Difference between consumer buying process and organizational buying process

Introduction

A consumer is defined as the ultimate user of a product/commodity or a service, while an organization is a social set up, separated by physical boundary with defined objectives.

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A consumer can influence an organizations buying behavior at the same time an organization can also be able to influence a consumers buying behavior. This means that the two parties depend on each other. When for example consumers change their purchasing pattern owing to an introduction of a given statute, companies may also change to reflect the same. On the other hand a company changes its pricing strategies consumers will be able to change immediately. (Foxall, 1993)

Organizations buying behavior vs. consumer’s buying behavior

In most cases organizations will buy products for resale while consumers buy for consumption purposes. Companies buy products for resale in order to make profits. (Foxall, 1993)

An organization may buy a product to aid in the production of other goods and services while an individual may purchase goods for household use only. (Foxall, 1993)

The decision to buy or not in a company is charged within a specific single unit while for a consumer it may be influenced by family preferences. (Personal selling: consumer buying behavior, 2008)

In an organizational buying there is greater use of marketing in formation while a consumer does need to do marketing in order to make a purchase.

Consumers buying process is less vigorous as opposed to an organization’s where it may involve four stages Webster’s (1965)model i.e. problem solving, buying responsibility , the search process and the choice process(Personal selling: consumer buying behavior, 2008)

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In an organizations buying process there are different roles played in the buying centers, these roles include: those who first recognize the product, individuals who affect the buying decision, those who are the authority of buying, and finally those who actually buy the product. (Personal selling: consumer buying behavior, 2008)

Organizations buy as rational groups while consumers buy as willful individuals.

Future expectation of changes in price

When consumers expect that the price of a commodity will rise against their favor they tend to buy more to avoid being victims of future price changes. Similarly organization will buy more of a product when there is a speculation that the price will change. E.g. a company will buy a large quantity of materials in order to take advantage of unprecedented changes in price; this could be to make abnormal profits or to ensure steady supply of products to the market thereby retaining their clients. (Kerimcan, 2004)

Future expectation of changes in supply

When there is a perception that quantity of a commodity supplied in the market will fall consumers will buy more. At the same time organizations will react almost the same way. (Kerimcan, 2004)

Quality sensitive

Consumers always would want to buy high quality products. They are ever cautious about the nature, quality and quantity of the product they buy. Likewise organizations are also quality sensitive. They will purchase high quality materials that are likely not to give them unfavorable variances. This will ensure that they maintain their client loyalty and satisfaction. (Kerimcan, 2004)

Different factors influencing the buying behaviors of organization as well as consumers

There are three main factors that influence the buying behavior of a consumer

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External

Group, this may include culture, family and preferences. A group of people from a particular cultural background will exhibit a different buying behavior when exposed to a different situation. Likewise a situation in which a company operates will influence its buying behavior i.e. it’s recognized as an influence both to the process as well as to the buying centre. (Johnston & Lewin, 1996)

Environment

In an organization the decision to buy does not only involve individuals but also joint groups. In consumer purchasing it may be influenced by a family.

Interpersonal and inter-organizational

The relationships between the buying and selling organizations, price and distribution capacity, and competitors market strategies; market positioning and industries marketing variables are a real threat in buying behavior. (Johnston & Lewin, 1996)

In consumer buying interpersonal behavior is a key factor. Different lifestyles exhibited by different personalities, decision making ability and the level of motivation will immensely affect the buying behavior. (Kerimcan, 2004)

Conclusion

It is important that marketing organizations understand the different kinds of behaviors exhibited by both organizations and consumers especially when making purchasing decision. This can be a critical success factor to a firm.

An organization that clearly distinguishes the difference between the two will make further steps in market research. A market research is considered to be one the best strategies in ensuring that a firm achieves its competitive sustainability. (Personal selling: consumer buying behavior, 2008)

Organizations themselves should also understand their own buying behavior. This will aid in making strategic planning decisions; managers need to give priority to their policies and organizational culture. Corporate organizations need to be a ware that the buying process can be bigger than the purchasing and procurement department and therefore should be ready to fully participate in the buying process as a whole.

List of references

Foxall G.R. 1993, Consumer behavior as an evolutionary process, European journal of marketing, Vol. 27, No. 8, pp. 185-92

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Johnston W.J & Lewin J.E, 1996, “organizational buying behavior: toward an integrative framework” Journal of business research, Vol. 35, pp 1-16

Kerimcan O. 2004, consumer-to-consumer interactions in a networked society: word-of-mouth theory, consumer experiences, and network dynamics, PhD dissertation; Univ. Michigan.

Personal selling: consumer buying behavior, 2008, consumer buying vs. organizational buying. Web.

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