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Chapter 7: Business Marketing
1
Review and Assignments for Chapter 7
Review Quesons
1. Why is relationship or personal selling the best way to promote in business
marketing?
2. Explain how a marketer could use the website
http://www.census.gov/eos/www/naics/index.html to better understand the NAICS
system.
There is a link on the top of the NAICS web page labeled “FAQs” that answers frequently
3. How might derived demand affect the manufacturing of an automobile?
The demand for new cars drives the demand for products such as tires, brake linings,
4. Intel Corporation supplies microprocessors to Compaq for use in their computers.
Describe the buying situation in this relationship, keeping in mind the rapid
advancement of technology in this industry.
Students should address some of the points outlined below.
The two companies do have a close and long-standing relationship; however, the purchases are
not simple rebuys. With the new technology, Compaq and Intel are constantly renegotiating
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
2
Applicaon Quesons
1. As the marketing manager for Huggies diapers made by Kimberly-Clark, you are
constantly going head-to-head with Pampers, produced by rival Procter & Gamble.
You are considering unlocking the potential of the business market to increase your
share of the disposable diaper market, but how? Write an outline of several ways you
could transform this quintessentially consumer product into a successful business
product as well.
2. How could use you use the website http://www.btobonline.com to help define a target
market and develop a marketing plan?
This website provides some services to organizations that wish to do business with other
organizations. Links on the website include: services, resources, finance, tools, media kits,
and access to the Business to Business magazine. To find a potential target market, the first
3. Reconsider question 1. How could you use the Internet in your business marketing of
Huggies diapers?
4. Understanding businesses is the key to business marketing. Publications like
Manufacturing Automation, Computer Weekly, Power Generation Technology &
Markets, and Biotech Equipment Update can give you insights into many business
marketing concepts. Research the industrial publications to find an article on a
business marketer that interests you. Write a description of the company using as
many concepts from the chapter as possible. What major category or categories of
business market customers does this firm serve?
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
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5. What do you have to do to get a government contract? Check out the websites
http://www.fedbizopps.gov and http://www.governmentbids.com to find out. Does it
seem worth the effort?
6. Pick a product, and determine its NAICS code. How easy was it to trace the groups
and sectors?
7. Your boss has just asked you, the company purchasing manager, to buy new
computers for an entire department. Since you have just recently purchased a new
home computer, you are well educated about the various products available. How will
your buying process for the company differ from your recent purchase for yourself?
As with family purchasing decisions, several people may play a role in the business purchase
process. The boss is the initiator and may be the decider. The coworkers for whom the
computers are being purchased will be the users, and you are the purchaser, but you may
8. In small groups, brainstorm examples of companies that feature the products in the
different business categories. (Avoid examples already listed in this chapter.) Compile
a list of 10 specific products, and compare them with another group. Have each group
take turns naming a product, and have the other groups identify its appropriate
category. Try to resolve all discrepancies through discussion. It is certainly possible
that some identified products might appropriately fit into more than one category.
9. A colleague of yours has sent you an e-mail seeking your advice as he attempts to sell
a new voice-mail system to a local business. Send him a return e-mail describing the
various people who might influence the customer’s buying decision. Be sure to include
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
4
suggestions for dealing with the needs of each.
Students’ answers should address some of the points given below.
The initiator is the person who first suggests making a purchase. This could be a CEO or an
office manager or someone else. Influencers or evaluators often define specifications for
The decider is the person who possesses formal or informal power to choose or approve the
Vendors need to identify and interact with the true decision makers. Other critical issues are
Applicaon Exercise
Purchasing agents are often offered gifts and gratuities. Increasingly, though, companies are
restricting the amount and value of gifts that their purchasing managers can accept from vendors.
The idea is that purchasing managers should consider all qualified vendors during a buying
decision instead of only those who pass out great event tickets. This exercise asks you to
consider whether accepting various types of gifts is ethical.
Activities
1. Review the following list of common types of gifts and favors. Put a checkmark next to the
items that you think it would be acceptable for a purchasing manager to receive from a
vendor.
Advertising souvenirs Automobiles
Clothing Dinners
2. Now look at your list of acceptable gifts through various lenses. Would your list change if
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
5
the purchasing manager’s buying decision involved a low-cost item (say, pens)? Why, or
why not? What if the decision involved a very expensive purchase (like a major
installation)?
3. Form a team and compare your lists. Discuss (or debate) any discrepancies.
Purpose: This exercise helps students confront the gray areas in their own ethical perceptions.
Setting It Up: Distribute the checklist above. You can have students work individually, in pairs,
or in groups to complete it. Expect some debate, as differences over what students consider
ethical are bound to arise. After students have had adequate time to determine the gifts they find
ethical, show them the grid on the next page. Discuss any differences in perceptions.
