MKT 300 Chapter 8

1. Producer 2. Reseller 3. Government 4. Institutional

4 major categories of business markets?

d

Dell obtains most of its computer parts and chips from other producers and assembles them together into a desktop or a laptop, which is then sold to customers. It can be said that Dell is a part of a(n) ____ market. a) reseller b) government c) retailer d) producer e) institutional

1. level of demand 2. resale price 3. space required (sales per square food) 4. supplier's ability to provide adequate quantities when and where needed 5. availability of technical assistance

Factors Resellers Consider (5)?

b

George, the purchase manager for a car manufacturing company, was asked to collect the specifications of a new engine part form the production manager and the vendor specifications from the other departments before placing an order with a supplier. He was also asked to create the procedures for future purchases of the particular engine part that would help in increasing the car's mileage. Which of the following types of business purchase is the company going to make? a) negotiation b) new-task purchase c) straight rebuy purchase d) modified rebuy purchase e) sampling

1. price 2. product quality 3. services 4. supplier relationships

Primary concerns of business customers (4)

1. initiators/users 2. influencers 3. buyers 4. deciders 5. gatekeepers

Roles in business buying decisions (5)

a

The purchase manager of a cake and pastries store wanted to purchase supplies of milk. He told the seller that he wanted cow's milk that contained at least 10% fat. Which of the following methods of business buying did the purchase manager use? a) description b) inspection c) sampling d) straight rebuying e) negotiation

larger; marketing time; selling effort

Transactions between businesses tend to be much ____ than individual consumer sales. Discussions and negotiations associated with business purchases can require considerable _______ and _______.

vendor analysis

a formal, systematic evaluation of current and potential vendors.

modified rebuy

a new-task purchase that is changed on subsequent orders or when straight-rebuy requirements are modified.

product quality

a product must meet specifications

straight rebuy

a routine purchases of same products under approximately the same terms

price

amount of investment necessary to obtain a certain level of return or savings

reciprocity

an arrangement in which two organizations agree to buy from each other.

value analysis

an evaluation of each component of a potential purchase.

new task purchase

an item is purchased to be used to perform a new job or solve a new problem.

sole sourcing

an organization's decision to use only one supplier

multiple sourcing

an organization's decision to use several suppliers

1. well informed about the products they purchase 2. demand detailed information and technical specifications 3. help the firm achieve organizational objectives 4. engage in rational buying behavior 5. often form partnerships with suppliers

attributes of business customers (5)

the buying center

the group of people within the organization who make business purchase decisions

fluctuating demand (fluctuate)

because demand for business products is derived from consumer demand, it may _____ enormously

north american industrial classification system (naics)

classification system used by the u.s., canada, and mexico to help generate comparable statistics.

international standard industrial classification system (isic)

classification system used mainly in Europe

derived demand

demand for business products that is the result of demand for consumer products

inelastic demand

demand that is not significantly altered by a price increase or decrease.

sampling

entails taking a specimen of the product and evaluating it for suitability before purchase. Ex: one-inch nails for a building customer.

Government Markets

federal, state, county, or local governments that buy goods and services to support their internal operations and provides products to their constituencies

d

in business markets, individuals or groups purchase products for one of three purposes. these purposes are... a) resale, wholesale, and direct use b) wholesale, direct use, and use in producing other products c) resale, wholesale, and use in producing other products d) resale, direct use in producing other products, and use in general daily operations e) use in general daily operations, wholesale, and resale

organizational influences

include company objectives, purchasing policies and resources and size and composition of buying center

environmental influences

include competitive and economic factors, political forces, legal and regulatory forces, technological changes and sociocultural issues

Producer markets

individuals or business organizations that purchase products in order to make a profit by using them in producing other products or in their operations

business markets

individuals, organizations, or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations

1. environmental 2. organizational 3. interpersonal 4. individual

influences of the business buying decision process (4)

Reseller markets

intermediaries (or wholesalers) who buy finished goods and resell them to final consumers for a profit

a

many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships which are often called... a) partnerships b) co-ops c) monopolies d) reciprocity e) alliances

1. description 2. inspection 3. sampling 4. negotiation

methods of business buying

services

offered by suppliers directly and indirectly influence customer's costs, sales, and profits

Institutional Markets

organizations with charitable, educational, community, or other non-business goals (members can include churches, hospitals, charitable organizations, and private colleges)

individual influences

personal characteristics (age, educational level, personality and tenure and position) of participants in the buying center.

negotiation

some purchases are based on negotiated contracts wherein buyers describe what they need and sellers submit bids. Ex: a building for the home office of a light bulb manufacturer

1. recognize problem 2. develop product specifications to solve problem 3. search for and evaluate possible products and suppliers (value and vendor analysis) 4. select product and supplier and order product (multiple and sole sourcing) 5. evaluate product and supplier performance

stages of the business buying decision process (used primarily for new task purchases) (5)

standard industrial classifica (sic)

system was developed by the federal government but replaced

business (organizational) buying behavior

the purchase behavior of producers, government units, institutions and resellers

interpersonal influences

the relationship between people in the business; trust and collaboration are important

1. new task purchase 2. straight rebuy 3. modified rebuy

types of business purchases (3)

1. derived 2. inelastic 3. joint 4. fluctuating

types of demand for business products (4)

inspection

used with some products that have unique characteristics and vary in regard to condition. Ex: wool for a clothing manufacturer.

description

when products are highly standardized, a buyer can order by describing quantity, grade and other attributes. Ex: an Alaskan cruise for a company retreat, booked through a travel agency.

joint demand

when two or more items are used in combination to produce a product (hamburgers and buns)