1. Dr. Chen, Principle of Marketing Part 3 Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

2. Dr. Chen, Principle of Marketing 6: Consumer Buying Behavior 7: Business Markets and Buying Behavior 8: Reaching Global Markets 9: Digital Marketing and Social Networking

3. Dr. Chen, Principle of Marketing Chapter 7 Business Markets and Buying Behavior Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

4. Dr. Chen, Principle of Marketing 4 Marketing Applications  2. Identify organizations in your area that fit each business market category: producer, reseller, government, and institutional. Explain your classifications.   Students’ answers will vary, but they should fit the following general classifications described in the text:  Producer markets purchase products to use them to produce other products.  Reseller markets buy finished goods and resell them for profit.  Government markets include federal, state, county, and local governments that buy goods and services to support internal operations and provide products to their constituencies.  Institutional markets are organizations with non-business goals.

5. Dr. Chen, Principle of Marketing 5  3. Indicate the method of buying (description, inspection, sampling, or negotiation) an organization would be most likely to use when purchasing each of the following items. Defend your selections.  a. A building for the home office of a light bulb manufacturer  Negotiation  b. Wool for a clothing manufacturer  Inspection  c. An Alaskan cruise for a company retreat, assuming a regular travel agency is used  Description  d. One-inch nails for a building contractor  Sampling

6. Dr. Chen, Principle of Marketing 6  4. Purchases by businesses may be described as new-task, modified rebuy, or straight rebuy. Categorize the following purchase decisions and explain your choices. a.Bob has purchased toothpicks from Smith Restaurant Supply for 25 years and recently placed an order for yellow toothpicks rather than the usual white ones. b.Jill’s investment company has been purchasing envelopes from AAA Office Supply for a year and now needs to purchase boxes to mail year-end portfolio summaries to clients. Jill calls AAA to purchase these boxes. c.Reliance Insurance has been supplying its salespeople with small personal computers to assist in their sales efforts. The company recently agreed to begin supplying them with faster, more sophisticated computers.

7. Dr. Chen, Principle of Marketing 7  4. (cont.) a. Bob has purchased toothpicks from Smith Restaurant Supply for 25 years and recently placed an order for yellow toothpicks rather than the usual white ones. Ans: This is a modified rebuy purchase because the purchase is changed on subsequent orders or the requirements of a straight-rebuy purchase have been modified. b. Jill’s investment company has been purchasing envelopes from AAA Office Supply for a year and now needs to purchase boxes to mail year-end portfolio summaries to clients. Jill calls AAA to purchase these boxes. Ans: This is a straight rebuy purchase because it is a routine purchase of the same products with approximately the same contract terms c. Reliance Insurance has been supplying its salespeople with small personal computers to assist in their sales efforts. The company recently agreed to begin supplying them with faster, more sophisticated computers. Ans: This is a new-task purchase because it is an initial purchase of an item to be used to perform a new job or solve a new problem.

8. Dr. Chen, Principle of Marketing 8 Internet Exercise  Boeing   Boeing is the second largest aerospace and defense contractor in the world, manufacturing commercial and military aircraft. Visit the company’s website at www.boeing.com. www.boeing.com

9. Dr. Chen, Principle of Marketing 9  1. At what types of business markets are Boeing’s products targeted?   Boeing targets several B2B markets. With its commercial airplanes, it targets producer markets because commercial airlines companies use the airplanes in day-to-day operations. With its defense, space, and security products, Boeing targets government markets.

10. Dr. Chen, Principle of Marketing 10  2. How does Boeing address some of the concerns of business customers?   The four primary concerns of business customers are _____, ______, service, and _______ __________. Boeing has developed business units that help to reduce the concerns of business customers. One business unit, Boeing Capital Corporation, “arranges, structures, and/or provides financing to facilitate the sale and delivery of Boeing commercial and military aircraft, satellites and launch vehicles.”  This helps its customers to deal with the high price of its product. To mitigate quality and service concerns, Boeing provides “a broad range of services to support its aircraft - from the time the airplane is delivered to the customer until the airplane goes out of service. These services help our customers improve fleet utilization, reduce costs, manage information, upgrade or reconfigure their airplanes, and ensure passenger well-being.” Boeing is also transparent and shares information about its suppliers directly on the website. price quality supplier relationships

11. Dr. Chen, Principle of Marketing 11  3. What environmental factors do you think affect demand for Boeing products?   Demand for Boeing products could be influenced by several environmental factors. Students’ answers may include the following:  Political - government spending, debates over the role of aerospace, debates over government support and/or management of commercial airline industry  Economic - changes to the economy, business spending, consumer spending on travel  Sociocultural - consumer support of the defense industry  Technological - new technologies  Legal and Regulatory - government support and/or management of the commercial airline industry, pollution regulations, consumer safety regulations  Environmental - pollution, airline efficiency

12. Dr. Chen, Principle of Marketing 12 Video Case 7.1  DALE CARNEGIE FOCUSES ON BUSINESS CUSTOMERS

13. Dr. Chen, Principle of Marketing 13  Summary   This case shows how a company that provides a valuable service thrives in the B2B market. Dale Carnegie was a successful entrepreneur and speaker famous for his book, How to Win Friends and Influence People. His self-named firm trains business people and members of the government on how to connect with customers and colleagues. Dale Carnegie focuses on helping companies to develop powerful business relationships by learning to listen and interact well, both face-to-face and through digital communications.

14. Dr. Chen, Principle of Marketing 14  1. How would you apply Dale Carnegie’s methods if you were trying to make a sale to a company with a large buying center?   The buying center is the group of people involved in making such purchase decisions. Dale Carnegie’s philosophy is that a marketer trying to appeal to a large buying center should take the time to listen to the concerns of users, influencers, buyers, deciders, and gatekeepers, connect with all groups, and address all of their needs.

15. Dr. Chen, Principle of Marketing 15  2. From a marketing perspective, why would people who work for the U.S. Department of Veteran Affairs be as interested in taking a Dale Carnegie course as people who work for American Express?   Government agencies such as the Department of Veterans affairs have customers too—the people that they serve. Because of this, it is important for members of the government to understand how to connect with their colleagues and with their constituencies.

16. Dr. Chen, Principle of Marketing 16  3. Which concerns of business customers should Dale Carnegie’s marketers pay close attention to when selling training services to a company like American Express?   Although all four concerns (price, quality, service, and supplier relationships) may have a role, Dale Carnegie’s marketers should pay close attention to quality and service. They may be searching for a great long-term customer service experience.  Companies want to get the best quality information and training and may want ongoing support when they deal with challenging situations and hire new employees.