Chapter 7 Flashcards
(37 cards)
Key characteristics of specific types of organizational customers (4)
Manufacturers
Producers of services
Retailers & wholesalers
Government units
Differences between organizational customers & final consumers (5)
Purchase criteria & specifications Multiple buying influence Problem-solving process B2B e-commerce Buyer-seller relationships
Are used to manufacture other products
- -Become part of another product
- -Aid the normal operations of an organization
- -Are acquired for resale without change in form
Business products –> key is intended use
the use of the Internet to facilitate the exchange of goods, services, and information between organizations
Business-to-business electronic commerce
A measure of a Web site’s effectiveness
–Calculated by??
Stickiness
- -Multiplying the frequency of visits by the duration of a visit by the number of pages viewed during each visit
- -Stickiness = Frequency x Duration x Site Reach
All Business & Organizational Customers (4 of them and their examples) 1) Manufacturers Farms, mines, etc. Financial Institutions Other providers
2) Wholesalers
Retailers
3) Federal
State and local
4) Federal
State and local
1) Producers
2) Intermediaries
3) Governments
4) Nonprofits
Demand is???
1) Demand for business products results from demand for consumer products.
2) A change in price will not significantly affect the demand for product.
3) o Multiple items are used together in final product. Demand for one item affects all.
4) o Demand for business products is more volatile than for consumer products.
1) derived
2) inelastic
3) joint
4) fluctuating
Types of business products (7 components)
Major equipment Accessory equipment Raw materials Component parts Processed materials Supplies Business services
Describe the need
specifications
This certification is needed for every business in the world, without it, the business cannot work with other businesses
ISO 9000 (quality certification)
Buying center (5 components)
Buyers Users Influencers Deciders Gatekeepers
**Info only: Evaluating Organizational Buying Influences
- -Vendor analysis considers all influences
- -Behavioral needs are important too
- -Ethical conflicts may arise
- -Purchasing may be centralized
- -Buying firm’s values affect purchasing practices
–Buying situations
1) o A situation requiring the purchase of a product for the first time.
2) o A situation where the purchaser wants some change in the original good or service.
3) o A situation in which the purchaser
reorders the same goods or services without looking for new information or investigating other suppliers.
1) new buy
2) modified buy
3) straight buy
**Info only: Buyer-Seller Relationships in Business Markets
Close Relationships May Produce Mutual Benefits
Mutual trust
Long-term outlook
Share tasks at lower total cost
Relationships May Not Make Sense
Reduced flexibility
Some purchases are too small or infrequent
Some purchases require much special attention
**Info only: Relationship marketing
- -Loyal customers are more profitable than price-sensitive customers with little brand loyalty
- -Long-term relationships build competitive advantage
Relationships in other countries
o ____ relationships are highly integrated:
Companies have executive sitting on each other’s boards
Maintain dedicated trade efforts
Joint development, finance, and marketing
Keiretsu
The Government market (8 components)
- -Size and diversity
- -Competitive bids
- -FCPA – (Foreign corrupt practices act) prohibits US firm from bribing foreign officials
- -Rigged specifications
- -“approved” supplier list
- -Negotiated contracts
- -Government wants
- -Foreign governments
Any buyers who buy for resale or to produce other goods and services
Business and organizational customers
Written (or electronic) description of what the firm wants to buy
Purchasing specifications
Way for supplier to document its quality procedures
ISO 9000
Buying specialists for their employers
–In large organizations, usually specialize by product area and are real experts
Purchasing managers
1) Several people – perhaps even top management – play part in making purchase decision
Include:
2) perhaps production liner workers or their supervisors
3) engineering or R&D people who help write specifications or supply information for evaluating alternatives
4) purchasing managers who have the responsibility for working with suppliers and arranging the terms of the sale
5) people in the organization who have the power to select or approve the supplier – often a purchasing manager buy perhaps top management for larger purchases
6) people who control the flow of information within the organization – perhaps a purchasing manager who shields users or other deciders (include receptionists, secretaries, research assistants, etc.)
1) Multiple buying influence
2) Users
3) Influencers
4) buyers
5) deciders
6) gatekeepers
All the people who participate in or influence a purchase
Salesperson must study each case carefully
• Maybe have to talk to each member –> lengthens selling period
Buying center
Formal rating of suppliers on all relevant areas of performance
(Goal: lower total costs associated with purchases)
Vendor analysis
