Week 2 Project

Organizational vs Consumer Buying

© 2016 South University

Marketing managers need to be aware of the various factors affecting consumer buying. Understanding how these factors influence a target market is the key to developing a good marketing plan. Marketing research helps analyze these factors. That is why, marketing research is important to successful marketing.

Consumer Buying

1. Cultural Factors - Culture is a powerful influence based on where people were raised and their family heritage. It greatly influences their choices in food, clothing, and entertainment.

2. Social Influences - Social factors greatly influence a buyer’s behavior as relationships influence individual’s decisions related to purchases.

3. 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.

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Marketing Management

©2016 South University

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4. 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.

Organizational Buying

1. Generally, business markets have few large buyers. Marketing targets professional buyers, and close relationships often develop between marketers and buyers. There are three basic buying situations involving organizational buyers.

2. Straight Rebuy It is a purchase situation in which a firm orders more products from the same supplier. It is the most common buying situation in marketing.

3. Modified Rebuy It is a purchase situation in which a routine purchase order is modified for some reason, such as a change in product features.

4. New Task Buying It is a situation in which a firm identifies an unmet need and goes through a process of vendor identification, selection, and purchase. This is the most complex of the buying situations.

There are four major influences on organizational buying:

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Marketing Management

©2016 South University

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1. The economic environment of the market, which influences demand - The demand for a product has a significant influence on the overall economic environment. If the demand for the organization's products and services is down, so will be the demand for purchasing products from vendors. The number of competing vendors will also determine the demand for a firm's goods and services.

2. The organization and its culture - The culture of an organization influences its buying or selling policies. The organization’s policies and procedures set the ground rules for how the firm will buy or sell. In addition to culture, the structure of an organization determines which individuals have the authority to make the buying or selling decisions, thereby influencing the buying or selling policies.

3. The interpersonal relationship between the buyer and the seller - The length of time the buyer and seller have been dealing with each other and their interests, as well as the persuasiveness of the seller, all influence the organizational buying process.

4. Factors associated with the individual buying the product for the organization - One major factor is the attitude of the organization buyer toward risk. Buyers who are risk averse must be approached with more caution because they will make decisions more slowly than those buyers who are less risk averse.

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Marketing Management

©2016 South University

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Marketing Management

©2016 South University

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