Type of negotiations negotiating is common and buyers

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TYPE OF NEGOTIATIONS. Negotiating is common, and buyers and sellers negotiate product spe- cifications, delivery dates, payment terms, and other pricing matters. USE OF RECIPROCITY. Business purchasers often buy from their customers, and vice versa. USE OF LEASING. Businesses often lease equipment, unlike consumers who more often purchase products. PRIMARY PROMOTIONAL METHOD. Personal selling is often emphasized in business marketing, while advertising is emphasized in consumer marketing. PTS: 1 REF: 106-107 OBJ: 07-6 TOP: AACSB Communication | TB&E Model Customer
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12. What is reciprocity? Is it illegal or unethical? Why or why not? ANS: Reciprocity is when business purchasers choose to buy from their customers. The practice is neither unethical nor illegal unless one party coerces the other into the reciprocal purchasing arrangement and the result is unfair competition. Reciprocity is generally considered to be a reasonable business prac- tice, because it makes sense to patronize firms that help your organization achieve its sales and profit goals. PTS: 1 REF: 108 OBJ: 07-6 TOP: AACSB Communication | TB&E Model Strategy 13. Briefly define and describe each of the categories of business goods and services. Give two specific examples of goods or services that fit into each category. ANS: 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 dir- ectly. Text examples include large machinery, mainframe computers, blast furnaces, generators, air- planes, and buildings. ACCESSORY EQUIPMENT is shorter-lived than major equipment and is often charged as an expense in the year it is purchased. Advertising and local distributors play a role in the sale of accessory equip- ment. Text examples include portable power tools, word processors, and fax machines. RAW MATERIALS are unprocessed extractive or agricultural products that are used as "ingredients" in other finished goods. Personal selling, direct channels, and price inflexibility characterize the mar- keting of raw materials. Text examples include mineral ore, timber, wheat, and fish. COMPONENT PARTS are either finished items ready for assembly or products that need little pro- cessing to become part of another product. Component parts sometimes retain their identity, often need replacement in the final product, and are marketed through OEM and replacement markets. Text ex- amples include spark plugs, motors, and automobile tires. PROCESSED MATERIALS are used directly in the manufacturing of other products and do not retain their identity in the final product. Text examples include sheet metal, plastics, corn syrup, lumber, and specialty steel. The materials may be custom-processed, so price and service are important in vendor selection. SUPPLIES (or MRO items) are consumable items that are not part of the final product. They are relat- ively inexpensive and have a short life. Text examples include lubricants, cleaning supplies, pencils, and paper.
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