CH04: Analyzing Business Markets Flashcards
business market
all orgs that acquire goods/services used in the production of other goods/services
main characteristics of business markets
- fewer, larger buyers
- close supplier/customer relationships
- derived demand
- inelastic demand
- fluctuating demand
- direct purchasing
types of buying situations
- straight rebuy
- modified rebuy
- new task
people involved in the buying center
- initiators
- users
- influencers
- deciders
- approvers
- buyers
- gatekeepers
what is the role/purpose of the buying center
seek the best value from fewer and better suppliers
the 8 stages of the business-buying process
- problem recognition
- need description
- product specification
- supplier search
- proposal solicitation
- supplier selection
- contract negotiation
- performance review
product value analysis
an approach to cost reduction that studies whether components can be redesigned, standardized, or made cheaper without adversely affecting performance; basically, optimizing costs without sacrificing quality
vertical hub
buying hub centered on an industry (e.g. plastics, steel, paper)
functional hub
buying hub centered on a business function (e.g. logistics, media buying, energy management)
main factors by which to evaluate vendors
- price
- reputation
- reliability
- agility
blanket contract
supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time; stockless purchase plan
long-term contracts
used by buyers to ensure a steady flow of materials; used when buyer fears a shortage of key materials and are willing to buy and hold large quantities
vendor-managed inventory
suppliers are privy to customer inventory levels and take responsibility for continuous replenishment programs
systems buying
an all-in-one solution from one seller; originated from govt wanting complete weapons systems
systems selling
used as a marketing tool; one supplier provides a turnkey solution; supplier bids out the subcomponents to subcontractors
