CONSUMER

AND
ORGANISATIONAL
BUYING
BEHAVIOUR
Nandini Pathak
Roll no 23 Bba llb 1st year
2nd sem
Sndt law school
 WHAT IS CONSUMER
BEHAVIOR
Consumer behavior is the actions and decisions that people or households
make when they choose, buy, use, and dispose of a product or service. Many
psychological, sociological, and cultural elements play a role in how
consumers engage with the market.
•Better marketing and communications
As living standards, trends, and technology keep changing, consumers’ choices also keep varying.
Understanding how these factors affect customers’ buying habits helps organizations design their
messaging accordingly. Eg promoting cozy winter wear during colder months to meet customer
needs.
•Improve customer retention
It is far more beneficial to retain an existing customer than to gain new customers. It’s easier to sell
new products and services to your existing customers than to find new ones.
Customer loyalty can prove to be a promoter of your business and spread positive word of mouth.
Satisfied customers share their happy experiences with their friends and family. Eg like sending
discounts on preferred products, encourages repeat business.

•Increase customer loyalty

Understanding customer behavior helps in finding out ways to boost customer loyalty, which in
turn, will lead to higher sales and a strong brand. Analyzing trends in sales can aid in offering
discounts as well as suggesting the best products and services to them. Eg Consider your local café
that remembers your favorite drink and occasionally suprises you with a free pastry.
•Better plan inventory
Researching customer attitudes helps companies plan inventory and stock raw materials. If
businesses see a trend in demand for specific products, they are likely to send more purchase
orders to their suppliers. Consumer behavior data can help them to balance demand and supply. Eg
Imagine a snack shop keeping extra bags of the most-loved chips because they know those are
everyone’s favorite. So, when you go to grab a snack, your favorite is always available
•Increase sales
If you know your customers well, you can have better conversations with a high probability of
closing the deal. Learning more about consumer behaviors helps to define the main customers that
come directly to the company. Your inventory should be stocked with products that meet the
requirements of your potential buyers. Eg Consider a clothing store putting the latest fashion on
display at the front. This makes it more likely for customers to spot and buy the trendy items,
leading to increased sales.
•Research competition
Studying consumer buying behavior helps in understanding the competitive market. You can plan
on how to position your products and services to offer competitive advantages. Eg Offering faster
delivery where competitors fall short.
What factors influence consumer
behavior while purchasing?
Consumer behavior is influenced by many external factors and
internal factors such as situational, psychological, environmental,
and marketing factors, personal factors, family, and culture.
Businesses try to collect data so that they can make decisions on
how they can reach their target audience in the most efficient way.
While some influences may be temporary and others can be long-
lasting, these factors can influence a person to buy or not buy. Let’s
now look at some of these factors in detail.
•Situational factors
They are temporary in nature and include physical factors such as a store’s location, layout, colors, music,
lighting, and even scent. Companies try to make these factors as favorable as possible. Other situational factors
include holidays, time, and moods of the consumer.

•Personal factors
These factors include demographic factors such as age, gender, income, occupation, etc. It also depends on
one’s interests and opinions. To further understand consumers, companies also look more closely at their
lifestyles – their daily routine, leisure activities, etc.

•Social factors
This factor also includes social class, level of education, religious and ethnic background, sexual orientation,
customer orientation, and people around you – family, friends, or social network. Different cultures have
varying customs and rituals that influence how people live their lives and what products they purchase.
Generally, consumers in the same social class exhibit similar buying behavior. Most market researchers believe
a person’s family is one of the biggest determinants of buying behavior.

•Psychological factor
A person’s ability to understand information, perception of needs, and mindset influence consumer behavior.
One’s reaction to a marketing campaign will depend on one’s beliefs and state of mind.
Here are some examples of how consumer behavior affects marketing:
•Segmentation
Consumer behavior research helps marketers behavioral segment markets. Marketers can
modify their marketing messages and strategies to better appeal to each demographic by
recognizing these segments.
•Product design
Understanding consumer behavior can also aid in product development. Marketers can create
products that better meet consumer needs and preferences by analyzing customer
requirements and tastes, leading to increased sales and customer satisfaction.
•Pricing Strategies
Marketers can use consumer behavior data to determine the price points at which customers
are willing to pay for a product, as well as the pricing strategies most likely to appeal to each
market segment.
•Branding
Consumer behavior research helps in the development of branding strategies. Marketers can
create brand messages and strategies that resonate with consumers and build brand loyalty by
understanding consumer attitudes and perceptions of brands.
WHAT IS ORGANISATIONAL BUYING
BEHAVIOR
Individual consumers are not the only buyers in a market. Companies and other
organizations also need goods and services to operate, run their businesses, and produce
the offerings they provide to one another and to consumers. These organizations, which
include producers, resellers, government and nonprofit groups, buy a huge variety of
products including equipment, raw materials, finished goods, labor, and other services.
Some organizations sell exclusively to other organizations and never come into contact
with consumer buyers. ALSO KNOWN AS B2B BUYING BEHAVIOR

