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MKT 300 – CH 6

In marketing, business and organizational customers are distinct from:
Final consumers are individual shoppers. In contrast,
business and organizational buyers are made up of
government units, intermediaries, manufacturing and service companies, and nonprofit organizations. Business and organizational customers are any buyers who buy for resale or to produce other goods and services.
Which of the following statements accurately compares marketing to final consumers with
marketing to organizational customers?
Organizations typically focus on economic factors when they
make purchase decisions and are usually less emotional in
their buying than final consumers.
Which of the following is not a concern of organizational buyers?
Organizational buyers are concerned with meeting a range of economic needs, from the cost and quality of products to the seller’s ability to provide maintenance and repair. In business markets, organizational buyers do not bid for suppliers; instead, suppliers offer bids to provide goods and services to organizational buyers.
Concerning consumer and business markets:
Like final consumers, organizations make purchases to
satisfy needs. But it’s often easier to understand an
organization’s needs because most organizations make
purchases for the same basic reason.
As compared to final consumers, organizations
It is often easier to understand an organization’s needs
because most organizations make purchases for the same
basic reason. They buy goods and services that will help
them meet the demand for the goods and services that they
in turn supply to their markets.
If a firm targets business and organizational markets,
Small differences in buying behavior may be important
because success often hinges on fine-tuning the marketing
mix. Hence, each customer may need to be treated as a
different segment.
Purchasing specifications
When quality is highly standardized, as is often the case with manufactured items, the specification may simply consist of a brand name or part number.
Which of the following buying methods would a supermarket buyer be MOST LIKELY to use in the
purchase of grade A large eggs?
The supermarket buyer is specific about purchasing grade A large eggs. So, he is most likely to buy through purchasing specifications.
Which of the following products would be bought using purchasing specifications?
All of these are highly standardized products and can be
bought using simple purchase specifications.
Which of the following buying methods would a purchasing manager be most likely to use on the
Internet?
A purchasing manager is most likely to use purchasing
specifications to buy on the Internet.
Which of the following statements about ISO 9000 is NOT TRUE?
ISO 9000 assures a customer that the supplier has effective
quality checks in place, without the customer having to
conduct its own costly and time-consuming audit.
Of the many people involved in making an organizational purchase, the one with the most power
is usually the:
Deciders are the people in the organization who have the
power to select or approve the supplier—often a purchasing
manager but perhaps top management for larger purchases.
After conducting a vendor analysis on potential suppliers, purchasing managers are likely to
choose the vendor that:
The purpose of a vendor analysis isn’t just to get a low price from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases as may be achieved through greater efficiencies. For example, analysis might show that the best vendor is the one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts.
Smart tips for selling to business customers include all the following except:
Marketers must be very careful to abide by strict ethics,
especially as it relates to gifts. Purchasing managers seek to avoid a conflict between their own self? interest and
company outcomes, and many firms have policies against
employees accepting any gift from a supplier.
. _____ are responsible for working with suppliers and arranging the terms of sale.
Buyers are responsible for working with suppliers and
arranging the terms of sale.
During the purchase of janitorial services for a new building, Teresa has responsibility for working
with suppliers and arranging the terms of the sale. In this role, Teresa appears to be acting as
Buyers are responsible for working with suppliers and
arranging the terms of sale. In this role, Teresa appears to
be acting as a buyer.
Natalie Simopoulos, director of procurement at Grecian Glass Company must approve every
purchase order, and Anthony Markatos, purchasing manager, must authorize any sales rep who
wants to talk to a Grecian Glass employee. Natalie and Anthony are acting as _____ and _____,
respectively.
Deciders are the people in the organization who have the
power to select or approve the supplier and gatekeepers are
people who control the flow of information within the
organization. Natalie and Anthony are acting as decider and
gatekeeper, respectively.
A _____ refers to all of the people who participate in or influence a purchase.
A buying center includes all the people who participate in or influence a purchase. Different people may make up a
buying center from one decision to the next.
A “buying center”
A “buying center” may vary from purchase to purchase as
different people make up a buying center from one decision to the next
When a salesperson calls on a new business prospect,
When a salesperson calls on a new business prospect, he
has to move through a proper channel, normally meeting
each member of the buying center at different stages.
. Regarding organizational buying,
With centralized buying in large organizations, a sales rep
may be able to sell to facilities all over a country; many large
organizations rely on purchasing managers; a geographically
bound salesperson can be at a real disadvantage as specific
business customs vary from one country to another.
Vendor analysis is a(n)
Vendor analysis is a formal rating of suppliers on all relevant areas of performance.
Vendor analysis
In trying to deal with complexities arising while making
purchase decisions many firms use vendor analysis—a
formal rating of suppliers on all relevant areas of
performance. The purpose isn’t just to get a low price from the supplier but also to lower the total costs associated with purchases.

The purpose of vendor analysis isn’t just to get a low price
from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases.

