Chapter 5: Business Marketing

Question 1

What is business marketing?

Answer 1

The marketing of goods and 
	services to individuals and 
	organizations for purposes
	other than personal
consumption.

Question 2

How has the internet affected business marketing?

Answer 2

• Business marketing on the internet offers tremendous opportunities for companies to 
		○ Increase efficiency
		○ Reduce costs
		○ Improve customer service
		○ Create one-to-one relationships
		○ Introduce new products
                 =Expand markets. 

• Internet provides a powerful platform for
	○ Convey information
	○ Conducting transactions
	○ Delivering innovative services
	○ Building customer and supplier relationships
	○ Gathering marketing research data
	○ Reducing costs and prices
            =Integrate the entire supply chain from suppliers to end users

Question 3

Strategic alliance

Answer 3

cooperative agreement between business companies. Take form of licensing or distribution agreements, joint ventures, research and development or partnership.

Question 4

Business markets form strategic alliances to:

Answer 4

○ Leverage what they have by combining theses assets with those of other companies
○ Achieve increased productivity and lower costs for all participants
○ Limit competitors
-Create cheaper alternatives (partnering with companies in different markets– using same call centre)

Question 5

What are the 4 major categories of business customers?

Answer 5

1. Producer/ OEM
2. Reseller
3. Government
4. Institutions

Question 6

What are the 4 major categories of business customers? :1. Producer/ OEM

Answer 6

○ OEM– original equipment manufacturer

Organizations that use purchased goods and services (raw materials) to produce other products, to inc

Question 7

What are the 4 major categories of business customers? :2. Reseller

Answer 7

• retail and wholesale businesses that buy finished goods and resell them for a profit.

Question 8

What are the 4 major categories of business customers? :3. Government

Answer 8

federal, provincial, municipal

Question 9

What are the 4 major categories of business customers? :4. Institutions

Answer 9

look to achieve goals other than the standard business goals of profit, market share and return on investment. (schools, churches, civic clubs, nonbusiness organizations, colleges, fraternal groups, unions, foundations, hospitals.

Question 10

What is NAICS?

Answer 10

North American Industry Classification System

• North American Industry Classification System An industry classification system introduce in 1997 to replace the standard industry classification system. Groups goods or service producing companies that use identical or similar production processes. Useful too for business markets engaged in analyzing, segment, and targeting markets.

Question 11

What are the major differences between business and consumer customers?

Answer 11

• Demand is derived – organizations buy products based on the demand for their product of their customers - formal buying
• Volume - more people involved
• Few customers - reciprocity and leasing
• Geographically concentrated - personal selling
direct

Question 12

Seven types of business goods and services

Answer 12

• Major Equipment - capital goods such as large machines
• Accessory Equipment- less expensive and shorter lived equipment
• Raw Materials- unprocessed extractive or agricultural products
• Component Parts- finished items ready for assembly or products that need very little process before becoming a part of something else
• Processed Materials– products used directly in manufacturing others
• Supplies– consumable items that do not become part of the final product (lubricants, detergents, paper towels)
=Business Services- expense items that do not become a apart of final prouct (janitoryial, advertising, legal)

Question 13

What is different/unique about business buying?

Answer 13

1. Buying centres
2. Evaluation Criteria
3. Buying situations
4. Business ethics
5. Customer services

Question 14

What is different/unique about business buying?:1. Buying centres

Answer 14

all those people in an organization who become involved in the prucahse decision

		i. Intiatior- first suggests
		ii. Influencer- 
		iii. Gatekeepers- members who regulate flow of information
		iv. Decider- person with formal or informal power to make decision 
		v. Purchaser- person who negotiates purchase
                      vi. User- members of organization who will use the purchase

Question 15

What is different/unique about business buying?:2. Evaluation Criteria

Answer 15

business buyers evaluate products and suppliers against three imporant criteria

		i. Quality- technical suitability
		ii. Service- as much as they want the product, they also require good service
		iii. Price- want the lowest price for best quality product

Question 16

What is different/unique about business buying?:3. Buying situations

Answer 16

• Should we make the product or contract it out?
• 3 kinds of buys
□ New buy-purchase of product first time- go through alternatives processs
□ Modified buy- less crital and less time consuming than new buy– user wants a chang ein the orginal good or service (colour, better strength,)
=Straight buy– no new information is needed, product is ordered and order is supplied (vendors prefer this product)

Question 17

What is different/unique about business buying?:4. Business ethics

Answer 17

–

Question 18

What is different/unique about business buying?:5. Customer services

Answer 18

• markets need to recognize the benefits of developing a formal system for monitoring customer opinions an perceptions of quality customer service

Question 19

New buy

Answer 19

purchase of product first time- go through alternatives processs

Question 20

modified buy

Answer 20

less critical and less time consuming than new buy– user wants a change in the ordinal good or service (colour, better strength,

Question 21

straight buy

Answer 21

no new information is needed, product is ordered and order is supplied (vendors prefer this product)

Question 22

Bases for segment business markets:Company characteristics

Answer 22

○ Geographic location
		○ Type of company
		○ Company size
		○ Volume of purchase 
                 -Product use

Question 23

bases for segment business markets:buyer characteristics

Answer 23

○ Criteria of price
		○ Quality and support
		○ Satisficer- business customers who place an order with the first familiar supplier to satisfy product and delivery requirements 
		○ Optimizer- business customers who consider numerous suppliers, both familiar and unfamiliar , solicit bids, and study all proposals careful before selecting one. 
		○ New purchase
		○ Modified purchase
		○ Re-buy
Personal characteristics

Question 24

Satisficer

Answer 24

business customers who place an order with the first familiar supplier to satisfy product and delivery requirements

Question 25

Optimizer

Answer 25

business customers who consider numerous suppliers, both familiar and unfamiliar , solicit bids, and study all proposals careful before selecting one.