Koofers

Exam 2 Chapters 6-10 - Flashcards

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Class:MKT 3343 - PRIN OF MARKETING
Subject:Marketing
University:Texas State University - San Marcos
Term:Fall 2011
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      Mode:   CARDS LIST       ? pages   PRINT EXIT
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.
Organizational Buyers Those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

divided into 3 markets: 1) Industrial  2) Reseller  3) Government
Industrial Markets Industrial Firms reprocess a product or service they buy before selling again to the next buyer

service companies represent 75% of all Industrial firms

7.2 Million Firms involved in Industrial(Business) Market
Reseller Markets Resellers are wholesalers and retailers that buy physical products and resell them again without any reprocessing 

2 million retailers and 430,000 wholesalers


Generated by Koofers.com
Government Markets Government Units are the federal, state, and local agencies that buy goods and services for the constituents they serve.

89,500 of these in US

(NASA)
Global Organizational Markets largest exporting industries in the US focus on organizational buyers, NOT ultimate consumers

Capital equipment and Industrial supplies account for 46% of ALL US product exports
NAICS North American Industry Classification System

used by business and government to classify business establishments according to type of economic activity (process of production) in Canada, Mexico and the United States.

makes it easier to measure economic activity

Consistent with the International Standard Industrial Classification of All Economic Activities
NAPCS The North American Product Classification System

a classification system used by Canada, Mexico, and the United States to classify products produced by industries in those countries.

NAICS and NAPCS represent the continued effort toward economic integration in North America and the world
Generated by Koofers.com
Derived Demand when the demand for industrial products and services is driven by demand for consumer products and services

based on expectations of future consumer demand
Organizational Buying Criteria the objective attributes of the supplier's products and services and the capabilities of the supplier itself

7 most commonly used criteria: 1) price  2) ability to meet the quality specifications required for the item  3) ability to meet required deliver schedules  4) technical capability  5) warranties and claim policies in the event of poor performance  6) past performance of previous contracts  7) production facilities and capacity
ISO 9000 Standards developed by the International Standards Organization (ISO)

refer to standards for registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedure

type of certification
Supplier Development a practice of transforming their buying criteria into specific requirements that are communicated to prospective suppliers

involves the deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers
Generated by Koofers.com
Just-In-Time Inventory System reduces the inventory of production parts to those to be used within hours or days

promotes on-time delivery

discussed further in Chapter 16
Reciprocity an industrial buying practice in which two organizations agree to purchase each other's products and services

US Justice Department disapproves of reciprocal buying becuase it restricts the normal operation of the free market

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
Buying Center individuals who share common goals, risks and knowledge important to a purchase decision
Generated by Koofers.com
5 Roles in a Buying Center Users
Influencers
Buyers
Deciders
Gatekeepers

Users people in the organization who actually use the product or service

Ex. secretary who will use a new word processor
Influencers affect the buying decision, usually by helping define the specifications for what is bought

Information Systems Manager in the purchase of a new mainframe computer
Buyers have formal authority and responsibility to select the supplier and negotiate the terms of the contract
Generated by Koofers.com
Deciders have the formal or informal power to select or approve the supplier that receives the contract. 
Gatekeepers control the flow of information in the buying center to the other 4 roles
Buy Classes 3 types of buying situations: 1) New Buy  2) Straight Rebuy  3) Modified Rebuy
New Buy Organization is a first-time buyer of the product or service

greater potential risks
Generated by Koofers.com
Straight Rebuy Buyer or Purchasing Manager reorders an existing product or service from the list of acceptable suppliers, probably without checking with users or influencers

ex. Office supplies and maintenance services
Modified Rebuy the users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier.
Organizational Buying Behavior decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers
Make-Buy Decision an evaluation of whether components and assemblies will be purchased form outside suppliers or built by the company itself.
Generated by Koofers.com
Value Analysis a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.
Bidder's List a list of firms believed to be qualified to supply a given item
E-Marketplaces online trading communities that bring together buyers and supplier organizations

go by a variety of names, including B2B exchanges and e-hubs
Traditional Auction a seller puts an item up for sale and the would-be buyers are invited to bid in competition with each other. 

provides an upward pressure on bid prices

often used to dispose of excess merchandise

over when the highest bidder remains
Generated by Koofers.com
Reverse Auction A reverse auction is a type of auction in which the roles of buyers and sellers are reversed.

