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What is business marketing?
The marketing of goods/services to individuals & organizations for purpose other than personal consumption.
Types of business products are:
- raw materials
- processed materials
- component parts
- accessory equipment
- major equipment
- business services
demand for business product can be:
- derived - demand for BP results from demand for consumer product
- inelastic - demand for BP is not affected by the price
- joint - when mult. items are used together in a final product, demand for one item affects the other
- fluctuating - demand for BP is more volatile than consumer products (manuf. plants or equipment)
Business customers are:
- 1. producers
- 2. resellers
- 3. governments
- 4. institutions
What is buying center?
Is all the persons in an organization that are involved in purchasing decision.
Roles in the Buying Center:
- initiator - initiates/suggests making a purchase
- influencer/evaluator - help define specs and provide evaluating options
- gatekeepers - group members who regulate the flow of information (i.e. purchasing agent determines which vendor gets an appt. with a buyer)
- decider - has the power to approve or choose the selection
- purchaser - actually negotiates the purchase (could be president or even the purchasing agent based on the importance of the decision
- users - members who will actually use the product
Evaluating criteria consists of
- 1. quality (technical suitability)
- 2. service ( delivery, installing, maintenance)
- 3. price
- new buy - purchase of a product for the first time (the greatest opportunity for vendors)
- modified rebuy - buyer wants some changes in the original good/service
- straight rebuy - vendor preffered, buyer re-orders same goods without looking for new information or investigating other suppliers.
Strategic alliance is...
...a cooperative agreement between business firms (strat. partnership)
difference between business and consumer markets?
- customers (org / individuals)
- volume (large / small)
- # of customers (fewer/many)
- location (concentrated / dispersed)
- nature of buy (professional / personal)
- negotiations (complex / simple)
- promotion (personal selling / advertising)