Marketing Management, 14e (Kotler/Keller)
Chapter 7 Analyzing Business Markets
1) ________ refers to the decision-making process by which formal organizations establish the
need for purchased products and services and identify, evaluate, and choose among alternative
brands and suppliers.
A) Marketing channels
B) Organizational buying
C) Corporate retailing
D) Brand auditing
E) Inventory control
Answer: B
Page Ref: 183
Objective: 1
Difficulty: Easy
2) The ________ consists of all the organizations that acquire goods and services used in the
production of other products or services that are sold, rented, or supplied to others.
A) business market
B) consumer market
C) e-commerce market
D) global market
E) domestic market
Answer: A
Page Ref: 183
Objective: 1
Difficulty: Easy
3) How can a marketer overcome the negative effects of commoditization?
A) convince target consumers that the firm's products are as good as those of competitors
B) convince target consumers that price is irrelevant in determining quality
C) convince target consumers that the firm's products are different from those of competitors
D) convince target customers that buying the highest-priced product is no guarantee of quality
E) convince target customers that all the products in the market are equivalent

Answer: C
Page Ref: 184
Objective: 1
Difficulty: Easy

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4) Which of the following is true for business marketers?
A) They deal with more and larger buyers than consumer marketers.
B) They deal with more and smaller buyers than consumer marketers.
C) They deal with fewer and larger buyers than consumer marketers.
D) They deal with fewer and smaller buyers than consumer marketers.
E) They deal with the same kind of buyers as consumer marketers.
Answer: C
Page Ref: 184
Objective: 1
Difficulty: Easy
5) Which of the following is a challenge in which business marketers differ from the consumer
marketers?
A) understanding deep customer needs in new ways
B) identifying new opportunities for organic business growth
C) geographically concentrated buyers
D) calculating better marketing performance and accountability metrics
E) competing and growing in global markets, particularly China
Answer: C
Page Ref: 184-185
Objective: 1
AACSB: Analytic skills

Difficulty: Moderate
6) Ultimately, the amount of steel sold to General Motors depends on the consumers' demand for
GM cars and trucks. From the standpoint of the steel manufacturer, which of the following
demand forms is most pertinent?
A) derived demand
B) inelastic demand
C) geographic demand
D) relational demand
E) static demand
Answer: A
Page Ref: 185
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate

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7) The demand for business goods is ultimately derived from the demand for ________.
A) raw materials
B) consumer goods
C) services
D) business solutions
E) e-commerce
Answer: B
Page Ref: 185
Objective: 2
Difficulty: Easy
8) A given percentage increase in consumer demand can lead to a much larger percentage

increase in the demand for plant and equipment necessary to produce the additional output.
Economists refer to this as ________.
A) derived demand
B) inelastic demand
C) the acceleration effect
D) a straight rebuy
E) the sales cycle
Answer: C
Page Ref: 185
Objective: 2
Difficulty: Moderate
9) The total demand for many business goods and services is not much affected by price changes.
Thus, this demand is ________.
A) derived
B) fluctuating
C) accelerated
D) multiple
E) inelastic
Answer: E
Page Ref: 185
Objective: 2
Difficulty: Moderate
10) The purchasing department buys office supplies on a routine basis from a pre-approved list
of suppliers. This type of purchase is classified as a ________.
A) straight rebuy
B) modified rebuy
C) new task
D) secondary purchase
E) procure-to-pay
Answer: A

Page Ref: 185
Objective: 2
Difficulty: Moderate
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11) Sometimes a rise of only 10% in consumer demand can cause as much as a 200% rise in
business demand for products for the next period. This is an example of ________.
A) inelastic demand
B) direct purchasing
C) fluctuating demand
D) derived demand
E) a straight rebuy
Answer: C
Page Ref: 185
Objective: 1
Difficulty: Easy
12) Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor
will they buy much less leather if the price rises, unless they can find satisfactory substitutes.
This is an example of ________.
A) inelastic demand
B) direct purchasing
C) the acceleration effect
D) a modified rebuy
E) a straight rebuy
Answer: A
Page Ref: 185
Objective: 1
AACSB: Analytic skills

Difficulty: Moderate
13) Kenilworth Inc. is shifting from its rented four-room office to a standalone office building
owned by the company itself. This can be classified as a ________.
A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task
Answer: E
Page Ref: 186
Objective: 2
Difficulty: Moderate

