Module 7 - Understanding Organisational Markets and Buying Behaviour

Question 1

1 The quantitative, multiattribute, supplier-rating systems discussed in the text most closely resemble which type of consumer decision-making approach?
A.JND.
B.Compensatory.
C.Lexicographic.
D.Conjunctive.
E.Disjunctive.

Answer 1

B

See section Evaluation and Selection of Suppliers.

Question 2

2 When an organisation favours a supplier who is, in turn, a customer or potential customer for the organisation’s own products or services, this is termed:
A.cross-purchasing.
B.reciprocity.
C.a joint purchasing agreement.
D.countertrade.
E.a mutual purchase agreement

Answer 2

B

See section Evaluation and Selection of Suppliers.

Question 3

3 Requirements planning is when an organisation:
A.analyses products and vendors during new-task buying.
B.determines if a product meets specific technical requirements.
C.engages in an in-depth investigation before qualifying a firm as a potential supplier.
D.attempts to forecast future inventory needs for advance purchase.
E.determines how best to market its product.

Answer 3

D

See section The Purchase.

Question 4

4 Buyers auctions are like:
A.a straight rebuy.
B.a modified rebuy.
C.new-task buying.
D.a purchasing contract.
E.reciprocity

Answer 4

B

See section Types of Buying Situations.

Question 5

5 For an unregulated electric utility company, which type of product is it likely to be better off ‘making’ than ‘buying’?
A.Raw materials.
B.Component parts.
C.Component materials.
D.Accessory equipment.
E.Operating supplies.

Answer 5

A

See section Selling Different Kinds of Goods and Services.

Question 6

6 When buying raw materials, organisational buyers are least concerned with:
A.the supplier’s business practices.
B.the product’s brand name.
C.governmental regulations.
D.advances in technology.
E.All of the above factors are equally important

Answer 6

B

See section Raw Materials.

Question 7

7 A parts management system for windscreens for the Ford Taurus which is designed so that the parts arrive within two hours of when they are needed on the production line is an example of what type of inventory management system?
A.MBO.
B.PERT.
C.CAD/CAM.
D.JIT.
E.GANTT.

Answer 7

D

See section Component Materials and Parts.

Question 8

8 For producers of accessory equipment, like new office equipment, the key marketing activity is:
A.beating competitors’ offers.
B.media advertising.
C.an indirect sales channel.
D.face-to-face contact with potential customers.
E There is insufficient information to make a judgement

Answer 8

D

See section Accessory Equipment.

Question 9

9 Which is the most important promotional method to use in the selling of accessory equipment for businesses?
A.Direct mail.
B.Advertising.
C.Brand-name promotion.
D.Personal selling.
E.Publicity

Answer 9

D

See section Accessory Equipment.

Question 10

10 Plastic which is purchased by Chrysler Corporation for use in its automobiles represents which type of product?
A.Natural product.
B.Farm product.
C.Component parts.
D.Component materials.
E.Installations.

Answer 10

D

See section Component Materials and Parts.

Question 11

Industrial goods producers are more likely than producers of most consumer goods to try to diversify because they face:
A. a larger number of smaller niches that they must try to fill.
B. lower returns on investments in traditional areas of their capital investments.
C. more of a classical BCG-type portfolio where one set of businesses must finance the activities of others.
D. countercyclical returns, such that when sales are going up in consumer markets overall, they tend to go down in industrial markets.
E. substantial fluctuation in sales and a highly cyclical pattern of demand.

Answer 11

E

See section Purchase Motives – Derived Demand.

Question 12

2 The demand for industry goods and services is:
A. relatively elastic and stable, compared to that for consumer goods.
B. relatively inelastic compared to that for consumer goods, but more stable.
C. relatively inelastic and more erratic, compared to that for consumer goods.
D. somewhat more elastic, but also more erratic, than that for consumer goods.
E. of about the same price elasticity and demand stability as that for consumer goods.

Answer 12

C

See Exhibit 7.1.

Question 13

3 Compared to markets for consumer goods, organisational markets:
A. use buying specialists, have closer buyer–seller relationships and are subject to multiple buying influences.
B. use buying specialists, who rely on weaker buyer–seller relationships and focus on fewer buying influences to reduce costs.
C. rely on close buyer–seller relationships, together with a focus on fewer buying influences, to control for lack of buying specialisation.
D. avoid close buyer–seller relationships, in part because of multiple buying influences and the use of buying specialists.
E. compensate for lack of buying specialisation with close buyer–seller relationships.

