Question

In: Economics

View "Consumer Purchasing Decisions" and "Technology and Consumer Behavior." Based on your review of this chapter,...

View "Consumer Purchasing Decisions" and "Technology and Consumer Behavior." Based on your review of this chapter, you know that consumers demonstrate specific behaviors as they work toward purchasing a specific product. In addition, the text points out that consumers can arrive at a specific buying decision based on previous experiences with a specific product, a newfound awareness of the usefulness of a particular new product, positive reviews form customers who have previously purchased the same product, etc. Based on your understanding of the consumer buying process, compare and contrast how the consumer buying process and the organizational buying processes differ. Illustrate your ideas with specific real-world examples. In replies to peers, discuss whether you agree or disagree with the way your peers have differentiated between the two buying processes.

Solutions

Expert Solution

The consumer buying process is the steps a consumer takes in making a purchasing decision. The steps include recognition of needs and wants, information search, evaluation of choices, purchase, and post-purchase evaluation. Organizational buying process refers to the process through which industrial buyers make a purchase decision. Every organization has to purchase goods and services for running its business operations and therefore it has to go through a complex problem solving and decision making process.For Example I have to buy wheat for home consumption. As a consumer I will evaluate it on factors like quality, price, stores nearest to my place, discounts offered etc. Suppose I am a producer of Bread and require wheat as a raw material to be used in production of bread. In this case the factors affecting my buying decision will be different. The factors like relationship with vendors, budget approval from concerned department will affect my decision.

Key Differences:

  • Planning Most purchases made by a business are planned in advance, where the same purchases might be impulse buys for a consumer. A family may plan a short trip instantly. In case of organization going for a short trip proper planning and organizing is required and has to be decided well in advance.To be able to accommodate both business and consumer purchases, you need to have a structure in place that allows businesses to plan their purchases while still offering impulse options to consumers.

  • Decision Making In case of consumers decision maker and person actually buying the product are the same persons. A mother may decide to buy school bag for children and she alone will buy the product in most cases. In case of business every purchase require budget approval, concerned department approval.The person that makes the final purchase is often a purchasing agent or departmental representative.

  • Support Many businesses require support contracts when purchasing certain types of items. For example, if a business purchases a copier then the copier may need to have at least a three-year warranty on the product before the company can finalize the purchase. A consumer is not restricted by support needs when it comes to buying products, but that does not mean that support is unimportant to a consumer.

  • Relationship History A business having cordial relationship with vendors will affect the buying decision.For example, if a business has an ongoing relationship with an office supply store, then pricing contracts and dedicated support personnel can make the relationship beneficial to the business. A consumer compares the prices offered by different companies and then make buying decision.

To conclude consumer buying process is comparatively simpler and easy as compared to organization buying process which is more complex and require fulfillment of certain formalities.


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