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business to business
chapter 1 to 3
35
Marketing
Undergraduate 4
02/07/2011

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Term
What is B2B marketing? 2 examples
Definition
Marketing products or services to other companies, government bodies, institutions, and other govt organizations.
McDonalds buys salt to use in their french fries
Term
List the 3 major reasons for studying B2B marketing and indicate the one that is most important to you and state why.
Definition
JOBS- more marketing majors find jobs in it than ones selling to consumers
MAGNITUDE- widespread purchasing power
UNIQUE
Term
5 Ways b2b differs from b2c marketing
Definition
1. shorter distribution channels 2. greater web integration 3. unique promotional strategies 4. consumption 5. marketing research
Term
4 types of B2B PRODUCTS and examples
Definition
1. raw materials- gold
2. manufactured material- sheet steel
3. accessory equipment- desktop printers
4. capital equipment- industrial robots
Term
3 types of B2B CUSTOMERS and examples
Definition
1. resellers- wholesalers
2. govt agencies- country, state, or province
3. institutions- hospitals
Term
good example of a unique B2B promotional strategy
Definition
BASF sells carpet fibers to dupont, who then make carpets for GM to put into their cars, and GM customers ultimately judge the quality
Term
Give a clear pair of examples which contrast either how standards or how processes differ in the B2B and B2C contexts. Be clear as to which you are comparing.
Definition
skip this?
Term
What is derived demand? Give an example.
Definition
demand for their products and services is derived from the demand for the customers' products and services
ex. morton salt predicts sales from food sales
Term
9. What is demand elasticity and how does it manifest in B2B marketing? Compare elastic to inelastic demand with two examples.
Definition
Demand elasticity- The percentage in sales change relative to the percentage change in price.
-if price of one thing needed goes up, company can either do without the thing or pay a higher price
inelastic demand- not affected greatly by price
-morton can't do without the salt, but you personally can if the price is too high
Term
10. Do firms selling to businesses typically have more or less volatility in demand as compared to B2C? Why?
Definition
more volatility because derived demand causes wide swings in demand whereas individual consumers don't have as large of demand swings
Term
11. Give an example of a marketing mix for a B2B situation. Include all four major components of the mix.
Definition

a. Four p’s i. With value and competitive advantage

  • successfully match the product or service strengths with the needs of a definable target market;
  • position and price to align the product or service with its market, often an intricate balance; and
  • communicate and sell it in the fashion that demonstrates its value effectively to the target market.

Term
12. Give a good example of a B2B market in which competition allows transactional exchange (spot markets or discrete markets) to regulate a market.
Definition
a. General mills buying various wheat and other grains on commodities markets, a restaurant buyer at a cash and carry produce market, or a rail freight service offering standard boxcars to any shipper
Term
13. Give a good example of a B2B market in which competition through transactional exchange fails to regulate a market.
Definition
Term
14. Define supply chain management (SCM). Why has it become more important in recent years?
Definition
Proactively planning and coordinating the flow of products, services, and information among connected firms focusing on creating and delivering value to end users.
Stems from the global nature of competition in today's business markets.
Term
15. Contrast the effects on profits of a 10% sales increase with a 10% cost decrease. Assume a 25% profit margin.
Definition
income statements, base case, marketing impact, supply management impacts

