A straight rebuy is a buying situation where a company reorders the same products in the same quantity from the same supplier. In this purchasing situation, buyers are likely to skip researching suppliers and products since they have previously ordered from this specific vendor.
What is the difference between a straight rebuy and a modified rebuy?
Purchasing situations vary and can change when the market changes. Let’s break them down into three types:
- new buy;
- straight rebuy;
- modified rebuy.
New buy
A new buy, also called a new task, is a buying situation in which a company places an order with a supplier for the first time. This purchasing type takes longer since you need to conduct in-depth research and analysis on products from various suppliers to make the right decision.
Straight rebuy
This means that an individual or a company only needs to reorder from the same vendor without changing any of its elements. In this buying situation, a company expects the order to be on time since the supplier already knows the details and can plan production. There shouldn’t be any confusion or misunderstandings between a supplier and the company that orders products because of their previous collaboration.
To keep loyal customers, suppliers should maintain product and service quality and automate their reordering systems to save clients’ time. Additionally, they can offer new products and services to capture more markets. Manufacturers prefer this buying situation because the client doesn’t consider alternative suppliers to buy from. As a result, they have a stable constant revenue stream.
Modified rebuy
This means that a company wants to reorder but needs to modify some elements of their previous orders. The change can be in terms of the supplier, delivery time, packaging, price, quality, or quantity. This modification can result in delayed order delivery because the supplier has to change it. Sometimes it can be time-consuming. In some cases, a modified rebuy can cause the wrong supply of goods to the clients. Also, it can require research to find a good supplier or to make changes to an order.
As you can see, these purchasing types have several differences and are used in different situations between your company and a supplier during the reordering process. Now that you know the difference, let’s walk you through the examples.
- Dunkin' Donuts and Blue Diamond Growers
- Starbucks
- Boeing and King Aerospace Aircraft Support Services
Here you can find several examples of a straight rebuy to see the process in action.
Dunkin' Donuts and Blue Diamond Growers
In 2014, the multinational coffee and donut company introduced almond milk at most of its restaurants. This is a plant-based alternative for vegans or people who don’t consume dairy products. So the brand needed a regular supplier of milk for their new product. Blue Diamond Growers has supplied almond milk to Dunkin’ Donuts since 2014 when its product was first introduced to guests of the famous donut brand.
Starbucks
This corporation is known worldwide as the largest coffeehouse chain. The brand entered Southeast Asia a long time ago, and today it sources a great amount of arabica coffee beans from Indonesia (Sumatra), the Philippines, Thailand, and Vietnam, Latin America, etc. So, it has regular suppliers located in the United States, Singapore, Hong Kong, Mexico, Indonesia, India, etc.
Boeing and King Aerospace Aircraft Support Services
In 2019, Boeing, the manufacturer of airplanes mentioned King Aerospace among 10 companies-suppliers of the year that create and supply high-quality products, services, and value for Boeing and its clients. The company expressed gratitude for collaboration that aimed at innovation, process, or product improvement.
Companies can find themselves in different types of buying situations based on the products they want to buy, the information they have, timeframe, etc. A straight rebuy is the most simple buying situation as a company purchases from an approved supplier. The examples above demonstrate this type of purchase in action.
Last Updated: 21.01.2021
1. When purchasing a high speed packaging machine, Nestlé would be classified as:
- an original equipment manufacturer.
- a user.
- a distributor.
- a dealer.
- an institutional buyer.
2. When Tata Steel notices a drop in the demand for steel as a result of a decline in ultimate consumer demand for automobiles, this illustrates the concept of:
- derived demand.
- connector demand.
- linked demand.
- reflection demand.
- evoked demand.
Answer:
a. derived demand.
3. Which of the following would be classified as entering goods?
- operating supplies
- maintenance and repair items
- component materials
- both (a) and (c)
- none of the above
Answer:
d. both (a) and (c)
4. Douglas Jackson is a salesperson for Quality Surgical Products. To achieve success in selling medical supplies, Doug may have to:
- satisfy the requirements of the hospital administrator.
