Test 1 Study Guide
Test 1 Study Guide 86498 - MKT 3010 - 006
Popular in Principles of Marketing
86498 - MKT 3010 - 006
verified elite notetaker
Popular in Marketing
This 21 page Study Guide was uploaded by Alexis Cone on Thursday September 10, 2015. The Study Guide belongs to 86498 - MKT 3010 - 006 at Clemson University taught by Amanda Cooper Fine in Spring 2015. Since its upload, it has received 319 views. For similar materials see Principles of Marketing in Marketing at Clemson University.
Reviews for Test 1 Study Guide
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 09/10/15
Chapter 1 Terms Marketing an organizational function and a set of processes for creating capturing communicating and delivering value to customers and for managing customer relationships in ways that bene t the organization and its stakeholders Marketing Plan a written document composed of an analysis of the current marketing situation opportunities and threats for the rm marketing objectives and strategy speci ed by the four Ps action programs and projected or proforma income statements Exchange the trade of things of value between the buyer and the seller so that each is better off as a result Marketing Mix four Ps product price place and promotion the controllable set of activities that a rm uses to respond to the wants of its target markets Goodsitems that can be physically touched Servicesany intangible offering that involves a deed performance or effort that cannot be physically possessed intangible customer bene ts that are produced by people or machines and cannot be separated from the producer Ideasintellectual conceptsthoughts opinions and philosophies BZC business to consumersprocess in which businesses sell to consumers BZB business to businessprocess of selling merchandise or services from one business to another C2C consumer to consumerprocess in which consumers sell to other consumers Valuere ects the relationship of bene ts to costs or what the consumer gets for what he or she gives Value Cocreationcustomers act as collaborators with a manufacturer or retailer to create the product or service Relational Orientationmethod of building a relationship with customers based on the philosophy that buyers and sellers should develop a longterm relationship Supply Chaingroup of rms that make and deliver a given set of goods and services Videos Luxxicota is an Italian based company that produces the majority of the eyewear today both sunglasses and prescription glasses They produce brands such as ray ban Oakley polo ect They own sunglass hut as well LensCrafters and Pearle Vision Overview of Marketing Marketing is the activity set of institutions processes for creating capturing communicating delivering and exchanging offerings that have value for customers clients partners and society at large The Four PS 0 Productcreating value Suppliers and customers collaborate Overall goal is to create goods and services and ideas that have value 0 Pricedelivering value Trade value is anything that the consumer gives us 0 Placedelivering value Deals the most with the supply chain getting product from the manufacturer to the consumer Optimizing value through supply chain management 0 Promotioncommunicating value Describing offerings to consumer Manufacturer learns from consumers Brands must learn how differentiate themselves from other brands Pro table Exchange is a person value equation 0 Value bene ts price 0 Price cost hassle Marketers seek to satisfy the needs and wants of a customer The fundamental purpose of marketing is to create value 0 Everyone should bene t ValuedBased Marketing 0 Balances the bene ts and cost costbene t analysis 0 Firms must focus on four concepts to become value drive Sharing Information marketers share information about customers and competitors and integrate it across the rms various departments Balancing Bene ts with Costs rms must constantly measure the bene ts that customer perceive against the cost of their offerings They use available customer data to nd opportunities to satisfy the needs of their customers keep their cost down and develop longterm loyalties Building Relationships with Customers marketers have begun to focus on relational orientation viewing their customers as relationships and not just as transactions Connecting with Customers by Using Social and Mobile Media allows marketers to better connect with customers and thus serve their needs in a more ef cient way Who engages in Marketing 0 Forpro t companies are de ned by customers and function 0 Business to Business B2B vs Business to Consumer B2C 0 Function deals with who you are in the supply chain and what your main function is 0 Nonpro t organizations 0 Individuals C2C Consumer to Consumer Marketing is NOT 0 Just buyers and sellers exchanging money 0 Simply about making pro t 0 A random activity Marketing has a speci c plan known as the marketing plan Chapter 2 Terms Marketing Strategy a rms target market marketing mix and method of obtaining a sustainable competitive advantage Sustainable Competitive Advantage something the can persistently do better than its competitors Customer Excellence involves a focus on retaining loyal customers and excellent customer service Operational Excellence involves a rm s focus on ef cient operations and excellent supply chain management Product Excellence involves highquality products effective branding and positioning is key