Marketing Exam 2 Flashcards
(35 cards)
3 reasons why businesses purchase products.
Resale, direct use in producing other products, use in general daily operations
Market characteristics of organizational buyers
Derived demand: the demand for industrial products and services is driven by demand for consumer products and services.
Size of order or purchase
number of potential buyers,
purchases tend to be made by commitee
Differences between B2B and B2C purchase decision process.
Business customers differ from consumers
-better informed
-demand more detailed product info
-goals of a purchase agent may include advancement of financial awards
-some suppliers and business customers build and maintain mutually beneficial relationships or partnerships
what’s is the buying center
A 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
What’s a buying committee
a more formal buying center within an organization
Roles in the buying center
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 among people who occupy other roles in the buying center
What are the three buying classes, why are they different.
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 Auction: One seller, many buyers. Higher price.
Reverse Auction: Many sellers competing for one buyer. Lower price.
Market segmentation
Aggregating prospective buyers into groups, or segments, that
(1) have common needs/wants and
(2) 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 2 things
Forms meaningful groups, and develops specific marketing actions
3 targeting strategies
Undifferentiated strategy, concentrated strategy, differentiated strategy
One product multiple markets vs. multiple products multiple markets segments
The segmentation tradeoff
Synergies vs. Cannibalization
Organizational Synergy, Customer value
Cannibilzation: New products/chains can steal customers from each other
Mass customization vs. Build-to-order
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-step segmentation process
- Group potential buyers into segments
- Group products sold into categories
- Develop a market product grid and estimate a size market
- Select target markets
- Take marketing actions to reach target markets
Ways to segment consumer markets
Demographic segmentation, Geographic segmentation, Psychographic Segmentation, Behavioral Segmentation
Product positioning (head-to-head VS. differentiation)
Product repositioning
Product defintion
A product is:
a good (tangible physical entity), service (intangible result of the application of human and mechanical efforts to people and object), or idea (concept, philosophy, image, issue)
consisting of a bundle of tangible nd intangible attributes that satisfy a customers needs/wants and is received in exchange for money or something else of value
3 layers of a product
Augmented product: ALL additional, non-tangible benefits the
product provides (e.g.
service, warranty,
delivery, etc.)
Actual Product: The actual product
itself
Core Product: The basic need/want
the product fulfills
Durable vs. nondurable goods
Durable Goods: Many uses, consumed over longer period of time, focus on personal selling
Nondurable goods: 1 or few uses, consumed in short period of time, focus on consumer advertising
Benefits of packaging
Communication benefits: Information conveyed to the consumer, alternative uses, directions, seals of approval
Functional Benefits: Storage, convenience, protection, or quality
Perceptual Benefits: Shape, color, graphics, etc. distinguish brands, Packaging can enhance brand image
Classification of Products (4 types of consumer products)
Convenience products: inexpensive, purchased frequently, ow involvement
Shopping Products: somewhat expensive, mid to high involvement
Speciality products: unique items, buyers willing to expend significant effort to obtain
Unsought products: Solve “sudden problems” (people don’t think about buying)
