Personal Selling- Final Exam Review- CH 14 – Retail, Business, Services, Non-Profit Selling
ex. General Motors purchases tires for its cars. The number of tires it purchases is determined by the customer demand for new General Motors cars.
inelastic demand is demand that does not change in direct proportion to a change in price.
ex. The Chevrolet produced by General Motors has many parts. The cost of each part represents a fraction of the total cost. If there is an increase or decrease in the price of a single part, such as the interior cloth, the demand for the car is not significantly influenced. Even if the cost of the cloth doubled (assuming it did not represent a large proportion of production costs), and was passed along to the consumer, the car’s sales price would increase by a small amount, having little effect on consumer demand.
joint demand is demand that occurs when two or more products are used together to produce a single product.
General Motors manufactures automobiles and needs numerous component parts—tires, batteries, steel, glass, and so on. These products are demanded jointly.
new-task purchases – a type of purchase made when a product is bought in conjunction with a job or task newly performed by the purchaser
straight-rebuy purchases – a routine purchase of products bought regularly
modified-rebuy purchases – a type of purchase made when regular purchasing patterns are slightly changed to suit customers’ present needs
Initiator. The person proposing to buy or replace the product
ex. For example, users of a company’s copy machine (initiators) may become dissatisfied with its quality of copies.