Topics: Automobile, Fleet, Purchasing Pages: 3 (849 words) Published: February 6, 2011
Using the auto industry as an example, demonstrate the concept of derived demand. How might derived demand affect the industry in the following product categories: a) steel, b) CD players, c)safety air bags, d) on-star roadside assistance service, and e) customized chrome wheels? What consumer trends would affect these products and their demand by the auto industry? a) steel is not really affected by derived demand because its like one the major parts of a car. Every car companies would buy this product. b) CD players are slightly affected by derived demand. Especially when there are significant differences in different players. c) safety air bags would be in demand when there are increasing number of accidents on the road. d) on-star roadside assistance greatly depends on the income of consumer. e) customized chrome wheels are greatly influenced by derived demand. Consumers at around 25 years old would want these but as they grow old, they would prefer the simpler ones.

The derived demand of all these products would be affected if the demand for cars would also be affected.

2.Which of the major types of buying situation is represented by each of the following: a) Chrystler’s purchase of computers that go into cars and adjust the engine performance to changing driving conditions b) Volkswagen’s purchase of spark plugs for its line of minivans, and c) Honda’s purchase of lightbulbs for its new Acura model?

A) the Chrystler’s purchase of computers that go into cars and adjust the engine performance to changing driving conditions is characterized by new task. It is a buying situation in which the buyer purchases a product or a service for the first time. In such cases, the greater the cost or risk, the larger the number of decision participants ad the greater their efforts to collect information will be. The new task situation is the marketer’s greatest opportunity and challenge. The marketer not only...
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