Business Buyers: New Buy, Modified Rebuy, Straight Rebuy
- 0:08 Business Buying
- 0:27 Business Buying Centers
- 1:07 Buying Situations
- 2:57 Lesson Summary
A business-to-business sales situation has numerous key differences from a business-to-consumer situation. Marketing managers must understand how a basic buying center works and the different types of rebuy situations.
Marketing managers have to deal with a different buying situation when they sell directly to businesses. The buying center of a business can complicate how a sale occurs. The marketing manager will also have to deal with three different types of rebuys - new buy, modified rebuy and straight rebuy.
Business Buying Centers
A buying center consists of everyone in an organization who is part of the overall business purchase decision. Depending on the company, many different types of business positions are included as part of the buying center. Sometimes the marketing and engineering departments are the biggest influencers of buying decisions, and other times it might be product managers.
For example, Charter Fishing Company sells fresh-caught seafood to area business restaurants. Their sales team must convince restaurants, hotels and catering companies to purchase their seafood. In this instance, the buying center might consist of the owner, chef and marketing manager.
Not all buying situations are first-time occurrences. There are actually three types of buying situations that can occur:
A new buy is a situation requiring the purchase of a product for the very first time. In this type of buying situation, it is important for the business seller to provide a competitive argument to use their product line and a ton of information to help the business owner make an educated decision. A new buy situation can take longer to occur since research, analysis and more buying center participants are needed to make a final decision.
A straight rebuy is when the purchaser reorders the same products without looking for information or considering other suppliers. The Charter Fishing Company has many restaurants that have standing monthly orders for fish due to their happiness with the fish product line. A straight rebuy is usually an automated purchase where the vendor has a standing order for a set amount of product per week or month. Straight rebuys are what the supplier can use to predict inventory levels since they occur in an easy pattern to track.
There is also a third buying situation called a modified rebuy. This is a situation where the purchaser makes some changes in the order, and it could require some additional analysis or research. For example, the Charter Fishing Company is now offering crabs to area restaurants. Most restaurant owners need to decide if they want the new product. Their decision process may include researching the quality of the crabs and debating the benefits in having them in their restaurants. In this buying situation, the Charter Fish Company might even need to provide additional sales information, pricing and product recommendations to help the restaurant make a final rebuy decision.
Business-to-business sales are different than selling to consumers for the marketing manager. Marketing managers must develop a business-to-business selling strategy, which includes being aware of how a buying center, which is everyone in an organization who is part of the overall business purchase decision, is an important part of the sales exchange.
Once a decision is made, the purchase can be a:
- New buy: a situation requiring the purchase of a product for the very first time
- Modified rebuy: situation where the purchaser makes some changes in the order, and it could require some additional analysis or research
- Straight rebuy: where the purchaser reorders the same products without looking for information or considering other suppliers
Chapters in Business 102: Principles of Marketing
People are saying…
"This just saved me about $2,000 and 1 year of my life." — Student
"I learned in 20 minutes what it took 3 months to learn in class." — Student