MKTG 3010 Test#1: Chapter 6 Business Markets and Business Buyer Behavior – Flashcards
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objectives
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1) business markets 2) business buyer behavior 3) the business buying process (BBP) 4) institutional markets and government markets
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business buyer behavior
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the buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others
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business buying process
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the decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands
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business markets different than consumer market
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large in size, far more dollars and items than in consumer markets; include many sets of business products
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business markets similar to consumer markets
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both involve people who assume buying roles and make purchase decisions to satisfy needs
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main differences btwn business markets and consumer markets
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1) market structure and demand 2) nature of the buying unit 3) types of decisions and the decision process
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market structure & demand
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-derived demand -inelastic and more fluctuating demand (less driven by price) -a small percentage increase in consumer demand can cause large increases in business demand
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derived demand
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business demand that ultimately comes from the demand for consumer goods (eg. Gore-Tex)... less control as a business, demand for your product depends of demand of finished product
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nature of the buying unit
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-business purchases involve more decision participants/more professional purchasing effort -companies have well-trained marketers & salespeople to deal w/ well-trained buyers
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types of decisions and the decision process
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-more complex buying decisions than consumer buyers -longer & more formalized process -buyer & seller dependent on each other -supplier development
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supplier development
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systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others
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objective 2: business buyer behavior: 2 parts
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1) the buying center- all the people involved in the buying decision 2) buying decision process *influenced by organizational, interpersonal, and individual factors plus external environmental factors
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major types of buying situations
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1) straight rebuy 2) modified rebut 3) new task 4) systems selling/solutions selling
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straight rebuy
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a business buying situation in which the buyer routinely reorders something w/o any modifications
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modified rebuy
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a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers
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new task
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a business buying situation in which the buyer purchases a product or service for the first timeq
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systems selling/solutions selling
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buying a packages solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation (eg. IBM, Six Flags)
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participants in the business buying process
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1) buying center 2) users 3) influences 4) buyers 5) deciders 6) gatekeepers
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buying center
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all the individuals and units that play a role in the purchase decision-making process
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users
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members of the buying organization who will actually use the purchased product or service
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influencers
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people in the organization who affect the buying decision; define specifications and also provide information for evaluating alternatives (technical personnel)
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buyers
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people in an organization's buying center who make purchase
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deciders
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people who have formal or informal power to select/approve final suppliers
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gatekeepers
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control the flow of info to others
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major influences on business buyers
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1) environmental 2) organizational 3) interpersonal 4) individual 5) buyers
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objective 3: the business buying process (BBP)
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1) problem recognition 2) general need description 3) product specification 4) supplier search 5) proposal solidification 6) supplier selection 7) order routine specification 8) performance review
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problem recognition
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the stage in which the company recognizes a problem or need that can be met by acquiring a good or service (eg. Quill)
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general need description
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stage in which a buyer describes the general characteristics and quantity of needed item
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product specification
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stage in which the buying organization decides on and specifies the best technical product characteristics for a needed item
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supplier search
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stage in which the buyer tries to find the best vendors
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proposal solidification
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stage in which buyer invites qualified suppliers to submit proposals
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supplier selection
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stage in which the buyer reviews proposals and selects a supplier or suppliers
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order routine specification
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stage in which buyer writes the final order with the chaos supplier(s), listing the technical specifications, qu
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performance review
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stage in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the management
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objective 4: institutional markets and government markets
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1) institutional markets 2) government markets
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institutional markets
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schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care (eg. P)
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government market
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federal, state, local that purchase or rent goods and services (eg. Lockheed Mar)
