Buy Grid Framework

Background

The Buy Grid Framework is a model developed by three professors, Patrick J. Robinson, Charles W. Faris and Yoram Wind in 1967.

The Buy Grid model is a framework that describes the organizational buying process and the decision stages involved in different types of purchases.

The Buy Grid model covers the purchase decision process at B2B, also called industrial buying –the sale and purchase of goods and services between companies.

About the model

The Buy Grid model contains eight buying phases.

There are also three categories of buying situations.

These three categories of buying situations are New tasks, Modified Rebuy And straight Rebuy.

New tasks involve buying goods and services the company has never previously bought.

Modified Rebuy of goods and services occurs when members of the organization are not satisfied with the product previously purchased or there have been changes to circumstances which impact the buying decision.

A Straight rebuy occurs when the company purchases a standard product or service the organization has bought many times before.

The eight buying phases for each buying situation.

The first phase is problem recognition. Here, the company's buyers recognize a need that can be satisfied by buying a product or a service.

All three buying situations – new task, modified rebuy and straight rebuy – go through the problem recognition phase.

Step two in the buying phase is the determination of characteristics and quantity of products or services needed. In this phase, a description of the product or service's requirements must be prepared.

When making a new purchase – a new task- a thorough description of the requirements you set for the purchase is essential.

In the case of a modified rebuy, this step may be necessary depending on how much the circumstances of the requirement for the product or service have changed.

In the case of straight rebuy, it is uncomplicated because you buy as usual, so specification of requirements is unnecessary.

Buying phase three - product specification – is where the specification of the product or service is determined. In this phase, a systematic product analysis, a cost analysis and other analyses of the product or service, identified in phase two, are carried out.  

For all three buying situations– new task, modified rebuy and straight rebuy – it is necessary to determine the quantity and requirements of the specific product or service.

In phase four – the search for potential suppliers and preliminary evaluation of their suitability - the buyer and his team look at which supplier should be choosen. This means finding the supplier who can deliver the product you specified in phase three.

When considering a purchase decision for a brand new task, finding the right supplier is a crucial phase.

This may be different if the purchase is a modified rebuy:  if the product is almost identical to the previous purchase, a search for a new supplier is not necessary, but if there are extensive changes, it will be necessary to search for a new supplier that meets the new requirements. in case of a straight rebuy the purchase can be made from the same supplier as usual. 

The fifth phase - acquisition and initial analysis of proposals (samples) from suppliers - is about obtaining and analyzing offers.

When the purchase is a New task, very detailed specifications must be prepared for potential suppliers and a preliminary analyseis of proposals and samples from potential suppliers undertaken, as this purchase is new to all participants.

In the case of a modified rebuy, it is only meaningful if there have been changes to the product – otherwise, it is not.

For a straight rebuy situation, you use the same supplier as you usually do, which makes an acquisition of proposals irrelevant.

Phase six – evaluation of proposals and selection of suppliers – in this phase, the company's buyers look thoroughly at the proposals made by the suppliers.

Again we need to consider the three different purchase situations when it comes to this sixth phase, the evaluation and negotiation of proposals.

For new purchases, evaluation of proposals is an essential step before the supplier is selected.

In the case of a modified rebuy, if the change in the service or the product is significant, there will be an assessment; otherwise, it will not be.

For straight rebuy situations, it is not relevant.

In buying phase seven, we have to consider the process to select an order. Practical considerations such as delivery time, place, and possibly transport modes are agreed upon here.

When specifying orders for all three types of purchase situations, it is crucial to agree on the place, time, and mode of transport in the contract.

The last phase, eight, is the evaluation phase - performance, review, feedback, and evaluation - where the delivery is checked to ensure the correct service orproduct has been delivered, at the right quantity, the right quality, and the correct price.

Evaluation is in the 8th and final phase in all three buying situations.

Critique of the model 

The model may be criticized when considering a modified rebut as there are no guidelines; when is it modified when is it not modified, and when does it turn into a straight rebuy? 

It is an individual consideration.

It is a good and straightforward model for working with the purchase decision process at a B2B level, where companies trade with one another.