Week 2 Questions and Exercises

1) Explain the specific ways in which business markets vary from

consumer markets, using the headings in the notes.
Business markets and consumer markets vary in different ways. The
biggest difference between those markets is the end user. The products
sold between business and business will be bought with another target.
The buyers in the business market are much bigger than the buyers in the
consumer markets. In the business market are the buyers companies and
not only a single consumer like in the consumer market. There is also a big
difference between the purchase and sales volumes. Business to business
deals with much bigger volumes. For example desks. If a big company
wants to renovate the interior, and decides to replace the old desks by
new ones, they need a lot of desks. This is much different at the consumer
market. A consumer wants to buy not more than one or maybe two desks.
The buyers in the B2B market are not so geographical concentrated as the
buyers in de consumer market. A lot of companies have buyers spread
over the whole country (or at least a state). But except national buyers
have a lot of companies also international buyers. The geographical
concentration of the buyers in the business market depends on the
business but is mostly very big and spread. The buyers of a consumer
market are more geographical concentrated around that specific store.
The catchment of a company in the consumer market is mostly not bigger
than a state because consumers don’t want to drive to long to buy
something.
2) Provide examples, to demonstrate your understanding of
derived demand, fluctuating demand, inelastic demand and joint
demand.
Derived demand
An example of derived demand is the demand for fabrics. The demand for
more fabrics would be related to the demand by consumers for clothes. Or
another example is the demand for flat screens. When more consumers
want to buy a flat screen, they have to produce more flat screens so they
need more chips and tubes. So the demand for chips and tubes is an
example of derived demand.

Inelastic demand
An example of inelastic demand is the demand for life saving medicines.
Consumers ‘need’ those medicines. The price is not so important so it
doesn’t matter if the price changes. The quantity of demand stays the
same.

Fluctuating demand

Joint demand
Consumers buy toothbrushes, but they don’t only need a toothbrush to
clean their teeth, they also need toothpaste. The combination of those two
products is necessary to clean your teeth
3) My (UB supplied) laptop is broken and I am getting a new one. I
do not like the brand, the model or the specifications of the
laptop I will be supplied with (a Toshiba Tecra). It will cost $1,500.
I have found that I could buy a laptop I prefer for around half the
price (retail, off the shelf). Discuss this case, and provide reasons
for/against the lack of choice afforded (geboden) to me by my
employer.
I think it’s a good offer by the employer. The employer has probably a deal
with the laptop supplier about buying a bigger volume for a lower price.
This means that the employer can offer the laptops for a relatively lower
price as usual. A disadvantage of this situation
4) A case usually involves looking at a real company situation,
imagining you are involved employees (or consultants), and
applying business theory to resolve the problem or to act on the
opportunity. In this cause cases will involve marketing and the
objective will be to better understand the topics covered each
week by applying problem-solving techniques to a given situation.
This first case, instead of looking deeply into one company looks
at the factor of ‘mission’ which will interpret as that companies
statement of its purpose and an expression of its values. Consider
what a company is likely to expect of its marketing function given
its mission or central philosophy of operation. Companies like
individuals can make a conscious decision about what they stand
for and how they function is this world. In competitive business
markets some companies decide a central philosophy will be ‘ the
marketing concept’. That is as is finding, satisfying, and keeping
customers. Obviously not all companies operate like this. In the
case that follows, the issue is used to help you recognise
particular philosophy when you see evidence of it. You will also
need to think about what that means the company's marketing
department and for its customers.
The case involves three people that have the same information.
Michael Moore is a purchasing agent at Telecom Pty Ltd. He needs
to pick the most promising candidates to make a presentation
concerning why Telecom should do business with them. Irena
Jackson is a direct sales person for RJ Systems (a multinational
producer of photocopiers) and is looking for potential customers.
Irena needs to decide how to approach each customer. Tom Brown
is a student graduating with a degree in marketing and he is
looking at the list trying to decide where to send a job
application.
4a) analyse the information from Michael's perspective (see
statements)
4b) analyse the information from Irena’s perspective (see
statements)
4c) analyse the information from Tom’s perspective (see
statements)

4d) What is the mission statement of the University of Ballarat?

