Chapter 4

c. Derived demand is a market demand for a good or service that results from a demand for a related good or service.

a. A B2B (or “business-to-business”) transaction is one that is conducted between one business and another.

c. B2B purchasing is more likely to involve complex negotiations concerning price, delivery schedules, technical specifications, etc., so personal selling plays a vital role.

c. The B2B market is more geographically concentrated in areas based on cost, access, and availability of resources.

d. DaVonte’s purchase of the lumber in connection with his business is a B2B transaction; the purchase of batteries for the smoke detector in his house is a B2C transaction.

c. Government markets make up the largest single business and organizational market in the United States.

a. A straight rebuy is making a routine purchase of a standard product or products with no modifications from a familiar supplier.

c. In a modified rebuy, the purchaser is buying goods that have been purchased previously but changes either the supplier or certain elements of the previous order.

c. The initiator is the individual within the buying center who first suggests the idea of purchasing a new product or service.

d. Buyers are those who have authority within the organization to select suppliers and negotiate and arrange the purchase terms.

c. The goals and objectives act as a major element as to what the business purchases.

a. Legal factors include laws, rules, and regulations with which a business or individual must comply.

d. Conditional factors include the present financial condition of the organization, as well as product/service availability.

b. Economic factors include the level of primary demand, the economic outlook, and the cost of money (i.e., interest rates).

d. The availability of the product or service plays a significant role in the buying decision, and availability is a conditional factor.

c. The purpose of a product specification is to provide a description and statement of the requirements of a product, the components of a product, the capability or performance of a product, and/or the service or work to be performed to create a product.

d. Stage 5 of the B2B buying process is proposal solicitation, in which qualified vendors are asked to submit proposals.

b. In Stage 2: Need description, the buying center will work to put some parameters around what needs to be purchased and develop a bill of materials.

d. In Stage 7: Order-routine specification, the B2B buyer negotiates the order, listing the technical specifications, the quantity needed, the expected time of delivery, etc.

a. Similar to consumer buying, the first stage in the B2B buying decision process occurs when someone identifies a problem that can be resolved through a purchase.