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Chapter 6
Understanding Organizations As Customers
16
Marketing
Undergraduate 1
08/09/2010

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Term
Ultimate User(consumer) (Customers)
Definition
Products/services are everyday purchases that individuals make. Person buying product/service does so for their own use. The decision to buy is made by an individual or couple. Marketing efforts are designed to apeal, inform, and stimulate these individuals. When sales taxes must be paid for the purchase of an item/service, consumer pays this tax.
Term
Industrial Markets (Customers)
Definition
Companies that purchase a product/service for own use or to incorporate product/service for sale then the company is subject to pay sales tax. If the product is incorporated into their product/service for sale, then company is subject to pay sales tax. If product is not incorporated into their product they market then it is tax exempt.
Term
Government Purchases (Customers)
Definition
All governmental entities purchase goods/services. These include small items such as office supplies to major military purchases. Company supplying product does not pay any sales tax for the items or materials they purchase which go into the product being sold to the government.
Term
Industrial Markets (Organizational Buyers)
Definition
Some way manufactures or reprocess a product/service before selling it again to the next buyer.
Term
Reseller Markets (Organizational Buyers)
Definition
Buy physical products and resell them again without any reprocessing. These markets include wholesalers and retailers. Wholesale buys from the manufacturer and then distributes this product to the retailer who ultimately sells it to the end user.
Term
Government Markets (Organizational Buyers)
Definition
Purchase products/services for use in government activities.
Term
Global Organizational Markets (Organizational Buyers)
Definition
Include industrial, reseller, and government. Majority of world traded involves exchange relationships throughout the world. This means that products sold in a foreign market include items manufactured in foreign markets.
Term
Derived Demand (Characteristics of Organizational Buying)
Definition
the demand for inducstrial products/services is driven by, or derived from, demand for consumer products/services.
Term
Size of the Purchase (Characteristics of Organizational Buying)
Definition
Typically much larger than that of consumer purchases.
Term
Organizational buying objectives (Characteristics of Organizational Buying)
Definition
have SINGULAR purpose which is to achieve the objectives of the organization.
Term
Organizational Buying Criteria (Characteristics of Organizational Buying)
List of 7
Definition
objective attributes of a supplier's product/services and the capabilities of the supplier itself which include
1. Price
2. Ability to meet quality specifications
3. Ability to meet delivery schedules
4. Technically capabilities
5. Warranties and claim policies
6. Past performance
7. Production facilities and Capacity
Term
Buyer-seller Relationships (Characteristics of Organizational Buying)
Definition
involves negotiations concerning technical specifications, delivery, schedules.
Term
The Buying Center (Characteristics of Organizational Buying)
Definition
involves several people to help in the buying decision.
Term
Make or Buy (Organizational Buying Process)
Definition
Experts from the buyer and seller usally meet to discuss and review purchasing requirements. Industrial buyers are confronted with this decision. These decisions involve capabilities, capacity, and ability to meet schedule. Also based on cost, time, quality.
Term
Value Analysis (Organizational Buying Process)
Definition
Systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs. Ex. Drawing product of an inch, and see if it's okay.
Term
Organizational Buying in Organizational Markets
Definition
Online Buying by far exceeds the transactions of consumers in number of transactions, size and purchasing volume.
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