Exam 2 Flashcards
(42 cards)
3 reasons why businesses purchase products?
Resale, direct use in producing products, use in general daily operations
Market characteristics of organizational buyers
Derived demand, size of order or purchase, number of potential buyers, and purchases tend to be made by committee
Difference between B2C vs. B2B purchase decision process
In B2C its a simple decision process. In B2B there is a longer decision process. Business customers are better informed, demand me detailed product information, goals of a purchasing agent may include advancement or financial awards, and some suppliers and business customers build and maintain mutually beneficial relationships or partnerships.
Buying center
Consists of the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to purchase decisions.
Buying center roles
Users: members who frequently initiate the purchase, use the product and evaluate the product.
Influencers: technical personnel who develop the specifications and evaluate alternative products.
Buyers: select suppliers and negotiate terms.
Deciders: actually choose the products.
Gatekeepers: control the flow of information to and amount people who occupy other roles in the buying center.
3 types of buying classes
New-task purchase: initial purchase of an item for use in performing a new job or solving a new problem.
Straight rebuy purchase: routine purchases of the same products under approximately the same terms of sale.
Modified rebuy purchase: when new-task purchases are changed on repeat orders or straight rebuy purchases are modified.
Traditional vs. Reverse auction
Traditional has one seller and multiple buyers so price goes up as more buyers come.
Reverse has more sellers and one buyer so price goes down.
Market segmentation
Aggregating prospective buyers into groups, or segments, that have common needs/wants and will respond similarly to a marketing action
Market segments
Relatively homogeneous groups of prospective buyers that result from the market segmentation process.
Effective segmentation does what two things?
Forms meaningful groupings and develops specific marketing actions
One product multiple markets vs. multiple products multiple market segments
The costs can be cheaper because you don’t have to spend a lot of money on production costs.
Synergies
Combining markets or products.
Ex. Retail business that sells clothes starts selling accessories to increase revenue. It can be a negative.
Cannibalization
A loss in sales caused by a company’s introduction of a new product that displaces one of its won older products.
Mass Customization
Tailoring goods or services to the tastes of individual customers on a high-volume scale
Build-to-Order
Manufacturing a product only when there is an order for it
5 Steps in segmentation
- Group potential buyers into segments
- Group products sold into categories
- Develop a market-product grid and estimate size of markets
- Select target markets
- Take marketing actions to reach target markets
Ways to segment consumer markets
Demographic, geographic, psychographic, and behavioristic variables
Product positioning (head-to-head vs. differentiation)
Head-to-head: as a kin to primary competitors. Same thing, same way.
Differentiation: competing similar ways but do it differently
Repositioning
Move to reach new markets.
Ex. Chocolate milk as an adult option instead of just for kids
Product
-a good (tangible physical entity),
-service (intangible result of the application of human & mechanical efforts to people/objects),
- or idea (concept, philosophy, image, issue)
3 layers of a product
Core product: the basic need/want the product fulfills (e.g. communication, productivity etc.)
Actual product: the actual product itself (e.g. IPhone)
Augmented product: All additional, non-tangible benefits the product provides (e.g. service, warranty, delivery, etc.)
Non durable goods
1 or few uses, consumed in short period of time (3 yrs. or less), focus on consumer advertising
Durable goods
Many uses, consumed over longer period of time (> 3 yrs.), focused on personal selling
Benefits of packaging
Communication benefits: information conveyed to the consumer
Functional benefits: storage, convenience, protection, or quality
Perceptual benefits: shape, color, graphics, etc. distinguish brands, packaging can enhance brand image