Regarding selling to organizational buyers,
Purchasing managers and others involved in buying
decisions look forward to friendly relationships with
suppliers. Hence, it becomes imperative for a sales person
to balance a purchasing manager’s emotional needs and
economic needs.
A typical purchasing manager:
A typical purchasing manager tries to satisfy both individual
needs and company needs. A seller’s marketing mix should
therefore satisfy both the needs of the customer company as
well as the needs of individuals who influence the purchase.
Most purchasing managers:
Most purchasing managers make purchases from suppliers
who deliver on time and with high-quality and keep the total
costs associated with purchases low.
Organizational buyers:
Organizational buyers are problem solvers.
A requisition
A requisition is a request to buy something
All of the following are true of requisitions except
The process of turning an authorization into a purchase
order may take a few hours for a simple purchase but, for a complex purchase, it may take months.
Sometimes suppliers take straight rebuy relationships for granted, which can:
Marketers sometimes get lazy enjoying an automated
straight rebuy situation. As a result, straight rebuy
relationships open the door for savvy competitors move in
with a better marketing mix.
A buyer who has not purchased from a vendor in the past is MOST LIKELY to buy from that
vendor when there is:
New-task buying situations provide a good opportunity for a new supplier to make in roads with a customer.
Sweets Galore, the manufacturer of Rainbow brand lollipops, decided to expand into
manufacturing liqueur-filled chocolate truffles. Its buying process for the chocolates, liqueurs, and
molds was extensive, and included setting product specifications and evaluating sources of supply.
This is an example of a
New-task buying occurs when a customer organization has a
new need and wants a great deal of information. New-task
buying can involve setting product specifications and
evaluating sources of supply.
Definitely Scrumptious Co., a cookie manufacturer, decides to expand into cake manufacturing. It
begins the buying process for cake molds, toppings, and icing equipment by setting product
specifications and evaluating sources of supply. This is an example of a
New-task buying occurs when a customer organization has a
new need and wants a great deal of information. New-task
buying can involve setting product specifications and
evaluating sources of supply.
A vendor is MOST likely to make a sale if the buyer has bought from the vendor before and is
doing:
A vendor is most likely to sell to the buyer who has bought
from the vendor before and is doing a straight rebuy as it
would be a routine repurchase.
A vendor is LEAST LIKELY to make a sale if the buyer has not bought from the vendor before
and is doing:
A vendor is least likely to sell to the buyer who has not
bought from the vendor before and is doing a straight rebuy
as it is a routine repurchase and there is no reason for the
buyer to seek new information or new sources of supply
A straight rebuy
A straight rebuy is a routine repurchase that may have been made many times before.
Percy Malik, purchasing agent for Black Mountain Chemical Industries, routinely signs purchase
orders for office supplies without further consideration. At Black Mountain, purchases of office
supplies are
Percy Malik routinely signs purchase orders for office
supplies. So, it is a straight rebuy. A straight rebuy is a
routine repurchase that may have been made many times
before.
Home Sweet Home Co. manufactures and sells handmade wooden furniture. Its manager
routinely orders 50 cartons of Supreme Furniture Polish and 10 bottles of Ultra Sheen Varnish from
the same vendor. This is an example of a
This is an example of a straight rebuy as the manager
makes routine repurchases. A straight rebuy is a routine
repurchase that may have been made many times before.
Circle Z Tires is a retailer of car tires. Unless the store manager requests something different,
every month there is an automatic order of 10 XZ Performance Tires and 12 J-1 wheels from Box Tire
Supply. This is an example of a
This is an example of a straight rebuy as there is a routine
order made. A straight rebuy is a routine repurchase that
may have been made many times before.
. A purchase having some multiple influence and requiring some information would fit the
description of a
Modified rebuy is the in-between process where some
review of the buying situation is done though not as much as
in new-task buying.
Whitewater Corp. is looking for a new vendor for basic plastics because the present vendor has
been inconsistent about meeting delivery schedules. Which of the following buying processes is the
firm’s purchasing agent MOST LIKELY to use?
Whitewater Corp. already has the purchase specifications
and only needs to look for a new supplier of basic plastics.
So, the firm’s purchasing agent is most likely to use modified
rebuying.
Which dimension of buyer-seller relationships most significantly increases the risk that proprietary
knowledge or trade secrets may leak to competitors or the public?
Some relationships involve open sharing of information,
whether by discussions between personnel or through
information systems connected via the Internet-a key facet of B2B e-commerce. However, firms resist sharing information if there’s a risk that a partner might misuse it.
The method by which suppliers provide deliveries to organizations precisely when the buyer
needs them (“just in time”) involves this dimension of buyer-seller relationships:
By establishing operational linkages with suppliers,
organizations can receive material precisely on time. This
technique can reduce total inventory costs, maintain
adequate inventory levels, and keep production lines
moving.
Suppliers to business markets often
Suppliers to business markets often share information on
industry trends with the customer, provide just-in-time
delivery, serve as technical consultants to their customers,
and agree to negotiated contract buying.
