Principles of Marketing Chapter 4

Principles of Marketing

Chapter 4 Homework Questions

1. There are more transactions in B2B markets than B2C markets, because the size of each transaction for business customers is much greater. There are fewer buyers in B2B because they buy in very large quantities and the customer market has many customers, because there are more individual customers than there are business customers.

2. Derived demand is demand that springs from, or is derived from, a source other than the primary buyer of a product. So with B2B sellers, they watch the general economic conditions to anticipate consumers buying patterns even though they don’t sell their products to consumers. Derived demand means when a business sells to another business, the seller is looking at the buying patterns of the purchasing business’s customers. If consumers aren’t demanding the products produced by businesses, the firms that supply products to these businesses are in big trouble.

3. Firms experience a bullwhip effect when consumers demand changes because consumers are a powerful purchasing force and if they were to change their demands even a little it can cause some major effects. Say consumers aren’t as interested in a product, so sales go down, this entails that the B2B sales will decrease. So, slight fluctuations in demand can cause big effects throughout the chain of business.

4. It’s difficult to figure out whom to call on in the business market, because the business has its targets customers, but that target isn’t what is going to make the business its’ money. Like the college textbook example from the book, if publishers focused on directly selling textbooks to you or to a bookstore manager they would go out of business. The business knows that the professors are the true revenue generators.

5. People have very different ideas about what’s ethical and what’s not. Like the U.S. does not consider bribes to be ethical but in other countries, some businesses demand bribes....