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Marketing Management chapter 7 practice test

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Marketing Management
Chapter 7

Analyzing Business Markets


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All Cards 111

________ refers to the decision-making B


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

Page: 183

The ________ consists of all the organizations A


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

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B) consumer market
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C) e-commerce market
D) global market
E) domestic market

Page: 183

How can a marketer overcome the negative C


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

Page: 184

Which of the following is true for business C


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.

Page: 184

Which of the following is a challenge in C


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

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D) calculating better marketing performance


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and accountability metrics
E) competing and growing in global markets,
particularly China

Page: 184-185

Ultimately, the amount of steel sold to A


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

Page: 185

The demand for business goods is ultimately B


derived from the demand for ________.
A) raw materials
B) consumer goods
C) services
D) business solutions
E) e-commerce

Page: 185

A given percentage increase in consumer C


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

Page: 185

The total demand for many business goods E


and services is not much affected by price
changes. Thus, this demand is ________.
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A) derived
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B) fluctuating
C) accelerated
D) multiple
E) inelastic

Page: 185

The purchasing department buys office A


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

Page: 185

Sometimes a rise of only 10% in consumer C


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

Page: 185

Shoe manufacturers are not going to buy A


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

Page: 185

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Kenilworth Inc. is shifting from its rented


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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

Page: 186

In a ________ purchasing situation, the buyer D


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

Page: 186

The business buyer has to make the fewest C


decisions when involved in a ________.
A) modified rebuy
B) regular buy
C) straight rebuy
D) new rebuy
E) new task

Page: 186

Jason Riggs' company is considered to be an E


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

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E) modified rebuy
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Page: 186

Orica Inc. competes in the market for A


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

Page: 187

If you decided to go into the systems E


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

Page: 187

Many business buyers prefer to buy a total B


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

Page: 187

Xerox offers a ________ approach to C


prospective clients when it offers a complete
turnkey solution, including the operation and
management of the client's information and
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communication need.
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A) guided selling
B) fair trading
C) systems buying
D) cross-selling
E) local purchasing

Page: 187

If Ampex Support Systems is the single E


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

Page: 187

________ is a key industrial marketing strategy C


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

Page: 187

________ is composed of all parties who A


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

Page: 188

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In the purchasing decision process, the


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________ 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

Page: 188

In the purchasing decision process, the D


________ 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

Page: 188

In the purchasing decision process, the major B


role of ________ is in selecting vendors and
negotiating.
A) gatekeepers
B) buyers
C) initiators
D) approvers
E) deciders

Page: 188

If you performed the role of the ________ in a D


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

Page: 188

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When purchasing disposable surgical gowns, D Sign in


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

Page: 188

When purchasing disposable surgical gowns, C


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

Page: 188

In which of the following is a person C


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.
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C) Liam heads the Tech team at LKG and


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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.

Page: 188

In which of the following is a person E


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.

Page: 188

In which of the following is a person D


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

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deciders and buyers in LKG.


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Page: 188

Which of the following is true about the D


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.

Page: 188-189

Small sellers should first concentrate their C


marketing efforts on reaching ________.
A) approvers
B) initiators
C) influencers
D) users
E) initiators

Page: 193

If you were an upper-level marketing B


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.

Page: 193

________ occurs when customers are given a C


perspective or point of view that allows the
firm to "put its best foot forward."
A) Gatekeeping
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B) Commoditization
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C) Framing
D) Rebuying
E) Bartering

Page: 194

The new, more strategically oriented C


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.

Page: 194

Patrick J. Robinson and his associates have A


identified eight stages in the business
buying-decision process. This model is called
the ________ framework.
A) buygrid
B) buying/selling
C) seller-centered
D) commercial
E) buy-analysis

Page: 195

According to Patrick J. Robinson, the eight A


stages in the business buying-decision
process are known as ________.
A) buyphases
B) buybacks
C) buyouts
D) buyables
E) buyoffs

Page: 195

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Which of the following is a step in the


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straight rebuy buyclass?
A) problem recognition
B) general need description
C) product specification
D) supplier search
E) proposal solicitation

Page: 195

A new-task buyclass decision begins with D


which of the following steps?
A) supplier search
B) general need description
C) product specification
D) problem recognition
E) proposal solicitation

Page: 195

In reordering office supplies, the only stages E


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

Page: 195

The approach to cost reduction that studies B


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)

Page: 196

Business buyers may get new ideas at a trade A


show, see an ad, or receive a call from a sales
representative who offers a better product or
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a lower price compared to the current in-


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supplier. These situations spur the ________
stage.
A) problem recognition
B) general need description
C) order-routine specification
D) supplier search
E) performance review

Page: 196

Business marketers can stimulate problem B


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

Page: 196

With respect to e-procurement, Coca-Cola, D


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

Page: 197

Plastics.com allows plastics buyers to search D


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

Page: 197

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On an online ________ , prices change by the D Sign in


minute.
A) buying alliance
B) barter market
C) systems seller
D) spot market
E) catalog site

Page: 197

With respect to e-procurement, which of the B


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

Page: 197

Which of the following is an example of a D


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.

