Analyzing business markets - Stages in the buying process

5 important questions on Analyzing business markets - Stages in the buying process

What are the 8 buy-phases? Explain which stages are present in new task, modified and straight re-buy.

  1. Problem recognition
  2. General need description
  3. Product specification
  4. Supplier search
  5. Proposal solicitation
  6. Supplier selection
  7. Order-routine specification
  8. Performance review


  • New task: all of the above
  • Modified re-buy: product specification and performance review. The rest of the steps MAY BE involved.
  • Straight re-buy: only product specification and performance review, other steps are NOT involved.

Explain product value analysis (PVA).

PVA is an approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods without adversely impacting product performance.

How is the internet used in companies that purchase online?

  • Catalog sites
  • Vertical markets: searching for the best price among thousands of sellers.
  • Auction sites
  • Spot (or exchange) markets
  • Private exchanges
  • Barter markets: participants offer to trade goods or services.
  • Buying alliances
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What restrictive conditions can be handled when setting a lower price?

  • Limited quantities (op=op)
  • No refunds
  • No adjustments
  • No services

What is a blanket contract?

It establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time.

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