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14) In a ________ purchasing situation, the buyer wants to make some change to existing
product specifications, prices, delivery requirements, or other terms.
A) new rebuy
B) regular buy
C) straight rebuy
D) modified rebuy
E) new task
Answer: D
Page Ref: 186
Objective: 2
Difficulty: Moderate
15) The business buyer has to make the fewest decisions when involved in a ________.
A) modified rebuy

B) regular buy
C) straight rebuy
D) new rebuy
E) new task
Answer: C
Page Ref: 186
Objective: 2
Difficulty: Moderate
16) Jason Riggs' company is considered to be an in-supplier for a lawn mower manufacturer.
However, recently the lawn mower company has put out a memo to in- and out-suppliers
indicating that it would like to change product specifications and delivery schedules. Which of
the following buying situations is most likely to be in operation given this data?
A) straight rebuy
B) single rebuy
C) rakeback rebuy
D) system buy
E) modified rebuy
Answer: E
Page Ref: 186
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate

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17) Orica Inc. competes in the market for commercial explosives. The company recently changed
its business model from just selling explosives to managing an entire blast in a quarry. This
customer-solution-based approach to the sale of explosives is an example of ________.

A) systems selling
B) straight rebuying
C) customer referencing
D) derived demand
E) channel consolidation
Answer: A
Page Ref: 187
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
18) If you decided to go into the systems contracting business, which of the following categories
would constitute your main area of expertise, the service you provide for customers?
A) computer applications
B) database management
C) manufacturing
D) promotion management
E) MRO (maintenance, repair, operating) supplies
Answer: E
Page Ref: 187
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
19) Many business buyers prefer to buy a total solution to a problem from one seller. This
process is also known as ________.
A) channel consolidation
B) systems buying
C) vertical buying
D) horizontal buying
E) supply buying
Answer: B

Page Ref: 187
Objective: 2
Difficulty: Moderate

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20) Xerox offers a ________ approach to prospective clients when it offers a complete turnkey
solution, including the operation and management of the client's information and communication
need.
A) guided selling
B) fair trading
C) systems buying
D) cross-selling
E) local purchasing
Answer: C
Page Ref: 187
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
21) If Ampex Support Systems is the single supplier for a local manufacturing company's MRO
(maintenance, repair, operating) supplies and needs, Ampex Support Systems is considered as
providing ________ for the manufacturer.
A) guided selling
B) purchasing support
C) turnkey logistics
D) decision support
E) systems contracting
Answer: E

Page Ref: 187
Objective: 2
AACSB: Analytic skills
Difficulty: Difficult
22) ________ is a key industrial marketing strategy in bidding to build large-scale industrial
products such as dams, pipelines, etc.
A) Systems contracting
B) Systems buying
C) Systems selling
D) Solutions buying
E) Turnkey logistics
Answer: C
Page Ref: 187
Objective: 2
Difficulty: Moderate

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23) ________ is composed of all parties who participate in the purchasing decision-making
process and share common goals and risks associated with their decisions.
A) The buying center
B) The marketing sales team
C) Strategic management
D) Engineering support
E) The logistics center
Answer: A
Page Ref: 188
Objective: 3

Difficulty: Easy
24) In the purchasing decision process, the ________ are those who request that something be
purchased. They may be users or others in the organization.
A) users
B) initiators
C) influencers
D) deciders
E) approvers
Answer: B
Page Ref: 188
Objective: 3
Difficulty: Easy
25) In the purchasing decision process, the ________ are those who have the power to prevent
sellers or information from reaching members of the buying center.
A) approvers
B) buyers
C) initiators
D) gatekeepers
E) deciders
Answer: D
Page Ref: 188
Objective: 3
Difficulty: Easy
26) In the purchasing decision process, the major role of ________ is in selecting vendors and
negotiating.
A) gatekeepers
B) buyers
C) initiators
D) approvers
E) deciders

Answer: B
Page Ref: 188
Objective: 3
Difficulty: Easy
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27) If you performed the role of the ________ in a buying center, you would be the person that
has the power to prevent sellers or information from reaching other members of the buying
center.
A) initiator
B) influencer
C) decider
D) gatekeeper
E) approver
Answer: D
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
28) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing
analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings
favor disposable gowns, then the operating-room administrator compares various competitors'
products and prices and makes a choice. Surgeons influence the decision retroactively by
reporting their satisfaction with the particular brand. In this situation, the operating-room
administrator performs the role of the ________.
A) gatekeeper
B) initiator
C) user

D) decider
E) influencer
Answer: D
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
29) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing
analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings
favor disposable gowns, then the operating-room administrator compares various competitors'
products and prices and makes a choice. Surgeons influence the decision retroactively by
reporting their satisfaction with the particular brand. In this situation, the surgeons perform the
role of the ________.
A) decider
B) initiator
C) user
D) gatekeeper
E) buyer
Answer: C
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
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30) In which of the following is a person performing the role of an influencer?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.

