Consumer Buying Behavior
Consumer Buying Behavior is the result of consumers’ attitudes, preferences, intentions, and decisions in a marketplace prior to purchasing a product. The study of consumer purchasing behavior is an interdisciplinary subject that draws heavily on sociology, psychology, anthropology, and other disciplines.
Standard Buying Process
The purchasing process can be broken down into a series of tasks.
Problem Recognition: The consumer becomes aware of a fulfilled need or desire during this stage. For example, his old laptop may be broken, necessitating the purchase of a new laptop.
Information Search: During this stage, the consumer gathers information that will help him solve his problem. For example, a collection of data on various laptop models.
Evaluation: The various options are weighed against the consumer’s wants, needs, preferences, financial resources, and so on.
Purchase: At this point, the consumer will commit to a specific option and make the final decision. Price and availability may influence the decision.
Post-Purchase Evaluation: At this point, the consumer determines whether or not the purchase met his or her needs.
Types of Buying Behavior
Complex: Consumer involvement is high, with significant brand differences. For example: automobiles
Dissonance Reducing: A high level of involvement with few brand differences. As an example, consider carpeting.
Habitual: Low involvement and little brand differentiation. As an example: – Salt
Variety Seeking: Low participation with a significant perceived brand difference. Chocolates, for example.
Organizational Buying Behavior
Organizational Buying Behavior is defined as the rational decision-making process by which an organization purchases goods and services when they are in need of such goods and services. The purchased products and services are identified, evaluated, and selected from a pool of competing brands and suppliers. Organizational purchasing is similar to consumer purchasing in many ways. Organizations purchase products and services to help them achieve their goals, such as manufacturing and delivering goods and services to members, customers, or the community. There are three types of purchasing situations: straight rebuy, modified rebuy, and new task.
The straight rebuy: It is the buying condition in which buyers frequently purchase the product. Purchasing those items will become a routine task for the organization.
The modified rebuy: A business purchasing condition in which the buyer wishes to change the product specifications, price, terms, or suppliers.
The new task: A new task is created when an organization purchases products or services for the first time. In this case, the higher the cost, the more decision participants there will be, as well as more effort for gathering information. The new task situation brings with it new opportunities as well as new challenges.
Participant in the business Process
When making a decision to purchase any products for the organization, the buying center that actually participates in buying the products or services will play a significant role.
Users: Members who make use of the products or services. In some cases, users initiate purchasing proposals and also contribute to the product specification.
Influencer: Influencers are individuals who have an impact on a company’s purchasing decisions. They aid in the definition of specifications and provide information for evaluating alternatives.
Buyers: Buyers are the individuals who purchase goods and services in an organizational buying center.
Decider: Deciders are those who have formal or informal power to select or approve the final supplier in an organizational buying center.
Gatekeepers: Gatekeepers are those who control the flow of information to others in organizational purchasing.
Major Influence on Organisation Buyers
Business Buyers are influenced by a variety of factors when making purchasing decisions. Some marketers believe that economic factors are the most important. Business buyers, on the other hand, are influenced by both economic and personal factors.
Environmental factors: When making a decision, business buyers are heavily influenced by the state’s and the world’s current and future economies. The economic environment is made up of three components: the level of primary demand, the economic outlook, and the cost of money. They are also influenced by environmental technological, political, and competitive developments.
Organizational Factors: The major organizational factors, such as objectives, policies, procedures, structure, and system, must be thoroughly understood.
Interpersonal factors: Because there are many participants who influence one another, interpersonal skills are important in the business buying process. However, such interpersonal factors and group dynamics will be difficult to implement.
Individual Factors: Personal motives, perceptions, and preferences are brought into the business purchasing decision-making process by those who participate. Personal motives, perceptions, and preferences are brought into the business purchasing decision process by these individuals. Individual characteristics such as age, income, education, professional identification, personality, and risk attitudes all have an impact on these individual factors.
Organisation Buying Process
There are eight stages in total, and by working through them, an organization will be able to make a rational decision. If the desired result is not obtained, the steps will be repeated until the goals and objectives are met.
Problem Recognition: The first stage of the purchasing process in which people identify the organization’s need that will be met by purchasing any goods or services. Internal or external stimuli can cause problem recognition. Internally, the company may decide to launch a new product that necessitates the purchase of new manufacturing equipment and materials. A machine may fail and require a replacement part. Externally, the buyer encounters new ideas at a trade show, sees an advertisement, or receives a call from a seller who offers the best products at the best price.
General Need Description: After identifying the need, the buyers create a general need description that includes both the characteristics and quantity required, as well as the items for the organization. This process presents very few problems for standard items, but for complex problems, the buyer must collaborate with other engineers, users, and consultants to define the item.
Product Specification: The purchasing organization decides and specifies the technical product features for the required item at this stage. Product value analysis is an approach that helps to reduce costs by studying the components. They can be redesigned, standardized, or manufactured using lower-cost methods of production after careful examination. The team will select the best product features and specify them.
Supplier Search: During this stage, the buyer searches for the best sellers. By analyzing trade directories, conducting computer searches, or contacting other companies for recommendation letters, the buyer can compile a list of qualified suppliers.
Proposal Solicitation: Proposal solicitation refers to the stage of business purchasing in which the buyer requests proposals from qualified suppliers. Following that, the supplier will only send a catalog or a salesperson. When the item is complex or costly, however, the buyer requests detailed written proposals or formal presentations from each potential supplier.
Supplier Selection: The buyer reviews proposals and selects a supplier or suppliers at this stage. During supplier selection, the buying center will frequently compile a list of desired supplier characteristics and their relative importance. Product and service quality, on-time delivery, ethical corporate behavior, honest communication, and competitive pricing are examples of such characteristics.
Order-Routine Specification: This is the stage of the purchasing process in which the buyer selects the final supplier by listing various factors such as technical specifications, quantity required, expected delivery time, return policies, and warranties.
Performance Review: The stage of the purchasing process in which the buyer evaluates the supplier’s performance using various criteria and decides whether to continue, modify, or terminate the arrangement. The seller’s job is to observe and examine the same factors that the buyer uses to ensure that the seller provides the expected satisfaction.