpation. The south is acting on a principle she has always held
sacred—resistance to unauthorized taxation. These, sir, are the
principles which induced the immortal Hampden to resist the
payment of a tax of twenty shillings. Would twenty shillings have
ruined his fortune? No! but the payment of half twenty shillings, on
the principle on which it was demanded, would have made him a
slave. Sir, if acting on these high motives—if animated by that ardent
love of liberty which has always been the most prominent trait in the
southern character—we should be hurried beyond the bounds of a
cold and calculating prudence, who is there, with one noble and
generous sentiment in his bosom, that would not be disposed, in the
language of Burke, to exclaim, “You must pardon something to the
spirit of liberty?”
Webster’s Great Reply to Hayne,
In which he “Expounds the Constitution,” delivered in Senate,

January 26, 1830.
Following Mr. Hayne in the debate, Mr. Webster addressed the
Senate as follows:—
Mr. President: When the mariner has been tossed, for many days,
in thick weather, and on an unknown sea, he naturally avails himself
of the first pause in the storm, the earliest glance of the sun, to take
his latitude, and ascertain how far the elements have driven him
from his true course. Let us imitate this prudence, and before we
float farther, refer to the point from which we departed, that we may
at least be able to conjecture where we now are. I ask for the reading
of the resolution.
[The Secretary read the resolution as follows:
“Resolved, That the committee on public lands be instructed to inquire and
report the quantity of the public lands remaining unsold within each state and
territory, and whether it be expedient to limit, for a certain period, the sales of the
public lands to such lands only as have heretofore been offered for sale, and are
now subject to entry at the minimum price. And, also, whether the office of
surveyor general, and some of the land offices, may not be abolished without
detriment to the public interest; or whether it be expedient to adopt measures to
hasten the sales, and extend more rapidly the surveys of the public lands.”]
We have thus heard, sir, what the resolution is, which is actually
before us for consideration; and it will readily occur to every one that
it is almost the only subject about which something has not been said
in the speech, running through two days, by which the Senate has
been now entertained by the gentleman from South Carolina. Every
topic in the wide range of our public affairs, whether past or present,
—every thing, general or local, whether belonging to national politics
or party politics,—seems to have attracted more or less of the
honorable member’s attention, save only the resolution before us. He
has spoken of every thing but the public lands. They have escaped his
notice. To that subject, in all his excursions, he has not paid even the
cold respect of a passing glance.
When this debate, sir, was to be resumed, on Thursday morning, it
so happened that it would have been convenient for me to be
elsewhere. The honorable member, however, did not incline to put
off the discussion to another day. He had a shot, he said, to return,
and he wished to discharge it. That shot, sir, which it was kind thus
to inform us was coming, that we might stand out of the way, or
prepare ourselves to fall before it, and die with decency, has now
been received. Under all advantages, and with expectation awakened
by the tone which preceded it, it has been discharged, and has spent
its force. It may become me to say no more of its effect than that, if
nobody is found, after all, either killed or wounded by it, it is not the
first time in the history of human affairs that the vigor and success of
the war have not quite come up to the lofty and sounding phrase of
the manifesto.
The gentleman, sir, in declining to postpone the debate, told the
Senate, with the emphasis of his hand upon his heart, that there was
something rankling here, which he wished to relieve. [Mr. Hayne
rose and disclaimed having used the word rankling.] It would not,
Mr. President, be safe for the honorable member to appeal to those
around him, upon the question whether he did, in fact, make use of
that word. But he may have been unconscious of it. At any rate, it is
enough that he disclaims it. But still, with or without the use of that
particular word, he had yet something here, he said, of which he
wished to rid himself by an immediate reply. In this respect, sir, I
have a great advantage over the honorable gentleman. There is
nothing here, sir, which gives me the slightest uneasiness; neither
fear, nor anger, nor that which is sometimes more troublesome than
either, the consciousness of having been in the wrong. There is
nothing either originating here, or now received here, by the
gentleman’s shot. Nothing original, for I had not the slightest feeling
of disrespect or unkindness towards the honorable member. Some
passages, it is true, had occurred, since our acquaintance in this
body, which I could have wished might have been otherwise; but I
had used philosophy, and forgotten them. When the honorable
member rose, in his first speech, I paid him the respect of attentive
listening; and when he sat down, though surprised, and I must say
even astonished, at some of his opinions, nothing was farther from
my intention than to commence any personal warfare; and through
the whole of the few remarks I made in answer, I avoided, studiously
and carefully, every thing which I thought possible to be construed
into disrespect. And, sir, while there is thus nothing originating here,
which I wished at any time, or now wish to discharge, I must repeat,
also, that nothing has been received here which rankles, or in any
way gives me annoyance. I will not accuse the honorable member of
violating the rules of civilized war—I will not say that he poisoned his
arrows. But whether his shafts were, or were not, dipped in that
which would have caused rankling if they had reached, there was not,
as it happened, quite strength enough in the bow to bring them to
their mark. If he wishes now to find those shafts, he must look for
them elsewhere; they will not be found fixed and quivering in the
object at which they were aimed.
The honorable member complained that I had slept on his speech.

