Organizational Buying Behaviour is a complex decision-making and communication process involving selection and procurement of product and services by organizational buyers.
Individuals, organizations or government agencies that make a purchase decision regarding raw materials, products and services, components or finished goods are known as organization buyers.
Consumers – Purchase products for personal consumption
Industrial Buyers – Purchase products on behalf of their business or organization
Since the organizational buyers or industrial buyers are motivated or influenced more by profit objectives and less by personal motives, therefore it is empirical to understand the buying behaviour of organizational buyers and formulate marketing strategies for organization buyers that are different from strategies for regular consumers.
Usually the buying decisions in an organization are taken by the Buying centre which may consist of the top management or the members of the procurement committee or any other department.
Nature / Characteristics of organizational buying behaviour
- Every organization is unique – As different organizations have different organization structures, organization cultures, values, objectives and resources. Therefore they also have a unique set of needs, demands and exhibit unique buying behaviour.
- There is a long time lag between efforts and results – In the process of individual buying, the time taken between a purchase decision and sales transaction is shorter than industrial buying. This is due to the extra formalities and procedures that are to be followed in organizational buying process. For e.g. asking quotations, evaluating tenders, preparing bulk orders etc.
- It is a rational as well as emotional activity – Due to presence of human beings in the purchase process, it gives rise to emotional element involved in buying. An industrial buyer may select the quantity and quality of a product on the basis of specified organization norms but may choose a dealer on the basis of his personal or political affiliation or past experience with the dealer.
- It is a formal activity – Organization buying involves a formal contract between the buyer and seller. It is an formal activity which requires the buyer to follow rules and procedures laid down by the organization regarding the type, quality, quantity, terms of payment, delivery time etc. while making a purchase decision.
- It is a multi-person activity – Buying decisions in an organization are generally taken by a team of qualified personnel also referred to as buying centre where each individual plays different buying roles.
- Other characteristics of organization buying:
- There are few industrial buyers and many individual buyers
- Organization buyers usually buy in bulk
- Role of middlemen is reduced as the buyers buy directly in bulk from manufacturers
- Organizations generally have an inelastic demand
Factors influencing organizational buying behaviour
| External Environment | Organizational Factors | Inter-personal Factors | Individual Factors |
| Economic Environment
Social Environment Political Environment Legal Environment Infra-structural Environment Competition in market |
Goals & Objectives
Policies & Procedures Organization Structure Organization Culture Financial Position |
Status and Authority
Involvement Persuasiveness Negotiation Buying Role |
Education
Expertise Experience Job position Attitude towards risk |
NEXT: Buying Centre/Buying Situation, Organizational Buying Process
Please provide me notes in my gmail about determinents of business buying behaviour and family influence on consumer behaviour
After a while I learn a blog, I expect making sure it doesnt disappoint me as high as this one. I’m implying, I know it was my option to read, however I truly thought youd have something interesting to say. All I hear is a bundle of whining about an item which might repair when you werent too busy searching for attention.