Week 2 Project

Organizational VS Consumer Buying

Marketing managers need to be aware of the various factors affecting consumer buying.

Cultural Factors: Culture is a powerful in�uence based on where people were raised and their family heritage. It greatly in�uences their choices in food, clothing, and entertainment.

Social In�uences: Social factors greatly in�uence a buyer's behavior as relationships in�uence individual's decisions related to purchases.

Personal Experience: A close relationship exists between personal experience and buying behavior. For example, if people have a bad experience with a brand, they are unlikely to buy any product of that brand again. On the other hand, if they think that a brand will give them status, they may buy a product of that particular brand.

Psychological Factors: Psychological factors are about what motivates a purchase. Therefore, these factors affect the buying decision. You may buy one brand of clothing for yourself but another brand when buying a gift. Therefore, marketing managers must consider the psychological factors when they are developing a marketing plan.

Generally, business markets have few large buyers. Marketing targets professional buyers, and close relationships often develop between marketers and buyers.

Three basic buying situations involving organizational buyers.

Straight Rebuy: A �rm orders more products from the same supplier. It is the most common buying situation.

Modi�ed Rebuy: A routine purchase order is modi�ed for some reason, such as a change in product features.

New Task Buying: Identi�es an unmet need and goes through a process of vendor identi�cation, selection, and purchase. This is the most complex of the buying situations.

There are four major in�uences on organizational buying:

The economic environment of the market, which in�uences demand

The organization and its culture

The interpersonal relationship between the buyer and the seller

Factors associated with the individual buying on behalf of the organization

The organizational buying decision process has the same �ve steps as the consumer buying decision process.

Need Recognition - The main difference between the two processes at the �rst stage of decision making is in the number of people who are involved in the recognition of the need (problem). The decision-making unit (DMU) in the organization is more complex and is usually in�uenced by many people across the organization.

Information Search - An information search is more complicated for an organizational buyer than for a consumer. Depending on whether the organization is doing a straight rebuy or new task buying, the amount of time, effort, and money invested in the search for information is much higher. Another difference is that the demand for (or purchase of) products by organizations is more strongly in�uenced by environmental and economic conditions and changes in demographics.

Evaluation of Alternatives - The main difference between consumers and organizations here is that an organizational buyer's evaluation criteria are more elaborate and stringent than a consumer's. There is an emphasis on obtaining good post purchase services. Another difference is that an organizational buyer is more concerned about the �nancial stability of its vendors than a consumer buyer.

Purchase Decision -An established organizational buyer typically has contracts already worked out with vendors. Therefore, the purchase process for an organizational buyer tends to be less complicated than that for a new buyer. When the purchase is a straight rebuy, the organizational buyer would just place an open-ended purchase requisition, where the amount of product needed is called in by a procurement agent or automatically reordered when inventory levels are down to the acceptable minimum. When the purchase is a modi�ed rebuy, the organizational buyer needs to evaluate purchase options every year.

Post-purchase Behavior –Post-purchase evaluations of a product are more formal for an organizational buyer than for a household consumer. A major component of a post-purchase evaluation is the service provided by the vendor.

Additional Materials

View a Pdf Transcript of Organizational VS Consumer Buying Behavior (media/transcripts/Week_1/SUO_MKT3010%20W2%20L2.pdf? _&d2lSessionVal=2l62M8CfZKmEhm3v7ZkPzOSfo&ou=80393)

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