Murdock Exam 2

Business marketing

is the marketing of goods and services to companies, government, or non-profit organizations for the use in the creation of goods and services that they can produce and market to others

Organizational buyers

are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. There are 3 different markets.

3 markets of organizational buyers

1. Industrial/Buisness Markets, 2. Reseller Markets, 3.Gevernment Markets

Industrial/Buisness Markets

reprocess a product or service before selling it again to the next buyer.

Reseller Markets

Wholsalers and retailers that buy physical products and resell them again without any reprocessing.

Government Markets

federal, state, and local agencies that buy goods & services for the constituents they serve

Ultimate consumer

are people who use the goods and services purchased for the household

NAICS

North American Industry Classification System, provides common industry definitions for Canada, Mexico, & the US, which makes the measurment of economic activity, in the 3 member countries of NAFTA, easier. Replaces SIC system. Each given a "zipcode"

NAPCS

North American Product Classification System: classification system for products & services, UN-Central Product Classification System

Derived Demand

means the demand for industrial products/services is derived from, demand for consumer products/services. Example: milk & all it's compnents are now in demand when purchased. Based on future expectations of consumer demand.

Derived Demand v. Organizational Market

demand is always much lower for derived demand

Organizational Buying Criteria

the objective attributes of the supplier's products & services & the capabilities of the supplier itself.

7 most common Organizational Buying Criteria

1. price, 2. ability to meet required delivery schedules, 3. ability to meet the quality specifications, 4. technical capabilites, 5. warranties & claim polocies 6. past performance, 6. production facilities/capabilities

ISO 9000

International Standards Org: meet exact standards to set standards for quality/ consists of standards for registration & certification of a manufacturer's quality management & assurance system based on an on-site audit of practices & procedures

Supplier development

the deliberate efforts by a company to build relationships with suppliers to improve their efficency, quality, & costs for an ultimate result for consumer & company

JIT Inventory System

Just In Time...

Reciprocity

an industrial buying practice in which two organizations agree to purchase each other's products & services. The government frowns on reciprocity because it inhibits market competition. "I buy your stuff, if you agree to buy mine."

Supply Partnership

exists when a buyer & its supplier adopt mutually beneficial objectives, policies & procedures for the purpose of lowering the costs/increasing the value of products & services delivered to the ultimate consumer.

Buying Center

group of people in an org. who participate in the buying process & share common goals, risks & knowledge important to a purchase decision. AKA Buying Comitee

Roles in the Buying Center

1.Users (use product), 2. Influences(define specifications), 3. Buyers(negotiate terms of contact), 4. Deciders(selects supplier), 5. Gatekeepers(control flow of info)

Buy Classes

consists of three types of buying situations: straight rebuy; modified rebuy; and new buy.

Organizational Buying Behavior

the decision-marking process that organizations use to establish the need for products & services & identify, evaluate & choose among alternative brands & suppliers. (5 steps)

Stage 1 in Organizational Buying Process

Problem Recognition./ (Make-Buy Decision: do we make it or do we buy it?)

Stage 2 in Organizational Buying Process

Information Search./ (Value analysis: a systematic appraisal of the design, quality & performance of a product to reduce purchasing costs.)

Stage 3 in Organizational Buying Process

Alternitave Evaluation./ (Bidder's List: a list of firms believed to be qualified to supply a given item.)

Stage 4 in Organizational Buying Process

Purchase Decision

Stage 5 in Organizational Buying Process

Postpurchase Behavior

Prominence of Online Buying in OM's

1.timely supplie information, 2. reduces buyer order prcessing costs, 3. can reduce marketing costs

E-Marketplaces

online trading communities that bring together buyers & supplier organizations to make possible the real time exchange of information, money, products & services. AKA: B2B exchanges, e-hubs

Independent E-marketplace

p.158

Traditional Auctions

a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other

Reverse Auctions

a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other

Countertrade

practice of using barter rather than money for making global sales

Trade Feedback Effect

export creates demand for import, vice versa

GDP

gross domestic product: monetary value of all goods/services produced in a country during one year. US always has the highest GDP, but Unions of countries now create competition.

Blanace of Trade

difference between the monetary value of a nation's exports & imports. Import>export=deficit, Export>import=surplus.

U.S. Balance of trade

U.S. in deficit& overall volume has decreased. Importers-Canada, China, Mexico, Japan/Exporters-China, Japan, South Korea, Taiwan, Phillipines

Porter's Diamond

explain a nation's competitive advantage. 1. Factor Conditions-natural resources, 2. Demand Conditions-# & sophistication of domestic customers for a product, 3.Related Supporting Industries- infrastructure, talent pool, 4. Company Stategy, Structure, & Rivalry- competitive atmoshpere

Economic Espionage Act (1996)

a law that makes the theft of trade secrets by foreign entities a federal crime in the US.

Protectionism

the practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quota. What countries engage in to protect their country includes tariffs, quotas, etc. The use of protectionism is declining.

Tariffs

a government tax on goods or services entering a country, primarily serving to raise prices on imports. Screws the customer!

Quota

a restriction placed on amount of a product allowed to enter or to leave a country.

GATT

General Agreement on Tariffs & Trade: to limit trade barriers & promote world trade through the reduction of tariffs. Did not explicitly adress non-tariff trade barriers(e.g.quotas)

World Trade Organization

(WTO) a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members & issue binding decision. Ultimate goal of the WTO is to eliminate tariffs & quotas. WTO is an organization to make nations treat each other right. Member nations agree that they'll accept/abide by organization's decision if complaints are filed against their country.

European Union

27 countries with a common currency (Euro), no protectionism within their borders.