net revenue, cost of goods sold, gross profit, promotion, general and admin, net earnings
Term
16. Give an example of how SCM can make marketing more effective.
Definition
-Suppliers are used to make market share gains
-a press for accountability and effectiveness in marketing efforts and an invigorated quest for operational efficiency, the elimination of any waste.
-often the profit impact from purchasing and logistical efficiencies outweighs that from market penetration
Term
17. How does the motivation to maintain a strong buyer-seller relationship vary? Look to Exhibit 2-2 for clues.
Definition
For a strong relationship, there should be mainly joint relationship maintenance, with some seller maintained and buyer maintained relation and NOT no exchange or solely buyer's or seller's market
Term
18. CRM stands for what term. What does the term mean?
Definition
-Customer Relationship Management
-A business strategy or philosophy based on gathering data about individual customers and using that info to create individualized offers in order to optimize long run profitability.
Term
19. What is strategic partnering? Give a clear example.
Definition
-when both parties have keen interests in maintaining ongoing exchange
-example- palm PDA partnering with a new Chinese manufacturer to trim costs
Term
20. What is a JIT relationship? Why must it be different from a transactional relationship?
Definition
-requires supplier to produce and deliver to the OEM precisely the necessary quantities at the necessary time
-eliminates costly inventories and frequent handling costs
Term
21. The book offers two broad areas for the development of high-performance b2b relationships. Pick either major category and describe two ways to enhance a B2B relationship
Definition
external measures
-large firms produce their own profiles using supply relationships with various company operations
-compare the performance of independent sales agents across the country
Term
22. List the five stages of business relationship development and describe one.
Definition
1. awareness- no interaction, buyer and seller independently consider the other as an exchange partner
2. exploration
3. expansion
4. commitment
5. dissolution
Term
23. List four of the five subprocesses for deepening dependence and describe one.
Definition
1. attraction- degree to which interaction between buyer and seller yields them net payoffs in excess of some minimum level
2. communication and bargaining
3. power and justice
4. norm development
5. expectations development
Term
24. List the five of the six methods for safeguarding relationships and describe one.
Definition
1. house calls
2. trading places- one of our people lives at your plant
3. managing dependence
4. supplier pledges
5. contracts
6. ownership
Term
25. What are the three major contributions of purchasing to the firm? Briefly describe each one.
Definition
1. providing supply- provide the right product or service in the correct amounts when needed
2. the correct quality- keep up with ever increasing quality specifications
3. lowest total cost- purchase price, delivery, storage, service, and more
Term
26. Give a clear example of the use of the total cost of ownership as compared to the lowest initial cost.
Definition
total cost of ownership- total amount expended in order to own a product or service
-ex. media cart- adds installation? repairs? power? delivery?
Term
27. What is the meaning of EOQ? Give the words and the overall concept in your answer. How does forward buying connect to EOQ
Definition
Economic Order Quantity- quantity that minimizes both ordering and storing costs
-balancing costs against demand
-look at each individual term annually
-discounts for volume? ordering costs?
Term
28. Give a clear example of the use of the use of value analysis. Include all three major considerations in your example.
Definition
1. reduce cost and improve design
2. complexity management
3. consider if alternatives exist
b. What does this save us compared to next base case?
c. How do we look at it?
d. What is it costing us?
Term
29. Contrast adversarial purchasing with partnership purchasing.
Definition
a. Adversarial- several vendors for each product
i. Transactional relationship
ii. See other as enemy or opposition
b. Partnership purchasing
i. Seeks to maximize benefits of collaboration between the buyer and a few suppliers
ii. More committed relationship
iii. Work together with both important
Term
30. Diagram the buy phase model.
Definition
a. 1. Recognition of a need
b. 2. Definition of the product-type need
c. 3. Development of detailed specifications
d. 4. Search for qualified suppliers
e. 5. Acquisition and analysis of proposals
f. 6. Evaluation of proposals and selection of a supplier
g. 7. Selection of an order procedure
h. 8. Evaluation of product performance
Term
31. Give three good examples for each of the buy-class types of buying situation.
Definition
a. New buy- new display case for retail store chain, extensive research, team
b. Modified rebuy- change size or placement a little
c. Straight rebuy- buy more for same exact store layout
Term
32. Give a simple example of multiattribute decision making.
Definition
a. Page 75 table with only 3 attributes
Term
33. List and give examples of two trends in purchasing.
Definition
a. Outsourcing- restaurant getting desserts from other bakery
b. Demand planning- computer circuit maker trying to influence demand so they have enough supply to make items and not too many
Term
34. Give two examples of how government purchasing differs from other B2B purchasing situations.
Definition
a. Fixed pricing
b. Cost plus
i. Reliance on formalized bidding processes and specialized orgs ex. gsa
Term
35. State two issues important to B2B purchasing ethics. Give examples of ethical failures for each. Each.
Definition
a. Receiving gifts
b. Access to information- tell all vendors what budget is
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