Answer 13

A

See Exhibit 7.1.

Question 14

4 In an organisational market the customer relies on the marketer for:
A. product and service information.
B. coordinated delivery schedules.
C. spare parts availability.
D. efficient order handling.
E. all of the above.

Answer 14

E

See section What Do the Unique Characteristics of Organisational Markets Imply for Marketing Programs?

Question 15

5 The individual who controls the flow of information to other people in the purchasing process is termed the:
A. decider.
B. buyer.
C. influencer.
D. user.
E. gatekeeper.

Answer 15

E

See section Participants in the Organisational Purchasing Process.

Question 16

6 The buying centre is:
A. several people from different departments who participate in the buying decision process.
B. a wholesale geographic centre (like the World Trade Mart) where numerous sellers of goods and services are available at one time.
C. a separately staffed department in many large organisations with the full-time function of making purchases.
D. a retail geographic centre where buyers and sellers tend to congregate.
E. a conference during which buyers confer and pool their orders.

Answer 16

A

See section The Organisational Buying Centre.

Question 17

7 A straight rebuy involves:
A. definition of specifications and collection of information about alternative products.
B. comparison of alternative products and suppliers with the current product and vendor.
C. purchasing a common product or service the organisation has bought many times before.
D. purchasing products that are somewhat different from, but extensions of, products previously purchased.
E. vertical (top-down) decisions to purchase a product for the organisation.

Answer 17

C

See section Types of Buying Situations.

Question 18

8 The derived nature of industrial demand is exemplified by:
A. increases in paper prices because of shortages of timber in the Northwest.
B. decline in beef consumption because of the movement of health-conscious consumers toward poultry products.
C. a reduction in demand for feed grains because of a decline in beef consumption.
D. an increase in industrial demand throughout the economy because of advanced production technology.
E. decreases in paper prices because of excess timber production in the Northwest.

Answer 18

D

See section A Comparison of Organisational vs Consumer Markets.

Question 19

9 Each stage of the decision process is likely to be more extensive and involve many technical experts and administrators, in the:
A. modified rebuy situation.
B. new-task buying situation.
C. straight rebuy situation.
D. collateral purchase arrangement.
E. intermediated purchase.

Answer 19

B

See section Types of Buying Situations.

Question 20

10 Value analysis refers to the:
A. systematic reappraisal of an item’s design, quality and performance requirements.
B. assessment of the value of the product compared to that of comparable products on the market.
C. appraisal of the value of the business unit in terms of its contribution to the corporation and the resource requirements from the corporation.
D. appraisal of each functional department within the business unit in terms of its contribution to the superordinate goals of the organisation.
E. comparison of the worth of publicly traded company stock to the book value of the company.

Answer 20

A

See section Search for Information about Products and Suppliers.

Question 21

What are the major differences between organisational and consumer markets?

Answer 21

Question 22

What groups of people are the participants in the buying process?

Answer 22

users
influencers
gatekeepers
buyers
deciders

Question 23

Describe briefly the organisational purchase decision-making process.

Answer 23

Question 24

What are the marketing implications of the following categories of industrial goods and services?
 Raw materials.
 Component materials and parts.
 Accessory equipment.
 Installations.
 Operating supplies.
 Business services.

Answer 24

Raw materials

• most raw natural materials are marketed directly to processors and manufacturers
• distribution channels for agricultural products usually involve many middlemen
• branding is not important in agricultural goods – little promotional activity

Component materials and parts

• component materials are processed in some way before they are sold
• component parts are manufactured items assembled as part of another product without further changes in form
• component materials are usually sold direct
• Use JIT and involve close relationships between buyers and sellers

Installations

• buildings and major capital equipment
• few potential customers and high value
• post sale service usually involved
• distribution is usually direct
• promotion is usual personal selling rather than advertising

Accessory equipment

• industrial machines and tools that manufacturers, service producers and govts use to carry out their operations e.g. pc’s, desks, hand tools
• if the dollar value is high enough, direct selling is appropriate
• if the market is geographically spread and dollar amount low, distributors are used
• personal selling is important, but advertising and web is also used

Operating supplies

• these do not become part of the buyers product or service, nor are they used in producing it
• examples: paper clips, typing paper
• wholesale middlemen – price is critical with little brand loyalty

Business services

• businesses that have special areas of expertise used and paid for by other organizations e.g. security, ad agencies
• suppliers qualifications, past performance, and reputation become critical determinants of the success of the marketing effort
• personal selling and negotiation
• relationships can last a long time

Question 25

What distinguishes organisational markets from consumer markets is:
A. motivation of the buyer.
B. demographics of the market.
C. nature of purchasing process.
D. all of the above.
E. none of the above.

