Chapter 1 - Understanding Business Marketing

Question 1

What is the main difference between B2B and B2C?

Answer 1

The main difference between the two is who are the actors. In B2B the customers are other companies, organizations, government bodies, …

Question 2

Which are the main differences between B2B and B2C?

Answer 2

1. Nature and behavior of the business customer
2. The nature of the exchange
3. The object of the exchange

Question 3

Which are the characteristics of “Nature and behavior of the business customer”?

Answer 3

1. Professional
2. Multiple
3. Rational
4. Complex Buying Process
5. Continuous demand and assessment

Question 4

Which are the characteristics of “The Nature of the exchange”?

Answer 4

1. Continuity of exchange relationships
2. Complex orders == Complex Negotiations
3. Long-term agreement
4. The «quality» of the relationship will affect the
   outcome of the negotiations
5. The relationship is interactive and incorporates various exchanges

Question 5

Which are the characteristics of “The object of the exchange”?

Answer 5

1. It is not given
2. It is co-generated
3. It is not predictable entirely

Question 6

Which are the main characteristics of B2B market?

Answer 6

1. Concentration
2. Nature of the demand
3. Relational nature of the exchange
4. Continuity
5. Change

Question 7

What is “concentration ratio”?

Answer 7

Is an index calculated by summing the market share percentages of the first 4/5 companies per market share in a industry

Question 8

What is “General concentration”?

Answer 8

is the scenario where few companies have the complete leadership on a specific industry market share (f.i., Airbus and Boeing)

Question 9

What is “Specific concentration”?

Answer 9

Is when 80% of sales derive from 20% of clients

Question 10

What is “Geographical concentration”?

Answer 10

Is when there are some areas of the world where is more likely to find companies of a specific industry (f.i. central Europe for chemical)

Question 11

What does it mean “Derived demand”?

Answer 11

The product that a business
produces for another business depends on the demand that derives from
customers.

Question 12

What is the demand “perverse elasticity”?

Answer 12

The total demand of some products does not depend on the price’s variations. Business demand is likely to be less price elastic than consumer market demand.

Question 13

What is “Accelerator effect”?

Answer 13

The percentage change in derived demand may be much larger, or much smaller, than the percentage change in original demand

Question 14

What does it mean “Relational nature of the exchange”?

Answer 14

In B2B relationships are more important than transactions. It’s not just money the object of the exchange, but knowledge, information, technology, …

Question 15

What does it mean “Continuity”?

Answer 15

The relationship in the business market is characterized by continuity:
1. In the supply process
2. In the actors
3. There is relationship continuity due to interdependencies and barriers to enter and exit

Question 16

What does it mean “Change”?

Answer 16

The relationship in the business market is characterized by change:
1. In relationships dynamics. Content and goals are always changing
2. Dynamic in the single actor
3. Dynamics due to external factors