Exam question 1 Flashcards
Value based approach of pricing
An approach in which you set the price primarily on the value the customer receives rather than an actual cost of the product
Closed bidding
Suppliers are formally invited to offer a bidding. All offers are sealed and will be evaluated on a certain date. The contract is always given to the lowest bidder that meets the requirements
Open bidding
Informal, allows suppliers to offer a bidding before a certain date, without a special invitation
Price elasticity of demand
The degree to which demand responds to any change in the price. It’s the percentage change of demand in respond to the percentage change of the price
Activity based costing (ABC)
A method to measure costs tied to a specific activity and trace those costs to the products, customers and channels that consumed those activities
Key account management
A key account manager provides specific and high-quality services to a key account. A key account is an important customer who buys in large quantities and dispersed locations
Trade fair
An event where companies can come and meet potential customers. They can present (new) products and it’s a good place for advertising. Furthermore they can solve problems with existing customers. A good way to reach a large audience and advertise.
Supply chain management
A technique for linking a manufacturer’s operations with those of all its strategic suppliers and its key intermediaries and customers to enhance efficiency and effectiveness
4 goals of Supply Chain Management
- Waste reduction
- Time compression
- Flexible response
- Unit cost reduction
BCG Global advantage diamond
Model to explain the success of global expansion. There are 4 elements that give growth advantage, resource leveraging advantage & manyness advantage
4 elements of diamond model
- Market access - driving sales growth by targeting new markets
- Resources access - Leveraging valuable resources in RDE to achieve competitive advantage
- Local adaptation - develop and adapt products to RDEs unique customer needs
- Network coordination - integrate operations to capitalize on the strength of the companies global network
Original equipment manufactureres
Commercial enterprises who buy products in the b2b market in order to incorporate them into other products
Just in time management
All materials and products become available at the very moment they are needed in the production process, aims at reducing and eliminating hidden costs (e.g. buffer stock)
total cost of ownership
Determines the total costs of acquiring and then using a particular item from a supplier (acquisition, possesion and usage costs)
Strategic global alliances
Business relationship between 2 or more partners to achieve a common objective, involves commitment of capital, management, technical resources & sharing of risks
Macro segmentation
Focuses on:
- geographic
- customer type
- customer size
- product/service use
- purchasing situation
Micro segmentation
Focuses on:
- purchasing criteria
- purchasing strategy
- importance of purchase
- personal characteristics
Relationship buyers
Focus on service, not price
Transactional buyers
Price sensitive, considerations made on service
Programmed buyer
Neither price or service sensitive
Bargain hunter
Highly sensitive for price/ service changes
4 types of buyer
- Programmed
- Relationship
- Transactional
- Bargain hunter
Delphi method
Quantitative technique for demand forecasting
- analyst a forecast opinion from a panel of anonymous experts
- Estimates passed around, new estimates are evoked
- Continue until a consensus is reached
Derived demand
Refers to direct link between the demand for industrial products and the demand for consumer products
Inelastic demand
When a percentage change in price causes a smaller percentage change in demand
Joint demand
Characteristics of certain products which are used together where a change in demand for one product causes a similar change in demand for the other product
Fluctuating demand
Opposite of stable demand, demand for a product changes over time
Economic value
Represents cost savings/ revenue gains that customers realize by purchasing the firm’s product in stead of the second best alternative
Commodity value
The value that customers assign to product features that looks like those of competitor’s offerings
Differentiation value
Value associated with product features that are different and unique from competitors
