THE BUYGRID MODEL

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THE BUYGRID MODEL

This model was conceptualized to identify critical decision phases, the information needs of purchasing organizations and the various criteria buyers consider when making purchase decision. It incorporates three types of buying situations 1. New Task, 2. Straight Rebuy, 3. Modified Rebuy and eight phases in buying decision process.

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A Buygrid Analytic Framework for Industrial Buying Situations New Task Straight Modified
Rebuy 1. Anticipation or Recognition of problem(Need). 2. Determination of Characteristics and quantity of needed item. 3. Description of Characteristics and quantity of needed item. 4. Search for and qualification of potential sources. 5. Acquisition and analysis of proposals. 6. Evaluation of proposals and selection of suppliers. 7. Selection of an order routine. 8. Performance feedback and evaluation. 5/17/12 Rebuy

Buying Situations
New Task: In this situation the problem or need is considerably different from past experiences. Problem recognition may be triggered by internal or external factors. Here, decision makers and influencers enter into extensive problem solving activity. They obtain a variety of information to explore alternative 5/17/12 solutions adequately before a purchase

Buying Situations
Modified Rebuy: This situation occurs when organizational decision makers feel that significant benefits such as quality improvements or cost reduction may be derived from reevaluating alternatives. Reevaluation of supply alternatives may be triggered by internal and/or external forces. This situation occurs when firm is 5/17/12 displeased with the performance of

Buying Situations
Straight Rebuy: Most common buying situatuion in Industrial purchasing. Purchases are continuing or recurring, routine response is normal buying pattern. Prompt delivery, consistent quality, reasonably competitive price influence Straight Rebuy.
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Phases in Purchasing Decision Process

Phase 1. Anticipation or Recognition of a Problem (Need).
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It originates within the buying organization, when products become outmoded, equipment breaks down or existing materials are unsatisfactory in quality or availability. It may also originate outside the buying organization with a marketer who recognises opportunities for potential performance improvement.

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Phases in Purchasing Decision Process

Phase 2. Determination of the Charecteristics and Quality of Needed Item.
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Organizational members determine specifically how the situation may be resolved, problems & solutions are narrowed & precisely analyzed. The narrowing of problem and alternatives is a task internal to User department. Critical decisions & information needs at this phase lie chiefly within the user department.

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Phases in Purchasing Decision Process

Phase 3. Description of the Characteristics and Quantity of the item needed item.
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Buying influences may change from department heads to engineering and manufacturing personnel. In this phase buying influencers also begin to look outside the firm for suppliers & product information and for assistance in developing product specifications.

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Phases in Purchasing Decision Process

Phase 4. Search for and Qualification of Potential Sources.
Buying organization begins to search for all sources of supply, leading to qualification of suppliers. n Qualifications sought vary with the type of buying organization, specific buying situation & buying influencers. n End result of this phase is that decision makers have determined which suppliers will be considered as potential vendors. 5/17/12
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Phases in Purchasing Decision Process

Phase 5. Acquisition and Analysis of Proposals.
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Qualified suppliers are requested for proposals. Extensive information is required. A great deal of time is given to analyzing proposals and comparing products, services & costs. This phase is considered as distinct component of purchasing process.

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Phases in Purchasing Decision Process

Phase 6. Evaluation of Proposals and Selection of Suppliers.
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Various proposals of competing suppliers are weighed and analyzed. Make or buy Further negotiations may continue with selected suppliers on terms, prices, deliveries or other aspects of suppliers proposals.

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Phases in Purchasing Decision Process

Phase 7. Selection of an Order Routine.
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Order routines are established by forwarding purchase orders to vendors and status reports to using departments, by determining inventory levels needed over various time periods. The user department does not view its problems solved until the specified product has been received & is available for use.

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Phases in Purchasing Decision Process

Phase 8. Performance Feedback and Evaluation.
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The final phase in purchasing process. It consists of a formal or informal review and feedback regarding product performance as well as vendor performance.

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Overview of the Buygrid Model.

Analysis of the Decision making Process. n Creeping Commitment. Firm commitment to final solution and

more Specific (Creeping) with each phase. Center of Gravity. Various phases or combination of phases become more critical to final outcomes of purchase decisions.
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MARKETING IMPLICATIONS
Marketing strategy is greatly affected by both purchasing situation and decision phase of customer. The most important phases affecting marketing strategies are phase1 to phase 5 IN suppliers OUT suppliers

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NEW TASK
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Phase 1: Anticipate problem; use advertising and creative sales people to convince buyers of problem solving capabilities. Phase 2: provide technical assistance and information. Phase 3: Provide detailed product/service information to decision makers. 5/17/12

Phase 4: IN suppliers maintain dependability; OUT suppliers demonstrate ability to perform task. Phase 5: Understand details of customer problem/needs; make timely proposals.

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MODIFIED REBUY
Phase 1:IN supplier: maintain quality/service standard; OUT suppliers watch for developing trends. n Phase 2: IN and OUT suppliers stress capability, reliability, and problem solving capabilities n Phase 3: same as phase 2.
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Phase 4: IN suppliers watch for problems OUT suppliers demonstrate ability to perform task. n Phase 5: Understand details of customer problem/needs; make timely proposals.
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STRAIGHT REBUY
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Phase 1: IN suppliers maintain close relationship with users and buyers; OUT suppliers convince firm to reexamine alternatives. Phase 2 : same as phase 1. Phase3 : same as phase 1. Phase4 : same as phase 1. Phase 5: make timely proposals.

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THANK YOU

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