Chapter 8 &9 exam review Flashcards by Becky Briley

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

Business Markets

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

Producer Markets

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

Reseller Markets

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

government markets

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what are the factors resellers consider?

level of demand, resale price, space required, sales per square foot, suppliers ability adequate quantities when and where needed, availability of technical assistance

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organizations with charitable, educational, community, or other non-business goals; members can include churches, hospitals, charitable organizations, and private colleges; marketers may use special techniques to target them

Institution Markets

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information about business customers is based on industrial classification systems

Industrial classification systems

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system was developed by the federal government but replaced

standard industrial classification (SIC)

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is used by the U.S., Canada, and Mexico to help generate comparable statistics

North American Industrial Classification System (NAICS)

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An arrangement in which two organizations agree to buy from each other

Reciprocity

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large orders, expensive items, extended negotiations, and reciprocity

Characteristics of transactions

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well informed about the procedures about the products they purchase; demand detailed information and technical specifications; help the firm achieve organizational objectives; engage in rational buying behaviors, often perform partnerships with suppliers

Attributes of Business Customers

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Price, Product Quality, Service, and supplier relationships are all part of what dimension of marketing to business customers

Primary Concerns of Business Customers

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a business customer views price as the amount of investment necessary to obtain a certain level of return or savings

Price

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a product must meet specifications

Product Quality

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offered by suppliers, directly and indirectly, influences customers’ costs, sales, and profits

Services

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what are the methods of Business Buying?

Description, inspection, sampling, negotiation

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when products are highly standardized, a buyer can order by describing quantity, grade, and other attributes

Description

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used with some products that have unique characteristics and vary in regard to condition

Inspection

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Entails taking a specimen of the product and evaluating it for sustainability before purchase

Sampling

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some purchases are based on negotiated contracts wherein buyers describe what they need, and sellers submit bids

Negotiation

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3 types of business purchases

New task purchase, Straight Rebuy, Modified Rebuy

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

New task purchase

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a routine purchases of the same products under approximately the same terms

straight rebuy

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

Modified rebuy

3 types of demand

derived demand, inelastic demand, Joint demand

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

Derived Demand

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

Inelastic Demand

when two or more items are used in combination to produce a product; demand for the product drives demand for both items

Joint Demand

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

Business (organizational) Buying Behavior

the group of people within the organization who make business purchase decisions; roles include: initiators/users, influencers, buyers, deciders, and gatekeeper

The buying center

What are the 5 stages of the Business Buying Decision Process

1) Recognizing a Problem 2) develop product specifications to solve problem 3) Search for and evaluate possible products and suppliers 4) select product and supplier and order product. 5) evaluate product and supplier performance

an evaluation of each component of a potential purchase

Value analysis

a formal, systematic evaluation of current and potential vendors

Vendor analysis

and organization's decision to use several suppliers

multiple sourcing

an organization's decision to use only one supplier

sole sourcing

environmental, organizational, interpersonal, individual are all influences of....

Influences of the business buying decision process

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

Environmental influences

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

Organizational influences

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

interpersonal influences

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

Individual influences

online marketplaces where business buyers and sellers from around the world can exchange information, goods, services, ideas, and payments

B2B eCommerce sites

developing and performing marketing activities across national boundaries; provides growth opportunities

international marketing

firms that are international from their inception; often small-technology based firms; earn most of their sales outside the domestic home market; ex: ebay , google, logitech

Born Globals

proper environmental analysis of international markets can:

generate financial awards, increase market share, heighten customer awareness of products

marketing activities are influenced by beliefs and values regarding family, religion, education, health, and recreation

Sociocultural Factors

For Economic Forces, Global marketers must understand:

international trade systems, economic stability/ instability of nations, trade barriers, economic disparities between nations

many differences between nations

standards of living, availability of credit, buying power, income distribution, national resources, exchange rates

the market value of a nations total output of goods and services for a given period; an overall measure of economic standing; gives insights into a nation's wealth and market potential

Gross domestic product

any duty levied by a nation on goods bought outside its borders and brought into the country

import tariff

A limit on the amount of goods an importing country will accept for certain product categories in a specific period of time

Quota

A governments suspension of trade in a particular product or with a given country; is generally directed at a specific country or product

Embargo

Government restrictions on the amount of a particular currency that can be bought or sold that can affect international trade

exchange controls

the difference in value between a nation's exports and its imports

balance of trade

import tariffs, Quota, Embargo, exchange controls, and balance of trade are what type of forces

Political, Legal and regulatory forces

accepted business practices vary from country to country; differences exist in ethical standards; different modes of operations; dealing with different cultures; the least and most corrupt countries are what types of forces

ethical and social responsibility forces

the unconscious reference to one's own cultural values, experiences, and knowledge

Self-Reference Criterion (SRC)

the concept that morality varies from one culture to another; "when in Rome, do as the Romar do."