C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.
Answer: C
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
31) In which of the following is a person performing the role of an approver?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.
E) Dana authorizes the actions of the deciders and buyers in LKG.
Answer: E
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
32) In which of the following is a person performing the role of a gatekeeper?
A) Dan decides on the product requirements and makes the final choice of suppliers.
B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.
C) Liam heads the Tech team at LKG and provides information for evaluating the possible
alternatives.
D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good
prospects and refer them to others in LKG.

E) Dana authorizes the actions of the deciders and buyers in LKG.
Answer: D
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate

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33) Which of the following is true about the buying center?
A) In a buying center, one person cannot play more than one role.
B) A typical buying center has a maximum of five or six members.
C) A buying center consists of only mid-level managers and below.
D) It is the decision-making unit of a buying organization.
E) Gatekeepers in a buying center are people who authorize the proposed actions of deciders or
buyers.
Answer: D
Page Ref: 188-189
Objective: 3
Difficulty: Moderate
34) Small sellers should first concentrate their marketing efforts on reaching ________.
A) approvers
B) initiators
C) influencers
D) users
E) initiators
Answer: C
Page Ref: 193

Objective: 4
Difficulty: Easy
35) If you were an upper-level marketing executive of a large seller of trucks, which of the
following strategies would be most appropriate in reaching buying center targets?
A) Concentrate on key buying influencers.
B) Use multilevel in-depth selling.
C) Use trade-based promotions.
D) Concentrate sales efforts on the support staff.
E) Move all operations to the Internet.
Answer: B
Page Ref: 193
Objective: 4
AACSB: Analytic skills
Difficulty: Difficult
36) ________ occurs when customers are given a perspective or point of view that allows the
firm to "put its best foot forward."
A) Gatekeeping
B) Commoditization
C) Framing
D) Rebuying
E) Bartering
Answer: C
Page Ref: 194
Objective: 4
Difficulty: Moderate
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37) The new, more strategically oriented purchasing departments have a mission. Which of the

following most accurately describes that mission?
A) Make the most profit possible and remain independent of entanglements.
B) Approach every purchasing opportunity as means to create interdependency.
C) Seek the best value from fewer and better suppliers.
D) Outsource the supply function.
E) Abandon all strategies except for systems selling and buying.
Answer: C
Page Ref: 194
Objective: 4
Difficulty: Moderate
38) Patrick J. Robinson and his associates have identified eight stages in the business buyingdecision process. This model is called the ________ framework.
A) buygrid
B) buying/selling
C) seller-centered
D) commercial
E) buy-analysis
Answer: A
Page Ref: 195
Objective: 4
Difficulty: Moderate
39) According to Patrick J. Robinson, the eight stages in the business buying-decision process
are known as ________.
A) buyphases
B) buybacks
C) buyouts
D) buyables
E) buyoffs
Answer: A
Page Ref: 195
Objective: 4

Difficulty: Moderate
40) Which of the following is a step in the straight rebuy buyclass?
A) problem recognition
B) general need description
C) product specification
D) supplier search
E) proposal solicitation
Answer: C
Page Ref: 195
Objective: 4
Difficulty: Moderate
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41) A new-task buyclass decision begins with which of the following steps?
A) supplier search
B) general need description
C) product specification
D) problem recognition
E) proposal solicitation
Answer: D
Page Ref: 195
Objective: 4
Difficulty: Moderate
42) In reordering office supplies, the only stages that the buyer passes through are the product
specification stage and the ________ stage.
A) problem recognition
B) general need description
C) order-routine specification

D) supplier search
E) performance review
Answer: E
Page Ref: 195
Objective: 4
Difficulty: Moderate
43) The approach to cost reduction that studies whether components can be redesigned or
standardized or made by cheaper methods of production without adversely impacting product
performance is termed as ________.
A) maintenance, repair, and operating (MRO)
B) product value analysis (PVA)
C) vendor managed inventories (VMI)
D) supplier performance management (SPM)
E) supplier added value effort (SAVE)
Answer: B
Page Ref: 196
Objective: 4
AACSB: Reflective thinking
Difficulty: Moderate

