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21 Cards in this Set
- Front
- Back
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Business to business markets (B2B)
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The group of customers that include manufacturers, wholesalers, retailers, and other organizations
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organizational markets
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another name for business to business markets
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Key Differences n Business vs. Consumer Markets
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Multiple buyers, number of customers, geographic concentration, & size of purchases
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Multiple buyers
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Must meet the requirements of everyone involved in the company's purchase decision.
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Number of Customers
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Fewer when compared to the end-user consumer. (100 million consumer households, less than half a million businesses and other organizations)
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Size of purchases
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Organizations purchase many products that can cost a million dollars or more. Recognizing these differences in the size of purchases allows marketers to develop effective marketing strategies. Purchases of size are best advertised by strong personal sales force.
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Geographic Concentration
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many business customers are located in a small geographic area rather than being spread out across the country. (Could be exclusively in a single region).
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Demand B2B
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most demand for B2B products is derived, inelastic, fluctuating and joint
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Derived Demand
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demand for business or organizational products caused by demand for consumer goods or services
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Inelastic Demand
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Changes in price have little or no effect on the amount demanded
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Fluctuating demand
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small changes in consumer demand create large increases or decreases in business demand. Life expectancy of the product can cause fluctuating demand.
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Joint Demand
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Demand occurs for two or more goods that are used together to create a product.
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Professional Buyers and buying centers (on PwrPt)
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trained professional buyers typically carry out buying in business to business markets: 1. purchasing agents 2. Procurement officers 3. directors of materials management
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Professional Buyers and buying centers (in Notes)
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participates in decision making process: user, initiator, gatekeeper, influences, decision maker, buyer
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Steps in business to business buying decision process
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problem recognition, information search, evaluate alternatives, select the product & supplier, Evaluate Postpurchase
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Problem recognition
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Factors prompting recognition vary by situation. Actions resulting from problem recognition include: initiation or purchase requisition or request, and formation of a buying center, if needed.
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Information Search
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-Search for information about products and suppliers
-Develop product/or service specifications -Identify potential suppliers, obtain proposals/bids |
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Evaluate Alternatives
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-Price is a primary consideration (others, perks/extra services)
-Customers reference programs, product demos, and presentations can help sell the marketer's products to firms |
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Select Product and Supplier (1of2)
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-single sourcing: business practice of buying a particular product from only one supplier
-multiple sourcing: buying from several diff. suppliers -Reciprocity: trading partnership in which 2 firms agree to buy from one another |
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Select Product and Supplier (2of2)
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-outsourcing: obtaining vendors to provide goods/services that might otherwise be supplied in-house
-crowdsourcing: pulling together expertise from around the globe to work on solving a problem -Reverse marketing: buyers try to find capable suppliers and "sell" their purchase to the suppliers |
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Evaluate Postpurchase
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organizational buyers assess whether the performance of the product and the supplier live up to expectations
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