MKTG EXAM 3 Review - Chapter Six Business to business...

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Chapter Six Business to business markets (definition) a. The marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others. Organizational markets a. Industrial, reseller, and government markets also exist on a global scale. The largest exporting industries in the US focus on organizational customers, not ultimate consumers. b. The majority of world trade involves manufacturers, resellers, and government agencies buying goods and services for their own use or for resale to others. Organizational buying behavior a. Those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. i. Manufacturers buy raw materials and parts that they reprocess into the finished goods they sell. ii. Wholesalers and retailers resell the goods they buy without reprocessing them. iii. Organizational buyers include all buyers except ultimate consumers. iv. Organizational buyers are divided into three different markets: industrial, reseller, and government markets. Multiple buyers, number of customers, size of purchases, geographic Concentration. o Demand characteristics (derived/inelastic/fluctuating/joint) o Demand characteristics - Consumer demand for products and services is affected by their price, availability, and consumers’ tastes and income. o Derived characteristics – Means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services. Examples of producers, resellers, government markets
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o Example of resellers - Competitive bids and RFP NAICS rebuy/modified buy/new task buying Professional buyer, centralized purchasing The buying center Roles in the buying center (initiator, user, gatekeeper, influencer, decider, buyer) Product specifications, multiple/single sourcing, reciprocity, outsourcing, reverse marketing bidder’s list o Typically, two or three suppliers for each standard component and assembly are identified from a bidder’s list. o A list of firms believed to be qualified to supply a given item. derived demand o ISO 9000 a. Refer to the standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures. Make-buy decision a. An evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself. Reciprocity o An industrial buying practice in which two organizations agree to purchase each other’s products and services. o The US Justice Dept. frowns on reciprocal buying because it restricts the normal operation of the free market.
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