Discussing applying the concepts

Discussing the Concepts

1. Compare and contrast business and consumer markets.

2. Discuss several ways in which a straight rebuy differs from a new-task situation,

3. In a buying center purchasing process, which buying center participant is most likely to make each of the following statements?

• "This bonding agent better be good, because I have to put this product together."

• "I specified this bonding agent on another job, and it worked for them."

• "Without an appointment, no sales rep gets in to see Ms. Johnson."

• "I'll place the order first thing tomorrow."

4. List the major influences on business buyer behavior. Why is it important for the business-to-business marketer to understand these major influences?

5. Name and briefly describe the stages of the business buying process.

6. How do the institutional and government markets differ from business markets?

Applying the Concepts

1. Business buying occurs worldwide, so marketers need to be aware of cultural factors influencing business customers. In a small group, select a country and develop a multimedia presentation on proper business etiquette and manners, including appropriate appearance, behavior, and communication. Include a map showing the location of the country as well as a description of the country in terms of demographics, culture, and its economic history.

2. Interview a business person to learn how purchases are made in his or her organization. Ask this person to describe a straight rebuy, a modified rebuy, and a new-task buying situation that took place recently or of which he or she is aware (define them if necessary). Did the buying process differ based on the type of product or purchase situation? Ask the business person to explain the role he or she played in a recent purchase and to discuss the factors that influenced the decision. Write a brief report of your interview by applying the concepts you learned in this chapter regarding business buyer behavior.

3. Government procurement (buying goods and services for the government) is big business. It is a massive part of international trade, given the considerable size of the procurement market (often 10-15 percent of the GDP of countries), and the process benefits domestic and foreign stakeholders in terms of increased competition. The process is also prone to corruption, however. The efforts of the World

Trade Organization (WTO) to create transparent and nondiscriminatory procurement procedures is generally considered to be the best tool to achieve "value for money" because it optimizes competition among suppliers. Go to the WTO's Web site (http://www.wto.org) and read about government procurement. Then write a brief report on three major areas of the WTO's work on this issue.

focus on Technology

In today's competitive marketplace, many businesses strive to cut costs. One solution is for business buyers to drive down supplier prices. Online reverse auctions allow businesses to do this more efficiently and effectively. Reverse auctions, often called e-auc-tions, are conducted online with the buyer and seller roles reversed. Buyers announce auctions months in advance and vendors qualify to participate. During the live online auction, suppliers have a short time in which to bid down their prices anonymously. Such auctions started in the aerospace and automotive industries to reduce costs on commodity parts but have now spread to other industries. Buyers don't always go with the lowest bidder, but the process puts pressure on suppliers to reduce prices and in turn reduce their own costs to maintain profitability. Although heralded as a "best practices" tool by some, reverse auctions are loathed by others. Some suppliers, bitten by the reverse auctions bug of their customers, turn around and reduce costs by requiring such auctions for their own suppliers.

1. Discuss at least three pros and cons of reverse auctions for buyers. Do the same for suppliers. Are reverse auctions used by businesses in your country?

2. How can a supplier succeed in reverse auctions? How can it avoid them altogether?

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