Term
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Definition
| the marketing of goods and services to individuals and organizations for purposes other than personal consumption |
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Term
| business market customers |
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Definition
| producers (OEMs), resellers(wholesalers, retailers), governments (federal, state, municipal, county), institutions (unions, churches, foundations, civic clubs, nonprofits) |
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Term
| business to business product classes |
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Definition
| raw materials, component parts and materials, supplies and services, accessory equipment, installations |
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Term
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Definition
| items used in the manufacturing process that become part of final product |
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Term
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Definition
| items used to assist in producing other goods and services |
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Term
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Definition
| demand for business products results from demand for consumer products |
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Term
| inelastic industry demand |
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Definition
| a change in price will not significantly affect the demand for product |
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Term
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Definition
| multiple items are used together in final product. demand for one item affects all |
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Term
| fluctuating industry demand |
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Definition
| demand for business products is more volatile than for consumer products. small changes in consumer demand create large increases or decreases in buesinss demand |
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Term
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Definition
Are used to manufacture other products
Become part of another product
Aid the normal operations of an organization
Are acquired for resale without change in form |
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Term
| Business demand is different from consumer demand in the following areas: |
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Definition
The demand for business products is derived demand, meaning that organizations buy products to be used in producing customer products. As a result, business marketers must carefully monitor trends and patterns in final consumer markets as well as customers’ forecasts.
Inelastic demand is demand without regard to price. An increase or decrease in the product price will not significantly affect the demand for the product.
Joint demand occurs when multiple items are used together in a final product. Consequently, a demand change for one product will affect the other products as well.
Fluctuating demand: The demand for business products tends to be more unstable than the demand for consumer products. A small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and manufacturing equipment needed to make the consumer product. This is known as the multiplier effect. |
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Term
| difference in purchase volume between business customers and consumers |
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Definition
| buuiness customers buy in larger quantities than consumers |
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Term
| difference in # of customers between B & C |
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Definition
| business marketers have fewer customers than consumer marketers. An advantage is that it is easier to identify buyers, monitor customer needs, and build personal relationships. a disadvantage is that each customer becomes crucial, especially for those manufacturers who have only one customer |
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Term
| difference in location of buyers |
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Definition
| business customers are more geographically concentrated than consumers. for example, many firms in the automobile manufacturing industry are clustered near detroit |
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Term
| difference in distribution structure |
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Definition
| business products typically have shorter channels of distribution, and direct channels are common. On the other hand, consumer products pass through a distribution system that may include the producer, wholesaler, and the retailer |
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Term
| differences in the nature of buying |
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Definition
| More people are involved in a business market purchase decision than in a consumer purchase. Representatives from quality control, marketing, finance, and purchasing may be grouped in a buying center. |
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Term
| differences in the types of negotiations |
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Definition
| Consumers are used to negotiating price on items like real estate and automobiles, although in most cases, however, the sellers set the price and other conditions of sale. In contrast, negotiation is common in business marketing decisions and may take months to work out the final contracts. |
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Term
| difference in the use of reciprocity |
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Definition
| Business purchasers often choose to buy from their own customers. It is not unethical or illegal unless the exchange is coerced |
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Term
| differences in the primary promotional method |
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Definition
| Business marketers emphasize personal selling, especially for expensive, custom-designed products. |
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Term
| difference in use of leasing |
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Definition
| Businesses commonly lease expensive equipment to reduce capital outflow, keep state of the art products, and gain tax advantages. |
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Term
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Definition
| the purchase of a product for the first time, complete with high levels of risk, complexity, and/or extensive decision making |
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Term
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Definition
| a situation where the purchaser wants some change in the original good or service which has been previously purchased |
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Term
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Definition
| a situation in whichthe purchaser reorders the same goods or services without looking for new information or investigating other suppliers |
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Term
| past uses of the internet in business marketing |
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Definition
| revenue generation, basic marketing communication |
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Term
| current uses of the internet in business marketing |
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Definition
| reduce costs, build partnerships and alliances, creation of e-marketplace, develop customer-focused technology and systems, integrate online and traditional media |
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Term
| decision making model steps |
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Definition
| problem recognition, information search, evaluate alternatives, purchase decision, postpurchase behavior |
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Term
| differentiating and positioning |
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Definition
| understanding customer's view, using positioning techniques, differentiating the marketing mix |
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Term
| segmentation and targeting |
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Definition
| choosing the best segmentation variables, decide on # and description of segment groups, quantify and describe segments, select which segments will be your target market |
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Term
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Definition
| subdividing the marketplace into distinct subsets of customers based on some shared characteristic. aggregating prospective buyers into groups (markets) with common needs and that will respond similarly to a marketing action |
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Term
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Definition
| undifferentiated or mass marketing |
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Term
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Definition
| no segmentation, single segment selection, multisegment selection, build to order all the way to mass customization |
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Term
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Definition
| could be niche (concentrated) marketing where once you find the group you think you can own the group with little competition |
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Term
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Definition
| one product, multiple market segments (may need different promotional strategies); multiple products, multiple market segments |