Location a method of achieving excellence by having a strong physical location andor Internet presence Marketing Plan a written document composed of an analysis of the current marketing situation opportunities and threats for the rm marketing objectives and strategy speci ed in terms of the four Ps action programs and projected or fro forma income statements Mission Statement a broad description of a rms objectives and the scope of activities it plans to undertake Situation Analysis second step in a marketing plan uses a SWOT analysis that assesses both the internal environment with regards to its strengths and weaknesses and the external environment in terms of its opportunities and threats STP the processes of segmentation targeting and positioning that rms use to identify and evaluate opportunities for increasing sales and pro ts Market Segment a group of consumers who respond similarly to a rms marketing efforts Market Segmentation the process of dividing the market into groups of customers with different needs wants or characteristics who therefore might appreciate products or services geared especially for them Target Marketing Targeting the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market Market Positioning involves the process of de ning the marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison with competing products Products anything that is of value to a consumer and can be offered through a voluntary marketing exchange Metric a measuring system that quanti es a trend dynamic or characteristic Strategic Business Unit SBU a division of the rm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objective Product Lines groups of associated items such as those that consumers use together or think of as part of a group of similar products Market Share Percentage of a market accounted for by a speci c entity Relative Market Share a measure of the products strength in a particular market de ned as the sales of the focal product divided by the sales achieved by the largest rm in the industry Market Growth Rate the annual rate of growth of the speci c market in which the product competes Market Penetration Strategy a growth strategy that employs the existing marketing mix and focuses the rm s efforts on existing customers Market Development Strategy a growth strategy that employs the existing marketing offering to reach new market segments whether domestic or international Product Development Strategy a growth strategy that offers a new product or service to a rms current target market Diversi cation Strategy a growth strategy whereby a rm introduces a new product or service to a market segment that it does not currently serve Developing Marketing Strategies an a Marketing Plan 0 A marketing strategy identi es 1 a rms target market 2 a related marketing mix and 3 the bases on which the rm plans to build a sustainable competitive advantage 0 Strategic Planning Within the Firm 0 Corporate Level Plans top executives establish the overarching goals that then trickle down to the lower levels 0 Business Level Plans Strategic Business Unit reports to the corporate level what can the SBU do to contribute to the overarching goal 0 Functional Level Plans departmental looks at the plans set by the SBU that relate to the corporate level plans 0 Strategic Marketing Planning Process 0 The function is to allocate resources 0 The goals are to accomplish objectives deliver value and be competitive 0 Marketing Plan 0 Step 1 De ne the Business Mission Statement 0 Step 2 Situational Analysis Assessment of the organizations internal and external environment SWOT Analysis 0 Step 3 Identifying and Evaluating Opportunities Using STP Segmentation Targeting and Positioning Step 4 Implement Marketing Mix and Allocate Resources 0 Step 5 Evaluate Performance Using Marketing Metrics Setting benchmarks for success 0 Mission Statement 0 What is the purpose of the organization Type of business that is being engaged in Not static and can change from year to year Goals and objectives to accomplish Rather general and overarching Sustainable competitive advantage 0 Competitive Advantage 0 V something of Value 0 dif cult to lmitate o R Rare in the marketplace o 0 Organization can support the competitive advantage 0 Examples Customer Excellence Nordstrom is about slow positive growth and they strive to guarantee of good workforce by having half their employees at a new store come from a previous store 0 OOO Company Culture a company s identity a better company culture leads to a better ability to recruit and retain employees Intellectual Property patents copyrights trademarks Operational Excellence WalMart built a more ef cient supply chain in order to be able to charge lower prices for products Product Excellence deals with quality of products offered and brand excellence Locational Excellence being convenient to your consumers Social Responsibility operating a business in a manner that is cognizant of society environment new trends buying local The Body Shop lost a lot of customers when a larger company bought them because the larger company used animal testing and uses chemicals in their products 0 SWOT Analysis 0 O O 0 Ex Nike Strengths strong brand strong celebrity endorsers and innovative products Weaknesses overreliance on footwear Opportunities emerging countries and other fashion segments Threats cheaper imports imitation products and retail