Carly ThompsonMKTG 305Spring 2014Review of Material for Exam 2Chapters 6-11Chapter 6: Business-to-Business Marketing- Companies are a lot more complex than individuals or households. Companies can vary from 1 person to thousands of employees. Companies perform many different activities.- Often use…o Buying specialists or purchasing agentso Multiple buying responsibilityo Multiple suppliers- More likely to have exacting requirements for purchases- Employ competitive bidding and negotiations- The Business-to-Business Market is 5 times as large as the Business-to-Consumer Market in the United States.- Demand for business products is derived demand- The size of the order and purchase price of the products usually are much larger than that of a household.- They require dependable relationships and a high level of service.- Marketing tends to be done by personal selling (one-on-one) calls to the customer.- Specialized media used such as:o Trade journalso Sales brochureso Web siteso Trade showsBusiness Products- Are used to manufacture other products- Become part of another product- Aid the normal operations of an organization- Are acquired for resale without change in formMajor Categories of Business Customers- Manufacturerso OEMs, manufacturers of goods, service providers- Resellerso Wholesalers, retailers- Governmentso Federal, State, County, Municipal- Institutionso Schools, hospitals, colleges, churches, unions, civic clubs, foundations, nonbusiness organizationsDemand in Business Markets- Derived: Demand for business products results from demand for consumer products.- Inelastic: A change in price will not significantly affect the demand for product.- Joint: Multiple items are used together in final product. Demand for one product affects the demand for all.- Multiplier/Accelerator: Demand for business products is more volatile than for consumer products.o Understanding the Multiplier/Accelerator Principle: Just a 1% change in demand at the final consumer level, may cause several percentage points change in demand for organizational goods and services.North American Industry Classification System (NAICS)- A detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes.Stage 1: Need Recognition- Can be generated internally or externally- Sources for recognizing new needs:o Supplierso Salespeopleo CompetitorsStage 2: Product Specifications- Used by suppliers to develop RFPs- Can be done collaboratively with suppliersStage 3: RFP Process- Request for ProposalsStage 4: Proposal Analysis, Vendor Negotiation and Selection- Often several vendors are negotiating against each other- Considerations other than price play a role in final selectionStage 5: Order Specification- Firm places the order- The exact details of the purchase are specified- All terms are detailed including paymentStep 6: Vendor/Product Performance Assessment- Value Analysis: a review of the qualities of the product for the price.- Vendor Analysis: a review of the services of the vendor (seller).- Evaluation on an ongoing basis rather than at one single point in time.- Impact of relationships and alliances means stronger commitment to current suppliers.Factors Affecting the Buying Process- Buying Situationo New Buyo Straight Rebuyo Modified Rebuy- Organization Culture- The Buying Centero Initiatoro Influencero Decidero Buyero Usero GatekeeperChapter 7: Global MarketingWhat is Globalization?- Globalization is a process of interaction and integration among the people, companies, and governments of different nations.- This process affects the environment, culture, political systems, economic development and prosperity, and human physical well-being in societies around the world.What Drives Globalization?- Globalization of Customers: 31%- New Customers Emerging in Markets: 27%- Globalization of Competitors: 16%- Reduced Trade Barriers: 10%- Technology Advances: 8%- Enhanced Customer Responsiveness: 8%Market Assessment (What Market to Enter?)- Economic Analysis Using Metricso General economic environmento Market size and population growtho Real income- Infrastructure and Technologyo Transportationo Channelso Communicationo Commerce- Sociocultural Analysiso Power distanceo Uncertainty avoidanceo Individualismo Masculinityo Time orientation- Government Actionso Tariff: a tax leveled on goods entering the country.o Quota: Limit on the amount of product entering a country. o Boycott: Exclusion of products from a country.o Exchange Control: Foreign exchange must be sold to a control agency.o Market Grouping: Common trade alliance.o Trade Agreement: An agreement to stimulate international trade.Economic DevelopmentHow to measure the size of an economy:- Stage of economic development- Gross Domestic Product- Gross National Income- Human Development Index- Per capita income- Distribution of wealth- Purchasing Power ParityEconomic Development has a Fundamental Impact on Buyer Behavior:- Developed Countryo Complex, sophisticated industries, sophisticated customers- Undeveloped Countryo Basic industries, basic needs satisfactionCultural Influences on Buyer Behavior- Cultural Forces: Religion, History, Family, Language, Arts/Entertainment, Education- Cultural Messages: Symbols, Morals, Rules of Behavior, Knowledge- Consumer Decision Process: Selecting and Prioritizing Wants for Goods and Services- BehaviorGovernment- International Law, US Laws, and Host Country Lawso Current laws and regulations for each countryo US laws that affect business overseas- Political conditionso Political Risk Assessment (PRA)Entering a Host Market- Export: Sell domestically produced products to buyers in other countries.- Licensing: Legal process allowing use of manufacturing/patents/knowledge.- Contract Manufacturing: Private-label manufacturing by a foreign company.- Joint Venture: Domestic firm buys/joins a foreign company to create a new entity.- Direct Investment: Active ownership of a foreign company/manufacturing facility.The Global Marketing Mix: Product Strategies- Sell the same product or service in both the home country market and host country market.- Sell a product or service similar to that sold in home country but include minor adaptations.- Sell totally new products or services.The Global Marketing Mix: Promotion Strategies- Literacy levels vary by country.- Firms choose whether to adapt to language differences.- Cultural and religious