Chap001.docx

Chapter 01 (p. 6) Business marketers do NOT sell to: Other companies Government bodies Institutions Service suppliers E. Individual consumers (p. 7) Increasingly, organizational survival depends upon firms being: a. Individual-driven B. Market-driven Ideology-driven Product-driven Sales...

Chapter 01 (p. 6) Business marketers do NOT sell to: Other companies Government bodies Institutions Service suppliers E. Individual consumers (p. 7) Increasingly, organizational survival depends upon firms being: a. Individual-driven B. Market-driven Ideology-driven Product-driven Sales-driven (p. 7) Being means that customer satisfaction and operational efficiency are the order of the day for every department and individual employee or associate. Product-driven Profit-driven Technology-driven D. Market-driven e. Sales-driven (p. 7) means that at many organizations, individuals with complementary expertise and skills work in teams to constantly strive to serve organizational customers better, to innovate and to develop the means to approach new institutional markets. Product-driven Profit-driven Technology-driven Market-driven e. Sales-driven (p. 7) Which of the following is NOT a valid reason for studying business marketing? The magnitude of business marketing Business marketing is unique One type of marketing does not fit all situations It is an exciting area of study It is the same as consumer marketing (p. 9) All the following are ways in which business marketing differs from consumer marketing EXCEPT: Its distribution channels are shorter and more direct It emphasizes personal selling and negotiation C. The Web is not integrated It employs "unique" promotional strategies It requires knowledge of the customer's customer (p. 9) BASF sells fibers direct to Dupont for the manufacture of carpet and through distributors to smaller companies. This example shows that business marketing is characterized by compared to consumer marketing. Shorter distribution channels Marketing research Greater web integration Consumption Lesser emphasis on personal selling (p. 9) BASF salespeople work directly with fire departments to sell the latest fire-fighting chemicals and ensure that they are used properly. This example shows that business marketing is characterized by compared to consumer marketing. a. Longer distribution channels Greater emphasis on personal selling Varying buyer-seller relationships Greater web integration Consumption (p. 9) Which of the following statements about buyer-seller relationships in business marketing is TRUE? Strong personal and business relationships between buyer and seller are extremely rare Close personal relationships exist between buyer and seller in all industries Personal selling is never an important element of the marketing mix Companies rarely enter into long-term contracts as the opportunity cost of mistakes is high E. Many companies focus on building relationships that enable buyers and sellers to plan jointly (p. 10) In business marketing, large customer size and use of direct channels increase the importance of: Advertising Distribution C. Negotiation Packaging Production (p. 10) These members of an organization are specifically responsible for coordinating their company's efforts at satisfying their customers. Salespeople Middle managers Supervisors Human resource personnel First-line managers (p. 10) In terms of personal selling, which of the following statements is TRUE? a. A business cannot be successful through personally getting to know each individual and coordinating the sales-purchase process Complex buying procedures involving many members of the buying organization require personal selling Multiple personal relationships can strengthen organizational relationships and these relationships are the responsibility of the manager A customer's size and a direct channel do not affect the importance of negotiation Large orders sold directly by the manufacturer to the user increase the likelihood of negotiation because changes can be made in place and promotion (p. 11) Why is the demand for business products dependent ultimately on individual consumers? Because individual consumers are larger than business customers Because individuals within organizations purchase for personal consumption and consumers do not Because business markets consume products in the process of making other products Because the buyers of business products are the final consumers Because of the emphasis on personal selling for business products (p. 13) When a company purchases a product or service to be included in its own final product, the company is called a(n) Reseller User Institution Original equipment manufacturer e. Industrial distributor (p. 13) Resellers include all of the following EXCEPT: Wholesalers Dealers C. Government agencies Brokers Industrial distributors (p. 13) All the following types of customers purchase products for consumption EXCEPT: A. Brokers Original equipment manufacturers Hospitals Universities Users (p. 13) OEMs are BEST described as: a. End users B. Companies that consume Government agencies Firms that resell a product without making any changes Institutions (p. 13) When purchasing products/services to be consumed in support of the firm's operation, the firm is BEST described as a(n): User Institution Reseller Government agency Wholesaler (p. 13) Users are similar to final consumers in that: a. They purchase products to include in their own final product Satisfaction is determined through consumption They are primarily influenced by advertising The impact upon profit is not important They incorporate their purchases into their final product (p. 13) Identify the largest single purchaser of products and services in the United States. Wal-Mart Defense department Government Financial institutions Steel industry (p. 13-14) In the United States: The state governments are the single largest consumers The government does not use any product it buys The purchasing processes used by the government are simple and easy to sell to The federal government is the only government customer E. The federal government is the country's largest single landlord (p. 14) Government agencies tend to have complex purchasing processes because purchasing is: Limited to military goods Solely designed to produce profits Solely for their own use D. Often designed to accomplish social objectives e. Largely influenced by negotiation (p. 14) Policies designed to encourage the growth of minority- or women-owned businesses as well as small businesses are examples of policies that influence government purchasing. A. Social objective Environmental objective Economic objective Business objective Protectionist (p. 14) Which of following business customers provide services similar to those delivered by wholesalers and retailers of consumer goods? OEMs Government agencies Institutions Private contractors E. Industrial distributors (p. 15) In business markets, products are generally classified on the basis