Page 224 - Foundations of Marketing

Business Markets and Buying Behavior | Chapter 7 191

5. Describe industrial classification systems, and Classification (SIC) system and is used by the United
explain how they can be used to identify and States, Canada, and Mexico. It provides marketers with
analyze business markets. information needed to identify business customer groups.
Marketers can best utilize this data in conjunction with
Business marketers have a considerable amount of infor- other information. After identifying target industries, a
mation available for use in planning marketing strategies. marketer can obtain the names and locations of poten-
Much of this information is based on an industrial clas- tial customers by using government and commercial data
sification system, which categorizes businesses into major sources. Marketers then must estimate potential purchases
industry groups, industry subgroups, and detailed industry of business customers by finding a relationship between a
categories. The North American Industry Classification potential customer’s purchases and a variable available in
System (NAICS) replaced the earlier Standard Industrial industrial classification data.

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Key Concepts

producer markets 175 straight rebuy joint demand 184 multiple sourcing 186
reseller markets 175 purchase 182 business (organizational) sole sourcing 186
government markets 177 modified rebuy buying behavior 184 North American Industry
institutional markets 177 purchase 183 buying center 184 Classification System
reciprocity 179 derived demand 183 value analysis 185 (NAICS) 188
new-task purchase 182 inelastic demand 183 vendor analysis 186

Issues for Discussion and Review

1. Identify, describe, and give examples of the four major 7. How does demand for business products differ from
types of business markets. consumer demand?
2. Why might business customers generally be considered 8. What are the major components of a firm’s buying
more rational in their purchasing behavior than ultimate center?
consumers? 9. Identify the stages of the business buying decision pro-
3. What are the primary concerns of business customers? cess. How is this decision process used when making
4. List several characteristics that differentiate transactions straight rebuys?
involving business customers from consumer transactions. 10. How do environmental, business, interpersonal, and
5. What are the commonly used methods of business buying? individual factors affect business purchases?
6. Why do buyers involved in straight rebuy purchases require 11. What function does an industrial classification system
less information than those making new-task purchases? help marketers perform?

Marketing Applications

1. The United States is the largest producer of corn in the will be. In approximately a decade, corn production for
world. Each year, a corn farmer must decide what type livestock, poultry, and fish has fallen from 80 percent of
of seed to use and what the end market for the corn crop total production to 40 percent. At the same time, corn

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