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Chapter 7: Analyzing Business Markets

GENERAL CONCEPT Q E!T"ON! Multiple Ch#i$e


1. To create and capture value, sellers need to understand business organizations needs, resources, policies, and ________. a. demands b. protocols c. strategies d. buying procedures e. personnel policies Answer: d Page: 2 ! "evel o# di##iculty: $asy 2. %ebster and %ind de#ine ________ as t&e decision'ma(ing process by w&ic& #ormal organizations establis& t&e need #or purc&ased products and services and identi#y, evaluate, and c&oose among alternative brands and suppliers. a. mar(eting c&annels b. organizational buying c. demand'oriented buying d. purc&asing e. inventory control Answer: b Page: 21 "evel o# di##iculty: )edium *. T&e ________ consists o# all t&e organizations t&at ac+uire goods and services used in t&e production o# ot&er products or services t&at are sold, rented, or supplied to ot&ers. a. business mar(et b. consumer mar(et c. e'commerce mar(et d. global mar(et e. supplier mar(et Answer: a Page: 21 "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

/. 0usiness mar(ets &ave several c&aracteristics t&at contrast s&arply wit& t&ose o# consumer mar(ets. All o# t&e #ollowing would be among t&ose c&aracteristics $1.$PT ________. a. #ewer, larger buyers b. close supplier'customer relations&ip c. pro#essional purc&asing d. inverted demand e. multiple sales calls Answer: d Pages: 21 2211 "evel o# di##iculty: 3ard -. All o# t&e #ollowing would be among t&e ma4or industries t&at ma(e up t&e business mar(et $1.$PT ________. a. agriculture, #orestry, and #is&eries b. manu#acturing c. construction d. ban(ing, #inance, and insurance e. t&e 5nternet Answer: e Page: 21 "evel o# di##iculty: &ard 6. Trained purc&asing agents, w&o must #ollow t&eir organizations ________, o#ten purc&ase business goods. a. culture b. past purc&asing &istory c. purc&asing policies, constraints, and re+uirements d. needs e. #inancial budgets Answer: c Page: 211 "evel o# di##iculty: )edium ,. 7ltimately, t&e amount o# steel sold to 8eneral )otors depends on t&e consumers demand #or 8) cars and truc(s. 9rom t&e standpoint o# t&e steel manu#acturer, w&ic& o# t&e #ollowing demand #orms is most pertinent: a. ;erived demand b. 5nelastic demand c. 8eograp&ic demand d. <elational demand e. =tatic demand Answer: a Page: 211 "evel o# di##iculty: 3ard >. T&e demand #or business goods is ultimately derived #rom t&e demand #or ________. a. raw materials b. consumer goods c. electronics d. business solutions e. e'commerce Answer: b Page: 211 "evel o# di##iculty: $asy

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.&apter ,: Analyzing 0usiness )ar(ets

!. T&e business buyer #aces many decisions in ma(ing a purc&ase. T&e number o# decisions depends on t&e buying situation. All o# t&e #ollowing e?amples are appropriate to t&e preceding $1.$PT ________. a. comple?ity o# t&e problem being solved b. newness o# t&e buying re+uirement c. number o# people involved d. applicability o# situation to mission statement e. time re+uired Answer: d Page: 212 "evel o# di##iculty: 3ard 1 . T&e purc&asing department buys o##ice supplies on a routine basis. T&is type o# purc&ase is classi#ied as a ________. a. straig&t rebuy b. modi#ied rebuy c. new tas( d. secondary purc&ase e. preordained purc&ase Answer: a Page: 212 "evel o# di##iculty: $asy 11. T&ere are a series o# guidelines #or selling to small businesses. %&ic& o# t&e #ollowing s&ould not be among t&ose guidelines: a. ;ont waste t&eir time. b. ;o (eep it simple. c. ;o use t&e 5nternet. d. ;ont #orget about direct contact. e. ;o lump small and midsize businesses toget&er #or e##iciency sa(e. Answer: e Page: 212 "evel o# di##iculty: )edium 12. T&e business buyer ma(es t&e #ewest decisions in t&e ________. a. modi#ied rebuy b. regular buy c. straig&t rebuy d. new rebuy e. new tas( buy Answer: c Page: 21* "evel o# di##iculty: )edium 1*. )any business buyers pre#er to buy a total solution to a problem #rom one seller. ________ is t&e correct term #or t&is process. a. .&annel consolidation b. =ystems buying c. @ertical buying d. 3orizontal buying e. =upply buying Answer: b Page: 21* "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

1/. 1ero? o##ers a ________ approac& to prospective clients w&en it o##ers a complete turn(ey procedure, operation, and management o# t&e clients in#ormation and communication need. a. supply buying b. primary buying c. systems buying d. co'op buying system e. direct buying Answer: c Page: 21* "evel o# di##iculty: )edium 1-. 5# Ampe? =upport =ystems is t&e single supplier #or a local manu#acturing companys )<A Bmaintenance, repair, operatingC supplies and needs, Ampe? =upport =ystems would t&en be considered as providing ________ #or t&e manu#acturer. a. systems buying b. purc&asing support c. turn(ey logistics d. decision support e. systems contracting Answer: e Page: 21/ "evel o# di##iculty: 3ard 16. ________ is a (ey industrial mar(eting strategy in bidding to build large'scale industrial products Be.g., dams, pipelines, et ceteraC. a. =ystems contracting b. =ystems buying c. =ystems selling d. =olutions buying e. Turn(ey logistics Answer: c Page: 21/ "evel o# di##iculty: 3ard 1,. ________ is composed o# all t&ose individuals and groups w&o participate in t&e purc&asing decision'ma(ing process, w&o s&are some common goals and t&e ris(s arising #rom t&eir decisions. a. T&e buying center b. T&e mar(eting sales team c. =trategic management d. $ngineering support e. T&e logistics center Answer: a Page: 21/ "evel o# di##iculty: )edium

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.&apter ,: Analyzing 0usiness )ar(ets

1>. 5n t&e purc&asing decision process, t&e ________ are t&ose w&o re+uest t&at somet&ing be purc&ased. T&ey may be users or ot&ers in t&e organization. a. users b. initiators c. in#luencers d. deciders e. approvers Answer: b Page: 21/ "evel o# di##iculty: $asy 1!. 5n t&e purc&asing decision process, t&e ________ are t&ose w&o &ave t&e power to prevent sellers or in#ormation #rom reac&ing members o# t&e buying center. a. gate(eepers b. buyers c. initiators d. approvers e. deciders Answer: a Page: 21"evel o# di##iculty: )edium 2 . T&e typical buying center &as a minimum o# ________ members. a. 22* b. *2/ c. /2d. -26 e. 1 Answer: d Page: 21"evel o# di##iculty: 3ard 21. %ebster cautions t&at ultimately, ________ ma(e purc&asing decisions. a. only senior managers b. individuals, not organizations c. organizations, not individuals d. t&ird parties e. systems contractors Answer: b Page: 21"evel o# di##iculty: )edium 22. =mall sellers concentrate t&eir mar(eting e##orts on reac&ing ________. a. approvers b. initiators c. (ey buying in#luencers d. users e. t&e purc&asing sta## Answer: c Page: 216 "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

