Example
A new purchase or repurchase in the producer market can be illustrated in
terms of a company wanting to replace their warehouse door.

1) Problem identification
The company identifies its problem: We need a warehouse door, or: Our
main warehouse door is defective. Will the budget allow a purchase?

2) Determination of requirement characteristics
The company defines its requirement: Should the door be manually
operated? Or should it be automatically activated by photocells?

3) Product specifications
The company determines the type of door needed: Size? Metal or another
material?

4) Tracking down potential suppliers
The company checks their supplier file: Where did we get the existing
door? Or: Who supplies warehouse doors?

5) Making analysis and obtaining quotations
The company may ask you and other potential suppliers to come and take
measurements for the door. The company requests a quotation for the
delivery of the door, and may also ask you to state references.

6) Evaluation and negotiation of quotation and choice of supplier
The company compares the quotations received: Which one is the
cheaper? The expensive? Will we get value for money? Advantages and
disadvantages? Any guarantee that you or another supplier will be able to
carry out the task proficiently?

7) Placing an order
The company chooses a supplier and rejects those not chosen.

8) Check ups on supplier and delivery
The company follows up on its order: Will you be able to deliver the door on
time? The company tests whether the door functions according to their
order.

A similar process would be applied if the company were to commission a
large translation project, a company progress report, or implementation of a
new accounting system.

Of course if the manager is your uncle you might not have to go through all
these steps.



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