I must have slept on it, or not slept at all. The moment the honorable
member sat down, his friend from Missouri arose, and, with much
honeyed commendation of the speech, suggested that the
impressions which it had produced were too charming and delightful
to be disturbed by other sentiments or other sounds, and proposed
that the Senate should adjourn. Would it have been quite amiable in
me, sir, to interrupt this excellent good feeling? Must I not have been
absolutely malicious, if I could have thrust myself forward to destroy
sensations thus pleasing? Was it not much better and kinder, both to
sleep upon them myself, and to allow others, also, the pleasure of
sleeping upon them? But if it be meant, by sleeping upon his speech,
that I took time to prepare a reply to it, it is quite a mistake; owing to
other engagements, I could not employ even the interval between the
adjournment of the Senate and its meeting the next morning in
attention to the subject of this debate. Nevertheless, sir, the mere
matter of fact is undoubtedly true—I did sleep on the gentleman’s
speech, and slept soundly. And I slept equally well on his speech of
yesterday, to which I am now replying. It is quite possible that, in
this respect, also, I possess some advantage over the honorable
member, attributable, doubtless, to a cooler temperament on my
part; for in truth I slept upon his speeches remarkably well. But the
gentleman inquires why he was made the object of such a reply. Why
was he singled out? If an attack had been made on the east, he, he
assures us, did not begin it—it was the gentleman from Missouri. Sir,
I answered the gentleman’s speech, because I happened to hear it;
and because, also, I choose to give an answer to that speech, which, if
unanswered, I thought most likely to produce injurious impressions.
I did not stop to inquire who was the original drawer of the bill. I
found a responsible endorser before me, and it was my purpose to
hold him liable, and to bring him to his just responsibility without
delay. But, sir, this interrogatory of the honorable member was only
introductory to another. He proceeded to ask me whether I had
turned upon him in this debate from the consciousness that I should
find an overmatch if I ventured on a contest with his friend from
Missouri. If, sir, the honorable member, ex gratia modestiæ, had
chosen thus to defer to his friend, and to pay him a compliment,
without intentional disparagement to others, it would have been
quite according to the friendly courtesies of debate, and not at all
ungrateful to my own feelings. I am not one of those, sir, who esteem
any tribute of regard, whether light and occasional, or more serious
and deliberate, which may be bestowed on others, as so much
unjustly withholden from themselves. But the tone and manner of
the gentleman’s question, forbid me thus to interpret it. I am not at
liberty to consider it as nothing more than a civility to his friend. It
had an air of taunt and disparagement, a little of the loftiness of
asserted superiority, which does not allow me to pass it over without
notice. It was put as a question for me to answer, and so put as if it
were difficult for me to answer, whether I deemed the member from
Missouri an overmatch for myself in debate here. It seems to me, sir,
that is extraordinary language, and an extraordinary tone for the
discussions of this body.
Matches and overmatches? Those terms are more applicable
elsewhere than here, and fitter for other assemblies than this. Sir, the
gentleman seems to forget where and what we are. This is a Senate; a
Senate of equals; of men of individual honor and personal character,
and of absolute independence. We know no masters; we
acknowledge no dictators. This is a hall of mutual consultation and
discussion, not an arena for the exhibition of champions. I offer
myself, sir, as a match for no man; I throw the challenge of debate at
no man’s feet. But, then, sir, since the honorable member has put the
question in a manner that calls for an answer. I will give him an
answer; and I tell him that, holding myself to be the humblest of the
members here, I yet know nothing in the arm of his friend from
Missouri, either alone or when aided by the arm of his friend from
South Carolina, that need deter even me from espousing whatever
opinions I may choose to espouse, from debating whenever I may
choose to debate, or from speaking whatever I may see fit to say on
