Marketing Strategies and Business Buying Process
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Questions and Answers

What is the primary focus of complex decision-making in purchasing?

  • Decisions involving large sums of money (correct)
  • Low-risk individual purchases
  • Simple product approvals
  • Spontaneous consumer choices

What is a key element included in a purchase order (PO)?

  • Order number and payment details (correct)
  • Product promotion timelines
  • Supplier's marketing strategies
  • Customer feedback analysis

Which of the following describes the relationship between a brand and an important customer in the context of purchasing?

  • Brands only care about individual purchases.
  • There is mutual dependency between the brand and the important customer. (correct)
  • Brands are less dependent on important customers.
  • Important customers are independent of brands.

Which characteristic distinguishes formalized purchasing decisions?

<p>Use of detailed product specifications (D)</p> Signup and view all the answers

What does the term 'incoterms' refer to in the purchasing process?

<p>Shipping terms and conditions (D)</p> Signup and view all the answers

What is the process an organization follows when preparing a final order?

<p>Listing items, tech specifications, and expected delivery time (A)</p> Signup and view all the answers

Which action is taken during the performance review process in a buying department?

<p>Contacting users to assess their satisfaction (B)</p> Signup and view all the answers

What characterizes a straight rebuy in the business buying process?

<p>Reordering the same product without changes (C)</p> Signup and view all the answers

What defines a modified rebuy situation?

<p>Purchasing an item that has additional features or types (D)</p> Signup and view all the answers

What typically happens if a purchased item is deemed not good enough for a customer?

<p>A request for a product upgrade (A)</p> Signup and view all the answers

What primarily characterizes a business market?

<p>Organizations buying goods to produce other goods or services (C)</p> Signup and view all the answers

Which of the following is NOT a similarity between business and consumer markets?

<p>Both require market research (A)</p> Signup and view all the answers

How does the nature of the buying unit differ between business and consumer markets?

<p>Business markets often have specialized buying units (D)</p> Signup and view all the answers

What is a key factor that influences buying decisions in business markets?

<p>Perceived value in relation to profit (D)</p> Signup and view all the answers

What typically differentiates the decision process in business markets from that in consumer markets?

<p>Business markets often require multiple approvals (B)</p> Signup and view all the answers

What is a common need expressed in business exchanges?

<p>Economic benefit to enhance value proposition (A)</p> Signup and view all the answers

Which of the following statements is generally true for consumer markets compared to business markets?

<p>Consumer markets often respond to trends and emotional factors (B)</p> Signup and view all the answers

Which of the following best describes the payment structure in business markets?

<p>Credit terms are frequently negotiated (D)</p> Signup and view all the answers

What characterizes the demand for rubber in the tire manufacturing industry?

<p>It shows inelastic behavior, especially in the short term. (A)</p> Signup and view all the answers

Which factor affects the decision-making process in business purchases?

<p>Increased participation from multiple decision-makers. (B)</p> Signup and view all the answers

What is a primary reason why relationship marketing is more effective in business markets?

<p>Businesses have a greater potential for higher returns on investment. (A)</p> Signup and view all the answers

Which purchasing strategy is commonly seen in luxury firms?

<p>Concentration in high-value urban markets. (A)</p> Signup and view all the answers

What is an example of derived demand in the tire industry?

<p>Tire manufacturers purchasing rubber based on projected tire sales. (C)</p> Signup and view all the answers

What does fluctuating demand in industrial markets often result in?

<p>An accumulation of stock that leads to increased complexity in sales. (C)</p> Signup and view all the answers

What is a common characteristic of business purchasing compared to consumer purchasing?

<p>It generally involves a more professional and systematic approach. (B)</p> Signup and view all the answers

Which of the following is NOT a feature of business purchases?

<p>Emotionally-driven decisions based on personal preference. (C)</p> Signup and view all the answers

What triggers problem recognition in a company?

<p>Both external and internal stimuli (B)</p> Signup and view all the answers

What is included in the general need description stage?

<p>Listing characteristics and quantity of the needed item (C)</p> Signup and view all the answers

Which department is consulted during the general need description phase for checking if the item can be sold?

