Organisational Buying Behaviour

How organizations buy: Differences with CB?

The buying decision-making process of an organization involves many individuals rather than that decision of an individual customer. Organizational buying behavior differs from consumer buying behavior in that of the following,

 (a) Normally, multiple individuals are involved - 

Here, HUL will procure all the chemicals and cleansing agents required to formulate the product called Surf Excel easy wash. The business market will involve major industries like manufacturing, transportation, communication, public utilities etc.

(b) Buying decision rules or standards may be applicable-  

The procurement department faces many decisions in making a purchase. The procurement team at HUL will have to abide by the Surf excel detergent quality policies as well as the policies of the organization befire making any purchase with a vendor.

 (c) Purchases occur as a result of derived demand- 

There is tremendous competition in the market for selling and buying goods/ services in order to formulate the final product. Demand for a detergent which helps reduce washing time as well as readily removes tough stains is the derived demand which creates purchasers to achieve the best deal in order to fulfill customer expectations as well as reduce company costs by increasing the value offered.

The Howard Sheth Model

The Howard Sheth theory of buyer behaviour is a sophisticated integration of the various social, psychological and marketing influences on consumer choice into a coherent sequence of information processing. It aims not only to explain consumer behaviour in terms of cognitive functioning but to provide an empirically testable depiction of such behaviour and its outcomes (Howard 1977). 

Utilizing the learning theory thoroughly and systematically, John Howard came out with the first truly integrative model of buyer behaviour. He was the first to introduce the difference between problem solving behaviour, limited problem solving and automatic response behaviour. 

The model is essencially an attempt to explain brand choice behaviour over time and therefore specially pertinent to our field. Focussing on repeat buying, the model relies on four major components - stimulus inputs, hypothetical constructs, response outputs and exogenous variables.