the floor of the Senate. Sir, when uttered as matter of commendation
or compliment, I should dissent from nothing which the honorable
member might say of his friend. Still less do I put forth any
pretensions of my own. But when put to me as a matter of taunt, I
throw it back, and say to the gentleman that he could possibly say
nothing less likely than such a comparison to wound my pride of
personal character. The anger of its tone rescued the remark from
intentional irony, which otherwise, probably, would have been its
general acceptation. But, sir, if it be imagined that by this mutual
quotation and commendation; if it be supposed that, by casting the
characters of the drama, assigning to each his part,—to one the
attack, to another the cry of onset,—or if it be thought that by a loud
and empty vaunt of anticipated victory any laurels are to be won
here; if it be imagined, especially, that any or all these things will
shake any purpose of mine, I can tell the honorable member, once for
all, that he is greatly mistaken, and that he is dealing with one of
whose temper and character he has yet much to learn. Sir, I shall not
allow myself, on this occasion—I hope on no occasion—to be
betrayed into any loss of temper; but if provoked, as I trust I never
shall allow myself to be, into crimination and recrimination, the
honorable member may, perhaps, find that in that contest there will
be blows to take as well as blows to give; that others can state
comparisons as significant, at least, as his own; and that his impunity
may, perhaps, demand of him whatever powers of taunt and sarcasm
he may possess. I commend him to a prudent husbandry of his
resources.
But, sir, the coalition! The coalition! Aye, “the murdered
coalition!” The gentleman asks if I were led or frighted into this
debate by the spectre of the coalition. “Was it the ghost of the
murdered coalition,” he exclaims, “which haunted the member from
Massachusetts, and which, like the ghost of Banquo, would never
down?” “The murdered coalition!” Sir, this charge of a coalition, in
reference to the late administration, is not original with the
honorable member. It did not spring up in the Senate. Whether as a
fact, as an argument, or as an embellishment, it is all borrowed. He
adopts it, indeed, from a very low origin, and a still lower present
condition. It is one of the thousand calumnies with which the press
teemed during an excited political canvass. It was a charge of which
there was not only no proof or probability, but which was, in itself,
wholly impossible to be true. No man of common information ever
believed a syllable of it. Yet it was of that class of falsehoods which,
by continued repetition through all the organs of detraction and
abuse, are capable of misleading those who are already far misled,
and of further fanning passion already kindling into flame. Doubtless
it served its day, and, in a greater or less degree, the end designed by
it. Having done that, it has sunk into the general mass of stale and
loathed calumnies. It is the very castoff slough of a polluted and
shameless press. Incapable of further mischief, it lies in the sewer
lifeless and despised. It is not now, sir, in the power of the honorable
member to give it dignity or decency, by attempting to elevate it, and
to introduce it into the Senate. He cannot change it from what it is—
an object of general disgust and scorn. On the contrary, the contact,
if he choose to touch it, is more likely to drag him down, down, to the
place where it lies itself.
But, sir, the honorable member was not, for other reasons, entirely
happy in his allusion to the story of Banquo’s murder and Banquo’s
ghost. It was not, I think, the friends, but the enemies of the
murdered Banquo, at whose bidding his spirit would not down. The
honorable gentleman is fresh in his reading of the English classics,
and can put me right if I am wrong; but according to my poor
recollection, it was at those who had begun with caresses, and ended
with foul and treacherous murder, that the gory locks were shaken.
The ghost of Banquo, like that of Hamlet, was an honest ghost. It
disturbed no innocent man. It knew where its appearance would
strike terror, and who would cry out. A ghost! It made itself visible in
the right quarter, and compelled the guilty, and the conscience-
smitten, and none others, to start, with,
“Prithee, see there! behold!—look! lo!
If I stand here, I saw him!”
Their eyeballs were seared—was it not so, sir?—who had thought

