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IM Part 3: Exam Questions: MC, TF, SA, Essay

Chapter 1—A Business Marketing Perspective


MULTIPLE CHOICE

1. The business market consists of the following three components:
a. commercial enterprises, resellers, and government.
b. manufacturers, institutions, and defense.
c. manufacturers, service organizations, and government.
d. commercial enterprises, service organizations, and government.
e. commercial enterprises, institutions, and government.


ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Marketing Plan | R&D Knowledge of general business
functions

2. Concerning manufacturing customers, the business market is:
a. concentrated by size.
b. geographically concentrated.
c. experiencing declining growth in many large metropolitan areas.
d. all of the above.
e. (a) and (b) only.


ANS: E PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Marketing Plan | R&D Knowledge of general business
functions

3. Based on the volume of their purchases, _____ are the most important commercial customers in the
business or industrial market.
a. construction companies
b. manufacturers
c. transportation companies
d. service firms (e.g., hotels)
e. health care facilities


ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Marketing Plan | R&D Knowledge of general business
function
4. Market­driven firms demonstrate:
a. the coordinated use of interfunctional resources (for example, research and development,
manufacturing).
b. a set of values and beliefs among employees that places the customer's interests first.
c. the ability to generate, disseminate, and productively use superior information about
customers and competitors.
d. all of the above.
e. (b) and (c) only.
ANS: D PTS: 1

, NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

5. Market­driven firms spot market changes and react well in advance of their competitors. This
illustrates:
a. the customer­linking capability of market­driven firms.
b. the value proposition of market­driven firms.
c. the market­sensing capability of market­driven firms.
d. the value of using direct channels of distribution in the business market.
e. both (b) and (c).
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

6. The particular skills, abilities, and processes that an organization has developed to manage close
customer relationships are referred to as:
a. the customer­linking capability.
b. channel management.
c. derived demand.
d. the market­sensing capability.
e. the extended enterprise.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Managing decision­making
processes

7. The ability of an organization to quickly recognize changes in its market and to anticipate customer
responses to marketing programs is referred to as:
a. market research capability.
b. customer­linking capability.
c. competitive intelligence.
d. market­sensing capability.
e. derived demand.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Customer | R&D Managing decision­making
processes

8. Motorola reduced the price of the electronic engine control that it sells to Ford by 10 percent and
experienced a 15 percent increase in quantity demanded. This suggests that Ford’s price elasticity of
demand is:
a. elastic.
b. inelastic.
c. neither elastic nor inelastic.
d. insensitive to price changes.
e. none of the above.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Pricing | R&D Knowledge of general business
functions

9. Dayco increased the price of the drive belts that it sells to General Motors by 5 percent and sales of the
item grew by 9 percent. Price elasticity of demand for drive belts appears to be:
a. elastic.

, b. inelastic.
c. neither elastic nor inelastic.
d. sensitive to price changes.
e. none of the above.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Pricing | R&D Knowledge of general business
functions

10. A diverse array of organizations make up the business market. These organizations can be broadly
classified as:
a. commercial enterprises, governmental organizations, and institutions.
b. commercial enterprises, users, and governmental units.
c. commercial enterprises, users, and original equipment manufacturers.
d. producers and resellers of industrial products or services.
e. upstream suppliers, users, and governmental units.
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

11. When purchasing a high speed packaging machine, General Foods would be classified as:
a. an original equipment manufacturer.
b. a user.
c. a distributor.
d. a dealer.
e. an institutional buyer.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

12. Concerning the chain of suppliers involved in the creation of a Honda automobile, which of the
following fall within the business marketing domain?
a. Honda purchasing power steering components from direct suppliers.
b. Direct suppliers of power steering systems purchasing sheet metal from upstream
suppliers.
c. Organizations purchasing Honda automobiles for their fleets.
d. all of the above.
e. (a) and (b) only.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Distribution | R&D Knowledge of general
business functions

13. Which of the following transactions fall into the business marketing domain?
a. Ford purchasing machine tools for their plants from Cincinnati Milacron.
b. Ford selling their automobiles to the fleet manager at Cincinnati Milacron for use by the
sales force.
c. Ford purchasing power­steering systems from Motorola for use in a particular model.
d. all of the above.
e. (a) and (c) only.
ANS: D PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Distribution | R&D Knowledge of general

, business functions

14. When purchasing machine tools for their plants, American Honda is:
a. an original equipment manufacturer.
b. a user.
c. a distributor.
d. an institutional buyer.
e. an upstream supplier.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

15. Concerning the classification of customers in the business market, General Motors is a(n) ____ when
purchasing a mainframe computer system from IBM, but is a(n) ____ when purchasing tires from
Goodyear.
a. user; original equipment manufacturer (OEM)
b. user; distributor
c. original equipment manufacturer (OEM); user
d. user; upstream supplier
e. original equipment manufacturer (OEM); downstream supplier
ANS: A PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

16. As an industrial customer, Ford Motor Company would be classified as:
a. a user.
b. an original equipment manufacturer (OEM).
c. a user in purchasing some products, an OEM in purchasing other products.
d. a producer of facilitating goods.
ANS: C PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

17. When purchasing microprocessors from Intel Corporation to be incorporated into Dell's line of
personal computers, IBM would be classified as:
a. a user.
b. an original equipment manufacturer (OEM).
c. an institutional buyer.
d. a dealer.
e. a distributor.
ANS: B PTS: 1
NAT: AACSB Reflective Thinking | CB&E Model Strategy | R&D Knowledge of general business
functions

18. When purchasing manufacturing equipment from General Electric, Chrysler would be classified as:
a. a user.
b. an original equipment manufacturer (OEM).
c. an institutional buyer.
d. a dealer.
e. a distributor.