becoming price competitive Strengths and weaknesses are internal to the rm and opportunities and threats are external to the rm Segmentation dividing the marketplace into segments or subgroups gender age income education ect Targeting evaluating attractiveness of the different markets used to decide which segment to pursue Positioning de ne the marketing mix so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison to competing products 0 Value and the 4 P5 0 0 Product creating value customers must view the product as valuable enough to buy Price capturing value rms want to charge a price that customers perceive as giving them good value for the product they receive Place delivering value product must be readily accessible when and where the customer wants it 0 Promotion communicating value how marketers communicate the value of their product to consumers Evaluating Performance 0 Accountability why were the goals met or not met 0 Objectives and Metrics use metrics to see if different objectives were met 0 Financial Objectives nance is considered to be the language of the rm Pro ts revenues sales ect 0 Portfolio Analysis management evaluates the rm s various products and businesses and allocates resources according to which are projected to make the most product 0 Boston Consulting Group Matrix Relative Market Shares Market Growth Rate Stars Question Marks Cash Cows Dogs 0 Stars occur in highgrowth markets and are high market share products they require heavy resource investment in promotions and new production facilities they will eventually become cash cows 0 Cash Cows occur in lowergrowth markets but are high market share products 0 Question Marks appear in highgrowth markets but have relatively low market shares they are the most managerially intensive products because they require signi cant resources to maintain and increase their market shares 0 Dogs are in lowgrowth markets and have relatively low market shares should be phased out unless they are needed to boost the sales of another product or for competitive purposes 0 Strategic Planning is NOT sequential the planning process can move back and forth in between steps 0 Growth Strategies 0 Market Penetration same offerings to the same customers I hopes of getting the current market to buy more Ex Starbucks adding a drive through to make their coffee more convenient Ex Loyalty and rewards programs 0 Market Development same products to new markets Ex New demographic markets the NFL is trying to target female fans Ex New geographical areas Starbucks is now in China 0 Product Development new offerings in the same market Offering new products and services that the market needs Ex Fruit Juice Frappuccino at Starbucks selling non caffeinated beverages for people who may not want caffeine Selling breakfast sandwiches at Starbucks to make it easier for consumers to get everything the want in the morning in one place food and coffee 0 Diversification variety of offerings for a variety of markets new products and services to new markets Products and Services Markets Current New Current Market Product penetration development New Market Diversi cation development Downsizing is eliminating products or abandoning markets 0 This happens because of changes in the macro environment recession or changes in demographics your product grew faster than your assets could support you lacked the proper knowledge to succeed in the market or your product was not relevant Chapter 5 Terms Macroenvironmental Factors aspects of the external environment that affect a company s business such as the culture demographics social issues technological advances economic situation and politicalregulatory environment Culture the set of values guiding beliefs understandings and ways of doing thinkgs shared by members of a society exists on two levels visible artifacts and underlying values Country Culture entails easytospot visible nuances that are particular to a country such as dress symbols ceremonies language colors and food preferences and more subtle aspects which are trickier to identify Regional Culture the in uence of the area within a country in which people live Demographics information about the characteristics of human populations and segments especially those used to identify consumer markets such as by age gender income and educann Generational Cohort a group of people of the same generation typically have similar purchase behaviors because they have shared experiences and are in the same stage of life Generation Z Digital Native people in this group were born into a world that already was full of electronic gadgets and digital technologies such as the Internet and social networks Generation Y generational cohort of people born between 1997 and 1995 biggest cohort since the original postwar baby boom Millennials consumers born 1977 and 2000 and the children of the Baby Boomers Generation X generational cohort of people born between 1965 and 1976 Baby Boomers generational cohort of people born after World War II between 1946 and 1964 Green Marketing Involves a strategic effort by rms to supply customers with environmentally friendly merchandise Greenwashing exploiting a consumer by disingenuously marketing products or services as environmentally friendly with the goal of gaining pubic approval and sales In ationrefers to the persistent increase in the prices of goods and services Foreign Currency Fluctuations