2*. To t&e ________ price is everyt&ing and transactional selling is used. a. solution'oriented customers b. income'oriented customers c. gold'standard customers d. strategic'value customers e. price'oriented customers Answer: e Page: 216 "evel o# di##iculty: $asy 2/. T&e strategic'value customers want a #airly permanent sole'supplier relations&ip wit& your company. %&ic& o# t&e #ollowing would be t&e best selling #ormat to use wit& t&e strategic'value customer: a. Transactional selling b. .onsultative selling c. Duality selling d. $nterprise selling e. 5ndirect demand selling Answer: d Page: 216 "evel o# di##iculty: 3ard 2-. =ome customers are willing to &andle price'oriented buyers by setting a lower price, but establis&ing restrictive conditions. All o# t&e #ollowing would be among t&ose conditions $1.$PT ________. a. limiting t&e +uantity t&at can be purc&ased b. no re#unds c. no ad4ustments d. no services e. no customer advertising Answer: e Page: 216 "evel o# di##iculty: )edium 26. 5# a supplier signs an agreement wit& a customer t&at states E*- , in savings will be earned by t&e customer over t&e ne?t 1> mont&s in an e?c&ange #or a ten'#old increase in t&e customers s&are o# supplies ordered by t&e customer, t&e two parties will &ave participated in w&at is called ________. a. solution selling b. consultative selling c. ris( and gain s&aring d. strategic alignment e. demand s&i#ting Answer: c Page: 21, "evel o# di##iculty: )edium

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.&apter ,: Analyzing 0usiness )ar(ets

2,. %.%. 8rainger employees wor( at large customer #acilities to reduce materials' management costs. %&ic& o# t&e #ollowing #orms o# solution selling is %.%. 8rainger using: a. =olutions to partners&ips. b. =olutions to alter corporate culture. c. =olutions to en&ance customer revenues. d. =olutions to decrease customer ris(s. e. =olutions to reduce customer costs. Answer: e Page: 21, "evel o# di##iculty: )edium 2>. 5n principle, business buyers see( to ________ in relation a mar(et o##erings costs. a. spread ris(s b. obtain t&e &ig&est bene#it pac(age c. maintain everyday'low'prices d. outsource as muc& as is possible e. eliminate partners s&ares in pro#its as muc& as possible Answer: b Page: 21, "evel o# di##iculty: 3ard 2!. 5n t&e past, w&at position did purc&asing departments &old in t&e management &ierarc&y o# most organizations: a. A &ig& level because o# t&eir role in managing t&e companys costs. b. A moderate level because o# t&eir spotty record on controlling costs. c. A low level despite t&e #act t&at t&ey manage more t&an &al# o# t&e companys costs. d. A secretive position. e. T&ere &as been no determination o# t&is position. Answer: c Page: 21> "evel o# di##iculty: 3ard * . T&e new, more strategically'oriented purc&asing departments &ave a mission. %&ic& o# t&e #ollowing most accurately describes t&at mission: a. )a(e t&e most pro#it possible and remain independent o# entanglements. b. Approac& every purc&asing opportunity as means to create interdependency. c. =ee( t&e best value #rom #ewer and better suppliers. d. Autsource t&e supply #unction. e. Abandon all strategies e?cept #or systems selling and buying. Answer: c Page: 21> "evel o# di##iculty: 3ard *1. %&en t&e purc&asers #ocus is s&ort term and tactical and t&ey are rewarded on t&eir ability to obtain t&e lowest price #rom suppliers #or t&e given level o# +uality and availability, t&is is re#erred to as ________. a. procurement orientation b. supply c&ain management orientation c. buying orientation d. sellers orientation e. mar(et orientation Answer: c Page: 21> "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

*2. %&en buyers simultaneously see( +uality improvements and cost reductions and t&ey develop collaborative relations&ips wit& ma4or suppliers and see( savings t&roug& better management o# ac+uisition, conversion, and disposal costs, t&is is re#erred to as ________. a. sellers orientation b. supply c&ain management orientation c. mar(et orientation d. procurement orientation e. buying orientation Answer: d Page: 21> "evel o# di##iculty: 3ard **. %&en t&e purc&asing role is #urt&er broadened to become a more strategic, value' adding operation, t&is is re#erred to as ________. a. supply c&ain management orientation b. buying orientation c. sellers orientation d. procurement orientation e. routine orientation Answer: a Page: 21> "evel o# di##iculty: )edium */. Peter Fral4ic distinguis&ed #our product'related purc&asing processes. %&ic& o# t&e #ollowing matc&es to products t&at &ave &ig& value and cost to t&e customer but involve little ris( o# supply because many companies ma(e t&em: a. =trategic products b. 0ottlenec( products c. "everage products d. <outine products e. .ommodity products Answer: c Page: 21! "evel o# di##iculty: 3ard *-. T&e products t&at &ave &ig& value and cost to t&e customer and also involve &ig& ris( Be.g., main#rame computersC are called ________. a. strategic products b. bottlenec( products c. leverage products d. routine products e. commodity products Answer: a Page: 21! "evel o# di##iculty: )edium

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.&apter ,: Analyzing 0usiness )ar(ets

*6. )ost purc&asing pro#essionals describe t&eir 4obs as more ________, tec&nical, team' oriented, and involving more responsibility t&an ever be#ore. a. ris(y b. strategic c. et&ically di##icult d. %eb'based e. &uman'based Answer: b Page: 21! "evel o# di##iculty: 3ard *,. <obinson and Associates &ave identi#ied eig&t stages and called t&em buyphases. T&is model is called t&e ________ #ramewor(. a. buygrid b. buyingGselling c. seller'centered d. commercial e. buy'analysis Answer: a Page: 21! "evel o# di##iculty: )edium *>. T&e #irst step Bbuyp&aseC in t&e straig&t rebuy buyclass is ________. a. problem recognition b. general need description c. product speci#ication d. supplier searc& e. proposal solicitation Answer: c Page: 22 "evel o# di##iculty: 3ard *!. A new tas( buyclass decision begins wit& w&ic& o# t&e #ollowing buyp&ases: a. Problem recognition b. 8eneral need description c. Product speci#ication d. =upplier searc& e. Proposal solicitation Answer: a Page: 22 "evel o# di##iculty: )edium / . 0usiness mar(eters can stimulate problem recognition by ________. a. trade directories b. direct mail, telemar(eting, and calling on prospects c. encouraging t&e 0etter 0usiness 0ureau to release statistics d. consumer advertising e. re+uesting testimonials #rom e?isting customers Answer: b Page: 221 "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

