Marketing

Business

Quiz 8 :

Products, Services, and Brands: Building Customer Value

Quiz 8 :

Products, Services, and Brands: Building Customer Value

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When developing a marketing strategy for business customers, it is essential to understand the process the business goes through when making a buying decision. Knowledge of business buying behavior is important when developing several aspects of the marketing plan. To assist you in relating the information in this chapter to the creation of a marketing plan for business customers, consider the following issues: What are the primary concerns of business customers? Could any of these concerns be addressed with the strengths of your company? The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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Below mentioned are the four primary concerns of business customers:
1. Price: It is very important concern for business customers. Business customers consider price as the investment which is necessary for obtaining some level of savings or returns.
2. Product quality: A product should meet all the required specifications so that it may satisfy all the needs and requirements of the ultimate consumer.
3. Service: The services provided by the suppliers influence the cost, sales and profit of the business customer, either directly or indirectly.
4. Relationship with suppliers: Business customers are always concerned about the cost of developing and managing relationship with the suppliers.
All business organizations should direct their strengths in address the above mentioned concerns in best possible manner. Addressing these concerns would help the organizations in reducing the cost of the product while improving the quality. This would result in satisfying the ultimate customer which is the key for any successful business organization.

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Why might business customers generally be considered more rational in their purchasing behavior than ultimate consumers?
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Business customers are rationale than end consumers because they have accurate information about all the products that need to be purchased. Their purchase is appropriate as all the required information about functional and technical features is gathered before actually purchasing any product. Certain personal goals and psychological satisfaction influence the purchasing process.
This rational attitude of business customers provides financial rewards and organizational advancement which is not possible in case of ultimate consumers.

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Purchases by businesses may be described as new-task, modified rebuy, or straight rebuy. Categorize the following purchase decisions and explain your choices. a. Bob has purchased toothpicks from Smith Restaurant Supply for 25 years and recently placed an order for yellow toothpicks rather than the usual white ones. b. Jill's investment company has been purchasing envelopes from AAA Office Supply for a year and now needs to purchase boxes to mail year-end portfolio summaries to clients. Jill calls AAA to purchase these boxes. c. Reliance Insurance has been supplying its salespeople with small personal computers to assist in their sales efforts. The company recently agreed to begin supplying them with faster, more sophisticated computers.
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Following would be the choices made by one during purchase:
a) B has made the purchase decision under the modified rebuy purchase as the quality of the product has been changed from white toothpicks to the yellow ones.
b) J's Investment Company has made the purchase under new task purchase as it has ordered the boxes for a new task of supplying the pre-purchased envelops to its clients.
c) Company RI has made the personal computer purchase under straight rebuy purchase. The company has been regularly supplying customers to its salesperson and now is just making the supply faster and quality better.

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Identify, describe, and give examples of the four major types of business markets.
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What are the primary concerns of business customers?
