B2b Flashcards
What three components does the business market consist of?
Commercial customers, Institutional customers, Governmental customers
What is market sensing capability?
The capability that concerns how well the organization is equipped to continuously sense changes in its market and anticipate customer responses to marketing programs
What does it mean that price elasticity of demand is elastic?
Demand is elastic when a given percentage change in price brings about an even larger percentage change in the quantity demanded
What does it mean that price elasticity of demand is inelastic?
Demand is inelastic when a given percentage change in price brings about a smaller percentage change in the quantity demanded
How do you determine what suppliers fall within the business marketing domain?
Both buyer and seller are businesses (business buying from another business)
What does it mean to be a user vs. an original equipment manufacturer (OEM)?
Users purchase industrial products to produce other goods; OEM purchases industrial goods to incorporate into other products
What is derived demand?
Refers to the direct link between the demand for an industrial product and the demand for consumer products
What is the difference between an installation and accessory equipment?
Installations are major long-term investment items; accessory equipment is generally less expensive and short-lived
What are component parts?
They can be installed directly into another product with little or no additional processing
What factors distinguish business marketing from consumer marketing?
Intended use of product and intended consumer
What does it mean to be market driven?
Matching resources, skills, and capabilities to customer needs that are currently not being served adequately
What are examples of new task, modified rebuy, and straight rebuy?
New task: totally different problem; Straight rebuy: continuing requirement; Modified rebuy: re-evaluating alternatives
What could an out-supplier do in a modified rebuy situation?
Hold the organization in modified rebuy status, offer performance guarantees
What could an in-supplier do in a modified rebuy situation?
Understand needs, move to straight rebuy, remedy customer problems
What are environmental forces that influence organizational buying behavior?
Economic outlook, technological change, global trade relations
What are the roles in the buying center?
- Users
- Gatekeepers
- Influencers
- Deciders
- Buyer
What is a reverse auction?
Process where one buyer invites bids from several prequalified suppliers in a competitive bidding process
What are the main elements of Total Cost of Ownership?
Considers the full range of costs associated with the purchase and use of a product over its complete life cycle
What are examples of situations that trigger an organizational buying process to start?
- Need for equipment
- Unhappy with current supplier
- Sales presentation
- Advertising
What problem solving approach is typically used in a new task buying decision?
Extensive problem-solving
What problem solving approach is typically used in a modified rebuy decision?
Limited problem-solving
What is the focus in a transactional exchange?
Focuses on the timely exchange of basic products for highly competitive market prices
What are operational linkages?
Reflect how much the systems, procedures, and routines of the buying and selling firms have been connected
In what situations would buying firms prefer transactional relationships?
When supply market features many alternatives and the purchase decision is not complex
In what situations would buying firms prefer more collaborative relationships?
When alternatives are few and the market is dynamic
What is the industry bandwidth?
The range of strategies competing firms pursue from transactional to collaborative relationships
What is relationship marketing?
Centers on all activities directed toward establishing, developing, and maintaining successful exchanges
What are the two types of switching costs when considering switching suppliers?
- Investment
- Risk of exposure
What are goals of CRM?
- Achieving continuing dialogue with customers
- Personalized treatment of valuable customers
- Ensuring customer retention
- Effectiveness of marketing initiatives
What is Activity Based Costing?
Illuminates activities associated with serving a customer and links transaction data with financial information
What is a value proposition?
Represents the products, services, ideas, and solutions that advance customer performance goals
What are macro bases of segmentation?
- Characteristics of buying organization
- Product/service application
- Characteristics of purchasing situation
What are micro bases of segmentation?
- Criteria important for purchase decision
- Purchasing strategies
- Structure of decision-making unit
- Importance of purchase
- Organizational innovativeness
- Personal characteristics
What does the type of buying situation mean in macro level segmentation?
New task, modified rebuy, and straight rebuy
What are personal characteristics used in micro level segmentation?
- Demographics
- Decision style
- Risk
- Confidence
- Job responsibility
What are qualitative techniques used to forecast sales?
- Executive judgment
- Sales force composite
- Delphi method
When is the Delphi method of forecasting appropriate to use?
Long term forecasting for new products or situations not suited to quantitative analysis
What is time series analysis?
Uses historical data ordered chronologically to project sales trends
What are causal models?
Identifies factors that have affected past sales and implements them in a mathematical model
Explain the different elements of time series analysis.
- Trend
- Cycle
- Seasonal
- Irregular
What does the Value in use segmentation criteria focus on?
The product’s economic value to the user relative to a specific alternative
What do corporate, business unit, and functional strategies focus on?
- Corporate: overall scope and direction of a firm
- Business unit: how a firm competes in a given industry
- Functional: efficient resource allocation to support business-level strategy
What is a business unit?
A single business or collection of businesses with a distinct mission and responsible manager
Explain the different roles in business marketing decision making.
- Responsible
- Approve
- Consult
- Implement
- Inform
What are the components of a business concept or model?
- Customer interface
- Core strategy
- Strategic resources
- Value network
What are elements of the customer interphase?
- Fulfillment and support
- Information and insight
- Relationship dynamics
- Pricing structure
What are components of the firm’s value network?
- Suppliers
- Strategic alliance partners
- Coalitions
What is a balanced scorecard?
Provides managers with a comprehensive system for converting a company’s vision and strategy into performance measures
What are forms of differentiation used by B2B marketers when developing the value proposition?
- Low total cost
- Product innovation and leadership
- Complete customer solutions
- Lock-in
What is a strategy map?
Provides a visual representation of the cause-and-effect relationships among the components of the balanced scorecard
What elements do you find under the Customer Perspective in the Balanced Score Card?
- Market share
- Customer acquisition
- Customer retention
- Customer satisfaction
- Customer profitability