/1. %&en 3ewlett'Pac(ard sells suc& comple? products as a networ( computer system, it is engaging in w&at it calls t&e ________ concept because it o##ers in#ormation and speci#ic solutions to uni+ue problems. a. Hproduct speci#icationI b. Hprice de'escalationI c. Hsystems sellingI d. Htrusted advisorI e. Hstrategic allianceI Answer: d Page: 221 "evel o# di##iculty: )edium /2. 7.=. businesses spent about ________ on online transactions wit& ot&er businesses in 2 2 as compared to consumer online purc&ases o# E,1 billion during t&e same time period. a. E6- billion b. E- billion c. E/>2 billion d. E22- billion e. E-* billion Answer: c Page: 222 "evel o# di##iculty: 3ard /*. %it& respect to e'procurement, %eb sites are organized around two types o# e'&ubs: ________. a. vertical and &orizontal &ubs b. vertical and #unctional &ubs c. #unctional &ubs and organizational &ubs d. supplier and user &ubs e. manu#acturer and supplier &ubs Answer: b Page: 222 "evel o# di##iculty: 3ard //. %it& respect to e'procurement, .oca'.ola, =ara "ee, Fra#t, Pepsi.o, 8illette, PJ8, and several ot&er companies 4oined #orces to #orm a ________ called Transora to use t&eir combined leverage to obtain lower prices #or raw materials. a. manu#acturers co'op b. suppliers co'op c. middleman group d. buying alliance e. cabal Answer: d Page: 222 "evel o# di##iculty: )edium

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.&apter ,: Analyzing 0usiness )ar(ets

/-. 0usiness'to'business cyberbuying is #louris&ing on t&e 5nternet. =o #ar, most o# t&e products t&at businesses are buying electronically are ________, and travel and entertainment services. a. promotion services suc& as advertising b. 3< services Be.g., employee recruitmentC c. )<A materials Bmaintenance, repair, and operationsC d. #ood services e. mar(eting researc& services Answer: c Page: 22* "evel o# di##iculty: )edium /6. )oving into e'procurement &as many bene#its. %&ic& o# t&e #ollowing would not be among t&ose bene#its: a. Aggregating purc&asing across multiple departments gains larger volume discounts. b. Aggregating purc&asing across multiple departments gains centrally negotiated volume discounts. c. T&ere is less buying o# substandard goods #rom outside t&e approved list o# suppliers. d. A smaller purc&asing sta## is re+uired. e. Purc&asing gains a signi#icant leverage wit& top management because o# its management team. Answer: e Page: 22/ "evel o# di##iculty: 3ard /,. %it& respect to e'procurement commitment, in 2 * ________ was named number one in BtoB magazines annual ran(ing o# t&e top 0'to'0 %eb sites because o# its ability to generate sales Babout -- percent o# t&e companys total salesC and commitment to t&e process. a. .oca'.ola b. ;ell .omputers c. 3ewlett'Pac(ard d. .adillac e. 0oeing Answer: c Page: 22/ "evel o# di##iculty: 3ard />. 5n t&e proposal solicitation process, ________ s&ould be mar(eting documents t&at describe value and bene#its in customer terms. a. written proposals b. oral proposals c. e'proposals d. alliance proposals e. global proposals Answer: a Page: 22"evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

/!. 1ero? +uali#ies only suppliers w&o meet t&e 5=A ! +uality standards, but to win t&e companys top awardKcerti#ication statusKa supplier must #irst complete ________. a. government certi#ication b. an e?tensive et&ics statement evaluation c. t&e 1ero? )ultinational =upplier Duality =urvey d. a company training and indoctrination period e. a )alcolm 0aldridge Lational Duality Award entry #orm and t&en enter Answer: c Page: 22"evel o# di##iculty: )edium - . All o# t&e #ollowing are considered to be met&ods o# assessing customer value $1.$PT ________. a. direct survey +uestions b. e?it interviewing c. #ocus'group value assessment d. con4oint analysis e. benc&mar(s Answer: b Page: 226 "evel o# di##iculty: )edium -1. According to purc&asing pro#essionals, w&ic& o# t&e #ollowing is considered to be t&e ma4or responsibility o# t&e purc&asing agent in supplier negotiations: a. 9orming networ(s #or #uture business. b. Assuring +uality con#ormance. c. 0eing #air wit& all parties. d. To use a team approac& in negotiations. e. Legotiating price. Answer: e Page: 226 "evel o# di##iculty: 3ard -2. 5# an industrial buyer leases &eavy e+uipment li(e mac&inery and truc(s rat&er t&an purc&asing t&em, t&e lessee gains several advantages. %&ic& o# t&e #ollowing would LAT be among t&ose advantages: a. 3ig&er +uality products. b. .onserving capital. c. 8etting t&e latest products. d. <eceiving better service. e. =ome ta? advantages. Answer: a Page: 22, "evel o# di##iculty: 3ard -*. HAT59L$I is a term t&at summarizes t&ree desirable outcomes o# a 0'to'0 transaction: ATKdeliver on timeM 59Kin #ullM and, L$K________. a. no error b. no emergencies c. non'e?perimental d. new entrepreneurs e. need e+uipment Answer: a Page: 22, "evel o# di##iculty: $asy

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.&apter ,: Analyzing 0usiness )ar(ets

-/. .orporate credibility depends on t&ree #actors: corporate e?pertise, corporate trustwort&iness, and ________. a. corporate manpower b. corporate mission statement c. corporate li(eability d. corporate governance e. corporate management structure Answer: c Page: 22> "evel o# di##iculty: 3ard --. .annon and Perreault #ound t&at buyer'suppler relations&ips di##ered according to #our #actors. %&ic& o# t&e #ollowing would LAT be among t&ose #actors: a. 5mportance o# supply. b. .omple?ity o# supply. c. Availability o# alternatives. d. =upply mar(et dynamism. e. ;emand mar(et conservatism. Answer: e Page: 22! "evel o# di##iculty: )edium -6. According to .annon and Perreault, buyer'supplier relations&ips #all into eig&t di##erent categories. %&ic& o# t&e #ollowing relations&ips is c&aracterized as being one t&at &as muc& trust and commitment leading to a true partners&ip: a. )utually adaptive b. .ollaborative c. 0asic buying and selling d. .ustomer supply e. .ooperative systems Answer: b Page: 22! "evel o# di##iculty: )edium -,. 5n t&e ________ category o# .annon and Perreaults buyer'supplier relations&ip categorization, alt&oug& bonded by a close, cooperative relations&ip, t&e seller adapts to meet t&e customers needs wit&out e?pecting muc& adaptation or c&ange on t&e part o# t&e customer in e?c&ange. a. contractual transaction b. cooperative system c. collaborative d. mutually adaptive e. customer is (ing Answer: e Page: 22! "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