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Bombardier Serves Multiple Business Markets Bombardier is all about trains and planes. Founded by Joseph-Armand Bombardier in 1942, the company originally marketed snowmobiles for transportation through the wintry terrain of Canada's Quebec province. Among its earliest products were snowmobiles for delivering mail, shuttling students to and from schools, and moving commercial freight shipments. The company also served consumer markets through its Ski-Doo, a pioneer of the personal snowmobile industry, and its Sea-Doo, a pioneer of the personal watercraft industry. Today, however, Bombardier's primary markets are governments and businesses that purchase aerospace and railroad-related products. For example, Bombardier markets its narrow-body jetliners to commercial airlines. To seal such sales, Bombardier emphasizes fuel efficiency, low operating costs, and other bottom-line benefits that airlines seek when buying new planes. Competition for orders is especially intense as the global economy recovers from recession and airlines plan ahead to replace the oldest models in their aging fleets. Depending on their needs, airlines may look at aircraft made by Airbus, Boeing, Embraer, Mitsubishi, or other competitors, not just at Bombardier's products. The exact configuration of each jet is customized airline by airline, which means every order represents a major investment of time, energy, and negotiation for buyer and seller alike. Bombardier also markets corporate jets, under the brand names of Learjet, Challenger, and Global, to big businesses that fly executives from state to state, across the country, or halfway around the world. Because different businesses have different needs, Bombardier listens carefully to learn where and when the aircraft will be used. Business customers that don't need a jet standing by every day may be good prospects for other Bombardier offerings. If they anticipate using a jet for 50 or more flight hours per year, they can become part-owners of a plane through Bombardier's Flexjet program. If they occasionally need a private plane for specific trips, they may prefer Bombardier's Skyjet charter program. Both commercial airlines and corporate buyers expect a high level of customer service when they purchase a new jet. To meet their needs, Bombardier operates round-the-clock customer response centers staffed by specialists who understand each product inside and out, from engineering and technical systems to parts and supplies. When customers call, the company is ready to help get their planes back in the air as quickly as possible. Government markets are the focus of Bombardier's rail transportation division. During the 1970s, with a global oil crisis hurting sales of gasoline-powered vehicles, such as snowmobiles, Bombardier diversified by winning a large and lucrative contract to make subway trains for its headquarters city of Montreal. This paved the way for marketing to other municipalities who were expanding or modernizing their mass-transit systems. Now the company markets all manner of train and railway equipment, including passenger cars, high-speed locomotives, mass-transit systems, signal and control mechanisms, and railway- related maintenance and services. Rail transportation is booming these days as countries and urban centers upgrade their infrastructures. Although no two government buyers have exactly the same requirements, Bombardier knows that quality, reliability, safety, and price are always major concerns in such purchases. Therefore, to compete with General Electric, Siemens, and other rivals, the company showcases its manufacturing expertise and points with pride to its many satisfied customers worldwide. Sustainability is an increasingly important factor for government buyers as well. "Everybody accepts that rail transportation is an eco-friendly way to move people in large cities," says Bombardier's CEO. As a result, Bombardier's marketing communicates that the firm's new energy-efficient, low-emission rail products have been designed with the environment in mind. Knowing that business and government customers care about the reputation of their vendors, Bombardier requires all employees, managers, suppliers, and agents to follow its strict code of ethics and business conduct. Its social-responsibility initiatives include programs to reduce waste, conserve water and energy, and obtain electricity from renewable power sources. From its current level of $19 billion in annual sales and a workforce of 70,000 employees on five continents, Bombardier is poised for even better performance as its business marketing takes off. In which stage of the business buying decision process is Bombardier's reputation likely to have the most influence on a government that is considering the purchase of new subway cars?
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Indicate the method of buying (description, inspection, sampling, or negotiation) an organization would be most likely to use when purchasing each of the following items. Defend your selections. a. A building for the home office of a light bulb manufacturer b. Wool for a clothing manufacturer c. An Alaskan cruise for a company retreat, assuming a regular travel agency is used d. One-inch nails for a building contractor
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Boeing Boeing is the world's leading aerospace corporation and largest manufacturer of commercial and military aircraft. Visit the company's website at www.boeing.com. What environmental factors do you think affect demand for Boeing products?
