Exam 2 - Chapter 8 Flashcards
Business Markets
individuals, organizations or groups that purchase a specific kind of product for one of three purposes: resale, direct use in production, use in general daily operations
3 Reasons a Business Buys a Product
resale
direct use in production
use in general daily operations
Types of Business Markets
producer
reseller
Government (UWSP)
Institutional (church/private college)
Producer Markets
Individuals and business organizations that purchase products to make profits by using them to produce other products or using them in their operations
ex: buying an industrial freezer for a grocery store
Reseller Markets
intermediaries such as wholesalers and retailers, who buy finished goods and resell them for a profit
ex: Walmart
Factors for Reseller Consideration
a. level of demand
b. resale price
c. space required
d. supplier’s ability to provide, adequate quantities when and where needed, ease of placing orders
e. ease of placing orders
Planogra
system for planning store/shelf layout to maximize sales/linear foot
Wholesaler
an intermediary entity that buys in bulk and sells to reseller rather than to consumers
Government Markets
federal, state, county, and local governments that buy goods and services to support their internal operations and provide products to their constituencies; very formal bidding process
ex: Oshkosh Corp.
Institutional Market
organizations with charitable, educational, community, or other non-business goals
ex: private schools/churches
Transaction Characteristics between Businesses
large business orders, issue = costs, purchases made by committees, considerable marketing time and selling effort required for negotiations
Reciprocity
an arrangement unique to business markets in which two organizations agree to buy from each other
Business Customer Attributes
business customers vs. consumers: better informed, demand more detailed product info, goals of purchasing agent may include advancement of financial awards, build and maintain mutually beneficial relationships or partnerships (purchases based on evidence and facts)
Primary Concerns of Business Customers
price
SUPPLIER RELATIONSHIPS
product quality
service
Primary Concerns of Business Customers
Price
influences operating costs, which in turn affect selling price, profit margin and the ability to compete-total value often a consideration
Primary Concerns of Business Customers
Product Quality
most firms have standards or specifications they must meet and not exceed