changes in the value of a country s currency relative to the currency of another country can in uence consumer spending Interest Rates these represent the cost of borrowing money PoliticalRegulatory Environment comprises political parties government organizations and legislation and laws Videos Target School Supplies Commercial uses the beat of We Got the Beat song to attract parents of school children and then shows products kids would want in order to get their attention RadioShack Commercial about the 805 wanting their store back RadioShack revamped their store but they wanted to show that its going to be the same store that was brought up to the modern day Analyzing the Marketing Environment Consumers are at the center of all marketing activities and they affect marketers by portraying their different needs and wants Immediate Environment 0 Company Capabilities Internal Resources Tangible resources nancials physical property or technological resources Intangible resources brand reputation company culture and intellectual property 0 Human resources human capital skills that employees posses and incentives that employees have to be ef cient and productive Global resources international labor international of ces and international distribution 0 Competitors Identify competitors 0 Direct same things just a different brand 0 lndirect same industry 0 Ex Deltas direct competitors are Southwest and other airlines Deltas indirect competitor is AMTRAK Competitive intelligence collecting information on competitors from annual reports PR pieces ect Proactive vs Reactive always want to be proactive instead of reactive 0 Corporate Partners Firms are part of alliances how strong is your alliance Align with competitors suppliers ect 0 Ex Net ix is on Amazons cloud even though they are competitors in the streaming industry 0 Ex Coke bottles DrPepper in SC and Pepsi bottles Dr Pepper in Georgia 0 Macroenvironment Factors 0 Culture shared meanings beliefs values morals and customs Culture de nes what consumers think they need to buy Country Culture Chips in America are different than chips in other cultures 0 In Australia ip ops are called thongs Regional Culture 0 Having different names for the same things in different regions across America 0 Demographics characteristics of a population Generational cohorts 0 Ex Dora the Explorer and the game Clue have changed because one generation doesn t want what the generation before them had lncome tied to purchasing power how much you make determines how much you can spend in the market 0 Ex Decline in the middle class has led to stores like dollar general doing better 0 Ex Tiffany amp Co is only targeting higher incomes because there lower income products don t sell as well Education tied to income more debt decreases purchasing power Gender traditional gender roles have blurred over the last generation Ethnicity 0 Ex General Mills now puts some of their commercials in Spanish in certain areas of the US and their sales have risen 0 Social Trends social issues values and concerns that help to shape culture Ex Green movement caringawareness of the environment Ex Privacy concerns how much of out civil liberties are we willing to give up for protection As companies gain more information from consumers and they use it is that okay Ex Timepoor society this is great for the service industry Ex Fair laborwages under what conditions are people in America making items that consumers buy wage working conditions child labor ect Ex Price sensitivity thrift people have become into getting great deals Ex Health and wellness concerns 0 Technological Advances Improves the value of productsservices New products new forms of communication and new retail channels Can involve making current products better not just making completely new products 0 Economic Situation affects how consumers buy cash credit ect how money is spent what do consumers buy Ex In ation Ex Unemployment o quotaltruism marketingquot all about trying to do the right thing during the recession certain companies tried to do things promotions to try and boost sales and build relationships with customers Ex FedEx allowed people to come print offmake copies of their resumes to try and help people get jobs Ex JetBlue said that if you lost yourjob you could get a refund on the ticket Ex Hyundai allowed people to return cars if they lost theirjob within a year of purchasing a car Ex Interest Rates Ex Value of Currency 0 Political Regulatory Environment political parties involved and how much power they have government organizations legislations and laws how does the legislation work and what laws are in place Terms Need Recognition the beginning of the consumer decision process occurs when consumers recognize they have an unsatis ed need and want to go from their actual needy state to a different desired state Functional Needs pertain to the performance of a product or services 1890 Sherman Antitrust Act prohibits monopolies or anything else that restrains trade or competition allows for fair trade and a free market 1914 Clayton Act supports the Sherman Antitrust Act looks more at pricing policies clari es that things such as price discrimination is not okay and prohibits the combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies 1936 RobinsonPatman Act further clari es price discrimination and states that within the supply chain you cant charge different