- meet the requirements and specifications of the professional staff (doctors and nurses).
- satisfy the requirements of the purchasing manager.
- all of the above.
- (a) and (c) only.
Answer:
d. all of the above.
5. The NAICS is:
- a standard industrial classification system.
- the North American equivalent of NACE.
- used for segmenting B2B markets.
- all of the above.
Answer:
d. all of the above.
6. Organizational buyers do not have well-defined criteria that can be applied to the procurement
problem in:
- modified rebuy situations.
- new task buying situations.
- straight rebuy situations.
- purchasing expensive accessory equipment.
Answer:
b. new task buying situations.
7. Strategies that would be appropriate for an “out” supplier to follow when confronting a modified rebuy situation include:
- offering performance guarantees.
- encouraging the organization to sample the firm’s offering.
- defining and responding to the organization’s problem with the existing supplier.
- all of the above.
- (b) and (c) only.
Answer:
d. all of the above.
8. Sales forces that frequently encounter this type of buying situation provide the following sketch:
“The buying center is large, slow to decide, uncertain about its needs and the appropriateness of the
possible solutions, more concerned about finding a good solution than getting a low price, more
influenced by technical personnel, less influenced by purchasing
agents.” This describes a:
- capital equipment purchase.
- new task.
- straight rebuy.
- modified rebuy.
- none of the above
9. Within the buying centre, individuals who actually make the organizational buying decision, whether or
not they have formal authority to do so, are performing the role of:
a user.
a gatekeeper.
an influencer.
a decider.
a buyer
10. A common identifiable element in buying centres in all sectors of the industrial market is:
- the chief executive officer.
- the accounting function.
- the purchasing function.
- the production function.
- the engineering function.
Answer:
c. the purchasing function.
11. Transactional exchange features very close:
- information linkages.
- social linkages.
- operational linkages.
- all of the above.
- none of the above.
Answer:
e. none of the above.
12. Ongoing transactions in the business market where the customer and the supplier focus only on
the timely exchange of standard products at competitive prices could be described as:
- transactional exchange.
- a partnership.
- collaborative exchange.
- a strategic alliance.
- a joint venture.
Answer:
a. transactional exchange.
13. Buying firms prefer a more collaborative relationship when:
- the purchase is deemed strategically important to the buying organization.
- the market is dynamic.
- there are few alternatives.
- all of the above.
- (a) and (c) only.
Answer:
d. all of the above.
14. Which of the following statements concerning business market segmentation is (are) true?
- The decision to enter a particular market segment carries with it significant long-term resource commitments for the industrial firm.
- In evaluating alternative bases for segmentation, the marketer is attempting to identify good predictors of differences in buyer behaviour.
- Segmentation decisions can be reversed more easily in the business market than in the consumer market.
- All of the above
- (a) and (b) only.
Answer:
e. (a) and (b) only.
15. NACE is an acronym for:
- National Association of Chimney Engineers.
- National Association of Colleges and Employers.
- Nomenclature générale des activités Économiques dans les Communautés européennes.
- National Association of Catering Executives.
- All of the above.
Answer:
e. All of the above.
16. Which of the following is NOT a method of differentiating B2B marketing from B2C marketing?
- market structure
- derived demand
- buying behaviour
- demand concentration
- product type
17. A particular industrial customer might be properly classified as a user by somebusiness marketers
and an original equipment manufacturer by other business marketers.
- True
- False
18. A purchasing manager could assume the roles of buyer, gatekeeper, and influencerin the buying centre.
- True
- False
19. The marketing task appropriate for the straight rebuy situation depends on whether the marketer is
an “in” or an “out” supplier.
- True
- False
20. Buying firms prefer a transactional relationship when there are few alternatives and the complexity of purchase is high.
- True
- False