marketing ch.6 Flashcards
Business Marketing
marketing of stuff to companies/organizations/government
Organizational Buyers
Manufacturers, wholesalers, retailers and govt agencies who buy/sell for own use or resale
3 Organizational Buyer Markets
industrial, reseller, govt
industrial markets
reprocesses a product before selling it
reseller markets
wholesalers/retailers who buy physical products and resell without reprocessing
Government Markets
government agencies that buy goods/services for the constituents they serve
NAICS (North American Industry Classifciation System)
measures markets. Provides definitions. Designates with numerical codes
Derived Demand
demand for industrial products and services is derived from demand for consumer products and services
Size of organizational buy orders
size is larger –> more money at stak –> constraints and competitive bids
Number of potential buyers
firms selling to organizations restricted to fewer buyers. ex.jets
Organizational Buying Objectives for business firms
icnrease profits through reducing costs/ increasing revenue
Organizational buying objectives for governmnet
usually to meet needs of groups they serve
Organizational Buying Criteria
objective attributes of the suppliers products and services as well as capibilities of supplier itself
ISO 9000
standards developed by international standards organization for registration/certification of quality mangment and assurance system
Supplier development
effort by org. buyers to build relationships that shape suppliers products/services/capabilities to fit buyers needs
JIT Manufacturing
reduces the inventory of production part to those to be used within hours or dats
Reciprocity
- industrial buying practice where organizations agree to by each other’s good. Legal, but Justice Department disapproves
Supply Partnership
- when a buyer and its supplier adopt mutually beneficial objectives, policies and procedures to lower costs or increase value of products.
Buying Center
- several people in an organization sharing common goals, risk and knowledge important to purchase decisions.
Roles in the Buying Center
Users, influencers, buyers, deciders, gatekeepers
Users-
people in the organization who use product
Influencers
Influencers- affect buying decisions usually by helping to define specifications
Buyers
Buyers- have the formal authority to choose suppliers, negotiate contract
DEciders
Deciders formal/informal power to select/approve supplier that receives
Gatekeepers
Gatekeepers- control flow of info.
buy classes
Buy Classes- three types of buying situations
New Buy
New Buy- first time buyer of product/service. Greater risk involved. Buying center therefore enlarged to include all who have stake in new buy
Straight reBuy
Straight Rebuy - reordering an existing product/service from list of acceptable suppliers. Small buying center (ex. Office supplies)
Modified Rebuy
Modified Rebuy- users/influencers/deciders want to change the product/specs/delivery/supplier. Item purchased largely the same. Larger buying center
Organizational buying behavior
- decision making process that orgs use to establish need for products/services and to choose among brands/suppliers
Stages in Organizational Buying Process
Stages in Organizational Buying Process- very similar to consumers, but more people, bigger, more formal
Make-buy decision
whether components are purchased or produced internally
Value Analysis
systematic appraisal of design, quality and performance of a product to reduce purchasing cost.
Bidder’s list
list of firms qualified to supply. Generated from databank and engineering inputs
Post purchase Behavior
supplier performance is monitored, Items examined formally (product acceptance process)
Traditional Auction
Seller puts an item up for sale. Buyers invited to bid.
More buyers=more upward pressure on prices
Reverse auction
Buyer communicates need.
Suppliers make offers
Downward pressure on bid prices
