MKTG 3832 - Exam 2 Flashcards
4 Business Market Categories
Commercial
Reseller
Institutional
Government
Commercial Market
Largest of the business market. All individuals/firms that get products to support production of other goods and services, both directly and indirectly
Dell buying chips from Intel.
Resellers Market
Retailers and wholesalers. Finished goods sold.
Government Market
Domestic institutions - federal, state, local - and foreign. Motivator is to provide public benefit, wide purchases like cement, military uniforms, and Internet.
Institutional Market
Public and private hospitals, churches, skilled care and rehab centers, colleges, museums, and non-profits.
Business Buying Decision INFLUENCES
Environmental
Organizational
Interpersonal
Environmental Factors
Economic, political, regulatory, competitive, technological considerations
Organizational Factors
Company’s structure, policies, and purchasing processes.
Interpersonal Factors
Building rapport with the people/committees involved in making decisions
B2B Buying Process
- Anticipate problem, need
- Define characteristics and qty needed
- Search for and qualify potential suppliers
- Gather/analyze proposals
- Evaluate proposals and select supplier
- Select order routine
- Obtain feedback and evaluate performance
Buying Center Roles
Users Influencers Gatekeepers Buyers Deciders
Users
Actually use product/service
Influencers
Supply information to guide the evaluation of alternatives, or by establishing buying specifications. Typically technical staff, engineers or qa
Gatekeepers
Control the info that all buying center members ultimately review.
Buyers
Formal authority to select a supplier and begin securing the good or service
Deciders
Actually select a good or service. Sometimes same person as buyer. Final decision.
B2B Market Segmentation
Demographic
Customer Type
End-Use Application
Free-Trade Area
Where participating nations agree to the free trade of goods among themselves, abolishing tariffs and trade restrictions.
One form of multinational economic integration
North American Free Trade Agreement
US, Canada, Mexico; removes trade restrictions. Focus on economic cooperation.
International Marketing Environment Factors
Economic Social-cultural Political-legal Technological Competitive
International Marketing Mix Strategies
Straight extension Promotion adaptation Product adaptation Dual adaptation Product invention
Straight Extension
One product, one message; permits economies of scale; universal recognition
Promotion Adaptation
Same product, different promotion
Product Adaptation
Same promotion, different product.
Dual Adaptation
Both product and promotion adaptation
Product Invention
Unique foreign market opportunities to match needs. Hand-powered washing machine.
Entering Foreign Market Strategies
Exporting Franchising and foreign licensing Subcontracting International divisions Acquisitions Joint ventures
Exporting
Companies to distribute goods globally without setting up formal operations. Typically first step in international business.
Franchising and Foreign Licensing
- Contractual arrangement, franchisee agrees to meet operating requirements of the manufacturer or franchiser
- Grants foreign markers right to distribute firm’s merchandise or use its trademark, patent, or process in a specified geographic area
Access to marketing info/distrib. channels; protection from legal barriers; more control over promotions and sells
Subcontracting
When the production of goods or services is assigned to local companies
International Divisions
Company that has resources and commitment to enter a foreign market can invest in building or creating wholly owned facility. Once up, company retains complete control
Acquisition
Company buys existing firm; fully functioning operation in new country, requires large investment
Joint Ventures
Companies share risk, costs, and management with one or more partners. Problems in language, culture, operational differences
Consumer Market Segmentation
Geographic
Demographic
Psychographic
Behavioral
Geographic Segmentation
Dividing overall market into homogeneous groups based on locations
Market size
Market density
Climate
Region
Strategies for Reaching Target Markets
Undifferentiated (mass)
Differentiated
Concentrated (niche)
Undifferentiated Marketing
Mass marketing; all customers targeted using a single marketing mix
Differentiated Marketing
Targeting several different market segments using a different marketing mix for each segment
Concentrated Marketing
Niche marketing; selecting single market segment and concentrating efforts on profitability satisfying that segment
Demographic Segmentation
Consumer groups according to variables such as gender, age, ethnic group, family life cycle stage and household type, income. Census Bureau is primary source
Psychographic Segmentation
Differentiating population groups according to values and lifestyle factors which are common to group. Conduct large-scale survey asking consumer to agree,disagree.
PRIZM - divides into 66 segments through blends of demographics, consumer lifestyle behavior, media usage, etc.
4 Positioning Strategies
Value
Product Attributes
Competitive
Product Use/Application
Value
What the customer receives in exchange for the costs of the product. Doesn’t require lowest price, but that customers believe it was worth it
Competitive
Focus on product/company attribute, specifically in relation to competition (comparison)
Product Attributes
Specific features are highlighted to create desired perception of the brand or consistency.
Product Use or Application
Specifically associate a product with a particular use or application.
6 Business Products
Installations Accessory equipment Component Parts and Materials Raw Materials Supplies Business Services
Brand Name
American Marketing Association: “part of a brand that can be spoken.” Not associated with design
Trademark
Brand for which owner claims exclusive legal protection. “Bud” and “Coke” also
