Modified Rebuy
This article covers meaning, importance & example of Modified Rebuy from marketing perspective.
What is Modified Rebuy?
Modified Rebuy is a buying situation in which an individual or organization purchase goods that have been purchased previously but changes either the supplier or some other elements of the previous order. In this the buyer wants to modify product specifications, terms, prices etc. The suppliers in this rebuy situation are mostly part of an approved supplier list which can provide the same product or material as per the requirement.
Importance of Modified Rebuy
Modified Rebuy helps the business in saving a lot of time. Business maintain lists of such materials and products which can be bought again from the same supplier or another supplier from an approved list which is already onboarded and knows the requirement well. In addition to time savings, modified rebuy also keeps the product quality high and relevant.
It differs from the straight rebuy situation in which the product or material is bought without any changes from the same supplier. In this case the “in supplier” has to protect his account whereas the “out supplier” sees it as a better offer and gain some business. A modified rebuy is less critical and consumes less time. A new product introduction from the earlier version always creates a modified rebuy situation.
For any individual or company, there are three types of buying situations, which can be explained below.
- New Purchase: When a company wants to find a new vendor or wants to buy new set of goods, it is a new purchase. This is the most elaborate & time consuming process where a company has to identify a new vendor, check product quality, negotiate pricing, decide on volume, plan for delivery etc.
- Straight rebuy: This is a simple process where a repeat of the past order of goods is done again.
- Modified rebuy: In this process, a company or individual can ask to slight modifications to quality, quantity, schedule etc. to the earlier purchases.
Example of Modified Rebuy
The best example for this is 3M. This helps them to always stay ahead in the competition. Another example can be of an automobile company which may prefer to use an updated version of bearings. For this it will see different suppliers and thus will get many options to choose from and select the best bid.
Hence, this concludes the definition of Modified Rebuy along with its overview.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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