Term
| Tell three differences between B2B and B2C |
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Definition
lMarket characteristics
lProduct characteristics
lCustomer decision making style |
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Term
| Name some more differences between B2B and B2C marketing. |
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Definition
lFewer and larger customers
lLarger value of transaction
lMore technical products and services
lIndustrial inputs and outputs (machineries and production materials) vs. end products (TVs and phones)
lProfessional/rational business buyers vs. impulsive/emotional consumers
lGreater need of personal selling and negotiation in business market
lStronger relationship with business customers and suppliers… |
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Term
| B2B customers are Rational because.. |
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Definition
| Value and price in business transactions determine profits and assets, eventually determine performance and operational profitability. |
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Term
| 3 core processes in industrial marketing |
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Definition
| product development management, supply chain management, customer relationship management |
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Term
| Fundamental Value Equation |
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Definition
(ValueA - PriceA) > (ValueB - PriceB)
superior amount is called "customer incentive to purchase"
Value-in-Use |
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Term
| Cross-Border Business Management |
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Definition
| Globalization offers larger market and lower cost as two incentives for business |
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Term
| Differences when you go global? |
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Definition
-Economic/political/legal framework
-Phyiscal and cultural distance
-Instability of regimes and unpredictable fast change
-Foreign currency exchange fluctuation
-Crime/terror threats
-Language and customs |
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Term
| What are the determining factors in cross-border negotiations? |
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Definition
1. Who are the players? Identify their roles
2. Who decides what?
3. Informal influences that can make or break a deal? |
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Term
| The Process of Market Sensing |
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Definition
| the process of generating knowledge about the marketplace that individuals in the firm, such as business market managers, salespersons, or senior executives, use to inform and guide their decision making. |
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Term
| Four-step business market sensing process |
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Definition
1. Defining the market. Market segmentation, determining segments of interest.
2. Monitoring Competition. Competitor analysis, improving monitoring performance.
3. Assessing Value. Value assessment methods, customer value management.
4. Gaining Customer Feedback. Customer satisfaction measurement, customer value analysis. |
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Term
| Major Segmentation Variables for Business Markets |
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Definition
-Demographics
-Operating Variables
-Purchasing Approaches
-Situational Factors
-Personal Characteristics |
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Term
| Conventional/Demographic B2B Segmentation Criteria |
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Definition
-Geographical Location
-Business Sector
-Firm Size
also: Production volume, diversification |
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Term
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Definition
-Market potential
-Total market demand
-Sales potential
-Sales forecast
-Share of Customer's business
-Customer incentive to purchase |
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Term
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Definition
| fragmentation at one end and concentration at the other. Such markets create tremendous opportunities for a player for the concentrated end to create and dominate the iMarket. |
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Term
| Butterfly Market (bowtie) |
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Definition
| fragmentation at both ends. Tremendous opportunities for an intermediary or metamediary to dominate by offering total solutions and one-stop shopping. |
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Term
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Definition
| Benchmarking: investigating how other firms do something better than you and how you can become better than them. |
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Term
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Definition
| worth in monetary terms of the economic, technical, service, and social benefits a customer receives in exchange for the price it pays for a market offering. |
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Term
| customer's incentive to purchase |
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Definition
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Term
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Definition
| competitive market, a customer will prefer offering A |
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Term
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Definition
| If suppliers and/or customers don't understand value |
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Term
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Definition
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Term
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Definition
1. (V.A -V.B) - (P.A - P.B)
2. the superior benefits of costs and price, the À, that a customer firm gets from purchasing and using your firm's market offering rather than a competitor's
3. VIU as the basis for value proposition |
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Term
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Definition
-More [value] for more [price]
-More for the same
-The same for less
-Less for much less
-More for less |
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Term
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Definition
1. P.B + (V.A - V.B)
2. indifference price at which the customer firm would have no preference
3. VIU Price reference point in price negotiations with a customer |
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Term
| American Customer Satisfaction Index Model |
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Definition
Perceived Quality, Perceived Value, and Customer expectations
Feed into the Overall Customer Satisfaction
offset by Customer Complaints and Customer Loyalty. |
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Term
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Definition
1. Buying - Lowest Price
2. Procurement - Lowest Total Cost
3. Supply Management - Best Value |
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Term
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Definition
1. Obtain the best deal in terms of price, quality, and availability
2. Maximize power over suppliers
3. Avoid Risk
4. Short-term |
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Term
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Definition
1. Improving quality
2. reducing total costs
3. cooperating with suppliers
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Term
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Definition
| One supplier's offer is clearly and demonstratibly surperior in terms of a given value element. |
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Term
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Definition
1. higher perceived quality leads to higher customer satisfaction.