13
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44) Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales
representative who offers a better product or a lower price compared to the current in-supplier.
These situations spur the ________ stage.
A) problem recognition
B) general need description
C) order-routine specification

D) supplier search
E) performance review
Answer: A
Page Ref: 196
Objective: 4
Difficulty: Moderate
45) Business marketers can stimulate problem recognition by ________.
A) ensuring a presence in trade directories
B) direct mail, telemarketing, and calling on prospects
C) encouraging the Better Business Bureau to release statistics
D) using consumer advertising
E) conducting surveys of existing customers
Answer: B
Page Ref: 196
Objective: 4
Difficulty: Moderate
46) With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, P&G, and several other
companies joined forces to form a ________ called Transora to use their combined leverage to
obtain lower prices for raw materials.
A) manufacturer's co-op
B) supplier's co-op
C) middleman group
D) buying alliance
E) buying cabal
Answer: D
Page Ref: 197
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate


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47) Plastics.com allows plastics buyers to search the best prices among thousands of plastics
sellers. Plastics.com is an example of a(n) ________.
A) buying alliance
B) barter market
C) systems seller
D) vertical market
E) auction site
Answer: D
Page Ref: 197
Objective: 4
Difficulty: Moderate
48) On an online ________ , prices change by the minute.
A) buying alliance
B) barter market
C) systems seller
D) spot market
E) catalog site
Answer: D
Page Ref: 197
Objective: 4
Difficulty: Easy
49) With respect to e-procurement, which of the two types of e-hubs are Web sites organized
around?
A) vertical and horizontal hubs
B) vertical and functional hubs
C) functional hubs and organizational hubs

D) supplier and user hubs
E) manufacturer and supplier hubs
Answer: B
Page Ref: 197
Objective: 4
Difficulty: Moderate

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50) Which of the following is an example of a functional hub?
A) Plastics.com allows plastics buyers to search the best prices among thousands of plastics
sellers.
B) ChemConnect.com is an online exchange for buyers and sellers of bulk chemicals.
C) SteelMart.com concentrates on steel buyers from the United States.
D) SupplyLink.com offers manufacturers information on ensuring workplace safety.
E) PaperTiger.com offers paper buyers a comprehensive look at the prices and quality in the
paper market.
Answer: D
Page Ref: 197
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
51) The ________ approach to consumer research asks customers to attach a monetary value to
alternative levels of a given attribute. The value of a given configuration is determined by adding
the average values of each of the given attributes.
A) benchmarking
B) compositional
C) importance rating

D) focus-group
E) conjoint analysis
Answer: B
Page Ref: 199
Objective: 4
Difficulty: Moderate
52) In the ________ method for assessing customer value, customers are asked how costs of
using a new product compare to those of using an incumbent.
A) direct survey
B) importance ratings
C) field value-in-use assessment
D) benchmarking
E) conjoint analysis
Answer: C
Page Ref: 199
Objective: 4
Difficulty: Moderate

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53) Robert Jennings consultants help farmers deliver an incremental animal weight gain of 8% to
12% over competitors. This is an example of ________.
A) solutions selling to enhance customer revenues
B) solutions selling to reduce customer costs
C) solutions selling to decrease customer risks
D) solutions selling to simplify customer purchasing
E) solutions to provide better partnership
Answer: A

Page Ref: 200
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
54) A supplier signs an agreement with a customer that states that $350,000 in savings will be
earned by the customer over the next 18 months in exchange for a tenfold increase in the
customer's share of supplies ordered by the customer. If the supplier achieves less than this
promised savings, it will make up the difference. If the supplier achieves substantially more than
promised, it participates in the extra savings. This is an example of ________.
A) solution selling
B) price fixing
C) demand shifting
D) systems buying
E) risk and gain sharing
Answer: E
Page Ref: 200
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
55) GM employees work at large customer facilities to reduce materials-management spending.
This is an example of the ________ form of solution selling.
A) solutions to encourage partnerships
B) solutions to alter corporate culture
C) solutions to enhance customer revenues
D) solutions to decrease customer risks
E) solutions to reduce customer costs
Answer: E
Page Ref: 200
Objective: 4
AACSB: Analytic skills