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Term
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Definition
| from build to order all the way to mass customization |
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Term
| steps in segmenting markets |
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Definition
| select a product and study market needs, choose bases for segmentation (segmentation variables), select descriptors, profile and analyze segments, select target markets; design, implement, maintain marketing mix |
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Term
| criteria for segment decisions |
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Definition
Meets heterogeneity (differences among segments) and homogeneity (similarity within a segment) standards
Segments must be identifiable and measurable (must give number of people in each segment)
Segments must offer a potential for increased profit (substantial in size and an improvement over no segmentation)
Segments must be reachable with specific marketing actions
If yes: Useful segmentation scheme |
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Term
| bases for segmenting consumer markets |
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Definition
| geography, demographics, psychographics, behavioral |
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Term
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Definition
| region, market size, market density, climate |
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Term
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Definition
| age, gender, income, education, occupation, race/ethnicity, family life cycle/stage, marital status |
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Term
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Definition
| personality, motives (needs) and benefits sought, lifestyle, geodemographics |
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Term
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Definition
| benefits sought from product features, user status, usage rate, store visitation rate, store type, promotional usage |
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Term
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Definition
| consumers buy based on image they want to portray |
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Term
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Definition
| strongly correlated with buying behavior |
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Term
| segmenting by psychographics |
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Definition
| the use of psychological, sociological, and anthropological factors to construct market segments-members typically share activities, interests, and opinions or AIOS |
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Term
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Definition
| combines geography with demographics and psychographics |
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Term
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Definition
| segments consumers based on how they act toward, feel about, or use a product (20% of purchasers account of 80% of a product's sales) |
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Term
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Definition
| firms can make money selling small amounts of items if they sell enough different items |
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Term
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Definition
| a strategy in which marketers evaluate the attractiveness of each potential segment and decide in which segment they will invest resources to try to turn them into customers |
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Term
| criteria for selecting target markets |
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Definition
Market size and expected growth
Competitive situation
Cost of reaching the segment
Compatibility with your firm’s objectives & resources |
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Term
| differentiating and positioning |
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Definition
| understanding customer's view, using positioning techniques, differentiating the marketing mix, knowing the relationship between positioning and targeting |
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Term
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Definition
| show marketers how closely products are conceptually positioned by consumers to "ideal" points to their own products, and to competitors' products |
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Term
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Definition
| relevant for: product performance specs, delivery service, advertising themes, brochure designs, written and video use instructions |
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Term
| demographics relevant for |
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Definition
choice of sales regions
estimating segment size
choice of local channels
choice of media |
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Term
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Definition
new offerings that solve previous problem
to raise awareness
to change image and positioning |
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Term
| benefits sought relevant for |
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Definition
different models with different features
different ad messages emphasizing different benefits
sales training |
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Term
| heavy product use relevant for |
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Definition
special products
special services
special frequent user programs
special financial terms |
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Term
| channel loyalty relevant for |
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Definition
choice of distributors
different product mix for different channels |
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Term
| heavy media use relevant for |
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Definition
promotion for a medium
media buying
message for a medium |
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Term
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Definition
| those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale |
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Term
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Definition
| reprocess a product before they sell it again to the next buyer |
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Term
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Definition
| wholesalers and retailers that buy physical products and resell them again without any reprocessing |
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Term
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Definition
| the federal, state and local agencies that buy goods and services for the constituents they serve |
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Term
| North American Industry Classification System (NAICS) |
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Definition
| provides common industry definitions for canada, mexico, and the US, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement. It groups economic activity to permit studies of market share, demand for goods and services, import competition in domestic markets, and similar studies. It designates industries with a numerical code in a defined structure. |
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Term
| North American Product Classification System (NAPCS) |
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Definition
| provides a classification system for products and services that is consistent across canada, mexico, and the US and international classification systems |
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Term
| organizational buying criteria |
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Definition
| price, ability to meet the quality specifications required for the item, ability to meet required delivery schedules, technical capability, warranties and claim policies in the event of poor performance, past performance on previous contracts, and production facilities and capacity. |
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Term
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Definition
| exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer |
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Term
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Definition
| aims to integrate environmental considerations into all stages of an organization's buying process with the goal of reducing the impact on human health and the physical environment. |
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Term
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Definition
| control the flow of information in the buying center. purchasing personnel, technical experts, and secretaries can all keep salespeople or information from reaching people performing the other four roles (users, influencers, buyers, deciders) |
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Term
| original equipment manufacturers (OEMs) |
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Definition
| manufacturers that incorporate a product into something bigger and resell it for a lot more money |
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Term
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Definition
| a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs |
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Term
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Definition
| a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs |
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