Consumer and Organizational Markets

Businesses offer products and services to both consumer and organizational markets.
Consumer Markets Consumer markets include individuals and/or households who purchase
product services for personal consumption.

 The Consumer Buying Process

The consumer buying process outlines the steps a consumer goes through this

product/service. It is important for marketers to know this process to under stand how
consumers buy.

Step 1: Problem/Need recognition

This initial step in the consumer buying process is the most important of all
because the failure of a consumer to recognize a need or problem will not result
in any sale.

Step 2: Information search

After having recognized the need or problem, the consumer will search for ways
(various brands of products or services) to address the need or solve the problem.
Step 3: Alternatives evaluation

At this point, the consumer compares the attributes, features, and selling prices of the

various brands of products or services capable of addressing his/her recognized need

or solving his/her problem.

Step 4: Purchase decision

After evaluating the brands of product/service that will best address his/her need or solve
his/her problem, and provide the highest value, the consumer shall proceed to make the
purchase.

Step 5: Post-purchase behavior

he purchase, the consumer shall make a judgment of the product/service's ability

isty his/her recognized need or problem (which triggered the buying process).
  Consumers Buying Roles

there are five roles individuals may portray in a consumer buying decision :

 initiator- person who initially suggests buying a particular product or service.

 influencer- person who tries to convince others of the need for the product/service and
influences the purchase decision.
 Decider - the person will make the final decision to purchase or makes the final

decision on any produce service components such as what to buy, how to buy where to

 Buyer - the person who makes the actual purchase.

 User - the person who actually uses the product service.

Consumer Market and Buying Behavior

Consumers are in different genders and ages. They have varving income levels, live

different regions of the country and have various personalities and psychological profile

This makes developing a single way to sell to consumers difficult as they are intuen

different factors when buying goods and services. This makes developing a single way to sell to
consumers difficult as they are influenced by different factors when buying goods and services.

Buyer characteristics comprise of cultural, social, personal, and psychological factors.

Cultural characteristics particularly play a large role in consumer interest and eventual

purchase. Products and services must "fit" the cultural background of the potential buyer

and not run contrary to it. An individual's personal culture is developed over time.

Subcultural factors are minute parts of one's culture that provide specific identification

of its members. This can include one's nationality mix e.g. Tsinoy (Chinese-Filipino), a

Spanish-Filipino, or a Filipino-American, or regional origins, e.g. Ilocano, Batangueño,

Ilonggo, or Manileño, among others. These factors play a critical role in one's buying

behavior.

Buyer behavior may also be influenced by one's social class. Social class is a status

hierarchy in which individuals and groups are classified through economic success and

accumulation of wealth. The four most common social classes are upper class, middle

class, working class, and lower class. Consumers may purchase products and services

befitting what they perceive as "acceptable" by their own social class. Purchases made

outside this "acceptable classification can lead to one being openly or silently ostracized

by other members of their social class.

Reference groups, likewise, exert a strong influence on consumer buyer behavior.

erence groups include individuals or groups that influence consumer opinions, beliefs,

uudes, and behaviors. They often serve as role models and inspiration. Many consumers

ng to reference groups such as families, friends, schoolmates, and coworkers.

An even stronger influence on buyer behavior is the family. This

is particularly true among Filipinos. Because of the length of time one sa

family, an individual adopts the values, habits, and philosophical orientation of h

i.e. self-worth, spending habits, and general perspective and outlook towards life. This

continues even after he has married.

Lifestyle is defined as a manner of living that reflects a person's values and attitude

Ones lifestyle is independent of his/her occupation, social class, or Status. Therefore, a

person may occupy a high position in a bank, and yet prefer to maintain a frugal lifestyle

In contrast, an entry-level teller in the same bank may live an extravagant lifestyle; always

eating out, buying branded clothes, and using the latest mobile communication device.

Personality refers to individual differences in characteristic patterns

feeling, and behaving.Typical personality traits are dominance, deference, defon

adaptability, autonomy, sociability, and self-confidence.

Similar to psychological factors, motivation addresses the issue of why a consume

buys a product or what needs he is trying to satisfy. Most individuals purchase product

and services in order to satisfy one or more of the five need levels identified by Abrahan

Maslow:

Perception is the process by which people translate sensory impressions into a coherent

view of the world around them. Because of perception consumers may view marketing stimuli in
different ways.

Learning is a relatively lasting change in behavior that is the result of experience

When a consumer purchases a particular brand of product and is completely satisfied

with it, his/her positive experience with the brand is reinforced.

A Belief is defined as confidence in the truth or existence of something not immediately

susceptible to rigorous proof. On the other hand, an attitude ia a settled way of feeling about
someone or something typically one that is reflected in a person's behavior.

 Organizational Markets

Organizational markets are all the individuals and companies who purchase goods and

services for some use other than personal consumption.

There are three types of organizational markets:

 Industries - are business organizations that purchase goods and services for the purpose
of producing other products and services or for use in their production and operating
processes.
 Resellers - are entities that buy goods and services in order to resell them at a promy

(most commonly distributors, wholesalers, and retailers).

 Government - comprise of agencies or government units at all levels that puc

soods and services for the purpose of producing public services or to transfer them
parties that need them.

Types of Organizational Buying Decisions

There are three types of organizational buying decisions:

 New task - involves the purchase of products or services that the organization has never
brought before or has not purchased for a long period of time.
 Straight rebuy pertain to organizational purchases which have exactly the same

specifications as previously purchased. For most companies, a straight rebuy situation

requires no additional evaluation most especially if the organizational buyer is satisfied

with the last purchase.

 Modified rebuy - this can be a rebuy with some change in specifications. This can also be
a straight rebuy that was reclassified as a modified rebuy for one of following reasons:
(1) the straight rebuy supplier has been removed from the buying company's accredited
supplier list due to certain reasons, (2) the supply contract between the purchasing
company and the supplier has expired, (3) there is a new company decision-maker who
wants the company's supplier list and supply arrangements re-evaluated, and/or (4)
intensive and persistent marketing efforts by supplier competitors have prompted the
reassessment of previous purchase arrangements.

Organizational Buying Roles

Many individuals play roles in the organizational buying process. In most cases, the higher the
amount of the purchase, and the more important the purchase is to the company's operations,
the greater is the number of participants.

The following are the roles involved in organizational buying decisions:

 Users - usually initiate the organizational buying process after having identified a

specific need in their department. Because they will be the ultimate user of the product,

they usually indicate needed specifications for the supply requirement.

 Influencers-are individuals within the organization that influence the purchase decision;

their inputs are especially important in specification refinement and in alternative supplier
evaluation.

 Deciders - are parties who are empowered to make the purchase decision with regards
to product specifications or selection of suppliers.
 Approvers - are individuals in higher level management who oversee the purchase
decisions of the deciders and buyers and who grant final approval on the purchase.
 Buyers - are responsible for the actual purchase; other than making the actual
purchase, buyers may be allowed to negotiate payment and/or credit terms, delivery
arrangements, and in some cases, even supplier selection
 Gatekeepers - are individuals whose positions allow them to sche

Presentatives and vital product/service information from reaching participants

roles in the organizational buying decision; in some instances, they may actually implicitly favor
one supplier over another.