Difficulty: Moderate

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56) Through its dedicated research team, CISCO Systems Inc. has developed new value-added
business solutions which enable its variant class-II capacitors to provide incremental productivity
of 10 to 20 percent over its competitors. This is an example of the ________ form of solution
selling.
A) solutions to reduce customer costs
B) solutions to decrease customer risks
C) solutions to alter corporate culture
D) solutions to enhance customer revenues
E) solutions to partnerships
Answer: D
Page Ref: 200
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
57) Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in
the U.S. Its customers have shifted their ordering responsibilities to Praxair and the company
regularly monitors its customer's inventory levels and has taken responsibility for replenishing
the supplies automatically through continuous replenishment programs. Which of the following
systems do Praxair and its customers follow with respect to order-routine specification?
A) Supplier Added Value Effort ($AVE)
B) Vendor Managed Inventory (VMI)
C) Direct Concentrated Buying (DCB)
D) Supplier Performance Management (SPM)
E) Product Value Analysis (PVA)

Answer: B
Page Ref: 201
Objective: 4
AACSB: Analytic skills
Difficulty: Difficult
58) Which of the following methods is most likely to be used by buyers to review the
performance of chosen suppliers?
A) the buyer may contact different suppliers and ask for their evaluations
B) the buyers may rate the end-users on several criteria using a weighted-score method
C) the buyer might aggregate the cost of poor performance to come up with adjusted costs of
purchase, including price
D) the buyers may aggregate the opinions of various competitors and come up with the adjusted
cost of supply
E) the buyers might adopt the Supplier Added Value Effort technique to calculate supplier
efficiency
Answer: C
Page Ref: 201
Objective: 4
Difficulty: Difficult

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59) A ________ establishes a long-term relationship in which the supplier promises to resupply
the buyer as needed, at agreed-upon prices, over a specified period of time.
A) stockless purchase plan
B) direct stock purchase plan
C) defined contribution plan
D) stock purchase plan

E) share purchase plan
Answer: A
Page Ref: 201
Objective: 4
AACSB: Reflective thinking
Difficulty: Moderate
60) In the ________ category of buyer-supplier relationships, competition rather than
cooperation is the dominant form of governance.
A) basic buying and selling
B) bare bones
C) contractual transaction
D) customer supply
E) collaborative
Answer: D
Page Ref: 202
Objective: 5
Difficulty: Moderate
61) Which of the following relationships is characterized by much trust and commitment leading
to a true partnership?
A) mutually adaptive
B) collaborative
C) basic buying and selling
D) customer supply
E) cooperative systems
Answer: B
Page Ref: 202
Objective: 5
Difficulty: Moderate

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62) The partners in ________ systems are united in operational ways, but neither demonstrates
structural commitment through legal means or adaptation.
A) mutually adaptive
B) collaborative
C) basic buying and selling
D) customer supply
E) cooperative
Answer: B
Page Ref: 202
Objective: 5
Difficulty: Moderate
63) Value Central has a partnership of high trust and commitment with certain suppliers and
gives them access to its sophisticated and detailed daily, individual store-based sales data. In
exchange, those suppliers are responsible for managing Value Central's inventory of their
products. This relationship is best described as ________.
A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king
Answer: C
Page Ref: 202
Objective: 5
AACSB: Analytic skills
Difficulty: Moderate
64) The relationship between a company and its office supplies vendor where competition rather
than cooperation is the dominant form of governance is probably best described as ________.

A) basic buying and selling
B) contractual transaction
C) collaborative
D) customer supply
E) customer is king
Answer: D
Page Ref: 202
Objective: 5
AACSB: Analytic skills
Difficulty: Moderate

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65) In the ________ category of buyer-supplier relationship, although bonded by a close,
cooperative relationship, the seller adapts to meet the customer's needs without expecting much
adaptation or change on the part of the customer in exchange.
A) contractual transaction
B) cooperative system
C) collaborative
D) mutually adaptive
E) customer is king
Answer: E
Page Ref: 203
Objective: 5
Difficulty: Moderate
66) According to research studies, the closest relationships between customers and suppliers
arise when ________.
A) supply is important to the customer and there were procurement obstacles

B) procurement is simple
C) there are many undifferentiated vendors in the marketplace
D) the customer is highly price sensitive
E) the suppliers charge a premium for their products
Answer: A
Page Ref: 203
Objective: 5
AACSB: Reflective thinking
Difficulty: Moderate
67) The type of buyer-supplier relationship in which buyers and sellers make many relationshipspecific adaptations, but without necessarily achieving strong trust or cooperation is termed as
________.
A) customer is king
B) mutually adaptive
C) collaborative
D) contractual transaction
E) customer supply
Answer: B
Page Ref: 203
Objective: 5
AACSB: Reflective thinking
Difficulty: Moderate

