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[14 minute read]

I had a question to answer that had no punctuation in it whatsoever. Clarification of the question would have taken at least a week, so I just went ahead and answered it. Obviously, this is not a question set by the Open University and certainly the answer I gave would fail at the first hurdle. But some courses do provide good mental exercise, so bash on.

At the time of purchasing explain “Different Approaches for Different Products and Terms and Conditions”

NOTE TO SELF -

Here we have:

At the time of purchasing, explain different approaches for different products, and at the time of purchasing, explain different approaches for terms and conditions

OR

At the time of purchasing, explain different approaches for different products, and at the time of purchasing, explain terms and conditions

OR

At the time of purchasing, explain different approaches for different products, and at the time of purchasing, explain different terms and conditions

Yet; since there are quote marks containing “Different Approaches for Different Products and Terms and Conditions” we must consider that there are different approaches for both different products and different approaches for terms and different approaches for conditions; because the sentence includes ‘products and terms and conditions’ without punctuation.

This, altogether, is known as ‘amphiboly’.

So, let us begin;

What is a product and how is it differentiated from another product?

What approaches can be made towards products?

What is a term and how can it be differentiated from another term?

What approaches can be made towards terms?

What is a condition and how can it be differentiated from another condition?

Finally, what approaches can be made towards conditions?

- END OF NOTE TO SELF

Products

Happily, we know what a product is. Raw instinct and empirical knowledge tells us that it is a tangible item that has been formulated either through natural means or through a deliberate process to change one thing into another. In both cases, this could be by way of chemical or biological changes, including applying pressure and/or the addition or subtraction of other elements. In any case, for our purposes, a product is the result of fabrication.

Each business will use a slightly different process to manufacture a product, even an almost identical product to another business. These processes, however, can be grouped into seven different categories. Usually, these categories, themselves, are simply referred to as processes. It is not difficult to understand that the process of making a cup of tea, (with prepared ingredients, such as picked and appropriately fermented leaves and flowers) in a kitchen or at a campfire can involve a series of different steps, some of which are interposable. It is only the ingredients and chemical changes that are relevant. It does not matter how the liquid is heated as a process, or whether it is heated at the beginning of the process of making a tea, or somewhere in the middle, as long as the whole process results in a tea.

The seven different processes of manufacture: Casting; Moulding; Metal forming; Labelling and painting; Joining; Machining including laser and water cutting; Additive manufacturing including 3D printing.

A purchaser of a product may approach different products in different ways to ascertain that the product is qualified as being adequate to the needs and requirements of the purchasing business. If we consider a product that has been cast, the purchasing business may be particularly concerned about the product’s porosity. So, a vase that has been cast, for example, will require a check that a vase that has been moulded (Am. molded) may not. Moulded products, we understand, have been subject to pressure and tiny air bubbles are forced out, which reduces porosity. Of course, a steel fabricated vase requires a check for seal integrity, and of course, the quality of protective coatings that have been applied. So, knowledge of the manufacturing process is crucial in determining which approach to use in purchasing a product. However, these lie well within the remit of procurement, since all these details are thrashed out and smoothed before any purchase is made.

If we continue with the vase example. A requirement for mass produced vases of low value will initiate a different purchasing approach than would a pair of matching boutique vases. Any ‘big-ticket’ product; that which has a high price, will require significantly more investigation into its integrity and its probable longevity. ¹ There are exceptions, of course; a very expensive bottle of champagne has only an emphemeral existence if it is bought with the intention to be drunk immediately. This bottle of champagne, however, if it is spontaneously bought by an individual, may not be considered to be a relatively (and prohibitively) high priced item if the purchaser has a very high financial income.

