The Difference Between Consumer Buyer Behaviour and Organisational Buyer Behaviour

The difference between Consumer Buyer demeanour and Organisational Buyer Behaviour In this essay we will be public lecture active the difference between consumer secureer doings and organisational bargainer conduct and how commercializeers washstand harvest this knowledge to create the right marketing strategies for each category of market. The main difference between consumer vendee behaviour and organisational emptor behaviour is that consumer buying consists of activates conductd in buying and using of out ordinates for private and household use, where organisational buyers purchase primarily for organisational purpose.Consumer behaviour is entangled and a participation has to fit their intersection point more closely and conform to their customer need more fully than the competitors. Marketers will in like manner need to know whether their governable variables, e. g. marketing mix variables, will affect buying behaviour. Culture is the broadest environmental f actor ravish finds buyer behaviour, consumption choices discount non be beneathstood without considering the culture. It is the prisms with witch customers perceive the product. The culture of consumers determines the priorities he attaches to polar products.The link between consumer behaviour and culture is a two-way street. In one direction the products that ar produced to fit a consumers culture atomic number 18 better accepted, in the other direction products and innovation that are created in a specific culture on a given time show us a clear domination in the cultures ideals. (Michael Solomon, Culture, 2006) Social class refers to the class together of individuals or families who have certain common social or economic characteristics. Societies can be divided in haves and have-nots.Social Class is headstrong by income, family background and occupation. The social class is not only find out how much money is spent by the individual but also how it is spent. (Micha el Solomon, Consumer Behaviour A European location, 2006) Consumer buyer behaviour Maslows power structure of needs is the source specimen we are looking at. It implies a hierarchy of biogenic and psychogenic needs where the order of development is fixed and a certain level must be attained before the beside higher one.In Maslows hierarchy one must first satisfy basic needs before he can progress up the ladder. The application of this model is relatively simplistic as one product can satisfy more than one need. (Michael Solomon, Consumer Behaviour , 2006) The next model we are talking about is the Howard Sheth model. The model describes target decision under incomplete or limited cultivation. It distinguishes three levels of decision 1) Extensive difficulty solving- the buyer has little or no knowledge about the product and has no criteria by which to choose the product. ) Limited bother solving- In this gunpoint the choice criteria are defined but the buyer is still loos e about the brads which best serve him. 3) Routinized responses behaviour- The criteria set in this arrange is closely defined and the consumer has the best brand which best serves him. He makes the buying offshoot with little evaluation of alternatives. The Howard Sheth model borrows concepts from the learning model to explain brand choice. Four major components are involved in this process everyot variables, output variables, hypothetical constructs and exogenous variables. Rao, 2011) There are three variant impute variable, the first and second is provided by the marketer by hearty stimuli like physical brand characteristics and symbolic stimuli like visual or verbal characteristics. The third variable is provided by family, quotation group etcetera (Rao, 2011) The perceptual and learning construct define the main part of the model. It deals with the psychological variables with interact with the consumer decision making. The output variables are the response to the impu te variables and helps us understand how the consumer will engage with the perceptual construct. Rao, 2011) The Last model we are looking at is the Engel-Kollat-Blackwell model which was created to describe the knowledge concerning consumer behaviour. The first stage is the decision-process stage. The model is focusing on the five mine decision-process stages Problem recognition, take motorcare for alternatives, alternate evaluation purchase, and outcomes. The consumer does not necessarily have to go by means of all this stages. The number of stages depends if it is an extended or a routine problem solving behaviour.The Second stage is the randomness impute where the consumer is getting information from marketing and non-marketing sources with will influence the decision-making process. The third stage is the information touch on stage and it consists of the exposure, attention and retention of the consumer to the information. The consumer must first be subject to the message, allocate space for this information, interpret the stimuli, and retain the message by transferring the introduce to long-term memory. The fourth stage consists of individual and environmental influences that affect all five stages of the decision process.Individual characteristics include motives, honours, lifestyle, and personality the social influences are culture, reference groups, and family. Situational influences, such as a consumers financial condition, also influence the decision process. (Engel, 1995) Organisational buyer behaviour Broadly speaking organisational customers can be classified in commercial, institutional and organisational sector. (Oxford University Page) The Commercial customers can be divided furthermore in 1) Distributors They are also cognize as intermediaries and their main purpose is to transfer products through the supply chain adding value to them.The main types of intermediary are wholesales, dealers, agents, value-added resellers. 2) Original e quipment manufacturers (OEMs) They are the classic handicraft customer. They purchases parts or materials and manufacture and market with the manufacturers brand. 