MARKETING FOR MANAGERS (MKTG5009)
TRIMESTER 3 2015
Individual buying behaviour vs Group buying behaviour
ASSIGNMENT 1
ROBIN KARUMBA
STUDENT ID: 18331141
WORD COUNT: 1450 EXCLUDING REFERENCE
Introduction
The consumer buying behaviour varies from one customer to another. (Graves 2013) states that it is difficult understanding human emotions effect on the buying decision process yet because we humans have very similar neural wiring we tend to make similar mistakes what he calls ‘mind gap’. This is what leads us to walk out of a shop believing we bought what we wanted.
This study will attempt to understand behavioural difference between individuals and group consumers based on influence from various environmental factors. This raises the need for consumer behaviour analysis using a nominated product buying decision process.
In this research I’ll use my past experience in the purchase of a laptop for university purpose and a large quantity of laptops for an organisation I worked for. This document this will be categorised into individual and Organisation buying decision process
The Individual Analysis * Understanding the customer: influences Personal and Social
To get an accurate individual analysis, it is important to understand the consumer demographics and background that influences the decision process.
The Organisation * Understanding the customer: influences Buy class and product type
The organisation is a multinational food and beverage industry operating in east and south of Africa.
The Individual Buying Decision Process
1. The Need
According to (Dadhe 2015) a need or want is the feeling of being deprived of something. Any unsatisfied consumer is neither happy nor comfortable. This is essentially what drives a consumer to buying. (Hynes 2014) on the other hand categorises need into functional or emotional. In other words need arises either rom a problem encountered or emotional fulfilment.
In my situation I needed a laptop for my Masters of Engineering Management studies at Curtin University. From the onset it may seem functional but there might have been an underlying desire or feeling of being deprived of a portable computer as I already owned a desktop 2. Information Search
The second stage commences when the problem recognition is sufficiently strong (Hynes 2014). This is categorised either as internal or external i. Internal
Having a background in IT and computing, I already had a lot of information based on past experiences on current technologies in the laptop industries. ii. External
If what I already knew about laptops wasn’t enough I would continue to gather information from various external sources. This involves personal circle of friends I have, magazines, and internet searches 3. Evaluation
The evaluation criteria depends on the product being purchased. In the case of a laptop, technical choice criteria will be employed. Technical criteria involve the performance of a product and include: Reliability, durability, comfort and convenience (Hynes 2014). He continues to state that consumers justify technology purchases using technical terms but usually motivated by emotional needs. This leads to ‘brand preference’ * Perceived Benefits
Some of the benefits a laptop would offer in comparison to my home desktop would be: Portability, access to the internet remotely, ability to charge other devices through USB port, work in the dark,
This therefore drove me to get a laptop that is lightweight, strong and fast Wi-Fi, bigger RAM space, adequate battery and backlit keyboard. These would take precedence over: processing speed, graphics, and screen-size. * Perceived Cost
The Cost of the laptop sought would be considerably low as money had already been spent on a home desktop computer. 4. Purchase
The purchase was influenced by environmental and social factors as well. I bought a Microsoft Surface because of its good specification and social trend. * Mid-level involvement
Being that the purchase is a mid-involvement decision, it didn’t take too much consideration in making the actual purchase. All I had to do is satisfy the evaluation criteria and get the option that was cheapest 5. Post-Purchase evaluation
(Hynes 2014)states that customers experience post purchase concern that arise from uncertainty of the buying decision. Such concern is greatly reduced by product reviews to reinforce the wisdom in the decision made. Such was the case with the purchase of the laptop as I watched many reviews online that confirmed that my decision was wise.
The Organisation Buying Decision Process 1. Recognition of Need
The need of an organisations is usually almost entirely functional. It arises as a result of a problem that needs a solution or as a result of routine depletions(Hynes 2014).The people involved tend to be less emotional about purchasing equipment for work.
As more managers need to be on the move, sometimes between countries, there was an obvious need for portability. This would be solved with the purchase of laptops that were small but with big storage capacity and durable. 2. Determination of Specifications and Quantity
The Determination of the product specifics usually involves more than one person in an organisation. (Webster and Wind 1972) state that an organisation’s buying behaviour is greatly motivated by its organisational goals and usually constrained by its financial restrictions, human resources and technological advancement. * Who buys? The buying decision making process
The organisation buying process is usually broken down to parts performed by different members of a team. This team is called the buying decision team. It is structured using the ‘who buys’ model.
Decider
Decider
Who buys model
Who buys model
In the organisation, this is no different:
The initiators: The managers with the problem
The Users: the same managers
The influencers: this is where I come in, the IT department. They will normally take over from the initiators and better shape the outcome by matching laptop specifications to the need. For our managers, basically a laptop that is small and portable with focus on multitasking and storage capacity
Deciders: This will be the IT department head or Managing director. The IT manager will decide on the brand and make of the laptops while the Director will decide on quantity of purchase
Gatekeepers: Secretaries, Security personnel 3. Potential Sources: Acquisition and Analysis of Proposals
As a matter of brand loyalty, the organisation chose to keep HP (the suppliers of our desktop computers) as our suppliers. This is due to the discounts and support that comes with it. As a result there is reduced risk and communication between supplier and customer improved 4. Evaluation
Evaluation wasn’t needed. The suppliers took the specifications we needed and supplied us with the required laptops. All laptops came with warranty 5. Order and Routine
This purchase will be categorised under new task buy class and straight rebuy as the purchase of laptops would be a new experience for the organisation but desktop computers have been purchased previously and customer loyalty suggests we should go with the same suppliers
The order would be a one off as laptops don’t expire. Even though they can be upgraded, I did not experience it in my tenure.
The purchase was a mid-level involvement for the organisation because they are used to spending millions on big machinery. 6. Performance Feedback
Companies recently have put a lot of effort to improve customer support after sales to improve brand loyalty. HP offered good customer support if we needed solutions beyond our ability. A few computers have been replaced, in my time at the organisation, at no charge.
Similarities and Differences between Individual and Organisation Buying Decision Process
There are some major similarities and differences between the individual and organisation buying process. Organisation purchase will tend to be more complex as it has 1: a lot of steps before actual purchase and 2: involves many people and potentially conflicting and therefore takes up a lot of time and resources (Webster and Wind 1972)
Organisation purchases tend to be more rational and objective and focuses on issues like: Brand loyalty, efficiency and organisational goal alignment. On the other hand individual purchases will be emotional and subjective and issues may be: Price, fashion, customer care/warranty, social acceptance and emotional satisfaction.
Both suffer influence from environmental and social sources. An organisation may make a purchase based on influence from other businesses. The organisation initially went with HP because their computers are good but also because of its stature and name.
Conclusion
Consumers are increasingly using brands to convey their identity and emotions (Hynes 2014). This means that marketers have to exert a lot of effort to sell their products through brand loyalty.
This report covers only some aspects of consumer behaviour in the buying decision process. Consumer behaviour as a whole is an extensive topic is still under study
References
Dadhe, Dr Archana. 2015. Marketing Management: Skills You Need to Create a Modern Marketing Team. 1st edition ed: Amazon.com.
Graves, Philip. 2013. Consumer.Ology: The Truth About Consumers and Psychology of Shopping. Revised edition. London: Nicholas Brealey Publishing. Original edition, 2010.
Webster, Frederick E. Jr., and Yoram Wind. 1972. "A General Model for Understanding Organizational Buying Behavior." Journal of Marketing 36 (2): 12-19. doi: 10.2307/1250972.
