Page 225 - Foundations of Marketing

192 Part 3 | Customer Behavior and E-Marketing

produced for ethanol production has soared to 40 percent likely to use when purchasing each of the following
of total corn production. In addition, the shift to ethanol items. Defend your selections.
has taken corn out of the supply chain for the agricultural a. A building for the home office of a light bulb
feed market, causing an impact on food costs. About manufacturer
12 percent of corn is used for direct human consump- b. Wool for a clothing manufacturer
tion, in the form of cereal and corn chips, for example. c. An Alaskan cruise for a company retreat, assuming
It is much less costly for farmers to produce corn for a regular travel agency is used
ethanol, because it can be produced using more efficient, d. One-inch nails for a building contractor
genetically modified seeds. To plant genetically modified 4. Purchases by businesses may be described as new-task,
corn for ethanol, the seed costs around $ 200 /bushel, and modified rebuy, or straight rebuy. Categorize the follow-
the yields are significantly higher than other corn crops ing purchase decisions and explain your choices.
because insecticides and herbicides are built into the a. Bob has purchased toothpicks from Smith
seed. Non-genetically modified seed produces more rev- Restaurant Supply for 25 years and recently placed
enue at market per bushel but will have a lower overall an order for yellow toothpicks rather than the usual
crop yield and is more costly to produce. If you assume white ones.
that the non-genetically modified crop sells for $ 10.00 / b. Jill’s investment company has been purchasing enve-
bushel and that the genetically modified seed crop sells lopes from AAA Office Supply for a year and now
for $ 7.00 /bushel, rank each of the following variables needs to purchase boxes to mail year-end portfolio
1 – 5 . Think of 1 as the most important variable and 5 as summaries to clients. Jill calls AAA to purchase
the least important. Based on health, environment, and these boxes.
dependency on foreign energy sources, what would you c. Reliance Insurance has been supplying its salespeo-
do as a farmer purchasing seed for next year’s crop? ple with small personal computers to assist in their
Rate the decision of whether to use genetically sales efforts. The company recently agreed to begin
modified or non-genetically modified seed based on the supplying them with faster, more sophisticated
following considerations: computers.
a. Safety to the environment 5. Identifying qualified customers is important to the
b. Ability to control production costs survival of any organization. NAICS provides helpful
c. Impact on food prices information about many different businesses. Find the
d. Overall health concerns NAICS manual at the library or online at www.naics.com
e. Contribution to reducing dependence on foreign and identify the NAICS code for the following items.
energy sources a. Chocolate candy bars
2. Identify organizations in your area that fit each business b. Automobile tires
market category: producer, reseller, government, and c. Men’s running shoes
institutional. Explain your classifications. 6. Develop your analytical and communication skills using
3. Indicate the method of buying (description, inspection, the Role-Play Exercises online at
sampling, or negotiation) an organization would be most www.cengagebrain.com.

Internet Exercise

Boeing

Boeing is the second largest aerospace and defense 2. How does Boeing address some of the concerns of busi-
contractor in the world, manufacturing commercial ness customers?
and military aircraft. Visit the company’s website at 3. What environmental factors do you think affect demand
www.boeing.com . for Boeing products?
1. At what types of business markets are Boeing’s products
targeted?

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