->. @ertical coordination can #acilitate stronger customer'seller ties but at t&e same time may increase t&e ris( to consumers and suppliers ________ Be.g., t&ose e?penditures tailored to a particular company and value c&ain partnerC. a. logistics c&annel b. independent operations c. speci#ic investments d. leverage ability e. li+uidity situation Answer: c Page: 2* "evel o# di##iculty: 3ard -!. T&e ________ mar(et consists o# sc&ools, &ospitals, nursing &omes, prisons, and ot&er institutions t&at must provide goods and services to people in t&eir care. a. vertical b. nonpro#it c. spot d. secondary business e. institutional Answer: e Page: 2* "evel o# di##iculty: )edium 6 . %it& purc&ases o# E2 billion annually in goods and services, ________ is t&e largest customer in t&e world. a. %al')art b. 8rainger c. t&e =tate o# .ali#ornia d. t&e 7.=. government e. "atin America Answer: d Page: 2*2 "evel o# di##iculty: )edium

True%&alse
61. %ebster and %ind de#ine organizational buying as t&e decision'ma(ing process by w&ic& #ormal organizations establis& t&e need #or purc&ased products and services and identi#y, evaluate, and c&oose among alternative brands and suppliers. Answer: True Page: 21 "evel o# di##iculty: $asy 62. T&e business mar(et is essentially t&e same t&ing as t&e consumer mar(et. Answer: 9alse Page: 21 "evel o# di##iculty: $asy 6*. T&e demand #or business goods is ultimately derived #rom t&e demand #or raw materials. Answer: 9alse Page: 211 "evel o# di##iculty: )edium 6/. T&e total demand #or many business goods and services is inelasticKt&at is, not muc& is a##ected by price c&anges. Answer: True Page: 211 "evel o# di##iculty: $asy

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.&apter ,: Analyzing 0usiness )ar(ets

6-. 5n t&e straig&t rebuy, Hout'suppliersI try to get a small order and t&en enlarge t&eir purc&ase s&are over time. Answer: True Page: 212 "evel o# di##iculty: $asy 66. Aver time, new'buy situations become straig&t rebuys and routine purc&ase be&avior. Answer: True Page: 21* "evel o# di##iculty: )edium 6,. )ost business buyers, pre#erring to spread t&eir ris(, re4ect w&at is called systems buying #rom one seller. Answer: 9alse Page: 21* "evel o# di##iculty: )edium 6>. Systems selling is a (ey industrial mar(eting strategy in bidding to build large'scale industrial pro4ects suc& as dams or pipelines. Answer: True Page: 21/ "evel o# di##iculty: )edium 6!. T&e buying center is w&ere consumers go to purc&ase t&eir goods and services. Answer: 9alse Page: 21/ "evel o# di##iculty: $asy , . Initiators are t&ose w&o aut&orize t&e proposed action o# deciders or buyers. Answer: 9alse Page: 21/ "evel o# di##iculty: )edium ,1. Users per#orm all seven roles in t&e buying center because o# t&eir direct tie to t&e product and w&at it is supposed to do. Answer: 9alse Page: 21/ "evel o# di##iculty: )edium ,2. T&e typical buying center &as a minimum o# two to t&ree people even t&oug& large companies may &ave more per#orming t&is #unction. Answer: 9alse Page: 21"evel o# di##iculty: 3ard ,*. %ebster cautions t&at ultimately, organizations not individuals ma(e purc&asing decisions. Answer: 9alse Page: 21"evel o# di##iculty: )edium ,/. 5n t&e business mar(et, small sellers concentrate on reac&ing as many participants as possible because t&eir c&ances o# success are slim. Answer: 9alse Page: 216 "evel o# di##iculty: )edium ,-. To gold'standard customers, a seller is wise to use w&at is called quality selling. Answer: True Page: 216 "evel o# di##iculty: )edium ,6. To e##ectively sell to price'oriented customers, a company is wise to use transactional selling. Answer: True Page: 216 "evel o# di##iculty: )edium

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Part *: .onnecting wit& .ustomers

,,. Ane o# t&e #orms o# solution selling is to provide solutions to en&ance customer revenues. Answer: True Page: 21, "evel o# di##iculty: )edium ,>. Today, purc&asing departments occupy a relatively low position in t&e management &ierarc&y and answer primarily to t&e vice'president o# mar(eting. Answer: 9alse Page: 21> "evel o# di##iculty: )edium ,!. 5# a companys purc&asing department #ocus is s&ort term and tactical, it is said to &ave a buying orientation. Answer: True Page: 21> "evel o# di##iculty: )edium > . %&en business buyers wor( simultaneously to see( +uality improvements and cost reductions, t&e business buyers are said to &ave a demand orientation. Answer: 9alse Page: 21> "evel o# di##iculty: )edium >1. A##ice supplies are good e?amples o# w&at are called bottleneck products. Answer: 9alse Page: 21! "evel o# di##iculty: $asy >2. Strategic products &ave &ig& value and cost to t&e customer and also involve &ig& ris(. Answer: True Page: 21! "evel o# di##iculty: )edium >*. According to t&e buygrid #ramewor( described in t&e te?t, a performance review completes t&e buygrid as a last step. Answer: True Page: 22 "evel o# di##iculty: )edium >/. T&e buying process begins w&en someone places an order wit& a sales representative. Answer: 9alse Page: 22 "evel o# di##iculty: $asy >-. Product value analysis BP@AC is an approac& to cost reduction in w&ic& components are studied to determine i# t&ey can be redesigned or standardized or made by c&eaper met&ods o# production. Answer: True Page: 222 "evel o# di##iculty: )edium >6. A buying alliance attempts to use t&eir combined leverage to obtain lower prices #or raw materials. Answer: True Page: 222 "evel o# di##iculty: )edium >,. 5n t&e business'to'business mar(et on t&e 5nternet, t&e ma4ority o# purc&ases #all under t&e category o# services Be.g., advertising, #inancial needs, et ceteraC. Answer: 9alse Page: 22* "evel o# di##iculty: 3ard >>. %it& respect to proposal solicitation in 020, sellers begin t&e process by re+uesting permission to ma(e a proposal rat&er t&an waiting #or t&e buyer to re+uest one. Answer: 9alse Page: 22"evel o# di##iculty: )edium

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.&apter ,: Analyzing 0usiness )ar(ets

