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Chapter 4: Business Markets and Purchasing Behavior

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Chapter 4: Business Markets and Purchasing Behavior

20 problems · 0 figures

Knowledge Check 4.1.1 §4.1 source ↗

The demand for smartphones and similar devices has created a demand for other needed components, such as touch-sensitive glass screens, microchips, and circuit boards. This is an example of ________ demand.
  1. a.
    direct
  2. b.
    irregular
  3. c.
    derived
  4. d.
    negative

Answer

C. derived
Derived demand is a market demand for a good or service that results from a demand for a related good or service.

Knowledge Check 4.1.2 §4.1 source ↗

Jason, a purchasing agent for an electronics firm, places an order with a supplier for diodes to be used in the manufacturing process. This is an example of a transaction in the ________ market.
  1. a.
    B2B
  2. b.
    B2C
  3. c.
    B2G
  4. d.
    C2C

Answer

A. B2B
A B2B (or “business-to-business”) transaction is one that is conducted between one business and another.

Knowledge Check 4.1.3 §4.1 source ↗

Alejandro is a salesperson for a company that manufactures electrosurgical units. He calls on hospitals in his sales region to familiarize the buying centers in the hospitals with the benefits of his company’s equipment. Which difference between B2B and B2C markets does this scenario illustrate?
  1. a.
    Longer, more complex buying decision cycles
  2. b.
    More rigid product standards
  3. c.
    More reliance on personal selling
  4. d.
    More reliance on mass marketing

Answer

C. More reliance on personal selling
B2B purchasing is more likely to involve complex negotiations concerning price, delivery schedules, technical specifications, etc., so personal selling plays a vital role.

Knowledge Check 4.1.4 §4.1 source ↗

Many of the world’s high-tech companies are located in Silicon Valley, California, including the headquarters of more than 30 businesses in the Fortune 1000. Which difference between B2B and B2C markets does this illustrate?
  1. a.
    More reliance on personal selling
  2. b.
    Derived demand versus direct demand
  3. c.
    Fewer customers, often geographically concentrated in areas
  4. d.
    Larger purchases/fewer buyers than the B2C market

Answer

C. Fewer customers, often geographically concentrated in areas
The B2B market is more geographically concentrated in areas based on cost, access, and availability of resources.

Knowledge Check 4.1.5 §4.1 source ↗

DaVonte has a home repair business. He goes to a home improvement store to purchase a large quantity of lumber for his next repair project. While he is there, he picks up batteries for the smoke detector in his house. In this scenario, the lumber is a ________ purchase, and the batteries are a ________ purchase.
  1. a.
    B2C; B2B
  2. b.
    B2B; B2G
  3. c.
    B2C; B2G
  4. d.
    B2B; B2C

Answer

D. B2B; B2C
DaVonte’s purchase of the lumber in connection with his business is a B2B transaction; the purchase of batteries for the smoke detector in his house is a B2C transaction.

Knowledge Check 4.2.1 §4.2 source ↗

The largest business and organizational market in the United States is ________.
  1. a.
    producers
  2. b.
    institutions
  3. c.
    governments
  4. d.
    resellers

Answer

C. governments
Government markets make up the largest single business and organizational market in the United States.

Knowledge Check 4.2.2 §4.2 source ↗

Jenae, a purchasing agent for an electronics firm, places an order with a local office supply company for several dozen reams of copy paper. He has ordered the same brand of paper from the company several times before. This is an example of ________.
  1. a.
    a straight rebuy
  2. b.
    a modified rebuy
  3. c.
    a new-task buy
  4. d.
    systems selling

Answer

A. a straight rebuy
A straight rebuy is making a routine purchase of a standard product or products with no modifications from a familiar supplier.

Knowledge Check 4.2.3 §4.2 source ↗

Alejandro, the owner of a Mexican restaurant, decides to revise the restaurant’s menu. He intends to use the same printing company but has to make several changes in the menu. What type of buying situation does this best illustrate?
  1. a.
    Systems selling
  2. b.
    Straight rebuy
  3. c.
    Modified rebuy
  4. d.
    New-task buy

Answer

C. Modified rebuy
In a modified rebuy, the purchaser is buying goods that have been purchased previously but changes either the supplier or certain elements of the previous order.

Knowledge Check 4.2.4 §4.2 source ↗

The human resources manager submits a request to upper management for a new software package that will manage payroll, benefits, compliance, and information technology. Within the buying center, what role is illustrated by this scenario?
  1. a.
    Influencer
  2. b.
    Buyer
  3. c.
    Initiator
  4. d.
    Decider

Answer

C. Initiator
The initiator is the individual within the buying center who first suggests the idea of purchasing a new product or service.

Knowledge Check 4.2.5 §4.2 source ↗

Metro Corp. wants to acquire a new IT system, and Aliyah has been charged with selecting potential new vendors. Within the buying center, what is Aliyah’s role?
  1. a.
    Gatekeeper
  2. b.
    Influencer
  3. c.
    Initiator
  4. d.
    Buyer

Answer

D. Buyer
Buyers are those who have authority within the organization to select suppliers and negotiate and arrange the purchase terms.