<p>Accountancy department (A)</p> Signup and view all the answers

What is primarily developed during the product specifications stage?

<p>The needed item's product specifications (D)</p> Signup and view all the answers

In the supplier search stage, which strategy is most effective?

<p>A combination of past and new supplier searches (D)</p> Signup and view all the answers

What is value analysis primarily focused on during the product specifications stage?

<p>Evaluating cost versus benefits (B)</p> Signup and view all the answers

What supports the supplier's reliability evaluation process?

<p>Feedback from previous collaborations (D)</p> Signup and view all the answers

Which of these is NOT a part of the product specifications process?

<p>Conducting environmental impact assessments (B)</p> Signup and view all the answers

Who typically provides information for evaluating alternatives in the business buying process?

<p>Influencers (D)</p> Signup and view all the answers

What role does the buyer play in the business buying process?

<p>They negotiate terms and select vendors. (C)</p> Signup and view all the answers

Which of the following is a characteristic of gatekeepers in the buying process?

<p>They filter information and control access to decision-making. (A)</p> Signup and view all the answers

In a traditional business buying process, who has the final say on whether to make a purchase?

<p>Deciders (C)</p> Signup and view all the answers

What is one factor that influences the complexity of the buying process?

<p>The number of decision participants (B)</p> Signup and view all the answers

What is primarily the responsibility of users in the buying process?

<p>Utilize the product or service (B)</p> Signup and view all the answers

Which group in the business buying process can both formally and informally influence purchasing decisions?

<p>Buyers (A)</p> Signup and view all the answers

Which aspect is NOT mentioned as a consideration for the buying decision?

<p>Cost of marketing (C)</p> Signup and view all the answers

Flashcards

Strategic Decisions

Decisions that involve higher risk and impact, often with large sums of money and complex considerations.

Operational Decisions

Decisions made by individuals, often with lower risk and simpler considerations.

Purchasing Process

The process of acquiring goods or services from external providers.

Purchase Order (PO)

A formal document used to order goods or services.

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Low Dependence

The level of dependence between a buyer and a seller, where either party can easily switch to another.

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Business Market

Organizations that purchase goods and services to use them in the production of other goods or services, to resell, or to rent out for profit.

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Business Market: Buying Roles

It involves individuals taking on buying roles, similar to consumer markets.

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Business Market: Needs

Both business and consumer markets are driven by needs, both economic (profit) and non-economic (satisfaction).

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Business Market: Market Structure and Demand

Business markets usually have a smaller number of buyers, who tend to make larger purchases compared to individual consumers and are often concentrated geographically.

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Business Market: Buying Decisions

Business buying decisions are often made by teams (purchasing departments) and involve complex decision processes with greater formality.

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Business Market: Decision Process

Business buying decisions are often based on rational economic factors, such as price, quality, and value for money.

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Business Buying Process

The activities undertaken by organizations to identify, evaluate, and select suppliers of goods and services.

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Business Buying Behavior

The specific needs and characteristics of the individuals and organizations involved in the business buying process.

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Problem Recognition

A situation where a company recognizes a need or problem that can be solved by acquiring a specific product or service.

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Internal Stimuli

Internal factors that trigger a need for a product or service, like a new product launch or a need for new equipment.

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External Stimuli

External factors that trigger a need for a product or service, like attending a tradeshow or discovering a new product in the market.

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General Need Description

A detailed document outlining the characteristics and quantity of the desired product or service.

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Product Specifications

A thorough analysis of the product specifications to ensure they meet the company's needs and value proposition.

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Supplier Search

The process of searching for potential suppliers who can provide the desired product or service.

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Checking with Production Department

Checking with the production department to ensure the product is viable for the company.

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Checking with Accounting Department

Checking with the accounting department to ensure that the product can be acquired within the company's budget.

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Business Market Structure

A market structure characterized by fewer but larger buyers, often geographically concentrated, whose demand is derived from the demand for their own products and is relatively inelastic in the short term.

