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Buss 442: Industrial Marketing Question Paper
Buss 442: Industrial Marketing
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2011
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions
THE CASE
Eva Lentzer is a buyer in the Purchasing Department of Venus, which is responsible for procuring supplies for the 4Y models of cars. Recently the department sent specifications for the models to several tire manufacturers and received bids from three of them. One manufacturer informed Eva that it needed more time, and another manufacturer advised that it could not meet the specifications because of costs.
Eva had been studying each bid for several minutes when Phil Dupont stuck his head into her office. “Eva, are you ready for the meeting? Eva looked up, smiled, and replied, “Yes, I think so”.
“Well, lets go. I think the others are in the conference room”.
Eva and Phil walked down the carpeted hall to the conference room, where every member of the buying center was sitting at the table, waiting. As they joined the group, Phil said, “Eva, why don’t you share what you have”.
“Okay. I’m sure you remember that we sent proposals to five manufacturers, inviting them to bid based on our specifications. Marie Patterson, who works for one of the manufacturers, claimed they could not meet our specifications – that our specifications would cost them too much money. Charlie Watts said his company was interested in submitting a bid, but he needed another week. The other three manufactures submitted bids based on our specifications. The first said they could provide 500,000 tires at $50 a tire, for a total of $25 million. And they could meet our delivery dates with no problems. The second said they could provide the tires at$45 a tire, for a total of $22.5 million. They also said they could meet our delivery dates. And the third said they could provide the tires at $55 dollars a tire, for a total of $27.5 million. And they could deliver the tires on time”.
“Eva, what do you think about giving Charlie more time to give us an estimate?” Phil asked. “Considering that the company he works for manufactures an excellent product, I’d say we should give him more time”.
“The bid may be higher than the others,” Phil said.
“Well, if it is, we can go with one of the others, say, the first company at $50 a tire”.
“Why not go with the second at $45 a tire?” asked Bill Masterson, who worked in engineering.
“I’m wondering why they are so much lower than the other two,” Eva said.
“They may be trying to get as much business as they possibly can, considering the problems they had with one of their brands several years ago”, Bill said. Eva nodded. “You may be right, Bill”.
Phil said, “I think we should wait to see what Charlie’s company’s bid is before we make a decision. I also think we need to check each company’s website to see if they have any recalls. We don’t want to go with a company that has problems”
“Phil, we checked before we decided don these manufacturers”, May Carpenter, who worked in research and development, said.
“I know, but I think we need to check again to see if any of these companies have had to recall tires since the proposals were mailed”.
Bill said, “That’s a good idea”. “Sounds good to me”, Eva said. The remaining members nodded.
“Well, then, I’ll check on the third company,” Phil said. “Bill, you check on the second. Eva, you check on the first. May, you check on Charlie’s company. Okay? We’ll meet again when Eva gets the bid from Charlie’s company and compare what we’ve found out”.
Question 1
a) Let’s say that you visit the websites of the manufacturers to determine if any have had to recall tires. Let’s say that you discover one of the manufacturers had recalled tires or is recalling tires. What would you suggest that the members do about this manufacturer? Would you suggest that the manufacturer not be considered, even if the manufacturer had put in a reasonable bid? Why? Why not? (5marks)
b) Let’s say that none of the manufacturers have had to recall tires in the past few weeks, and that Charlie’s company’s bid is the same as the third company’s bid, $55 a tire. What would you suggest that the members do? Eliminate both because their bids are the same? Consider both because their bids are the same? Or would you suggest something different? Explain. (5marks)
c) If Charlie’s company’s bid is the same as the third company’s – that is, more costly than the other two companies’ bids – what would you suggest that the members decide? Explain your reasoning. (5marks)
d) Do you think Bill’s comment about the second company’s problems with one of its brands should be considered by the members? Why? Why not? Would you suggest that the members seriously consider the lowest bid? Why? Why not? (5marks)
e) If a company misses the date for submitting bids, do you think a purchasing group should consider the company’s bid when it arrives? Why? Why not? (5marks)
f) Let’s say that Charlie’s bid ends up being the same as the first manufacturer. Of the four, which manufacturer do you think the members should choose? Why? Why not? (5marks)
Question 2
a) Explain the characteristics of industrial marketing (10marks)
b) How does it differ from consumer marketing? Use relevant examples. (10marks)
Question 3
a) Describe the role of the different publics in the industrial marketing environment (10marks)
b) Explain how government purchasing differ from purchasing by commercial organizations (10marks)
Question 4
a) Different stages an organization undergoes in buying process is vital to a marketer under industrial marketing (8marks)
b) Explain how if happens using BYGRID model of organizational buying behaviour. (12marks)
Question 5
Discuss the following marketing environmental forces on how they determine a company’s industrial marketing effort.
a) Socio – cultural environment (8marks)
b) Economic environment (6marks)
c) Demographic environment (6marks)
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