Q. Illustrate about buying situations?

There is a requirement to discuss the three types of buying situations before they can be applied to the buying centre and the different stages involved in the organisational buying process.

The first type of buying situation is the 'new buy' situation in which a company buys a product for the first time and doesn't have any experience with the vendors or the product it is attempting to buy. This situation is extremely important especially for a project situation in which consultative selling efforts are involved. A company effort to market an ERP package to an organisation has to acquire the precise customised requirements of the buying organisation before formulating a solution. For example lifts for a commercial complex can be classified under a new buy situation.

The second kind of buying situation is a 'straight re-buy' situation in which a buying organisation records or else repeats the previous order without changes hospital consumables and office stationery may be instances. In these circumstances the organisation which is currently the supplier the 'in-supplier' will have to make sure that it is able to sustain its offerings and service so that competitors don't enter the scene. These competitors are 'out-suppliers' who would similar to enter the buying organisation.

The third type of situation is the 'modified re-buy' situation in which the buying organisation brings in changes in its requirements. An automobile company may favour to use an updated version of bearings. A company working on updating its contributions can create a modified re-buy situation by working with the influences of the buying centre in the organisation. Company marketing x-ray equipment is able to introduce an updated offering for the replacement market -- hospitals which had procured the earlier version.

In such equipment fresh product introductions always create a modified re-buy situation as well as hence a company should introduce new products to stay ahead of the competition.

Still in consumables there is scope to create a modified re-buy situation with new products self-stick pads from 3M as well as waterproof medicated plasters from Johnson and Johnson are examples. A modified re-buy situation can as well be created through services such as the consultative sales efforts discussed earlier or through better product delivery promises.