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Dale Carnegie Focuses on Business Customers Dale Carnegie was a highly successful entrepreneur and one of the most legendary speakers of the 20th century. His simple but effective two-step formula for connecting with customers and colleagues in business situations was (1) win friends and (2) influence people. He began teaching his methods as part of the Dale Carnegie Course in 1912. In 1936, he published his ground-breaking book, How to Win Friends and Influence People, which went on to become an international best seller and is still available in print, as an audio book, and as an e-book. The original manuscript of this famous book remains on view in the Hauppauge, New York, headquarters of the company that Dale Carnegie founded, inspiring the new leaders who have brought the firm into the 21st century. Today, Dale Carnegie operates in 85 countries, from China to Cameroon, with 2,700 trainers teaching his methods in 25 languages. In all, more than 8 million people have taken a Dale Carnegie course. The company has trained managers, employees, and teams in multinational corporations, such as Ford, Honda, Adidas, John Deere, 3M, Verizon, American Express, and Apple. It also provides training to people in government agencies, such as the U.S. Department of Veteran Affairs, as well as to small business owners and individuals who want to learn the Carnegie way. Carnegie's methods can help marketers build a relationship with people at all levels, from the mail room to the board room. Whether the conversation involves a sales call or a factory visit to see a particular piece of equipment, "you can change people's behavior by changing your attitude towards them," says Peter Handal, CEO of Dale Carnegie. Listening carefully, wearing a smile, and being courteous is common sense, yet "it's not common practice," Handal explains, which is where the Dale Carnegie course comes in. Dale Carnegie's principles still apply in this era of digital communications. For example, choosing positive words in a business e-mail can give recipients a good feeling about the message and the sender. Businesspeople are busy, so many value the efficiency of brief messages sent via text or Twitter. At the same time, adding a personal touch with a quick Skype conversation or recording a relevant video message can be a very effective way to engage business customers. And there's nothing like a face-to-face meeting where the customer can sit with a supplier or technical expert, ask questions, watch a live demonstration or handle a product, and build trust. As CEO, Peter Handal travels the world to hear what customers and trainers have to say about Dale Carnegie's operations and about their own business situations. He emphasizes the need for managers to listen to what others have to say, even if the news is bad. "That's a very dangerous situation," Handal says. "You can't have everyone on the team in charge, but you have to have everyone be able to speak openly and honestly." In other words, it's important to be nice, but it's also important to speak up so decision makers have all the information they need to proceed. Which concerns of business customers should Dale Carnegie's marketers pay close attention to when selling training services to a company like American Express?
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Bombardier Serves Multiple Business Markets Bombardier is all about trains and planes. Founded by Joseph-Armand Bombardier in 1942, the company originally marketed snowmobiles for transportation through the wintry terrain of Canada's Quebec province. Among its earliest products were snowmobiles for delivering mail, shuttling students to and from schools, and moving commercial freight shipments. The company also served consumer markets through its Ski-Doo, a pioneer of the personal snowmobile industry, and its Sea-Doo, a pioneer of the personal watercraft industry. Today, however, Bombardier's primary markets are governments and businesses that purchase aerospace and railroad-related products. For example, Bombardier markets its narrow-body jetliners to commercial airlines. To seal such sales, Bombardier emphasizes fuel efficiency, low operating costs, and other bottom-line benefits that airlines seek when buying new planes. Competition for orders is especially intense as the global economy recovers from recession and airlines plan ahead to replace the oldest models in their aging fleets. Depending on their needs, airlines may look at aircraft made by Airbus, Boeing, Embraer, Mitsubishi, or other competitors, not just at Bombardier's products. The exact configuration of each jet is customized airline by airline, which means every order represents a major investment of time, energy, and negotiation for buyer and seller alike. Bombardier also markets corporate jets, under the brand names of Learjet, Challenger, and Global, to big businesses that fly executives from state to state, across the country, or halfway around the world. Because different businesses have different needs, Bombardier listens carefully to learn where and when the aircraft will be used. Business customers that don't need a jet standing by every day may be good prospects for other Bombardier offerings. If they anticipate using a jet for 50 or more flight hours per year, they can become part-owners of a plane through Bombardier's Flexjet program. If they occasionally need a private plane for specific trips, they may prefer Bombardier's Skyjet charter program. Both commercial airlines and corporate buyers expect a high level of customer service when they purchase a new jet. To meet