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Business To Business Marketing > Lecture Two > Flashcards

Lecture Two Flashcards

1
Q

What are the steps in the Consumer Decision Process?

A
  1. Need recognition
  2. Information search
  3. Evaluation of alternatives
  4. Purchase decision
  5. Post-purchase behaviour
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2
Q

What is Organizational buying and what are the differences between Organization buying and Consumer buying?

A
  • Involves more buyers (group process with fewer large purchases and lengthly negotiations where customer service, quality and supply are paramount)
  • Stakeholders in Buying Centre driven by professional responsibilities
  • Different decisions occurring simultaneously within the Buying Centre
  • Organizations buy what they need whereas consumers buy what they want.
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3
Q

What external factors affect the buying centre?

A
  • Customer needs and buying behaviour
  • Government agencies
  • Various publics
  • Independent standard-setting organizations
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4
Q

What internal factors affect the buying centre?

A
  • Technology
  • Accounting
  • Management
  • Marketing
  • Legal
  • Production/Mfg.
  • Finance
  • Service
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5
Q

What are the steps in the “traditional” buying decision process (Process flow/Buy-Phase Model)?

A
  1. Problem recognition
  2. General need description
  3. Product specification
  4. Supplier/source search
  5. Proposal solicitation
  6. Selection
  7. Make the transaction routine
  8. Evaluate performance
    Note: the steps may overlap or occur at the same time
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6
Q

Explain the key factors of the buying decision process.

A
  • Interaction is fluid and broad based
  • Process is simultaneous not sequential
  • The “Track-Record” determines if supplier is included in evoked set
  • Relationships build loyalty
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7
Q

Define evoked set.

A

A group of relevant brands that a prospective customer is favourably familiar with when thinking about making a purchase.

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8
Q

The three needs members of the buying centre must meet in the decision process are:

A
  1. Organizations Needs - Benefits of the product or service
  2. Individual Needs - Based on professional activities and functions of the job
  3. Individual’s Personal Needs - Career success, Quality of life, Recognition
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9
Q

List and define the four dimensions of buying centres.

A
  1. TIME DIMENSIONS - highly fragmented means there are many decision makers and little time spent on decision stages. Not fragmented means there are few decision makers who spend a lot of time on decision stages.
  2. VERTICAL DIMENSIONS - The number of layers of management involved in decision-making
  3. HORIZONTAL DIMENSIONS - The number of departments involved in decision-making
  4. FORMALIZATION DIMENSION - Purchasing tasks and roles are guided and enforced by written procedures and policies
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10
Q

What are the four stages of the Process Flow Model of the Buying Decision Process?

A
  1. Definition Stage
  2. Selection Stage
  3. Deliver Selection Stage
  4. End Game Stage
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11
Q

What happens in the Definition stage of the Process Flow Model of Buying Decision process?

A

Problem recognition, general need description, solution description, and suppliers are involved in product specification.

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12
Q

What happens in the Selection stage of the Process Flow Model of Buying Decision process?

A

Selection may occur at definition stage. Supplier source/search, proposal solicitation (request for proposal RFP), contract for supplier(s). Either new buy, modified or straight rebuy. Possibility of public sector purchasing and other constraints.

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13
Q

What happens in the Deliver Solution stage of the Process Flow Model of Buying Decision process?

A

Make the transaction routine. Development of a total offering.

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14
Q

What happens in the End Game stage of the Process Flow Model of Buying Decision process?

A

Evaluate performance and resell the job. The supplier reinforces the validity of the buying centre’s decision to ensure they are part of the supplier’s evoked set.

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15
Q

Name three types of buy classes.

A
  1. New Task
  2. Modified Re-buy
  3. Straight Re-buy
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16
Q

What is Straight Re-buy buy class?

A

A reoccurring purchase decision where the customer reorders a product that satisfied needs in the past. Maintaining a good relationship with customers helps to ensure straight re-buys.

17
Q

What is a modified Re-buy buy class?

A

A similar purchase was made in the past but modifications to the purchase are needed or a new supplier should be chosen.

