31. Because retailers have to be concerned with product selection

31. Because retailers have to be concerned with product selection, price, and space, they often
evaluate products on the basis of
a) their markup.
b) sales per square foot of selling area.
c) how many of the product they can fit in a certain amount of space.
d) profit per dollar of selling price.
e) the reliability of the supplier.
32. Which type of business market tends to have the most complex buying procedures?
a) Reseller
b) Institutional
c) Retailer
d) Government
e) Producer
33. The recently created Department of Homeland Defense is a member of the _____ market.
a) regulatory
b) reseller
c) government
d) producer
e) institutional
34. The state of Montana is preparing to buy a large quantity of frozen orange juice for use in a
large school district. Citrus Sweet, Inc. is in the citrus juice business but has never sold to the
government market. To have a chance at getting this order, Citrus Sweet’s first step must be to get
her firm to
a) make a presentation appointment with the state.
b) quote prices to the purchasing department.
c) advertise in the capital city.
d) negotiate with the state.
e) secure a slot on the list of qualified bidders.
35. About what percentage of the annual U.S. gross domestic product is government spending?
a) 2 percent
b) 10 percent
c) 20 percent
d) 30 percent
e) 50 percent
36. A friend of yours starts his own business. He would like to expand his client base to include
the government, but he believes his small business would be ignored. Based on your knowledge
from the text, you tell him
a) that he’s absolutely right, the government doesn’t deal with small businesses.
b) although the government will deal with small businesses, he will never make a profit off a
government contract.
c) that any government, federal, state, or local would laugh at the size of his business.
d) the government rarely considers new suppliers when making purchasing decisions.
e) the government buys products from all sizes of business, but there is some red tape.
37. The government decides to purchase a new fleet of fighter jets for the U.S. Air Force. What
type of buying procedure is the government most likely to use?
a) The government will request bids from all companies on its qualified bidder list.
b) It will contact whatever company made the last jets and have them develop the new ones.
c) Ads will be placed in the top five circulated U.S. newspapers for a company to produce the
jets.
d) The government will select a few firms and enter into negotiations with them until the
contract is awarded.
e) The contract will go to the first company that submits a reasonable bid for the desired jets.
38. Pi Delta Mu sorority purchases food in bulk to feed its members living in the house. This
means it is part of a(n) ___________ market.
a) producer
b) consumer
c) reseller
d) institutional
e) government
39. Churches, charitable organizations, and private colleges are considered _____ buyers.
a) corporate
b) government
c) institutional
d) producer
e) nonprofit
40. Institutional markets are
a) intermediaries who resell goods to make a profit.
b) federal and state government units.
c) state or local government units.
d) consumers who buy products for their own use.
e) organizations that seek nonbusiness goals.
41. Which of the following would be considered an institutional buyer?
a) The University of Illinois
b) The Environmental Protection Agency
c) Apple Computers
d) The United Way
e) City of Greenville
41. What are the two ways governments make purchases?
a) Cash or credit
b) Contracting previous suppliers and bids
c) Bids and negotiated contracts
d) Lottery system and contract negotiations
e) Request for new purchases and recurring orders
43. What is a primary difference between business and consumer buyers?
a) Consumer buyers require more product information than business buyers.
b) Business purchases are made by one individual whereas families make consumer purchases
together.
c) Repeat sales are more common with consumer buyers than business buyers.
d) Consumers primarily buy inexpensive items; businesses only buy expensive items.
e) Business buyers generally make larger orders than consumer buyers.
44. Bob Denton of Denton Pest Control buys equipment from a supplier because that supplier
hires him to spray the warehouse for insects periodically. This practice is known as
a) cost-benefit analysis.
b) cooperative selling.
c) reciprocity.
d) supplier agreement.
e) modified rebuy purchase.
45. A disadvantage of reciprocity is that it can lead to
a) a price war.
b) higher promotional costs.
c) more competitive firms entering the industry.
d) less-than-optimal purchases for the buyer.
e) longer periods of negotiation.
