“Research is creating new knowledge.”
Gathering Market Information Through RFI
Regardless of the industry your business is in or which products or services you purchase, it is very important for you to conduct a quality market research before starting the procurement process. Supply and demand are constantly changing, and adapting your business to the market is the key to achieving competitiveness. Every successful company that cares about its customers and associates wants to provide the best. To make this possible, it’s essential to cooperate with reliable suppliers.
One way of conducting the market research is to send RFIs (Request for Information) to your suppliers. From the very name, it’s clear that RFI serves to gather information in order to simplify decision-making on further steps before entering the negotiation process. RFI is a request sent to a wide range of potential suppliers with the aim of setting criteria, gathering information, preparing RFPs or RFQs, developing a strategy or building a database that will be useful in later negotiations. Some information collected this way is:
- Information about suppliers: their assortment, financial data, their attitudes, motivation…
- Real market situation
- Market dynamics
- Trends and factors that influence market change
- Alternative pricing strategies
- Competition among suppliers
- Volume and breadth of product / service offerings from suppliers
- Strategic focus, business and production plans of suppliers
Procurement can benefit from RFIs, in example, by getting detailed product specifications and pricing. The prices obtained in this type of research can later be used for comparative purposes in negotiations (though not as the basis for decision making). Analyzing RFI responses can give you guidelines for defining different strategic options, lower cost alternatives and cost reduction options.
Good preparation and market knowledge are the key to success of any procurement project. With Ensolva, simplify your information gathering and market research processes – create and send questionnaires to your suppliers in digital form and find out all the information you need to make your project successful.