NAME : CHIEDZA PORTIA MOYO

PROGRAMME : MARKETING

MODULE : BUSINESS TO BUSINESS MARKETING

LECTURER : M. MHAKA

MODULE CODE : COMM2112

PART :2.1

QUESTION:

IDENTIFY AND DISCUSS THREE MAIN BUYING SITUATIONS THAT ARE

GENERALLY ASSOCIATED WITH ORGANISATIONAL BUYING ROUTINES.

QUESTION 2

INDUSTRIAL, MARKETERS HAVE AT LEAST FOUR STRATEGIC OPTIONS

AVAILABLE TO THEM IN MANAGING EXISTING INDUSTRIAL RELATIONSHIPS.
CONSIDER AND MATCH EACH STRATEGIC OPTION TO APPROPRIATE
BUSINESS CIRCUMSTANCES AND JUSTIFY YOUR ANSWER.
Buying situations refer to the circumstances surrounding a purchase that can be defined by the
value of information and understanding that the buyer has concerning the products and vendors
available, as well as the effort it will take to make the purchase decision. The three main buying
situations that are associated with organizational buying routines are: New task buying, straight
re buy and modified re buy.

New task buying

According to Rogers K, (2022) new task buying refers to the type of purchase that the
organization or firm makes for the first time. In this case the organization will have to reflect on
the options available to them, since it will be fairly a new product to the business. A new buy
could mean that the type of product has not yet been made by the business or rather the company
in general. It can also mean that the personnel involved in the purchase, or the buying center
have not made thus type of procurement before.

In this type of buying situation it is important for the prospect supplier or seller to provide a
competitive argument to use their product line and loads of information to help the prospect
buyers or the business owners to make an informed decision on whether to buy the product or
not. New buys usually take longer because information research has to be done. More people in
the buying center have to be involved in the decision making. For example in the purchasing of a
new software system, the marketing department will have their own inputs on the product and
the finance department might think the product is overpriced while the IT department might
think the product is needed as the organization has to move with time. So this explains that
decision making will take a long time because of the conflict in the three departments.

Straight Re-Buy

A straight re-buy is when the procurement team reorders the same products without any
information research being done, or even considering other suppliers like in the case of when
they are making a new buy. For example Hawk Flight construction is content with the bricks
they bought from MacDonald’s Bricks, they will order or buy their bricks from MacDonald’s
again and that will be a straight re-buy. It is done when the procurement team is happy or
satisfied with the product line. A straight re-buy is usually an automated procurement where the
seller has a standing order for a set amount of product per week or month. Straight re-buys are
usually what the supplier uses to foretell or estimate their stock levels since they occur in easily
traceable pattern. Decision making in a straight re-buy is usually based on the previsiously
negotiated contract.

Modified re-buy

According to Lombardo J (2022) modified re-buy refers to the type of purchase from the same
vendor or seller, which is generally the same product with slight altercations. A modified re-buy
is a type of buying situation that occurs when a business makes a purchase from the same
supplier but changes the order slightly. For example a business that typically orders Bricks from
a supplier might upgrade to higher quality bricks, that would be a modified re-buy. In a
modified re-buy significant information is required to make that procurement. It is also more
complicated but less sophisticated for examples when buying cars and computers. The company
is usually familiar with the product but with specific modifications to the product. The problem
or need will be totally different from the previous experience. Modified re-buy is more interested
in product specification, evaluation of costs and prices. The company may be dealing with a
known supplier and this could be part of a previously negotiated contract. Or even have the
desire to explore alternative suppliers for better value or quality. Modified re-buy involves more
evaluation and comparison of options as compared to a straight re-buy.

In conclusion, the three main buying situations associated with organizational buying routines
are new buying task, straight re-buy and modified re-buy. All three situations vary in terms of
participation of stake holders, level of evaluation required and its intricacy. Knowledge of these
three buying situations help organizations make more efficient their purchasing process and
make sound and informed buying purchasing decisions based on their specific needs under their
respective circumstances.
QUESTION 2

Industrial marketers have at least four strategic options available to them in managing
existing industrial relationships. Consider and match each strategic option to appropriate
business circumstances and justify your decision.