Answer 25

D

Question 26

Organisational markets:
A. are made up entirely of companies that produce other goods, such as manufacturing firms, as well as mining and agricultural firms.
B. include manufacturers of goods as well as companies that provide a service, such as transportation firms, health care and the like.
C. include goods manufacturers, services and resellers, including both wholesalers and retailers.
D. include goods manufacturers, services, resellers and the government (including local, state and federal).
E. include goods manufacturers, services, resellers, government and households

Answer 26

D

Question 27

Organisational buyers purchase goods and services for:
A. further production, such as raw materials and components.
B. further production, for use in operations and for resale.
C. further production, but not for operations or resale.
D. production and operations, but not for resale.
E. production and for resale, but not for operations

Answer 27

B

Question 28

Organisational buyers, when compared to buyers of consumer goods, are ____ in number, geographically ____ and ____ apt to buy on specification.
A. fewer; dispersed; less.
B. fewer; concentrated; less.
C. fewer; concentrated; more.
D. greater; dispersed; more.
E. greater; concentrated; less.

Answer 28

C

Question 29

Organisational marketers would most likely use which of the following medias for marketing their product?
A. Television.
B. Point-of-purchase.
C. Websites.
D. Newspaper advertising.
E. Radio.

Answer 29

C

Question 30

The individual who provides information for evaluating alternative products and suppliers is termed a(n):
A. decider.
B. buyer.
C. influencer.
D. user.
E. gatekeeper

Answer 30

C

Question 31

A machine operator who asks the company’s purchasing agent to buy a certain tool for his work on the assembly line acts as which type of participant in the buying process?
A. Decider.
B. Gatekeeper.
C. Influencer.
D. User.
E. Buyer.

Answer 31

D

Question 32

The functional area with the greatest relative influence in the supplier selection decision is:
A. purchasing.
B. production.
C. engineering.
D. purchasing, but only for straight rebuys.
E. R&D, but only for new buys

Answer 32

A

Question 33

A modified rebuy typically involves:
A. definition of specifications and extensive collection of information about alternative products.
B. purchasing a common product or service the organisation has bought many times before.
C. comparison of alternative products and services with the current product and vendor.
D. bottom-up decisions to purchase a product for the organisation.
E. top-down decisions to purchase a product for the organisation.

Answer 33

C

Question 34

A company eliminates a raw materials supplier because their products did not meet company standards for quality and delivery time and then negotiates contracts with new suppliers. This reflects which type of purchase?
A. Straight rebuy.
B. Modified rebuy.
C. New-task buy.
D. Problem recognition.
E. Post-purchase evaluation.

Answer 34

B

Question 35

The fact that when Ford’s car sales decrease, its demand for steel, tyres and fabrics decreases, illustrates:
A. the domino effect of economics.
B. cross-elasticity of demand.
C. derived demand.
D. world series demand.
E. serial demand.

Answer 35

C

Question 36

When a sales report from a top salesperson points out that a major competitor has added a new feature to one of its products and that several of his top customers have also asked that this same feature be added to one of his company’s products, which stage in the buying-decision process does this represent?
A. Information search.
B. Post-purchase evaluation.
C. Problem recognition.
D. Purchase decision.
E. Alternative evaluation.

Answer 36

C

Question 37

After economic considerations a firm has decided to outsource their advertising. They have performed a:
A. make-or-buy decision.
B. vendor analysis.
C. choice criteria.
D. value analysis.
E. new-task buying

Answer 37

A

Question 38

Organisational buyers evaluate alternative suppliers and their offerings:
A. by eliminating the worst alternative first, and the successive alternatives until a final choice remains.
B. through a standardised checklist applied to all purchases.
C. in terms of choice criteria reflecting benefits the firm wants from the specific purchases.
D. primarily as a political compromise among competing departments within the organisation.
E. in terms of underlying cultural compatibility between the buyer and supplier organisations.

Answer 38

A

Question 39

Vendor analysis should consider which of the following issues?
A. Price and reliability.
B. Availability and delivery time.
C. Quality and financial stability.
D. All of the above.
E. Only A and B above.