This exercise was inspired by the following Great Idea in Teaching Marketing:
Gregory B. Turner, College of Charleston
Student Ethics Versus Practitioner Ethics
This exercise can be used during a logistics or ethics segment in a basic marketing class. The
students find it quite enjoyable, and it helps promote student participation in the classroom. I
have developed a standard list of gifts and gratuities that are offered to purchasing agents. This
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
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TYPE OF GIFT/FAVOR A B C D E F G H
Advertising Souvenirs 29 19 69 30 54 80 73 92
Automobiles 0 0 — 0 — — 1 1
Clothing 5 0 6 16 0 — 7 3
Dinners 38 10 22 79 8 — 48 70
A = 1995–1997 NAPM National Meetings (Turner et al. 1998)
B = 1994 State of South Carolina (Turner et al. 1995)
Ethics Exercise
Cameron Stock, purchasing manager for a sports equipment manufacturer, is responsible for
buying $5 million of supplies every year. He has a preferred list of certified suppliers who are
awarded a large percentage of his business. Cameron has been offered a paid weekend for two in
Las Vegas as a Christmas present from a supplier with whom he has done business for a decade
and built a very good relationship.
Questions
1. Would it be legal and ethical for Cameron Stock to accept this gift?
It may be legal to accept the gift in certain states, but it would not be ethical. Although
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Chapter 7: Business Marketing
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2. How is this addressed in the AMA Code of Ethics? Go to the AMA website at
http://www.marketingpower.com, and reread the Code of Ethics. Write a brief
paragraph summarizing where the AMA stands on the issue of supplier gifts.
There is no specific paragraph in the code regarding supplier gifts. There is, however, a
rule against exercising coercion in the marketing channel. The acceptance of the gift could
Video Assignment: Zappos
Zappos, known for its outstanding customer service and speedy shipping, also gives away
informaon about making organizaonal culture work for employees and the company. The
program, Insights, oers companies assistance in building strong cultures around core values in
a variety of ways, starng with free tours. Despite seeming like this would give away valuable
compeve informaon, Zappos is expanding this service to help other companies deliver
happiness to their customers.
1. Zappos Insights is an example of:
a. business supplies.
b. B-to-B e-commerce.
c. business service.
d. an accessory for businesses.
2. When Zappos started charging for certain training events, they were worried that people
would not pay. However, they have paid. What does this indicate about the Insights
program?
a. The Insights program has great service, just like Zappos.
b. The Insights program is a high-quality program that offers great service for a price
that is acceptable to businesses.
c. The Insights program is priced low enough to be acceptable for management
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
8
consulting services.
d. The buying center agreed on using the Zappos program.
3. The primary customers of Zappos are consumers. However, Zappos Insights experiences
very different customers, including:
a. all members from the buying center.
b. OEMS, raw materials handlers, and other B-to-B providers.
c. resellers, producers, and institutions.
d. members of strategic alliances.
4. Zappos wants to deliver happiness to the highest number of people, which has driven the
company’s commitment to work with other companies to help them develop a culture
promoting happy employees. This could be considered:
a. a joint demand for happy employees.
b. a derived demand for joy into the supply chain.
c. a strategic alliance for culture building.
d. the multiplier effect of happiness.
5. Zappos Insights is expanding to work onsite with companies like Google to develop even
stronger organizational cultures and connecting culture to customer service. This
relationship is a keiretsu.
a. True
b. False
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Chapter 7: Business Marketing
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6. Zappos Insights is an example of relationship commitment to other businesses.
a. True
b. False
7. Zappos found that the Insights program has elastic demand, because when they began
charging for the workshops, the demand for these workshops did not change.
a. True
b. False
8. When Zappos vendors visited the company headquarters and wanted to know more about
how the business was run, they were expecting:
a. installations.
b. reciprocity.
c. e-commerce training.
d. relationship marketing.
9. Which of the following criterion is Zappos Insights committed to helping other companies
improve?
a. Quality
b. Service
c. Price
d. Commitment
10. Zappos would agree with the statement that “some customers are more valuable than
others,” which is why it is expanding its Zappos Insights program.
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
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a. True
b. False
Case Assignment: Square, Inc.
In October 2015, amid rising fears about the security of credit card transactions, financial
institutions and businesses made the transition to using chip cards. Unlike the quick swipe of a
The switch to chip readers was precarious, with many businesses taping over the chip
card slots in the terminals until the kinks were worked out. Even after a year, some businesses
“Consumers and business owners alike loathe waiting for chip cards to process,” said
Founded in 2009 and headquartered in San Francisco, California, Square started with the
In response to customer inconvenience at the slow chip readers, in September 2016,
Square announced that it had reduced the speed of their chip card reader by 25 percent, from 5.7
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Business Marketing
11
“We’re committed to saving time for our sellers and the customers they serve.
Square was able to tackle the problem of speed better than others because they designed
Square released a $49 contactless payment and chip reader terminal with a simple design
Square is not alone in their efforts to reduce chip card transaction times. Visa debuted
Sources: N. Gagliordi, “Square Cuts Transaction Times on Its Chip Card Readers,” ZD Net,
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
