a. Outline four differences between organizational buying behaviour and consumer buying behaviour b. List and explain three influencing factors in organizat...
Question 1 Report
a. Outline four differences between organizational buying behaviour and consumer buying behaviour
b. List and explain three influencing factors in organizational buying behaviour.
Answer Details
(a) Four differences between organizational buying behaviour and consumer buying behaviour
| Organizational buying behaviour | Consumer buying behaviour |
|---|---|
| Purchases are made by firms for production, resale or use in operations. | Purchases are made by individuals or households for personal or family use. |
| Buying is done by professionals and often a buying committee, involving many people. | Buying is usually done by one person or a family, involving few people. |
| Quantities bought are large and orders are often frequent and repetitive. | Quantities bought are relatively small and less frequent. |
| Decisions are rational, technical and based on specifications, quality and price. | Decisions are often influenced by emotion, taste, fashion and personal preference. |
Other valid differences: organizational demand is derived from consumer demand while consumer demand is direct; organizational buying involves formal procedures, tenders and negotiation while consumer buying is informal.
(b) Three influencing factors in organizational buying behaviour (explained)
- Environmental factors: External conditions such as the level of demand, economic outlook, interest rates, technological change and government regulations affect how and when organizations buy.
- Organizational factors: The firm's own objectives, policies, procedures, purchasing structure and available budget shape its buying decisions.
- Interpersonal and individual factors: The interests, authority, status and relationships of the people in the buying centre, as well as the personal characteristics (age, education, attitude to risk) of the buyer, influence the choice made.
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