Question 1

In the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase share over time.

Accepted Answer

In a straight rebuy situation, "out-suppliers" (suppliers not currently doing business with the purchasing company) often attempt to secure a small initial order with the goal of gradually increasing their share of purchases over time by demonstrating their reliability, quality, or cost advantages.

Question 2

Most business buyers, preferring to spread their risk, reject what is called systems buying from one seller.

Accepted Answer

Systems buying, where a buyer purchases a complete solution from one seller rather than components from multiple sellers, is often preferred by business buyers for its convenience and the potential for better integration and cost savings, rather than rejecting it to spread risk.

Question 3

The typical buying centre has a minimum of two to three people even though large companies may have more performing this function.

Accepted Answer

The answer of The typical buying centre has a minimum...

Question 4

The demand for business goods is ultimately derived from the demand for raw materials.

Accepted Answer

The demand for business goods is ultimately derived from the demand for consumer goods, not directly from the demand for raw materials.

Question 5

The business market is essentially the same thing as the consumer market.

Accepted Answer

The business market involves selling goods and services to other businesses, whereas the consumer market involves selling to individuals. These two markets have different needs, behaviors, and decision-making processes.

Question 6

Several companies buying the same goods can join together to form purchasing consortia to gain deeper discounts on volumn purchases.

Accepted Answer

True, this is a common practice in procurement where companies join forces to increase their purchasing power and negotiate better deals with suppliers.

Question 7

Some companies handle price-oriented buys by setting a lower price but establishing restrictive conditions.

Accepted Answer

This practice is common among companies that aim to attract price-sensitive customers while maintaining their profit margins. Examples of restrictive conditions include limited product warranty, lower quality materials, or shorter delivery times.

Question 8

Users perform all seven roles in the buying centre because of their direct tie to the product and what it is supposed to do.

Accepted Answer

The buying center typically consists of multiple individuals performing different roles such as users, influencers, buyers, deciders, gatekeepers, and more, rather than a single individual performing all roles.

Question 9

Webster cautions that ultimately, organizations not individuals make purchasing decisions.

Accepted Answer

Organizations are made up of individuals who are the decision-makers; therefore, individuals within organizations do make purchasing decisions, often based on their roles, responsibilities, and influence within the organization.

Question 10

In barter markets, participants offer to trade goods or services.

Accepted Answer

In barter markets, participants exchange goods or services without the use of money.

Question 11

In the business market, small sellers concentrate on reaching as many participants as possible because their chances of success are slim.

Accepted Answer

In the business market, small sellers often focus on niche markets or specific segments where they can meet unique needs or offer specialized products or services, rather than trying to reach as many participants as possible. This strategy allows them to compete more effectively by differentiating themselves.

Question 12

The buying centre is where consumers go to purchase their goods and services.

Accepted Answer

The buying center refers to the group of individuals within an organization who are involved in the process of making a purchasing decision, not a physical location where consumers buy goods and services.

Question 13

Webster and Wind define organizational buying as the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Accepted Answer

Webster and Wind's definition of organizational buying includes the decision-making process of formal organizations in establishing needs, evaluating alternatives, and choosing brands and suppliers.

Question 14

Today, purchasing departments occupy a relatively low position in the management hierarchy and answer primarily to the vice-president of marketing.

Accepted Answer

Purchasing departments typically report to the chief financial officer or chief operating officer, not the vice-president of marketing.

Question 15

Some multinationals have even elevated purchasing departments to "strategic supply departments" with responsibility for global sourcing and partnering.

Accepted Answer

This statement describes a trend in some multinational companies to rebrand and elevate their purchasing departments to include more strategic responsibilities, such as global sourcing and partnering.

Question 16

At Caterpillar, purchasing, inventory control, production scheduling, and traffic have been combined into one department.

Accepted Answer

The statement mentions that these four functions have been combined into one department at Caterpillar.

Question 17

Over time, new-buy situations become straight rebuys and routine purchase behaviour.

Accepted Answer

This is true because as consumers become more familiar with a product or service, they often develop loyalty and habitually repurchase without considering other options. Therefore, what was initially a new-buy situation becomes a routine purchase.

Question 18

Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams or pipelines.

Accepted Answer

Systems selling is a widely used industrial marketing strategy for bidding on large-scale projects such as dams or pipelines. It involves providing a comprehensive solution that includes system design, engineering, procurement, construction, and commissioning. This approach helps ensure that all components and subsystems work seamlessly together, and it minimizes the risks associated with managing multiple contractors and vendors.

Question 19

The total demand for many business goods and services is inelasticthat is, not much is affected by price changes.

Accepted Answer

Inelastic demand means that the quantity demanded does not change significantly in response to price changes. This is often the case for business goods and services as they are often essential for business operations and cannot easily be substituted.

Question 20

Initiators are those who authorize the proposed action of deciders or buyers.

Accepted Answer

Initiators are the ones who first suggest or think of the idea of purchasing a particular product or service, not those who authorize the proposed action.

Quiz 7: Analyzing Business Markets