Difference between Consumer Buying Behavior and Organizational Buying Behavior

The differences between consumer buying behavior and organizational buying behavior can be listed as follows:
Bases Consumer Buying Behavior Organizational Buying Behavior
Purpose of Buying
The individual consumers buy goods and services for ultimate use or satisfy their needs. The buying purpose of such consumers is not to earn profit by reselling the goods and services.
The organizations buy goods and services for their business needs. The buying purpose of them is to earn profit by using and reselling the goods and services.
Quantity
Although consumers buy various kinds of goods, the quantity of goods remains small. They buy only the necessary quantity of goods, which they need for regular use.
Organizational buying is done in large quantities. There are several reasons why organizations must buy the goods they need in bulk. In the first place, they use large quantities of each item and must maintain inventories at a level high enough that they will not run out of stock. Secondly, it is cheaper and more efficient to make large-volume purchases.
Purchase Decision
Consumer buying takes decision by consumers themselves. Sometimes they can consult with family members and friends. They need not fulfill any formality like organizational buying.
Organizational purchasing is a rational process because the purchasing behavior of organizations is guided by objective factors having to do with production and distribution. It takes long time than consumer buying.
Market Knowledge
Most of the consumers may not have adequate knowledge and information about market situation, available goods and services, etc. The educated customers may be aware and have knowledge about market and goods.
Organizational purchase criteria are specifically defined. Organizational buyers usually have fewer brands to choose from than do individuals, and their purchases must be evaluated on the basis of criteria that are specific to the overall needs of the organization. The organizational buyers have full knowledge of market and suppliers.
Types of Goods
Consumers buy many goods to use to satisfy personal or family needs.
Organizational buyers buy limited goods to use to conduct business.
Effect
Consumer buying behavior is effected by age, occupation, income level, education, gender etc. of consumers.
Many individuals are involved in the buying process. Within large organizations, rarely is one individual solely responsible for the purchase of products for the purchase of products or services. Instead, many individuals and departments may be involved and departments may be involved in the buying process.
Buying Process
The consumer buying process is very simple. No need to fulfill any formality. There is also no need to maintain extensive contact with sellers.
Buyers and sellers in the organizational market must maintain extensive contact.
You may also like this:
5 comments:
Related keywords , ,

Role of Market Segmentation in Marketing Decision Making

Market segmentation is the act of identifying and profiling distinct groups of buyers who might prefer or require varying products and marketing mixes. It is a process of dividing the total market for a good or service into several groups, such that the members of each group are similar with respect to the factors that influence demand. It plays a vital role in marketing decision-making. Market segmentation plays the following roles in marketing decision making. They are:

1. Identification of market opportunities

Without segmentation organization cannot find the needs of customer easily. Organization can identify the market opportunities like most profitable sectors, through well segmentation.

2. Understanding of the customer

A segmentation perspective leads to more precise definition of the market in terms of consumer needs. Segmentation thus improves management’s understanding of the customer and more importantly, why he/she buys.

3. To direct marketing programs

Management, once it understands consumer needs, is in a much better position to direct marketing programs that will satisfy these needs and hence parallel the demands of the market.

4. Strengthen management capabilities

A continuous program of market segmentation strengthens management capabilities in meeting changing market demands.

5. To assess competitive strengths and weakness

Management is better able to assess competitive strengths and weakness of greatest importance; it can identify those segments where competition is thoroughly entered. This will save company resources by forgoing a pitched battle of locked-in competition, where there is little real hope of market gain.

6. Systematic planning

It is possible to assess a firm’s strengths and weakness through identifying market segments. Systematic planning for future markets is thus encourages.

7. Efficient allocation of marketing resources

Segmentation leads to a more efficient allocation of marketing resources. For example, product and advertising appeals can be more easily coordinated. Media plans can be developed to minimize waste through excess exposure. This can result in a sharper brand image, and target consumers will recognize and distinguish products and promotional appeals directed at them.

8. Market objectives

Segmentation leads to a more precise setting of market objectives. Targets are defined operationally, and performance can later be evaluated against these standards.

You may also like to read:
No comments:
Related keywords , , ,

Meaning of Trend and Mega Trend: some momentum and durability

Trend


A trend is a collection or sequence of events that has some momentum and durability. Generally, a trend is last for two to five years. Marketers can find many opportunities by identifying trends. The trend of smoking habits in teenager helps the growth of the tobacco industry. The trend of buying mobile phones is helping Nepal Telecom to expand its transactions. Generally, the trends can be seen mainly in fashionable items like in dress, electronics, beauty products, etc. It helps manufacturers and marketers to design the products and services according to the emerging trends.
According to Faith Popcorn –“A trend has longevity, is observable across several market areas and consumer activities, and is consistent with other significant indicators occurring or emerging at the same time.”
Trend reveals the shape of the future. It is direction of events in the changing environment. A trend is usually active for a period of two to five years.

