question

Business to business marketing

answer

The process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers

question

B2B marketing involves who?

answer

Manufacturers, wholesalers, retailers, and service firms that market goods and services to other businesses but not to the ultimate consumer

question

What is the distinction between B2B and B2C?

answer

Distinction between a b2b and b2c transaction is not the product or service itself; rather it is the ultimate purchaser and user of that product or service

question

Manufacturers?

answer

Manufacturers buy raw materials, components, and parts that allow them to manufacture their own goods

question

Resellers

answer

Marketing intermediaries that resell manufactured products without significantly altering their form

question

Government

answer

In most countries, the central government tends to be one of the largest purchasers of goods and services

question

What are the key challenges of reaching B2B clients?

answer

For marketers to be effective and successful at B2B marketing, they must master 3 key challenges for each business customer they want to serve

question

What are the 3 challenges?

answer

First challenge is to identify the right persons or decision makers within the organizations who can authorize or influence purchases. Second marketers must understand the buying process of each potential client. Third challenge is to identify the factors that influence the buying process of potential clients

question

What are the differences between B2B and B2C markets?

answer

Market characteristics, product characteristics, buying process characteristics, marketing mix characteristics

question

Derived Demand

answer

The linkage between consumers' demand for a company's output and its purchase of necessary inputs to manufacture or assemble that particular output

question

Characteristics of B2B buying as compared with B2C buying

answer

Market Characteristics, Product characteristics, buying process characteristics, marketing mix characteristics

question

Market Characteristics

answer

Demand for business products is derived, fluctuates more and more frequently, fewer customers more geographically concentrated and orders are larger, demand is more inelastic

question

Product Characteristics

answer

Products are technical in nature and purchased based on specifications, mainly raw and semifinished goods are purchased, heavy emphasis is placed on delivery time technical assistance after sale service and financing assistance

question

Buying Process Characteristics

answer

Buying decision is more complex; buying may involve competitive bidding, negotiated pricing, and complex financial arrangements, buying involves qualified, professional buyers who follow a more formalized buying process; buying criteria and objective are specified, as are procedures for evaluating and selecting vendors and products; multiple people with varied interests participate in purchase decisions; reciprocal arrangements exist, and negotiations between buyers and sellers are common; buyers and sellers usually work closely to build close long-term relationships; online buying over the internet is common

question

Marketing Mix Characteristics

answer

Direct selling is the primary form of selling and physical distribution is often essential, advertising is technical in nature, and promotions emphasize personal selling, price is often negotiated inelastic, frequently affected by trade and quantity discounts. Price usually includes a service or maintenance component

question

Step 1: Need Recognition

answer

In the first stage of the B2B buying process, the buying organization recognizes through either internal or external sources, that it has an unfilled needs

question

Step 2: Product Specification

answer

Product specification is determining the specific products the company needs to fulfill their needs

question

Step 3: RFP process

answer

Request for proposals, is a process through which buying organizations invite alternative suppliers to bid on supplying their required components

question

Step 4: Proposal Analysis and Supplier Selection

answer

Buying organization with its critical decision makers, evaluates all the proposals it receives in response to its RFP

question

Step 5: Order Specification(Purchase)

answer

The firm places its order with its preferred supplier(or suppliers). The order will include a detailed description of the goods, prices, delivery dates, and in some cases, penalties if the order is not filled on time

question

Step 6: Vendor Performance assessment using metrics

answer

Firms analyze their vendors performance so they can make decisions about their future purchases. The difference is that in a B2B setting, this analysis is typically more formal and objective

question

The buying centre

answer

The group of people typically responsible for the buying decisions in large organizations

question

What 3 factors may influence the six stage B2B buying process?

answer

The buying centre, the buying organization's philosophy or corporate culture and the buying situations

question

The buying centre roles

answer

The influencer(person whose views influence other members), decider(the person who ultimately determines any part of the buying decision), buyer(the person who handles the paperwork of the actual purchase), user(person who consumes or uses the product or service), gatekeeper(person who controls information or access), initiator(first suggests buying the particular product or service)

question

Organizational culture

answer

Reflects the set of values, traditions, and customs that guides a firm's employees' behaviour

question

Autocratic Buying Centre

answer

A buying centre in which one person makes the decision alone, though there may be multiple participants

question

Democratic Buying

answer

A buying centre in which the majority rules in making decisions

question

Consultative Buying Centre

answer

A buying centre in which one person makes the decisions, but he or she solicits input from others before doing so

question

Consensus Buying Centre

answer

A buying centre in which all members of the team must reach a collective agreement that they can support a particular purchase

question

What are the type of buying situations?

answer

New buys, modified rebuys and straight rebuys

question

New buy

answer

in a B2B setting a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item

question

Modified rebuy

answer

Refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, and options

question

Straight rebuy

answer

Refers to when the buyer or buying organization simply buys additional units of products that had previously been purchased

Chapter 5: Business-to-Business Marketing – Flashcards

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