Operational linkages are
Operational linkages are direct ties between the internal
operations of the buyer and seller firms.
_____ refers to reliably getting products there exactly before the customer needs them.
Just-in-time delivery means reliably getting products there
just before the customer needs them.
Creative Electronics has an idea for a new MP3 accessory. Now it is looking for a supplier to
design and manufacture the product. It will most likely use ______________ buying
Creative Electronics only has an idea for a new MP3
accessory and not a detailed description of it. So, it is most
likely to use negotiated contract buying. Negotiated contract
buying means agreeing to contracts that allow for changes in
the purchase arrangements.
Chu’s Coating Services, a painting company, designs a set of four paint colors that will only be
used by custom motorcycle maker Walker County Choppers. This decision is an example of
Chu’s Coating Services is providing customized services to
Walker County Choppers, which is a relationship-specific
adaptation. Relationship-specific adaptations involve
changes in a firm’s product or procedures that are unique to
the needs or capabilities of a relationship partner.
Specific adaptations are usually required when a buyer chooses _____, which is a contract with
an external firm to produce goods or services rather than the buyer producing them internally.
Specific adaptations are usually made when the buying
organization chooses to outsource—contract with an outside
firm to produce goods or services rather than to produce
them internally
Which of the following is not a key variable that marketers need to consider when developing
marketing mixes for manufacturers?
To help develop effective marketing mixes, marketers should
pay close attention to the size, geographic locations, buying
procedures, and types of manufacturers.
When referencing NAICS codes, marketers should know that:
NAICS codes help categorize all types of businesses and
begin by listing general industry categories, which are
marked by two-digit codes. Subcategories of those top-level
groupings then receive codes of three or more digits,
signifying greater detail about the products and services
offered by firms.
Which of the following tips would help marketers find new B2B clients that are similar to clients
they already serve?
Marketers can find firms that are similar to current
B2B-market clients by looking up current customers’ NAICS
codes and then studying NAICS-coded lists for related firms.
Which of the following statements about manufacturers is true?
Internationally, industrial customers are concentrated in
countries that are at the more advanced stages of economic
development.
U.S. business manufacturing markets tend to be concentrated:
U.S. business manufacturing markets tend to be
concentrated by industry type, industry size, and
geographical location.
“NAICS” means:
NAICS stands for North American Industry Classification
System.
Which of the following NAICS codes would be used by a marketing manager who wanted data on
the MOST GENERAL breakdown of a particular industry?
A marketing manager looking for data on the most general
breakdown of a particular industry should follow the NAICS
codes with the least number of digits. The NAICS code
breakdowns become more detailed as the number of digits
in the code increase.
Which of the following NAICS codes would be used by a marketing manager who wanted data
that was the MOST SPECIFIC to a particular type of firm within an industry?
The NAICS code breakdowns become more detailed and
specific as the number of digits in the code increase.
Which of the following statements about purchasing by small service firms is NOT TRUE?
Purchases by small service firms are often handled by
whoever is in charge or their administrative assistant. This
may be a doctor, lawyer, owner of a local insurance agency,
hotel manager, or their secretary or office manager.
Which of these statements regarding manufacturing and service firms is true?
Manufacturing and service firms alike use e-commerce for
purchasing.
With regard to retail buying:
Decisions to add or drop lines or change buying policies may
be handled by a buying committee.
When a large wholesaler or retailer uses a buying committee,
When a large wholesaler or retailer uses a buying
committee, the seller may not get to present her story to the
buying committee in person.
Committee buying in large retail chains
When large retail chains use a buying committee, the seller
may not get to present her story to the buying committee in
person. This approach certainly reduces the impact of a
persuasive salesperson
In large retail firms
Most large firms use computer systems to control inventory
levels. The automated control systems create daily reports
showing sales of every product which can be used to assess
the profitability of each product.
. With regard to government buying
Often the government buyer must accept the lowest bid that
meets the specifications. A contract can be landed without
the lowest bid when lower bids don’t meet minimum or
requested specifications. Government buyers in the United
States are expected to spend money wisely, so their
purchases are usually subject to much public review.
All of the following are true of government markets except
Government is the largest customer group in many but not
all countries.
Regarding U.S. government market buying,
The government unit simply places an order at a previously
approved price. To share in this business, a supplier must be
on the list of approved suppliers and agree on a price that
will stay the same for a specific period—perhaps a year.
In selling to government units, a supplier should do each of the following EXCEPT:
Potential suppliers should focus on targeted government
units; they should monitor websites where government
contracts are advertised; make sure their marketing mixes
are well matched with the different bid procedures; and get
permission from the government in its own country when
they want to sell to a foreign government.
The Foreign Corrupt Practices Act:
The Foreign Corrupt Practices Act, passed by the U.S.
Congress in 1977, prohibits U.S. firms from paying bribes to
foreign officials. The law was amended in 1988 to allow
small grease money payments if they are customary in a
local culture. Since 1998, the law applies to foreign firms or
foreign individuals who accept payments while in the United
States.

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