Following are some of the glaring examples of marketing trends in Nepal:
  • Women’s participation in different NGO’s for raising against social injustice and crime.
  • The demand for self-service
  • The use of miniskirt
  • Digital watches
  • Getting admission in MBBS classes by donating a huge amount of money
  • Sending children for education to foreign countries etc.

Mega Trend


Mega trends are direction or sequence of events in the environmental forces that are of longer duration and they are shown because of political, economic, social, and technological changes. In other words, mega trends are large social, economic, political and technological changes that are slow to form once in place, they influence us for some time-between seven and ten year, or longer.

Some example of mega trends are:
  • The booming global economy
  • A renaissance in the arts
  • The emergence of free-market socialism
  • Global lifestyles and cultural nationalism
  • The privatization of the welfare state
  • The rise of the Pacific Rim
  • The decade of women in leadership
  • The age of biology
  • The religious revival of the new millennium
  • The triumph of the individual
There are some differences between a trend and mega trends. Mega trends are larger than trends. Trend is stable for two to five years whereas mega trends are relatively stable for almost a decade. Mega trend throws a greater influence on marketing than a trend.

The examples of mega trends visible in Nepal are as follow:
  • Cultural invasion from the western countries
  • Privatization of state owned enterprises
  • Liberalization and globalization
  • Increasing use of information technology
  • Westernization of life styles
  • Open university system, etc.
These trends and mega trends create marketing opportunities for the concerned marketing firms. But the firm should develop new products or marketing programs in line with strong trends and mega trends rather than opposing them.
You may also like to read:
No comments:
Related keywords , , , ,

Environmental Scanning and Methods of Environment Scanning

Environmental Scanning

Scanning is generally defined as acquiring information. In the context of marketing programs and plan environmental scanning involves monitoring changes and developments in the marketing environment that have potential impact on the marketing activities. It is essential for formulating plans.
According to Richard Steers –“Environmental scanning involves monitoring changes and developments in the environment that have potential impact on the organization.”
In conclusion, environmental scanning is the process by which marketing management monitor its relevant environment to identify opportunities and threats affecting the business. Environmental scanning should be done to bring controllable environment in favor of the organization and plans.

Methods of Environmental Scanning


Environmental scanning is absolutely necessary for strategy formulation. As the environment is complex environmental scanning should be cautiously dealt. For the environmental scanning, some of following methods can be used.
  1. Extrapolation method: These methods require information from the past to explore the future. The future is assumed to be some function of the past. There are a variety of extrapolation methods, including trend analysis, forecasting and regression analysis.
  2. Historical analogy: When past data cannot be effectively used to analyze an environmental trend, the trend is studied by establishing historical parallels with other trends. This method assumes that sufficient information is available from the other trend. Turing points in the progression become guideposts for predicting the behaviors of the trend being studied.
  3. Intuitive reasoning: This method calls for a rational intuition by the scanner. Intuitive thinking requires free thinking unconstrained by past experience and personal biases.
  4. Scenario building: This procedure involves constructing a time-ordered sequence of events that have a logical cause-and-effect relationship to one another. The resulting forecast is based on interrelationships among the events.
  5. Cross-impact matrix: When two different trends in the environment point to two conflicting futures, the trends are studied to see their potential impact on each other.
  6. Morphological analysis: This method is used to identify all possible ways to achieve an objective. It can be used to anticipate and to develop ideal patterns for achieving desired objectives.
  7. Network methods: Two types of network methods are popular: Contingency Trees and Relevance Trees.
    1. Contingency Tree: A contingency tree is a graphic display of logical relationships among environmental trends that focuses on branch points, at which several alternate outcomes are possible.
    2. Relevance tree: A relevance tree is a logical network similar to a contingency tree, but assigning degrees of importance to various environmental trends with reference an outcome.
  8. Missing line approach: This approach combines morphological analysis and the network method. Many developments and innovations that appear promising may be hindered because something is missing. Under such circumstances this unique may be used to study new trends to see if they reveal the missing links.
  9. Model building: This method is similar to network methods but relies more on developing mathematical representations of the environmental phenomena in question. Simulations are good examples of model building techniques.
  10. Delphi technique: The Delphi technique is the systematic solicitation of experts opinion in varying stages, using feedback to develop new forecasts.

You may also like to read:
No comments:
Related keywords , , , ,
Subscribe to: Posts (Atom)