3) Users These customers buy well-nigh products to sustain their own production. 4) Retailers They purchase goods to sell them to their customers. The Institutional customer whitethorn differ greatly from the commercial customer in the forward list. Universities are a good example of institutional customers and the products they have to buy in order to keep operating. Oxford University Page) The Governmental customers can differ from government to government as they can regalement their spending on military wellness and education. While there are differences between consumer buyer behaviour and organisational buyer behaviour we clearly can see some similarities between them oddly when we realises that rationality in organisational buyer behaviour can be misplaced. If the buyer are people to then they can also make mist akes deuce-ace by perception, emotion and pear pressure.On the other hand some consumer purchases involve high technical complexity and time involving information search. The practice of B2B and B2C is not always clear as an example we can take fair weather Microsystems witch approaches large business directly but also encourages meek developers to build OEM machines and sell them to customers. (Oxford University Page) We clearly can see that there are some similarities in the B2C and B2B market but there are some huge differences. For example, consumer markets often consist of millions of customers where far fewer customers are in the organisational market.A small percentage often makes a large percentage of the internet of a B2B business. (Oxford University Page) The B2C buying process can be fairly complex for a high involvement purchase like a car but in a B2B market there is often not only one person involve in this process, it is typically known as the decision-making so cial unit (DMU). Members involved in this decision making unit can be managers who are not involved in the physical exercise of the product and often have a strategic and financial aspect of the fellowship but also members who directly use the product are involved in the decision making process.We can describe the different parties (Webster and Wind, 1972) in the decision making process as followed 1) Initiator- is the person who makes the first request for the purchase 2) Buyer they are the formal authority in the process and are making the purchases from the suppliers 3) Influencers they affect the decision-making process by providing familiar or external information. 4) Decision makers- they are the persons with the authority to approve a purchase. 5) Users they are the persons who use the product. They often deliver feedback of the performance. ) Gatekeepers they control the flow of information to other managers within the buying organisation One of the most prize models of organisational buyer behaviour is the Buygrid Framework (Robinson et al, 1967). It combines nature of the buying situation with the stages in the decision process. It is worth noting the differences between the three buyclass situations 1) New task purchases In this category the company is buying a product or a service for the first time. They typically have no experience in the suppliers capabilities. The DMU is usually larger and the schedule for the decision is often extended. ) Modified rebuy in this chase the company has already knowledge about the suppliers capabilities but has to alter a variable in the order witch could be time, amount or price. 3) Straight rebuy in this case the company does not alter the order. It is normally seen when basic goods are ordered. The decision-making process is quite formal in B2B markets and it goes through many as eight buyphases for a new task purchase 1) Problem Recognition this can be created by a supplier review, dissatisfaction with current providers and changing business needs. ) ecumenic need description the need can come from an innovation, the need for cut costs or improving production. 3) Specifications It necessity buyer/supplier dialogue and is the part where suppliers are differentiated and evaluated. 4) Supplier search it is the stage where a consideration set of suppliers is created and information is gathered. 5) Proposal submission suppliers are put into a choice set and a proposal is solicited from those last few suppliers 6) Supplier Selection in this stage proposals are evaluated and negotiation may take place between buyer and seller. ) Order process specification in this stage an agreement or a contract is created. 8) achievement review in this stage the suppliers are revised and benchmarked and then changed, change or discontinued. (Oxford University Page) It is very important for a company in the B2B market to understand the different members and their roles in a DMU of a c ompany the members can be brought together from all parts of a company and can include purchasing, R&D, finance and even marketing.The marketing schema of the supplying must reflect the individual interest within a DMU but also the whole interest and group dynamic of a DMU. (Oxford University Page) Referencing (n. d. ). Retrieved 03 21, 2012, from Oxford University Page http//www. oup. com/uk/orc/bin/9780199551682/ellis_ch02. pdf Engel, J. B. (1995). Consumer Behaviour. In J. B. Engel, Consumer Behaviour. Michael Solomon, G. B. (2006). In G. B. Michael Solomon, Consumer Behaviour A European Perspective (p. 460). Michael Solomon, G. B. (2006). Consumer Behaviour . In G. B.Michael Solomon, Consumer Behaviour A European Perspective (pp. 125-126). Michael Solomon, G. B. (2006). Culture. In G. B. Michael Solomon, Consumer Behaviour A European Pespective (pp. 525-527). Rao, V. S. (2011, 01 10). Howard Sheth Model. Retrieved 03 21, 2012, from cite Man meshing http//www. citeman. com/1 3241-howard-sheth-model. html Robinson, P. J. , Faris, C. W. , & Wind, Y. (1976) Industrial Buying and Marketing , Allyn & Bacon, capital of Massachusetts Webste, F. E. & Wind, Y. (1972) Organisational Buying Behaviour, Prentice Hall, Engelwood Cliffs, NJ