MKT 320F Chapter 6 – Flashcards
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The organizational consumer market is often referred to as the ________________ or _________________
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industrial market; the business-to-business (B2B) market
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four main categories for business and organizational customers
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producers, intermediaries, government units, nonprofit organizations
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Business products 1) 2) 3) 4) 5) 6)
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1) used to manufacture other products 2) become part of another product 3) aid normal operations of organization 4) acquired for resale without change in form 5) purchased for use in business 6) size of market exceeds that of the consumer market
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Business vs. Consumer Markets # of customers advantages/disadvantages
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business marketers have fewer customers than consumer markets advantage: easier to identify buyers, monitor customer needs, build personal relationships disadvantage: each customer becomes crucial, especially for those manufacturers who have only one customer
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Business vs. Consumer Markets location of buyers
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business customers are more geographically concentrated than consumers
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Business vs. Consumer Markets distribution structure
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business products have shorter channels of distribution consumer products pass through a distribution system that may include the producer, wholesaler, and retailer
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Business vs. Consumer Markets nature of buying
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more people are involved in a business market purchase decision then in a consumer purchase
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Business vs. Consumer Markets influence
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more people are involved in a single business purchase decision than in a consumer purchase
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Business vs. Consumer Markets type of negotiations
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more common in business; may take months to work out final contracts
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Business vs. Consumer Markets use of reciprocity
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business purchasers often choose to buy from their own customers
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Business vs. Consumer Markets use of leasing
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businesses commonly lease expensive equipment to reduce capital outflow, keep state of the products, and gain tax advantages
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Business vs. Consumer Markets primary promotional method
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business marketers emphasize personal selling, especially for expensive custom-designed products
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Demand in Business Markets Demand is... 1) 2) 3) 4)
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1) derived 2) inelastic 3) joint 4) fluctuating
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Demand in Business Markets derived =
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demand for business products results from demand for consumer products
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Demand in Business Markets inelastic =
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a change in price will not significantly affect the demand for the product
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Demand in Business Markets joint =
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multiple items are used together in making the final product; demand for one item affects all
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Demand in Business Markets fluctuating =
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demand for business products is more volatile than for consumer products thus requiring more planning and exacting detail
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Types of Business Products major equipment
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capital goods such as large or expensive machines, mainframe computers, airplanes, and buildings
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Types of Business Products accessory equipment
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less expensive and shorter-lived than major equipment, includes fax machines, personal computers, and power tools
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Types of Business Products raw materials
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unprocessed products, such as minerals, timber, wheat, corn, and fish
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Types of Business Products component parts
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finished items ready for assembly or than need very little processing
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Types of Business Products processed materials
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used directly in manufacturing other products, includes sheet metals, chemicals, and lumber
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Types of Business Products supplies
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consumable items that do not become part of the final product
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Types of Business Products business services
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expense items that do not become part of the final product
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objective of BB&T
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help small business
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organizational buyers often concentrate on _____ ______________ in making purchases
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quality cetifications
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a way for a supplier to document its quality procedures according to internationally recognized standards
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ISO 9000
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written or electronic descriptions of what the firm wants to buy
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purchasing specifiations
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Lands End Video Kinds of purchases
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straight rebuy, modified rebuy, new task purchases
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Lands End Video buying criteria
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economic, quality and service, vendor
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Multiple Buying Influence 1) 2) 3) 4) 5)
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1) buyers 2) users 3) influencers 4) gatekeepers 5) deciders
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Multiple Buying Influence buyers
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purchasing managers who are responsible for working with suppliers and arranging for the terms of the sale
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Multiple Buying Influence users
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people who will actually use the product
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Multiple Buying Influence influencers
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people whose expertise is used to help determine which products are needed
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Multiple Buying Influence gatekeepers
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people in key positions in the organization who control the flow of information
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Multiple Buying Influence deciders
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people in the organization who have the power to select or approve the supplier
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Evaluating Organizational Buying Influences 1) 2) 3) 4)
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1) Vendor Analysis considers all influences 2) behavioral needs are important too 3) ethical conflicts may arise 4) purchasing may be centralized
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vendor analysis
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a formal rating of suppliers on all relevant areas of performance
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requisition
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a request to buy something
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buying situations 1) 2) 3)
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1) new buy 2) modified rebuy 3) straight rebuy
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buying situations new buy
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a situation requiring the purchase of a product for the first time
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buying situations modified rebuy
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a situation where the purchaser wants some change in the original good or service
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buying situations straight rebuy
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a situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers
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kinds of buying process 1) 2) 3)
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1) new-task buying 2) straight rebuy 3) modified rebuy
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kinds of buying process new-task buying
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occurs when a customer organization has a new need and wants a great deal of information
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kinds of buying process straight rebuy
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a routine repurchase that uses existing suppliers to fill a standard order
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kinds of buying process modified rebuy
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in-between process buying process is done but not as much s in a new-task buy
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new task buy
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when a user becomes aware of a need and beings researching solutions
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close relationships may produce mutual benefits 1) 2) 3)
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1) mutual trust 2) long-term outlook 3) share tasks at lower total cost
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close relationships may not make sense 1) 2) 3)
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1) reduced flexibility 2) some purchases are too small or infrequent 3) some purchases require much special attention
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both the supplier and the buyer benefit when they can _____ ___________
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share information
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There may be an imbalance of power favoring one of the partners a powerful customer may _____________ buyers may use _______ ________ to reduce their risk buying variations by ___________ ____
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control the relationship; several sources; customer type
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The Government Market 1) the ____ and _______ of the government market make it an attractive target 2) Government buyers are retrained by purchasing ______________, and ____________ _____ may be required 3) for routine purchases, a government unit can prepare an _________ _________ _____ 4) Government __________ help marketers to learn what to government wants to buy 5) in dealing with ________ _____________, information is less available, and there may be significant obstacles that favor a __________ supplier
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size, diversity; regulations, competitive bids; approved supplier list; publications; foreign governments, domestic