Industrial marketers have various strategic options at their disposal when it comes to managing
existing industrial relationships. These options can be matched to specific business
circumstances based on various factors such as the nature of the relationship, the industry
dynamics and company objectives. I will delve into the strategic options, and also provide
justifications for their applicability in different cases.

Relationship Innovation

Dieffenbacher S.F(2023) says improved innovation and investing on latest technology is also a
strategy, it involves introducing innovative approaches or technologies into the existing
industrial relationship to intensify growth and differentiation. It is appropriate where there is
intense competition rather than an oligopolistic market. It is applicable in a competitive market,
because there will be need to stay ahead of competitors and meet the ever evolving customer
demands. It also allows marketers to create significant propositions and establish themselves as
industry cream of the crop.

Relationship maintenance

This strategy involves the maintaining of existing industrial relationships without making
significant changes. It is fitting when the relationship is already strong, and both parties are
satisfied with the current arrangements. It also allows marketers to focus on the areas of their
business while ensuring that the existing relationship continues to thrive.

Horizontal intergration.

According to Pink D (2020), business can use horizontal integration as a strategy, this may be
used in circumstances where competition is growing and chances of losing their customers to
rivals increases hence they decide to merge or acquire competition as part of horizontal
integration. This way the two companies become a large invincible company that will probably
lead the market. This will also help to maintain the relationship of the business with its loyal
industrial suppliers as business may continue as usual.

Liquidation

Borad S (2022), says liquidation is the final strategic option in the company life cycle. Kenton
W(2023), says liquidation is the process of bringing the business to an end and distributing its
assets to claimants. It occurs when the company stops operating and decides to sell its assets. The
company arrives to such a decision when it becomes bankrupt or insolvent. However in some
case the business will be financially solvent, but the management won’t be having the will to go
on hence they come to the decision of liquidating the business.

Relationship termination

In some cases the termination of existing industrial relationship is necessary. This could be due
to failure to comply with the contractual agreements, declining profits or even strategic
realignment. Relationship termination should be considered as the last resort when all else has
failed or when all other possible options have been exhausted and the costs of continuing the
relationship outweigh the benefits.

Harvesting

Harvesting, refers to the practice of maximizing the value derived from these relationships while
minimizing further investment or resource allocation. It involves extracting the benefits and
returns from established partnerships, customers, suppliers, or other stakeholders without
actively seeking to expand the relationship. It is viable in circumstances where the focus shifts
from growth to consolidation and optimization. It is adopted when a company has reached a
mature stage in its life cycle. It is applicable where market saturation or declining growth rates
makes it less attractive to pursue aggressive expansion strategies. Instead, the organization aims
to leverage its existing industrial relationships to sustain profitability and maintain market share.
(McKinsey and Company).

Relationship Expansion

It involves deepening the broadness of the industrial relationship with the customer. This strategy
is fitting when there is a high level of mutual trust and benefit between the two parties. It allows
marketers to then leverage their knowledge of the customer’s needs and preferences to offer
additional products or services that compliment their current offerings. By expanding the
relationship marketers can increase customer loyalty, enhance revenue streams and gain
competitive advantage over rivals. It is particularly effectual when the customer has expressed
satisfaction with the current offerings and has shown a willingness to explore future
collaborations.

In conclusion, industrial marketers have a wide range of strategic options available to them in
managing existing industrial relationships. By cautiously considering these options and justifying
their use, marketers can effectively steer and optimize their existing relationships.
REFERENCES

Kristen Rodgers, Jennifer Lombardo (2022) Business courses New buy, straight buy, straight re
buys and modified re buys.

Stefan F Dieffenbacher (2023) Strategic options, techniques, tips and tools for business access

Mckinsey & Company www.mckinsey.com

Journal of marketing- www.journals.sagepub.com/home/jmk

Havard Business Review www.hrb.org

Sanjay Borad (2022) Finance Management

Business Horizons-www.journals.elsevier.com/businesss-horizon