Eg: A restaurant deciding where to buy kitchen equipment, an office choosing a supplier for
stationery, or a small business selecting a cleaning service In each case, the organization
assesses options to make purchases that best suit its needs and budget.
According to W. M. Pride and O. C. Ferrel, “Organizational buying behavior
refers to the purchase behavior of producers, government units, institutions
and resellers.”
1) Needs/Wants: Organizations must first identify their needs and wants to determine what type of product or
service they need to purchase. This includes evaluating the organization’s budget, desired features, size of the
purchase, time frame for purchasing decisions etc.

2) Research Suppliers: Once organizations have identified their needs and want, they can begin researching
potential suppliers capable of providing these products/services at an acceptable price point.

3) Select/Evaluate The Supplier: After conducting research, organizations should select one or two potential
suppliers best suited for their particular needs and requirements before formally negotiating terms with them (e.g.,
pricing structure). Additionally, organizations can evaluate each supplier based on factors such as delivery
timescales, customer service capabilities, etc.,

4) Negotiate Terms & Conditions: Once both parties agree upon terms and conditions related to pricing structures
and timeline expectations, then both parties can enter into a contract formalizing agreement between them regarding
said topics.

5) Final Decision: After considering these factors and reaching an agreement, the organization can make their final
purchase decision. They should ensure that they are obtaining value for their money and that the supplier they have
chosen is reliable and trustworthy.
 Features of Organizational Behaviour

POWE &
ATTITUDE MOTIVATION
INFLUENCE

DECISION MAKING
COMMUNICATION
PROCESSES

LEADERSHIP GROUP DYNAMICS

1.Attitude: Organizational behaviour focuses on studying individual and group attitudes within
an organization, such as job satisfaction and commitment to organizational goals.

2.Communication: It studies how communication flows between members of the organization,

including both verbal and non-verbal forms of communication.

3.Leadership: The study of leadership styles, traits, and effectiveness in motivating employees
and developing a shared vision is part of organizational behaviour research.

4.Power & Influence: This covers how power is distributed among various organisational roles
and how influences can be used to effect change or achieve desired outcomes from work groups
or teams.
5.Decision-Making Processes: Organizations need effective decision-making processes to remain
competitive in today’s rapidly changing marketplace. These processes are studied through
organizational behavior theories and game theory or system dynamics modelling techniques.

6.Group Dynamics: Organizational behavior also looks at team dynamics–how people interact with
each other when working together as a team towards achieving common goals — covering topics
like conflict resolution/management, creativity/innovation management etc.

7.Motivation: Organizational behavior examines what motivates individuals in different ways –

whether it be intrinsic rewards (like a feeling of achievement) or extrinsic rewards (such as bonuses).
It uses this knowledge to determine methods that will help motivate employees more effectively,
which enhances their productivity levels overall.

8.Communication: This is essential for any organization because it enables the effective exchange
of information between different departments and personnel within the company, leading to better
understanding, cooperation among parties involved, and smoother functioning operations overall.
 Difference between Consumer Buying and Organizational buying Behaviour
Consumer Buying Behaviour
1. Large volume of buyers but small purchase
volume.
2. Emotional buying decision.
3. Less priority to documentation system.
4. No need to collect proposal
5. Generally cash purchase.
6. Generally purchase for personal and family
use.
7. Generally purchase from the retailer.
8. Elastic demand.
9. Generally purchase decision by a single.
10. Behaviour can be influenced by sales.
11. Low involvement purchase
12. Decision is affected by person & family
activities.
Organizational Buying Behaviour
1. Small volume of buyers but large purchase
volume.
2. Rational buying decision.
3. High priority to documentation system.
4. Necessary to collect proposal.
5. Generally credit proposal.
6. Generally for organizational use.
7. Purchase from wholesalers and companies.
8. Inelastic demand.
9. Purchase by committee and group decision.
10. Behavior can be influenced by personnel selling.
11. High involvement purchase.
12. Decision is affected by organizational rules,
regulations, systems, etc
Thankyou