The naics system will provide the requested sales

Info icon This preview shows pages 49–51. Sign up to view the full content.

View Full Document Right Arrow Icon
could use (NAICS) data for market analysis, segmentation, and targeting. The NAICS system will provide the requested sales volume information at an industry level as well as information on the number of firms, number of employees, and geographic breakdowns of the in- dustry. PTS: 1 REF: 106-107 OBJ: 07-5 TOP: AACSB Communication | TB&E Model Research 10. Explain the four ways demand in business markets differs from demand in consumer markets. ANS: DERIVED DEMAND. The demand for business-to-business products is derived from the demand for consumer products. This is because organizations buy products to be used directly or indirectly in the production of consumer products. Therefore, firms must carefully monitor demand patterns in final consumer markets. INELASTIC DEMAND. The demand for business-to-business products tends to be price inelastic. This means changes in price will not significantly affect demand for the product (unlike consumer markets).
Image of page 49

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
JOINT DEMAND. Most business products involve the combination of many components into a final product. Joint demand occurs when two or more items are used in combination in a final product. The text provides an example of microcomputer disk drives and memory chips. Joint demand is much more common in business markets. FLUCTUATING DEMAND. The demand for business products tends to be more unstable than the de- mand for consumer products. The multiplier effect explains how a slight change in consumer demand can result in a significant change in demand for business products. PTS: 1 REF: 106-107 OBJ: 07-6 TOP: AACSB Communication | TB&E Model Customer 11. Name and briefly describe five of the major differences between business and consumer markets. ANS: There were several points of differentiation discussed in the chapter, and students can discuss any five: DEMAND. There are several differences between organizational and consumer demand. Organiza- tional demand is derived from the demand of consumer products, tends to be price inelastic, has joint demand with related products used in combination with the final product, and tends to fluctuate more than consumer demand. PURCHASE VOLUME. Business customers buy in much larger quantities (both in single orders and in total annual volume) than do consumers. NUMBER OF CUSTOMERS. Business marketers tend to have far fewer customers than consumer marketers. LOCATION OF BUYERS. Unlike consumer markets, business customers tend to be geographically concentrated. DISTRIBUTION STRUCTURE. Channels of distribution tend to be much shorter in business market- ing. Direct channels are also more common. NATURE OF BUYING. Business buying is usually more formalized with responsibility assigned to buying centers or purchasing agents. NATURE OF BUYING INFLUENCE. More people are involved in business purchasing decisions than in consumer purchases, because many levels and departments of the firm are involved in the pur- chase.
Image of page 50
Image of page 51
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern