Marketing Chapter 6
Marketing Chapter 6 MAR 250
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This 5 page Class Notes was uploaded by Melanie Guerrero on Thursday February 25, 2016. The Class Notes belongs to MAR 250 at Pace University taught by Harvey Markowitz in Winter 2016. Since its upload, it has received 33 views. For similar materials see Principles of Marketing (20335) in Marketing at Pace University.
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Date Created: 02/25/16
Marketing – Chapter 6 Vocabulary: Bidder’s list – a list of firms believed to be qualified to supply a given item Business marketing – the marketing of goods and services to companies, governments, or not- for-profit organizations for use in the creation of goods and services that they can produce and market to others Buy classes – consist of three types of organizational buying situations: straight rebuy, new buy, and modified rebuy Buying center – a group of people who share common goals, risks, and knowledge important to a purchase decision Derived demand – the demand for industrial products and services driven by, or derived from, demand for consumer products and services E – marketplaces – online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services ISO 9000 – standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures Make-buy decision – an evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself North American Industry Classification System (NAICS) – provides common industry definitions for Canada, Mexico, and the U.S., which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA) Organizational buyers – those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale Organizational buying behavior – the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers Organizational buying criteria – the objective attributes of the supplier’s products and services and the capabilities of the supplier itself Reciprocity – an industrial buying practice in which two organizations agree to purchase each other’s products and services Reverse auction – a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other Supplier development – the deliberate effort by organizational buyers to build relationships that shape suppliers’ products, services, and capacities to fit a buyer’s needs and those of its customers Supply partnership – 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 Traditional auction – a seller puts up an item for sale and would-be buyers are invited to bid in competition with each other Value analysis – a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs I. The nature and size of organizational markets A. Organizational markets 1. Industrial 2. Reseller 3. Government B. Industrial markets 1. Reprocess a product or service they buy before selling it again to the next buyer 2. Companies that primarily sell physical goods represent 25% of all industrial firms C. Reseller markets 1. Resellers are wholesalers and retailers that buy physical products and resell them again without any reprocessing 2. Resellers mainly are organizational buyers in terms of a. How they make their own buying decisions b. Which products they choose to carry D. Government Markets 1. The federal, state, and local agencies that buy goods and services for the constituents they serve II. Characteristics of organizational buying A. Demand Characteristics 1. Derived demand – vocab** 2. Consumer demand for products and services is affected by: a. Their price b. Availability c. Consumers’ personal tastes d. Discretionary income B. Size of the order of purchase 1. The size of the purchase is typically much larger than that in consumer buying C. Number of potential buyers 1. Firms selling consumer products or services often try to reach thousands or millions of individuals or households D. Organizational buying objectives 1. Organizations buy products and services for one reason: to help them achieve their objectives 2. The objective is usually to increase profits through reducing costs or increasing revenues E. Organizational buying criteria 1. Vocab** 2. Most commonly used criteria: a. Price b. Ability to meet the quality specifications required for the item c. Ability to meet required delivery schedules d. Technical capability e. Warranties and claim policies in the event of poor performance f. Past performance on previous contracts g. Product facilities and capacity 3. ISO 9000 – vocab** 4. Supplier development – vocab** F. Buyer-seller relationships and supply partnerships 1. Reciprocity – vocab** 2. Supply partnership – vocab** a. Supply partnerships often include provisions for what is called sustainable procurement G. The Buying Center: A cross-functional group 1. People in the buying center 2. Roles in the Buying center a. Users b. Influencers c. Buyers d. Deciders e. Gatekeepers 3. Buying situations and the buying center a. New buy b. Straight Rebuy c. Modified Rebuy III. Charting the organizational buying Process A. Stages in the organizational buying process 1. Problem recognition a. Make-buy decision – vocab** 2. Information search a. Value analysis – vocab** 3. Alternative evaluation a. Bidder’s list – vocab** 4. Purchase decision 5. Post purchase behavior B. Prominence of online buying in organizational markets 1. Organizational buyers depend heavily on timely supplier information that describes product availability, technical specifications, application uses, price and delivery schedules 2. This technology has been shown to substantially reduce buyer order processing costs 3. Business marketers have found that Internet technology can reduce marketing costs, particularly sales and advertising expense, and broaden their potential customer base for many types of products and services C. E-marketplaces: Virtual organizational markets 1. E-marketplaces – vocab** 2. Online communities often go by: a. B2B b. Exchanges c. E-hubs D. Online Auctions in organizational markets 1. Traditional auction – vocab** 2. Reverse auction – vocab**