Chapter 5: Business Marketing Flashcards
What is business marketing?
The marketing of goods and services to individuals and organizations for purposes other than personal consumption.
How has the internet affected business marketing?
• Business marketing on the internet offers tremendous opportunities for companies to
○ Increase efficiency
○ Reduce costs
○ Improve customer service
○ Create one-to-one relationships
○ Introduce new products
=Expand markets.
• Internet provides a powerful platform for
○ Convey information
○ Conducting transactions
○ Delivering innovative services
○ Building customer and supplier relationships
○ Gathering marketing research data
○ Reducing costs and prices
=Integrate the entire supply chain from suppliers to end users
Strategic alliance
cooperative agreement between business companies. Take form of licensing or distribution agreements, joint ventures, research and development or partnership.
Business markets form strategic alliances to:
○ Leverage what they have by combining theses assets with those of other companies
○ Achieve increased productivity and lower costs for all participants
○ Limit competitors
-Create cheaper alternatives (partnering with companies in different markets– using same call centre)
What are the 4 major categories of business customers?
- Producer/ OEM
- Reseller
- Government
- Institutions
What are the 4 major categories of business customers? :1. Producer/ OEM
○ OEM– original equipment manufacturer
Organizations that use purchased goods and services (raw materials) to produce other products, to inc
What are the 4 major categories of business customers? :2. Reseller
- retail and wholesale businesses that buy finished goods and resell them for a profit.
What are the 4 major categories of business customers? :3. Government
federal, provincial, municipal
What are the 4 major categories of business customers? :4. Institutions
look to achieve goals other than the standard business goals of profit, market share and return on investment. (schools, churches, civic clubs, nonbusiness organizations, colleges, fraternal groups, unions, foundations, hospitals.
What is NAICS?
North American Industry Classification System
• North American Industry Classification System An industry classification system introduce in 1997 to replace the standard industry classification system. Groups goods or service producing companies that use identical or similar production processes. Useful too for business markets engaged in analyzing, segment, and targeting markets.
What are the major differences between business and consumer customers?
• Demand is derived – organizations buy products based on the demand for their product of their customers - formal buying
• Volume - more people involved
• Few customers - reciprocity and leasing
• Geographically concentrated - personal selling
direct
Seven types of business goods and services
• Major Equipment - capital goods such as large machines
• Accessory Equipment- less expensive and shorter lived equipment
• Raw Materials- unprocessed extractive or agricultural products
• Component Parts- finished items ready for assembly or products that need very little process before becoming a part of something else
• Processed Materials– products used directly in manufacturing others
• Supplies– consumable items that do not become part of the final product (lubricants, detergents, paper towels)
=Business Services- expense items that do not become a apart of final prouct (janitoryial, advertising, legal)
What is different/unique about business buying?
- Buying centres
- Evaluation Criteria
- Buying situations
- Business ethics
- Customer services
What is different/unique about business buying?:1. Buying centres
all those people in an organization who become involved in the prucahse decision
i. Intiatior- first suggests
ii. Influencer-
iii. Gatekeepers- members who regulate flow of information
iv. Decider- person with formal or informal power to make decision
v. Purchaser- person who negotiates purchase
vi. User- members of organization who will use the purchase
What is different/unique about business buying?:2. Evaluation Criteria
business buyers evaluate products and suppliers against three imporant criteria
i. Quality- technical suitability ii. Service- as much as they want the product, they also require good service iii. Price- want the lowest price for best quality product