>!. 5n general, buyers review t&e product and its price rat&er t&an any ot&er considerations about t&e seller as a buying decision is made. Answer: 9alse Page: 22"evel o# di##iculty: $asy ! . %it& respect to assessing customer value, in con4oint analysis customers are as(ed to ran( t&eir pre#erence #or alternative mar(et o##erings or concepts. Answer: True Page: 226 "evel o# di##iculty: )edium !1. T&e buying center &as many responsibilitiesM &owever, it does not negotiate wit& suppliers in order to avoid a con#lict o# interest. Answer: 9alse Page: 226 "evel o# di##iculty: )edium !2. HAT59L$I is t&e term t&at summarizes t&ree desirable outcomes o# a 0'to'0 transaction, stands #or: on time, in #ull, no error. Answer: True Page: 22, "evel o# di##iculty: )edium !*. )ost per#ormance reviews are conducted by outside auditing agencies to avoid bias and internal discrepancies. Answer: 9alse Page: 22, "evel o# di##iculty: )edium !/. .orporate credibility depends on: corporate e?pertise, corporate trustwort&iness, and corporate li(eability. Answer: True Page: 22> "evel o# di##iculty: )edium !-. Ane o# t&e problems #acing 020 on t&e %eb is t&at many #irms o#ten impose more stringent re+uirements on t&eir online business partners t&an t&ey do on non'online partners. Answer: True Page: 22> "evel o# di##iculty: )edium !6. Ane o# t&e eig&t categories o# buyer'seller relations&ips is t&e contractual transaction t&at generally s&ows low levels o# trust, cooperation, and interactionM e?c&ange is de#ined by #ormal contract. Answer: True Page: 22! "evel o# di##iculty: 3ard !,. 5n t&e Hcustomer is (ingI category o# buyer'seller relations&ip, t&e category is c&aracterized as being one t&at it relatively simple w&ere routine e?c&anges wit& moderately &ig& levels o# cooperation and in#ormation e?c&ange occurs. Answer: 9alse Page: 22! "evel o# di##iculty: 3ard !>. A good illustration o# a member o# t&e institutional mar(et would 0oeing because it is a member o# t&e aviation institution structure. Answer: 9alse Page: 2* "evel o# di##iculty: )edium !!. T&e 7nited =tates government is t&e largest customer in t&e world. Answer: True Page: 2*2 "evel o# di##iculty: $asy

1!1

Part *: .onnecting wit& .ustomers

. Today, almost all companies t&at sell to t&e 7.=. government use a mar(eting orientation because o# t&e special relations&ip re+uired. Answer: 9alse Page: 2** "evel o# di##iculty: )edium

Essay
1 1. 0usiness mar(ets &ave several c&aracteristics t&at contrast s&arply wit& t&ose o# consumer mar(ets. Lame and brie#ly c&aracterize #ive o# t&ose contrasts.

!uggeste' Ans(er: T&e c&aracteristics are: B1C #ewer, larger buyers, B2C close supplier'customer relations&ip, B*C pro#essional purc&asing, B/C several buying in#luences, B-C multiple sales calls, B6C derived demand, B,C inelastic demand, B>C #luctuating demand, B!C geograp&ically concentrated buyers, and B1 C direct purc&asing. =ee c&apter section #or brie# c&aracterizations. Pages: 21 2212 "evel o# di##iculty: )edium 1 2. 5llustrate t&e di##erences between a straig&t rebuy, modi#ied rebuy, and a new tas( purc&ase. !uggeste' Ans(er: 5n a straig&t rebuy, t&e purc&asing department reorders on a routine basis and c&oose #rom suppliers on an Happroved list.I 5n a modi#ied rebuy, t&e buyer wants to modi#y product speci#ications, prices, delivery re+uirements, or ot&er terms. "astly, in t&e new tas( purc&ase, a purc&aser buys a product or service #or t&e #irst time. 9or additional di##erences, see c&apter section. Page: 212 "evel o# di##iculty: $asy 1 *. "ist and brie#ly describe t&e seven roles played by members o# a buying center. !uggeste' Ans(er: T&e roles are: B1C initiators, B2C users, B*C in#luencers, B/C deciders, B-C approvers, B6C buyers, and B,C gate(eepers. 9or descriptions, see c&apter section. Pages: 21/221"evel o# di##iculty: 3ard 1 /. 5n de#ining target mar(et segments, #our types o# business customers can o#ten be identi#ied wit& corresponding mar(eting implications. "ist and brie#ly describe eac& o# t&ese business customers. !uggeste' Ans(er: T&e types are: B1C price'oriented customersKtransactional sellingKprice is everyt&ingM B2C solution'oriented customersKconsultative selling Kt&ey want low prices but will respond to arguments about lower total cost or more dependable supply or serviceM B*C gold'standard customersK+uality selling Kt&ey want t&e best per#ormance in terms o# product +uality, assistance, reliable delivery, and so onM and, B/C strategic'value customersKenterprise

1!2

.&apter ,: Analyzing 0usiness )ar(ets

sellingKt&ey want a #airly permanent sole'supplier relations&ip wit& your company. Page: 216 "evel o# di##iculty: 3ard 1 -. $?plain t&e concept o# solution selling. 8ive one e?ample o# t&is approac&. !uggeste' Ans(er: Solution selling approac&es buyers #rom a solutions'to' problems approac& rat&er t&an a product'purc&ase approac&. T&ree #orms include: B1C solutions to en&ance customer revenues, B2C solutions to decrease customer ris(s, and B*C solutions to reduce customer costs. =tudents may e?pound on any o# t&e above. 9or additional in#ormation, see c&apter section. Page: 21, "evel o# di##iculty: )edium 1 6. T&e upgrading o# purc&asing means t&at business mar(eters must upgrade t&eir sales personnel to matc& t&e &ig&er caliber o# t&e business buyers. "ist and brie#ly describe t&e t&ree company purc&asing orientations t&at buyers select #rom. !uggeste' Ans(er: T&e t&ree orientations are: B1C buying orientationKt&e purc&asers #ocus is s&ort term and tacticalM B2C procurement orientationKt&e buyers simultaneously see( +uality improvements and cost reductionsM and, B*C supply c&ain management orientationKpurc&asings role is broadened to become a more strategic, value'adding operation. 9or additional details, see t&e c&apter section. Page: 21> "evel o# di##iculty: 3ard 1 ,. Peter Fral4ic distinguis&ed #our product'related purc&asing processes. "ist and brie#ly describe eac& o# t&ese #our product groups. !uggeste' Ans(er: T&e groups are: B1C routine productsKt&ese products &ave low value and cost to t&e customer and involve little ris(M B2C leverage productsK t&ese products &ave &ig& value and cost to t&e customer but involve little ris( o# supply because many companies ma(e t&emM B*C strategic productsKt&ese products &ave &ig& value and cost to t&e customer and also involve &ig& ris(M and, B/C bottlenec( productsKt&ese products &ave low value and cost to t&e customer but t&ey involve some ris(. 9or additional details, see c&apter section. Page: 21! "evel o# di##iculty: 3ard 1 >. "ist t&e stages Bbuyp&asesC o# t&e industrial buying process. !uggeste' Ans(er: T&e ma4or stages in t&e industrial buying process include: B1C problem recognition, B2C general need description, B*C product speci#ication, B/C supplier searc&, B-C proposal solicitation, B6C supplier selection, B,C order'routine speci#ication, and B>C per#ormance review. Page: 22 "evel o# di##iculty: )edium

1!*

Part *: .onnecting wit& .ustomers

1 !. "ist and brie#ly c&aracterize #ive met&ods o# assessing customer value. !uggeste' Ans(er: T&ere are eig&t suggested met&ods #or assessing customer value. T&e students may list and describe any #ive o# t&e #ollowing: B1C internal engineering assessment, B2C #ield value'in use assessment, B*C #ocus'group value assessment, B/C direct survey +uestions, B-C con4oint analysis, B6C benc&mar(s, B,C compositional approac&, and B>C importance ratings. =ee c&apter section #or descriptions o# eac& assessment met&od. Page: 226 "evel o# di##iculty: 3ard 11 . .annon and Perreault #ound t&at buyer'supplier relations&ips di##ered according to #our #actors: availability o# alternativesM importance o# supplyM comple?ity o# supplyM and supply mar(et dynamism. 0ased on t&ese #our #actors, t&ey classi#ied buyer'supplier relations&ips into eig&t di##erent categories. %&at are t&ose categories: !uggeste' Ans(er: T&e categories are: B1C basic buying and selling, B2C bare bones, B*C contractual transaction, B/C customer supply, B-C cooperative systems, B6C collaborative, B,C mutually adaptive, and B>C customer is (ing. 9or additional in#ormation, see t&e speci#ic c&apter section. Page: 22! "evel o# di##iculty: 3ard

APPL"CAT"ON Q E!T"ON! Multiple Ch#i$e


111. 8erman so#tware company =AP &as become a leading seller to t&e business mar(et by specializing in so#tware to automate business #unctions. =APs ________ strategy is to #ocus care#ully on w&at customers want, and s&ows t&em &ow =APs so#tware applications can improve pro#its, raise revenue, or reduce costs. a. product b. service c. leaders&ip d. concentrated e. simplistic Answer: c Page: 2 ! "evel o# di##iculty: )edium

1!/

.&apter ,: Analyzing 0usiness )ar(ets

112.

T&e ________ mar(et consists o# all t&e organizations t&at ac+uire goods and services used in t&e production o# ot&er products or services t&at are sold, rented, or supplied to ot&ers. a. non'pro#it b. business c. &ardware d. so#tware e. government Answer: b Page: 21 "evel o# di##iculty: $asy 11*. 50) counts small to midsize businesses as 2 percent o# its business and &as launc&ed ________, a line o# &ardware, so#tware services, and #inancing, #or t&is mar(et. a. 5mpresario b. $?press c. ;atacount d. =mallbiz e. Ta?)an Answer: b Page: 21 "evel o# di##iculty: )edium )ore t&an &al# o# 7.=. business buyers are concentrated in seven states. %&ic& o# t&e #ollowing states %A7"; LAT be among t&ose #avored by business buyers: a. Te?as b. Lew Nor( c. .ali#ornia d. Pennsylvania e. A&io Answer: a Page: 211 "evel o# di##iculty: 3ard Oason <iggs company is considered to be an in'supplier #or a lawn mower manu#acturer. 3owever, recently t&e lawn mower company &as put out a memo to in' and out'suppliers indicating t&at it would li(e to modi#y product speci#ications and delivery sc&edules. %&ic& o# t&e #ollowing buying situations is most li(ely to be in operation given t&e data above: a. =traig&t rebuy b. $lastic rebuy c. 9luctuating rebuy d. 9latten rebuy e. )odi#ied rebuy Answer: e Page: 212 "evel o# di##iculty: )edium

11/.

11-.

1!-

Part *: .onnecting wit& .ustomers

116.

All o# t&e #ollowing are considered to be guidelines #or selling to small businesses $1.$PT ________. a. do not use t&e 5nternet b. do (eep it simple c. dont lump small and midsize businesses toget&er d. dont #orget about direct contact e. do provide a#ter t&e sale support Answer: a Page: 212 "evel o# di##iculty: )edium

11,.

9ord )otor .o. &as #orged supplier and manu#acturing relations&ips around t&e world. Today, an accurate description o# t&is automotive giant is one w&ere it is c&aracterized as being mainly a car ________. a. designer b. manu#acturer c. assembler d. distributor e. promoter Answer: c Page: 21/ "evel o# di##iculty: )edium 11>. 5# you decided to go into t&e systems contracting business, w&ic& o# t&e #ollowing categories would constitute your main area o# e?pertise in t&at t&is area would be w&at service you provide #or customers. a. .omputer applications b. ;atabase management c. )anu#acturing d. Promotion management e. )<A Bmaintenance, repair, operatingC supplies Answer: e Page: 21/ "evel o# di##iculty: 3ard T&in( about w&at you &ave learned about a buying center. 5# you per#ormed t&e role o# t&e ________, you would be t&e person t&at &as t&e power to prevent sellers or in#ormation #rom t&em in reac&ing ot&er members o# t&e buying center. a. initiator b. in#luencer c. decider d. gate(eeper e. approver Answer: d Page: 21"evel o# di##iculty: )edium

11!.

1!6

.&apter ,: Analyzing 0usiness )ar(ets

12 .

According to %ebster, wit& respect to buying center in#luences, senior managers s&ould remember t&at people are ________. a. not buying productsKt&ey are buying solutions to problems b. buying products t&at t&ey personally will not use c. buying surrogates t&at must appreciate t&at role d. are &uman s&opping bots e. limited in t&eir scope o# overall business operations Answer: a Page: 21"evel o# di##iculty: )edium .onsider yoursel# as an upper'level mar(eting e?ecutive a large seller o# #leet truc(s. %&ic& o# t&e #ollowing strategies would be most appropriate in reac&ing buying center targets: a. .oncentrate on (ey buying in#luencers. b. 7se multilevel in'dept& selling. c. 7se trade'based promotions. d. 0egin all sales e##orts wit& t&e secretarial support sta##. e. )ove all operations to t&e Let. Answer: b Page: 216 "evel o# di##iculty: 3ard 0illi4ean )on( tells &er supplier, HPrice is everyt&ingP 5 mean i# its not priced rig&t, 5 am out o# &ere #ast.I To succeed in selling to )s. )on(, w&ic& o# t&e #ollowing strategies would be most appropriate: a. .onsultative selling b. Duality selling c. $nterprise selling d. Transactional selling e. 3ig& pressure, &ig& ris( selling Answer: d Page: 216 "evel o# di##iculty: )edium T&e Tu?a? .ompany &as decided t&at &andling price'oriented buyers can be pro#itable under certain conditions. .onditions t&at would ma(e good sense #or Tu?a? .ompany would be all o# t&e #ollowing $1.$PT ________. a. limiting t&e +uantity t&at can be purc&ased b. no services c. no ad4ustments d. no re#unds e. no pac(aging or crating Answer: e Page: 216 "evel o# di##iculty: $asy

121.