North American Free Trade Agreement

NAFTA: lifted many tade barriers between Canada, Mexico, & US. Extended many advantages with CAFTA-DR

Asian Free Trade Agreement

have reduced tariffs among countries & promoted trade. To liberate East Asia from Japan & "The Four Little Dragons"

Global Competition

exists when firms originate, produce & market their products & services worldwide.

Strategic Alliances

agreements among 2+ independent firms to cooperate for the purpose of achieving common goals.

Types of Global Companies

International, Multinational, Transnational

International Firm

same product, marketing program, etc. everywhere, selling the same idea (ex. Coke)

Multinational Firm

changes whats needed for other countries markets (ex: breathe right)

Transnational Firm

change mkt strategy where needed keep same where can.

Multidomestic Marketing Strategy

used by multinational firms that have as many different product variations, brand names & advertising programs as countries in which they do business.

Global Marketing Strategy

used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similitarties & adapting them when cultures differ.

Global brand

brand marketed under the same name in multiple countries with similar & culturally coordinated marketing programs.

Global consumers

consists of customer groups living in many different countries or regions of the world who have similar needs or seek similar features & benefits from products/services. People around the world have a lot in common

Cross-cultural analysis

involves the study of similiarities & differences among consumers in 2+ nations or societies. For effective marketing programs

Values

a society's personally or socially preferable modes of conducts/states of existence that tend to persist over time.

Customs

what is considered normal & expected about the way people do things in a specific country.

Foreign Corrupt Practices Act (1977)

a law, amended by the International Anti-Dumping & Fair Competition Act (1998), that makes it a crime for US corporations to bribe an official of a foreign government or political part to obtain/retain business in a foreign country.

Cultural symbols

things that represent ideas or concepts.

Semiotics

a field of study that examines the correspondence between symbols & their role in the assignment of meaning for people. Semiotics are the study of symbols. Example is that #4 is an un-lucky number in Japan

Back translation

when a translated word/phrase is retranslated into the original language by a different interpreter to catch errors

Customer ethnocentrism

the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign made products.

Bottom of the Pyramid

largest, but poorest socioeconomic group in the world, mostly landlocked countries, it's to our advantage to help these coutries (Trade)

Economic Infrastructure

a country's communication, transportation, financial, & distribution systems. Critical for determining weather to enter a country's market.

Microfinance

practice of offering small, collateral-free loans to individuals who otherwise would not hav access to the capital necessary to participat in an income generating activity

Currency exchange rule

the price of one country's currency expressed in terms of another country's currency.

Exporting

producing goods in one country & selling them in another country.

Indirect Exporting

sell to a country through an intermediary

Direct Exporting

sell directly from us to them

Liscencing

A company offer the right for items of intellectual property for a royalty fee, in other countries however they lose all control of it's product, may lose profit, or create competition with their company.

Contact Assembley

contacts for a foreign company to ASSEMBLE parts for the prodcut.

Contact Manufacturing

US may contract with a foreign form for them to manufacture product to specifications

Joint venture

when a foreign country & a local firm invest together to create a local business

Direct investment

entails a domestic firm actually investing in & owning a foreign subsidiary or division

Dumping

when a firm sells a product in a foreign country below its domestic price or below its actual cost.

Gray market

a situation where products are sold through unauthorized channels of distribution. Also called parallel importing

Marketing research

the process of defining a marketing problem & opportunity, collecting data to try & fix the problem.

Difficulties of Marketing Research

Consumers do not know about new products, lying, purchase behavior could be different.

Decision

a conscious choice from among 2+ alternatives

5 Step Marketing Research Approach

1.Define the Problem: set research objectives & possible solutions, 2.Develop the Research Plan: constraints, data, 3.Collect Relevent Data, 4.Develop Findings: analyze data, 5. Take Mkt Action: implement

Exploratory research

gives ideas about a vague problem, used for many new products

Descriptive research

frequency or relationship of 2 factors

Casual Research

how much one thing occuring effects another thing occuring.

Measures of success

criteria or standards used in evaluating proposed solutions to a problem, how we know if our research tells us anything

Constraints

in a decision are the restrictions placed on potential solutions to a problem. Boundaries/limits on types of things trying to figure out, so not too broad.

Methods of Collecting Data

Sampling, Probability Sampling, Nonprobability Sampling, Statistical Inference

Sampling

involves selecting representative elements from a population. Involves making judgments about whole by what you know about a few.

Probability sampling

random sample

Nonprobability sampling

involves using arbitrary judgments to select the sample so that the chance of selecting a particular elements by an unknown or 0. A random sample w/ consraints, can't get statistical inference

Statistical inference

involves drawing conclusions about a population from a sample taken from that population. Drawing conclusions from information gotten from research.

Data

the facts & figures related to the problem, & are divided into 2 main parts: secondary data & primary data.

Secondary data

facts & figures that have already been recorded before the project at hand. The advantage is that it is inexpensive & fast. The disadvantages are that it's not specific to your problem. (Internal & external)

Primary data

facts & figures that are newly collected for the project. The advantages are that it is specific to the problem. The disadvantage is that it's time consuming & expensive. (Observation, Questionarre)

Observational data

the facts & figures obtained by watching, either mechanically or in person, how people actually behave. More truthful.

Questionnaire data

the facts & figures obtained by asking peple about their attitudes, intentions & behaviors.

"Fuzzy Front End"

try to id trends before typical consumers have recognized them themselves.

Question Formats

1.Open ended, 2. fixed alt., 3.Dichotomous(Y/N), 4. Semantic Differential(Y/N scale), 5.Likert(agrrement scale)