‘Only one Victorian University rated five stars for teaching’. So the mission
of UB is being the University which provide the best teachers and the best
learning programs.
 Case study 1
Most well-known companies have statements of mission (values, guiding
principles, vision). These are usually summarised as mission statements.
Some of these are included below. My intention is to point out good or bad
statements but to foster academic discussion. Many mission statements
do sound clichéd, and I refer you to the dilbert.com mission statement
generator, for some light relief.
Statement 1: We truly care for each customer. We build enduring relationships by
understanding and anticipating each customer's needs and by serving them better each
time than the time before. Our customers can count on us to consistently deliver superior
products and services that help them achieve their business objectives’.
Michael’s perspective : for a purchaser like Michael is this a very interesting
mission. As a purchaser you want to deal with a company you can count on and
were you have a good relationship with
Irena’s perspective:
Tom’s perspective: by reading this statement you can say that it is a company
which is really active in communicating with their customers. So if you want to
work there, it’s important that you like to communicate a lot.
Statement 2: We are dedicated to maintaining our position as a profitable organisation and
a leader in the industry. In this way, we provide our shareholders a solid return on their
investment, our employees with the benefits of gainful employment, and the surrounding
community with a share in our prosperity’.
Michael’s perspective :
Irena’s perspective: It is an interesting and big customer to get because it is a
leader in the industry.
Tom’s perspective:
Statement 3: ‘ To be the number one company in the world and among the premier
industrial concerns in terms of quality, profitability and growth’.
Michael’s perspective: for a purchasing agent like Michael is it important that
he purchase products by a company who delivers quality products.
Irena’s perspective: This company is a good customer to approach, because if
it will be the number one company in the world in terms of quality, profitability
and growth, then you have a good customer.
Tom’s perspective: If he get a job here, then it will stand good on his
curriculum vitae, because if they will be the number one company in the world in
terms of quality, profitability and growth, everybody will know this company.

Statement 4: We are dedicated to the creation and demonstration of a new corporate

concept of linked prosperity. Our mission consists of three interrelated parts: (a) to make
and distribute the finest quality innovative products, (b) to operate the company in such a
way that actively recognises the central role that business plays in the structure of
society... by improving the quality of life of the broad local, national, and international
community’.

Michael’s perspective: For Michael is this an interested statement, because as

a purchasing agent you would like to purchase quality innovative products.
Irena’s perspective:
Tom’s perspective: If you want to work in a company who make and distribute
finest quality innovative products and will grow than he has to send a job
application.
Statement 5: ‘ We believe that our past, current, and future successes come from a total
dedication to excellence service to those who buy our products. Satisfying our customers
and consumer needs in a superior way is the only reason we are in business.’
Michael’s perspective: This is a very interesting statement for Michael, it
means that they will care about their customers and that excellence service very
important is for them.
Irena’s perspective:
Tom’s perspective: If Tom likes to communicate and likes customer service
than he has to send a job application to this company.
Statement 6: We are in business to please our customers... to provide greater value than
our competitors.’
Michael’s perspective: If they provide a greater value than their competitors,
than it is interesting to purchase by this company, because he will get a greater
value.
Irena’s perspective:
Tom’s perspective:
Statement 7: BOUNDARYLESS in all our behaviour. SPEED in everything we do. STRETCH in
every target we set. Our mission statement is just these three words.’
Statement 8: Being the best of everything we do.’
Michael’s perspective:
Irena’s perspective: For RJ Systems is it good to approach this customer,
because they are the best in everything what they do.
Tom’s perspective: It is nice to work in a company who want to be the best in
everything what they do.
Statement 9: Our mission is to achieve or enhance clear leadership, worldwide, in the
existing or new core product categories in which we choose to compete.’
Michael’s perspective:
Irena’s perspective: If RJ Systems wants a customer who also operates
worldwide than she can approach this company.
Tom’s perspective: If Tom wants to work in a worldwide company, then he can
send a job application to this company.
Statement 10: We believe that our first responsibility is to those who use our products and
services. In meeting their needs everything must be of high quality. We must constantly
strive to reduce our costs in order to maintain reasonable prices. Customer orders must
be serviced promptly and accurately. Our suppliers and distributors must have an
opportunity to make a fair profit.’
Michael’s perspective: This is a good mission for Telecom Pty Ltd, because if
they purchase products from this company, they will get a high quality and they
will get is for a reasonable price.
Irena’s perspective:
Tom’s perspective:
Statement 11: ‘..... is a global company committed to building long-term growth in volume
and profit and to enhancing its world wide leadership position by providing products of
superior value.’
Michael’s perspective :
Irena’s perspective: This is about a big worldwide company. It is a company
that tries to grow. Sounds like a interesting customer
Tom’s perspective: This can be an interesting company if you want to work
international and all around the globe.
Statement 12: We are committed to achieving outstanding value for our clients, rewarding
careers for our staff, and excellent performance for our owners.’
Michael’s perspective :
Irena’s perspective:
Tom’s perspective: a company which thinks about their staff. Interesting point
by considering to apply.
Statement 13: Our fundamental objective (everyone's overriding responsibility) is one
phrase: total customer satisfaction.’
Michael’s perspective : In this company is all about the customer. Interesting
point for a purchaser. It is good to work with a company that cares about your
satisfaction.
Irena’s perspective:
Tom’s perspective: This statement doesn’t really give much information for
Tom. It still don’t tells a lot about the company.
Statement 14: To market products developed and manufactured in Australia that are world
leaders in quality, cost, and customer satisfaction through the integration of people,
technology, and business systems and to transfer knowledge, technology, and experience
through our parent company.’
Michael’s perspective :
Irena’s perspective:
Tom’s perspective:
Statement 15: Our mission is dedicated to the highest quality of customer service
delivered with a sense of warmth, friendliness, individual pride, and company spirit.’
Michael’s perspective :
Irena’s perspective: The mission says you that it is a nice company to work
with but it doesn’t say anything about the size, profit etc.
Tom’s perspective: At this company is customer service really important. I
think all the employers have to be really friendly and respectful. So a nice
environment to work in.
Statement 16: Our mission is to provide the world's best products, service, and
intelligence.... designed to help people work more effectively.’
Michael’s perspective :
Irena’s perspective:
Tom’s perspective:

Statement 17:‘ The first corporate goal is to earn money through our shareholders and
increase the value of their investment. We believe that the best measure of the
accomplishment of our goal is consistent growth in earnings per share.’

Michael’s perspective : This company cares mostly about their shares. Not
even about the relation with customers and about their sales. Not really an
interesting company to work with.
 Irena’s perspective:
Tom’s perspective: When you work at this company I think you have to know a
lot about shareholders, the value of shares and all the other things of shares. If
this is what you are interested in, it will be a nice company to work at.

Statement 18: We will be the global leader in the industry.’

Michael’s perspective : This is about an international company so if Michael

want to purchase at an international company, than this can be an interesting
customer.
Irena’s perspective:
Tom’s perspective: It is probably a big company which want to keep growing
and will work hard to become the global leader. Not everyone wants to work with
a big company so this is something for Tom to think about
Statement 19: The University of...... exists so that human knowledge be transferred,
preserved, expanded, and disseminated and that the human mind, body and spirit be
nurtured and strengthened through learning. The University is committed to meet these
great obligations: but if students learn well, guided, stimulated, and helped by scholarly,
dedicated teachers so that each may grow according to his or her own talents; that is
students broaden and deepen their knowledge of life and thought and values,
encouraged to understand what has gone before, to wonder what may yet come, and to
dream; that is undergraduate study includes rigourous, disciplined exploration of the
accumulated core of human knowledge, and that graduate and professional study
includes mastery of that mix of knowledge, expertise and skills that provides the
foundation for effective, ethical service to others; that there be fostered respect to the
differences among people, the nurturing of curiosity, the insistence upon high standards
of thought, study, communication and the skills that should characterise the educated
person; that its graduates be broadly educated men and women, prepared to bear that
special responsibility in a free, pluralistic society of those privileged to have a higher
education; that the University firmly maintain its independence; that there be and be
defended an atmosphere of tolerance and freedom to explore, to question, to argue, to
create, to accept or reject;........
Michael’s perspective :
Irena’s perspective:
Tom’s perspective:

Statement 20: mission is to discover, preserve, and disseminate knowledge; produce

creative work; and promote a culture of broad inquiry throughout and beyond the ....
community.... also aims, through public service, to enhance the lives and livelihoods of
our students, the people of New York, and others around the world.
Michael’s perspective :
Irena’s perspective:
Tom’s perspective: This company can be interesting to work at because they
aim to enhance the lives and livelihoods of students. Tom is just graduate and
knows a lot of this group.