122.

12*.

1!,

Part *: .onnecting wit& .ustomers

12/.

T&e new, more strategically oriented purc&asing departments &ave a mission to ________. a. always ma(e a pro#it b. always ta(e t&e lowest bid c. see( t&e best value #rom #ewer and better suppliers d. continue to see( outsourcing as t&eir primary strategy e. use consultants w&enever possible Answer: c Page: 21> "evel o# di##iculty: )edium 12-. 5# a buyer is using t&e buying tactic o# commoditization, &e or s&e &as a ________ as t&eir purc&asing orientation. a. buying orientation b. procurement orientation c. supply c&ain management orientation d. raw materials orientation e. simultaneous orientation Answer: a Page: 21> "evel o# di##iculty: 3ard 126. =pare parts are considered to be an e?ample o# a ________ product in t&at t&ey &ave a low value and cost to t&e customer but t&ey involve some ris( wit& respect to reliability. a. routine b. leverage c. strategic d. bottlenec( e. strangle'&old Answer: d Page: 21! "evel o# di##iculty: )edium 12,. %&ic& o# t&e #ollowing buyclasses uses t&e least number o# buyp&ases BstagesC in t&e industrial buying process: a. =traig&t rebuy b. )odi#ied rebuy c. Lew tas( d. 8lobal tas( e. <elational rebuy Answer: a Page: 21! "evel o# di##iculty: $asy

1!>

.&apter ,: Analyzing 0usiness )ar(ets

12>.

Oapan &as an e?tremely well organized organizational buying processM &owever, because o# its strategic bottlenec( position, t&e ________ is critical to t&e success o# any venture. a. mar(eting department b. production department c. delivery department d. accounting department e. inventory control department Answer: b Page: 22 "evel o# di##iculty: 3ard 12!. %&ic& o# t&e #ollowing met&ods #or assessing customer value would you consider to be appropriate i# you as(ed your customers to attac& a monetary value to eac& o# t&ree alternative levels o# a given attribute: T&ose values would t&en be added toget&er #or any o##er con#iguration. a. ;irect survey +uestions b. 5mportance ratings c. .ompositional approac& d. 0enc&mar(s e. .on4oint analysis Answer: c Page: 226 "evel o# di##iculty: )edium 1* . %it& respect to buyer'seller relations&ips, w&ic& o# t&e #ollowing categories would you believe to be t&e most appropriate description o# a situation w&ere t&ere was a traditional custom supply situation w&ere competition rat&er t&an cooperation was t&e dominant #orm o# governance: a. 0are bones b. .ontractual transaction c. .ollaborative d. .ustomer supply e. .ustomer is (ing Answer: d Page: 22! "evel o# di##iculty: )edium

!h#rt Ans(er
1*1. T&e business mar(et consists o# all t&e organizations t&at ac+uire goods and services used in t&e production o# ot&er products or services t&at are sold, rented, or supplied to ot&ers. %&at are t&e ma4or industries t&at ma(e up t&e business mar(et: !uggeste' Ans(er: T&e ma4or industries ma(ing up t&e business mar(et are agriculture, #orestry, and #is&eriesM miningM manu#acturingM constructionM transportationM communicationM public utilitiesM ban(ing, #inance, and insuranceM distributionM and services. Page: 21 "evel o# di##iculty: )edium

1!!

Part *: .onnecting wit& .ustomers

1*2.

;e#ine organizational buying. !uggeste' Ans(er: Arganizational buying is t&e decision'ma(ing process by w&ic& #ormal organizations establis& t&e need #or purc&ased products and services and identi#y, evaluate, and c&oose among alternative brands and suppliers. Page: 21 "evel o# di##iculty: $asy

1**.

$?plain &ow #luctuating demand impacts business mar(ets di##erently t&an consumer mar(ets. !uggeste' Ans(er: T&e demand #or business goods and services tends to be more volatile t&an t&e demand #or consumer goods and services. A given percentage increase in consumer demand can lead to a muc& larger percentage increase in t&e demand #or plant and e+uipment necessary to produce additional output. $conomists re#er to t&is as t&e acceleration effect. Page: 211 "evel o# di##iculty: )edium

1*/.

5# you were a purc&asing agent #acing a modi#ied rebuy situation, &ow would you describe t&at situation: !uggeste' Ans(er: T&e buyer wants to modi#y product speci#ications, prices, delivery re+uirements, or ot&er items. T&e modi#ied rebuy usually involves additional participants on bot& sides. Page: 212 "evel o# di##iculty: $asy

1*-.

5n systems buying, t&e 7.=. government o#ten solicits bids #rom primary contractors. %&at do primary contractors do: !uggeste' Ans(er: T&e government solicits bids #rom primary contractors w&o assemble t&e pac(age or system. T&e contractor w&o was awarded t&e contract would be responsible #or bidding out and assembling t&e systems subcomponents #rom second'tier contractors. T&us, t&e primary contractor would provide a turn(ey solution. Page: 21* "evel o# di##iculty: )edium

1*6.

=ystems selling is a (ey industrial mar(eting strategy in bidding to build large' scale industrial pro4ects. .ompetition #or t&ese pro4ects is #ierce. %&at are t&e main areas o# competition #or t&ese pro4ect engineering #irms: !uggeste' Ans(er: Primary competitive areas include: price, +uality, reliability, and ot&er attributes to win contracts. Page: 21/ "evel o# di##iculty: $asy

.&apter ,: Analyzing 0usiness )ar(ets

1*,.

%ebster and %ind call t&e decision'ma(ing unit o# a buying organization the buying center. %&at is t&e composition o# t&e buying center: !uggeste' Ans(er: 5t is composed o# Hall t&ose individuals and groups w&o participate in t&e purc&asing decision'ma(ing process, w&o s&are some common goals and t&e ris(s arising #rom t&e decisions.I T&e buying center includes all members o# t&e organization w&o play any o# seven roles in t&e purc&ase decision process. 0uying centers usually include several participants wit& di##ering interests, aut&ority, status, and persuasiveness. $ac& member o# t&e buying center is li(ely to give priority to very di##erent decision criteria. Page: 21/ "evel o# di##iculty: )edium

1*>.

