Buying Situations in the Industrial Marketing

There are three common types of buying situations in industrial market, which are  discussed as  follows:

1. New Purchase

The industrial buyers buy the item for the first time in this situation. The need  for a new purchase may be due to internal or external factors. For example,  when a firm decides to diversify into new purchase situations the buyers have  limited knowledge and lack of previous experience. Therefore, they have to  obtain a variety of information about the product, the suppliers, the prices and so  on. The risks are more, decisions may take longer time, and more people are  involved in decision making in the new purchase decisions.

2. Change in Supplier

This situation occurs when the organisation is not satisfied with the performance  of the existing suppliers, or the need arises for cost reduction or quality  improvement. The change in supplier may also be necessary if technical people  in the buying organization ask for changes in the product specification, or  marketing department asks for redesigning the product to gain some competitive  advantage. As a result, search for information about alternative sources of  supply becomes necessary. Even though, certain attributes or factors can be  used to evaluate the suppliers. There may be uncertainty regarding the supplier  who can best meet the needs of the buying firm. Therefore, the modified  re-buy  situation occurs mostly when the buying firms are not satisfied with the  performance of the existing suppliers.

3. Repeat Purchase

If the buying organization requires certain products or services continuously and  products/services had been purchased in the past then the situation of repeat  purchase occurs. In such a situation, the buying organisation reorders/places  repeat orders with the suppliers who are currently supplying such items. This  means that the product, the price, the delivery period, and the payment terms  remain the same in the reorder, as per the original purchase order. This is a  routine decision with low risk and less information needs, taken by a junior  executive in the purchase department. Generally, the buying firms do not  change the existing suppliers if their performance is satisfactory.

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