Business Buying Situations

Started by TechShristi, December 13, 2013, 06:30:31 am

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Business Buying Situations

Business buyers in companies, institutions, and government organizations face many decisions in the course of making a purchase. The number of decisions depends on the type of buying situation. Robinson and others distinguish three types of buying situations:

  •   Straight re buy

  •   Modified re buy

  •   New task.

  • Straight re buy: The straight re buy is a buying situation in which the purchasing department reorders on a routine basis (e.g., office supplies, bulk chemicals). The buyer chooses from suppliers on an "approved list." These suppliers make an effort to maintain product and service quality. They often propose automatic reordering systems to help purchasing agents save time. The "out-suppliers" attempt to offer something new or to exploit dissatisfaction with a current supplier. Out-suppliers try to get a small order and then enlarge their purchase share over time.

  • Modified re buy: The modified rebuy is a situation in which the buyer wants to modify product specifications, prices, delivery requirements, or other terms. The modified rebuy usually involves additional decision participants on both sides. The insuppliers become nervous and have to protect the account; the out-suppliers see an opportunity to gain some business.

  • New task: The new task is a buying situation in which a purchaser buys a product or service for the first time (e.g., office building, new security system). The greater the cost or risk, the larger the number of decision participants and the greater their information gathering--and therefore the longer the time to decision completion.


Mr. Patel

Thank you for the good article

Example of Modified rebuy is 3M company.3M company generally used modified re buy suitation.
Further if we want to have detailed example then it will be like this:

A automobile company may planning to use upgrade version of the bearing. In this case unlike the previous bearing, this time it modified the requirement and call for the various bids from the supplier to select the best options.

So when  a new latest upgraded version of product is introduce it is modified rebuy.

Like J& J introduce waterproof plaster pad or Software making company allow to upgrade the software with there latest updates.

The best example would be of the 'Antivirus' software, this company use modified re buy situtation by providing the options to replace the old version with upgraded version

Have a nice day  :)

Mr. Patel

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