their needs, Bombardier operates round-the-clock customer response centers staffed by specialists who understand each product inside and out, from engineering and technical systems to parts and supplies. When customers call, the company is ready to help get their planes back in the air as quickly as possible. Government markets are the focus of Bombardier's rail transportation division. During the 1970s, with a global oil crisis hurting sales of gasoline-powered vehicles, such as snowmobiles, Bombardier diversified by winning a large and lucrative contract to make subway trains for its headquarters city of Montreal. This paved the way for marketing to other municipalities who were expanding or modernizing their mass-transit systems. Now the company markets all manner of train and railway equipment, including passenger cars, high-speed locomotives, mass-transit systems, signal and control mechanisms, and railway- related maintenance and services. Rail transportation is booming these days as countries and urban centers upgrade their infrastructures. Although no two government buyers have exactly the same requirements, Bombardier knows that quality, reliability, safety, and price are always major concerns in such purchases. Therefore, to compete with General Electric, Siemens, and other rivals, the company showcases its manufacturing expertise and points with pride to its many satisfied customers worldwide. Sustainability is an increasingly important factor for government buyers as well. "Everybody accepts that rail transportation is an eco-friendly way to move people in large cities," says Bombardier's CEO. As a result, Bombardier's marketing communicates that the firm's new energy-efficient, low-emission rail products have been designed with the environment in mind. Knowing that business and government customers care about the reputation of their vendors, Bombardier requires all employees, managers, suppliers, and agents to follow its strict code of ethics and business conduct. Its social-responsibility initiatives include programs to reduce waste, conserve water and energy, and obtain electricity from renewable power sources. From its current level of $19 billion in annual sales and a workforce of 70,000 employees on five continents, Bombardier is poised for even better performance as its business marketing takes off. How does derived demand apply to the demand for commercial jets purchased by airlines? What are the implications for Bombardier's marketing efforts?
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Bombardier Serves Multiple Business Markets Bombardier is all about trains and planes. Founded by Joseph-Armand Bombardier in 1942, the company originally marketed snowmobiles for transportation through the wintry terrain of Canada's Quebec province. Among its earliest products were snowmobiles for delivering mail, shuttling students to and from schools, and moving commercial freight shipments. The company also served consumer markets through its Ski-Doo, a pioneer of the personal snowmobile industry, and its Sea-Doo, a pioneer of the personal watercraft industry. Today, however, Bombardier's primary markets are governments and businesses that purchase aerospace and railroad-related products. For example, Bombardier markets its narrow-body jetliners to commercial airlines. To seal such sales, Bombardier emphasizes fuel efficiency, low operating costs, and other bottom-line benefits that airlines seek when buying new planes. Competition for orders is especially intense as the global economy recovers from recession and airlines plan ahead to replace the oldest models in their aging fleets. Depending on their needs, airlines may look at aircraft made by Airbus, Boeing, Embraer, Mitsubishi, or other competitors, not just at Bombardier's products. The exact configuration of each jet is customized airline by airline, which means every order represents a major investment of time, energy, and negotiation for buyer and seller alike. Bombardier also markets corporate jets, under the brand names of Learjet, Challenger, and Global, to big businesses that fly executives from state to state, across the country, or halfway around the world. Because different businesses have different needs, Bombardier listens carefully to learn where and when the aircraft will be used. Business customers that don't need a jet standing by every day may be good prospects for other Bombardier offerings. If they anticipate using a jet for 50 or more flight hours per year, they can become part-owners of a plane through Bombardier's Flexjet program. If they occasionally need a private plane for specific trips, they may prefer Bombardier's Skyjet charter program. Both commercial airlines and corporate buyers expect a high level of customer service when they purchase a new jet. To meet their needs, Bombardier operates round-the-clock customer response centers staffed by specialists who understand each product inside and out, from engineering and technical systems to parts and supplies. When customers call, the company is ready to help get their planes back in the air as quickly as possible. Government markets are the focus of Bombardier's rail transportation division. During the 1970s, with a global oil crisis hurting sales of gasoline-powered vehicles, such as snowmobiles, Bombardier diversified by winning a large and lucrative contract to make subway trains for its headquarters city of Montreal. This paved the way for marketing to other municipalities who were expanding or modernizing their mass-transit systems. Now the company markets all manner of train and railway equipment, including passenger cars, high-speed locomotives, mass-transit systems, signal and control mechanisms, and railway- related maintenance and services. Rail transportation is booming these days as countries and urban centers upgrade their infrastructures. Although no two government buyers have exactly the same requirements, Bombardier knows that quality, reliability, safety, and price are always major concerns in such purchases. Therefore, to compete with General Electric, Siemens, and other rivals, the company showcases its manufacturing expertise and points with pride to its many satisfied customers worldwide. Sustainability is an increasingly important factor for government buyers as well. "Everybody accepts that rail transportation is an eco-friendly way to move people in large cities," says Bombardier's CEO. As a result, Bombardier's marketing communicates that the firm's new energy-efficient, low-emission rail products have been designed with the environment in mind. Knowing that business and government customers care about the reputation of their vendors, Bombardier requires all employees, managers, suppliers, and agents to follow its strict code of ethics and business conduct. Its social-responsibility initiatives include programs to reduce waste, conserve water and energy, and obtain electricity from renewable power sources. From its current level of $19 billion in annual sales and a workforce of 70,000 employees on five continents, Bombardier is poised for even better performance as its business marketing takes off. When an airline wants to order new jets to replace older jets in its fleet, do you think it would approach the decision as a new-task purchase, a straight rebuy, or a modified rebuy purchase? Explain. Also, which methods of business buying are Bombardier's customers most likely to use? Why?
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Boeing Boeing is the world's leading aerospace corporation and largest manufacturer of commercial and military aircraft. Visit the company's website at www.boeing.com. At what types of business markets are Boeing's products targeted?
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Boeing Boeing is the world's leading aerospace corporation and largest manufacturer of commercial and military aircraft. Visit the company's website at www.boeing.com. How does Boeing address some of the concerns of business customers?
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Dale Carnegie Focuses on Business Customers Dale Carnegie was a highly successful entrepreneur and one of the most legendary speakers of the 20th century. His simple but effective two-step formula for connecting with customers and colleagues in business situations was (1) win friends and (2) influence people. He began teaching his methods as part of the Dale Carnegie Course in 1912. In 1936, he published his ground-breaking book, How to Win Friends and Influence People, which went on to become an international best seller and is still available in print, as an audio book, and as an e-book. The original manuscript of this famous book remains on view in the Hauppauge, New York, headquarters of the company that Dale Carnegie founded, inspiring the new leaders who have brought the firm into the 21st century. Today, Dale Carnegie operates in 85 countries, from China to Cameroon, with 2,700 trainers teaching his methods in 25 languages. In all, more than 8 million people have taken a Dale Carnegie course. The company has trained managers, employees, and teams in multinational corporations, such as Ford, Honda, Adidas, John Deere, 3M, Verizon, American Express, and Apple. It also provides training to people in government agencies, such as the U.S. Department of Veteran Affairs, as well as to small business owners and individuals who want to learn the Carnegie way. Carnegie's methods can help marketers build a relationship with people at all levels, from the mail room to the board room. Whether the conversation involves a sales call or a factory visit to see a particular piece of equipment, "you can change people's behavior by changing your attitude towards them," says Peter Handal, CEO of Dale Carnegie. Listening carefully, wearing a smile, and being courteous is common sense, yet "it's not common practice," Handal explains, which is where the Dale Carnegie course comes in. Dale Carnegie's principles still apply in this era of digital communications. For example, choosing positive words in a business e-mail can give recipients a good feeling about the message and the sender. Businesspeople are busy, so many value the efficiency of brief messages sent via text or Twitter. At the same time, adding a personal touch with a quick Skype conversation or recording a relevant video message can be a very effective way to engage business customers. And there's nothing like a face-to-face meeting where the customer can sit with a supplier or technical expert, ask questions, watch a live demonstration or handle a product, and build trust. As CEO, Peter Handal travels the world to hear what customers and trainers have to say about Dale Carnegie's operations and about their own business situations. He emphasizes the need for managers to listen to what others have to say, even if the news is bad. "That's a very dangerous situation," Handal says. "You can't have everyone on the team in charge, but you have to have everyone be able to speak openly and honestly." In other words, it's important to be nice, but it's also important to speak up so decision makers have all the information they need to proceed. How would you apply Dale Carnegie's methods if you were trying to make a sale to a company with a large buying center?