Answer 39

D

Question 40

An example of reciprocity would be:
A. an agreement by a personal computer manufacturer to buy components from a source that agrees, in turn, to buy the manufacturer’s personal computers.
B. an agreement by a forest products firm to buy chemical products in volume, in exchange for a price reduction.
C. an agreement to exchange key managerial personnel for the duration of a major purchase.
D. equal commitment by two firms to a joint venture, with equal division of profits.
E. a lowering of trade barriers in equal amounts by two countries that trade together.

Answer 40

A

Question 41

An annual requirement contract:
A. is used for frequently purchased items like office and janitorial supplies.
B. obligates the supplier to keep a specific amount of the product always available during the course of the year.
C. covers a wide variety of products purchased by a single buyer from several suppliers at one time.
D. covers an entire trade area, obliging the supplier to offer the specified product to any buyer at a set price.
E. obligates a supplier to fill a buyer’s needs for a specific product at a consistent price for a year

Answer 41

E

Question 42

If K-Mart agrees to share sales information with Coca-Cola for the purpose of keeping stock replenished, they would have a:
A. JIT system.
B. long-term purchasing contract.
C. supply chain management alliance.
D. annual requirements contract.
E. reciprocity agreement.

Answer 42

C

Question 43

When regular suppliers are studied according to a formal rating system to determine their delivery performance, what stage in the organisational buying process is represented by this process?
A. Information search.
B. Performance evaluation.
C. Alternative evaluation.
D. Problem recognition.
E. Purchase decision.

Answer 43

B

Question 44

For a supplier who wants to gain the business of a customer whose purchases are a straight rebuy with an established supplier, what must they attempt to do?
A. Wine and dine the customer.
B. Impress them with marketing brochures and packages.
C. Interest the buyer in modifying the purchase criteria.
D. Call the customer daily.
E. Send daily emails.

Answer 44

C

Question 45

When Frito-Lay manages its snack displays, including stock levels, at Walgreen’s stores, this illustrates:
A. a logistical alliance.
B. an illogical relationship.
C. a long-term relationship.
D. a merger.
E. none of the above.

Answer 45

A

Question 46

In complex business relationships, mutual trust means:
A. on-time delivery.
B. delivery at the agreed-on price.
C. delivery of the quality and quantity specified.
D. all of the above.
E. not to act opportunistically

Answer 46

E

Question 47

Lumber and iron ore are examples of which type of goods?
A. Operating supplies.
B. Natural products.
C. Business services.
D. Accessory equipment.
E. Installations

Answer 47

B

Question 48

Buildings and major capital equipment that manufacturers use to conduct their operations are examples of:
A. component parts.
B. accessory equipment.
C. business services.
D. operating supplies.
E. installations.

Answer 48

E

Question 49

When American Airlines purchases ten new 737 aeroplanes for its fleet, what type of industrial good do these planes represent?
A. Raw materials.
B. Component parts.
C. Component materials.
D. Operating supplies.
E. Installations.

Answer 49

E

Question 50

When the marketing department of a university purchases desks, filing cabinets and personal computers for its office staff, what type of industrial good do these products represent?
A. Operating supplies.
B. Accessory equipment.
C. Installations.
D. Component parts.
E. Component materials.

Answer 50

B

Question 51

All of the following are examples of business services EXCEPT:
A. advertising agencies.
B. taxi-cab firms.
C. marketing research firms.
D. trucking firms.
E. accounting agencies

Answer 51

B

Question 52

The most important marketing tool used by business services is:
A. Websites.
B. Trade journal advertising.
C. Personal selling.
D. Brochures.
E. Direct mail.

Answer 52

C

Question 53

Sales people from firms that manufacture office equipment often spend a good deal of their time talking with secretaries and office managers in the offices of potential customers. But those employees seldom have the authority to purchase major pieces of equipment. Is this an effective use of the sales person’s time? Why or why not?

Answer 53

This can be an effective use of the salesperson’s time in that the secretary or office manager often functions as a gatekeeper who controls the flow of information to other people in the purchasing process. The organisation decision maker cannot choose the salesperson’s products unless she/he is aware of them and a secretary or office manager often controls access to the decision maker. Also, since secretaries are usually the primary users of such equipment, they may have some influence on the firm’s evaluation criteria and in the final purchase decision.

