general business data bank

1. U.S. businesses spent about ________ on online transactions with other businesses in 2002 as compared to consumer online purchases of $71 billion during the same time period.

a. $650 billion

b. $500 billion

c. $482 billion

d. $225 billion

e. $53 billion

2. With respect to e-procurement, Web sites are organized around two types of e-hubs: ________.

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

3. With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, Gillette, 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. cabal

4. Business-to-business cyberbuying is flourishing on the Internet. So far, most of the products that businesses are buying electronically are ________, and travel and entertainment services.

a. promotion services such as advertising

b. HR services (e.g., employee recruitment)

c. MRO materials (maintenance, repair, and operations)

d. food services

e. marketing research services

5. Moving into e-procurement has many benefits. Which of the following would not be among those benefits?

a. Aggregating purchasing across multiple departments gains larger volume discounts.

b. Aggregating purchasing across multiple departments gains centrally negotiated volume discounts.

c. There is less buying of substandard goods from outside the approved list of suppliers.

d. A smaller purchasing staff is required.

e. Purchasing gains a significant leverage with top management because of its management team.

6. With respect to e-procurement commitment, in 2003 ________ was named number one in BtoBmagazine’s annual ranking of the top B-to-B Web sites because of its ability to generate sales (about 55 percent of the company’s total sales) and commitment to the process.

a. Coca-Cola

b. Dell Computers

c. Hewlett-Packard

d. Cadillac

e. Boeing

7. In the proposal solicitation process, ________ should be marketing documents that describe value and benefits in customer terms.

a. written proposals

b. oral proposals

c. e-proposals

d. alliance proposals

e. global proposals

8. Xerox qualifies only suppliers who meet the ISO 9000 quality standards, but to win the company’s top award—certification status—a supplier must first complete ________.

a. government certification

b. an extensive ethics statement evaluation

c. the Xerox Multinational Supplier Quality Survey

d. a company training and indoctrination period

e. a Malcolm Baldridge National Quality Award entry form and then enter

9. All of the following are considered to be methods of assessing customer value EXCEPT ________.

a. direct survey questions

b. exit interviewing

c. focus-group value assessment

d. conjoint analysis

e. benchmarks

10. According to purchasing professionals, which of the following is considered to be the major responsibility of the purchasing agent in supplier negotiations?

a. Forming networks for future business.

b. Assuring quality conformance.

c. Being fair with all parties.

d. To use a team approach in negotiations.

e. Negotiating price.

11. If an industrial buyer leases heavy equipment like machinery and trucks rather than purchasing them, the lessee gains several advantages. Which of the following would NOT be among those advantages?

a. Higher quality products.

b. Conserving capital.

c. Getting the latest products.

d. Receiving better service.

e. Some tax advantages.

12. “OTIFNE” is a term that summarizes three desirable outcomes of a B-to-B transaction: OT—deliver on time; IF—in full; and, NE—________.

a. no error

b. no emergencies

c. non-experimental

d. new entrepreneurs

e. need equipment

13. Corporate credibility depends on three factors: corporate expertise, corporate trustworthiness, and ________.

a. corporate manpower

b. corporate mission statement

c. corporate likeability

d. corporate governance

e. corporate management structure

14. Cannon and Perreault found that buyer-suppler relationships differed according to four factors. Which of the following would NOT be among those factors?

a. Importance of supply.

b. Complexity of supply.

c. Availability of alternatives.

d. Supply market dynamism.

e. Demand market conservatism.

15. According to Cannon and Perreault, buyer-supplier relationships fall into eight different categories. Which of the following relationships is characterized as being one that has 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

16. In the ________ category of Cannon and Perreault’s buyer-supplier relationship categorization, 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

17. Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to consumer’s and supplier’s ________ (e.g., those expenditures tailored to a particular company and value chain partner).

a. logistics channel

b. independent operations

c. specific investments

d. leverage ability

e. liquidity situation

18. The ________ market consists of schools, 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

19. With purchases of $200 billion annually in goods and services, ________ is the largest customer in the world.

a. Wal-Mart

b. Grainger

c. the State of California

d. the U.S. government

e. Latin America

20. 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.

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

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

23. The total demand for many business goods and services is inelastic—that is, not much is affected by price changes.

Answer: True

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

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

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

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

28. The buying centeris where consumers go to purchase their goods and services.

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

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

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

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

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

75. To gold-standard customers, a seller is wise to use what is called quality selling.

76. To effectively sell to price-oriented customers, a company is wise to use transactional selling.

77. One of the forms of solution selling is to provide solutions to enhance customer revenues.Answer: True

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

79. If a company’s purchasing department focus is short term and tactical, it is said to have a buying orientation.

80. When business buyers work simultaneously to seek quality improvements and cost reductions, the business buyers are said to have a demand orientation.