Consumer & Organizational Buyer Behavior
Consumer and organizational buyer behavior are sub-categories of marketing. Research in both fields has enabled manufacturers and distributors to understand the needs, preferences and behavior of buyers, as well as the internal and external factors that influence buyer behavior. Although much has been written about the differences between consumer and organizational buyer behavior, it appears that the demarcations between the two fields are not as clear as they may seem to be.
Keywords Buying Center; Buying Decision Process; Consumer Buyer Behavior; Decision-Making Unit (DMU); Organizational Buyer Behavior
Buyer behavior is concerned with the selection and purchase of Products or services to satisfy a need for individuals or groups. It is focused on the needs of individuals, groups and organizations. Buyer behavior occurs either for an individual consumer on his own; an individual consumer in the context of a group (where others in the group influence how a person behaves); or an organization (where employees make decisions about which products or services the firm should use).
Although economists were the first academic group to offer a theory of buyer behavior, the field of buyer behavior is a subcategory of marketing that blends elements from economics, psychology, sociology, social psychology, anthropology and other sciences, such as physiological psychology, biochemistry, and genetics. The two main areas of buyer behavior are consumer buyer behavior, and organizational buyer behavior.
Consumer buyer behavior has developed, since the 1960s, as a separate discipline within marketing, to enable manufacturers and distributors to research and understand the needs and preferences of the increasingly sophisticated customer, and to respond accordingly. The field of organizational buyer behavior — initially called industrial buyer behavior — also surfaced in the 1960s, but most of the research in this area has taken place since 1980. Progress in this field has led to a new occupation of professional buyers.
Buyer behavior is influenced by many factors, namely the internal mental processes of individuals; external factors; the availability of resources; the characteristics of the product, service or idea required; availability of the requisite skills; and socio-demographic variables.
There are four typical types of buyer behavior based on the nature of the product, service or idea to be purchased. Complex buyer behavior involves a high value brand and involves an intense information search before the purchase is made. Habitual or routinized response buyer behavior is where a product is regularly purchased out of habit, and as such, the buyer needs relatively little information. Variety seeking buyer behavior describes the situation where the buyer shops around and experiments with different products. In some purchases, buyer dissonance is reduced because the purchase is large or infrequent, thus reducing the amount of differences between brands; the buyer becomes more highly involved with the purchase.
Consumer Buyer Behavior
As individuals or as households, consumers undergo various stages in making the decision to purchase. These stages occur in varying degrees, depending on the complexity of the purchase and the buyer’s purchasing behavior (Zahorsky, n.d.). At the most, many experts agree that the consumer buying decision process can have six stages: problem recognition, information search, evaluation of alternatives, purchase decision, purchase, and post-purchase evaluation.
First Stage of Consumer Buying Decision Process
The first stage, problem recognition or need awareness, occurs when a potential buyer becomes aware of a need, which may have been established by encountering a problem or may have been prompted by a company's marketing efforts. Consumer needs are either biological, that is, relating to primary or physiological elements; or psychological, that is, emotional. Needs change as individuals satisfy their basic needs and move along the path towards self-actualization.
Second Stage of Consumer Buying Decision Process
The second stage of buying is the information search. Information often facilitates purchasing. There are two types of information searches: Internal and external. With an internal information search, the consumer searches the information stored in his or her memory. If more information is needed after the internal search, the consumer may consult external information sources such as friends and relatives for word-of-mouth; marketing information; comparison shopping; and public sources. This information search stage is usually bypassed when the consumer is buying out of habit, wants to experiment, or is buying on impulse.
Third Stage of Consumer Buying Decision Process
A successful information search leaves a needy consumer with possible alternatives collectively called the evoked set. Armed with an evoked set, the consumer embarks on the third stage of the buying decision process: Evaluation of alternatives (also known as information evaluation). Here, the consumer may need to establish the criteria for evaluation, such as features of the product or service that the buyer wants or does not want, pricing, and company credibility. The consumer may rank or weight the alternatives to arrive at a choice, or resume searching if a satisfactory choice is not arrived at.
The fourth stage in the consumer buying decision process is the purchase decision. Here, the consumer makes the decision to buy; he or she has selected from the available alternatives, making decisions on details such as the specific product or service, its packaging, retail outlet and method of purchase. The fifth stage, which some authors do not recognize as a separate stage, is the purchase, which at times occurs simultaneously with the purchase decision. When the product or service is not readily available, there is likely to be a time lapse between the purchase decision and the actual purchase.
Sixth Stage of Consumer Buying Decision Process
The sixth and last stage in the consumer buying decision process is post-purchase evaluation (also known as post-acquisition evaluation, post-buying behavior, or after-purchase evaluation), which may occur to the buyer consciously or subconsciously. The buyer may look to the media, friends and other sources for reinforcement, to confirm that he or she has made the right decision.
At the end of his or her evaluation, the buyer may experience satisfaction or dissatisfaction. Dissatisfaction, also known as cognitive dissonance or buyer's remorse, may result from many factors, such as unmet brand expectations. Dissatisfaction may also cause the consumer to lodge a complaint. Satisfaction, on the other hand, may result in a customer becoming loyal to a particular brand or retail outlet.
Factors that Affect Consumer Buyer Behavior
Internal Mental Processes
Consumer buyer behavior is affected by internal mental processes such as behavioral intention, past experience, behavior in similar settings, perceptions, habit, and genetic heritage. According to the Theory of Planned Behavior, behavioral intention is the most influential predictor of behavior. According to Pavlou and Fygenson (2006), “Behavioral intentions are motivational factors that capture how hard people are willing to try to perform a behavior” (p. 4). They are derived from attitude, subjective norm (one's desire to act as others act or think one should act) and perceived behavioral control (the perception of how easy or difficult it would be to carry out a behavior). Most consumer behavior is learned from experience, and the lessons learnt from past experience have been found to influence consumer buyer behavior. Consumer buyer behavior is also affected by the way the consumer tends to behave in similar settings; as well as by perceptions, habit and genetic heritage (Pavlou and Fygenson, 2006).
Trust is another important factor in consumer buyer behavior, since it reduces uncertainty. First of all, “trust is important for getting information, since consumers tend to assess whether the information obtained is valid, credible, and accurate.” Trust is also important for product purchasing, especially in cases such as online purchasing, where consumers tend to be vulnerable, as they cannot see or touch any products or vendors (Pavlou and Fygenson, 2006).
The common external factors that influence consumer buyer behavior are: Other people; the setting or situation; one's upbringing, culture and religion; marketing and advertising; and the media. According to Wilson (2000), “many consumer purchasing decisions are probably more accurately seen as collective decisions, in that they are influenced by many others.” As such, purchasing decisions are influenced by family members, friends and other peer groups, reference groups, and other groups.
Reference groups are particular groups of people that an individual looks up to. These groups of people are used as a standard of reference against which individuals compare themselves. Reference groups come in various forms. For...
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