46. A practice in which two businesses agree to buy from each other is
a) a new task purchase.
b) a straight rebuy.
c) a modified rebuy.
d) reciprocity.
e) a straight purchase.
47. Which of the following statements about business buying is false?
a) Business marketers prefer not to sell to customers who place small orders.
b) Business marketers must often sell their products in large quantities to make profits.
c) Most business purchases are made by committee.
d) Business purchases are usually made on the basis of contracts.
e) Orders in business markets tend to be smaller than those placed in consumer markets.
48. Many suppliers and their customers invest time and resources to build and maintain
mutually beneficial relationships which are often called
a) partnerships.
b) co-ops.
c) monopolies.
d) reciprocity.
e) alliances.
49. Raython Hardware and Thames Industrial Supplier have worked closely for many years and
have a mutually beneficial relationship in which Raython provides all of Thames’s hardware needs in
a timely manner. Raython and Thames’s relationship could be best characterized as a(n)
a) reciprocity agreement.
b) partnership.
c) intra-organizational group.
d) alliance.
e) tying arrangement.
50. Which of the following is true with respect to buyers in business markets?
a) Business buyers always act rationally when making purchases for their company.
b) Business customers tend to be less informed about the products they purchase than
consumer buyers.
c) Business customers demand detailed information about a product’s quality, features, or
technical specifications.
d) Business customers are no different than buyers in consumer markets.
e) Business customers tend to buy products from their friends and contacts with business
suppliers.
51. When buying materials, the purchasing agent for Alco Pillow Manufacturing Company
considers a variety of factors. Which one of the following is least likely to concern this buyer?
a) Does the quality of the goods meet company specifications?
b) Does the supplier consistently deliver on time?
c) Does the supplier also sell to my competitors?
d) Does the supplier offer the services required?
e) Does the price meet company budget requirements?
52. Product specifications are
a) physical characteristics and level of quality.
b) types of services that are provided with the product.
c) financing available for the product.
d) types of competitors offering similar products.
e) product return policies.
53. Most businesses try to control the level of quality in the parts they buy from suppliers. Most
firms develop standards for _____ in order to achieve their quality goals.
a) how many different suppliers they use
b) how many parts can fail
c) controlling when shipments will arrive
d) the percentage of defects allowed
e) how long the parts should last
54. All of the following are important concerns of business customers except
a) achieving a specific level of quality in the products offered to target markets.
b) obtaining a level of quality that meets specifications.
c) obtaining products that exceed specifications to ensure the best possible product
performance.
d) obtaining products for which the quality level is consistent.
e) supporting customers with services they expect.
55. Volkswagen purchases upholstery for the interiors of its vehicles from various suppliers. This
upholstery must have a set of characteristics that is expressed by Volkswagen. This set is called
a) descriptions.
b) product features.
c) criterion.
d) purchase requests.
e) specifications.
56. Management at Readyfresh Dry Cleaners is concerned that it maintains a high level of
service for its business accounts. How should the firm monitor the level of service these customers
receive?
a) Develop a code of service.
b) Set service objectives.
c) Formally survey customers.
d) Specify service uniformity.
e) Stress truthfulness with employees.
57. Johnson’s Industrial Pest Control Service wants to meet its customers’ expectations with
regard to the quality of service it provides. How should Johnson’s identify these expectations?
a) Conduct market research.
b) Use management judgment.
c) Trace existing service levels.
d) Stress quality service with employees.
e) Train employees better.
58. A Pillsbury mill in Utah buys grain from growers in the western region. The purchasing agent
for Pillsbury will most likely use which buying method?
a) Description
b) Inspection
c) Sampling
d) Negotiation
e) Selection
59. Collin Roberts of Roberts Construction is planning to buy a piece of used earth-moving
equipment. He would most likely base his purchase decision on ___________ of the alternative
machines.
a) descriptions
b) inspections
c) a sampling
d) specifications
e) reputations
60. Which method of business buying is most likely to be used when the products being
purchased are standardized based on certain characteristics?
a) Homogeneous selection
b) Inspection
c) Description
d) Sampling
e) Negotiation

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