The characteristic of B2B markets that is most opposite of B2C markets is the concept of derived and fluctuating demand. These concepts explain why when consumer purchasing goes down, the effect on the economy is multiplied by all the transactions that occur throughout the channels. A slowdown in consumer spending is not good for the economy.
Here are some examples of derived demand.
A good way to illustrate derived demand is to study the LeBron effect, the economic boost the basketball superstar LeBron James brought to his hometown of Cleveland, Ohio. Watch this video as the LeBron effect illustrates how businesses throughout the Cleveland area prospered and declined as a result of his choice of where to play.
Cleveland’s Basketball Boom Brings Economic Vigor:
This article will help you understand derived demand in a different way more easily.
Can you think of another situation similar to the LeBron effect in which derived demand was created by something that happened in the external environment, something that caused other companies to sell their products to other businesses to meet new demand?
Another example, after 9/11, many people were concerned for their safety or their ability to survive during an attack. This prompted companies to market safety kits for home and auto. Most of these kits were compilations of existing products, but the derived demand for bandages, flashlights, etc. increased.
You might remember Joy Mead, associate director of marketing at Procter & Gamble, when she spoke about consumer behavior. Listen to this clip to hear Mead talk about the research techniques and methods Procter & Gamble uses to develop consumer insight. You will learn that the company isn’t just interested in what consumers want now but also years into the future.
Primary marketing research is generally used when all other options for gathering marketing data have been exhausted. It is very expensive, and sometimes the research itself is flawed in its design.
One of the areas of primary marketing research we are all familiar with is the customer satisfaction survey. Even this supposedly simple type of survey is difficult to design to elicit the most accurate responses from customers. Let’s get a little experience in question design.
Go to surveymonkey.com. Click on “Solutions,” then “Customer Satisfaction,” then on the Customer Satisfaction Survey Template, click “Preview.” On the right side, click on “Surveys 101.” (You should not have to sign up for an account to access this information.)
Scroll through the tutorial on survey design, paying special attention to the section on “How to Design a Survey.”
Then create one question you would ask UMUC students about this class for the purposes of improving the course, or measuring student satisfaction. The question type can be multiple choice, comment/essay, rating scale—your choice based on the objective of the question.
Give a few brief comments as to why you felt this question was an important measurement of customer satisfaction and why you chose the particular question format.
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