2. higher customer satisfaction leads to higher customer loyalty.
3. higher perceived quality leads to higher perceived value. |
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Term
| Traditional Pricing vs. Defeaturing |
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Definition
Traditional: Product is fixed, price is variable
Defeaturing: Product is variable, price is fixed |
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Term
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Definition
| the sum of all expenses associated with the acquisition, use, and disposal or recycling of a market offering. |
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Term
| Procurement and Suppliers |
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Definition
| purchasing managers draw upon the capabilities and resources of their first-tier suppliers to jointly improve quality and reduce total costs. Trust and equitably share rewards. |
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Term
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Definition
| integration and coordination of purchasing with other functions in the firm and other firms in the value network. |
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Term
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Definition
1. firm's efforts focused to deliver value to end-users
2. concentrate resources on a set of core compentencies and outsource all other activities
3. build a supply network that efficiently completes required business processes
4. sustain highly collaborative relationships with selected first-tier and lower-tier supplier firms |
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Term
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Definition
Roles Likely Person
initiator general manager
decider controller
influencer R&D engineer
purchaser buyer
gatekeeper purchasing manager
user worker |
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Term
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Definition
| managing feasible market offering, variety of perferences, and cannot predict the preferences |
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Term
| Operational effectiveness |
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Definition
| performing similar activities better than rivals perform them. |
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Term
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Definition
| creation of a unique and valuable position, involving a different set of activities |
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Term
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Definition
| performing different activities than rivals or performing similar activities in different ways. |
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Term
| Exploiting a Firm's Resources |
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Definition
Deploying resources against market opportunities to add value:
1. identify core competencies (knowledge)
2. build distinctive capabilities (skills)
3. leverage partner resources |
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Term
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Definition
1. Product Leadership - offering customers leading-edge offerings that enhace the customer's use
2. Customer intimacy - segmenting and targeting markets and precisely tailoring offerings to match customer requirements
3. Operational excellence - providing customers with reliable offerings and delivering them with minimal difficult or inconvenience |
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Term
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Definition
1. Price leadership - affordable and competitive prices to customers for a similar product offered by other firms in the marketplace
2. professional boundaries - offers professional customer services up to the limit of transaction-related needs
3. cost reduction and operational saving - cutting costs through using alternative materials, cheaper labor, less costly advertising instruments, and more effective direct channels |
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Term
| Strategic Market Strategy Making Process |
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Definition
1. What do we know? - resource, market information, customer needs
2. What do we want to accomplish? - goals and objectives, positioning/branding
3. How will we do it? - action plan, marketing/sales programs, managerial skills |
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Term
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Definition
-Brand image or reputation that a product, service, or firm currently has in the marketpalce
-Brand identity unique set of assocations the marketer would like to create and maintain for a brand.
-Value proposition is a statement of the functional, emotional, and self-expressive benefits a brand delivers
-Brand Position is that part of the value proposition and brand identity to be actively communicated |
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Term
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Definition
Important to customer?
Deliverable by the firm?
Unique? |
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Term
| Flexible Market Offerings |
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Definition
-articulate present market offerings
- asses customer value and supplier cost
- formulate flexible market offerings for target customers/segments
-prepare to implement market offerings
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Term
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Definition
-Core Benefit
-Core Product
-Minimally augmented product
-Augmented product
-Potential product |
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Term
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Definition
| Let customers choose the combination of componenets under a fixed price |
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Term
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Definition
| Gradually adding augmented and potential products to basic components |
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Term
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Definition
| Offer different components based on market segments. (mass customization) |
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Term
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Definition
-core benefit = transportation
-core product = car
-minimally augmented = battery, gas, oil
-augmented = sun roof, gps
-potential = oil change, maintenance, cleaning |
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Term
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Definition
| Customers' short- and long-term needs may not be realized during the initial transaction |
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Term
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Definition
| customers have similar preferences from a market segment |
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Term
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Definition
| Marketing managers add some percentage onto those costs to arrive at the market offering price (cost of goods, variable costs, full costs) |
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Term
| Competition-Based Pricing |
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Definition
| Marketing managers set their price in relation to what the competitor's prices are. |
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Term
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Definition
| price is set in relation to a market offerings value |
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Term
| Matching pricing strategies with different customers? |
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Definition
-Cost-Plus pricing = buying oriented firms
-Competition-Based Pricing = procurement
Value-Based pricing = supply management |
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Term
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Definition
-VIU Price is the CAP price in a competitive situation whre the sellers want to demonstrate VIU
- At VIU Price, there is NO monetary incentive (NO VIU) for customers to purchase
-Final price below VIU price (3-5%) |
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