Comparisons of organization buying and consumer buying
Similar to consumers, organizations are also involved in buying decisions. However, the processes involved in organizational buying are quite complex compared to the buying decision process in consumers. In the organization buying processes, the purchasing decisions are more often than not replaced with new complex ones. Organizations often buy in three circumstances, including straight re-buy, modified re-buy, and new tasks (Hawkins et al., 2010). Each of these situations determines distinct organizational behavior (Hawkins et al., 2010).
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While making purchasing decisions, organizations take into consideration factors such as the availability of information, whether the purchase will solve the organization problem, as well as the final payment for the purchases. Moreover, the organization purchasing decision-making process undergoes various stages ranging from problem identification to post-purchase evaluation (Hawkins et al., 2010). In between this purchasing, decision-making process spectra are the information search assessment and assortment process as well as the purchase implementation.
Like the individual buying decision-making process, information search forms a critical part of the process. The internet forms the basic element through which the information is retrieved across the various phases in the buying decision-making process (Graham, 2010). Functional attributes, including price, quality, and the brand image, play a critical role in the buying decisions of both the organization and the individual consumer. Both the organization and the household are influenced in the same manner by these attributes. The individual consumer act in the same way towards the functional attributes as the organization buyers (Lantos, 2010).
However, the purchasing implementation is more complex in organizations than in individual buying decisions. The most important process in purchase implementation is the process of payment. To the organizations, how the payment is made remains critical in their decision-making process (Hawkins et al., 2010). The post-purchase evaluation is similar in both the individual consumers and the organizations. The entities will perform several assessments to determine the life-cycle cost of the product.
The role of organizational culture in organizational buying
The organization’s buying-decisions are being influenced by both internal and external factors. One of these factors includes the firm’s culture. The organization culture is the way the organization operates (Hawkins et al., 2010). The characteristics that determine the organization’s culture includes the firm’s magnitude, setting, actions, goals, position, and the industry in which it operates. These characteristics are external to the firm. However, they influence the firm’s behavior, particularly the buying pattern (Hawkins et al., 2010). Other characteristics that determine the firm’s culture includes its internal composition. These include the income allocation to the workers, the major age group, and gender composition as well as education levels.
The firm’s internal composition influences its buying pattern. For instance, the market will be segmented depending on the internal composition, and the buying-decisions are based on this macro-segmentation (Hoyer & MacInnis, 2008). The other external factors that influence the firm’s culture comprise of the society in which the organization operates as well as the government policy. Internal factors include discernment, principles and standards, knowledge, reminiscence, intentions, and sensations. Firms embrace values and perceptions that influence the general behavioral style (Hawkins et al., 2010). The individuals within the organization hold these values and perceptions in differing levels. Organizations develop images, motifs, and learn from past behavior. Whereas the motives of the organizations are rational, individuals guided by their emotions make decisions. All these factors must be put into consideration for the buying decision to be successful.
The way each organization perceives these cultural values make it distinct from others. For instance, seller organizations such as Hewlett & Packard applied the organization buying behavior principle to be distinctive in the highly competitive technology market. Also, the organization understood the fact that its buying behavior will eventually influence the buying pattern of its consumers. Generally, the organization’s buying behavior influences individuals buying patterns.
Graham, J. (2010). Critical thinking in consumer behavior: Cases and experiential exercises. Boston: Prentice Hall.
Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2010). Consumer behavior: Building marketing strategy. Boston: McGraw Hill.
Hoyer, W. D. & MacInnis, D. J. (2008). Consumer behavior. Farmington Hills, MI: Cengage Learning.
Lantos, G. P. (2010). Consumer behavior in action: Real-life applications for marketing managers. Armonk, NY: M.E. Sharpe.