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Marketing 3010 > Chapter 7 - Why Organizations Buy > Flashcards

Chapter 7 - Why Organizations Buy Flashcards

1
Q

Business to Business Marketing/Organizational Markets

A

Marketing of goods and services that business and organizational customers need to produce other goods and services for resale or to support their operations.
- Purposes other than personal consumption.

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2
Q

Difference of B2B Markets

A
  • Products have to meet requirements of everyone involved.
  • Narrow customer base and a small number of buyers.
  • Large purchases (high risk and high cost)
  • Customers located in small geographic area.
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3
Q

Derived Demand

A

Demand for business or organizational products derived from demand for consumer goods or services.
- B2B Demand

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4
Q

Inelastic Demand

A

Changes in price have little or no effect on the amount demanded.
- B2B demand isn’t always inelastic

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5
Q

Acceleration Principle (Multiplier Effect)/Fluctuating Demand

A

Small changes in consumer demand can create large increases or decreases in business demand.
- A product’s life expectancy influences fluctuations.

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6
Q

Joint Demand

A

Occurs when two or more goods are necessary to create a product.

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7
Q

Producers

A

The individuals or organizations that purchase products for use in the production of other goods and services.

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8
Q

Resellers

A

The individuals or organizations that buy finished goods for the purpose of reselling, renting, or leasing to others to make a profit and to maintain their business operations.

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9
Q

Governments

A

The federal, state, county, and local governments that buy goods and services to carry out public objectives and to support their operations.

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10
Q

Competitive Bids

A

A business buying process in which 2 or more suppliers submit proposals (price and data) for a proposed purchase and the firm providing the better offer gets the bid.

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11
Q

Not-for-Profit Institutions

A

organizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members.

  • hospitals, churches, universities, museums, nursing homes.
  • Low budgets
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12
Q

North American Industry Classification System

A
  • NAICS
  • Numerical coding system that the United States, Canada, and Mexico use to classify firms into detailed categories according to their business activities.
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13
Q

Buy Class

A

Buying situations that characterizes the degree of time and effort required to make a decision.

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14
Q

Straight Rebuy

A

A buying situation in which business buyers make routine purchases that require minimal decision making.
- Low risk purchases

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15
Q

Modified Rebuy

A

A buying situation classification used by business buyers to categorize a previously made purchase that involves some change and that requires limited decision making.
- Firms shop around for suppliers with better prices, quality, or delivery times.

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16
Q

New-Task Buy

A

A new B2B purchase that is complex or risky and that requires extensive decision making.

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17
Q

Centralized Purchasing

A

A business buying practice in which a single department does the buying for all the company’s facilities.

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18
Q

Buying Center

A

The group of people in an organization who participate in a purchasing decision.
- Cross-functional team

19
Q

Roles in the Buying Center

A
  • Initiator
  • User
  • Gatekeeper
  • Influencer
  • Decider
  • Buyer
20
Q

Initiator

A

Recognized that a purchase needs to be made

21
Q

User

A

Individuals who will ultimately use the product

22
Q

Gatekeeper

A

Controls flow of information to others in the organization.

23
Q

Influencer

A

Affects decision by giving advice and sharing expertise.

24
Q

Decider

A

Makes the final purchase decision.

25
Q

Byuer

A

Executes the purchase decision.

26
Q

Business Buying Decision Process

A
  1. Problem Recognition
  2. Information Search
  3. Evaluation of Alternatives
  4. Product and Supplier Selection
  5. Post-purchase Evaluation
    “PIEPP”
27
Q

Problem Recognition

A
  • Occurs when someone sees that a purchase can solve a problem.
  • Purchase requisition
  • Buying Center Formed
28
Q

Information Search

A

The buying center searches for information about products and suppliers.

  • Product Specifications Developed
  • Potential Suppliers Identified
  • Proposals and Quotations Obtained.
29
Q

Product Specifications

A

A written description of the quality, size, weight, and so forth required of a product purchase.

30
Q

Evaluation of Alternatives

A
  • Buying Center assesses the proposals.
31
Q

Product and Supplier Selection

A
  • Total Quality Management approach helps to select the suppliers.
32
Q

Just In Time (JIT)

A

Inventory management and purchasing processes that manufacturers and resellers use to reduce inventory to very low levels and ensure that deliveries from suppliers arrive only when needed.

33
Q

Single Sourcing

A

The business practice of buying a particular product from only one supplier.

34
Q

Multiple Sourcing

A

The business practice of buying a particular product from many suppliers.

35
Q

Reciprocity

A

A trading partnership in which 2 firms agree to buy from one another.

36
Q

Outsourcing

A

The business buying process of obtaining outside vendors to provide goods or services that otherwise might be supplied in house.

37
Q

Reverse Marketing

A

A business practice in which a buyer firm attempts to identify suppliers who will produce products according to the buyer firm’s specifications.

38
Q

Post-Purchase Evaluation

A

When purchases are evaluated to see if the performance of the product and the supplier is living up to expectations.

39
Q

B2B E-commerce

A

Internet exchanges between 2 or more business or organizations.

40
Q

Extranet

A

Private, corporate computer network that links company departments, employees, and databases to suppliers, customers, and others outside the organization.

41
Q

Private Exchanges

A

Systems that link an invited group of suppliers and partners over the Web.

42
Q

Authentification

A

Making sure that only authorized individuals are allowed to access a site and place an order.

43
Q

Firewall

A

A combination of computer hardware and software that ensure only authorized individuals gain entry into a computer system.

44
Q

Encryption

A

Scrambling a message so that only another individual has the right “key” for deciphering it can unscramble it.

Marketing 3010 (14 decks)

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