Marketing 1 Chapter 6

LO 1 How do B2B firms segment their markets?
* The same basic principles apply to both B2B and consumer segmentation.
* B2B firms divide the market into manufactures, resellers, institutions, and government.
* B2B firms use NAICS to identify potential customers by type of business and then develop appropriate marketing strategies.
Business-To-Business (B2B) Marketing
The process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers.
Derived Demand
The linkage between consumer’s demand for a company’s output and its purchase of necessary inputs to manufacture or assemble that particular output.
B2B Markets
* Manufacturers or Producers
* Resellers
* Institutions
* Government
North American Industry Classification Sysstem (NAICS) Codes
U.S. Bureau of census classification scheme that categorizes all firms into a hierarchical set of six digit codes.
Identify the various types of B2B markets.
* Mnaufacturers
* resellers
* institutions
* government
What are the NAICS codes and how are they used?
North American Industry Classification System catagorize all firms into a hierarchical set of six digit codes. They are useful to B to B marketers for segmenting and targeting their markets.
LO 1 The NAICS system is:
* the joint system devised by Canada, Mexico, and the US to classify business organizations
* a resource for B2B marketers for segmenting and targeting their markets.
* the successor to the Standard Industrial Classification (SIC) that had been in place for more than sixty years
* a system that can be used in Mexico
* all if the above
LO 1 apaul bought a laptop computer for personal use- mainly gaming- and another one for use in his consulting business. His purchases were:
* both b-to c purchases
* both B2B purchases
* THE FIRST WAS B2C AND THE SECOND WAS B2B
* the distinction is not clear because he is advising consumers
* the distinction is not clear because his gaming helps him understand the needs of his business.
LO 1 Business-to business marketing refers to selling goods or services to all of the following EXEPT:
* manufacturers
* the federal government
*institutions like hospitals
* CONSUMERS
* retailers
LO 2 How does B2B buying differ from consumer buying behavior?
* B2B buying is more formal than consumer buying.
* Product specifications are critical to customers.
* The RFP process is often used.
* Vendor assessment is more formal.
What are the six steps to the Business-To-Business process?
* Need recognition
* Product Specification
* RFP Process
* Proposal Analysis, Vendor Negotiation, and Selection
* Order Specification
* Vendor Performance Assessment Using Metrics
Request For Proposals (RFP)
A process through which buying organizations invite alternative suppliers to bid on supplying their required components.
Identify the stages of the BwB buying process.
* Need recognition
* Product specification
* RFP process (Request for proposal)
* Proposal analysis and supplier selection
* Order specification
*Vendor preformance assessment using metrics
How do you do a vendor analysis?
* The buying team developes a list of issues that it believs to be important to consider in the evaluation of the vendor(column 1)
* Next, in column 2, the buying team assigns an importance sccore to each issue. The more important the issue the higher the score.
* In the third column, the buying team assigns a number that reflects its judgment about how well the vendor preforms.
* In the fourth column, to get the overall preformance of the vendor, the team muliply column 2 with column 3.
LO2 The end of the Business-toBusiness Buying process does not end with the receipt of the purchased goods or services. Most companies will:
* use reverse auctions to git rid of products they mistakenly purchased
* evaluate organizational culture
**** conduct vensor analysis
* return merchandise thay did not use
* attempt to renegotiate payment terms
LO 2 Your firm has recently responded to an RFP from a large manufacturer. You and your team have worked hard on the response, and your next step will be to:
* contact the manufacturer for the product specification
* celebrate the new business and begin planning on how to spend your bonus check
**** expect the manufacturer to analyze the proposal and perhaps come back to you to negotiate key provision of what you’ve submitted
* begin work with the production and to schedule the incremental work
* None of the above
LO2 Compared to the B2B process, the information search and alternative evaluation steps in the B2B process:
* are easy and often not used
* are internal functions of a firm and of little intrest to the marketer
* ARE MORE FORMAL AND STRUCTURED
* make the vendors responsible in the RFP
LO 3 Organizational culture reflects the values, traditions and customs that guide employee’s behavior, I the context of the buying canter, there are number of recoginized cultures of critical importance to B2B marketers. Which of the following is NOT one of these buying cultures?