18
Q

What is a New Task buy class?

A

When the customer has a new need that has not been faced by the organization before making it a unique purchase situation.

19
Q

Explain the difference between New Task and Straight Re-buy with regards to the stages in the Process Flow Model of the buying decision process.

A

In New Task the definition the four stages are separated. Each stage has to be done from scratch. In the Straight Re-buy, the stages of the process flow model overlap, and not as much work needs to be redone.

20
Q

What are some influences that shape the buying decision process?

A
  • complexity of the problem and solution
  • organizational mission, goals and objectives
  • risk tolerance of decision makers and influencers
  • decision importance
  • time (how quickly must the decision be made)
  • interpersonal and individual influences.
21
Q

What is a value image?

A

Value Image: the total of all impressions that a customer has of the firm (not necessarily relevant to the buying situation)

22
Q

Describe market segmentation.

A

In business-to-business marketing, segments are CLUSTERS of firms that are DISTINCT from others in terms of WHAT THEY NEED and buy as well as HOW THEY BUY.

23
Q

What are the criteria for successful segmentation?

A

MASH
Measurable - identifiable and evaluated
Accessible - accessible (can be reached by marketing activity)
Substantiality/Sizeable - substantial enough to justify efforts (profitable)
Homogeneous/actionable – possible to satisfy needs of the segment (competitive advantage)

24
Q

An effective segment has members that are ______________ within the segment and those members as _______________ as possible with the members of other segments.

A

homogeneous, heterogeneous

25
Q

Describe targeting

A

Producing an offering that MEETS THE NEEDS of customers in the segment better than the competitor’s, and reach segment through COMMUNICATION AND DISTRIBUTION CHANNELS so that customers REALIZE THE SUPERIOR VALUE offered.


26
Q

Good positioning comes down to three simple principles:

A
  1. Provide better value than competitors on one or more key dimensions of value
  2. Communicate the differentiation
  3. Deliver on your promises
27
Q

describe positioning

A
  • Relationship of product and marketing activities
  • In comparison to other segment participants must demonstrate superior value to consumers
  • Positioning is IN THE MIND OF THE CONSUMER
  • Resources often managed to ensure successful positioning
28
Q

What are some common bases for segmentation of business to business markets?

A

Product
Buying behaviour
Size of account: customers who order roughly the same amounts.
Size of company
Technology used: companies that use the same general product or process technology
Industry of customer: all companies in the same industry group.

29
Q

What are the three segmentation approaches

A
  1. Value-based segmentation
  2. Analytical approach
  3. Innovation translation
30
Q

Describe value based segmentation (one of the three segmentation approaches)

A

Aims to provide value to a segment whose members all seek similar sorts of value.

31
Q

Describe the analytical approach to segmentation (one of the three segmentation approaches)

A

Organizations use the analytical approach when they face a market with many customers or an unfamiliar market they are trying to enter.

Secondary data: relative size and growth potential of segments
Primary data: individual segment needs and buying behavior

32
Q

Describe the innovation translation approach to segmentation (one of the three segmentation approaches)

A

Used in markets in which only a few customers exist and the company may decide to look for new customers or verify existence of segment.

Involves exploratory interaction with current and prospective customers

33
Q

What is the Technology Adoption Life Cycle (TALC)?

A

It describes how a breakthrough innovation becomes adopted in a market. Involves Technophiles, Visionaries, pragmatists, Conservatives and Laggards. A chasm occurs between visionaries and pragmatists when is a break in the growth curve, deciding who will be the dominant supplier.

34
Q

What 5 adopter categories exist for the Technology Adoption Life Cycle? Describe each.

A

Technophiles—tries out the latest and greatest technology, does not need fully developed offering
Visionaries—See competitive advantage by using technology, standardized buying with custom offering
Pragmatists—want same as visionaries but will not buy it unless technology is easily adopted with minimal difficulty
Conservatives—only buy when doesn’t cost to adopt, need to be convinced offering exact for needs
Laggards—will avoid adoption of technology at all costs

Business To Business Marketing (5 decks)

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