provides a downward pressure on bid prices

lowest bidder wins
Generated by Koofers.com

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 Business MarketingThe 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.
 Organizational BuyersThose manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

divided into 3 markets: 1) Industrial  2) Reseller  3) Government
 Industrial MarketsIndustrial Firms reprocess a product or service they buy before selling again to the next buyer

service companies represent 75% of all Industrial firms

7.2 Million Firms involved in Industrial(Business) Market
 Reseller MarketsResellers are wholesalers and retailers that buy physical products and resell them again without any reprocessing 

2 million retailers and 430,000 wholesalers


 Government MarketsGovernment Units are the federal, state, and local agencies that buy goods and services for the constituents they serve.

89,500 of these in US

(NASA)
 Global Organizational Marketslargest exporting industries in the US focus on organizational buyers, NOT ultimate consumers

Capital equipment and Industrial supplies account for 46% of ALL US product exports
 NAICSNorth American Industry Classification System

used by business and government to classify business establishments according to type of economic activity (process of production) in Canada, Mexico and the United States.

makes it easier to measure economic activity

Consistent with the International Standard Industrial Classification of All Economic Activities
 NAPCSThe North American Product Classification System

a classification system used by Canada, Mexico, and the United States to classify products produced by industries in those countries.

NAICS and NAPCS represent the continued effort toward economic integration in North America and the world
 Derived Demandwhen the demand for industrial products and services is driven by demand for consumer products and services

based on expectations of future consumer demand
 Organizational Buying Criteriathe objective attributes of the supplier's products and services and the capabilities of the supplier itself

7 most commonly used criteria: 1) price  2) ability to meet the quality specifications required for the item  3) ability to meet required deliver schedules  4) technical capability  5) warranties and claim policies in the event of poor performance  6) past performance of previous contracts  7) production facilities and capacity
 ISO 9000 Standardsdeveloped by the International Standards Organization (ISO)

refer to standards for registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedure

type of certification
 Supplier Developmenta practice of transforming their buying criteria into specific requirements that are communicated to prospective suppliers

involves the deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers
 Just-In-Time Inventory Systemreduces the inventory of production parts to those to be used within hours or days

promotes on-time delivery

discussed further in Chapter 16
 Reciprocityan industrial buying practice in which two organizations agree to purchase each other's products and services

US Justice Department disapproves of reciprocal buying becuase it restricts the normal operation of the free market

 Supply Partnershipexists 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
 Buying Centerindividuals who share common goals, risks and knowledge important to a purchase decision
 5 Roles in a Buying CenterUsers
Influencers
Buyers
Deciders
Gatekeepers

 Userspeople in the organization who actually use the product or service

Ex. secretary who will use a new word processor
 Influencersaffect the buying decision, usually by helping define the specifications for what is bought

Information Systems Manager in the purchase of a new mainframe computer
 Buyershave formal authority and responsibility to select the supplier and negotiate the terms of the contract
 Decidershave the formal or informal power to select or approve the supplier that receives the contract. 
 Gatekeeperscontrol the flow of information in the buying center to the other 4 roles
 Buy Classes3 types of buying situations: 1) New Buy  2) Straight Rebuy  3) Modified Rebuy
 New BuyOrganization is a first-time buyer of the product or service

greater potential risks
 Straight RebuyBuyer or Purchasing Manager reorders an existing product or service from the list of acceptable suppliers, probably without checking with users or influencers

ex. Office supplies and maintenance services
 Modified Rebuythe users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier.
 Organizational Buying Behaviordecision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers
 Make-Buy Decisionan evaluation of whether components and assemblies will be purchased form outside suppliers or built by the company itself.
 Value Analysisa systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.
 Bidder's Lista list of firms believed to be qualified to supply a given item
 E-Marketplacesonline trading communities that bring together buyers and supplier organizations

go by a variety of names, including B2B exchanges and e-hubs
 Traditional Auctiona seller puts an item up for sale and the would-be buyers are invited to bid in competition with each other. 

provides an upward pressure on bid prices

often used to dispose of excess merchandise

over when the highest bidder remains
 Reverse AuctionA reverse auction is a type of auction in which the roles of buyers and sellers are reversed.

provides a downward pressure on bid prices

lowest bidder wins
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