**** ethical
* Autocratic
* Democratic
* Consensus
* Consultive
LO 3 Sylvia supervises th print shop in a large nonprofit organization. One of the machine operators has complained to her about a particulat piece of equipment which is continually malfunctioning, After she made the formal request to replace tha equipment, she was asked to serve on a small committee to advise the Purchasing Agent and CFO in what kind of new equipment to purchase. What role does Sylvia play in this buying cinter?
* user
* INITIATOR ( MADE A FORMAL REQUEST TO REPLACE EQUIPMENT)
* influencer
* decider
* gatekeeper
LO 3 What factors influence the B2B buying process?
* In B2B sotiatopms. several people wil be involves, oftenin a buying center.
* A firm’s organizational culture will affect the buying process.
* Sales representatives may neel special skills or enperience to match the customers’ needs.
* Purchasing will differ depending on whether the product or service is being bought for the first time, or if it is modified, or if it is a straight rebuy.
Buying Center
The group of people typically responsible for the buying decisions in large organizations.(Initiator, influencer, decider, buyer, user, gatekeeper)
Initator
The buying center participant who first suggests buying the particular product or service.
Influencer
The buying center participant whose views influence other members of the buying center in making the final decision.
Decider
The buying center participant who ultimately determines any part of or the entire buying decisino– whether to buy or where to buy.
Buyer
The buying center participant who handles the paperwork of the actual purchase.
User
The person who consumes or uses the product or service puchased by the buying center
Gatekeeper
The buying center participant who controls, information or access to decision makers and influencers.
Organizational Culture
Reflects the set of values, traditions and customs that guide a firm’s employees’ behavior.
Autocratic Buying Center
A buying center in which one person makes the decision alone, through ther may be multiple participants.
Democratic Buying Center
A buying center in which the majority rules in making decisions.
Consensus Buying Center
Abuying center in which all members of the team must reach a collective agreement that they can support a particualr purchase.
Consultive Buying Center
A buying center in which one person makes the decision but he or she solicits input from others before doing so.
New Buy
A situation when a B2B customer purchases a good or service for the first time.
Modifies Rebuy
Refers to when the buyer has purchassed a similar priduct in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth.
Straight Rebuy
Refers to when the buyer or buying organization simply buys assitional units of products that have previously been puchased.
What factors affedt the B2B buying process?
* the buying center
* the buying orginizations philosophy or corporate culture
* the buying situation
What are the six different buying roles?
* initiator- the person who first suggests buying the product or service
* influencer- the person whose views influence the other members in making the puchase decision.
* decider- the person who ultimatly determines in any part or all, whether to buy, what, how much, where, and when to buy
* buyer- the person who handles the actual paperwork of the purchase
* user- uses the product or service
* gatekeeper- controls info or access
What is the difference between new buy, rebuy, and modified buy?
*New buy-first time purchase, involved desision, all six steps of buying process are used,involve many people.
* Modified Rebuy-purchased similar products in the past but has decided to change specifications such as price, quality, level of service, ect.
* Straight Buy- simply a reorder of thing purchased in the past
LO 3 In a _____ B2B buying situation, the buying decision is likely to quite simple.
* new buy
* modified Buy
* STRAIGHT BUY
* either a new buy or modified rebuy
* all of the above
LO 3 The Internet has changed the way B2B salespeople can interact with their customers and prospects. A critical use is to:
* check the product availability
* check on order status
* confer with his sales manager about prices
* confer with sales manager about discounts
**** all of the above
LO 3 While the B2C and B2B buying processes mirror each other, a significant difference between B2B and B2C marketing is:
*the importance of the buying center
* the importance of the culture of the purchasing firm
* the formal structure of the buying process
* the context of the buying situation
*** all of the above