prices to different companies Chapter 6 Psychological Needs pertain to the personal grati cation consumers associate with a product or service Internal Search for Information occurs when the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences External Search for Information occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision Internal Locus of Control refers to the when consumers believe they have some control over the outcomes of their actions in which case they generally engage in more search activities External Locus of Control refers to when consumers believe that fate or other external factors control all outcomes Performance Risk involves the perceived danger inherent in a poorly performing product or service Financial Risk risk associated with a monetary outlay includes the initial cost of the purchase as well as the costs of using the item or service Physiological Risk the fear of an actual harm should a product not perform properly Safety Risk psychological risk associated with the way people will feel if the product of service does not convey the right image Universal Sets includes all possible choices for a product category Retrieval Sets includes those brands or stores that the consumer can readily bring forth from memory Evoked Set comprises the alternative brands or stores that the consumer states he or she would consider when making a decision Evaluative Criteria consists of a set of salient or important attributes about a particular product Determinant Attributes product of service features that are important to the buyer and on which competing brands or stores are perceived to differ Consumer Decision Rules the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives Conversion Rate percentage of consumers who buy a product after viewing it Postpurchase Cognitive Dissonance the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance buyers remorse Negative Word of Mouth occurs when consumers spread negative information about a product service or store to others Motive a need or want that is strong enough to cause the person to seek satisfaction Maslow s Hierarchy of Needs a paradigm for classifying people s motives It argues that when lowerlevel more basic needs physiological and safety are ful lled people turn to satisfying their higherlevel human needs social and personal Physiological Needs those relating to the basic biological necessities of life food drink rest and shelter Safety Needs one of the needs in the PSSP hierarchy of needs pertain to protection and physical wellbeing Love Needs needs expressed through interactions with others Esteem Needs needs that enable people to ful ll inner desires SelfActualization when a person is completely satis ed with his or her life Attitudea person s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea consists of three components cognitive affective and behavioral Cognitive Component a component of attitude that re ects what a person believes to be true Affective Component a component of attitude that re ects what a person feels about the issue at hand his or her like or dislike of something Behavioral Component a component of attitude that comprises the actions a person takes with regard to the issue at hand Perception the process by which people select organize and interpret information to form a meaningful picture of the world Learning refers to a change in a person s thought process or behavior that arises from experience and takes place throughout the consumer decision process Lifestyle a component of psychographics refers to the way a person lives his or her life to achieve goals Reference Group one or more persons whom an individual uses as a basis for comparison regarding beliefs feelings and behaviors Culture the set of values guiding beliefs understandings and ways of doing things shard by members of a society exists on two levels visible artifacts and underlying values Situational Factors factors affecting the consumer decision process those that are speci c to the situation that may override or at least in uence psychological and social issues lnvolvement consumer s interest in a product or service Extended Problem Solving a purchase decision process during which the consumer devotes considerable time and effort 0 analyzing alternatives often occurs when the consumer perceives that the purchase decision entails a lot of risk 0 Limited Problem Solving occurs during a purchase decision that calls for at most a moderate amount of effort and time lmpulse Buying a buying decision made by customers on the spot when they see the merchandise Habitual Decision Making a purchase decision process in which consumers engage with little conscious effort Videos 0 Ford Truck commercial portrays a functional need Escalade commercial portrays a psychological need 0 Betty White snickers commercial you aren t you when your hungry portrays physiological needs ADT Commercial being safe in your house portrays a safety need eHarmony commercial about nding love portrays a social need 0 Audi commercial luxury has progressed portrays an esteem need Consumer Behavior 0 The study of consumer behavior wants to understand consumer actions why people buy products or services 0 Consumer Decision Process 0 Need Recognition how do recognize that you have a need Stimuli internal comes from you and external comes from outside yourself Needs 0 Functional we need the product to perform