Chapter 5

Question 1

What are the differences between Business-to-business and Consumer markets?

Answer 1

1. Relationship with Customer
2. Number and Size of Customer
3. Geographic Concentration
4. Complexity of the Buying Process
5. Complexity of the Supply Chain
6. Demand for Products

Question 2

How do relationships with the customer differ from B2B and B2C?

Answer 2

B2B - Invest more in maintaining personal relationship

B2C - Impersonal; exist through electronic communication

Question 3

How does the number and size of customers differ from B2B and B2C?

Answer 3

B2B - Fewer but larger customers

B2C - More customers but buy in smaller, less frequent quantities

Question 4

How does the geographic concentration differ from B2B and B2C?

Answer 4

B2B - Suppliers located strategically by the buyer

B2C - Could be anywhere in the world

Question 5

How does the complexity of the buying process differ from B2B and B2C?

Answer 5

B2B - Complex process that can can take a long time (years in some cases) and involve more people

B2C - Fewer people, often just one, directly involved in the purchase decision is often based on personal and psychological benefits

Question 6

How does the complexity of the supply chain differ from B2B and B2C?

Answer 6

B2B - Direct from supplier to manufacturer

B2C - Complex with product moving through the channel to reach the consumer

Question 7

How does the demand for product differ from B2B and B2C?

Answer 7

B2B - Derived from consumer demand, fluctuates with changes to consumer demand, and more inelastic (less price sensitive)

B2C - Consumer perception about their own needs mitigated by environmental factors and marketing stimuli

Question 8

What are the different buying situations?

Answer 8

1. Straight Rebuy
2. Modified Rebuy
3. New Purchase

Question 9

What is a straight rebuy?

Answer 9

Companies use a wide range of products on a consistent basis and simply reorder when needed. (office supplies, raw materials)

Question 10

What is a modified rebuy?

Answer 10

Occurs when the customer id familiar with the product and supplier but is looking for additional information.

Question 11

What is a new purchase?

Answer 11

The purchase of a product or service by a customer for the first time.

This is the most complex and difficult buying situation.

Question 12

What is the process of the purchasing process?

Answer 12

1. Problem Recognition
2. Define the need and product specifications
3. Search for Suppliers
4. Seek Sales Proposal – Response to RFP
5. Make the Purchase Decision
6. Post-Purchase Evaluation of Product & Vendor

Question 13

Nature of B2B Relationships

Answer 13

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Question 14

What are buying centers?

Answer 14

All those individuals who participate in the purchasing decision-making process

Question 15

What are the roles within buying centers?

Answer 15

Users (staff)
Influencers (committee)
Deciders (president)
Approvers (purchasing staff)
Buyers
Gatekeepers ( control information)

Question 16

Actual customers of a product or service who have a great deal of input at various stages of the buying decision process but are typically not decision makers

Answer 16

User

Question 17

The individual who starts the buying decision process

Answer 17

Initiator

Question 18

An individual, either inside or outside the organization, with relevant expertise in a particular area who provides information used by the buying center in making a final buying decision

Answer 18

Influencer

Question 19

An individual who controls access to information and relevant individuals in the buying center

Answer 19

Gatekeeper

Question 20

An individual within the buying center who ultimately makes the purchase decision

Answer 20

Decider

Question 21

Local, state and federal entities that have unique and frequently challenging purchasing practices for manufacturing firms

Answer 21

Government

Question 22

Nongovernmental organizations driven by the delivery of service to the target constituency, rather than by profits

Answer 22

Institutions