In economics, it is opportunity cost that determines how much effort is put into achieving a goal, or more importantly here, how much effort is put into achieving savings at the opportunity cost of generating revenue. Even, a celebratory bottle of champagne bought by a business may not induce much investigation into its pedigree or provenance, since it could easily be bought by a PA or someone outside of a procurement department. There is simply no reason to disrupt a procurement team from their normal focused activity for the sake of ordering a single bottle of expensive celebratory bubbly. A valid point here though is that much of the procurement checks have already been done by the retailer and their supplier of the champagne. So, up the supply chain, a wine merchant will inevitably make sure that the champagne, of a vintage, will have adequate provenance. They may have, indeed, ordered a significant quantity of the same vintage and have been in extended negotiations not only for availability but also for price. Such an occasion may arise for the sake of an end-consumer’s wedding when there is an ostentatious desire to serve excellent champagne. Again, here the end-consumer shunts off the lengthy procurement details to the wine merchant and instead concerns themselves with choosing a respectable wine merchant.

The end-consumer buying washing powder or liquid on a regular basis will use an heuristic from empirical evidence to determine whether to purchase the same brand and compound. Did it wash my clothes well and was it within my idea of a budget for cleanliness? However, buying a new car requires fitting the complete immediate family into it to see how well they fit, agreeing a colour, looking in the boot (trunk) and asking searching questions on economy and sustainability for answers from the dealer. The car is a high-end product that is a durable good and needs to last a long time against the money spent.

We should, however, not lose sight that when we say purchasing, we actually most often mean procuring. Purchasing is simply paying for something that is procured. Different approaches for paying can be: using credit, cash, lien (that later results in financial satisfaction), or bartering. This paying can be done before a product is received (or even produced); as a continuous series of payments; or at the finalisation of a job or delivery.

Terms and Conditions

Many people fail to understand that in the English language the word ‘if’ is a conditional which can be used in:

first conditional sentences - We use the first conditional to talk about the result of an imagined future situation, when we believe the imagined situation is quite likely. “If it rains I will take an umbrella.”

second conditional sentences – an imagined future wherein we say what the conditions must be for the present or future situation to be different. “This holiday would be great if it would just stop raining.”

and third conditional sentences – when we imagine a different past (now an impossibility). “If we had played a different strategy we would probably have won.”

For anyone who coded with BBC Basic decades ago the conditional IF statement would have an argument following it that checked or compared values. Simplified, this might be IF A>B. The IF statement would then be followed by a THEN statement which told the computer what to do next in the program. This might simply be THEN LET A=0 AND B=0. In effect, resetting the value of the A and B variables. There was also an ELSE statement that told the computer what to do if these conditions were not met.

‘Generally speaking, “terms” refers to the specific provisions or clauses of an agreement, while “conditions” refers to the broader requirements or obligations that must be met in order for the agreement to be valid.

- https://thecontentauthority.com/blog/terms-vs-conditions’

....the difference between terms and conditions is that the terms of a sale is the broad agreement between the two parties outlining a contractual relationship. The conditions are specific clauses that must be met for the deal to go through successfully.

- https://www.enzuzo.com/blog/difference-between-terms-and-conditions

Somehow, neither of these explanations make it clear that a condition is absolutely distant from a term, and the two explanations above contradict one another. A specific clause that must be met for the deal to go through successfully (enzuzo.com - above) is a term (The price is x). There is no wiggle room with a term. Breaking a condition carries a penalty – this is not so with a term. The terms of an agreement when making transactions may be – ‘We will supply you with x amount of units and you will pay us y amount of money within 30 days by bank transfer to an offshore account’. There is no imagined scenario other than the transference of ownership of the units before the transaction has been initiated. Where there is an imagined possibility, a condition to the terms is added, as in, IF you fail to pay within 30 days there will be a 15% surcharge on the whole order for late payment, which usually ends up being called ‘administration costs’. Another condition is IF you buy z amount the unit price is lower, but this does NOT affect the original terms as an offer and acceptance of a contract. There is an element of choice with a condition, such as compelling the customer to purchase before a specific date to achieve a discount; this is not true with a term. A condition we often find in the UK is that an offer is not available in Northern Ireland. This is ‘IF you live in Northern Ireland there is a penalty to pay on this offer in the form of no discount, no delivery, no service, etc. This is written as ‘Not available in NI’. This is not a term because eligibility is conditional on living in the UK except for Northern Ireland (sometimes The Isle of Man is also included). The terms for the rest of mainland UK are unaffected by this conditional.

