Meaning of Organizational Behavior 

      
The behavior of an organization shown in buying goods or services is called organizational buying
behavior. The organizations buy goods or services for business use, resale, produce other goods or
provide services. Business and industrial organizations buy goods to use in business or produce
other goods. Resellers buy goods for reselling them at profitable price. Similarly, government
bodies buy goods for office and conducting development program. Non-governmental
organizations, hospitals, educational institutes, social organizations, religious organizations etc.
buy goods to provide services to their followers or customers.

Users, influencers, buyers, deciders and gate keepers take part in organizational buying process.
Users who are the members of organization use bought goods or services. They prepare buying
proposal and help in preparing product specification. They also help in preparing special report
and analyzing alternatives. Influencers influence buying decision. They help in preparing products
specification and analyzing alternatives. Those who buy goods or services are called buyers.
Buyers select suppliers and make buying terms and conditions. The person who makes the last
decision to buy goods or services from the selected supplier is called decider. Goods are
purchased from the supplier selected by the decider. Gatekeeper controls follow of information
and other things. Technical staff and personal assistant work as gate keeper.

Organizational buying behavior is influenced by marketing stimuli and other stimuli. Marketing
stimuli includes product, price, place and promotion and other stimuli includes economic,
technological, political, cultural and competition. These motivators bring changes in the buyers’
behavior after they enter in an organization. Or these
stimuli influence selection of goods or service, selection of suppliers, order, quantities, delivery
time, terms and conditions of goods or services etc.

According to Pette D. Bennett, “Organizational buying behavior is the decision making

process by which a buying group establishes the needs for goods and services and identifies,
evaluate, and chooses among alternative brand and suppliers.”

In conclusion, the behavior shown by an organization while buying goods or services is called
organizational buying behavior. User, influencer, buyer, decider and gate keeper are involved in
organizational buying process. Organizational buying behavior is influenced by marketing stimuli
and other stimuli. Generally, these stimuli influence selection of goods or services, selection of
suppliers, buying quantity, terms of delivery, terms of service and terms of payment.

Features of Organizational Buying Behavior      

Few buyers, close relationship between buyers and suppliers, rational buyers, direct
channel, adaptation of certain purchase policy made by business organization etc. are the main
features of organizational buying behavior.

1. Few buyers
As organization itself become buyer, organizational buyers are few in number. But they buy in
huge quantity. Organization buyers live scattered in different places.

2. Close relationship

Organizational buyers and suppliers have close relations. It may be long lasting. Such relation
has positive effect on future buying. Generally all organizational buyer and suppliers have close
relation.

3. Rational buyers

Buyer becomes rational in organizational buying. Professional and trained buyers are involved in

buying. So, buying decision becomes rational.

4. Direct channel

As organizational buyers buy a huge quantity, they buy goods directly from producer. So,
marketing channel becomes dir

5. Purchase policy

The buying method of organization and persons become different. An organization makes certain
policy for buying and buys goods according to the policy. Buying through quotation, buying through
tender, buying through contract etc. are the major buying policies of organizations.

Organizational Buying Process              

Organizational buying has certain processes. The following figure shows organizational buying
process. There are eight stages. An organization may go through all of these stages as following or
it may change some of them. This depends on buying quantity, buying price, nature of goods,
buying frequency etc.
 Stages of Organizational Buying Process

Need Recognition

Organizational buying process starts from need recognition. In an organization, a certain person
recognizes need of certain goods and after buying the needed goods, need is fulfilled. Needs in
organization can be recognized in two ways. They are: external stimuli and internal stimuli. If a
company decides to produce new goods, it is internal stimuli. It needs to buy new goods and
equipment. Similarly, when a buyer observes trade exhibition, s/he may make his/her idea to buy
new goods. Such idea is external stimuli, because this idea is made from outer environment and
materials should be purchased for this.

2. Need Description

After the need is recognized, the buyers should describe need. This task is completed in the
second stage of organizational buying process. While describing need, features of needed goods
and needed quantity should be described. If the goods have standard, this task becomes easy; if
otherwise, it becomes complicated. Help of engineers, users and consultants should be taken for
complex goods.

