MKTG Exam 2 Chs 6 to 10

Disintermediation the elimination of intermediaries

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Disintermediation : the elimination of intermediaries such as wholesalers or distributers from a marketing channel Reintermediation : the reintroduction of an intermediary between producers and users LO 3: Relationship Marketing and Strategic Alliances Strategic Alliance (strategic partnership) : a cooperative agreement between business firms Relationship Commitment : a firm’s belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it indefinitely
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Trust : the condition that exists when one party has confidence in an exchange partner’s reliability and integrity Keiretsu : a network of interlocking corporate affiliates LO 4: Major Categories of Business Customers The business market consists of four major categories of customers: producers, resellers, governments, and institutions. PRODUCERS: RESELLERS: GOVERNMENTS: INSTITUTIONS: Original Equipment Manufacturers (OEMs): includes all individuals and organizations that buy business goods and incorporate them into the products they produce for eventual sale to other producers or consumers. Companies such as General Motors that buy steel, paint, tires, and batteries are said to be OEMs. LO 5: The North American Industry Classification System The NAICS is an industry classification system introduced in 1997 to replace the standard industrial classification system (SIC) NAICS: a detailed numbering system developed by the US, Canada, and Mex to classify North American business establishments by their main production processes LO 6: Business versus Consumer Markets The basic philosophy and practice of marketing are the same whether the customer is a business organization or a consumer Derived Demand: the demand for business products Joint Demand : the demand for two or more items used together in a final product Multiplier effect (accelerator principle): Phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product Business-to-Business Online Exchange : an electronic trading floor that provides companies with integrated links to their customers and suppliers Reciprocity : a practice where business purchasers choose to buy from their own customers LO 7: Types of Business Products Business products generally fall into one of the following seven categories, depending n their use: major equipment, accessory equipment, raw materials, component parts, processed materials, supplies, and business services. Major Equipment (installations) : capital goods such as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings Accessory Equipment : goods, such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment Raw Materials : unprocessed extractive or agricultural products, such as mineral ore, lumber, wheat, corn, fruits, vegetables and fish Component Parts:
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