to shield themselves by concealing their own hand and laying the
imputation of the crime on a low and hireling agency in wickedness;
who had vainly attempted to stifle the workings of their own coward
consciences, by circulating, through white lips and chattering teeth,
“Thou canst not say I did it!” I have misread the great poet, if it was
those who had no way partaken in the deed of the death, who either
found that they were, or feared that they should be, pushed from
their stools by the ghost of the slain, or who cried out to a spectre
created by their own fears, and their own remorse, “Avaunt! and quit
our sight!”
There is another particular, sir, in which the honorable member’s
quick perception of resemblances might, I should think, have seen
something in the story of Banquo, making it not altogether a subject
of the most pleasant contemplation. Those who murdered Banquo,
what did they win by it? Substantial good? Permanent power? Or
disappointment, rather, and sore mortification—dust and ashes—the
common fate of vaulting ambition overleaping itself? Did not even-
handed justice, ere long, commend the poisoned chalice to their own
lips? Did they not soon find that for another they had “filed their
mind?” that their ambition though apparently for the moment
successful, had but put a barren sceptre in their grasp? Aye, sir,—
“A barren sceptre in their gripe,
Thence to be wrenched by an unlineal hand,
No son of theirs succeeding.”
Sir, I need pursue the allusion no further. I leave the honorable