a certain way Psychological personal grati cation 0 Information Search lnternal your own memories and knowledge External ask others for their information Factors that affect information search Perceived bene ts vs cost of search cost bene t analysis digital technology is the number one factor that decreases the cost of a search Locus of Control an internal locus of control is much more likely to engage in information search 0 Actual vs Perceived Risk 0 Performance risk if the product doesn t perform well what does it look like Ex Christmas Tree Stand what happens if your tree stand doesn t work and your tree falls over 0 Financial Risk the more money related to the purchase the more risk associated with that purchase 0 Psychological Risk functional vs psychological needs What is the risk of others will perceive me if I don t buy the right thing 0 Physiological Risk some sort of safety or harm concern Ex What happens if your ladder doesn t perform well or is to heavy to pick up 0 Evaluation of Alternatives Attribute Set characteristics about the product 0 Universal Sets knowing every possible option within a set Retrieval Sets options that you know about 0 products and services you like 0 products and services you know nothing about 0 products and services you don t like Evaluation Criteria 0 Determinant attributes o Attributes consumers care most about 0 Attributes that differentiate products 0 Decision Heuristics mental shortcuts o Somatic markers 0 Choosing based on brand 0 Choosing based on price 0 Choosing based on packaging 0 Purchase Decisions and Consumption Choice is made based on how the consumer values the product 0 Postpurchase Behavior Customer Satisfaction consumer expectations vs perceived performance if performance is above expectations the customer is satis ed Postpurchase Cognitive Dissonance what you believe doesn t match up with your behavior 0 Buyers Remorse not feeling good about your purchase decision Happens mostly with expensive items infrequently purchased items and any item where risks are perceived to be high Customer Loyalty marketers want to have a loyal relationship with customers they want their customers to be satis ed with the goods purchased so that they will buy from the same company again Negative Word of Mouth amplor Reviews when consumers spread negative information about a product service or store to others 0 Can impact sales 0 Factors in uencing the Consumer Decision Process 0 Maslow s Hierarchy of Needs is about understanding the motives behind needs physiological ljsafetyljsocialesteemselffulfillment Physiological most basic needs food water sex ect Safety health wellbeing ect Social love sense of belonging Esteem personal needs status SelfFul llment o Psychological Factors Motives Attitudes feelings towards an object that are usually constructed by our culture and beliefs 0 Cognitive what we believe to be true what we know Affective based on what we believe to be true do we like or dislike something 0 Behavioral based on whether we like or dislike something how do we act towards it Perception something that really plays into what we think we need and how we make our purchase decisions 0 Ex keeping the same product but changing the name can either help or hurt sales Learning refers to changes in your behavior based on experience or reasoning Can be the reasons why product extensions work 0 Ex Can be the reason why product extension work if you take Tylenol as you grow up you associate it with taking care of you which is why you might try cold and sinus Tylenol Lifestyle made up of activities interest and opinions 0 Social Factors Family single most important buying organization in America Reference Groups those we look too for information regarding what to buy Culture where we grew up morals beliefs ect o Situational Factors can override all psychological and social factors Purchase Situations shopping for others allows you to buy something you wouldn t usually buy Shopping Situations something about the store or website gets you to purchase something you wouldn t typically buy Temporal Situations something about your temporal state makes you more or less likely to buy something you wouldn t usually buy Chapter 7 Terms BusinesstoBusiness Marketing BZB the process of buying and selling goods or services to be used I the production of other goods and services for consumption by the buying organization or for resale by wholesalers and retailers Derived Demand the linkage between consumers demand for a company s output and its purchase of necessary inputs to manufacture or assemble that particular output Resellersmarketing intermediaries that resell manufactured products without signi cantly altering their form Wholesalersthose rms engaged in buying taking title to often storing and physically handling goods in large quantities then reselling the goods usually in smaller quantities to retailers or industrial or business users Distributors a type of reseller or marketing intermediary that resells manufactured products without signi cantly altering their form Distributors often buy from manufacturers and sell to other businesses like retailers in a BZB transaction Request for Proposals RFP a process through which buying organizations invite alternative suppliers to bid on supplying their required components Web Portal an Internet site whose purpose is to be a major starting point for users when