Knowledge Check 4.3.1 §4.3 source ↗

Garrett’s company is considering whether or not to purchase new manufacturing equipment that will lower its manufacturing cost significantly and improve its profit margins. Which factor appears to be influencing the B2B purchase?
  1. a.
    Workforce skills
  2. b.
    Personality
  3. c.
    Business objectives and goals
  4. d.
    Social environment

Answer

C. Business objectives and goals
The goals and objectives act as a major element as to what the business purchases.

Knowledge Check 4.3.2 §4.3 source ↗

The local government has just passed an ordinance requiring manufacturing firms to reduce pollutants from their manufacturing processes. As a result, Shereace Manufacturing Company is investigating the purchase of pollution control equipment. What factor appears to be influencing the B2B purchase?
  1. a.
    Political and legal factors
  2. b.
    Economic factors
  3. c.
    Competition
  4. d.
    Workforce skills

Answer

A. Political and legal factors
Legal factors include laws, rules, and regulations with which a business or individual must comply.

Knowledge Check 4.3.3 §4.3 source ↗

Shane’s company has been experiencing a downturn in sales, and cash is tight right now. This has caused Shane to look only at suppliers who offer credit to the company. Which factor appears to be influencing the B2B purchase?
  1. a.
    External factors
  2. b.
    Internal factors
  3. c.
    Interpersonal factors
  4. d.
    Conditional factors

Answer

D. Conditional factors
Conditional factors include the present financial condition of the organization, as well as product/service availability.

Knowledge Check 4.3.4 §4.3 source ↗

Interest rates have gone up significantly in the past few months, prompting Johnson Manufacturing to reconsider purchasing a new building. Which factor appears to be at play in this B2B transaction?
  1. a.
    Political and legal factors
  2. b.
    Economic factors
  3. c.
    Workforce skills
  4. d.
    Competition

Answer

B. Economic factors
Economic factors include the level of primary demand, the economic outlook, and the cost of money (i.e., interest rates).

Knowledge Check 4.3.5 §4.3 source ↗

A worldwide shortage of microchips has prompted Vorderman Enterprises to use a new vendor who has higher prices but can deliver the product on time. Which factor appears to be at play in this B2B transaction?
  1. a.
    External factors
  2. b.
    Political and legal factors
  3. c.
    Economic factors
  4. d.
    Conditional factors

Answer

D. Conditional factors
The availability of the product or service plays a significant role in the buying decision, and availability is a conditional factor.

Knowledge Check 4.4.1 §4.4 source ↗

A blueprint that outlines the product the company will be building, what it is going to look like, and its specific requirements and functions is known as a ________.
  1. a.
    project scope
  2. b.
    bill of materials
  3. c.
    product specification
  4. d.
    participant matrix

Answer

C. product specification
The purpose of a product specification is to provide a description and statement of the requirements of a product, the components of a product, the capability or performance of a product, and/or the service or work to be performed to create a product.

Knowledge Check 4.4.2 §4.4 source ↗

Jackson has asked several qualified vendors to submit proposals. Which stage of the B2B buying process does this illustrate?
  1. a.
    Stage 2: Need description
  2. b.
    Stage 3: Product specification
  3. c.
    Stage 4: Supplier search
  4. d.
    Stage 5: Proposal solicitation

Answer

D. Stage 5: Proposal solicitation
Stage 5 of the B2B buying process is proposal solicitation, in which qualified vendors are asked to submit proposals.

Knowledge Check 4.4.3 §4.4 source ↗

During which stage of the B2B buying process will members of the buying center be called upon to develop a bill of materials?
  1. a.
    Stage 1: Problem recognition
  2. b.
    Stage 2: Need description
  3. c.
    Stage 3: Product specification
  4. d.
    Stage 4: Supplier search

Answer

B. Stage 2: Need description
In Stage 2: Need description, the buying center will work to put some parameters around what needs to be purchased and develop a bill of materials.

Knowledge Check 4.4.4 §4.4 source ↗

During which stage of the B2B buying process will the B2B buyer negotiate the order?
  1. a.
    Stage 4: Supplier search
  2. b.
    Stage 5: Proposal solicitation
  3. c.
    Stage 6: Supplier selection
  4. d.
    Stage 7: Order-routine specification

Answer

D. Stage 7: Order-routine specification
In Stage 7: Order-routine specification, the B2B buyer negotiates the order, listing the technical specifications, the quantity needed, the expected time of delivery, etc.

Knowledge Check 4.4.5 §4.4 source ↗

Donita has determined that the current payroll software system is no longer adequate to handle the growing number of employees in the company. Which stage of the B2B buying process does this illustrate?
  1. a.
    Stage 1: Problem recognition
  2. b.
    Stage 2: Need description
  3. c.
    Stage 5: Proposal solicitation
  4. d.
    Stage 8: Performance review

Answer

A. Stage 1: Problem recognition
Similar to consumer buying, the first stage in the B2B buying decision process occurs when someone identifies a problem that can be resolved through a purchase.

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Problems and answers are adapted from Principles of Marketing by Maria Gomez Albrecht, Mark Green and Linda Hoffman, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/principles-marketing/pages/1-unit-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.