What is an example of a straight rebuy?

In case of the corporate world, the relationship between supplier and companies is similar to a relationship between food and water just like food and water complements each other when it comes to survival of human being in the same way supplier and companies’ complements each other for the survival of business of the companies. Companies usually do not buy goods from suppliers for one time rather they keep reordering goods from suppliers, companies can reorder goods from suppliers in two ways while one method of reordering goods from suppliers is called straight rebuy and other method is called modified rebuy. In order to understand more about both the terms better one should know the difference between straight rebuy and modified rebuy –

Straight Rebuy Vs Modified Rebuy

Meaning

Straight rebuy is very simple to understand because under this type of order the company only reorders the previous order from the supplier without making any modification to the previous order while modified rebuy is slightly complex because under this type of order company modifies the previous order and that modification can be in terms of price or quality, terms of order, payment terms and so on.

Example

In real life when you go to eat pizza at same restaurant and order every time margarita pizza than it is a case of straight rebuy whereas if you order Sicilian pizza or order cheeseburger with margarita pizza than this is a case of a modified rebuy. In case of corporate world suppose a furniture shop owner orders 10 piece of oak wood every month from wood supplier at $1000 per piece than it is an example of straight rebuy while if the furniture shop owner asks the wood supplier to give 5 pieces of oak wood and 5 pieces of maple wood or asks the supplier to reduce the price from $1000 to $950 per piece than this modification in product type and product price is an example of modified rebuy.

Time Period for Completion of Order

In case of straight rebuy company can expect supply from suppliers on time as everything is known to a supplier and he or she can plan the production accordingly while in case of modified rebuy since product specifications are changed the supplier has to modify the order which can be time-consuming and can result in the delay of the order.

Expensive and Time Consuming

In case of straight rebuy, a company has to do nothing but place an order to the supplier which can be done by anyone from the company whereas in case of modified rebuy since product specifications are changed it requires both time as well as budget on the part of the company. In simple words, if you are in urgent need for products than straight rebuy is the only solution as completion of modified rebuy order will take its own time.

Confusion or Misunderstanding

In case of straight rebuy, there is no scope of confusion as supplier knows what to supply because of previous experience in supplying goods to the company whereas in case of modified rebuy chances of confusion are there which may lead to an incorrect or wrong supply of goods to the company by the supplier.

As one can see from the above differences that while both modified and straight rebuy involves reordering goods from the suppliers but that does not mean that they two are same as both have different use and reasons due to which they are used by companies for reordering of goods from the suppliers.

• time required.In a straight rebuy, the suppliers make an effort to maintain product and service quality andautomate reordering systems to save time. For a supplier to break into this system andcapture more market, he has to offer something new or exploit dissatisfaction with acurrent supplier. He can get a small order and then enlarge their purchase share over time.Example: an example for straight rebuy would be the purchase of office supplies or bulkchemicals. The order quantity and specifications are routine, and the purchase is madefrom the same competent supplier at regular intervals, without any decision makingprocess.Modified RebuyModified Rebuy is a buying situation in which an individual or organization purchase goodsthat have been purchased previously but changes either the supplier or some otherelements of the previous order. In this the buyer wants to modify product specifications,terms, prices, suppliers.Read NextModified DurationStraight RebuyIn this case the “in supplier” has to protect his account whereas the “out supplier” sees it asa better offer and gain some business. A modified rebuy is less critical and consumes lesstime. A new product introduction from the earlier version always creates a modified rebuysituation.The best example for this is3M. This helps them to always stay ahead in the competition.Example: -An automobile company may prefer to use an updated version of bearings. Forthis it will see different suppliers and thus will get many options to choose from and selectthe best bid.Consumer behaviour is the study of individuals, groups, or organizations and the processesthey use to choose, expend, and dispose of products, services, experiences, or ideas tosatisfy their needs and the impacts that these processes have on the consumer and society(Noel, 2009). Consumer behaviour mixes elements from psychology, sociology, socialanthropology and economics and it also intends to understand the buyer decision makingprocess, both in individual and in groups (Noel, 2009). There are various elements which caninfluence consumer behaviour, recent research implies that it may vary depending on thebuying situation. This essay is going to define the main types of buying situations, outlinethe characteristics of them and explain factors which are likely to impact customerinvolvement in each situation.In general, there are three major types of buying situations (BE, 2005).

What is a straight rebuy decision?

What are the 3 types of buying situations?

What is a straight rebuy situation or a modified rebuy situation?

What is a modified rebuy?