Chapter 8 &9 exam review Flashcards
Individuals, organizations, or groups that purchase a specific kind of product for resale, direct use in producing other products. or use in general daily operations
Business Markets
individuals or business organizations that purchase products in order to make a profit by using them in producing other products or in their operations
Producer Markets
Resellers: intermediaries (wholesalers) who buy finished goods and resell them to final consumers for a profit.
Reseller Markets
federal, state, county, or local governments that buy goods and services to support operations and provide products to their constituencies
government markets
what are the factors resellers consider?
level of demand, resale price, space required, sales per square foot, suppliers ability adequate quantities when and where needed, availability of technical assistance
organizations with charitable, educational, community, or other non-business goals; members can include churches, hospitals, charitable organizations, and private colleges; marketers may use special techniques to target them
Institution Markets
information about business customers is based on industrial classification systems
Industrial classification systems
system was developed by the federal government but replaced
standard industrial classification (SIC)
is used by the U.S., Canada, and Mexico to help generate comparable statistics
North American Industrial Classification System (NAICS)
An arrangement in which two organizations agree to buy from each other
Reciprocity
large orders, expensive items, extended negotiations, and reciprocity
Characteristics of transactions
well informed about the procedures about the products they purchase; demand detailed information and technical specifications; help the firm achieve organizational objectives; engage in rational buying behaviors, often perform partnerships with suppliers
Attributes of Business Customers
Price, Product Quality, Service, and supplier relationships are all part of what dimension of marketing to business customers
Primary Concerns of Business Customers
a business customer views price as the amount of investment necessary to obtain a certain level of return or savings
Price
a product must meet specifications
Product Quality
offered by suppliers, directly and indirectly, influences customers’ costs, sales, and profits
Services
what are the methods of Business Buying?
Description, inspection, sampling, negotiation
when products are highly standardized, a buyer can order by describing quantity, grade, and other attributes
Description
used with some products that have unique characteristics and vary in regard to condition
Inspection
Entails taking a specimen of the product and evaluating it for sustainability before purchase
Sampling
some purchases are based on negotiated contracts wherein buyers describe what they need, and sellers submit bids
Negotiation
3 types of business purchases
New task purchase, Straight Rebuy, Modified Rebuy
an item is purchased to be used to perform a new job or solve a new problem
New task purchase
a routine purchases of the same products under approximately the same terms
straight rebuy
a new-task purchase that is changed on subsequent orders or when straight-rebuy requirements are modified
Modified rebuy
3 types of demand
derived demand, inelastic demand, Joint demand
demand for business products that is the result if demand for consumer products
Derived Demand
demand that is not significantly altered by a price increase or decrease
Inelastic Demand
when two or more items are used in combination to produce a product; demand for the product drives demand for both items
Joint Demand
the purchase behavior of producers, government units, institutions and resellers
Business (organizational) Buying Behavior
the group of people within the organization who make business purchase decisions; roles include: initiators/users, influencers, buyers, deciders, and gatekeeper
The buying center
What are the 5 stages of the Business Buying Decision Process
1) Recognizing a Problem 2) develop product specifications to solve problem 3) Search for and evaluate possible products and suppliers 4) select product and supplier and order product. 5) evaluate product and supplier performance
an evaluation of each component of a potential purchase
Value analysis
a formal, systematic evaluation of current and potential vendors
Vendor analysis
and organization’s decision to use several suppliers
multiple sourcing
an organization’s decision to use only one supplier
sole sourcing
environmental, organizational, interpersonal, individual are all influences of….
Influences of the business buying decision process
include competitive and economic factors, political forces, legal and regulatory forces, technological changes, and sociocultural issues
Environmental influences
include company objectives, purchasing policies and resources and size and composition of buying center
Organizational influences
the relationships between people in the business; trust and collaboration are important
interpersonal influences
personal characteristics (age, education level, personality and tenure, and position) of participants in the buying center
Individual influences
online marketplaces where business buyers and sellers from around the world can exchange information, goods, services, ideas, and payments
B2B eCommerce sites
developing and performing marketing activities across national boundaries; provides growth opportunities
international marketing
firms that are international from their inception; often small-technology based firms; earn most of their sales outside the domestic home market; ex: ebay , google, logitech
Born Globals
proper environmental analysis of international markets can:
generate financial awards, increase market share, heighten customer awareness of products
marketing activities are influenced by beliefs and values regarding family, religion, education, health, and recreation
Sociocultural Factors
For Economic Forces, Global marketers must understand:
international trade systems, economic stability/ instability of nations, trade barriers, economic disparities between nations
many differences between nations
standards of living, availability of credit, buying power, income distribution, national resources, exchange rates
the market value of a nations total output of goods and services for a given period; an overall measure of economic standing; gives insights into a nation’s wealth and market potential
Gross domestic product
any duty levied by a nation on goods bought outside its borders and brought into the country
import tariff
A limit on the amount of goods an importing country will accept for certain product categories in a specific period of time
Quota
A governments suspension of trade in a particular product or with a given country; is generally directed at a specific country or product
Embargo
Government restrictions on the amount of a particular currency that can be bought or sold that can affect international trade
exchange controls
the difference in value between a nation’s exports and its imports
balance of trade
import tariffs, Quota, Embargo, exchange controls, and balance of trade are what type of forces
Political, Legal and regulatory forces
accepted business practices vary from country to country; differences exist in ethical standards; different modes of operations; dealing with different cultures; the least and most corrupt countries are what types of forces
ethical and social responsibility forces
the unconscious reference to one’s own cultural values, experiences, and knowledge
Self-Reference Criterion (SRC)
the concept that morality varies from one culture to another; “when in Rome, do as the Romar do.”
