MKTG chapter 7

Primary Promotional Method

Business marketers tend to emphasize personal selling in their promotion efforts, especially for expensive items, custom-designed products, large-volume purchases, and situations requiring negotiations. The sale of many business products requires a great deal of personal contact

Use of Leasing

Consumers normally buy products rather than lease them. But businesses commonly lease expensive equipment The leaser, the firm providing the product, may be either the manufacturer or an independent firm. The benefits to the leaser include greater total revenue from leasing compared to selling and an opportunity to do business with customers who cannot afford to buy.

Concentration Customers

More than Half of All U.S. Manufacturers Moncentrate the majority of their Operations in *EIGHT* 8 States (California, New York, Ohio, Illinois, Michigan, Texas, Pennsylvania, and New Jersey.*)

Fluctuating Demand

The demand for business products—particularly new plants and equipment—tends to be less stable than the demand for consumer products. A Small Increase or Decrease in Consumer Demand can produce a much Larger change in demand for the Facilities and Equipment needed to make the consumer product. **Economists refer to this phenomenon as the Multiplier Effect (or Accelerator Principle).**

NAICS - THE NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM

is an industry classification system introduced in 1997 to replace the standard industrial classification system (SIC). NAICS (pronounced nakes) is a system for classifying North American business establishments. The system, developed jointly by the United States, Canada, and Mexico, provides a common industry classification system for the North American Free Trade Agreement (NAFTA) partners. Goods- or service-producing firms that use identical or similar production processes are grouped together. NAICS is an extremely valuable tool for business marketers engaged in analyzing, segmenting, and targeting markets. Each classification group is relatively homogeneous in terms of raw materials required, components used, manufacturing processes employed, and problems faced. Therefore, if a supplier understands the needs and requirements of a few firms within a classification, requirements can be projected for all firms in that category.