3. Product Specification
The task of preparing specific description of goods is the third stage of organizational buying
process. In this stage, description performance of goods is prepared to solve the problems.
Technician’s help should be taken for this task. In this stage, the value of goods is analyzed.

4. Supplier Search

At this stage of organizational buying process, the buyer searches proper suppliers or sellers.
Buyer prepares a list of suppliers to select good and proper suppliers. This list is prepared by
looking at trade directory, searching in Internet, asking other companies for suggestions etc. If the
goods to be bought are new, complicated and costly, it needs long time to search suppliers.

5. Proposal Solicitation

Proposal solicitation is the fifth stage of organizational buying process. At this stage,
buyer calls best suppliers for submitting proposal. As the reaction, some send catalog or sellers to
the organization. If the product is costly and complicated, the buyer demands detailed proposal,
and if the product is technical, business organization calls for presenting the product itself.

6. Supplier Selection

At the sixth stage of organizational buying process, buyers assess the proposal and select one or
more suppliers. For selecting the suppliers, a list is prepared and rating is made on the basis of
their attribute and importance. Then the best supplier is selected. Analysis of the suppliers is
done in the following ways.

7. Order Routine Specification

After the best suppliers have been selected, the buyer prepares final order. In this order, all the
matters such as attribute of goods, quantity, specification, time for supply, warranty, method of
payment, service after sale etc. should be clearly mentioned.

8. Performance Review

This is the last process of organizational buying. At this stage, the buyer reviews suppliers’
performance. This type of review helps to take decision whether to continue relation with the
supplier or change or end the relation. If the performance of the supplier is satisfactory, the
relation can be continued; if it is somewhat defective, if partial correction is made and the
relation is maintained. But if the performance is disagreeable, it is broken.
What is Consumer Research?
Consumer research is a part of market research in which inclination, motivation and
purchase behavior of the targeted customers are identified. Consumer research
helps businesses or organizations understand customer psychology and create
detailed purchasing behavior profiles.

It uses research techniques to provide systematic information about what customers

need. Using this information brands can make changes in their products and services,
making them more customer-centric thereby increasing customer satisfaction. This
will in turn help to boost business.

An organization that has an in-depth understanding about the customer decision-

making process, is most likely to design a product, put a certain price tag to it,
establish distribution centers and promote a product based on consumer research
insights such that it produces increased consumer interest and purchases.

For example, A consumer electronics company wants to understand, thought process

of a consumer when purchasing an electronic device, which can help a company to
launch new products, manage the supply of the stock, etc. Carrying out a Consumer
electronics survey can be useful to understand the market demand, understand the
flaws in their product and also find out issues in the various processes that influence
the purchase of their goods. A consumer electronics survey can be helpful to gather
information about the shopping experiences of consumers when purchasing
electronics. which can enable a company to make well-informed and wise decisions
regarding their products and services.

Consumer Research Objectives

When a brand is developing a new product, consumer research is conducted to
understand what consumers want or need in a product, what attributes are missing
and what are they looking for? An efficient survey software really makes it easy for
organizations to conduct efficient research.

Consumer research is conducted to improve brand equity. A brand needs to know

what consumers think when buying a product or service offered by a brand. Every
good business idea needs efficient consumer research for it to be successful.
Consumer insights are essential to determine brand positioning among consumers.
Consumer research is conducted to boost sales. The objective of consumer research
is to look into various territories of consumer psychology and understand their
buying pattern, what kind of packaging they like and other similar attributes that
help brands to sell their products and services better.

Consumer Research Model

According to a study conducted, till a decade ago, researchers thought differently
about the consumer psychology, where little or no emphasis was put on emotions,
mood or the situation that could influence a customer’s buying decision.

Many believed marketing was applied economics. Consumers always took decisions
based on statistics and math and evaluated goods and services rationally and then
selected items from those brands that gave them the highest customer satisfaction
at the lowest cost.

However, this is no longer the situation. Consumers are very well aware of brands
and their competitors. A loyal customer is the one who would not only return to
repeatedly purchase from a brand but also, recommend his/her family and friends to
buy from the same brand even if the prices are slightly higher but provides an
exceptional customer service for products purchased or services offered.

