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- Assign one or more levels of the hierarchy of needs and the motives described in Figure 5-5 (Maslow) to the following products: (a) life insurance, (b) cosmetics, (c) The Wall Street Journal, and (d) hamburgers.
(16 points)
- List and discuss the key characteristics of organizational buying that make it different from consumer buying. (20 points)
- Demand characteristics:
Organizational buying is mostly dependent upon customer demands, such as demand for paper products is based upon consumer’s need for newspapers etc.
- Size of order:
- Size of market:
The consumer market consists of millions of buyers worldwide, while, there are very few organizational customers out there in the market for the same product or service.
- Nature of products:
Most of the products bought by organizations are raw materials or semi-finished goods which are further processed. A huge emphasis is laid upon technical assistance and timely delivery. On the other hand, consumer products are mostly finished goods bought for usage.
- Marketing Mix characteristics:
For selling to organizations, a firm needs strong network of distribution and direct contact with the organization. Prices are also vary and are negotiable, according to the quantity ordered.
- How does licensing differ from a joint venture? (14 points)
Licensing is defined as paying a fixed amount or percentage of sales to a foreign company in order to get the rights of selling their products. On the other hand, joint venture is when a foreign company becomes partner of a local company in order to launch a product. Some of the key differences of the two are as follows:
- Licensing is easier than joint venture and it offers higher profit with least investment.
- Joint venture gives a complete control over the business and also promotes cultural mingling.
- Licensing is usually a long term agreement, whereas joint ventures are short term.
- An upfront fee is needed to apply for a license but not in case of a joint venture.
- Licensing is a faster method of entering a foreign market.
- What are the advantages and disadvantages of licensing?(15 points)
- What are the advantages and disadvantages of a joint venture?(15 points)
- Why did they add “government” to the “classic” Porter Diamond?
What is the function and impact of the “government factor” in regards to the other factors? (30 points)
The role of Government is to encourage companies to move ahead. Government policies can influence production and supply conditions, causing early demand for advanced products, motivating focus on specialized factor creation, subsidizing a specific supporting industry and promoting local rivalry by implying suitable regulations.
