Unformatted text preview: PROMOTIONAL METHOD. Personal selling is often emphasized in business
marketing, while advertising is emphasized in consumer marketing.
KEY: CB&E Model Customer OBJ: 07-6 TOP: AACSB MSC: BLOOMS Synthesis 12. What is reciprocity? Is it illegal or unethical?
Reciprocity occurs when business purchasers choose to buy from their own customers. The
practice is neither unethical nor illegal unless one party coerces the other and the result is unfair competition. Reciprocity is generally considered to be a reasonable business practice.
KEY: CB&E Model Strategy OBJ: 07-6 TOP: AACSB MSC: BLOOMS Synthesis 13. Briefly define and describe each of the categories of business products. Give two specific
examples of goods or services that fit into each category.
MAJOR EQUIPMENT (or installations) consists of capital goods that are depreciated over time.
These goods are often custom designed and therefore often sold by personal selling and
distributed directly. Text examples include large machinery, mainframe computers, blast furnaces,
generators, airplanes, and buildings.
ACCESSORY EQUIPMENT is generally less expensive and shorter-lived than major equipment
and is often charged as an expense in the year it is purchased. Advertising and local distributors
play an important role in the sale of accessory equipment. Text examples include portable drills,
power tools, microcomputers, and fax machines.
RAW MATERIALS are unprocessed extractive or agricultural products that become part of
finished products. Personal selling, direct channels, and price inflexibility characterize the
marketing of raw materials. Text examples include mineral ore, lumber, wheat, corn, fruits,
vegetables, and fish.
COMPONENT PARTS are either finished items ready for assembly or products that need very
little processing to become part of another product. Component parts sometimes retain their
identity, often need replacement in the final product, and are marketed through original
equipment manufacturer and replacement markets. Text examples include spark plugs, tires, and
electric motors for automobiles.
PROCESSED MATERIALS are products used directly in the manufacturing of other products
and do not retain their identity in the final product. Text examples include sheet metal, chemicals,
specialty steel, treated lumber, corn syrup, and plastics. The materials are generally bought
according to customer specifications or industry standards, so price and service are important in
SUPPLIES (or MRO items) are consumable items that are not part of the final product. They are
relatively inexpensive and have a short life. Text examples include lubricants, detergents, paper
towels, pencils, and paper.
BUSINESS SERVICES are expense items that are not part of the final product. When it is costeffective, firms often retain outside companies to provide services. Text examples include
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- Fall '13
- Marketing, AACSB Reflective, CB&E Model Strategy, CB&E Model