Buy-Grid Model

Buy-Grid Model: A Comprehensive Guide

Introduction

The buy-grid model is a foundational concept in business marketing, depicting rational organizational decision-making. It helps business marketers understand and anticipate the steps businesses take when making purchase decisions. This article delves into the components of the buy-grid model, its phases, and classes, providing insights into how businesses make purchasing decisions.

What is the Buy-Grid Model?

The buy-grid model consists of two main components: buy phase and buy class. These components represent the sequential steps and types of buying situations businesses encounter when making purchasing decisions.

Buy Phase

The buy phase includes eight logical steps businesses follow when making purchasing decisions. These steps help businesses identify their needs, evaluate options, and select suppliers:

1. Need Recognition: Identifying a problem or need that requires a purchase.
2. Definition of Product Type Needed: Specifying the type of product or service required.
3. Development of Detailed Specifications: Outlining the technical and functional specifications of the needed product.
4. Search for Qualified Suppliers: Identifying potential suppliers who can meet the specifications.
5. Acquisition and Analysis of Proposals: Collecting and evaluating proposals from qualified suppliers.
6. Evaluation of Proposals and Selection of a Supplier: Comparing proposals and selecting the most suitable supplier.
7. Selection of an Order Procedure: Deciding on the ordering process and terms.
8. Evaluation of Product Performance: Assessing the product's performance after purchase to ensure it meets the specified requirements.

Business marketers must recognize that at each step in the buying process, different organizational groups may be involved, and the needs of business buyers vary. By understanding the specific needs at each stage, marketers can provide the necessary information and support, increasing their chances of being selected.

Buy Class

The buy class categorizes buying decisions into three types: new buys, straight rebuys, and modified rebuys. Each type involves a different number of steps from the buy phase.

1. New Buys: These are purchases of products or services that a company has never used before. The complete buying process is typically used, involving all eight steps.
2. Straight Rebuys: These involve reordering products or services without modifications. Only need recognition and reordering steps are used. For marketers, being listed as an approved vendor is crucial. Reminder advertising, relationship-building activities, and personal selling help maintain this status.
3. Modified Rebuys: These occur when a buyer is willing to consider alternative suppliers or make changes to the order. The buyer may go through some or all of the purchasing steps. Marketers use comparison advertising and demonstrations to influence buyers in modified rebuy situations. Incumbent firms leverage relationships, special offers, and quick responses to customer needs to retain their preferred status.

Application of the Buy-Grid Model

Many organizations, including government agencies, have formal purchasing procedures that incorporate the buy-grid model. Programs targeting small and minority-owned businesses and bid solicitation requirements often follow a defined procedure based on this model.

Importance for Business Marketers

Understanding the buy-grid model is essential for business marketers as it helps them tailor their marketing strategies to align with the purchasing process. By becoming involved early in the decision-making process and providing relevant information at each stage, marketers can increase their chances of being considered in the final selection.

Strategies for Different Buy Classes

• New Buys: Emphasize the comprehensive benefits and unique features of the product or service. Provide detailed information and support to guide buyers through the entire process.
• Straight Rebuys: Focus on maintaining relationships and ensuring customer satisfaction. Use reminder advertising and personal selling to keep the product top-of-mind.
• Modified Rebuys: Highlight the advantages of your product compared to alternatives. Offer demonstrations and special deals to sway buyers considering other options.

Conclusion

The buy-grid model is a powerful tool for understanding and influencing organizational purchasing decisions. By recognizing the distinct steps and types of buying situations, business marketers can develop targeted strategies to meet the needs of their clients, enhance their chances of selection, and build long-term relationships. Understanding this model is crucial for effectively navigating the complexities of business-to-business marketing.

Further Reading

For more in-depth knowledge, consider exploring the following resources:

• Dwyer, F. Robert, and John F. Tanner, Jr. Business Marketing. 4th ed. Boston: Irwin McGraw-Hill, 2008.