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Derived Demand

The demand for a product is driven by the demand for a related final good. For instance, tire manufacturers' demand for rubber depends on the demand for cars.

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Business Purchase Involves More Participants

A company's purchase decisions involve a larger number of people and a more professional purchasing process. This happens because business purchases are often more significant and require more careful consideration.

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Buying Committees

A group of people within a business who are responsible for making purchasing decisions. They evaluate different options to choose what best suits their needs.

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Inelastic Demand

Demand that is not significantly affected by price changes in the short term. Business buyers often need to buy a certain amount of a product regardless of price fluctuations.

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Fluctuating Demand

The quantity of goods and services demanded fluctuates depending on factors like consumer demand, production schedules, and economic conditions. This can lead to stock accumulation and market instability.

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Relationship Marketing for Business Buyers

Businesses often engage in relationship marketing with their larger customers to foster loyalty and create long-term partnerships, as these customers represent significant revenue streams.

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Geographically Concentrated Demand

When a company's demand for a particular product is concentrated in specific geographic locations due to factors like the availability of resources or the presence of related industries.

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Performance Review

A process where the buying department evaluates customer satisfaction with previously purchased goods or services. This involves gathering feedback, assessing the effectiveness of the items, and deciding if future purchases are warranted.

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Straight Rebuy

A straightforward repurchase of previously acquired goods or services, without any modifications. No need for extensive research or evaluation.

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Modified Rebuy

A purchase situation where the buyer seeks alterations or modifications to previously purchased items. It might involve exploring different options or requesting specific adjustments.

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Preparing the Final Order (PO)

A crucial step in the purchasing process where the final order is prepared. It involves meticulously listing details like items, specifications, quantities, delivery expectations, returns policies, and warranties.

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Users

Individuals within an organization who will directly use the product or service being purchased. They may be the first to suggest the need for a purchase.

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Influencers

Individuals who influence the decision-making process by providing expert opinions or technical expertise. They may recommend specific products or suppliers.

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Buyers

Individuals with the formal authority to select suppliers and negotiate the terms of purchase. They handle the logistics and contracts.

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Deciders

Individuals with the authority to approve or reject purchases. They hold the final decision-making power.

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Gatekeepers

Individuals who control the flow of information to others. They may filter information or influence others' perceptions.

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Factors Influencing Business Buying

The factors that increase the complexity of a business buying decision. These factors can include higher costs, risks, more stakeholders involved, and the need to gather more information.

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Participants in the Business Buying Process

The different roles individuals play in a business buying process, each with their own expertise and influence. Understanding these roles is crucial for effective sales and marketing strategies.

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Study Notes

Marketing Strategies

  • A marketing strategy involves buying goods and services for use in production, resale, or rental.
  • Business markets have similarities to consumer markets, including needs and psychology of buyers.
  • However, business markets differ in their structure, demand, and size of buyers.
  • Business markets often involve more decision-makers and a more intricate buying process than consumer markets.
  • A business to business (B2B) sale differs in distance between seller and buyer.
  • B2C transactions have a lower degree of dependency on both sides than B2B

Business Buying Process

  • The business buying process starts with problem recognition and ends with performance review.
  • Businesses analyze needs and specifications, research suppliers, seek proposals, select a supplier, and conduct the order routine and review of performance.
  • The process takes into consideration several participants in the buying procedure such as the users, influencers, buyers, decision-makers, and gatekeepers.

Influences on Business Buyers

  • Environmental factors, such as economic conditions, technological changes, and political regulations, as well as organizational factors like objectives, policies, procedures, and organizational structure influence business buyers.
  • Interpersonal factors, including authority, status, empathy, and persuasiveness, and individual factors, such as age, income, education, job position, personality, and risk attitudes, also play a significant role.

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Related Documents

UNIT 4 Strategic Marketing: Industrial Markets PDF

Description

Explore the nuances of marketing strategies and the business buying process in this quiz. Understand how B2B interactions differ from B2C transactions, including the complexities involved in decision-making and supplier selection. Test your knowledge on the key components and steps in these processes.

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