Consumer market research is based on two types of research method:

1. Qualitative Consumer Research

Qualitative research is descriptive in nature, It’s a method that uses open-ended

questions, to gain meaningful insights from respondents and heavily relies on the
following market research methods:

Focus Groups: Focus groups as the name suggests is a small group of highly validated
subject experts who come together to analyze a product or service. Focus group
comprises of 6-10 respondents. A moderator is assigned to the focus group, who
helps facilitate discussions among the members to draw meaningful insights

One-to-one Interview: This is a more conversational method, where the researcher

asks open-ended questions to collect data from the respondents. This method
heavily depends on the expertise of the researcher. How much the researcher is able
to probe with relevant questions to get maximum insights. This is a time-consuming
method and can take more than one attempt to gain the desired insights.

Content/ Text Analysis: Text analysis is a qualitative research method where

researchers analyze social life by decoding words and images from the documents
available. Researchers analyze the context in which the images are used and draw
conclusions from them. Social media is an example of text analysis. In the last decade
or so, inferences are drawn based on consumer behavior on social media.

2.Quantitative Consumer Research

In the age of technology and information, meaningful data is more precious than
platinum. Billion dollar companies have risen and fallen on how well they have been
able to collect and analyze data, to draw validated insights.

Quantitative research is all about numbers and statistics. An evolved consumer who
purchases regularly can vouch for how customer-centric businesses have become
today. It’s all about customer satisfaction, to gain loyal customers. With just one
questions companies are able to collect data, that has the power to make or break a
company. Net Promoter Score question, “On a scale from 0-10 how likely are you to
recommend our brand to your family or friends?”

How organic word-of-mouth is influencing consumer behavior and how they need to
spend less on advertising and invest their time and resources to make sure they
provide exceptional customer service.

Online surveys, questionnaires, and polls are the preferred data collection tools.

Data that is obtained from consumers is then statistically, mathematically and
numerically evaluated to understand consumer preference.

Consumer Research Process

The process of consumer research started as an extension of the process of market

research. As the findings of market research is used to improve the decision-making
capacity of an organization or business, similar is with consumer research.

The consumer research process can be broken down into the following steps:
1. Develop research objectives: The first step to the consumer research process is to
clearly define the research objective, the purpose of research, why is the research
being conducted, to understand what? A clear statement of purpose can help
emphasize the purpose.
2. Collect Secondary data: Collect secondary data first, it helps in understanding
if research has been conducted earlier and if there are any pieces of evidence
related to the subject matter that can be used by an organization to make
informed decisions regarding consumers.
3. Primary Research: In primary research organizations or businesses collect their
own data or employ a third party to collect data on their behalf. This research
makes use of various data collection methods (qualitative and quantitative) that
helps researchers collect data first hand.
4. Collect and analyze data: Data is collected and analyzed and inference is drawn to
understand consumer behavior and purchase pattern.
5. Prepare report: Finally, a report is prepared for all the findings by analyzing
data collected so that organizations are able to make informed decisions and
think of all probabilities related to consumer behavior. By putting the study
into practice, organizations can become customer-centric and manufacture
products or render services that will help them achieve excellent customer
satisfaction.

After Consumer Research Process

Once you have been able to successfully carry out the consumer research process,
investigate and break paradigms. What consumers need should be a part of market
research and should be carried out regularly. Consumer research provides more in-
depth information about the needs, wants, expectations and behavior of clients.  

By identifying this information successfully, strategies that are used to attract

consumers can be made better and businesses can make a profit by knowing what
consumers want exactly. It is also important to understand and know thoroughly the
buying behavior of consumers to know their attitude towards brands and products.

The identification of consumer needs, as well as their preferences, allows a business

to adapt to new business and develop a detailed marketing plan that will surely
work. The following pointers can help. Completing this process will help you:

 Attract more customers  

 Set the best price for your products  
 Create the right marketing message  
 Increase the quantity that satisfies the demand of its clients  
 Increase the frequency of visits to their clients  
 Increase your sales  
 Reduce costs  
 Refine your approach to customer service.  