gentleman to run it out at his leisure, and to derive from it all the
gratification it is calculated to administer. If he finds himself pleased
with the associations, and prepared to be quite satisfied, though the
parallel should be entirely completed, I had almost said I am
satisfied also—but that I shall think of. Yes, sir, I will think of that.
In the course of my observations the other day, Mr. President, I
paid a passing tribute of respect to a very worthy man, Mr. Dane, of
Massachusetts. It so happened that he drew the ordinance of 1787 for
the government of the Northwestern Territory. A man of so much
ability, and so little pretence; of so great a capacity to do good, and so
unmixed a disposition to do it for its own sake; a gentleman who
acted an important part, forty years ago, in a measure the influence
of which is still deeply felt in the very matter which was the subject of
debate, might, I thought, receive from me a commendatory
recognition.
But the honorable gentleman was inclined to be facetious on the
subject. He was rather disposed to make it a matter of ridicule that I
had introduced into the debate the name of one Nathan Dane, of
whom he assures us he had never before heard. Sir, if the honorable
member had never before heard of Mr. Dane, I am sorry for it. It
shows him less acquainted with the public men of the country than I
had supposed. Let me tell him, however, that a sneer from him at the
mention of the name of Mr. Dane is in bad taste. It may well be a
high mark of ambition, sir, either with the honorable gentleman or
myself, to accomplish as much to make our names known to
advantage, and remembered with gratitude, as Mr. Dane has
accomplished. But the truth is, sir, I suspect that Mr. Dane lives a
little too far north. He is of Massachusetts, and too near the north
star to be reached by the honorable gentleman’s telescope. If his
sphere had happened to range south of Mason and Dixon’s line, he
might, probably, have come within the scope of his vision!
I spoke, sir, of the ordinance of 1787, which prohibited slavery in
all future times northwest of the Ohio, as a measure of great wisdom
and foresight, and one which had been attended with highly
beneficial and permanent consequences. I suppose that on this point
no two gentlemen in the Senate could entertain different opinions.
But the simple expression of this sentiment has led the gentleman,
not only into a labored defence of slavery in the abstract, and on
principle, but also into a warm accusation against me, as having
attacked the system of slavery now existing in the Southern States.
For all this there was not the slightest foundation in anything said or
intimated by me. I did not utter a single word which any ingenuity
could torture into an attack on the slavery of the South. I said only
that it was highly wise and useful in legislating for the northwestern
country, while it was yet a wilderness, to prohibit the introduction of
slaves; and added, that I presumed, in the neighboring state of
Kentucky, there was no reflecting and intelligent gentleman who
would doubt that, if the same prohibition had been extended, at the
same early period, over that commonwealth, her strength and
population would, at this day, have been far greater than they are. If
these opinions be thought doubtful, they are, nevertheless, I trust,
neither extraordinary nor disrespectful. They attack nobody and
menace nobody. And yet, sir, the gentleman’s optics have discovered,
even in the mere expression of this sentiment, what he calls the very
spirit of the Missouri question! He represents me as making an
attack on the whole south, and manifesting a spirit which would
interfere with and disturb their domestic condition. Sir, this injustice
no otherwise surprises me than as it is done here, and done without
the slightest pretence of ground for it. I say it only surprises me as
being done here; for I know full well that it is and has been the
settled policy of some persons in the south, for years, to represent
the people of the north as disposed to interfere with them in their
own exclusive and peculiar concerns. This is a delicate and sensitive
point in southern feeling; and of late years it has always been
touched, and generally with effect, whenever the object has been to
unite the whole south against northern men or northern measures.
This feeling, always carefully kept alive, and maintained at too
intense a heat to admit discrimination or reflection, is a lever of great
power in our political machine. It moves vast bodies, and gives to
them one and the same direction. But the feeling is without adequate
cause, and the suspicion which exists wholly groundless. There is
not, and never has been, a disposition in the north to interfere with
these interests of the south. Such interference has never been
supposed to be within the power of the government, nor has it been
in any way attempted. It has always been regarded as a matter of
domestic policy, left with the states themselves, and with which the
federal government had nothing to do. Certainly, sir, I am, and ever
had been, of that opinion. The gentleman, indeed, argues that slavery
in the abstract is no evil. Most assuredly I need not say I differ with
him altogether and most widely on that point. I regard domestic
slavery as one of the greatest evils, both moral and political. But,
though it be a malady, and whether it be curable, and if so, by what
means; or, on the other hand, whether it be the culnus immedicabile
of the social system, I leave it to those whose right and duty it is to
inquire and to decide. And this I believe, sir, is, and uniformly has
been, the sentiment of the north. Let us look a little at the history of
this matter.
When the present constitution was submitted for the ratification of
the people, there were those who imagined that the powers of the
government which it proposed to establish might, perhaps, in some
possible mode, be exerted in measures tending to the abolition of