Question 54

Suppose you are the vice president of marketing for a firm that makes printed circuit boards and other electronic components for manufacturers in a variety of industries. General Motors is about to choose a supplier of printed circuits and wiring assemblies for a new car model they are going to produce for the first time next year. You would like to win the contract to supply those circuits and assemblies. How are each of the following groups of people within GM likely to influence the firm’s purchase decision concerning the new circuits and assemblies? At which stages in the purchasing process is each group likely to be most influential?

a. R&D managers.
b. Product design engineers.
c. Production managers.
d. Purchasing managers.

Answer 54

Question 55

In view of your answers to Question 7.34, outline the important elements of a marketing programme that would communicate the appropriate information at the appropriate time to each group involved in the purchase decision at GM.

Answer 55

Question 56

Purchasing managers at IBM have faced a very unstable environment in recent years. The firm has developed a variety of new component parts and materials to be purchased from suppliers. The identity of those suppliers, in turn, keeps changing over time as new entrepreneurial start-ups emerge and as established firms make rapid technological advances in the design and production of components such as microchips and disk storage. How is this rapidly changing and unpredictable environment likely to affect the organisation of IBM’s purchasing function and the nature of the firm’s purchasing procedures? What are the marketing implications for a firm that would like to become an approved supplier to IBM?

Answer 56

The unstable environment would probably lead to:

(a) More decentralised decision making, accompanied by relatively greater use of technical expertise and specialisation of purchasing managers.
(b) Fewer formal purchasing procedures.
(c) More professional purchasing personnel.

The marketing implications of this include a corresponding need for product-related expertise in the supplying firm. This may involve assembling a technical team associated with each product (or product group) to meet with corresponding purchasing personnel. Periodic briefings of purchasing personnel from the buying firm about advances or modifications of product may be useful to maintain the firm-to-firm relationship.

Question 57

In the past year, companies and their suppliers have worked to reduce inventories through just-in-time programmes which closely orchestrate delivery schedules and the delivery of zero-defect products. What does each party have to do to make such a programme successful?

Answer 57

Sellers must ensure a steady, reliable supply of materials and parts since the system’s objective is to eliminate inventories at the customer’s manufacturing site, which requires the delivery of 100 per cent quality (zero defects) products. This relieves the customer of any incoming inspection. Buyers have to work closely with suppliers to develop and continuously update the just-in-time system with regard to the product, changes in the manufacturing processes which include the product and information pertaining to the volume and pattern of usage. Both parties must strive to develop a close relationship based on trust.

Question 58

You are the marketing manager for an industrial robots company. What challenges would you expect to face in marketing such capital equipment? What parts of the marketing plan will be most critical in determining success?

Answer 58

The challenges in marketing industrial robots (accessory equipment) are:

(a) Identification and prioritising of potential customers.
(b) Demonstrating the benefits of using industrial robots including tailoring their operation to the needs of a particular company. Servicing such equipment to minimise downtime.

The most critical parts of the marketing plan are the product and its servicing (including the availability of spare parts), pricing (both product and software) and personal selling (including the installation and servicing).

Question 59

Suppose the marketing manager in the above question decides to consider leasing the company’s robotics to companies around the world. How would such a programme differ from a direct sale programme with respect to its marketing?

Answer 59

Pricing would certainly be different since leasing would have to take into account the cost-of-capital, default by the customer, unplanned obsolescence resulting from new product development by the company, and the cost of service over the lifetime of the lease.

Question 60

How does selling to the government differ from selling to the household and commercial markets?

Answer 60

The major difference is that the government typically buys on a bid basis for goods which are described in the form of specifications. Would-be buyers are often consulted or queried concerning these specifications and may even be successful in having their brand made the basis of the specifications. The government often buys in such large quantities (but not necessarily at one time) that it expects large quantity discounts. Also, it expects to buy direct, further reducing the bid price.

Question 61

Compare and contrast the similarities and differences between consumer and organisational markets and buying processes and discuss their implications for marketers.

Answer 61

This question concerns Modules 6 and 7. For a good answer a number of the following points should be made.

Consumers buy for their own use and consumption, whereas organisational buyers purchase goods and services which are transformed and passed on to final consumers. As they buy more for their own use, consumers are more likely to be more personally involved in what they purchase than industrial buyers and more susceptible to emotional and ego based advertising appeals.

The market-demographic profile of organisational buyers is much more concentrated than for consumer markets. They are fewer in number, larger and more geographically concentrated. The implication that direct marketing and selling is more likely to industrial buyers.