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68) ________ investments are those expenditures tailored to a particular company and value
chain partner.
A) Diversified
B) Pooled

C) Specific
D) Umbrella
E) General
Answer: C
Page Ref: 203-204
Objective: 5
Difficulty: Moderate
69) Which of the following is a form of cheating or undersupply relative to an implicit or explicit
contract which usually takes place when buyers cannot easily monitor supplier performance?
A) Institutional sale
B) Business buying
C) Opportunism
D) Vertical integration
E) Contractual transactionism
Answer: C
Page Ref: 204
Objective: 5
Difficulty: Moderate
70) The ________ market consists of schools, hospitals, nursing homes, prisons, and other
institutions that must provide goods and services to people in their care.
A) vertical
B) nonprofit
C) spot
D) secondary business
E) institutional
Answer: E
Page Ref: 205
Objective: 6
Difficulty: Easy
71) In most countries, ________ are the major buyers of goods and services. They typically

require suppliers to submit bids and often award the contract to the lowest bidder.
A) consumer packaged-goods companies
B) government organizations
C) health services vendors
D) educational institutions
E) households
Answer: B
Page Ref: 206
Objective: 6
Difficulty: Easy
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72) Organizational buying is the decision-making process by which formal organizations
establish the need for purchased products and services and identify, evaluate, and choose among
alternative brands and suppliers.
Answer: TRUE
Page Ref: 183
Objective: 1
Difficulty: Easy
73) The business market consists of all the organizations that acquire goods and services used in
the production of other products or services that are sold, rented, or supplied to others.
Answer: TRUE
Page Ref: 183
Objective: 1
Difficulty: Easy
74) Commoditization strengthens customer loyalty.
Answer: FALSE
Page Ref: 184

Objective: 1
AACSB: Reflective thinking
Difficulty: Easy
75) The business market is essentially the same market as the consumer market.
Answer: FALSE
Page Ref: 184
Objective: 1
AACSB: Reflective thinking
Difficulty: Easy
76) Business buyers often select suppliers who also buy from them.
Answer: TRUE
Page Ref: 184
Objective: 1
Difficulty: Easy
77) The business marketer normally deals with far fewer, much larger buyers than the consumer
marketer does.
Answer: TRUE
Page Ref: 184
Objective: 1
Difficulty: Easy

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78) An increase in the demand for plant and equipment can lead to a much larger increase in
consumer demand. This is known as the acceleration effect.
Answer: FALSE
Page Ref: 185
Objective: 1

Difficulty: Easy
79) The demand for business goods is ultimately derived from the demand for raw materials.
Answer: FALSE
Page Ref: 185
Objective: 1
AACSB: Reflective thinking
Difficulty: Easy
80) The total demand for many business goods and services is inelastic that is, not much
affected by price changes.
Answer: TRUE
Page Ref: 185
Objective: 1
Difficulty: Easy
81) In the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase
share over time.
Answer: TRUE
Page Ref: 185
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
82) The buyer in a straight rebuy usually changes product specifications, prices, delivery
requirements, or other terms.
Answer: FALSE
Page Ref: 186
Objective: 2
AACSB: Reflective thinking
Difficulty: Moderate
83) The business buyer makes the fewest decisions in the straight rebuy situation and the most in
the new-task situation.
Answer: TRUE

Page Ref: 186
Objective: 2
AACSB: Reflective thinking
Difficulty: Moderate

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84) Most business buyers reject what is called systems buying from one seller.
Answer: FALSE
Page Ref: 187
Objective: 2
AACSB: Reflective thinking
Difficulty: Easy
85) Systems selling is a key industrial marketing strategy in bidding to build large-scale
industrial projects such as dams or pipelines.
Answer: TRUE
Page Ref: 187
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
86) Sellers benefit from systems contracting through lower operating costs as a result of steady
demand and reduced paperwork.
Answer: TRUE
Page Ref: 187
Objective: 2
AACSB: Reflective thinking
Difficulty: Easy
87) The buying center is where consumers go to purchase their goods and services.

Answer: FALSE
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Easy
88) With respect to the buying center, approvers are people who have the power to prevent
sellers or information from reaching members of the buying center.
Answer: FALSE
Page Ref: 188
Objective: 3
AACSB: Reflective thinking
Difficulty: Easy
89) Initiators are those who authorize the proposed action of deciders or buyers.
Answer: FALSE
Page Ref: 188
Objective: 3
AACSB: Analytic skills
Difficulty: Easy

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Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall