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Services Need MarketingChapter 11
A service is an activity that is intangible, exchanged directly from producer to consumer, and consumed at the time of production. - #4 Practice Test
The service sector is the largest and fastest-growing employment area in our economy.
In a recent year, nearly 79% of all jobs in the United States were service jobs.
What Are Services?
Frameworks 6.2
Products (or goods) are tangible objects such as cars, DVDs, tables, and hamburgers that can be purchased and resold.
What is a Product?
#10 Practice Test
Frameworks 6.2
The fastest growing service sector is health care with almost 2 our of every 5 new jobs by 2014.
What are Services?
Fastest-Growing Industries
Industry10-Year
Growth RateNumber of
Jobs Added
Education and Health Services 30.6% 5.19 million
Professional and Business Services 27.8% 4.57 million
Leisure and Hospitality 17.7% 2.22 million
Information Services 11.6% 0.36 million
Financial Activities 10.5% 0.85 million
Trade, Transportation, Utilities 10.3% 2.62 million
#12 Practice Test
Discretionary income is the amount of income left after paying basic living expenses and taxes.
Today, people have more discretionary income to spend on services.
What are Services?
#11 Practice Test
Intangible means that the service cannot be touched, seen, tasted, heard, or felt.
Unique Qualities of Services
#1 Practice Test
Frameworks 6.2
The most important difference between goods and services is that services are intangible.
Unique Qualities of Services
#13 Practice Test
Frameworks 6.2
Inseparable means that the service is provided and consumed at the same time.
Unique Qualities of Services
#3 Practice Test
Frameworks 6.2
Services such as a college class, a facial, or a car repair are produced and consumed simultaneously. This illustrates the characteristic of a service that is described as being inseparable.
Unique Qualities of Services
#14 Practice Test
Frameworks 6.2
Perishable means that services unused in one time period cannot be stored for use in the future.
Unique Qualities of Services
#15 Practice Test
Frameworks 6.2
Heterogeneous means there are differences between services.
Unique Qualities of Services
This could be a bad haircut.
#16 Practice Test Frameworks 6.2
Service organizations rely heavily on publicity and word-of- mouth promotion. People often consider information from friends to be very credible.
Unique Qualities of Services
#9 Practice TestFrameworks 6.2
Just as with products, there are two types of markets for services:Business consumers Individual consumers
Service Classifications
#17 Practice Test
Frameworks 6.2.2
There are not-for-profit organizations that also offer services.
Service Classifications
#18 Practice Test
Labor intensiveness refers to the amount of human effort required to deliver a service.
Service Classifications
#2 Practice Test
Service quality is defined as the degree to which the service meets customers’ needs and expectations.
Service Classifications
#6 Practice Test
An endorsement is an advertisement in which a satisfied customer publicly expresses approval of a product or service.
Service Classifications
#8 Practice Test
Service ClassificationsBundling is the practice of combining several related services for one price.
#5 Practice Test
Business-to-Business MarketingChapter 12
Business-to-business marketing is the exchange of products and services between businesses.
Business-to-Business Exchanges
#19 Practice Test
Categories of the Business Product Classification System
Capital Goods
The building and major equipment of business
Operating Equipment
Equipment used in the daily operation of the business
Supplies Consumable materials used in the operation of the business
Raw Materials
Unprocessed materials that are incorporated into the products by the business
Component Parts
Partially or completely processed items that become a part of the products produced by the business
Services Tasks performed in the operation of the business or to support the production, sale, or maintenance of the business’s products and services
#20 Practice Test
Purchasing includes determining the products and services needed, indentifying the best sources to obtain them, and completing the activities necessary to obtain and use them.
Purchasing as a Marketing Activity
#21 Practice TestFrameworks 10.6
Wholesale and retail businesses are part of the product distribution system connecting producers and consumers.
Purchasing as a Marketing Activity
#22 Practice Test
Frameworks 10.3
Wholesalers, such as Pippin Wholesale Company, sell to retailers and/or other businesses and organizations.
Purchasing as a Marketing Activity
#23 Practice Test
Retailers purchase from wholesalers, agents, or manufacturers and sell to the final consumer.
Purchasing as a Marketing Activity
#24 Practice Test
The largest category of business customers in the United States is service businesses.
Purchasing as a Marketing Activity
#25 Practice Test
The total purchases made by the U.S. government make it the largest single customer in the world.
Purchasing as a Marketing Activity
#26 Practice Test
Compared to final consumers, business customers purchase in larger quantities, base their purchases on derived demand, and more frequently buy directly from the producer.
Purchasing as a Marketing Activity
#27 Practice Test
Purchase Specifications: These are the detailed requirements for construction or performance of a product.
The Buying Decision
#28 Practice Test
The reorder point is the level of inventory needed to meet the usage needs of the business until the product can be resupplied.
The Buying Decision
#29 Practice Test
Reciprocal trading is a form of bartering in which the products or services of one company are used as payment for the products or services of another company.
The Buying Decision
#30 Practice Test
The purchase decisions of businesses are usually more rational than the purchase decisions of final consumers.
Business Purchasing Procedures
#31 Practice Test
Vendors are companies that offer products for sale to other businesses, aka suppliers.
Business Purchasing Procedures
#32 Practice Test
Frameworks 10.1
A vendor analysis is an objective rating system used by buyers to compare potential suppliers on important purchasing criteria.
Business Purchasing Procedures
#33 Practice Test
A request for proposal (RFP) contains a specific description of the type of product or service needed and the criteria that are important to the buyer.
Business Purchasing Procedures
#34 Practice Test
In bidding, several suppliers develop specific prices at which they will meet detailed purchase specifications and other criteria prepared by the buyer.
Business Purchasing Procedures
#35 Practice Test
A supply chain is the flow of products, resources, and information through all of the organizations involved in producing and marketing a company’s products.
Business Purchasing Procedures
#36 Practice Test
Just-in-time (JIT) means that the inventory level is kept low and resupplied by supply chain members just as it is needed.
Business Purchasing Procedures
#37 Practice Test
Frameworks 10.5
Total quality management (TQM) establishes specific quality standards for all procedures. This is a commitment to zero defects and 100% accuracy, 100% of the time.
Business Purchasing Procedures
#38 Practice Test
Inventory is the assortment of products maintained by a business.
Business Purchasing Procedures
#39 Practice Test
Frameworks 10.1
A physical inventory system determines the amount of product on hand by visually counting the items.
Business Purchasing Procedures
#40 Practice Test
Frameworks 10.5
A perpetual inventory system determines the amount of a product on hand by maintaining records on purchases and sales. This is the amount of inventory that SHOULD be on hand according to computer inventory records.
Business Purchasing Procedures
#41 Practice Test
Frameworks 10.5
A purchase order is a form listing the variety, quantity, and prices of products ordered and is completed by the buyer and sent to the seller to begin the purchasing process.
Business Purchasing Procedures
#42 Practice Test
Frameworks 10.6
Harrison School District Purchase Order
Frameworks 10.6
Packing List: The seller fills the order and sends it to the buyer along with this form.
Business Purchasing Procedures
#43 Practice Test
The invoice is an itemized billing statement with terms of payment for the order.
Business Purchasing Procedures
#44 Practice Test
Frameworks 10.6
A receiving record is completed listing all the merchandise received in the shipment and its condition.
Business Purchasing Procedures
#45 Practice Test
Frameworks 10.6
A merchandise plan identifies the types, assortments, prices, and quantities of products that will be stocked by the business for a specific period of time.
Business Purchasing Procedures
#46 Practice Test
A basic stock list identifies the products a store must have available to meet the most important needs of the its customers. These are items that customer expect to find anytime they visit the store.
Business Purchasing Procedures
#47 Practice Test
A model stock list identifies the complete assortment of products a store would like to offer its customers. More extensive than a basic stock list and more subject to change.
Business Purchasing Procedures
#48 Practice Test
Retailers track sales and inventory using scanners that read the electronic bar code on each product that is sold.
Business Purchasing Procedures
#49 Practice Test
A wholesaler is a business that buys products in very large quantities and resells them to retailers and other businesses in smaller quantities.
The Wholesaler
#50 Practice Test
Frameworks 10.1
Test
End of Chapters 11 and 12Services Need Marketing &Business-to Business Marketing
