Chapter 6 notes - Chapter 6 Understanding Business...

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Chapter 6 Understanding Business Marketing Derived demand - the amount of sales for business-to-business products ultimately depends on (is derived from) the consumer demand. Example: when Wii sales increase, so does the need for materials, components, etc. Inelastic demand - products so necessary that a change in price has relatively little effect on the quantity demanded The accelerator principle - a small fluctuation (increase or decrease) in consumer demand has a larger effect on business demand. Example: to save money consumers closely watch energy consumption. Even a small drop in demand may be enough to force the plant to postpone the purchase of multi-million dollar equipment. Types of markets Commercial market - organizations that acquire goods and services that are then used to product other goods and services, eventually creating finished products used by consumers. Examples of organizations: fabricators, component manufacturers, processors, original equipment manufacturers, designers. Purchase examples: raw materials, component parts, processing equipment, transportation, consulting services. Extractor industries - organizations that obtain and process raw materials, as in forestry or mining. They acquire much of their supply from the earth. Purchase examples: fertilizer and pesticides, seeds, heavy and light duty equipment, pipe, aircraft and transportation, real estate mining rights, products for resale, loading of equipment. Trade industries - organizations that acquire or distribute finished products to businesses or consumers. They play an important role in the “place” of the marketing mix. Examples of organizations: retailers, wholesalers, dealerships. Purchase examples: computer systems, building/real estate, advertising, transportation, warehousing, pharmaceuticals, and equipment. o Reseller - a company that purchases a product and sells it in the same form for profit. They have been gaining more recognition recently. In many cases, resellers repackage products to suit the needs of particular market segments. Institutions
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This note was uploaded on 12/04/2011 for the course MKT 300 taught by Professor Gilbertharrell during the Spring '09 term at Michigan State University.

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Chapter 6 notes - Chapter 6 Understanding Business...

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