Assume t&at you are buying center manager w&o &as decided to pursue a mar(et segment called t&e Hgold'standard customers.I %&at would be t&e best strategy to reac& t&ese customers: !uggeste' Ans(er: According to in#ormation #ound in t&e te?t, t&e manager s&ould use H+uality sellingI to reac& t&e gold'standard customer Be.g., t&ese customers want t&e best per#ormance in terms o# product +uality, assistance, reliable delivery, and so onC. Page: 216 "evel o# di##iculty: )edium

1*!.

Assume t&at you are a purc&asing manager t&at &as adopted a Hbuying orientationI in ma(ing t&is years purc&ases. %&at two tactics are o#ten used by purc&asing managers wit& t&is orientation: !uggeste' Ans(er: T&e two basic tactics are commoditization and multi' sourcing. Page: 21> "evel o# di##iculty: 3ard

1/ .

Peter Fral4ic distinguis&ed #our product'related purc&asing processes. %&ic& o# t&ese processes would be most appropriate #or a buyer o# main#rame computers: !uggeste' Ans(er: T&e most appropriate process would be one w&ere t&e product is considered to be a Hstrategic productI Be.g., t&ese products &ave &ig& value and cost to t&e customer and also involve &ig& ris(. Page: 21! "evel o# di##iculty: )edium

1/1.

$'procurement %eb sites are organized around two types o# e'&ubs. 5# you were in t&e advertising business and were see(ing to ta(e advantage o# e'procurement, w&at type o# e'&ub s&ould be constructed by your company: !uggeste' Ans(er: T&e two types o# &ubs are vertical &ubs Bcentered on industries suc& as plasticsC and #unctional &ubs Bcentered on #unctions suc& as advertisingC. T&ere#ore, you would construct a #unctional &ub. Page: 222 "evel o# di##iculty: )edium

2 1

Part *: .onnecting wit& .ustomers

1/2.

0usiness'to'business B020C cyberbuying &as become increasingly popular between purc&asing agents and buying centers. 3ow could Hpure playI auction sites be used to conduct cyberbuying: !uggeste' Ans(er: T&e most popular Hpure playI auction sites are e0ay and 9reemar(ets.com. An t&ese sites, buyers and sellers o# industrial parts, raw materials, commodities, and services can participate in auctions in many categories. T&ese sites &ave accounted #or over E/ billion wort& o# commerce since 1!!-. Page: 22* "evel o# di##iculty: $asy

1/*.

5n 2 *, 3ewlett'Pac(ard was named number one in BtoB magazines annual ran(ing o# t&e top 0'to'0 %eb sites. %&at does t&is %eb site allow companies to do t&at ma(es it wort&y o# t&e distinction mentioned: !uggeste' Ans(er: T&e site allows companies to create customized catalogs #or #re+uently purc&ased products, set up automatic approval routing #or orders, and conduct t&e end'to'end transaction processing. 9or additional in#ormation see t&e c&apter story on 3P. Page: 22/ "evel o# di##iculty: 3ard

1//.

Assume t&at you &ave been given t&e tas( o# assessing customer value at your organization. 9urt&er, you &ave been instructed to use t&e Hcompositional approac&I to ma(e t&is assessment. ;escribe w&at you would do i# you used t&e compositional approac& in assessing customer value. !uggeste' Ans(er: 5n t&e compositional approac&, customers are as(ed to attac& a monetary value to eac& o# t&ree alternative levels o# a given attribute. T&is is repeated #or ot&er attributes. T&e values are t&en added toget&er #or any o##er con#iguration. Page: 226 "evel o# di##iculty: 3ard

1/-.

5n t&e buygrid #ramewor( model w&ere t&e ma4or stages o# t&e industrial buying process are listed and c&aracterized, supplier selection is an important process. %&at #ollows supplier selection and w&at occurs in t&is p&ase: !uggeste' Ans(er: T&e step t&at #ollows supplier selection is order'routine speci#ication. A#ter selecting suppliers, t&e buyer negotiates t&e #inal order, listing t&e tec&nical speci#ications, t&e +uantity needed, t&e e?pected time o# delivery, return policies, warranties, and so on. Pages: 22 222, "evel o# di##iculty: )edium

2 2

.&apter ,: Analyzing 0usiness )ar(ets

1/6.

A customer tells a supplier t&at &e or s&e would li(e HAT59L$I as a desired outcome o# upcoming purc&ase transaction. %&at &as t&e customer indicated t&at &e or s&e wants by using t&is acronym: !uggeste' Ans(er: AT59L$ is a term t&at summarizes t&ree desirable outcomes to a 0'to'0 transaction: AT Q deliver on timeM 59 Q in #ullM and L$ Q no error. Page: 22, "evel o# di##iculty: )edium

1/,.

As a seller in t&e business mar(et, you &ave promised your customers t&at you &ave, as a corporate goal, corporate credibility. %&at t&ree #actors will &ave some bearing on w&et&er you will be able to meet your goal and promise: !uggeste' Ans(er: T&e t&ree #actors are: B1C corporate e?pertise, B2C corporate trustwort&iness, and B*C corporate li(eability. 5n ot&er words, a credible #irm is seen as being good at w&at it does, it (eeps its customers best interests in mind, and it is en4oyable to wor( wit&. Page: 22> "evel o# di##iculty: 3ard

1/>.

.annon and Perreault #ound t&at buyer'supplier relations&ips could be classi#ied into eig&t di##erent categories. %&at category would be appropriate #or a relations&ip w&ere, alt&oug& bonded by a close, cooperative relations&ip, t&e seller adapts to meet t&e customers needs wit&out e?pecting muc& adaptation or c&ange on t&e part o# t&e customer in e?c&ange: !uggeste' Ans(er: T&e appropriate category would be t&e Hcustomer is (ingI category. Page: 22! "evel o# di##iculty: 3ard

1/!.

Nour organization is considering selling its products to t&e institutional mar(et. %&at type o# customers will you be ma(ing your appeals to: 8ive speci#ic e?amples. !uggeste' Ans(er: T&e institutional mar(et consists o# sc&ools, &ospitals, nursing &omes, prisons, and ot&er institutions t&at must provide goods and services to people in t&eir care. Page: 2* "evel o# di##iculty: $asy

1- .

As a purc&asing manager, you &ave 4ust completed a large contract wit& t&e 7.=. government w&ere your company sold t&e government several Htec&'orientedI products and services. %&at t&ree tips would be appropriate to pass along to t&ose t&at would also li(e to tap into t&is large mar(et: !uggeste' Ans(er: According to t&e )ar(eting )emo #ound in t&e te?t, tips would include: B1C get in t&e 8overnment 5T .atalogM B2C wor( your way in Bma(e

2 *

Part *: .onnecting wit& .ustomers

sure contractors can #ind you, stay on top o# (ey contracts, and wor( t&e anglesC, and B*C networ( actively. Page: 2** "evel o# di##iculty: 3ard

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