Chapter 5 - Business-to-Business Marketing

Question 1

Business-to-business marketing

Answer 1

refers to 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

Question 2

manufacturing

Answer 2

Involves manufacturing (levis, ford), selling to wholesalers that, in turn sell products to retailers

Question 3

service

Answer 3

Include service firms that market their services to other businesses but not the ultimate consumer

Question 4

B2B Markets

Answer 4

• manufacturers or producers
• resellers
• institutions
• government

Question 5

Manufacturers or Producers

Answer 5

Manufacturers buy raw materials, components, and parts that allow them to manufacture their own goods - IBM consultants

Question 6

Resellers

Answer 6

Marketing intermediaries that resell manufactured products without significantly altering their form

Question 7

Institutions

Answer 7

Hospitals, educational organizations, prisons, religious organizations, and other non-profit organizations also purchase all kinds of goods and services for people they serve

Question 8

Government

Answer 8

The largest purchases of goods and services

Question 9

Key differences between B2B buying and B2C buying

Answer 9

• Nature of the buying process - more formalized
• Nature of the marketing mix
• Prices are inelastic in the short run

Question 10

Stages of the B2B Buying process

Answer 10

1. Need Recognition
2. Product Specificaiton
3. RFP Process
4. Proposal analysis and supplier selection
5. Order specification (purchase)
6. Vendor performance assessment using metrics

Question 11

Stage 1: Need Recognition

Answer 11

In the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that is has an unfilled need

Question 12

Stage 2: Product Specification

Answer 12

After recognizing the needs and considering the alternative solutions

Question 13

Stage 3: RFP Process

Answer 13

The request for proposal (RFP) is a common process through which buying organization invite alternative suppliers to bid on supplying their required components or specifications

Question 14

Stage 4: Proposal Analysis and Supplier Selection

Answer 14

The buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP and narrows the process to a few supplies and discuss key terms of the sale, such as price, quality, delivery, and financing

Question 15

Stage 5: Order Specification (purchase)

Answer 15

• The firm places its order with its preferred suppliers
  The order will include a detailed description of the goods, prices, delivery dates, and in some cases, penalties if the order is not filled on time
• The supplier than sends an acknowledgment that it has received the order and will fill it by the specified date

Question 16

Stage 6: Vendor Performance Assessment Using Metrics

Answer 16

Just as the consumer buying process, firms analyze their vendors performance so they can make decisions about their future purchases

Can be influenced by 3 factors within the org
- buying centre
- buying org philosophy or corporate culture
- buying situation

Question 17

buying center

Answer 17

participants can range from employees who have a formal role in purchasing decisions, to members of the design team that is specifying the particular equipment or raw materials needed, to employees who will be using a new machine that is being ordered

Question 18

Different Buying roles

Answer 18

• initiator
• influencer
• decider
• buyer
• user
• gatekeeper

Question 19

The initiator:

Answer 19

the person who first suggests buying the particular product or service

Question 20

Influencer:

Answer 20

: the person whose views influence other members of the buying center in making the final decision

Question 21

Decider

Answer 21

the person who ultimately determines any part of or the entire buying decision-whether to buy, what to buy, how to buy, or where to buy

Question 22

Buyer

Answer 22

: the person who handles the paperwork of the actual purchase

Question 23

User

Answer 23

the person who consumes or use the product or service

Question 24

Gatekeeper

Answer 24

the person who controls information or access, or both, to decision makers and influencers

Question 25

Organizational Culture:

Answer 25

• A firm’s organizational culture reflects the set of values, traditions, and customs that guides its managers and employees behavior
• It comprises a set of unspoken guidelines that employees share with one another through various work situations

Question 26

4 Types of Org Culture

Answer 26

1. Autocratic buying centre
2. democratic buying centre
3. consultive buying centre
4. consensus buying centre

Question 27

Autocratic buying center

Answer 27

a buying center in which one person makes the decision alone, though there may be multiple participants

Question 28

Democratic buying center

Answer 28

a buying center in which the majority rules in making decisions

Question 29

Consultative buying center -

Answer 29

a buying center in which one person makes the decision, but he or she solicits input from other before doing so

Question 30

Consensus buying center -

Answer 30

• a buying center in which all members of the team must reach a collective agreement through which they can support a particular purchase

Question 31

Buying situations

Answer 31

• new buy
• modified rebuy
• straight rebuy

Question 32

New buy

Answer 32

in a new buy situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item

Question 33

Modified rebuy

Answer 33

the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quantity level, customer service level, and/or option

Question 34

A straight rebuy:

Answer 34

occurs when the buyer or buying organization simply buy additional units or products that has previously been purchased