Consumer Research Methods

Consumers are the reason for a business to run and flourish. Gathering enough
information about consumers is never going to hurt any business, in fact, it will only
add up to the information a business would need to associate with its consumers and
manufacture products that will help their business refine and grow.

Following are consumer research methods that ensure you are in tandem with the
consumers and understand their needs:

The studies of customer satisfaction

One can determine the degree of satisfaction of consumers in relation to the quality
of products through:

 Informal methods such as conversations with staff about products and services
according to the dashboards.   
 Past and present questionnaires/surveys that consumers might have filled that
identify their needs.   
The investigation of the consumer decision process

It is very interesting to know the consumer’s needs, what motivates them to buy,
and how is the decision-making process carried out, though:

 Deploying relevant surveys and receiving responses from a target audience.

Proof of concept

Businesses can test how well accepted their marketing ideas are by:

 The use of surveys to find out if current or potential consumer see your products
as a rational and useful benefit.  
 Conducting personal interviews or focus group sessions with clients to understand
how they respond to marketing ideas.
Knowing your market position

You can find out how your current and potential consumers see your products, and
how they compare it with your competitors by:

 Sales figures talk louder than any other aspect, once you get to know the
comparison in the sales figures it is easy to understand your market position within
the market segment.
 Attitudes of consumers while making a purchase also helps in understanding the
market hold.      
Branding tests and user experience

You can determine how your customers feel with their brands and product names
by:

 The use of focus groups and surveys designed to assess emotional responses to
your products and brands.  
 The participation of researchers to study the performance of their brand in the
market through existing and available brand research.   
Price changes

You can investigate how your customers accept or not the price changes by using
formulas that measure the revenue – multiplying the number of items you sold, by
the price of each item. These tests allow you to calculate if your total income
increases or decreases after making the price changes by:

 Calculation of changes in the quantities of products demanded by their customers,

together with changes in the price of the product.   
 Measure the impact of the price on the demand of the product according to the
needs of the client.   
Social media monitoring

Another way to measure feedback and your customer service is by controlling your
commitment to social media and feedback. Social networks (especially Facebook) are
becoming a common element of the commercialization of many businesses and are
increasingly used by their customers to provide information on customer needs,
 service experiences, share and file complaints. It can also be used to run surveys and
test concepts. If handled well, it can be one of the most powerful research tools of
the client. I also recommend reading: How to conduct market research through
social networks.

Customer Research Questions

Asking the right question is the most important part of conducting research.
Moreover, if it’s consumer research, questions should be asked in a manner to
gather maximum insights from consumers. Here are some consumer research
questions for your next research:

 Who in your household takes purchasing decisions?

 Where do you go looking for ______________ (product)?
 How long does it take you to make a buying decision?
 How far are you willing to travel to buy ___________(product)?
 What features do you look for when you purchase ____________ (product)?
 What motivates you to buy_____________ (product)?

Importance of Consumer Research

Launching a product or offering new services can be quite an exciting time for a
brand. However, there are a lot of aspects that need to be taken into consideration
while a band has something new to offer to consumers.

Here is where consumer research plays a pivotal role. The importance of consumer
research cannot be emphasized more. Following points summarizes the importance
of consumer research:

1. To understand market readiness: However good a product or service may be,

consumers have to be ready to accept it. Creating a product requires investments
which in return expect ROI from product or service purchases. However, if a
market is mature enough to accept this utility, it has a low chance of succeeding by
tapping into market potential. Therefore, before launching a product or service,
organizations need to conduct consumer research, to understand if people are
ready to spend on the utility it provides.
2. Identify target consumers: By conducting consumer research, brands and
organizations can understand their target market based on geographic
segmentation and know who exactly is interested in buying their products.
 According to the data or feedback received from the consumer, research brands
can even customize their marketing and branding approach to better appeal to the
specific consumer segment.
3. Product/Service updates through feedback: Conducting consumer research,
provides valuable feedback from consumers about the attributes and features of
products and services. This feedback enables organizations to understand
consumer perception and provide a more suitable solution based on actual market
needs which helps them tweak their offering to perfection.