Lecture one

Question 0

What are the three types of organizational customers?

Answer 0

1. Commercial enterprises
2. Government units
3. Not-for-profit organizations

Question 1

What is B2B marketing?

Answer 1

The process of matching and combining the suppliers capabilities to the customer’s desired outcomes to create value for the customer’s customer.

Question 2

What are the four types of commercial enterprises (one of the three organizational customers)

Answer 2

A. Industrial distributors
B. Value added resellers
C. Original equipment manufacturers (OEM)
D. Users and end users

Question 3

Describe industrial distributors (a type of commercial enterprise which is a type of organizational customer)

Answer 3

Industrial distributors are middlemen that provide the economic utilities of: Form, Time, Place, Possession.
An industrial distributor is a wholesale company that sells products to businesses that use the products in their own business, rather than for resale. For example, a robotic arm used in automated manufacturing would be sold by an industrial distributor.

Question 4

Describe value added reseller (a type of commercial enterprise which is a type of organizational customer)

Answer 4

A value added reseller provides a product/service offering with unique enhancements to manufacturers products. For example, computer software and hardware integration (possibly customized). Creates a value network at the user level.

Question 5

Describe original equipment manufacturer OEM (a type of commercial enterprise which is a type of organizational customer)

Answer 5

OEM’s purchase products and incorporate them into their own products. OEMs are usually the largest-volume users of goods and services (particularly in oligopolistic markets). GM is an OEM, Goodyear is an OEM supplier.

Question 6

Describe users and end-users (a type of commercial enterprise which is a type of organizational customer)

Answer 6

A manufacturer that purchases goods or services for consumption or incorporation into its own products.

Question 7

What are the four product types?

Answer 7

1. Raw material producers
2. Component parts and manufactured materials producers
3. Accessory equipment suppliers
4. Capital goods manufacturers

Question 8

Describe raw materials producer

Answer 8

Compete in price-sensitive markets

Product loses identity once incorporated into consumers product. Dominated by a few large producers.

Question 9

Describe component parts and manufactured materials producers

Answer 9

Parts retain their same form when incorporated into consumer’s products. Differentiated by value-added.

Question 10

Describe capital goods manufacturers

Answer 10

Consists of large purchases with high risk to customer.
Capital goods are tangible objects that are used in the production of other goods or commodities or during the providing of services. They can include things such as buildings, machinery, tools and computers.

Question 11

Describe accessory equipment suppliers

Answer 11

Equipment that works with another offering. Accessories can be added to a bundle.

Question 12

What is the marketing mix

Answer 12

It is a total offering which includes:
Product 
price 
place 
promotion

Question 13

Place is about getting the product to the customer in order to maximize _______________________.

Answer 13

Economic utility (Which consists of: form, time, place and possession).

Question 14

What is the evaluated price?

Answer 14

The evaluated price is the total cost of owning or using a product. It includes transportation, carrying costs, financing costs, cost of failure, installation etc.

Question 15

What is price?

Answer 15

Price is the measure of value exchanged and is determined by the market (not by costs)

Question 16

For promotion B2B marketing emphasizes on what three things?

Answer 16

Personal selling rather than advertising.
Communication with customers is a dialogue rather than a monologue.
Relationship is often long-lasting rather than brief.

Question 17

Describe the market structure of business to business marketing

Answer 17

Geographically concentrated
Relatively few buyers
Oligopolistic competition

Question 18

Describe the bullwhip effect

Answer 18

Suppliers forecast production or existing order rates. If consumer demand drops, the order rate also drops. Supply-chain members are than likely to overcompensate the difference between the old and the new forecasts. This is because:
Inventory levels can decline to fit the new order rate.
Customers change orders frequently.
Minimum order quantities may exist.
Trade promotions may influence buying patterns.

Question 19

Describe value and it’s three parts

Answer 19

Value is the perception of the product’s benefits beyond its price.
The three parts are:
1. Value received from the product.
2. Value received from the seller’s services.
3. Value received from relationship with seller.
1+2+3= total product offering.

Question 20

In the B2B marketplace ____________ tend to dominate

Answer 20

Oligopolies

Question 21

What are some trends affecting the B2B marketplace?

Answer 21

Hyper competition
Formation of partner networks
Adoption of technology and the Internet
Supply chain management
Time compression

Question 22

Define entrepreneurial marketing.

Answer 22

Entrepreneurial marketing is conducting marketing in a way that involves innovation, acting proactively, and taking calculated risks.

Question 23

Define business markets

Answer 23

Business markets consist of all organizations that purchase goods and services to use in the creation of their own goods and services.

Question 24

The augmented business- to- business product is a total offering that will provide a complete solution to the buyers needs. Define total offering.

Answer 24

Total offering is the offering that provides a complete solution to the buyers needs. This may include financing, delivery, service, or based on the buyers preference, only the core product.

Question 25

Economic utility is a necessary ( though not sufficient), pivotal part of the concept of value in business- to- business markets which often takes on the form of ______________, ______________, and __________________.

Answer 25

supply chain management, inventory services, and material resource planning.

Question 26

Providing value in terms of place involves what four aspects of economic utility?

Answer 26

Form: size, package, quantity
Time: short waiting period, reasonable hours of operation
Place: minimum inconvenience
Possession: easy transfer of ownership

Question 27

What are the four parts of the promotion mix?

Answer 27

Advertising, sales promotion, personal selling, public relations.

Question 28

What is the marketing concept?

Answer 28

The marketing concept states that the firm should be contextually market sensitive, understand customer needs, meet those needs in a coordinated way that provides value to the customer, and do so in a way that meets organizational goals.

Question 29

Define supply chain

Answer 29

Supply chain is the chain of entities and activities that results in products provided to end- users.

Question 30

Define derived demand

Answer 30

The demand experienced by the chain of suppliers and producers that contribute to the creation of a total offering. Without initial consumer demand, there will not be any demand on the chain of suppliers.

Question 31

What is the difference between consumer demand and derived demand?

Answer 31

Consumer demand is the quantity of goods or services desired to be bought, given market conditions.
Derived demand is the demand experienced by the chain of suppliers and producers that contribute to the creation of a total offering. Without initial consumer demand, there will not be any demand on the chain of suppliers.