Cultural relativism

competition is a staple of the global marketplace; firms that operate internationally be aware of competitive forces, identify the interdependence of countries, be mindful of a new breed of customers; each country has unique competitive aspects; the global consumer is changing international competition are all part of what force

Competitive forces

Technological advances have made international marketing easier, faster, and more affordable is what kind of force

Technological Forces

agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the U.S., and Mexico

North American Free Trade Agreement (NAFTA)

a union of European Nations established in 1958 to promote trade among its members; one of the largest single markets in the world today: 28 countries; half a billion consumers and combined GDP of nearly $18 trillion

European Union (EU)

promotes free circulation of goods, services, and production factors; common external tariff and commercial policy among member nations; south America and Latina America are catching the attention of many international businesses

The common Market of Southern Cone (MERCOSUR)

an international trade alliance that promotes open trade and economic and technical cooperation among members; approximately 2.8 billion of the world's population, 57% of the world GDP, and nearly 47% of global trade; 21 member alliance, most important economic power is China, which has become one of the most productive manufacturing nations.

Asia-Pacific Economic Cooperation

established in 1967

Association of Southeast Asian Nation

international organization dealing with the rules of trade between nations; officially founded in 1995; successor to GATT; 162 members representing 95% of global trade; many issues of dumping which is selling products at unfairly low prices

The World Trade Organization (WTO)

The Four modes of entering an international market

Stage 1: No regular export activities Stage 2: export via independent representatives (agents) Stage 3: establishment of one or more subsidiaries internationally Stage 4: Establishment of international production/ manufacturing facilities

What are the 5 levels of involvement in global marketing

globalized marketing, regional marketing, multinational marketing, limited exporting, domestic marketing

marketing strategies are developed for the entire world with the focus on similarities across regions and country markets

Globalized Marketing

marketing strategies are developed for each major region, with the countries in the region being marketed to in the same way based on similarities across the region

Regional Marketing

international markets are a consideration in the marketing strategy, with customization for the country based on critical differences across regions and country markets

multinational markets

the firm develops no international marketing strategies, but international distributors, foreign firms, or selected customers purchase some of its products

limited exporting

all marketing strategies focus on the market in the country of origin

Domestic marketing

the sale of products in foreign markets

exporting

the purchase of a product from a foreign source

importing

an organization that links buyers and sellers in different countries; reduces risk for those wanting to get involved

trading company

an alternative to direct investment that requires a license to pay commission or royalties on sales or supplies used in manufacturing

licensing

a form of licensing in which a franchiser, in exchange for a financial commitment, grants the franchisee the right to market a product in accordance with the franchise standards

Franchising

3 types of contract manufacturing

outsourcing, offshoring, offshoring outsourcing

contracting noncore operations with an organization that specializes in that operation

outsourcing

moving a business process that was done domestically to a foreign country. The production accomplished in the foreign country may be performed by the local company or a third party

offshoring

contracting with an organization to perform business functions in a country other than the country in which the product will be sold

Offshoring outsourcing

a partnership between domestic and a foreign firm or government; popular in industries requiring large investments; may be a political necessity because of laws and regulations

Joint ventures

partnerships formed to create global competitive advantages; firms may be traditional rivals competing for the same market; firms may compete in some markets while collaborating in others

Strategic Alliance

a situation in which a company owns subsidiaries or other facilities overseas; owning facilities may be too expensive for many firms; Multinational enterprises (multinational corporation)

Multinational Enterprise

three most common structures of architecture

product division structure, geographic area structure, global matrix structure

a subunit of the marketing department

export departments

centralizes all of the responsibility and communications related to international operations

international divisions

most likely engage in direct ownership

international integrated structures

the form used by most multinational enterprises good for firms that are diversified, yet driven by domestic operations esch unit is self-contained

Product division structure

good for firms with low diversification | divides the world into logistical areas based on operations and customer's characteristics

The Geographic Area Structure

designed to achieve global integration, cost, efficiencies, knowledge transfers, and local responsiveness most firms do not use this structure

The global matrix structure

adapting marketing strategy and marketing mixes according to cultural, regional, and national differences

customization

the development of marketing strategies that treat the entire world as a single entity (entails producing standardized products, promotion campaigns, prices, and distribution channels for all markets)

globalization

maintaining a global presence creates fice opportunities for creating value:

adapt to local market differences exploit economies of global scale exploit economies of global scope mine optimal locations for activities and resources maximize the transfer of knowledge across locations

Chapter 8 &9 exam review Flashcards

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