Consumer Behavior

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1. How would you differentiate between organizational buying and individual buying? Taking the example of purchase of a computer for your personal use and for organizational purposes, explain the differences.

Answer :

Definition of organizational buying:

Webster and wind define organizational buying as follows:

‘Organizational buying is a complex process of decision making and communication, which takes place over time, involving several organization members and relationship with other firms and institutions. ( Ignou Text book).

‘Organizational buying is the decision making process by which formal organizations establish the need for purchased products and services and identify, evaluate and choose among the alternative brands and suppliers’ ( Webster and Wind- Philip Kotler 12E , Page 196)

Definition of individual Buying or Consumer buying:

Individual buying is defined as follows

“The decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services”( Ignou Text Book)

Some features of organizational buying are as follows:

1. Multi person buying activity

In most of the situations in many organizations buying will be a multi person activity.
Though every organization will have ‘material management’ and ‘procurement’ departments which will conduct ‘buying activity’ its decisions are based on feedback from concerned persons from different departments. Persons involved in such decision process may also be from different hierarchy and background such as managers, technicians, marketing personnel, finance controllers and users of the product. Moreover each persons involved in buying process may play different roles.

For example in EQUATE Petrochemical Company purchase of computers for Marketing department involve following roles:
• Users- Marketing Department Staff
• Influencers: Business Director, Regional Sales Manager, IT quality controllers etc.
• Deciders: Committee

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