Difference between Consumer and

Organizational Buying Behavior

Introduction to Consumer Behaviour

Module: 1
Difference between Consumer and Organizational Buying Behavior

In order to develop effective marketing strategies, it's essential to understand

the key differences between consumer and organizational buying behavior as

well as the factors that influence each type of behavior.

Key Differences between Consumer and
Organizational Buying Behavior

Decision-Making Unit Purchase Process Product Characteristics

In consumer buying behavior, the Consumers typically make Consumer products are often
decision is usually made by purchase decisions based on purchased for personal use, while
individuals or small groups, personal preferences or needs, organizational products are
whereas in organizational buying whereas organizations are guided purchased for use in a business
behavior, the decision-making by formal processes that require setting and may have specific
unit may involve multiple people the consideration of different product characteristics or
with different roles and criteria. requirements.
responsibilities.
Factors Affecting Consumer Buying Behavior

Culture Social Factors

Cultural values and beliefs often influence Social factors, such as family, reference groups,
consumer behavior, including attitudes towards and social class, can also impact consumer
branding, product usage, and purchasing behavior and influence product choices.
frequency.

Psychological Factors Situational Factors

Consumer behavior is also influenced by Finally, situational factors such as location,

psychological factors including motivation, timing, and momentary moods may also affect
perception, and personality. consumer buying behavior.
Factors Affecting Organizational Buying
Behavior
Organizational Culture & Structure Corporate culture and organizational structure may
have a significant impact on how businesses make
purchasing decisions, including factors such as
hierarchy, communication channels, and risk
tolerance.

Environmental Factors Organizations must also consider environmental

factors such as regulations, social responsibility,
and the wider economic climate in which they
operate when making purchasing decisions.

Individual Factors Individual factors such as personal values, career

aspirations, and influence may also impact
purchasing decisions among organizational buyers.
Types of Consumer Buying Behavior
1 Habitual Buying 2 Variety-Seeking Buying

Consumers make purchase decisions out of Consumers are looking for variety in their
habit, without much thought or deliberation. purchases and may switch brands or products
Examples include common household frequently. Examples include fashion products
products. or snack foods.

3 Dissonance-Reducing Buying 4 Complex Buying

Consumers experience anxiety or after a Consumers engage in extensive research,

purchase and require reassurance regarding comparing and evaluating different brands or
their decision. Examples include big-ticket products before making a purchase. Examples
items such as cars or homes. include luxury items or high-end electronics.
Types of Organizational Buying Behavior

1 Classical Model
A rational, formal approach that involves a thorough analysis of the product or service,
supplier assessment, and decision-making by the appropriate authority.

2 Bureaucratic Model
The purchasing decision is made based on strict rules, procedures, and protocols. Approval may
be required from multiple individuals before a purchase can be made.

3 Administrative Model
Individual buyers or teams have some degree of authority to make purchasing
decisions based on their own experience and knowledge of the product or service.

4 Political Model
Purchasing decisions are made by influential individuals or coalitions within the
organization, often based on subjective factors such as personal relationships or
political alliances.
Marketing Strategies for Consumer Buying
Behavior

Affective Branding Endorsements & Influencer Deals & Promotions

Marketing
Creating a positive emotional Offering price discounts, coupons,
connection between the consumer Using celebrity or influencer or promotions to encourage
and the brand, emphasizing values endorsements to promote products consumers to try the product or
or characteristics that are and appeal to consumer make repeat purchases.
important to them. aspirations and lifestyle.
Marketing Strategies for Organizational Buying
Behavior
Product Expert Exclusivity &
Demonstrations Consultations Customization

Showcasing product Consulting with experts Offering exclusive or

features and in the field, who can customized solutions
functionality that meet provide insights and that align with the
the specific needs of the knowledge about the organization's unique
organization, providing product or service, needs and are not easily
an opportunity for especially in more accessible by
stakeholders to engage complex or specialized competitors.
with the product in markets.
person.
 Personal Influences on Consumer Buying Behaviour
Consumer buying behaviour is influenced by a variety of personal factors, including:

 Perception of the product or service

 Motivation and needs
 Attitudes and beliefs
 Lifestyle and personality
 Personal influences can impact consumer buying decisions in a variety of
ways, such as by influencing the perception of the product or service, or by
affecting the motivation to make a purchase.
 Organizational Buying Behaviour
Organizational buying behaviour, on the other hand, is influenced by factors such as:

 Budget and financial considerations

 Organizational goals and objectives
 Availability of resources and expertise

 Organizational buying behaviour is typically more rational and objective than consumer
buying behaviour, with decisions based on the needs and goals of the organization rather
than personal preferences or emotions.
 Consumer buying behavior:
Organizational buying behaviour, on the other hand, is influenced by factors such as:

 Consists of activities involved in buying and using of products for personal and
household use.
 Consumers buy goods to use for themselves, or as a gift for someone else.
 Consumers are free to purchase for personal use.
 Consumers buy in smaller volumes pertaining to their individual, and often immediate,
needs.
 The decision maker is most often the buyer.
 Organizational buying behavior
Organizational buying behaviour, on the other hand, is influenced by factors such as:

 Organizations buy goods due to consistent, ongoing operations or to resell, and

generally focus on the long-term Consumers buy goods to use for themselves, or as a
gift for someone else.
 Organizations often purchase raw materials to build products for consumers, or whole
products to resell to consumers.
 Organizations purchase large volumes of goods at one time because they plan for
long-term needs and are driven instead by personal need by their consumers’ and
manufacturing needs.
The organizational buying process contains eight stages,
which are listed below

1 Problem Recognition

General Need
2 Description

3 Problem Recognition
The organizational buying process contains eight stages,
which are listed below

4 Supplier Search

5 Proposal Solicitation

6 Supplier Selection
The organizational buying process contains eight stages,
which are listed below
Order – Routine
7 Specification

8 Performance Review
 Consumer Buying Organizati onal Buying
Behaviour Behaviour
Purpose The individual consumers buy goods and The organizations buy goods and services for their business
services for ultimate use or satisfy their needs. The buying purpose of them is to earn profit by using
of Buying needs. The buying purpose of such consumers and reselling the goods and services
is not to earn profit by reselling the goods and
services.

Quantity Although consumers buy various kinds of goods, Organizational buying is done in large quantities. There are
the quantity of goods remains small. They several reasons why organizations must buy the goods they
buy only the necessary quantity of goods, need in bulk. In the first place, they use large quantities of
which they need for regular use. each item and must maintain inventories at a level high
enough that they will not runout of stock. Secondly, it is
cheaper and more efficient to make large-volume purchase

Purchase Consumer buying takes decision by consumers Organizational purchasing is a rational process because
themselves. Sometimes they can consult with family the purchasing behavior of organizations is guided by
Decision members and friends. They need not fulfill objective factors having to do with production and
any formality like organizational buying. distribution. It takes long time than consumer buying.
 Consumer Buying Organizati onal Buying
Behaviour Behaviour
Market Most of the consumers may not have adequate Organizational purchase criteria are specifically defined.
Knowledge knowledge and information about market Organizational buyers usually have fewer brands to choose
situation, available goods and services, etc. The from than do individuals, and their purchases must be
educated customers may be aware and have evaluated on the basis of criteria that are specific to the
knowledge about market and goods. overall needs of the organization. The organizational buyers
have full knowledge of market and suppliers.

Types of
Goods Consumers buy many goods to use to satisfy Organizational buyers buy limited goods to use to conduct
personal or family needs. business departments may be involved and departments may
be involved in the buying process.

Effect Consumer buying behaviour is affected by age, Many individuals are involved in the buying process. Within
occupation, income level, education, gender etc. of large organizations, rarely is one individual solely
consumers. responsible for the purchase of products for the purchase of
products or services. Instead, many individuals and
departments may be involved and departments may be
involved in the buying process.
 Consumer Buying Organizati onal Buying
Behaviour Behaviour
Buying No need to fulfil any formality. There is also Buyers and sellers in the organizational market must
Process no need to maintain extensive contact with sellers. maintain extensive contact.