slavery. This suggestion would, of course, attract much attention in
the southern conventions. In that of Virginia, Governor Randolph
said:—
“I hope there is none here, who, considering the subject in the
calm light of philosophy, will make an objection dishonorable to
Virginia—that, at the moment they are securing the rights of their
citizens, an objection is started, that there is a spark of hope that
those unfortunate men now held in bondage may, by the operation of
the general government, be made free.”
At the very first Congress, petitions on the subject were presented,
if I mistake not, from different states. The Pennsylvania Society for
promoting the Abolition of Slavery, took a lead, and laid before
Congress a memorial, praying Congress to promote the abolition by
such powers as it possessed. This memorial was referred, in the
House of Representatives, to a select committee, consisting of Mr.
Foster, of New Hampshire, Mr. Gerry, of Massachusetts, Mr.
Huntington, of Connecticut, Mr. Lawrence, of New York, Mr.
Dickinson, of New Jersey, Mr. Hartley, of Pennsylvania, and Mr.
Parker, of Virginia; all of them, sir, as you will observe, northern
men, but the last. This committee made a report, which was
committed to a committee of the whole house, and there considered
and discussed on several days; and being amended, although in no
material respect, it was made to express three distinct propositions
on the subjects of slavery and the slave trade. First, in the words of
the constitution, that Congress could not, prior to the year 1808,
prohibit the migration or importation of such persons as any of the
states then existing should think proper to admit. Second, that
Congress had authority to restrain the citizens of the United States
from carrying on the African slave trade for the purpose of supplying
foreign countries. On this proposition, our early laws against those
who engage in that traffic are founded. The third proposition, and
that which bears on the present question, was expressed in the
following terms:—
“Resolved, That Congress have no authority to interfere in the emancipation of
slaves, or of the treatment of them in any of the states; it remaining with the
several states alone to provide rules and regulations therein, which humanity and
true policy may require.”
This resolution received the sanction of the House of
Representatives so early as March, 1790. And, now, sir, the
honorable member will allow me to remind him, that not only were
the select committee who reported the resolution, with a single
exception, all northern men, but also that of the members then
composing the House of Representatives, a large majority, I believe
nearly two-thirds, were northern men also.
The house agreed to insert these resolutions in its journal; and,
from that day to this, it has never been maintained or contended that
Congress had any authority to regulate or interfere with the
condition of slaves in the several states. No northern gentleman, to
my knowledge, has moved any such question in either house of
Congress.
The fears of the south, whatever fears they might have entertained,
were allayed and quieted by this early decision; and so remained, till
they were excited afresh, without cause, but for collateral and
indirect purposes. When it became necessary, or was thought so, by
some political persons, to find an unvarying ground for the exclusion
of northern men from confidence and from lead in the affairs of the
republic, then, and not till then, the cry was raised, and the feeling
industriously excited, that the influence of northern men in the
public councils would endanger the relation of master and slave. For
myself, I claim no other merit, than that this gross and enormous
injustice towards the whole north has not wrought upon me to
change my opinions, or my political conduct. I hope I am above
violating my principles, even under the smart of injury and false
imputations. Unjust suspicions and undeserved reproach, whatever
pain I may experience from them, will not induce me, I trust,
nevertheless, to overstep the limits of constitutional duty, or to
encroach on the rights of others. The domestic slavery of the south I
leave where I find it—in the hands of their own governments. It is
their affair, not mine. Nor do I complain of the peculiar effect which
the magnitude of that population has had in the distribution of
power under this federal government. We know, sir, that the
representation of the states in the other house is not equal. We know
that great advantage, in that respect, is enjoyed by the slaveholding
states; and we know, too, that the intended equivalent for that
advantage—that is to say, the imposition of direct taxes in the same
ratio—has become merely nominal; the habit of the government
being almost invariably to collect its revenues from other sources,
and in other modes. Nevertheless, I do not complain; nor would I
countenance any movement to alter this arrangement of
representation. It is the original bargain, the compact—let it stand;
let the advantage of it be fully enjoyed. The Union itself is too full of
benefit to be hazarded in propositions for changing its original basis.
I go for the constitution as it is, and for the Union as it is. But I am
resolved not to submit, in silence, to accusations, either against
myself individually, or against the north, wholly unfounded and
unjust—accusations which impute to us a disposition to evade the
constitutional compact, and to extend the power of the government
over the internal laws and domestic condition of the states. All such
accusations, wherever and whenever made, all insinuations of the
existence of any such purposes, I know and feel to be groundless and
injurious. And we must confide in southern gentlemen themselves;
we must trust to those whose integrity of heart and magnanimity of
feeling will lead them to a desire to maintain and disseminate truth,
and who possess the means of its diffusion with the southern public;
