Question

what are the differences between consumer buying process and business buying process?
take example to illustrate the differences

Answer 1

There are intrinsic differences between Business buyers i.e. business-to-business and Individual or final consumers i.e. business-to-consumer marketing. The differences are a result of the complex and interdependent relationships between buyers and sellers relative to their roles in the supply chain.

Business buying Business buying is buying products and services by an organisation for the end-use purpose. Business buying behavior refers to the actions of employees of an organisation to buy products and services for the organisation which includes the decision making the process of selection of suppliers and bearing post-purchase consequences.

In this market business, buyers buy products on a large scale either for the production of another product or for their own use. They buy products and add value to the same for selling to Consumers. For example, raw material (crude oil, steel, etc.), final products for company use (generators, printing machines, etc.), office stationary, etc. Due to companies operating on the large scale in global markets, they also utilise services of banks for life insurance of its employees, security services, legal services, etc. from other organisations which provide such offerings.

Business buyers tend to buy all the products and services from one seller or a few sellers. This benefits the organisation in many ways.

For Example, 1. It helps in cost reduction, 2. No over storage needed for emergencies, 3. Long term relationship brings effectiveness, 4. Less price fluctuation as the contract signed over a long period. decision making differs from organisation to organisation. Depending on the size of the organisation, the decisions can be made by different people. The Decisions can be related to Product characteristics, price negotiation, selecting a supplier, contract/ paperwork. For a small firm which has limited resources and small production unit, a single person like a Senior Production Manager can take all the decisions with the help from its staff.

The business should invest in effective promotion campaign to promote its products. The company representatives should be adequately trained and supported to do presentations and generate leads. In today’s competitive environment, each and every organisation is striving to increase its market share. So it becomes important that the organisation reaches to Business buyers and effectively communicates about its products and services.

The marketing team has to proactively reach out to organizations to give presentations, etc. for the sale of their products. They need to understand the structure of the organisation to identify the various approval and advising authorities for effective sales and competitive advantage. There are two main factors that affect business to business deals – Organisational factors and Individual and Interpersonal factors of Buying center participants.

a) Organisational Factors – As an individual has an image, organisations also have an image. They hold values that influence their style of functioning. These refer to its structure, formal or informal interaction among departments, etc. This understanding helps suppliers identify how dealing with one organisation is different from the other.

b) Individual and Interpersonal factors of Buying center participants – the individuals at the buying center affect the purchase decisions due to many factors. The participants may exhibit conflict based on rewards, demotion, expertise, special relationship with other participants, etc. Other characteristics which business marketers should study include personal goals, professional experience, life-style, attitudes and opinions, personality traits, etc. Like consumer buying characteristics, the participants at the buying center are also influenced by emotions, beliefs, etc.

Consumer buying behavior refers to the buying behavior of individuals or households who buy products for their own consumption.

In the decision-making process, the buyer is influenced by many factors for making the purchase. These could be his product need, financial capacity, the influence of the family members and friends, effective salesmanship, brand value, etc. This entire process of arriving at a final decision to buy a product encompasses Buyer Behaviour. Thus the Consumer Buying Behaviour includes physical as well as mental activities in buying and using a product.

A consumer may want to buy a certain product, but he may opt for something else either because of a recommendation of a friend or a past experience of a different product from the same manufacturer. We can say that buying behavior is influenced by cultural, social, personal, and psychological factors.

The buyers buy products and services for their personal consumption. For example, soaps, office stationery, bread, etc., which fall under the category of Fast Moving Consumer Goods. And the other category in this market is Durable Goods – the products or services utilized over a long period. For example, Refrigerators, cars, insurance products, banking services, etc.

Not all consumers exhibit the same buying behavior. The buyer is influenced by various variables like cultural, social, personal, and psychological factors.

a) Cultural factors – there is a culture in every society. Culture forms the ideas, beliefs, values, and behavior of a person living in a particular region. People living with each other in an area are influenced by each other. A person brought up in a Hindu family will have different set of behavior for buying meat products as compared to a person raised in a Muslim family.

b) Social factors – Man being a social animal, his behavior is derived from the people he lives and interacts with. These also affect his/her thinking and preferences. These factors are reference groups, family, role, and status in society.

c) Personal Factors – personal factors include a person’s age, job, and income, lifestyle, personality and self-image.

d) Psychological factors – there are four psychological factors that influence buying behavior – motivation, perception, learning, and beliefs and attitudes. We can see that the behavior depends on the needs and position of the buyer in the supply chain. The individual buyers buy products for their own use and Business buyers mostly products for making another product or their own use in the organization. The buying in Business buying is more formal and needs paperwork.