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Dale Carnegie Focuses on Business Customers Dale Carnegie was a highly successful entrepreneur and one of the most legendary speakers of the 20th century. His simple but effective two-step formula for connecting with customers and colleagues in business situations was (1) win friends and (2) influence people. He began teaching his methods as part of the Dale Carnegie Course in 1912. In 1936, he published his ground-breaking book, How to Win Friends and Influence People, which went on to become an international best seller and is still available in print, as an audio book, and as an e-book. The original manuscript of this famous book remains on view in the Hauppauge, New York, headquarters of the company that Dale Carnegie founded, inspiring the new leaders who have brought the firm into the 21st century. Today, Dale Carnegie operates in 85 countries, from China to Cameroon, with 2,700 trainers teaching his methods in 25 languages. In all, more than 8 million people have taken a Dale Carnegie course. The company has trained managers, employees, and teams in multinational corporations, such as Ford, Honda, Adidas, John Deere, 3M, Verizon, American Express, and Apple. It also provides training to people in government agencies, such as the U.S. Department of Veteran Affairs, as well as to small business owners and individuals who want to learn the Carnegie way. Carnegie's methods can help marketers build a relationship with people at all levels, from the mail room to the board room. Whether the conversation involves a sales call or a factory visit to see a particular piece of equipment, "you can change people's behavior by changing your attitude towards them," says Peter Handal, CEO of Dale Carnegie. Listening carefully, wearing a smile, and being courteous is common sense, yet "it's not common practice," Handal explains, which is where the Dale Carnegie course comes in. Dale Carnegie's principles still apply in this era of digital communications. For example, choosing positive words in a business e-mail can give recipients a good feeling about the message and the sender. Businesspeople are busy, so many value the efficiency of brief messages sent via text or Twitter. At the same time, adding a personal touch with a quick Skype conversation or recording a relevant video message can be a very effective way to engage business customers. And there's nothing like a face-to-face meeting where the customer can sit with a supplier or technical expert, ask questions, watch a live demonstration or handle a product, and build trust. As CEO, Peter Handal travels the world to hear what customers and trainers have to say about Dale Carnegie's operations and about their own business situations. He emphasizes the need for managers to listen to what others have to say, even if the news is bad. "That's a very dangerous situation," Handal says. "You can't have everyone on the team in charge, but you have to have everyone be able to speak openly and honestly." In other words, it's important to be nice, but it's also important to speak up so decision makers have all the information they need to proceed. From a marketing perspective, why would people who work for the U.S. Department of Veteran Affairs be as interested in taking a Dale Carnegie course as people who work for American Express?
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Identify organizations in your area that fi t each business market category: producer, reseller, government, and institutional. Explain your classifications.
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When developing a marketing strategy for business customers, it is essential to understand the process the business goes through when making a buying decision. Knowledge of business buying behavior is important when developing several aspects of the marketing plan. To assist you in relating the information in this chapter to the creation of a marketing plan for business customers, consider the following issues: Determine the type of business purchase your customer will likely be using when purchasing your product. How would this impact the level of information required by the business when moving through the buying decision process? The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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When developing a marketing strategy for business customers, it is essential to understand the process the business goes through when making a buying decision. Knowledge of business buying behavior is important when developing several aspects of the marketing plan. To assist you in relating the information in this chapter to the creation of a marketing plan for business customers, consider the following issues: Discuss the different types of demand that the business customer will experience when purchasing your product. The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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List several characteristics that differentiate transactions involving business customers from consumer transactions.
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Identifying qualified customers is important to the survival of any organization. NAICS provides helpful information about many different businesses. Find the NAICS manual at the library or online at www.naics.com and identify the NAICS code for the following items. a. Chocolate candy bars b. Automobile tires c. Men's running shoes
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