we must leave it to them to disabuse that public of its prejudices. But,
in the mean time, for my own part, I shall continue to act justly,
whether those towards whom justice is exercised receive it with
candor or with contumely.
Having had occasion to recur to the ordinance of 1787, in order to
defend myself against the inferences which the honorable member
has chosen to draw from my former observations on that subject, I
am not willing now entirely to take leave of it without another
remark. It need hardly be said, that that paper expresses just
sentiments on the great subject of civil and religious liberty. Such
sentiments were common, and abound in all our state papers of that
day. But this ordinance did that which was not so common, and
which is not, even now, universal; that is, it set forth and declared, as
a high and binding duty of government itself, to encourage schools
and advance the means of education; on the plain reason that
religion, morality and knowledge are necessary to good government,
and to the happiness of mankind. One observation further. The
important provision incorporated into the constitution of the United
States, and several of those of the states, and recently, as we have
seen, adopted into the reformed constitution of Virginia, restraining
legislative power, in questions of private right, and from impairing
the obligation of contracts, is first introduced and established, as far
as I am informed, as matter of express written constitutional law, in
this ordinance of 1787. And I must add, also, in regard to the author
of the ordinance, who has not had the happiness to attract the
gentleman’s notice heretofore, nor to avoid his sarcasm now, that he
was chairman of that select committee of the old Congress, whose
report first expressed the strong sense of that body, that the old
confederation was not adequate to the exigencies of the country, and
recommending to the states to send delegates to the convention
which formed the present constitution.
An attempt has been made to transfer from the north to the south
the honor of this exclusion of slavery from the Northwestern
territory. The journal, without argument or comment, refutes such
attempt. The session of Virginia was made March, 1784. On the 19th
of April following, a committee, consisting of Messrs. Jefferson,
Chase and Howell, reported a plan for a temporary government of
the territory, in which was this article: “That after the year 1800,
there should be neither slavery nor involuntary servitude in any of
the said states, otherwise than in punishment of crimes, whereof the
party shall have been convicted.” Mr. Speight, of North Carolina,
moved to strike out this paragraph. The question was put according
to the form then practiced: “Shall, these words stand, as part of the
plan?” &c. New Hampshire, Massachusetts, Rhode Island,
Connecticut, New York, New Jersey and Pennsylvania—seven states
—voted in the affirmative; Maryland, Virginia and South Carolina, in
the negative. North Carolina was divided. As the consent of nine
states was necessary, the words could not stand, and were struck out
accordingly. Mr. Jefferson voted for the clause, but was overruled by
his colleagues.
In March of the next year (1785) Mr. King, of Massachusetts,
seconded by Mr. Ellery, of Rhode Island, proposed the formerly
rejected article, with this addition: “And that this regulation shall be
an article of compact, and remain a fundamental principle of the
constitution between the thirteen original states and each of the
states described in the resolve,” &c. On this clause, which provided
the adequate and thorough security, the eight Northern States, at
that time, voted affirmatively, and the four Southern States
negatively. The votes of nine states were not yet obtained, and thus
the provision was again rejected by the Southern States. The
perseverance of the north held out, and two years afterwards the
object was attained. It is no derogation from the credit, whatever that
may be, of drawing the ordinance, that its principles had before been
prepared and discussed, in the form of resolutions. If one should
reason in that way, what would become of the distinguished honor of
the author of the declaration of Independence? There is not a
sentiment in that paper which had not been voted and resolved in
the assemblies, and other popular bodies in the country, over and
over again.
But the honorable member has now found out that this gentleman,
Mr. Dane, was a member of the Hartford Convention. However
uninformed the honorable member may be of characters and
occurrences at the north, it would seem that he has at his elbows, on
this occasion, some highminded and lofty spirit, some magnanimous
and true-hearted monitor, possessing the means of local knowledge,
and ready to supply the honorable member with every thing, down

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4. The Internet has eliminated the need for distributors.

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8. The reseller market is the same as the retailer market.

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18. Another commonly used term for accessory equipment is installations.

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23. The role of gatekeeper may be filled by a receptionist.

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3. Business marketing does NOT include goods and services that:

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9. The elimination of intermediaries such as wholesalers or distributors from a marketing channel is

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11. The reintroduction of an intermediary between producers and users is called:

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12. A cooperative agreement between business firms is a:

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18. A keiretsu is a(n):

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