Chapter 5

Question 1

define business marketing

Answer 1

Marketing products to firms, governments, or nonprofit organizations for use in the creation of goods and services that they then produce and market to others

Question 2

What are organizational buyers

Answer 2

Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

Question 3

Organizational buyers are divided into what 4 different markets

Answer 3

1. industrial
2. reseller
3. government
4. non profit markets

Question 4

What do industrial firms do

Answer 4

in some way reprocess a product or service they buy before selling it again to the next buyer

Question 5

Describe reseller markets

Answer 5

Wholesalers and retailers that buy physical products and sell them again without any reprocessing are resellers

Question 6

Describe government markets

Answer 6

Government units are the federal, provincial, regional, and municipal agencies that buy goods and services for the constituents that they serve

Question 7

Describe non profit organizations

Answer 7

do not have financial profit as the goal, seek to provide good and services for the good of society

Question 8

Describe the North American Industry Classification System (NAICS)

Answer 8

Provides common industry definitions for Canada, Mexico, and the United States.

Question 9

most business to business marketers use what tactic

Answer 9

content marketing tactics - these keep potential customers engaged by ensuring that relevant and valuable content is available at various touch points

Question 10

Define derived demand

Answer 10

Demand for industrial products and services driven by demand for consumer products and services.

ex. Pulp and paper products demand is based on consumer demand for products like newspapers

• often based on expectations of future consumer demand

Question 11

Describe inelastic demand

Answer 11

Demand for products does not change because of increases or decreases in price

• in B2B customer will buy the same quantity even if the price of a component goes up

Question 12

Describe fluctuating demand

Answer 12

Demand for business products and services changes more than demand for consumer products and services

Question 13

what is the size of purchase like in organizational buying compared to consumer buying

Answer 13

Organizational purchase has a much larger purchase size than consumer purchase

Question 14

What is the organizational buying objective

Answer 14

they buy products and services to help them achieve their own objectives

Question 15

what is organizational buying criteria

Answer 15

businesses use criteria in their purchasing

Question 16

what is reverse marketing

Answer 16

many organizational buyers today are transforming their buying criteria into specific requirements that are communicated to suppliers. Organization buyers are attempting to work with suppliers to make their product, services, and capabilities fir the buyers needs

Question 17

B2B buying decisions are driven by what emotion

Answer 17

fear - it is all about minimizing fear by eliminating risk

Question 18

What is organizational risk

Answer 18

typically formalized and dealt with in the buying process

Question 19

what is personal risk

Answer 19

unstated but remains a huge influencing factor in organizational buying

Question 20

Define reciprocity

Answer 20

an industrial buying practice in which two organizations agree to purchase each others products and services

Question 21

define a supply partnership

Answer 21

Relationship between a buyer and supplier that adopts mutually beneficial objectives, policies, and procedures.

Question 22

Describe organizational buying behaviour

Answer 22

Process by which organizations determine the need for goods and then choose among alternative suppliers.

• it is the decision making process that organizations use to establish the need for products and services, and to identify evaluate and choose among alternative brands and suppliers

Question 23

what is a buying centre

Answer 23

Group of people in an organization who participate in the buying process

Question 24

buying center - describe users

Answer 24

are the people in the organization who actually use the product or service, such as office staff who will use new word processing software

Question 25

Buying center - describe influencers

Answer 25

They affect the buying decision, usually by helping define the specifications for what is bought. They usually have specialized knowledge. The information systems manager would be a key influencer in the purchase of a new computer network

Question 26

Buying center - describe buyers

Answer 26

Have formal authority and responsibility to select the supplier and negotiate the terms of the contract. The purchasing manager probably would perform this role in the purchase of a computer network

Question 27

Buying center - describe deciders

Answer 27

Have the formal or informal power to select or approve the supplier that receives the contract.

Question 28

Buying center -describe gatekeepers

Answer 28

Control the flow of information in the buying center.

Question 29

what are buy classes

Answer 29

Three types of organizational buying situations: straight rebuy, modified rebuy, or new buy.

Question 30

describe straight rebuy

Answer 30

reorder existing product of service from list of acceptable suppliers, probably without checking with users or influencers from the engineering production or quality control departments ex. office supplies an maintenance services

Question 31

Describe modified rebuy

Answer 31

the company is purchasing a product that it has experience purchasing, but it wants to change the product specifications, price, delivery schedule, or suppliers. Involves other people, more input would be necessary than for a straight rebuy

Question 32

Describe new buy

Answer 32

company is buying product or service for the first time, this involves greater potential risk and is more complex than other buying situations - has a large buying center

Question 33

The process of segmenting business markets divides markets based on

Answer 33

type of customer, size, buying situation, customer location, and benefits sought

Question 34

why is online buying in organizational markets prominent

Answer 34

1. organizational buyers depend heavily on timely supplier information that describes product availability, technical specifications, application uses, price and delivery schedules --> this can be conveyed quickly online 2. Web based tech has been shown to substantially reduce buyer order processing costs. 3. business marketers have found that web based tech can reduce marketing costs, particularly sales and advertising expenses and broaden their potential customer base for many types of products and services

Question 35

what are e marketplaces

Answer 35

Online trading communities that bring together buyers and supplier organizations.

Question 36

independent e markets have what features

Answer 36

- thousands of geographically dispersed buyers and sellers - frequently changing prices cause by demand and supply fluctuations - time sensitivity due to perishable offerings and changing technologies - easily comparable offerings between a variety of suppliers

Question 37

What is a traditional auction

Answer 37

Occurs when a seller puts an item up for sale and would-be buyers bid in competition with each other - as more buyers get involved there is an upwards pressure on prices

Question 38

describe reverse auctions

Answer 38

Occurs when a buyer communicates a need for something and would-be suppliers bid in competition with one another. - as more suppliers get invovled there is downward pressure on price