Buying behavior varies greatly between consumers and businesses. That’s because while consumers purchase goods and services for personal use, businesses buy these things either to manufacture other goods or to resell them to other businesses or consumers. The participants, characteristics, influences and the buying process are different for both groups.
The Number of Participants
Consumer buying is usually limited to one or two participants, including the final user of the product. For example, one person is usually involved in buying groceries and basic home supplies. Business buying usually involves multiple participants, such as the final users of the product, influencers who establish the need for certain products, gatekeepers who screen potential suppliers and purchasing managers and senior management who approve the funds for the purchases.
Differing Behavioral Characteristics
The consumer market consists of thousands of customers located in different geographies and with different buying habits. However, their needs are usually the same for a particular product for example, everybody uses washing machines in the same way. The business market usually consists of a few large buyers who are often concentrated in specific geographic markets. Businesses generally form close and long-term relationships with their suppliers. Different businesses might use the same product differently. For example, a retail business might install computers to track its inventory, while a technology company might use them for product research.
Influencing Factors and Motivations
The influences on consumer buying behavior include basic needs, membership in groups, family requirements, occupation, age, economic situation and lifestyle choices. The psychological influences include perception of certain products and brands, beliefs and attitudes. Influences on business buying behavior include environmental and organizational factors. Competitive pressures, technological evolution and changing macroeconomic conditions are some of the environmental influences, while corporate objectives, policies and procedures are some of the organizational factors.
The Buying Process
The consumer buying process consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision and post-purchase outcomes. Marketing stimuli can generate need, which leads to a search for information from different sources. Consumers evaluate alternative products based on brand name, features, quality and price. Possible post-purchase outcomes include delight, satisfaction and dissatisfaction. Critical success factors in the consumer market include quality, value and customer service.
The business buying process also starts with need recognition, followed by development of product specifications. The company prepares a request for proposal to elicit expressions of interest or bids from potential suppliers. It selects one or more suppliers, issues purchase orders and monitors the quality of the products supplied. Critical success factors in the business market include customization capabilities, quality, performance, ease of use and personal relationships.