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Commercial Enterprises Government Units Non-Profit and Not-for-Profit Organizations
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I. Industrial Distributers II. Value Added Resellers III. Original Equipment Manufacturers (OEM) IV. Users and End Users
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Provide 4 types of utility: o Form, Time, Place, Possession Assortment of Products from many manufacturers based on segment needs “Reduce the discrepancy of assortment” Serves smaller customers where direct representation is not efficient
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More than just a distributor Provides unique, complete Offering from many sources Creates a value network at the user level.
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Purchase products and incorporate those products into their products. Usually the largest-volume users of goods and services. Ex: Intel is an OEM to many computer manufacturers, Goodyear is an OEM to the auto industry.
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A manufacturer that purchases goods or services for consumption or incorporation into its own products Identity of the purchased product becomes lost Ex: When Goodyear purchases steel for fabrication into steel belts for tires, Goodyear is the steel manufacturer’s end user
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More than 35% of GNP Largest consuming group in the United State.
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Consumer grouping consists of: o Hospitals o Churches o Colleges o Nursing Homes
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Raw Material Producers Component Parts and Manufactured Materials Producers Accessory Equipment Suppliers Capital Goods Manufacturers
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Raw Materials Producer Compete in price sensitive markets Seek Value Added positions Product loses identity once incorporated into customer’s product Dominated by a few very large producers
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Component Parts and Manufactured Materials Producers Parts retain their same form when incorporated Retains identity when incorporated into consumer’s product Differentiated by value added EX:Seagate Disc Drives in Hewlett Packard Computers
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Capital Goods Manufacturer Consists of large purchases with high risk to customer Many parts of customer orgainzation involved in decision Customers expect installation, equipment and accessories
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Accessory Equipment Suppliers Equipment that works with another offering Accessories can be added to a bundle opportunity by a channel intermediary Produced by an independent supplier Add value by complying with industry standards for primary offering
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Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers, or competitors.
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Financial Publics Independent Press Public Interest Groups Internal Publics o All may have interests because of economic or societal effects of activities o Often may be considered stakeholders in the buying center
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Demographic Environment Economic Environment Socio- cultural Environment Technological Environment Natural Environment Influence Value Creation
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Influences value creation, behavior of market participants Various Types: o Pure Competition o Monopolistic Competition o Oligopolistic Competition o Pure Monopoly
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Exhibit 2-3 The Multidimensional Value Network Efforts of collaborators at different levels in the Value Network combine to create the total offering for the customer. See Chapter 1, Exhibit 4 for greater detail. Total Offering Value Activities Value Enabling Value Creating
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Exhibit 2-5 The Product Life Cycle (PLC) Decline Introduction Growth Maturity Time Sales Revenue/ period
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Exhibit 2-6 The Technology Adoption Life Cycle (TALC) Technophiles Visionaries Laggards Time Sales from New Adopters/ period Pragmatists Conservatives
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TALC and PLC Exhibit 2-7 A Hypothetical TALC and PLC for Wireless LANs TALC - Sales from New Adopters/ period PLC –Total Sales Time
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