Cultural relativism
competition is a staple of the global marketplace; firms that operate internationally be aware of competitive forces, identify the interdependence of countries, be mindful of a new breed of customers; each country has unique competitive aspects; the global consumer is changing international competition are all part of what force
Competitive forces
Technological advances have made international marketing easier, faster, and more affordable is what kind of force
Technological Forces
agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the U.S., and Mexico
North American Free Trade Agreement (NAFTA)
a union of European Nations established in 1958 to promote trade among its members; one of the largest single markets in the world today: 28 countries; half a billion consumers and combined GDP of nearly $18 trillion
European Union (EU)
promotes free circulation of goods, services, and production factors; common external tariff and commercial policy among member nations; south America and Latina America are catching the attention of many international businesses
The common Market of Southern Cone (MERCOSUR)
an international trade alliance that promotes open trade and economic and technical cooperation among members; approximately 2.8 billion of the world’s population, 57% of the world GDP, and nearly 47% of global trade; 21 member alliance, most important economic power is China, which has become one of the most productive manufacturing nations.
Asia-Pacific Economic Cooperation
established in 1967
Association of Southeast Asian Nation
international organization dealing with the rules of trade between nations; officially founded in 1995; successor to GATT; 162 members representing 95% of global trade; many issues of dumping which is selling products at unfairly low prices
The World Trade Organization (WTO)
The Four modes of entering an international market
Stage 1: No regular export activities Stage 2: export via independent representatives (agents) Stage 3: establishment of one or more subsidiaries internationally Stage 4: Establishment of international production/ manufacturing facilities
What are the 5 levels of involvement in global marketing
globalized marketing, regional marketing, multinational marketing, limited exporting, domestic marketing
marketing strategies are developed for the entire world with the focus on similarities across regions and country markets
Globalized Marketing
marketing strategies are developed for each major region, with the countries in the region being marketed to in the same way based on similarities across the region
Regional Marketing
international markets are a consideration in the marketing strategy, with customization for the country based on critical differences across regions and country markets
multinational markets
the firm develops no international marketing strategies, but international distributors, foreign firms, or selected customers purchase some of its products
limited exporting
all marketing strategies focus on the market in the country of origin
Domestic marketing
the sale of products in foreign markets
exporting
the purchase of a product from a foreign source
importing
an organization that links buyers and sellers in different countries; reduces risk for those wanting to get involved
trading company
an alternative to direct investment that requires a license to pay commission or royalties on sales or supplies used in manufacturing
licensing
a form of licensing in which a franchiser, in exchange for a financial commitment, grants the franchisee the right to market a product in accordance with the franchise standards
Franchising
3 types of contract manufacturing
outsourcing, offshoring, offshoring outsourcing
contracting noncore operations with an organization that specializes in that operation
outsourcing
moving a business process that was done domestically to a foreign country. The production accomplished in the foreign country may be performed by the local company or a third party
offshoring
contracting with an organization to perform business functions in a country other than the country in which the product will be sold
Offshoring outsourcing
a partnership between domestic and a foreign firm or government; popular in industries requiring large investments; may be a political necessity because of laws and regulations
Joint ventures
partnerships formed to create global competitive advantages; firms may be traditional rivals competing for the same market; firms may compete in some markets while collaborating in others
Strategic Alliance
a situation in which a company owns subsidiaries or other facilities overseas; owning facilities may be too expensive for many firms; Multinational enterprises (multinational corporation)
Multinational Enterprise
three most common structures of architecture
product division structure, geographic area structure, global matrix structure
a subunit of the marketing department
export departments
centralizes all of the responsibility and communications related to international operations
international divisions
most likely engage in direct ownership
international integrated structures
the form used by most multinational enterprises
good for firms that are diversified, yet driven by domestic operations
esch unit is self-contained
Product division structure
good for firms with low diversification
divides the world into logistical areas based on operations and customer’s characteristics
The Geographic Area Structure
designed to achieve global integration, cost, efficiencies, knowledge transfers, and local responsiveness
most firms do not use this structure
The global matrix structure
adapting marketing strategy and marketing mixes according to cultural, regional, and national differences
customization
the development of marketing strategies that treat the entire world as a single entity (entails producing standardized products, promotion campaigns, prices, and distribution channels for all markets)
globalization
maintaining a global presence creates fice opportunities for creating value:
adapt to local market differences
exploit economies of global scale
exploit economies of global scope
mine optimal locations for activities and resources
maximize the transfer of knowledge across locations