of: Price Durability C. Type of purchaser and reason for purchase Size and weight of product Type of promotion employed (p. 15) Gold purchased by AT&T for use in the manufacture of telecommunications equipment would be BEST described as a(n): Raw material Facilitating supply Manufactured material Component part MRO (p. 15) Which of the following product types has been transformed from the raw material and requires further processing before use? a. OEM Manufactured material Component part Capital equipment MRO (p. 15) Raw materials A. Are sold to OEMs for use in the products they manufacture Are parts assembled into the final product without further transformation Facilitate a firm's achievement of its objectives, but are not part of the final product Are also called installations Are products sold to users for use in the company's operations (p. 15) Parts that may be assembled into a final product without further processing are BEST described as: Capital equipment Manufactured materials Raw materials MROs E. OEM parts (p. 15) Sometimes, a company purchases OEM parts and assembles these to make a component for installation into the final product by another company. The component may then be called a(n) Facilitating product Manufactured material Installation D. Subassembly e. MRO item (p. 15) Gates Controls may purchase plastic casing, a component part, from Plastech and parts from Metric Devices and then put these components together into a tachometer that is sold to GM. GM would then put the tachometer into its cars or trucks. GM may refer to the part as a(n) A. Assembly Manufactured material Accessory equipment Capital equipment MRO item (p. 15) Computers used to facilitate the company's achievement of its objectives, but not part of the final product would be BEST described as: OEM parts Component parts C. Accessory equipment Raw materials Subassembly (p. 15) Large, expensive items used in the production process are BEST classified as: A. Capital equipment OEMs Accessory equipment MROs Manufactured materials (p. 15) Overhead cranes, blast furnaces, industrial robots and other manufacturing equipment as well as forklifts, road graters and other heavy construction machinery are examples of MRO items Maintenance products Manufactured materials Accessory equipment E. Capital equipment (p. 15) What is an important difference between accessory and capital equipment when it comes to marketing the equipment to users? a. Accessory equipment is part of the organization's final product while capital equipment facilitates the organization's activities B. Capital equipment is much more expensive and its purchase may involve more members of the organization than purchase of accessory equipment Accessory equipment demand is derived from the demand for consumer products Marketing requirements for accessory equipment are different as more members of the organization must be reached by marketing efforts Capital equipment is ordered on a more regular basis than accessory equipment (p. 15) Products purchased for use in the firm's operations are usually called: OEM parts Capital goods Accessory equipments D. MRO items e. Component parts (p. 15) The hiring of an advertising agency would be BEST descried as the purchase of a(n): a. Operating supply B. Facilitating service Component part MRO Accessory (p. 15) Facilitating products: A. Aid the company's achievement of its objectives, but are not part of the final product Are parts assembled into the final product without further transformation Include raw and manufactured materials, component parts or OEM parts and assemblies Are parts assembled to make a component for installation into the final product by another company Are parts assembled into the final product without further transformation (p. 15) Facilitating supplies: Are also called OEM products Refer to products sold to users for use in the company's final product Are materials processed only to the point required for economic handling and distribution Are parts assembled into the final product without further transformation E. Support company efforts but are not part of the final product (p. 16) Janitorial products, painting contractors who paint the buildings, plumbing services and heating and air conditioning services fall under: MRO items Repair services C. Maintenance products Capital equipment Accessory equipment (p. 16) A key raw material for technology-driven companies is: a. MRO item Personnel Steel Accessory equipment Location (p. 16-17) Compared to individual consumers, business customers: Have less stringent standards for judging a vendor Are more in number Are more likely to be geographically concentrated Have lower purchasing power Are less important to the financial success of the business marketer (p. 17) Compared to the typical household buying, the organizational purchasing process: Involves lesser number of people Rarely involves checks and controls Arises from implicit negotiation, expertise and habit Is more complex e. Uses crude cost accounting systems and cash flow management (p. 19) Business marketers must recognize that the demand for their products and services is demand, which means that demand for their products and services results from the demand for their customers' products and services. A. Derived Concentrated Limited Direct Conditional (p. 19) Typically, business marketers face: Hypothetical demand Highly elastic demand C. Derived demand Latent demand Primary demand (p. 19) As one moves further away from the consumer market, derived demand can cause wide swings in demand, called a. Inelasticity B. Volatility Make-or-buy Deficiency Dissolution (p. 20) The percentage change in sales relative to the percentage change in price is: Volatile demand Market demand Final demand D. Demand elasticity e. Price elasticity (p. 20) Industrial products having no substitutes typically face: A. Inelastic demand Volatile demand Elastic demand Stable demand Unitary demand (p. 22) All of the following are part of the marketing mix EXCEPT: Product Promotion Place D. Process e. Price (p. 22) Marketing is a process by which the marketer creates: Derived demand Vision C. Value Volatility Service (p. 22) Value a. Is equivalent to profit for a seller Is the perception of how much the buyer benefited beyond what was invested in a product Is the reason why an organization is created Is based on some general need that has been identified in the market Is the recognition of a need and the means to satisfy it (p. 22) Value is equivalent to for the buyer. Product Price Profit Distribution Cost (p. 23) is something that provides incremental value when compared to other offerings. A. Competitive advantage Value chain Volatility Demand elasticity Derived demand (p. 23) The system of value creation is also known as: Organizational value Quality process A value chain Competitive advantage Core competency (p. 23) Marketing is BEST described as a(n) process. Sales Profit-maximizing Cost-minimizing Integrative e. Internal