connect to the Web Buying Center the group of people typically responsible for the buying decisions in large organizations Initiatorthe buying center participant who rst suggests buying the particular product or service ln uencer the buying center participant whose views in uence other members of the buying center in making the nal decision Decider the buying center participant who ultimately determines any part of or the entire buying decision whether to buy what to buy how to buy or where to buy Buyerthe buying center participant who handles the paperwork of the actual purchase Userthe person who consumes or uses the product or service purchased by the buying center Gatekeeper the buying center participant who controls information of access to decision makers and in uences Organizational Culture re ects the set of values traditions and customs that guide a rm s employee s behavior Autocratic Buying Center a buying center in which one person makes the decision alone though there may be multiple participants Democratic Buying Center a buying center in which the majority in making decisions Consultative Buying Centers a buying center in which one person makes the decision but he or she solicits input from others before doing so Consensus Buying Center a buying center in which all members of the team must reach a collective agreement that they can support a particular purchase New Buy in a B2B setting a purchase of a good or service for the rst time the buying decisions is likely to be quite involved because the buyer or the buying organization does not have any experience with the item Modify Rebuy refers to when the buyer has purchased a similar product in the past but has declined to change some speci cations such as the desired place quality level options or so forth Straight Rebuys refers to when the buyer or buying organization simply buy additional units of products that have been previously purchased BusinesstoBusiness Marketing B2B Marketing refers to the process of buying and selling goods or services to be used in the production of other goods and services for competition by the buying organization andor resale by wholesalers and retailers Who is involved in B2B Marketing Manufacturers or Producers Industrial markets manufacturer Resellers buy product typically from a manufacturer and them resell it to another business they do not signi cantly altar the product Ex Nike selling shoes to Zappos who them sells the shoes to an end user Institutions Ex Colleges or universities churches museums ect Government typically the largest purchaser of goods and services Characteristics of Organizational Buying Demand Characteristics Consumer demand vs Derived Demand Consumer demand deals with consumption need recognition and is all about the end user and what type of demand they have for the product Derived demand looks at the link between consumer demand and the maufactuter what does the rm have to do to meet consumer demand Size of the OrderPurchase Amount of product being ordered by a company or a price tag Some companies have certain regulations set in place on how much money can be sent Ex Oracle certain lower level project managers only have so much money they can spend on a project If they need more money they have to ask an upper level for more money Number of Potential Buyers B2B has way less potential buyer than B2C markets thus one customer can make or break you Ex Rubbermaid went bankrupt about 10 years ago because the commodity prices for certain raw materials went up and therefore Rubbermaid had to increase the price of their product Wal Mart dropped Rubbermaid because of the new prices and Rubbermaid went out of business within a year Organizational Buying Objective different rms have different objectives that must be met when buying certain things B2B Buying Process Stage 1 Need Recognition There is an unful lled need that is either internal or external to the rm Stage 2 Product Speci cations What are the product speci cations of what we need Direction to suppliers helps suppliers understand if they can provide you with the product you need Collaborate with people to help come up with product speci cations Stage 3 Request for Proposals Process RFP Suppliers bid on the need we can supply you with this at this price Stage 4 Proposal Analysis Vendor Negotiations and Selection Evaluate the proposals from different suppliers Negotiate the terms Selective Criteria Choose based on some sort of criteria One of the top criteria is price Value is also very important Additional bene ts Stage 5 Order Speci cation Order Placed Making a contract Details are speci ed Stage 6 Vendor Analysis Similar to postpurchase behavior and analysis Formal evaluation of performance Do you want to renew Factors In uencing the Buying Process The Buying Center How many people are involved Less people involvedess complicated More people involvedmore complicated Organizational Culture Who gets to make the decision Does everyone get a vote does just one person decide is it multiple people involved If multiple people are involved do they all get an equalsay Buying Situation Have we bought this product before or is it a rst time purchase If we have purchased this product before we probably don t need to go through all 6 stages If we haven t bought the product before we will most likely go through all six steps
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'