Buying Behavior of Individual and Business (Organizational) Customer

OBJECTIVES:

 Identify the factors that affect Consumer Buying Behavior and the types of Buying Behavior;
 Differentiate the Buying Behavior and Decision Making of Individual Household Customer
versus the Business (Organizational) Customer.
 Appreciate the importance of differentiating the Buying Behavior and Decision Making of
Individual Household Customer versus the Business (Organizational) Customer.

Task 1:. Describe the process involved in a recent purchase that required a lot of deliberation (such as a
mobile phone, a book, shoes, etc.).
• What led you to consider purchasing the product?
• Who were involved in the decision making?
• Did you shop around? If so, how many shops did you go to? List down their names
• What factors led you to select the product that you bought?

Task 2 :Give three examples of products that you would buy without much thinking(. a. b. c.). Is
there anything that the above three products have in common?

What is Consumer Buying Behavior?

Consumer Buying Behavior refers to the actions taken (both on and offline) by consumers
before buying a product or service. This process may include consulting search engines,
engaging with social media posts, or a variety of other actions. It is valuable for businesses to
understand this process because it helps businesses better tailor their marketing initiatives to the
marketing efforts that have successfully influenced consumers to buy in the past (DJ Team 2020).

We have all experienced the moment when we walk into a store and see something that we just
have to have. Retailers spend billions of dollars every year trying to generate that feeling in
their customers. Web campaigns, video and print ads, social media campaigns, and branding seem to
converge as the consumer finally feels a connection to a product and makes a purchase. So, what
drives that behavior? And how do you capture and then replicate that lightning-in-a-bottle moment
when a potential customer turns into a buyer?

The major factors that influence Consumer Buyer Behavior?

A variety of factors go into the consumer buyer behavior process, but here we offer just a few. Taken
separately, they may not result in a purchase. When put together in any number of combinations, the
likelihood increases that someone will connect with a brand and make a purchase. Four factors
influencing consumer buying behavior are:
1. Cultural Factors - Culture is not always defined by a person's nationality. It can also be defined
by their associations, their religious beliefs or even their location.
2. Social Factors - Elements in a person's environment that impact the way they see
products.
3. Personal Factors - These may include someone's age, marital status, budget, personal beliefs,
values, and morals.
4. Psychological Factors - A person's state of mind when they are approached with a
product will often determine how they feel not only about the item itself but the brand as a
whole (DJ Team 2020).
 What are the four (4) Types of Buyers?
1. The Analytical Buyer - Motivated by logic and information, this buyer will look at all the data on
competing brands and products before making an informed decision.
2. The Amiable Buyer - Warm and friendly, this buyer just wants everyone to be happy. That is why they are
often paralyzed by big decisions when there is the perception of a win/lose outcome.
3. The Driver Buyer - Drivers are most concerned with how others view them and whether they follow. The
trendsetters, Drivers are most concerned with their appearance rather than the relationships that are
formed during a transaction.
4. The Expressive Buyer - Relationships are key to the Expressive Buyer. They cannot stand feeling isolated or
ignored during a transaction. Instead, they want to feel like your most important asset.

It's hard to distill something as complex as consumer buying behavior into four neat and tidy categories.
Most people will find they are a combination of these types of consumer buying behavior (DJ Team 2020).

Meaning of Organizational Buyer 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.
Source: https://www.investopedia.com/terms/o/organizational-behavior.aspu.

Consumer Buying Behavior Vs. Business Buying Behavior

Buying behavior varies greatly between consumers and businesses. That's because while consumers purchase
goods and services for personal use, businesses buy these things either to manufacture other goods or to resell
them to other businesses or consumers. The participants, characteristics, influences and the buying process are
different for both groups.

The Number of Participants

Consumer buying is usually limited to one or two participants, including the final user of the product. For
example, one person is usually involved in buying groceries and basic home supplies. Business buying usually
involves multiple participants, such as the final users of the product, influencers who establish the need for
certain products, gatekeepers who screen potential suppliers and purchasing managers and senior management
who approve the funds for the purchases.

Differing Behavioral Characteristics

The consumer market consists of thousands of customers located in different geographies and
with different buying habits. However, their needs are usually the same for a particular product — for
example, everybody uses washing machines in the same way. The business market usually consists of a
few large buyers who are often concentrated in specific geographic markets. Businesses generally form
close and long-term relationships with their suppliers. Different businesses might use the same product
differently. For example, a retail business might install computers to track its inventory, while a
technology company might use them for product research.

Influencing Factors and Motivations

The influences on consumer buying behavior include basic needs, membership in groups, family
requirements, occupation, age, economic situation and lifestyle choices. The psychological influences
include perception of certain products and brands, beliefs and attitudes. Influences on business
buying behavior include environmental and organizational factors. Competitive pressures, technological
 evolution and changing macroeconomic conditions are some of the environmental influences, while
corporate objectives, policies and procedures are some of the organizational factors.

The Buying Process

The consumer buying process consists of five stages: need recognition, information search,
evaluation of alternatives, purchase decision and post-purchase outcomes. Marketing stimuli can generate
need, which leads to a search for information from different sources. Consumers evaluate alternative
products based on brand name, features, quality and price. Possible post-purchase outcomes include
delight, satisfaction and dissatisfaction. Critical success factors in the consumer market include quality,
value and customer service. The business buying process also starts with need recognition, followed
by development of product specifications. The company prepares a request for proposal to elicit
expressions of interest or bids from potential suppliers. It selects one or more suppliers, issues purchase
orders and monitors the quality of the products supplied. Critical success factors in the business market
include customization capabilities, quality, performance, ease of use and personal relationships (Basu, C.
2018).

Task 3 Identify a product that you aspire to have. Discuss what makes this product particularly
appealing to you. Assess how much of this involves the factors that influence you in buying the product.

Product:

Reasons

Task 4 Differentiate the buying behavior and decision making of individual/household customer
versus business (organizational) customer). Note: Number 1 is done for you.
Bases Consumer Buying Behavior Organizational Buying Behavior
Purpose of Buying The individual consumers buy goods The organizations buy goods and
and services for ultimate use or services for their business needs.
satisfy their needs. The buying The buying purpose of them is to
purpose of such consumers is not earn profit by using and reselling
to earn profit by reselling the the goods and services.
goods and services.
Quantity
Purchase Decision The individual consumers, are usually

Market Knowledge
Types of Goods
Effect
Buying Process