However, if we take conditions to be ancillary to terms we end up with: ‘This transaction will take place (financing; operational – acquisition of products or services, labour, raw materials; sales – products and services) so long as you do this, or have this, or have a specific property that enables this. This latter could be a degree to move on to taking a Masters degree; possession of a yard big enough to take a delivery; or for some countries be of the right nationality to own a business in their country.

So, how can we take a different approach to terms or conditions at the time of purchase?

Well, terms are pretty much fixed by the time the negotiation stage of procurement has passed. The only thing to do to complete a contract is to make intention to complete a transaction clear. This intention could be for the contract to come into force at a later time and indeed, could be a rolling contract. In the latter case, there may not be an end date that has been set. So, we have an entry into why an approach to terms at the time of purchase may be required. While it is possible to secure a service, such as a mobile telephone contract for two years, it is rarely possible to commit a telephone company to freezing the monthly payment over the same period. What tends to happen is that the price of the service rises annually. Once the contractual period is over there is an open rolling agreement to continue as though a contract is still in place, except that either party can cancel the agreement at any time without penalty. Here then, we have terms that apply for the service which can be assessed at each purchase point after the contractual period is over. So, a new approach to the terms can be made. 

It is important here to understand that prior to there being a contract for the phone service the terms were spelled out and then the purchase was made. Once the contractual period is over, purchases have already been made, and importantly, experience of the service has been accomplished. This places the customer in a position of making a choice to continue with the agreement or make comparisons for service elsewhere every time they pay. For a business, a management control system would invariably be in place.

Since price is one of the terms of a mobile phone contract and the service provided is important (these days it is data download limits and connectivity), the user can approach the service provider as being merely a stop-gap between changing providers solely for convenience or to wait to see how the market changes to suit their requirements. An example here is Vodaphone, a very popular service provider.

 Vodaphone is one of the big four providers in the UK, that owns its own networks. Other smaller telephone service providers, which are called Mobile Virtual Network Operators (MVNO) rent network accessibility from the big four. Vodaphone is so popular that at certain times of the day, there is a significant diminishment of data download speed due to simultaneous network activity by many people. Essentially, the portion of their network that they have not rented out, and have instead retained for themselves, has been temporarily saturated. Yet, a smaller, and less popular service provider who has rented some of Vodaphone’s network may still have a huge capacity to provide an excellent data download service. An approach to a term at the point of purchase is by knowing that Vodaphone has an excellent network across the UK and knowing that a smaller service provider rents network space from Vodaphone (this is made clear from price comparison sites) a purchaser can make an excellent decision to use this competitor to Vodaphone because data download speeds are unlikely to diminish so much that immediate service is lost. With this example, the customer also makes an approach to a condition that the smaller service provider uses a specific network (Vodaphone instead of O₂ or EE or Three). However, which.co.uk has a comparison site that rates the service providers, including MVNOs, and gives an amalgamated score for each provider. This score includes ‘ease of contact’. 

One approach to a term or condition is ‘If it ain’t broke, don’t fix it’. If they don’t mess up why contact them? Of course, the fickle public want to be able to tweak their services seemingly on a random basis – add this service, upgrade this service, turn on and off roaming, etc. 

Another approach at the time of purchase is to separate services across a number of service providers. Telephone calls with one service provider and data download with another provider. This, strangely, because it is NOT a ‘bundle’ can actually be cheaper. All one needs is a Smartphone that allows two sim cards or two separate devices. One approach at the time of purchase, following this separation of services onto different devices pertains to cyber security, as in cross-contamination of information, and a risk-averse approach to loss of connectivity with the wider world, at pinched points of time.