8.4 Chapter Summary
Chapter Eight explores the distinctions between B2B and B2C markets, emphasizing the complexity of B2B transactions. It highlights the detailed processes involved in B2B operations, such as purchasing parts, assembling products, and managing marketing efforts. The role of salespeople and marketing departments in B2B is discussed, and the unique characteristics of business products are outlined, along with the importance of ethical behaviour.
Ethical considerations are emphasized as critical for business success, linking ethical practices to customer retention, employee satisfaction, and financial stability. The chapter underscores the importance of trustworthiness in B2B operations.
The vulnerability of B2B companies, particularly those reliant on a few major clients, is illustrated using examples from industries like the U.S. auto sector. The concept of a “straight rebuy” and the influence of the buying situation on organizational decisions are similarly explored.
Review Questions
- Assume your company makes shop towels, hand-washing stations, and similar products. Make a list of all the golf courses that could be potential customers of your firm. Then identify all the markets from which their demand is derived. (Who are their customers and their customers’ customers?) What factors might influence the success or failure of your business in these markets?
- Imagine you are a salesperson for a company that sells turf maintenance items used in keeping a golf property landscaped. There is a large buying group such as Clublink that buys 60 percent of its products from one competitor and the other 40 percent from another competitor. What could you do to try to make a sale if they have never purchased from you before? How would your answer change if you were the 40 percent vendor and wanted to increase your share of the buyer’s business? Would your answer change if you were the other vendor? Why or why not?
- When your family makes a major purchase, such as choosing a vacation destination or buying furniture, does it resemble a buying center? If so, who plays what roles?
- How does a code of conduct affect ethical culture at a Club?
- Why are there more transactions in B2B markets than B2C markets? Why are there fewer buyers?
- Explain what derived demand is.
- Why do firms experience a bullwhip effect in the demand for their products when consumers’ demand changes?
- What buying stages do buying centers typically go through?
- Why should business buyers collaborate with the companies they buy products from?
- Explain how a straight rebuy, new buy, and modified rebuy differ from one another.
Key Terms
Business Ethics: Is the application of ethical behaviour in a business context.
Derived Demand: Demand that springs from, or is derived from, a source other than the primary buyer of a product.
Fluctuating Demand: Is a characteristic of B2B markets, and a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it.
Modified Rebuy: Occurs when a company wants to buy the same type of product it has in the past but makes some modifications to it.
New-buy Selling: Occurs when a firm purchases a product for the first time.
New-to-an-organization Buying: A purchase is new to the people involved.
Straight Rebuy: A situation in which a purchaser buys the same product in the same quantities from the same vendor.
