Factors affecting consumer behavior in B2B markets in India
B2B buying behavior is influenced by a selection of variables. These variables are divided into four fundamental classes:
Table below illustrates this classification and exemplifies variables being used. The variables are also grouped in task and nontask variables that apply to all other classes. The task variables are directly related to the buying problem, and the nontask variables are broaden beyond the specific buying problem. To separate variables into task and nontask are not always obvious, so the one being predominant ought to be chosen in many cases.
Table: Variables influencing organizational buying decisions (adapted from Webster & Wind, 1972, pp. 13).
| |Task |Nontask | |Environmental |Anticipated changes in prices |Political climate in an election year | |Organizational |Policy regarding local supplier preference |Methods of personnel evaluation | |Interpersonal |Meetings to set specifications |Informal, off-the-job-interaction | |Individual |Desire to obtain low prices |Personal values and needs |
Market Segmentation in B2B markets in the Indian Context
B2B markets typically have far fewer behavioral or needs-based segments than is the case with consumer markets. Whereas it is not uncommon for an FMCG market to boast 10, 12 or more segments, the average business-to-business study typically produces 3 or 4. Part of the reason for this is the smaller target audience in business-to-business markets. In a consumer market with tens of thousands of potential customers, it is practical and economical to divide the market into 10 or 12 distinguishable segments, even if several of the segments are only separated by small nuances of behavior or need. This is patently not the case when the target audience consists of a couple of hundred business buyers. The main reason for the smaller number of segments, however, is simply that a business audience’s behavior or needs vary less than that of a (less rational) consumer audience. Whims, insecurities, indulgences and so on are far less likely to come to the buyer’s mind when the purchase is for a place of work rather than for oneself or a close family member. And the numerous colleagues that get involved in a B2B buying decision, and the workplace norms established over time, filter out many of the extremes of behavior that may otherwise manifest them if the decision were left to one person with no accountability to others. It is noticeable that the behavioral and needs-based segments that emerge in business-to-business markets are frequently similar across different industries. Needs-based segments in a typical business-to business market often resemble the following: • A price-focused segment, which has a transactional outlook to doing business and does not seek any ‘extras’. Companies in this segment are often small, working to low margins and regard the product/service in question as of low strategic importance to their business. • A quality and brand-focused segment, which wants the best possible product and is prepared to pay for it. Companies in this segment often work to high margins, are medium-sized or large, and regard the product/service as of high strategic importance. • A service-focused segment, which has high requirements in terms of product quality and range, but also in terms of after-sales, delivery, etc. These companies tend to work in time-critical industries and can be small, medium or large. They are usually purchasing relatively high volumes. • A...
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