The organisational buying process tends to be more formal than the consumer process and there is also a tendency to buy on specification with the consequences that rational appeals tend to predominate in organisational purchase decisions. Organisations employ professional specialists employing specialised buying procedures. The implication is that the sales force must be competent to deal with enquiries from specialists.

The stages in the organisational buying process and the consumer decision process are similar for more complex decisions. However the organisational decision process is more formal and technical.

There are usually more people involved (from the Buying Centre) in organisational purchases. The implication is that much more effort is needed to consider the different requirements of different actors in the Buying Centre.

Question 62

Siemens, the German engineering and communications MNC (multinational corporation) has developed a new range of machine tool controls which are aimed at the East Asian region. Siemens ranks second in the world’s $3 billion. US-a-year market for machine tool controls with about 20% of sales. Fanuc of Japan is the leader with 40% of the market. In Europe and the USA, Fanuc sells its controls through a joint venture with General Electric of the USA.

Siemens’ marketing efforts concern a new set of machine tool controls which sell for about $9000 US, less than half the price of more sophisticated controls in which the German company has traditionally specialised. Siemens has been criticised in the past for ‘over-engineering’ its machine tool products, especially in relation to Fanuc’s cheaper controls.

Siemens believes that the east Asian region, outside Japan, will account for sales of 42 000 controls in the year 200X. This would mark a substantial increase from 5 years ago, when sales were 23 000 units valued at DM400 million.

Describe the likely buying decision process for these new machine tool controls and discuss briefly the implications for the promotional mix that Siemens might follow?

Answer 62

This answer covers Modules 7 and 14. Generally answers should spend about 2/3rds of the time discussing the buying decision process and at most, 1/3rd discussing the implications for the promotional mix.

The machine tool controls are being sold to goods producers for use in their production process. This new product range brings Siemens’ prices in line with those offered by Fanuc who are the market leader.

Competent answers should briefly discuss the organisational decision process. They should also discuss how industrial buyers are likely to buy on specifications and how a competitive price is likely to be a key requirement. Candidates should discuss the buying situation. As machine tool controls are forms of capital equipment used in the production of other goods it is unlikely that orders would be triggered by a requirements planning program. Competent answers would probably identify this as either a modified re-buy or a new-buy. In my view at $9000, the decision will probably offer potential for a modified re-buy, particularly where potential customers are not happy with some aspect of the extended product (e.g. quality or service). However candidates should not be penalised for opting for a new-buy. The decision is therefore likely to be complex, although with the modified re-buy buyers require information about alternative products and suppliers to compare with their current product and vendor but do not require to define the need or requirements. There may be possibilities for segmenting the market according to the nature of the buying process and candidates who suggest this should be rewarded.

As a modified re-buy, this type of purchase would probably involve several members of the organisational Buying Centre. Mentions of roles played by Buying Centre members should attract more marks. While the chief executive may not be involved in this level of decision making, it would certainly involve R&D, engineering, production and quality control staff in addition to those from finance.

As this is a modified re-buy, it is unlikely that prospective customers will evaluate all potential sources of supply. It is much more likely that only those customers who have been somehow dissatisfied with products which they have purchased in the past or those who are convinced that the new product offers a clear advantage over the competition, will be interested.

In considering possibilities for promotions those answers which realistically address this within the context of a business to business market should be rewarded while answers which suggest that Siemens use exclusive television advertising, would not. Also those answers which do refer to advertising should not be rote answers which refer to the entire advertising planning process, but should focus on issues relevant to this answer, which focuses on an industrial marketing situation.

Competent answers should suggest some form of market share goal as a prelude to listing promotions objectives, for example initially raising awareness of the new product and price, followed by the stimulation of interest. Very good answers could use the template from Exhibit 14.2 here. Competent answers should discuss different vehicles for raising levels of awareness. They should also discuss the promotional message including the appeal. Here the price (which is half of Siemens’ usual price) might well form the key appeal (alongside Siemens’ powerful reputation for quality, which is referred to as ‘over-engineering’ in the question). Responses to leads generated through ads, exhibitions and direct mail could be screened and could then form the basis of a list of prospects to be followed through by the sales force.

References to market research should be awarded if made appropriately through the answer; for example with respect to potential buyers’ definition of the marketing problem, requirements sought by potential customers, promotional appeals and promotional tracking research.