Consumer and Business Markets Overview

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Questions and Answers

What is derived demand in a business market?

Demand that is influenced by consumer demand (correct)

Demand that remains constant regardless of consumer behavior

Demand based on the availability of raw materials

Demand that decreases with price reduction

Which of the following best describes a straight re-buy?

A one-time purchase of a completely new product

A request for a new bid from multiple suppliers

A negotiation process for altered contract terms

A routine re-order from an approved supplier list (correct)

What characterizes the relationship between suppliers and customers in a business market?

Close supplier-customer relationships (correct)

Large variation in prices due to competition

Casual and informal purchasing approaches

Infrequent communication regarding orders

Which type of buyer is considered a non-profit oriented business customer?

A hospital purchasing medical supplies Signup and view all the answers

What role does a gatekeeper play in the buying center?

They collect and filter information for the buying center Signup and view all the answers

Which of the following best describes the concept of systems contracting?

A single supplier managing all aspects of procurement for a buyer Signup and view all the answers

What aspect of demand in a business market is characterized by being inelastic?

Demand that does not significantly respond to price changes Signup and view all the answers

Which of the following is NOT a role in the buying center?

Supervisors Signup and view all the answers

What is the primary purpose of a consumer market?

To enable personal consumption of goods and services Signup and view all the answers

Which of the following factors is NOT a cultural influence in consumer behavior?

Family roles Signup and view all the answers

Which demographic factor is NOT used to categorize consumers in the consumer market?

Employment status Signup and view all the answers

What is the correct term for the collection of individuals involved in the buying decision process in a business market?

Buying center Signup and view all the answers

Which of the following best describes 'needs hierarchies' in the context of consumer behavior?

Maslow's hierarchy of needs Signup and view all the answers

Which of the following is NOT a characteristic of buyer decision processes in a business market?

Engagement in family discussions Signup and view all the answers

What type of buying is characterized by the routine repurchase of products?

Routine buying Signup and view all the answers

Which of the following factors is categorized under personal influences on consumer behavior?

Occupation Signup and view all the answers

Study Notes

Consumer Market

A consumer market is made up of individuals and households who buy goods and services for personal consumption.
The buyers in this market are individuals and households, also known as end consumers.
Demographics, geographical areas, cultures, locations, life cycle, needs hierarchies, satisfaction, and decision-making are examples of factors that influence consumer behaviour.

Business Market

A business market consists of companies, organizations, sectors, and industries that buy goods and services for use in producing other goods or aiding in the production process.
The buyers in this market are organizations and businesses.

Types of Business Customers

There are profit-oriented, non-profit-oriented, private, government, and industry customers within the business market.

Characteristics of the Business Market

Fewer producers, larger buyers
Close supplier-customer relationships
Professional purchasing with well-trained purchasing staff
Multiple buying influences with many involved in the decision-making process
Multiple sales calls, often longer decision-making processes that are time-consuming.
Derived demand, relying on consumer demand.
Inelastic demand, not sensitive to price changes.
Fluctuating demand, changing with consumer demand.
Geographically concentrated buyers, reducing selling costs.
Direct purchasing, with no middleman involved for complex goods.

Types of Purchases in a Business Market

A straight re-buy is when a purchasing department re-orders routinely from approved suppliers.
A modified re-buy involves the buyer making modifications to product specifications, prices, delivery requirements, or other aspects.
A new task occurs when the purchaser buys a product or service for the first time.

Buying Center Roles

Initiators recognize the need for a product or service.
Influencers shape the buying decision by offering technical specifications or providing information.
Gatekeepers control the flow of information.
Deciders have the final authority to approve the purchase.
Approvers authorize the purchase.
Buyers are responsible for the actual purchase.
Users are who will ultimately use the product or service.

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Description

This quiz explores the distinctions between consumer and business markets. It covers key characteristics, types of customers, and factors influencing consumer behavior. Test your knowledge of market dynamics and customer relationships.