Page: 197

The ________ approach to consumer research B


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

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D) focus-group
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E) conjoint analysis

Page: 199

In the ________ method for assessing C


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

Page: 199

Robert Jennings consultants help farmers A


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

Page: 200

A supplier signs an agreement with a E


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

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E) risk and gain sharing


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Page: 200

GM employees work at large customer E


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

Page: 200

Through its dedicated research team, CISCO D


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

Page: 200

Praxair Limited is a supplier of synthetic B


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)

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E) Product Value Analysis (PVA)


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Page: 201

Which of the following methods is most C


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

Page: 201

A ________ establishes a long-term A


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

Page: 201

In the ________ category of buyer-supplier D


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

Page: 202

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Which of the following relationships is B Sign in


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

Page: 202

The partners in ________ systems are united in B


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

Page: 202

Value Central has a partnership of high trust C


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

Page: 202

The relationship between a company and its D


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

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D) customer supply
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E) customer is king

Page: 202

In the ________ category of buyer-supplier E


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

Page: 203

According to research studies, the closest A


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

Page: 203

The type of buyer-supplier relationship in B


which buyers and sellers make many
relationship-specific 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

Page: 203

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________ investments are those expenditures


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tailored to a particular company and value
chain partner.
A) Diversified
B) Pooled
C) Specific
D) Umbrella
E) General

Page: 203-204

Which of the following is a form of cheating C


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

Page: 204

The ________ market consists of schools, E


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

Page: 205

In most countries, ________ are the major B


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

Page: 206

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Organizational buying is the decision-making true Sign in


process by which formal organizations
establish the need for purchased products
and services and identify, evaluate, and
choose among alternative brands and
suppliers.

Page: 183

The business market consists of all the true


organizations that acquire goods and
services used in the production of other
products or services that are sold, rented, or
supplied to others.

Page: 183

Commoditization strengthens customer false


loyalty.

Page: 184

The business market is essentially the same false


market as the consumer market.

Page: 184

Business buyers often select suppliers who true


also buy from them.

Page: 184

The business marketer normally deals with true


far fewer, much larger buyers than the
consumer marketer does.

Page: 184

An increase in the demand for plant and false


equipment can lead to a much larger
increase in consumer demand. This is known
as the acceleration effect.

Page: 185

false
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The demand for business goods is ultimately


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derived from the demand for raw materials.

Page: 185

The total demand for many business goods true


and services is inelastic that is, not much
affected by price changes.

Page: 185

In the straight rebuy, "out-suppliers" try to true


get a small order and then enlarge their
purchase share over time.

Page: 185

The buyer in a straight rebuy usually changes false


product specifications, prices, delivery
requirements, or other terms.

Page: 186

The business buyer makes the fewest true


decisions in the straight rebuy situation and
the most in
the new-task situation.

Page: 186

Most business buyers reject what is called false


systems buying from one seller.

Page: 187

Systems selling is a key industrial marketing true


strategy in bidding to build large-scale
industrial projects such as dams or pipelines.

Page: 187

Sellers benefit from systems contracting true


through lower operating costs as a result of
steady demand and reduced paperwork.

Page: 187

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The buying center is where consumers go to false Sign in


purchase their goods and services.

Page: 188

With respect to the buying center, approvers false


are people who have the power to prevent
sellers or information from reaching
members of the buying center.

Page: 188

Initiators are those who authorize the false


proposed action of deciders or buyers.

Page: 188

Influencers influence the buying decision by true


helping define specifications and providing
information for evaluating alternatives.

Page: 188

In the buying center, several people can true


occupy a given role such as user or
influencer, and one person may play multiple
roles.

Page: 188

Small sellers concentrate on multilevel in- false


depth selling instead of reaching the key
buying influencers.

Page: 193

In the business market, small sellers false


concentrate on reaching as many
participants as possible because their
chances of success are slim.

Page: 193

Framing occurs when customers are given a true


perspective or point of view that allows the
firm to "put its best foot forward."
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Sign in
Page: 194

A performance review is the first step in the false


buygrid framework.

Page: 195

The buying process begins when someone false


places an order with a sales representative.

Page: 196

Product value analysis is an approach to false


efficiency that studies whether components
can be redesigned or made by more efficient
methods of production without adversely
impacting product performance.

Page: 196

On spot electronic markets, prices of true


products or commodities change by the
minute.

Page: 197

In buying alliances, participants offer to trade false


goods or services.

Page: 197

With respect to assessing customer value, in true


conjoint analysis customers are asked to rank
their preference for alternative market
offerings or concepts.

Page: 199

One of the forms of solution selling is to true


provide solutions to enhance customer
revenues.

Page: 200

true

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Risk and gain sharing can offset price


Sign in
reductions that customers request.

Page: 200

Companies are increasingly reducing the true


number of suppliers they utilize, and there is
a trend toward single sourcing.

Page: 201

Most performance reviews are conducted by false


outside auditing agencies to avoid bias and
internal discrepancies.

Page: 201

In buyer-seller relationships, the contractual true


transaction generally shows low levels of
trust, cooperation, and interaction.

Page: 202

Corporate credibility depends on corporate true


expertise, corporate trustworthiness, and
corporate likability.

Page: 203

One of the problems facing B2B on the Web true


is that many firms often impose more
stringent requirements on their online
business partners than they do on non-
online partners.

Page: 203

The "customer is king" category of buyer- false


seller relationship is relatively simple, and
one in which routine exchanges with
moderately high levels of cooperation and
information exchange occur.

Page: 203

false

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Contracts are always sufficient to govern


Sign in
supplier transactions and prevent supplier
opportunism.

Page: 204

A good illustration of a member of the false


institutional market would be Boeing
because it is a member of the aviation
institution structure.

Page: 205

The U.S. government is the largest customer true


in the world.

Page: 206

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